Court File and Parties

Citation: Wheeler v. Taylor, 2024 ONSC 2042 Court File No.: CV-23-00705105-00ES Date: 2024-04-15 Superior Court of Justice - Ontario

Re: KRISTY RAE WHEELER, in her capacity as attorney for property and personal care for James Bruce MacAulay, Applicant/Moving Party And: CELINE ANNE TAYLOR also known as CELINE ANNE ST. LOUIS, personally and in her capacity as attorney for property and personal care for James Bruce MacAulay, and James Bruce MacAulay, Respondents/ Responding Party

Before: Dietrich J.

Counsel: Liza Saad, for the Applicant/Moving Party Allen Wilford, for the Respondent/Responding Party, James Bruce MacAulay Shayna Beeksma, for the Respondent, Celine Taylor Erroll G. Treslan, s. 3 counsel for the respondent, James Bruce MacAulay

Heard: In writing

Costs Endorsement

[1] The within application involves the management of the property of the respondent James Bruce MacAulay (“Mr. MacAulay”). In 2016, Mr. MacAulay granted a power of attorney for property and a power of attorney for personal care to his granddaughter, the applicant Kristy Rae Wheeler (“Ms. Wheeler”), and to the respondent, Celine Anne Taylor (“Ms. Taylor”), jointly. In 2024, Ms. Wheeler commenced the within application alleging that Ms. Taylor, as attorney for property, carried out improvident transactions on Mr. MacAulay’s behalf and misappropriated hundreds of thousands of dollars. Ms. Wheeler also seeks an accounting from Ms. Taylor.

[2] Unbeknownst to Ms. Wheeler, Mr. MacAulay executed new powers of attorney for property and personal care in 2019, in which he appointed Ms. Taylor, alone, as his attorney for property and personal care, and he appointed Ms. Taylor’s spouse as his alternative attorney for property and personal care. When Ms. Wheeler became aware of the 2019 powers of attorney, she amended her application to include a challenge to the validity of the 2019 powers of attorney.

[3] For several years, Allen Wilford (“Mr. Wilford”) and A. Wilford Professional Corporation (“AWPC”) have been providing legal advice and services to Mr. MacAulay, including in respect of real estate transactions and estate planning. Mr. Wilford prepared the 2019 Powers of Attorney.

[4] On January 26, 2024, I heard two motions in the within application.

[5] The first motion was brought by Mr. Wilford, on behalf of Mr. MacAulay, to have the application transferred from the Superior Court in Toronto to the Superior Court in Walkerton (Central West Region). Mr. Wilford argued that having the application heard in the Central West Region would be more convenient for Mr. MacAulay, who lives in that region, as does Ms. Taylor, and that the Central West Region is where the impugned real estate transactions took place. I dismissed Mr. MacAulay’s motion because it was not properly brought before the court. I did so without prejudice to any counsel for Mr. MacAulay to bring such a motion in accordance with the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) and the Consolidated Provincial Practice Direction. Such a motion must be brought at the court location to which the moving party seeks to have the application transferred, and it is to be brought in writing to the Regional Senior Judge or his or her designate.

[6] The second motion was brought by Ms. Wheeler. She moved to have Mr. Wilford and AWPC removed as counsel of record and disqualified from acting as counsel in the within application on the basis of a conflict of interest. She also moved for an order directing the appointment of s. 3 counsel for Mr. MacAulay. I granted Ms. Wheeler’s motion.

[7] In my reasons, I noted that Ms. Wheeler had been successful on her motion and was entitled to costs. I encouraged the parties to agree on the matter of costs, failing which they were permitted to make written submissions. They did not agree. Each party submitted written submissions, as did the newly appointed s. 3 counsel, Erroll G. Treslan, on behalf of Mr. MacAulay.

Ms. Wheeler’s Costs Submissions

[8] Ms. Wheeler seeks costs on a substantial indemnity basis, in the all-inclusive amount of $15,558.41, payable by Mr. Wilford personally (pursuant to r. 57.07(1) of the Rules), or from Mr. MacAulay’s assets. Alternatively, she seeks her costs on a partial indemnity basis, in the all-inclusive amount of $10,485.27, payable by Mr. Wilford personally, or from Mr. MacAulay’s assets.

[9] Ms. Wheeler submits that the general civil litigation rules apply in this case such that the successful party is entitled to their costs paid by the unsuccessful party. Ms. Wheeler submits that she was entirely successful on her motion to disqualify Mr. Wilford and AWPC on the grounds of a conflict of interest, and to have s. 3 counsel appointed.

[10] Ms. Wheeler also submits that Mr. MacAulay and she have been subjected to costs which were incurred unnecessarily because Mr. Wilford’s decision to defend the motion was not reasonable. She contends that Mr. Wilford’s conflict of interest was a “very clear one,” and that where the spectre of a conflict of interest is raised, counsel acting reasonably ought to step down.

Mr. MacAulay’s Costs Submissions

[11] Following his appointment as s. 3 counsel, Mr. Treslan prepared costs submissions on behalf of Mr. MacAulay.

[12] Section 3 counsel submits that when he met with Mr. MacAulay on March 17, 2024, he found that “Mr. MacAulay did not possess the requisite capacity to appreciate the nature of this proceeding”.

[13] Section 3 counsel agrees that Ms. Wheeler was successful on her motion and is presumptively entitled to recover her costs. He observes that he has no insight into why Mr. Wilford defended the motion despite the inevitability of being a witness, and he states that Mr. MacAulay cannot provide any insight on this point. Accordingly, he takes no position on whether Mr. Wilford should be responsible for any of Ms. Wheeler’s costs.

[14] Section 3 counsel suggests that notwithstanding Ms. Wheeler’s presumptive entitlement to costs, it would be appropriate that costs be fixed in the cause. He submits that if Ms. Taylor is successful on the merits of the application and her own counter application, Ms. Wheeler’s motion and application will have been for naught, and she may not be entitled to any costs in the result.

Mr. Wilford’s Costs Submissions

[15] Mr. Wilford submits that the issue of a solicitor’s removal is based on the facts of the case and that the applicant’s application is based on conjecture and false allegations but not facts. For these reasons, Mr. Wilford submits that Mr. MacAulay instructed him to defend the application and the motion. Mr. Wilford further submits that it was not improper for him to represent and advocate for Mr. MacAulay in this regard, and his action should not be punishable by a costs order.

Ms. Wheeler’s Reply Costs Submissions

[16] Ms. Wheeler disagrees with s. 3 counsel’s position that costs should be deferred. She submits that she was successful on both her motion to have Mr. Wilford removed and to have s. 3 counsel appointed for Mr. MacAulay. She submits that success on these two matters directly benefitted Mr. MacAulay and served to protect his interests.

[17] Ms. Wheeler further submits that her motion allowed the proceedings to advance in a just and fair manner for the benefit of the parties and in the interests of justice.

[18] Ms. Wheeler also submits that contrary to the submissions made by Mr. Treslan, on behalf of Mr. MacAulay, there is no counter application or other competing claim before the court. There is only the within application, the merits of which will need to be addressed in due course.

Law

[19] The court has the power to award costs against a lawyer personally as part of its inherent jurisdiction, which is codified in r. 57.07. This rule is designed to protect and compensate a party who has been subjected to costs being incurred without reasonable cause, not to punish the lawyer: Young v. Young, [1993] 4 S.C.R. 3, at p. 135. Bad faith is not required: Standard Life Assurance Co. v. Elliott (2007), 86 O.R. (3d) 221 (S.C.), at para. 24; and Galganov v. Russell (Township), 2012 ONCA 410, 294 O.A.C. 13 (“Galganov”), at paras. 18.

[20] The test under this rule is not concerned with a lawyer’s professional conduct generally but whether such conduct caused unreasonable costs to be incurred. The court considers a two-part test: (1) whether the lawyer’s conduct falls within r. 57.07(1) in the sense that it caused costs to be incurred unnecessarily; and (2) whether, applying the extreme caution principle, in the circumstances, imposition of costs against the lawyer personally is warranted: Galganov, at paras. 17-22.

Analysis

[21] In my reasons on the motion, I found that “Mr. Wilford would be a necessary, if not critical, witness on material issues in the application.” I agree with Ms. Wheeler that if Mr. Wilford had acknowledged the conflict of interest that arose from the likelihood that he would be a key witness on issues raised in the application (e.g., the making of the 2019 powers of attorney, and his involvement in the impugned real estate transactions), he could have saved both Ms. Wheeler and his own client from incurring unnecessary costs. Mr. Wilford did not adduce any persuasive evidence or authority for his position that he should not be removed as counsel of record for Mr. MacAulay based on the conflict of interest. The evidence he adduced came from his law clerk rather than his client, Mr. MacAulay. In the result, he subjected Ms. Wheeler and Mr. MacAulay to costs without reasonable cause. For these reasons, and with due caution, I find that costs against Mr. Wilford, personally, are warranted in this case. He should share in the costs payable to Ms. Wheeler.

[22] I do not agree that costs on an elevated level are appropriate in this case. While I acknowledge that some of the language chosen by Mr. Wilford’s law clerk in her affidavit was imprudent and inappropriate, I do not find that this conduct rises to the level of reprehensible conduct that would attract an elevated costs award.

[23] Because the applicant brought the motion in her capacity as attorney for property for Mr. MacAulay, for his benefit, I find that it is fair and appropriate that Mr. MacAulay also bear a portion of Ms. Wheeler’s costs. It is to Mr. MacAulay’s advantage that s. 3 counsel was appointed to determine Mr. MacAulay’s wishes and to protect his rights and interests going forward. This result is also in the interests of justice.

Disposition

[24] I fix Ms. Wheeler’s costs, on a partial indemnity basis, at $10,485.27, all inclusive. Of this amount, Mr. Wilford shall pay Ms. Wheeler $5,000, and Mr. MacAulay shall pay Ms. Wheeler the balance of $5,485.27. These costs shall be payable to Ms. Wheeler within 30 days.

Dietrich J. Date: April 15, 2024