COURT FILE NO.: CV-23-00092923-0000 (Ottawa)
DATE: 20241205
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Guoxun Chen and Xiucheng Shi, Plaintiffs
AND:
Nanchun Chen and Weidong Yang, Defendants
BEFORE: Mr. Justice Graeme Mew
COUNSEL: Miriam Vale Peters, for the Plaintiffs
David Wagner and Jake Palace, for the Defendants
HEARD: 3 December 2024 at Ottawa (by videoconference)
ENDORSEMENT
(Contested Request for Adjournment of Motion)
[1] The plaintiffs bring a motion for:
a. leave to amend their statement of claim to reflect the appointment of Nan Chen as litigation guardian for the plaintiffs; and
b. a finding that the defendants are in contempt of court as a result of their failure to attend examinations for discovery in contravention of the Order of Justice Somji dated 17 May 2024.
[2] The plaintiffs scheduled their motion on the short motions hearing list, with one hour allocated for oral submissions on the merits of the plaintiffs’ motion.
[3] The defendants seek an adjournment of the motion pending the hearing of a cross-motion which they have brought seeking, inter alia, a stay of this action pursuant to Rule 15.02(4) of the Rules of Civil Procedure:
a. because at the time the action was commenced, the plaintiffs lacked capacity to authorise the commencement of proceedings;
b. because there is a pending application concerning the guardianship of the plaintiffs; and
c. until a litigation guardian for the plaintiffs is appointed pursuant to Rule 7.
[4] The defendants also submit that a long motion hearing date should have been sought, with an allocation of a half day for the hearing of the motion and cross-motion.
[5] The defendants have requested a case conference, which has been scheduled for 8 January 2025, to obtain the court’s directions regarding the motion and cross-motion.
[6] After hearing extensive submissions by counsel, I granted the adjournment request and stayed the plaintiffs’ motion to amend, with reasons to follow. The plaintiffs withdrew their request for a finding of contempt.
[7] These are my reasons.
[8] The plaintiffs are the parents of the defendant Nanchun Chen and of the proposed litigation guardian, Nan Chen. The defendant Weidong Yang is the husband of Nanchun Chen.
[9] The parties agree that the plaintiffs are currently incapable, and that the appointment of a litigation guardian is necessary.
[10] The defendants assert that Nan Chen is not a suitable litigation guardian for the plaintiffs and, in a separate proceeding, the defendants have sought, inter alia:
a. declarations that Powers of Attorney for Property and Powers of Attorney for Personal Care granted by Guoxun Chen and Xiucheng Shi on 27 January 2023, appointing Nan Chen as attorney and Jun Fang Zhu as alternate attorney be declared null and void; and
b. orders appointing Nanchun Chen, or in the alternative, the Public Guardian and Trustee, as guardian of property and guardian of person with respect to health care, nutrition, shelter, clothing, hygiene and safety, for Guoxun Chen and/or Xiucheng Shi.
[11] The defendants argue that an adjournment (and stay) of the plaintiffs’ motion is appropriate because the litigation guardian issue in this action, and the separate guardianship application by Nanchun Chen, should be decided before the amendments to the pleadings sought by the plaintiffs are made.
[12] The plaintiffs oppose the adjournment request. They say, in essence, that this action has already been unduly delayed by tactical manoeuvres that have been orchestrated by the defendants and that further delay, particularly in the face of Justice Somji’s order, is causing an injustice to the plaintiffs. They observe that to date, no motion materials have been served in connection with the defendants’ pending motion for a stay (during the course of argument, Mr. Wagner said that the defendants would be relying on the evidence already filed as part of the record for this motion).
[13] Furthermore, the record indicates that in a costs endorsement of 17 May 2024, Justice Somji deemed an earlier motion by the defendants opposing the appointment of Nan Chen as litigation guardian for the plaintiffs to have been abandoned. She also determined that the separate application “raises issues that are largely distinct and certainly more expansive than the issues raised in the notice of motion”.
[14] Instead, the plaintiffs say that the amendment should be granted now, pointing out that pursuant to Rule 7.02, court appointment of a litigation guardian for parties under a disability is not necessary where there is a guardian with authority to act as litigation guardian, or where the parties under disability have an attorney under a power of attorney with authority to act as a litigation guardian. Accordingly, as provided for by Rule 26.01, the court “shall grant leave to amend a pleading on such terms that are just, unless prejudice would result that could not be compensated for by costs on an adjournment”.
Chronology
[15] I have found the following chronology of events instructive in my efforts to place the current motion and request for an adjournment in context:
Date
Event
27-Jan-23
Guoxun Chen and Xiucheng Shi execute powers of attorney appointing Nan Chen as their attorneys for property and personal care; the powers of attorney for property specifically authorise the attorney to act as litigation guardian for any proceedings.
14-Aug-23
Plaintiffs commence an action against the defendants, their daughter and son-in-law, for misappropriating $478,490 from their personal accounts.
10-Oct-23
Defendants serve a statement of defence and counterclaim, denying the allegations and seeking compensation for attendant care and personal support services provided to the plaintiffs.
27-Oct-23
Defendants (by their lawyer) request the appointment of a litigation guardian for the plaintiffs.
01-Nov-23
Two affidavits are sworn by Nan Chen pursuant to Rule 7.02.
03-Nov-23
Plaintiffs advise that they will seek amendment of statement of claim to reflect appointment of litigation guardian and enclose draft amended statement of claim and draft reply and defence to counterclaim.
06-Nov-23
Defendants (through their lawyer) object to Nan Chen's appropriateness as a litigation guardian.
13-Dec-23
Defendants serve a notice of motion, inter alia, opposing Nan Chen's appointment as litigation guardian. The motion is scheduled to be heard on 30 April 2024.
15-Mar-24
Lawyer for defendants writes to plaintiffs' lawyer advising: "We are going to change the motion to appoint a Litigation Guardian to one where we seek the appointment of the [Public Guardian and Trustee] as Litigation Guardian, but we will need to look at proceeding on another date. The motion needs to be served on the PGT". The plaintiffs' lawyer responds: "Your clients have delayed the matter far too long, and I am going to be seeking instructions regarding costs at the next return date".
26-Mar-24
Plaintiffs' lawyer advises that a timetabling order will be sought at the motion return date of 30 April 2024 and proposes that, inter alia, the defendants adjourn their motion to 18 July 2024 and pay the plaintiffs’ costs in the amount of $1,500.
09-Apr-24
Defendants issue Application in Court File No: CV-24-95320. The lawyer for the defendants writes to the plaintiffs' lawyer: "We have chosen to proceed by way of Application, a copy of which is attached …. We will vacate the motion date and will then contact the court to obtain case conference dates".
10-Apr-24
Plaintiffs' lawyer responds: "You do not have my consent to vacate the hearing date. I will be seeking costs against your client".
30-Apr-24
Motion hearing date. Counsel appear before Somji J who records that the defendants had revisited their decision to bring a motion to contest the appointment of Nan Chen as litigation guardian and thereby "effectively vacated" the motion. The plaintiffs seek costs of the vacated motion pursuant to Rule 37.09(3) as well as a litigation timetable. Defendants argue that motion not vacated but, rather, adjourned to a later date in the form of an application.
17-May-24
Somji J. finds that the defendants have abandoned their motion. Defendants ordered to pay plaintiffs' costs of $7,945 forthwith. A litigation timetable is ordered including terms that examinations for discovery are to be completed by 31 July 2024 and that mediation is to be completed by 30 September 2024.
13-Jun-24
Correspondence between lawyers advising that plaintiffs will examine defendants for discovery on 12 July 2024 and Nan Chen will be produced for examination for discovery on 19 July 2024.
20-Jun-24
Defendants' lawyer advises that it is inappropriate to proceed to examinations for discovery until the issue of the plaintiffs' capacity and the potential litigation guardian is determined.
08-Jul-24
Plaintiffs' lawyer offers to agree to an adjournment of the examinations of discovery for the plaintiffs or the litigation guardian (whoever the court ultimately finds to be the appropriate party to be examined) on the condition, inter alia, that the defendants consent to the amendment of the statement of claim and appointment of the litigation guardian without prejudice to the defendants bringing a motion in the future to challenge Nan Chen’s appropriateness as litigation guardian. The defendants did not accept that offer.
12-Jul-24
Defendants fail to attend for examination for discovery. Certificates of non-attendance obtained.
16-Jul-24
Defendants appoint new lawyers to represent them.
17-Jul-24
Defendants' new lawyer writes to the plaintiffs' lawyer: "The timetable needs to be adjusted. The examinations are not happening Friday as we were just retained and you are away for the remainder of the week. Further, as there is technically no litigation guardian at this point, I don't see how you presenting the proposed litigation guardian as the witness is sufficient or complies with the plaintiff's obligations".
09-Aug-24
Defendants’ notice of change of lawyers served.
13-Aug-24
Plaintiffs' lawyer advises that: "I am going ahead with the contempt motion and the motion to add as litigation guardian. I will be booking for 2 hours on October 25. If there is a cross motion, I will consider whether it is appropriate to adjourn the date". Defendants' lawyer advises that he is unavailable, that there will be a cross-motion and that 2 hours is insufficient. He also states his position that until a litigation guardian has been formally appointed, no further steps in the action should be taken, and that the application concerning guardianship and the powers of attorney should be dealt with first. The defendants’ lawyer also advises that in order to avoid further delay, the defendants will consent to the appointment of the Public Guardian and Trustee as the guardian for property and personal care of the plaintiffs as well as the plaintiffs’ litigation guardian in this action.
23-Sep-24
Defendants serve a second motion challenging Nan Chen's appointment as litigation guardian and seeking a stay of this action pending determination of their application.
The Proceedings
[16] The record discloses that:
a. This action was started by Guoxun Chen and Xiucheng Shi on 14 August 2023, over six months after they had provided Nan Chen with powers of attorney for property. The record does not disclose whether Guoxun Chen and Xiucheng Shi personally instructed their lawyer to commence this action, or whether instructions were provided by Nan Chen in his capacity as their attorney.
b. The application commenced by Nanchun Chen alleges that by the time that Guoxun Chen and Xiucheng Shi executed powers of attorney in favour of Nan Chen they already lacked capacity to do so. Accordingly, if Nan Chen gave instructions to commence the action in his capacity as attorney, and the powers of attorney given to him were invalid, he would not have been able to give those instructions. And if the instructions were given by the plaintiffs personally, but they were incapable, the instructions would have been invalid.
c. The affidavit sworn by Nan Chan on 1 November 2023 states, in respect of his father, Guoxun Chen, that:
My father is suffering from Alzheimer's disease which has greatly affected his short-term memory. He can no longer remember things that have recently happened or retain new information. The memory loss has greatly affected his ability to effectively communicate and critical thinking. As such, he will not be able to effectively contribute to this application in any meaningful way.
d. In respect of his mother, Xiucheng Shi, Nan Chen states:
Since June 2023, my mother has gradually been suffering from short-term and long-term memory loss. Her memory loss is affecting her ability to effectively communicate the details of the events and she can no longer effectively articulate longer or complicated words or phrases. As such, she will not be able to effectively contribute to this application in any meaningful way.
e. Nan Chen’s affidavits of 1 November 2023 were sworn just three months after the action was commenced.
f. The defendants submit, and make reference to, what they describe as “significant evidence” demonstrating that the plaintiffs were incapable when the application was commenced.
[17] While making no finding on the question of the plaintiffs’ capacity, either to execute powers of attorney or to instruct counsel to commence these proceedings, I do find that there is a genuine issue, based on the record I have been provided with, as to whether the plaintiffs would have had the capacity to execute the powers of attorney and/or to commence this action.
[18] There are also some important procedural principles to be borne in mind.
a. Where there is some evidence that a plaintiff lacks the capacity to instruct a lawyer to commence an action, r. 7 must be considered. An action commenced by a plaintiff who did not have capacity to instruct a lawyer should be stayed in accordance with r. 15.02(4) and (5) until an application or a motion can be made under r. 78 for the appointment of a litigation guardian: Salisbury v. Sun Life Assurance Co. of Canada, 2013 ONCA 182.
b. Rule 7.02 of the Rules of Civil Procedure requires that, unless a court orders otherwise, a plaintiff who is under disability shall be represented by a litigation guardian. Any person who is not under a disability may act as litigation guardian.
c. Rule 7.02(1.1)(b) provides that an attorney who has authority under a power of attorney to act as litigation guardian is permitted to act unless the Court orders otherwise.
d. Pursuant to Rule 7.02(2), the proposed litigation guardian must file an affidavit stating that he or she has no adverse interest in the proceeding to the person under disability.
e. Rule 7.02(1.1) provides a presumptive right for an incapable person’s guardian or attorney under a power of attorney to act as the person’s litigation guardian “[u]nless the court orders otherwise”.
f. A litigation guardian must be indifferent to the outcome of the litigation or “cannot possess a conflict of interest vis-à-vis the interests of the disabled person”: Gronnerud (Litigation Guardians of) v. Gronnerud Estate, 2002 SCC 38, at para. [20].
g. Once a litigation guardian has been appointed for the plaintiffs, he or she may be examined in place of the parties under a disability: rule 31.03(5).
h. Because the defendants declined to consent to the amendment of the statement of claim adding Nan Chen as a party in his quality as litigation guardian for the plaintiffs, the plaintiffs were unable to file their amended statement of claim, and require leave of the court to do so.
i. Rule 26.01 of the Rules of Civil Procedure provides that the court “shall grant leave to amend a pleading on such terms that are just, unless prejudice would result that could not be compensated for by costs on an adjournment.”
j. There has been no determination on its merits of the issue of whether Nan Chen should be appointed litigation guardian for the plaintiffs. The defendants’ first motion opposing the appointment of Nan Chen was deemed abandoned; a second motion is pending, as is an application challenging the powers of attorney for property under which Nan Chen purports to act.
[19] Justice Somji was aware of the enmity between the siblings and the dispute concerning the suitability of Nan Chen to act as litigation guardian. However, the draft timetable she was provided with by counsel did not make provision for a motion to address the litigation guardian issue. That said, an obvious concern - one which Somji J. clearly had in mind - was that the defendants have been responsible for “several delays” in moving this action forward. No doubt that influenced her willingness to make a timetabling order. I infer that she left it to counsel to sort out any other procedural issues that were not addressed in the draft order, including the appointment of a litigation guardian.
[20] A barrier to the implementation of Somji J.’s order is that the parties have failed to resolve the litigation guardian issue. Although Somji J. found that the separate application brought by Nanchun Chen “raises issues that are largely distinct and certainly more expansive than the issues raised in the [abandoned motion to challenge the suitability of Nan Chen as litigation guardian]”, that did not absolve the parties from dealing with the issue. Having not done so, instead of coming back to the court to seek an amended timetable, they failed to comply with the order, choosing instead to bring this motion and the cross-motion.
The Motion to Amend
[21] The plaintiffs urge me to deny the adjournment request and to grant the proposed amendment, which would have the effect of appointing Nan Chen as litigation guardian, without prejudice to the defendants bringing a subsequent challenge against his suitability. They point to the decision of Perell J. in Kalia v. Kalia, 2020 ONSC 935 in support of taking this approach.
[22] In that case, a mother had given one of her daughters a power of attorney, which would have empowered the daughter to retain a lawyer on the mother’s behalf to commence proceedings against another of the mother’s daughters. After that action had been commenced, a motion was brought by the mother’s lawyers for the appointment of the sister with the power of attorney as the mother’s litigation guardian. When the defendant daughter objected, the law firm moved to have the Public Guardian and Trustee appointed as the litigation guardian instead, and an order was made to that effect. The defendants then moved to have the plaintiff’s lawyers removed as lawyers of record, because they had not been authorised to commence the action. That relief was denied. At para. 64 of his decision, Perell J. observed that if the defendant daughter believed that her sister’s power of attorney should be set aside, or that her mother did not have the legal capacity to give the lawyer instructions, “then the appropriate response would have been proceedings under the Substitute Proceedings Act, 1992 or a motion to have a litigation guardian appointed”.
[23] If anything, Perell J.’s decision in Kalia support the defendants’ position. Nanchun Chen has applied under the Substitute Decisions Act, 1992 regarding the guardianship of her parents, and in this proceeding, the defendants have urged the plaintiffs to seek the formal appointment of a litigation guardian, indicating in the course of doing so that they would agree to the PGT being appointed.
[24] In light of what I perceive to be genuine issues concerning Nan Chen’s powers of attorney and his suitability to act as litigation guardian due to his adverse relationship with his sibling and her husband, there are, in my view, circumstances that militate against granting the proposed amendment of the statement of claim at this time, which cannot be compensated for by an adjournment or an award of costs.
[25] A motion to amend the title of proceedings to add a litigation guardian in an action that has already been commenced is premature where it is known that the appointment of the proposed litigation guardian is contested. Although r. 7.02(1) renders court appointment of a litigation guardian for plaintiffs unnecessary at the outset of litigation, r. 26.02(c) requires leave of the court to add or substitute a party in proceedings that have already commenced if all of the other parties to the action have not consented. Read in conjunction with r. 7.2(1.1), which contains specific provisions relating to who may act as litigation guardian for a mentally incapable person and gives the court discretion to “order otherwise”, a dispute over who should act as litigation guardian should be resolved before leave to amend can be considered.
[26] Accordingly, I have concluded that the issues of the plaintiffs’ capacity to execute powers of attorney and to commence proceedings, and the suitability of Nan Chen to act as litigation guardian, should be determined before this action, and in particular any amendment that would name Nan Chen as litigation guardian, proceeds further.
[27] So far as the contempt relief sought by the plaintiffs as a result of the defendants’ non-attendance at examinations for discovery is concerned, my inclination would have been to decline to make a finding that the defendants are in contempt. As the correspondence contained in the record makes clear, the lawyers for the parties have both taken positions that meant non-compliance with the timetable became almost inevitable.
[28] The issue became academic when counsel for the plaintiffs conceded that, in the circumstances, the request for a finding of contempt against the defendants should be withdrawn.
The Adjournment Request Is Granted
[29] For the foregoing reasons, the defendants’ request for an adjournment of the motion to amend the statement of claim is granted. I further order that that motion should be stayed pending further order of this court.
[30] That having been said, it is incumbent on the defendants to move expeditiously to advance both the application and their pending motion concerning the appointment of the litigation guardian. This should be part of the discussion that occurs at the case conference on 8 January 2025, which is scheduled to be presided over by Associate Justice Perron.
[31] I direct that in advance of the case conference, the parties shall endeavour to agree on a procedural plan for the resolution of the issues of the plaintiffs’ capacity to execute powers of attorney and to commence proceedings, and the suitability of Nan Chen to act as litigation guardian. If they cannot agree on such a plan, each party should provide a succinct summary of how they propose that those issues should be litigated and adjudicated.
Costs
[32] The adjournment requested by the defendants should have been agreed to by the plaintiffs, perhaps on terms, given the concerns about delay.
[33] Furthermore, and as a practical point, even had I not considered that the motion to amend was premature, I would have allowed the adjournment because a short motion hearing would have provided insufficient time (indeed, even the plaintiffs’ original proposal was to seek a two hour hearing).
[34] I fix the costs of the motion to adjourn at $2,500 all inclusive, payable by the plaintiffs. However, in light of the litigation guardian and capacity issues, these costs will not become payable until an order has been made appointing a litigation guardian for the plaintiffs, or the conclusion of this action, whichever comes first.
Mew J
Date: 5 December 2024