Court File and Parties
COURT FILE NO.: CV-23-00705105-00ES
DATE: 2024-02-12
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
HEARD: January 26, 2024
ENDORSEMENT
[1] This matter involves a dispute regarding the management of the property of James Bruce MacAulay (“Mr. MacAulay”), and Mr. MacAulay’s capacity to manage his property. Mr. MacAulay is 94 years of age. It is undisputed that he experiences short-term memory loss.
[2] Mr. MacAulay does not have a spouse. The applicant, Kristy Rae Wheeler, also known as Kristy Rae MacAulay (“Ms. Wheeler”), is Mr. MacAulay’s granddaughter.
[3] The respondent, Celine Anne Taylor, also known as Celine Anne St. Louis (“Ms. Taylor”), is not related to Mr. MacAulay, but he considers her to be his niece. Ms. Taylor, her husband, Steven Arnott Taylor (“Steven”), and Ms. Taylor’s daughter reside with Mr. MacAulay in a residence that Mr. MacAulay purchased, in the locality of Mar, in Bruce County, Ontario (the “Mar Residence”). Ms. Taylor and Steven look after Mr. MacAulay and the Mar Residence.
[4] In 2016, Mr. MacAulay granted a Power of Attorney for Property and a Power of Attorney for Personal Care to Ms. Wheeler and Ms. Taylor, jointly (the “2016 Powers of Attorney”).
[5] Unbeknownst to Ms. Wheeler, on July 8, 2019, Mr. MacAulay granted a new Power of Attorney for Property and new a Power of Attorney for Personal Care to Ms. Taylor (the “2019 Powers of Attorney”). Steven is named as the alternative Attorney on each of the 2019 Powers of Attorney.
[6] In the within application, Ms. Wheeler seeks an accounting of the management of Mr. MacAulay’s property, the removal of Ms. Taylor as an attorney, and related relief regarding Mr. MacAulay’s property and personal care. Ms. Wheeler alleges that Ms. Taylor carried out improvident real estate transactions on Mr. MacAulay’s behalf and misappropriated hundreds of thousands of dollars.
[7] Allen Wilford (“Mr. Wilford”) and A. Wilford Professional Corporation (“AWPC”) have been providing legal advice and services to Mr. MacAulay for several years and have assisted him with his real estate transactions and his estate planning. Mr. Wilford is Mr. MacAulay’s trusted advisor.
[8] There are two motions before the court in the within application.
[9] Mr. Wilford brings a motion for an order to have the application transferred from the Superior Court of Justice in Toronto to the Superior Court of Justice in Walkerton, in Bruce County (Central West Region). Mr. Wilford submits that a hearing of the application in Central West Region would be more convenient for Mr. MacAulay.
[10] Ms. Wheeler brings a motion to have Mr. Wilford and AWPC removed from the record and disqualified from acting as counsel in the within application on the basis of conflict of interest.[^1] Ms. Wheeler also seeks an order appointing counsel for Mr. MacAulay pursuant to s. 3 (“s. 3 counsel”) of the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (the “SDA”).
[11] For the reasons that follow, I find that whether the application should be moved from Toronto to Walkerton is not a matter for me to decide. I also find that Mr. Wilford and AWPC should be removed from the record and disqualified from acting as counsel for any party in this proceeding for reasons of conflict of interest. Section 3 counsel should be appointed for Mr. MacAulay.
Background Facts
[12] Over his lifetime, Mr. MacAulay has amassed considerable wealth buying and selling real estate.
[13] In September 2023, Ms. Wheeler commenced the within application as Mr. MacAulay’s Attorney for Property. At that time, Ms. Wheeler was unaware of the 2019 Powers of Attorney, which, if valid, would have revoked the 2016 Powers of Attorney.
[14] Once Ms. Wheeler became aware of the 2019 Powers of Attorney, she amended her application to challenge the validity of the 2019 Powers of Attorney.
[15] The real estate transactions relevant to the application include the purchase of the Mar Residence and the purchase of a cottage property at 854 Howdenvale Road in South Bruce Peninsula, Ontario, on which Ms. Taylor was subsequently added as a joint tenant on title.
[16] On the change to the title to the cottage property, to add Ms. Taylor as a joint tenant, Mr. Wilford acted for both Mr. MacAulay and Ms. Taylor.
[17] Mr. Wilford was also involved in a transfer of a large sum of money from Mr. MacAulay’s assets to each of Ms. Taylor and Ms. Wheeler.
[18] These facts are undisputed.
Jurisdiction for the Application
[19] Mr. Wilford, as counsel to Mr. MacAulay, submits that the within application should be transferred to Central West Region, which is the region in which Mr. MacAulay is resident.
[20] Counsel to Mr. MacAulay also submits that Mr. MacAulay is frail and could not travel to Toronto should that become necessary. He submits that travel and accommodation in Toronto would be burdensome for Mr. MacAulay and dangerous to his health.
[21] On behalf of Mr. MacAulay, Mr. Wilford relies on r. 13.1.02(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) in support of the relief he seeks. He submits that a transfer of the matter to Central West Region would be in the interests of justice because events that gave rise to the claim arose there, the subject matter of the proceeding is located there, and it would be convenient for the parties, the witnesses, and the court. Mr. Wilford further submits that proceeding in the Central West Region would lead to the most expeditious and least expensive determination of the proceeding on its merits. Mr. Wilford submits that proceeding in Toronto is convenient only for Ms. Wheeler’s counsel, who resides in Toronto, and Ms. Wheeler, herself, who is a resident of the United States.
[22] Ms. Wheeler submits that the motion brought by Mr. Wilford on Mr. MacAulay’s behalf has not been brought in the appropriate manner and forum as required by the Rules and the Consolidated Provincial Practice Direction. Further, Ms. Wheeler submits that Mr. MacAulay has not met his onus to show that a transfer to Central West Region would be significantly better than having the application heard in Toronto such that the transfer is in the interests of justice.
[23] I agree that Mr. MacAulay has not complied with the Consolidated Provincial Practice Direction regarding a change of venue motion. Specifically, the motion is to be brought at the court location to which the moving party seeks to have the proceeding transferred. The Regional Senior Judge, or their designate, will hear such a motion to transfer, and it is to be brought in writing. If a hearing becomes necessary, the motion will be heard by teleconference arranged through the Office of the Regional Senior Judge in the region where the motion is brought.
[24] Accordingly, Mr. MacAulay’s motion should be dismissed, without prejudice to other counsel to Mr. MacAulay bringing such a motion in accordance with the Rules and the Consolidated Provincial Practice Direction.
Should Mr. Wilford and AWPC be removed from the record and disqualified from acting as counsel in the within application?
[25] Ms. Wheeler submits that Mr. Wilford and AWPC should be removed from the record and disqualified from acting as counsel in the within application on the basis of conflict of interest.
[26] Ms. Wheeler contends that is highly likely that Mr. Wilford will be called as a witness in this proceeding. She asserts that Mr. Wilford is a key witness in the following ways:
he is the lawyer who represented Mr. MacAulay on the subject real estate transactions;
he is the lawyer who prepared and witnessed the 2019 Powers of Attorney, the validity of which is being challenged in this proceeding; and
he was involved in the transfer of assets that are in issue in this proceeding.
[27] Ms. Wheeler submits that if Mr. Wilford is called as a witness, he will be in a conflict between his obligations of objectivity and detachment, which he owes to the court as counsel, and his obligations to his client to present the evidence in as favourable a light as possible.
Law
[28] The authority for the court to remove a lawyer of record lies within the court’s inherent jurisdiction. This inherent jurisdiction stems from the fact that lawyers are officers of the court and their conduct in legal proceedings, which may affect the administration or justice, is subject to this supervisory jurisdiction: MacDonald Estate v. Martin, 1990 CanLII 32 (SCC), [1990] 3 S.C.R. 1235, at p. 1245.
[29] The test to be applied when determining if counsel should be removed from the record is set out in Karas v. Ontario, 2011 ONSC 5181, at para. 26, as follows:
The overarching test to be applied on a motion to remove a lawyer from the record is whether a fair-minded reasonably informed member of the public would conclude that the proper administration of justice requires the removal of the lawyer. This determination is very fact specific and based on an examination of all of the factors in the case and the specific reason why the motion is being brought. The task of the court is to uphold and preserve the integrity of the justice system while ensuring that litigants are not deprived of their counsel of choice without good cause. [Citations omitted.]
[30] In Essa (Township) v. Guergis; Membery v. Hill (1993), 1993 CanLII 8756 (ON SCDC), 15 O.R. (3d) 573 (Div. Ct.), the Divisional Court of Ontario set out the following factors to be considered when determining whether a lawyer should be removed from the record, specifically in circumstances in which a lawyer may act as a witness in a proceeding:
the stage of the proceedings;
the likelihood that the witness will be called;
the good faith (or otherwise) of the party making the application;
the significance of the evidence to be led;
the impact of removing counsel on the party’s right to be represented by counsel of choice;
whether trial by judge or jury;
the likelihood of a real conflict arising or that the evidence will be “tainted”;
who will call the witness; and
the connection or relationship between counsel, the prospective witness, and the parties involved in the litigation.
[31] As stated by Gillese J. (as she then was) in Urquhart v. Allen Estate, [1999] O.J. No. 4816 (Ont. S.C.), at para. 27:
When counsel appears as a witness on a contentious matter, it causes two problems. First, it may result in a conflict of interest between counsel and his client. That conflict may be waived by the client …. The second problem relates to the administration of justice. The dual roles serve to create a conflict between counsel’s obligations of objectivity and detachment, which are owed to the court, and his obligations to his client to present evidence in as favourable a light as possible. This is a conflict that cannot be waived by the client as the conflict is between counsel and the court/justice system.
[32] The Law Society of Ontario Rules of Professional Conduct similarly state that a lawyer who appears as advocate shall not testify or submit their own affidavit evidence before the tribunal unless permitted to do so or on a purely formal or uncontroverted matter: s. 5.2-1.
[33] While the courts are not bound by the codes of conduct applicable to lawyers, the Supreme Court of Canada stated in MacDonald Estate, at p. 1246, that “an expression of a professional standard in a code of ethics relating to a matter before the court should be considered an important statement of public policy.”
[34] In Bose v. Bangiya Parishad Toronto, 2018 ONSC 7639, at para. 98, Perell J. confirmed that a lawyer who is a material witness should not be permitted to continue acting as counsel, even if they do not intend to testify in the case.
[35] While litigants have a right to retain counsel of choice, it is not an absolute right and can be outweighed when the administration of justice will be detrimentally affected by the lawyer remaining on the record: George S. Szeto Investments Ltd. v. Ott, [2006] O.T.C. 308 (Ont. S.C.), at para. 21.
Analysis
[36] Mr. Wilford argues that his role in the real estate transactions was minimal because the bulk of the work was done by law clerks in his office. Mr. Wilford admits that he would have met with Mr. MacAulay to sign the documents for the real estate transactions. Mr. Wilford also admits that he prepared the 2019 Powers of Attorney on Mr. MacAulay’s instructions, and he witnessed the execution of them. Mr. Wilford further admits that he was involved in the transfer of $40,000 from Mr. MacAulay to each of Ms. Wheeler and Ms. Taylor, but he was not involved in the larger gift of $500,000 to each of them.
[37] Mr. Wilford also argues that Mr. MacAulay trusts him, and they are friends. Therefore, he asserts that to deprive Mr. MacAulay of the counsel of his choice would be unfair to Mr. MacAulay. Mr. Wilford submits that retaining another lawyer would be onerous for Mr. MacAulay.
[38] In applying the relevant factors, as set out in Essa, I find that a fair-minded reasonably informed member of the public would conclude that the proper administration of justice requires the removal of Mr. Wilford as Mr. MacAulay’s lawyer in this case.
[39] The hardship caused to Mr. MacAulay by being denied the lawyer of his choice will be lessened by Mr. Wilford’s removal early in the proceeding and before a significant amount of time has been spent by Mr. Wilford. The appointment of s. 3 counsel should allow for a smooth transition from one lawyer to another and ease any burden on Mr. MacAulay to find and retain new counsel.
[40] Given Mr. Wilford’s involvement in the subject real estate transactions and the drafting and witnessing of the 2019 Powers of Attorney, I find that Mr. Wilford would be a necessary, if not critical, witness on material issues in the application. The production of his files in these matters will almost certainly be sought. Though Mr. Wilford submits that the information he has is subject to solicitor-client privilege, that privilege can be waived by a court under certain circumstances.
[41] Ms. Wheeler submits that she was not motivated by bad faith in bringing the within application. She commenced the litigation in a representative capacity, believing that she was an Attorney for Property for Mr. MacAulay. She submits that she is acting to protect Mr. MacAulay’s property.
[42] I find that the conflict in which Mr. Wilford finds himself is real. His involvement as a witness to material events is uncontroverted. Though Mr. Wilford submits that it was his law clerks who did the bulk of the legal work on the real estate transactions, I find that the solicitor-client relationship was between Mr. Wilford and Mr. MacAulay, that Mr. MacAulay would have relied on Mr. Wilford for legal advice, and that Mr. Wilford would ultimately be responsible for the work undertaken by his staff. Mr. Wilford is the lawyer of record in this case. It is evident from Mr. Wilford’s submissions that he participated in and has actual knowledge of the events in issue. The conflict between his duty to Mr. MacAulay and his duty to the court to provide objective advocacy is real.
[43] In conclusion, I find that the specific facts and circumstances of this case weigh in favour of Mr. Wilford’s removal from the record and his disqualification from acting as counsel for any party in the within application. His removal is necessary to protect the administration of justice.
The Appointment of s. 3 Counsel
[44] Section 3 of the SDA permits the court to direct the Public Guardian and Trustee to arrange for legal representation of a person where the capacity of a person, who does not have legal representation, is in issue in a proceeding under the SDA.
[45] This proceeding was brought under the SDA, legislation the purpose of which is to protect the vulnerable. Section 3 of the SDA permits the appointment of counsel to protect the dignity, privacy, and legal rights of a person who is alleged to be incapable.
[46] Based on the evidentiary record, the parties are at odds with one another as to the proper management of Mr. MacAulay’s property and person. Ms. Wheeler challenges Mr. MacAulay’s capacity to manage property, while Mr. Wilford and Ms. Taylor defend Mr. MacAulay’s capacity. When served with the application, the Public Guardian and Trustee observed that the court might think it appropriate to arrange for s. 3 counsel for Mr. MacAulay given the seriousness of the allegations and the relief sought.
[47] Given the allegations of incapacity, the input of the Public Guardian and Trustee, and Mr. MacAulay’s perceived vulnerability as described by Ms. Wheeler, I find that this is an appropriate case for the appointment of s. 3 counsel.
[48] I acknowledge Mr. Wilford’s opinion that Mr. MacAulay is not the vulnerable person that Ms. Wheeler perceives him to be. I would expect s. 3 counsel to be in a position to objectively ascertain Mr. MacAulay’s wishes, and to consider whether Mr. MacAulay has the capacity to instruct counsel of his choosing. Should Mr. MacAulay be found to have capacity to instruct counsel, he will be free to choose his own counsel, other than Mr. Wilford, to represent him in this proceeding.
Disposition
[49] Mr. MacAulay’s motion to transfer the within application to Central West Region is dismissed, without prejudice to other counsel to Mr. MacAulay bringing such a motion in accordance with the Rules and the Consolidated Provincial Practice Direction.
[50] Ms. Wheeler’s motion is granted.
[51] An order shall issue:
removing Mr. Wilford and AWPC as lawyers of record for Mr. MacAulay in this proceeding;
disqualifying Mr. Wilford and AWPC from acting on behalf of any party in this proceeding; and
directing the Public Guardian and Trustee to appoint s. 3 counsel for Mr. MacAulay in accordance with the SDA.
Costs
[52] Ms. Wheeler has been successful on her motion, and she is entitled to her costs. The parties are strongly encouraged to agree on the matter of costs. If they cannot agree, Ms. Wheeler shall serve and file written costs submissions not exceeding three pages, double spaced (excluding a costs outline and any offer to settle) within 14 days. Upon receipt of Ms. Wheeler’s written submissions, Mr. MacAulay and Mr. Wilford shall have 14 days in which to deliver similar written submissions. Reply submissions may only be made with leave.
Dietrich J.
Date: February 12, 2024
[^1]: References to “Mr. Wilford” alone, relating to Ms. Wheeler’s request that he be removed as Mr. MacAulay’s lawyer in the application and disqualified from acting for any party in the proceeding, shall include his professional corporation, AWPC.