Costs in Guardianship Proceedings: There may be nothing at the end of the "litigation rainbow"

  • 09 novembre 2015
  • Alexander Turner

Individuals who engage in vigorous, well-meaning litigation over the management of an incapable person's property, or over the administration of an estate, might often assume that they will be reimbursed out of the estate at the end. After all, what they did was in the best interest of the incapable person – often a parent, or other close relative. Why should they have to personally bear the substantial costs of protecting that person's interests? The answer (with so many things) is, "it depends" and "sometimes".

Historically, it was the position of the English courts that costs in a dispute over an estate, or the interpretation of a will, should be paid wholly out of the estate. This was because there is a public policy goal in giving effect to a valid will that was executed by a competent testator. Alternatively, if the testator caused an ambiguity in the interpretation of a will, the estate should rightfully be on the hook for costs associated with untangling the testator's intentions.[1]

However, over time, these considerations tended to be ignored, and it was a "virtually automatic" presumption that costs would be paid out of the estate.[2] This left litigants with little incentive to resolve cases reasonably, or speedily.  The problem was fictionalized by Dickens in Bleak House.  Jarndyce v. Jarndyce, a fictional lawsuit in that novel, had gone on so long that " The little plaintiff or defendant, who was promised a new rocking-horse when Jarndyce and Jarndyce should be settled, has grown up, possessed himself of a real horse, and trotted away into the other world."

In Ontario, this approach became an "historical" one in McDougald Estate v. Gooderham, a 2005 decision of the Ontario Court of Appeal. Writing for the court, Gillesse J.A. stated that unless one of the traditional grounds discussed above applied, the costs of estate litigation should be determined in accordance with Section 131 of the Courts of Justice Act and Rule 57 of the Rules of Civil Procedure, and not automatically paid out of the estate.[3]  "Gone are the days when the costs of all parties are so routinely payable out of the estate that people perceive there is nothing to be lost in pursuing estate litigation."[4] To turn it around, following McDougald, litigants should perceive that there is something to be lost in pursuing estate litigation.

In the context of a guardianship dispute, Brown J. followed similar reasoning in Fiacco v. Lombardi.[5] In analyzing the cost claims of the parties to a contested guardianship, Brown J. held that when a cost claim is made against the estate of an incapable person, the court should question whether the incapable person derived any benefit from the litigation.[6]  In contested guardianships, there is a "significant risk" that the proceedings, and the litigants, will lose sight of this principle.[7]  Brown J. included a stern warning for the profession: "I must emphasize that it would be a serious mistake for members of the Bar to presume that all parties to contested capacity litigation will have their costs paid by the estate of the incapable person."[8]

In the case of either an estate or arrangements for an incapable person, the court appears to be concerned that costs are only paid out of an estate for defensible purposes.  In a contested guardianship, these purposes must benefit the incapable person.  In estate litigation, or a contested guardianship, litigants who use the court process as a means to wage a proxy war against the other parties, which does not assist the administration of the estate, or the interests of the incapable person, should find themselves bearing their own costs (and possibly those of other parties) when the dust settles.

There are three reported decisions in 2015 that show the varied results when these principles are applied: Childs v. Childs Estate,[9] Lisowick v. Alvestad[10] and Korczak v. Soltyka.[11] The facts of all three are broadly similar – two or more siblings or group of siblings are in a dispute with each other over the care and management of an elderly and incapable parent's property and personal care.

The principles outlined in McDougald and Fiacco were most closely followed in Childs. In Childs, the unsuccessful children were ordered to pay the costs of Section 3 Counsel and partial costs for the parties who were successful on the motion.[12]  The issues were not complex, and the unsuccessful parties had several opportunities to settle the proceedings, and refused to, in the face of ever increasing costs.[13]  In ordering that the remainder of Section 3 Counsel's fees were to be paid from the Estate, Tranmer J. noted that the incapable person had received great benefit through Section 3 Counsel's participation and that counsel achieved a proper outcome. In this case, the incapable person bore only those costs which were not paid by the unsuccessful parties.

In Lisowick, following the settlement of a guardianship dispute in favour of the respondent, the respondent daughter sought costs from the applicant. Andre J. reviewed the applicant's conduct and found that her legal fees were high despite the relatively simple issues before the court; the dispute should have been resolved without litigation; and that the applicant brought the proceedings to oust the respondent in the face of the expressed wishes of her father. However, despite all of this "misguided" activity, Andre J. held that because the applicant had commenced the proceedings in her capacity as her father's attorney for property and for personal care (notwithstanding that the power of attorney was later revoked by her father), costs owing to the respondent ought to be paid from the incapable person's estate.[14]  This is an odd result, as the relief sought by the applicant was not strictly necessary for her to carry out her duties as her father's attorney, and her application was successfully resisted by the respondent.

Korzcak dealt with the costs arising from an interim motion for directions in a contested guardianship. The incapable person's son had been appointed as his attorney for property, and responded to the application in that capacity. The court held that while the applicant daughter's interim motion for directions was premature, there was a considerable amount of animosity between the son and daughter which had complicated a relatively simple matter, and which was against the wishes of the incapable person. On the basis of the sibling conflict, each of the son and daughter were ordered to pay their own costs, and some of the costs incurred by their father's Section 3 Counsel.[15] This result stands at odds with Lisowick, as the respondent son in this case was essentially penalized for acting as attorney for property and personal care and responding to the proceedings in that capacity, notwithstanding the "sibling conflict" referred to in the judgment.

These cases show that the application of the principles in Fiacco can produce results that appear to be at odds with each other. In both Childs and Korczak, the court was concerned that the incapable person bear little, if any, costs that were incurred by Section 3 Counsel. In Korczak, this approach penalizes the respondent attorney for property and personal care, who appeared to be forced to participate in the application. Finally, in Lisowick, on the basis that she was acting in her capacity as attorney, the unsuccessful applicant was not ordered to pay costs to the respondent, despite taking actions that were described as "misguided." The result was that the incapable person ultimately bore a hefty bill for those misguided actions.  

What is clear is that parties to a contested guardianship proceeding should think twice, and litigate once. The court has a very dim view of parties who bring guardianship applications, or take positions within those applications, that do not benefit the incapable person. The court is likely to make that view known when it comes time to determine costs.

About the Author

Alexander Turner is an associate at Bales Beall LLP


[1] McDougald Estate v. Gooderham, 2005 CarswellOnt 2407, 255 D.L.R. (4th) 435 (Ont CA), para. 78 ("McDougald")

[2] Ibid, 79

[3] Ibid, para. 80

[4] Ibid, para. 85

[5] 2009 CarswellOnt, 82 CPC (6th) 235 ("Fiacco")

[6] Ibid, para. 33

[7] Ibid, para. 36

[8] Ibid, para. 37

[9] 2015 CarswellOnt 14291, 2015 ONSC 5724 ("Childs")

[10] 2015 ONSC 257, 2015 CarswellOnt 9752 ("Lisowick")

[11] 2015 ONSC 5868 ("Korczak")

[12] Childs, para. 22

[13] Childs, para. 19-20

[14] Lisowick, para. 30

[15] Korczak, paras. 8-12

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