Guardianship Applications - Hull on Estates #195
Listen to: Guardianship Applications - Hull on Estates #195
This week on Hull on Estates, Nadia Harasymowycz and Paul Trudelle discuss the costs involved in guardianship applications. If you have any comments, send us an email at hull.lawyers@gmail.com or leave a comment on our blog.
Nadia M. Harasymowycz - Click here for more information on Nadia Harasymowycz.
Paul E. Trudelle - Click here for more information on Paul Trudelle.
Guardianship Applications - Hull on Estates- Episode #195
Nadia Harasymowycz: Hello and welcome to
Welcome to
Paul Trudelle: Hi and welcome to another episode of
Nadia Harasymowycz: And I’m Nadia Harasymowycz.
Paul Trudelle: How are you today, Nadia?
Nadia Harasymowycz: I’m great, Paul. How are you?
Paul Trudelle: Good. Happy New Year.
Nadia Harasymowycz: Thank you. Happy New Year to you too.
Paul Trudelle: This is our first podcast together and our first podcast of 2010 so I hope that it goes well and I hope that we have a good year and a good decade and I hope that all of our listeners have a good year as well.
When you last podcasted, Nadia, you were podcasting with David Smith and I understand you were talking about the issue of costs in estate litigation.
Nadia Harasymowycz: Exactly.
Paul Trudelle: And just to follow-up on that theme, I thought we would talk about a case today that deals with costs in the context of guardianship applications. The case that I would like to talk about is the case of Fiacco and Lombardi. It’s a 2009 decision of the Honourable Mr. Justice Brown. Jonathan Morse has blogged on this case on our blog page but I thought we’d spend a little more time dealing with it in our podcast today.
Nadia Harasymowycz: Sounds great. It’s an interesting case in that it comes down and demonstrates that costs are not necessarily going to come out of the estate of the incapable.
Paul Trudelle: Yeah, in his decision, Mr. Justice Brown refers to a prior decision of his dealing with the estates context where he highlights the importance or the relevance of the McDougall decision and how it deals with costs in the context of estate matters. The McDougall decision is a long-standing Court of Appeal decision that says that the costs won’t necessarily come out of the estate and in effect, the costs regime that applies is a loser pay cost regime. And there’s an interesting quote from Mr. Justice Brown in his decision where he says that “parties cannot treat the assets of an estate as a kind of ATM bank machine from which withdrawals automatically flow to fund their litigation.” And in this decision he makes that concept applicable to guardianship applications as well.
Nadia Harasymowycz: Now I think it’s interesting to note that this case does not necessarily state that costs never come out because in the earlier decision in this same matter, costs were awarded out of the estate.
Paul Trudelle: Right. I think this was a motion in the proceeding. The prior proceeding was a guardianship application brought by two siblings, was responded to by two other siblings with respect to who should be looking after mother’s affairs. There a guardianship award was made along with other terms and provisions. Costs were awarded out of the assets of the mother in the amount totalling $30,000 and Mr. Justice Brown points that out in a few different places that the costs were already paid out of the mother’s estate in the amount of $30,000 and with respect to this motion he was quite concerned about further depletion of her assets.
Nadia Harasymowycz: With respect to this motion specifically, the request being sought was actually enforcement of the Order from the previous motion and that’s one of the things that it seems Justice Brown takes specific issue with in that the motion was brought because two of the parties did not comply with the previous motion.
Paul Trudelle: Right. And I think he stresses that this isn’t something that was brought necessarily for the benefit of the mother. This was brought in order to effect compliance. He is quite critical of certain of the parties with respect to their actions or inaction with respect to complying with the Order and allowing the guardians to administer the mother’s property. And for that reason he takes a restricted view on the issue of costs and is clear that the costs here won’t come out of the estate.
Nadia Harasymowycz: On that perspective he also makes very clear that costs coming out of an estate are going to be considered and weighed with the benefit to the incapable.
Paul Trudelle: Right. He gives some background with respect to costs in guardianship proceedings and says that the Court will look at whether the incapable person derived any benefit from the legal work which generated those costs. In the context of the guardianship application, if it’s successful then that benefits the incapable person because the person now has someone appointed to look after their assets. The Court will normally award costs out of the estate where the application is successful; however he says that it’s the job of the Courts to assess whether those costs were reasonable.
Nadia Harasymowycz: And on that same note, Justice Brown makes clear that any time the Court is used as a battleground for family issues or family discrepancies or fights, that the Court is going to scrutinize the claims closely.
Paul Trudelle: Right. And I think that he notes here that in contested guardianship applications, there is often the well-being of the incapable person that’s kept in mind. However he states that there’s a significant risk that the parties may lose sight of the purpose which is to benefit the incapable person and the fight often degenerates into a battle amongst siblings or other family members. And he warns us that if that is what happens, then it’s clear that the costs won’t come out of the estate and the losing party will normally be responsible for those costs.
Nadia Harasymowycz: In order to avoid that kind of situation, Justice Brown also though puts forth a suggestion that a guardian can apply to the Court for directions regarding the administration of the property of the incapable person in an effort to avoid the problem of a family fight, as was in this case.
Paul Trudelle: Right. But even where you do make that application for directions, I think the Court will look at whether that application was necessary and will weigh the benefit to the incapable person in that light. If the application for directions is something that the Court feels shouldn’t be brought or wasn’t necessary, then you probably can’t look to the estate to recover your costs in that circumstance.
Nadia Harasymowycz: And that seems to be in keeping with the judgments in the Estates Bar.
Paul Trudelle: Yeah, I think that’s fair to say. In this case, the Court found that there shouldn’t be an award of costs out of the assets of the incapable person and found that the respondent in this case should be responsible for the costs of the applicant, as the respondents were the ones that caused or necessitated this motion.
Nadia Harasymowycz: The analysis actually with respect to the respondents’ position is quite short and simply discredits their argument that they should just be awarded costs at all.
Paul Trudelle: Right. They had claimed costs of $4,500. It’s dismissed simply as being a preposterous claim. It was they that failed to comply with the Order and caused this motion. With respect to the applicants’ costs, even though they were awarded to the applicants and payable by the respondents, Mr. Justice Brown took a very close look at their Bill of Costs in determining what amount or quantum of those costs the respondents had to pay.
Nadia Harasymowycz: The end result in that situation, though, was that approximately $12,000 was awarded to the applicants to support their costs claim.
Paul Trudelle: Right. Their initial claim was for $24,000. It was reduced, based on the hourly rates claimed and on the ground that not all of the work was necessarily done in furtherance of this motion. I think the upshot of this is that in guardianship applications as well as in estate matters, you have to keep an eye on the issue of costs and who will ultimately bear the costs at the end of the day or who may be responsible for those. Mr. Justice Brown states that it’s a mistake for counsel to think that those costs will necessarily come out of the estate.
Okay, I think that is a summary of the issue of costs and the cautionary tale with respect to what costs you can expect to be responsible for if you’re responding to an application or bringing an application and something that must be kept in mind. Keep in mind that it’s always the best interests of the incapable person that must be examined and kept at the forefront. Battles that degenerate as Mr. Justice Brown said into a squabble between siblings will be met with a harsh cost award at the end of the day.
Nadia Harasymowycz: And I think that brings us to the end of this week’s discussion. Thanks for listening and thanks for joining me today, Paul.
Paul Trudelle: Thank you, Nadia. It was a pleasure working with you as usual. And we look forward to podcasting again.
Nadia Harasymowycz: And we look forward to hearing from our listeners. You can send us an e-mail at hull.lawyers@gmail.com and be sure to visit our blog at estatelaw.hullandhull.com where you’ll find even more information and discussion on today’s practice of estate law. We hope that you enjoyed the show. I’m Nadia Harasymowycz.
Paul Trudelle: And I’m Paul Trudelle. And just before we leave, I just wanted to put a quick plug in for our Hull & Hull Breakfast Seminar Series. Our next Breakfast is on Thursday, January 21st and I’m hoping that you, the listeners, will be able to attend or participate by way of webinar. You can go to our web page for information on that seminar as well. Thank you. I’m Paul Trudelle.
Nadia Harasymowycz: And I’m Nadia Harasymowycz.
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