Estate Litigation Blog
Costs Award Against Power of Attorney Personally
by Robin Spurr, Published: November 06, 2015
Scalia v. Scalia is a Court of Appeal decision, which provides guidance for Power of Attorney disputes, specifically the scope of the attorney for property’s authority with respect to joint assets, as well as the cost consequences for an unreasonable attorney for property. This was an appeal involving a dispute over the financial affairs of Joe Scalia. The dispute was between Joe’s son from his first marriage, John Scalia, and Joe’s widow and second wife, Pina Scalia.
Joe developed Alzheimer’s disease and was moved into a long-term care home in 2012 when John took over many of Joe’s affairs. John became concerned that Pina was diverting funds that belonged to Joe. John sought financial information from Pina about the whereabouts of certain monies, and information about Pina’s personal finances. When that information was not forthcoming, John emptied the joint account held by Pina and Joe and moved the funds into a trust in Joe’s name alone to which Pina did not have access. These funds were subsequently frozen by the bank as a result of the dispute. John also stopped depositing Joe’s pension income into the joint account so that despite the fact that they had always shared income and expenses equally, by the end of 2012 Pina was receiving little to no income from Joe.
In 2013, John, acting as Joe’s litigation guardian, commenced an application seeking, among other things, that Pina deliver information about her personal finances; and that she account for the rental proceeds and other funds from her and Joe’s joint account. Pina then filed her own application and sought among other things, the removal of John as Joe’s Power of Attorney; an order that the frozen funds be released back into her and Joe’s account, and an order for support from Joe pursuant to the Family Law Act.
The application judge dismissed Joe’s application and granted Pina’s application, in part. In dealing with costs, the application judge found that John had acted in bad faith and his conduct had led to these adversarial proceedings that split the family. The judge relied on the Substitute Decisions Act to find that John had a fiduciary duty to act with integrity and in good faith. By unilaterally withdrawing funds from the joint account and holding back support from Pina, the application judge found John had not acted in Joe’s best interests. For these reasons, the costs of Pina’s application were ordered to be paid on a substantial indemnity basis by John personally.
John appealed the application judge’s decision and was successful on two of the three substantive grounds of appeal. However, the Court of Appeal declined to overturn the cost award made against him personally, even though the panel found that John’s conduct was not considered bad faith.
The court set out the test for bad faith in the family law context, which is that the behaviour must be carried out with the intent to inflict financial or emotional harm, or to deceive the parties or the court. However, the court found that many of the facts the application judge relied on to find bad faith on John’s part could not stand, and as such John’s conduct on the record did not meet the threshold for bad faith.
Regardless, however, John, as a fiduciary, owed a duty to Joe to act in his best interests. The court found that the litigation was of no benefit to Joe. Rather, the litigation was the result of John’s ill-advised handling of Joe’s affairs. The litigation was disproportionately costly and was not a reasonable reaction to John’s concern about his father’s finances. The court of appeal went further to admonish Joe for his actions. As the application judge had noted, instead of assisting the family to resolve the issues at stake, John’s conduct turned the matter into an unnecessarily brittle and adversarial proceeding that split the family.
This Court of Appeal decision provides us with several insights regarding what Attorneys for Property can do with joint assets, specifically real property and bank accounts. Most notably though, the court made it clear that in litigation the Attorney will be held to standard of conduct that must be in line with his role as fiduciary. Despite the Attorney being successful on two of the three substantive grounds of the appeal and indeed clawed money back into the estate, the court still declined to overturn the cost award. This is a lesson to Attorneys for Property faced with contentious family disputes – they must remember that their fiduciary obligation in litigation is not solely a question of financial benefit for the incapable person. Rather, the Attorney must consider what is in the person’s best interests overall, which may include mending family ties and settling at an early stage. Otherwise, unreasonable conduct could result in the Attorneys finding themselves personally liable for the legal costs.
Recent Posts
- Our law clerk Clare Aikins teaches Estates Law Course
- Felice Kirsh and Mitchell Rattner speak about Section 3 Counsel at OBA Conference
- Further Suspension of Limitation Periods and Statutory Deadlines
- Estate Litigation: Using Technology to Adapt
- Suspension of Limitation Periods and Statutory Deadlines Amid COVID-19 Pandemic
- The Courts and COVID-19
- Virtual Witnessing of Wills
- We are open during COVID 19 pandemic
- Felice Kirsh: Not every issue is worthy of a passing of accounts
- Felice Kirsh discusses the importance of record-keeping by estate trustees
- Sender Tator on Dependant Support cases and "Egregious Conduct"
- Improper Conduct and Dependant Support
- Felice Kirsh on why DIY wills are a recipe for disaster
- Felice Kirsh, Jordan Oelbaum, and Sender Tator named to Best Lawyers 2020
- Felice Kirsh discusses how lawyers should prepare their clients for mediation
- Felice Kirsh discusses the benefits of evaluative mediators
- Felice Kirsh on "Is my estate dispute suited for mediation?"
- Felice Kirsh discusses the benefits of mediating estate disputes
- Presentation at the MCBNA
- Top 10 Wills, Trusts and Estates Boutique
- No Two-Year Limitation Period for Passing of Accounts
- Limitation Period on a Will Challenge: Shannon v. Hrabovsky
- Make a Will Month
- Felice Kirsh discusses the perils of finding heirs
- The partners at SKOT LLP are Lexpert-ranked
- Probate and Privacy
- Buzz Aldrin Guardianship Dispute & the Importance of Planning for Incapacity
- The expensive consequences of being unreasonable in estate litigation
- Legally Valid Gifts
- Powers of Attorney - Common Myths
- Costs in Estate Litigation
- Capacity to reconcile or divorce
- What’s the “issue” with not updating your will?
- Top 5 Wills, Trusts and Estates Boutiques in Canada
- Mutual Wills v. Mirror Wills
- Costs in Will Challenge Litigation
- Estate Planning - Digital Assets
- 2016 Amendments to the Income Tax Act – Graduated Rate Estates and Qualified Disability Trusts
- Capacity to Enter into Contracts
- Court of Appeal overturns "racist will" decision
- Best Lawyers
- Costs Award Against Power of Attorney Personally
- Applications and Actions: dismissal for delay
- Schnurr Kirsh Oelbaum Tator LLP is heading east!
- Spence v. BMO Trust Company: the case of the racist father
- Top 5 Wills, Trusts and Estates Firms in Canada
- Quinn v. Carrigan: "No litigation outcome is inevitable"
- What you need to know before starting a will challenge: Leibel v. Leibel
- Do the claims of dependants have priority over the claims of other creditors?
- Estate Administration and Automatic Vesting
- Elizabeth Bozek to Chair OBA program "Complex Passing of Accounts"
- Jordan Oelbaum speaks about the discovery process at Osgoode Hall Law School
- Felice Kirsh speaks to financial advisors about best practices
- Best Lawyers for 2015
- Felice Kirsh to chair conference at Osgoode Hall Law School
- Parents have testamentary freedom
- Pro Bono Students Canada's Wills Project
- Leading practitioners
- Choose a power of attorney you trust
- Elizabeth Bozek chairs seminar on the Consent and Capacity Board
- Consider whether a passing of accounts is worth it
- Best Lawyers for 2014
- When estate litigation gets tense, lawyers must stay cool
- Bar Admissions Fall 2013
- Brian Schnurr, Felice Kirsh and Jordan Oelbaum named to Best Lawyers 2013
- OBA Estates and Trusts Dinner
- Trust Company Best Practices
- Brian Schnurr and Felice Kirsh named to Best Lawyers 2012
- Best Lawyers Awards Brian A. Schnurr 2011 Lawyer of the Year, Trust and Estates - Toronto
Tags
- "issue"
- 2017 onsc 2704
- 2018 onsc 6593
- accounts
- advocatedaily
- application for orders and directions
- armitage v. the salvation army
- as estate trustee of the estate of jadwiga koziarski v jesse sullivan
- as estate trustee of the estate of jadwiga koziarski v jesse sullivan 2017 onsc 2704
- attorney
- automatic vesting
- bad faith
- beneficiaries
- best lawyers
- best lawyers award
- boutique law firm
- bowmanville
- brian schnurr
- c. c.12
- c. s.26
- canada lawyer magazine
- canadian lawyer
- canadian lawyer magazine
- capacity
- case comment
- cheque
- children born outside of marriage
- children's law reform act
- children’s law reform act
- community engagement
- compensation
- conference
- conferences
- consent and capacity board
- contract law
- corona
- coronavirus
- corporate trustee
- costs
- court
- courts
- covid
- covid 19
- covid-19
- creditors
- creditors' relief act
- depandant
- dependant support
- dependants
- digital assets
- discoverability
- discovery
- dishonesty
- donee
- doner
- elizabeth bozek
- emergency
- emergency order
- equalization
- estate
- estate administration
- estate litigation
- estate planning
- estate trustee
- estate trustees
- estates
- estates administration act
- estates and trusts summit
- estates and trusts toronto
- estates boutique
- estates list
- executor
- executors
- felice kirsh
- fiduciary
- fiduciary duty
- financial advisors
- fraud
- gifts
- graduated rate estate
- guardianship
- heirs
- henry koziarski
- husband
- ilco
- incapable
- incapacity
- income tax act
- inheritance
- inter vivos
- intestacy
- issue
- jordan oelbaum
- law clerks
- leading lawyers
- leibel v. leibel
- lexpert
- limitation
- limitation period
- limitations act
- litigation
- make a will month
- mcbna; presentation; estates
- mediation
- mirror wills
- misappropriation
- misconduct
- mortgage
- mutual wills
- ontario bar association
- osgoode hall
- pandemic
- passing of accounts
- poa
- power of attorney
- powers of attorney
- privacy
- probate
- public policy
- qualified disability trust
- r.s.o. 1990
- rob levesque
- sandra schnurr
- sender tator
- shannon v. hrabovsky
- shnurr kirsh oelbaum tator
- shnurr kirsh oelbaum tator llp
- slra
- spouses
- substitute decisions act
- succession law reform act
- superior court
- superior court of justice of ontario
- support
- suspension
- tax
- tax planning
- testamentary capacity
- testator
- top 10
- top 5
- toronto
- trial
- trust and estates toronto
- trustee
- trusts
- trusts and estate toronto
- trusts and estates
- trusts and estates toronto
- virtual
- wall v. shaw
- wife
- will challenge
- will drafting
- will litigation
- wills
- wills and estates
- wills trusts and estates
- witnessing