Personal Costs Against Lawyer

Personal Court Costs Awarded Against Lawyer - Disinherited

C.A.S. of the R.M.of W. v C.T.and J.B. 2017 ONSC 318 awarded personal court costs of $100,000 against a lawyer for her role in a custody battle involved in the Children’s Aid Society.

The court found that the lawyer’s tactics and strategy had caused an unnecessary duplication of effort of counsel, unnecessary extra court attendances, and a significant consumption of court and counsel’s resources and taxpayer funding.

While this is an unusual development, it is not unheard of in Canadian jurisprudence were counsel’s behaviour is unacceptable irresponsible at it best reprehensible, at worst.  In fact, I sense it is a growing trend the courts attempts to deal with over crowded court lists that are made worse by the few lawyers that ultimately waste limited  court resources.
In a nutshell, decision to require a lawyer to pay court costs to a person is not predicated upon a finding of ineffective or inadequate counsel or upon that councils negligent conduct. Although such a finding may be relevant, the test is whether the lawyer has” wrote up costs without reasonable cause, or has wasted costs.”

Court costs are traditionally intended to:

a) indemnify the successful litigant;
b) encourage parties to settle disputes; and
c) sanction a parties unreasonable behaviour or parties that are unprepared ie costs wasted

[76] InRand Estate v Lenton (2009 ONCA 251 (CanLII)) at para. 5, the Ontario Court of Appeal found that the determination of costs against counsel requires a holistic and contextual approach to the entirety of the solicitor’s behaviour (not just during the trial only, as Ms. Sack argues) in order to “…produce an accurate tempered assessment” of costs.

Further, other case law confirms that the test for determining costs against counsel is a two-part test:

(1) did counsel cause costs to be unnecessarily incurred?

(2) should the court exercise its discretion to impose costs against counsel despite the requirement that it use extreme caution before doing so? (see Galganov v Russell (Township) )2012 ONCA 410 (CanLII)) at para 22. This decision reiterates the “extreme caution principle” set out in Young v Young (1993 CanLII 34 (SCC), [1993] 4 SCR 3 at para 263) which was also followed by Justice Hackland, in Carleton v Beaverton Hotel, 2009 CanLII 92124 (ON SCDC), [2009] 96 OR (3d) 391; 314 DLR (4th) 566 where, at para 15, he noted:

anLII 92124 (ON SCDC), [2009] 96 OR (3d) 391; 314 DLR (4th) 566 where, at para 15, he noted:

I agree with the appellant’s submission that the “extreme caution” which courts must exercise in awarding costs against a solicitor personally as stated in Young v. Young, means that these awards must only be made sparingly, with care and discretion, only in clear cases,

[76] In F. (V.) v F. (J.) (2016 ONCJ 759 (CanLII) at paras. 11-15) Kurz, Prov. J. elaborated  on the first part  of the test, as set down by the Ontario Court of Appeal in Galanov:

11          The Ontario Court  of Appeal offered the following directions in regard to the first part of the two-part test in Galganov:

a.    The first step is to determine whether the conduct of the lawyer comes within the rule; that is, whether his or her conduct caused costs to be incurred unnecessarily. To do so, the court must consider the facts of the case and the particular conduct attributed to the lawyer.

b.  The rule allowing costs against a lawyer is not intended as punishment for professional misconduct. Rather, it is as indemnity for the time wasted and expenses unnecessarily expended as a result of the conduct of a lawyer.

c.   Neither negligence nor bad faith is a requirement for imposing costs against a lawyer.

d.  Mere negligence or conduct that does not meet the level of negligence may be sufficient to attract costs against a lawyer.

e.   The costs rule is intended to apply “…only when a lawyer pursues a goal which is clearly unattainable or is clearly derelict in his or her duties as an officer of the court…”

f.   In determining whether the rule applies, the court must examine “the entire course of the litigation that went on before the application

Judge’.” This requires a “holistic examination of the lawyer’s conduct” in order to provide an “accurate tempered assessment”. But a general observation of the lawyer’s conduct is not sufficient. Instead, the court must look to the specific incidents of conduct that are subject to complaint, (my emphasis)

Occupational Rent – Competing Damages Between Co-Owners

Occupational Rent - Competing Damages Between Co-Owners

Ajayi v Oziegbe  2017 ONSC  2732 discussed the concept of occupational rent where one co owner occupies a jointly owned property to the exclusion of the co owner, and the co owner seeks damages for the use of the property and the occupying party seeks competing damages for the costs of carrying on the property such as maintenance and upkeep.

Occupation Rent and Carrying Costs

101      This brings me to Mr. Ajayi’s claim for occupation rent. The principles relating to occupation rent are set out in Erb v. Erb, 2003 CanLII 2112 (ON SC), where the Court stated at paras. 73 and 74:

In evaluating the claim for occupation rent, the jurisprudence establishes that a court has jurisdiction to grant occupation rent where it would be equitable and reasonable to do so. The court should look to a number of factors, including when the claim was first raised, the duration of the occupancy, as well as other circumstances existing between the parties: McColl v. McColl (1995), 12 R.F.L. (4th) 449; McKinlay v. McKinlay (1996), 22 R.F.L. (4th) 212. I subscribe to the observations of J.W. Quinn J. as set forth in paragraph 57 of Higgins v. Higgins, [2001] O.J. No. 3011. I think the case of Adams v. Adams (2001), 15 R.F.L. (5th) 1, relied upon by the defendant, to have little application to this case in that there the amounts paid by the husband were “prepayments” on the mortgage and were agreed by him to have been paid voluntarily for the family’s benefit. The expenses paid by the plaintiff in this case were not of that type or for that purpose.

I accept the defendant’s submission, supported as it is by remarks in Higgins, supra that as a basic proposition there should be an allowance for occupation rent if there is a claim for expenses during occupancy and prior to sale. The evaluation of those competing interests has to be decided based on all the circumstances in the case.

102      In resisting a claim for occupation rent, Ms. Oziegbe points to the decision of Horkins J. in B(J) v. M.(D.), 2014 ONSC 7410, where she states at para. 152:

The facts of this case do not support the respondent’s claim for occupancy rent. The respondent’s inability to use the matrimonial home arose from his criminal conduct when he assaulted the applicant. The applicant has been solely responsible for all of the household expenses since separation. It is not reasonable or equitable to award occupation rent given these facts. The request is denied.

103      When these decisions are reviewed, it is clear that the Court has the ability to consider the equities of the case in deciding whether to order occupation rent. The conduct of Mr. Ajayi in assaulting Ms. Oziegbe is a factor that supports denying Mr. Ajayi’s claim for occupation rent. However, I am of the view that this factor is outweighed by the factors in favour of granting occupation rent. These factors are:

a) The title to half the property should have been with Mr. Ajayi, and his equity has been tied up in the home, preventing him from investing it elsewhere.

b) Mr. Ajayi is responsible for the carrying costs for the home. As noted by Glithero J. in Erb, supra, where there is a claim for expenses there should be an allowance for occupation rent.

c) The delay in Mr. Ajayi obtaining his equity between September of 2015 and now is as a result of Ms. Oziegbe defending this case, and claiming that there was no resulting trust.

104      The parties have agreed on the amount that should be charged for occupation rent, and I have included that in my calculations in Appendix “1”. When the carrying costs are set off against the occupation rent, then Mr. Ajayi owes Ms. Oziegbe an adjustment of $5,773.44, which will be paid out of the proceeds from the house.

Avoiding Duplicate Litigation (Res Judicata)

Duplicate Litigation

Duplicate litigation is to be avoided and thus the legal concept of res judicata- when a court has decided the legal issue already it constitutes a bar to a subsequent action involving the same claim.

Alexander v Alexander 2017 BCSC 914 is a recent case dealing with this concept and states inter alia:

16      The doctrine of res judicata and its application was summarized by Ballance J. in Tylon Steepe Homes Ltd. v. Pont, 2011 BCSC 385beginning at para. 52:

[52] The doctrine of res judicata is a time-honoured cornerstone of Canadian justice. Where a cause or a fundamental issue has been decided, it is said to be res judicata and, absent special circumstances, is precluded from being adjudged a second time. When res judicata applies, a litigant is stopped by the prior suit, from proceeding in the subsequent action. The maxim has been traditionally regarded as an exclusionary rule of evidence. The paramount policy considerations include the avoidance of duplicative litigation, potential inconsistent results and inconclusive proceedings. Finality to litigation is the prime objective. (See generally: Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248 [Angle]; Grdic v. The Queen, [1985] 1 S.C.R. 810 [Grdic]; Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460[Danyluk]).

[53] Res judicata takes two distinct forms: issue estoppel and cause of action estoppel, indicating that there can be estoppel with respect to the entire cause or a discrete issue(s). Much of the judicial analyses of the doctrine spring from a scenario where it is a plaintiff who is attempting to relitigate a matter; however, the principles apply, with obvious modifications, to the attempted recycling of a defence.

[54] Generally speaking, the authorities require fastidious adherence to the constituent elements of res judicata in order to permit its application. However, even where the requisite ingredients are present, the court retains a residual discretion to decline to apply it if doing so would cause unfairness in the particular case: Danyluk at para. 33; British Columbia (Minister of Forests) v. Bugbusters Pest Management Inc. (1998), 159 D.L.R. (4th) 50, 50 B.C.L.R. (3d) 1 (C.A.) [Bugbusters, cited to D.L.R.]. As Finch J.A. (now the Chief Justice) emphasized at para. 32 in Bugbusters, the doctrine “inevitably calls upon the exercise of a judicial discretion to achieve fairness according to the circumstances of each case”.

[55] The three-fold requirements which must be established in order to successfully invoke issue estoppel are:

(1) that the same question has been decided and was fundamental, as opposed to collateral or incidental, to the decision;

(2) that the decision in the first proceeding said to create the estoppel was final; and

(3) that the parties to the first proceeding or their privies are the same persons as the parties, or their privies, to the subsequent proceeding:

(See Angle; Grdic and Danyluk).

[56] The “same question” test is a crucial element and a focal point of both types of estoppel under the res judicata umbrella.

17      With respect to the last of the three requirements, issue estoppel can be established through privity of blood, title or interest: Genesee Enterprises v. Abou-Rached, 2001 BCSC 59at para. 234; Giles v. Westminster Savings Credit Union, 2006 BCSC 1600at para. 45.

18      The test under Rule 9-5(1)(d) for striking an action on the basis of res judicata is whether it is “plain and obvious” that res judicata applies. The burden is on the applicant to establish the applicability of res judicata: see Worldwide Treasure Adventures Inc. v. Trivia Games Inc. (1996), 17 B.C.L.R (3d) 187 at 195.

19      Ballance J. continued at paras. 79 and 80 of Tylon Steepe Homes with a discussion concerning the relationship between the doctrine of res judicata and the doctrine of abuse of process:

[79] In response to perceived difficulties in demanding strict adherence to the constituent elements of res judicata, modern Canadian courts have developed the independent but related concept of abuse of process as a means of barring relitigation where permitting it to proceed would offend vital principles such as judicial economy, consistency, finality of legal disputes, and, perhaps most importantly, the integrity of the judicial decision-making process. Abuse of process is a flexible doctrine that finds its roots in the Court’s inherent residual discretion to prevent an abuse of its process.

[80] The concepts of res judicata and abuse of process are inter-related and share several overlapping features and common policy objectives. They are each extraordinary remedies to be applied sparingly: Chapman. Indeed, the decision in Saskatoon ultimately rested on abuse of process. It is key to appreciate that with respect to abuse of process the proper focus is on the integrity of the administration of justice and not the motive of the parties in terms. 

Property Partition and Sale Ordered for Joint Tenants

Property Partition and Sale Ordered for Joint Tenants

Bindley Estate v Quartermaine Holding Ltd. 2017 BCSC 672 ordered partition and sale of a property %50 owned by two parties where one party wished to sell and the other refused. They we unable to agree on a price for the respondent to buy out the petitioner’s interest. The petitioner estate wished to sell in order to wind up the estate of a deceased owner in a residential apartment .

The Court ordered a sale of the property pursuant to section 6 of the Partition of Property act.

Sections 2 and  6 of the act states: 

2 (1)  All joint tenants, tenants in common, coparceners, mortgagees or other creditors who have liens on, and all parties interested in any land may be compelled to partition or sell the land, or a part of it as provided in this Act.

6  In a proceeding for partition where, if this Act had not been passed, an order for partition might have been made, and if the party or parties interested, individually or collectively, to the extent of 1/2 or upwards in the property involved request the court to direct a sale of the property and a distribution of the proceeds instead of a division of the property, the court must, unless it sees good reason to the contrary, order a sale of the property and may give directions.

[27]        In McRae v. Seymour Village Management Inc., 2014 BCSC 714, a case involving a condominium development near Seymour Mountain in North Vancouver where 105 owners wanted to sell and 9 did not, Justice Fenlon stated at para. 20:

… [T]he Court, in exercising its discretion, is concerned with doing justice and must ultimately weigh the significance of the respondents’ reasons for objecting to the sale against the petitioners’ interest and reasons for wanting the [sale]. …

[28]        In the end, and as all the cases seem to agree, it is a matter of discretion under s. 6. In the exercise of the court’s discretion, the court must act judicially and fairly. One consideration will be whether an overriding fairness and similar result can be obtained by some other reasonable process: Richardson. v. McGuinness (13 December 1996), Vancouver Registry, C965381, (B.C.S.C.) at para. 34.

[38]        The court has a broad discretion to fashion a remedy that brings the parties’ dispute to an end in the fairest and most appropriate possible way. The respondent asks that if an order for sale is to be made, that I consider postponing it to allow for some tax planning and possible refinancing. The petitioner says that, given that this petition was filed some six months ago, the respondent has had sufficient time already.

[39]        I have considered the various options that may help a party solve this impasse. I find that the most appropriate remedy is to make the following orders:

a)     On or before June 9, 2017, and absent an agreement to the contrary, or absent any further court order, the parties will jointly appoint and engage an independent real estate broker (the “Broker”) to offer the Property for sale and obtain the highest price and most favourable terms (collectively called the “Sale Terms”) available on the open market. If the parties are unable to agree on the Broker to be engaged, the parties are at liberty to apply for an order in respect thereof.

b)     The respondent is at liberty to apply for an extension for the listing of the Property for sale past the June 9, 2017 deadline should the respondent consider it has appropriate grounds for an extension.

c)     Each of the parties may submit an offer to purchase the Property if either so wishes, provided that neither of them will act or omit to act in any way that affects the integrity of the sales process and the Broker’s mandate as set out in this order.

d)     Except as provided in subpara. (e) below, and subject to a right of first refusal, the Property will be sold pursuant to the sale terms, and upon completion of the sale, the net sale proceeds will be distributed equally between the parties.

e)     Instead of a sale of the Property, upon a determination of the sale terms, each of the parties may offer to purchase from the other that other’s 50 percent interest in the Property for an amount equal to the net amount that the vendor will receive if the Property is sold pursuant to the sale terms.

f)      If necessary, each party has liberty to apply to the court for directions with respect to the marketing of the Property or as to the conduct of sale on three days’ notice to the other if such directions are necessary.

g)     All necessary accounts, directions and inquiries may be taken, including a determination of net income owing to the parties, from the operation of Property, up to the date the sale of the Property completes.

h)     The parties have liberty to apply for the appointment of a trustee to conduct the sale of the Property and to distribute the net sale proceeds as the court directs.

Lawyer Duty Taking Will Instructions: Suspicious Circumstances

Lawyer Duty Taking Will Instructions: Suspicious Circumstances

The duty of a lawyer/solicitor  in taking will instructions when suspicious circumstances are present was discussed in Shroff v Schroff 2017 MBQB 51.

Suspicious Circumstances

Suspicious circumstances have been found to exist in a wide array of situations and are not necessarily sinister in nature. There is no checklist of circumstantial factors that will invariably fit the classification.

Commonly occurring themes include where a beneficiary is instrumental in the preparation of the will (especially where the beneficiary stands in a fiduciary position to the testator), or where the will favours “someone who has not previously been the object of [the testator’s] bounty and does not fall within the class of persons testators usually remember in their wills, that is to say their next of kin”: Longmuir v. Holland, 2000 BCCA 53, at para. 69 [Longmuir]; Heron Estate v. Lennox, 2000 BCSC 1553 at para. 67 [Heron Estate]. In Moore, N. Smith J. found the fact that the testatrix’s doctor had described her as no longer capable of managing her affairs and as suffering dementia around the time she made her will constituted a suspicious circumstance.

The suspicious circumstances may be raised by

(1) circumstances surrounding the preparation of the will,

(2) circumstances tending to call into question the capacity of the testator, or

(3) circumstances tending to show that the free will of the testator was overborne by acts of coercion or fraud.

Duty of the Solicitor When taking Will Instructions When Suspicious Circumstances Present:

[28] As to the role of a solicitor taking instructions from an elderly testator, he quoted with approval the following passage from Murphy v. Lamphier (1914), 31 O.L.R. 287 (H.C.) at 318 (at para. 81):

A solicitor is usually called in to prepare a will because he is a skilled professional man. He has duties to perform which vary with the situation and condition of the testator. In the case of a person greatly enfeebled by old age or with faculties impaired by disease, and particularly in the case of one labouring under both disabilities, the solicitor does not discharge his duty by simply taking down and giving legal expression to the words of the client, without being satisfied by all available means that testable capacity exists and is being freely and intelligently exercised in the disposition of the property. The solicitor is brought in for the very purpose of ascertaining the mind and will of the testator touching his worldly substance and his comprehension of its extent and character and of those who may be considered proper and natural objects of his bounty. The Court reprobates the conduct of a solicitor who needlessly draws a will without getting personal instructions from the testator, and, for one reason, that the business of the solicitor is to see that the will represents the intelligent act of a free and competent person.

[29] Guided by these principles, Hunter, J., concluded that the solicitor (at para. 93):

… did not go far enough, given the suspicious circumstances … to substantiate testamentary capacity. Further inquiries needed to be made to ascertain Ms. Peter’s capacity. Perhaps those inquiries were made, but if so, they were not documented and [the solicitor] has a very limited recollection of their conversations. If a solicitor has good reason to be concerned about testamentary capacity – and such seemed clearly to be the case here – then a systematic assessment of the testator’s capacity should take place, and if doubts remain then there should be an assessment by a physician or a psychologist.

[30] In Cousins Estate, Re, another will case where suspicious circumstances existed, Cullity, J., observed (at para. 70):

The obligations of solicitors when taking instructions for wills have been repeatedly emphasised in cases of this nature. At the very least, the solicitor must make a serious attempt to determine whether the testator or testatrix has capacity and, if there is any possible doubt – or other reason to suspect that the will may be challenged – a memorandum, or note, of the solicitor’s observations and conclusions should be retained in the file: see, for example, Maw v. Dickey (1974), 6 O.R.(2d) 146 (Ont. Surr. Ct.), at pages 158-59; Eady v. Waring [(1974), 2 O.R.(2d) 627 (Ont. C.A.)] …, at page 635; Murphy v. Lamphier … at pages 318-21. Some of the authorities go further and state that the solicitor should not allow a will to be executed unless, after diligent questioning, testing or probing he or she is satisfied that the testator has testamentary capacity. This, I think, may be a counsel of perfection and impose too heavy a responsibility. In my experience, careful solicitors who are in doubt on the question of capacity, will not play God – or even judge – and will supervise the execution of the will while taking, and retaining, comprehensive notes of their observations on the question.

Undue Influence: Shifts in Burden of Proof Means More Plaintiffs Win

Undue influence is nearly always done in secrecy. It’s behind closed doors. There’s never many witnesses. It’s the things that are said like, I’m going to put you in a care home if you don’t leave anything to me. There are no witnesses but it scares the hell out of the vulnerable person. They lose their freedom of thought and gradually, they lose their independency and they become very dependent on that caregiver and make their will accordingly.

It seems to me rather that one speaks of influence, one is really referring to the ability of one person to nominate the will of another whether it’s through manipulation or coercion or outright or subtle abuse of authority. Basically, they conclude with to dominate the will of another simply means to exercise a persuasive influence over him or her. You see, it’s not coercion now. It’s just persuasive influence. That’s a huge change.

Proving coercion is almost impossible. You have to have literally a gun to the head and witnesses witnessing that. But in these positions of domination and vulnerability, it’s just persuasive influence. The ability to exercise such influence may arise from the relationship of trust and confidence that may arise from other relationships as well. The point is that there is nothing per reprehensible about persons in a relationship of trust and confidence exerting influence, even undue influence over their beneficiaries. It depends on their motivation and objective to which they seek to achieve. And again, that’s an evidentiary matter but with the presumption, it’s a huge factor and a leg up. I predict there’s going to be more undue influence claims and that more plaintiffs are finally going to win.

Understanding Testamentary Documents

A testamentary document is like a will because the will is the most common form of that type of document. A will is a document that has its vigor and effect upon a death. In other words, a will is an invalid document until a death. It’s an important document but it’s not the type of document that you can take to the bank and borrow against until the actual death occurs and you can prove that you are a beneficiary.

Now, what’s the significance? Some documents look testamentary but may not be. While other documents do not necessarily look testamentary but might be. The legal test is whether the document requires its vigor and effect to be a death in order for the document to come into force and effect. The significance is is that if it is a testamentary document, then it must be signed in accordance with the Wills Act which requires two witnesses and the presence of the person signing the document all in the presence of each other. If it’s not validly witnessed in the court in such as that, then the document might not be valid. The article shows cases where the document is testamentary and cases where the document is found not to be testamentary.

How to Keep Wills Variation Out of BC Court

This video is about how to keep wills variation out of court which is basically what most testators want to do at the end of the day. The video and article is a very in-depth review of what the requirements are with respect to executing valid wills and dealing with various wills issues that arise in a state litigation such as ambiguities or missing pages or all sorts of problems that can arise. As I said, a very detailed examination of very, very many wills issues that can arise in a state litigation.

Understanding the Value of Life Estates

Life estates or life interests means that someone gets the use of a piece of property or some monies and investment or something along those lines for their lifetime and then after they pass away, the interest, whatever it was, goes to what is known as the remainder then.

Many issues can arise in the course of a life estate because many years, of course, are involved in the use of it and this video and paper deal with many of those types of issues. A life estate can be created by many different ways such as a will or a trust or a court order or a transfer or an intestacy. As it pertains, it lasts for a lifetime and then ceases to exist. The value of this can be a substantial sum of money. If it’s for example a house, it would be the value of the use of that property such as rent for the whole lifetime of the person or it may not be substantial enough at all depending on the circumstances.

2 Ways the Revocation of Wills Can Happen in Vancouver

A revocation of a will in British Columbia can happen in two different ways. For example, the test dater can rip it up with the intention of revoking it. He can burn it, destroy it, and any other matter of destruction of the will with the intention of revoking it, or it can happen by operation of law. For example, when a married couple divorced, the gift to the husband is revoked. The rest of the will is valid.

Revocation is a very important topic in the estate litigation issue as you can well imagine. It is important to safeguard that original will because if the original will cannot be produced, there is a presumption in law that the testator intended to revoke it provided that the will was in his or her possession at the time it went missing. This can have disastrous effects to some of the main beneficiaries. So, anything you need to know about revocation of wills, please feel free to contact us.