My colleague Sanaya Mistry has written about the case of Rudin-Brown et al. v. Brown, 2021 ONSC 3366, here and here on the admissibility of audio recordings and the validity of powers of attorney. Today, I want to delve into the costs decision, 2021 ONSC 6313, in this case.
Rudin-Brown is a Substitute Decisions Act, 1992 (“SDA”) proceeding over Carolyn Brown who was 91 years old at the time of the hearing. Carolyn has two living children, Gordon, who lives in Carolyn’s home and cares for her, and Missy. Missy started to notice issues with Carolyn’s memory in 2008 which became worse as time went on. In 2009, Carolyn named Jeanne, her sister-in-law, as her attorney for property, and she named Missy and Gordon as her attorneys for personal care. In 2016, Carolyn’s powers of attorney were changed and Gordon became the sole attorney for property and for personal care. Carolyn also made a new Will in 2016 where Gordon was the sole estate trustee and beneficiary. In contrast, Jeanne was the estate trustee in Carolyn’s 2009 Will, and the residue of Carolyn’s estate was left equally to Gordon, Missy, and a child of Gordon and Missy’s late sister. Missy and Jeanne commenced an application on the basis that Carolyn did not have capacity to execute the 2016 powers of attorney, and they sought orders to appoint themselves as Carolyn’s guardians for property and for personal care. Gordon commenced his own competing application to validate the 2016 powers of attorney, and for orders that would allow him to remain as Carolyn’s substitute decision maker.
Ultimately, the Court in Rudin-Brown found that the 2016 powers of attorney were invalid. The 2009 power of attorney for property appointing Jeanne was confirmed, and Jeanne and Missy became Carolyn’s guardians of person because it was not in Carolyn’s interest to have Missy and Gordon as her attorneys for personal care notwithstanding the validity of the 2009 POAs. Amongst other things, the Court took issue with Gordon’s disregard for Carolyn’s privacy when he recorded Carolyn’s telephone conversations and placed recording devices in Carolyn’s purse, and with how Gordon had failed to follow the interim orders of the Court, including a previous order to stop recording Carolyn’s conversations.
On costs, the Court relied on the principles that were articulated in Arvanitis vs. Levers, 2017 ONSC 3758, with respect to costs in SDA proceedings. Arvanitis stands for the proposition that the costs principles in estate litigation apply equally to costs in SDA proceedings which seeks to balance the purpose of costs orders in civil proceedings generally with the public policy objectives in giving effect to the intentions of those who are no longer able to speak for themselves, and to ensure that their affairs will be administered properly in accordance with those intentions.
Missy and Jeanne were found to be entitled to costs on a substantial indemnity scale, fixed at an all inclusive amount of $200,000.00, payable by Gordon.
However, at an earlier stage of the proceeding, Missy and Jeanne already received $100,000.00 from Carolyn’s assets and Gordon received $115,000.00 for their respective legal fees so that the Court could ensure that all parties would remain represented by counsel at the hearing. In the end, the Court permitted Gordon to reduce the amount owing to Missy and Jeanne by $50,000.00 through the $50,000.00 that Missy and Jeanna have already received from Carolyn’s assets. Gordon now has to pay Missy and Jeanne $150,000.00 in costs (being $200,000.00 minus $50,000.00). He was also additionally ordered to return $65,000.00 to Carolyn, whereas Missy and Jeanne were ordered to return $50,000.00 to Carolyn. Accordingly, $100,000.00 of Carolyn’s assets were applied to costs, and both Gordon and Missy were permitted to use their interest in Carolyn’s Estate to repay Carolyn if necessary.
Thanks for reading!