More and more, I am seeing siblings getting involved in fights over powers of attorney granted by their parents. Judges are becoming increasingly concerned with this type of litigation and are openly expressing their exasperation. Judges in these types of cases will base their ruling on the best interests of the elderly person who is at the centre of the dispute.
The ultimate question the Courts have to deal with is- who is to pay for the expensive litigation? In Ontario, the loser will usually be called upon to pay costs. However, where the litigation involves a fight over an elderly person who is still alive, the Courts are not inclined to allow costs to be paid out of the elderly person’s assets.
The high cost of power of attorney litigation and the need for reform has been the subject of judicial comment and criticism.
In a 2010 Ontario case called Re Baranek Estate, Justice Brown wrote:
“The so-called “battle of competing powers of attorney” is emerging as a growing area of litigation. This is a most unhealthy development. I suspect that when the Legislature passed the Substitute Decisions Act back in 1992 it intended to put in place a legal framework which would protect the affairs of the vulnerable elderly, not spawn a new breed of litigation which would see the hard-earned money of the vulnerable being exposed to claims for the payment of legal fees incurred by those whom they had appointed to protect their interests. In so commenting I am not passing judgment, one way or the other, on the conduct of Mr. Coon or Ms. Biegun. I am signaling that the inter-attorney litigation which erupted in this case is symptomatic of a much larger problem which, as Ontario’s population ages, risks turning into a very serious social issue. Indeed, I think the time may have arrived for the Legislature of this province to look into this problem of litigation involving competing powers of attorney, especially involving subsequent powers of attorney made during the latter periods of a person’s life when they are vulnerable to pressure, in order to see whether new protections are required to ensure that the assets of the vulnerable are used for one purpose only – the satisfaction of the needs of the vulnerable elderly while they are alive.”
The recent decision of Justice P.J. Flynn of the Ontario Superior Court of Justice in the case of Smith v. Ahonpa is an example of a judge’s exasperation with siblings who use the Courts as an arena to battle their differences without considering the well-being of the elderly parent.
Justice Flynn observed:
“Sometimes the court can’t do much after it has cursed the parties by calling for a pox on both their houses.”
In Ahonpa, the parties, who were brother and sister, were fighting over who should be managing their incapable father’s modest estate of approximately $ 58,000. The parties most likely spent more than that on legal fees fighting with each other.
The Court appointed the Public Guardian and Trustee as guardian to manage the parent’s affairs. The Court was very critical of both siblings but found the applicant Bonnie Smith the main culprit who “escalated the costs of the litigation beyond belief”.
The Judge refused to allow any costs to the parties to be paid out of the parent’s assets (other a modest amount for the capacity assessment). Each party had to bear their own costs and Ms. Smith as an indication of the Court’s displeasure with her actions was ordered to pay her brother $ 10,000.00 towards his claimed costs of almost $ 47,000.00!
The Judge stated that parties in estate litigation involving an incapable person should not expect as a matter of course that their legal costs will be borne by the estate of the incapable person. There must be a sense of proportionality in the costs claimed and the conduct of the parties will also be considered in determining costs.
Thanks to my hero B.B.King for inspiring the title to this blog post.