In Newell v. Newell (2011 ONSC 3228), the court awarded full indemnity costs to both parties to a guardianship dispute, despite the fact that neither party was wholly successful and the application and cross-application had become moot as a result of the death of the incapable mother.
In what Justice Salmers described as “a very high-conflict and hotly contested matter,” Madeline’s children fought over her personal care and the right to manage her property. Two of Madeline’s children, Donald and Catherine, brought an application to be appointed as her guardians of personal care and property and to have Madeline declared incapable. Two of Madeline’s other children, Edward and Bernadette, brought a cross-application to confirm the validity of a power of attorney appointing them.
The parties attended a three day mediation and an agreement in principle was signed. Problems arose after mediation and the settlement was not implemented. Edward and Bernadette brought a motion to enforce the settlement as set out in the agreement in principle. While Edward and Bernadette were ultimately unsuccessful in the motion, Justice Salmers was satisfied that Edward and Bernadette were entitled to full indemnity costs for the motion as they acted reasonably and were fulfilling their duties as attorneys for property for Madeline. Justice Salmers rejected Donald’s reasons for opposing the motion for judgment but acknowledged that Donald’s counsel was successful in arguing that because Catherine never consented to the settlement, it could not be enforced. He granted Donald full indemnity costs.
Madeline died before a final order was made on either the application or cross-application and the issues raised in both applications became moot. In ordering costs for both parties for the application, cross-application, and the settlement approval motion, Justice Salmers considered that no party had greater success than any other party on either the application or cross-application and there was no evidence that either application was frivolous. Justice Salmers noted that there were strong public policy reasons to support full indemnity of all legal costs for guardians, trustees, and attorneys. He found that Edward and Bernadette acted reasonably in bringing the cross-application to enforce Madeline’s power of attorney appointing them.
This cost decision reinforces the importance of full indemnity costs for attorneys who might otherwise be reluctant to bring or defend litigation involving incapable persons.
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