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October 26, 2009

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PAGE 8 NEW An online resource tool 1.800.263.3269 Bestcase earlug.indd 1 3/26/08 11:52:01 AM Focus On TRUSTS & ESTATES LAW Judge emphasizes the loser pays principle The ATM is closed, courts say BY I. JOHN HARVEY For Law Times he courts are increasingly voicing their displeasure at litigants who expect the estate to fund their squabbles over wills, win or lose. Th e door to the estate's bank machine slammed shut Sept. 9 this year when Superior Court Justice David Brown handed down his decision in the matter of Fiacco v. Lombardi. Somewhat ironically, Brown T resorted to quoting a decision he made in March this year in Salter v. Salter Estate, saying it's time the profession started paying atten- tion to existing jurisprudence. "Parties cannot treat the as- sets of an estate as a kind of ATM bank machine from which withdrawals automatically fl ow to fund their litigation," Brown wrote. "Th e 'loser pays' principle brings needed discipline to civil litigation by requiring parties to assess their personal exposure to costs before launching down the road of a lawsuit or a motion." Both decisions have sent rip- ples through circles of practitio- ners working in estates litigation, says Sender Tator of Schnurr Kirsh Schnurr Oelbaum Tator LLP. "In tough times, we tend to get busier in estates because people are looking for money wherever they can get it," says Tator. "I have to applaud [the decision], especially the refer- ence to the ATM. It's quite a statement." He adds that while the courts have been clearly signal- ling this move, up until fairly recently there was consensus in the profession that it was always worth the gamble of bringing a claim because costs were usu- ally covered out of the estate. "It was hard to explain to clients that their brother could continue to litigate on the as- sumption the costs would be covered. Now, you can explain that there will be an account- ing at the end and, if the court sees the facts our way, the costs will apply to the losing party." Still, Tator says, the appetite for litigation is balanced by the value of the estate. "Unless there are millions in the estate, it doesn't justify going to trial," he says, noting his fi rm also provides alternative dispute resolution services, a route it nursing home. She had granted her four children power of at- torney for personal care and a continuing power of attorney for property in 2003. However, the four siblings couldn't agree and by 2008 were litigating over guardian- ship. In January this year, the court appointed Carmela Fi- acco and Antonio Lombardi as her joint guardians for property and of the person along with several provisions to ensure prudent action. In June, costs were fi xed by a 'Do we want to dissuade those who need protection through legal inter- vention from taking steps because of costs risks?' asks Kimberly Whaley. prefers for its own clients because it's based in Toronto where me- diation is mandatory before trial. "I think in the eight years I've been here we've had three trials," he points out. Brown's decision in the Fiacco case revolved around the ailing Maria Lombardi, who suff ered from dementia and was in a Key Developments in Estates and Trusts Law in Ontario, 2009 Edition Estates and trusts law is evolving. Make sure you stay up to date. taxing offi cer at $21,398 for the applicants, Fiacco and Anto- nio, and $8,624 for the respon- dents, Giovanni Lombardi and Giuseppina Lombardi. Th at made a total of $30,022 to be paid from Maria's estate. Trouble soon arose when the newly appointed guard- ians couldn't obtain clear in- formation about how much of their mother's property Giovan- ni and Giuseppina controlled. After returning to court for di- rection, it was clear that Giovanni and Giuseppina had "unlawfully kept assets of Maria for over half a year" and that the amount was about $225,000. "I fi nd that the respondents, Giovanni Lombardi and Giusep- pina Lombardi, failed to comply with the order of Cameron J. that they account for their mother's property," wrote Brown. "It took this motion by the guardians and my order of Aug. 21 to prompt them to identify the assets of their mother which they were holding. When a court makes an order de- signed to protect the property of a vulnerable person, such as Maria Lombardi, it is not acceptable for any person, including the chil- dren of the incapable person, to fail to comply with that order. "Th e misconduct of the re- spondents in this case has been very serious; their delay in turn- ing over assets has put a strain on the ability of their mother's estate to pay for her ongoing needs." But it was on the issue of costs that Brown was especially stern. "Th e applicants sought their costs of this motion in the amount of $24,645.02 against the respondents or, alternatively, out of the estate of Maria Lom- bardi. Th e respondents sought their costs of $4,509.12 payable by the estate," he wrote. "Let me recall that the assessed costs of the contested guardianship applica- tion amounted to $30,022.22 paid out of Maria's assets. Her children are now asking that their mother's property be depleted by another $29,154.14 to fund their continuing sibling rivalry." Citing his own decision in Published annually, this book brings together a team of leading practitioners who provide expert insight into the latest noteworthy developments in estates and trusts law. Find out how these key developments will affect your practice and your clients, now and in the future. Articles include: • View from the Bench by • Personal Trusts by • Taxation of Trusts and Estates by • Insurance, RRSPs and RRIFs by • Family Law Issues in Estate Litigation by • Passing of Accounts, by • Conflict of Laws in Dependants' Relief Matters by • Will Challenges by • Claims By or Against an Estate by • Costs in Estate Litigation by • Solicitor's Liability by • Powers of Attorney by Key Development in Estates and Trusts Law in Ontario, 2009 Edition – helps you stay abreast of key statutory and case law developments in estates and trusts law in Ontario. Order your copy today! Hardbound • 176 pp. • August 2009 Standing order $105 • P/C 0241140000 Current edition only $115 • P/C 0241010000 ISSN 1916-8349 Salter and also citing a Court of Appeal ruling in McDougald (Estate) v. Gooderham, he wrote: "Estate litigation, like any other form of civil litigation, operates subject to the general civil litiga- tion costs regime established by s. 131 of the Courts of Justice Act and rule 57 of the Rules of Civil Procedure, except in a limited number of circumstances where public policy considerations per- mit the costs of all parties to be ordered paid out of the estate." Despite those words, lawyer Kimberly Whaley of Whaley Es- tate Litigation urges a little cau- tion in approaching the issue. "Conduct is often a key ele- For a 30-day, no-risk evaluation call: 1.800.263.2037 Canada Law Book is a Division of The Cartwright Group Ltd. Prices subject to change without notice, to applicable taxes and shipping & handling. www.lawtimesnews.com Croll_Key Developments (LT 1-3x4).indd 1 7/22/09 2:57:54 PM LT0727 ment," she says. "But of even greater consider- ation should be the whole of the principles enunciated in the con- cepts of access to justice and pro- portionality. Th ese concepts do not simply mean access to quick- er court proceedings and to coun- sel at a lesser cost. Do we want to dissuade those who need protec- tion through legal intervention from taking steps because of costs risks? Is that the main objective? I suggest not." LT OctOber 26, 2009 • Law times Melanie Y Madam Justice Bonnie Croll and Melanie Y Paul Gibney, Robin Goodman, H W Ian H ith contributions by: Mr. Justice David M. Brown, Fauzia Ahmed, Jeanne Chiang, S ull, Jonathan Lancaster, Martha McCarthy, Suzana Popovic- Susan Slattery, Kristina Soutar, Jasmine Sweatman, Corina W Montag, Archie Rabinowitz, eigl, Kimberley W usan Easterbrook, eather H ach ansen, haley and Fauzia Ahmed Archie Rabinowitz Susan Easterbrook Jasmine Sweatman ach Soutar and Jeanne Chiang and Heather H W Mr. Justice David M. Brown Susan Slattery ansen Paul Gibney, Kristina Robin Goodman eigl and Jonathan Lancaster Kimberly W Ian H ull and Suzana Popovic- Martha McCarthy Corina haley Montag

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