Shea v. The Estate of Shea

Shea v. The Estate of Shea Court Supreme Court Date 2002-06-03 Citation 2002 NSSC 146 Docket P 51527 Judge/Registrar/Adjudicator LeBlanc, Arthur J. (Honourable Justice) (SC) Document Type Decision Decision Content Date: 20020603 Docket: P.No. 51527 CANADA PROVINCE OF NOVA SCOTIA IN THE SUPREME COURT OF NOVA SCOTIA [Cite as: Shea v. The Estate of Shea, 2002 NSCC 146] BETWEEN: STEPHEN SHEA and ROXANE SHEA APPELLANTS - and - BONNY ELAINE MANKTELOW, EXECUTRIX OF THE ESTATE OF VERNET ERNEST SHEA and BRIAN SHEA RESPONDENTS DECISION HEARD: Before the Honourable Justice Arthur J. LeBlanc in Halifax, Nova Scotia, on January 24th, 2002 and February 18th, 2002 DECISION: June 3rd, 2002 COUNSEL: David A. Grant, for the Appellants John D. O’Neill, for the Respondent LeBlanc J. [1] This appeal is from a decision of the Registrar of Probate rendered November 13, 2001, to order costs to be paid by the appellants, Stephen and Roxanne Shea, and another party, Brian Shea. The grounds of appeal as expressed by the appellants are as follows: 1. The Learned Registrar of Probate erred in awarding costs on a solicitor client basis. 2. The Learned Registrar of Probate erred in awarding costs against three persons jointly where the cost, if attributable against each of them, were separate from each of the others. 3. The Learned Registrar of Probate erred in awarding costs against Roxanne Shea, who is not an heir nor was a proper party to the Citation. 4. The Learned Registrar of Probate erred in awarding costs for an attachment Order which was issued in the Supreme Court of Nova Scotia rather than the Court of Probate. 5. The Learned Registrar of Probate erred in awarding costs against Stephen Shea and Roxane Shea in any event since under Section 131 (1) of the Probate Act she only has authority to award costs against the party “against whom the decision was given”. Facts [2] Vernet Ernest Shea, father of the appellant Stephen Shea and the respondents Bonny Manktelow and Brian Shea, passed away in May 2001. In June of 2001 the Registrar issued a Citation to show cause to the appellants, upon the Petition of Ms. Manktelow, executrix of the estate, requiring them to show cause why a list of assets and property of the deceased in their possession, as well as the assets and property of the deceased in their possession, should not be delivered or paid over to Ms. Manktelow as executrix, at a hearing scheduled for August 24, 2001. [3] At the show cause hearing the appellants took the position that certain monies in their possession were a gift from the deceased. The hearing records indicate that the Registrar found that the gift of money is under the jurisdiction of the Supreme Court and that the matter was to be dismissed. The Registrar then went on to award costs against the appellants and Brian Shea to be paid on a solicitor-client basis. The taxation of the Bill of Costs was heard by the Registrar on October 18, 2001, and the Registrar subsequently ordered the amount of $8419.71 to be paid by the appellants and Brian Shea. Analysis [4] Both parties agreed at the hearing of this appeal that the Registrar, at the initial hearing, had decided that she did not have jurisdiction to hear the matter as the gift of money is under the jurisdiction of the Supreme Court. Similarly, both parties agreed that the Registrar had ordered that a teddy bear be returned to the respondent Ms. Manktelow. [5] At the outset of this appeal, I sought the submissions of counsel as to whether the Registrar of Probate had jurisdiction to make an award costs after having decided that she lacked jurisdiction. [6] Counsel for the appellants, David Grant, submits that the Registrar did not have jurisdiction to award costs. Mr. Grant draws attention to the case of In re The Workmen’s Compensation Act, Canadian Pacific Railway Company and Order A-43151 of the Workman’s Compensation Board [1950] 1 W.W.R. 673 (Man .C.A.) in which the court stated at page 680: Lack of jurisdiction to pronounce it deprives a judgement of any effect whatever: Archbishop of Dublin v. Coote & Lord Trimlestone (1849) 12 Ir. Eq. R. 251 [7] This statement of the law was expressed more recently in the case of Graham v. Canada, [2000] F.C.J. No. 1831 (F.C.T.D), where Tremblay-Lamer J. stated at paragraph 30: If on hearing the evidence on the merits a judge comes to the conclusion that he does not have jurisdiction ratione materiae to hear a case, he must decline to hear it: this is a rule of public order. Tremblay-Lamer J. stated further at paragraph 32: Although this line of authority has developed in accordance with art. 164, Quebec Code of Civil Procedure, the principle has also been recognized in the common law jurisdictions. A judgment rendered without jurisdiction is null and void and maybe ignored. This is what the Ontario Court of Appeal held in McIntosh v. Parent [[1924] 4 D.L.R. 420]: It is a well recognized principle that the lack of jurisdiction in the Court deprives the judgment of any effect whether by estoppel or otherwise, even where the party alleged to be estopped himself sought the assistance of the court whose jurisdiction is impugned: Rogers v. Wood (1831), 2 B. & Ad. 245; Dublin (Archbishop) v. Trimleston (1847), 12 Ir. Eq. R. 251; Toronto Railway Co. v. Toronto Corporation, [1904] A.C. 809, 815. [Footnotes omitted] [8] Mr. Grant also points out the case of Logan v. Nova Scotia (Denturist Licensing Board) (1994), 129 N.S.R. (2d) 269 (S.C.). One of the issues in that case was whether the Denturist Licensing Board of Nova Scotia (the Board) erred in awarding costs in the circumstances. In that case the relevant legislation was the Denturist Act, R.S.N.S. 1989, which read: 8(5) Following the hearing, the Board may order *** (d) the licensee or applicant to make payment to the Board of costs incurred by the Registrar and the Board in conducting the hearing. [Emphasis added.] Hall J. stated at paragraph 26 and 27: The Legislature has limited the Board's power to order payments of costs to those incurred in conducting the hearing. This does not give the Board authority to recover all its costs with respect to the investigation of a complaint and preparation for a hearing, but only those costs associated with "conducting the hearing". In my opinion the Board does not have carte blanche to charge to the person complained against all its costs of the hearing but only those directly connected to the conduct of the hearing. In exercising its discretion whether to order the payment of costs, in my opinion, the Board is subject to the same constraints as a judge or court in exercising the discretion to award costs in a court proceeding. It is well established that the discretion in the awarding of costs must be exercised judicially. That is to say that the Court must not act capriciously, but on the basis of reasons connected with the case. See Bent v. N.S. Farm Loan Board (1979) 30 N.S.R. (2d) 552 and Booth Fisheries Canada Company Limited v. Province of Nova Scotia (1978) 24 N.S.R. (2d) 228. The present case similarly requires consideration of the powers to order payment of costs conferred upon the Registrar by the Legislature in the Probate Act, and whether such powers are limited. [9] Counsel for the respondent, John O’Neill submits that the Registrar did have jurisdiction to award costs. Mr. O’Neill states at page 4 of his written submission that “...the Registrar has jurisdiction under Sections 129 and 139 of the Probate Act to award costs...” Section 129 and 139 are as follows: Cost and Fees Act 129 The solicitors, counsel and other officers of the court of probate, shall respectively be entitled to take for the performance of duties and services under this Act, the appropriate fees mentioned in the Cost and Fees Act as therein prescribed. Costs of appeal 139 (1) The Appeal Division of the Supreme Court may, in its discretion, order the costs of any appeal to be paid by the party who fails on such appeal, or out of the estate, or may refuse costs. Enforcement of payment of costs (2) The payment of costs may be enforced against an appellant by an execution or an action on the appeal bond, and against other parties by an execution. Section 129 refers specifically to the cost of the officers of the court of probate. This provision therefore deals only with costs incurred in conducting the hearing, not with individual parties costs in their preparation for the hearing. This section therefore does not give the Registrar the jurisdiction to award the solicitor-client costs that she did. Section 139 deals with the Appeal Division of the Supreme Court’s discretion to award cost. I am unable to see how this section gives the Registrar any jurisdiction to award costs. [10] The only other section which Mr. O’Neill suggests gives the registrar any authority is Section 131. This section reads as follows: Order for costs 131 (1) In any contested matter the court may, in its discretion, order that costs of and incident thereto to be paid by the party against whom the decision is given, and if such party is an executor or administrator, to be paid out of his own pocket or out of the estate of the deceased, as is just and proper. [Emphasis added]. In his written submission Mr. O’Neill states “... Section 131 of the Probate Act is discretionary and is not restrictive of the Registrar’s authority to award costs.” However, I feel that the section is “discretionary” to the extent that the court may or may not order costs, as it sees fit. If the court chooses to exercise its discretion, it can only order costs to be paid by the party against whom the decision is given. Mr. Grant indicates, and I would agree, that s. 131 could not be applied in the present case because it only provides for an award of costs against an unsuccessful party. As the matter was ostensibly dismissed for lack of jurisdiction, neither party could be “unsuccessful.” [11] I feel that if the legislature intended that the Registrar or the Court of Probate have the authority to award costs where a proceeding is dismissed for want of jurisdiction, then it should have expressly provided for such a result in the Probate Act. For example, Rule 57.05 (3) of the Ontario Rules of Civil Procedure provides: 57.05 (4) Where a proceeding is dismissed for want of jurisdiction, the court may make an order for the costs of the proceeding. There is no similar provision in the Probate Act. Furthermore, the position of Registrar of Probate, being as it is established by the Probate Act, can only exercise the powers conferred upon it by its enabling legislation (see R. v. 974649 Ontario Inc. (2002), 206 D.L.R. (4th) 444 (S.C.C.)). [12] Both Mr. O’Neill and Mr. Grant referred me to the principle of “functus officio.” The Supreme Court of Canada in Chandler v. Alberta Association of Architects [1989] 2 S.C.R. 848, considered this principle, and Sopinka J., writing for the majority, referred to several definitions of the term at paragraphs 37 and 39: Jowitt's Dictionary of English Law (2nd ed. 1977) defines functus officio as "having discharged his duty"; an expression applied to a judge, magistrate or arbitrator who has given a decision or made an order or award so that his authority is exhausted... *** Black's Law Dictionary (5th ed. 1979) defines functus officio as "a task performed": Having fulfilled the function, discharged the office, or accomplished the purpose, and therefore of no further force or authority. Applied to an officer whose term has expired and who has consequently no further official authority; and also to an instrument, power, agency, etc., which has fulfilled the purpose of its creation, and is therefore of no further virtue or effect. At paragraph 40, Sopinka J. went on to write: The doctrine of functus officio states that an adjudicator, be it an arbitrator, an administrative tribunal, or a court, once it has reached its decision cannot afterwards alter its award except to correct clerical mistakes or errors arising from an accidental slip or omission (Re Nelsons Laundries Ltd. and Laundry, Dry Cleaning and Dye House Workers' International Union, Local No. 292 (1964), 44 D.L.R. (2d) 463 (B.C.S.C.)). "To allow adjudicator to again deal with the matter of its own volition, without hearing the entire matter 'afresh' is contrary to this doctrine" (appellants' factum, at p. 19). [13] Mr. Grant submitted that the Registrar was functus officio, having discharged her duty, after she held that she did not have jurisdiction to hear the matter. Therefore her authority was exhausted and she did not have jurisdiction to make an order for costs. The Registrar could not afterward assume authority, according to the Chandler case, except to correct clerical mistakes or errors arising from an accidental slip or omission. [14] In his written submission Mr. O’Neill cited at length from the decision of the Nova Scotia Court of Appeal in R. v. Simpson (J.) (1998) 172 N.S.R. (2d) 182, in support of his contention that the Registrar had jurisdiction to award costs. This decision dealt with the principle of “functus officio”. In this case Roscoe J.A. expressed the opinion at paragraph 26 (not reproduced in Mr. O’Neill’s written submission) that once an adjudicator is “functus officio,” in order for a costs award to be valid, there must be some other source of jurisdiction. As I have already outlined, there is in fact no other source of jurisdiction. [15] Mr. O’Neill states in his written submission at page 5: “To allow the Appellant to escape the consequences of an award of costs for having adopted a course of action whereby the Estate was required to call upon the processes of the Court to simply establish that the Appellants, (Stephen Shea’s), possession of monies in question and then derail the Show-Cause process by counsel’s formal admission of Stephen Shea’s possession of the monies and assertion of gift is an abuse of process. The purpose of the show cause hearing was to require the parties to show why certain properties should not be delivered. Counsel’s formal submission, at the show cause hearing, of Stephen Shea’s possession of the monies and the assertion of gift, can not be said to have “derailed” the show cause process. Indeed, by this formal submission, it would appear counsel did what was required for the hearing, giving, as requested, a reason why these monies should not be delivered to the executrix. In fact, counsel for the appellants wrote a letter on August 9, two weeks before the hearing, asserting their claim of gift. [16] Mr. O’Neill submitted at the oral hearing that the Registrar acquired the requisite jurisdiction to hear the matter when she ordered the appellants to return a teddy bear to the respondent executrix. This assertion can not be maintained. The teddy bear was apparently of nominal value. Having determined that she did not have jurisdiction to hear the matter, the finding that the appellants must return the teddy bear was an ancillary matter, and can not justify the subsequent award of costs. [17] For these reasons, the Registrar did not have jurisdiction to make an award of costs. [18] The reasons outlined above may be sufficient to dispose of the appeal, however solicitor-client costs should also be addressed in the event that I have reached the above conclusion in error. Saunders J. canvassed the law of solicitor-client costs in Nova Scotia in his decision rendered in Balders Estate v. Nova Scotia (Registrar of Probate, County of Halifax) (1999), 181 N.S.R. (2d) 201 (S.C.) (hereinafter Balders Estate). In this case the applicants sought solicitor-client costs from the government of Nova Scotia, arguing inter alia that the government's conduct forced the applicants to embark on useless and expensive litigation. [19] Saunders J. referred to the type of exceptional circumstances said to justify an award of costs on a solicitor-client basis. At page 206 he stated: ... It is useful to recall the decision in Young v. Young (1993)108 D.L.R. (4d) 193, wherein Justice McLaughlin, for the majority, speaking to the matter of solicitor/client costs which were in fact awarded, on a limited basis, in that case, said, at p. 283: " ... Solicitor‑client costs are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of the one of the parties. Accordingly, the fact that an application has little merit is no basis for awarding solicitor‑client costs;..." (underlining mine) The limited grounds on which solicitor/client costs can properly be entertained are clearly established. In MacDonnell v. M & M Developments Ltd. et al. (1997), 164 N.S.R. (2d) 81 at p. 97, I observed: "The question then becomes whether costs ought to be awarded on a party and party or solicitor and client basis? I have studied the cases to which I was referred by counsel. It is clear from such cases as Roose, supra and Brown v. Metropolitan Authority et al. (1996), 150 N.S.R. (2d) 43; 436 A.P.R. 43 (C.A.) that in Nova Scotia it must be a 'rare and exceptional circumstance' before solicitor and client costs are awarded. In Roose, supra, solicitor and client costs were not awarded even though punitive damages were. A similar result arose in Flame Bar‑B‑Q Ltd. v. Hoar Estate (1979), 27 N.B.R. (2d) 271; 60 A.P.R. 271; 106 D.L.R. (3d0 438 (C.A.). It would appear from Warner v. Arsenault (1982), 53 N.S.R. (2d)146; 138 A.P.R. 146 (C.A.) and Brown, supra, that even conduct shown to be "reprehensible' is not enough to justify an award of costs on a solicitor and client basis. From my reading of the cases in order to justify an award of solicitor and client costs there must be proof tantamount to fraud or an abuse of process. Unless or until the observations of Pace, J.A., in Warner, supra, are varied or refined I am bound to follow them." I considered the same question in Campbell v. Lienaux et al (1998), 165 N.S.R. (2d) 356 (N.S.S.C.), and concluded, at p. 360, that solicitor/client costs are only awarded in "rare and exceptional circumstances", and even "reprehensible" conduct on the part of a party would not justify solicitor/client costs, "short of some proof of fraud or an abuse of process". Leave to appeal, on other grounds, was denied: (1998), 167 N.S.R. (2d) 196 (N.S.C.A.). [20] Saunders J. also referred to the case of Brown v. Metropolitan Authority et al. (1996), 150 N.S.R. (2d) 43 (N.S.C.A.). In that case the Court of Appeal reiterated that solicitor-client costs are only available in "rare and exceptional circumstances, to highlight the court's disapproval of the conduct of one of the parties in the litigation", at p. 55. In Balders Estate, Saunders J. held that there was no evidentiary basis for an award of solicitor-client costs. [21] In the present appeal there were allegations of deceit on the part of the appellants, in their retaining of monies obtained from the deceased. However it is apparent from the evidence of Ms. Manktelow, in the form of a transcript of an audiotape surreptitiously recorded and tendered at the taxation of costs hearing, that the appellants had told her about the money before she commenced her petition. The evidence before the Registrar did not indicate behavior on the part of the appellants that amounted to fraudulent behavior, nor could it even be described as reprehensible. An order of solicitor-client costs against the appellants was not warranted under these circumstances. Since I have concluded that the Registrar lacked jurisdiction in the matter, it is unnecessary for me to remit the matter back to her to hear fresh evidence. Conclusion It is my conclusion that the Registrar did not have jurisdiction to make an award of costs. Accordingly, the Registrar of Probate’s order as to costs is set aside. I allow costs to the appellant in the amount of $500.00.