McMaster v. McMaster: “Disaster” of Attorney’s Actions Leads to Substantial Indemnity Costs

On February 7, 2013, Justice Whitten ruled on an application that sought the removal of an attorney for property.¹

In 1994, Mary McMaster had named both of her sons, Graeme and Malcolm McMaster as attorneys for property in a general power of attorney. At that time, Mrs. McMaster had in excess of $5,000,000.00 in assets, not including her home and cottage.

As of 2012, Graeme McMaster did not know that he had been named attorney for property, or that his brother had been handling their mother’s finances pursuant to that document. The evidence emerged that over the years, Malcolm had transferred significant monies from the family corporation to himself, invested monies in troubled ventures that led to litigation and the inexplicable loss of funds. He also encumbered their mother’s home and generally led to the dissipation of her assets.

At paragraph 63 of the February decision, Justice Whitten summarized in no uncertain terms as follows:

The fiscal stewardship of Malcolm has been a disaster for his mother. He has literally blown through at least $2,000,000. If there was ever a case for removal of an attorney this is it. It will prevent the further haemorrhaging of his mother’s assets.

Graeme was removed as attorney for property leaving Malcolm as the sole named attorney for property.

In a decision dated April 24, 2014, Justice Whitten ruled on costs in this matter.² Turning to the finding that the respondent Malcolm McMaster had taken steps that had only caused his mother financial harm, Justice Whitten ordered Malcolm to pay costs on a substantial indemnity basis, as his conduct constituted “behaviour worthy of sanction, behaviour which is reprehensible, and an abuse of process.”³

In making the ruling on costs Justice Whitten deliberately debunked the notion that costs in estate and guardianship matters are payable by the estate or incapable person. Whitten J. points to the principles in the Substitute Decisions Act, 1992, which include the protection of vulnerable persons. Considering that it was the actions of Malcolm that led to the costly litigation, it was appropriate that he personally pay those expenses, and that they not be paid by Mrs. McMaster, the person who suffered harm in the first place.

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1. http://www.canlii.org/en/on/onsc/doc/2013/2013onsc1115/2013onsc1115.html

2. http://www.canlii.org/en/on/onsc/doc/2014/2014canlii19582/2014canlii19582.html

3. At para. 8