



COURT OF APPEAL FOR ONTARIO

CITATION: Leonard v. Zychowicz, 2022 ONCA
    212

DATE: 20220315

DOCKET: C68222

Strathy C.J.O., Roberts and
    Sossin JJ.A.

BETWEEN

Cheryl
    Leonard

Moving Party (Appellant)

and

Zara Zychowicz

Respondent (Respondent)

Marc A. Munro, for the appellant

Andrew L. Keesmaat and Simone A.
    Bilato, for the respondent

Heard: February 15, 2022 by video conference

On appeal from the order of Justice Paul
    R. Sweeny of the Superior Court of Justice, dated February 21, 2020, with
    reasons reported at 2020 ONSC 662, 56 E.T.R. (4th) 81, and from the costs
    order, dated March 23, 2020, with reasons at 2020 ONSC 1713.

REASONS FOR DECISION

[1]

This appeal involves a dispute between two
    cousins concerning the will of their late aunt, Helene Polomock (the
    Testatrix), who died on April 4, 2011. The central issue on the application
    was whether the Testatrix had testamentary capacity when she executed a will on
    October 23, 2007 (the Will), approximately four years prior to her death.

[2]

The Will named the respondent, Zara Zychowicz,
    as estate trustee and sole beneficiary. The appellant, Cheryl Leonard, had been
    named as the estate trustee and sole beneficiary in an earlier will, made in
    2002 (the earlier Will).

[3]

The appellant brought an application to declare
    the Will invalid and to require the respondent to surrender her appointment as
    estate trustee. She asserted that there were suspicious circumstances
    surrounding the execution of the Will, that the Testatrix lacked testamentary capacity
    as well as knowledge and approval of the Wills contents, and that the
    Testatrix had been subjected to undue influence around the time she signed the
    Will.

Decision Below

[4]

The application judge dismissed the application.
    After setting out the factual background and the issues, the application judge
    identified the relevant principles, summarized by Cullity J. in
Scott v.
    Cousins
(2001), 37 E.T.R. (2d) 113 (Ont. S.C.), and extrapolated from the
    authorities, including
Vout v. Hay
, [1995] 2 S.C.R. 876. The appellant
    does not assert that the application judge erred in his statement of the
    applicable principles or that he erred in the application of those principles.
    As we explain below, the appellants submission is that the application judge
    made a finding of testamentary capacity in the absence of evidence.

[5]

The application judge acknowledged that the
    Testatrix had longstanding mental health issues and had been diagnosed with
    bipolar disorder. He found that the Will had been executed with the requisite
    formalities and concluded that it could be presumed that the Testatrix knew and
    approved of its contents. He also found there were no suspicious circumstances
    raised concerning the preparation of the Will, nor was there evidence of undue
    influence. However, he was prepared to accept that there was some evidence
    raised by the appellant of suspicious circumstances concerning the capacity of
    the Testatrix, so as to put an onus on the respondent to prove testamentary
    capacity.

[6]

Having considered the evidence on capacity,
    including the expert evidence, the application judge found that the respondent
    had discharged her onus and the Will was valid. In coming to that conclusion,
    he largely rejected the evidence of the appellants expert, Dr. Shulman. He
    found that Dr. Shulmans evidence had been tainted by a summary of facts
    prepared by appellants counsel  a summary that had been admittedly created
    with advocacy in mind.

[7]

The application judge preferred instead the
    evidence of the respondents expert on capacity, Dr. Pachet, which he accepted.
    Dr. Pachet opined that there was no substantive or conclusive evidence that the
    Testatrix did not meet the test in
Banks v. Goodfellow
(1870), L.R. 5
    Q.B. 549, at p. 565, when she executed the Will. There was no evidence to
    suggest that she did not know the nature and effect of a will, her natural
    beneficiaries, or the extent of her assets. There was no evidence that she was
    delusional when she executed the Will. In sum, in Dr. Pachets words, [h]er
    cognitive impairment and degree of executive dysfunction would not have been
    viewed as a significant threat to her testamentary capacity. The application
    judge found that Dr. Pachets evidence was consistent with other evidence,
    including medical evidence, which indicated that the Testatrix had been
    functioning well and was not subject to delusions when she executed the Will.

[8]

The application judge dismissed the application
    and awarded costs to the respondent in the amount of $75,175.

Submissions on Appeal

[9]

First, the appellant submits that the
    application judge found that there were suspicious circumstances concerning the
    capacity of the Testatrix. He submits, however, that the application judge erred
    in relying on the presumption of capacity to make a determination of capacity
    in the absence of material evidence. The appellant submits that this was an
    error of law, and the standard of review is therefore correctness. She points
    to the fact that the solicitor had no notes or recollection as to the
    testamentary capacity of the Testatrix, and no contemporaneous record of her
    knowledge and approval of the Will.

[10]

Second, the appellant seeks leave to appeal the
    costs award. She notes that the appellants counsel did not render any
    accounts, did not keep dockets, and simply filed a bill of costs, which her
    counsel describes as fabricated guestimates.

[11]

We do not accept these submissions.

Testamentary Capacity

[12]

We begin with the standard of review. The
    appellant submits the standard of review is correctness and that we are free to
    substitute our opinion on capacity for the application judges. We do not agree.

[13]

The determination of testamentary capacity
    involves the application of a legal standard  the test in
Banks v.
    Goodfellow
 to a set of facts. The question, therefore, is one of mixed
    fact and law. If the application judge has applied the correct standard, has
    considered the requisite elements of that standard and has made no error in
    principle, either in the application of the standard or otherwise, the decision
    will only be set aside if the judge has made a palpable and overriding error in
    the assessment of the evidence:
Housen v. Nikolaisen
, 2002 SCC 33,
    [2002] 2 S.C.R. 235, at paras. 26, 36; see also
Wilton v. Koestlmaier
,
    2019 BCCA 262, 48 E.T.R. (4th) 12, at paras. 22-23.

[14]

On the other hand, where the application judge
    has made an error in principle, for example, by failing to consider the
    requisite elements of the legal test or standard, or has erred in the
    application of that test or standard, the court is entitled to intervene. For a
    recent example of such intervention, see this courts decision in
McGrath
    v. Joy
, 2022 ONCA 119.

[15]

The application judge correctly identified the
Banks
    v. Goodfellow
test with respect to testamentary capacity and considered
    its elements.

[16]

The appellant has not identified any palpable
    and overriding error in the application judges assessment of the evidence.

[17]

We disagree with the appellants submission that
    the application judge made a finding of suspicious circumstances concerning the
    capacity of the Testatrix. Rather, the application judge was prepared to accept
    that the appellant had adduced some evidence of suspicious circumstances with
    respect to capacity such that [the respondent] has the onus of proving
    testamentary capacity. He was satisfied, however, that the respondent had discharged
    that onus.

[18]

The application judge was entitled to discount
    the evidence of Dr. Shulman because his opinion was based on a summary of
    facts, prepared by counsel, that was patently neither objective nor fair.

[19]

As the application judge noted, the summary of
    the evidence provided to Dr. Shulman may well have affected his appreciation of
    the evidence. For example, Dr. Shulman stated in his report that [t]he stark
    difference in the two Wills of 2002 and 2007 reflect radical changes in [the
    Testatrixs] thinking about potential beneficiaries. In fact, the only change of
    substance between the two wills was the substitution of one niece, the
    respondent, Zara Zychowicz, for another, the appellant, Cheryl Leonard. In
    light of the Testatrixs circumstances, and the terms of her previous wills,
    this can hardly be described as a radical change. The Testatrix had no
    children, her husband had sufficient means and, as the application judge found,
    the circumstances surrounding the preparation of her prior Wills shows that
    [the Testatrix] was ambivalent about her beneficiaries. She had named her half-brother
    John, the respondents father, as the residual beneficiary of her will in 1989.
    When she gave instructions for the earlier Will, she initially wanted both the
    appellant and the respondent to be beneficiaries, but ultimately settled on the
    appellant alone. The Will subsequently identified the respondent alone as the
    sole beneficiary. As the application judge noted, this was not indicative of a
    radical change in her thinking so as to call her capacity into question.

[20]

In assessing the weight to be given to the
    expert evidence, having discounted the evidence of Dr. Shulman, the application
    judge was entitled to prefer the expert evidence of Dr. Pachet. He quoted Dr.
    Pachets evidence:

Overall, based upon the documents reviewed
    there is no substantive or conclusive evidence to suggest that [the Testatrix]
    did not meet
Banks vs. Goodfellow
criteria when she executed the Will
    dated October 23, 2007. There is no evidence to suggest she would not have known
    the nature and effect of a Will, her natural beneficiaries, or the extent of
    her assets. Her cognitive impairment and degree of executive dysfunction would
    not have been viewed as a significant threat to her testamentary capacity. As
    well, there was no indication of a challenge to her decisional capacity in
    association with her personal matters or financial affairs prior to or at the
    time she changed her Will in 2007.

... based upon the documentation reviewed
    there is no substantive evidence that [the Testatrix] was delusional or
    paranoid when she executed the 2007 Will.... While the rationale regarding her
    choice of beneficiary in 2007 was not documented in a fulsome manner, there is
    no substantive information to argue that delusions or paranoid ideations were influencing
    her estate disposition at that time.

[21]

A judges findings of fact based on the
    acceptance of expert evidence and their preference of the evidence of one
    expert over another is entitled to deference and should not be disturbed in the
    absence of a palpable and overriding error in the assessment of the evidence.
    The appellant has demonstrated no such error.

[22]

The appellants core submission, however, is
    that having found that the presumption of capacity was not available, the application
    judge erred in finding testamentary capacity in the absence of affirmative
    evidence. She submits, for example, that the application judge erred in finding
    that the paucity of evidence of medical visits during the period of 2005 to
    2009 was consistent with Dr. Pachets opinion and supported the view that the
    Testatrix was functioning well and was not under any delusions.

[23]

We do not accept the appellants submission that
    the application judge relied on the presumption of capacity to find capacity or
    that he found capacity in the absence of material evidence. The application
    judges findings of fact in relation to testamentary capacity were the product
    of his assessment of
all the evidence
.

[24]

In addition to Dr. Pachets evidence, there was
    ample evidence before the application judge to support the Testatrixs
    testamentary capacity and the absence of undue influence. This included:

·

the evidence of the respondents father, the
    half-brother of the Testatrix, who held her power of attorney executed the same
    day as the Will and who described her as independent, capable of living alone
    and capable of making her own property, banking and financial decisions as well
    as her personal care decisions;

·

the evidence of a longstanding neighbour, who
    talked to the Testatrix almost every day, and described her as very smart,
    aware of what was going on around her, capable of making decisions in her best
    interests and showing no signs of hallucinations or paranoia;

·

the evidence of the solicitor who prepared the
    Will, who had a long-standing relationship with the Testatrix, who had obtained
    a satisfactory capacity assessment in relation to the earlier Will, and who did
    not recall or note any concerns about the Testatrixs capacity in relation to
    the Will  his contemporaneous notes indicate the Testatrix was upset with
    the appellant and thus gave instructions to remove her from her will;

·

the evidence of the Testatrixs family physician
    for more than 10 years prior to her death, to the effect that there had been no
    change in her testamentary capacity between January 2002 (when the original
    capacity assessment was performed by that same physician) and September 2007 or
    shortly thereafter (when the Will was prepared and executed) or even in
    psychiatric and geriatric notes up to 2010; and

·

the absence of any evidence, in the extensive
    medical record produced on the application, that the Testatrix lacked capacity,
    or had a mental illness that affected her capacity, at the time she gave
    instructions for the Will or signed the Will.

[25]

This evidence, together with the evidence of Dr.
    Pachet, which he accepted, fully supports the application judges conclusions
    on the issue of testamentary capacity. The appellant has identified no palpable
    and overriding error in his assessment of the evidence.

Costs Awarded Below

[26]

We turn to the issue of costs.

[27]

In post-hearing costs submissions, the appellant
    submitted that no costs should be awarded because the respondents counsel had
    not rendered accounts, had not kept dockets, and had essentially copied the
    bill of costs of appellants counsel.

[28]

The application judge found that the absence of
    dockets did not preclude an award of costs, but it did make the determination
    of costs more challenging. He had before him, however, a bill of costs prepared
    by respondents counsel, setting out time spent and hourly rates charged. The
    respondent claimed costs on a partial indemnity basis of $190,000.

[29]

The application judge awarded the respondent
    costs of $55,175 in fees and $20,000 for disbursements, for a total of $75,175,
    inclusive of HST. Those costs were payable by the appellant, as opposed to
    payable out of the estate.

[30]

In this court, the appellant renews the following
    submissions: (a) awarding costs amounts to a windfall in this case and no
    costs should be payable because the respondents counsel sent no bills to the
    respondent and kept no dockets; (b) the respondents costs should be paid out
    of her own share of the estate; or (c) each party should bear her own costs.

[31]

A court should set aside a costs award on
    appeal only if the judge has made an error in principle or if the costs award
    is plainly wrong:
Hamilton v. Open Window Bakery Ltd.,
2004 SCC 9, [2004]
    1 S.C.R. 303, at para. 27.

[32]

We see no basis on which to interfere with the
    application judges decision on costs. He considered the principles applicable
    to the award of costs and how those principles apply in estates litigation. The
    appellant has failed to identify an error in principle or to establish that the
    award was plainly wrong.

[33]

The application judge did not err in requiring
    the appellant to pay costs, particularly having regard to his conclusion that
    there were no reasonable grounds upon which to question the execution of the Will
    or the capacity of the Testatrix. Furthermore, while it is certainly preferable
    to keep dockets, even where the client will not be billed until the completion
    of the matter, the fact that respondents counsel had not issued accounts, and
    had no dockets, was not an automatic bar to the recovery of costs. The application
    judge must do the best they can in such circumstances and this application judge
    did so.

[34]

In any event, and stepping back for a moment, we
    find the costs award reasonable. The claim related to a $500,000 estate; the application
    hearing lasted four and a half days; there was expert evidence on both sides,
    multiple affidavits, and a very substantial documentary record: in addition to
    the Appeal Book and Compendium, we have before us nine volumes of exhibits. The
    costs awarded were proportional and well within the appellants reasonable
    expectations.

Disposition

[35]

For these reasons, the appeal is dismissed. We
    grant leave to appeal costs but dismiss the costs appeal.

[36]

Costs of the appeal to the respondent in the
    agreed amount of $15,000, inclusive of disbursements and all applicable taxes.

G.R.
    Strathy C.J.O.

L.B.
    Roberts J.A.

L.
    Sossin J.A.


