No 'abuse of process' from Legal Aid Ontario, says Court of Appeal

The Court of Appeal of Ontario overturned a finding that Legal Aid Ontario engaged in "abuse of process” and set aside a costs order of $192,639.77.

The lower court judge had concluded that LAO “failed to properly carry out its mandate to monitor the proceedings, contributed significantly to the hardships and challenges” of the applicant, and “needlessly wasted judicial resources."

Family law associations intervened in the appeal, telling the panel of appeal judges that "this precedent will cause a chill in the availability of legal aid funding" and "a reduction in the number of lawyers willing to accept legal aid certificates." 

The appeal court’s analysis, released June 27, agreed that the lower court had “misconstrued the role of LAO.” 

“When LAO is a party to litigation, as with any other party, it may be exposed to a costs award. By way of example, in an employment or civil action in which LAO is an unsuccessful party, it would be open to a judge to grant an adverse costs award,” wrote Justice Sarah Pepall with Justices Robert Sharpe and Lois Roberts concurring. “In contrast, as a non-party, LAO’s conduct must be viewed in the context of its statutory mandate .... the decision to fund a litigant is driven by LAO’s statutory mandate and associated funding criteria, not by the prospect of economic return to LAO.” 

Toronto sole practitioner Katherine MacDonald, who co-chairs the intervention committee of the Family Lawyers Association, says the appeal decision will have an impact on many family lawyers who accept legal aid certificates. 

“There had been a few incidents where the opposing party had threatened costs against legal aid,” says MacDonald. “So, already, this costs award was creating a dangerous precedent to curtail advocacy…. [The decision] clarifies the role of legal aid as a funder and the role of the legal aid certificate lawyer.” 

The decision in Hunt v. Worrod focused on the after-effects of a catastrophic brain injury on applicant Kim Hunt. Hunt’s sons became his guardians of property and personal care. Hunt married respondent Kathleen Worrod three days after his release from the hospital, but Hunt’s sons argued their father did not have capacity to marry. There was also a dispute over a jointly purchased home, which Hunt and Worrod bought earlier in their years-long hot-and-cold relationship.

Through a legal aid certificate, Worrod hired lawyer D. Andrew Thomson, who got a clinical neuropsychologist’s report on Hunt’s capacity. The report said Hunt had an emotional desire to have a relationship and wanted to live with Worrod, but that Hunt lacked the understanding of his need for guardianship. During a 10-day trial, Worrod didn’t call the authors of the report or give any other medical evidence about Hunt’s capacity.

Hunt’s sons said that "had Thomson properly reported to LAO, LAO would not have continued to fund Kathleen’s defence," and the lower court judge ordered LAO to pay the Hunt family 50 per cent of the costs award, $192,639.77.

But on appeal, a panel of judges wrote that while there was “no question” LAO would have known about Hunt’s vulnerable state, that was not enough for the lower court to conclude there was an abuse of process. That would require “evidence of something more, such as bad faith or a collateral or improper purpose in granting funding to a litigant,” wrote Pepall.

“Many an action involves a vulnerable party. One must then determine whether that fact coupled with knowledge of the neuropsychological report could anchor a finding of abuse of process. The application judge determined that upon receiving the report, LAO should have terminated its funding,” wrote Pepall. “The problem here is that while the report was arguably fatal to the issue of the validity of the marriage, it did not speak to the other two issues in play in the litigation.” 

The appeal court’s decision also noted that the lower court treated the lawyer, Thomson, differently than it treated LAO.

Rose Muscolino, who represented Thomson, did not immediately respond to a request for comment. The appeal judges wrote in the decision that Thomson “takes no position” on the costs order against LAO. LAO did not provide answers to written questions by press time.

Andrea McEwan, a partner at Aird & Berlis LLP in Toronto and one of the lawyers who represented the Hunts, says the appeal court’s decision will have a significant financial impact on her client. 

“There is limited law on this issue. This is really the first time that the Court of Appeal has opined whether or not Legal Aid can be responsible for costs …. It would be certainly an unusual case where legal aid could be responsible,” says McEwan. “I’m not suggesting that legal aid shouldn’t be well-funded, I think it’s an incredibly important issue, and the lack of funding for legal aid is probably the most significant access to justice issue that the legal system is facing. But I’m not sure that issue in and of itself absolves a funder from cost consequences in the right circumstances. And that’s leaving aside whether or not this case was the right circumstances.”

Tammy Law practises at Tammy Law Barristers and Solicitors and is the Toronto-area president of Ontario Association of Child Protection Lawyers, which intervened in the case. Law says a day after the lower court released its judgment, a member of the Ontario Association of Child Protection Lawyers received a warning that the letter-writer would be seeking costs against the lawyer and Legal Aid Ontario if the lawyer refused to get her client to consent to crown wardship. 

Law says the appeal decision was a good one, and for legal aid funding to really work, it needs to be immune from interference in how it supervises lawyers. 

“One of the problems with the lower court’s judgment was that we believed it would have taken more funds away from frontline services. More of legal aid’s resources would have been spent monitoring and interfering with the way lawyers conduct their case. We were very concerned because we thought it would really undermine the certificate system,” says Law.