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Costs: Discretion, Proportionality, Access to Justice, and other Considerations

COSTS: Discretion, Proportionality, Access to Justice, and other Considerations
By Kimberly A. Whaley
Presented to the: ONTARIO BAR ASSOCIATION INSTITUTE 2011
February 3, 2011

Download a PDF copy of this paper (55 pages)

Table of Contents

Part I: Introduction

Part II: The Traditional Approach to Costs in Estate Litigation

Part III: Access to Justice

Part IV: The Developing to Modern Approach to Costs in Estate Litigation

Part V: Is there a Presumption that Costs are to be paid out of the Estate in Estate Litigation and related matters?

Part VI: A Review of Recent Costs Decisions with remarks and analysis, taking into consideration the exercise of discretion, ‘proportionality’, ‘access to justice’ and other relevant considerations

1. The costs endorsement in Salter v. Salter Estate, 2008 CarswellOnt 4902 (endorsement dated March 6, 2009); and 2009 CanLII 28403 (ON S.C.) (further endorsement dated June 4, 2009);

2. Teffer v. Schaefers in the matter of the Estate of Johanna Maria Schaefers, a Judgment of Justice Fragomeni, dated April 6, 2009; and Reasons for Supplemental Endorsement re Costs of Justice Fragomeni dated August 7, 2009;

3. The costs endorsement in the Estate of John Johannes Jacobus Kaptyn, of the Honourable Justice Brown dated June 5, 2009;

4. The endorsements of Justice Brown in Woolner v. D’Abreau, 2009 CarswellOnt 664, 50 E.T.R. (3d) 59, 70 C.P.C. (6th) 290, (Ont. S.C.J. Feb 10, 2009) leave to appeal by Woolner v. D’Abreau, 2009 CarswellOnt 6480 (Ont. Div. Ct. Aug 10, 2009) and reversed by Woolner v. D’Abreau, 2009 CarswellOnt 6479 (Ont Div. Ct. Sep. 29, 2009); Woolner v D’Abreau, 2009 CarswellOnt 2264 (Ont.S.C.J. Apr 29, 2009) leave to appeal allowed by Woolner v. D’Abreau, 2009 CarswellOnt 6480 (Ont. Div. Ct. Aug 10, 2009, and reversed by Woolner v. D’Abreau, 2009 CarswellOnt 6479 (Ont. Div. Ct. Sep. 29, 2009); 2008 CarswellOnt 8240 (December 12, 2008);

5. Buxbaum (Re) (unreported, May 15, 2009, Ont. S.C.J. , docket no, 60905, Gorman J.);

6. Dinglason v. Cabiles, 2009 CanLII 28642 (ON S.C.), costs endorsement of Justice Wilson;

7. Abrams v. Abrams 2009 CarswellOnt 2519 (Div. Ct,), judgment of Justice Low dated May 12, 2009; Abrams v. Abrams 2010 ONSC 1254, case management endorsement of Justice Brown dated March 1, 2010;

8. The decision of Justice Brown in Fiacco v. Lombardi, 2009 CanLII 46170 (ON S.C.);

9. Viau v. Kozicki, 2010 CarswellOnt 1664 (Ont. S.C.J.), judgement of Justice Gordon dated March 23, 2010;

10. Chu v. Chang, 2010 CarswellOnt 246 (Ont. S.C.J.); additional reasons in Chu v. Chang, 2010 CarswellOnt 1765 (Ont. S.C.J.);

11. Smith v. Rotstein 2010 ONSC 1117, costs endorsement of Justice Brown dated July 30, 2010;

12. McMichael Estate: Zimmerman v. McMichael Estate, 2010 ONSC 2947, judgment by Justice Strathy dated May 20, 2010; Zimmerman v. Fenwick, 2010 ONSC 3855, decision on costs of Justice Strathy dated July 6, 2010;

13. Pytka v. Pytka 2010 ONSC 6406 reasons for costs decision of Justice Brown dated December 31, 2010;

14. DeMichino v. DeMichino 2011 ONSC 142, judgment of Justice Roberts dated January 7, 2011;

15. St. Onge Estate v. Breau 2009 CarswellNB 237 (N.B. C.A)

Part VII: Concluding Remarks

PART I: INTRODUCTION

The consideration of costs by the Court in estate litigation and related matters has resulted in a recent flurry of uncertainty and confusion for clients and their counsel alike.

Judges who hear contested matters have at all times, discretion, with a “high level of deference”,1 to make orders as to costs. That discretion makes predicting cost outcomes difficult for practitioners and their clients. That difficulty is now only compounded by the fact that the Ontario Superior Court presently balances primarily two differing approaches to cost orders in estate litigation and related matters. The “traditional” approach in Ontario courts has historically mirrored the English approach and generally provided that costs in estate litigation were to be paid out of the estate; and the so-called “developing” now, “modern” approach moves away from the traditional approach and more closely resembles the “loser pays” rule found in civil litigation.

The question of costs is anything but clear-cut. It is not simply whether a court adopts the traditional or modern approach, as every judge must also take into account elements of public policy, the conduct of the parties, their success in the litigation, as well as proportionality and access to justice.

The treatment of costs in estate litigation continues to develop against a historical backdrop, and with a view to furthering positive public policy. Public policy supports access to the courts, while at the same time attempting to curtail frivolous or unnecessarily costly litigation.

Furthermore, as our courts are more frequently addressing capacity litigation, reflecting the needs of an increasingly aging population, judges are being called upon to take the needs of incapable persons – who will continue to require the funds in question – into consideration when dealing with claims for costs.

Still, it is paramount that the larger reasons for the historical approach to costs in estate matters be considered and not dismissed. The ability to access courts, and thereby ensure “access to justice” even if a party is impecunious, is important, as Courts play a central role in ensuring that the wishes of deceased or incapable persons are adhered to and that broader social aims are met.

This paper argues that there must be some certainty of approach, by the Courts and in turn society would benefit from Courts making cost decisions in compliance with long-established principles.2

PART II: THE TRADITIONAL APPROACH TO COSTS IN ESTATE LITIGATION

The traditional (historical) approach to costs in estate litigation is articulated clearly by the English judge, Sir J.P. Wilde in the 1863 judgment of Mitchell v. Gard 3 as follows:

The basis of all rules on this subject should rest upon the degree of blame to be imputed to the respective parties; and the question, who shall bear the costs will be answered with this other question, whose fault was it that they were incurred? If the fault lies at the door of the testator, his testamentary papers being surrounded with confusion or uncertainty in law or fact, it is just that the costs of ascertaining his will should be defrayed by his estate.

If the party supporting the Will has such an interest under it that the costs, if thrown upon the estate, will fall upon him, and he by his improper conduct has induced a litigation which the Court considers reasonable, it is not unjust that the Estate should bear the costs of the litigation which his conduct has caused.

But if the testator be not in fault and those benefited by the will not to blame, to whom is the litigation to be attributed? In a litigation entertained by other Courts, this question is in general easily solved by the presumption that the losing party must needs be in the wrong, and, if in the wrong, the cause of a needless contest. But other considerations arise in this Court. It is the function of this Court to investigate the execution of a Will and the capacity of the maker, and having done so, to ascertain and declare what is the will of the testator. If fair circumstances of doubt or suspicion arise to obscure this question, a judicial inquiry is in the manner forced upon it. Those who are instrumental in bringing about and subserving this inquiry, are not wholly in the wrong, even if they do not succeed. And so it comes that this Court has been in the practice on such occasions of deviating from the common rule in other Courts and of relieving the losing party from costs, if chargeable with no other blame, than that of having failed a suit which was justified by good and sufficient grounds for doubt.

There is still a further class of cases. I speak of those in which, beyond the execution of the Will, and the capacity of the testator, the opposing party takes upon itself to question the conduct or good faith of others, and to place on the record, pleas of undue influence or fraud. These are affirmative charges: they ought not to be made except upon some apparently very sufficient ground. But though they may and do differ largely in the degree of probability or suspicion to be demanded for their justification, it is not easy to say that they differ in nature from pleas denying execution or capacity. Both classes of defence are raised in the same question, what was the will of the testator, and both are within the scope of the subject entrusted to the vigilance of the Court. Here, also, it seems just and meet, if the circumstances of the case have rendered the inquiry, the proper one, then neither party should be condemned in costs.

From these considerations, the Court summarized the following two circumstances in which costs of the parties are payable from the estate:

1. If the litigation is caused by the fault of the testator or those interested in the residue; or

2. If there are sufficient and reasonable grounds, looking to the knowledge and means of knowledge of the opposing party, to question either the execution of the will or the capacity of the testator, or to put forward a charge of undue influence or fraud.

In the 1907 case of Spiers v. English,4 the Court summarized the rule that costs in estate matters are payable out of the estate in two situations as follows:

…the usual rule that costs follow the event will not apply where, firstly, the testator or those interested in the estate, have been the cause of the litigation, and secondly, where the circumstances lead reasonably to an investigation in regard to a propounded document.

Historically therefore, following the reasoning in Mitchell v. Gard and subsequent cases, the traditional approach saw the legal costs of the challenger paid out of the testator’s Estate irrespective of success.

The traditional approach reflects larger public policy aims. The underlying purpose of this approach was to ensure that Courts only gave effect to valid Wills that reflected the actual intentions of capable testators. As the body that grants probate and effectively allows for the implementation of a Will, the Court is duty-bound to ensure that the Will is true and reflects the wishes of the deceased. The Court has historically been seen as having a continuing duty to the deceased, who cannot speak. The Court’s role is not to simply rule on a dispute between parties, but to take a quasi-inquisitorial approach to estate matters.5

The public policy reasons for allowing estate litigation costs to be paid from the Estate in question were outlined in Mitchell v. Gard and relied upon, indeed, elaborated on in later cases. The unique nature of Wills, is that, unlike contracts, they are “unilateral private documents which are not usually reviewed by another party or negotiated by a number of individuals” which elevates the importance of judicial scrutiny. Not only are Courts charged with ensuring the veracity of the document, they are also required to balance social policy concerns including the proper support of dependants of the deceased.6

The rationale established, supporting the traditional approach is based on the premise that the estate litigation emerged from the fault of the testator. As a result, any costs from such litigation would properly be paid from the testator’s Estate. There has been much that has been written about what constitutes the fault of the testator. Broadly, this includes a deficiency or lack of estate plan, ambiguities in testamentary papers, conduct of the testator and capacity of the testator. Practically speaking, this has meant Will challenges on five specific grounds: testamentary incapacity, undue influence, lack of due execution and knowledge and approval under the Succession Law Reform Act, fraud or forgery, all of which could be coupled with suspicious circumstances. As a result, in the traditional approach those with a legitimate financial interest in the estate were entitled to make reasonable enquiry into the fault of the testator with the reasonable expectation that legal costs would flow from the testator’s Estate.7

However, a rule that costs are generally payable out of the estate carries with it the risk of excessive and unfounded estate litigation as litigants face little risk of paying for proceedings themselves. As early as 1900, the Court in Logan v. Harring 8 stated as follows:

There is, perhaps, too much litigation in this Province growing out of disputed Wills. It must not be fostered by awarding costs lightly out of the Estate. A party should not be tempted into a fruitless litigation, …. by a knowledge that their costs will be paid by others or defrayed by others. On the other hand, there is the contrasted danger of letting doubtful Wills pass into probate by making the costs of opposing them depend upon successful opposition. It is only by the careful adjustment of costs that these opposite risks can be guarded against.

Similarly, in the 1926 case of Re Plant,9 the Court stated that discretion is key to costs orders and that a rule that the estate pays costs should not diminish judicial discretion:

On questions of costs, so much depends upon the exact facts of the case upon which the discretion of the Judge is exercised, that specific rules are not deducible, and cannot be laid down. It may well be that this is fortunate, and not unwise. On questions of costs, it is right that the latitude left to the Judge who tries the case should be wide.

While the exercise of judicial discretion is undoubtedly important, the lack of predictability of costs orders makes it difficult to advise clients about the risks they may incur in taking on estate litigation. This is particularly problematic for those engaged in fiduciary litigation, as parties who are obliged to seek court assistance place themselves at risk of having costs ordered against them if the traditional approach is not employed. In his article, “Costs and Estate Litigation,” estates practitioner Ian Hull10 reviewed the case of Fox v. Fox Estate,11 Mr. Hull suggests that while the predictability of an award of costs is relatively clear in some examples, it is a matter which should give grave concern to all those engaged in fiduciary litigation in what are the cases that cannot be said to afford predictability respecting costs.12 If as a result of recent decisions there is a blanket approach that clients must always expect to pay, how are public policy objectives met? The persons wronged by the actions of a predatory beneficiary will have no ability to seek and obtain justice.

PART III: ACCESS TO JUSTICE

Another serious consideration is the ability of all parties, even those without means to access the courts and thereby access justice. In a November 20, 2010 address to the British Columbia branch of the Canadian Bar Association, B.C. Chief Justice Lance Finch addressed the issue of the shortage of lawyers in that province. One of his main concerns was access to justice. The Chief Justice stated that the constitution recognizes the principle of access to justice, that “it is a necessary element for maintaining the legitimacy of our judicial system.” He continued “It is also morally wrong that some are able to enforce or defend their civil rights while others, based solely on their inability to pay, are denied access to justice.”13 Costs decisions that allow for impecunious parties to have their costs paid are a means for those parties to have access to justice that may otherwise have eluded them. This is a principle that is arguably being overlooked in recent decisions.

PART IV: THE DEVELOPING TO MODERN APPROACH

A review of the case law from the 1800’s to today demonstrates that Courts are moving away from awarding all costs out of an estate. In the author’s view the prospect of all costs being awarded out of the estate has equally served the useful purpose of dissuading protracted litigation and provided a strong incentive for early settlement this should not be overlooked.

In the 1974 decision of Eady v. Waring,14 the executors had propounded a Will of the deceased by proof in solemn form. The trial Judge held there were many “suspicious circumstances” relating to the preparation of the Will. The trial Judge did not believe that the evidence adduced removed the suspicions and therefore the Will failed, and was not admitted to probate. At trial, the Judge ordered that the costs of all parties, including the executors, were to be granted on a solicitor and client basis, to be paid out of the Estate of the testator.

The executors appealed the case to the Ontario Court of Appeal, and their appeal was dismissed. On the question of appeal costs, the Court ordered costs against the appellant executors personally, denying them access to the estate assets for payment of the costs.

On the issue of costs at the appeal, the Court of Appeal wrote as follows:

The trial Judge allowed the costs of all parties out of the estate of the testator. This was, I think, a perfectly proper Order, because the executors had a duty to bring forward what purported to be the last Will of the testator. I do not think their duty extended to appealing from the adverse finding against the Will, particularly when one of the appellants was the son of the principal beneficiary, and had himself been a participant in the circumstances leading up to the execution of the Will in respect of which probate has been refused.

There is no question that the developing approach to cost awards in estate litigation is one that deviates from the traditional approach. The Court in applying different principles, including cost awards akin to those in civil litigation and assessing whether costs should follow the event, and be determined on success,15 suggests a blended, more balanced approach without losing the foundation established in earlier case law.

The Court of Appeal of Ontario dealt squarely with the issue of costs orders in estate litigation in the 2005 decision, McDougald Estate.16 In that case, the appellant executors asked the Court of Appeal to overturn the finding of the trial judge that the testator had been incapable when a property in question had been sold, affecting the interests of the testator’s sister, who was bequeathed that property under the Will. The Court denied the appeal, and reviewed the issue of costs, comparing the traditional approach with the so-called “modern” approach, which only provides for payment of costs from the estate in cases where one of the public policy considerations applies. The Court stated as follows:

[78] The practice of the English courts, in estate litigation, is to order the costs of all parties to be paid out of the estate where the litigation arose as a result of the actions of the testator, or those with an interest in the residue of the estate, or where the litigation was reasonably necessary to ensure the proper administration of the estate.  See Mitchell v. Gard (1863), 3 Sw. & Tr. 275, 164 E.R. 1280 and Spiers v. English, [1907] P. 122.  Public policy considerations underlie this approach:  it is important that courts give effect to valid wills that reflect the intention of competent testators.  Where the difficulties or ambiguities that give rise to the litigation are caused, in whole or in part, by the testator, it seems appropriate that the testator, through his or her estate, bear the costs of their resolution.  If there are reasonable grounds upon which to question the execution of the will or the testator’s capacity in making the will, it is again in the public interest that such questions be resolved without cost to those questioning the will’s validity.

[79] Traditionally, Canadian courts of first instance have followed the approach of the English courts.  While the principle was that costs of all parties were ordered payable out of the estate if the dispute arose from an ambiguity or omission in the testator’s will or other conduct of the testator, or there were reasonable grounds upon which to question the will’s validity, such cost awards became virtually automatic.

[80] However, the traditional approach has been – in my view, correctly – displaced.  The modern approach to fixing costs in estate litigation is to carefully scrutinize the litigation and, unless the court finds that one or more of the public policy considerations set out above applies, to follow the costs rules that apply in civil litigation.

In the lower Court, the application judge had allowed the appellants their costs, payable out of the Estate of the testator. Accordingly, the Court of Appeal held that to require the Estate to bear the costs of the appeal for all parties would be to make all of the residuary beneficiaries pay for the application, the counter-application and the appeal when only the appellants embarked on the appeal. Application of the usual costs rule would result in the Estate bearing only that portion of the respondent’s costs not recovered from the appellants. Therefore, the Court of Appeal dismissed the appeal with costs to the respondent fixed. The Court explained its decision on costs as follows:

[91] In ordering the appellants to pay costs, I act on the principle that the same rules that govern costs in civil litigation at the appeal level apply to unsuccessful appellants in estate litigation. I see nothing in the circumstances of the parties to warrant departing from that principle.

It is worth noting that although the Court of Appeal took pains to differentiate between the traditional and modern approach, the Court directly cites the exceptions in Mitchell v. Gard in which courts are to order that costs are to be paid from the estate. Nevertheless, this case and others demonstrated a developing approach to costs in estate litigation that incorporated consideration of civil litigation cost orders as well as the added scrutiny of the conduct of the parties.

As such, the developing approach has been a move towards a mix of traditional historical treatment and emerging considerations in an effort to dissuade gratuitous and unfounded estate challenges.

PART V: IS THERE A PRESUMPTION THAT COSTS ARE TO BE PAID OUT OF THE ESTATE?

In spite of some misunderstanding by some of this question, there is no presumption that costs in estate litigation and related matters are to be paid out of the estate in question. To assume that costs are always paid from the estate is to overstate the traditional approach. It is a risky presumption to make, as it is likely to lead not only to the disappointment of clients, but also potential harsh costs consequences against litigants and also against lawyers themselves as officers of the Court.

In light of the traditional and developing approaches, and the recent treatment of costs in estate matters, counsel must be extremely diligent in advising their clients on the risks associated with the determination of costs in estate litigation and related matters.

Estate litigation is well-suited to a step-by-step approach that includes case conferences, case management, mediation and other means of resolving disputes short of trial.

Whereas the traditional approach to costs has merit, it also has disadvantages. One of the merits of the traditional approach is that it permits all those with legitimate interests in an estate to make reasonable enquiries with the comfort that their reasonable costs to a point, may be paid from the estate, and without the risk of being held liable for costs should their enquiries prove unsuccessful. This provides access to justice as well as accommodating the need for proportionality. The traditional approach, however needs to be balanced and weighed carefully against the risk of the depletion of estates by unrestricted litigants. There is a great deal of unmeritorious, frivolous, vexatious, and emotional litigation that is conducted without regard to the step-by-step approach that best suits this type of litigation. It is the author’s view that in cases where parties bring unnecessary proceedings or prolong them inappropriately, that costs consequences are warranted against those parties.

Against the backdrop of Ontario’s traditional costs approach to estate litigation which is developing to incorporate costs penalties, from a practice management perspective, lawyers are encouraged to review recent case law and to report to clients on the issue of costs at the outset and throughout the client retainer.

PART VI: A REVIEW OF RECENT COST DECISIONS

The following are recent proceedings before the Courts which form the basis of further discussion.

1. The costs endorsement in Salter v. Salter Estate, 2008 CarswellOnt 4902 (endorsement dated March 6, 2009); and 2009 CanLII 28403 (ON S.C.) (further endorsement dated June 4, 2009);

2. Teffer v. Schaefers in the matter of the Estate of Johanna Maria Schaefers, a Judgment of Justice Fragomeni, dated April 6, 2009; and Reasons for Supplemental Endorsement re Costs of Justice Fragomeni dated August 7, 2009;

3. The costs endorsement in the Estate of John Johannes Jacobus Kaptyn, of the Honourable Justice Brown dated June 5, 2009;

4. The endorsements of Justice Brown in Woolner v. D’Abreau, 2009 CarswellOnt 664, 50 E.T.R. (3d) 59, 70 C.P.C. (6th) 290, (Ont. S.C.J. Feb 10, 2009) leave to appeal by Woolner v. D’Abreau, 2009 CarswellOnt 6480 (Ont. Div. Ct. Aug 10, 2009) and reversed by Woolner v. D’Abreau, 2009 CarswellOnt 6479 (Ont Div. Ct. Sep. 29, 2009); Woolner v D’Abreau, 2009 CarswellOnt 2264 (Ont.S.C.J. Apr 29, 2009) leave to appeal allowed by Woolner v. D’Abreau, 2009 CarswellOnt 6480 (Ont. Div. Ct. Aug 10, 2009, and reversed by Woolner v. D’Abreau, 2009 CarswellOnt 6479 (Ont. Div. Ct. Sep. 29, 2009); 2008 CarswellOnt 8240 (December 12, 2008);

5. Buxbaum (Re) (unreported, May 15, 2009, Ont. S.C.J. , docket no, 60905, Gorman J.);

6. Dinglason v. Cabiles, 2009 CanLII 28642 (ON S.C.), costs endorsement of Justice Wilson;

7. Abrams v. Abrams 2009 CarswellOnt 2519 (Div. Ct,), judgment of Justice Low dated May 12, 2009; Abrams v. Abrams 2010 ONSC 1254, case management endorsement of Justice Brown dated March 1, 2010;

8. The decision of Justice Brown in Fiacco v. Lombardi, 2009 CanLII 46170 (ON S.C.);

9. Viau v. Kozicki, 2010 CarswellOnt 1664 (Ont. S.C.J.), judgement of Justice Gordon dated March 23, 2010;

10. Chu v. Chang, 2010 CarswellOnt 246 (Ont. S.C.J.); additional reasons in Chu v. Chang, 2010 CarswellOnt 1765 (Ont. S.C.J.);

11. Smith v. Rotstein 2010 ONSC 1117, costs endorsement of Justice Brown dated July 30, 2010;

12. McMichael Estate: Zimmerman v. McMichael Estate, 2010 ONSC 2947, judgment by Justice Strathy dated May 20, 2010; Zimmerman v. Fenwick, 2010 ONSC 3855, decision on costs of Justice Strathy dated July 6, 2010;

13. Pytka v. Pytka 2010 ONSC 6406 reasons for costs decision of Justice Brown dated December 31, 2010;

14. DeMichino v. DeMichino 2011 ONSC 142, judgment of Justice Roberts dated January 7, 2011; and

15. St. Onge Estate v. Breau 2009 CarswellNB 237 (N.B. C.A).

1. Salter v. Salter Estate17

In this endorsement dated March 6, 2009, Justice Brown dismissed a motion brought by Rodika Salter (Rodika) against the Estate of her ex-husband, Brett Salter, for a declaration that Rodika possessed the sole beneficial interest in certain assets owned by the deceased prior to his death. Brown J. directed a trial of the issues to determine Rodika’s alternative claims of constructive trust over the remaining Estate assets held by the estate trustee and or damages for the breach of alleged Minutes of Settlement with the Estate.

Justice Brown declined to fix costs, deferring instead to the judge who would hear the trial of the issues and thus be in a better position to determine the merits of the parties` and therefore the resulting cost consequences. However, in a post-script to the judgment dated June 4, 2009, His Honour issued a caution on the question of costs in this matter, and estate matters more generally:

One final point. In his handwritten submissions counsel for Ms. Salter argued that “as a matter of principle and practice the costs of contentious estate matters are generally paid from the estate itself.” With respect, that is not a correct statement of the law. As the Court of Appeal made clear in McDougald Estate v. Gooderham (2005) 255, D.L.R. (4th) 435 (Ont. C.A.), estate litigation, like any other form of civil litigation, operates subject to the general civil litigation costs regime established by Section 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 permit the costs of all parties to be ordered paid out of the estate. Those limited circumstances exist where the litigation arose as a result of the actions of the testator or those with an interest in the residue of the estate, or where the litigation was reasonably necessary to ensure the proper administration of the estate: McDougald Estate, paras. 78-80.

From a year of acting as administrative Judge for the Toronto Estates List, I have concluded that the message and implications of the McDougald estate case are not yet fully appreciated. A view persists that estate litigation stands separate and apart from the general civil litigation regime. It does not; estates litigation is a sub-set of civil litigation. Consequently, the general costs rules for civil litigation apply equally to estates litigation – the loser pays, subject to the Court’s consideration of all relevant factors under Rule 57, and subject to the limited exceptions described in McDougald Estate. Parties cannot treat the assets of an estate as a kind of ATM bank machine from which withdrawals automatically flow to fund their litigation. The “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. There is no reason why such discipline should be absent from estate litigation. Quite the contrary. Given the charged emotional dynamics of most pieces of estate litigation, an even greater need exists to impose the discipline of the general costs principle of “loser pays” in order to inject some modicum of reasonableness into decisions about whether to litigate estate related disputes.18

Justice Brown refers directly to the case of McDougald Estate19 in his post-script and points to it as a changing point in estate litigation.

Remarks

The loser pays principle and the rules applicable to costs in civil litigation are arguably now more the norm in the treatment of costs in estate litigation and related matters, which would also include Substitute Decisions Act, 199220 (“SDA”) capacity and guardianship litigation.

As Justice Brown suggests, the loser pays principle applies a punitive approach to parties who are not proceeding in good faith.

Public policy considerations as well as the “loser pays” [or success follows the event] principle must be carefully weighed against the backdrop of the nature of the litigation, the legislation, and conduct. Conduct is often a key element. But, of even greater consideration should be the principles enunciated in the concepts of “access to justice” and “proportionality.” These concepts do not simply mean access to quicker court proceedings and to counsel at a lesser cost. It is a laudable aim that those parties who need protection through legal intervention should be able to seek such protection, without the risk of significant legal bills, or even a costs order against them should they be unsuccessful in their claim.

2. Teffer v. Schaefers21

Teffer v. Schaefers was a case decided by Fragomeni J. of the Ontario Superior Court of Justice. The case centred around Johanna Maria Schaefers who was diagnosed with Alzheimer’s disease, and the respondent, Peter Verbeek (Verbeek), a lawyer who had been appointed as Ms. Schaefers’s attorney pursuant to powers of attorney for property and personal care. As there were issues concerning Ms. Shaefers`s capacity, the Public Guardian and Trustee (“PGT”) made representations, and section 3 counsel was appointed for Ms. Schaefer.

In his ruling, Justice Fragomeni removed Justice Fragomeni finding that Verbeek had not had Ms. Schaefers assessed before she signed the attorney documents and, consequently, the applicants were successful in setting aside the power of attorney documents.

The main issue before the Court on April 6, 2009 was the parties’ costs. The applicants, the PGT and section 3 counsel all sought their costs personally from Verbeek. Verbeek submitted that the costs should be borne out of the assets or estate of Ms. Schaefers relying on the decisions in Brillinger v. Brillinger-Cain,22 and Glen v. Brennan.23

Fragomeni J. was particularly troubled by Verbeek’s (a solicitor) involvement in the incapable, Ms. Schaefers’s affairs and found that Verbeek had failed to comply with Court Orders and reasonable requests made by counsel and in particular, Section 3 Counsel, appointed by the Court in accordance with the SDA and on the recommendation of the PGT.

In its analysis, the Court commenced from the proposition that the Court has discretion to award costs pursuant to s. 131(1) of the Courts of Justice Act,24 and Rule 57.01(1) of the Rules of Civil Procedure. The Court referred to the case of Andersen v. St. Jude Medical Inc.,25 where at paragraph 22, the Divisional Court outlined the following principles applicable to the Court’s broad discretion to award costs:

1. The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in Rule 57.01(1): Boucher, Moon and Coldmatic.

2. A consideration of experience, rates charged and hours spent (formerly a costs grid calculation) is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering.

3. The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: Rule 57.01(1)(0.b)

4. The court should seek to avoid inconsistency with comparable awards in other cases. “Like cases, [if they can be found], should conclude with like substantive results”: Murano at p. 249.

5. The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher…

The Court also referred to the Court of Appeal decision in Boucher v. Public Accountants Council for the Province of Ontario,26 for the principle that the expectation of the parties concerning the quantum of a costs award is a relevant factor in deciding what is fair and reasonable. The Court further referred to the decision of the Honourable Madam Justice Spies in Ziskos v. Miksche,27 which among other things, articulates the principle that “typically an important factor in assessing costs is to consider the result in the proceeding – who was the successful party.” Justice Fragomeni also cited paragraph 56 of that decision which states as follows:

[…] it can no longer be said in estate matters, and in this regard I would include matters under the SDA, that parties and their counsel can reasonably expect all of their costs to be paid for by the assets or in this case now from the estate of Johanna Miksche. The trend for some time now has been to examine the nature of the dispute and the conduct of the parties. Although in most cases it is also possible to consider which party is the “successful” party, that is not as significant a factor in these types of cases provided it can be said that the parties are properly motivated by the best interests of the person under a disability and are acting reasonably.

Justice Fragomeni ordered Verbeek to personally pay the other parties’ costs on a substantial indemnity basis, due to his refusal to acknowledge Ms. Schaefer’s incapacity and other steps that unnecessarily lengthened the proceedings. Interestingly though, in spite of the fact that Justice Fragomeni ordered costs payable on a substantial indemnity basis, he reduced many of the costs claimed by the parties. His Honour found that some of the Bills of Costs submitted were “excessive” and “disproportionate” and further found that the Parties’ and their lawyer’s materials were “duplicitous” and “overworked”. His Honour was not satisfied that the accounts submitted were reasonable given the nature of the issues before the Court and reduced several of the amounts.

Justice Fragomeni ordered that the entirety of the Public Guardian and Trustees costs were to be paid by Verbeek. The applicant’s costs, although in excess of $180,000.00, were set at $70,000.00, half of which was to be paid by Verbeek personally. As for section 3 counsel, his account was in excess of $50,000.00. Justice Fragomeni ordered that $40,000.00 in costs were payable to section 3 counsel, with $15,000.00 payable by Verbeek and the balance payable by the estate.

It is important to be aware that His Honour was asked to fix costs, and not to assess costs. The distinction is an important one as Justice Fragomeni himself writes:

This is not an assessment of costs, but rather a fixing of costs, pursuant to Rule 57.01(3). In fixing costs, the Court does not conduct a line-by-line analysis of the services performed by counsel. The Court is required to consider the factors set out in the Rules and jurisprudence and determine a fair and reasonable quantum that reflects those principles.

Still, Justice Fragomeni took steps to alter the amounts paid to the parties. Rule 57 does not direct the Court to assess a lawyer’s account, nor does it set out the criteria for same. Assessments are governed by the Solicitors Act,28 and Rule 58 of the Rules of Civil Procedure. The factors relevant to an assessment are further outlined in the common law.

The issue of costs was revisited by the Court on August 7, 2009, after submissions were made by section 3 counsel and counsel for the applicants.29 The applicant sought additional costs based on a settlement offer. Section 3 counsel pointed out that his account had been paid by the estate pursuant to an earlier court order, and as such reimbursement was required by Verbeek. Justice Fragomeni altered his order so as to provide that Verbeek was to repay the estate for costs already paid to section 3 counsel but made no changes to the costs order for the applicants.

Remarks

In ruling on costs, the Court in Schaefers made particular note of the fact that the matter was an Application, not a trial, to support the point that costs ought to be lower. Much of an estate litigator’s work is by way of Notice of Application and not by action, statement of claim or ultimately disposition at trial. One of the many benefits in having matters proceed by Application is arguably the potential for earlier resolution of the issues and therefore by extension, a less costly result irrespective of the stage reached in what could be described as a graduated process.

Still, costs in proceedings commenced by Application may nevertheless be high depending on the stage reached and not necessarily unjustifiably so. With any litigation much of the costs equation often has to do with the conduct of one or more of the litigants and whether the process could have ended earlier but for such conduct.

The fixing of further, significant costs (i.e. the entirety of the parties’ costs) against Verbeek was characterized as “too punitive” by the Court. This is in spite of the fact that the Court accepted that the conduct of Verbeek attracted costs. Punitive or not, counsel were successful through significant resistance from Verbeek and ultimately to the benefit of Ms. Schaefers, who is of significant means. It is the author’s view that the means of the incapable person is a relevant consideration.

The emphasis and the fixing of costs in this matter was related to conduct and by extension, proportionality and reasonableness.

Justice Fragomeni fixed costs in significant sums against Mr. Verbeek personally on a substantial indemnity basis and made a further Order as to costs to be paid out of the assets or Estate of Schaefers, however he declined to order the payment of all the parties’ costs. It is difficult to determine from the Judgment precisely why the Court did not order that the remainder of the costs be absorbed by Ms. Schaefers’s assets or estate, which is substantial, and considering that she benefited from the litigation which succeeded in protecting her interests.

It is not clear what the purpose is of a Court opining on the extent of costs if the Court is not then prepared to otherwise fully assess the costs as contemplated by Rule 58 and the governing Ontario Court of Appeal decision in Cohen v. Kealey & Blaney30 and is only prepared to fix costs. It is difficult for a Court to decide, in fixing costs, what is reasonable where instructions are being sought from an elderly, incapacitated, vulnerable adult when a thorough, line-by-line analysis is not conducted of the account. For more discussion on the difference between fixing accounts and assessing accounts, please see Dinglason v. Cabiles, below.

The issue of section 3 counsel is also raised in this case. As court-appointed counsel, section 3 counsel surely would have expected to recover all of his costs out of the incapable person’s property. In fact, section 3(2) of the Substitute Decisions Act provides that section 3 counsel’s fees are payable from the incapable person’s property.

An order that fails to ensure that section 3 counsel’s fees are paid has potentially grave implications for incapable persons and section 3 counsel. If there is no certainty that section 3 counsel’s fees will be paid, there is a risk that counsel may decline such appointments. Without section 3 counsel, it is difficult to ensure that the positions of incapable persons are presented in proceedings affecting their interests.

As for the issue of the “excessive” costs of section 3 counsel, perhaps that determination is best left to the guardian of property, who manages the assets of the incapable person. The Court’s ruling moreover places the guardian in a difficult position. The Court declined to order that section 3 counsel’s costs be assessed but did not fix costs in the amount claimed. Nevertheless one could assume that the court-appointed guardian for property paid such costs from the property of Ms. Schaefers as section 3 counsel would have delivered his account to the guardian for payment.

If the guardian declined to pay section 3 counsel’s fees, such counsel could have the account assessed or taxed. Still, however, this is not a satisfactory resolution as it adds yet more potential costs to the incapable person unnecessarily.

In cases where the guardian pays the account which exceeds the court-ordered amount and the account is not assessed, the guardian faces the risk of criticism and objection on a future passing of accounts for having paid the full costs of Section 3 Counsel and not adhering to the amount fixed/ordered by the Court. It is not clear whether the provisions of the Substitute Decisions Act are sufficient to protect a Guardian in these circumstances. A court order requiring payment of section 3 counsel’s fees would avoid these potential conflicts.

Cost decisions also have implications for access to justice by individuals who may not be able to bear the burden of significant legal fees. In this case, Ms. Shaefers had access to justice, and the court was able to rule on a matter to protect her interests. However, the question is whether there was adequate access for those individuals who took steps to protect her. The outcome of Justice Fragomeni’s decision meant that the two applicants personally bore the weight of more than $100,000.00 in legal fees in these proceedings.

One of the goals of a judge in making cost decisions is to do so in a manner that is proportional. It is difficult to understand how placing such a significant financial burden on parties is proportional in these particular proceedings at least from that gleaned on reading the Judgment. There is a real risk that persons with honourable intentions whose only goal is to protect the vulnerable with no vested interest will avoid taking any steps to protect such individuals as they have no way of being assured that they will not personally have to pay significant legal expenses. Why would any reasonable person take this risk? This is particularly so of an individual without any vested nature in the estate or assets in question. If an appropriate individual intervenes for protective purposes concerning an elderly incapacitated person and is successful it stands to reason that “access to justice” also means access to their costs based on success. “Proportionality” must also mean certainty of treatment in the outcome and consistency of treatment.

“Access to justice” and “proportionality” require at a minimum certainty of treatment from the Court such that counsel and litigants alike are informed as to whether they want to act or embark on such proceedings, knowing the costs consequences and the factors that ultimately will be taken into account in the determination. “Access to justice” cannot possibly mean that the parties must wait to find out after the fact what they should have been done, not done, or done differently when compliant with the Rules of Civil Procedure, the legislation, and precedent.

Disallowing costs in such circumstances has the effect of failing to recognize clients’ rights and giving effect to “access to justice” and the “proportionality” in the entirety of the process.

3. Kaptyn Estate (Re)31

The Estate Trustees, both sons of the deceased, had brought competing motions regarding a potential action by the Estate against those involved in the preparation of their father, John Johannes Jacobus Kaptyn’s Will. The Estate was worth several million dollars.

On April 27, 2009, Justice Brown had dismissed both motions,32 relying on a previous Order in which the Court had held that it would not be appropriate for the Court to give the executors advice about potential lawsuits by the Estate which clearly required the joint decision and discretion of and by the co-executors.

The parties filed written costs submissions. The total costs claimed by all the parties were $63,168.92. In his analysis respecting costs, Justice Brown gave consideration to the factors enumerated in Rule 57 of the Rules of Civil Procedure and set out by the Court of Appeal in Boucher v. Public Accountants Council.33 Justice Brown noted that neither moving party had succeeded in their competing motions and therefore declined to make an order as to costs, finding that all parties should absorb their own costs.

With respect to the full indemnification of the estate trustees, and the principle that regardless of success that estate trustees are entitled to full indemnification from the Estate for their legal costs, His Honour referred to the test set out in D.W.M. Waters, . Gillen, and L. Smith, Waters Law of Trusts in Canada, Third Edition, p. 1151, as follows:

In ascertaining whether an expense was properly incurred, a Court must consider:

i. If the expense incurred arose out of an act within the scope of the trusteeship duties and powers;
ii. Whether in the circumstances it was reasonable; and
iii. Whether it was something that his duty as a trustee required him to do”.

Justice Brown was not satisfied that either of the two estate trustees met the second element of that test.

Of note is the fact that Justice Brown’s decision that all parties bear their own costs included the Children’s Lawyer and her costs. This is in spite of the fact that the Office of the Children’s Lawyer (the “OCL”) is legislatively mandated to represent minors and the unborn and unascertained and to advance and protect their interests and that the OCL had retained outside counsel.

Remarks

Predictability is a necessary element of “access to justice” and “proportionality”. Certainty of outcome regarding costs and expectation of the Courts assists litigants and their counsel in determining whether and how to proceed. Finding out at the conclusion of the proceedings that one ought not to have proceeded in a particular manner is simply untenable. It cannot be decided after the fact where the Rules are clear, or perhaps where silent, that a step should or should not have been taken.

As was the case in Kaptyn, an order that costs are to be borne by the OCL could impact the OCL’s ability to meet its legislative obligation to represent the interests of minors. Courts rely on the OCL to act on behalf of minors, and the OCL frequently retains outside counsel in contested matters. The OCL plays an important role and it is untenable that it be bound to pay significant legal costs, particularly in cases where the estate can afford to bear the costs and the OCL was served, mandated to be representing the minors and having assisted the Court.

It is not clear in this case how the OCL’s counsel would be paid. Compelling the payment of counsel fees from public funds is problematic in cases where the estate can bear the expense and the trustees’ litigation necessitated the appearances and involvement of the OCL. If the OCL had not responded it would have failed in its statutorily imposed obligations and responsibilities.

This outcome could potentially impact the extent of the OCL’s future involvement in like matters. Possible adverse effects of this decision as to costs respecting the OCL are likely to be seen if this cost outcome continues, given the OCL’s obligation to become involved and protect and advocate for minors and the unborn and unascertained.

The reasons do not disclose whether the OCL retained outside counsel at the government rate, legal aid rate or their regular rate. As a side matter, it is worth exploring whether outside counsel ought to be required or asked to agree to reduce their rates in cases where there is a significant estate that can absorb the costs.

“Access to justice” and “proportionality” must also mean that young adult beneficiaries as in this case, without significant means, or any means, have access to representation and protection and expect that costs be addressed taking into consideration all of the within concepts including the need for their protection before the court and access to costs from the estate. Otherwise, access to justice is restricted and the outcome is disproportionate, and there is a real risk that the OCL will limit its involvement in such cases, or that counsel may decline to take on OCL files if there is no assurance that costs will be recovered from the estate and at a reasonable rate.

4. Woolner v. D’Abreau34

Brown J. conducted a hearing further to litigation which had concluded under Rule 57.07(2) of the Rules of Civil Procedure to determine costs and whether costs should be disallowed as between the respondent, Norah D’Abreau and the two lawyers providing her with legal services, Marcovitch and Koven. Marcovitch acted as her attorney for property.

Brown J. referred to Rule 57.07(1) of the Rules that provides that “where a lawyer for a party has caused costs to be incurred without reasonable cause or to be wasted by undue delay, negligence or other default, the Court may make an order (a) disallowing costs between the lawyer and client or directing the lawyer to repay to the client money paid on account of costs.”

In an earlier endorsement Brown J. had identified four stages of litigation and indicated in the first three stages that he had concerns about the reasonableness and proportionality of the costs of the fourth stage. The litigation strategy employed by Ms. D’Abreau’s counsel in the first three stages was in the view of the Court valuable to her and Brown J. found therefore Counsel were entitled to their costs. However, in the fourth stage the litigation strategy was found not to be reasonable and not proportional. In that regard, Brown J. disallowed costs incurred after a specific date in the litigation.
In order to have the position of Ms. D’Abreau presented before the Court, Justice Brown appointed independent counsel, D’Arcy Hiltz to act on Ms. D’Abreau’s behalf in the Rule 57.07 hearing.

In a further endorsement issued April 29, 2009,35 Justice Brown confirmed the role of independent counsel and the Court’s authority to appoint independent counsel, analogous to section 3 counsel under the SDA. In his decision, Justice Brown ordered each of the lawyers in question to pay independent counsel $2,327.78 so as to ensure that “Ms. D’Abreau was not left bearing the financial consequences of decisions made by her legal advisors which departed from the principle of proportionality.”

Appeal of the Decision of Brown J.36

On September 29, 2009, the Divisional Court Justices, Jennings J., Swinton J. and Wilson J., granted an appeal of the costs decisions of Justice Brown and set aside the costs orders of February 10, 2009, April 26, 2009 and April 29, 2009, having regard to the civil practice and procedure on costs, scale and quantum of costs, the bills of costs and general principles. In this case the estate had appealed the costs which were disallowed on top of the costs that had already been paid for in an earlier portion of the litigation and the appeal was allowed and resulted in the costs orders being set aside. No known decision has been rendered as yet.

Remarks

Although there are good reasons for the success of the appeal, the concerns raised by Justice Brown about the role of counsel and its value to the client, especially to vulnerable clients, are important factors to be considered by our Courts and must not be dismissed in our analysis by virtue of the appeal and its success.

Justice Brown’s decision focused on the vulnerability of Ms. D’Abreau, an 83-year old women who relied on the two lawyers to be of assistance to her. Justice Brown looked in detail at the steps taken by the lawyers, and whether they were of value to Ms. D’Abreau. Where the steps taken were not of assistance, Justice Brown disallowed those costs.

Justice Brown was assisted in his analysis by independent counsel, whose role and appointment was analogous to that of section 3 counsel under the SDA. While in his decision, Justice Brown ordered that the costs of independent counsel were to be paid by the two lawyers in question, the Divisional Court’s decision to overturn Justice Brown’s ruling means that there is no cost order ensuring that independent counsel’s costs are paid. Presumably Ms. D’Abreau would have to pay her own costs.

Section 3 counsel (or in this case, “independent counsel”) play a valuable role when a party’s capacity is in issue. Such counsel act for appointed by the Court to act for an incapable person and generally require the Court to approve their fees, notwithstanding subsection 3(2) of the SDA which provides that unless the incapable person qualifies for Legal Aid, section 3 counsel’s fees are to be paid by the incapable person.

This poses difficult questions for counsel running a business and whether in light of the recent Court treatment of costs, counsel should and can viably agree to take on such appointments. The uncertainty with respect to an Order for payment of their costs is not the only concern. In the Court’s determination in fixing their costs, a Court has little by way of guidelines respecting section 3 counsel’s representation of the incapable. There is nothing governing the appointment and what counsel can and cannot do, short of the Law Society Rules of Professional Conduct. If counsel will hesitate however to take on such appointments due to the uncertainty regarding their fees, then access to justice and proportionality are impeded. Access to justice necessarily requires access to counsel. Where the incapable person is of limited resources, Legal Aid is available for section 3 counsel, however Legal Aid provides coverage for very few. The vast majority of estate matters require that section 3 counsel be paid from the assets of the incapable person. Court decisions on costs ought to reflect the fact that section 3 counsel’s fees are to be paid from the assets of the incapable person, as per section 3(2) of the SDA with the exception of egregious or abusive circumstances.

5. Buxbaum (Re)37

This case addressed an application to pass accounts by Royal Trust Corporation, the court-appointed Trustee of the Helmuth Treugott Buxbaum Trust, following the death of Helmuth Treugott Buxbaum. There were six Buxbaum adult children whose approval was sought for the Royal Trust Statements of Accounts. Of the adult children, four of the children approved the accounts, a fifth child took no position, and the sixth child, Philip Riesling filed a Notice of Objection to the Statements of Accounts. Riesling was self-represented and filed extensive materials before the Court. The Court held that Riesling’s allegations of impropriety were not supported by evidence.

In ruling on costs, Justice Gorman declined to order that the Objector’s costs be paid out of the estate, as such an order would effectively penalize the other beneficiaries of the Trust. Furthermore, the Court ordered Riesling to pay the costs of Royal Trust and the other beneficiaries. The ruling was made because in the Court`s view, the allegations were unsupported by evidence, and the litigation was ultimately unnecessary. In spite of Riesling’s submission that he would suffer financial hardship with a significant costs order, the Court required him to pay all the parties’ costs on a full indemnity basis, and stated that it did so to discourage the Objector from persisting in the litigation “without foundation or evidence.”

Remarks

In this case, despite the Objector’s financial difficulties, the Court required him to pay all the parties’ costs on a full indemnity basis. The message is clear: litigants who engage in unfounded and unnecessary litigation could face significant costs consequences at the end.

6. Dinglasan v. Cabiles38

On June 5, 2009, Justice Wilson ruled on costs in this guardianship application brought by Amalia Cabiles’s sister to be appointed guardian of personal care of Ms. Cabiles. Ms. Cabiles had appointed her husband Bill Tandon as her attorney for personal care by way of power of attorney for personal care. Mr. Tandon adduced a significant amount of evidence in support of Ms. Cabiles’s capacity to make personal care decisions and to give a power of attorney for personal care. At stake were the custody of the subject’s two minor children as well as access and visitation by her family members and the removal of Mr. Tandon as attorney. Justice Wilson dismissed the guardianship application.

In the costs ruling, Justice Wilson ordered the respondent’s costs to be paid personally by the applicant on the basis that the respondent was successful and there was “no reason why costs should not follow the event.”39 Justice Wilson fixed the costs payable at $12,500.00, in spite of the fact that Mr. Tandon’s costs were $36,987.50. in fixing costs, the costs claimed were stated to be excessive.

As to payment of the costs claimed by counsel for Mr. Tandon, an assessment hearing was held. In the decision issued July 17, 2009, Assessment Officer Ittleman reviewed the bills of Mr. Tandon’s counsel having regards to the guiding principles found in Rule 58 of the Rules of Civil Procedure, and the leading case of Cohen v. Kealey & Blaney.40 The Assessment Officer found that the issues in the litigation – guardianship of Ms. Cabiles as well as custody of Mr. Tandon and Ms. Cabiles’ children – were extremely serious. The Assessment Officer also found that counsel took steps that reduced expenses, for example by combining pleadings, making settlement offers, and ultimately bringing the matter to resolution. In the Assessment Officer’s view, counsel “took an approach aimed at keeping the client’s costs down and bringing the litigation to a conclusion in a very timely fashion.” Counsel’s costs were $36,987.50. While Justice Wilson had fixed those costs at $12,500.00, the Assessment Officer assessed them at $36,064.51, nearly the entire amount billed.

Remarks

Justice Wilson’s ruling was firm in finding that the applicant should pay the respondent’s costs. The issues before the judge were serious, in that there were two minor children involved and the applicant sought to displace an attorney who had already been properly appointed by the allegedly incapable person.

The fact that Justice Wilson reduced the amount of costs payable by the applicant from the full amount claimed is not unreasonable but to arbitrarily comment on the costs as excessive without regard to assessment principles is difficult.

An assessment, as opposed to fixing of costs, allows the evaluating party the opportunity to carefully review steps taken and the validity of such steps and more importantly, provides insight into the client in terms of level of sophistication, understanding, and hence time spent responding to and advising the client and hence in determining what is “excessive”

7. Abrams v. Abrams41

This May 12, 2009 decision concerned the costs of a motion by the applicant for leave to appeal a decision by Justice Strathy. On March 25, 2009 Justice Low denied the motion for leave and made an order as to costs in this ruling. At paragraph 6, Justice Low summarizes as follows: “The usual costs disposition on an unsuccessful motion for leave to appeal is that costs follow the event, and are awarded on a partial indemnity basis.” The respondents all sought their costs against the applicant/appellant on a substantial indemnity basis on the basis that the motion was without merit and that counsel for the applicant had filed an extremely long (90-page) factum and argument of the motion took a full day which led to additional work on the part of respondents’ counsel. Justice Low was not convinced that the circumstances warranted substantial indemnity costs, and awarded partial indemnity costs. However, Justice Low reviewed the costs claimed by counsel and found that even those costs claimed on a partial indemnity basis were “too high.” Justice Low significantly reduced the costs claimed by the respondents by one-half or more.

As this is a highly contested guardianship application, there are numerous endorsements in this case. Another endorsement worth considering on the issue of costs is Abrams v. Abrams, decided March 1, 201042 by Justice Brown following a telephone case conference. In this endorsement, Justice Brown did not directly address the issue of costs in estate matters, but he made strong and deliberate statements on the conduct of parties in guardianship proceedings and potential cost implications for those parties, and their counsel.

There have been numerous delays and appeals in the proceeding, in what appears to be primarily attributable to the applicant. In this endorsement, Justice Brown emphasized the need for expeditious proceedings relating to an individual’s capacity and scolded the parties and counsel for the continuous delays. Justice Brown ordered that counsel co-operate and prepare a plan to adjudicate the trial of issues, and ruled that if counsel did not act promptly as ordered, there would be costs consequences, and that counsel could have costs ordered against them personally.

Remarks

Justice Low’s endorsement reiterates the basic principle that parties unsuccessful in motions for leave to appeal are liable for the other parties’ costs on a partial indemnity basis. The fact that the respondents’ costs were significantly reduced is of some concern considering those parties were compelled to provide extensive materials and spend a full day in court because of the appeal brought by the applicant and the materials he filed.

As for Justice Brown’s endorsement, the outcome is that not only may parties in guardianship proceedings have costs ordered against them, but their counsel may as well, if their conduct is perceived as delaying matters. The Court will consider the benefit, if any, procured by the incapable person in capacity matters, and if there is no benefit to the person, the Court may order that costs are personally payable by the parties. This case demonstrates that it is not only that the losers pay costs, but those parties who unnecessarily delay matters may have to pay costs along the way.

8. Fiacco v. Lombardi43

In this decision on September 8, 2009, the Court ordered the unsuccessful litigants to pay the costs in a contested guardianship of property proceeding brought in accordance with the provisions of the SDA.

In his judgment, Justice Brown refers to the general principles regarding costs and capacity litigation. Justice Brown points out that since the SDA does not specifically address the costs of guardianship applications or accompanying motions for directions, Section 131 of the Courts of Justice Act and Rule 57 of the Rules of Civil Procedure provide the governing principles.

In this ruling on costs, Justice Brown referred to his decision in Salter v. Salter Estate,44 where he reiterates the paragraphs referenced in that case, and states at paragraph 6:

…parties cannot treat the assets of an estate as a kind of ATM bank machine from which withdrawals automatically flow to fund their litigation.

Moreover, at paragraph 33 of the Fiacco decision Justice Brown writes:

…the exercise of the Court’s discretion in respect of costs claims in capacity litigation should reflect the basic purpose of the SDA – to protect the property of a person found to be incapable and to ensure that such property is managed wisely so that it provides a stream of income to support the needs of the incapable person: SDA, Sections 32(1) and 37. To that end, when faced with a costs claim against the estate of an incapable person, the Court must examine what, if any, benefit the incapable person derived from the legal work which generated those costs.

And at paragraph 36 Justice Brown writes that courts must consciously scrutinize costs claims to ensure that any monies paid are for the benefit of the incapable person:

Contested guardianship applications are more problematic. While bona fide disputes may exist amongst those interested in the well-being of the incapable person as to who should be appointed her guardian, a significant risk exists that a contested guardianship application may lose sight of its purpose – to benefit the incapable person – and degenerate into a battle amongst siblings or other family members, some of whom may have only their own interests at heart. In such circumstances, Courts must scrutinize rigorously claims of costs made against the estate of the incapable person to ensure that they are justified by reference to the best interests of the incapable person.

And finally, at paragraph 37, Justice Brown states:

I must emphasize that it would be a serious mistake for members of the Bar to presume that all parties to contested capacity litigation will have their costs paid by the estate of the incapable person. Such an attitude would misapprehend the principles which must guide the Courts exercise in its discretion on costs.

Remarks

In this case Justice Brown made an award of costs, ordering the respondents to personally pay the applicant’s costs as guardians of the property of the incapable person. Justice Brown made the further comment that the respondents may think the result harsh, but added that to fix costs against them in a lesser amount would result in the incapable person having to pay for their misconduct and that would not be just.

Paramount to Justice Brown’s decision is his view that the respondents could have avoided the motion had they cooperated with the guardians as required by law and by prior Order of the Court.

9. Viau v. Kozicki45

This was a motion for directions brought by Marlene Viau, sister of the deceased and estate trustee in respect of a previous order dated August 29, 2008. The earlier order dealt with a claim for support for the deceased’s children, brought by the deceased’s former spouse, Kristina Kozicki. Minutes of settlement were signed and an order issued providing that the estate trustee, Viau was to pay debts of the estate and then to make arrangements for investments of the estate funds to be made for the benefit of the children.

Following the issuance of the order, Ms. Viau took steps to implement the order, and complete the administration of the estate. Over the course of the administration there were disagreements between Ms. Viau and Ms. Kozicki about the payment of expenses and potential passing of accounts and delays in the court-ordered purchase of annuities. Eventually, after the involvement of the Office of the Children’s Lawyer, Viau brought a motion for directions to vary the order. The parties were able to agree to a resolution of the dispute, but were unable to agree on what costs were payable from the estate. Justice Gordon ordered that only some of each of Ms. Viau’s and Ms. Kozicki’s legal costs were properly payable from the estate, the rest falling on each of them to pay personally. Some of these costs related to passing of accounts, arguably a duty of an estate trustee.

Justice Gordon justified the costs payable individually on the grounds that in spite of good intentions, the parties “incurred litigation costs that together far outweighed any potential benefit that could have accrued to the children. In the circumstances, it is not appropriate that the the children bear their costs beyond what I have ordered.”

Remarks

This case is a strong message to litigants, including estate trustees that they must be extremely judicious in their use of courts to resolve disputes. In this case, even costs incurred to pass accounts were assigned to the estate trustee personally. The message is confusing: while estate trustees have fiduciary obligations to the beneficiaries of the estate, that obligation may mean that they are personally saddled with legal expenses.

10. Chu v. Chang46

The case of Chu v. Chang revolved around Mrs. Chang, a then-98 year old woman, and the way in which her children and one of her grandchildren were involved in her care. The matter first came before the Court in December 2008 when her daughter, Lily Chu, applied for an order appointing her as sole attorney for personal care and property. The Court appointed two joint guardians for personal care and property: Kin Kwok Chang (one of Mrs. Chang’s sons) and Lily’s son, Dr. Stephen Chu, who were later removed due to findings of kidnapping and an inability by family members to get along with respect to Mrs. Chang’s property and personal care. The Court refused to appoint any of the remaining family members as guardians of property and, instead, appointed a trust company. Mrs. Chang’s youngest daughter, Peggy Wu, was appointed the guardian for Mrs. Chang’s personal care.

On March 26, 2010, the family was before the Court again to speak to the matter of costs. Justice Brown noted that while it was true that he had removed both individual co-guardians and replaced them, the Court found that Dr. Chu had initiated a second round of unnecessary litigation following the release of his November 20 endorsement and that he had been unsuccessful in so doing. Justice Brown opined that a guardian of the property or the person has fiduciary duties of honesty and integrity that require him to approach the court with only the cleanest of hands Justice Brown that Dr. Chu had breached his fiduciary duties to Mrs. Chang by:

1. Invoking the process of the court to make baseless allegations against others;47

2. misrepresenting the true state of affairs to the court;48

3. attempting to advance a position before the court in proceedings under the Substitute Decisions Act, which is not motivated solely by a concern, objectively-based, for the best interests of the incapable person but, instead, to initiate proceedings under the Substitute Decisions Act, including proceedings for directions, which reflect merely an effort by one side of a family to lever the court process to obtain some tactical advantage against another side:49

Citing the cases of Greenlight Capital Inc. v. Stronach50 and Willmot v. Willmot51, Justice Brown opined that “substantial indemnity costs may be awarded where a party has made serious allegations of misconduct against another which were unfounded and misused the court’s process.” As Dr. Chu’s misconduct, and its effect in prompting the litigation, stood at the extreme end of the scale, Justice Brown concluded that this was appropriate to award substantial indemnity costs against him.

Dr. Chu is appealing the cost Order. As of the writing of this article, the appeal has not been heard.

Remarks

Although the cost award is currently under appeal and may subsequently be overturned, it is worth noting that the conduct of Dr. Chu was held to be sufficiently egregious as to invoke substantial indemnity costs against him. Dr. Chu’s conduct was extreme, in that he kidnapped the incapable person, and made very serious and unfounded allegations against other family members to advance his own position. The Court clearly employed cost measures as a means of dissuading continuing litigation and to send a message to other potential litigants that the Court does not take such conduct lightly.

The Court fell short of awarding full indemnity costs against Dr. Chu, as requested by the respondents, even though it clearly indicated that Dr. Chu’s conduct was highly problematic. In the decision issued in October 2009 in Davies v. Clarington,52 (which is discussed in more detail in Smith v. Rotstein and Pytka v. Pytka, below) the Court of Appeal wrote that “reprehensible conduct.” could warrant full indemnity costs. No reasons are provided as to why the Court awarded substantial indemnity costs and not full indemnity costs.

11. Smith v. Rotstein53

Smith v. Rotstein is a cost decision issued by Justice Brown on July 30, 2010. It is currently under appeal.

In reasons released on April 15, 2010, Justice Brown granted a motion for partial summary judgment of Lawrence Smith dismissing an Amended Notice of Objection of his sister, Nancy-Gay Rotstein, in respect of the 1987 Will and the first two codicils made by their mother, Ruth Dorothea Smith, who had died in 2007. Justice Brown had also given directions for the process to determine the validity of a third and fourth codicil to the deceased mother’s will.

Mr. Smith sought full indemnity costs payable by Ms. Rotstein personally. Ms. Rotstein acknowledged that costs were likely payable by her personally but contended that they should be on a partial indemnity scale.

Justice Brown clarified the law with respect to costs, as set out in the case of McDougald Estate v. Gooderham.54 As stated by his Honour at paragraph 10:

It is crucial to note that the two exceptions to the “loser pays” principle in estate litigation are not class exceptions – i.e. the exceptions do not apply to all will challenge cases or all will interpretation cases. On the contrary, as revealed by the four cases pointed to by the Court of Appeal in McDougald Estate as examples of the application of the modern approach to costs, responsibility of the costs of will interpretation or will validity litigation may well be placed on the shoulders of the individual litigants [MacDougald Estate (2005), 255 D.L.R. (4th) 435 (Ont. C.A.) para. 85]. Only where the parties can demonstrate that reasonable grounds existed to question the execution of the will or the competency of the testator, or the presence of a reasonable dispute about the interpretation of a testamentary document, will the courts consider whether it is appropriate to award costs of the litigation from the estate, rather than apply the “loser pays” principle. The costs inquiry therefore will be specific to the facts and issues raised in each particular piece of estate litigation – no general class exceptions from the standard civil rules of costs exist for types of estate litigation.

In reviewing his findings of fact in his previous endorsement, Justice Brown concluded that an award should made against Ms. Rotstein personally as she “had failed to present any reasonable grounds upon which to question the validity of the 1987 Will and the first two codicils” and, therefore, “no basis existed to impose the responsibility for the costs of her will challenge on the estate.”55

As for the appropriate scale of indemnity, Justice Brown reviewed the law on elevated costs, that is substantial or full indemnity costs and cited paragraphs 28 and 40 of Davies v. Clarington56 as follows:

28     The first issue is whether the trial judge erred in relying on the February 2005 offer as justification for an elevated costs award. This court, following the principle established by the Supreme Court, has repeatedly said that elevated costs are warranted in only two circumstances. The first involves the operation of an offer to settle under rule 49.10, where substantial indemnity costs are explicitly authorized. The second is where the losing party has engaged in behaviour worthy of sanction.

40     In summary, while fixing costs is a discretionary exercise, attracting a high level of deference, it must be on a principled basis. The judicial discretion under rules 49.13 and 57.01 is not so broad as to permit a fundamental change to the law that governs the award of an elevated level of costs. Apart from the operation of rule 49.10, elevated costs should only be awarded on a clear finding of reprehensible conduct on the part of the party against which the cost award is being made. As Austin J.A. established in Scapillati, Strasser should be interpreted to fit within this framework – as a case where the trial judge implicitly found such egregious behaviour, deserving of sanction.57

Finding that “Ms. Rotstein had advanced bald allegations of testamentary invalidity, for which she offered no evidence in support, and which she persisted in pursuing at the hearing notwithstanding admissions made on her behalf by her husband against the position she took and the contrary evidence filed from independent witnesses”58 and made baseless allegations of misconduct against her brother and meritless claims of fraud, deceit, and dishonesty based on pure speculation, Justice Brown awarded Mr. Smith full costs payable by Ms. Rotstein personally.

Counsel for Ms. Rotstein had filed a detailed critique of the Bill of Costs submitted by opposing counsel. However, as Ms. Rotstein failed to submit her own Bill of Costs, the Court put little weight on this critique and, in the absence of a Bill of Costs, the Court inferred that the fees incurred by Ms. Rotstein on a full indemnity basis approximated those incurred by Mr. Smith. Consequently, Justice Brown refused to accept her submission that Mr. Smith had “overreached in respect of the time claimed.”59 Taking into account the factors set out in Rule 57.01 of the Rules of Civil Procedure, the Court agreed with the following comments of Justice Gray in his decision in the case of Cimmaster Inc. v. Piccione (c.o.b. Manufacturing Technologies Co.), 2010 ONSC 846 at paragraph 19:

The principle of proportionality is important, and must be considered by any judge in fixing costs…However, in my view, the principle of proportionality should not normally result in reduced costs where the unsuccessful party has forced a long and expensive trial. It is cold comfort to the successful party, who has been forced to expend many thousands of dollars and many days and hours fighting a claim that is ultimately defeated, only to be told that it should obtain a reduced amount of costs based on some notional concept of proportionality. In my view…the concept of proportionality appropriately applies where a successful party has over-resourced a case having regard to what is at stake, but it should not result in a reduction of the costs otherwise payable in these circumstances.

Justice Brown concluded that a fair and reasonable award of full indemnity fees to be payable by Ms. Rotstein, personally, to Mr. Smith would be $707,173.00, an amount reduced from that claimed by Mr. Smith by just under $84,000.00. The disbursement costs were reduced as well, and an award of $30,407.29 was to be paid by Ms. Rotstein personally to Mr. Smith.

Remarks

Justice Brown issued a costs award against Ms. Rotstein based on the fact that Mr. Smith was successful in his motion for partial summary judgment. He awarded those costs at the highest end of the scale, on a full indemnity basis because of Ms. Rotstein’s conduct which was described as to pursue baseless unwarranted litigation based on bald allegations and to do so in a relentless manner. Her conduct, in the view of the Court was sufficiently egregious such as to warrant a full cost award.

Justice Brown rejected Ms. Rotstein’s position that the costs were too high to be payable by her. His Honour also refuted the claim that proportionality precluded the payment of high costs awards. The decision has been appealed to be heard in January 2011.

12. McMichael Estate: Zimmerman v. McMichael Estate, 2010 ONSC 2947, judgment by Justice Strathy dated May 20, 2010; Zimmerman v. Fenwick, 2010 ONSC 3855, decision on costs of Justice Strathy dated July 6, 2010

In the judgment issued May 20, 2010, Justice Strathy ruled on an application to pass accounts by Adam Zimmerman, a lawyer and the trustee of the Signe McMichael Trust.

Justice Strathy found that Mr. Zimmerman’s handling of the Trust fell well below the standards required of a trustee and ordered that he repay in excess of $400,000.00 that he took from the Trust as compensation in various forms. Mr. Zimmerman was unable to account for numerous payments to himself or for his benefit or that of his family that came from the Trust, and failed to keep adequate records, and clearly used the funds of the Trust for his own advantage. Justice Strathy found that Mr. Zimmerman’s accounts were “manifestly inaccurate, incomplete and false,” and that in the course of the passing of accounts, Mr. Zimmerman delayed and obstructed matters and increased the expenses of the other parties by his conduct.

In his decision on costs dated July 6, 2010, Justice Strathy was asked to order payment of full costs for the estate trustees in the amount of $167,978.52 and for the residual beneficiary, the McMichael Collection in the amount of $116,383.67. Mr. Zimmerman made no submissions on costs. At paragraph 4 of his decision, Justice Strathy reviewed the principles to consider in making costs, as follows:

(a)  the costs of a proceeding are in the discretion of the court and the court may determine by whom and to what extent costs should be paid: Courts of Justice Act, R.S.O. 1990, c. C43, s. 131(1);

(b) estate litigation, like any other form of civil litigation, operates subject to the general civil litigation costs regime: McDougland Estate v. Gooderham 2005 CanLII 21091 (ON C.A.), (2005), 255 D.L.R. (4th) 435, [2005] O.J. No. 2432 (C.A.);

(c)  as a general proposition, the principle that the “loser pays” applies to estate litigation: Bilek v. Salter Estate, 2009 CanLII 28403 (ON S.C.), [2009] O.J. No. 2328, 2009 CanLII 28403 (S.C.J.);

(d) in the determination of costs, the court must have regard to the factors set out in Rule 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, but, at the end of the day, the court’s responsibility is to make an award that is fair and reasonable, having regard to all the circumstances, including the reasonable expectations of the parties;

(e)  the court’s discretion to award costs on a full indemnity basis is preserved by rule 57.01(4)(d);

(f)   full indemnity costs are reserved for those exceptional circumstances where justice can only be done by complete indemnity: Mark M. Orkin, The Law of Costs, Vol. 1, 2nd ed., looseleaf, (Aurora, Ontario: Canada Law Book, 2010).

Reviewing these principles and the provisions of Rule 57, Justice Strathy ordered Mr. Zimmerman to pay the costs of the other parties personally on a full indemnity basis.

Remarks

The Court found that the conduct of Zimmerman was egregious, both during his tenure as trustee and during the application to pass accounts. His conduct alone was responsible for the costs incurred by the parties in the application to pass accounts. This case is very clear-cut: the conduct of Mr. Zimmerman directly led to unnecessary litigation and expenditure, and as a consequence he was liable for the full indemnity costs of all the other parties, in addition to having to reimburse the estate for monies he took.

13. Pytka v. Pytka60

In this endorsement issued on December 31, 2010, Justice Brown considered costs on a motion to set aside a settlement involving a claim of dependant relief against an estate. Marilyn Pytka (Marilyn) had brought a motion to set aside a settlement she entered into for an earlier claim of dependant relief relating to her mother Rita Pytka’s estate. Rita passed away in January 2004. The application, brought in March 2005, sought extensive dependant relief from the estate, including the right to remain in her mother’s home, the main asset in the estate. Marilyn’s claim was based on the fact that she and her daughter had always lived with her mother and that she had cared for her mother before her death.

There were various offers made back and forth between Marilyn and the estate. Marilyn’s representation also changed on two separate occasions which further prolonged matters. Finally, a trial of an issue was ordered for June 18, 2007, peremptory to Marilyn. On June 15, 2007, the Friday before the trial was to begin, the parties entered into a settlement agreement. That settlement was approved by Justice Morawetz on June 18, 2007.

The settlement required Marilyn to vacate the house no later than July 19, 2009. Marilyn failed to vacate the house and brought a motion to set aside the settlement and judgment, arguing that she agreed to the settlement under duress and that it was unconscionable.

Justice Brown reviewed the facts leading to the settlement, including the ongoing negotiations between the parties from 2004 to 2007, the fact that Marilyn was continuously represented by able counsel, and frequently on a pro bono basis. Justice Brown found no duress and held that the fact that Marilyn was represented on a pro bono basis, meant that she was free of any pressure, as she was not paying for her counsel’s fees. Justice Brown reviewed the assertion that Marilyn had been compelled by her lawyers to agree to the settlement and found that, while Marilyn had some hesitations about settling the case, she ultimately had agreed to the terms. Justice Brown examined Marilyn’s conduct following the settlement and found that while she expressed some doubts about settlement, she also expressed gratitude to her lawyers.

As for Marilyn’s claim that the settlement was unconscionable, Justice Brown also rejected that position, finding that Marilyn did well under the settlement. The settlement provided her with 47.5% of her mother’s estate, as opposed to the 25% that the Will had provided her, and furthermore her daughter received another $25,000.00 that she would not have received under the Will. Marilyn also had the right to remain in her mother’s home for an additional two years after the settlement.

Justice Brown found no basis on which to set aside the settlement and judgment and Marilyn’s motion failed.

As the parties were unable to agree on costs, Justice Brown ruled on the issue following his ruling on the motion. The respondent, Saul Pytka, the estate trustee sought substantial indemnity costs in the amount of $86,014.00 to be deducted from Marilyn’s share of the estate upon distribution. Marilyn asserted that no costs should be awarded against her personally.

In considering whether costs should be ordered personally against Marilyn, Justice Brown first reviewed his earlier decision in Smith v. Rotstein61 and found that neither of the exceptions to the “loser pays” axiom cited in McDougald Estate62 were found in this case, and that as a result Marilyn was liable to pay costs to the estate trustee.

As for the scale of costs payable by Marilyn, Justice Brown further reviewed Smith v. Rotstein63 as well as the principles elucidated by the court of Appeal in Davies v. Clarington.64 Justice Brown found that Marilyn’s actions in bringing and pursuing the motion fell within the ambit of “reprehensible” conduct that would lead to full indemnity costs. His Honour pointed to the fact that the motion was an attempt to subvert an agreement that Marilyn had knowingly and with the full assistance of able counsel, entered into. At paragraph 15, Justice Brown characterized Marilyn`s behavior as “myopic, self-centred conduct activated by an obvious animus against the other beneficiaries” that, “rose to the level of a malicious effort by Marilyn Pytka to set aside the Settlement and consent Judgment and to subject her siblings to the harassment of a completely meritless piece of litigation which had the effect of inflicting unnecessary costs on the Estate and delaying the final administration of the Estate.” Justice Brown concluded that such conduct warranted elevated costs and awarded substantial indemnity costs against Marilyn.

In reviewing the quantum of costs, Justice Brown reduced the cost amount claimed, finding that more work should have been delegated to junior counsel and clerks, so as to reduce costs. Justice Brown noted that of 160.3 hours of legal work noted in the Bill of Costs, 143 hours were performed by senior counsel. On the basis of proportionality, Justice Brown re-apportioned the quantum of costs, and calculated the costs on the basis of calculation of half of the legal work being performed by junior counsel and fixed fees at $55,200.00. As for disbursements, Justice Brown reduced them from $7,359.52 to $4,500.00 finding the cost of photocopying elevated.

Remarks

In this case, Justice Brown applied the “loser pays” principle and finding the conduct of the moving party to be motivated by malice, awarded substantial indemnity costs against her. The moving party sought to set aside a settlement that she had agreed to previously, with the assistance of counsel. In the Court’s view, Marilyn’s motion was entirely self-serving and a naked attempt to obtain more from her mother’s estate and delay its distribution to the other beneficiaries. It was the conduct of Marilyn that led to serious cost consequences for her.

It is worth noting that although substantial indemnity costs were awarded, counsel’s bill was reduced by Justice Brown for failing to delegate to junior counsel, on the basis of proportionality. Justice Brown also reduced the disbursements charged, finding them elevated:

“In terms of disbursements, of the $7,359.52 sought, $3,346.00 related to photocopying. Those numbers signal that is the Superior Court of Justice had the facilities for e-filing (which unfortunately, it still does not), disbursements in this case could have been 50% lower. The assessment of costs, however, still must deal with the reality of a cumbersome paper world. I find the amount sought for photocopying too high, and I reduce the overall award for disbursements to $4,500.00.”

Since as Brown J. Indicates there is no ability to e-file pleadings, copying is a cost of complying with Court rules, service requirements and procedure. Disbursements are required and in most instances, they are non-discretionary – and therefore if successful, there should unequivocably be full reimbursement for such costs. Copying, binding and service is expensive and cannot unfortunately be avoided. In my respectful view, the reduction of disbursement costs by Brown J. is harsh.

14. DeMichino v. DeMichino65

Michele DeMichino was catastrophically injured in a car accident in 2003. The injuries sustained in that accident left Mr. DeMichino in need of intensive and continuous medical care and rendered him incapable of managing property and many elements of personal care.

Mr. DeMichino was represented in a tort action respecting the accident by Gary Neinstein. The action was settled for $1,153,617.08. At the same time that Mr. Neinstein sought court approval of the settlement, he brought a guardianship application, seeking the appointment of Mr. DeMichino’s common law spouse, Vassiliki Banushefski and her niece Eleni Makedonas as Mr. DeMichino’s guardians of property. The materials stated that Mr. DeMichino was estranged from his two sisters, in spite of evidence that Mr. Neinstein knew that this was not the case, and Mr. Neinstein had a signed retainer agreement with Mr. DeMichino’s sisters to act for them in a guardianship application. Mr. Neinstein also did not serve the guardianship application on Mr. DeMichino’s sisters as required by the SDA. On May 29, 2007, Justice Moore approved the tort settlement and granted the guardianship application but deferred Mr. Neinstein’s request for approval of additional fees and disbursements.

Upon learning of the guardianship and that vast sums of monies that were being withdrawn by the guardians of property, Mr. DeMichino’s sisters retained counsel and brought an application to replace the previous guardians and obtain an accounting from them. As a result of the guardianship application brought by Mr. DeMichino’s sisters, the Bank of Nova Scotia Trust Company was named Mr. DeMichino’s guardian of property on September 23, 2008, and Mr. DeMichino’s sisters were named guardians of the person on July 16, 2009.

The estate matter was case managed by Justice Roberts. Mr. DeMichino was represented by section 3 counsel. Ms. Banushefski – a person under disability – was represented by the Children’s Lawyer in settlement proceedings. The guardian of property was also represented in the proceedings as was Eleni Makedonas, the former guardian of property and the person of Mr. DeMichino.

Matters were protracted because Mr. Neinstein was, in the words of Justice Stinson who ruled in an earlier costs decision, “uncooperative.”66

In the January 7, 2011 judgment, Justice Roberts was asked to approve a settlement reached by the parties. The parties had reached agreement that Mr. Neinstein was to personally pay $145,000.00 for costs incurred by the various parties in the second guardianship application and related proceedings. As for the quantum of costs, and the fact that it did not fully indemnify the parties, Justice Roberts wrote at paragraph 74: “..I concur with the opinion expressed by counsel for the Bank of Nova Scotia Trust Company that, even though Mr. Neinstein’s contribution does not fully indemnify the parties for their costs, the expense of continuing with proceedings against Mr. Neinstein and his firm would outweigh any further benefit to be obtained….” Justice Roberts approved the amount of $145,000.00 in costs to be paid personally to the other parties’ counsel by Mr. Neinstein.

At an earlier attendance, counsel for Mr. Neinstein had taken the position that the payment of $145,000.00 in costs was contingent on court approval of the further fees and disbursements he was claiming. Justice Roberts issued a stern warning in this judgment that it is “completely inappropriate and bordering on contempt for counsel or parties to try to bind or put pressure on the Court to approve a settlement in a certain form on the threat of withdrawing all of part of its terms.”67

The Judgment speaks to Mr. Neinstein who continued to seek additional fees and disbursements from Mr. DeMichino. Specifically, Mr. Neinstein sought a further $487,432.81 related to the tort action, $47,700.00 in respect of a Consent and Capacity Board application and $10,000.00 for the first guardianship application brought by Mr. Neinstein. The other parties to the estate matter did not oppose the request for fees and disbursements.

In the May 29, 2007 order approving the settlement and the first guardianship application, Justice Moore had allowed payment of $10,000.00 to Mr. Neinstein for the guardianship application, $318,000.00 for fees and $50,000.00 for disbursements in the tort action. The total approved was $378,000.00. On that date, Mr. Neinstein’s firm claimed an additional $624,512.81 in fees and disbursements for the tort action. Justice Moore deferred the matter and requested that the PGT prepare a report respecting the claim for additional fees and disbursements. In its report dated July 10, 2007, the PGT recommended that Mr. Neinstein’s firm receive a further $487,432.81. Following receipt of the PGT report, Mr. Neinstein transferred $562,426.41 from the funds held in trust for Mr. DeMichino without court approval.68

In reviewing Mr. Neinstein’s request for further fees and disbursements, Justice Roberts noted the fact that Mr. Neinstein had pre-taken compensation without court approval and that there were discrepancies in his accounting. Justice Roberts also noted that Mr. Neinstein was seeking an equitable remedy in seeking costs, which requires that Mr. Neinstein come to court with clean hands. Justice Roberts held, that “there is no question that Mr. Neinstein has breached his fiduciary duty to Mr. DeMichino by pre-taking his fees to his client’s detriment. ”69 Justice Roberts continued at paragraphs 42 to 44:

Mr. Neinstein’s actions deserve the strongest condemnation. ..

They go to the root of his fiduciary relationship with his client and are all the more deplorable in the circumstances of this matter where his client was catastrophically injured and under a severe disability and is in need the monies taken by Mr. Neinstein and his firm…

Mr. Neinstein clearly and wilfully breached Justice Moore’s order by pre-taking compensation which had not received court approval because, by his own admission, he was too impatient to wait.

On that basis, Justice Roberts ruled that Mr. Neinstein was not entitled to any further fees or disbursements in spite of the PGT’s recommendation that Mr. Neinstein receive a further $487,432.81. Justice Roberts also found that even without the misconduct, Mr. Neinstein would not have been entitled to the amounts claimed. Justice Roberts noted that there were no dockets kept for the work performed by Mr. Neinstein and his firm, and that there was significant duplication in work, such that the additional fees were not justified. Justice Roberts also noted that Mr. DeMichino was in need of the funds for his own continuing care. In conclusion, Justice Roberts held that Mr. Neinstein had been well-compensated and that all monies taken as additional compensation were to be returned to Mr. DeMichino’s guardian of property with interest.

Remarks

Justice Roberts had strong comments about counsel’s conduct in this case. Justice Roberts emphasizes the fiduciary obligations of lawyers to their clients under disability.

Mr. Neinstein found himself paying the legal costs of other parties in the sum of $145,000.00. Justice Roberts`s comments suggest that full indemnification would be in order were it not for the fact that it would cost the parties much more in legal expenses to obtain it.

This is a serious lesson for counsel concerning expected conduct and adverse cost consequences.

15. St. Onge Estate v. Breau

Finally, another insightful case on the matter of costs is St. Onge Estate v. Breau,70 a case decided by the New Brunswick Court of Appeal. This case is interesting for its cross-provincial review of various appellate-level cases concerning costs in estate cases.

St. Onge Estate involved the estate of Ernest St. Onge, deceased (the “Deceased”). The appellant, a friend of the Deceased, had attempted to argue before the New Brunswick Court of Queen’s Bench that the Deceased had gifted him the monies shared by them in his joint account, which was created pursuant to a power of attorney in the appellant’s favour, while the deceased’s health was declining. On appeal, the Court of Appeal agreed with the court below, that the deceased did not have the requisite mental capacity to form the intention to make a gift of the monies in the joint account (or his tools and personal items).

The Court of Appeal also upheld the trial judge’s determination on costs, which was an award of party-and-party costs of $8,875 against the defendant/appellant. The defendant/appellant had attempted to argue that while the general rule is that costs follow the event is inapplicable in cases involving estate litigation. Rather, he contended that the general rule is that all parties, including the unsuccessful ones are prima facie entitled to reimbursement out of the estate, on a solicitor-client basis. In addition, the appellant insisted that only in exceptional circumstances is the unsuccessful party to be denied solicitor-client costs. The Court of appeal concluded that the trial judge did not err in exercising his discretion to award party-and-party costs against the appellant. The Court concluded that “there is no general rule that all litigants are entitled to full indemnification out of the estate or even a general rule that unsuccessful estate litigants are entitled to full or partial indemnification.”71

In reaching its conclusion, the Court commenced its analysis with the leading English authority on the matter of costs in estate cases: Mitchell v. Gard (1863), 164 E.R. 1280 (Eng. Prob. Ct.), a case which, the Court of Appeal opined, is cited “for the proposition that probate costs are at the discretion of the court and the general rule is that costs follow the event.”72 In the Court’s view, in the exercise of that discretion, the court must be guided by the principles laid down in the case law including Mitchell v. Gard in which the following two exceptions were recognized:

From these considerations, the Court deduces the two following rules for its future guidance: first, if the cause of the litigation takes its origin in the fault of the testator or those interested in the residue, the costs may properly be paid out of the estate; secondly, if there be sufficient and reasonable ground, looking to the knowledge and means of knowledge of the […] capacity of the testator, or to put forward a charge of undue influence or fraud, the losing party may properly be relieved from the costs of his successful opponent. [at p. 1281]

From this, the Court of Appeal found that the English cases do not support a blanket rule that costs in estate cases should be borne by the estate, but rather that that costs follow the event, subject to the two exceptions identified therein, i.e. (i) the litigation is the fault of the testator and (ii) the capacity of the testator is in issue. However, as noted by the Court, from the paragraph quoted above, “we are not told whether the payment of costs means party-and-party costs or solicitor-client costs” and, as such, “[o]ne can reasonably assume that the choice is a matter of discretion to be exercised by the court on a case-by-case basis.”73 The Court also opined that “if the second exception (e.g. capacity of testator) is applicable, the unsuccessful challenger is to be relieved of the obligation to pay costs so long as there are, for example, reasonable grounds for alleging testator incapacity,” “[…] however, that the exception does not say that the losing party is entitled to full indemnification cost of the estate.”74 In the Court’s view, “[t]hat too is a matter that remains at the discretion of the court.”75

The Court then referred to the cases decided by appellate courts of Ontario (i.e. McDougald Estate v. Gooderham), Manitoba (i.e. Jumelle v. Soloway Estate), and Alberta (i.e. McCullough Estate v. McCullough), along with appellate level cases from British Columbia and Prince Edward Island (Vielbig v. Waterland Estate (1995), 1 B.C.L.R. (3d) 76, [1995] B.C.J. No. 170 (B.C. C.A.) and Dagle v. Dagle (1990), 81 Nfld. & P.E.I.R. 245, [1990] P.E.I.J. No. 54 (P.E.I. C.A.)), to come to the following conclusion:

Over the last two decades, no less than five appellate courts have confirmed the understanding that, even in estate litigation, the general rule is that costs follow the event. Correlatively, only in exceptional circumstances will an unsuccessful litigant be entitled to full or partial indemnification out of the estate with respect to legal costs incurred in pursuing an action. Ironically, these two propositions of law are now labelled the “modern approach”. In reality, the modern approach is simply a reversion to the original or traditional rule established pursuant to English precedents.76

As noted by the Court of Appeal, “The general rule that costs follow the event when it comes to estate litigation appears to be law in British Columbia. Unless one of the recognized exceptions applies, the general rule will be applied: Vielbig v. Waterland Estate (1995), 1 B.C.L.R. (3d) 76, [1995] B.C.J. No. 170 (B.C. C.A.) and see Lee v. Lee Estate (1993), 84 B.C.L.R. (2d) 341, [1993] B.C.J. No. 1894 (B.C. Master).”77 The Court of Appeal also took comfort in the decision of the Prince Edward Island Court of Appeal in Dagle v. Dagle (1990), 81 Nfld. & P.E.I.R. 245, [1990] P.E.I.J. No. 54 (P.E.I. C.A.) where the unsuccessful estate litigant was ordered to pay costs at trial and, on appeal, “it was found that the appellant was entitled to costs out of the estate based on one of the exceptions set out in Mitchell v. Gard […].”78

At paragraph 69, the Court concluded its analysis on the law of costs in estate litigation, with the following:

Following the lead of Alberta, British Columbia, Manitoba, Ontario and Prince Edward Island, we believe the general rule that “costs follow the event” should apply in estate litigation. Moreover, the general rule envisages costs on a party-and-party basis (partial indemnification). Of course, the general rule is subject to an exceptional category which mirrors and builds upon the policy reasons cited in the jurisprudence. In exceptional cases, the probate court may exercise its discretion to depart from the general rule and award costs to an unsuccessful litigant (partial or full). Of course, the exercise of discretion must be effected on a principled basis and, hence, in accordance with the case law discussed above. In the present case, the probate court judge did not give any reasons for rejecting the appellant’s request for solicitor-client costs pay-able by the estate. Thus, it falls on this Court to decide the issue within the framework identified in these reasons.

Applied to the facts, the Court of Appeal found that this case did not fall within one of recognized exceptions where costs from the estate could be considered. It did involve the interpretation of a will or trust document and, consequently, one could attribute the litigation to the fault of the Deceased. The case did not involve the testamentary capacity of the Deceased and it was not a wills variation case. In the Court’s view, litigation over ownership of funds in a joint bank account should not be treated as exceptional category, but, even if it was an exceptional category, the defendant/appellant should still not succeed on the costs issue since he did not have reasonable grounds for pursuing or defending the litigation, nor was litigation reasonably necessary for the proper administration of estate.
2009 CarswellNB 237 (N.B. C.A).

PART VII: CONCLUDING COMMENTS

Recent case law raises several issues of concern for potential litigants and the estate bar.

Many recent cost decisions see Courts not only fixing costs but also purporting to assess costs as well.

The practice of some courts to reduce counsel costs for purported over-preparation is at odds with the duties of lawyers under the Rules of Professional Conduct to provide rigorous representation of one’s clients. This is especially problematic when counsel is faced with difficult opposing litigants and/or counsel who drive up the costs with unnecessary proceedings or intractable positions.

The fixing of costs is notably distinct from the assessment of costs. When a Court indicates that a lawyer’s fees are excessive or disproportionate, then the parties are well-served to have all factors relevant in any assessment considered. In reviewing the recent case law it does not appear that the usual assessment factors as outlined in Rule 58 and Cohen v. Kealey & Blaney are being reviewed and therefore all of the circumstances regarding the appropriateness of any Counsel’s account are arguably not being properly considered.

In any event, the time spent, is the time spent and absent disqualifying conduct, should be properly and fairly decided with consistency. If Counsel has prepared materials as required by procedure or by steps taken by opposing counsel, clients should not be penalized for the lawyer’s compliance with their obligations by the Court suggesting afterwards they should have done differently despite procedure.

In general, estate practitioners approach estates and related litigation on a step-by-step basis which reduces the potential cost exposure to the clients, or parties’ counsel, and should be considered in the context of conduct at given stages. Regardless, litigation is not inexpensive. The increased procedural requirements, in addition to the emotional element of estate matters mean that it is costly litigation by nature. Lawyers take on risk every time they act for a client in litigation. Inherent in the process is acting to a competent and acceptable standard and in doing so lawyers must be able to protect themselves during the retainer which necessarily means documenting the file and hence automatically increasing costs to the services provided. The nature of the litigants in these matters often means that in spite of success, counsel increasingly face assessments brought about by clients – a time consuming and costly process.

Recent cost awards aim to curtail the conduct of the wasteful, and overly aggressive litigant, as in Pytka v. Pytka or Chu v. Chang, or, as in McMichael Estate and penalize the party who acted improperly, to ensure the estate does not bear the burden of misconduct.

Courts have also indicated that counsel may be liable for costs themselves. A stern warning was issued to counsel by Justice Brown in Abrams v. Abrams, Ziskos v. Miksche, and in DeMichino v. DeMichino.

While the policy aims of penalizing wasteful litigants, or even lawyers are understandable, and laudable, there is a risk that broadly restricting costs could have severe negative consequences on parties who properly rely on cost awards, and an attendant negative result to public policy initiatives.

Throughout this paper, reference has been made to “access to justice” as a priority. This was prioritized recently in comments by B.C. Chief Justice Finch as a driving force in reforms to the justice system. Chief Justice Finch emphasized that it is “morally wrong” that some cannot defend their civil rights simply because they cannot pay. Cost awards can rectify that moral wrong by ensuring that those without means to pay are not saddled with legal bills.

An important element of allowing parties to access the courts and access justice is the deferred retainer. However, it is unlikely that counsel will agree to deferred retainers without some confidence that costs will be paid in the end. If lawyers determine that they may or will not be paid, there is a serious risk that they will not take on deferred retainers and that as a result, the system will be burdened with more unrepresented litigants. As a result, those who are most vulnerable and at risk may find it increasingly difficult to pursue legal remedies. Any lawyer who chooses to work in arrears in the future, would appear to be doing so at their increasing peril in light of the within decisions.

Another potential outcome of the current trend in cost decisions is that estate trustees may not avail themselves of the Courts. In some of the above-noted cases, well-meaning parties who have been unsuccessful find themselves burdened with significant legal expenses, at times incurred in their fiduciary duties as estate trustees. Viau v. Kozicki is an example of such a case, in which the estate trustee found herself responsible for a significant legal bill for steps she took in her capacity as estate trustee. Rulings that saddle estate trustees with unexpected legal expenses undermine the public policy purposes of encouraging trustees to seek the assistance of the courts, and ensuring that all steps are properly taken.

In Viau v. Kozicki, the mother of the minor children in question also found herself with only a partial cost award from the estate, so that she was responsible for significant legal fees. Although not an estate trustee, as the mother of children whose interest is affected by the estate distribution, she seems properly placed to bring enquiries and concerns before the courts. As a result of rulings such as this one, parties who have valid concerns about estates may avoid the courts altogether, so as to avoid personal liability for legal expenses.

Another consideration that arises in capacity cases is that they are often brought by parties who have no interest in the estate, but are driven by concerns for the well-being of the incapable person. Teffer v. Schaefers is an example of such a case. In that case, the uninterested individuals who brought the application that ultimately benefited Ms. Schaefers found themselves personally responsible for very significant legal fees. This is in spite of the fact that Ms. Schaefers had assets more than sufficient to pay costs, and that Ms. Schaefers benefitted immensely from the outcome. This is a serious consideration in light of the rapidly aging population and the fact that many elderly people do not have children or heirs to look after their interests. The failure to award costs in such circumstances will likely dissuade all but the most determined (and wealthy) of well-intentioned people to assist those vulnerable individuals who need Court intervention.

This paper has also dealt with the payment of section 3 and independent counsel fees and the OCL. When Courts decline to order costs payable from the estate where such monies are available, the statutory protections that provide legal representation for vulnerable minors and incapable persons are seriously undermined. Procedural requirements, representation and outcome must all be considered.

Many estate and related cases settle at mediation where costs are always the subject matter of the settlement. It may be in light of the current case law on costs, that parties will feel compelled to settle at mediation to ensure the cost implications and exposure is limited. While appropriate in many cases, there are many other situations where the Court is best-positioned to provide a remedy and justice is best-served by review by a judge. The emerging case law may dissuade even those with important cases to have them heard by a judge for fear of negative cost implications.

The broad goals of “access to justice” and “proportionality” require an ability to predict outcomes. A lawyer advising his or her client on a potential application or the steps required in response to an application must also be able to advise the client on potential cost implications. Arbitrary practice, procedure, and reasons within judgments are untenable to the client and the lawyer and not conducive to the concepts that our justice system is meant to uphold.

Careful Consideration before pursuing Estates and related claims:

Since legal fees in estate litigation can be quite significant, and virtually now unpredictable, these recent costs decisions must be reviewed carefully and considered when assessing the risk of costs, and hence the risk in pursuing the litigation.

In the case of Buchanan v. Goetel Communications Corp.,79 Justice Ferguson stated the following principle:

Having said all that, the bottom line is the proposed costs are excessive. They are excessive from two perspectives: costs of this magnitude will make litigation inaccessible as a method of dispute resolution; costs of this magnitude are also disproportionate to the value of the legal work reasonable and necessary to represent a client in this dispute.

Justice Ferguson continues with a warning to counsel:

If counsel do not use more restraint in deciding how much to invest in litigation, they will put both the Bar and the Courts out of business, which will profoundly harm the public and we will serve.

Particularly in dealing with emotionally fraught litigation, counsel must put their minds to these principles and must carefully manage the expectations of their clients. Counsel must manage their clients’ expectations in an effort to both protect their clients from punitive costs and to ensure that they have done so in order to discharge their fiduciary duty of care in the representation of their clients.

The “Modern” approach to costs must not ignore the in rem aspects of Will and Estate proceedings and the traditional public policy considerations. The value of precedent and hundreds of years of case law must not be ignored.

This paper is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This paper is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive. Kimberly A. Whaley, Whaley Estate Litigation January 2011

This paper is an updated version of a paper previously presented at the Ontario Bar Association Joint Trust and Estates and Young Lawyers Division Primer on Estate Litigation on December 9, 2009

Footnotes:
1 Davies v. Clarington (Municipality) (2009), 100 O.R. (3d) (C.A.) [hereinafter Davies v. Clarington]
2There are many helpful academic articles on costs in estate litigation which analyze the historical traditional treatment of costs in estate litigation and related matters, and which take into consideration the development and change in the Rules of Civil Procedure and developing case law. Please see, for example:
Probate Practice Macdonnell, Sheard & Hull, , 4th Edition, (Carswell 1996) pages 371 to 381; “Who Pays the Costs?” Brian A. Schnurr, Estate Litigation –Estates and Trusts Journal, Volume 11, 1991 at page 53; Ian Hull, “Costs and Estate Litigation”, 18 E.T.R. (2d) 218; “Costs of the Challenger in Unsuccessful Will Challenges”, Jordan Atin; “The Developments in Costs in Estate and Capacity Litigation”, Sender B. Tator, Schnurr, February 3, 2009, Ontario Bar Association, Institute, Trusts & Estates Law Program: “Will-ful and Wantin`: Estate Practice in the First Half of the 21st Century; Estates, Trusts and Pensions Journal, Vol. 29, The Implication of the Decision in Nolan v. Kerr (Canada) Inc., for the Role of Trusts in Pension Law by Lori M. Duffy; Estates, Trusts & Pensions Journal Volume 29, No. 1, December 2009, Determination of Costs in Estate Litigation (Passing of Accounts Proceeding): Buxbaum (Re) by Michael A. Menear
3 Mitchell v. Gard (1863), 3 Sw. & Tr. 275, 164 E.R. 1280 at page 1281 [hereinafter Mitchell v. Gard]
4 Spiers v English, [1907] page 122
5 Ettore v. Ettore Estate, 2004 CanLII 22087 (ON.S.C.) at 41
The extensive powers of the Court in estate matters areaddressed by Justice Cullity in this decision. At paragraph 41,Cullity J. details that historically, witnesses in estate matters were called by the Court, and that as recently as 1974, it was held that witnesses to the execution of a will are witnesses of the court and not of the party calling them: Re Webster, [1974] 1 W. L. R. 1641 (Ch. D.) Justice Cullity continues: “The special responsibility of the court is to be found, also, in its insistence that wills are not to be held to be invalid solely on the basis of the consent of the parties: Otis v. Otis (2004), 7 E.T.R. (3d) 221 (S.C.J.), at pages 227-229.”
See also: “Costs of the Challenger in Unsuccessful Will Challenges”, Jordan Atin, November 28, 2008
6 “Who Pays the Costs?”, Brian A. Schnurr, Estates and Trusts Journal, Volume 11, 1991 at page 53
7 McDougald Estate v. Gooderham, 2005, CarswellOnt 2407, 17 E.T.R. (3d) 36 (Ont. C.A.) [hereinafter McDougald Estate]
8 Logan v. Harring, (1900), 19 P.R. 168, per Boyd C. page 148
9 Re Plant, [1926] page 139 at 148 per Lord Hanworth, M.R.
10 “Costs and Estate Litigation”, Ian Hull, 18 E.T.R. (2d) 218[hereinafter Hull]
11 Fox v Fox Estate, (1994) 5 E.T.R. (2d) 174 (Ont. Gen. Div.) with additional reasons at (1994) 5 E.T.R. (2d) 174 at 188 (Ont. Gen. Div.), reversed in (1996), 10 E.T.R. (2d) 229, 28 O.R. (3d) 496, (sub nom Fox v. Fox) 88 O.A.C. 281 (C.A.), leave to appeal to S.C.C. refused (1996), 97 O.A.C. 328 (note), 207 N.R. 80 (note)
12 Hull supra note 10 at page 219
13 “B.C. Chief Justice recommends licensing more lawyers, but no government regulation”, Charlie Smith, straight.com, November 27, 2010
14 Eady v. Waring, (1974) 43 D.L.R. (3d) 667, 2 O.R. (2d) 627 (CA)
15 See also Olenchuk Estate Re (1991) 43 E.T.R. 146 (OCGD) and Schweitzer v. Piaseki [1998] O.J. No. 177 (OCGD); and Marshall Estate (Re) [1998] O.J. No. 258 (OCGD)
16 Supra note 7
17Salter v. Salter Estate, 2008 CarswellOnt 4902 (endorsement dated March 6, 2009); Salter v. Salter Estate, 2009 CanLII 28403 (ON S.C.) (further costs endorsement dated June 4, 2009)
18 Emphasis added
19 Supra note 7
20 Substitute Decisions Act, 1992, S.O. 1992, c. 30 [hereinafter SDA]
21 2009 CarswellOnt 2283 (endorsement as to costs); 2009 CanLII 21208 (ON S.C.) (original decision)
22 2007 CanLII 23331 (Ont. S.C.),
23 2006 CanLII 343 (Ont. S.C.J.)
24 Courts of Justice Act¸R.S.O. 1990 c. C-43
25 (2006), 264 D.L.R. (4th) 557, O.J. No. 508 (S.C.J.) (Div. Ct.)
26 (2004) 71 O.R. (3d) 291, O.J. No. 2634 (C.A.) [hereinafter Boucher v. Public Accountants]
27 2007 CarswellOnt 7162 (Ont. S.C.J.)
28 R.S.O. 1990, c. S. 15
29Unreported Reasons for Supplemental Endorsement re Costs, August 7, 2009
30 [1985 ] W.D.F.L. 1978, 26 C.P. C. 92d) 211, 10 O.A.C. 344 [hereinafter Cohen v. Kealey & Blaney]
31 2009 CarswellOnt 3224, 50 E.T.R. (3d) 78 (Ont. S.C.J., Jun 5, 2009)
There have been further judgments in this estate, since the issue of this decision. None of these addressed the costs ruling made in this judgment.
2009 CarswellOnt 3482 (Ont. S.C.J., Jun 18, 2009): decision on scheduling by Justice Strathy;
2009 CarswellOnt 7548, 54 E.T.R. (3d) 313: judgment issued by Justice Strathy on December 1, 2009 in a motion respecting one of the trustee’s management of an estate asset; and
2010 CarswellOnt 5804, 2010 ONSC 4293, 60 E.T.R. (3d) 74, 102 O.R. (3d) 1, [2010] W.D.F.L. 4962: issued by Justice Brown on August 6, 2010 in respect of the will dispute in this Estate. Costs decision pending. Appeal decision pending
32 2009 CarswellOnt 2160, 48 E.T.R. (3d) 278 (Ont. S.C.J., Apr. 27, 2009)
33 Supra note 28
342009 CarswellOnt 664, 50 E.T.R. (3d) 59, 70 C.P.C. (6th) 290, (Ont. S.C.J. Feb 10, 2009) leave to appeal by Woolner v. D’Abreau, 2009 CarswellOnt 6480 (Ont. Div. Ct. Aug 10, 2009) and reversed by Woolner v. D’Abreau, 2009 CarswellOnt 6479 (Ont Div. Ct. Sep. 29, 2009); Woolner v D’Abreau, 2009 CarswellOnt 2264 (Ont.S.C.J. Apr 29, 2009) leave to appeal allowed by Woolner v. D’Abreau, 2009 CarswellOnt 6480 (Ont. Div. Ct. Aug 10, 2009, and reversed by Woolner v. D’Abreau, 2009 CarswellOnt 6479 (Ont. Div. Ct. Sep. 29, 2009); 2008 CarswellOnt 8240 (December 12, 2008); Woolner v. D’Abreau
35 2009 CarswellOnt 2264 (Ont. S.C.J. Apr. 29, 2009)
36 Woolner v. D’Abreau, 2009 CarswellOnt 6479 (Ont. Div. Ct.)
37 (unreported, May 15, 2009, Ont. S.C.J., docket no, 60905, Gorman J.)
38 2009 CanLII 14570 (ON S.C.)
39 Paragraph 6
40 Supra note 30
41 2009 CarswellOnt 2519 (Div. Ct.)
42 2010 ONSC 1254 (CanLII), 2010 CarswellOnt 1135 (Ont.S.C.J.); additional reasons dated May 10, 2010, 2010 CarswellOnt 2915 (Ont.S.C.J.); leave to appeal denied Abrams v. Abrams 2010 CarswellOnt 6650 (Ont.S.C.D.C.) August 30, 2010
43 2009 CanLII 46170 (ON S.C.)
44 Supra note 17
45 2010 CarswellOnt 1664 (Ont. S.C.J.), judgment of Justice Gordon dated March 23, 2010
46 2010 CarswellOnt 246 (Ont. S.C.J.); additional reasons in 2010 CarswellOnt 1765 (Ont. S.C.J.)
47 At paragraph 11
48 At paragraph 12
49 At paragraph 13
50 (2008), 91 O.R. (3d) 241 (Ont. Div. Ct.)
51 2007 CarswellOnt 4199 (Ont. S.C.J.)
52 Supra note 1
53 2010 ONSC 2117
54 Supra note 7
55 At paragraph 15 [emphasis in original]
56 Supra note 1
57 Emphasis added
58 At paragraph 44
59 At paragraph 58
60 2010 ONSC 6406 reasons for decision – costs of Justice Brown dated December 31, 2010; 2010 CarswellOnt8659 – original decision by Justice Brown dated November 17, 2009
61 Supra note 53
62 Supra note 7
63 Supra note 53
64 Supra note 1
65 2011 ONSC 142, judgment of Justice Roberts dated January 7, 2011 at paragraph 11
66 2009 CarswellOnt 3099 (Ont.S.C.J., Jan 23, 2009)
67 At paragraph 73
68 There is currently a complaint before the Law Society of Upper Canada with respect to Mr. Neinstein`s pre-taking of fees from funds held in trust for Mr. DeMichino
69 At paragraph 36
70 2009 CarswellNB 237 (N.B. C.A)..
71 Ibid. at par. 3.
72 Ibid. at par. 55
73 Ibid. at par. 56
74 Ibid.
75 Ibid at para 56
76 Ibid. at par. 55.
77 Ibid. at par. 66.
78 Ibid. at par. 67
79 Buchanan v. Goetel Communications Corp., [2002] O.J. No. 3063 (QL) (S.C.J.) paras 10 and 11

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