CITATION: The Bank of Nova Scotia Trust Company v. Vincent, 2012 ONSC 940

COURT FILE NO.: 354/11

DATE: 20120210

SUPERIOR COURT OF JUSTICE - ONTARIO

(DIVISIONAL COURT)

RE: THE BANK OF NOVA SCOTIA TRUST COMPANY v. JANICE CAROLINE VINCENT AND JOHN DAVID VINCENT

BEFORE: Justices Swinton, Pepall and Harvison Young JJ.

COUNSEL: Kimberly Whaley and A. Sultan, for the Applicant (Respondent on Appeal)

Richard B. Swan, for the Respondent John David Vincent (Appellant)

HEARD AT TORONTO: February 6, 2012

E N D O R S E M E N T

[1] The appellant David Vincent appeals pursuant to s. 10 of the Estates Act, R.S.O. 1990, c. E.21 from the order of Corrick J. dated June 17, 2011 in which she ordered that he was estopped from objecting to legal accounts paid by the respondent Bank of Nova Scotia Trust Company ("Scotiatrust") prior to March 1, 2010.

[2] Scotiatrust was appointed the Estate Trustee During Litigation for the estate of Orlie Audrea Vincent. In response to Scotiatrust's application to pass its accounts for the period from January 21, 2006 to April 30, 2010, the appellant, one of the residual beneficiaries of the estate, filed a Notice of Objection, in which he objected to the legal fees of over $300,000 paid by the Estate Trustee and sought an assessment.

[3] Litigation concerning the validity of the wills of Mrs. Vincent was settled after mediation. On the consent of the parties, Janice Vincent and David Vincent, as well as Scotiatrust, D. Brown J. issued an order dated March 1, 2010 dismissing the proceedings. The order provided in paragraph 12(e) that the Estate Trustee shall be entitled to be paid from the estate "reimbursement of legal costs and disbursements." As well, in paragraph 10, reasonable legal costs for the transfer of a Florida condominium were to be paid to Janice from the estate.

[4] The parties scheduled an initial ten minute appointment on the Estates List for early April, 2011, in accordance with the Practice Direction Concerning the Estates List in Toronto. The parties adjourned that hearing to allow discussion, rescheduling for May 4, 2011.

[5] On April 25, 2011, counsel for the appellant served a draft order for directions. Counsel for the Estate Trustee wrote to counsel for the Children's Lawyer on April 29, 2011 informing him that the application was returnable on May 4, 2011 "for the purposes of obtaining an Order Giving Directions."

[6] In a letter dated May 2, 2011, counsel for the Estate Trustee provided appellant's counsel a draft unopposed judgment for the passing of accounts and a proposed order for directions. Her draft order for directions contemplated that the triable issues included whether the appellant was "prevented from raising any of the objections on the grounds that all or part of the objections raised have already been adjudicated and are subject to an existing Court Orders [sic]." Counsel also sought increased costs in accordance with Rule 74.18.

[7] The parties appeared before the motions judge on May 4, 2011 and made submissions. She reserved her decision and subsequently held that the appellant was estopped from challenging the legal fees incurred prior to March 1, 2010. In coming to her decision, she made findings of fact, including the finding that the appellant had received copies of the legal bills and had not objected to them when received or when the terms of the settlement were being negotiated.

[8] The appellant argues that the process adopted was flawed: he was deprived of the opportunity to submit evidence in support of his objection, and the motions judge, in effect, determined the substantive issues in dispute, rather than the appropriate procedure to be followed, as contemplated by the Practice Direction and the May 2, 2011 letter from respondent's counsel, including the draft orders.

[9] In our view, the motions judge erred in proceeding to determine the substantive issue of estoppel rather than resolving the conflict respecting the draft orders giving directions. The result of her decision was to deprive the appellant of an opportunity to present evidence and make his full case respecting his ability to challenge the legal fees.

[10] While the respondent argues that the appellant had an adequate opportunity to present such evidence before the hearing, we accept the submission of appellant's counsel that there was no reason to put forth evidence relating to the substantive issues for that attendance, given that the parties were making a first appearance on a contested motion for directions. As a result, there was no affidavit evidence from either party addressing the issue of estoppel.

[11] Therefore, the appeal is allowed and paragraphs 1 through 6 of the motions judge's order are set aside. The contested motion for directions shall be referred back for determination by a judge hearing matters on the Estates List. Given our conclusion on the process, we need not address the appellant's alternative argument that the motions judge erred in law in finding estoppel and in failing to address the issue of waiver.

[12] Costs to the appellant are fixed at $9,500.00 on a partial indemnity basis, payable from the estate. This amount is fair and reasonable, particularly in light of the substantially higher fees sought by the Estate Trustee for this appeal.

[13] We invite brief written submissions, to be made through the Divisional Court office within 30 days, on the following questions: whether the Estate Trustee should be reimbursed for its legal fees by the estate for this appeal and, if so, the quantum of those fees.

Swinton J.

Pepall J.

Harvison Young J.

DATE: February 10, 2012