Birtzu et al. v. McCron et al.
[Indexed as: Birtzu v. McCron]
Ontario Reports
Court of Appeal for Ontario
Doherty, Harvison Young and Thorburn JJ.A.
October 2, 2019
148 O.R. (3d) 603 | 2019 ONCA 777
Case Summary
Civil procedure — Costs — Appeal by defendant from trial decision not awarding costs allowed — Appellant awarded costs on partial indemnity basis, fixed at $150,000 — Appellant's brothers sued her after father left appellant his estate — Action dismissed as statute-barred but will valid — Trial judge's costs endorsement, which suggested appellant was successful only by virtue of limitation period defence, mischaracterized trial judge's detailed factual findings in his reasons for judgment — Trial judge erred in law by focusing costs analysis almost exclusively on misleading nature of one aspect of appellant's evidence.
Appeal by the defendant from a trial decision ordering that the parties should bear their own costs of the proceeding. The appellant's father had left his entire estate to her. The appellant's brothers then commenced an action against her to set aside the father's will. The trial judge dismissed the action as statute-barred. The trial judge accepted that the brothers had shown suspicious circumstances in respect of the 2006 will but found that the appellant had rebutted those suspicious circumstances and demonstrated her father's testamentary capacity. He also found the brothers had failed to show undue influence.
Held, the appeal should be allowed.
The costs order was varied to award costs to the appellant on a partial indemnity basis, fixed at $150,000. The appellant was entirely successful at trial. The trial judge's costs endorsement, which suggested that the appellant was successful only by virtue of the limitation period defence, mischaracterized the trial judge's detailed factual findings in his reasons for judgment. The trial judge made strong findings of fact in favour of the appellant on both the testamentary capacity and the undue influence issues. The appellant's misleading evidence about her recollection of her conversations with her father's doctor had no effect on either the length of the trial or the conduct of the trial. The trial judge erred in law by focusing his costs analysis almost exclusively on the misleading nature of one aspect of the appellant's evidence.
Statutes Referred To
Limitations Act, 2002, S.O. 2002, c. 24, Sch. B
Cases Referred To
APPEAL
From the order of costs in respect of the trial proceedings made by Bloom J., [2017] O.J. No. 1777, 2017 ONSC 2276.
Counsel:
Ian M. Hull and Doreen Lok Yin So, for appellant, Constance McCron.
Peter M. Callahan, for respondent, Julian Birtzu.
No one appearing for respondent, Valentin Birtzu.
BY THE COURT:
I
[1] This appeal is brought with leave from the order of the trial judge, directing that the parties should bear their own costs of the proceeding. At the end of oral argument, the court advised the parties that the appeal was allowed and the cost order varied to award costs to the appellant (defendant at trial) on a partial indemnity basis, fixed at $150,000. The court indicated that reasons would follow. These are those reasons.
II
[2] Constantin Birtzu ("Mr. Birtzu") died on April 29, 2009. He had three children, two sons, Julian and Valentin, and a daughter, Constance. Mr. Birtzu's wife had died in 2005.
[3] In January 2006, Mr. Birtzu executed a will, leaving his entire estate to his daughter, Constance. Previous wills had distributed the estate among his three children and his grandchildren.
[4] In August 2011, Julian and Valentin commenced an action against Constance and the estate. They sought:
- to set aside the 2006 will;
- a declaration that part of Constance's home was held in trust for the estate of Mr. Birtzu;
- an accounting of the assets of the estate; and
- damages against Constance for conversion of estate property and breach of fiduciary duty.
[5] The trial lasted for 21 days. Ultimately, the trial judge dismissed all of the claims made by Julian and Valentin. He held that the claims were statute-barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. He further held that, although Julian and Valentin had shown suspicious circumstances in relation to the execution of the 2006 will arising from Mr. Birtzu's dementia, Constance had discharged her onus to prove testamentary capacity. The trial judge further held that Julian and Valentin had failed to show undue influence.
[6] Having determined that the claims were statute-barred and that the will was valid in any event, the trial judge did not consider the merits of the other claims advanced by Julian and Valentin.
[7] Julian and Valentin commenced an appeal from the trial judge's decision. That appeal was dismissed for delay. A motion to set aside the dismissal failed. Constance sought and obtained leave to appeal the costs order.
III
[8] Cost awards are discretionary. This court seldom grants leave to appeal a cost order and will vary that order only if the appellant demonstrates legal error, or that the order is "plainly wrong": Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, [2003] S.C.J. No. 72, at para. 27.
[9] Constance was entirely successful at trial. In the normal course, she would have received her costs. Nor was this a case for costs payable by the estate. Constance was the sole beneficiary of the estate.
[10] In his brief costs endorsement, the trial judge made reference to two features of the trial proceedings before indicating that there would be no award as to costs. First, he noted that Julian and Valentin had successfully established "suspicious circumstances" surrounding the 2006 will, but had failed in their claim on account of the limitation period. Second, the trial judge indicated that Constance had given "misleading evidence" about her father's mental state. He held that Constance's attempt to mislead the court could not be condoned and was "relevant" to his costs decision.
[11] With respect, the trial judge's costs endorsement, which suggests that Constance was successful only by virtue of the limitation period defence, mischaracterizes the trial judge's detailed factual findings in his reasons for judgment. The trial judge accepted that Julian and Valentin had shown suspicious circumstances in respect of the 2006 will. However, he went on to find that Constance had rebutted those suspicious circumstances and demonstrated her father's testamentary capacity. The trial judge made strong findings of fact in favour of Constance on both the testamentary capacity and the undue influence issues. Those findings are set out below:
In coming to my conclusion on testamentary capacity I have had regard also to the six clinical factors listed by Dr. Shulman and the legal factors listed in the case law I have examined, particularly Banks v. Goodfellow, supra. Constantin knew that he was making a will giving his entire estate to his daughter. He did so to reward her for her care and assistance; he felt that he had done enough for his sons financially as stated by Mr. Schwind.
The Plaintiffs have not discharged their onus to prove undue influence. Constantin was susceptible to undue influence by reason of his age, dementia, and depression as noted by Dr. Shulman. Moreover, Connie made the arrangements to have the will drafted and was the sole beneficiary. However, the evidence falls far short of establishing the elements set out by the case law I have previously reviewed. There is no proof of coercion by Connie, nor is there proof that she subverted the testator's wishes to borrow phraseology from Dr. Shulman. The testator's gratitude to her and the absence of similar sentiments toward his sons explain why he made the will in question.
(Emphasis added)
[12] Julian and Valentin lost at trial on all fronts. The implication in the cost endorsement that success had been somehow divided at trial is not borne out by an examination of the trial judge's reasons for judgment.
[13] The second reason given for denying Constance her costs -- her misleading evidence at trial -- is reflected in the trial judge's reasons for judgment. He found that Constance lied about her recollection of conversations she had with her father's doctor relating to her father's mental condition in late 2004. She denied that the doctor had told her that her father had dementia. The doctor testified that he had told Constance about the dementia. The trial judge believed the doctor.
[14] Counsel for Constance invites us to reconsider the trial judge's credibility assessment. We will not do so. It was open to the trial judge to find that Constance misled him concerning her recollection of the conversations with her father's doctor.
[15] The conduct of a litigant in the course of a trial, including offering misleading testimony, can be relevant in assessing costs. Costs are not, however, used to punish a litigant for giving misleading evidence.
[16] Constance's misleading evidence about her recollection of her conversations with her father's doctor had no effect on either the length of the trial, or the conduct of the trial. Her misleading evidence also had no impact on the trial judge's findings. The trial judge accepted the thrust of Constance's evidence concerning her father's testamentary capacity, no doubt because that evidence was corroborated by other credible independent witnesses.
[17] Although, as the trial judge properly pointed out, misleading evidence can never be condoned, the misleading evidence given by Constance cannot justify, on its own, a denial of costs in respect of a 21-day trial in which Constance was entirely successful in defending the will. The trial judge erred in law by focusing his costs analysis almost exclusively on the misleading nature of one aspect of Constance's evidence.
[18] Counsel for Constance also argues that the reasons for the cost award are so brief as to be entirely inadequate. He submits that inadequate reasons constitute a freestanding error in law, justifying appellate intervention.
[19] Trial judges are very familiar with the factors that are relevant to costs assessments and have considerable experience in blending those factors to meet the needs of a particular case. That experience allows trial judges to hone in on the important factors. They should not be expected to provide a "grocery list" of the potentially relevant factors in their reasons.
[20] We think it was, however, incumbent on the trial judge in this case, to more fully explain why, despite Constance's total success, she was denied her costs. Nor does the endorsement refer to other factors that added further weight to Constance's claim to costs. The trial judge made no reference to the offers to settle made by Constance. She made two written offers. While both were operative for a relatively brief time period, and had been withdrawn by trial, they were nonetheless substantial offers, which obviously exceeded the result eventually achieved by Julian and Valentin. The trial judge also made no reference to the complexity of the proceedings. That complexity, reflected in the length of the trial, flowed in large measure from the multi-front challenge Julian and Valentin made to the will and the distribution of the estate assets. Constance had to reply to all allegations and claims.
[21] For the reasons set out above, we are satisfied that the trial judge's costs order was "plainly wrong". Appellate intervention is warranted.
IV
[22] Constance was entirely successful at trial. Costs should have followed the result. We also see no reason why the award should be on anything other than a partial indemnity basis. We would fix the quantum at $150,000. In doing so, we are guided principally by the amount claimed by Julian and Valentin for costs on a partial indemnity basis.
[23] Constance is entitled to her costs of the appeal. We would fix those costs at a total of $10,000, inclusive of the leave application, disbursements and relevant taxes. The costs are payable by both Julian and Valentin.
Appeal allowed.
End of Document
