Owen v The Estate of Barbara Owen, 2016 ONSC 6241

Court File and Parties

Court File No.: 10-47708 Date: 2016/10/06 Superior Court of Justice - Ontario

Re: Phillip Owen, Plaintiff And: The Estate of Barbara Owen, Deceased

Before: Mr. Justice Stanley Kershman

Counsel: Claude-Alain Burdet, Counsel for the Plaintiff Pam MacEachern, Counsel for Pamela Owen Lafrance, as Litigation Guardian Prior to Death E. Jane Murray, Counsel for the Estate Trustee During Litigation

Heard: via written submissions

Costs Endorsement

KERSHMAN J.

1On April 19, 2016 the Plaintiff withdrew his claim against the Defendant. On consent, the Plaintiff consented to judgment against him on the counterclaim for $21,649.81.

2On that date, the Court ordered that costs submissions be provided with respect to the issue of costs. Those costs submissions have now been received and reviewed.

Position of the Parties

Plaintiff’s Position

3Initially in his written costs submissions, Mr. Owen argues that each party should bear their own costs, which would reflect, he says, the longstanding attitude of his parents. He argues that his deceased mother did not change her will during litigation, even though he claims that she was capable to do so.

4Later on in his written costs submissions, Mr. Owen argues that it would be fair to have the Estate cover the costs of the action, since because at one point, he agreed to drop his claim at no cost.

Position of Pamela Owen Lafrance as Litigation Guardian Prior to Death

5The Litigation Guardian Prior to Death argues that the Plaintiff should be required to pay the costs of that claim on a full indemnity basis fixed at $67,558.79 to the date of death, together with the costs incurred by the Estate Trustee in the litigation.

6The Litigation Guardian argues that the amount claimed and recovered in the proceeding dealt with the declaration of ownership and vesting order in relation to the Plaintiff’s mother’s condominium located at 310-35 Murray Street, having an approximate value of $340,000.00.

7The Litigation Guardian argues that the proceedings were complex due to the conduct of the Plaintiff, which required 12 or more court appearances in relation to the civil matter.

8It is argued that the Plaintiff’s Certificate of Pending Litigation prevented the condominium from being sold, and the proceeds from being used for Barbara Owen’s needs thereby depleting her financial resources.

9The Litigation Guardian argues that the issues were of utmost importance to the late Ms. Owen because the condominium was her largest asset. She was an 84-year-old widow at the time that Mr. Owen commenced the litigation.

10In terms of conduct intended to unnecessarily shorten or lengthen the duration of the proceedings, the Litigation Guardian argues that the Plaintiff should never have started the action. The Plaintiff was charged and found guilty of fraud in relation to the condominium parking space, as well as other matters.

11The Litigation Guardian argues that the Plaintiff’s actions warrant an award of full indemnity costs.

12In addition, the Litigation Guardian argues that the Plaintiff did not comply with the March 25, 2010 Order of Justice McKinnon, requiring him to pay the carrying costs of the condominium. He also did not comply with the Costs Order of Master Roger dated May 28, 2010. This necessitated the Litigation Guardian bringing a contempt motion in conjunction with a motion to vacate the Certificate of Pending Litigation. Two days prior to that motion, the Plaintiff paid the sums required under the two Orders.

13On a decision on the motion of September 24, 2010, released on October 7, 2010, with the Litigation Guardian being successful, the Plaintiff failed to approve the Litigation Guardian’s draft Order, resulting in further delay and expense. The Litigation Guardian’s counsel had to appear before the Registrar on December 16, 2010 to have the Order issued.

14The Plaintiff also refused to approve the March 25, 2010 draft Order and May 28, 2010 draft Order.

15Lastly, the Plaintiff refused to execute a consent to the Bank of Montreal to release the bond despite an Order on the motion of September 24, 2010, thus requiring the Litigation Guardian to bring a contempt motion, which was adjourned both for administrative reasons and at the Plaintiff’s request, so that he could retain new counsel. The matter was ultimately not dealt with due to Barbara Owen’s death.

16In terms of steps that were either improper, vexatious, unnecessary, or taken through negligence, mistake or excessive caution, the Litigation Guardian argues that the entire proceedings were brought about and continued as a result of the Plaintiff’s illegal and vexatious actions.

17The Litigation Guardian claims that costs should be awarded on a full indemnity basis based on Tsymbalarou v. Gordon, 2013 ONSC 6406, where the Court noted that the party’s fraudulent conduct is the basis on which to make an Order for full indemnity costs (at paras. 17-19).

Position of the Trustee During Litigation

18The Trustee During Litigation does not take any position regarding liability of the Plaintiff for costs.

19It was noted that some of the costs incurred by the Estate Trustee During Litigation related to the administration of the estate and would have been incurred even if the Plaintiff had not commenced an action. Based on the “rule of thumb” of 5% used to calculate the executor’s compensation, and applied to the estimated estate value of $500,000.00, it was submitted that it is reasonable to conclude that the estate might have incurred costs in the order of $25,000.00 for the administration of the estate, even in the absence of litigation.

20On a partial indemnity basis, the net amount of costs claimed less $25,000.00 estate administration costs, would have been $13,540.33. On a substantial indemnity basis, they would have been $27,555.26. On a full indemnity basis, they would have been $33,394.73.

Analysis

21The overall objective of the costs process is to fix an amount that is fair and reasonable for the unsuccessful party to pay. The objective is not to simply take what the successful parties’ counsel alleges as their actual costs. The fixing of costs by a judge is not an item-by-item assessment but rather an attempt to consider the bill as a whole, and the work reasonably required to achieve the result in light of the factors in rule 57.01(1). Boucher v. Public Accountants Council (Ontario) (2004), 71 O.R. (3d) 291 (Ont. C.A.); Noble v. Noble, 17 C.P.C. (6th) 46 (Ont. S.C.J. [Commercial List]).

22Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 provides that an award of costs is a matter in the discretion of the Court.

23The factors to be considered when fixing costs are set out in Rule 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Those factors include: the result in the proceeding, the amount the unsuccessful party could reasonably expect to pay, the amount claimed and recovered, the complexity of the matter, the importance of the issues, the conduct of any party which unnecessarily lengthened the proceeding, Offers to Settle, the principles of proportionality, and the hourly rate claimed in relation to the partial indemnity rates set out in the Information to the Profession.

24This matter involved a claim and a crossclaim. The original claim related to a declaration seeking ownership of the condominium at 310-35 Murray Street.

25The crossclaim was for damages for breach of trust as well as damages resulting from the registration of a Certificate of Pending Litigation.

26At trial, the Plaintiff withdrew his claim, save and except with respect to the issue of costs, which were to be assessed and a determination was to be made as to who was entitled to costs.

27The Plaintiff consented to judgment in favour of the Trustee During Litigation in relation to the counterclaim in the amount of $21,649.82.

28In terms of success, the Court finds that both Defendants were successful, both in relation to the claim and the counterclaim.

29The Litigation Guardian Prior to Death is claiming costs on a full indemnity basis by virtue of the actions of the Plaintiff in this matter, including in fact, bringing the action when he was subsequently found guilty of defrauding his mother of a condominium parking space, having a value of over $5,000.00, contrary to section 380 (a) of the Criminal Code, R.S.C., 1985, c. C-46; perjury in the form of making a false land transfer tax affidavit contrary to section 132 of the Criminal Code: using a forged document, a transfer deed of land, as if it were genuine, contrary to section 368(1) (a) of the Criminal Code; and breach of his recognizance regarding keeping the peace and being of good behavior contrary to section 143(3) of the Criminal Code.

30The Plaintiff was sentenced to 18 months incarceration, together with a probationary period of two years and a no-contact condition during the term of his incarceration.

31Mr. Owen appealed his criminal conviction and that appeal was dismissed.

32The Litigation Guardian Prior to Death argues that costs should be payable on a full indemnity basis, and relies on the case of Tsymbalarou v. Gordon, 2013 ONSC 5358. In that case, the Court ordered costs on a full indemnity basis, meaning that the Plaintiffs were entitled to recover all that they had expended in the action. That Court in turn relied on the case of Union Carbide Canada Ltd. v. Vanderkop (1976), 1 CPC 114, in coming to that conclusion.

33This case was important to all parties. It dealt with the condominium being a major asset in the Estate.

34As to conduct tending to lengthen the proceedings, the Court finds that the Plaintiff’s conduct did lengthen these proceedings. The following are some examples of such conduct;

i. The Plaintiff was found guilty of fraud in relation to the transfer of the condominium parking space as well as guilty of other matters; ii. The Plaintiff did not comply with the Order of Justice Mackinnon dated March 25, 2010 requiring him to pay the carrying costs of the condominium; iii. The Plaintiff did not comply with the costs order of Master Roger dated May 28, 2010 which necessitated the bringing of a contempt motion in conjunction with a motion to vacate the Certificate Pending Litigation; iv. The Plaintiff failed to approve the Defendant’s draft Order in relation to a decision released on October 7, 2010; v. In addition, the Plaintiff refused to approve the March 25, 2010 draft Order and the May 28, 2010 draft Order; vi. The Plaintiff refused to execute a consent to the Bank of Montreal to release the bond despite an order of the Court.

35The Plaintiff argues that it made an Offer to Settle this matter.

36The Court finds that the Offer to Settle made by the Plaintiff was not an Offer to Settle in accordance with s. 49 of the Rules of Civil Procedure.

37A consideration in fixing costs includes what is fair and reasonable. As stated by Smith J., in the case of John Deere Financial Inc. v. 1232291Ontario Inc., 2016 ONSC 888 at paras. 18 and 19:

18. The principle of fairness and reasonableness is the major guiding principle in the fixing of costs. It was succinctly stated by Borins J.A. when he observed that an award of costs must:

…reflect “more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant”. This is a fundamental concept in fixing or assessing costs. (Moon v. Sher, (2004), 246 D.L.R. (4th) 440 at para. 30 (Ont. C.A.))

19. The Court of Appeal also endorsed this principle in Zesta Engineering Ltd. v. Cloutier, [2002] O.J. No. 4495 (Ont. C.A.)):

In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant.

38Following the reasoning in the Tsymbalarou case and the aforesaid analysis, the Court finds that both Defendants are entitled to their costs on a full indemnity basis.

39In terms of the quantum of costs, the Court finds that the amounts claimed on a full indemnity basis by both Defendants are somewhat high, and reduces them to the amounts set out below.

40Costs are awarded to the Defendant Litigation Guardian Prior to Death in the amount of $60,500 including disbursements and HST payable by the Plaintiff.

41Costs are awarded to the Defendant Estate Trustee During Litigation fixed at the amount of $30,000 inclusive of disbursements and HST payable by the Plaintiff.

42These costs shall be paid firstly out of any moneys that Mr. Owen would be entitled to from the Estate of Barbara Owen. In the event that any costs remain due and owing after payment from his share of the Estate, they will be paid by Mr. Owen personally within thirty days after the release of the estate moneys used to pay the costs.

43The aforesaid costs relate to both files 10-47708 and 11-51771.

44These costs bear interest from the date of release of this Endorsement at the post-judgment interest rate prescribed by the Courts of Justice Act.

45Order accordingly.