Court File and Parties
Court File No.: 05-180/18 Date: 2019-04-18 Ontario Superior Court of Justice
In the Matter of the Estate of Allen Berg, deceased
Between: JUDITH BERG and AMY BERG in their capacities as ESTATE TRUSTEES OF THE ESTATE OF ALLEN BERG and MELAMEL PROPERTIES INC. Applicants – and – JAYLEVY LIMITED, JUDITH BERG, in her personal capacity, AMY BERG, in her personal capacity, MICHAEL BERG and MELISSA BERG Respondents
Counsel: Megan E. Shortreed and Denise Cooney, for the Applicants Dena N. Varah and Derek Knoke, for the Respondent, Judith Berg, in her personal capacity
Heard: February 27, 2019
Before: Dietrich J.
Reasons for Decision
1This application involves the determination of the beneficial ownership of a cottage property located in the Lake Simcoe area of Ontario.
2During his lifetime, Allen Berg directed a series of transfers of the cottage property. At the time of his death, legal title to the cottage property was held by a corporation, Melamel Properties Inc., as trustee. All of the shares of Melamel Properties Inc. are held by Mr. Berg’s estate.
3The applicant Estate Trustees of Mr. Berg’s estate identify Mr. Berg’s widow, Judith Berg, as a potential beneficial owner of the cottage property either as a joint tenant or a tenant in common with the late Mr. Berg. They also identify Mr. Berg’s estate as a potential beneficial owner.
4For the reasons that follow, I find that the beneficial owners of the cottage property are Mrs. Berg and Mr. Berg’s estate as equal tenants in common.
Factual Background
5Following a fourteen-month battle with cancer, Mr. Berg died on April 17, 2015, at 67 years of age. He was quite unwell at the time he directed the final transfer of the cottage property some eight months before his death.
6Mr. Berg was survived by Mrs. Berg and their three children: Melissa Berg, Amy Berg and Michael Berg. Mrs. Berg, Amy Berg and Michael Berg were named as Executors (Estate Trustees) and Trustees under each of Mr. Berg’s Primary Will and Secondary Will. Mrs. Berg and Amy Berg are acting as Estate Trustees of both the Primary Will and Secondary Will. In her capacity as Estate Trustee, Mrs. Berg has a veto power.
The Purchase of the Cottage Property
7It was Mrs. Berg who took a keen interest in the Lake Simcoe area. As a child, she summered there with her family. In 1984, her parents gifted their family cottage to Mrs. Berg and her siblings. Eventually, Mr. and Mrs. Berg acquired the family cottage from Mrs. Berg’s siblings.
8When a cottage near the family cottage was offered for sale, Mr. and Mrs. Berg sold the family cottage, and Mr. Berg purchased the cottage property that is the subject of this application. The cottage property is known municipally as 576 Lake Drive North, Keswick, Ontario, and described as Concession 2, Part Lots 23 and 24, Township of Georgina, Region of York, in the Province of Ontario. Mr. Berg made the purchase on November 1, 2001 using funds that included Mrs. Berg’s share of the sale proceeds of the family cottage previously owned by Mrs. Berg’s family. Mr. Berg purchased the cottage property as a trustee.
9On December 1, 2001, Mr. Berg executed a trust indenture in which he agreed to hold the cottage property on trust for the settlor, Jaylevy Limited. All of the shares of Jaylevy Limited, a private investment corporation, were owned by Mrs. Berg. Jaylevy Limited is a respondent in this application but it does not assert that it holds any beneficial interest in the cottage property.
10The trust indenture also provided that Mr. Berg could only convey, lease, dispose or otherwise deal with the cottage property in such manner as Jaylevy Limited directed in writing.
The First Transfer by Mr. Berg
11Despite the terms of the trust indenture requiring Mr. Berg to act on the written direction of Jaylevy Limited, on February 17, 2007, Mr. Berg entered into an agreement of purchase and sale in which he, “Allen S. Berg in trust for Jay Levy Ltd.”, agreed to sell the cottage property to “Allen S. Berg in trust for Allen Berg and Judy Berg.” The sale resulted in a loss for Jaylevy Limited since the costs of renovating and building on the cottage property exceeded the fair market value of the property. Mr. Berg signed the agreement of purchase and sale on behalf of both the purchaser and the vendor. Jaylevy Limited received the proceeds of sale on February 26, 2007, which were paid from an account controlled by Mr. Berg.
12Mr. Larry Ross acted as the real estate lawyer for Mr. Berg on the initial acquisition of the cottage property and the subsequent transfers. The Estate Trustees obtained and reviewed his files relating to the cottage property. There they found a note, albeit undated, that states “Agmnt of PS Allen Berg in trust for Jaylevy Ltd.”, followed by an arrow to the words “Allen Berg in trust for Allen Berg + Judith Berg.” Subsequent to this transfer, Mr. Berg received correspondence from the Assessment Review Board with respect to the cottage property addressed to him “in trust.”
The Second Transfer by Mr. Berg
13On August 14, 2014, Mr. Berg, as trustee, again transferred the cottage property. This time he transferred it, together with a number of other investment properties owned by him, to Melamel Properties Inc., an investment company in which he owned all of the shares.
14Prior to the transfer, on July 14, 2014, Mr. Berg executed a declaration in which he solemnly declared that: i) Melamel Properties Inc. would hold the cottage property for him as beneficial owner; ii) that all consideration used in the acquisition of the cottage property relating to the conveyance was beneficially owned by him and that the source of the funds was him as beneficial owner; iii) that he was the beneficial owner of the cottage property and had been since November 30, 2001 and would continue to be after the transfer; iv) that Melamel Properties Inc. was and would be a bare trustee; v) a document attached as an exhibit set out the terms of the trust; vi) the books and records of Melamel Properties Inc. never recorded the cottage property as an asset; and vii) the transfer of the cottage property was being done for estate planning purposes.
15Mr. Berg also signed an Acknowledgement and Direction in respect of the transfer which included a space for the spouse of the transferor to sign, indicating her consent to the transfer. That space was left blank. Further, the transfer application registered with the Land Registrar states that “the property is not ordinarily occupied by me and my spouse who is not separated from me, as our residence.” The transfer register notes that the transferor is Allen Berg, “Acting as an individual”, and the transferee is Melamel, “Acting as a company” and “a Trustee” of the cottage property. The explanation for the nominal consideration is that it was a transfer of “beneficial owner to trustee”. The transfer is shown to be “for Allen Berg as Beneficial Owner.” Judith Berg is not mentioned as a beneficial owner.
16Since Mr. Berg’s death, Mrs. Berg has continued to reside in the cottage property as her secondary residence. Melamel Properties Inc. has paid the property taxes, while other expenses, such as gas, maintenance and hydro have been paid by Mrs. Berg.
Position of the Estate Trustees
17The Estate Trustees seek the direction of the court with regard to the identity of the beneficial owners for whom Melamel Properties Inc. holds the cottage property on trust.
18The Estate Trustees submit that although the declaration sworn by the late Mr. Berg states that he had been the beneficial owner of the cottage property since its acquisition, there is evidence to the contrary.
19Included in this evidence are the indenture, dated December 1, 2001, which identifies Jaylevy Limited as the beneficial owner of the cottage property, and the agreement of purchase and sale, dated February 16, 2007, which evidences the transfer of the beneficial interest held by Jaylevy Limited to Mr. and Mrs. Berg.
20The Estate Trustees have not located any documentation to suggest that Mrs. Berg consented to the elimination of her beneficial interest in the cottage property or a release of any of her rights as a beneficial owner.
Position of Mrs. Berg
21Mrs. Berg, in her personal capacity, submits that the entire beneficial interest in the cottage property should be vested in her. She submits that the cottage property has always been an important part of her life. She and Mr. Berg designed and built a new cottage on the existing property and they lived there up to six months of each year for ten years of their marriage. But for Mr. Berg’s death, she submits, it would have been their retirement home.
22Mrs. Berg also submits that at no time did she transfer her beneficial interest in the cottage property or consent to any action that would deprive her of her beneficial interest. She further submits that the cottage property was a matrimonial home for the purposes of the Family Law Act, R.S.O. 1990, c. F.3, which she and her husband used a matrimonial home, and that she never released her rights in respect of the matrimonial home through any agreement or otherwise.
23Mrs. Berg’s evidence is that she was not aware of the transfer to Melamel Properties Inc. until after Mr. Berg’s death. She deposed that she was not aware of, and did not consent to, the statements made by Mr. Berg in his declaration that he was the sole beneficial owner of the cottage property and had always been the beneficial owner and that all of the funds used to purchase the cottage property conveyed to Melamel Properties Inc. were sourced by him.
24Mrs. Berg submits that the purported transfer of the cottage property by Mr. Berg to Melamel Properties Inc. is not a valid transfer as it was not permitted by law and it was premised on fundamental mistakes of fact.
25Mrs. Berg seeks an order confirming that the entire beneficial interest in the cottage property is hers. Alternatively, she seeks an order confirming that she owns a 50% interest in the cottage beneficially and that she be permitted to compel the Estate Trustees to sell the remaining beneficial interest to her at the fair market value.
Analysis
26Rule 14.05(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) authorizes the commencement of a proceeding by way of an application where the relief claimed is for: “(a) the opinion, advice or direction of the court on a question affecting the rights of a person in respect of the administration of the estate of a deceased person or the execution of a trust; […] (d) the determination of rights that depend on the interpretation of a deed, will, contract or other instrument […] (e ) the declaration of an interest in land; […] and (h) in respect of any matter where it is unlikely that there will be any material fact in dispute.”
27Rule 74.15 provides that any person who appears to have a financial interest in an estate may seek an order providing for any matter that the court directs. The Estate Trustees have standing to seek an order with respect to the administration of the estate.
28The Estate Trustees seek an order vesting the beneficial interest in the cottage property in accordance with the court’s determination as to the beneficial owner or owners. Pursuant to s. 100 of the Courts of Justice Act, R.S.O. 1990, c. C.43, this court may, by order, vest in any person an interest in real property that the court has authority to order be disposed or, encumbered or conveyed.
The First Transfer by Mr. Berg
29The transfer of the cottage property from Mr. Berg in trust for Jaylevy Limited to Mr. Berg in trust for Mr. Berg and Mrs. Berg was a valid transfer. The trust indenture, dated the 1st day of December, 2001, at the third paragraph, specifically permits Mr. Berg, as trustee for Jaylevy Limited, to “convey, lease, dispose or otherwise deal with the said lands and premises only in such manner as the Settlor [being Jaylevy Limited] shall from time to time direct in writing.”
30Though Jaylevy Limited did not direct Mr. Berg, as trustee, in writing, to convey the cottage property, Mrs. Berg’s evidence is that she, as sole shareholder of Jaylevy Limited, was fully aware that the cottage property was for sale and she acknowledges that the fair market value sale proceeds were received by her company Jaylevy Limited at the time of the sale.
31The agreement of purchase and sale shows that Mr. Berg purchased the cottage property from “Jay levy Ltd. in trust”. It appears from the note in Mr. Ross’ file that Mr. Berg instructed him that the cottage property either had been transferred, or was to be transferred, from Jaylevy Limited to Allen Berg in trust for Allen Berg and Judy Berg. Because the note is undated, it is impossible to know whether it was made before or after the transfer. The note is consistent with the agreement of purchase and sale. Neither states whether the ownership between Mr. and Mrs. Berg was intended to be as joint tenants or tenants in common. Beyond the agreement of purchase and sale and the solicitor’s note, there is no evidence of any written trust agreement.
32By his choice of language in the agreement of purchase and sale, and in the note made by his solicitor, it is apparent that Mr. Berg intended to establish a trust. The three certainties required to establish an express trust are present. Mr. Berg’s intention to create a trust is clear. The subject matter of the trust is the cottage property. The objects or beneficiaries of the trust are himself and his wife.
33In construing the terms of a trust, the settlor’s intention is important. It is not clear whether Mr. Berg intended that he and his wife would share the beneficial ownership in the cottage property as joint tenants with right of survivorship or as tenants in common.
34In the absence of trust documentation to determine the nature and extent of Mrs. Berg’s interest in the trust, the court may look at extrinsic evidence to ascertain the settlor’s intention. This is especially so where an ambiguity exists: Byers v. Foley (1993), 16 O.R. (3d) 641 (Gen. Div.) [Byers], at para. 15 and Canada Trust Co. v. Ontario (Human Rights Commission) (1990), 74 O.R. (2d) 481 (C.A.), at paras. 108-111. Extrinsic evidence includes the conduct of the settlor and other evidence of the parties’ intentions: Byers, at para. 15 and Hunter Estate v. Holton (1992), 7 O.R. (3d) 372 (Gen. Div.), at paras. 12 and 19-20.
35Mrs. Berg asserts that Mr. Berg’s intention, in creating the express trust, was that the entire beneficial interest in the cottage property was to be hers following his death. She argues that whatever beneficial interest Mr. Berg had in the cottage property would pass to her by right of survivorship, because, on his death, she alone would hold the entire residual beneficial interest in the trust. In finding this intention, she relies on the fact that the cottage property was initially held in trust for Jaylevy Limited, which was solely owned by her. She further asserts that the cottage property was built for her, at her request, funded in part by money gifted to her from her family, and that the cottage was located near the community with which she and her family were closely associated. She further asserts that Mr. Berg told her that his dealings with the cottage property were all for her and that she always believed that, on her husband’s death, she would own the cottage property exclusively.
36Apart from the ownership of the cottage property by Jaylevy Limited, Mrs. Berg’s evidence in this regard is largely uncorroborated. In addition, her evidence fails to take into account that when Mr. Berg purchased the cottage property from Jaylevy Limited, in trust, for himself and Mrs. Berg, he paid $3,015,000 for it. At the time of purchase, Mr. Berg could have decided to hold the cottage property on trust for Mrs. Berg alone, but he did not do so.
37Mrs. Berg asserts that she contributed to the funds paid for the cottage when Mr. Berg purchased it from Jaylevy Limited as well as when he purchased it, in trust, for Jaylevy Limited. When Mr. Berg first purchased the cottage property, in trust for Jaylevy Limited, the evidence is that Mrs. Berg did contribute to the purchase price. She had funds to contribute from the sale of the family cottage, a share of which she had inherited from her late parents. When Mr. Berg made the second purchase, from Jaylevy Limited, for $3,015,000, the precise source of the funds used to make the purchase is not clear. Mrs. Berg submits that the funds included money gifted to her and from assets that she brought into the marriage and assets she and her husband amassed during their marriage. Mr. Berg paid the purchase price, by cheque, on February 26, 2007, from a bank account in Mr. Berg’s name alone. The memo line on the cheque states “Re Purchase of 576 Cottage.” The records for Jaylevy Limited show a cheque deposit for $3,015,000 into Jaylevy Limited’s bank account on February 26, 2007. There is no documentary evidence in support of Mrs. Berg’s assertion that she contributed to the purchase from Jaylevy Limited. Mr. Berg made the decision to hold the cottage property on trust for Mrs. Berg and himself. I find it more likely than not that, having made a significant investment in the cottage property, Mr. Berg intended to reserve for himself a beneficial interest.
38Further, when Mr. Berg later transferred the cottage property to Melamel Properties Inc., he made a declaration that he alone held the beneficial interest in the cottage property and had always held that beneficial interest.
39In light of this evidence I am unable to find that Mrs. Berg is entitled to the entire beneficial interest in the cottage property. Subsection 13(1) of the Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34 provides that where by any assurance, made and executed after the 1st day of July, 1834, land has been or is granted, conveyed or devised to two or more persons, other than executors or trustees, in fee simple or for any less estate, it shall be considered that such persons took or take as tenants in common and not as joint tenants, unless an intention sufficiently appears on the face of the assurance that they are to take as joint tenants. Subsection 13(2) provides that this section applies notwithstanding that one of such persons is the spouse of another. In this case there is little evidence other than Mrs. Berg’s uncorroborated evidence that there was an intention that Mr. Berg would hold the cottage property on trust for himself and Mrs. Berg as joint tenants with right of survivorship.
40Accordingly, I find that, as a consequence of the first transfer by Mr. Berg, he was holding the cottage property on trust for himself and Mrs. Berg as equal tenants in common.
The Second Transfer by Mr. Berg
41Subsequent to creating the express trust of the cottage property for the benefit of Mrs. Berg and himself, shortly before his death, as part of his estate planning, Mr. Berg attempted to transfer the cottage property to Melamel Properties Inc. The documentation in respect of this transfer shows a transfer by Mr. Berg, a trustee, to Melamel Properties Inc., in trust for Allen Berg. Mr. Berg, as president of Melamel Properties Inc., signed a Declaration of Trust, dated the 30th day of June, 2014, in which he states that he, as trustee, is holding the property as bare trustee and agent for Allen Berg as to “100%.” The declaration is signed by Mr. Berg as “Trustee”, and as “Beneficiary.” Other than his declaration made on the 14th day of July, 2014 that the transfer was for “estate planning purposes”, Mr. Berg’s motivation for transferring the cottage property at that time, as he did, is unknown. Regardless, I find that the purported transfer was ineffective.
42On the evidence, Mr. Berg, as trustee of Mrs. Berg’s one-half beneficial interest in the cottage property, had no authority to divest her of this interest. Without Mrs. Berg’s express consent, Mr. Berg, as trustee, had could not unilaterally vary the terms of the trust to eliminate Mrs. Berg’s beneficial interest. A trust cannot be terminated or varied except in limited circumstances. As stated by A.H. Oosterhoff, et al. in Oosterhoff on Trusts: Text, Commentary and Materials, 8th ed. (Toronto: Carswell, 2014) [Oosterhoff on Trusts], at p. 329:
After constitution, settlors cannot revoke trusts, unless they retain a power of revocation when creating the trust. This is because when a settlor establishes a trust he or she disposes of the property and no longer has control over it, save by express provision.
43Trusts may only be varied or terminated prematurely by the beneficiaries in reliance on the rule in Saunders v. Vautier (1884), 49 E.R. 482 (Ch.) [1]; or by court order; or by the trustee if the trust document specifically permits the variation and the variation is consistent with the settlor’s intention: see Oosterhoff on Trusts, at pp. 347-348. None of these methods of variation apply to the trust created by Mr. Berg. Accordingly, the trust could not be varied to eliminate Mrs. Berg’s beneficial interest without her consent.
44There is no evidence to suggest that Mr. Berg acquired Mrs. Berg’s beneficial interest in the cottage property prior to transferring it to Melamel Properties Inc. There is also no evidence to suggest that Mrs. Berg received any consideration for her beneficial interest in the cottage property on the transfer of the cottage property by Mr. Berg to Melamel Properties Inc., which would hold it on trust for his sole benefit.
45Further, the purported transfer was supported by a number of statements made by Mr. Berg that are inaccurate. On July 14, 2014, Mr. Berg executed a declaration in which he solemnly declared that Melamel Limited would hold the cottage property for “ALLEN BERG as Beneficial Owner.” No mention is made of Mrs. Berg’s beneficial interest. Mr. Berg also declares that all consideration used in the acquisition of the cottage property relating to the conveyance was beneficially owned by him and that the source of the funds was his as beneficial owner. However, it is Mrs. Berg’s evidence, albeit uncorroborated, that the funds used to purchase the cottage property from Jaylevy Limited came from money and assets that she brought into the marriage and assets that she and Mr. Berg had amassed during the marriage. Regardless of the source of the funds, Mr. Berg was not the sole beneficial owner. Mr. Berg further declared that he was the beneficial owner of the cottage property and had been since November 30, 2001 and would continue to be after the transfer. This is erroneous; on the evidence, he had not been the beneficial owner since November 30, 2001. Jaylevy Limited had been the beneficial owner from November 30, 2001 to February 15, 2007 and Mrs. Berg and he were beneficial owners thereafter up to and including the date on which Mr. Berg swore the declaration.
46Mr. Berg also signed an Acknowledgement and Direction to his lawyer, Mr. Ross, on the 14th day of July, 2014. He signed as “Allen Berg” with no reference to the trusteeship. The purported transfer required the signature of his spouse, giving her consent to the transfer, but he did not obtain her signature. Mrs. Berg’s evidence is that she was not asked to sign the consent.
47The transfer document attached to the Acknowledgement and Direction describes the transferor as “Berg, Allen Acting as an individual” and describes the transferee as “Melamel Properties Inc. Acting as company”. It also contains Mr. Berg’s statement that “the property is not ordinarily occupied by me and my spouse who is not separated from me, as our residence.” On the evidence, these too are erroneous statements. At the time of this transfer, Mr. Berg held legal title to the cottage property as a trustee. Mrs. Berg’s evidence, which is uncontroverted, is that the cottage property was indeed a matrimonial home, which she and her late husband used as their secondary residence up to six months of the year.
48In the Land Transfer Tax Statements, Mr. Berg does not tick the box describing himself as “a person in trust for whom the land conveyed in the above-described conveyance is being conveyed.” Instead, he ticks the box that describes him as “The President, Vice-President, Manager, Secretary, Director, or Treasurer authorized to act for Melamel Properties Inc. described as the [transferee].” The explanation for the nominal consideration is that the transfer was a transfer from “beneficial owner to trustee.” This statement is also inaccurate. Mr. Berg was not the sole beneficial owner, and in any case held legal title only in his capacity as trustee for himself and Mrs. Berg.
49The transfer was receipted and registered on the 14th day of August, 2014. The transferor is shown as “Berg, Allen” and the transferee is shown as “Melamel Properties Inc.” in the capacity as “Trustee.” In fact, Mr. Berg was acting as a trustee at the time of transfer because only the trustee, as legal owner, could convey title.
50In light of the many misstatements made by Mr. Berg in his effort to transfer the cottage property to Melamel Properties Inc. and his breach of fiduciary duty in attempting to divest Mrs. Berg of her beneficial interest in the cottage property, without her consent, I find that Mr. Berg’s purported transfer of the cottage property to his company as trustee for his exclusive benefit must fail.
51A court may set aside a trust where the trust was made based on a mistake. The mistake must be a “fundamental fact” that is basic to the transaction: Donovan W.M. Waters, Q.C., 4th ed., Waters’ Law of Trusts in Canada, 4th ed. (Toronto: Carswell, 2012) at pp. 389-390. The mistakes in this case relate to the fundamental facts that Mrs. Berg had a beneficial interest in the cottage that was not recognized by the trustee at the time he purported to transfer the cottage to Melamel Properties Inc., and that Mr. Berg had never been the sole beneficial owner of the cottage property, contrary to his declaration and other documented statements.
52Accordingly, the transfer to Melamel Properties Inc. must be set aside with the result that, immediately prior to Mr. Berg’s death, he continued to hold the cottage property on trust for the benefit of himself and Mrs. Berg as equal tenants in common. On his death, the beneficial owners of the cottage property became Mrs. Berg and the Estate of Allen Berg, each holding an undivided one-half interest.
Disposition
53As Allen Berg is deceased, the express trust he created for the benefit of himself and his spouse on February 15, 2007 is without a trustee and, therefore, a legal representative who can effect a transfer of the legal title to the cottage property to the beneficial owners. Under these circumstances, I find this to be an appropriate case in which to rely on s. 100 of the Courts of Justice Act and to order the vesting of the cottage property in the beneficial owners.
54An order shall issue vesting in Judith Berg, an undivided one-half interest in the cottage property as a tenant in common, and vesting in Judith Berg and Amy Berg, as Estate Trustees of the Estate of Allen Berg, an undivided one-half interest in the cottage property, known municipally as 576 Lake Drive North, Keswick, Ontario, and described as Concession 2, Part Lots 23 and 24, Town of Georgina, Region of York, in the Province of Ontario.
55In the event of any inconsistencies, irregularities or omissions that arise in the implementation of this order, the land registrar shall make or modify the relevant records as the land registrar sees fit in order to implement what the land registrar believes to be the true intent of this order, and to request such further evidence or assurance as the land registrar deems fit, all without prejudice to the right of the parties to return to this court for direction or clarification.
56I decline to order that Mrs. Berg shall be entitled to purchase Mr. Berg’s one-half interest in the cottage property from his estate at its fair market value. Mrs. Berg is one of two Estate Trustees of her late husband’s estate and is therefore in a position to influence how the cottage property is administered by the Estate Trustees. This is particularly so in light of the veto power she holds as long as she is a Trustee of the estate. Also, each of Mr. Berg’s Primary Will and Secondary Will permits encroachments on the capital of the respective estates for the benefit of Mrs. Berg. The Estate Trustees have discretion to administer Mr. Berg’s interest in the cottage property as they see fit. I see no need for the court to interfere with their discretion in this regard.
Costs
57Each of the parties submitted a bill of costs, which I have reviewed. The Estate Trustees seek costs of $83,097.31 (including disbursements and HST) on a full indemnity basis. Mrs. Berg seeks costs of $77,783 (including disbursements and HST) on a full indemnity basis. Pursuant to s. 131 of the Courts of Justice Act, the fixing of costs is a discretionary exercise. I have considered the bills of costs in light of the factors set out in r. 57.01 of the Rules. The principles of indemnity for the successful party and the expectations of the unsuccessful party do not apply in this case. The issues were not overly complex but nonetheless required the assistance of the court to resolve them.
58Because Mr. Berg is no longer alive to testify as to his intention at the time he made the second transfer of the cottage property, or to rectify the title issues relating to the cottage property that arise as a consequence of transfers that he undertook unilaterally, it is desirable and appropriate that the matter be resolved by the court. In this case, resort to the court may be the only means to determine the beneficial ownership of an asset held by Mr. Berg’s estate and to ensure that the interests in the cottage property are properly administered and registered. As such there is a good public policy reason to support the payment of the costs of both parties out of Mr. Berg’s estate: Sawdon Estate v. Sawdon, 2014 ONCA 101, at para. 85.
59I find an award of substantial indemnity costs for each of the parties to be fair and reasonable. I therefore fix the costs of the Estate Trustees at $74,787.58, including disbursements and HST, and fix the costs of Mrs. Berg at $70,201, including disbursements and HST. These costs shall be paid from the assets forming part of Mr. Berg’s estate.
Dietrich J.
Released: April 18, 2019