E. Neuberger in Her Capacity as the Named EstateTrustee of the Primary Will of C. Neuberger and in Capacity as the Named Estate Trustee of the Secondary Will of C. Neuberger v. York et al.
[Indexed as: Neuberger Estate v. York]
Ontario Reports
Court of Appeal for Ontario,
Gillese, van Rensburg and B.W. Miller JJ.A.
April 25, 2016
131 O.R. (3d) 143 | 2016 ONCA 303
Case Summary
Civil procedure — Costs — Estates — Motion judge in estates litigation ordering appellants to pay respondents' costs in amount of almost $390,000 — Appellants appealing successfully and costs award set aside [page144] — Appellants awarded their costs of motion in amount of $319,491.20 — Appeals raising legally complex issues arising from factually complex record — Fact that one appellant was waiving his "entitlement" to blended costs award on appeal not a relevant consideration as he would not in fact have been entitled to blended award — Appellants awarded costs of appeals in amount of $175,000.
The appellants were successful on appeals from orders of the motion judge in estates litigation, and the motion judge's costs award in favour of the respondents in the amount of almost $390,000 was set aside. The appellants sought their costs of the motion in the amount of $319,491.20 and their costs of the appeals. The appellant J-N asked the court to consider that he was waiving his entitlement to a "blended" costs award on appeal, that is, to have his partial indemnity costs paid by the respondents personally and the balance of his full indemnity costs paid out of the estate. The respondents submitted that costs should be made payable in the cause or in any event of the cause because the main legal issue on the appeals (whether the equitable doctrines of estoppel by representation and convention apply to bar a challenge to the validity of a will) was novel and of public interest.
Held, the appellants should be awarded their costs of the motion in
the amounts claimed and their costs of the appeal in the amount of $175,000.
The motion judge's costs endorsement gave guidance to the appellate court on, among other things, the reasonable expectations of the unsuccessful party, the complexity of the proceeding and the importance of the issues. The costs claimed by the appellants were considerably less than the costs order below. The costs of the motion requested by the appellants were fair and reasonable.
The issues raised on the appeals were not sufficiently novel to warrant a departure from the normal rule that a successful party is entitled to partial indemnity costs. The appeals were not "typical" estate appeals, and raised legally complex issues arising from a factually complex record. A fair and reasonable costs award for the appeals was $100,000 to N and $75,000 to J-N. J-N would not have been entitled to a blended costs award. In estate litigation in Ontario, the historical approach to costs has been displaced in favour of one in which the costs rules in civil litigation apply both at first instance and on appeal, unless the court finds that one or more of the relevant policy considerations dictate that costs (or some portion thereof) should be paid out of the assets of the estate. The issue of the availability of estoppel as a bar to a wills challenge, which was the main issue below and on the appeals, did not engage the relevant public policy considerations.
Cases referred to
Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634, 188 O.A.C. 201, 48 C.P.C. (5th) 56, 132 A.C.W.S. (3d) 15 (C.A.); McDougald Estate v. Gooderham, 2005 CanLII 21091 (ON CA), [2005] O.J. No. 2432, 255 D.L.R. (4th) 435, 199 O.A.C. 203, 17 E.T.R. (3d) 36, 140 A.C.W.S. (3d) 220 (C.A.); Neuberger Estate v. York, [2014] O.J. No. 6399, 2014 ONSC 7512, 6 E.T.R. (4th) 244, 250 A.C.W.S. (3d) 179 (S.C.J.); Sawdon Estate v. Sawdon (2014), 119 O.R. (3d) 81, [2014] O.J. No. 573, 2014 ONCA 101, 370 D.L.R. (4th) 686, 93 E.T.R. (3d) 247, 315 O.A.C. 129, 39 R.F.L. (7th) 6, 237 A.C.W.S. (3d) 560
Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 57.01(1)
APPEAL from the order of Greer J., [2014] O.J. No. 5605, 2014 ONSC 6706 (S.C.J.). [page145]
Chris G. Paliare, Megan E. Shortreed and Jean-Claude Killey, for appellant Edie Neuberger.
Kimberley A. Whaley, Benjamin Arkin and Arieh A. Bloom, for appellant Adam Jesin-Neuberger.
Guy Pratte, Aaron Blumenfeld and Ewa Krajewska, for respondent Myra York in all capacities.
Clare E. Burns and Bianca La Neve, for respondents Sonny York, Laura York and Spencer York.
The judgment of the court was delivered by
[1] GILLESE J.A.: — By judgment dated March 8, 2016, the appeals in this matter were allowed and, among other things, the costs award below was set aside. The parties were invited to make written submissions on costs of the appeal and underlying motion, if they were unable to resolve those matters between themselves.
[2] No agreement on costs was reached and the court has now received the individual costs submissions of each of Edie Neuberger and Adam Jesin-Neuberger (together, the "appellants"), and the joint costs submission of the respondents Myra York, Sonny York, Laura York and Spencer York (the "York parties").
Costs of the Motion Below
The parties' positions
[3] Edie Neuberger asks for costs of the motion below in the amount of $209,066.65, which includes almost $24,000 of disbursements and HST. Fees are calculated on a partial indemnity basis.
[4] Adam Jesin-Neuberger asks for costs of the motion in the amount of $110,424.55, all inclusive. Again, this reflects fees calculated on a partial indemnity basis.
[5] The York parties submit that the appellants should be awarded costs of the motion in the amount of $300,000, all inclusive. They say they did not have the benefit of scrutinizing the appellants' dockets and ask that the court infer that some of the time spent on the motion was unreasonable.
Analysis
[6] By order dated December 18, 2014 (the "costs order below"),[^1] the motion judge ordered that Edie Neuberger and Adam Jesin-Neuberger were jointly and severally liable for the [page146] costs of Myra York, fixed at $221,765.97, and the costs of Sonny York, Laura York and Spencer York, fixed at $165,621. Both sums were inclusive of disbursements and HST.
[7] As the appellants were successful on their appeals, they are presumptively entitled to their costs of the motion below. The York parties do not contend otherwise.
[8] In setting the quantum of costs for the motion below, I begin by considering that the motion judge ordered costs of almost $390,000 in favour of the York parties. I have also considered the reasons that the motion judge gave in setting that quantum. Her costs endorsement of December 18, 2014 demonstrates a full consideration of the factors set out in rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and gives guidance to this court on, among other things, the reasonable expectations of the unsuccessful party, the complexity of the proceeding and the importance of the issues. I note that the costs claimed by the appellants of almost $320,000 are considerably less than the costs order below of $387,386.97.
[9] I also note that Edie Neuberger's claimed amount ($209,066.65), is less than the amount claimed by Myra York on the motion ($247,941.25) and less than the amount actually awarded to Myra York on the motion ($221,765.97).
[10] I have further considered the parties' combined claims for costs of the motion below. The appellants' combined claim for costs of the motion is for $319,491.20 while the York parties' combined claim was for $425,427.46.
[11] With these considerations in mind and after reviewing the appellants' costs outlines, in my view, costs of the motion below should be ordered to the appellants in the amounts sought.
Costs of the Appeal
The parties' positions
[12] Edie Neuberger seeks costs of the appeal, on a partial indemnity basis, of $148,903.78, including disbursements and HST.
[13] Adam Jesin-Neuberger seeks his costs of the appeal on a partial indemnity basis in the amount of $197,297.23, inclusive of disbursements and HST. In support of the amount claimed, he says that this court should consider that he is waiving his entitlement to a "blended" costs award on appeal -- that is, to have his partial indemnity costs paid by the York parties personally and the balance of his full indemnity costs paid out of the estate. He contends that waiver of his right to a blended costs award is to the benefit of the York parties because the burden of [page147] the portion of his costs paid out of the estate would have fallen, in part, on them as beneficiaries. He also says that this consideration is relevant to the reasonable expectations of the unsuccessful parties.
[14] The York parties acknowledge that the appellants are entitled to costs of their appeals but submit that costs should be made payable in the cause or in any event of the cause and/ or be reduced to $50,000 because
(1) the main legal issue on the appeal (whether the equitable doctrines of estoppel by representation and convention apply to bar a challenge to the validity of a will) was novel and of public interest;
(2) the York parties were successful on some of the legal issues raised by the appellants on the appeal; and
(3) the quantum of costs sought by the appellants on their appeals is substantially greater than the quantum awarded in similar appeals and, therefore, greater than could be reasonably expected.
Analysis
[15] As the successful parties on appeal, the appellants are presumptively entitled to costs. While not all of the appellants' arguments were successful on the appeals, I do not view the outcome of these appeals as one of divided success -- the appellants were wholly successful in having the order under appeal set aside.
[16] While the significance of the legal issues resolved by these appeals goes beyond the parties, I do not accept that those issues are of sufficient novelty to warrant a departure from the normal rule that a successful party is entitled to partial indemnity costs.
[17] In deciding the quantum of costs, the award must be fair and reasonable in all the circumstances, with due consideration for the parties' reasonable expectations: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634 (C.A.), at para. 38.
[18] Comparing the parties' respective costs of appeal is useful when considering the parties' reasonable expectations. I understand that the York parties' combined partial indemnity costs of the appeal are approximately $353,000, which is similar to the appellants' combined partial indemnity costs of approximately $346,000.
[19] Reasonable expectations are also informed by past costs orders of this court. In that regard, I accept the York parties' [page148] submission that the amounts claimed by the appellants are larger than many of the costs awards made by this court in typical appeals. That said, however, costs in any appeal must be decided based on the particular circumstances of the case before the court. I would not describe these appeals as "typical" estate appeals. They raised legally complex issues arising from a factually complex record. The six-volume exhibit book contained 17 affidavits that set out a lengthy and complicated history and included medical records, expert medical evidence, expert appraisal evidence and accounting evidence. Seven cross-examinations on the affidavits were conducted and the appeal itself was heard over a day and a half.
[20] For these reasons, in my view, a fair and reasonable costs award for these appeals would be $100,000 to Edie Neuberger and $75,000 to Adam Jesin-Neuberger, both such sums inclusive of disbursements and taxes.
[21] While these amounts are less than the amounts sought by the appellants, they are significant sums that reflect the results of the appeals, the amounts in issue, the complexity of the proceeding, the importance of the legal issues disposed of by the appeals, and the distinct interests of the two appellants and their respective roles in this litigation and on appeal.
[22] I would order that costs be payable forthwith, in accordance with this court's usual practice. I do not accept the York parties' submission that the appellants' costs should be payable in the cause or in any event of the cause. The effect of the appellants' success on these appeals is that they are entitled to proceed with this litigation. They should not be required to wait until the conclusion of proceedings to recover their costs, nor should their recovery be contingent on whether they proceed with, or are ultimately successful in, this litigation.
[23] In setting the quantum of costs for each of the appellants, I have considered Adam Jesin-Neuberger's submission based on the proposition that he would have been entitled to a blended costs award in respect of his appeal. I do not accept that he would have been entitled to such a costs award.
[24] In estates litigation in Ontario, the historical approach to costs has been displaced in favour of one in which the costs rules in civil litigation apply both at first instance and on appeal, unless the court finds that one or more of the relevant public policy considerations dictate that costs (or some portion thereof) should be paid out of the assets of the estate: McDougald Estate v. Gooderham, 2005 CanLII 21091 (ON CA), [2005] O.J. No. 2432, 255 D.L.R. (4th) 435 (C.A.), at para. 80; see, also, Sawdon Estate v. Sawdon (2014), 119 O.R. (3d) 81, [2014] O.J. No. 573, 2014 ONCA 101, 370 D.L.R. (4th) 686, at para. 101. [page149] The public policy considerations at play in estate litigation are primarily of two sorts: (1) where the difficulties or ambiguities that give rise to the litigation are caused, in whole or in part, by the testator; and (2) the need to ensure that estates are properly administered.
[25] Blended costs awards, in which a portion of costs is payable by the losing party and the balance is payable out of the estate, are available at first instance and on appeal, in the discretion of the court, where one or more of the relevant public policy considerations are found to be engaged: Sawdon, at paras. 93-100 and 107.
[26] The availability of estoppel as a bar to a wills challenge was the main issue below and on the appeals. In my view, that issue does not engage the relevant public policy considerations. As such, the usual "loser pays" costs regime in civil litigation, which applied at the motion level, ought also to apply on appeal. Consequently, in my view, Adam Jesin-Neuberger would not have been entitled to a blended costs award with the balance of his costs of the appeal being paid out of the estate.
Disposition
[27] Accordingly, I would order that the appellants are entitled to their costs of the motion below, in the amounts sought. I would order costs of the appeals fixed at $100,000 and $75,000 in favour of Edie Neuberger and Adam Jesin-Neuberger, respectively. Both such sums are all inclusive. I would further order that all the costs orders are payable forthwith by the York parties.
Order accordingly.
Notes
[^1]: Reported at [2014] O.J. No. 6399, 2014 ONSC 7512 (S.C.J.).
End of Document