CITATION: Feinstein v. Freedman, 2021 ONSC 3971
DIVISIONAL COURT FILE NO.: DC-19-2514 DATE: 20210602
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
Ellies R.S.J., Swinton and McCarthy JJ.
BETWEEN:
ABRAHAM FEINSTEIN
Matthew P. Sammon and Sarah Bittman, for the Applicant (Respondent in Appeal)
Applicant (Respondent in Appeal)
– and –
MICHAEL FREEDMAN, SHIRA SCHNECK, RACHEL FREEDMAN, ELI FREEDMAN, JOSHUA PRIZANT, SARAH PRIZANT, and JACOB FREEDMAN on behalf of THE JARVIS FREEDMAN INSURANCE TRUST and THE RIVA FREEDMAN TRUST
Gregory Sidlofsky and Robert Alfieri, for the Respondents (Appellants)
Respondents (Appellants)
HEARD at Ottawa: costs submissions in writing
decision ON COSTS
Per curiam:
OVERVIEW
[1] For reasons dated April 12, 2012 (2021 ONSC 1493), we dismissed the appellants’ appeal of the compensation awarded by the trial judge to the respondent on a passing of accounts and denied the appellants’ request for leave to appeal the trial judge’s costs award. The parties were unable to agree on costs of the appeal and have filed written submissions on the issue.
[2] The respondent seeks full indemnity costs in the amount of $134,394.86, all-inclusive. He submits that 60 percent of those costs should be borne by the appellants and 40 percent by the trust of which he was the trustee.
[3] The appellants submit that the respondent’s costs should be paid on a partial indemnity basis only, that they are excessive even on a full indemnity basis, and that they should be paid by the trust. They also seek to have the trust fully indemnify them for their own costs in the amount of $71,715.
[4] For the following reasons, we conclude that the respondent should be awarded full indemnity costs in the amount of $90,000, all-inclusive, 60 percent of which should be paid by the appellants and 40 percent of which should be paid by the trust. The appellants should bear their own costs.
Issues
[5] The parties’ submissions raise four issues. Simply put, they are:
(1) Who should be paid their costs?
(2) Who should pay those costs?
(3) On what scale should the costs be paid?
(4) In what amount?
ANALYSIS
Who should be paid their costs?
[6] The appellants do not deny that the respondent should be awarded his costs as the successful party. However, they submit that they should also be paid their costs. They submit that those costs arose for the benefit of the trust, and therefore should be paid by the trust. We disagree.
[7] The appellants submit that the replacement trustee, Jacob Freedman, had a fiduciary duty to appeal the trial judge’s inadequate reasons on behalf of the beneficiaries of the Riva Freedman Trust (the “RFT”). A similar argument was made before the Court of Appeal by the unsuccessful appellants in Feinstein v. Freedman, 2014 ONCA 446, in which the appellants appealed the decision that allowed the Majority Siblings to appoint themselves as trustees in Mr. Feinstein’s place. The Court of Appeal rejected that argument on the basis that the uncertainty that had existed at the time Mr. Feinstein sought to remove himself as trustee no longer existed once the application judge’s decision had been made (para. 14). The same is true here and we reject the appellants’ argument on the same basis.
[8] Consequently, there is no reason why the appellants should be awarded their costs.
Who should pay those costs?
[9] The appellants submit that the ordinary “loser-pays” regime should not apply to make them responsible for payment of the respondent’s costs. They submit that the appeal was justified because the trial judge failed to deal in his brief reasons with key objections they made to the respondent’s accounts.
[10] This is the same argument the appellants made before us on the appeal itself. We rejected this argument. As our reasons make clear, the trial judge dealt with each of the appellants’ key objections. As our reasons also make clear, in advancing this argument, the appellants ignored the record and attempted to re-argue the trial judge’s factual findings.
[11] In these circumstances, we see no reason why the unsuccessful appellants should not be required to pay the respondent’s costs.
On What Scale?
[12] In Feinstein, the Court of Appeal awarded Mr. Feinstein his full indemnity costs. The appellants submit that the Court of Appeal’s decision in Feinstein is not applicable in the present case because, in Feinstein, the court held that Mr. Feinstein had incurred legal costs while acting as trustee, whereas in this case, they submit, he “is pursuing his personal interests”.
[13] This argument has also been made earlier by the appellants, who argued before us that Mr. Feinstein should have been treated like a self-represented litigant at trial when it came to the question of costs. We rejected this argument, as well (paras. 116-120). The argument has no more force with respect to the costs of this appeal than it did with respect to the costs of the trial. It would be illogical to hold, as we did, that Mr. Feinstein was acting in his capacity as trustee as the applicant at trial, but not as the respondent on appeal.
[14] The appellants also submit that it is typical on appeals for trustees to be awarded costs only on a partial indemnity scale. In support of their submission, they cite the decisions in Sawdon Estate v. Watch Tower Bible and Tract Society of Canada, 2014 ONCA 101, 119 O.R. (3d) 81; McLaughlin v. McLaughlin, 2016 ONCA 899; and Nichols v. Closs Jr., 2018 ONCA 295. However, none of these cases support the appellants’ submission.
[15] In Sawdon Estate, the Court of Appeal did not hold that trustees are limited to receiving partial indemnity costs. Rather, the court held that in awarding costs in appeals, courts may make blended costs orders, requiring the losing parties to pay partial indemnity costs and the estate to pay the balance of the trustee’s full indemnity costs: paras. 101-107. We will return to this case, below.
[16] The decisions in McLaughlin and Nichols are both distinguishable from the present case. In McLaughlin, the court dealt with the validity of a secondary will. In Nichols, the question was whether the deceased intended to create only a life interest. In both cases, the legal issue related to a single asset: a house. There is no indication that in either case there were any other assets in the estate to which the beneficiaries involved were entitled from which to pay the trustees their full indemnity costs. That is not the situation here. There are sufficient assets being held for the benefit of the appellants to satisfy a full indemnity award of costs in the respondent’s favour.
[17] Because Mr. Feinstein’s costs on the appeal were incurred in his capacity as trustee, he should be fully indemnified for his costs: Sawdon Estate, at paras. 82-85. We agree with the submission made on his behalf that a blended costs award such as that made in Sawdon should be made here and we apportion those costs 60 percent to the appellants and 40 percent to the trust.
How Much?
[18] Even when a party is entitled to full indemnity costs, however, those costs must still be reasonable: MacKinnon v. Ontario Municipal Employees Retirement Board, 2007 ONCA 874, at para. 92. They must also be proportionate: Marcus v. Cochrane, 2014 ONCA 207, at para. 15. We agree with the appellants that the respondent’s costs are excessive in light of these principles.
[19] Counsel for the respondent submits that more work was necessary because, unlike counsel for the appellants, he was new to the file (Mr. Feinstein’s trial counsel having passed away) and therefore had to spend time reviewing the entire 11-day trial record. However, it would be a rare case in which appellate counsel, even if he was also trial counsel, was not required to review the entire record at trial. That was done in this case by counsel for the appellants, who is slightly more senior than counsel for the respondent, and yet the appellants’ full indemnity costs were approximately $60,000 less than those of the respondent.
[20] We believe that a full indemnity costs award in favour of the respondent in the amount of $90,000, all-inclusive, is fair and reasonable in all of the circumstances of this case, including the fact that appellate counsel was new to the file.
CONCLUSION
[21] The appellants jointly and severally shall pay to the respondent his full indemnity costs in the amount of $54,000 and the RFT shall pay the balance of $36,000, both within 30 days of the date of these reasons.
Ellies R.S.J.
Swinton J.
McCarthy J.
Date of Release: June 2, 2021
CITATION: Feinstein v. Freedman, 2021 ONSC 3971
DIVISIONAL COURT FILE NO.: DC-19-2514 DATE: 2021/06/02
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
Ellies R.S.J., Swinton and McCarthy JJ.
BETWEEN:
ABRAHAM FEINSTEIN
Applicant (Respondent in Appeal)
– and –
MICHAEL FREEDMAN, SHIRA SCHNECK, RACHEL FREEDMAN, ELI FREEDMAN, JOSHUA PRIZANT, SARAH PRIZANT, AND JACOB FREEDMAN on behalf of THE JARVIS FREEDMAN INSURANCE TRUST and THE RIVA FREEDMAN TRUST
Respondents (Appellants)
REASONS FOR JUDGMENT
Per curiam
Date of Release: June 2, 2021