Court File and Parties

Citation: Cain v. Harnett, 2023 ONSC 4124 Divisional Court File No.: 632/22 Date: 2023-07-12 Superior Court of Justice – Ontario Divisional Court

Re: Valerie Cain and Christopher Harnett in their capacities as Co-Estate Trustee of the Estate of Dr. Barrie Erroyl Harnett, Applicants/Responding Parties

And: Carol Harnett (a.k.a. Carolyn Wu, Caroline Wu, Caroline Harnett and Carolyn Harnett) in her personal capacity and in her capacity as co-Estate Trustee of the Estate of Dr. Barrie Erroyl Harnett, Respondent/Moving Party

And: Caroline Harnett (also known as Carol Harnett nee Wu) in her personal capacity and in her capacity as Estate Trustee of Dr. Barrie Erroyl Harnett, Applicant/Moving Party

And: Christopher Harnett and Valerie Cain, personally and in their capacity as Estate Trustee of the Estate of Dr. Barrie Erroyl Harnett, Ryan Cain And The Children’s Lawyer, Respondents/Responding Parties

Before: Nishikawa J.

Counsel: Caroline Abela and Nadia Chiesa, for the Moving Party, Carol Harnett Melanie Yach and Stacey Blydorp, for the Respondents, Valerie Cain and Christopher Harnett Danielle Joel and Ziad Yehia, for the Office of the Children’s Lawyer

Heard at Toronto: in writing

Costs Endorsement

[1] The moving party, Carol Harnett, sought leave to appeal the interlocutory order of Justice Dietrich dated December 19, 2022 (the “Order”). In conjunction with that motion, Ms. Harnett brought a separate motion on an urgent basis for a stay of the Order pending appeal. The stay motion was scheduled to be heard on February 2, 2023. On the morning of the hearing, the court advised counsel that the stay motion would be adjourned pending a decision on the motion for leave to appeal which was scheduled to be heard in writing on February 13, 2023, without prejudice to return the motion to stay if leave to appeal was granted.

[2] The motion for leave to appeal the Order was dismissed with costs of $5,000, all-inclusive, to the Respondents, Valerie Cain and Christopher Harnett (the “Respondents”), and $5,000 to the Respondent, the Children’s Lawyer: 2023 ONSC 1019 (Div. Ct.).

[3] The Respondents and Children’s Lawyer requested that I address the costs of the stay motion, which was no longer necessary given that leave to appeal was denied.

[4] The Respondents seek costs of the stay motion from the Moving Party on a full indemnity basis on the basis that as estate trustees, they should not be subject to personal liability as long as they are acting properly in their capacity as estate trustees. Alternatively, they seek a “blended” costs order directing that any costs not paid by the Moving Party be paid out of the estate. The Respondents’ costs on a full indemnity basis total $45,684.18. Their partial indemnity costs total $26,413.18.[^1]

[5] The Children’s Lawyer also seeks costs on a full indemnity basis at the capped rate of $350 per hour for a total of $42,940.00. The Children’s Lawyer submits that they should be fully indemnified because they were required to respond to the motion to protect the interests of the two minor grandchildren, who are residual beneficiaries of the estate.

[6] The Moving Party submits that only minimal costs should be awarded, noting that the leave panel ordered $5,000 in costs on the motion for leave to appeal, despite the Responding Parties’ requests for more substantial costs. In the alternative, the Moving Party submits that $4,000 in costs be paid for by the estate or her share of the estate. The Moving Party’s own costs of the stay motion on a partial indemnity basis were approximately $29,209.00. I further note that the Moving Party’s offers to settle the costs of the stay motion for $5,500, to be paid from the estate, have no impact on costs.

[7] In Sawdon Estate v. Watch Tower Bible and Tract Society of Canada, 2014 ONCA 101, at para. 82, the Court of Appeal confirmed that estates trustees are entitled to be indemnified for all reasonably incurred costs, including legal costs. The Court of Appeal further held that courts have the authority to make “blended” costs orders, including on appeal. A blended costs order is appropriate if the losing party’s conduct unnecessarily increased the costs of litigation, but some costs were necessarily incurred to ensure that the estate is properly administered.

[8] The Moving Party, as the unsuccessful party on the motion should pay costs. As Brown J. (as he then was) noted in Salter v. Salter Estate, 2009 28403 (S.C.), at para. 6, “[t]he ‘loser pays’ principle brings needed discipline to civil litigation by requiring parties to assess their personal exposure to costs before launching down the road of a lawsuit or a motion[.]”

[9] Motions within motions for leave to appeal are generally discouraged because they unduly burden scarce judicial resources and may end up being unnecessary if, as here, leave to appeal is denied. In this case, it did not make sense to adjudicate the stay motion when the motion for leave would be heard shortly thereafter. To avoid unnecessary motions, parties are expected to agree to an expedited schedule for the delivery of material on the motion for leave and to attempt to agree to the terms of a stay in the interim period.

[10] I agree with the Respondents and Children’s Lawyer that they were required to oppose the stay motion because the Moving Party initially sought a broad stay, which was not narrowed until shortly before the motion was to be heard. Moreover, the motion was brought on an urgent basis, increasing the costs that the parties were required to incur. Despite claiming urgency, the Moving Party did not act promptly after the reasons were released and caused the Respondents and Children’s Lawyer to incur increased costs because the relief claimed was unclear.

[11] In my view, a blended costs order is appropriate in this case. The Respondents and the Children’s Lawyer are entitled to their full indemnity costs of the stay motion, with some portion to be paid from the estate. I nonetheless find the amounts in the Respondents and Children’s Lawyer’s respective cost outlines high in view of the relevant factors, including the nature, complexity and importance of the issues. In addition, the Children’s Lawyer’s cost outline does not provide a breakdown of the hours spent, making it difficult to determine whether the costs incurred were proportionate.

[12] Based on the foregoing, I fix the costs of the Respondents, Valerie Cain and Christopher Hartnett, at $36,547.34, which I find to be a fair and reasonable amount on a full indemnity basis. The Moving Party, Carol Harnett, shall pay the Respondents’ partial indemnity costs in the amount of $21,928.40 with the balance of $14,618.94 to be paid from the estate. I fix the Children’s Lawyer’s costs at $34,352 on a full indemnity basis. The Moving Party shall pay partial indemnity costs of $20,611.20, with the balance of $13,740.80 to be paid from the estate. All amounts are inclusive of disbursements and HST. Costs are to be paid within 30 days of the release of this endorsement.

“Nishikawa J.”

Date: July 12, 2023

[^1]: All amounts are inclusive of HST and disbursements.