Superior Court of Justice - Ontario

COURT FILE NO.: 02-80/08
DATE: 20120224

RE: IN THE MATTER OF THE SANDRA THOMPSON
FAMILY TRUST

BEFORE: Mr. Justice Lederer

COUNSEL:
Sendor Tator , for the Moving Parties (William D. Martin & Warren Brown)

George Callahan , for the party supporting the motion (Nancy Thompson)

Jenny Stephenson , for the Responding Party (Sandi Thompson)

COSTS ENDORSEMENT

[ 1 ] The trustees of the Sandra Thompson Family Trust commenced an application to pass their accounts. There were objections. There was a settlement. A term of the agreement was that Sandi Thompson and her sister, Nancy Thompson, provide a full and final release from all possible complaints to the Law Society of Upper Canada against one of the trustees, William D. Martin, with respect to the administration of the Sandra Thompson Family Trust.

[ 2 ] An order was sought directing Sandi Thompson to comply with the minutes of settlement.

[ 3 ] The motion was dismissed. It offends public policy for a person, subject to regulation, to require that a complaint about his or her conduct be withdrawn in exchange for payment or a benefit as part of a private settlement in a related civil matter.

[ 4 ] Sandi Thompson, as the successful party on the motion, seeks costs.

[ 5 ] The trustees, William D. Martin and Warren Brown, seek their costs. In their minds, Sandi Thompson, throughout the process, has been an overly-aggressive litigator, who is not so much in search of a resolution as she is “addicted to the fight”. It was her actions in failing to attend at the pre-trial conference and her seeking to resile from the settlement, after she had agreed to its terms, that led to the motion. It was submitted, on their behalf, that any costs award should be payable from the assets of the trust.

[ 6 ] Nancy Thompson was represented at the hearing of the motion. Although she was in support of the motion, her counsel made no submissions. He made it clear that his concern was with respect to costs. His client wishes the matter to be resolved. Her concern is with “the escalating costs of legal proceedings related to a passing of accounts, but which have now transcended into issues that appear to be peripheral to the main issue”. Nancy Thompson does not believe it would be appropriate for the trust to bear the costs of the motion.

[ 7 ] The submissions, made on behalf of the trustees, miss the point. The agreement was contrary to public policy. It is quite simply wrong for a settlement to require the withdrawal of a complaint made against a lawyer. The mistake is not, as counsel for the trustees would have it, Sandi Thompson’s for entering into the agreement and then seeking to withdraw, it was the lawyer’s, in this case, William D. Martin, for requesting that this term be included in the settlement in the first place. Obviously, it would have been better if Sandi Thompson or her counsel had picked up on this problem earlier, but it does not relieve William D. Martin of responsibility because the parties did not complete an arrangement that should never have been made. Moreover, having been confronted with the issue, William D. Marin should have recognized the error rather than prolonging the problem with this motion. In the circumstances, it would be inappropriate to protect William D. Martin from having to pay costs by requiring them to be paid by the trust. I do not accept the submission of counsel for the trustees: “To refuse to indemnify [the] trustee for costs incurred will result in a situation where no person will be prepared to act as a Trustee for fear of being exposed in all cases to costs of Court proceedings…” In this case, the trustee, as part of a settlement, has acted contrary to public policy. Only trustees who cross this line need have any fear of this award.

[ 8 ] It follows that I will not make any award of costs in favour of the trustees.

[ 9 ] It follows that I will not make any order that costs be payable from the assets of the trust.

[ 10 ] It follows that I will order costs in favour of Sandi Thompson. Given the nature of the error made and the insistence of William D. Martin to proceed with the motion in the face of having had the problem pointed out, I find that costs should be at an elevated scale.

[ 11 ] I have reviewed the Bill of Costs outlining the request made, on behalf of Sandi Thompson, for costs on a substantial indemnity basis. It seeks $10,520.75. I am not prepared to find that this is unreasonable or beyond what the losing party should expect.

[ 12 ] Finally, I note that the factum provided by counsel for the trustees was filed on behalf of only William D. Martin. As I understand it, the second trustee is not a lawyer. Accordingly, I will make no order for costs against Warren Brown.

[ 13 ] I order costs payable by William D. Martin, personally, to Sandi Thompson in the amount of $10,520.75.

LEDERER J.

Date: 20120224