SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 12-34639
DATE: 2012-09-17

RE: IN THE MATTER OF THE ESTATE OF ALEKSA (ALEX) GALEVSKI, deceased

BEFORE: The Honourable Mr. Justice Robert B. Reid

COUNSEL:
B. Yellin, Counsel, for the Objector (Moving Party)
P. Callahan, Counsel, for the Estate Trustee (Responding Party)

HEARD: May 29, 2012

COSTS ENDORSEMENT

[ 1 ] The residual beneficiary in this estate is the brother of the estate trustee.

[ 2 ] The beneficiary brought a motion to determine whether an enforceable settlement occurred when the trustee accepted the beneficiary’s offer of March 2, 2012.

[ 3 ] By decision dated June 12, 2012, I determined that the accepted offer did constitute an enforceable settlement. As result, the estate trustee was successful in resisting the motion.

[ 4 ] The discretion to award costs under section 131 of the Courts of Justice Act is guided by the factors set out in rule 57.01(1) of the Rules of Civil Procedure . The first consideration is the result in the proceeding and presumptively the successful party receives some portion of its costs from the unsuccessful party.

[ 5 ] The estate trustee seeks costs on a substantial indemnity basis based on his success and also on the fact that the issues were of utmost importance to the estate trustee who sought to uphold a final settlement of the litigation.

[ 6 ] The beneficiary points out that the entire proceeding was necessary as a response to the lack of accurate and timely information received from the trustee. The beneficiary seeks an award of costs to him as the unsuccessful party or in the alternative an order for no costs.

[ 7 ] I note that the main basis for the beneficiary’s motion was the unanticipated increase in costs incurred by him after his March 2 offer was made and prior to its acceptance by the trustee. As well, to a lesser extent the motion was prompted by further disclosure of previously unidentified estate assets by the trustee.

[ 8 ] In the beneficiary’s submission, the actions of the trustee throughout the proceeding tended to lengthen its duration unnecessarily and could be characterized as vexatious.

[ 9 ] In my view, the actions by the estate trustee leading up to the application to pass accounts and other actions prior to the motion are not directly relevant to this decision concerning the costs of the motion. This is not one of the unusual cases where the facts justify an award against the successful party. I accept, however, that the lack of careful and timely disclosure by the trustee following the March 2 offer played a role in the beneficiary’s decision to proceed with the motion, and that there should be some costs consequences to the trustee as a result.

[ 10 ] The beneficiary also seeks costs from the trustee arising from the parties’ attendance before MacKenzie J. when the matter was adjourned on March 20, 2012. Justice MacKenzie reserved costs of that day to the judge disposing of the matter. I am not inclined to assume jurisdiction over those costs since it was presumed that ultimate disposition would be after an argument on the merits rather than about the enforceability of accepted settlement offer. As well, the accepted offer constituted a final settlement, inclusive of costs.

[ 11 ] Although the trustee has sought substantial indemnity costs, I do not consider that the circumstances of this case warrant that result. There was no rule 49 offer to settle the motion nor were there any circumstances that would otherwise justify the punitive consequences of a substantial indemnity award.

[ 12 ] As a result, there will be an award of costs in favour of the estate trustee on a partial indemnity basis.

[ 13 ] The beneficiary contends that the time spent by the trustee was excessive in comparison with the time spent by the beneficiary. He also challenges some time recorded by the trustee which does not appear to be related to the motion. I agree that most of the time recorded between April 16 and April 30 should not be allowed. When those hours are deducted from the trustee’s claim, the trustee appears to have spent about 12 hours more on the motion than the beneficiary. I do not consider that difference to be so substantial that the claim by the trustee becomes grossly excessive, and I decline to second guess the time spent by the trustee. I also note that a significant part of the monetary difference between the bills of the two parties relates to the higher hourly rates charged by the trustee. As a result, I find that the claim by the trustee is within the range that the unsuccessful party could have expected to pay.

[ 14 ] Based on the foregoing and after exclusion of the April 16 – 30 time that did not appear to relate to the motion, and a further reduction to account for the late disclosure of estate assets, the trustee will have his costs fixed in the amount of $9,000 inclusive of HST and disbursements.

Reid J.

Date: September 17, 2012