SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: 05/84/12
DATE: 20130114
RE: Kalman, Plaintiff
AND:
Pick and Katz, Defendants
BEFORE: Carole J. Brown J.
COUNSEL: Heather Hogan and Kim Whaley, for the Applicant
David Smith, for the Executor
HEARD: January 10, 2013
ENDORSEMENT
Background
1In this application for dependant's support brought pursuant to the Succession Law Reform Act, R.S.0. 1990, c. s. 26 (the "SLRA"), a consent Order was signed by Chapnick J. on October 16, 2012. The applicant returns for an Order for interim legal fees and disbursements payable out of the Estate.
2The applicant, Susan Kalman, aged 75, was the common-law spouse of George Pick, deceased, and resided with him as spouse for over 21 years, until the time of his death on December 12, 2011. The respondents, Andrew Pick and Anita Katz, are the son and daughter of the deceased, the appointed estate trustees of the Estate of George Pick and the primary beneficiaries of the approximately $1.8 million Estate.
3The applicant brings this application for, inter alia, dependant’s support pursuant to Part V of the SLRA. The respondents acknowledge that the applicant falls within the definition of “spouse” contained in Part V of the SLRA, and, since January of 2012, following their father's death, have provided the applicant with monthly support payments from the Estate. While the issue of quantum for permanent support remains outstanding, the parties have now agreed, on an interim basis, to a quantum of interim monthly support. I note that the case law recognizes that when determining entitlement to support from a spouse’s Estate pursuant to the SLRA, Part V, such support should not simply provide for bare necessities, but should provide proper support which will permit the dependant to continue to enjoy the same or similar standard of living to which the dependant had been accustomed while supported by the spouse. Kipp v Buck, 1993 CarswellOnt 1708.
The Issues
4Those issues before the Court today are the applicant's claim for interim support for payment of legal fees and payment of the retainer of the expert, Krofchick Valuation Partners, retained to conduct an evaluation and quantification of the applicant's claim. The applicant seeks payment out of the Estate with respect to both of these expenses, to which the respondents object.
Jurisdiction to Award Interim Costs
5The applicant, in her factum and brief of authorities, refers the Court to a number of cases involving the Court’s authority to award interim costs in cases involving family law or matrimonial matters, commercial and constitutional cases and trusts and estates cases. Having reviewed those authorities, I am satisfied that the Court does have a general jurisdiction to award interim costs in a preceding, which general jurisdiction or power is inherent in the nature of the Court's equitable jurisdiction as to costs. I am further satisfied that such jurisdiction is not limited exclusively to matrimonial cases, but has been recognized and applied in cases and involving commercial, constitutional, trusts and estates matters: British Columbia (Minister of Forests) v Okanagan Indian Band [2003] 3 S. C. R. 371, 2003 SCC 71; Organ v Barnett, 1992 7433 (ON SC), 1992 CarswellOnt 710, 11 O. R. (3d) 210. In the usual case, where the Court exercises its equitable jurisdiction to make such costs orders as it concludes are in the interests of justice, three criteria must be met by the party seeking such costs, namely impecuniousity or financial difficulties such that the party would otherwise not be able to proceed with the case, a prima facie case of sufficient merit to warrant pursuit, and special circumstances to satisfy the court that the case is within the narrow class of cases where this extraordinary exercise of its powers is appropriate:. B. C. v Okanagan, supra. In making my decision in this matter, I have also considered the three cases with respect to the interim costs awards made in the context of estates and trusts matters, including Kraus v Valentini Estate, 1993 CarswellOnt 2128, 1993 O. J. No. 3276 (Ont. Gen. Div.), Zhao v Ismail Estate (Trustee of), 2006 CarswellOnt 8411, 29 E. T. R. (3d) 315, Perkovic v Marion Estate, 2008 Carswell on 5931 (S.C.J).
The Applicant's Financial Circumstances
6In this case, the deceased had supported the applicant with respect to all expenses of daily living, as well as entertainment, annual vacations to the United States and abroad. Specifically, this included their monthly condominium maintenance fees, property taxes, electricity and other utilities, repairs and maintenance, insurance, weekly household money for the applicant, groceries and restaurant bills, and the couple’s entertainment, which included season tickets to the Opera House and Roy Thompson Hall and other cultural events. In addition, Mr. Pick also paid for all of their trips and vacations, which included a six to eight week stay in Miami, Florida and one significant trip abroad each year.
7Since George Pick’s death, the applicant has been required to pay all costs related to the condominium which they own as tenants-in-common, and which expenses had previously been paid completely by Mr. Pick. To do this, she has been required to deplete the small amount of investments which she held personally. As at the date of Mr. Pick’s death, the applicant had no liabilities. At the time of Mr. Pick's death, she held investments of approximately $48,600, which have been depleted to approximately $4,322.51 in order to meet her ongoing expenses. Further, following his death, she has had to take out a $60,000 line of credit in order to pay monthly expenses related to the condominium and general living expenses, and currently owes over $8,000 on that line of credit related to the application and legal fees. Her total monthly expenses amount to $8,034.61, while total monthly income from all sources is $2,640, leaving a significant monthly shortfall. While the interim monthly support payment in the amount of $4,100 has now been agreed upon by all parties and ordered by Chapnick J, she remains in financial difficulty if required to pay the legal expenses related to this application. To date, her requests for interim costs have been refused by the respondents.
Submissions of the Parties
8The applicant submits that she has attempted to settle the issue of permanent support for almost one year without success, and was accordingly required to commence the application. The respondents did pay a small monthly amount of approximately $1,245 per month from January 2012 as well as a one time without prejudice amount of $3,500 in July of 2012, which she argues is still inadequate, given her ongoing living expenses, as well as her mounting legal costs.
9Counsel for the respondents argues that the applicant has sufficient income now, since the Order of Chapnick J of October 16, 2012, and that there is no need for an Order for payment of interim legal fees or disbursements. He further argues that such an Order would be prejudicial to the Estate as Chapnick J’s Order included a “non-dissipation” clause, such that the respondents would be precluded from accessing Estate funds to litigate on behalf of the Estate. I note that the Order regarding “non-dissipation” is stated to be “until further Order of the Court or as otherwise agreed to by the parties.”
10Counsel for the applicant submits that the applicant has already incurred $99,853.02 in legal fees, disbursements and HST on a full indemnity scale, faces additional fees going forward, and also disbursements from the evaluator, Kroftchick Valuation Partners, retained to assist in calculating damages for dependant relief and unjust enrichment, in the estimated range of $5,000-$10,000. The applicant produced a letter from Kroftchick Valuation Partners supporting the estimated fee. With respect to costs, counsel for the applicant provided a summary of total costs to date incurred by the applicant, including fees, disbursements and HST. They further provided, on a privileged basis, their unredacted accounts for the Court's review.
Analysis and Decision
11I am satisfied, based on the evidence before me, the case law and submissions of counsel, that the applicant has met the criteria set forth at paragraph 5, above, with respect to payment of interim costs. She has clearly set forth evidence of her financial status and her ongoing monthly income and expenses. Based on this evidence, I am satisfied that, given her current financial circumstances and the limited resources and monthly obligations that she has, were an interim order not made, the applicant's ability to prosecute her case would be prejudiced, or would depend on the generosity of her counsel. I am satisfied that there will be no prejudice occasioned by anyone by the interim award. While a good portion of the Estate is in investments and non-liquid assets, there are sufficient liquid assets to make such payments.
12I find the application and issues raised to be meritorious and that they present a prima facie case for dependant’s relief, which is conceded by the respondents. In the circumstances of this case, based on the long relationship and the dependency of the applicant on Mr. Pick, and the present state of her finances, there are special circumstances which justify and merit an award of interim costs and disbursements, which include the plaintiff's legal costs and the disbursements related to the expert retainer, and a significant prejudice to the ability to proceed without the interim order sought. I order that expenses for legal costs on a partial indemnity basis in the amount of $50,000 and disbursements for the evaluation to a maximum of $10,000 be paid out of the Estate, to be accounted for and subject to the right of the trial judge to order that the applicant repay these funds.
Costs
13I would urge the parties to agree upon costs, failing which I would invite the parties to provide any costs submissions in writing, to be limited to three pages, including the costs outline. The submissions may be forwarded to my attention, through Judges’ Administration at 361 University Avenue, within thirty days of the release of this Endorsement.
Carole J. Brown J.
Date: January 14, 2013