CITATION: Stevens v. Fisher, 2013 ONSC 3112

BARRIE COURT FILE NO.: CV-10-1188

DATE: 20130528

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

CAMILLE NANCY STEVENS

Applicant

– and –

MICHAEL JAMES FISHER and DAVID WARREN FISHER, estate trustees of the ESTATE OF MARK GREGORY FISHER and CONSTANCE ALICE MARGARET EAGLES

Respondents

W. Michael Adams, for the Applicant

Catherine P. Watson , for the Respondent Constance Alice Margaret Eagles

HEARD: by Written Submissions

REASONS FOR DECISION ON COSTS

DiTOMASO J.

THE TRIAL

[1] The Applicant Camille Nancy Stevens (“Stevens”) was the common-law spouse of the deceased Mark Gregory Fisher (“Fisher”). She brought an Application for support as a dependant from his Estate pursuant to the provisions of the Succession Law Reform Act R.S.O. 1990, c.S.26 (“SLRA”).

[2] She had been Mr. Fisher’s common-law spouse for 11 years prior to his death. Mr. Fisher in his Will made no provision for the support of Ms. Stevens.

[3] Ms. Stevens looked to the Group Life Insurance Policy in the amount of $84,000 issued by Sun Life Assurance Company of Canada (the “Group Life Insurance Policy”) for support where the Respondent Constance Alice Margaret Eagles (“Eagles”) was named as the beneficiary of that Policy.

[4] The Group Life Insurance Policy was discovered by both Ms. Stevens and Ms. Eagles sometime in the Fall of 2010 after the death of Mr. Fisher.

[5] Ms. Eagles contended that as beneficiary, she was entitled to the entire proceeds of the Group Life Insurance Policy. Ms. Stevens claimed the proceeds of the Group Life Insurance Policy as an asset of Mr. Fisher’s Estate pursuant to s.72(1)(f.1) of the SLRA.

[6] I found that Ms. Stevens was a dependant common-law spouse as defined in the SLRA. Further, I found that Mr. Fisher had not made adequate provision for her proper support. I went on to find that the Group Life Insurance Policy was an asset of the Estate of Mr. Fisher pursuant to s.72(1)(f.1) of the SLRA. I granted an Order for support from Mr. Fisher’s Estate payable to Ms. Stevens from the Group Life Insurance Policy in a lump sum in the amount of $75,000 plus accrued interest thereon in satisfaction of her dependant claims pursuant to Part V of the SLRA, s.58.

[7] I further ordered that the remaining proceeds of the Group Life Insurance Policy ought to be paid to Ms. Eagles in a lump sum in the amount of $9,000 plus accrued interest thereon, if any, in satisfaction of her claims as designated beneficiary of the said Policy.

[8] I suspended payment of any funds pursuant to the judgment in accordance with s.59 of the SLRA pending further order of the court. This order was made in accordance with the relief sought by Ms. Stevens.

[9] As for costs, the parties agreed that costs would be determined by way of written submissions. I have received those written submissions and now deliver my written reasons in respect of the costs issue. (See Reasons for Judgment released April 18, 2013).

POSITION OF THE PARTIES

Position of the Applicant Camille Stevens

[10] Ms. Stevens submits that as the successful party she is entitled to costs on either a partial indemnity or substantial indemnity scale – substantial indemnity costs in the amount of $45,779.66 or partial indemnity costs in the amount of $31,157.46. It is submitted that costs should be recovered from the Respondent Eagles. Ms. Eagles was not successful in respect of the arguments mounted to defeat the claims of Ms. Stevens. None of the defences were justified in the conduct of the two day trial in all the circumstances.

[11] An important submission is that the claim for costs by Ms. Stevens should not be paid out of the Group Life Insurance Policy. It is submitted that pursuant to s.72(1) of the SLRA, the Notional Estate is available for the payment of support orders only, and not for costs.

Position of the Respondent Constance Eagles

[12] Ms. Eagles submits that the principle of indemnity applies to this case and that costs ought to be awarded from the Group Life Insurance Policy rather than from her personally. She submits that she acted reasonably throughout: not only at trial but throughout the entire litigation. Both she and Ms. Stevens believed that they were entitled to the proceeds of the Group Life Insurance Policy. Not all of the proceeds of the Group Life Insurance Policy in the face amount of $84,000 was payable to Ms. Fisher. In addition, the quantum sought by Ms. Fisher was challenged as being excessive. The first day at trial was not a full day because Ms. Stevens had no witnesses to call in the early afternoon. Further, it was no fault of Ms. Eagles that the matter could not be reached on prior occasions due to no Justice being available. In this regard, it is submitted that costs should be considered as costs thrown away.

ISSUES

[13] There are two issues to be determined in respect of costs:

(a) Whether Ms. Stevens’ costs should be paid from the Group Life Insurance Policy rather than from Ms. Eagles personally; and,

(b) whether there ought to be an award of costs in these proceedings in any event.

ANALYSIS

Whether Ms. Stevens’ costs should be paid from the Group Life Insurance Policy rather than from Ms. Eagles personally.

[14] I do not agree with the submissions of Ms. Eagles that Ms. Stevens’ costs ought to be paid from the proceeds of the Group Life Insurance Policy rather than from Ms. Eagles personally.

[15] The traditional approach awarding costs of the parties out of the Estate in a dependant support application was rejected in the decision of Cummings v. Cummings (2003), 2003 CanLII 64218 (ON SC), 223 D.L.R. (4th) 732 (Ont.SCJ), aff’d (2004), 2004 CanLII 9339 (ON CA), 5 E.T.R. (3d) 97 (Ont.C.A.) leave to appeal to SCC refused (2004), 197 O.A.C. 400.

[16] When considering the issue of costs, Cullity J. concluded that the appropriate exercise of his discretion in the circumstances was for the parties to bear their own costs. On appeal, the Ontario Court of Appeal cited the discretion granted to the court pursuant to s.75 of the SLRA to direct that costs of the dependant support application be paid out of the Estate or otherwise, as it thinks proper. As a result, the Court of Appeal held that there was no error on the part of Cullity J. in exercising his discretion to order that the parties must bear their own costs.

[17] I agree with the proposition in Cummings that it is proper for the court to exercise its discretion regarding the issue of costs and that costs of the Dependant will not necessarily be paid by the Estate, as in the case at bar, from the Group Life Insurance Policy.

[18] Further, this issue came before Pollak, J., in Fernandez v. Fernandez Estate (2011) 2011 CanLII 97991 (ON SC), CarswellOnt. 2395, 2011 ONSC 1611, 100 R.F.L. (6th) 284, 200 A.C.W.S. (3d) 604.

[19] The issue before the Court in Fernandez was whether the costs should be paid out of the “Notional Estate”. Pursuant to s.72(1) of the SLRA, the Notional Estate is available for payment of support orders only, and not for costs.

[20] Pollak J. held that the Court did not have jurisdiction to make a costs award payable from the “Notional Estate”.

[21] I have found that pursuant to s.72(1)(f.1) the amount payable under the Group Life Insurance Policy falls within and is deemed part of Mr. Fisher’s Estate. Section 72 further provides that the Group Life Insurance Policy “shall be deemed to be part of his or her net Estate for purposes of ascertaining the value of his or her Estate, and being available to be charged for payment by an order under clause 63(2)(f).

[22] Section 63(2)(f) provides for the securing of payment under an order by a charge on property or otherwise.

[23] I concur with the reasoning of Pollak J. in Fernandez that the Group Life Insurance Policy is not available to either Ms. Stevens or Ms. Eagles to satisfy any claim for costs. Rather, to award costs out of the Notional Estate would serve only to defeat the dependant’s relief afforded to Ms. Stevens by the judgment. To do so in our case would run counter to the spirit and intent of dependant relief legislation.

[24] Ms. Eagles cited the case of Matthews v. Matthews, 2012 ONSC 933 where Flynn J. ordered costs incurred by the Respondents to be paid out of life insurance policy proceeds before those proceeds were dealt with regarding the applicant’s claim for support.

[25] I find that the Matthews decision is distinguishable from the case at bar as the trial judge did not have the benefit of considering the Fernandez case when arriving at his decision.

[26] I find that Matthews is further distinguishable from the case at bar because awarding any costs out of the Notional Estate would act to defeat Ms. Stevens’ relief afforded to her by the judgment.

[27] Accordingly, I conclude that neither Ms. Stevens nor Ms. Eagles can resort to the Group Life Insurance Policy for payment of their costs.

Whether there ought to be an award of costs in these proceedings in any event.

[28] At the heart of this issue is whether the “loser pays” principle applies or should the parties bear their own costs.

[29] The parties tried to resolve this matter between themselves but without success. I was not presented with any formal offers to settle pursuant to Rule 49 to consider in respect of costs. However, I do know that the parties did their best to exchange offers with a view to settlement each in the honest belief that they were entitled to the proceeds of the Group Life Insurance Policy – Ms. Stevens as dependant and Ms. Eagles as beneficiary. Unfortunately the matter could not be resolved.

[30] The parties proceeded to a short and focused trial regarding the critical issues co-operating by producing a statement of facts and agreeing on the production of documents.

[31] Both parties agreed that for the most part the Estate of Mr. Fisher was insolvent. The only asset that could be looked to with a view to satisfying the competing claims was the Group Life Insurance Policy.

[32] Ms. Eagles was unsuccessful in respect of three principle arguments advanced at trial; namely,

(a) the designation and the provisions of section 196 of the Insurance Act took precedence over and therefore rendered meaningless the provisions of Part V of the SLRA. She was unsuccessful on this point.

(b) Ms. Stevens should have sought relief against other policies even though Ms. Eagles had no law to support this contention. Ms. Stevens was not obligated to contest other policies, even though it would have been unreasonable in the circumstances to have done so. Ms. Eagles was unsuccessful in respect of this argument.

(c) Lastly, Ms. Eagles was not prepared to concede that Ms. Stevens was a dependant. A large part of the trial was spent establishing that undoubtedly, Ms. Stevens was. Ms. Eagles was unsuccessful in respect of this argument as well.

[33] Ultimately, there was a mixed result at trial. Ms. Stevens was awarded the lion’s share of the proceeds of the Group Life Insurance Policy. However, she did not receive the entire proceeds. She was awarded the sum of $75,000 plus accrued interest with Ms. Eagles being awarded the sum of $9,000 plus accrued interest, if any.

[34] I do not consider this case to be an appropriate case to award costs by Ms. Stevens against Ms. Eagles personally.

[35] Both parties reasonably believed that they had a good claim to the proceeds of the Group Life Insurance Policy. Both parties proceeded without the acrimony and rancour often found in these types of cases. Rather, each attempted to resolve the matter short of trial. Each attempted to co-operate with the other in order to place the issues before the court for ultimate determination. In that ultimate determination, Ms. Stevens was more successful than Ms. Eagles.

[36] I have found that neither can look to the proceeds of the Group Life Insurance Policy to satisfy their costs.

[37] In addition, this case involved the determination of a novel point regarding the interplay and priority of the dependant relief provisions of the SLRA over the provisions of the Insurance Act, in particular the applicability of s.72(1)(f.1) of the SLRA.

[38] Given the mixed result in this case, the fact that the Group Life Insurance Policy is the only asset of the Estate, and the novel issues at play, I exercise my discretion in awarding no costs in this matter. The circumstances of this case clearly dictate that such a disposition of no costs would be fair, reasonable and proportional given the outcome. Each party shall bear their own costs.

DISPOSITION

[39] For these reasons, no costs are awarded. Each party shall bear their own costs. The suspension order made in accordance with s.59 of the SLRA in accordance with the Reasons for Judgment herein dated April 18, 2013 is hereby set aside. There shall be immediate payment of the funds from the Group Life Insurance Policy to Ms. Stevens and Ms. Eagles as provided in the Court’s Judgment herein released April 18, 2013.

DiTOMASO J.

Released: May 28, 2013