ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 12-53861
DATE: 2013/07/02
BETWEEN:
ABRAHAM FEINSTEIN
Applicant
– and –
JACOB FREEDMAN, JONATHAN FREEDMAN, ROSE-ANNE FREEDMAN-PRIZANT, JOSH FREEDMAN, MICHAEL FREEDMAN, SHIRA LEAH BEN-CHOREEN SCHNEK, RACHEL FREEDMAN, JOSHUA FREEDMAN, ELI FREEDMAN, TAL-OR BEN CHOREEN, ELISHUA BEN-CHOREEN, JOSHUA PRIZANT, SARAH IDIT PRIZANT, SAMUEL PRIZANT, JOSHUA FREEDMAN, ADAM FREEDMAN, LIAT BEN-CHOREEN, RIVA FREEDMAN ROTENBERG AND THE OFFICE OF THE CHILDREN’S LAWYER
Respondents
Peter Hagen, for the Applicant
Counsel for Jacob Freedman, Rose-Anne Freedman-Prizant and Josh Freedman: Catherine Francis
Counsel for Jonathan Freedman : Jaye Hooper
Counsel for Michael Freedman, Shira Leah Ben-Choreen Schneck, Rachel Freedman, Joshua Freedman, Eli Freedman Joshua Prizant and Sarah Idit Prizant : Gregory Sidlofsky
Counsel for Tal-or Ben-Choreen, Liat Ben-Choreen and Elishua Ben-Choreen: Joseph Obagi
Counsel for Samuel Prizant, Joshua Freedman, Adam Freedman and the Office of the Children’s Lawyer: Clare Burns and Bianca La Neve
Counsel For Riva Freedman Rotenberg: Ken Radnoff
HEARD: written submissions
endorsement regarding costs
Parfett j.
[1] The parties in this matter have been unable to reach an agreement on costs and have submitted the matter to me for determination.
Background
[2] In 2008, I decided that the trustees of the Riva Freedman Trust (RFT) should be removed and replaced with an independent trustee. After some dispute, the parties consented to the appointment of Abraham Feinstein. The primary basis for Mr. Feinstein’s appointment was the long-standing and acrimonious relationship between the four children of Jarvis Freedman. That acrimony had resulted in much litigation that was impeding the operation of Freedman Holdings Inc. (FHI).
[3] In 2012, Mr. Feinstein decided to resign and submitted the matter to the court for its approval as well as for directions on how trustees should be appointed in future. The Office of the Children’s Lawyer (OCL) brought a cross-application seeking the appointment of an institutional trustee as the parties could not agree on who should replace Mr. Feinstein. Ultimately, the issue to be decided was whether the mechanism for the appointment of trustees that is set out in Jarvis Freedman’s will should operate, or whether the court should again appoint an independent trustee.
[4] The determination of this issue involved the interplay between s. 3 of the Trustee Act[^1] and s. 5 of the same act. I found that there was no evidence of abuse of discretion that would justify this court intervening pursuant to s. 5(1) of the Trustee Act and therefore, that trustees of RFT could be appointed pursuant to the provisions of Jarvis Freedman’s will.
Positions of the parties
[5] As noted in my decision in this matter, there are essentially two opposing groups whose positions have been primarily advanced by one member of that group. The cross-application seeking the appointment of an independent trustee was led by the OCL. The remaining members of that group were Jonathan Freedman and Liat Ben-Choreen, Elishua Ben-Choreen and Tal-Or Ben-Choreen. This group failed in their bid to have an independent trustee appointed. The other group was led by Jacob Freedman, Josh Freedman and Rose-Anne Freedman-Prizant (the three siblings). Included in this group were Riva Freedman and the adult children of Jacob Freedman and Rose-Anne Freedman-Prizant. This group succeeded in their submission that the provisions of Jarvis Freedman’s will should govern the appointment of trustees to the RFT. The Applicant, Abraham Feinstein was seeking to have his resignation approved by the court as well as directions from the court.
[6] Jacob Freedman and all those who formed part of the successful group of respondents to the cross-application are seeking full recovery of their costs of both the application and the cross-application payable by the OCL, either alone or jointly with Jonathan Freedman and his children (Liat Ben-Choreen, et al). They argue that estate litigation operates subject to the general civil litigation costs regime except in limited circumstances where the litigation arose as a result of the actions of the testator or where the litigation was reasonably necessary to ensure the proper administration of the estate.[^2]
[7] The OCL and others in this group contend that this litigation falls within one of the exceptions to the general rule regarding costs in that it was necessary to ensure the proper administration of the estate. As a result, they are seeking to have all the costs payable out of the RFT and the Jarvis Freedman Insurance Trust (JFIT).
[8] Mr. Feinstein seeks to have his costs and that of his counsel payable either by the OCL or out of the estate.
Issue
[9] The key issue to be decided is whether this litigation was necessary to ensure the proper administration of the estate.
Analysis
[10] In my view, Mr. Feinstein’s application for approval of his resignation and directions for the method of appointing new trustees was clearly necessary for the proper administration of the estate. This estate has been mired in litigation since well before my first decision in 2008. Without the agreement of all the parties involved – which he could not obtain – Mr. Feinstein was required to seek direction from the court. Consequently, the costs his lawyer should be paid by the estate. Those costs are fixed at $43,000 inclusive of disbursements and HST. Mr. Feinstein’s costs should be paid in the normal course of payment of trustee’s fees.
[11] Mr. Feinstein’s application was never seriously litigated by anyone. His resignation was accepted and the key dispute was whether an independent, institutional trustee should be appointed as requested by the OCL or whether the provisions of Jarvis Freedman’s will should operate. As a result, the more difficult issue regarding costs is how the cross-application should be characterized. Was it necessary to ensure the proper administration of the estate as alleged by the OCL, or was it an over-aggressive manoeuvre designed to give the OCL long-term control of FHI and which involved unfounded allegations of wrongdoing by the three siblings as alleged by those siblings?
[12] The three siblings argue that this litigation produced no benefit to FHI, JFIT or any of the income or capital beneficiaries of the estate of Jarvis Freedman. I disagree. In my view, the cross-application was a vitally necessary part of the determination of how the trustees of RFT would be appointed in the future, so as to determine who would be directors of FHI and how that company would be run – a matter of critical importance to both the income and capital beneficiaries of the trust. Given the highly litigious history of this estate and the long-standing acrimony between the four children of the testator this decision was essential to any effort to move forward without further litigation. Therefore, the costs should be paid out of the estate. However, in my view the matter does not end there. The general principles set out in Rule 57.01 of the Rules of Civil Procedure[^3] still govern how costs should be awarded. The relevant portions of that rule state:
In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(c) the complexity of the proceeding;
(d) the importance of the issues; and
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding.
[13] In addition, the overriding principle in fixing costs is fairness and reasonableness that reflects the reasonable expectation of the parties.[^4]
[14] The OCL contends that this litigation involved a matter of public policy because it raised a novel question of law relating to the interplay between sections 3 and 5 of the Trustee Act. Counsel for Riva Freedman Rotenberg questions this position and suggests that in fact ‘it was simply a question of applying section 3 of the Trustee Act.’ I agree with the OCL – this matter was not simply a matter of applying s. 3 of the Trustee Act. In addition, the proceeding was moderately complex requiring an in-depth analysis of the financial affairs of FHI in order to assess whether the three siblings were being even-handed in their approach to the management of that company.
[15] The three siblings have levelled serious accusations against the OCL suggesting that the OCL had ulterior motives in pursuing this litigation. They were unhappy with the late filing of the affidavit of Susan Glass. I agree that this affidavit was filed late and resulted in hastily held cross-examinations. However, I did admit it into evidence and it proved to be very useful to all parties in assessing the financial issues. In addition, the three siblings lay the blame for the highly litigious history of this trust at Jonathan Freedman’s door and argue that only by requiring Jonathan and the OCL to pay the costs of this current litigation will there ever be an end to the litigation.
[16] I should point out that both Jonathan Freedman and the OCL have been equally vociferous in their complaints about the three siblings and their handling of the litigation. In short, all of these behaviours underline why there has been so much litigation and so little effort to resolve matters peaceably. In my view, the conduct of all parties in this litigation has been less than ideal.
[17] I note as well that not long after my decision was released that Liat Ben-Choreen brought a motion to have fresh evidence heard and for me to reconsider my decision. Moreover, the parties had been unable to agree on the form that an order arising out of my decision would take and a teleconference was required to deal with both issues. Consequently, I too have some concern whether this litigation will ever end.
[18] As noted in my previous costs decision after the 2008 litigation, there are once again some puzzling differences among the lawyers in the amount of time and therefore the cost of this litigation. I accept that the three siblings and the OCL as the ‘leads’ in the litigation would have spent considerably more time than the others on this file, but I have difficulty understanding why the lawyer for the adult children of Jacob Freedman and Rose-Anne Freedman-Prizant would be more than double that of the others even taking into consideration the fact that a change in counsel would have resulted in some time related to getting up to speed on the file. I also do not understand why the OCL’s costs are double those of the other lead litigators. There is insufficient difference in the experience of the counsel involved to justify the difference. As a result, I have adjusted those costs accordingly.
Conclusion
[19] Taking into consideration all the principles outlined in s. 57.01 of the Rules of Civil Procedure, I set the costs of the parties as follows:
Jacob Freedman, Rose-Anne Freedman-Prizant and Josh Freedman - $160,000 inclusive of HST and disbursements;
Michael Freedman, Shira Leah Ben-Choreen Schneck, Rachel Freedman, Joshua Freedman, Eli Freedman, Joshua Prizant and Sarah Idit Prizant - $55,000 inclusive of HST and disbursements;
Riva Freedman Rotenberg - $27,500 inclusive of HST and disbursements;
Jonathan Freedman - $35,000 inclusive of HST and disbursements;
Liat Ben-Choreen - $31,500 inclusive of HST and disbursements; and
Office of the Children’s Lawyer - $160,000 inclusive of HST and disbursements.
Madam Justice Julianne A. Parfett
Released: July 2, 2013
COURT FILE NO.: 12-53861
DATE: 2013/07/02
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ABRAHAM FEINSTEIN
Applicant
– and –
JACOB FREEDMAN, JONATHAN FREEDMAN, ROSE-ANNE FREEDMAN-PRIZANT, JOSH FREEDMAN, MICHAEL FREEDMAN, SHIRA LEAH BEN-CHOREEN SCHNEK, RACHEL FREEDMAN, JOSHUA FREEDMAN, ELI FREEDMAN, TAL-OR BEN CHOREEN, ELISHUA BEN-CHOREEN, JOSHUA PRIZANT, SARAH IDIT PRIZANT, SAMUEL PRIZANT, JOSHUA FREEDMAN, ADAM FREEDMAN, LIAT BEN-CHOREEN, RIVA FREEDMAN ROTENBERG AND THE OFFICE OF THE CHILDREN’S LAWYER
Respondents
endorsement regarding costs
Madam Justice Julianne A. Parfett
Released: July 2, 2013
[^1]: R.S.O. 1990, c. T-23, as amended
[^2]: McDougald Estate v. Gooderham, 2005 21091 (ON CA), 255 D.L.R. (4th) 435 at para. 78.
[^3]: R.R.O. 1990, Reg. 194
[^4]: Boucher v. Public Accountant Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3D) 291 (O.C.A.) and Larcade v. Ontario (Ministry of Community and Social Services) (2006), 2006 17943 (ON SCDC), 211 O.A.C. 247 S.C.J. (Div. Ct.).