ONTARIO
SUPERIOR COURT OF JUSTICE
ST. CATHARINES COURT FILE NO.: 750/11
DATE: 2013-12-19
B E T W E E N:
Robert Henry McMaster
Richard P. Startek, for the Applicant
Applicant
- and -
Estate of Mary Margaret McMaster
John A. Crossingham, for the Respondent
Respondent
HEARD: November 26 & 29, 2013
THE HONOURABLE JUSTICE C. A. TUCKER
DECISION
Issue
[1] The sole issue for the court to decide is whether the respondent is entitled to his costs and the quantum of those costs if awarded.
[2] The respondent seeks costs in the amount of $63,055.42 on a partial indemnity basis, and $71,004.97 on a substantial indemnity basis. These costs do not include case and settlement conference costs which cannot be claimed as they were not awarded at those steps in the proceeding. Those costs would increase the amount claimed by the respondent to $88,011.47 on a partial indemnity basis, and $101,249.42 on a substantial indemnity basis. The disbursements claimed are $10,945.47, most of which comes from the cost of one appraisal at $7,797.00. I outline in detail these figures as I will later refer to these amounts as one of the factors I will take into account in determining an appropriate cost award.
[3] The applicant’s position is that the costs are excessive in the circumstances, and that a figure in the range of $16,000.00 would be more appropriate. His lawyer reviewed each and every line of each and every bill of the respondent pointing out what he considered to either be duplication of services, given that the respondent changed lawyers, or unnecessary time and time charged for a motion which was not pursued and what he considered excessive time on the file in general.
[4] The respondent also seeks $6,584.95 on a substantial indemnity basis and $6,573.65 on a partial indemnity basis, which do not make intrinsic sense given the different bases of calculations, for the argument of this costs issue which was framed as a motion. The time spent on the argument before me took over four hours. Both parties filed substantial amounts of material for the hearing, including costs brief authorities.
Background
[5] The applicant commenced the action which gave rise to the costs claim against him claiming spousal support and equalization of property, exclusive possession of the matrimonial home and its contents, an accounting of assets, and a freezing order over all assets owned by the estate of his late wife and/or by the respondent and her son.
[6] The parties married on April 1, 1982. Margaret McMaster died on May 9, 2011 ending the 29-year relationship. Both parties had been previously married, and Mrs. McMaster had two grown children as a result of her first marriage, one of whom is the estate trustee of the respondent, being Richard Malaryk. It was the respondent’s position that the marriage was an unhappy one for Mrs. McMaster due to the verbal and other abuse of the applicant. The applicant is now over 90 years old and in failing health.
[7] Mrs. McMaster acquired the property which became the matrimonial home without any financial contribution by Mr. McMaster. In or around 1999 the property was transferred with the consent of the applicant into the name of Mrs. McMaster, her son Richard Malaryk, and Mr. McMaster jointly. Prior to her death Mrs. McMaster transferred monies into an account into the joint names of herself and her son. Her son, using her power of attorney, removed funds from her account in addition to those funds just prior to her death to his own account. In addition, shortly after her death, Richard Malaryk attended at the matrimonial home and removed what the applicant described as substantially all the furniture from the matrimonial home claiming them as assets brought into the marriage by his mother. He took this action without notice to Mr. McMaster, who was away from the home at the time. Mr. McMaster involved the police who indicated that a charge could be laid. I would agree with Mr. Startek that after 30 years the furniture was matrimonial property. I find that the actions taken by the estate trustee in removing the furniture probably fueled the litigation and, as such, must be taken into consideration in assessing the litigation costs.
[8] Mrs. McMaster revised her will before her death leaving everything to her sons. During the marriage she also assisted her children with money to acquire a home and for other purposes. At least one loan was evidenced by a promissory note which was claimed to have been forgiven on death by her estate trustee. Given that the children were the sole beneficiaries of her will and there is no attack on its validity, the loan repayment forgiven or not, would only be a payment to the beneficiaries, subject to any accounting between the brothers.
[9] Unfortunately, after the furniture incident, when Mr. McMaster inquired about the estate he was told that there was nothing in it and no bequest to him. This led to this action. It is Mr. McMaster’s position that he had paid the day-to-day expenses of the couple’s 29-year marriage allowing Mrs. McMaster to acquire assets, and through undue influence or her incompetence or otherwise, the family assets were transferred to her children rather than equalized as required under the Family Law Act (“FLA”) as matrimonial property.
[10] I hesitate to describe in such detail the background to this litigation, but do so to provide some understanding of how a couple whose total value of property on the valuation date appears to be less than $250,000.00 could run up costs in excess of $100,000.00 in litigation. I acknowledge that if you factor in the two promissory notes in the order of $102,000.00, that amount would also be increased to over $350,000.00 but even at that amount the claimed costs appear all out of proportion to the quantum in issue.
[11] There was a large volume of production required and produced as a result of the allegations made and to answer the question of the amounts owing. Ultimately, once the almost $8,000.00 appraisal of land owned by Mrs. McMaster was obtained, the parties finally provided net family property statements almost two years after the litigation began, which ultimately showed a negligible amount owing by either party for equalization and no other claims were established. The issue of competence and undue influence were disproved.
[12] Ultimately, the applicant and the respondent consented to a dismissal of all claims in the proceeding, save and except for the issue of costs. In an offer to settle the applicant offered to pay the respondent $20,000.00 in costs inclusive of disbursements and HST or to have the same determined by a judge.
The Law
[13] Pursuant to Rule 24(1) a successful party is entitled to its costs. Here, success is measured with the case being dismissed on consent against the respondent without any of the claims made in the original application succeeding. Accordingly, presumptively the respondent is entitled to costs.
[14] The factors that I am to consider in exercising my discretion as to costs are set out under Rule 24(11) and include the importance, complexity or difficulty of the case, the reasonableness or unreasonableness of each party’s behaviour in the case, the lawyers rates, and the propriety of the expenses incurred by the party.
[15] The applicant, as noted, reviewed in detail each of the respondents’ cost entries, pointing out that he was not given the underlying dockets that supported the entries on the bills. In this case, the application was made and a response was made. There was a lengthy motion launched for production, which was never proceeded with, and questioning. There were no argued motions nor was there a trial of any issue. There was a case conference and a settlement conference.
[16] It is the respondent’s position that the matter should never have been started, pointing out his correspondence sent even prior to the litigation commencing in which he said there was no purpose in bringing the action given that Mr. McMaster received more from his deceased wife in her death than he would achieve by any action. He described the numerous allegations raised by the applicant which forced the estate to constantly find evidence to refute charges as a constant “whack-a-mole” game. The respondent points to property sold by the applicant, the proceeds of which were not received by the respondent. He also notes that the respondent’s pension was considerably larger than the applicant’s. For the most part the parties kept separate accounting and bank accounts.
[17] The applicant responds that after a 29-year marriage in which the parties accumulated assets, albeit through pensions, not active income, he was left with nothing as a result of his wife’s estate. The applicant also points out the respondent changed lawyers resulting in a duplication of effort when the second lawyer had to be brought up to speed. He also points out that the motion which was filed with the court accounts for a large amount of the time charged but was firstly never heard and secondly never required as evidenced by his secretary’s affidavit response wherein she indicated that many of the documents had already been produced.
[18] In a review of the bills, the applicant also points out a lack of detail to explain the actions described which leaves the reader unable to determine if the same is justified.
[19] My role is not that of an assessment officer to review the costs on a one by one basis, but rather to evaluate the proper amount for costs based upon the factors I have set out. I do, however, have to agree that the amount of time charged appears to be excessive given the issues involved, albeit there were numerous such issues. Most family law cases involve valuations and accounting and many, many other claims. Obviously the issues were important to the parties, but they were not overly complex legally. Richard Malaryk was in a difficult position as compared to most respondents who are a living party knowledgeable about the financial affairs of the marriage. I would note, however, that he was power of attorney for his mother and was probably better informed than many children about his mother’s finances, having borrowed money from her and owning property with her. The issuance, however, of the support claim made by the applicant, and its validity, could not be something of which he had knowledge without a great deal of work.
[20] It is unfortunate that the $8,000.00 valuation was not completed earlier so that a calculation of equalization and amounts owing could be completed and perhaps have led to earlier resolution. It is also unfortunate that actions, such as the removal of the furniture without notice to Mr. McMaster, were taken and that a new will was drawn again without his knowledge. I can empathize with the applicant as to his upset with finding he was left next to nothing by his wife of 29 years. However, to commence and continue the litigation given the relatively small amount of assets involved and without a proper assessment of the risks involved have now led to these costs consequences.
[21] Although the respondent believed that there was no equalization owing, until the hard cold facts as set out in the net family property statement were determined, which only occurred on this past summer, neither party nor their solicitors could advise their client or decide the essential issue of the amounts properly payable by one party to the other. Accordingly, I do not find that either party was completely unreasonable. The only issue is the time properly spent on the case, although the claim for spousal support I agree should either have been not commenced or been discontinued long in the litigation. I acknowledge the accounting to determine liability over an almost 30-year period results in much greater time and much greater costs.
[22] The respondent, according to his lawyer, did much of the work himself to find information to support and/or refute the claims made. I find that the respondent is entitled to costs on a partial indemnity basis and to its disbursements in the amount of $10,945.47 which appear to be properly paid and payable.
[23] On a weighing of all of the relevant factors, given the number of issues involved, the amounts in issue, the difficulty in trying to defend a case where the party is deceased, combined with the fact that the legal issues in this case were not complex, I find the respondent is entitled to $50,000.00 plus HST for costs involved up to the motion, and the disbursements set out above, and $2,500.00 for the motion itself together with HST and disbursements.
Tucker J.
Released: December 19, 2013
ST. CATHARINES COURT FILE NO.: 750/11
DATE: 2013-12-19
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Robert Henry McMaster
Applicant
- and –
Estate of Mary Margaret McMaster
Respondent
DECISION
Tucker, J.
Released: December 19, 2013