SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 06-005/06
DATE: 20140429

RE: Martin Mroz and Adrianna Mroz by their Litigation Guardian Agnieszka Mroz, Plaintiffs

AND:

Helen Mroz, Richard Paramonczyk, Kathleen Paramonczyk, Elizabeth Paramonczyk, Christine Paramonczyk and Anne Paramonczyk, Defendants

BEFORE: Madam Justice Darla A. Wilson

COUNSEL:
Michael W. Czuma, Counsel for the Plaintiffs

Monty Thomas Hyde, Counsel for the Defendants

HEARD: By Written Submissions

ENDORSEMENT on costs

[1] This action was brought by Martin and Adrianna, the grandchildren of the deceased Kay Mroz, for a declaration that the will she signed in 2004 was invalid; or alternatively, that the Defendant Helen Mroz (“Helen”) was liable to them in damages for breach of trust. The trial proceeded before me over the course of 3 days and in written reasons released March 13, 3014, I found that the 2004 will was valid, and that Helen was liable for damages of $140,000 for breach of trust. I indicated that if counsel could not agree on costs, I would accept written submissions following which I would fix costs. Each side has submitted material, which I have reviewed.

Positions of the Parties

[2] The Plaintiffs submit that they ought to be awarded costs on a full indemnity basis, arguing they were successful at trial and because of the conduct of the Defendant Helen Mroz, she ought to pay the costs. It is argued that Helen failed to make an Offer to Settle and given her behaviour, she should be ordered to pay costs on a full indemnity basis, in the sum of $87,618.17.

[3] The Defendant Helen concedes that she was not successful at trial and thus, must pay costs to the Plaintiffs but it is submitted the appropriate scale is on a partial indemnity basis. It is submitted that prior to the issuance of this claim, Helen had offered to pay the $140,000 into Court but this offer was not accepted and the Litigation Guardian chose instead to proceed with this lawsuit. Mr. Hyde argues that Helen made a formal Offer to Settle on this basis in September 2006, but concedes this offer was withdrawn in March 2011.

[4] Helen submits that the Plaintiffs sought a declaration that the 2004 will was not valid and they were unsuccessful on this ground and furthermore, the Plaintiffs failed to admit a single fact from the Defendant’s Request to Admit, which resulted in additional legal fees. Mr. Hyde suggests that the fees ought to be fixed at $40,000 plus HST plus $3,600 for disbursements for an all-inclusive figure of $49,000.

Analysis

[5] Section 131 of the Courts of Justice Act¸ R.S.O. 1990, c. C.43 confers on the court the discretion to determine by whom and to what extent the costs of a proceeding shall be paid.

[6] Rule 57.01 sets out the various factors the court may consider, in addition to the results in the case and any offers to settle or contribute, when exercising its discretion.

[7] In fixing the costs of this matter, I am mindful of the principles set forth by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON C.A.), (2004), 71 O.R. (3rd) 291 (C.A.), specifically that the overall objective of fixing costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant. I am also guided by rule 57.01(1) which specifies that the reasonable expectation of an unsuccessful party in respect of costs to be paid is a relevant factor which the court may take into account when fixing costs.

[8] While the Plaintiffs were not successful on all of the relief sought, they prevailed on the point of the bequests to the grandchildren which were not honoured. My findings resulted in a judgment of $140,000 plus interest and costs.

[9] There apparently was no Rule 49 Offer to Settle served by either party, for reasons which have not been provided to me. The Defendant Helen seems to suggest that the fact that in September, 2006, she offered to settle by paying the bequests into court ought to be a significant factor taken into account by me when deciding the issue of costs. I reject this submission. While Helen did make an offer to settle which was not accepted by the Plaintiffs, I note that the offer was formally withdrawn in March 2011 and no further offer was made. During the trial, Helen testified that after this litigation was instituted, she gave her solicitor [not Mr. Hyde] the sum of $140,000 in satisfaction of her obligations under the will. There was correspondence referred to which indicated it was anticipated that since the Plaintiffs would not accept that amount in full satisfaction of their claims, the sum would be paid into court. For reasons which were never elucidated, that step was not taken and Helen received the money back from her counsel and spent it. Had the application been launched and the funds paid into court, Helen would have been in a strong position to argue she was entitled to costs. It remains a mystery to me, given the evidence, why this matter proceeded through trial.

[10] In my view, there is no reason to depart from the usual order that costs follow the event and thus, the Plaintiffs are entitled to their costs. I am not persuaded the appropriate scale of costs is that of full indemnity. The Plaintiffs sought to prove the 2004 will was not valid and they were unsuccessful on this point and there was a paucity of evidence that supported that position at trial. Had the Plaintiffs served a Rule 49 Offer to Settle, they would have been in a strong position to argue for costs on a higher scale, but they failed to do so. My view of the conduct of Helen is clear from the Reasons for Judgment, but in my opinion, that does not mean the Plaintiffs are entitled to full indemnity costs, which is a punitive measure. In all of the circumstances, I am of the view that costs to the Plaintiffs on a partial indemnity scale payable by Helen and not the estate is appropriate.

[11] Mr. Czuma, a 1983 call, claims 73 hours at $250 per hour. The prior counsel, Mr. Poliacik, also a 1983 call, claims 123.35 hours at a rate of $225 per hour. Together they seek $46,003 in fees. Further sums are sought by other counsel who acted in the early stages of the action. There is a printout of dockets from January 2006 to February 2006 in the amount of $882.04. It appears this account is from Mark Scott. A further sum of $3,660 is sought by P. Szajak, but there is no information as to what he did on the file. What is included in the materials is a document entitled “Retainer of Service” dated January 13, 2011 from Szajak Law office and it indicates that the Litigation Guardian provided him with $2,260.00 with a further sum of $1,977.50 due. There is absolutely no information in the materials as to what Mr. Szajak’s involvement was and consequently, I reject this amount.

[12] This action was commenced in 2006. Mr. Poliacik was the original solicitor and it appears from his accounts that he drafted the Application, and obtained the order; drafted a motion for Directions and the resulting order; drafted the Statement of Claim; attended the examination for discovery of Helen; arranged and attended on the mediation; set the action down for trial; drafted motion to compel solicitor Malicki to attend for discovery [which was unsuccessful] and thereafter handed the file off in June 2011 to Mr. Czuma to do the trial.

[13] In my view, this was not a complicated matter and while I agree this action was of great importance to the parties, the legal issues were straightforward. There weren’t any unusual steps that were required or much in the way of documentary disclosure. The hours spent by the former solicitor Poliacik are excessive.

[14] Mr. Czuma assumed carriage of the matter in June 2011. It appears that the majority of his time after that was spent on the motion for attendance of Malicki for discovery and a motion for directions. It does not appear the Plaintiffs were successful on these motions or that they were awarded costs on them so these sums would not be properly claimed in the action. Mr. Czuma attended the brief pre-trial and commenced trial preparation in February 2013, approximately a year prior to the trial. Mr. Czuma claims 48.5 hours for trial preparation, attendance at trial, and costs submissions. In my view, this is a reasonable amount of time to have spent for these steps.

[15] In my view, taking into account the circumstances of this particular case, the factors enumerated under Rule 57 as well as the principle of proportionality, I am of the view that the sum of $50,000 for fees is appropriate plus taxes plus the disbursements of $5,829.88 and the Defendant Helen Mroz is to pay that sum to the Plaintiffs forthwith.

D.A. Wilson J.

Date: April 29, 2014