ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-13-0710-00

DATE: 2014-09-02

RE: Daniel McLaughlin, Estate Trustee of the Estate of Elizabeth Anne McLaughlin v. Wayne McLaughlin, Laurie Maveal, Thomas McLaughlin, Michael Corrado, Tiffany Sloboda, Ryan McLaughlin, Leonard Corrado, T.J. McLaughlin, Christopher Corrado, Ian McLaughlin, Mark McLaughlin, Joanna McLaughlin, Sarah McCullagh, Tracy Ross, Lee McLaughlin, Joanna McLaughlin, Cameron Maveal, Alexander Maveal, Spencer Maveal, Joy McLaughlin, Denise McLaughlin and Judith Corrado

BEFORE: Lemon, J.

COUNSEL:
Archie J. Rabinowitz, Deepshikha Dutt, Dean Allison, Counsel for the Applicant

Thomas McLaughlin, In Person

Judith Corrado, In Person

Respondents

COSTS ENDORSEMENT

[1] On July 8, 2014, I granted the applicant estate trustee’s request to rectify the will of Elizabeth Anne McLaughlin. I have now received the costs submissions from all parties.

[2] The applicant seeks his costs in the amount of $18,942.85. The respondent, Judith Corrado, seeks her costs in the amount of $29,041.76. The respondent, Thomas McLaughlin, seeks his costs in the amount of $2,975.

[3] The applicant asks that those costs be paid jointly and severally by Ms. Corrado and Mr. McLaughlin. Ms. Corrado seeks her costs paid by Mr. Walsh, who drafted the will in issue, or the estate. Mr. McLaughlin does not specify who should pay his costs.

POSITION OF THE PARTIES

[4] The applicant submits that, as he was successful, he should be entitled to his costs. He submits that these are reasonable costs and are only a portion of the actual costs. He points out that he made a reasonable offer that would have been more beneficial to Ms. Corrado than the outcome and that her proposal was unreasonable. Finally, he submits that both respondents were unreasonable in their positions.

[5] Ms. Corrado submits that the negligence and the questionable actions by both the executor and the lawyer who drafted the will are the cause of the litigation. She points out that significant information came forward as a result of the examinations carried out by her then lawyer. Although mediation was recommended by a pre-trial judge, the applicant would not agree to have a mediation.

[6] Mr. Thomas McLaughlin primarily responded by setting out his concerns about my determination of the issue. Indeed, rather than submissions regarding costs, he filed a “Response to Verdict”. From a review of those comments, it appears that, with respect to costs, he is dismayed by the involvement of the insurance company for Mr. Walsh. He points out the significant work carried out by Ms. Corrado’s lawyer in finding out the details of the signing of the will.

LEGAL PRINCIPLES

[7] According to 58.06 of our Rules of Civil Procedure, in assessing costs I may consider,

(a) the amount involved in the proceeding;

(b) the complexity of the proceeding;

(c) the importance of the issues;

(d) the duration of the hearing;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have been admitted; and

(h) any other matter relevant to the assessment of costs.

[8] Further, Rule 49 states that where an offer to settle,

(a) is made by a plaintiff at least seven days before the commencement of the hearing;

(b) is not withdrawn and does not expire before the commencement of the hearing; and

(c) is not accepted by the defendant,

and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer to settle was served and substantial indemnity costs from that date, unless the court orders otherwise.

[9] Modern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants: Fong v. Chan (1999), 1999 2052 (ON CA), 46 OR (3d) 330 at para 22, [1999] OJ No 4600 (ONCA).

[10] Costs awards, at the end of the day, should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties”: see Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 OR (3d) 291 at para 24, [2004] OJ No 2634 (ONCA).

ANALYSIS

[11] The applicant was successful, and is therefore entitled to his costs.

[12] The applicant made an offer to settle on March 13, 2014. That offer sets out in writing that the applicant would forego the costs incurred to date and contribute $5,000 towards Ms. Corrado’s costs. That offer was not accepted by Ms. Corrado and was obviously better than the result for her.

[13] In return, Ms. Corrado offered that she would drop her objection to the application if she was paid one fifth of the value of the property in question plus her full legal costs. The effect of her offer was that she was prepared to withdraw her objection if she received all that she requested. That was not an offer to settle in hopes of resolving matters; it was an offer to capitulate. Not unreasonably, it was not accepted by the applicant.

[14] Although unsuccessful, I do not find that Ms. McLaughlin was otherwise unreasonable. Until just before the argument of the matter, she had retained counsel who had done a good job of investigating and setting out the matters in issue. The factum was of benefit to the court. Ms. Corrado’s submissions, for a lay person, were articulate and to the point.

[15] With respect to the applicant’s Bill of Costs, I can see many issues that would cause a great deal of concern and upset for the respondents. The applicant had a lawyer, Dean Alison. Mr. Rabinowitz is most obviously counsel for Mr. Walsh. He is retained by Law Pro on behalf of Mr. Walsh. Mr. Rabinowitz is called to the bar in 1984 and is a leading member of the estates litigation bar in the province of Ontario. He was assisted by a total of three other lawyers not including Mr. Alison. Two of those lawyers had over 10 years’ experience. For the category of costs titled “Receipt and review of additional Respondent materials and preparing responses” in the Applicant’s costs submission a total of three lawyers reviewed the respondent’s materials. The time spent is divided between each of the three lawyers. It should be noted that of the three lawyers who contributed to the “receipt and review” category of costs there is combined 42 years’ worth of legal experience involved.

[16] For the category of costs titled “Preparation for the Application hearing and attending Court” there are costs for three different lawyers. Mr. Rabinowitz has 30 years of experience, Mr. Stewart has 10 years and Ms. Dutt has 2 years.

[17] I see nothing in these issues that required Mr. Rabinowitz’s level of expertise. This matter involved a contested hearing that was 2 days in length but all parties specifically requested that I deal with this matter on documentary evidence. There was no need for any findings of credibility or a hearing with witnesses. During the contested hearing, the Applicants were not facing sophisticated counsel but instead 2 unrepresented parties. Finally, the entire value of the estate in question was only $418,000.

[18] Law Pro is a sophisticated litigant. If it wishes to retain top end counsel, that is its choice. It cannot, however, expect unrepresented and unsuccessful litigants to be able to pay for those costs.

[19] Ultimately, however, all of that is irrelevant to the applicant’s request. After totalling all of this work, the applicant seeks costs of 75 percent of the outlined costs or $18,942.85.

[20] There is no doubt that the applicant would require counsel with experience in this field to bring the application. The materials filed by both respondents were voluminous. Cross examinations were held. The hearing itself occurred over two days one month apart. There was $3,138 in disbursements. In my view, one lawyer of moderate experience plus a legal assistant would, with complete success and a reasonable offer to settle, be entitled to costs as requested by the executor.

[21] Mr. Rabinowitz requests that the costs be paid by the respondents. His submissions do not deal with the question of whether the estate should pay the costs except for one reference to a footnote. In the recent case of White v. Gicas, 2014 ONCA 490 at para 72, 2014 OJ No 3036, Watt J.A. stated that, “it logically follows that where the problems giving rise to the litigation were caused by the testator, it is appropriate that the testator, through his/her estate, bare reasonable costs associated with their resolution.” Had Ms. McLaughlin read the will in question here, this application would not have been necessary. While I fully agree with Mr. Rabinowitz that the old rule of costs being paid by the estate is now gone, this is one of those limited circumstances where the litigation arose as a result of the actions of the testator and are therefore payable by the estate.

[22] Similarly, Ms. Corrado’s costs request against the estate is not unreasonable. On the materials filed, she was the first to notice the error that lead to the application. She was required to respond to the application and, for most of the time, paid the expense of a lawyer to assist her. His efforts brought out further information for the assistance of the Court. On the other hand, she lost in contesting the rectification and her offer was unreasonable. Given the factors set out above, her costs fixed in the amount of $10,000 shall also be paid by the estate.

[23] Mr. McLaughlin is in a somewhat different position. Although he made heart felt and sincere submissions, his submissions were irrelevant to the issues, and extended the proceedings into the second day. The materials filed by him, although not properly admissible, still needed to be reviewed by the applicant’s counsel adding to the work involved. He too was entirely unsuccessful. In view of those considerations, I do not grant costs to Mr. McLaughlin.

[24] Finally, Ms. Corrado submits that costs should be payable by Mr. Walsh. Although his participation was obviously relevant to the proceedings, he was not a party to the action. It is not appropriate that I order costs against a non-party in this circumstance. I do, however, take some comfort in the comments of the Albert Court of Appeal in Graham v. Bonnycastle 2004 ABCA 270 at para 27, [2004] AJ No 940. There, McFadyen J.A. said “Costs properly incurred to challenge probate of the new will should be paid for by the estate. If the estate thereby suffers a loss, it has its own remedy against the negligent solicitor.”

RESULT

[25] Accordingly, the applicant shall be entitled to his costs fixed in the amount of $18,942.85 payable by the estate. Ms. Corrado shall have her costs fixed in the amount of $10,000 payable by the estate.

Lemon, J.

DATE: September 2, 2014

COURT FILE NO.: CV-13-0710-00

DATE: 2014-09-02

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Daniel McLaughlin, Estate Trustee of the Estate of Elizabeth Anne McLaughlin v. Wayne McLaughlin, Laurie Maveal, Thomas McLaughlin, Michael Corrado, Tiffany Sloboda, Ryan McLaughlin, Leonard Corrado, T.J. McLaughlin, Christopher Corrado, Ian McLaughlin, Mark McLaughlin, Joanna McLaughlin, Sarah McCullagh, Tracy Ross, Lee McLaughlin, Joanna McLaughlin, Cameron Maveal, Alexander Maveal, Spencer Maveal, Joy McLaughlin, Denise McLaughlin and Judith Corrado

BEFORE: Lemon, J.

COUNSEL: Archie J. Rabinowitz, Deepshikha Dutt, Dean Allison, Counsel for the Applicant

Thomas McLaughlin, In Person

Judith Corrado, In Person

Respondents

COSTS ENDORSEMENT

Lemon, J.

DATE: September 2, 2014