ONTARIO

SUPERIOR COURT OF JUSTICE

ESTATES LIST

COURT FILE NO.: 2357/76

DATE: 20140914

IN THE ESTATE OF ENRICO CARFAGNINI, deceased.

ROSEMARY CARFAGNINI and RAYMOND CARFAGNINI
Applicants

– and –

LIONEL WHITE, deceased and IDA CARFAGNINI, in their capacities as Trustees, CARMELA PALERMO, THERESA ANTONACCI, ROSE MARIE SAGARESE, MARK PALERMO, LOUANNE PALERMO, LORETTA PALERMO, CHRISTOPHER PALERMO, DANIELLE PALERMO, CAROLYN CARFAGNINI, ENRICO CARFAGNINI, CHANTELLE COSENTINO, KATEY CARFAGNINI, ROSS ANTONACCI, DONNY SAGARESE, MICHAEL SAGARESE, MELISSA SAGARESE-BOMBEN, and THE OFFICE OF THE PUBLIC GUARDIAN AND TRUSTEE for and on behalf of Ida Carfagnini and THE OFFICE OF THE CHILDREN’S LAWYER for and on behalf of the minors, unborn and unascertained

Respondents

Kimberly A. Whaley and Benjamin D. Arkin, Counsel for the Applicants

Richard J. Worsfold, Counsel for the Respondents Carmela Palermo, Theresa Antonacci and Rose Marie Sagarese

– and –

COURT FILE NO.: 05-31/14

IN THE ESTATE OF IDA CARFAGNINI, deceased.

ROSEMARY CARFAGNINI and RAYMOND CARFAGNINI
Applicants

– and –

CARMELA PALERMO, THERESA ANTONACCI, ROSE MARIE SAGARESE in their capacity as named estate trustees of the Will of Ida Carfagnini dated March 31, 2008, attorneys for property of Ida Carfagnini, and in their personal capacity, THE PERSONAL REPRESENTATIVE OF THE ESTATE OF LIONEL WHITE, CAROLYN CARFAGNINI, ENRICO CARFAGNINI, and HOWARD CARR in his capacity as succeeding Estate Trustee of the Estate of Enrico Carfagnini, deceased

Respondents

Kimberly A. Whaley and Benjamin D. Arkin, Counsel for the Applicants

Richard J. Worsfold, Counsel for the Respondents Carmela Palermo, Theresa Antonacci and Rose Marie Sagarese

WRITTEN SUBMISSIONS ON COSTS

ENDORSEMENT: GREER J.

[1] On June 9, 2014, I released Written Reasons in this Application brought on by the Applicants, Rosemary Carfagnini (“Rosemary”) and Raymond Carfagnini (“Raymond” or “the Applicants”). The style of cause shows all named Respondents. In the Motion before me, the main protagonists were Carmela Palermo (Carmela”), Theresa Antonacci (“Theresa”) and Rose Marie Sagarese (“Rose Marie” or “the three Respondents”). They are the Estate Trustees of the Estate of Ida Carfagnini, their late Mother. Rosemary and Raymond are two of Ida’s grandchildren, and the children of her deceased son, Anthony, who predeceased Ida, dying on January 5, 2008.

[2] The Estate of Enrico Carfagnini is involved in the proceeding since Ida was the main beneficiary of that Estate, as his widow, receiving large sums of income from it after Enrico’s death. It was therefore necessary to include Enrico’s Estate and his Estate Trustees as Respondents on this Motion for an Order for Directions. It takes no position on the Motion.

[3] Rosemary and Raymond were successful in obtaining a very comprehensive Order for Directions affecting both Estates.

[4] In paragraph 23 of my Endorsement I ordered the parties to provide me with Written Submissions on Costs together with dockets, a Bill of Costs and any case law relied on. They have done so.

The Applicants’ Position

[5] The Applicants say they were successful under Rule 57.01(1) in obtaining the Order for Directions in five substantial areas, including a preservation Order for both Estates. They say they are entitled to their Costs payable on a full indemnity basis because they were fully successful in obtaining the Order they requested. They also say that they achieved more than they had offered to settle for.

[6] The Applicants have been trying since September 27, 2012, to obtain an accounting by the three Respondents, daughters of the Estate of Ida and Enrico, to provide an accounting of the administration of Ida’s assets, during the period they administered these assets under a Power of Attorney for Property granted to them by Ida. No such accounting was forthcoming.

[7] On August 1, 2013, the Applicants sent Carmela, Theresa and Rose Marie a draft of a Guardianship Application with respect to Ida, and asked that their Power of Attorney be terminated and that a guardian of her property be appointed. They also asked them to pass their Accounts as Attorneys. Nothing took place and Ida died on December 5, 2013. Shortly thereafter, the Applicants asked for a statement of assets and what assets had passed outside the Will (as Ida’s Estate’s value was only around $100,000). In late February, 2014, they tried again to get an informal accounting and asked for a Consent with respect to the Draft Order for Directions. That proposal was not accepted.

[8] The amount in question is substantial under Rule 57.01(1)(a), since about $2,000,000 was alleged to have been “given” to the three Respondents, and they were named under a beneficiary designation change of a large insurance policy on Ida’s life.

[9] The Order for Directions was complex under Rule 57.01(1)(c), as there is an intersection between Enrico’s and Ida’s Estates. Needless to say, under Rule 57.01(1)(d), the issues are very important to all parties.

[10] The Applicants have presented a Bill of Costs, which covers the period December 13, 2013 to May 28, 2014 and for the time after June 19, 2014, when they tried to settle the issues of Costs. The total fees presented are inclusive of disbursements and HST.

[11] The fees are broken down into 3 categories as follows:

1. Partial Indemnity at 65% - $28,636.43
2. Substantial Indemnity at 85% - $36,889.95
3. Full Indemnity at 100% - $43,080.12

Several counsel participated in the proceeding. Kimberly A. Whaley, Senior Counsel, billed between $560 and $650 per hour. Benjamin D. Arkin's hourly rate is $385 and Ameena Sultan’s is $425. Most of the work on the proceeding was done by Mr. Arkin.

The position of the three Respondents

[12] These Respondents, Carmela, Theresa and Rose Marie, take the position that all Costs asked for by the Applicants, are excessive. They say a reasonable range for the proceeding would be $5,000 to $10,000, given that there were no cross-examination, and only one Affidavit was produced, with the argument in Court taking about 2 hours.

[13] The Respondents say that this was the parties' first appearance in Court to argue the issues. They had asserted that the Applicants were not beneficiaries of Ida's Estate and therefore had no right to ask for a Passing of Accounts under their Power of Attorney. They said they had allowed Ida's medical records to be released shortly after Ida`s death and provided full production of documentation, each coming about under Court Orders on Consent.

[14] They also say they did not object to a preservation Order within Enrico`s Estate.

[15] As for the Costs, these Respondents say that too much time was spent on the preparation of documents. They objected to the having two counsel in Court to speak to the proceeding. They say $8,000 would be a fair amount, a figure which is similar to what they paid their counsel.

Offers to Settle

[16] The Applicants counsel sent letters to these Respondents counsel offering to settle the proceeding on certain terms. They are as follows:

1. September 27, 2012 – it offered an early Mediation and set out a list of all the issues. That offer was refused.
2. August 1, 2013 – it again offered to mediate. It was refused.
3. December 18, 2013 – they asked for a Statement of Assets and Liabilities of Ida’s Estate. None was forthcoming.
4. February 24, 2014 – Draft Orders of Directions and Consent were sent on a without prejudice basis. It was not accepted.

[17] These were followed by a letter of June 24, 2014, with a proposal to settle the Costs. The Offer said that at that point their full indemnity Costs were $35,356.57. They asked that all Costs, both theirs and the three Respondents, be paid out of Enrico`s Estate, pointing out the huge Costs that have been incurred over the past 2 years. This was refused.

Analysis

[18] In my view, the Applicants are entitled to their full indemnity Costs, which I fix at $43,080.12 to be forthwith paid within 30 days, as follows:

(a) Carmela, Theresa and Rose Marie shall jointly and severally pay $21,000 personally.

(b)The Estate of Enrico Carfagnini shall pay the balance of $22,080.12 from the capital of the Estate.

[19] I make this Order, keeping in mind the two propositions of reasonability and proportionality. The three Respondents were unreasonable and stubborn in their position that the two Applicants, both grandchildren of an beneficiaries of $5,000 bequests under Idas Will, had no right ask for a Passing of Accounts by them as Idas attornies. The case law and legislation is clear that they were entitled to do that. See: Para. 18 of my Endorsement.

[20] The three Respondents continually refused to deal with Offers that were reasonable. There is mandatory mediation under the Estates Rule so it was going to be an inevitable Order by the Court.

[21] To think that the Court would only order Costs equal to their own legal fees, was not realistic. They failed to provide an informal accounting that was reasonable. Their counsel simply refused to co-operate on any level on their instructions. The earlier two Orders only came about as a result of the Applicants’ demands.

[22] I did not order Ida’s Estate to bear any of the Costs since it has little money in it. The three Respondents were not acting reasonable in their role as Estate Trustees, so the Estate should not bear the Costs.

[23] The Court has the discretion to make a Costs award on a full indemnity basis against a party in litigation. See: Columbos v. Columbos, 2014 ONSC 2263, where Madam Justice Healey in para. 5, set out the case law respecting Costs in Estate matters. She examined the factors set out in Rule 57(1) as I have done, and came to the conclusion that full indemnity was the scale to be used in this regard. I adopt the reasoning in Columbos, supra. I have set out the complexity of the combined type of litigation that will take place under my Order, which affects both Estates. I therefore ordered Enrico’s Estate to bear approximately half the Costs.

[24] I have also reviewed the Court of Appeals decision in Smith Estate v. Rotstein, [2011 ONCA 491](https://www.canlii.org/en/on/onca/doc/2011/2011onca491/2011onca491.html), 106 O.R. (3d) 161 (C.A.), respecting what should be included in the "losers" Bill of Costs, if it is submitted for comparison. In this case, the three Respondents` Bill of Costs was simplistic in structure and amount and time-wise, it does not take long to refuse all attempts to obtain co-operation.

[25] The Costs awarded are not "oppressive" given that the Enrico Estate is valued at around $16,000,000 and given that these Respondents received large amounts through Ida`s assets, while they acted as her Attorneys.

[26] Order to go accordingly.

Greer J.

Released: September 14, 2014

COURT FILE NO.: 2357/76

DATE: 20140914

ONTARIO

SUPERIOR COURT OF JUSTICE

ESTATES LIST

IN THE ESTATE OF ENRICO CARFAGNINI, deceased.

ROSEMARY CARFAGNINI and RAYMOND CARFAGNINI

Applicants

– and –

LIONEL WHITE, deceased and IDA CARFAGNINI, in their capacities as Trustees, CARMELA PALERMO, THERESA ANTONACCI, ROSE MARIE SAGARESE, MARK PALERMO, LOUANNE PALERMO, LORETTA PALERMO, CHRISTOPHER PALERMO, DANIELLE PALERMO, CAROLYN CARFAGNINI, ENRICO CARFAGNINI, CHANTELLE COSENTINO, KATEY CARFAGNINI, ROSS ANTONACCI, DONNY SAGARESE, MICHAEL SAGARESE, MELISSA SAGARESE-BOMBEN, and THE OFFICE OF THE PUBLIC GUARDIAN AND TRUSTEE for and on behalf of Ida Carfagnini and THE OFFICE OF THE CHILDREN’S LAWYER for and on behalf of the minors, unborn and unascertained

Respondents

– and – COURT FILE NO.: 05-31/14

IN THE ESTATE OF IDA CARFAGNINI, deceased.

ROSEMARY CARFAGNINI and RAYMOND CARFAGNINI

Applicants

– and –

CARMELA PALERMO, THERESA ANTONACCI, ROSE MARIE SAGARESE in their capacity as named estate trustees of the Will of Ida Carfagnini dated March 31, 2008, attorneys for property of Ida Carfagnini, and in their personal capacity, THE PERSONAL REPRESENTATIVE OF THE ESTATE OF LIONEL WHITE, CAROLYN CARFAGNINI, ENRICO CARFAGNINI, and HOWARD CARR in his capacity as succeeding Estate Trustee of the Estate of Enrico Carfagnini, deceased

Respondents

ENDORSEMENT

Greer J.

Released: September 14, 2014