COURT FILE NO.: CV-08-00359873

DATE: 20140923

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Manuela Estrela Andrade, Plaintiff

– AND –

Henrique E. Andrade and Leonardo Andrade, Estate Trustee for Luisa Cabral Andrade, Defendants

BEFORE: Justice E.M. Morgan

COUNSEL:
John Longo and Pamela Miehls, for the Plaintiff

Partick Summers, for the Defendant, Leonardo Andrade, Estate Trustee for Luisa Cabral Andrade

Andrew Anthony, for the Defendant, Henrique E. Andrade

HEARD: March 31 – April 5, 2014, April 7, 9, and 10, 2014, with written submissions on costs

COSTS ENDORSEMENT

[1] On July 28, 2014 I issued my judgment in this matter and requested written submissions on costs. I have now received submissions from all counsel.

[2] The Plaintiff was entirely successful in the action.

[3] Counsel for the Defendant, Leonardo Andrade as Estate Trustee for Luisa Cabral Andrade (the “Estate”), submits that since the Plaintiff is an employee of her counsel’s law firm, she must have had a special fee arrangement with them and I should take this into account by discounting the fees requested on the Plaintiff’s behalf. He further submits that at a pre-trial Master’s motion the Estate requested a copy of the Plaintiff’s retainer agreement with her law firm, and that this request was refused; he goes on to state that, as a consequence, we do not know what the Plaintiff was really billed by her counsel.

[4] Counsel for the Plaintiff has responded to this argument by providing me with a copy of the Plaintiff’s submissions on costs at the Master’s motion referred to by counsel for the Estate. In those submissions counsel for the Plaintiff stated expressly that, “The Plaintiff is not seeking an award of costs in excess of amounts actually being charged to her”, and that “the signed costs outlines submitted by us on behalf of the Plaintiff…has specified the rate being charged to the client”.

[5] I see no reason to doubt this statement by counsel for the Plaintiff or to look behind the Bill of Costs now submitted on her behalf. I take the Bill of Costs to represent the fees and disbursements incurred by the Plaintiff.

[6] Counsel for the Plaintiff advises that the Plaintiff made an offer to settle on March 19, 2014 that qualifies under Rule 49 of the Rules of Civil Procedure as an offer that was not accepted by the Estate and which the Plaintiff bettered in the final result of the trial. The offer provided that the Estate pay the Plaintiff $250,000 in return for all of the Plaintiff’s rights, title and interest in the house that was the subject of the litigation – 510 Crawford Street (the “Property”).

[7] The result of the trial was that the Plaintiff was declared to be the owner of a one-half interest in the Property. Accordingly, if the Property is worth over $500,000, the Plaintiff did better than she would have done had her offer been accepted.

[8] Along with the materials on costs, the Plaintiff submitted real estate board notices of the recent sales of comparable properties in the same neighbourhood as the Property. Counsel for the Plaintiff submits that that although there is no formal appraisal available, the comparable sales demonstrate that the Property is worth more than $500,000. Counsel for the Estate responds by reminding me that there was testimony at trial indicating that the Property is in a state of some disrepair and that, although it has been continuously lived in, it has not been renovated in a long time.

[9] Since October 2012 there have been 15 published “sold” listings relating to residential properties on the street on which the Property is located. The houses sold for a low of $589,800 and a high of $1,495,000. While I have neither the expertise nor sufficient information to determine the current market value for the Property, I do observe that in this ample selection of nearby properties not a single one has sold for as low as $500,000. It appears to me that the Plaintiff was prudent in basing her Rule 49 offer on a value that is substantially lower than not just some but all of the comparable sales. The Estate would have been prudent to have accepted that offer.

[10] Since the Estate did not accept the Plaintiff’s offer to relinquish her interest in the Property for $250,000, Rule 49 applies. The Plaintiff should get costs on a partial indemnity scale up to the date of the offer and on a substantial indemnity scale thereafter.

[11] The Defendant, Henrique E. Andrade (“Henrique’), submits that any costs awarded to the Plaintiff be against the Estate alone and not against him. His counsel points out that although Henrique supported his late mother’s position (and, therefore, effectively the Estate’s position) in the litigation, he assigned his interest in the Property to his mother in September 2011 and was therefore not in a position to settle with the Plaintiff. Only the Estate could respond to the Plaintiff’s offer or in any way deal with the Plaintiff’s claim to an interest in the Property.

[12] I agree with counsel for Henrique on this point. The entire case revolved around the question of title to the Property. While the Estate claimed that it owned the Property outright, by the time the trial came around Henrique did not claim any interest at all.

[13] Although Henrique did have counsel present throughout the trial, his participation was rather minimal. Henrique’s own appearance was as a witness called by the Estate. The fact that Henrique remained in the action as a Defendant subsequent to his assigning his interest to his mother did not add any appreciable cost to the case, and he could have done nothing to reduce the cost of the case as between the Plaintiff and the Estate.

[14] Henrique also requests that part of his own costs be borne by the Estate. He contends that his continued participation in the litigation was for his mother’s (and ultimately the Estate’s) benefit.

[15] It may well be that Henrique had nothing to financially gain in the litigation; after all, the Plaintiff was seeking a declaration of her interest in the Property, and Henrique had already given up any claim that he might have in the Property. That said, his continued presence as a Defendant, and his participation as a party at trial, was not demanded by the Estate and should not be paid for by the Estate.

[16] Henrique’s counsel concedes in his costs submissions that Henrique had his own personal concerns about his relationship with his mother that prompted the position that he took and the way that he participated in the trial. It seems only fair that he should bear his own costs, and that his siblings who are the beneficiaries of the Estate not be ordered to subsidize his legal fees.

[17] Turning to the question of quantum, I will first observe that the fixing of costs is a discretionary decision under section 131 of the Courts of Justice Act. That discretion is generally to be exercised in accordance with the factors listed in Rule 57.01 of the Rules of Civil Procedure, including the principle of indemnity for the successful party (57.01(1)(0.a)), the expectations of the unsuccessful party (57.01(1)(0.b)), the amount claimed and recovered (57.01(1)(a)), and the complexity of the issues (57.01(1)(c)).

[18] Overall, the court is required to consider what is “fair and reasonable” in fixing costs: Boucher v Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 OR (3d) 291 (Ont CA), at paras 26, 37.

[19] The Plaintiff seeks costs representing $227,976.67 in fees and $9,419.52 in disbursements, for a total of $237,396.19. This represents recovery on a partial indemnity scale until March 19, 2014 (the date of the Rule 49 offer) and a substantial indemnity scale from that date until the end of trial.

[20] Counsel for the Estate submits that the Plaintiff’s costs are too high for a trial of this size. Counsel for the Plaintiff points out that the 9 day trial took place at the end of 6 years of a hard-fought dispute in which first Luisa Cabral Andrade herself and then the Estate aggressively defended its position. The importance of the litigation was very high to all parties, and costs at the level requested by the Plaintiff should not have been beyond the expectations of any party after many years of litigation and a full trial.

[21] Furthermore, the Plaintiff submits that the Estate persisted in fighting what was clearly an uphill battle in attempting to challenge documented title to a piece of real estate.

[22] It was my impression as trial judge that counsel for the Plaintiff approached the trial efficiently; it goes without saying that their lawyering was effective and that their investment of time and effort paid off well for their client. It appears to me in reviewing the Bill of Costs that they did neither more nor less than it took to be properly prepared for each step. I find no reason to quibble with their success.

[23] The Estate shall pay the Plaintiff $237,396.19, inclusive of disbursements and tax. There shall be no costs payable either by or to Henrique.

Morgan J.

Date: September 23, 2014