Gordon v. Gordon, 2015 ONSC 4735

SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-13-3207-00
DATE: 2015 07 24

RE: BARBARA SELWYN GORDON, a mentally incapable person, by her Litigation Guardian RICHARD GORDON and JOHN HAMISH GORDON and BARBARA SELWYN GORDON, a mentally incapable person, by her Litigation Guardian RICHARD GORDON, RICHARD GORDON personally and PETER GORDON

BEFORE: FRAGOMENI, J.

COUNSEL:
J. De Vries and Gillian Fournie, for the moving party, John Hamish Gordon

Scott Price, for the Plaintiff/Responding Party

Peter Gordon, self-represented

HEARD: July 20, 2015

E N D O R S E M E N T

1This is a Motion for approval of the October 15, 2014 Minutes of Settlement on behalf of Barbara “Sally” Gordon, an incapable adult, pursuant to Rule 7.08(1) of the Rules of Civil Procedure and for judgment in accordance with the terms of the Minutes of Settlement. The parties to the settlement are Sally’s three sons, Richard Gordon, Peter Gordon and John “Hamish” Gordon.

2At the hearing before me on July 20, 2015 all of the parties had agreed with the terms of the draft judgment submitted to the Court. On the strength of the Affidavit of the Litigation Guardian, Richard Gordon, sworn February 24, 2015 and the Affidavit of Mr. Scott D. Price, counsel for Sally Gordon and Richard and Peter Gordon I am satisfied that this settlement ought to be approved.

3In his Affidavit Richard Gordon sets out the following at paragraphs 13 to 17:

13. Peter, Hamish, and I attended two days of mediation on October 8 and 15, 2014, with Howard Black acting as Mediator. All the parties were present either in person or represented by their respective counsel.

14. Because the first day of mediation did not result in settlement, we booked an additional day to continue our attempts to reach a resolution. At the end of the second day of mediation, we agreed to a comprehensive settlement of the litigation.

15. At the mediation, I instructed Scott Price of Pallett Valo LLP to agree to a settlement of the matter in the manner as set out in the Minutes of Settlement dated October 15, 2014.

16. In my opinion, the settlement reached is appropriate in the circumstances, and in Sally’s best interest. Not only does it protect Sally’s immediate financial interests, it also addresses the management issues pertaining to the Family Trust. The settlement also sets in place a dispute resolution mechanism should further disagreements arise in the future. A copy of the Minutes of Settlement is attached to the Affidavit of Scott Price.

17. I have instructed our lawyers, in my capacity as Sally’s Litigation Guardian and on behalf of myself, to terminate this action as against the Defendant and to consent to an Order dismissing the Action and the Counterclaim on a without costs basis. Attached as Exhibit “G” is a true copy of the Authorization to Pallett Valo LLP in such regards.

4In his Affidavit, Mr. Price sets out the following at paragraph 8:

I have fully investigated the circumstances of this case and I am satisfied that this settlement both protects Sally’s financial interest and is a cost-effective resolution of the litigation.

a) The $450,000.00 cash payment from Hamish to Sally’s benefit, has been mutually agreed by all parties to settle the issue of outstanding payment for Son Viguet;

b) The legal costs of litigating the action, the counter-claim, Hamish’s motion, and Richard’s cross-motion would have been significant; and

c) The parties have agreed to dismiss the action and cross-claim, with each side absorbing its own legal fees.

The Minutes of Settlement

5The Public Guardian and Trustee had been provided with notice of the settlement, along with a copy of the Minutes of Settlement. The PGT has advised that he did not intend to take a position with respect to the Motion to approve the settlement.

6The only issue, therefore, left to be determined by this Court relates to costs. John Hamish Gordon seeks his costs of proceeding with this motion. John Hamish Gordon seeks the following:

1. Full indemnity costs in accordance with the Bill of Costs filed in the sum of $37,939.31.

2. In the alternative, substantial indemnity costs in the sum of $33,543.61.

7John Hamish Gordon seeks these costs as against Richard Gordon personally.

8In the alternative, John Hamish Gordon submits that in the event that Richard Gordon cannot or is unwilling to pay these costs personally, then whatever amount is determined by the Court, that amount is to be paid out of the funds being held from the sale of the Adams Cove property in Halifax. This sum would then be deducted from whatever share Richard Gordon is entitled to under the Estate of Sally on her death. In this way, Richard Gordon is ultimately responsible for any cost award and not Peter Gordon or John Hamish Gordon.

9Richard Gordon, on the other hand submits that Barbara Selwyn Gordon and Richard Gordon as her Litigation Guardian and in his personal capacity are entitled to costs. They seek partial indemnity costs in the total sum of $9,866.51.

Chronology of Events Leading Up To The Attendance Before The Court on July 20, 2015

10The evidentiary record filed is voluminous and contains a detailed review of the chronology of events up to the time the Minutes of Settlement were prepared. A review of that information in these reasons is not necessary. It is sufficient to note that after attending two days of mediation, the parties signed Minutes of Settlement which represented a comprehensive settlement of all the outstanding litigation and issues between the parties. The terms of the Minutes of Settlement included the following:

(a) Hamish will pay into the Family Trust, in trust for Sally, a total of $450,000.00 in full satisfaction of the 2011 transfer of Son Viguet (the property in Spain);

(b) Hamish will resign as co-trustee of the Family Trust;

(c) Hamish will resign as Sally’s attorney for property, but will remain as Sally’s attorney for care;

(d) All health care decisions regarding Sally must be made unanimously by Hamish, Peter and Richard;

(e) Any disputes regarding Sally’s health care will be resolved by an arbitrator;

(f) Peter and Richard acknowledge Sally’s need for additional caregiving and their duty to pay for her care from the assets of the Family Trust;

(g) The parties will sign a mutual release;

(h) Peter and Richard will sign an acknowledgement that the 2011 transfer of Son Viguet from Sally to Hamish, including the transfer price, was fair and reasonable and that, to the best of their knowledge, no additional taxes are owing; and

(i) The action and counterclaim will be dismissed on a without costs basis.

11Further to the Minutes of Settlement, the family trust was to bear the cost and responsibility for bringing a motion to the court for approval of the settlement.

12On May 12, 2015, over seven months after the settlement was reached, Richard Gordon’s counsel served and filed the motion materials for court approval.

Dispute Re: The Wording Of The Acknowledgements

13The acknowledgement drafted by counsel for John Hamish Gordon incorporates the terms of para. 12 of the Minutes of Settlement. Para. 12 of the Minutes of Settlement states:

Richard and Peter acknowledge that the terms of the January 26, 2011 sale and transfer, including but not limited to the transfer price of Cdn $612,000.00 and 50,000.00 Euro were fair and reasonable. Peter and Richard will sign an acknowledgement to be prepared by Hamish’s counsel that the Cdn $450,000.00 paid pursuant to these Minutes of Settlement is not a reduction in the transfer price, but is the remaining value of the transfer price not already paid in kind or otherwise by Hamish to Sally in respect of the January 26, 2011 transfer of Son Viguet from Sally to Hamish and that all outstanding taxes arising from the January 2011 sale and transfer of Son Viguet from Sally to Hamish have, to the best of their knowledge, been paid in full and no taxes are owing and they have no reason or basis to contact, notify or complain to the Authorities regarding the sale and transfer of Son Viguet.

14The Acknowledgement states:

PETER GORDON AND RICHARD GORDON ACKNOWLEDGE AND AGREE that the terms of the January 26, 2011 sale and transfer of Son Viguet from Barbara Selwyn Gordon (“Sally”) to John Hamish Gordon (“Hamish”), including but not limited to the transfer price of $612,000.00 CND and €50,000.00 was fair and reasonable.

PETER GORDON AND RICHARD GORDON FURTHER ACKNOWLEDGE AND AGREE that the $450,000.00 CND payment from Hamish to the to the [sic] trust settled on December 22, 2011 to Sally’s benefit satisfies the remaining value of the transfer price not already paid in kind or otherwise, without any reduction in transfer price.

PETER GORDON and RICHARD GORDON FURTHER ACKNOWLEDGE AND AGREE that, to the best of their knowledge, all taxes arising from the January 26, 2011 transfer of Son Viguet have been paid in full and that no taxes are owing.

15The Acknowledgement was signed by Peter Gordon but not Richard Gordon.

16Mr. Price, counsel for Richard Gordon had provided an alternative wording of the acknowledgement.

17At this point there is no agreement on the wording of the acknowledgement. Richard Gordon would not sign it and in fact withdrew his motion for court approval of the Minutes of Settlement.

18The following e-mail chain is informative to provide a context in the discussions taking place between Peter Gordon and Richard Gordon in May 2015:

(email correspondence reproduced verbatim as in source)

19There is no doubt that on a review of those e-mails and subsequent e-mails set out at Tabs S and T of the Motion Record it is clear that Peter Gordon is urging Richard to resolve the issue.

20On June 16, 2015 John Hamish Gordon sent Peter Gordon and Richard Gordon the following e-mail:

(email reproduced verbatim)

21The Acknowledgement reads as follows:

(acknowledgment reproduced verbatim)

22By e-mail dated June 16, 2015 Richard Gordon agrees to sign that acknowledgement.

23Richard Gordon submits that he was justified in not signing the Acknowledgement as initially worded. He believed John Hamish Gordon’s actions were fraudulent. Once the wording of the Acknowledgement was revised Richard Gordon signed it. Richard Gordon takes the position that a resolution of the wording of the Acknowledgement completely finalized this motion. There was no indication from John Hamish Gordon that a final resolution of that outstanding matter would attract cost consequences to Richard Gordon. The only further requirement was that the Acknowledgement and Mutual Release would be held in escrow pending payment of the settlement funds.

24Richard Gordon submits that rather than simply reinstate the motion for approval he had initially prepared, John Hamish Gordon proceeded with this motion. This motion was not necessary and has added to the cost of this entire approval process. Richard Gordon argues that this motion is simply an inappropriate attempt to obtain an order for costs.

25Although Peter Gordon had not filed any material for this motion, he did wish to make submissions.

26Peter Gordon advised the court that he feels that Richard Gordon’s position on the wording of the Acknowledgement was unnecessary. Richard Gordon took that position because he is bitter and wanted to have the last word in this motion.

27Peter Gordon supports the position taken by John Hamish Gordon as it relates to costs.

28In addition to that, Peter Gordon is asking that Richard Gordon pay for his flight from Europe to attend at the motion.

29Peter Gordon does not agree with Richard Gordon’s behaviour throughout this process. Peter Gordon has always accepted his mother Sally’s wishes to give the Spain property to John Hamish Gordon. Especially since John Hamish Gordon will not be receiving anything from their mother’s Canadian estate. From that estate, both Peter and Richard will each get about one million dollars. In the end, all three brothers will have received a significant amount from their mother.

Conclusion:

30I agree with the position taken by John Hamish Gordon and Peter Gordon.

31Richard Gordon was represented by counsel throughout this process, including the two-day mediation that culminated in the October 15, 2014 Minutes of Settlement.

32The initial Acknowledgement prepared by John Hamish Gordon mirrored the wording found in paragraph 12 of the Minutes of Settlement.

33Richard Gordon did not accept that wording. Rather than work toward a wording that would be acceptable to all of them, Richard Gordon took the position that he would resile from the October 15, 2014 Minutes of Settlement. He also withdrew his motion for court approval. As he notes in his May 27 e-mail

In the interests of congeniality I will ask my lawyer to give Hamish a grace period up until I return from Montreal to agree to strike this passage from the Minutes of Settlement. If Hamish is not prepared to do so by that time, I will apply to the court to have the whole agreement abrogated by the court.

In other words, it will be as though the mediation resulted in complete failure.

34The position taken by Richard Gordon was a drastic one considering that the Minutes of Settlement were signed on October 15, 2014, some seven months prior. He had counsel. There was a two-day mediation. To take this position was not only unreasonable, it was unnecessary. This is borne out by the fact that as further discussions took place a compromise on the wording of the Acknowledgement was achieved.

35It is also important to note that Peter Gordon signed the initial Acknowledgement and encouraged his brother Richard to do so as well.

36Further, I find and conclude that it was necessary for John Hamish Gordon to proceed to take this motion for approval as opposed to simply re-instating the motion withdrawn by Richard Gordon when the Acknowledgement dispute arose.

37In light of the position taken by Richard Gordon, this motion brought by John Hamish Gordon is properly brought before the court to ensure that in fact the matter would be finalized.

38I am also satisfied that John Hamish Gordon is entitled to his costs in doing so.

39I have reviewed the bill of costs. I find that the amount being claimed by John Hamish Gordon is excessive.

40The principle of proportionality must be kept in mind. The work required from May 2015 to July 20, 2015 to finalize this matter with a court order approving the settlement does not result in a cost award of $37,939.31.

41The materials filed for this approval and costs motion are the following:

1. Motion Record returnable July 20, 2015 consisting of the Affidavit of John Hamish Gordon sworn June 10, 2015. The Affidavit is 46 paragraphs and has attached to it Tabs A to U;

2. Supplementary Motion Record returnable July 20, 2015 consisting of the Affidavit of Delita Nunes, legal assistant to de Vries Litigation LLP. This affidavit is 12 paragraphs with Tabs A to H;

3. Factum prepared by John Hamish Gordon;

4. Book of Authorities of John Hamish Gordon;

5. Responding Motion Record of the respondents;

6. Factum of the respondents;

7. Book of Authorities of the respondents.

42The Bill of Costs of John Hamish Gordon sets out the following with respect to the work done:

• Discussion with opposing counsel and self-represented party re: implementing terms of settlement, including acknowledgement and approval motion;
• Meetings and discussions with client re: breach of settlement and motion to enforce settlement;
• Draft Affidavit of Hamish Gordon in support of motion;
• Draft supplementary Affidavit of Delita Nunes;
• Research for factum;
• Prepare factum and Book of Authorities;
• Review responding motion record and factum and Book of Authorities of responding party;
• Prepare for and attend motion to enforce settlement.

43The issues to be determined are how much is reasonable and how much of the work is attributable to the conduct of Richard Gordon.

44It is important to note that the affidavits in support of the motion to approve the settlement had already been prepared. Further, all parties agreed that the settlement was in the best interests of Sally. This motion for approval was required in any event and the costs of that motion and attendance before the court ought to be paid out of the estate. That portion of the attendance was brief and ought not attract a significant amount of costs. As I indicated, I find it was reasonable for John Hamish Gordon to bring the motion back to the court in light of the conduct of Richard Gordon.

45The balance of the work set out in the Bill of Costs is directly related to the conduct of Richard Gordon, up to the point where the Acknowledgement is finally signed. The timeframe of the work is May to July when the re-drafted Acknowledgement is finally agreed to by Richard Gordon.

46In these circumstances I am prepared to exercise my discretion as follows:

1. John Hamish Gordon is entitled to costs fixed in the all-inclusive sum of $15,000, allocated as follows:

(a) Sally’s estate shall be responsible for the sum of $5,000;

(b) Richard Gordon shall be responsible for the sum of $10,000, personally. This amount shall be paid out of the funds being held in trust from the sale of the Adam Cove, Halifax property. This amount shall also be deducted from Richard Gordon’s share of Sally’s estate upon death.

47I am not prepared to make an order for payment of Peter Gordon’s airfare. Peter Gordon’s attendance at the motion was not necessary, although the court did appreciate hearing his views on the issues before the court.