GASTLE v. GASTLE, 2015 ONSC 718
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: CALVIN GASTLE, Applicant
AND:
ROBERT GASTLE, Respondent
BEFORE: The Honourable Justice D.A. Broad
COUNSEL: Lisa S. Toner, for the Applicant
Mark A. Radulescu, for the Respondent
COSTS ENDORSEMENT
1The parties have not been able to settle the question of costs and have now delivered their submissions on costs.
Positions of the Parties
2The respondent seeks costs on a partial indemnity basis in the total sum of $8,006.30, comprised of fees of $6,892.90 plus HST. thereon and disbursements of $217.32 inclusive of HST. The respondent argues that that he was successful at the hearing in that the relief sought by the applicant was not granted and the court directed the parties to proceed to cross-examinations as requested by the respondent. He submits that the hearing to determine whether he should formally pass his accounts under the power of attorney and as estate trustee was an unnecessary step in the litigation. He points to his offer to settle dated October 1, 2014 in which he offered to resolve the issues relating to the relief sought in subparagraphs 1(d) and (e) of the Notice of Application by providing to the applicant account statements in respect of all bank or investment accounts held by Arthur Robert Gastle, and that each party be entitled to cross-examine the other party on the content of the account statements.
3The applicant seeks costs on a substantial indemnity basis in the sum of $19,172.29 comprised of fees of $15,840, HST thereon in the sum of $2,059.20, disbursements of $1,162.06 and HST on the disbursements of $111.03. The applicant argues that he was partially successful in that it was held that a formal passing of accounts is not necessary at this time pending cross-examinations and that if the respondent is not forthcoming with necessary information and clarification on his cross-examination the applicant may apply for further directions, including a direction that the respondent provide a formal accounting. The applicant submits that it was necessary to bring the application as the respondent had not been previously forthcoming with necessary information and documentation relating to his dealings as power of attorney for the parties’ father and as estate trustee of his estate.
Guiding Principles
4Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that "subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the cost shall be paid."
5The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in subrule 57.01(1), as follows:
57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing, various factors, including:
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(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;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs.
6The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan (1999) O.J. No. 3707 (CA) at para. 24).
7It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is "fair and reasonable" having regard to what the losing party could have expected the costs to be (see Boucher v. Public Accountants Council (Ontario), 2004 14579 (ON CA), [2004] O.J. No. 2634 (Ont. C.A.) at para. 26 and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 2005 1042 (ON CA), [2005] O.J. No. 160 (Ont. C.A.)).
8The usual rule in civil litigation is that costs follow the event and that rule should not be departed from except for very good reasons (see Gonawati v. Teitsson 2002 41469 (ON CA), [2002] CarswellOnt 1007 (Ont. C.A.)], 2002 41469 and Macfie v. Cater, 1920 401 (ON SC), [1920] O.J. No. 71 (Ont. H.C.) at para 28).
Analysis
9In my view, it was not unreasonable for the applicant to have sought an accounting from the respondent as part of the relief in the Application. Indeed, it appears that much of the information provided by the respondent respecting his dealings with the assets of the parties’ father under the power of attorney and his dealings as the de facto controlling estate trustee only came forward in his affidavits filed in response to the Application. In the case of McAllister Estate v. Hudgin (2008) E.T.R. (3d) 313 (S.C.J.) Pattillo, J. awarded costs to the applicant, notwithstanding that the requested relief of a formal accounting was not granted, on the basis that the applicant was nonetheless successful to the extent that he obtained production of most of the financial records requested by him (see para. 21).
10However, in my view it was not reasonable for the applicant to persist in seeking a formal accounting after most of the information requested was provided in the respondent’s affidavits and the respondent offered to submit himself to cross-examination on those issues. Moreover, even if the respondent’s Offer to Settle may not qualify for consideration under rule 49.10, I can have regard to it under rule 49.13. I find that the approach proposed by the respondent for resolution of the issues argued at the hearing on December 1, 2014 was reasonable.
11In my view, the applicant is entitled to the costs associated with the bringing of the application and the respondent is entitled to the costs after delivery of his Offer to Settle on October 1, 2014, each on a partial indemnity basis. The parties’ costs should therefore be offset.
12It is difficult to discern with particularity, from the Bills of Costs submitted, the breakdown of the parties’ costs before and after the respondent’s Offer to Settle. Doing the best that I can in the circumstances, I would consider the applicant’s entitlement to costs to be somewhat more than that of the respondent. In all of the circumstances, and applying the principle of proportionality, I would fix the applicant’s net costs in the sum of $3,750.00, inclusive of HST and disbursements.
Disposition
13It is therefore ordered that the respondent pay to the applicant costs in the sum of $3,750.00
D.A. Broad, J
Date: January 30, 2015