Court File and Parties

NEWMARKET COURT FILE NO.: CV-15-121454-00 DATE: 2016-06-03 CORRECTED DATE: 2016-08-15

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

YORK CONDOMINIUM CORPORATION NO. 366 Plaintiff – and – GLADYS LI Defendant

Counsel: Mr. A.G. Casalinuovo, for the Plaintiff Mr. R. Lachmansingh, for the Defendant

HEARD: March 17 and May 16, 2016

AND

NEWMARKET COURT FILE NO.: CV-15-540863

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

HOWARD KEITH JURIANSZ, as Estate Trustee with a Will of the Estate of Gladys Li, deceased Applicant – and – ELIA ASSOCIATES PROFESSIONAL CORPORATION Respondent

Counsel: Mr. R. Lachmansingh, for the Applicant Mr. A.G. Casalinuovo, for the Respondent

HEARD: March 17 and May 16, 2016

Corrected decision: The text of the original Reasons for Decision was corrected on August 15, 2016 and the description of the correction is appended.

Reasons for Decision

VALLEE J.

[1] The plaintiff brought an action against Gladys Li. It obtained default judgment and a writ of possession. It later learned that Gladys Li was deceased. The plaintiff brings this motion to amend the title of proceedings to replace the defendant “Gladys Li” with “The Estate of Gladys Li and the personal representative of Gladys Li.” The plaintiff also requests that the court fix the costs of the proceeding. The defendant opposes this. The defendant brings a cross motion for the following relief:

(a) to set aside the noting in default of the defendant;

(b) to set aside the default judgment obtained;

(c) to set aside an order which granted leave to issue a writ of possession along with the writ itself; and,

(d) to continue the proceedings against “Keith Juriansz, Estate Trustee of the Estate of Glady Li” and to amend the title of proceedings accordingly.

[2] The defendant also brings an application (CV 15-540863) against Elia Associates Professional Corporation, counsel for the plaintiff, for an order referring Elia’s bills in connection with CV 15-121454 for assessment.

Issues

(1) Should the proceeding be continued against the Estate Trustee?

(2) Should the following be set aside:

(a) the noting in default;

(b) the default judgment;

(c) the order which granted leave to issue a writ of possession; and

(d) the writ of possession.

(3) Should the court fix the costs of the proceeding or should the costs be referred for assessment?

Applicable Statute and Rules

[3] Rule 9.03(3) of the Rules of Civil Procedure states:

A proceeding commenced in the name of or against a person who has died before its commencement shall not be treated as a nullity but the court may order that the proceeding be continued by or against the proper executor of the deceased…appointed for the purpose of the proceeding and the title of the proceeding shall be amended accordingly.

[4] Rule 58.01 of the Rules of Civil Procedure states:

Where a rule or order provides that a party is entitled to the costs of all or part of a proceeding and the costs have not been fixed by the court, they shall be assessed in accordance with rules 58.02 to 58.12

[5] Section 9(1) of the Solicitors Act, R.S.O. 1990, C.s. 15 states:

Where a person, not being chargeable as the principal party, is liable to pay or has paid a bill either to the solicitor, his or her assignee, or personal representative, or to the principal party entitled thereto, the person so liable to pay…may apply to the court for an order referring to assessment as the party chargeable therewith might have done…

Should the proceeding be continued against the Estate Trustee?

[6] Gladys Li, the defendant, was the owner of a condominium unit. The common expense fees relating to her unit were not paid for a period of time and arrears accrued. The plaintiff registered a lien against the unit on June 30, 2014. It issued an action against her on January 23, 2015 which was served by mail pursuant to an order for substituted service. The plaintiff obtained default judgment on April 15, 2015 and, subsequently, a writ of possession. Ms. Li’s son, Elliot Li, was living in the unit.

[7] Mr. Li wrote a number of letters to plaintiff’s counsel between August, 2014 and February. 2015. They make statements such as “we understand” and “we have been notified.” They are signed “Elliot Li for Gladys Li.” The letters comment that the arrears would be paid when Old Age Security and other benefit payments were received. Some payments were made toward the arrears.

[8] The unit contained a considerable amount of garbage and spoiled food. The plaintiff stated that this created an unsanitary condition and constituted a health hazard. Some of the arrears remained outstanding. Mr. Li retained counsel. Plaintiff’s counsel corresponded with him about rectifying the unsafe condition and payment of the arrears. By May 14, 2015, counsel were discussing the sale of the unit to pay the arrears and appointment of a realtor for the transaction. Shortly afterwards, Mr. Li retained another lawyer.

[9] On May 28, 2015, Mr. Li’s new counsel wrote a letter to the plaintiff stating that Gladys Li had passed away on January 15, 2009, five years prior to the lien’s registration. Mr. Li renounced his right to a certificate of appointment of estate trustee with a will. Steps were taken to appoint Keith Juriansz as the Estate Trustee. Counsel for the plaintiff and the Estate Trustee disagreed as to the proper procedure to reconstitute the proceeding and whether the default judgment and writ of possession were valid. As noted above, the plaintiff brought this motion to amend the title of proceedings to replace the defendant “Gladys Li” with “The Estate of Gladys Li and the personal representative of Gladys Li.”

[10] The Estate Trustee brings a cross motion to continue the proceeding against “Keith Juriansz, Estate Trustee of the Estate of Gladys Li,” and to set aside the orders obtained by the plaintiff.

Analysis and Ruling

[11] Rule 9.03(3) is clear that the proceedings are to be continued against the proper executor of the deceased. Accordingly, I conclude that the proceeding shall be continued against “Howard Keith Juriansz, Estate Trustee of the Estate of Gladys Li.” The title of proceedings shall be amended accordingly.

Should the orders obtained by the plaintiff be set aside?

[12] The plaintiff, through no fault of its own, proceeded against Ms. Li who was already deceased. Accordingly, the noting in default, default judgment and writ are invalid. They are set aside.

Should the court fix the costs of the proceeding or should the costs be referred for assessment?

The Plaintiff’s Position

[13] The plaintiff states that its Bylaw 10, Article 9, paragraph 8 provides that arrears of payment bear interest at 18 percent. Paragraph 9 states that in any collection proceedings, its legal fees shall be added to any amount found due on a solicitor and client basis together with disbursements. Article 10 states that each owner shall indemnify the corporation for any legal costs on a solicitor and client basis which the corporation may incur resulting from an act or omission of an owner.

[14] The plaintiff states that it incurred $64,000 in costs in this matter and that the court should fix the costs of the proceeding. The parties require finality. Proceedings should be dealt with in the least expensive and most time efficient manner. If the court were to order an assessment, more legal fees would be incurred and a delay would result.

Analysis

[15] Mr. Juriansz, as Estate Trustee, must pay the plaintiff’s costs. He is not a principal. The plaintiff referred me to a number of cases in which the court fixed costs rather than referring them to an assessment; however, I note that these cases did not involve a third party who was liable to pay costs, so they can be distinguished from this matter.

[16] The defendant stated that s. 8 of the Solicitors Act applies to this matter. The amount claimed for costs is high, considering the work that was done. The defendant also referred me to a number of cases. They did involve parties who were not principals. In those cases, the court referred the costs for assessment. (See Borden & Eliliott v. Barclays Bank of Canada, 1993 CarswellOnt 1071 and Plazavest Financial Corp. v. National Bank of Canada, , 2000 CarswellOnt 1081)

[17] In Metropolitan Toronto Condominium Corp. No. 985 v. Vanduzer, 2010 CarswellOnt 761, par 35, the court stated that where a party is required to pay full indemnity costs to a condominium corporation, “there is an inherent danger of ‘overlawyering’ a matter with the knowledge that it is the other party who will have to pay”, and that “the issue is whether the totality of the applicant’s legal expenses in relation to this matter is not reasonable and therefore recoverable from the respondent. On that point, the court is not in a better position to assess the matter than an assessment officer.”

[18] Although referring costs in this matter for assessment would not be the most expeditious and inexpensive manner in which to address this issue, the Solicitors Act states that a non-principal in these circumstances may request an assessment. I note that Mr. Juriansz has a fiduciary obligation to the estate to ensure that its liabilities are calculated correctly and are paid. Special circumstances exist because Mr. Juriansz objected to the plaintiff’s account as soon as possible after his appointment as Estate Trustee. Furthermore, the plaintiff had not provided copies of all of its accounts at that time.

[19] In these circumstances, I conclude that the costs of the proceeding should be referred for an assessment in accordance with Rule 58 of the Rules of Civil Procedure. The defendant states that the costs should be assessed on a partial indemnity basis. I disagree. The other unit owners should not be expected to bear a portion of the legal fees that were reasonably necessary relating to these collection proceedings. Given the provisions of Bylaw 10 noted above, the assessment officer shall assess the plaintiff’s costs on a substantial indemnity basis. Elia Associates shall provide its unredacted invoices to the assessment officer for a determination as to solicitor and client privilege. If they are determined to be privileged documents, viva voce evidence may be permitted at the assessment.

Costs of this Motion and Application

[20] The plaintiff stated that it does not request any costs relating to the motion or application, regardless of the outcome.

[21] The defendant requests, on a partial indemnity basis, $19,840.24 in costs for its cross motion and $28,131.34 for the application.

[22] I note that the plaintiff’s judgment and writ would not have been invalid if Mr. Li had simply advised the plaintiff that his mother was deceased when he became aware that the plaintiff was taking legal action to collect the arrears. He had ample time to do so. Furthermore, the defendant’s motion to continue would not have been required. Accordingly, no costs are allowed regarding the motion and cross motion.

[23] Regarding the application, the defendant requests $26,200.18 for fees and $1,581.16 for disbursements. The defendant’s costs outline shows that two lawyers, two law students, two law clerks and two legal assistants worked on this matter. The defendant was represented by Juriansz and Li. The Estate Trustee, Mr. Juriansz and defence counsel, Mr. Lachmansingh are both lawyers at that firm. The costs outline lists numerous meetings between Mr. Lachmansingh and Mr. Juriansz. Approximately $5,475 is billed for instructing students to do legal research and for the research itself. Some of it was carried out by counsel. The outline also lists telephone calls from legal assistants within the office and a teleconference between Mr. Lachmansingh and Mr. Juriansz. A law student’s time to attend on the motion and application is billed. The application was issued in Toronto on November 19, 2015 even though it concerned a property in North York and even though the plaintiff’s action was issued in Newmarket on January 23, 2015. The costs outline shows time billed to have the application transferred to Newmarket.

[24] The application was over-lawyered and over-researched. Costs are not allowed for the time spent to transfer the application to Newmarket. The defendant requests $1,581.16 for disbursements including tax. Two requisitions were filed to transfer the application file to Newmarket from Toronto. The related disbursements total $75.50. This is not allowed.

[25] The action and the application related to a common sequence of events. As noted above, the action concerned proceedings against Ms. Li for collection of arrears in common expenses. Unbeknownst to the plaintiff, Ms. Li was deceased. The application concerned the process in which the plaintiff’s fees, related to obtaining judgment and collection, should be determined. The respondent law firm, who represented the plaintiff, was unsuccessful in defending the Trustee’s application to have its fees assessed. Although only the law firm was named as respondent in the application, this is not an appropriate case in which to order costs against the law firm.

[26] The applicant’s request for a declaration that York Condo’s motion before the court was not reasonably brought and that the legal fees in connection with it were not reasonably incurred is denied.

[27] The applicant’s request for a declaration that York Condo’s fees and disbursements for unsuccessfully responding to the application not be awarded on assessment is granted.

[28] Taking into account the factors listed in Rule 57.01(1) of the Rules of Civil Procedure and the principles set out in Boucher v. Public Accountants, , 71 O.R. (3d) 291, I conclude that a fair and reasonable amount for costs in this matter is $15,000 plus HST of $1,800. Disbursements are allowed in the amount of $1,308.20. York Condo shall pay costs to Howard Keith Juriansz, as Estate Trustee with a Will of the Estate of Gladys Li, deceased, in the amount of $18,108.20 for the application.

VALLEE J.

Released: August 15, 2016

1. Correction to Para. 11, second line now reads: …the proceeding shall be continued against Howard Keith Juriansz, Estate Trustee of the Estate of Gladys Li. (I left out “Howard” in the decision)
2. New para. 25.
3. Addition of para. 26
4. Addition of para. 27
5. Original para. 25 is now para. 28. Last line now reads: York Condo shall pay costs to Howard Keith Juriansz, as Estate Trustee with a Will of the Estate of Gladys Li, deceased, in the amount of $18,108.20 for the application.