CITATION: Kuzyk v. Romaniuk, 2016 ONSC 564
COURT FILE NO.: CV-15-0112
DATE: 2016-01-22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Peter Kuzyk, as estate trustee of the estate of Mary Kuzyk,
Applicant
- and -
Michael Romaniuk, as estate trustee of the estate of Walter Chopty and as estate trustee of the estate of Dan Chopty, Hanusia Tkaczyk, as estate trustee of the estate of Walter Chopty and as estate trustee of the estate of Dan Chopty, Olesia Blando also known as Elaine Blando, as estate trustee of the estate of Walker Chopty and as estate trustee of the estate of Dan Chopty, and Stephanie Theresa Romaniuk, as estate trustee of the estate of Anna Chopty,
Respondents
Morris J. Holervich, for the Applicant
Martha Petryshyn, for the Respondents
HEARD: December 14, 2015, at Thunder Bay, Ontario
Regional Senior Justice D. C. Shaw
Reasons On Costs
[1] The applicant, Peter Kuzyk, brought an application for an order vesting in him, as estate trustee of the estate of Mary Kuzyk, ownership of a 25% interest in a home in Thunder Bay. In the alternative, he sought an order requiring the responding estate trustees of three related estates to administer any interest which those estates may have in the home
[2] For reasons delivered September 28, 2015, the application was dismissed. The parties made submissions on costs on December 14, 2015. This is a decision on those costs.
Positions of the Parties
[3] The respondents file a Bill of Costs, setting out fees on a substantial indemnity basis of $7,804.00, plus HST and disbursements, totaling $9,000.57.
The applicant presents three alternatives in response to the respondents’ claim for costs:
both parties to have their costs fixed in the sum of $4,000 to $5,000, all inclusive, payable out of the estates of Dan Chopty and Anna Chopty;
costs not be paid until the house, which is the asset of the estates in question, is sold; or
no costs to be payable by any party.
Submissions
(a) Respondents
[4] The respondents submit that costs should follow the cause. The respondents refer to the modern approach to costs in estate litigation set out in McDougald Estate v. Gooderham, 2005 21091 (ON CA), [2005] O.J. No. 2432 (C.A.), at para. 85:
The modern approach to awarding costs, at first instance, in estate litigation recognizes the important role that courts play in ensuring that only valid wills executed by competent testators are recognized. It also recognizes the need to restrict unwarranted litigation and protect estates from being depleted by litigation. Gone are the days when the costs of all parties are so routinely ordered payable out of the estate that people perceive there is nothing to be lost in pursuing estate litigation.
[5] The respondents submit that there are two situations where costs should be borne by the estate, neither of which are applicable in this case: where there is ambiguity in the will or where litigation is reasonably necessary to ensure the proper administration of the estate.
[6] The respondents contend that they should receive something more than party and party costs. They say that the application was unnecessary and that they were involuntarily drawn into litigation that they, in their personal capacity, have had to finance because the estates have no liquid assets.
[7] The solicitor for the respondents, Ms. Petryshyn, has 28 years of experience. The Bill of Costs shows an hourly rate of $325.00 and approximately 18 hours of her time. Ms. Dushnicky, with one year experience, has 2 hours of time at an hourly rate of $160.00. Ms. McLeod, a law student, has 7.2 hours of time, at a rate of $100 per hour. There are also 5.3 hours of time billed by Ms. Parker, a legal assistant, at $140.00 per hour and .5 hours billed by Ms. Allen, a real estate clerk, at $130 per hour.
(b) Applicant
[8] The applicant submits that based on letters from certain of the respondents, he had a reasonable expectation that as estate trustee for his mother’s estate he would be put on title to the home. His inheritance of his share of the sale proceeds of the home has been postponed indefinitely. The applicant submits that this is the context in which the application was brought.
[9] The applicant notes that in my reasons dismissing the application, I did not make a finding that the applicant was unreasonable in bringing his motion.
[10] The applicant submits that he brought the application as an estate trustee of an estate that has an entitlement as a beneficiary. He was asking that the estates which hold the asset be administered or that a vesting order be made, putting title into his name, as estate trustee of the beneficiary estate.
[11] With respect to the quantum of the respondents’ account, the applicant submits that the time docketed by Ms. Petryshyn’s assistant, her clerk and her law student should be removed.
Discussion
(a) Entitlement of the respondents to costs from the applicant
[12] In my view, the applicant should pay the respondent’s costs.
[13] The application was dismissed. The respondents were wholly successful.
[14] In Bilek v. Salter Estate, 2009 28403 (ON SC), [2009] O.J. No. 2328 (S.C.J.), Brown J (as he then was) stated, at para. 6:
A view persists that estates litigation stands separate and apart from the general civil litigation regime. It does not; estate litigation is a sub-set of civil litigation. Consequently, the general costs rules for civil litigation apply equally to estates litigation – the loser pays, subject to a court’s consideration of all relevant factors under Rule 57, and subject to the limited exceptions described in McDougald Estate. Parties cannot treat the assets of an estate as a kind of ATM bank machine from which withdrawals automatically flow to fund their litigation. The “loser pays” principle brings needed discipline to civil litigation by requiring parties to assess their personal exposure to costs before launching down the road of a lawsuit or a motion. There is no reason why such discipline should be absent from estate litigation. Quite the contrary, given the charged emotional dynamics of most pieces of estates litigation, an even great need exists to impose the discipline of the general costs principle of “loser pays” in order to inject some modicum of reasonableness into decisions about whether to litigate estate-related disputes.
[15] The limited public policy considerations set out in McDouglad Estate do not apply in this case. The litigation did not arise as a result of the actions of the testators or to ensure the proper administration of the estates.
(b) Scale of Costs
[16] If the general costs rules for civil litigation apply to estates litigation, those general costs rules would also apply to determine the appropriate scale on which costs are awarded. In civil litigation, costs are generally awarded on a partial indemnity basis. Substantial indemnity costs may be awarded when the unsuccessful party has engaged in reprehensible, scandalous or outrageous conduct or under a Rule 49 offer. There was no untoward conduct by the applicant nor was there a Rule 49 compliant offer.
(c) Quantum of Costs
[17] The hourly rate of the respondents’ counsel of $325 is reasonable for her 28 years of experience, on a substantial indemnity basis. The number of hours are also reasonable, given that counsel was at court for almost an entire day for submissions and then subsequently had to prepare written submissions pursuant to my request.
[18] I would take out from the Bill of Costs the secretarial work done by Ms. Petryshyn’s assistant.
[19] In my view, on a partial indemnity basis, a fair and reasonable fee would be $4,750.00 plus disbursements, as claimed, in the amount of $161.00, plus applicable HST on the fees and disbursements, and it is so ordered.
The Hon. Mr. Justice D. C. Shaw
Released: January 22, 2016
COURT FILE NO.: CV-15-0112
DATE: 2016.01.22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Peter Kuzyk, as estate trustee of the estate of Mary Kuzyk,
Applicant
- and -
Michael Romaniuk, as estate trustee of the estate of Walter Chopty and as estate trustee of the estate of Dan Chopty, Hanusia Tkaczyk, as estate trustee of the estate of Walter Chopty and as estate trustee of the estate of Dan Chopty, Olesia Blando also known as Elaine Blando, as estate trustee of the estate of Walker Chopty and as estate trustee of the estate of Dan Chopty, and Stephanie Theresa Romaniuk, as estate trustee of the estate of Anna Chopty,
Respondents
REASONS ON COSTS
Shaw R.S.J.
Released: January 22, 2016
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