The Bank of Nova Scotia Trust Company v. Ait-Said, 2016 ONSC 6775

Brockville Court File No.: 15-0558 Date: 2016-10-28 Superior Court of Justice – Ontario

In the matter of the Estate of Franklin Walter Briggs, deceased

Re: The Bank of Nova Scotia Trust Company, Applicant And: Louisa Ait-Said, Judy Ostopchik (née Popp), Gary John Ostopchik, Denise Geukens, Jessie Longstone, Derek Longstone, Elizabeth Lockhart, the Governing Council of the Salvation Army of Canada, Erna Harper, Larry Baldissera, the Canadian National Institute for the Blind and Christine Rogerson, Respondents

Before: Madam Justice A.C. Trousdale

Counsel: Neville C. Johnston, for the Applicant Ian B. McBride, for Elizabeth Lockhart and as Agent for the Governing Council of the Salvation Army of Canada and the Canadian National Institute for the Blind

Heard: In Chambers

Endorsement on Costs

[1] This was an Application for the opinion, advice and direction of the court brought by The Bank of Nova Scotia Trust Company as Estate Trustee for the Estate of Franklin Walter Briggs. Ms. Elizabeth Lockhart, a beneficiary under Mr. Briggs’ Will, filed an Application Record and Factum in response to the Estate Trustee’s Application. No other parties filed any affidavit material.

[2] In my endorsement dated June 17, 2016, I indicated that the parties could make written submissions as to the issue of costs. I received written submissions as to costs from the Estate Trustee and from Ms. Lockhart and a Reply as to costs from the Estate Trustee.

[3] The Estate Trustee seeks full indemnity costs from Ms. Lockhart and that a deficiency (if any) be paid from the Estate of Mr. Briggs. The Estate Trustee seeks full indemnity costs of $59,230.00 and disbursements in the sum of $13,211.89 for total fees and disbursements of $72,441.81.

[4] The Estate Trustee claims full indemnity costs from Ms. Lockhart on the basis that Ms. Lockhart was unsuccessful on all issues involving the Notes Document and the proceeds of the life insurance, which were the main items in dispute. The Estate Trustee submits that the propounding by Ms. Lockhart of the Notes document as a testamentary instrument was unreasonable. The Estate Trustee argues that Ms. Lockhart should have known that the Notes document was not a valid testamentary instrument, particularly where Ms. Lockhart is a lawyer and previously was employed as a Will and Estate Planner by the Bank of Nova Scotia Trust Company.

[5] The Estate Trustee argues that all of the beneficiaries, except Ms. Lockhart, signed a consent prepared by the Estate Trustee that recognized the July 29, 2013 Document and the August 8, 2014 Document as valid holograph Codicils to Mr. Briggs’ Will. Due to Ms. Lockhart’s refusal to sign the consent prepared by the Estate Trustee and Ms. Lockhart propounding the Notes Document as a valid testamentary document, it became necessary for the Estate Trustee to commence and carry through to argument the Application for opinion, advice, and direction of the court.

[6] The Estate Trustee submits that Ms. Lockhart’s conduct was reckless, irresponsible and reprehensible in forcing the litigation to a court hearing when she knew or should have known that her position was doomed to fail. The Estate Trustee also argues that Ms. Lockhart’s position has significantly delayed the administration of the Estate with resultant administration expenses.

[7] Ms. Lockhart’s position is that the reasonable costs incurred by all parties should be payable by the Estate. This is based on the public policy considerations that it was important to determine the Testator’s intentions. Ms. Lockhart submits that the issues were being litigated because the Testator was ambiguous in the handwritten documents he left behind. Ms. Lockhart points to the fact that the Estate Trustee obtained two legal opinions regarding ambiguities, and that both opinions recommended that an application for directions be brought before the court.

[8] Ms. Lockhart disputes that her conduct has been reckless, irresponsible and reprehensible as argued by the Estate Trustee. She points to the fact that she tried to resolve the matter by way of agreement, which she states she ultimately had from all the beneficiaries.

[9] Ms. Lockhart submits that the rates charged and the hours spent by the Estate Trustee’s counsel are unreasonable and excessive. It is pointed out that nearly $55,000.00 is docketed for fees for the Application in which the Estate Trustee did not prepare a Factum, no medical evidence was required, no cross-examinations on Affidavits occurred, and the Estate Trustee did not conduct substantial research on the issues before the court. Ms. Lockhart also submits that the Estate Trustee’s claim of $12,600.00 plus HST to prepare three pages of costs submissions is excessive.

[10] Ms. Lockhart submits that by comparison her costs as per the dockets filed by her counsel were $11,963.27 inclusive of disbursements. She argues that she could not have reasonably been expected to pay costs in the amount of $72, 441.81 as claimed by the Estate Trustee if she were found to be unsuccessful on the motion.

[11] Ms. Lockhart was not successful on the main disputed issues in this Application. I found that the Notes Document put forward by her as being part of the holograph Codicil dated August 8, 2014 was not part of that holograph Codicil, nor was it a valid testamentary document. I also found that Ms. Lockhart was not entitled to the proceeds of the Testator’s life insurance.

[12] Rule 57.01 sets out some of the factors the court may consider in determining the costs of this matter.

[13] The court may consider the complexity of the procedure and the importance of the issues to the parties. The Estate Trustee submits that the Application was of moderate to high complexity, whereas Ms. Lockhart submits that the proceeding was not complex.

[14] I find that the proceeding was of medium complexity. I find the issues were important to Ms. Lockhart. The Notes Document would have doubled Ms. Lockhart’s share as a residuary beneficiary to the Estate and the value of the life insurance policies was approximately $60,000.00. It was important for the Estate Trustee to have the issues raised by Ms. Lockhart determined by the court in order to avoid claims by other beneficiaries against the Estate Trustee arising out of these issues.

[15] The Estate Trustee tried to get all the residuary beneficiaries to execute a consent which would have avoided the necessity of arguing a motion for directions. That consent was essentially in the same terms as my endorsement on hearing the motion. All of the residuary beneficiaries signed the consent except for Ms. Lockhart.

[16] Ms. Lockhart also tried to get all the beneficiaries to consent to her proposal for the disposition of the Estate. She did get the consent of all the beneficiaries, but the Estate Trustee advised the consent was insufficient as it did not deal with all of the necessary matters. When Ms. Lockhart attempted to obtain the consent of all the beneficiaries to a revised consent, she was unable to obtain the consent of two of the beneficiaries who were the two beneficiaries most adversely affected monetarily by the proposed augmentation of Ms. Lockhart’s share in the Estate. Accordingly in the end result, Ms. Lockhart was unable to obtain the consent of all the beneficiaries and the motion for directions had to proceed.

[17] I have reviewed the costs outline and dockets submitted by the Estate Trustee. Counsel for the Estate Trustee has 50 years of experience. The material indicates that he spent 122 hours on this matter. An articling student spent 43.3 hours on this matter, much of which was spent on service of the documents as all of the residuary beneficiaries except Ms. Lockhart resided outside the jurisdiction, in European countries, England, and the United States.

[18] I have also reviewed the costs outline and dockets submitted by Ms. Lockhart. Her counsel’s hourly rate is lower than the Estate Trustee’s hourly rate but not substantially so. The total time spent on the case by all persons at the firm including lesser paid lawyers/support staff was 36.30 hours total for total fees of disbursements and HST of $11,963.27. However, on reviewing the material, it is apparent that some of the work on this file must have been done by Ms. Lockhart and/or someone else outside her counsel’s firm as there is very little time shown for preparation of Ms. Lockhart’s Application Record and the Affidavits contained therein, and her supplementary material. I find that the legal fees payable by Ms. Lockhart would have been greater if her counsel had done all of the work involved in relation to the motion, so the comparison of fees is not helpful.

[19] I find that the total number of hours expended on the file by the Estate Trustee’s Counsel were beyond what would be required or expected on a motion such as this. Some of this may be due to some matters that would have had to be attended to by the Estate in any event as part of the administration of the Estate, such as for example drafting the affidavit of Mr. Briggs’ doctor in relation to the doctor witnessing Mr. Briggs’ signature on the holograph Codicil made on July 29, 2013. That affidavit would likely have been required for probate as the original Codicil was never found and only a photocopy was available. In other places there appears to be some inadvertent duplication of dockets. Accordingly, I have reduced the time spent on certain items such as preparation of some documentation, preparation for the hearing and preparation of costs submissions.

[20] I find that the Estate Trustee’s disbursements of $4,605.23 plus HST of $598.68 are reasonable as many persons outside Canada had to be served with the Application at a substantial cost.

[21] The Estate Trustee submits that Ms. Lockhart should pay full indemnity costs of the Estate Trustee as her conduct was unreasonable and has delayed matters. Ms. Lockhart submits that the reasonable costs incurred by the Estate Trustee and by her should be payable by the Estate as the ambiguities which required directions were caused by the Testator, Mr. Briggs in preparing handwritten documents himself.

[22] Both parties refer to the case of McDougald Estate v. Gooderham, 2005 CanLII 21091 (ON CA), [2005] O.J. N. 2432, 255 D.L.R. (4th) 435, 199 O.A.C. 203, where Justice Gillese of the Ontario Court of Appeal stated at paragraphs 79 and 80:

Traditionally, Canadian courts of first instance have followed the approach of the English courts. While the principle was that costs of all parties were ordered payable out of the estate if the dispute arose from an ambiguity or omission in the testator’s will or other conduct of the testator, or there were reasonable grounds upon which to question the will’s validity, such costs awards became virtually automatic.

However, the traditional approach has been – in my view, correctly – displaced. The modern approach to fixing costs in estate litigation is to carefully scrutinize the litigation and, unless the court finds that one or more of the public policy considerations set out above applies, to follow the costs rules that apply in civil litigation.

[23] Justice Gillese went on to state at paragraph 85 of McDougald Estate v. Gooderham:

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 propounded. 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.

[24] I find that Ms. Lockhart with her training as a lawyer and her prior experience as a Will and Estate Planner at The Bank of Nova Scotia Trust Company, should have known that the Notes Document was not a testamentary document and that it would not be admitted to probate. In my endorsement on the motion I set out the numerous obvious problems with the Notes Document which I will not repeat here.

[25] I find that Ms. Lockhart was unsuccessful on the main issues before the Court and that she should pay some of the costs of the Estate Trustee.

[26] In Boucher v. Public Accountants Council (Ontario), (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.), the Court of Appeal set out the approach to follow in determining costs at para. 26:

Overall, as this court has said, the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.

[27] Ms. Lockhart would have known that she was running a risk of costs if she were unsuccessful in her position on the motion. However, in my view, she would not have expected that the reasonable costs that she could be expected to pay in relation to this motion would be $72,441.81.

[28] In taking into account the factors set out in Rule 57.01, the principle that the court should fix costs in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, and in the exercise of my discretion, Order to go as follows:

(1) The Estate Trustee shall be entitled to costs fixed at $35,000.00 inclusive of fees, disbursements and HST.

(2) The aforesaid costs of the Estate Trustee shall be paid as follows:

(a) Ms. Lockhart shall pay costs to the Estate Trustee in the sum of $20,000.00 inclusive of fees, disbursements and HST within 30 days of the release of this decision.

(b) The Estate of Mr. Briggs shall pay costs to the Estate Trustee in the sum of $15,000.00 inclusive of fees, disbursements and HST within 30 days of the release of this endorsement.

(3) No other party shall be entitled to costs of this motion.

Madam Justice A.C. Trousdale Released: October 28, 2016