CITATION: Booy-Bos v. Farruggia, 2016 ONSC 7392

COURT FILE NO.: 15-52917

DATE: 2016/11/28

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: In the matter of the Estate of Ralph Bos, deceased

Frederika Marianna Booy-Bos, Applicant

AND:

Cynthia Joy Farruggia, Estate Trustee

AND:

Netta Douglas, Respondent

BEFORE: Justice A. J. Goodman

COUNSEL: K. Watters on behalf of F. Booy-Bos B. Wiseman for C. Farruggia A. Keesmaat for N. Douglas

HEARD: November 22, 2016

COSTS ENDORSEMENT

[1] The late Mr. Ralph Bos had two "scrapbooks" filled with reminiscences and events that portrayed his life. He desired to share those memories after his death. To that end, Mr. Ralph Bos took steps to ensure that his 80th birthday and life story "scrapbooks" be scanned, printed and distributed to all of his children, grandchildren, step-children, and wife. His laudable intention as to how these life reflections and memories were to be distributed was contained in a First Codicil to his last Will and Testament.

[2] However, what evolved from this very noble gesture was acrimony, misunderstanding and disagreement; not only about certain aspects of the estate, but the very scrapbooks in question. The dispute related explicitly and solely to these scrapbooks occasioned legal costs being claimed from all parties in amounts exceeding $30,000.00.

[3] While Mr. Ralph Bos' scrapbooks were ultimately distributed in accordance with his wishes, the issue for this application is the legal costs for the litigation related to the discrete issue of the scrapbooks.

Positions of the Parties:

[4] Ms. Watters on behalf of the applicant seeks costs of $11,238.03 on a substantial indemnity basis inclusive of disbursements and HST.

[5] Ms. Watters claims that the trustee failed to address concerns raised by the applicant in a timely manner that necessitated legal intervention and litigation. Counsel submits that her client did not act in bad faith or otherwise conduct herself improperly but was merely trying to obtain what was rightly bequeathed to her under the Will.

[6] Mr. Wiseman on behalf of the estate trustee, in defending this particular segment of the application, filed a Bill of Costs in the amount of $6,238.49 on a substantial indemnity basis, or in the alternative, $4,199.07 on a partial indemnity basis, inclusive of disbursements and HST.

[7] Mr. Wiseman submits that his client had no responsibility for the scrapbooks, but having assumed carriage in order to assist the beneficiaries, ought to have her costs paid. The trustee acted in good faith and provided timely direction to Ms. Douglas and others to give effect to the intent of the testator. Her clear directions were not followed by Ms. Douglas and her overall conduct does not warrant an award of costs paid personally by her.

[8] In response, Mr. Keesmaat on behalf of the respondent, Douglas seeks costs in the amount of $15,298.31 on a substantial indemnity basis. Counsel disagrees with the assertions raised by the trustee in respect of the history of the proceedings.

[9] Mr. Keesmaat submits that his client did not receive adequate or detailed instructions from the trustee in a timely manner. It was crucial that certain confidential information not be copied, giving rise to his client's objections about unredacted versions being distributed. His client was entitled to reasonable costs for the monumental task of copying the scrapbooks, an amount that was paid and is not in dispute. Ms. Douglas was, at all material times, trying to remedy the matter at an early stage without response from the trustee.

[10] Counsel argue that in fixing costs, on a substantial indemnity basis, their respective hourly rates and fees are both fair and reasonable and accord with the principles related to various Offers to settle this matter at an earlier phase of the proceedings.

General Principles:

[11] As a general principle, costs are in the absolute discretion of the court. The fixing of costs is not simply a mechanical exercise. The overall 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.

[12] The Court of Appeal, in Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579, (2004) 71 O.R. (3d) 291, articulated the principles that govern costs assessments. In that case, Armstrong J.A. noted that Rule 57.01(3) provides: "When the court awards costs, it shall fix them in accordance with subrule (1) and the tariffs." He continued: "...Subrule (1) lists a broad range of factors that the court may consider in exercising its discretion to award costs under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

Factors to be considered in Fixing Costs:

[13] Rule 57.01(1) contains what amounts to a non-exhaustive checklist of factors that should guide the court in its reasoning when awarding costs in the exercise of its discretion under section 131 of the Courts of Justice Act. Rule 57.01(1) provides, in part:

In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider...

(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;

(c) the complexity of the proceeding;

(d) the importance of the issue;

(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

(i) any other matter relevant to the question of costs.

[14] The amount of costs on a motion varies widely depending on the circumstances, including the complexity of the issue, of facts, and the witnesses from whom evidence is required.

Bill of Costs:

[15] It is widely accepted that the appropriate quantum of costs is not determined by multiplying hours by rates. Rather, "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.

[16] While the amounts presented in the respective Bills of Costs are relatively consistent with applicant's and respondent's expectations in the amounts sought by each party, there is a dispute with respect to whether partial or substantial indemnity ought to be awarded. There is also an issue as to entitlement and from where or by whom the costs, if ordered, ought to be taken.

[17] The Court must, first and foremost, be fair and reasonable when exercising its discretion to award costs. Proportionality is of fundamental import.

Discussion:

[18] Whether the genesis of the litigation was a result of concurrent estate litigation or disagreement between the beneficiaries on other matters, it appeared that this discrete issue could not be resolved through counsel at an earlier stage, and necessitated the involvement of lawyers. Recognizing that the scrapbooks issue had eventually been settled, its resolution did not come easily, rather it was obtained through the threat of litigation and direct involvement of the various lawyers for the parties.

[19] As mentioned, Ms. Booy-Bos and Ms. Douglas submit that they ought to be entitled to substantial indemnity costs. At various times during this dispute, they had provided Offers to settle in support of their positions. Ms. Watters and Mr. Keesmaat, submit that their respective Offers invoke enhanced awards. Counsel submit that even if their respective Offers to settle do not fall under the ambit of Rule 49, it is a valid consideration to be employed by me in assessing costs under Rule 57.01.

[20] In this case, I am not satisfied that substantial indemnity costs are warranted. First, I do not accept that the applicant had provided Offers to settle captured by Rule 49. The applicant's July 19, 2016 or the July 19 2015 Offer document is unclear and confusing (Tab "T" of the Supplementary Application Record). The November 14, 2016 Offer did not dispose of the substantive matter and clearly only advances the quantum of costs, unsuccessfully in the result.

[21] It is clear that the applicant attempted to properly exercise her rights to the scrapbooks under the directions provided in the Codicil. In my view, there is no reason to depart from the general principle of costs at the partial indemnity rate. However, as I will explain momentarily, the applicant's costs are to be borne by both the estate and the trustee.

[22] Similarly, Ms. Douglas' Offer to settle does not fall under the auspices of Rule 49.03. During the course of this matter, Ms. Douglas insisted on furnishing unredacted copies of the scrapbook as it pertain to some personal information; and immediate reimbursement for the hardware needed to scan and copy the scrapbooks. While she may have had some valid concerns, Ms. Douglas appeared to have wrested control of the issue from the trustee who had assumed carriage. I do not accept Ms. Douglas' assertion as deposed in para. 10 of her October 19, 2016 affidavit. As such, in my view, Ms. Douglas must take some responsibility for her conduct as this appears to be one contributing factor to increased legal activity and costs.

[23] Notwithstanding that unredacted copies of the scrapbook was the eventual outcome of this tangled quandary, on the limited evidentiary record before me, Ms. Douglas' unilateral conduct in May and June 2015, - in the face of some clear direction from the trustee - contributed to the misunderstanding and was, in part, responsible for a delay in furnishing the scrapbooks. In my view, Ms. Douglas is disentitled to full or substantial indemnity costs.

[24] The normal rule is that costs are generally borne by the estate. I see no reason to deviate from that approach. However, I am inclined to reduce counsel's costs to reflect any legal fees related to the events prior to and including August 12, 2015, as a result of Ms. Douglas' intransigence.

[25] Mr. Wiseman's efforts on behalf of his client in this application have not gone unnoticed. I appreciate that he was only recently retained to represent the estate trustee. Generally, I would be amenable to an award of costs for counsel's efforts in advancing his client's interests. However, in my assessment of the conduct of the parties, the estate trustee's actions in performing her fiduciary duty ought not to be condoned as it relates specifically to the issue of the scrapbooks.

[26] I have some concerns about the trustee's conduct in relation to the distribution of the scrapbooks in tandem with her duties in administering the residue of the estate. Having taken on the task of the scrapbooks, whether with or without authority, the estate trustee directed its copying and ultimate distribution. I am somewhat critical of her actions as it pertains to her directions outlined in her April 14, 2015 email to all beneficiaries, specifically: "Freddy's (the applicant) copies will be held by Ms. Olsiak's office and not release until Freddy has signed an agreement regarding the house". This was clearly inappropriate and the notion of a quid pro quo is a matter that raises a serious question. The follow-up email chain does little to ally my trepidation.

[27] Further, once the trustee decided to act in person, Ms. Farruggia repeatedly failed to respond to proper requests advanced to her in letters from both Ms. Watters and Mr. Keesmaat during the period of approximately October 2015 to August 2016. It appears that the trustee did not notify the beneficiaries about the estate litigation in a timely manner. I do not accept the excuses advanced by Mr. Wiseman to explain away his client's conduct during this timeframe. I am persuaded that the estate trustee's inaction perpetuated the non-resolution of the scrapbook issue, and propagated a flurry of correspondence between counsel, thus exacerbating unnecessary legal costs being incurred. I am persuaded that the estate trustee's conduct in dealing with the scrapbook issue does not warrant an award of costs in her favour.

[28] Moreover, the trustee must accept some personal responsibility for some of the mounting legal costs incurred. I am cognizant that an award of costs personally against a trustee or fiduciary are rare and a court must exercise caution in that respect. That said, for these brief aforementioned reasons, this is a case where a segment of the costs related to the applicant's legal fees ought to be borne by the trustee personally.

[29] That said, I do not opine on any other activity or decision undertaken or adopted by the estate trustee in relation to the remainder or residue of the estate. For greater certainty, no adverse inference ought to be drawn against the trustee's conduct generally, by virtue of my reasons with respect to this discrete costs issue.

Conclusion:

[30] In the exercise of my discretion under Rule 57.01, the applicant is entitled to her partial indemnity costs for this application. It is ordered that the estate of Ralph Bos pay costs in favour of Frederika Booy-Bos fixed at $4,579.60 (all inclusive). It is further ordered that the estate trustee, Cynthia Farruggia pay costs personally to the applicant, Frederika Booy-Bos fixed in the amount of $4,579.60 (all inclusive) within 30 days.

[31] For the aforementioned reasons, the respondent, Netta Douglas is entitled to a portion of her partial indemnity costs. It is ordered that the estate of Ralph Bos pay costs in favour of Netta Douglas fixed in the amount of $9,641.37 (all inclusive).

[32] The estate trustee shall bear her own costs for this application.

A. J. Goodman J.

Released: November 28, 2016