Court File and Parties

COURT FILE NO.: 05-162/16 DATE: 20170315 SUPERIOR COURT OF JUSTICE – ONTARIO (ESTATES LIST)

IN THE MATTER OF THE ESTATE OF JOHANN RUBIN, also known as JAY RUBIN, Deceased

BETWEEN:

ANNIE MAYER in her capacity as an Estate Trustee of the Estate of JOHANN RUBIN and in her personal capacity Applicant

-and-

MORRIS ERIC RUBIN in his capacity as an estate trustee of the Estate of Johann Rubin and in his personal capacity, IDA RUBIN in her capacity as an estate trustee of the Estate of Johann Rubin and in her personal capacity, SARAH WERNER in her capacity as an estate trustee of the Estate of Johann Rubin and in her personal capacity, Arsandco Investments Limited in its capacity as trustee for the Estate of Johann Rubin and in its personal capacity, Faigy Esther Hammer and THE OFFICE OF THE CHILDREN’S LAWYER, Respondents

BEFORE: F.L. Myers J.

COUNSEL: Peter Griffin and Arieh A. Bloom, counsel for the applicant. Nancy J. Tourgis, Agent for Henry Juroviesky and Henry Juroviesky, counsel for the Respondents, other than the Office of the Children's Lawyer and Arsandco Investments Limited in its capacity as an Estate Trustee of Johann Rubin and in its personal capacity. Clare E. Burns and Bianca V. La Neve, counsel for Anne Rubin and Ray Rubin in their capacities as estate trustees for the Estate of Joseph Rubin and Eric Rappaport and Sharon Slansky in their capacities as estate trustees for the Estate of Abraham Rappaport.

HEARD: March 14, 2017

COSTS ENDORSEMENT

[1] By endorsement dated March 1, 2017, reported at 2017 ONSC 1404, the court dismissed the motion brought by the respondents represented by Mr. Juroviesky to enjoin counsel for the applicant from continuing to act for her.

[2] Counsel attended today to deal with costs and scheduling of future matters.

[3] The applicant seeks costs on a full indemnity basis of approximately $27,000. She claims entitlement to enhanced costs due to the unsubstantiated allegations of wrongdoing leveled against her counsel and because, in her submission, the motion was a tactical effort to intimidate her and to run up her costs.

[4] Counsel for the moving respondents submits that there was good reason to bring the motion. The court found that counsel to the applicant’s lawyer’s firm was provided with a privileged memo (the “Memo”) on behalf of the respondents prior to the engagement of the law firm by the applicant. They had a prima facie right to be concerned about the potential for misuse of their confidential information they argue. The moving respondents also argue that the quantum of costs sought by the applicant exceeds their reasonable expectations. They also discount the effect of the applicant’s settlement offer in that it was withdrawn prior to the hearing. The offer also required the respondents to forego their desired examination of the applicant as a term of the offer. They say that an offer that requires a compromise before the party opposite has obtained their “best evidence” is no offer at all. Finally, they seek a deduction from the applicant’s fees for the portion of the motion that will deal with a sealing order that has yet to be heard and is scheduled below.

[5] I agree with the applicant that the motion to remove her counsel was not borne of any legitimate concern for misuse of their confidential information. As noted in my prior endorsement, the moving respondents voluntarily disclosed the Memo to the applicant in their motion materials and then again in their cross-examination of her under summons to witness. Doing so utterly belies any concern to protect the privacy of the information contained in the Memo. The process to protect the confidentiality of privileged information during a motion to remove opposing counsel is well understood as discussed in the prior endorsement. This was not a case of inadvertent disclosure. It is not open to the respondents to make deliberate disclosure of their Memo and then say that they brought their motion out of a legitimate concern that the applicant would obtain the document or its contents illicitly from their firm’s counsel to whom it was disclosed in anticipation of a lawyer client relationship. That is, a party cannot claim, at the same time, that he or she fears harm if the party opposite learns its confidential information while purposefully providing that very information to the party opposite.

[6] In addition, in the prior endorsement, I found that the applicant’s lawyer had not heard of or seen the Memo until Mr. Juroviesky sent it to him on this motion. Yet, in their submissions in response to costs, the moving respondents doubled down on their allegations that the applicant’s counsel has already used their confidential information against them. In paragraphs 4 through 8 of their written submissions, the moving respondents argue that the Memo discussed that the applicant’s estates counsel (at another firm) has already threatened to involve the PGT in potential litigation among the parties. This, they argue, shows that the applicant already knew of and surreptitiously moved on their concern regarding the involvement of the PGT that was also disclosed in the Memo. But how could the applicant have learned about and used their concerns when those concerns were only disclosed to counsel for the applicant’s lawyer’s firm in that same Memo? That is, the threat that they say proves the illicit use of their information, was made before the privileged information was even conveyed. They allege that the applicant’s law firm had already illicitly discussed the contents of the Memo with the applicant’s estates lawyer over eighteen months before they were retained by the applicant and before they even received the Memo that contained the information that they are alleged to have surreptitiously disclosed. The argument makes no logical sense and is the product of minds that are convinced beyond an assessment of the actual facts and despite the court’s finding. This is very similar to the allegations on the motion, made in sworn affidavits of both Mr. Juroviesky and Mr. Rubin, that the applicant’s lawyer misused the confidential information well before the applicant retained him. In fact, the applicant’s lawyer was not even employed by his firm and was still qualifying to become a lawyer at the time that Messrs. Rubin and Juroviesky swore to their belief that he surreptitiously committed misconduct on behalf of the applicant.

[7] Another point that the Memo discusses is that the moving respondents believe that the applicant has a lack of enthusiasm and funding for litigation. This motion appears to have been a tactic to exacerbate both perceived weaknesses. Apart from the purposeful disclosure of the Memo, the moving respondents also issued a summons to witness to compel the applicant to come to Toronto from her home in New York for examination in support of the motion. There were many questions refused on the examination concerning the merits of the proceedings. There were also questions that appear to have been an effort to obtain evidence to support a future motion for security for costs that Mr. Juroviesky has said is likely to be brought. There was little, if any, evidence of substance elicited on the cross-examination of the applicant in support of the allegations of misuse of information. I do not accept Ms. Tourgis’s submission that the applicant’s evidence was the moving respondents’ “best evidence.” The issues involved the Memo sent by Mr. Juroviesky to Mr. Handleman and whether there was a rebuttal of the presumed risk of Mr. Handleman disclosing the contents of the Memo to the applicant’s lawyer’s firm. The Applicant had little role in those facts. Her evidence consequently played little role at the hearing. I accept the applicant’s submission that the motion was brought and the summons to witness was served upon her for tactical reasons including to intimidate her and to run up her costs. It could not have been brought out of a bona fide concern for misuse of confidential information when the moving respondents made the decision to release the Memo as part of the motion as discussed above.

[8] The respondents’ concern about their reasonable expectations as to the quantum of costs is difficult to assess in that they chose not to deliver a Costs Outline for comparative purposes. I agree with them however, that a small portion of the costs claimed must relate to the motion for a sealing order that has yet to be heard. Some adjustment is therefore required.

[9] The fixing of costs is a discretionary decision under section 131 of the Courts of Justice Act. That discretion is generally to be exercised in accordance with the factors listed in Rule 57.01 of the Rules of Civil Procedure. These include the principle of indemnity for the successful party (57.01(1)(0.a)), the expectations of the unsuccessful party (57.01(1)(0.b)), the amount claimed and recovered (57.01(1)(a)), and the complexity of the issues (57.01(1)(c)). Overall, the court is required to consider what is “fair and reasonable” in fixing costs, and is to do so with a view to balancing compensation of the successful party with the goal of fostering access to justice: Boucher v Public Accountants Council (Ontario), (2004), 71 O.R. (3d) 291, at paras 26, 37.

[10] In my view, a party who brings a motion alleging unethical conduct by opposing counsel ought reasonably to expect to receive a very spirited and fulsome response. If the allegations of wrongdoing are not made out, it is obvious that the moving party ought to expect cost consequences at an enhanced level. Moreover, where, as here, a party brings a motion for illegitimate tactical reasons, whether to intimidate or to run up a party’s costs to take advantage of her perceived financial weakness, the moving party ought reasonably to expect to bear all of the other party’s costs. The lack of bona fides is laid so bare by the disclosure of the Memo that the applicant ought to be entitled to full indemnity for all of the costs and disbursements that she reasonably incurred. Requiring the applicant to pay any portion of her costs provides a measure of success to the moving respondents for their abuse of the litigation process.

[11] I have reviewed the Costs Outline submitted by the applicant. The hourly rates and time spent appear to be reasonable for responding to the numerous allegations made by the moving respondents on this motion.

[12] In my view, taking a small discount for the simple sealing issues that remain to be heard, the respondents, other than the OCL and Arsandco, ought to be and are hereby jointly and severally liable to pay to the applicant costs on a full indemnity basis of $25,500. Payment shall be made within 21 days of the date of release of these reasons.

[13] Two motions have been booked for a full day in total on May 26, 2017. First, the applicant seeks appointment of an Estate Trustee Pending Litigation. The applicant shall deliver any further material on which she relies for that motion by March 24, 2017. The respondents to that motion, including the clients of Ms. Burns and Ms. La Neve, shall deliver any responding evidence on which they rely by April 20, 2017. Cross-examinations shall be completed by May 12, 2017.

[14] The moving respondents’ motion to seal the entire court file and/or for protective terms in respect of the positions of the clients of Ms. Burns and Ms. La Neve will be heard on May 26, 2017 as well. Ms. Burns and Ms. La Nave shall deliver their evidence by April 12, 2017. Responding materials shall be delivered by April 29, 2017. It seems to me that there ought to be consensual terms agreed upon in respect of the issues raised by Ms. Burns and Ms. La Neve if not all legitimate aspects of privacy raised. The parties should not overreach however and ought to bear in mind that the open courts principle applies to their litigation like any other.

[15] A 9:30 appointment has been booked for May 16, 2017 to ensure that the motions will be ready for the scheduled date.

F.L. Myers J. Date: March 15, 2017