Craven v Osidacz, 2017 ONSC 1757

Court File and Parties

COURT FILE NO.: CV-06-251 (Brantford); and CV-08-846 (Brantford) DATE: 2017-05-19 ONTARIO SUPERIOR COURT OF JUSTICE

Court File No. CV-06-251 B E T W E E N:

JULIE MARIE CRAVEN (formerly Julie Marie Osidacz) Plaintiff

Counsel: Michael Jaeger, for the Plaintiff

- and -

ELIZABETH OSIDACZ and MICHAEL GERARD OSIDACZ, EXECUTOR OF THE ESTATE OF ANDREW PETER OSIDACZ Defendants

Counsel: Rick D. Simmons, for the Defendants

AND

Court File No. CV-08-846 B E T W E E N:

JULIE MARIE CRAVEN Applicant

Counsel: Michael Jaeger, for the Applicant

- and -

MICHAEL GERARD OSIDACZ, as Executor and Trustee of THE ESTATE OF ANDREW PETER OSIDACZ Respondents

Counsel: Rick D. Simmons, for the Respondents

HEARD: October 25, 26, 27, November 5, December 6, 7, 8, and 9, 2016 in Brantford and April 5, 6, and 7, 2017 in Hamilton

Reasons for Judgment

The Honourable Mr. Justice T.R. Lofchik

1These are two proceedings before this Court which stem from a series of acts perpetrated by the deceased Andrew Osidacz against the plaintiff/applicant, Julie Craven and their son, Jared Osidacz, and also stemming from the administration of the Estate of Andrew Peter Osidacz.

2On November 18, 2010, I ordered the two proceedings to be consolidated.

3The first proceeding is the claim by Julie Craven, in which she claims the following damages from the Estate of Andrew Peter Osidacz (the “estate”):

• Family Law Act damages for the wrongful death of Jared Osidacz in the sum of $125,000.00 plus interest in the amount of $43,753.60;
• General damages for the 2002 assault of Andrew Peter Osidacz on Julie Craven in the sum of $25,000.00 plus interest in the amount of $8,372.42;
• General damages for the 2006 assault and attempted murder of Julie Craven by Andrew Peter Osidacz in the sum of $90,000.00 plus interest in the amount of $31,439.76;
• Aggravated/punitive damages in the sum of $75,000.00 plus interest in the amount of $26,252.16;
• Dependant’s relief under Part V of the Succession Law Reform Act in the sum of $156,520.00;
• Spousal support arrears in the sum of $22,110.00 plus interest in the amount of $7,214.02; and
• OHIP subrogated expenses in the sum of $457.85.

4The total sum of damages claimed by Julie Craven in the wrongful death/assaults action is $622,159.41. This sum as acknowledged by both plaintiff and the defendants far exceeds the total value that the Estate was ever worth.

5The second proceeding, bearing Court File No. CV-08-846 (the “estate action”) relates to claims by Julie Craven that Michael Osidacz violated his duties as executor and estate trustee of the Estate. On that basis, Julie Craven claims that Michael should be held personally responsible for all legal costs expended by the Estate in defending the actions. Further, Julie Craven seeks her own legal costs to be paid by Michael personally on a substantial indemnity basis.

6There are ultimately two issues that the plaintiff has asked this Court to determine:

1. What is the quantum of damages that the plaintiff/applicant has suffered from her 2002 assault, the 2006 wrongful death of Jared, and her 2006 assault and attempted murder?
2. Has Michael violated his duties and acted unreasonably as an estate trustee? If so, to what extent is he personally liable to repay the Estate for the legal costs expended out of the Estate and for the legal costs of the plaintiff/applicant?

7Liability against Michael Osidacz acting as estate trustee of the Estate of Andrew Peter Osidacz was established by way of summary judgment of the Honourable Mr. Justice Arrell on January 21, 2009. The claim against Elizabeth Osidacz has been withdrawn.

8Michael denies that he acted outside of his duties or was unreasonable in his role as estate trustee and denies that he should be held personally liable to repay the legal fees expended to defend the Estate or that he should be personally liable for all legal costs of Julie Craven.

9The following facts are not in dispute and have been admitted by the defendant:

• On April 23, 2002, the deceased, Andrew Osidacz (“Andrew”), physically assaulted Julie at their matrimonial home located at 18 Cecil Avenue, Brantford, Ontario (“18 Cecil”) (the “2002 assault”).
• Subsequently, family law proceedings ensued between Andrew and Julie and ultimately, on May 21, 2002, Justice Cavarzan awarded Julie interim custody of their son Jared Osidacz (“Jared”) with weekend access for Andrew, exclusive possession of 18 Cecil, the matrimonial home, monthly child support in the sum of $500.00, monthly spousal support in the sum of $670.00, and ordered that Andrew and Julie were restrained from molesting, harassing, or annoying each other.
• Andrew pleaded guilty to assault under s. 266 of the Criminal Code and was given a suspended sentence and placed on probation for two years.

10On March 8, 2006, Andrew Osidacz, the estranged spouse of Julie Craven, while exercising his right of access to Jared Osidacz, the child of the marriage, stabbed eight year-old Jared to death. Andrew Osidacz also stabbed two other people, his then girlfriend and her daughter, both of whom survived.

11Later that night, Andrew Osidacz forced his way into the home of Julie Craven (the former matrimonial home), advised her that he had killed Jared and terrorized her at knifepoint for some 45 minutes culminating in his being shot to death by officers of the Brantford Police Service in order to save the life of Julie Craven.

12While at Craven’s residence, Andrew telephoned his mother, Elizabeth Osidacz. She lived two doors down and eventually arrived at Julie Craven’s home, 18 Cecil Avenue, Brantford, with two grandchildren.

13Despite pleas for help from Julie, Mrs. Osidacz did nothing while in the residence to assist Julie Craven or Jared. She told Julie that she (Julie) had “pushed him too far”, in reference to Andrew and the unfolding tragedy.

14Elizabeth Osidacz locked the door to 18 Cecil Avenue upon her arrival.

15Officers of the Brantford Police Service arrived at the 18 Cecil Avenue residence and were let in by one of Elizabeth’s grandchildren. The police confronted Andrew Osidacz in the bathroom of the home where he had forcibly dragged Julie Craven. He refused to drop the knife which he was holding and just as he was about to plunge the knife into Julie’s throat, and he was shot to death by police thus saving Julie’s life.

16The effects of the tragic events linger on. Ms. Craven’s counsel argues that the situation was exacerbated by the litigation “strategy” employed by the Estate trustee of Andrew Osidacz’s estate, Michael Osidacz, the brother of Andrew, which involved advancing virtually every legal defence available to resist Julie’s claims for compensation.

17The Last Will and Testament of Andrew Osidacz, dated July 13, 2002, provided nothing for Julie Craven or Jared. The will appointed Michael Osidacz as estate trustee with the residue of the Estate divided equally between Michael and Elizabeth Osidacz, Andrew’s mother. This created an inherent conflict of interest in Michael’s role as estate trustee. The will stated very little in terms of how any litigation would be handled, except for paragraph 9(h) which directed the trustee to “release, forgive, compromise, settle or waive any claim or debt which is owing to me or by me at the time of my death”. Despite that directive, the Estate fought “tooth and nail” virtually every claim advanced by Julie Craven.

[18] Andrew’s estate was primarily comprised of the following assets: i. Two RBC bank accounts; ii. A Manulife insurance policy; iii. A pension; and iv. Real property located at 18 Cecil. The total value of the assets of the Estate amounted to $408,912.76. Approximately $130,000.00 was available in the Estate at the time of trial.

19Although liability was established in 2009, the respondents did not concede that Julie Craven’s damages exceeded the value of the assets of the Estate or agree to any specific amount.

20The position of the Estate of Andrew Osidacz was that Julie Craven suffered no damages or that the damages she suffered were caused by “pre-existing injuries”. Therefore, damages had to be assessed at trial.

[21] Julie Craven seeks damages as follows: i. Family Law Act damages Homicide of Jared Osidacz - $125,000.00 $125,000.00 x 3.3% interest = $4,125.00 to October 24, 2016. ii. General damages Re assault April 23, 2002 - $25,000.00 Prejudgment interest to October 24, 2016 at 2.3% = $8,372.42 iii. General damages for assault, forcible confinement, trespass, attempted murder (March 18, 2006) - $90,000.00 Prejudgment interest to October 24, 2016 - $2,970.00 iv. Succession Law Reform Act “Dependant’s Relief” damages and/or income claim - $156,520.00 v. OHIP subrogated expense - $11,457.85 vi. The plaintiff also claims aggravated damages in the amount of $75,000.00 and punitive damages in the amount of $50,000.00 vii. There is also a claim for arrears of spousal support (s. 34(4) of the Family Law Act) – 33 months x $1,200.00 = $39,600.00 plus interest to October 24, 2016 at $12,386.36

22Based on the above, Julie Craven’s claim for damages amounts to $622,159.41, not including costs and some interest to March 1, 2017.

[23] Some, but not all damages were admitted by the defendant estate trustee, Michael Osidacz, on October 20, 2016, as follows: i. That Julie Craven sustained “substantial damages” as a result of the incidents of April 23, 2002, and March 18, 2006. ii. That Julie Craven suffered damages of at least $25,000.00 for the April 23, 2002 assault against her. iii. That Julie Craven suffered damages of $100,000.00 for the wrongful death of Jared Osidacz. iv. That Julie Craven suffered damages of at least $50,000.00 for assault with a weapon and forcible confinement. Total damages admitted: $175,000.00 not including interest or costs

[24] With prejudgment interest, the above amounts (without costs) total $237,826.64 broken down as follows as of March 1, 2017: i. Damages of at least $25,000.00 for the April 23, 2002 assault against her, from April 23, 2002, to March 1, 2017: $25,000.00 x 2.3% / 365 = $1.58 per day x 5,426 days = $8,573.08 ii. Damages of $100,000.00 for the wrongful death of Jared Osidacz, from March 18, 2006 to March 1, 2017: $100,000.00 x 3.3% / 365 = $9.04 per day x 4,001 days = $36,169.04 iii. Damages of at least $50,000.00 for assault with a weapon and forcible confinement, from March 18, 2006 to March 1, 2017: $50,000.00 x 3.3% / 365 = $4.52 per day x 4,001 days = $18,084.52 Total admitted damages = $175,000.00 Total prejudgment interest = $62,826.64 Total admitted damages and interest = $237,826.64 This sum clearly exceeds the amount in the Estate as of October 2006 which was approximately $130,000.00.

25Ms. Craven also seeks an order that Michael Osidacz repay to the Estate the sum of $91,277.98 which has been paid out of the Estate in legal costs.

26There is also a claim under the Succession Law Reform Act, R.S.O. 1990 and an order continuing $1,000.00 per month for spousal support.

Claim under S. 34(4) of the Family Law Act, R.S.O. 1990

27Counsel for the applicant claims that the order of May 21, 2002 for spousal support was binding on the Estate.

28At the time of his death on March 18, 2006, Andrew Osidacz was still subject to a spousal and child support order rendered by Mr. Justice Cavarzan on May 21, 2002. This support was otherwise needed by Julie Craven for her support and that of her son Jared.

29In accordance with the said order at paragraph 2, the sum of $500.00 per month was payable for child support and in accordance with paragraph 3, the sum of $670.00 (net) per month was payable for spousal support.

30However, immediately after Jared and Andrew’s death, the Estate stopped paying spousal support. The parties have agreed that the arrears under the former support order of May 21, 2002 totals $22,110.00 plus prejudgment interest.

Damages for Wrongful Death

31Damages for the wrongful death of Jared are at the core of this litigation but are certainly not the only head of damages sought. A claim for wrongful death is by its nature a claim under Part V of the Family Law Act for “loss of guidance, care and companionship”.

32That Jared Osidacz and his mother Julie shared a close personal bond was not disputed at the trial in any way. Julie Craven, John Craven, Louise Huzul, and Eva Palanio clearly testified to this, as well as the horrible suffering to Julie as a result of the loss of this relationship.

33Happy and playful photographs of Jared, both individually and with his mother, Julie Craven, were filed in the exhibit book filed. It is obvious from these photographs, the various cards and artwork in the exhibit book, that the death of Jared at the hands of his father as opposed to dying in a car accident would cause enormous suffering for the plaintiff and her wellbeing – a fact demonstrated by the evidence at trial.

34As stated above, liability of Andrew Osidacz for the murder of Jared has been established.

35In To et al. v. Toronto Board of Education et al., [2001] O.J. No. 3490 (C.A.), the jury assessed damages for the tragic accidental death of a child at $100,000.00 payable to each of the deceased’s parents. The Ontario Court of Appeal upheld the damage award payable to the parents and since that time the decision has served as a benchmark for assessing damages for wrongful death in many cases. I find that the kind of strong bond between Jared and Julie as demonstrated at trial through the applicant and multiple corroborating witnesses would see damages awarded to Julie Craven in at least the amount of $100,000.00 for wrongful death of Jared. It is clear that Jared was part of the core of Julie’s every being, her “soul mate” so to speak, and the light of her life. In Fiddler v. Chiavetti, 2010 ONCA 349, the Court of Appeal applied the Consumer Price Index (CPI) to establish that $100,000.00 wrongful death in 2005 (as opposed to 1992 when the facts of To et al. v. Toronto Board of Education et al. occurred) was roughly $125,000.00, at the upper end of the range.

36The present case involved the death of a defenceless eight year-old child by multiple fatal stab wounds. Jared had suffered multiple defensive wounds to his hands as indicated in the medical reports filed and as was confirmed by Julie Craven in her evidence in-chief. I find that the award for loss of care and companionship based on the case law and on the evidence, establishes that the applicant Julie Craven is entitled to damages in the amount of $125,000.00 with respect to the wrongful death of Jared Osidacz.

Damages to Julie Craven Arising from Assault, Forcible Confinement, Trespass, and Attempted Murder on March 18, 2006

37Having murdered his son Jared, Andrew Osidacz attended at the residence of his estranged wife Julie Craven, told her that he had killed their son and armed with a knife, began assaultive behaviour toward her. She described him as covered in blood and in effect dragging her around the various rooms in the house with a knife in his hand, and at one point had a knife to her throat. This ordeal went on for about 45 minutes with Julie asking where her son was and wanting to call 911 and dispatch them to where she thought he was.

38At one point, it appeared as though he had raised the knife and was going to put it down into her chest. This was when the police shot and killed Andrew.

39Having been told that he had killed Jared and seeing him covered in blood holding a knife and in effect chasing her around the house, and holding the knife to her throat saying “I’m going to kill her”, there is no doubt in my mind that this was a horrifically terrifying experience and that Julie Craven truly feared for her life. Prior to the beginning of trial, the defence conceded that with respect to the assault, Julie Craven suffered damages to the value of at least $50,000.00. Plaintiff’s counsel is seeking $90,000.00 under this set of damages. I find that this is a reasonable sum of compensation for Julie Craven for all she went through during the attack in her home by her estranged husband, and her damages with respect to the assault, attempted murder, and home invasion are set at $90,000.00.

Aggravated Damages

40Applicant’s counsel argues that an award for aggravated damages is in order in the circumstances of this case.

41One of the leading cases in regard to aggravated and punitive damages is the decision in Wieslawa Soczek v. Jan Soczek et al., 2016 ONSC 3701, an attempted murder case. In Soczek, the husband set his spouse on fire and stabbed her as she escaped from the residence. She suffered major burns and lifelong injuries. The principles relating to the award of aggravated damages are set out in that case as follows: “Aggravated damages may be awarded where a battery has occurred in humiliating or undignified circumstances. These damages serve to take into account any aggravating features of the case and to that extent increase the amount awarded for general damages”.

42I find that the attempted murder of the plaintiff was particularly humiliating and horrific and gives rise to aggravating circumstances in the sense that Andrew told his wife that he had murdered her son and yet did not allow her to make any calls for help, and when asked what his last words were, she was told by Andrew that her son’s last words were “Daddy, please don’t kill me”. The damages are also aggravated by his confining her to her house when she was pleading to go and help Jared. This was a terrorizing knifepoint attack, break and enter, hostage-taking style conduct which went on for about 45 minutes, cumulating in a dramatic attempted murder of Julie Craven. As in Soczek, the torture committed by Julie’s spouse, albeit estranged, with the terrorizing knowledge that she could not help her son, Jared, was especially traumatizing, humiliating and undignified.

43I find that an award of aggravated damages in the amount of $75,000.00 is appropriate in these circumstances.

Punitive Damages

44Applicant’s counsel seeks an award of punitive damages in the amount of $75,000.00.

45In Soczek, above, the Supreme Court of Canada indicated that the objectives of punitive damages go beyond punishment and deterrence. They also include denunciation being the means by which the trier of fact expresses his outrage at the aggregious conduct of the defendant. In its decision in the case of de Montigny v. Brossard (Succession), [2010] 3 SCR 64, 2010 SCC 51, at page 54, the Supreme Court of Canada stated as follows:

...care must be taken not to give exemplary damages a subsidiary criminal justice role. The fact that Martin Brossard cannot be punished for his actions by the criminal justice system is not a determining factor in the analysis.... It is a requirement for punitive damages not only that the defendant commit a tort advertently, but that the conduct be exceptional.... The claim may be brought only by the victim of the tort and damages may be awarded only in reference to the conduct that affected the victim.

46In respect of the present case, the conduct of the perpetrator clearly reaches the status of being “exceptional” as referred to above. The circumstances of the present case, whereby Julie Craven was terrorized at knifepoint for 45 minutes and came within seconds of being brutally stabbed to death, justify an award of $50,000.00 in punitive damages against the Estate.

47As to the difference between punitive damages and aggravated damages, the Court of Appeal in Plester v. Wawanesa Mutual Insurance Company quoting from the Supreme Court of Canada decision in Vorvis v. Insurance Corporation of British Columbia, [1989] 1 SCR 1085, stated as follows:

Punitive damages, as the name would indicate, are designed to punish. In this, they constitute an exception to the general common law rule that damages are designed to compensate the injured, not to punish the wrongdoer. Aggravated damages will frequently cover conduct which could also be the subject of punitive damages, but the role of aggravated damages remains compensatory.

Julie Craven – Loss of Income

48It is the plaintiff’s position that the events of April 2002 and March 18, 2006 caused severe psychological damage to Julie Craven and disabled her from working for the period March 18, 2006 to the present. Although the respondents acknowledge that Julie Craven suffered from PTSD and had a major depressive disorder as a result of the March 18, 2006 episode, Michael Osidacz does not admit that the effects of the same disabled her from working from March 18, 2006 onward.

49Julie Craven’s evidence on her medical issues and disability was uncontradicted at trial. In-chief, she testified that she would need, “time-outs all the time”, that she cannot stand “certain noises” such as a clock; that she has to run out of a room on occasion; that, “she can’t breathe”; that her heart is frequently like a “tornado”; that her teeth are “clenched”; and that she “panics” in groups of people – all to the present day. In regard to attempting similar remunerative employment as she previously enjoyed, Julie commented on her former work at Tranquility Place, the retirement home in Brantford. She said it involved a preparation of food with “large knives” which she could not have done, and would need “timeouts” and the need to “run out of the building”. Julie had nearly completed training as an educational assistant by March 2006. She commented that she was afraid of children “running up to her”. She could not stand the sounds of children “shrieking and screaming”.

50Julie Craven’s psychiatrist, Dr. Theresa Clarke, was called as a witness. She outlined the debilitating effects the incidents had on Julie and her family life, her relationships, her relationship with her son, and her ability to work. This includes anxiety, panic attacks (with disassociation), shortness of breath, feeling numb and distant caused by ordinary events – seeing bathtubs, knives, etc. After diagnosing PTSD and major depressive disorder (and confirming that she still suffered from same for the period of 2006 to present), Dr. Clarke outlined that 30 percent of PTSD victims essentially have permanent aftereffects that are “chronic, pernicious and impairing”.

51Julie Craven was not cross-examined by counsel on the issue of her fitness and ability to work and the direct medical evidence of Dr. Clarke was completely unchallenged at trial, including Julie’s inability to work from March 18, 2006 up to and including the present time and into the foreseeable future.

52That Julie Craven could not “work” is also confirmed by her financial information and tax returns. As with the medical evidence, the defence had no evidence to dispute the income loss by Julie Craven for the period 2006 to 2016.

53Based on the foregoing, including the tax returns submitted by Julie Craven, it was clear from the evidence that Julie was disabled from working from March 18, 2006 to the present.

54Plaintiff’s counsel calculates Julie Craven’s claim for lost income to the end of 2016 discounted by 20% to be $156,520.00 based on her working 20 hours per week, 12 months per year at $17.50 per hour ($350.00 per month) plus $11,700.00 part-time earnings from Tranquility Place ($13.00 per hour x 30 months).

Succession Law Reform Act – Dependant’s Relief

55As stated above, Mr. Justice Arrell already ordered interim dependant’s relief on January 21, 2009 in favour of Julie Craven in the amount of $1,000.00 per month under s. 64 of the Succession Law Reform Act, R.S.O. 1990. At that time, any issues respecting the six month limitation period (which is flexible) were dealt with as they were raised by estate counsel. The limitation defence was thoroughly rejected by Justice Arrell. S. 58 of the Succession Law Reform Act reads as follows:

Order for support

58. (1) Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.

56“Dependant” is defined in that act as including the spouse of the deceased to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death.

57Julie Craven clearly falls within the purview of this section of the Act as the will of Andrew Osidacz did not provide for her and she was clearly dependent on Andrew Osidacz for support. This obligation would have immediately transferred to the Estate trustee who bitterly resisted even Julie’s modest claim of $1,000.00 per month for interim dependant’s relief granted by Justice Arrell on January 21, 2009.

58An argument can be made that Julie’s potential claims for permanent relief under Part V of the Succession Law Reform Act could engulf the entire estate or most of it – even without consideration of the wrongful death of Jared. This is due to her dependency on the Estate and her proven inability to work and earn an income.

59What I must consider is what would be an appropriate amount of Succession Law Reform Act dependant’s relief considering all the facts and circumstances of the case and considering that $93,000.00 in interim dependant’s relief has already been paid as ordered by Justice Arrell.

60I am satisfied on the evidence that the lingering aftereffects of the events of March 18, 2006, including the attempted murder of Julie Craven, have scarred her for life and there is no evidence she will be working in the foreseeable future.

61In the trial decision of Cummings v. Cummings emphasis was placed on the term “proper” support in s. 58 of the SLRA and the moral obligations of a testator to provide for his dependants:

It is the duty of the Court, so far as is possible, to place itself in all respects in the position of the testator, and to consider whether or not, having regard to all existing facts and surrounding circumstances, the testator has been guilty of a manifest breach of that moral duty which a just, but not a loving, husband or father owes his wife or towards his children, as the case may be.

62In the present case, the sum of $156,520.00 is sought in relation to the “lost income to date” of Julie Craven. This claim is not framed as SLRA dependant’s relief. However, under the circumstances, in my view what would be the appropriate amount of SLRA dependant’s relief is, in considering all the facts and circumstances of the case, and considering the $93,000.00 interim dependant’s relief already paid as ordered by Justice Arrell, would have to take into consideration the loss of income claim in the amount of $156,520.00 plus interest as being duplicative. That amount however, as set out above, is loss of income to date. In my view, the situation is best dealt with through an award under the SLRA as permanent relief in the amount of $200,000.00 in addition to the $93,000.00 in interim relief already paid, given Julie’s age (i.e. mid-40s at the time of the loss) and the fact she could be expected to live another 40 years from the date of the tragedies.

Depleting Assets of the Estate

63Michael denies that he acted outside of his duties and was unreasonable in his role as estate trustee, and denies that he should be held personally liable to repay the legal fees expended to defend the Estate. Further, he denies that he should be personally liable for all legal costs of Julie Craven.

64From the total value of the assets of the Estate of $408,912.76 as mentioned above, the Estate has made the following expenditures:

1. Property payments: as of April 1, 2006, the Estate paid for several expenses relating to 18 Cecil, including the mortgage, property taxes, insurance, utilities (as of October 15, 2010), and general maintenance. Between April 1, 2006 and the time Cecil was sold in August 2011, the total sum expended by the Estate amounts to $66,577.60.
2. Dependant’s relief payments: on January 21, 2009, Justice Arrell ordered the Estate to pay Julie support under the Succession Law Reform Act in the amount of $1,000.00 per month. Since January 21, 2009, the Estate has paid Julie over $93,000.00 in dependant’s relief.
3. Estate solicitor fees: John Wiacek of the firm of Trepanier Verity LLP was retained as the Estate solicitor to manage administration of the Estate and its accounting. In total, the Estate has paid Mr. Wiacek $8,871.32. There are additional monies owing to Mr. Wiacek.
4. Estate litigation fees: Deborah Ditchfield of Waterous Holden Amey Hitchon LLP was retained by Andrew in and around April 2002 with respect to family law matters between himself and Julie Craven. Upon Andrew’s death, Ms. Ditchfield continued to act for the Estate. In regards to the wrongful death/assaults action, the total amount of legal fees expended by the Estate trustee from the Estate was $71,000.00 with an additional $80,000.00 left owing. The defendant negotiated a reduction to $20,000.00 of these outstanding monies which has now been paid out of the Estate for a total payout of $91,000.00 in legal fees.
5. Funeral expenses: a total of $11,941.57 was spent on funeral and cemetery expenses.
6. Income tax: a total of $4,964.46 was expended from the Estate account to pay T1 income tax and T3 income tax. As a result of the foregoing expenditures, the Estate had a value of $132,530.82 at the commencement of trial, minus the $20,000.00 payable to Ms. Ditchfield and additional monthly payments to Julie Craven, leaving a current value of approximately $107,530.82.

65The defendant takes the position that the trial with respect to damages on wrongful death and assault need not take place. They argue that on a request to admit, the defendant admitted that the damage exceeded the value left in the Estate and the trial was therefore unnecessary.

66The total sum of damages claimed by Julie Craven in the wrongful death/assaults action is $622,159.41. This sum far exceeds the total value the Estate was ever worth. This conclusion is based upon the assumption that Michael Osidacz would not be required to repay $71,000.00+ in legal fees to the Estate or a significant portion thereof plus interest. The plaintiff argues that if a significant repayment of the costs paid to Waterous Holden is ordered in this action, it could bring the “value” of the Estate to more than $200,000.00. They argue that just because there are no longer funds in the Estate or there are insufficient funds in the Estate, that does not deny the necessity to quantify damages or end the inquiry into the Estate trustee’s conduct and deny various damage heads. They point out that s. 50 of the Trustee Act, R.S.O. 1990, mandates that a trustee pay the debts of the deceased on a proportionate basis if they exceed the value of the estate. This does not appear to have been done. Therefore, knowing the quantum of the indebtedness (in this case the damages) is necessary in that there may be other monies that could be reclaimed or claimed from the trustee as having been improperly paid out. Just as importantly, however, a trial on the issue of damages was ordered by Mr. Justice Arrell on January 21, 2009. An assessment of the damages I find was necessary before liability had been established with respect to issues such as to claim for damages as a result of Julie Craven being disabled from working from March 18, 2006 to the present; the defendant did not admit punitive or aggravating damages; a trial for damages was also required to demonstrate (absent an admission by the defendant) that the damages suffered by Julie Craven have always exceeded the value of the Estate and such fact should have been recognized by the Estate trustee at an early date, and acted on accordingly instead of vigorously defending the action at the expense of depleting the assets of the Estate.

67An estate is not a juridical person and therefore parties cannot sue an estate, but rather the estate through the estate trustee. As such, the estate trustee will undoubtedly incur expenses and costs in the course of litigation.

68The general principle that estate trustees are indemnified for all costs including legal fees that are reasonably incurred is codified in s. 23.1 of the Trustee Act which reads as follows:

23.1 (1) A trustee who is of the opinion that an expense would be properly incurred in carrying out the trust may,

(a) pay the expense directly from the trust property; or

(b) pay the expense personally and recover a corresponding amount from the trust property.

(2) The Superior Court of Justice may afterwards disallow the payment or recovery if it is of the opinion that the expense was not properly incurred in carrying out the trust.

69From this, I conclude that the executor is entitled, indeed, obliged to defend claims against the estate so long as the estate assets are expended reasonably.

70Where the reasonableness of expenses incurred by the trustee is in question, the estate trustee must show that they acted in good faith and had good reason to believe the expenditures were necessary for the benefit of the estate at the time the expense was incurred, and further, has the onus of proving that defending a proceeding is reasonable.

Carmen Theriault, Widdifield on Executors and Trustees, 6th Ed. (Toronto: Carswell, 2003), at 4-2.

71Geffen v. Goodman is the leading case on the role of an estate trustee in covering expenses of the estate, both during administration of the estate and with respect to litigation involving the estate. The court stated:

The courts have long held that trustees are entitled to be indemnified for all costs, including legal costs, which they have reasonably incurred. Reasonable expenses include the costs of an action reasonably defended: see Re Dingman (1915), 35 O.L.R. 51. In Re Dallaway, [1982] 3 All E.R. 118, Sir Robert Megarry V.C. stated the rule thus at p. 122:

In so far as such person [trustee] does not recover his costs from any other person, he is entitled to take his costs out of the fund held by him unless the court otherwise orders; and the court can otherwise order only on the ground that he has acted unreasonably, or in substance for his own benefit, rather than for the benefit of the fund.

Geffen v. Goodman Estate, [1991] 2 SCR 353 at para. 74

72It is the plaintiff’s position that Michael Osidacz should be personally liable for repayment of the $91,277.98 (plus interest) in legal costs paid to Waterous Holden LLP without a court order.

73The courts have held that a trustee may risk the expense of litigation as part of discharging his duties to “collect the assets”. However, if there is some question as to whether the proceedings are “meritorious” and whether it is “prudent or appropriate” for a trustee to pursue them, “the appropriate course of action is for the trustee to apply to the court for its directions”.

Bank of Nova Scotia Trust et al. v. Pressman et al. at p. 12

74In the present case, the Estate trustee never sought directions from the Court concerning whether or not the defences and claims it was advancing were “meritorious” and whether or not it was “prudent or appropriate” to proceed; that is, embarking on a vigorous “tooth and nail” defence or denying significant claims without evidence (even after liability was established).

75There is considerable evidence, given Michael Osidacz’s interactions with the plaintiff and her family, of significant personal animosity – dare I say hate – between Michael Osidacz and Julie Craven and her family. Such animosity, it would appear, prevented him from exercising the fair and impartial judgment necessary of an estate trustee. Michael Osidacz also appears to have personal opinions about the events of April 2002 and March 18, 2006 contrary to facts found by impartial parties that influenced his judgment and overall approach to the litigation. Thus motivated, Michael Osidacz soldiered on with his agenda of hostility and denial. Viewing the relevant facts objectively, this would seem to be anything but “prudent or appropriate”, in clear violation of the principles established in Bank of Nova Scotia Trust et al. v. Pressman et al. at p. 12.

76As indicated in Bank of Nova Scotia Trust et al. v. Pressman et al., supra, direction should have been immediately sought from the court as to whether or not the intended path of the estate trustee was “prudent or appropriate”, especially where, as here, the vigorous defence of the litigation was not specified in the will, an aggressive approach to same could (and did) lead to significant expense and circumstances where the estate trustee was both personally and emotionally involved.

77Michael Osidacz, as Estate trustee, is a trustee for creditors, beneficiaries, and those with a financial interest in the Estate, including Julie Craven.

78The will stated very little in terms of how any litigation would be handled, except that para. 9(h) directed the trustee to “release, forgive, compromise, settle or waive any claim or debt which is owing to me or by me at my death”.

79I find that mounting an “all-out” defence to the claims of Julie Craven in a situation where liability was clear virtually from the start and where it should have been clear to any reasonable person that Julie Craven was entitled to substantial damages which would likely exceed the assets of the Estate, and using the assets of the Estate to advance speculative and groundless defences, was anything but reasonable or “prudent or appropriate”.

80To incur approximately $160,000.00 in legal fees defending an action that was clearly likely to succeed with virtually no evidence upon which to base the defence was totally irrational and reckless conduct on the part of the Estate trustee, amounting to dissipation of the assets of the overall modest size of the Estate.

81Spending tens of thousands of dollars in legal fees advancing frivolous and groundless defences either to see to it that Julie Craven saw no or at least the minimal amount of the assets of the Estate or to prevent personal liability from attaching to Michael Osidacz for legal fees is not a valid basis to “preserve” estate assets and does nothing for the creditors or the beneficiaries of the Estate.

82The “modern approach” to awarding estate litigation costs was set out in the decision of McDougald Estate v. Gooderham, [2005] OJ No. 2432 (CA). Essentially, it incorporates the modern “loser pays” approach to awarding costs of litigation as follows: “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”.

83Such approach displaces the “traditional” approach to costs whereby the costs of a proceeding were generally paid out of the estate subject to certain exceptions as follows: “The practice of the English courts, in estate litigation, is to order the costs of all parties to be paid out of the estate where the litigation arose as a result of the actions of the testator, or those with an interest in the residue of the estate, or where the litigation was reasonably necessary to ensure the proper administration of the estate”.

McDougald Estate v. Gooderham, supra

84Essentially, Michael Osidacz ran up his legal bills to a maximum until he was stopped by an order of this Court. Michael Osidacz exercised dubious judgment at best and generally tried to evade responsibility by shifting blame for most decisions either to the lawyers, or the legal advice received, or to Julie Craven.

85The fact that Michael Osidacz received legal advice, per se, does not permit him to abdicate his responsibilities as trustee or immunize him from the ultimate decisions made. That is especially where, as here, the decisions he personally made, including raising unnecessary and unsubstantiated defences – such as limitation periods, denying obvious claims and asserting that Julie Craven’s injuries were a result of events prior to March 18, 2006, without any evidentiary basis, had enormous consequences resulting in a situation where the Estate trustee essentially used estate funds to bankroll his legal fees and run up a gigantic bill without regard to any of the consequences. I find it would be inequitable to allow Michael Osidacz to have used the assets of the Estate as kind of an ATM machine, from which withdrawals automatically flowed, to fund litigation that was totally unreasonable.

86Based on the foregoing, it is ordered that there be no indemnity of the legal costs incurred by Michael Osidacz and that he repay to the Estate the sum of $91,277.98, save and except for some limited costs which would be reasonably incurred in relation to the investigation and initial receipt of the claims which I fix at $20,000.00, leaving the amount to be repaid to be $71,277.98.

87It should be noted that in addition to the above amounts paid to Waterous Holden LLP, accounts rendered by John Wiacek, retained as estate solicitor in relation to administration of the Estate and preparation of the Estate accounts, have never been seriously questioned in the litigation and are not being challenged by the plaintiff.

88In the result, the plaintiff Julie Marie Craven shall have judgment for the following damages against the Estate of Andrew Peter Osidacz:

Damages with respect to the 2002 assault upon Julie Craven by Andrew Osidacz	$25,000.00
Under the Family Law Act, damages with respect to the death of her son Jared	$125,000.00
Damages with respect to assault, forcible confinement, trespass, and attempted murder	$90,000.00
Aggravated damages	$75,000.00
Punitive damages	$50,000.00
Damages under the Succession Law Reform Act	$200,000.00
Total	$565,000.00

89There shall be judgment in favour of OHIP in respect of the subrogated claim for medical expenses in the amount of $11,457.86.

90The plaintiff shall have interest on the above amounts in accordance with the provisions of the Courts of Justice Act.

91Order to issue that Michael Gerard Osidacz reimburse the Estate of Andrew Peter Osidacz in the amount of $71,277.98 in respect of Estate assets dissipated in the conduct of this litigation, together with prejudgment interest.

92With respect to the matter of costs, the plaintiff shall have 10 days to submit written submissions with respect to costs setting out the amount sought, from whom it is sought, and the scale of costs sought.

93The defendant Michael Osidacz in his capacity as executor of the Estate of Andrew Peter Osidacz and in his personal capacity shall have 10 days to respond to the plaintiff’s submissions.

94The plaintiff shall have a further five days to reply to the defendant’s submissions.