Court File and Parties
COURT FILE NO.: CV-11-3278-00 DATE: 2017 04 11
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Julian Birtzu and Valentin Birtzu -and- Constance McCron and the Estate of Constantin Birtzu
BEFORE: Bloom, J.
COUNSEL: Peter M. Callahan, Counsel for the Plaintiffs Ian M. Hull and Doreen Lok Yin So, Counsel for the Defendants
C O S T S E N D O R S E M E N T
I. INTRODUCTION
[1] On March 2, 2017 I released my reasons for judgement dismissing the action. I have received and reviewed the written submissions of the parties on costs. This is my ruling.
II. POSITION OF THE PARTIES
[2] The Defendant, Constance McCron, seeks substantial indemnity costs of $395,898.13 payable by the Plaintiffs based on the result of the action and on the Plaintiffs’ having pursued their claim after the expiry of the limitation period.
[3] The Plaintiffs’ position is that, even under the modern approach to costs in matters of estates litigation, public policy warranted the litigation of their action; and, accordingly, their costs (and inferentially those of the Defendants) should be paid out of the estate. Alternatively, the Plaintiffs submit that the parties should bear their own costs.
III. GOVERNING PRINCIPLES
[4] In McDougald Estate v. Gooderham, Justice Gillese for the Court stated at paras. 79 and 80:
[79] 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 cost awards became virtually automatic.
[80] 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.
[5] Amplifying those principles, Justice Brown in Bilek Estate v. Salter Estate, [2002] O.J. No. 2328 (ON SC) at para. 6 stated:
6 From a year of acting as administrative judge for the Toronto Region Estates List I have concluded that the message and implications of the McDougald Estate case are not yet fully appreciated. A view persists that estates litigation stands separate and apart from the general civil litigation regime. It does not; estates 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 greater 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.
IV. ANALYSIS
[6] Applying those principles, I find that on the facts the Plaintiffs had reasonable grounds upon which to question the validity of the will, although their challenge failed on the merits. Indeed, I found that they had established suspicious circumstances. Further, I found that the testator was susceptible to undue influence by reason of his age, dementia, and depression.
[7] However, I found that the attack on the will was statute-barred. Moreover, the limitation period issue was not one to attract the reasonable grounds exception articulated in the applicable principles. Therefore, I decline to award the Plaintiffs their costs out of the estate.
[8] In paragraphs 98 and 100 of my reasons dismissing the action, I found against the credibility of the Defendant, Connie McCron, who takes the entirety of the estate under my judgment. I found that she gave misleading evidence in relation to the mental state of the testator, the critical issue in the case. That conduct cannot be condoned by the Court, and is relevant in making my decision as to costs by virtue of Rule 57.01 (1) of the Rules of Civil Procedure. I, therefore, do not award Ms. McCron costs against the Plaintiffs despite her success in the action.
[9] My order is that the parties shall bear their own costs.
Bloom, J.