CITATION: Craven v. Osidacz and Osidacz; and Craven v. Osidacz, 2017 ONSC 4396
COURT FILE NO.: CV-06-251 (Brantford); and CV-08-846 (Brantford)
DATE: 2017-08-04
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)
Michael Jaeger, for the Plaintiff
Plaintiff
- and -
ELIZABETH OSIDACZ and MICHAEL GERARD OSIDACZ, EXECUTOR OF THE ESTATE OF ANDREW PETER OSIDACZ
Rick D. Simmons, for the Defendants
Defendants
AND
Court File No. CV-08-846
B E T W E E N:
JULIE MARIE CRAVEN
Michael Jaeger, for the Applicant
Applicant
- and -
MICHAEL GERARD OSIDACZ, as Executor and Trustee of THE ESTATE OF ANDREW PETER OSIDACZ
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 )
Rick D. Simmons, for the Respondents
REASONS FOR JUDGMENT - COSTS
The Honourable Mr. Justice T.R. Lofchik
[1] This case was a claim for damages by the plaintiff against the estate of Andrew Peter Osidacz of which Michael Osidacz was the executor, for damages for personal injuries sustained as a result of having been assaulted by Andrew Osidacz prior to the separation of the parties, for damages for wrongful death of their son, Jared Osidacz stabbed to death by Andrew Osidacz, and for personal injury stemming from Andrew Osidacz having held the plaintiff hostage with a knife to her throat, threatening to kill her before being shot to death by Brantford Police in order to prevent the murder of the plaintiff. There was also a claim against the estate for arrears of spousal support awarded to the plaintiff against Andrew Osidacz at the time of separation.
[2] The case went on for over a decade with judgment being delivered on May 19, 2017 awarding the plaintiff a total of $565,000.00 including aggravating damages and punitive damages, plus costs to be fixed and an order requiring Michael Osidacz to personally repay to the Estate of Andrew Osidacz $71,227.98 plus interest, being the sum found to be dissipated from the assets of the estate by Michael Osidacz in defending the plaintiff’s claim.
[3] The plaintiff seeks costs in the amount of $156,310.00, plus HST and disbursements of $10,021.26. It is the plaintiff’s position that such costs should be payable by Michael Osidacz personally to compensate the plaintiff, Julie Craven on a complete indemnity basis. Out of the above claim for costs, $81,000.00 is for the cost of the trial: trial preparation, one motion prior to trial, attendance at trial for eight days, written submissions and oral argument for 2.5 days after submissions were delivered.
[4] Michael Osidacz admits that, as an unsuccessful party, he would ordinarily pay a reasonable sum for costs of the trial in these proceedings. However, it is his position that the costs claimed are excessive and not in line with the reasonable expectations of the parties with respect to costs an Estate Trustee in his personal capacity would expect to pay. It is also argued that while the plaintiff is seeking costs on a substantial indemnity basis, the bill of costs and the amounts claimed in the costs submissions set out costs on a solicitor client basis.
[5] Michael Osidacz submits that the factors set out in Rule 57.01 of the Rules of Civil Procedure ought to be considered when exercising the discretion granted to the Court under Section 131 of the Courts of Justice Act.
[6] Section 131 provides that, “The costs of and incidental to a proceeding or any step in a proceeding are in the discretion of the Court and the Court may determine by whom, and to what extent costs shall be paid”.
LAW
[7] The modern approach to estate litigation is “the loser pays” as set forth in numerous decisions of the appellant level in McDougald Estate v. Gooderham 2005 21091 (ON CA), [2005] O.J. No. 2432 (C.A.). The concept is also dealt with by the Superior Court in Gelcer v. Tamari [2011] O.J. No. 3131 (S.C.J.) and Tierney (Estate) v. Brown [2015] ONSC 6949 (S.C.J.).
[8] A comprehensive decision of the Court of Queen’s Bench in Manitoba indexed as S.B. v. A.S.B. (Estate of N.B. deceased), 2004 NBQB 7, also sets out the applicable principles. That decision can be summarized by saying that the Courts have long ruled that an executor who engages in litigation without proper basis will be held accountable.
[9] In the decision in Re: Estate of Brett Salter, Salter re: Salter, 2009 28403 (ON SC), [2009] 50 ETR 3d 227 (S.C.J.), the Court stated as follows:
Given the emotional dynamics of most pieces of estate litigation, an even greater need exists to impose the discipline of the general cost principles of “loser pays” in order to inject some modicum of reasonableness into decisions about whether to litigate the estate related disputes.
[10] Ultimately, the Court in Glecer v. Tamari, supra, ordered the Estate Trustee to pay costs personally (on a full indemnity basis) for his “egregious conduct” which included ignoring court orders and failing to properly administer the estate in question.
[11] The Court of Appeal decision in Davies v. Corporation of the Municipality of Clarington et al 2008 ONCA 772, 100 OR 3d 66 (C.A.), sets out the basis of the obligation to pay costs on an “elevated basis” (sometimes referred to as full indemnity costs but historically sometimes referred to as substantial indemnity costs). Bearing in mind that an award of solicitor client costs is the exception and not the norm, the Court of Appeal in Davies quoted the following principle at paragraph 30 of the decision:
An award of costs on the solicitor-and-client scale, it has been said, is ordered only in rare and exceptional cases to mark the court's disapproval of the conduct of a party in the litigation. The principle guiding the decision to award solicitor-and-client costs has been enunciated thus:
Solicitor-and-client costs should not be awarded unless there is some form of reprehensible conduct, either in the circumstances giving rise to the cause of action, or in the proceedings, which makes such costs desirable as a form of chastisement.
[12] The overriding principle of reasonableness and proportionality governs the fundamental objective of costs awards. Partial indemnity costs is the rule, substantial indemnity costs is the exception and full indemnity costs are very rare and should only be rewarded for repugnant behaviour.
[13] Costs on a solicitor and client basis should not be awarded unless special grounds exist to justify departure from the usual scale. The Court in Foulis v. Robinson stated:
Generally speaking, an award of costs on a party-and- party scale, to a successful party, strikes a proper balance as to the burden of costs which should be borne by the winner without putting litigation beyond the reach of the loser. There are, of course, cases in which justice can only be done by a complete indemnification for costs.
Foulis v. Robinson; Gore Mutual Insurance Co., (1978) OR (2d) 769 (C.A.)
[14] The Supreme Court of Canada has approved the following statement in principle in respect to the award of the higher level of costs:
Solicitor and client costs are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties.
Young v. Young 1993 34 (SCC), [1993] 4 SCR 3
ANALYSIS
[15] In addition to referring to the law as set out above, counsel for Michael Osidacz raised the following issues against awarding costs as sought by the plaintiff:
(a) The plaintiff/applicant sought the full repayment of $91,277.98, representing legal fees expended by Michael Osidacz from the estate. The Court ordered Mr. Osidacz to repay $71,000.00, being a portion of the legal fees expended and therefore the applicant was not fully successful in her claim;
(b) Any party recovering costs ought to recover costs on a partial indemnity basis unless a party beat a formal Rule 49 offer to settle. There was no offer which met the requirements of Rule 49 in this litigation.
(c) While the plaintiff/applicant was successful with the majority of her claim, there were occasions throughout the litigation wherein the plaintiff/applicant tended to lengthen the proceeding including:
(1) Amending claims;
(2) Seeking removal of Mr. Osidacz as Estate Trustee and then withdrawing same;
(3) The delay in the sale of 18 Cecil (the former matrimonial home);
(4) The removal of plaintiff’s counsel, Mr. Jaeger as solicitor of record and his reappointment;
(5) The unavailability of witnesses that the plaintiff wished to call.
(d) The Court has discretion to consider other relevant factors in relation to costs. One such factor is a party’s ability to pay costs. A court may take this factor into consideration and reduce the quantum of costs being sought. Michael Osidacz is a retiree. He has already expended well over $75,000.00 personally and now has judgment against him in the $71,277.88. Mr. Osidacz does not have the financial resources to pay a costs order amounting to over $186,000.00.
(e) The overriding principle as set out in Rule 57.01(1) is that the amount of costs that an unsuccessful party could reasonably expect to pay in relation to a step in the proceeding for which costs are being fixed: is proportionality.
(f) The trial itself with respect to this case did not require an assessment of damages as the defendant had admitted the value of the claim, exceeded the value of the estate in its response to a Request to Admit. This trial should have been only one to two days dealing only with the conduct of Michael Osidacz as the executor of the estate. Therefore, the amount claimed is excessive and was because the trial was extended for no judicial reason. In dealing with proportionality, the plaintiff is requesting costs in excess of $180,000.00 on a claim where she was successful in recovering $71,000.00 from Michael Osidacz. In Trafalgar Industries of Canada Ltd. v. Pharmax Ltd. 2003 40313 (ON SC), [2003] 64 OR 3d 288, the trial in the Simplified Procedure case proceeded as a regular trial and the plaintiff recovered judgment in the amount of approximately $27,000.00 and requested costs in the amount of approximately $54,000.00. Costs were fixed at $12,000.00. It is submitted that the judgment against Michael Osidacz in the amount of $71,000.00 falls within the jurisdiction of Simplified Procedure. It is submitted that as the estate had accepted that the value of the claim had far exceeded the assets of the estate, the only issue that needed to be tried was whether Osidacz should reimburse the estate.
(g) The entire proceeding could have been shortened had the plaintiff requested summary judgment on damages when they appeared before Mr. Justice Arrell in 2009 wherein he ruled in favour of the plaintiff on a motion for summary judgment on liability from the estate for damages.
(h) Michael Osidacz has already spent in excess of $140,000 in carrying out his duties as executor of his late brother’s estate.
(i) If costs are ordered payable to Julie Craven, they would be payable out of the estate of Andrew Peter Osidacz. While it is unfortunate that the Estate does not have, or ever did have enough assets to cover the value of the claim, that should not fall upon the executor, Michael Osidacz to top off his late brother’s estate.
(j) If any costs are awarded against Michael Osidacz personally, they should be reduced drastically due to the recovery of only $71,000.00 against Michael Osidacz personally. There is no judicial reason that this case warrants an award of solicitor and client costs, especially against Michael Osidacz personally.
[16] The estate takes no position with respect to costs.
[17] In his submission on costs, Michael Osidacz attempted to portray himself as a person of limited means. However, it was demonstrated at trial that this is not the case. For example, it was revealed at trial that he lives in a very large house at 47 William Drive, Brantford, which he acknowledged in cross-examination was mortgage free and built with his own money. Photographs of the house were in fact filed at trial. Michael Osidacz was also forced to admit at trial (after trying to portray himself as lacking financial resources) that he owns seven rental properties, five of which were mortgage free and had been for more than 10 years.
[18] Contrary to the submission by counsel for Michael Osidacz, I find that the trial was necessary, not only because it was ordered by Justice Arrell at the time he granted summary judgment on liability, but also because it was necessary to quantify damages which were not fully admitted by the defendant. Although Michael Osidacz, on behalf of the estate, admitted that the plaintiff was entitled to “substantial damages”, the defence refused to agree to a quantification of the claim for damages and because Michael Osidacz refused to admit punitive and aggravated damages, the SLRA claims, the binding nature of the 2002 spousal support order, and that Julie Craven was disabled from working through to trial. These issues had to be canvassed at trial. Subsequently, when evidence was introduced on these issues (ie: medical and financial evidence, evidence of disability until trial) it was un-contradicted by the defence. These areas of evidence and the claims they gave rise to should have been obvious to the defendant and admitted by them but instead were stubbornly refused without evidence.
[19] Michael Osidacz was acting not as estate trustee but personally in carrying out a vendetta against Julie Craven in order to limit any compensation she received from the estate where liability was clear, virtually from the start and it was obvious that she was entitled to substantial damages that would exceed the value of the estate.
[20] I have found that Michael Osidacz advanced “speculative and groundless defences” and acted in a manner that was “anything but reasonable, prudent or appropriate”. I have found that Michael Osidacz raised the estate’s defence on “virtually no evidence” and was totally irrational and reckless in his conduct as Estate Trustee amounting to a dissipation of assets of an overall modest sized estate. I have also found that the groundless and frivolous defences raised by Michael Osidacz were designs to ensure that Julie Craven would see little or no benefits from the estate.
[21] It is clear that there was mutual distain between Michael Osidacz and Julie Craven. The fact remains however that Michael Osidacz occupied the position of a fiduciary as Estate Trustee. He used that position and the assets of the estate, until prevented from doing so, to conduct the litigation in a way that amounted to harassment of the plaintiff, to protect his own position and to deny Julie’s legitimate claims to justice in rightful compensation for 10 years. He subjected an impoverished, grieving mother who had just nearly been killed by the perpetrator of the heinous murder of her nine-year-old son and a litigation “strategy” of denial, deflection and ultimately blame that had no basis in the will, the evidentiary record or reasonableness.
[22] Michael Osidacz resisted Julie Craven’s obvious and lawful claims for 10 years until shortly before trial. His actions went far beyond “mis-guided litigation” and amounted to harassment of another party by pursuit of “fruitless litigation”. In the end, the plaintiff was successful on every major issue raised at trial including the issue of the trustees’ improper payment of legal fees from the assets of the estate. The only area where the plaintiff was not 100 percent successful is concerning the quantum of repayment of dissipated legal fees to the estate. Even on this issue, the plaintiff was substantially successful.
[23] Based on the foregoing, reckless and egregious conduct on the part of Michael Osidacz, the plaintiff’s position is that “the loser pays” should apply in this case against Michael Osidacz and he should be required to pay her costs personally on an elevated basis, in this case, complete indemnity, except as set out below. I find that his reckless, totally irrational and totally unreasonable conduct and personal confrontations with the plaintiff rise to the level of “reprehensible” conduct in accordance with the case law and is worthy of sanctions as a form of chastisement justifying the imposition of solicitor and client costs.
[24] If elevated costs are not awarded to the plaintiff, she would have to spend a substantial amount of her damages judgment on elevated legal fees caused by the conduct of Michael Osidacz, thereby allowing him to achieve his objective of seeing to it that she obtains as little of the assets of the estate as possible.
[25] Contrary to the submissions of defence counsel, the amount in issue in this litigation was over $565,000.00, plus $71,277.98 re-payable to the estate by Michael Osidacz.
[26] I find that in light of the $160,000.00 legal bill incurred by Michael Osidacz to 2014 that did not include the costs of a trial, the amounts claimed for costs for 10 years of litigation, dealing with every conceivable roadblock and unnecessary defence raised by the defendant to be reasonable.
[27] With respect to the issue of proportionality, and the amount that the defendant might expect to pay in costs, in addition to the fact that the defendant ran up a legal bill of more than $160,000.00 without the costs of trial, it should be borne in mind that the defendant, because of the manner in which he carried out a “tooth and nail” defence created the circumstances for the plaintiff to incur greater costs.
[28] I find that if a defence had been carried on in a reasonable manner, the plaintiff’s legal costs would have been in the area of about $45,000.00. Costs claimed from the defendant on a party-and-party basis would be approximately $30,000.00 so that the plaintiff would be required to pay $15,000.00 from her own funds. Her claim here should be reduced by that amount leaving the plaintiff’s claim for costs at $141,310.00.
[29] Order to go that the Plaintiff recover from the defendant, Michael Osidacz personally, costs on a solicitor-client scale fixed in the amount of $141,310.00, plus HST and disbursements of $10,021.26.
LOFCHIK J.
Released: August 4, 2017
CITATION: Craven v. Osidacz and Osidacz and Craven v. Osidacz, 2017 ONSC 4396
COURT FILE NO.: CV-06-251 (Brantford) and CV-08-846 (Brantford)
DATE: 2017-08-04
Court File No. CV-06-251
B E T W E E N:
JULIE MARIE CRAVEN (formerly Julie Marie Osidacz)
Plaintiff
- and -
ELIZABETH OSIDACZ and MICHAEL GERARD OSIDACZ, EXECUTOR OF THE ESTATE OF ANDREW PETER OSIDACZ
Defendants
AND
Court File No. CV-08-846
B E T W E E N:
JULIE MARIE CRAVEN
Applicant
- and -
MICHAEL GERARD OSIDACZ, as Executor and Trustee of THE ESTATE OF ANDREW PETER OSIDACZ
Respondents
COSTS JUDGMENT
TRL:jl
Released: August 4, 2017