Court File and Parties

BARRIE COURT FILE NO.: CV-15-0381ES DATE: 2019-08-29 SUPERIOR COURT OF JUSTICE – ONTARIO

In the Estate of Marjorie Ann Wall, Deceased

RE: Ian Paul Shaw, Estate Trustee, Moving Party AND: Elizabeth Wall, Responding Party

BEFORE: The Hon. Mr. Justice G.M. Mulligan

COUNSEL: S.A. Easterbrook and R.G. Colautti, Counsel for the Moving Party C.M.B. Graham, Counsel for the Responding Party

HEARD: By written submissions

COSTS ENDORSEMENT

[1] On February 2, 2018, in Ian Paul Shaw, Estate Trustee (Shaw) brought a motion to strike the Notice of Objection to Accounts filed by Elizabeth Wall, a beneficiary of the Estate of Marjorie Wall. For reasons issued March 14, 2018, Shaw’s motion was dismissed. The parties were invited to make costs submissions.

[2] Prior of those costs submissions, Shaw appealed the matter to the Ontario Court of Appeal. The parties reached an agreement that costs would be dealt with after the decision of the Court of Appeal.

[3] For reasons issued November 21, 2018, the appeal was dismissed, and costs for the appeal were fixed against Mr. Shaw personally.

[4] I have now received Costs Submissions from Wall and Responding Submissions from Shaw.

Position of Wall

[5] Wall seeks costs on a full indemnity basis of $47,963.67, or alternatively, $38,880.16 on a substantial indemnity basis.

[6] As Wall states in her costs submissions at para. 3:

Liz successfully defended the motion which was in the nature of a summary judgment motion. That itself would lead to a presumption of substantial indemnity costs. Liz asserts that the Estate Trustee’s conduct merits an award of full indemnity costs.

[7] Wall further notes at para. 20:

Liz respectfully submits that the personal insults against her, professional criticisms and allegations against her lawyer, and the constant failure to respect litigation procedures are factors justifying an elevated costs award against the Estate Trustee. All of these were done in the course of a motion strategy the Court of Appeal harshly criticized.

[8] As Wall concludes at para. 23:

The Estate is large: the Deceased died with assets of approximately $3,337,140.13. The fees requested by Liz are reasonable for the work that had to be done. This motion was all-or-nothing for Liz and was caused completely by the Estate Trustee. It would be unfair to measure Liz’s efforts too finely when she was successful.

Position of Shaw

[9] Shaw concedes that as the successful party, Wall is entitled to costs, but those costs not ought to exceed $20,000 on a partial indemnity basis and be payable from the Estate of Ann Wall.

[10] Shaw submits that his motion brought forward a novel issue, relying on the Supreme Court of Canada’s decision in Goodman Estate v. Geffen, 1991 CanLII 69 (SCC), [1991] 2 S.C.R. 353, at para. 78 “…it is clear that [the Estate Trustees] had a tenable case against the [beneficiaries] and I think it appropriate that they simply bear their own costs but not have to bear the [beneficiaries’] costs as well.” Shaw further submits that Wall is seeking double recovery, as some of the costs sought relate to other motions not brought and cross-examinations with respect to same.

Analysis

[11] It is well-settled that s. 131 of the Courts of Justice Act, R.S.O 1990, c. C.43 provides considerable judicial discretion on the issue of fixing costs. The principle set out in r. 57.01 of the Rules of Civil Procedure also give guidance to the court. In this case, Shaw as the unsuccessful party, did not submit his own Bill of Costs for comparison purposes. In determining the expectation of the parties, it is always helpful to the court if the losing party shows what his costs were with respect to the same matter: Work Price v. Mariner’s Haven Inc., [2004] O.J. No. 5528 at para. 13.

[12] In Serra v. Serra, 2009 ONCA 395 at para. 8, the Ontario Court of Appeal provided these overarching comments with respect to costs rules:

Modern costs rules are designed to foster three fundamental purposes:

(i) to partially indemnify successful litigants for the cost of litigation;

(ii) to encourage settlement; and

(iii) to discourage and sanction inappropriate behaviour by litigants.

[13] In this case, Wall seeks costs on an elevated basis. As Epstein J.A. stated for the Court in Davies v. Clarington (Municipality), 2009 ONCA 722, [2009] O.J. No. 4236 at para. 28:

This court, following the principle established by the Supreme Court, has repeatedly said that elevated costs are warranted in only two circumstances. The first involves the operation of an offer to settle under rule 49.10, where substantial indemnity costs are explicitly authorized. The second is where the losing party has engaged in behaviour worthy of sanction.

[14] Modern costs rules with respect to estates were the subject of a review and summary by Strathy J. (as he then was) in Zimmerman v. Fenwick, 2010 ONSC 3855. As Strathy J. stated at para. 4:

The following principles are applicable to this issue:

(a) the costs of a proceeding are in the discretion of the court and the court may determine by whom and to what extent costs should be paid;

(b) estate litigation, like any other form of civil litigation, operates subject to the general civil litigation costs regime;

(c) as a general proposition, the principle that the “loser pays” applies to estate litigation;

(d) in the determination of costs, the court must have regard to the factors set out in Rule 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, but, at the end of the day, the court’s responsibility is to make an award that is fair and reasonable, having regard to all the circumstances, including the reasonable expectations of the parties;

(e) the court’s discretion to award costs on a full indemnity basis is preserved by rule 57.01(4)(d);

(f) full indemnity costs are reserved for those exceptional circumstances where justice can only be done by complete indemnity.

[Citations omitted.]

[15] As noted, the Ontario Court of Appeal dismissed Shaw’s appeal of his unsuccessful motion. The comments and findings of the Ontario Court of Appeal provide guidance as to how costs should be disposed of with respect to the motion. As Brown J.A. noted for the Court at para. 54:

In my view, Mr. Shaw should be personally responsible for the costs. In bringing a motion to strike out the notice of objections he acted unreasonably and in his own self-interest. In those circumstances, he is not entitled to indemnification by the estate.

[16] At para. 55, Brown J.A. provided reasons for his finding that Mr. Shaw acted unreasonably. As Brown J.A. continued at para. 58 “Layering a ‘summary judgment’ type motion on top of a ‘summary’ application generally does nothing more than increase costs and delay the final adjudication of the dispute on the merits.”

[17] After reviewing the history of the litigation and the steps taken by the Estate Trustee, Brown J.A. noted at para. 61 “That kind of litigation delay by an estate trustee who has been ordered to account for his administration of the estate is unacceptable.”

[18] As the Court of Appeal noted, this motion was akin to a summary judgment motion. As Regional Senior Justice Daley noted in Blake v. Blake, 2019 ONSC 4062 at para. 40:

There is no symmetry whatsoever as between the costs incurred to launch and argue a summary judgment motion as compared to the time and expense that may necessarily be incurred by a party responding to such a motion. This is especially so given the fact that for the responding party the outcome could be “all or nothing” and as they are required to put their best foot forward, significant time and expense is typically incurred by a respondent on a summary judgment motion.

Conclusion

[19] I am satisfied that this is one of those rare and exceptional cases where justice can only be done by complete indemnity and that those costs should be payable personally by Mr. Shaw. Words of Brown J.A. for the Court of Appeal at para. 54 bear repeating “In bringing a motion to strike out the notice of objections he acted unreasonably and in his own self-interest.” I am satisfied that the time spent and hourly rates sought by counsel for Wall were fair and reasonable under the circumstances. This was an “all or nothing” motion for her. I therefore fix costs against Ian Paul Shaw personally on a full indemnity basis in the amount of $47,963.67, inclusive of fees, disbursements and HST. Said costs are payable by Ian Paul Shaw to Elizabeth Wall within 30 days of the release of this endorsement.

MULLIGAN J.

Date: August 29, 2019