ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE ESTATE OF ELIAS GEFEN, deceased
BETWEEN:
YEHUDA GEFEN
Applicant
– and –
HENIA GEFEN, personally and as estate trustee of the Estate of ELIAS GEFEN, HARVEY GEFEN and HARRY GEFEN
Respondents
Christopher Graham, for the Applicant
Ronald Moldaver Q.C., for the Respondent Henia Gefen in her personal capacity and as estate trustee of the estate of Elias Gefen
Aaron Blumenfeld, for the Respondent Harry Gefen
Lisa Filgiano, for Ronald Rutman, Estate Trustee During Litigation (ETDL) of the Estate of Elias Gefen (appearing occasionally)
SUBMISSIONS ON COSTS HEARD/ READ: March 28 and 29, 2019 (at closing of trial in Action No. CV-13986451/CV-14-005107-00ES)
Application under Part V of the Succession Law Reform Act, Ontario
KIMMEL J.
reasons for decisiON – cOSTS OF dEPENDENT’S sUPPORT MOTION
1By order of Mesbur J. dated December 14, 2016, the costs of Yehuda Gefen’s successful application for dependent’s support (heard November 23, 2015 and decided December 3, 2015) were reserved to the trial judge in Superior Court of Justice Action No. CV-13986451/CV-14-005107-00ES (the “main action”). The trial of the main action was heard by me between November 13, 2018 and March 29, 2019. Yehuda Gefen passed away on May 6, 2016 and his estate is representing his interests in these related proceedings, including for the recovery of the costs he incurred to secure the interim dependent’s support that he was found to be entitled to pursuant to the December 2015 Order of Mesbur J.
2This request for costs was briefed as part of the closing submissions at the trial of the main action that dealt with the remaining Gefen family members’ competing claims to the estates and assets of Elias and Henia Gefen. This decision is being released at the same time as my Reasons for Judgment in the main action and my decision in another related application that was also heard at the same time, involving the interests of Yehuda’s estate in a property known as 11 Townsgate Drive, under Ontario Superior Court File No. 05-76/16, 2019 ONSC 6017. Terms not otherwise defined in these reasons shall have the same meaning as ascribed to them in my Reasons for Judgment in the main action, at 2019 ONSC 6015.
Positions of the Parties
(i) Yehuda’s Estate
3Yehuda’s estate is seeking costs against Henia personally and/or against the estate of Elias Gefen, as follows:
a. costs of $104,620.96 on a full indemnity basis, consisting of counsel fees of $89,225, HST of $11,599.25 and disbursements of $3,796.71; or
b. alternatively, costs of $84,456.11 on a substantial indemnity basis, consisting of counsel fees of $71,380.00, HST of $9,279.40 and disbursements of $3,796.71; or
c. in the further alternative, costs of $71,016.21 on a partial indemnity basis, consisting of counsel fees of $59,486.29, HST of $7,733.21 and disbursements of $3,796.71.
4These costs are sought on the basis that Yehuda was successful on his dependent’s support application in obtaining a lump sum urgent one-time support payment of $5,000.00 plus $5,000.00 in monthly support payments commencing December 1, 2015, despite the vigorous and extreme positions taken on behalf of Henia in opposition to any relief being granted.
5Harvey’s affidavits filed in support of Henia’s opposition are described as “a vituperous diatribe demeaning Ed’s entire life.” I understand “vituperative” to mean containing or characterized by verbal abuse. That description is a fair characterization of the allegations that were made on Henia’s behalf against Yehuda on this application.
6Yehuda’s estate contends that, in the normal course, costs of a dependent’s relief application are paid out of the estate on a substantial indemnity basis. (See Cummings v. Cummings (2004), 2004 9339 (ON CA), 69 O.R. (3d) 398 (C.A.)) Yehuda’s estate also relies upon Yehuda’s offer made on October 9, 2015 prior to the hearing of the application, that was not accepted, to extend the ongoing arrangement for interim support for six months at $5,500.00 per month plus a lump sum payment of $8,984.63 to cover immediate expenses, as another ground for an elevated costs award.
7Yehuda’s estate relies upon the decision of Greer J. in Morassut v. Jaczunski et al., 2013 ONSC 6624 at paras. 12-341 in support of the request for full indemnity costs where the opposing parties’ position was reprehensible and worthy of sanction. This being an example of the type of circumstance in which the Supreme Court has said that elevated full indemnity costs may be warranted. (See Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66)
(ii) Harry
8Harry is seeking $12,215.00 in all-inclusive costs on a partial indemnity basis for his support of Yehuda’s application. These are costs that were notionally incurred by Harry for work done by his wife Susan Drummond (who is a law professor) in her capacity as a consultant to Harry’s lawyers of record in these proceedings, with whom she has an agreement that she will be paid out of any costs recovered.
(iii) Henia
9The position taken on Henia’s behalf is that opposition was appropriate given that there was no provision in Elias’ 2007 wills for Yehuda’s support and that any costs awarded should be awarded against Elias’ estate, not Henia personally. Henia also contends that the amount of any costs awarded should be no more than $15,000.00, having regard to reasonable expectations, said to be based, in part, on costs awards in other similar cases.
10The only case cited in support of Henia’s position is Clarington, in which the Court of Appeal set aside an award of full indemnity costs at trial and substituted a lower scale of partial indemnity costs based on the accepted overarching principle that an award of costs must be determined to be fair and reasonable in all of the circumstances of the case, including with regard to the expectation of the parties and, in particular, those of the losing party. (See Clarington at paras. 20 and 49-55; see also Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A)).
11With respect to the request for costs by Harry, the position taken on behalf of Henia is that there was no lis between Henia and Harry on this support application and that Harry is not entitled to costs from Henia for his support of Yehuda’s motion.
Analysis and Disposition
12I see no reason to depart from the normal course award of substantial indemnity costs to the successful party on this dependent’s support application. The fact that costs were reserved by Mesbur J. to the return of the application does not lead me to infer (as has been suggested on Henia’s behalf) that she was undecided about whether Yehuda was entitled to costs. This deferral of costs on the interim application made sense when there were matters in dispute still to be determined by the judge hearing the application. Those issues became moot when Yehuda died.
13The elevated scale of substantial indemnity costs is supported by the general approach referenced in Cummings. An elevated scale of substantial indemnity costs is also supported by the positions taken by Henia and the way the application was opposed and conducted on her behalf, which tended to unduly lengthen the proceedings leading up to and including the hearing of the application.
14The importance of this application to Yehuda is apparent from the observations of Mesbur J. in her Endorsement of December 3, 2015 (at paras. 6-11): Yehuda was a 64-year old man with no source of employment who had suffered a stroke in 2012 and a heart attack in 2013 and had various other medical needs for which he required financial assistance and had only $2,000.00 in his bank. “This lack of funds and the termination of the without prejudice support payments have prompted this motion for dependent’s support.”(at para.11) The application was necessitated by the cessation of voluntary support payments that had been made for a period after Elias Gefen died, and by the uncertainty of the interim without prejudice support arrangements which had been intermittent. Yehuda’s offer to settle, while not exceeded in the end result, is another relevant consideration in the exercise of my discretion and the determination of the scale and quantum of costs that is fair and reasonable.
15This was not a situation of divided success as has been suggested on Henia’s behalf, simply because Yehuda did not get the higher amount of support payments that he had asked for. Henia opposed the application on the threshold question of whether Yehuda was a dependent, and secondarily challenged the amount of support to be provided.
16A party opposing a dependent’s relief application should reasonably expect that the applicant, if successful, would be awarded substantial indemnity costs and should reasonably expect those substantial indemnity costs to be significant in a situation such as this where the opposition is fairly characterized “a vituperous diatribe demeaning Ed’s entire life.”
17In the exercise of my discretion with respect to the costs of this application under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, and the factors enumerated under Rule 57.01, and having regard to the overarching principle of what I consider to be fair and reasonable in the circumstances of this case, I am awarding Yehuda (now his estate) his substantial indemnity costs of this application fixed in the amount of $84,456.11 on a substantial indemnity basis, consisting of counsel fees of $71,380.00, HST of $9,279.40 and disbursements of $3,796.71.
18There has been no suggestion that Yehuda’s lawyer did not do the work for which fees are now claimed on Yehuda’s behalf, as detailed in the Bill of Costs filed on the application. I have not been directed to any bill of costs or costs outline provided by Henia’s counsel against which to compare the costs she actually incurred, which might have provided a benchmark for her expectations. Nor have I been directed to any other analogous cases decided in this context in which the costs awarded were in the $15,000.00 range that Henia’s counsel suggested be awarded. In the absence of such and having regard to the positions taken and time spent over the more than two years that the dependent’s support issues were being litigated (from September 2014 to May 2016), I find the costs that are detailed in the bill of costs submitted by Yehuda’s counsel to be reasonable.
19Yehuda’s estate seeks an order that Henia pay these costs personally, as opposed to them being paid by Elias’ estate. Since she is the sole beneficiary of Elias’ estate, they would come out of the same pocket in either event. However, I am mindful of the concerns noted in the December 2015 Endorsement of Mesbur J. and her rationale for ordering that Henia pay the dependent’s support, because the ETDL had no funds in hand because the estate had already been distributed to Henia. Although I am aware from the evidence in the main action that some assets and receipts may have since come into the hands of the ETDL, the amounts are unknown to me. The costs of this application should be paid out of the net assets of the estate of Elias Gefen, whether they are currently in Henia’s hands or in the hands of the ETDL. In these particular circumstances where the assets of the estate of Elias Gefen are held by two parties, I order that Henia and the estate of Elias Gefen are jointly and severally liable to pay the costs of Yehuda’s dependent’s support application that I have fixed and awarded herein.
20The Court of Appeal has endorsed awarding costs against estate trustees personally in other circumstances, where for example it is considered to be unfair to have the estate (and its other beneficiaries) bear those costs (see McDougald Estate v. Gooderham (2005), 2005 21091 (ON CA), 255 D.L.R. (4th) 435 (Ont. C.A.)). This is an equally compelling circumstance in which to make Henia, as estate trustee, personally liable where she has distributed assets from the estate to herself and others, creating cash flow difficulties in the remainder of the estate that is being managed by the ETDL.
21I anticipate that there will be cost submissions from the parties in the main action, including Henia and Yehuda’s estate, and that there may be considerations that will impact the timing of the payment of other amounts owing between the parties. However, these costs of the dependent’s support application have been long outstanding, and I see no reason why they should not be paid forthwith, regardless of the timing of any other payments arising out of my decision in the main action and/or in the Townsgate application.
22I find that Harry is not entitled to be awarded any costs of Yehuda’s dependent’s support application. While it is to be commended that he would be willing to devote time and resources to support his older brother’s request, he had no direct interest or lis in the issues or the outcome. The affidavit he filed, if it was needed from an evidentiary perspective, was as a witness on the application and Yehuda’s lawyer could have taken responsibility for its preparation and defence on cross-examination. No costs are awarded to Harry on this dependent’s support application.
Kimmel J.
Released: October 17, 2019
COURT FILE NO.: 05-107/14
DATE: 20191017
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE ESTATE OF ELIAS GEFEN, deceased
BETWEEN:
YEHUDA GEFEN
Applicant
– and –
HENIA GREEN, personally and as estate trustee of the Estate of ELIAS GEFEN, HARVEY GEFEN and HARRY GEFEN
Respondents
Application under Part V of the Succession Law Reform Act, Ontario
REASONS FOR DECISION – costs OF dependent’S support MOTION
Kimmel J.
Released: October 17, 2019
Footnotes
- Aff’d at 2015 ONSC 502 (Ont. Div. Ct.), 7 E.T.R. (4th) 173, at paras. 61-62.