Court File and Parties
Estates Court File No.: 05-107/14 CV: 13-486451 DATE: 2020-02-14
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: HENIA GEFEN in her personal capacity and as estate trustee of the Estate of ELIAS GEFEN, Plaintiff
AND:
ARIE GAERTNER, MILLER, CANFIELD, PADDOCK and STONE LLP, THE JEWISH HOME FOR THE AGED, BAYCREST HOSPITAL, BAYCREST CENTRE FOR GERIATRIC CARE, YEHUDA GEFEN (Deceased) and HARRY GEFEN, Defendants
AND:
HARRY GEFEN, Plaintiff by Counterclaim and in Third Party Action
LUCIA MARIE SAUNDERS, as Estate Trustee of the Estate of Yehuda Gefen, deceased, Plaintiff by counterclaim and in Third Party Action
AND:
HENIA GEFEN, in her personal capacity and as estate trustee of the Estate of ELIAS GEFEN, HARVEY GEFEN, ASHLEY GEFEN, DUNDAS-THICKSON PROPERTIES LTD., 1393522 ONTARIO LIMITED and 1585708 ONTARIO LIMITED, Defendants by Counterclaim and HARVEY GEFEN and ASHLEY GEFEN, Third Parties
BEFORE: Kimmel J.
COUNSEL: Ronald Moldaver, Q.C., for Henia Gefen, in her personal capacity and as estate trustee of the estate of Elias Gefen Harvey Gefen representing himself and Ashley Gefen Aaron A. Blumenfeld / Aidan Fishman, for Harry Gefen Christopher Graham, for Lucia Maria Saunders Estate Trustee of the Estate of Yehuda Gefen Lisa Filgiano, for Ronald Rutman, Estate trustee during litigation (ETDL) of the Estate of Elias Gefen No one appearing for the defendants Dundas-Thickson Properties Ltd., 1393522 Ontario Limited and 1585708 Ontario Limited
READ: Cost submissions dated December 4, 5, 18, 19, and 20, 2019 and January 14, 2020
COSTS ENDORSEMENT
1I released Reasons for Judgment in this matter on October 17, 2019. I provided directions regarding written costs submissions on November 4, 2019 and have subsequently received them. This costs endorsement deals with the costs of the main action, counterclaims and third-party actions. Each party is seeking an award of costs in their favour as against opposing parties.
The Competing Claims for Costs
Henia Seeks Costs in Excess of $4.3 Million from Harry and Yehuda’s Estate
2Henia is seeking full, or alternatively, substantial indemnity costs of her defence of the counterclaims asserted by Harry Gefen and the Estate of Yehuda Gefen, including a reversal of interlocutory costs awards made against her by Justices Newbould (June 29, 2017 and August 18, 2017), Pattillo (October 31, 2018) and Penny (September 26, 2018).
3According to Henia’s Costs Outline, her substantial indemnity costs of the counterclaim, inclusive of HST, are $1,020,629.67 (calculated at 90% of her actual costs). Her partial indemnity costs of the counterclaim, inclusive of HST, are $680,419.78 (calculated at 60% of her actual costs). Her full indemnity costs of the counterclaim, inclusive of HST, are indicated to be $1,134,032.97. Henia’s disbursements of the counterclaim are indicated to be $17,529.70 inclusive of HST.
4According to Henia’s Costs Outline, the interlocutory costs awards made against her that she seeks to have reversed are as follows:
(a) Newbould J. $101,340.50 (to Harry) and $51,588.12 (to Yehuda’s estate).
(b) Patillo J. $144,015.34 (to the ETDL), $45,000 (to Harry) and $25,000 (to Yehuda’s estate).
(c) Penny J. $41,470.80 (to the ETDL).
5Henia also seeks an order requiring Harry and Yehuda’s estate to pay any amounts that she or Elias’ estate are ordered to pay to any of the trial witnesses. She further seeks full indemnification for all costs paid to the ETDL who she maintains was appointed at the behest of Harry and with the support of Yehuda and his estate and whose fees and disbursements will otherwise be a burden on the estate of Elias Gefen, of which Henia is currently the sole beneficiary. Henia estimates that the costs payable to the ETDL will be approximately $2.8 million.
6Henia concedes that she should pay partial indemnity costs to Harry and Yehuda’s estate for the main action which she effectively abandoned at trial. She suggests that a set off be allowed for these costs as well as for the costs that have been awarded in favour of Yehuda’s estate in the Dependent’s Relief Application (which I fixed in the amount of $84,456.11 in my endorsement of October 17, 2019 in action no. 05-107/14) and for any costs that may be awarded in favour of Yehuda’s estate in the Townsgate Application, under Court File No. 05-76/16 (although Henia’s initial position is that there should be no costs of the Townsgate Application).
Harvey and Ashley Seek Costs in Excess of $4.8 Million from Harry and Yehuda’s Estate
7Adopting the same approach as Henia to their costs, Harvey and Ashley seek their full, or alternatively substantial indemnity, costs of the counterclaim/third-party claims asserted against them by Harry and Yehuda’s estate. They also seek the reversal of the same interlocutory costs awards made by Justices Newbould, Pattillo and Penny. They seek a further order that Harry and Yehuda’s estate pay any amounts that they or Elias’ estate are ordered to pay to any of the trial witnesses. They also seek full indemnification for the costs of the ETDL, who they maintain was appointed at the behest of Harry and with the support of Yehuda and his estate and whose fees and disbursements they are concerned will otherwise be a burden on the estate of Elias Gefen, of which Harvey is a contingent beneficiary. The reversal of interlocutory costs awards and claim for indemnification of amounts payable to the ETDL sought by Harvey and Ashley are duplicative of those same amounts claimed by Henia.
8According to their Costs Outline, Harvey and Ashley’s substantial indemnity costs of the counterclaim/third-party actions, inclusive of HST, are $1,494,552.94 (calculated at 90% of their actual costs, the amounts of which have been certified by the lawyers who previously represented them). Their partial indemnity costs of the counterclaim/third-party actions, inclusive of HST, are $996,359.68 (calculated at 60% of their actual costs). Their full indemnity costs of the counterclaim/third-party actions, inclusive of HST, are indicated to be $1,660,605.40. Harvey and Ashley’s disbursements of the counterclaim/third-party actions are indicated to be $46,389.89, inclusive of HST.
Harry Seeks Costs in Excess of $1 Million from Henia, Elias’ Estate and Harvey
Harry’s seeks:
(a) his substantial indemnity costs of the main action against Henia and Elias’ estate in the amount of $443,857.40, or alternatively partial indemnity costs of $365,362.66, based on his assessment that just over 26% of the trial time was spent defending the claims in the main action.
(b) his partial indemnity costs of his counterclaim relating to the alleged mutual will agreement and secret trust against Elias’ estate in the amount of $365,362.66, based on his assessment that the same percentage of trial time was spent advancing these counterclaims for which he seeks to hold the estate responsible, even though he was unsuccessful.
(c) his substantial indemnity costs of the counterclaim relating to allegations of unconscionable procurement against Harvey in the amount of $265,484.80, or alternatively those costs on a partial indemnity basis in the amount of $188,024.75.
9Harry asks that no costs be awarded against him and that any costs awarded in his favour to be paid by Elias’ estate be secured by a charge against the estate property, second in priority to the charge granted by Justice Penny in favour of the ETDL whose fees he maintains should be paid by Elias’ estate.
10Harry claims that the total costs he has incurred in connection with the main action, counterclaims and third-party claims, excluding fees in respect of interlocutory costs awards already made are $1,175,154.67 on a partial indemnity basis and $1,659,279.99 on a substantial indemnity basis. These amounts are comprised of all fees and taxes charged by outside counsel of record, their disbursements totalling $160,795.29 and a special disbursement to be paid to Susan G. Legal Consulting Limited of $360,187.50 for the legal support provided by Harry’s wife, Professor Susan Drummond, to his trial counsel in lieu of an associate at the law firm working with trial counsel.
Yehuda’s Estate Seeks Costs in Excess of $1 Million from Henia, Elias’ Estate and Harvey
11Yehuda’s estate seeks his costs:
(a) of defending the main action on a full indemnity basis in the amount of $328,615.40 from Henia and Elias’ estate, based on his assessment that just over 26% of the trial time was spent defending the claims in the main action;
(b) of the issues in the counterclaims and third-party actions that related to causes of action for matters that occurred before Elias died (such as the mutual wills and secret trust claims), against Elias’ estate, on a partial indemnity basis in the amount of $268,075.95, based on his assessment that just over 26% of the trial time was spent on this aspect of the counterclaims, even though they were not successful; and
(c) of the issues in the counterclaims and third-party actions that related to estate administration matters after Elias’ death against Harvey, or alternatively against Elias’ estate on a partial indemnity basis in the amount of $466,001.18.
12Yehuda’s estate asks that no costs be awarded against him or his estate. The Bill of Costs for Yehuda’s estate discloses his total all-inclusive legal costs of the action, counterclaims and third-party claims to be $1,313,218.78.1
The ETDL’s Fees and Disbursements
13The order appointing the ETDL and orders made since the appointment order, make it clear that the ETDL is to be paid out of the estate of Elias Gefen. The ETDL has been granted a first charge over certain assets of the estate as security for payment of its fees. The ETDL objects to any order for payment of its fees and disbursements in the first instance from any other source. The ETDL also objects to any shifting of responsibility for any interlocutory costs awards in its favour that have already been made. This includes some of the costs awards made against Henia, Elias’ estate and/or Harvey that have yet to be paid and for which they are seeking to shift responsibility to Harry and/or Yehuda’s estate.
14The ETDL takes no position regarding any requests for indemnification that one party may wish to make against another regarding the re-distribution of responsibility for amounts it is paid from the estate of Elias Gefen.
15It is agreed among all parties that the quantum of the ETDL’s fees and disbursements is to be determined by the estates court when the ETDL’s accounts are passed.
Requests for Payment of Professional Fees and Disbursements by Non-Party Witnesses
16The ETDL has received various requests for reimbursement from the estate of Elias Gefen for the fees of professionals who were subpoenaed at trial and/or who were asked to produce their files by the litigants. These include claims by:
(a) Nestor Wolicki for costs of his counsel totalling $47,800.72 plus his personal attendance costs based on his $550.00 hourly rate, totalling a further $4,950.00;
(b) Marshall Swadron for his attendance costs of $4,056.63 and disbursements, with fees calculated at his hourly rate of $600.00; and
(c) Hull & Hull LLP for $28,315.61, comprised of $10,025.93 in preparation and attendance time and related disbursements plus $18,289.68 to comply with a mid-trial production order that was made, at his hourly rate of $950.00 and his associate’s hourly rate of $425.
17Mr. Wolicki was originally summonsed to trial by counsel for Henia. Mr. Swadron was summonsed to trial by Harvey. Mr. Hull says he was summonsed to trial by Harry, but it was pointed out that he was called to testify in-chief by Henia.
18None of the party litigants consent to the payment out of the estate of Elias Gefen of the costs claimed by the professionals who testified at the trial. The parties suggest that each of them should receive only the prescribed attendance money under the Rules, or whatever else may have been agreed to as between the witness and the party who called them.
Entitlement to Costs
Costs of the Parties
19The Court of Appeal has adopted a more modern approach to costs in estates litigation confirmed in its decision of Sawdon Estate v. Sawdon, 2014 ONCA 101, following earlier decisions in McDougald Estate v. Gooderham (2005), 2005 CanLII 21091 (ON CA), 255 D.L.R. (4th) 435 and Zimmerman v. McMichael Estate, 2010 ONSC 3855. This line of authority makes it clear that, unless one of the public policy considerations at play in estates litigation applies, the costs in estate matters shall follow the same costs rules that apply in civil litigation and are in the discretion of the court having regard to s. 131 of the Courts of Justice Act and Rule 57 of the Rules of Civil Procedure. See Sawdon at paras. 84-85. As a general proposition, therefore, the “loser pays” principle applies to estate litigation.
20As between the Gefen family members who were the parties to the trial proceedings, there is no clear “winner” or “loser”:
a) Henia’s claim in the main action was dismissed. She never formally abandoned it and resisted the motion for a non-suit by Harry and Yehuda’s estate at the outset of the trial.
b) Harry’s and Yehuda’s estate’s claims counterclaims against Henia were dismissed in their entirety.
c) Harry’s and Yehuda’s estate’s claims against Harvey in the third-party actions for maintenance and secret trust were dismissed, but the claim for unconscionable procurement was successful.
d) Harry’s and Yehuda’s estate’s claims against Ashley in the third-party actions were dismissed, but Ashley was represented by the same counsel as Harvey and her entitlement to costs is bound up with his.
21I am not ordering any party to pay the costs of any other party since there was no clear “winner” or “loser”. Where there is no clear “winner” or “loser”, the parties may be ordered to each bear their own costs. But if there is a justification for doing so, in estates litigation the court may still consider whether it is appropriate for some or all of their costs to be paid out of the estate.
22Two important policy considerations in estates litigation were in play in this case: the policy that seeks to give effect to valid wills that reflect the intention of competent testators and the policy that seeks to ensure the proper administration of the estate at issue. (Swadon Estate, at para. 85)
23Elias’ testamentary intentions and understandings were called into question by his own actions prior to his death. Some of these actions were documented by the lawyer who he retained, Arie Gaertner, while others were documented by his son Harvey in the handwritten document of August 17, 2011 that was implicated in many of the issues that were decided at the trial. The uncertainty created by Elias’ actions before his death was at the heart of this litigation. Furthermore, while Henia seeks to downplay the significance of her claims asserted in her personal capacity and as estate trustee of Elias’ estate in the main action, they were the catalyst for these proceedings. These proceedings did engage the court in an exploration and determination of the testamentary intentions of Elias and Henia and these proceedings were concerned with the proper administration of Elias’ estate.
24In the absence of a clear winner or loser among the remaining parties and having regard to these estates-related policy considerations at play, I find that this is one of those cases where it is appropriate for some of the litigation costs to be paid out of the estate. That said, I agree with the submission of Henia’s counsel that discontented and resentful putative beneficiaries (a description that can, at different times in the course of the events leading up to this litigation, be applied to each of Harvey, Harry and Yehuda) cannot reasonably expect to litigate over an estate without some impunity for the overall cost of the litigation – in other words, the estate will not necessarily bear the burden of all of the parties’ costs. This is not an endorsement of the use of the estate as a piggybank to cover costs.
25As in all civil litigation, in determining costs in estates matters the court must consider, among other factors under Rule 57, the principle of indemnity and the overarching principle that an award of costs be fair and reasonable, having regard to the circumstances and the reasonable expectations of the parties. (See, for example, Swadon, at para. 84)
Costs of the ETDL
26The ETDL is entitled to have its costs paid out of Elias’ estate, once the quantum has been determined through the established process in the estates court and pursuant to the governing orders.
Fees and Disbursements of Professional Non-Party Witnesses
27The ETDL has provided authority for a trust or estate being ordered to pay for the reasonable preparation and time for a professional to attend as a witness when attending to give evidence about work done on behalf of the estate or trust. See Primo Poloniato Grandchildrens’ Trust (Trustee of) v. Browne, 2011 ONSC 4400, at para. 54 and Guttman v. Dube, 2013 ONSC 7573, at para. 8.
28This line of authority is consistent with the mid-trial award that I made in my November 19, 2019 endorsement in respect of the $18,289.68 sought by Hull & Hull LLP for its fees and disbursements incurred in the production of its records during the trial, which I have already ordered to be paid by Elias’ estate (or by Henia if the estate does not have the assets or cash available to satisfy these costs, for which she can then seek recovery or reimburse herself from the estate). These were files that had been identified as relating to the administration of the estate of Elias Gefen.
29The professionals who are seeking to be compensated for preparing for and attending at trial were summonsed as witnesses in respect of work that they performed for Henia. The need for them to testify arose out of the broader litigation relating to Elias’ estate.
30Henia complains that it is a disproportionate burden on her as the sole beneficiary of the Elias’ estate for the estate to bear the cost of the professional fees of these witnesses. I disagree. These witnesses are all lawyers who were at various times retained by her in both her personal capacity and in her capacity as the estate trustee. Two of them were summonsed to testify at trial by her lawyer. This is not an unfair or disproportionate burden for her or the estate to bear.
31The third-party witnesses who have claimed costs shall have their costs for preparing for and appearing at trial paid out of the estate, but not their costs for external legal counsel who may have been involved prior to and during their preparation and testimony. They are not entitled to recover their costs for outside counsel.
32The amounts these non-party witnesses are entitled to recover from Elias’ estate for their fees and disbursements referable to their respective attendances at trial are as follows:
a) Nestor Wolicki for the cost of his preparation for and attendance at trial in the all-inclusive amount of $4,950.00;
b) Marshall Swadron for the cost of his preparation for and attendance at trial in the all-inclusive amount of $4,056.63; and
c) Hull & Hull LLP for the cost of their preparation for and Ian Hull’s attendance at trial in the all-inclusive amount of $10,025.93
33This is not an invitation for other lawyers who testified to come forward now and claim their costs for preparing for and attending trial. The time for doing so has now past.
34As previously indicated, Hull & Hull LLP is also entitled to be paid its costs and disbursements incurred to comply with the mid-trial order of November 19, 2019 in the all-inclusive amount of $18,289.68.
Scale and Quantum of Costs of the Parties
Scale of Costs
35There are no Rule 57 or Rule 49 factors at play in this case that would justify an award of costs in favour of any party for more than their partial indemnity costs. The conduct or allegations that each seeks to attribute to the other side to justify a higher scale of substantial or full indemnity costs in their favour cuts both ways.
36Each of the parties made unproven serious and degrading allegations against the parties opposite, including accusations involving dishonesty and intentional misconduct. No party made an offer that attracts the automatic cost consequences of Rule 49. All parties took positions at different times that tended to lengthen the proceedings. No party deserves to be rewarded by a higher scale of costs for the bad behaviour of the others, where their own behaviour is subject to the same criticism.
Quantum of Costs of Harvey, Harry and Yehuda’s Estate
37The reasonableness of the quantum of costs sought by each party can be assessed in the first instance by the amount of costs sought by the opposing parties. The partial indemnity costs of Harry and Harvey and Yehuda’s estate are each indicated to be slightly in excess of $1 million, all inclusive.
a) Harvey’s (and Ashley’s) Costs
38The costs outline submitted by Harvey and Ashley for the counterclaims/third-party claims indicates their partial indemnity costs to be $996,359.68 in fees and $46,389.89 in disbursements, both inclusive of HST, for a total of $1,042,749.57.2
b) Harry’s Costs
39Harry’s costs outline indicates his partial indemnity costs of the action and the counterclaim to be $1,175,154.67, inclusive of all fees and disbursements. This includes a disbursement charge of $360,187.50 for Susan Drummond’s work in lieu of an associate at trial. While I agree that there is authority for awarding costs for this type of legal support, I do not agree that it should be flowed through as a disbursement at what amounts to a full indemnity rate. Using the same percentages applied by the parties in their costs outlines to calculate partial indemnity costs at 60% of full indemnity, in rough terms the appropriate amount to be recovered for this disbursement to Susan G. Legal Consulting is $216,112.50. There may be a more precise way of calculating this adjustment, but I consider this conceptual adjustment to be sufficient for the purposes of my determination of the amount of Harry’s costs award, which is discretionary. This results in adjusted partial indemnity costs indicated for Harry of $1,031,084.67, all-inclusive.
c) Yehuda’s Estate’s Costs
40Yehuda’s partial indemnity costs of the main action and the counterclaim are indicated to be $1,002,153.08, all inclusive.
d) Considerations Impacting Relative Cost Recoveries
41It is not realistic, or possible based on the material filed, for the court to attempt to value the relative success and loss of each party on each of their claims and attempt to apportion relative cost recoveries based on the value of what was “lost” or “won”. Having reviewed the costs outlines, I also do not consider it to be realistic, or possible based on the material that has been field, for the court to attempt to parse through the relative amount of pre-trial and trial time spent on the main action as opposed to the counterclaims and third-party actions.
42As indicated earlier in these reasons, I do not accept the attempts to downplay the significance of the action commenced by Henia and effectively abandoned at trial. Viewed objectively, the issues raised in that action were as important and significant to the defending parties as were the issues raised in the counterclaims and third-party actions to the parties defending them. All of the issues involved factually and emotionally complex considerations and interrelated historical narratives. Many of the witnesses had evidence to give on more than one issue. The historical context was common to all of the claims. At different times, each of the parties could be said to have taken positions that tended to lengthen the proceedings, either by unnecessary opposition or by over-reaching and a lack of proportionality in their requests
43Taking into account all of the submissions and the matters noted above, in the exercise of my discretion, each of Harvey (and Ashley), Harry and Yehuda’s estate shall be entitled to recover their partial indemnity costs of these proceedings, in the amounts as indicated immediately above, from Elias’ estate.
44It is significant to my decision that the amounts awarded are all within $50,000.00 of each other (in other words, roughly equivalent). It is also significant to my decision that each of these three litigants will be left with the responsibility for paying some of their own costs of these proceedings. In order to ensure that outcome, to the extent that any of Harvey and Ashley’s legal costs have been paid, directly or indirectly, out of the assets of Elias’ estate or by Henia,3 those paid amounts are to be accounted and deducted from the partial indemnity costs awarded herein in their favour so that the same legal costs are not effectively paid a second time by the estate if they were paid by estate interests or assets in the first place.
e) Henia’s Costs
45The partial indemnity costs indicated for Henia total $697,949.48, inclusive of all fees, disbursements and taxes but these are said to be only for her defence of the counterclaim and do not include her costs of the abandoned main action.4 However, since Henia is the sole beneficiary and estate trustee of Elias’ estate nothing is achieved and no money will change hands if I award her partial indemnity costs to be paid out of the estate. As her lawyer points out, this will be coming from the same pocket which presumably has been or will be paying her legal fees throughout, on a full indemnity basis.
46There is no impediment to Henia’s wealth, including that which she inherited from Elias, being used to pay her lawyers and to pay any other costs awarded against her. This would include the costs I have already ordered her to pay to Yehuda’s estate in the Dependent’s Relief Application and the costs that she is being ordered to pay to Yehuda’s estate in the Townsgate application, by the companion costs endorsement that I am releasing in that proceeding. This would also include any prior interlocutory costs awards made against Henia in these related proceedings that remain unpaid.
47Henia’s counsel argued that it is unfair for her to directly and indirectly bear the burden of the costs of these related proceedings. I am aware that the effect of the costs awards I have made will mean that Henia is bearing a significant proportion of the costs of all of the parties, although each of her sons will also bear some of their own costs. However, I do not consider this to be inequitable or unfair. Henia’s net wealth is derived primarily from Elias’ estate. The issues being litigated are traced back to Elias’ residency at Baycrest Hospital and things that he did before he died concerning his estate planning that created or contributed to confusion and discord among the Gefen family members. Furthermore, the litigation began with Henia suing her two youngest sons for over $2 million, a claim that she pursued until the trial. She is not an innocent bystander in all of this.
Other Cost Considerations
Prior Interlocutory Costs Awards Against Henia, Elias’ Estate and Harvey
48I am not persuaded of any reason to justify the court revisiting previously made interlocutory costs awards in these proceedings. The Rules contemplate that costs will be fixed and awarded for interim steps taken in civil litigation that are not dependent on the outcome of the litigation. None of the previously made awards (that Henia, Harvey and Ashley seek to reverse or for which they seek indemnity from Harry and Yehuda’s estate) were said to be “in the cause” or otherwise indicated to be contingent upon the outcome of these proceedings. Those costs awards stand and are to be paid by the parties against whom they were made to the parties in whose favour they were made.
The ETDL’s Fees and Expenses
49Justice Newbould’s order appointing the ETDL specifies, at paragraph 1(b) that the costs of the ETDL shall be paid out of the assets of Elias’ estate, subject to the ETDL’s passing of accounts. That order has never been appealed or varied. The Estates Act, R.S.O. 1990, c. E.21, s. 28, under which the ETDL was appointed, provides for the remuneration of an ETDL out of the property of the deceased. The subsequent order of Justice Penny granting security for payment of the ETDL against the assets of Elias’ estate reinforced that the ETDL was to be paid from Elias’ estate.
50Henia and Harvey seek to shift the responsibility of the fees and disbursements of the ETDL from Elias’ estate to Harry and Yehuda, on the basis that the ETDL was not needed and that his role was dependent upon Harry and Yehuda’s success on their claim that a mutual will agreement existed between Henia and Elias that impacted Henia’s ability to deal with the estate assets.
51Given the nature and complexity of the issues in this litigation and the family dynamic, I am not in a position to determine that this appointment was necessitated by one particular claim. While the alleged mutual will agreement may have been a consideration at the time of the appointment of the ETDL, there were other factors at play at the time (for example, the statutory stay and preservation issues arising under s. 72 of the Succession Law Reform Act in the context of Yehuda’s application for dependant support). The very existence of Henia’s claim against Harry and Yehuda which created a dispute among the estate trustee and contingent beneficiaries also cannot be ignored. There are also matters that came to light afterwards (such as the circumstances that gave rise to the claims of unconscionable procurement against Harvey) that lend support to the need for an independent trustee. These various considerations cannot now all be disentangled from each other to suggest that the ETDL’s appointment was entirely unwarranted because the mutual will agreement was not proven.
52I do not see it as akin to an interlocutory injunction for which the parties seeking the appointment (in this case Harry and Yehuda’s estate) should be held accountable for costs. Furthermore, for reasons previously indicated, the outcome of the litigation was not entirely against them.
53I decline to make any order altering the ultimate responsibility for the ETDL’s fees and disbursements, which lies with Elias’ estate.
Costs of the Cost Submissions
54Harry seeks approximately $24,000 in costs for the cost submissions made. I do not believe that any other party has made a direct request for these costs. I do not consider this to be an appropriate case in which to order costs of the cost submissions. In the exercise of my discretion, each party shall bear their own costs of the cost submissions they made.
Kimmel J.
Date: February 14, 2020
Footnotes
- The costs summary table provided indicates the full indemnity costs to be $1,228,468.78, which appears to take into account some discounts from counsel.
- The criticism by Harry and Yehuda’s estate that the costs outlines were not signed by the lawyers whose fees and disbursements are being claimed was rectified in the Reply Cost Submissions of Henia, Harvey and Ashley Gefen that attached the lawyers’ certificates. The costs outlines provided are sufficient for me to determine the costs, in light of the approach I have adopted. While Rule 57.01(5) requires a bill of costs to be served by a party who is awarded costs, that entitlement to costs is only now being decided. A bill of costs could have been requested from Henia and Harvey if opposing parties sought to challenge the reasonableness of the amounts claimed, but given the overall consistency in the amounts indicated in the parties’ costs outlines, that exercise would likely not have proven fruitful and, in any event, was not undertaken.
- For example, there was evidence at trial from Mr. Gottschalk of legal bills from lawyers representing Harvey being paid out of some of the corporate accounts, although this could not be conclusively determined based on the evidence before the court. I made no findings but, to the extent that this occurred, Harvey should not recover those costs a second time from the estate if they have already been paid by the estate indirectly through the corporate accounts.
- It is unclear whether any costs were carved out of costs outline of Henia’s counsel for the Townsgate Application and Dependent’s Relief Application. Since all of Henia’s costs are being paid by her and/or out of Elias’ estate, I do not need to determine whether these amounts have been included or not, as I might have otherwise needed to do.