Court File and Parties

Court File No.: CV-13-1222-00ES Date: 2022-01-06

SUPERIOR COURT OF JUSTICE - ONTARIO

Re: Grier v. Grier

Before: Fowler Byrne J.

Counsel: Douglas G. Loucks, for the Applicant David James Grier Frances M. Wood, for the Respondent the Public Guardian and Trustee, as litigation guardian for Janet Lynn Grier Jerald W. MacKenzie, for the non-party Sandra Gail Grier

COSTS ENDORSEMENT

[1] This costs endorsement follows my decision on two motions, one brought by the Applicant, and one brought by the Respondent, both seeking the court’s approval of a settlement as they were both under a disability.

[2] The non-party Sandra Grier (“Sandra”) opposed both motions. After a very lengthy process, and numerous attendances, both motions were granted on August 25, 2021. The parties were invited to make costs submissions in writing. This decision is the result of my consideration of those submissions and the Bill of Costs they provided. Sandra did not file a Bill of Costs although subparagraph 133(h)(3) of my August 25, 2021 decision specifically required her to so.

[3] A lengthy background of these proceeding is not necessary here. It has already been set out in a number of the previous endorsements. [1] It was an estate matter where two children, David Grier (“David”) and Janet Grier (“Janet”), were disputing their others’ entitlement and the quantum of their father’s estate. The non-party, and David and Janet’s only other sibling, Sandra Grier (“Sandra”) reappeared after many years of disinterest to oppose the settlement that was finally reached between David and Janet. As a result, what commenced as two simple “basket” motions ended up being a contested proceeding requiring numerous attendances and interim motions spanning a year and a half.

[4] David, the Applicant, seeks the court’s approval of partial indemnity costs in the sum of $8,000 being paid by the estate, a further $27,100 payable by David to his solicitor for his work leading up to the settlement, and a further sum of $75,452.05 for his lawyer’s work thereafter, on a substantial indemnity basis, which he seeks be paid entirely from Sandra’s share of their father’s estate.

[5] Janet, the Respondent, seeks the court’s approval of partial indemnity costs in the sum of $8,000 being paid by the estate, a further $35,388.76 payable by Janet to her solicitor for her work leading up to the settlement, and a further sum of $4,972 for her lawyer’s work thereafter, on a substantial indemnity basis, which she seeks be paid entirely from Sandra’s share of her father’s estate.

[6] In addition, Janet seeks the court’s approval for the payment of $8,049.84 to Jeffrey Feldman, a forensic accountant, from Janet’s share of the estate. Finally, Janet’s previous lawyer, Mr. Campbell, seeks payment of his account, in the sum of $19,640.90.

[7] Sandra submits that each party should bear their own legal fees.

Law

[8] A court is required to approve any settlement for a party under a disability, which includes the approval of any fees charged to that client. The evidence on a motion for the court’s approval must provide sufficient evidence to demonstrate that the fees and disbursements which the lawyers propose be paid are reasonable in the circumstances: Rivera v. LeBlond (2007), 44 C.P.C. (6th) 180, at para. 27-28.

[9] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides that orders in respecting the costs of, and incidental to, a proceeding are in the discretion of the court, and are subject to the provisions of that act or the rules of court.

[10] In awarding costs in estate litigation, the court is to carefully scrutinize the litigation and, unless certain public policy considerations apply, follow the costs rules that apply to civil litigation. The public policy considerations at play in estate litigation are primarily of two sorts: (1) were the difficulties or ambiguities that give rise to the litigation are caused, in whole or in part, by the testator; and (2) the need to ensure that estates are properly administered. In these circumstances, costs may properly be paid by the estate. A blended costs award, where a portion of the costs are paid by the losing party and the balance is paid out of the estate, is also possible if one or more of the public policy considerations are engaged: McDougald Estate v Gooderham (2005), 255 D.L.R. (4th) 435 (Ont. C.A.) at paras. 78-80; Neuberger Estate v York, 2016 ONCA 303, 131 O.R. (3d) 143, at paras. 24-5.

[11] The general rule with respect to costs in civil litigation is that costs will be awarded to the winning party on a partial indemnity basis.

[12] In some, generally rare circumstances, however, the level of costs may be increased to substantial indemnity or even a full indemnity basis. This can happen when the provisions of rule 49.10 Rules of Civil Procedure, R.R.O 1994, Reg. 194 are triggered. It can also occur when there has been a clear finding of reprehensible conduct on the part of the party against whom the cost award is being made and the court wants to mark its disapproval of that conduct: Davies v. Clarington, 2009 ONCA 722, 100 O.R. (3d) 66, at para. 40; Akagi v. Synergy Group (2000) Inc., 2015 ONSC 771, at para. 31.

[13] As stated by Justice Armstrong in Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.), fixing costs involves more than merely calculating the docketed hours and using the cost grid. At para. 24., Justice Armstrong cites, with approval, para. 4 of the Court of Appeal’s previous decision Zesta Engineering Ltd. v. Cloutier (2002), 21 C.C.E.L. (3d) 161:

In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.

[14] A further consideration is that both Janet and David are seeking that their costs be paid by Sandra, who is not a named party in this litigation.

[15] The court has already established that it has jurisdiction to make an order against a non-party when they act as a “straw man” for the real litigant, or in situations where the non-party has initiated or conducted litigation in such a manner as to amount to an abuse of process: 1318847 Ontario Limited v. Laval Tool & Mould Ltd., 2017 ONCA 184, 134 O.R. (3d) 641, at paras. 2, 59-60, and 66.

[16] There is an additional circumstance in which a costs order can be made against a non-party such as Sandra, which is particular to estate matters. As a party with a financial interest in an estate, Sandra was entitled to notice of a Motion for Directions, which David brought in June 2014, although she was not named as a party. She was given notice of that motion, but she did not attend or take part in any manner. Nonetheless, in his Order Giving Directions, Justice Trimble properly directed that Sandra and her son Garret Grier (“Garret”) be served with the Order Giving Directions, and that they served with the notification of any settlement reached or of any judgement obtained. When served with notice of the settlement, Garret indicated he had no interest in participating in the litigation although he received nothing from the estate. By contrast, when Sandra was served with the settlement in 2020, and she attempted to block the court’s approval of it and actively tried to set the settlement aside.

[17] As a matter of procedural fairness, a non-party must be given notice of a litigant’s intention to seek a costs award against him or her: Laval Tool & Mould Ltd. at para. 79. This procedural fairness was afforded to Sandra. After Sandra was provided notice of the settlement, she was served with all court proceedings and had full opportunity to participate. The only instance in which she was not served with a complete court document was when she was originally served with the Motions for approval, and not all affidavits were included. She moved for an order that the complete motion records be served on her – and she succeeded.

[18] Accordingly, in the circumstances where a person with a financial interest in an estate, although not named as a party, is put on notice of all proceedings, and fully participates, it is appropriate that this non-party be entitled to both request costs but also be the subject of a costs order, if deemed appropriate by the judge.

Analysis

[19] At the time this motion was brought, the value of the estate was approximately $360,000. The approved settlement was that the estate would be divided equally between Sandra, David, and Janet.

[20] There are two sets of costs to be approved for the parties. First, when David and Janet first brought these motions, in writing, they also sought the court’s approval for the costs they were to pay their counsel for their work from the commencement of litigation to the settlement. As Sandra did not participate in these seven years of litigation, she sought no such costs. Had the settlement been approved at that time, that would be all the costs that the lawyers were entitled to.

[21] The matter did not end there though. Given that Sandra contested the court’s approval, David, Janet, and Sandra also incurred another set of legal costs, for which they seek the court’s approval. David and Janet ask that these costs be paid by Sandra on a substantial indemnity basis, from Sandra’s share of the estate. Sandra does not seek any costs from David or Janet.

A. Costs of Action up to Motion for Approval

[22] In the original motions for approval filed by David and Janet, both agreed that they would each receive $8,000 from the estate towards their costs, and that the remainder would be paid from their share of the estates. This is reasonable as part of the initial litigation involved two competing wills and issues of capacity, where were issues caused by the testator.

i. Mr. Loucks’ Account

[23] Mr. Loucks has acted for David, and then for his litigation guardian, from the beginning of the litigation. This litigation between the various siblings started in 2013 and has been ongoing since that time. Mr. Loucks agreed to reduce his account by approximately 45% and seeks the sum of $22,000 plus H.S.T, for a total of $27,100. This is in addition to the $8,000 to be paid from the estate. Given the years of litigation and the discount provided, I find these costs to be reasonable. David’s litigation guardian is aware of these fees and consents to same.

ii. Mr. Campbell’s Account

[24] Mr. Campbell was Janet’s former lawyer when the litigation commenced. At that time, Janet had capacity to instruct counsel. In late 2014, Janet decided to change lawyers and retain Ms. Wood. At that time, Mr. Campbell had an outstanding account of $19,640.90. To facilitate the transfer, Ms. Wood verbally agreed to protect the account. When Janet lost capacity to provide instructions, and the PGT took over to provide instructions, Ms. Wood took the position that she could no longer protect this account and that it would be subject to the court’s approval.

[25] Mr. Campbell has filed an affidavit in support of his account which showed his account from March 2014 to September 2015. The details supporting the time are cursory and summary in nature. It is difficult to understand how such an account could have been amassed in only 6 months without better evidence.

[26] Nevertheless, Janet had capacity when this account was incurred. She was not found to be incapable to provide instructions until November 2015 when the PGT took over. Janet did nothing to assess the account or otherwise dispute the time charged. I see no reason to discount or disallow this account.

iii. Ms. Wood’s Account

[27] In addition to the $8,000 to be paid from the estate, Ms. Wood sought the additional sum of $35,388.76 for Janet’s costs, an additional sum of $1,000 for preparation of her motion for approval, plus the sum of $8,049.84 to cover the cost of the forensic accountant who provided an opinion on whether anything was missing from the estate.

[28] I see no difficulty in allowing for payment of the invoice by the forensic accountant. The report he produced addressed the key allegation the litigation against David and was the impetus to settlement. I also note that the accountant has discounted his fee by $1,000.

[29] For Ms. Wood’s account, I note that it has already been subjected to write-offs of 67 hours, and she claims pro bono work valued approximately $7,500. The hourly rate charged is appropriate given her years of experience as well as her use of lower-priced lawyers in her office. She has claimed over 120 hours, but that is over six years, and with respect to a document heavy estate. The total account rendered is for $38,485.76, yet she is only claiming $35,388.76, which is an additional reduction of $3,000. I note that the PGT is aware of the size of the account and consents to same. Accordingly, I find that this sum is appropriate.

B. Costs of Motion after Service on Sandra

i. Mr. Loucks’ Account

[30] David has requested costs on a substantial indemnity basis in the sum of $75,542.05, or in the alternative, on a partial indemnity basis, in the sum of $50,574.70, which he asks to be paid from Sandra’s share of the estate.

[31] Mr. Loucks’ hourly rate is reasonable given his experience. He claims approximately 150 hours of time devoted to this matter since Sandra had an opportunity respond to the motion for approval. This amount of time is high, but not unreasonably so given the numerous appearances required due to Sandra’s inability to follow court-ordered directions and timelines. I do note that in this same period, Janet’s counsel has claimed only approximately 25 hours. This smaller number is a direct result of the PGT’s decision to not oppose a number of Sandra’s procedural motions in order to save on costs and to simply support David’s position. Accordingly, David counsel undertook the lion’s share of the work in opposing Sandra’s position, which Janet supported.

[32] The issues before me were important as they concerned the protection of parties under a disability. The issues involving the approval of the settlement were not complex, but were made complex by Sandra’s attempt to freeze David’s accounts, the numerous adjournments she sought, her inability to follow court-ordered deadlines, and her reluctance to put her position forward in an affidavit and serve it on the other parties. Sandra disagreed with this court’s decision to not grant her ex parte request for an injunction freezing David’s assets, and rather than comply with the order to serve her materials on the parties, she repeatedly avoided doing so, causing the other parties considerable expense. Details of her failure to serve her materials at the appropriate time is set out in my earlier endorsement at 2021 ONSC 5743.

[33] The reason behind Sandra’s objection to the settlement is her firm belief that David has stolen from the estate and from their father before his death. Originally, Janet believed this too, and when the PGT took over her representation, they hired a forensic accountant to determine if there was any validity to this claim. In the end, the accountant was able to conclude that only approximately $30,000 were unaccounted for. Given that this was only a difference of $10,000 per party, Janet decided it was not worth the added expense of litigation. Accordingly, she settled.

[34] Sandra refused to accept the forensic account’s conclusions and relied on documents that pre-dated the relevant time period to allege theft on a larger scale by David. Her position in this litigation was also unreasonable in that she appeared to be advocating for Garret receiving a portion of the estate, while Garret indicated that he had no interest in any of it.

[35] Accordingly, I have no difficulty finding that an award of substantial indemnity costs is properly made against Sandra. Her decision to not serve her responding materials on Janet and David, despite being ordered to do so, and her failure to meet court ordered deadlines was deliberate, improper, and vexatious. Despite this court’s attempts to give all parties a full opportunity to respond and deal with the issues in a timely and costs efficient manner, Sandra continued to delay: She failed to respond, brought additional motions without leave, and commenced a companion action against the Estate Trustee During Litigation seeking its assistance to continue her dispute with David. Sandra’s conduct between early September until the argument of the motion in February 2021, and thereafter, in addition to her unsubstantiated allegation of fraud as against David, warrant an award of substantial indemnity.

[36] That being said, I see no reason to grant substantial indemnity costs to David for the entirety of his costs. Sandra always had a right to oppose this motion for approval, and the exercise of this right should not result in a cost order that is punitive. The time incurred by David to deal with Sandra’s numerous delays and adjournments leading up to the final hearing, and the additional delays afterward when she continued to not follow court ordered directions for the filing of materials and the timelines set, though attract substantial indemnity costs.

[37] I have also examined the time claimed for certain steps in David’s Bill of Costs and find that at times they are excessive. In particular, the time spent on preparing for the final argument, including the facta, the time spent on responding to Sandra’s written submissions in May 2021, and the time David claims for his costs submissions and reply costs submissions, are on the high end and should be reduced appropriately.

[38] Accordingly, I will grant an order that Sandra pay a large portion of David’s costs, but the remainder of his reasonable costs must be born by him.

ii. Ms. Wood’s Account

[39] For the period following the summer of 2020, Janet claims her costs on a substantial indemnity basis in the sum of $4,972. This number is substantially lower than what is claimed by David for a number of reasons. First, Ms. Wood only charged the PGT the hourly rate of $200, which is less than one-half of her market rate. Secondly, as indicated, the PGT made the decision to avoid escalating the conflict, and to simply support David’s position without having to incur unnecessary costs. Nonetheless, this court takes note that for the most part, Sandra’s materials were excessive, repetitive, and disorganized, causing other counsel, if not this court, to expend numerous hours just to be able to adequate address what was being alleged.

[40] The same considerations that are made with respect to Janet’s costs are also made with respect to David’s costs. As indicated, substantial indemnity costs against Sandra are warranted. Given the modest amount claimed, there is no need to discount this sum.

Conclusion

[41] It is noted that Sandra’s main opposition to a cost award being made against her is that she was poorly advised by her counsel. Unfortunately, this court is not in a position to reduce any costs award that that reason. Firstly, that is a matter as between Sandra and her counsel. Secondly, no party has asked that Sandra’s counsel pay these costs, and if they had, Sandra’s counsel should have had an opportunity to respond.

[42] A final comment is required to address the issues of proportionality and reasonableness of the costs incurred. When the motion for approval was first served, the value of the estate was $360,000. Since that time, Sandra has also involved the Estate Trustee During Litigation in another lawsuit, which will no doubt result in the estate being further diminished. While each party is entitled to one third of the estate, at this time I can only predict that their respective share will be closer to $110,000 or $100,000.

[43] While this sum is still significant to the parties, it is unfortunately insignificant considering the legal fees expended to get to the settlement. David and Janet finally decided rationally in May 2020 to settle the matter, cut their losses, and salvage what was left of the estate, at no cost to Sandra. Unfortunately, Sandra was not ready to bury the hatchet quite yet and insisted on continuing the internal family infighting for almost a further 2 years. Her decision, however ill-advised, will severely impact her share of the estate. While this court is hesitant to approve any costs award that significantly reduces a party’s entitlement, her actions should not be to the detriment to the parties who wished to put the litigation to bed.

[44] For the foregoing reasons, I make the following orders with respect to all motions that were before me on February 12, 2021:

a) From the estate, in which include the RRIF held by James William Grier at his death, the sum of $8,000 shall be paid to Janet and the sum of $8,000 shall be paid to David, for their costs;

b) Thereafter, and subject to any order, judgment or endorsement that flows from Court File No. CV-20-004114 (which involves the Estate Trustee During Litigation), the residue of the estate shall be divided evenly between David, Janet, and Sandra and each parties’ costs for all outstanding motions, actions or applications as between them, shall be paid as follows:

i. From Sandra’s share of the estate: I. The sum of $4,972, to be paid to Ms. Wood, for Janet’s legal expenses following settlement; and, II. the sum of $45,000 to be paid to Mr. Loucks, for a portion of David’s legal expenses following settlement;

ii. From Janet’s share of the estate, the following shall be paid: I. the sum of $8,049.84 to be paid to SLF Financial Services Inc.; II. the sum of $35,388.76 to be paid to Ms. Wood for Janet’s legal expenses prior to settlement; and, III. the sum of $19,640 to be paid to Mr. Campbell for Janet’s legal expenses prior to settlement;

iii. From David’s share: I. The sum of $27,100 to be paid to Mr. Loucks, for David’s legal expenses prior to settlement; and II. The further sum of $20,000 to be paid to Mr. Loucks, for David’s legal expenses after the settlement, which are not payable by Sandra;

c) Any other costs orders that have not already been satisfied shall be paid out of the liable party’s share of the estate.

Fowler Byrne J. DATE: January 6, 2022

Footnotes

[1] See 2020 ONSC 3301, 2020 ONSC 4799, 2021 ONSC 5743.