Court File and Parties

COURT FILE NO.: 17-74763 & 18-76346 DATE: 2022-01-12 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Christina Rudin-Brown and Jeanne Brown, Applicants AND Carolyn Emily Brown, Gordon Russell Brown and Public Guardian Trustee, Respondents

AND BETWEEN:

Gordon Russell Brown, Applicant AND Carolyn Emily Brown, Christina Rudin-Brown and Jeanne Brown and Public Guardian Trustee, Respondents

Counsel: Ian B. McBride and Natalie Scott, Counsel for Christina Rudin-Brown and Jeanne Brown Rodrigue Escayola, Counsel appointed under s. 3 of the Substitute Decisions Act for Carolyn Emily Brown Gordon Russell Brown, Self-represented

HEARD: In writing

SUPPLEMENTARY COSTS ENDORSEMENT

Justice H. J. Williams

[1] In my costs decision of September 24, 2021, I ordered Gordon Brown to pay Christina (“Missy”) and Jeanne Brown $150,000 in costs. I invited submissions in respect of how the costs should be paid, for example, whether they should be paid from the assets of Carolyn Emily Brown and considered an advance on Gordon’s future share of Carolyn’s estate.

[2] I have reviewed and considered Missy and Jeanne’s submissions of October 6, 2021. In addition to responding to my request for submissions in respect of how the costs should be paid, Missy and Jeanne asked me to reconsider para. 49 of my September 24, 2021 decision.

[3] I have also reviewed and considered Gordon’s submissions of October 21, 2021. Unfortunately, Gordon’s submissions did not assist with my assessment of Missy and Jeanne’s submissions and raised several issues unrelated to costs.

Reconsideration

[4] As I have not yet disposed of the issue of costs, I consider myself to have jurisdiction to consider Missy and Jeanne’s request to reconsider para. 49 of my initial costs decision.

[5] In para. 49, I ordered that the $200,000 in substantial indemnity costs I awarded to Missy and Jeanne be reduced by a $50,000 payment their lawyers had received from Carolyn’s assets under an order by Kershman J., who had case managed the parties’ applications.

[6] On January 15, 2020, Kershman J., had made the following order:

[1] THIS COURT ORDERS that each of MBC Law Professional Corporation, counsel for the Applicants, and Equilibrium Law, counsel for Gordon Brown, shall be paid a maximum of $50,000 out of Ms. Brown’s assets, in three installments, to be used towards the parties’ respective legal fees, disbursements and HST, to cover all legal services and associated disbursements, to bring the parties to the conclusion of trial in this matter, including any written submissions, costs submissions and any required attendance and re-attendance at trial. These funds shall be withdrawn and paid to counsel from Ms. Brown’s assets on a tax-efficient and prudent basis and delivered to each of MBC Law Professional Corporation and Equilibrium Law as follows…

[7] In my September 24, 2021 endorsement, I concluded that the two $50,000 payments to the parties’ law firms ordered by Kershman J. on January 15, 2020 were intended to ensure that the trial would proceed as scheduled and in an orderly manner and that Kershman J. also intended that Carolyn would contribute these amounts to the parties’ costs.

[8] Kershman J. had made a similar order in August 2018, except that, at that time, he had specified that the amounts paid to the lawyers would be treated as an advance to Missy and Gordon out of any future entitlement they would have to Carolyn’s estate. Missy had received $50,000 under the August 2018 order and Gordon had received $65,000. The January 15, 2020 order did not characterize the two $50,000 payments as advances against Missy and Gordon’s inheritances or otherwise contemplate that the amounts would be repaid, hence my conclusion that the payments were intended to be a contribution from Carolyn.

[9] Missy and Jeanne acknowledge that they received a total $100,000 contribution to their legal costs from Carolyn’s assets and that Gordon received $115,000.

[10] In their October 6, 2021 submission, Missy and Jeanne argue that in para. 49 of my endorsement, I had converted the January 15, 2020 $50,000 contribution to their costs into a $50,000 contribution to Gordon’s costs:

Your Honour also found that Justice Kershman’s order of January 15, 2020 for payment of $50,000 to each of Christina Rudin Brown and Gordon Brown was to be a non-refundable contribution to each party’s costs. (Paragraph 48)

Paragraph 49 of Your Honour’s endorsement effectively takes the $50,000 ordered to be paid to Christina Rudin-Brown as a contribution toward her costs and instead makes it a contribution towards Gordon Brown’s costs by reducing the substantial indemnity payment for which he would otherwise have been liable and thereby increases the out-of-pocket amounts of Christina Rudin-Brown and Jeanne Brown.

Christina Rudin-Brown and Jeanne Brown respectfully request that Your Honour revisit this part of the endorsement to, in their submission, give effect to Justice Kershman’s Order of January 15, 2020.

[11] In my view, Missy and Jeanne are asking me to ignore the fact that they have already received a court-ordered contribution of $50,000 toward their legal costs. The $50,000 Missy and Jeanne’s lawyers received pursuant to Kershman J.’s January 2020 order was not a payment on account made by Missy and Jeanne at their discretion or from their own funds. It was a court-ordered payment made directly to their lawyers from Carolyn’s assets.

[12] This is an unusual situation, but it seems to me that Missy and Jeanne are really asking for a $250,000 contribution to their costs, $200,000 from Gordon plus the $50,000 their lawyers received from Carolyn’s assets under Kershman J.’s January 15, 2020 order. As Missy and Jeanne’s actual costs were $260,580.24, $250,000 would be much closer to a full indemnity costs award than to the $200,000 in substantial indemnity costs I had concluded was fair and reasonable. Missy and Jeanne had requested substantial indemnity costs of $238,004.08. If I had awarded them the amount they had requested, and not deducted the $50,000 they had received from Carolyn, they would have received $288,004.08, almost $30,000 more than full indemnification and, obviously, a windfall for them. There was no provision in Kershman J.’s January 15, 2020 order for the $50,000 payments, or any portion of them, to be used for any purpose other than legal fees, disbursements and HST or to be refunded to Carolyn for any reason, such as a costs order in Missy and Jeanne’s or Gordon’s favour. I concluded that not to take the $50,000 payment into account would have been to over-compensate Missy and Jeanne.

[13] I am mindful that the Court of Appeal said in Boucher v. Public Accountants Council for the Province of Ontario, at para. 26, that the objective when awarding costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay, rather than an amount fixed by the actual costs incurred by the successful litigant. In my September 24, 2021 decision, before I considered the $50,000 payment from Carolyn’s assets, I had concluded that $150,000 in substantial indemnity fees was a fair and reasonable amount for Gordon to pay, then added disbursements and HST to arrive at a total award of $200,000. After I considered and deducted the $50,000 payment, Gordon obviously benefited by being required to pay $50,000 less than he otherwise would have, resulting in an amount which, in these circumstances, I ultimately concluded was the fair and reasonable amount for him to pay.

[14] I am satisfied that it was appropriate to account for the $50,000 Missy and Jeanne received from Carolyn and to have reduced their costs award. (I did not deduct the $50,000 Missy and Jeanne received under the August 2018 order because the order provided that it was to be treated as an advance on Missy’s inheritance.)

[15] However, the exercise of reconsidering my September 24, 2021 decision has led me to conclude that I had penalized Missy and Jeanne by deducting the entire $50,000 payment. The $50,000 was applied to their actual legal fees, disbursements and HST, while my costs award was for substantial indemnity fees, disbursements and HST. This means that, at least to the extent that the $50,000 payment from Carolyn’s assets was applied to their lawyers’ fees, as opposed to disbursements or HST, I had deducted an amount applied to their actual fees, on a dollar-for-dollar basis, from an amount awarded on a substantial indemnity basis, which was lower than the dollar-for-dollar value of their actual fees.

[16] I have no evidence of whether the $50,000 payment ordered by Kershman J. was applied to fees or disbursements or to both. However, I note that the $150,000 in substantial indemnity fees I awarded was 25 per cent less than Missy and Jeanne’s approximately $200,000 in actual fees, and also that, coincidentally, the $200,000 in substantial indemnity costs I awarded was close to 25 per cent (roughly 23 per cent) less than their actual fees, disbursements and HST of $260,580.24. In the circumstances, to address the issue I identified in the previous paragraph, I have concluded that a reduction of the $50,000 deduction by 25 per cent would be appropriate and fair.

[17] I will, therefore, deduct $37,500 (75 per cent of $50,000) and not $50,000 from Missy and Jeanne’s $200,000 substantial indemnity costs award. As a result, I award Missy and Jeanne $162,500 and not $150,000.

[18] Gordon shall, therefore, pay Missy and Jeanne substantial indemnity costs of $162,500, inclusive of fees, disbursements and HST.

How should the costs be paid

[19] I am satisfied that, for the reasons in paras. 8 and 9 of Missy and Jeanne’s submission of October 6, 2021, it would be appropriate for the $162,500 costs to be paid in accordance with the proposal in paras. 6 and 7 of their submission.

[20] Missy and Jeanne shall prepare a draft order and forward it to Gordon for approval. If Gordon has not approved the order within 10 days, Missy and Jeanne may send the order to me for my consideration at scjassistants@ontario.ca.

Released: January 12, 2022 H. J. Williams J.