COURT FILE NO.: 19-0048
DATE: 20220118
SUPERIOR COURT OF JUSTICE - ONTARIO
BETWEEN: DONNA MAY DONALDSON and DONNA MAY DONALDSON as litigation guardian for MELBA ELIZABETH LANGDON, Applicants
-and-
KEVIN M. CAMERON and PRIMERICA LIFE INSURANCE COMPANY OF CANADA, Respondents
AND
COURT FILE NO.: 19-0073
BETWEEN: KEVIN M. CAMERON AND KEVIN M. CAMERON, in his capacity as attorney for property and personal care of CHERYL CAMERON, Applicants
-and-
DONNA MAY DONALDSON AND DONNA MAY DONALDSON, in her capacity as attorney for property and personal care of CHERYL CAMERON, Respondents
BEFORE: Madam Justice Heather J. Williams
COUNSEL: Jonathan Collings, for the Applicants in 19-0048 and the Respondents in 19-0073
Edward Conway, for the Respondents in 19-0048 and the Applicants in 19-0073
HEARD: In writing
COSTS ENDORSEMENT
Overview
[1] Donna May Donaldson and her brother Kevin M. Cameron brought competing applications in respect of the proceeds of two life insurance policies owned by their late mother, Cheryl Cameron (“Cheryl”). Ms. Donaldson and Mr. Cameron both also sought orders for an accounting relating to the time the other had acted as Cheryl’s attorney under a power of attorney for property.
[2] I declared Ms. Donaldson to be the beneficiary of a $100,000 policy.
[3] I set aside a change of beneficiary designation under a $24,000 policy. Ms. Donaldson had prepared a written designation in February 2017 to change the beneficiary from Mr. Cameron to their aunt, Melba Elizabeth Langdon. Ms. Langdon, who is incapable of managing her own affairs, lives with Ms. Donaldson. I found that Ms. Donaldson failed to rebut a presumption that the designation had been signed by Cheryl under suspicious circumstances. I declared Mr. Cameron to be the beneficiary of the $24,000 policy.
[4] Neither Ms. Donaldson nor Mr. Cameron had appeared to appreciate that Ms. Donaldson was never a co-beneficiary with Mr. Cameron of the $24,000 policy but rather the “contingent” beneficiary. This misapprehension was the death knell not only for Ms. Donaldson’s argument that she was entitled to 50 per cent of the proceeds of the $24,000 policy but also for Mr. Cameron’s argument that Cheryl had intended him to be the co-beneficiary of both policies.
[5] At Mr. Cameron’s request, Ms. Donaldson had produced hundreds of pages of Cheryl’s banking records and receipts for various expenditures. Mr. Cameron had then prepared a detailed spreadsheet which he said itemized Ms. Donaldson’s wrongful use of Cheryl’s money. Ms. Donaldson retained an accountant who prepared a report which concluded that Ms. Donaldson’s use of Cheryl’s money, for the most part, appeared to be reasonable.[^1] The parties and the accountant were all cross-examined.
[6] I found that neither Ms. Donaldson nor Mr. Cameron had standing to seek relief in respect of the other’s conduct while acting as Cheryl’s attorney. Ms. Donaldson and Mr. Cameron had both sought relief that might have been available to Cheryl’s estate but was not available to either of them personally. Neither Ms. Donaldson nor Mr. Cameron had named Cheryl’s estate as a party to their application, although, during the application hearing, Mr. Cameron’s counsel had proposed to Ms. Donaldson’s counsel that they consent to doing so before I released my decision. Ms. Donaldson’s counsel properly refused. The estate would not have been added in either event.
The parties’ positions
[7] Ms. Donaldson argues that although success on the applications was divided, she was more successful than Mr. Cameron. Ms. Donaldson seeks substantial indemnity costs of $31,164.58. Alternatively, she argues that because she was awarded 80.645 per cent of the available insurance proceeds, she should be awarded 80.645 per cent of her substantial indemnity costs, or $25,132.68. Ms. Donaldson says that Mr. Cameron acted unreasonably and extended the duration of the litigation by taking unnecessary steps. Ms. Donaldson argues that any costs awarded to her should be paid from Mr. Cameron’s share of the $124,000 insurance proceeds, which were paid into court in July 2019.
[8] Mr. Cameron seeks full indemnity costs of $62,099.20. He says the court should consider an offer to settle he made in November 2019. He says Ms. Donaldson should have agreed to his successful request to adjourn the hearing in July 2019. He also says Ms. Donaldson made numerous statements under oath “that proved to be false with strong indications of fabrication.”
A brief summary of the law with respect to costs
[9] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C. 43, provides that the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court. Although discretionary, a court must fix costs on a principled basis. (Davies v. Clarington, 2009 ONCA 722, at para. 40.)
[10] Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, sets out the factors the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing, in exercising its discretion under section 131 of the Courts of Justice Act to award costs:
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(g) a party’s denial of or refusal to admit anything that should have been admitted;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs.
[11] Elevated (substantial or full indemnity costs) should only be awarded if Rule 49.10 is triggered by an offer to settle or if there is a clear finding of reprehensible conduct on the part of the party against which the costs order is being made. (Davies, at para. 40.)
[12] The fixing of costs does not begin and end with a calculation of hours times rates. The objective 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. (Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 26.)
[13] The overriding principle is reasonableness. Otherwise, the result could be contrary to the fundamental objective of access to justice. (Davies, at para. 52.)
Analysis
[14] Although this litigation mushroomed to include a costly and ultimately futile battle over which sibling had misappropriated more of Cheryl’s money while acting as her attorney, to the extent that the parties had a legitimate dispute, and they did, it was over two life insurance polices worth a total of $124,000.
[15] The dispute arose when Mr. Cameron informed the life insurance company that he objected to a payout of the proceeds of the two policies based on the beneficiary designations in place at the time of Cheryl’s death. Mr. Cameron’s objection prompted Ms. Donaldson’s application. Mr. Cameron then launched his application, in which he requested an order requiring Ms. Donaldson to pass accounts relating her role as attorney for property of Cheryl from March 2014 until Cheryl’s death. Mr. Cameron pleaded that Ms. Donaldson had used Cheryl’s funds improperly and for her own benefit and that, consequently, a constructive trust in his favour should be imposed on 50 per cent of the proceeds of both insurance policies.
[16] Mr. Cameron’s objection to the payout of the $24,000 policy was legitimate. I found that there were suspicious circumstances surrounding the execution of the February 2017 beneficiary designation which substituted Ms. Langdon for Mr. Cameron as the beneficiary of the policy. Ms. Donaldson believed, incorrectly, this change would result in Ms. Langdon joining her as a co-beneficiary of the policy. I have already noted that Ms. Langdon is incapable of managing her affairs and that she lives with Ms. Donaldson. I found that Ms. Donaldson failed to prove: (a) that Cheryl knew and approved of the change of beneficiary designation; and (b) that Cheryl had testamentary capacity at the relevant time. Although Cheryl signed the designation, the designation was in Ms. Donaldson’s handwriting, not Cheryl’s. None of these findings reflects well on Ms. Donaldson.
[17] Mr. Cameron, however, added significantly to the complexity and the cost of the litigation by raising issues requiring production of years of financial records and receipts without having any legal basis for doing so. It is unfortunate that Ms. Donaldson, rather than objecting to Mr. Cameron’s demands, produced the documents he asked for and made misappropriation allegations of her own. In her costs submissions, Ms. Donaldson conceded that her claims against Mr. Cameron had also been dismissed, but argued that at least hers were of a much smaller magnitude.
[18] I have already mentioned that, prior to the hearing of the applications, when I asked the parties’ counsel how their clients interpreted the words “contingent beneficiary” in Cheryl’s application for insurance, neither party had appeared to appreciate that Ms. Donaldson was a “contingent beneficiary” under the $24,000 policy and not a co-beneficiary with Mr. Cameron. This meant that Ms. Donaldson had no interest in the $24,000 policy as long as the primary beneficiary was alive. This misunderstanding had a bearing on the relief sought by both Ms. Donaldson and Mr. Cameron: the main thrust of Mr. Cameron’s argument was that he should receive 50 per cent of the proceeds of both policies; Ms. Donaldson argued that she was entitled to 100 per cent of the $100,000 policy and 50 per cent of the $24,000 policy.
[19] In terms of relative success, Ms. Donaldson won the battle over one of the insurance policies and Mr. Cameron over the other. In the circumstances, I do not consider the face value of the policies to be relevant to the measurement of the parties’ success and I consider the parties to have been equally successful in respect of the policies. Mr. Cameron’s application was entirely unsuccessful, however, rather than objecting to Mr. Cameron’s standing to raise his allegations of misappropriation, Ms. Donaldson had climbed on board and made similar allegations against Mr. Cameron. I found that neither had a right to claim the relief they were seeking. Although, in respect of the misappropriation allegations, Ms. Donaldson could fairly complain about her brother that “he started it”, she had poked him right back and, in the end, neither was any further ahead.
[20] Mr. Cameron’s November 20, 2019 offer to settle does not help his cause. Mr. Cameron offered to settle the applications based on a payment by Ms. Donaldson of $49,000.00. Of the $124,000 in insurance proceeds, Mr. Cameron was awarded $24,000. He did not beat his offer.
[21] Mr. Cameron says Ms. Donaldson should not have objected to his adjournment request in July 2019. Mr. Cameron had sought the adjournment to prepare his ultimately unsuccessful application for a hearing. I am not prepared to find that Ms. Donaldson’s position, which had been that the hearing in respect of the insurance policies could proceed because it was distinct from the issues raised by Mr. Cameron in his application, was unreasonable.
Disposition
[22] Having considered the applicable Rule 57.01(1) factors, the parties’ submissions, and the facts of this unfortunate case, I have concluded that the most just and reasonable disposition is for both parties to bear their own costs, including the costs of the July 2019 adjournment.
Date: January 18, 2022
COURT FILE NO.: 19-0048
DATE: 20220118
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN: DONNA MAY DONALDSON and DONNA MAY DONALDSON as litigation guardian for MELBA ELIZABETH LANGDON, Applicants
-and-
KEVIN M. CAMERON and PRIMERICA LIFE INSURANCE COMPANY OF CANADA, Respondents
AND
COURT FILE NO.: 19-0073
BETWEEN: KEVIN M. CAMERON AND KEVIN M. CAMERON, in his capacity as attorney for property and personal care of CHERYL CAMERON, Applicants
-and-
DONNA MAY DONALDSON AND DONNA MAY DONALDSON, in her capacity as attorney for property and personal care of CHERYL CAMERON, Respondents
costs endorsement
Madam Justice Heather J. Williams
Released: January 18, 2022
[^1]: On cross-examination, the accountant had disclosed that he had employed Ms. Donaldson’s husband for the past three years and that Ms. Donaldson’s husband had done contract work for him prior to that time. It was not necessary for me to address the issue of the accountant’s independence because, as it turned out, his opinion was not relevant to an issue I had to decide.