Court File and Parties

COURT FILE NO.: CV-21-00662960 DATE: 20230116 SUPERIOR COURT OF JUSTICE – ONTARIO TORONTO ESTATES LIST

RE: Riley Jenna Steinhards by her litigation guardian Saiva Steinhards, Plaintiff AND: Kimberly Whaley, Kelly Whaley Senike, Raymond Render, Ted R. Laan, Deborah Scott, Wenda Yenson and Dickson Appell LLP, and the Estate of Edwin Joseph Whaley, deceased, Defendants

BEFORE: C. Gilmore, J.

COUNSEL: Christopher M. B. Graham, Counsel for the Plaintiff (Responding Party) Brian Shiller, Counsel for Deborah Scott (Moving Party) Marc Kestenberg, Counsel to Graham Law Alex Smith, Counsel for Kimberly Whaley

HEARD: In Writing

Endorsement

Introduction

[1] This endorsement relates to the summary judgment motion brought by Deborah Scott (“Ms. Scott”) on December 9, 2022. At the conclusion of the motion, I gave an oral ruling indicating that I would be granting partial summary judgment in favour of Ms. Scott and dismissing the cross-claims of Mr. Laan and Ms. Yenson with reasons to follow. The reasons were released on December 14, 2022. The entire proceeding was settled at mediation on December 19, 2022 subject to court approval.

[2] In my reasons I requested that Mr. Graham and Mr. Shiller provide written submissions on costs on a scheduled turnaround. Those submissions have now been received. LawPro is not seeking costs in relation to Mr. Kestenberg’s appearance.

[3] Ms. Scott seeks her full indemnity costs of $282,633.92. She seeks costs on this elevated scale because of accusations of both criminality and immorality which were found to be without foundation. Further, in the month leading up to the motion, the Plaintiff made new allegations against Ms. Scott including an allegation that she had or would receive pay offs totaling $750,000 in relation to the alleged conspiracy and that Ms. Scott owed a fiduciary duty to Mr. Whaley which she breached by actively lying with the intention of harming Riley.

[4] The Plaintiff concedes that Ms. Scott is entitled to some costs but only the partial indemnity costs of the action which total approximately $48,000. The Plaintiff’s view is that Ms. Scott is not entitled to any costs of the motion because of her request for costs against the Plaintiff’s counsel personally. That relief was never pursued and was groundless and misplaced in any event. The Plaintiff’s full indemnity costs for the motion only were $282,841.98.

The Positions of the Parties

Ms. Scott

[5] Ms. Scott was accused of intending to harm Riley (who was 11 at the relevant time) through lies, deceit, theft, fraud and elder abuse. Ms. Scott had extreme difficulty defending herself against these allegations as Riley’s counsel failed to provide particulars of the claims against her.

[6] After Riley’s Litigation Guardian (her mother Saiva Steinhards) was examined for discovery on June 1, 2022 it was clear that there was no evidence to support her allegations. Undeterred, Riley’s counsel filed a Responding Motion Record on November 15, 2022 with 10,567 pages of material in which Ms. Scott was repeatedly called a liar and accused of perjury.

[7] The Plaintiff served a supplementary motion record on November 21, 2022 with a further 2,459 pages of material. Ms. Scott’s counsel submits that this motion record contained nothing of substance but was intended to overwhelm Ms. Scott and drive up her costs.

[8] Cross-examinations for the motion took place on November 23 and 24, 2022. The Plaintiff was hostile, and her counsel obstructed the majority of questions rendering the examination mostly futile.

[9] In the month leading up to the hearing the Plaintiff made further allegations of criminality and immorality including a fabrication that Ms. Scott received a $250,000 payoff in relation to the conspiracy and then lied about it in her affidavit and called it a severance payment, an allegation that Ms. Scott was to receive a further $500,000 payment in relation to the conspiracy and that Ms. Scott breached her fiduciary to Mr. Whaley by going against his wishes and maneuvering to deplete his estate to Riley’s detriment.

[10] Throughout the Plaintiff’s material Ms. Scott was repeatedly called a liar and accused of acting in a manner to intentionally cause harm to Riley who was 11 years old at the time. All of those allegations were rejected by the Court.

[11] This was a high stakes case in which millions of dollars was claimed against the Defendants. The issues were complex and intertwined. The issues were very important to Ms. Scott as she had to fund the litigation herself whereas the other Defendants had personal financial means to do so or insurers.

[12] Ms. Scott alleges that the conduct of the Plaintiff in this matter has been high handed to the level of abusive including false allegations of theft, perjury, immorality, secret payments and an intricate conspiracy. She submits that many steps taken by the Plaintiff in the proceeding were improper or vexatious and included knowingly making false allegations, failing to answer undertakings in a timely manner, obstructing the cross-examination of Ms. Steinhards and bringing a motion to obtain documents that were part of the manufactured allegations.

[13] It must be noted as well that the Plaintiff delivered her motion record two months after receiving Ms. Scott’s motion record and three days before the original return date. Her factum was received only 36 hours before the motion was heard.

[14] Ms. Scott’s counsel has claimed costs for 407 hours of work in relation to the entire action and motion including 17 days of discovery. By comparison the Plaintiff’s Bill of Costs shows 491 hours of work for the summary judgment motion alone.

[15] Ms. Scott served an Offer to Settle on February 2, 2022 whereby the action would be dismissed against her on a without costs basis if the Offer was accepted before she served her Affidavit of Documents. Thereafter, she could accept the Offer if she agreed to substantial indemnity costs from the date of the Offer to the date of acceptance. The Plaintiff did not accept the Offer.

[16] Ms. Scott was forced to defend a myriad of false allegations and use all of her resources to do so. Both her reputation and financial security were at risk. Ms. Scott submits that the conduct of the Plaintiff should be censured by this Court given the results of the motion.

The Plaintiff

[17] The Plaintiff submits that Ms. Scott should receive her partial indemnity costs of the action but no costs for the summary judgment motion.

[18] The Plaintiff submits that it pursued the action against Ms. Scott in good faith. It was the co-defendants who included Ms. Scott in their emails, the To-Do List, called her a fiduciary and viewed her participation as critical. The documents initially received by the Plaintiff did not imply that Ms. Scott was acting in an agency role. Thus, the reason for including Ms. Scott in the Statement of Claim when it was issued in May 2021.

[19] Ms. Scott initially refused to provide any productions in relation to the “severance funds” but changed her position when the Plaintiff brought a refusals motion.

[20] Ms. Scott could have brought her motion months earlier. Had she done so, the Plaintiff would have had time to consider the possible exit of Ms. Scott from the litigation. Instead, Ms. Scott waited and brought her motion on September 12, 2022. The timing of the motion created problems for the Plaintiff who had other motions on the horizon and an 8-week trial looming.

[21] The Plaintiff denies that she failed to provide the particulars of her claim against Ms. Scott. The particulars were provided in her affidavit dated November 15, 2022. She also provided all of her undertakings. Attacks on her conduct during the litigation are without merit.

[22] Ms. Scott’s motion relief included a claim for costs against the Plaintiff’s lawyer personally. No evidence was filed in support of this claim nor was it pursued in written costs submissions. However, Plaintiff’s counsel was obliged to hire counsel to defend him in the event that such arguments were pursued. This was simply a tactic which should disentitle Ms. Scott her costs of the motion.

Analysis and Ruling

[23] Parties to litigation must be circumspect about making allegations of lies, deceit, perjury, theft and immoral conduct. This is because such allegations go to the very heart of a litigant’s reputation and character. The accused person has no choice but to vigorously defend the allegations. It becomes a risky venture because if the allegations are shown to be false, the Defendant is entitled to be indemnified at a higher scale.

[24] In this case, serious allegations were made against Ms. Scott with respect to a myriad of accusations generally related to improper conduct. The allegations were found to be without foundation and the case against her was entirely dismissed.

[25] Ms. Scott should never have been a party to this litigation. She was not a fiduciary, co-conspirator or even a member of the family. She was an employee and friend of the deceased. At the core of the allegations appears to be extreme animus against Ms. Scott by Ms. Steinhards for reasons which were never clear to this Court. There was no evidence that Ms. Scott had ever done anything to harm Riley. In fact, some of the evidence demonstrated the contrary. In short, the motivation to litigate against Ms. Scott appears to have been entirely misplaced and ill-advised. Ms. Steinhards on behalf of Riley chose to engage in high stakes litigation in which she was entirely unsuccessful.

[26] The Plaintiff argues that she lacked time to consider whether Ms. Scott should be exited from the litigation. She argues that the motion was brought in August and her counsel was embroiled in examinations and other motions related to the litigation. Respectfully, the Plaintiff did have time to consider the seriousness of keeping Ms. Scott in the litigation after she received Ms. Scotts materials months before the motion date. Negotiations with respect to her exit could have commenced at any time. Ms. Scott’s Offer to Settle remained open for acceptance throughout that time.

[27] The Plaintiff suggests that Ms. Scott receive only her costs of the action because of her request for costs against her counsel personally. This was not pursued at the motion. The Plaintiff could have confirmed with Ms. Scott’s counsel what his intentions were before engaging Mr. Kestenberg.

[28] At my request, Mr. Graham provided a Bill of Costs for fees and disbursements claimed in the Action against Ms. Scott (excluding the summary judgment motion). Those costs were $72,222.23 on a substantial indemnity scale and $48,148.11 on a partial indemnity scale. The Plaintiff suggests that Ms. Scott should only receive her partial indemnity costs of the Action and no costs for the summary judgment motion. This would result in an award of under $50,000 which is entirely unreasonable. Ms. Scott should have her costs of the summary judgment motion as well. The fact that she requested costs from the Plaintiff’s counsel personally but did not pursue them is an insufficient reason to deprive Ms. Scott of her costs of the motion.

[29] Even in the face of spurious and unfounded allegations, the Court must ensure that any costs award is an amount that the unsuccessful party would reasonably expect to pay and is fair and reasonable. Given the level of dissension in this matter, I infer that if the Plaintiff had been successful, she would have been requesting costs at an elevated scale. The Plaintiff’s total full indemnity costs including the costs of the action were $367,087. This amount far exceeded Ms. Scott’s total full indemnity costs of $282,841.

[30] Ms. Scott’s reference to Annabelle Tingas-Demetrion v. Max Dublin, 2016 ONSC 3414 case is appropriate. In that case the Plaintiff made allegations of deceit, misrepresentation, conspiracy and fraud. Early offers to settle from the Defendant were rejected. In assessing costs, the Court called the matter an “ill-founded action.” The Court noted at paragraph 23 that “a greater concern is the fact that serious allegations of improper conduct were made against the defendants without any evidentiary foundation.”

[31] In the Dublin case the Court ordered costs on a full indemnity scale in large part because the reputations of the Defendants were put into question by the Plaintiff’s allegations.

[32] The case at bar is replete with spurious and serious allegations, none of which were proven and all of which were rejected by this Court. Some of the more egregious examples of those allegations are:

a. Ms. Scott lied under oath during discovery; b. Ms. Scott lied in her affidavit evidence. c. Ms. Scott participated in and was paid for her part in the alleged conspiracy; d. She concealed Mr. Whaley’s whereabouts, death, and funeral and kept him cloistered from Riley while in hospital. e. She knowingly assisted in the procurement of a fraudulent Power of Attorney. f. She actively worked to deplete Mr. Whaley’s assets in order to deprive and thwart 11-year old Riley.

[33] In this case Ms. Scott should receive her costs on a full indemnity scale given the findings of the Court, the spurious unproven allegations and the importance of the motion to Ms. Scott.

[34] I therefore order the Plaintiffs to pay Ms. Scott the sum of $282,000 inclusive of HST and disbursements. This amount is far less than what the Plaintiff would have expected to pay given her own costs. As such, no reduction in costs for the unpursued relief against counsel personally is warranted.

[35] The costs awarded are to be paid when the settlement funds are paid to Graham Law after court approval of the settlement. The costs are to be paid as directed by Ms. Scott or her counsel.

C. Gilmore, J. Date: January 16, 2023