Court File and Parties
COURT FILE NO.: CV-18-00005037-00ES DATE: 20231214
SUPERIOR COURT OF JUSTICE – ONTARIO
IN THE MATTER OF THE ESTATES OF VINCENZO ANDREACCHI, DECEASED, AND ELISABETH ANDREACCHI, DECEASED
BETWEEN:
RAFFAELE ANDREACCHI, ROSA MARCHELLETTA, JEREMY ANDREACCHI, and VINCENT ANDREACCHI Applicants
AND:
JOE ANDREACCHI and CONNIE FIGLIUZZI Respondents
BEFORE: Justice A.A. Sanfilippo
COUNSEL: Bradley Phillips and James J. Dunphy, for the Applicants, Jeremy Andreacchi and Vincent Andreaccchi Raffaele Andreacchi, acting in person Rosa Marchelletta, acting in person Joe Andreacchi, acting in person Connie Figliuzzi, acting in person
HEARD: In writing
ENDORSEMENT ON COSTS
[1] In my Reasons for Judgment issued August 31, 2023, Andreacchi v. Andreacchi, 2023 ONSC 4877 (“Reasons for Judgment”), I provided in para. 150 that if the parties were unable to agree on the issue of costs, they could deliver written submissions on costs in accordance with the timetable that was established, as follows:
The parties are encouraged to agree on the issue of costs. If the parties cannot agree on the issue of costs, any party seeking costs may, by September 28, 2023, deliver by email to my judicial assistant, after service and filing on CaseLines, written costs submission of no more than eight (8) pages, plus a Bill of Costs. Any party against whom costs is sought may, by October 26, 2023, deliver by email to my judicial assistant after service and filing on CaseLines, responding cost submissions of the same length. If no party delivers any written cost submissions by October 26, 2023, I will deem the issue of costs to have been settled.
[2] On September 25, 2023, the Respondent, Giuseppe (“Joe”) Andreacchi, sent by email to my judicial assistant, a spreadsheet that listed costs in the amount of $20,050.00, without a Bill of Costs or written submissions on costs. The Applicants, Jeremy Andreacchi and Vincent Andreacchi, delivered their written Cost Submissions and Bill of Costs on September 28, 2023. They claim costs payable by Joe and Consolata (“Connie”) Figliuzzi, jointly and severally, in the amount of $259,998.60, on a substantial indemnity basis, or, alternatively, in the amount of $177,527.17 on a partial indemnity basis.
[3] No costs have been sought by, or against the Applicants Raffaele (“Ralph”) Andreacchi and Rosa Marchelletta.
[4] Joe and Connie did not deliver responding written cost submissions by October 26, 2023. On October 30, 2023, I issued an Endorsement notifying Joe and Connie that I would extend the time for them to deliver responding written cost submissions to November 10, 2023. Joe and Connie delivered responding written cost submissions and a Bill of Costs on November 3, 2023.
[5] In this Endorsement, I will explain my determination of the issue of costs in this proceeding. Because several of the family members share the same surname, I will refer to each of them by their first names, respectfully.
I. THE PARTIES’ POSITIONS
[6] The Applicants, Jeremy and Vincent, submitted that they are entitled to an award of costs because they were successful in this Application. They established that the house known as 626 Shaw Street, Toronto (the “Shaw Street Property”) was not intended to be owned solely by Joe and Connie, who defended this Application on the basis that their mother, Elisabeth Andreacchi, gifted the property to them and Ralph to the exclusion of any other sibling or to Jeremy and Vincent, the children of Elisabeth’s deceased son, Fortunato. Jeremy and Vincent’s Bill of Costs details their claim for costs on a substantial indemnity basis in the amount of $259,998.60 or on a partial indemnity basis in the amount of $177,527.17. Jeremy and Vincent submitted that these costs should be payable by the Respondents, Joe and Connie, jointly and severally.
[7] Joe and Connie defended Jeremy and Vincent’s claim for costs by submitting that Jeremy and Vincent did not achieve at trial the “precise relief” that they claimed. Joe and Connie submitted that Jeremy and Vincent sought a declaration that the Shaw Street Property was held by its registered owners, Joe, Connie and Ralph, in trust for Rosa (as to a one-fifth interest) and for Jeremy and Vincent (as to a combined one-fifth interest). I determined that Joe, Connie and Ralph hold registered title to the Shaw Street Property in resulting trust for Elisabeth’s Estate, to be distributed in accordance with any will left by Elisabeth, if identified and proven, or in accordance with the principles of intestate succession set out in the Succession Law Reform Act, R.S.O. 1990, c. S.26 (“SLRA”). Joe and Connie submitted, correctly, that Jeremy and Vincent’s claim for an Order under the Partition Act, R.S.O. 1990, c. P.4 was dismissed, and the claim for an Order that Joe pass accounts as a trustee de son tort was dismissed without prejudice the estate trustee seeking an order for accounting in the Estate of Elisabeth Andreacchi.
II. ANALYSIS
[8] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides the Court with discretion in the determination of costs: Restoule v. Canada (Attorney General), 2021 ONCA 779, 466 D.L.R. (4th) 1, at para. 344. The Court of Appeal has instructed that the purposes of an award of costs are to indemnify the successful party of the legal costs they incurred; to encourage settlement; to deter frivolous actions and defences; and to discourage unnecessary steps that unduly prolong the litigation: 1465778 Ontario Inc. v. 1122077 Ontario Ltd., 2006 CanLII 35819 (ON CA), 82 O.R. (3d) 757 (C.A.), at para. 26; Fong v. Chan (1999), 1999 CanLII 2052 (ON CA), 46 O.R. (3d) 330 (C.A.), at para. 22.
[9] To fix the costs of this Application, the Court will first undertake a critical examination of all relevant factors, including the factors enumerated in Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The Court will then “step back” and consider the result produced and determine whether, in all the circumstances, the cost result is fair, reasonable and proportionate: Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 587, [2022] O.J. No. 3632, at para. 60: “A proper costs assessment requires a court to undertake a critical examination of the relevant factors as applied to the costs claimed and then “step back and consider the result produced and question whether, in all the circumstances, the result is fair and reasonable”. Also, Boucher v. Public Accountants Council (Ontario) (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 24. In Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at para. 12, leave to appeal to the SCC refused, [2019] S.C.C.A. No. 82, Nordheimer J.A. stated that “proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs.”
A. The Determination of Success
[10] Consideration of success is the starting point in the determination of the issue of costs.
[11] The issue of entitlement to an award in costs is informed by the “result in the proceeding”, a factor set out in Rule 57.01(1). The case law has well-established that absent special circumstances, “costs follow the event”: Bell Canada v. Olympia & York Developments Ltd. (1994), 1994 CanLII 239 (ON CA), 111 D.L.R. (4th) 589 (Ont. C.A.); Yelda v. Vu, 2013 ONSC 5903, [2013] O.J. No. 4246, at para. 11, leave to appeal refused, 2014 ONCA 353; St. Jean v. Cheung, 2009 ONCA 9, [2009] O.J. No. 27, at para. 4; 1318706 Ontario Ltd. v. Niagara (Municipality) (2005), 2005 CanLII 16071 (ON CA), 75 O.R. (3d) 405 (C.A.), at paras. 48-52.
[12] Joe and Connie’s submission that Jeremy and Vincent failed to establish the precise relief claimed is flawed. The issue that “drove” the proceeding, to use the terminology expressed by the Court of Appeal in Mihaylov v. 1165996 Ontario Inc., 2017 ONCA 218, [2017] O.J. No. 1351, at para. 8, was whether Joe, Connie and Ralph owned the Shaw Street Property as a gift from Elisabeth to the exclusion of any other family member or whether the registered ownership of the Shaw Street Property by Joe, Connie and Ralph was held in trust for other family members. Joe and Connie failed to establish that Elisabeth intended to convey the Shaw Street Property to them as a gift. The Applicants succeeded in establishing that Joe, Connie and Ralph held title to the Shaw Street Property in resulting trust. The Applicants did not establish that the Shaw Street Property “resulted back” to an undocumented inter vivos trust, as they alleged, but they did establish that the Shaw Street Property is held in resulting trust for Elisabeth’s Estate. Of the two “ownership options” disputed in this case – ownership of the Shaw Street Property in legal and beneficial interest by Joe, Connie and Ralph or registered ownership by these parties in resulting trust for Elisabeth’s Estate – Joe and Connie failed and Jeremy and Vincent succeeded.
[13] I find that Jeremy and Vincent shall receive an award of costs.
[14] Joe and Connie delivered a spreadsheet with values totaling $20,050.00, later engrafted into a Bill of Costs, but without setting out a basis for costs through their written submissions. To the extent that these documents were intended to constitute a claim for costs by Joe and Connie, it is dismissed. Joe and Connie were unsuccessful in this Application and have not established any basis on which they would be entitled to an award of costs.
B. The Liability for the Payment of Costs
[15] In McDougald Estate v. Gooderham, 2005 CanLII 21091 (ON CA), 255 D.L.R. (4th) 435 (Ont. C.A.), at para. 79, the Court of Appeal displaced the traditional approach of Canadian trial courts of ordering costs of all parties in estates litigation on a “virtually automatic” basis, all payable out of the estate.The Court of Appeal stated, at para. 80, that the modern approach to fixing costs in estates litigation is for the judge to “carefully scrutinize the litigation and, unless the court finds that one or more of the public policy considerations … applies, to follow the cost rules that apply in civil litigation.” The recognized public policy considerations are “[w]here the difficulties or ambiguities that give rise to the litigation are caused, in whole or in part, by the testator” and “[i]f there are reasonable grounds upon which to question the execution of the will or the testator’s capacity in making the will”. The Court of Appeal reiterated these principles in Sawdon v. Sawdon Estate, 2014 ONCA 101, 119 O.R. (3d) 81, at para. 84: “…the starting point is that estate litigation, like any other form of civil litigation, operates subject to the general civil litigation costs regime established by section 131 of the Courts of Justice Act … and Rule 57 … except in those limited circumstances where public policy considerations apply.”
[16] Here, there are no public policy considerations that call for deviation from the general civil litigation costs regime. The unsuccessful positions taken jointly by Joe and Connie in defence of the relief sought by the Applicants ultimately caused this trial. Their positions were aligned, throughout. I find that Joe and Connie shall be liable for payment of the award of costs on a joint and several basis.
C. Fixing the Amount of Costs Payable by Joe and Connie to Jeremy and Vincent
[17] I will now examine the relevant factors applicable to fixing the amount of costs.
(a) The Scale of Costs
[18] The claim by Jeremy and Vincent for costs on a partial indemnity basis of $177,527.17 is comprised of $146,075.14 for legal fees and disbursements plus $18,989.77 in HST. Their claim for costs on a substantial indemnity basis of $259,998.60 is comprised of $219,058.71 in legal fees and disbursements and HST of $28,477.63.
[19] None of the parties submitted that they made an Offer to Settle that engages the principles set out in Rule 49.10. Apart from any statutory presumption of elevated costs, which is absent here, costs on an elevated scale are exceptional and are reserved for those situations when a party has displayed reprehensible, scandalous or outrageous conduct: Quickie Convenience Stores Corp. v. Parkland Fuel Corporation, 2021 ONCA 287, [2021] O.J. No. 2352, at para. 4, relying on Montréal (Ville) v. Octane Stratégie Inc., 2019 SCC 57, 440 D.L.R. (4th) 1, at para. 95. I do not see any basis for an award of elevated costs. I find that the award of costs to Jeremy and Vincent shall be fixed on a partial indemnity basis.
(b) The Amount of Costs Claimed
[20] Rule 57.01(1)(0.a) provides that that a relevant factor in fixing costs is consideration of the experience of the lawyer, the rates charged and the hours spent. My review of Jeremy and Vincent’s Bill of Costs shows that the hourly rates applied are reasonable considering the experience level of the lawyers, the staffing of legal professionals is reasonable and the partial indemnity value of them is acceptable at 60% of the full indemnity rates. The number of hours incurred are also reasonable considering the length of the Application, the interlocutory steps involved, the duration of the trial and the issues raised.
(c) What Costs Could Joe and Connie Reasonably Expect to Pay?
[21] Rule 57.01(1)(0.b) provides that a relevant factor in the exercise of my discretion is “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.” In the Endorsement issued by Justice Gilmore on October 22, 2021, which is filed as document 17 in the Amended Supplementary Trial Record, Her Honour denied Joe’s request for a rescheduling of the trial date. Justice Gilmore noted that in support of his request for an adjournment of the trial date, Joe submitted that he had contacted “at least 30 lawyers” to act for him at trial, and that “some wanted retainers of $100,000.00 and upwards”. Based on this statement, I find that Joe and Connie could reasonably expect that the costs of this trial would exceed $100,000.00.
(d) The Complexity of the Proceeding/ Importance of the Issues
[22] Rule 57.01(1)(c) provides that a relevant factor in the exercise of my discretion is the complexity of the proceeding. This proceeding was of modest complexity, from the standpoint of both the factual evidence and the legal issues.
[23] Rule 57.01(1)(d) provides that the importance of the issues to the parties is material to my exercise of discretion on the issue of costs. I accept that the issues raised by this proceeding were important to the Applicants. Joe and Connie denied that Jeremy and Vincent should share in inheritance from their grandmother through their late father, and denied that their sister Rosa should share in the value of the Shaw Street Property. I also accept that the issues raised by this proceeding were important to Joe as he resides in the Shaw Street Property, and to the other parties as family members.
(e) The Conduct of Any Party That Shortened or Lengthened the Trial
[24] Rule 57.01(1)(e) provides that the Court may consider whether the conduct of any party tended to shorten or unnecessarily lengthen the duration of the trial. Jeremy and Vincent submitted that Joe unnecessarily lengthened the trial in two ways. First, Joe did not confer with the lawyers for the Applicants in the pre-trial stage for the assembly of the Joint Books of Documents, even though this was addressed at a Trial Management Conference on January 23, 2023. Second, Joe did not notify the Applicants of objections that he intended to raise regarding hearsay evidence, even though the affidavits filed as part of the Trial Record showed the evidence that would be tendered at trial.
[25] Rule 57.01(1)(g) provides that the Court may consider whether any party refused to admit anything that should have been admitted. The Applicants raise two areas. First, Joe raised hearsay objections despite tendering similar evidence on which he relied: Reasons for Judgment, paras. 95-96. Second, Joe objected to the authenticity of the video recording of his meeting with Jeremy, Vincent and Ralph on January 1, 2017, on his submission that it was edited, dubbed or otherwise unreliable but without establishing these positions: Reasons for Judgment, para. 113.
[26] While I acknowledge that this conduct contributed to the trial taking seven days rather than the scheduled five days, I do not accept that this conduct supports an elevated cost award against Joe and Connie. I attribute this conduct to Joe’s lack of familiarity with the trial process and not an intention to unduly lengthen the duration of the trial.
(f) Divided Success
[27] Rule 57.01(4)(a) authorizes the Court “to award or refuse costs in respect of a particular issue or part of a proceeding.” Joe and Connie submitted that I should take into consideration that the Applicants did not achieve all the remedies that they sought in this Application. The Applicants did not establish the basis for an Order under the Partition Act, or for an Order that Joe pass accounts as a trustee de son tort.
[28] The time spent at trial for the claim for an Order under the Partition Act did not meaningfully expand the duration of the trial as this issue was interwoven with, or incidental to, the claim that the Shaw Street Property was held by its registered owners in trust for others. However, the claim for accounting did expand the trial length, both in the documentary evidence and in the time involved for Ralph’s testimony and the cross-examination of Joe. I will take this into consideration in fixing the amount of costs.
D. Conclusion – Fixing the Costs
[29] Having considered all of the relevant factors in fixing the costs payable by Joe and Connie to Jeremy and Vincent, I then “step back” and “consider the result produced and question whether, in all the circumstances, the result is fair and reasonable”: Apotex, at para. 60, applying Restoule, at para. 356; Boucher, at para. 24. This is because the overarching objective is to determine a cost quantification that is objectively fair and reasonable, and not simply an arithmetic or mechanical measure of the actual costs incurred by a successful litigant: Apotex Inc., at para. 61; Barbour v. Bailey, 2016 ONCA 334, [2016] O.J. No. 2352, at para. 9; Boucher, at paras. 26 and 38; Zesta Engineering Ltd. v. Cloutier, 2002 CanLII 25577 (Ont. C.A.), at para. 4.
[30] Having considered all applicable principles set out by the case law and under Rule 57.01, and in the exercise of my discretion, as set out in s. 131 of the Courts of Justice Act, I have concluded that it is reasonable, fair, just and proportionate to fix Jeremy and Vincent’s costs of this proceeding in the amount of $160,000.00, all inclusive, payable by Joe and Connie jointly and severally.
[31] Last, Jeremy and Vincent sought an Order that any unpaid costs owed by Joe and Connie at the time of the sale of the Shaw Street Property be deducted by the real estate lawyer acting on the sale from Joe and Connie’s share of the net sale proceeds. Jeremy and Vincent did not establish any basis on which to find that such an order is needed. I decline to make this Order, without prejudice to Jeremy and Vincent seeking such an order should it be required to enforce payment of the cost award.
III. DISPOSITION
[32] On the basis of the reasons set out herein, I order:
The Respondents, Joe Andreacchi and Connie Figliuzzi, shall forthwith pay the Applicants, Jeremy Andreacchi and Vincent Andreacchi, costs of this proceeding, fixed in the amount of $160,000.00, all-inclusive of legal fees, disbursements, and applicable taxes.
[33] The parties have not been able to agree on the form and content of a draft Judgment. I direct the lawyers for Jeremy and Vincent to confer with the self-represented Applicants and the Respondents on scheduling, and then arrange with the Estates List Trial Coordinator to appear before me in a Case Conference to settle the form of Judgment. If the parties can agree on the form of draft Judgment that comprises the disposition set out in this Endorsement on Costs and in the Reasons for Judgment, they may deliver the draft Judgment to my judicial assistant after agreeing on its form and content and filing the draft Judgment, endorsed with agreement as to form and content, on CaseLines.
Justice A.A. Sanfilippo
Date: December 14, 2023