Court File and Parties

COURT FILE NO.: CV-21-00668457-00ES DATE: 20240112

ONTARIO SUPERIOR COURT OF JUSTICE (Estates List)

IN THE MATTER OF THE Estate of PAUL HADDAD, deceased

BETWEEN:

ROYAL TRUST CORPORATION OF CANADA, in its capacity as the Estate Trustee of the Estate of Paul Haddad Applicant

AND:

RAYMONDE HADDAD, DORIS HADDAD-BEJJANI, ROSEMARY WHELAN, VERONICA NEWBURY, AMANDA BEJJANI, GABRIELLE WHELAN, ISAAC WHELAN, THE CHILDREN’S LAWYER on behalf of JUSTIN BEJJANI AND THE UNBORN AND UNASCERTAINED ISSUE OF RAYMONDE HADDAD, DORIS HADDAD-BEJJANI AND ROSEMARY WHELAN Respondents

BEFORE: Justice A.A. Sanfilippo

COUNSEL: David M. Lobl and Irina Samborski, for the Moving Party Applicant Natalie Scott, for the Respondent, Rosemary Whelan Debra Stephens and Amanda Bettencourt, agent lawyers for the Children’s Lawyer Doris Haddad-Bejjani, acting in person Stephen Cavanagh, for the Estate of Paul Dancause in related action

HEARD (In Writing): January 12, 2024

Endorsement on Costs

[1] In Royal Trust Corporation of Canada v. Haddad, 2023 ONSC 5637 (the “Reasons for Decision”), I granted the motion brought by the Applicant Estate Trustee, Royal Trust Corporation of Canada (“Royal Trust”), for an Order appointing the Public Guardian and Trustee (the “PGT”) as Litigation Guardian for the Respondent, Raymonde Haddad (“Royal Trust’s Motion”), and dismissed the motion brought by the Respondent, Doris Haddad-Bejjani for an order that she be appointed as Litigation Guardian for Raymonde (“Doris’ Motion”). Paragraph 46 of the Reasons for Decision set out a timetable for the delivery of written submissions on costs if the parties were unable to agree on costs.

[2] The parties were unable to settle the issue of costs, and delivered the following written submissions: (a) Cost Submissions of the Royal Trust dated October 20, 2023, together with Costs Outline; (b) Cost Submissions of the Office of the Children’s Lawyer (the “CL”) dated October 20, 2023, together with Costs Outline; (c) Cost Submissions of the Respondent, Rosemary Whalen dated October 19, 2023, together with Costs Outline; (d) Costs Submissions of the Respondent, Doris Haddad-Bejjani dated November 2, 2023, together with Bill of Costs. At the Case Conference conducted on January 5, 2024, the parties confirmed that this comprises their written submissions on the costs of Royal Trust’s Motion and Doris’ Motion (collectively, the “Motions”).

[3] In this Endorsement, I will explain my determination of the issue of costs in the Motions. For brevity and clarity, I will respectfully refer to the parties by their first names, in the same manner they did in their written submissions.

I. The Parties’ Positions

[4] Royal Trust submitted that they were successful in their Motion and in responding to Doris’ Motion. Royal Trust seeks full indemnity costs in the amount of $54,016.85, comprised of $47,502.50 for legal fees, $339.00 for disbursements and $6,175.35 in HST. Royal Trust contended that they incurred these costs properly and reasonably in the interests of the Estate of Paul Haddad (the “Estate”) and are therefore entitled to recovery in accordance with s. 23.1 of the Trustee Act, R.S.O. 1990, c. T.23 and the principles set out by the Supreme Court of Canada in Geffen v. Goodman Estate, [1991] 2 S.C.R. 353, at p. 390: “The courts have long held that trustees are entitled to be indemnified for all costs, including legal costs, which they have reasonably incurred. Reasonable expenses include the costs of an action reasonably defended.” Royal Trust submitted that their costs should be paid from the capital of the Estate or, if all or a portion of the costs are awarded against Doris, from the testamentary trust established for the benefit of Doris under the Primary Will and Limited Property Will of Paul Haddad both dated May 12, 2015 (“Doris’ Testamentary Trust”).

[5] The CL supported Royal Trust’s Motion and joined with Royal Trust in defending Doris’ Motion. The CL seeks full indemnity costs in the amount of $17,981.80, comprised of legal fees of $15,827.00, disbursements of $97.29 and applicable taxes of $2,057.51. The CL contended that the costs were a direct result of Doris’ conduct in “contesting, obstructing and delaying” for years the appointment of a Litigation Guardian for Raymonde. The CL submitted that it sought the appointment of the PGT as Litigation Guardian for Raymonde since January 2022 but that this was stalled until October 2023 because Doris insisted on acting on Raymonde’s behalf in these estate proceedings. The CL contends that Doris’ conduct was “inappropriate and entirely self-serving” and that she failed to recognize that she was acting contrary to Raymonde’s interests. The CL submitted that $15,000.00 of the CL’s costs should be payable by Doris out of Doris’ Testamentary Trust and the balance should be paid out of the capital of the Estate. Alternatively, the CL submitted that her full indemnity costs should be paid out of the Estate.

[6] Rosemary also supported Royal Trust’s Motion and joined with Royal Trust in defending Doris’ Motion. Rosemary seeks costs on a partial indemnity basis in the amount of $2,792.67, comprised of legal fees of $2,028.90, applicable taxes of $263.77 and $500.00 as the lawyer’s fee for appearance on the hearing of the Motions. Rosemary submitted that, like Doris, she is a beneficiary of the Estate but that, unlike Doris, she conceded, early and throughout, that she and Doris were not able to act as Litigation Guardian for Raymonde due to an obvious, actual conflict of interest. Rosemary submitted that her costs were reasonably incurred and should be payable either by Doris, personally or out of Doris’ Testamentary Trust, or by the Estate.

[7] Doris submitted in response that any costs ordered payable to Royal Trust, the CL and Rosemary should be fixed on a partial indemnity basis and ordered to be paid by the Estate. Doris submits that the Estate was required, by Rule 7 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 to bring a motion for the appointment of a Litigation Guardian for Raymonde, and that this cost would be payable by the Estate. Doris submitted that the CL and Rosemary did not need to support Royal Trust’s Motion. Doris contended that she should not be ordered to pay costs of the Motions on the basis of delay in the administration of the Estate because no findings were made in the Reasons for Decision that Doris had delayed the administration of the Estate.

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), 82 O.R. (3d) 757 (C.A.), at para. 26; Fong v. Chan (1999), 46 O.R. (3d) 330 (C.A.), at para. 22.

[9] To fix the costs of the Motions, 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, 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), 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 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”.

[10] Rule 57.03 provides that “[o]n the hearing of a contested motion, unless the court is satisfied that a different order would be more just, the court shall, (a) fix the costs of the motion and order them to be paid within 30 days, or (b) in an exceptional case, refer the costs of the motion for assessment under Rule 58 and order them to be paid within 30 days after assessment.” I find that it is just to fix the costs of the Motion at this time, as a step in the proceeding, and order that any cost award be paid within 30 days. I am satisfied that the determination of costs by written submissions is the “simplest, least expensive and most expeditious process for fixing costs”, compliant with Rule 57.01(7).

A. The Determination of Success

[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 is well-established that absent special circumstances, the successful party is entitled to costs: Przyk v. Hamilton Retirement Group Ltd. (The Court at Rushdale), 2021 ONCA 267, 70 C.P.C. (8th) 219, at para. 11, citing Bell Canada v. Olympia & York Developments Ltd. (1994), 111 D.L.R. (4th) 589 (Ont. C.A.), at para. 23.

[12] Royal Trust was successful in its Motion. Doris was unsuccessful in her Motion. Royal Trust is entitled to an award of costs. Doris’ Motion was brought against all parties in this Application. Accordingly, Doris could reasonably expect that any party to this Application could respond, as did the CL and Rosemary. The CL and Rosemary successfully supported Royal Trust’s response to Doris’ Motion and are, in my determination, entitled to an award of costs.

B. The Liability for the Payment of Costs

[13] In McDougald Estate v. Gooderham (2005), 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 Court of Appeal reiterated these principles in Sawdon v. Sawdon Estate, 2014 ONCA 101, 119 O.R. (3d) 81, at para. 84.

[14] Here, the only public policy consideration that calls for a deviation from the general civil litigation costs regime is in regard to the scale of costs and not the determination of the party to be responsible for the payment of costs. I accept Doris’ submission that Royal Trust would have been required to seek the appointment of a Litigation Guardian for Raymonde regardless of the position taken by Doris. However, Royal Trust would not have incurred the expense of the record required by Doris’ opposition to the appointment of the PGT as Litigation Guardian, and Royal Trust would not have been put to the expense of responding to Doris’ Motion.

[15] The same consideration applies to the costs sought by the CL and Rosemary. They would not have incurred costs in supporting Royal Trust’s Motion had it been unopposed by Doris, and they would not have incurred costs in opposing Doris’ Motion had it not been brought.

[16] I see no basis on which to order that all Royal Trust’s costs be paid by the Estate. There is no public policy consideration that would cause deviation from the general civil litigation costs regime that Doris, as the unsuccessful party on the Motions, shall pay Royal Trust’s costs on a partial indemnity basis. I therefore find that Doris shall pay Royal Trust’s costs on a partial indemnity basis from Doris’ Testamentary Trust.

[17] As an Estate Trustee, Royal Trust is entitled to be fully indemnified for all costs that they have reasonably incurred in bringing Royal Trust’s Motion and in responding to Doris’ Motion, in accordance with the principles stated in Geffen, at pp. 390–91. Section 23.1 of the Trustee Act provides that such amounts are payable from the “trust property”. Accordingly, I find that the balance between Royal Trust’s partial indemnity costs (payable by Doris) and Royal Trust’s full indemnity costs shall be paid from the capital of the Estate.

[18] I follow a similar analysis regarding the cost award in favour of the CL. The CL’s costs directly derived from the necessity to respond to Doris’ Motion. In my view, the CL should recover their full indemnity costs in representing the interests of the unborn and unascertained beneficiaries in the Motions: Giann v. Giannopoulos, 2023 ONSC 6655, at paras. 10-11. I find that Doris shall pay the CL’s costs on a partial indemnity basis from Doris’ Testamentary Trust. I find, as well, that the balance between the CL’s partial indemnity costs (payable by Doris) and the CL’s full indemnity costs shall be paid from the capital of the Estate.

[19] Rosemary has claimed costs on a partial indemnity basis. Rosemary is entitled to these costs through success in responding to Doris’ Motion. I find that Doris shall pay Rosemary’s costs on a partial indemnity basis from Doris’ Testamentary Trust.

C. Fixing the Amount of Costs

[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 the Costs Outlines filed by Royal Trust, the CL and Rosemary shows that the hourly rates that have been used and the staffing of legal professionals are reasonable.

[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”. Since the issue of Raymonde’s competence has been raised since at least January 2022 and since the issue of the necessity of a Litigation Guardian has been considered at multiple case conferences, Doris could reasonably have expected that this step in the proceeding could result in the level of costs now being claimed.

[22] Rule 57.01(1)(c) provides that a relevant factor in the exercise of my discretion is the complexity of the proceeding. This motion to appoint a Litigation Guardian ought not to have been complex but was made complex by the positions taken by Doris. Specifically, Doris’ insistence that she had no interest in the proceeding adverse to Raymonde, and her position that the power of attorney empowered her to act as Litigation Guardian - neither of which were accepted - rendered these Motions more complex. This consideration applies also to Rule 57.01(1)(e), which provides that a Court may consider, when fixing costs, whether the conduct of any party tended to shorten or unnecessarily lengthen the duration of the proceeding.

[23] Having considered all the applicable relevant factors in fixing the amount of costs, I then “step back” and “consider the result produced and question whether, in all the circumstances, the result is fair and reasonable”: Apotex Inc., at para. 60, citing 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, at para. 9; Boucher, at paras. 26 and 38; Zesta Engineering Ltd. v. Cloutier (2002), 21 C.C.E.L. (3d) 161 (Ont. C.A.), at para. 4.

[24] 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 costs as follows: (a) the partial indemnity costs of Royal Trust payable by Doris are fixed at $20,000.00, all inclusive, and the balance of Royal Trust’s full indemnity costs of $34,016.85 shall be payable by the Estate ($54,016.85 - $20,000 = $34,016.85); (b) the partial indemnity costs of the CL payable by Doris are fixed at $8,000.00, all inclusive, and the balance of the CL’s full indemnity costs of $9,981.80 shall be payable by the Estate ($17,981.80 - $8,000.00 = $9,981.80); (c) the partial indemnity costs of Rosemary payable by Doris are fixed at $2,792.67, all inclusive. These costs shall be paid within 30 days, in accordance with Rule 57.03(1).

D. Costs of the Costs Submissions

[25] Rosemary sought costs in the amount of $350.00 for the preparation of cost submissions. Doris sought partial indemnity costs of $2,258.10, all inclusive, payable from the Estate for preparing cost submissions. These claims are denied. The parties shall bear their own costs of delivering written submissions on costs.

III. Disposition

[26] On the basis of these reasons, I order:

(a) Royal Trust is awarded partial indemnity costs fixed in the amount of $20,000.00 all-inclusive, payable by Doris within 30 days from Doris’ Testamentary Trust, and Royal Trust is awarded the balance of its full indemnity costs, specifically the amount of $34,016.85 all-inclusive, payable within 30 days from the assets of the Estate.

(b) The Children’s Lawyer is awarded partial indemnity costs fixed in the amount of $8,000.00 all-inclusive, payable by Doris within 30 days from Doris’ Testamentary Trust, and the Children’s Lawyer is awarded the balance of its full indemnity costs, specifically the amount of $9,981.80 all-inclusive, payable within 30 days from the assets of the Estate.

(c) Rosemary is awarded partial indemnity costs fixed in the amount of $2,792.67 all inclusive, payable by Doris within 30 days from Doris’ Testamentary Trust.

Justice A.A. Sanfilippo Date: January 12, 2024