COURT FILE NO.: CV-23-91185 DATE: 2024/07/16 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

STEPHEN VRIEND Applicant – and – ELLEN CHARLOTTE VRIEND and THE PUBLIC GUARDIAN AND TRUSTEE Respondents

Counsel: Frank G. Tanner, counsel for the applicant Ryan Flewelling, Section 3 counsel for Ellen Charlotte Vriend No one appearing for the Public Guardian and Trustee

HEARD: In Writing

RULING ON COSTS

Corthorn J.

Introduction

[1] This application was for the appointment of a guardian of the person and a guardian of property for Ellen Charlotte Vriend (“Ellen”). The applicant (“Stephen”) is Ellen’s son. The hearing of the application commenced in April 2023, continued in April 2024, and was completed thereafter in writing.

[2] Following the April 2023 appearance, Stephen was appointed as guardian of the person for Ellen: Vriend v. Vriend and PGT, 2023 ONSC 2704 (“Ruling No. 1”). The court also appointed Section 3 counsel for Ellen: Ruling No. 1, at paras. 33, 39. The issues related to guardianship of Ellen’s property could not be determined at that time: Ruling No. 1, at paras. 31-32. That portion of the application was adjourned.

[3] Following the April 2024 appearance, Stephen and Deborah A. Narraway (one of Ellen’s siblings and, hereinafter, “Deborah”) were appointed as Ellen’s guardians of property: Vriend v. Vriend and PGT, 2024 ONSC 2692 (“Ruling No. 2”), at paras. 23-29, 63.

[4] At the conclusion of the April 2024 appearance, Stephen was ordered to file written materials addressing his request, in the context of guardianship of Ellen’s property, for an order dispensing with the requirement that he and Deborah post security. The request in that regard was denied. The guardians of property were ordered to post security in the form of a one-time bond, based on an estimated seven-figure value of Ellen’s property: Ruling No. 2, at paras. 34-35, 53.

[5] At para. 65 of Ruling No. 2, the court identified that the issues of Stephen’s costs and the costs payable to Section 3 counsel remain to be determined. Stephen and Section 3 counsel were ordered to file materials, no later than 30 days following the date on which Ruling No. 2 was released, in support of their respective requests for costs: Ruling No. 2, at paras. 69-70.

[6] Ruling No. 2 was released on May 9, 2024. The court received Stephen’s costs submissions on June 7, 2024. As of the date this ruling, the court has yet to receive materials from Section 3 counsel regarding the costs he is seeking.

[7] In this ruling, the court,

• determines Stephen’s request for his costs of the application to be paid on the full indemnity scale and from Ellen’s property; and
• reiterates the steps to be taken by Section 3 counsel to enable the court to determine the costs to which he is entitled.

[8] Before addressing Stephen’s costs, I will review general principles applicable to entitlement to costs, the scale upon which costs are payable, and the quantum of costs payable in capacity litigation.

Costs in Capacity Litigation – General Principles

[9] The overarching principle specific to costs claims in capacity litigation is that “[t]he exercise of the court’s discretion in respect of cost claims in capacity litigation should reflect the basic purpose of the SDA – to protect the property of a person found to be incapable and to ensure that such property is managed wisely so that it provides a stream of income to support the needs of the incapable person”: Fiacco v. Lombardi (2009), 82 C.P.C. (6th) 235 (Ont. S.C.), at para. 33, citing ss. 32(1) and 37 of the Substitute Decisions Act, 1992, S.O. 1992, c. 30.

[10] At para. 33 of Fiacco, D.M. Brown J. (as he then was) said, “when faced with a cost claim against the estate of an incapable person, a court must examine what, if any, benefit the incapable person derived from the legal work which generated those costs.”

[11] As an example of a benefit to the incapable person, D.M. Brown J. identified the appointment of a guardian of property – including on an unopposed application: at para. 35. The appointment itself is a benefit to the incapable person, because their property will be managed for their benefit: at para. 35.

[12] In Fiacco, D.M. Brown J. considered requests for costs incurred in the context of protracted contested capacity litigation. Regardless of the context in which D.M. Brown J. reviewed the general principles summarized above, the principles apply equally to requests for costs in uncontested capacity litigation.

[13] In Gadula v. Leroux, 2016 ONSC 6990, Goodman J. also considered requests for costs in the context of contested capacity litigation. The unsuccessful applicant and Section 3 counsel each requested that their costs be paid out of the incapable person’s estate. The applicant was awarded costs on the partial indemnity scale. The successful respondent, appointed as guardian of property, and Section 3 counsel were both awarded their respective costs on the full indemnity scale. All costs were to be paid out of the incapable person’s property.

[14] In his decision, Goodman J. applied the following general principles:

• In capacity litigation, the notion of success is not a significant factor, as it typically is in other types of civil litigation: at para. 15.
• Section 3 counsel, tasked with assisting the court on applications of this kind, provide valuable information to the parties. “Most importantly, they discharge their role in assisting the court with the fundamental issue of the best interests of the incapable person”: at para. 26.
• It is good public policy to permit Section 3 counsel to recover their full costs, because they otherwise have no recourse for payment: at para. 27.
• It is incumbent on Section 3 counsel to satisfy the court that their work and the fees and disbursements for their work are reasonable: at para. 27.
• The normal practice is that a party’s reasonable legal costs are paid out of the incapable person’s estate, unless the conduct of the party seeking costs warrants a departure from the normal practice: at para. 29.

[14] In the matter before this court, there are two sets of costs to address – Stephen’s and those of Section 3 counsel.

Stephen’s Costs

a) Factum and Costs Outlines

[15] When the application was first before the court in April 2023, Stephen requested that his costs of the application be paid from Ellen’s property. At the time, Stephen asked the court to fix his costs in the total amount of $6,000.

[16] Prior to the continuation of the hearing in April 2024, Stephen filed a costs outline. That document identifies that, at the time, Stephen was seeking his costs of the application, on the full indemnity scale, in the total amount of $16,713.50 (for fees, disbursements, and HST).

[17] The April 2024 costs outline includes a printout of the dockets entered, from November 18, 2022 to March 25, 2024, by timekeepers at the office of Stephen’s lawyer of record. The fees therein total $15,860.50 (exclusive of HST). The printout does not include a list of disbursements.

[18] In Ruling No. 1, the court ordered Stephen to file a factum, for the continuation of the application, addressing the scale upon which Stephen seeks costs, the quantum of costs requested, and the request for the costs to be paid from Ellen’s property. The factum Stephen filed for the continuation of the application did not address any of those issues.

[19] In Ruling No. 2, the court once again ordered Stephen to file a factum addressing the issue of costs. At para. 69, the court said the following:

Stephen’s request for his costs of the application to be paid on the full indemnity scale from Ellen’s assets is adjourned and shall be continued in writing. Stephen shall, within 30 days of the date of this ruling, (a) serve his factum regarding costs on Section 3 counsel, (b) file with the court the factum and related affidavit of service, and (c) upload to Case [Center] both the factum and affidavit of service.

[20] In Ruling No. 2, the court did not require, nor did the court permit, Stephen to file a further costs outline. Regardless, on June 7, 2024, Stephen filed both a factum and a second costs outline. The title of the latter document is “Costs Outline (Updated to June 6/24)”.

[21] The June 2024 costs outline is intended by Stephen to support his request for costs, on the full indemnity scale, now in the amount of $26,491.66, to be paid from Ellen’s property. Included in the materials filed with the June 2024 costs outline is a printout of the dockets entered, from November 18, 2022 to June 6, 2024, by timekeepers at the office of Stephen’s lawyer of record. The fees therein total $22,285.50 (exclusive of HST).

[22] The additional fees docketed between late March 2024 and early June 2024 total $6,425. Those fees are for work done on the materials filed, subsequent to the April 2024 hearing, regarding the issue of posting security and, later, costs.

[23] Despite the fact that Stephen was not permitted to file an updated costs outline and did not request leave of the court to do so, I am satisfied that it was reasonable for him to file such a document. The June 2024 bill of costs addresses work done relevant to substantive issues determined in Ruling No. 2. The order made at the conclusion of this ruling includes an order granting Stephen leave to file the June 2024 bill of costs.

b) Analysis

[24] Stephen requests that his costs, in the total amount of $26,491.66, be paid from Ellen’s property. That amount is broken down as follows:

Fees $ 22,285.50 Estimated appearance fee $ 600.00 Disbursements $ 586.40 HST $ 3,019.76

[25] I will first address the request for Stephen’s costs to be paid from Ellen’s property, then the scale upon which costs are payable, and conclude with fixing the quantum of costs payable.

Costs to be Paid from Ellen’s Property

[26] The request for an order appointing Stephen as the guardian of the person for Ellen was addressed efficiently. One year after addressing that issue, when appointing Stephen and Deborah as the guardians of property for Ellen, the court made the following observations: “Stephen has long demonstrated his devotion to his mother, his wish to see that she is well-cared for, and his desire to see that her day-to-day needs are met. I am satisfied that Stephen has his mother’s best interests at heart and will, together with Deborah, carefully manage Ellen’s property”: Ruling No. 2, at para. 23.

[27] There is nothing about Stephen’s conduct or, for that matter, Deborah’s conduct warranting deviation from the normal practice of the court ordering that Stephen’s reasonable costs be paid from Ellen’s property.

[28] I turn next to the scale upon which Stephen’s costs are payable from Ellen’s property.

The Scale upon which Costs are Payable

[29] As I have already noted, the notion of success is not a significant factor in capacity litigation, as it is in other types of civil litigation: Gadula, at para. 15. Success, or the lack thereof, is not, however, entirely irrelevant to costs in capacity litigation.

[30] Stephen was not successful in obtaining all of the relief originally requested. For example, Stephen was not successful on his request to be appointed as Ellen’s sole guardian of property. As another example, Stephen was not successful in obtaining an order dispensing with the requirement to post security. As a final example, Stephen was not successful in obtaining relief specific to reimbursement of expenses incurred in amounts less than $1,500.

[31] I balance the lack of success on those issues with Stephen’s overall success on the application. The appointments made will benefit Ellen. Taking the benefits to Ellen into consideration, I find it reasonable, and in Ellen’s best interests, to award Stephen his reasonable costs of the application on the full indemnity scale.

[32] I conclude this section of the ruling by fixing the quantum of costs payable to Stephen, on the full indemnity scale, from Ellen’s property.

Fixing the Amount of Costs Payable

[33] The fees claimed on the full indemnity scale total $22,285.50, exclusive of HST. For the following reasons, I reduce the fees payable to $15,000.00.

[34] First, I highlight that, prior to commencing this application, Stephen failed to consider the impact that his multiple pre-existing interests or roles would have on the outcome of the application. At paras. 31-33 of Ruling No. 1, the court identified Stephen’s multiple pre-existing interests or roles – those of estate trustee of his late father’s estate (“the Estate”) and of co-beneficiary, with Ellen, of the Estate.

[35] On the continuation of the application, Stephen requested that he and Deborah be appointed as joint guardians of property. I find that Stephen’s initial approach to guardianship of property resulted in both (a) an unnecessary protraction of the proceeding, and (b) duplication or inefficiency in the preparation of supporting materials.

[36] I reduce the fees awarded because of the duplication or inefficiency arising from Stephen’s initial approach to guardianship of property. I take into consideration that the fees for counsel’s work done regarding the second portion of the application for the appointment of a guardian of property total $2,800. I do not reduce the fees by that specific amount; rather I take that amount into consideration when determining the overall reduction of the fees.

[37] Second, I consider Stephen’s lack of success on the request for an order dispensing with the requirement to post security. Stephen, initially alone and subsequently together with Deborah, persisted with a request for an order dispensing with the requirement to post security. He did so,

• fully appreciating that the value of Ellen’s property is in the seven-figure range;
• in the face of the PGT’s recommendation, in writing, that the guardians be required to post security;
• in the face of the PGT’s statement, in writing, that security considerations must be addressed separately for each proposed joint guardian;
• in the face of the written submissions from Section 3 counsel that “the PGT’s comments regarding [the] posting of security are sensible”;
• based on a misapprehension as to who, other than Ellen, would benefit from the posting of security (see Ruling No. 2, at paras. 48-52); and
• aware that the case authorities stipulate that the posting of security is not to be dispensed with lightly (see Ruling No. 2, at para. 53, citing Fiacco, at para. 26).

[38] I reduce the fees from the amount claimed to reflect (a) the lack of success on that issue, and (b) Stephen’s misapprehension that the posting of security was, at least in part, for his benefit as the sole beneficiary of Ellen’s estate (see Ruling No. 2, at paras. 48-52).

[39] The cost of posting security is to be paid from Ellen’s property: Ruling No. 2, at para. 61. Ellen should not have to pay for the cost of posting the security and for Stephen’s failed efforts to dispense with the requirement to post security.

[40] I take into consideration that the fees for counsel’s work done regarding the posting of security total $2,000. I do not reduce the fees by that specific amount; rather I take that amount into consideration when determining the overall reduction of the fees.

[41] Third, the fees are reduced by a nominal amount to reflect the lack of success on the issue of reimbursement of expenses (see para. 30, above).

[42] Fourth, some of the work done by Stephen’s counsel relates to the administration of the Estate (i.e., the estate of Stephen’s late father). That work was required because of an error made by Stephen, in his capacity as the sole estate trustee for the Estate. The error made was to Ellen’s prejudice. When the error was identified, Stephen was required to reimburse the Estate and the Estate, in turn, redistributed the subject funds to Ellen.

[43] There is no basis for Stephen to be reimbursed from Ellen’s property for work (a) in the context of the administration of the Estate, or (b) required because of an error on Stephen’s part.

[44] Before leaving the subject of work done in the context of the administration of the Estate, I find that the June 2024 printout includes docket entries relating to the administration of the Estate in addition to those relating to the above-described error and correction of it. For example, a docket entered by Stephen’s counsel for March 24, 2024 is for “[r]eviewing reports of auctioneer; reviewing estate bank records and drafting summary of prior proceedings for court hearing”. As of March 2024, Stephen had not yet been appointed as guardian of property for Ellen.

[45] Based on the work described in the March 24, 2024 docket (1.5 hours; $600 in fees), and on Stephen’s role as the sole estate trustee for the Estate, I draw an inference and find that the work reflected in that docket relates exclusively to the Estate and has nothing to do with the guardianship application.

[46] In total, I reduce the fees by $2,000 for fees related to the Estate.

[47] Fifth, it appears from the dockets that, subsequent to the release of Ruling No. 2, Stephen’s counsel and Section 3 counsel reached an agreement that Section 3 counsel’s costs are fixed in the amount of $13,500. The dockets reflect negotiations over three days in early June 2024. The net result appears to be a reduction, of approximately $5,000, from the amount originally proposed by Section 3 counsel for his costs.

[48] Negotiations of the kind reflected in the early June 2024 dockets were not contemplated by the court in Ruling No. 2. Stephen is not entitled to costs, paid from Ellen’s property, for the work done by his counsel in that regard. The costs to which Section 3 counsel is entitled are discussed in the section of this ruling, which follows below.

Work by Non-lawyer Employees

[49] Sixth, numerous docket entries in the June 2024 printout are for work done by two non-lawyer employees of the firm. The issue is not whether Stephen’s counsel is entitled, on a solicitor-client basis, to charge Stephen for work done by non-lawyer employees of the firm. In the context of costs of the application, the issue is whether it is reasonable to order that fees for work done by non-lawyer employees of the firm are paid from Ellen’s property.

[50] I start with general principles relevant to the inclusion of fees for work done by non-lawyer employees of a firm in fees when fixing costs to be paid by an opposing party. First, there is a distinction between “law-related tasks” and “administrative tasks”: Fettes v. Wojcik, 2017 ONCJ 13, at para. 43 and footnote 6; Mackenzie v. 1785863 Ontario Ltd., 2018 ONSC 4992, at paras. 23-24; and W. v. F., 2024 ONSC 2170, at para. 27.

[51] The decisions in which this distinction is addressed include the decisions cited in the preceding paragraph and other decisions too numerous to mention. From those decisions and from my review of the dockets included in the June 2024 printout filed on Stephen’s behalf, I provide the following non-exhaustive list of administrative tasks:

a) filing work that does not advance the litigation; b) organizing documents for disclosure; c) scanning documents; d) collating and binding documents; e) emails to the court; f) preparing confirmation forms; g) serving documents; h) preparing affidavits of service; i) preparing Excel spreadsheets; j) leaving voicemail messages with third parties; k) forwarding to a client, emails received from opposing counsel; l) preparing simple letters (e.g., cover letters for service of documents); m) preparing documents to be electronically filed or to be uploaded to Case Center; n) filing court documents and uploading documents to Case Center; and o) Internet searches to locate parties, non-parties, witnesses and other individuals.

[52] Additionally, and regardless of the scale upon which costs are payable, a party ordered to pay costs is not obliged to pay fees for work done by a law clerk which is effectively administrative work that an assistant is capable of performing: Mackenzie, at para. 24.

[53] As noted by Sharma J. at para. 25 of W. v. F., a party may recover fees charged by law clerks for services they are authorized by the Law Society of Ontario to provide. In support of that conclusion, Sharma J. cites the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Tariff A, Lawyers’ Fees and Disbursements Allowable Under Rules 57.01 and 58.05 (“Tariff A”). Part I of Tariff A deals with fees. It provides that “[w]here students-at-law or law clerks have provided services of a nature that the Law Society of Ontario authorizes them to provide, fees for those services may be allowed.”

[54] Stephen did not provide the court with any authority to suggest that the general principles reviewed in paras. 48-51, above, do not apply (a) generally in capacity litigation, or (b) specifically when a party to capacity litigation requests that their costs be paid from the incapable person’s property.

[55] I turn to the June 2024 printout. The entries include dockets for the work done by two non-lawyer employees of the firm. The first employee is “JM”; she is described as a “clerk” with more than 20 years experience. The second is “NEB”; she is described as a “law clerk” with more than 20 years experience. I note that in her February 27, 2023 docket, JM’s work is recorded as “email and conversation with clerk/NEB and uploaded Record online per her instructions”.

[56] Based on the roles held by each of JM and NEB, and the contents of JM’s February 27, 2023 docket, I draw an inference and find that JM is not a law clerk authorized by the Law Society of Ontario to carry out “law-related tasks”.

[57] In drawing that inference and making that finding, I also rely on the substance of JM’s dockets. All the work recorded by JM falls within the scope of administrative tasks. Even if JM were a law clerk authorized by the Law Society of Ontario to carry out “law-related tasks” (which I find she is not), Stephen is not entitled to have the fees for the administrative work done by JM paid out of Ellen’s property.

[58] The printout includes only one docket for NEB. That docket, for February 27, 2023, describes that NEB attended at the courthouse to address a lack of success, to that point, in filing documents electronically. That work falls within the scope of administrative tasks. Once again, Stephen is not entitled to have the fees for that work paid out of Ellen’s property.

[59] Based on the “Time Summary”, which appears at the end of the docket entries, the fees for the work done by JM and NEB total $2,190 (rounded figure). I exclude those fees from the fee portion of the costs to which Stephen is entitled.

[60] Regarding administrative tasks for which non-lawyer employees docket, counsel in this and on other matters may wish to adopt the approach taken by at least one of the counsel in Roelandt v. Roelandt et al., 2015 ONSC 8080. In Roelandt, I.F. Leach J. determined two competing guardianship applications. When addressing the issue of costs, at para. 34, I.F. Leach J. said the following regarding one counsel’s approach to administrative tasks:

I also was favourably impressed by the frequency of indications, in the Bill of Costs submitted on behalf of Yvonne, that fees relating to certain expended time repeatedly were reduced or not charged because they related to administrative time or other reasons. To me, that reflects an ongoing and sensible effort to monitor the reasonableness of time that would be charged, and in respect of which reimbursement would be sought.

[61] It would not be difficult for counsel to identify in the bill of costs administrative tasks for which a docket is recorded and for which reimbursement is not being sought.

Summary

[62] The fees to which Stephen is entitled are reduced, for the reasons set out above, from the $22,285.50 claimed, to $15,000.00, plus HST of $1,950.00. The disbursements claimed of $586.40 plus HST of $44.64 are reasonable.

[63] Stephen’s costs on the full indemnity scale are fixed in the total amount of $17,581.04 ($15,000.00 + $1,950.00 + $586.40 + $44.64).

Costs of Section 3 Counsel

[64] The dockets in the June 2024 printout include entries for work done in early June 2024 by Stephen’s counsel regarding the costs claimed by Section 3 counsel. From the dockets, it appears the costs originally sought by Section 3 counsel were $18,500. Section 3 counsel appears to have reached an agreement with Stephen’s counsel that the former’s costs would be fixed in the amount of $13,500.

[65] There is no information in the dockets as to how Section 3 counsel’s costs will be paid – by Stephen personally or from Ellen’s property. I note, however, that in the final paragraph of Stephen’s factum regarding costs, he request an order authorizing that Section 3 counsel’s costs be paid “from Ellen’s funds in the estate account”.

[66] The court is not in a position to address administration of the Estate. Section 3 counsel’s costs, once fixed, are to be paid from Ellen’s property. It will be up to Stephen and Deborah, in their capacity as guardians of property, to make the necessary arrangements for payment of Section 3 counsel’s costs.

[67] It is unclear to the court why Section 3 counsel chose not to comply with the order made at para. 70 of Ruling No. 2. The court therein addresses Ellen’s costs (i.e., if any incurred) and Section 3 counsel’s costs:

Paragraph 16 of the May 2023 order, made pursuant to Ruling No. 1, provides that “Ellen Charlotte Vriend’s reasonable legal fees and disbursements shall be paid from her property unless a Legal Aid certificate is issued in connection with this proceeding.” If any additional relief is required to address the entitlement of Section 3 counsel to be paid for his services on Ellen’s behalf, then Section 3 counsel shall, within 30 days of the date of this ruling, (a) serve his bill of costs on Stephen, (b) file with the court, the bill of costs and related affidavit of service, and (c) upload to Case [Center] both the bill of costs and affidavit of service.

[68] Paragraph 70 of Ruling No. 2 makes it clear that relief related to Section 3 counsel’s entitlement to costs is to be addressed by Section 3 counsel filing the requisite documents with the court.

[69] The agreement reached between Section 3 counsel and Stephen (i.e., through his counsel), runs contrary to the principles set out by Goodman J. at para. 27 of Gadula. For example, Goodman J. therein states that it is good public policy to permit Section 3 counsel to recover their full costs, because they otherwise have no recourse for payment.

[70] In the same paragraph, Goodman J. speaks to the process pursuant to which Section 3 counsel’s costs are determined. Goodman J. therein states that it is incumbent on Section 3 counsel to satisfy the court that their work and the fees and disbursements for their work are reasonable.

[71] At the conclusion of this ruling, the court repeats the order made in para. 70 of Ruling No. 2. If Section 3 counsel wishes to rely on the agreement reached with Stephen, it is open to Section 3 counsel to do so. It will, however, be necessary to satisfy the court that it is reasonable in the circumstances of this application to deviate from the principles applicable when fixing costs to which Section 3 counsel are entitled.

Conclusion

[72] The court makes the following order with respect to costs of the application:

1. Stephen Vriend is granted leave to file an updated bill of costs to and including June 6, 2024.
2. Stephen Vriend is entitled to his costs of the application on the full indemnity scale and fixed in the amount of $17,581.04 for fees, disbursements, and HST.
3. Stephen Vriend’s costs, in the amount of $17,581.04, shall be paid from the property of Ellen Charlotte Vriend.
4. If Section 3 counsel is seeking costs of the application, including payable from the property of Ellen Charlotte Vriend, then Section 3 counsel shall, within 30 days of the date of this ruling, (a) serve his bill of costs and factum related to costs on Stephen, (b) file with the court, the bill of costs, factum related to costs, and related affidavit of service, and (c) upload to Case Center, the bill of costs, the factum related to costs, any other documents upon which Section 3 counsel relies, and an affidavit of service.

[73] I remain seized of the matter for the purpose of determining the costs to which Section 3 counsel is entitled, including the scale upon which they are payable, the quantum of costs payable, and the party responsible to pay those costs.

[74] When filing the documents referred to in paragraph 4 of the order made in the preceding paragraph, Section 3 counsel shall inform the court’s administrative staff that the documents are to be brought to my attention.

Madam Justice Sylvia Corthorn

Released: July 16, 2024