COURT FILE NOS.: CV-23-00696229-00ES
CV-23-00704035-00ES
DATE: 20241024
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE LAST WILL AND TESTAMENT OF LEONARDO LA CALAMITA, DECEASED
RE: JOHN MICHAEL LA CALAMITA also known as JOHN LA CALAMITA IN HIS CAPACITY AS ESTATE TRUSTEE OF LEONARDO LA CALAMITA DECEASED, MARCH 16^TH^ 2018
Applicant
AND:
DIANE MARIA LA CALAMITA, NADINE ROSE LA CALAMITA and JOHN MICHAEL LA CALAMITA
Respondents
AND BETWEEN:
DIANE MARIE LaCALAMITA
Applicant
AND:
JOHN MICHAEL LaCALAMITA, personally and in his capacity as estate trustee of the Estate of Leonardo LaCalamita, also known as Leonard LaCalamita, and NADINE ROSE LaCALAMITA
Respondents
BEFORE: Justice A.A. Sanfilippo
COUNSEL: Ronald B. Moldaver, K.C., for John Michael La Calamita
Justin W. De Vries and Karen Watters, for Diane Marie LaCalamita
HEARD: In Writing
COSTS ENDORSEMENT
[1] In Reasons for Judgment released July 26, 2024, I determined the following applications (“Reasons for Judgment”):[^1]
(a) An application brought by John La Calamita in his capacity as the estate trustee of the Estate of Leonardo La Calamita (the “Estate”) in court file number CV-23-0069622 (“John’s 2023 Application”); and
(b) An application brought by Diane Marie LaCalamita against John,[^2] personally and in his capacity as estate trustee, and their sister, Nadine Rose La Calamita, in court file number CV-23-00704035-00ES (“Diane’s 2023 Application”).
[2] I also granted an Order for the issuance of a Certificate of Appointment of Estate Trustee to John in the probate application that he brought in court file number 2023-010485 (the “Probate Application”).
[3] In paragraph 113 of the Reasons for Judgment, I directed a process for the parties to deliver written submissions on the issue of costs of this Application, if the parties could not agreement on this issue. At Diane’s request, I extended the time for delivery of written submissions on costs by my endorsement of August 8, 2024.[^3] The parties delivered their written costs submissions in accordance with the extended timetable.[^4]
A. John’s Position on the Issue of Costs
[4] John’s Costs Outline sets out John’s claim that he incurred actual costs of $136,460.73, consisting of $130,345.50 for fees and HST and $6,115.23 in disbursements. John submitted that these actual costs quantify at $123,426.18, all inclusive, on a substantial indemnity basis, and $84,322.53, all inclusive, on a partial indemnity basis.
[5] John claimed full indemnity costs of John’s 2023 Application payable by the Estate, on the basis that as estate trustee he was entitled to seek the Court’s direction on the administration of the Estate. John submitted that about one-third (1/3rd) of the costs that he incurred were in relation to his 2023 Application, and thereby stated that he should receive a cost award of $45,486.91,[^5] all inclusive, for John’s 2023 Application. John took no issue with Diane also receiving costs of John’s 2023 Application payable by the Estate but submitted that Diane’s costs should be no more than $20,000.00. Alternatively, John submitted that neither party should receive any costs of John’s 2023 Application.
[6] John submitted that Diane should pay John his costs of Diane’s 2023 Application because Diane failed to establish any of the relief claimed. John submitted that he incurred costs totaling $90,973.82[^6] in responding to Diane’s 2023 Application and in advancing the Probate Application. John claimed costs on a substantial indemnity basis, which he quantified as 80% of actual costs, which constitute $72,779.06.[^7]
[7] John’s claim for costs payable by the Estate in John’s 2023 Application is based on John’s submission that John’s 2023 Application raised a public policy consideration, namely an ambiguity in the last will and testament of Leonardo La Calamita (the “Will”) requiring clarification, with the result that costs arising from John’s 2023 Application should be payable by the Estate. John submitted that Diane’s 2023 Application did not raise a public policy consideration and that the costs of Diane’s 2023 Application are determinable by the civil costs regime. John contended that since he succeeded in Diane’s 2023 Application he is presumptively entitled to costs, and that Diane’s failure to establish her claims that John acted in self-interest, breach of his fiduciary duty, self-dealing and abuse of process should attract the sanction of an elevated cost award.
B. Diane’s Position on the Issue of Costs
[8] Diane’s Bill of Costs sets out her position that she incurred actual costs of $354,123.12, consisting of $333,537.58 in legal fees and HST and $20,585.54 in disbursements. Diane submitted that these actual costs quantify at $271,259.66, all inclusive, on a substantial indemnity basis, and $187,548.58, all inclusive, on a partial indemnity basis.
[9] Diane claimed that she should be awarded her full indemnity costs of John’s 2023 Application on the basis that the Will interpretation submitted by Diane was accepted and the Will interpretation submitted by John was rejected. Diane submitted that she incurred $140,078.92, all inclusive, in responding to John’s 2023 Application and should be awarded costs in this amount payable by the Estate. Alternatively, Diane claimed costs on a substantial indemnity basis in responding to John’s 2023 Application in the amount of $107,963.70 all inclusive, or $75,345.35, all inclusive, on a partial indemnity basis.
[10] Diane submitted that John should not receive an award of costs in John’s 2023 Application because John did not seek Court directions but rather sought an order permitting him to appropriate Estate property; that John did not seek a Will interpretation or assistance of the Court in administration of an estate; and because John was not successful in the Will interpretation that he proposed. If John is awarded costs, Diane submitted that John’s attribution of one-third (1/3rd) of his actual costs to John’s 2023 Application and two-thirds (2/3rds) to Diane’s 2023 Application is not reasonable because John’s actual costs were incurred equally (50/50) between the Applications.
[11] Diane conceded that she was not successful in her 2023 Application but submitted that the costs payable to John in Diane’s 2023 Application should be fixed on a partial indemnity basis in a modest amount. Diane denied that John established any basis for an elevated cost award in responding to Diane’s 2023 Application.
[12] Diane claimed that she was more successful than John on the evidentiary motions that each party brought at the hearing of the Applications to strike affidavit evidence. Diane claimed that she incurred actual fees of $33,862.00, all inclusive, in arguing the admissibility of six property appraisals, and that she incurred $29,385.50, all inclusive, in responding to John’s Motion to strike evidence and bringing a Motion to strike evidence of her own (collectively, the “Motions to Strike Evidence”). Diane claimed costs of these evidentiary issues.
[13] Diane submitted that there was divided success on the Applications and that, overall, no costs should be paid by either John or Diane personally to the other or by the Estate and that the parties should bear their own costs, or each should receive modest amounts from the Estate.
C. Analysis
[14] The historical approach in estate litigation that all costs be paid out of the estate has long-been displaced by an approach that is intended to ensure that estates are not unnecessarily depleted by unwarranted litigation.[^8] The issue of costs in estates litigation is like any form of civil litigation in that it is governed by s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 and r. 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, unless public policy considerations require that the costs be paid out of the estate.[^9] There are two public policy considerations applicable to my analysis of costs in these Applications: (a) the need to give effect to wills that reflect the testator’s intentions; and (b) the need to ensure that estates are properly administered.[^10]
[15] I will apply this approach to the analysis of costs in each of the Applications.
(a) Costs Analysis in John’s 2023 Application
[16] In my view, John’s 2023 Application engaged a public policy consideration. Specifically, John brought his Application to seek the direction of the court on the interpretation of the Will. I reject Diane’s submission that John’s 2023 Application is not an application for directions. John’s Notice of Application is stated to be brought on the basis of rr. 14.05(3)(a)[^11] and 14.05(3)(b),[^12] and the parties stipulated that John’s 2023 Application raised a will interpretation issue for determination.[^13] John’s 2023 Application raised the public policy consideration of providing directions to the trustee to give effect to the Will in a manner that reflected Leonardo’s intentions.
[17] I accept Diane’s submission that her response to John’s 2023 Application was proper and necessary to the interpretation of the Will and that she should receive an award of costs reasonably incurred to be payable by the Estate. I do not accept Diane’s submission that since the interpretation of the Will proposed by John was not accepted, John should be disqualified from receiving costs, because John acted properly as an estate trustee in seeking court direction in estate administration when uncertain in the operation of the Will.
[18] In consideration of the amount of costs, I accept that John incurred actual costs of $136,460.73, all inclusive, for both Applications. Having reviewed John’s Costs Outline, I find that these costs are fair, reasonable and proportionate, both in terms of the amount of hours of legal services incurred and the hourly rates. Diane cannot complain that John’s costs are excessive or unreasonable when Diane incurred actual costs that are greater ($354,123.12).
[19] I agree with Diane that the amount of costs incurred by John should be divided equally (50/50) between the two Applications, considering that the Applications were interwoven in the evidentiary record and in argument. I see no reasonable basis for the one-third (1/3rd)/ two-thirds (2/3rds) allocation proposed by John between John’s 2023 Application and Diane’s 2023 Application.
[20] To the total amount of costs incurred by John, I deduct the amount of $25,000.00 in costs that I attribute to the Motions to Strike Evidence. I found that both parties tendered affidavit evidence that was irrelevant and scandalous,[^14] inadmissible,[^15] and constituted hearsay.[^16] Diane succeeded in showing the admissibility of her six appraisal documents solely for their role in establishing the factual narrative, context and matrix of the parties’ dealings as placed in issue in Diane’s 2023 Application but did not establish the relief that she sought. In my view, neither party is entitled to any costs for their Motions to Strike Evidence, and each shall bear their own costs of these Motions.
[21] After deducting the costs attributable to the Motions to Strike Evidence, I accept that John’s actual costs reasonably incurred in both Applications are $111,460.73, all inclusive, which I will round to $110,000.00, all inclusive.[^17] I attribute one-half of this amount to John’s 2023 Application. John shall thereby receive an award of costs of John’s 2023 Application payable by the Estate, fixed in the amount of $55,000.00, all inclusive.
[22] Diane’s claim of $140,078.92, all inclusive, in responding to John’s 2023 Application is, in my view, unreasonable and disproportionate. I find that Diane’s reasonable costs in responding to John’s 2023 Application shall be fixed in the amount of $55,000.00, equal to that awarded to John in bringing his application. Diane shall thereby receive an award of costs of John’s 2023 Application payable by the Estate, fixed in the amount of $55,000.00, all inclusive.
(b) Costs Analysis in Diane’s 2023 Application
[23] Diane’s 2023 Application did not raise a public policy consideration. The main purpose of Diane’s 2023 Application was to displace John as Estate Trustee, and Diane also sought orders to bar John from being heard on the Will interpretation issue as an abuse of process, and for an order for the appointment of a disinterested trustee. Diane failed in all the relief sought in her 2023 Application, and I found that there was no reason to change the estate administration. By reason of rejection of Diane’s Application to remove John as estate trustee, I issued an Order for the issuance of a Certificate of Appointment of Estate Trustee (“CAET”) to John in the Probate Application.
[24] I do not accept Diane’s submission that her 2023 Application was a necessary response to John’s 2023 Application because Diane sought the removal of John as estate trustee two years earlier in the application that she brought in November 2021 in court file number CV-21-00671643-00ES (“Diane’s 2021 Application”). Considering the issues raised by Diane and their determination, Diane’s 2023 Application was unwarranted litigation that ought not to unnecessarily deplete the assets of the estate.
[25] The analysis of costs in Diane’s 2023 Application shall thereby be determined in accordance with the principles set out by the civil costs regime, on the basis of s. 131 of the Courts of Justice Act, as guided by the factors set out in r. 57.01. As John was successful in dismissing the claims advanced in Diane’s 2023 Application, John is presumptively entitled to an award of costs, payable by Diane. I see no factors that displace this presumption.
[26] Regarding the scale of costs, I do not accept John’s submission that he is entitled to costs fixed on an elevated scale. Costs on a substantial indemnity basis “are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties”.[^18] I do not accept that Diane’s conduct in her application meets this threshold. By reason of his success in meeting the issues raised by Diane’s 2023 Application, John is entitled to an award of costs fixed on a partial indemnity basis.
[27] The question, then, is “to fix an amount of costs that is objectively reasonable, fair, and proportionate for the unsuccessful party to pay in the circumstances of the case.”[^19] With reference to the factors set out in r. 57.01(1), I find that Diane’s conduct in lengthening unnecessarily the duration of the proceeding (r. 57.01(1)(e)) has already been taken into consideration in my determination that all parties shall bear their own costs of the Motions to Strike Evidence. I find, as well, that Diane could reasonably expect to pay costs to John in the amount claimed if unsuccessful in her application (r. 57.01(1)(0.b)) considering the greater amount of costs incurred by Diane in bringing her own application. Diane’s 2023 Application was clearly important to the parties (r. 57.01(1)(d)), but the issues were not complex (r. 57.01(1)(c)).
[28] Having considered the factors set out in r. 57.01(1), I have then “stepped back” to fix, in all the circumstances, a cost result that is fair, reasonable, and proportionate.[^20] Having considered all applicable principles set out by the case law and under Rule 57.01, and in the exercise of my discretion provided by s. 131 of the Courts of Justice Act, I have concluded that it is reasonable, fair, just and proportionate to fix John’s partial indemnity costs payable by Diane as $35,000.00, all inclusive. These costs may be paid from Diane’s distributive share in the Estate.
[29] This leaves one remaining consideration. John was required to respond to Diane’s 2023 Application in his capacity as estate trustee. As an estate trustee, John is entitled to be fully indemnified for all costs that he reasonably incurred in responding to Diane’s 2023 Application, in accordance with the principles set out by the Supreme Court of Canada in Geffen v. Goodman Estate: “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”.[^21] Section 23.1 of the Trustee Act provides that such amounts are payable from the “trust property”.[^22]
[30] I have found that John’s actual costs of responding to Diane’s 2023 Application are $55,000.00, all inclusive, and I have fixed the costs payable by Diane to John, on a partial indemnity basis, as $35,000, all inclusive. John shall thereby be paid the balance of his costs of responding to Diane’s 2023 Application, being $20,000.00, from the assets of the Estate.
[31] The costs of the Probate Application are subsumed, and form part of the costs awarded to John in the disposition of Diane’s 2023 Application. As a result, there shall be no order as to costs of the Probate Application.
D. Disposition
[32] On the basis of these reasons, I order:
(a) John La Calamita is awarded costs of the Application that he brought in court file number CV-23-00696229-00ES fixed in the amount of $55,000.00, payable from the Estate of Leonardo La Calamita.
(b) Diane La Calamita is awarded costs of the Application brought by John La Calamita in court file number CV-23-00696229-00ES fixed in the amount of $55,000.00, payable from the Estate of Leonardo La Calamita.
(c) John La Calamita is awarded partial indemnity costs of the Application brought by Diane La Calamita in court file number CV-23-00704035-00ES fixed in the amount of $35,000.00 all-inclusive, payable by Diane La Calamita personally or from her distributive share of the Estate, and John La Calamita is awarded the balance of his full indemnity costs, specifically the amount of $20,000.00, all-inclusive, payable from the assets of the Estate.
(d) All parties shall bear their own costs of the Motions to Strike Evidence brought in court file number CV-23-00696229-00ES and CV-23-00704035-00ES.
(e) There shall be no order as to costs of the probate application brought in court file number 2023-010485.
Justice A.A. Sanfilippo
Date: October 24, 2024
[^1]: La Calamita v. La Calamita, 2024 ONSC 4219.
[^2]: For brevity and clarity, I will respectfully refer to the parties by their first names, particularly as they share a surname, although spelled differently. I will refer to the parties’ surname in the manner used by John La Calamita because that is the spelling used by Leonardo in testamentary documents. Diane’s Application Record referred to her name interchangeably as “LaCalamita” and “La Calamita”.
[^3]: Endorsement, August 8, 2024, at para. 4: “The revised timetable is as follows: (a) any party seeking costs may, by September 9, 2024, deliver written costs submissions in the manner set out in paragraph 113 of the Reasons for Judgment; (b) any party against whom costs is sought may, by September 30, 2024, deliver responding written costs submissions in the manner set out in paragraph 113 of the Reasons for Judgment.”
[^4]: Costs submissions of John and Nadine La Calamita dated September 3, 2024, together with Updated Costs Outline and affidavit of service; Costs submissions of Diane La Calamita dated September 9, 2024, together with Bill of Costs; Responding Costs submissions of Diane La Calamita dated September 30, 2024.
[^5]: $136,460.73 ÷ 3 = $45,486.91.
[^6]: $136,460.73 ÷ 3 x 2 = $90,973.82.
[^7]: $90,973.82 x 80% = $72,779.06.
[^8]: McDougald Estate v. Gooderham (2005), O.A.C. 203, at para. 85.
[^9]: Westover Estate v. Jolicouer, 2024 ONCA 81, at paras. 12-13; Di Nunzio v. Di Nunzio, 2022 ONCA 889, 164 O.R. (3d) 796, at para. 9; Johnson v. Johnson, 2022 ONCA 682, 81 E.T.R. (4^th^) 7, at para. 21; Sawdon Estate v. Watch Tower Bible and Tract Society of Canada, 2014 ONCA 101, 119 O.R. (3d) 81, at para. 84; McDougald Estate, at paras. 78-80; Neuberger v. York, 2016 ONCA 303, 131 O.R. (3d) 143, at para. 24.
[^10]: Westover, at para. 13, citing Sawdon, at para. 85 and White v. Gicas, 2014 ONCA 490, 98 E.T.R. (3d) 197, at paras. 70-72; Neuberger, at para. 24.
[^11]: Rule 14.05(3)(a): “…the opinion, advice or direction of the court on a question affecting the rights of a person in respect of the administration of the estate…”
[^12]: Rule 14.05(3)(b): “…an order directing executors, administrators or trustees to do or abstain from doing any particular act in respect of an estate or trust for which they are responsible…”
[^13]: Reasons for Judgment, para. 44: “The parties stipulated that John’s 2023 Application raised the following will interpretation issue for determination: Does Leonardo’s Will provide that the Estate Trustee may make an appropriation and distribution of the Yonge Street Property in the manner claimed in the Notice of Application, in accordance with para. 1(b)(iii) and 1(e)(iii) of the Will notwithstanding paragraph 14 of the Will?”
[^14]: Reasons for Judgment, at para. 29.
[^15]: Reasons for Judgment, at paras. 31-32.
[^16]: Reasons for Judgment, at paras. 63-64.
[^17]: $136,460.73 - $25,000.00 = $111,460.73
[^18]: T.A.W. v. J.C.L., 2021 ONCA 270, at para. 4, citing Young v. Young, 1993 CanLII 34 (SCC), [1993] 4 S.C.R. 3, at p. 134 and Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 26; Davies v. Clarington (Municipality) et al., 2009 ONCA 722, 100 O.R. (3d) 66, at para. 28.
[^19]: Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 587, at para. 61, citing Boucher v. Public Accountants Council for the Province of Ontario et al. (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 26; Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at para. 12, leave to appeal refused, [2019] S.C.C.A. No. 38555.
[^20]: Apotex, at para. 60.
[^21]: 1991 CanLII 69 (SCC), [1991] 2 S.C.R. 353, at p. 390. See also, Sawdon Estate, at paras. 93-95; Di Nunzio, at paras. 8-10.
[^22]: R.S.O. 1990, c. T.23.