Court File and Parties

COURT FILE NO.: CV-18-1236-ES DATE: 2024/01/26

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Kelly Kurt Plaintiff

– and –

Robert Darrell Kurt, Roy Sullivan and Heinz Nowak in their capacities as the Estate Trustees of the Estate of Donald Alvin Kurt, Heinz Nowak, in his capacity as the Estate Trustee of the Estate of Culleen Janet Irene Kurt, and Culleen and Donald Kurt Foundation, Warren Griffin and Giesbrecht, Griffin, Funk & Irvine LLP Defendants/Responding Parties

COUNSEL:

Mark Muir Rodenburg, for the Plaintiff and Moving Party

Theodore D. Dueck, for the defendants and responding parties, Robert Darrell Kurt, Roy Sullivan and Heinz Nowak in their capacities as the Estate Trustees of the Estate of Donald Alvin Kurt, Heinz Nowak, in his capacity as the Estate Trustee of the Estate of Culleen Janet Irene Kurt, and Culleen and Donald Kurt Foundation

Anna Husa, for the Defendants/Responding Parties, Warren Griffin and Giesbrecht. Griffin, Funk and Irwin LLP

HEARD: In Writing

MR. JUSTICE M.J. VALENTE

COSTS ENDORSEMENT

Overview

[1] the Plaintiff brought a motion for summary judgment in the principal amount of $800,000 plus interest and costs pursuant to an alleged legacy left to her by her late father, Donald Alvin Kurt (‘Donald’) in his Secondary Will, dated December 17, 2013 (‘Donald’s Secondary Will’).

[2] In considering the Plaintiff’s motion for summary judgment, all parties agreed that they were seeking this court’s opinion, advice, and direction with respect to Donald’s Secondary Will.

[3] I rejected the Plaintiff’s interpretation of the relevant paragraph of Donald’s Secondary Will and instead corrected an error in the will to reflect Donald’s intention by deleting certain words and replacing them with others. In doing so, I dismissed the Plaintiff’s motion for judgement thereby disposing of the action.

[4] In my judgment of November 22, 2023, I encouraged the parties to agree on the issue of costs, failing which I was prepared to entertain written cost submissions. I now have the parties’ submissions and this is my ruling with respect to the matter of costs.

Position of Parties

[5] The Plaintiff seeks that her substantial indemnity costs in the amount of $96,973.90, or in the alternative, her partial indemnity costs in the amount of $65,998.80, be paid by either the estate of Donald (the ‘Estate’) or Warren Griffin, and his law firm Giesbrecht, Griffin, Funk & Irvine LLP (collectively, “Griffin”) or a combination of the two. The Plaintiff submits that the traditional approach to fixing costs in estate litigation as payable by the estate should be followed in this instance. The Plaintiff argues that the standard cost rules should not be followed because the litigation arose as a result of the actions of the testator, Donald. The Plaintiff further submits that should I find that Donald’s lawyer, Griffin, made mistakes in drafting Donald’s Secondary Will that gave rise to the litigation, I should nonetheless find that Donald is responsible for the Will that he signed. The Plaintiff submits that the traditional approach in fixing costs in estate litigation should be followed when certain public policy considerations are triggered. One such consideration is that where the litigation is caused by the testator, it is appropriate for the estate to bear the costs of the dispute.

[6] Griffin seeks his partial indemnity costs of $44,898.38 from the Plaintiff. Griffin submits that there is no basis to deviate from the normal cost considerations as prescribed by Rule 57.01. Given that he was successful in defending the Plaintiff’s motion for summary judgement, costs should follow the event and he be awarded his partial indemnity costs. In the alternative, Griffin submits each party should bear their own costs.

[7] For their part, the Estate and Culleen and Donald Kurt Foundation (the ‘Foundation’) seek their partial indemnity costs of $29,547.23 from the Plaintiff. They are aligned with Griffin to the extent that is also their position that the normal civil cost rules should apply and not the traditional approach of fixing costs in estate litigation. The Estate also submits should this court award the Plaintiff her cost, they should be awarded solely as against Griffin, or in the alternative, any costs awarded to the Plaintiff from the Estate should be indemnified by Griffin.

Guiding Principles

[8] The Court of Appeal in its 2005 decision of McDougald Estate v. Gooderham, 2005 CanLII 21091 (‘McDougald Estate’), displaced the traditional approach to fixing costs in estate litigation by the approach of scrutinizing the litigation, and unless the court finds that a public policy consideration is at play, the cost rules that normally apply in civil litigation should be followed. The court in McDougald Estate refers to two public policy considerations for deviating from the standard civil cost rules: (1) where the litigation was reasonably necessary to ensure the proper administration of the estate, as in the case where there are reasonable grounds on which to question the execution of a will or the testator’s capacity to make a will; and (2) where the litigation arose as a result of the actions of the testator or those with an interest in the residue of the estate.

[9] This principle was restated by the court of Appeal in its decisions of Sawdon Estate v. Sawdon 2014, ONCA 101 and McGrath v. Joy, 2022 ONCA 119. (‘McGrath’).

[10] In McGrath, the Court makes clear that is not a question of balancing the public policy considerations against the rationale for the ordinary civil cost rules but rather, it is a sequential analysis. The first step is to determine if one or more policy considerations apply. If so, and unless there are exceptional circumstances, the parties’ reasonable costs are are payable from the estate. If not, then the court is to exercise its discretion with respect to costs pursuant to s. 137 of the Courts of Justice Act RSO 1990, c.C.42, as amended (CJA), and Rule 57.01.

[11] Section 131(1) of the CJA provides that “subject to the provisions of an Act or rules of the court, the costs of and incidental to a proceeding or a step in proceeding are in the discretion of the court, and that the court may determine by whom and to what extent of the costs shall be paid”.

[12] The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in sub - Rule 57.01(1), including, in particular:

(1) The principle of indemnity, including where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged, and the hours spent by that lawyer;

(2) 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.

[13] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behaviour by litigants (see: Fong v. Chan, 1999 CanLII 2052 (ON CA), [1999] O.J. No 4600 (Ont. C.A.) at para. 24).

[14] Justice Perell in 394 Lakeshore Oakville Holdings Inc v. Misek, 2010 ONSC 7238, [2010] O.J. No. 5692 (Ont. S.C.J.) reformulated the purposes of the modern cost rules, at paragraph 10, as follows:

(1) To indemnify successful litigants for the costs of litigation, although not necessarily completely: (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and to (5) to encourage settlements.

[15] The usual rule in civil litigations is that costs follow the event and that the rule should not be departed from except for very good reasons (see: Gonawati v. Teitsson 2002 CanLII 41469 (ON CA), [2002] CarswellOnt 1007 (Ont. C.A.) and MacFie v Carter, 1920 CanLII 401 (ON SC), [1920] O.J. No.71 (Ont. H.C.) at para. 28).

[16] It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is “fair and reasonable” having regard to what the losing party could have expected the costs to be (see: Coldmatic Refrigeration of Canada Ltd v. Leveltek Processing LLC, 2005 CanLII 1042, (Ont. C.A.)).

Discussion

[17] I disagree with the Plaintiff’s submission that public policy considerations are triggered in this case, and specifically, I do not accept that this litigation arose as a result of the actions of the testator. Yes, the Will at issue was Donald’s, and yes, Donald signed it but I agree with the submission of counsel for the Estate that a higher burden should not be placed on Donald to identify, question and understand the consequences of drafting errors than his lawyer, Griffin. Griffin failed to read Donald’s Secondary Will sufficiently to notice and correct the drafting errors before presenting the Will for signature.

[18] It does not escape me that Justice Pattillo in Lipson v. Lipson, 2010 ONSC 475, 2010 ONSC 475 (‘Lipson’) decided that the estate should be responsible for the costs of all parties where the court determined that the drafting solicitor made errors undetected by both he and the testator. However, the facts in Lipson are distinguishable. There the testator did not read his will prior to signing it and declined to have it read to him. There is no such evidence in the case before me.

[19] If, however, I am wrong in my determination that Donald should have some responsibility for the litigation, I nonetheless decline to order the Plaintiff’s costs be recoverable from the Estate in light of the Plaintiff’s conduct which is not to be sanctioned with an award of costs. The Plaintiff’s less than laudable conduct includes the following:

(1) The Plaintiff was aware that she did not have a close relationship with either of her parents such as would entitle her to an extra $800,000 legacy from her father’s estate. The Plaintiff’s action was entirely tactical in my view.

(2) The Plaintiff refused to proceed by way of application and instead insisted on proceeding with an action with full rights of discovery of Griffin and all three Estate trustees. In my view, the Plaintiff’s position contributed to unnecessary costs being incurred in this litigation.

(3) The Plaintiff submitted two offers to settle: one on January 24, 2022, for $790,000 plus interest and costs, and a second, on August 24, 2022, for $600,000 plus interest and costs. In my opinion, neither offer is reflective of an earnest attempt at compromise.

[20] I, therefore, find that the Plaintiff’s costs should not be paid from the Estate but rather the normal civil cost rules apply. As the unsuccessful party, I find that the Plaintiff should bear her own costs of the action, including the motion for summary judgement.

[21] Although Griffin, along with the co-defendants, was successful in defeating the Plaintiff’s claim, I find that as a result of his drafting error, he was responsible for the litigation. While I recognize that Griffin admitted his error, this admission was not stipulated on the record until the Plaintiff’s action was will advanced. Accordingly, in these circumstances, and after considering the factors stipulated in Rule 57.01(1) and (2), I decline to order any costs in favour of Griffin. Griffin shall bear his own costs.

[22] Unlike Griffin, the Estate and the Foundation bear no responsibility for the litigation. They were each dragged into this dispute as necessary parties who at the end of the day were successful. In my view, these defendants are entitled to their partial indemnity costs payable by the Plaintiff in accordance with the usual rule in civil litigation.

[23] I am also prepared to fix the costs of the Estate and the Foundation in the amount claimed. In reaching this determination, I have considered, among other factors:

(1) The matters at issue were of high importance and value;

(2) The matters at issues were relatively complex;

(3) The experience level of counsel; and

(4) The reasonable delegation of tasks between the members of the firm representing these defendants.

Disposition

[24] It is therefore ordered that:

(1) The Plaintiff shall bear her own costs of the action, inclusive of the motion for summary judgement;

(2) The Defendants, Griffin, shall bear their own costs of the action, inclusive of the motion for summary judgement, and

(3) The Plaintiff shall pay the partial indemnity costs of the Estate and the Foundation fixed in the amount of $29,547.23, inclusive of disbursements and HST within 30 days of the date of Endorsement.

M.J. Valente J.

DATE: January 26, 2024