COURT FILE NO.: CV-05-90/14 DATE: 2024-01-05 ONTARIO SUPERIOR COURT OF JUSTICE

IN THE ESTATE OF BEVERLY GRACE ROE, Deceased

BETWEEN:

ROBERT MARK ROE, Applicant/Plaintiff

• and -

RICHARD THOMAS ROE, RANDALL SCOTT ROE and RAYMOND CHRISTOPHER ROE, in their capacity as Estate Trustees of the Estate of Beverly Grace Roe, Deceased and RICHARD THOMAS ROE and RANDALL SCOTT ROE, in their personal capacity, Respondents

(Also Court File No: CV-05-121/16, for the action between ROBERT MARK ROE, Plaintiff and RICHARD THOMAS ROE, RANDALL SCOTT ROE and RAYMOND CHRISTOPHER ROE, in their capacity as Estate Trustees of the Estate of Beverly Grace Roe, Deceased, and in their personal capacity, Respondents)

BEFORE: Sugunasiri, J.

COUNSEL: Brendan Donovan & Noah Kochman, for the Applicant/Plaintiff Andrew Rogerson, Robert A. Rastorp and Nikil Mukherjee, for the Respondents, Richard Thomas Roe and Randall Scott Roe David Delagran, for the Respondent, Raymond Christopher Roe

HEARD: In Writing

REASONS FOR COSTS DECISION

Sugunasiri, J.:

Overview:

[1] After a three-week trial of the Application which by court order was converted into an action (“Will Action”), Mark Roe unsuccessfully challenged his mother, Beverly’s capacity to exclude him from her Last Will and Testament dated August 24, 2005 (“Will”). In the second concurrent action, Mark challenged Beverly’s capacity to give monetary gifts to his brothers while Beverly was still alive (“Gift Action”). I dismissed both actions. The task at hand is to fix costs. Each party submitted extensive cost compendia and submissions. I determined costs based on their submissions uploaded to caselines under the December 14, 2022 motion bundle.

[2] The focus of the trial was the Will Action because if Mark did not set aside the Will, he had no standing to challenge the gifts. Mark named Rick, Randy and Chris in their capacity as estate trustees, and Rick and Randy in their personal capacities. Before the trial commenced, Rick died, leaving Randy and Chris as the estate trustees. At trial Mark abandoned the cause of action framed as interference with inheritance rights raised against Rick and Randy personally.

[3] Randy successfully established that Beverly had the mental capacity to execute the Will and did not suffer from insane delusions. Mark was unsuccessful in persuading me that Beverly was unduly influenced by Rick. Randy spent $1,226,540.16 in legal fees and disbursements to resist sharing roughly $1 million with Mark. He now seeks indemnification from Mark for his costs. There is also a difference of opinion in a costs order made by Justice Faieta on July 4, 2019. Chris submitted his rights to the court in the Will application, thereby foregoing any claim to costs in that proceeding. He also settled with Mark in the Gift Action but claims costs incurred prior to settlement to be paid out by the residue of the estate.

[4] For the reasons that follow, I order:

a. Randy owes Mark $25,114.53 for the Faieta, J. order of July 4, 2019; b. Mark shall pay Randy $330,000 in all inclusive costs; c. Mark shall bear his own costs; d. The estate shall cover $260,338.03 of Randy’s litigation costs; e. Randy cannot recover any other litigation costs from the estate and is personally responsible for the balance of the fees and disbursements; and f. Chris shall be reimbursed $170,000 from the residue of the estate.

Legal Framework for costs in estates matters:

[5] In estate matters, the unsuccessful party pays an amount fixed by the court in accordance with s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, and r. 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, subject to public policy reasons that may permit the costs of all parties to be paid out of the estate. Public policy considerations include disputes arising from ambiguity or omission on the testator’s will, or other reasonable grounds upon which to question its validity. [1] The estate trustee acting reasonably and for the benefit of the estate is usually fully indemnified by having a portion of the costs paid by the losing party and the balance paid by the estate. [2] A will challenger could be relieved from paying the trustee’s cost on an unsuccessful will challenge if they raise a bona fide concern with the will that warrants judicial scrutiny. [3] On the flipside, a court may deprive an estate trustee from using estate coffers to cover the cost of litigation where they have acted unreasonably or in substance for their own benefit. [4]

Analysis:

[6] Randy has provided multiple schedules to his Bill of Costs with suggested ratios for determining costs at a given stage when the items in the schedule may have overlapping time with other schedules. The court takes a bird’s eye view of costs and does not do the mathematical calculations that Randy invites. [5] Rather, the court exercises its discretion with due consideration for the relevant factors in r. 57.01(1) to achieve a just result. [6]

[7] Randy does provide a bottom line, which I accept on the word of counsel that it appropriately excludes costs for interlocutory steps that have already been dealt with. Randy seeks either $1,005,583.01 or $1,159,029.15 in all inclusive fees, disbursements and HST, less what Randy owes on the costs awarded by Justice Faieta on July 4, 2019. If there are other unpaid costs orders by Randy, the parties can address those set-offs on their own.

Randy owes only $25,114.53 under the Faieta, J. order of July 4, 2019

[8] Justice Faieta decided Randy’s motion to replace his expert, Dr. Silberfeld, with Dr. Sadavoy. I agree that Randy owes Mark $25,114.53 under that order. At paragraph 18, Justice Faieta orders Rick and Randy to pay Mark “reasonably incurred costs of the types described above” other than the attendance before Justice Myers, on a full indemnity basis in any event of the cause. Justice Faieta is referring to the enumerated costs in paragraph 12 of his decision which itemizes Mark’s prejudice in having to switch his focus to a new expert. I agree with Randy that Justice Faieta’s endorsement only indemnifies Mark for the cost of time already spent on addressing Dr. Silberfeld’s proposed evidence. Mark’s time in responding to the new expert, Dr. Sadavoy is in a different category of costs going forward that are normally part of the trial judge’s determination of costs. It would be unusual for a motion judge to also award the affected party full indemnity prospective costs of responding to the new expert. Had Justice Faieta specified that Randy was to specifically pay for each item listed in paragraph 12, I might have agreed with Mark that to limit the full indemnity recovery to time spent on Dr. Silberfeld would be a collateral attack on my colleague’s order. However, Justice Faieta used the phrase “of the types…” which implies that Mark should be indemnified for the appropriate categories of costs thrown away as that term is routinely understood. I also agree with Randy that Justice Faieta refers to “reasonably incurred costs”, past tense; meaning costs Mark incurred prior to the motion to change the expert.

Randy’s starting point for costs is a non-starter

[9] The range of costs Randy seeks from Mark after setting off the Faieta, J. order is $980,468.48 to 1,133,914.62. Removing Randy’s disbursement cost of $134,168.03 (including HST), Randy’s requested fee recovery ranges from $846,300.45 to $999,746.59. The actual fee charged to Randy is $1,092,372.13 according to Randy’s Bill of Costs. Randy is claiming substantial or full indemnity from Mark. His calculation is based in part on his argument that any measure of indemnification should stem from fees that Rogerson Law Group could have charged had Randy not negotiated a favourable price for certain parts of the litigation. Total fees under that theory amount to $1,343,401.63.

[10] I reject this proposition. To do so would be to refocus costs determinations from the parties to the lawyers. The indemnity function of costs is to indemnify a party. It is not to help a law firm make up the difference between what they agreed to charge their client and what their regular market rate is. The appropriate starting point is $1,092,372.13, which in any event is subject to my assessment of whether those fees are reasonable and proportionate, given the nature of the case and the counsel involved.

There is no basis for elevated costs against Mark

[11] Randy seeks elevated costs against Mark for his allegedly reprehensible and reckless litigation behaviour as understood in Davies v. Clarington (Municipality). In that case, the Court of Appeal for Ontario stated that elevated costs are warranted where there is a r. 49.10 offer to settle (not applicable here to Randy’s claim for costs) or where the losing party has behaved in an egregious or reprehensible manner. Egregious and reprehensible behaviour is different from hard fought litigation. [7] I find no basis to require Mark to pay more than partial indemnity costs.

[12] As I noted in the trial decision, a stubborn attachment to their point of view appeared to be a family trait. Mark dug in his heels and left no stone unturned to prove that his mother lacked capacity when she disinherited him and when she gifted his brothers money. At the same time, from April 18, 2017 to January 14, 2022, Mark made nine offers to settle with Randy and Rick. While many of the offers suggested that Mark receive 24.5% of the estate and the inter vivos gifts (a settlement close to his best day in court), his December 13, 2018 offer suggested a payment of $625,000 with the parties bearing their own costs. This offer was a meaningful compromise reflecting a bona fide attempt to settle at that time. Randy, on the other hand, made one attempt to settle in January of 2020 when he offered Mark $100,000 in full satisfaction of both actions.

[13] The litigation was nothing more than a hard-fought battle whose cost was not worth the war, but it was a battle Mark was entitled to pursue. Both parties tendered extensive evidence. Mark may have attached impermissible hearsay evidence to his trial affidavits but that is not reprehensible behaviour. I agree that Mark filed numerous audio recordings and transcripts of his conversations with Beverly, but that is not egregious and reprehensible behaviour. In fact, Randy relied on some of those recordings to argue that Beverly had capacity, and I relied on some of those recordings to make findings. Mark’s premeditated collection of evidence with litigation in mind also does not push his conduct into the realm that warrants sanction. As Randy’s counsel noted in his opening, this is a simple case that I would add, was complicated by the approach taken by both Mark and Randy. Many of the facts could have formed an Agreed Statement of Facts, and cross-examinations could have been truncated if Mark and Randy were less combative and reactionary about everything.

[14] Randy also alleges that Mark required him to prepare for trial three times, with one delay attributable to Covid and the other to court unavailability. I do not fault Mark for this extra expense which he too had to incur. I agree with Mark in his submissions at paragraphs 20-28 of his responding cost submissions as the basis to reject Randy’s request for elevated costs.

[15] The appropriate scale to award is partial indemnity, which is not necessarily a mere application of a percentage to $1,092,372.13 (what Randy was charged), [8] but an overall assessment of what is fair and just in the circumstances, considering the factors in r. 57.01 including Mark’s reasonable expectations and proportionality and the law particular to estates matters.

Randy is entitled to recover total fees of $500,000 as the propounder of the Will of which Mark shall pay $300,000 and the estate shall pay $200,000

[16] As estate trustee and the propounder of the Will, Randy had no choice but to respond to Mark’s Will Action and later, his Gift Action. The burden was on him to satisfy the court that Beverly had the capacity to execute the Will and was not suffering from insane delusions and had donative capacity. He is entitled to recover some of his costs for doing so, from both Mark and the estate. The appropriate recovery is $500,000 with $300,000 from Mark and $200,000 from the estate. This figure, and Mark’s share are well within Mark’s reasonable expectations.

[17] Four main factors inform this amount and allocation as between Mark and the estate. First, I agree with Mark that Randy engaged in scandalous and reprehensible conduct when he reported Messrs. Donovan and Kochman to the Law Society of Ontario in the weeks prior to the February 2019 trial date. I accept counsel’s submission that this was not an isolated incident and that Randy also reported former counsel and Chris’ counsel, Mr. Delagran. I understand the LSO did not pursue any of those complaints. Messrs. Donovan and Kochman advise that the LSO commented that “the advancement of a legal position with which [Mr. Rogerson] disagree[s] does not constitute professional misconduct.” Randy should not recover any amount for time spent on these complaints and further deserves the court’s disapproval in launching such tactics.

[18] Second, Randy engaged nine lawyers, all billed at relatively high rates even with Randy’s discounts. Randy is entitled to retain whomever he wants but it is not on Mark nor the estate to pay for the Rolls Royce of legal service. Randy must bear the cost of that choice. Having nine lawyers on file necessarily leads to duplication of time as each gets up to speed to address their part. Randy’s bill is disproportionate to the litigation, even allowing for the fact that counsel had to prepare three times through no fault of Randy. It makes no sense in modern litigation to spend $1.2 million to save $1 million and make one low-ball offer to settle. In Tri-S Investments v. Vong, Justice Feldman observed that “I do not view it to be the court’s function when fixing costs to second guess successful counsel on the amount of time that should or could have been spent to achieve the same result, unless the time spent is so grossly excessive as to be obvious overkill.” [9] Randy’s bill of costs reflects the obvious overkill Justice Feldman refers to. There are also fees for matters not related to the actions, like the sale of Laurentide and the cost of the estate trustee during litigation that managed that sale.

[19] Third, in line with the Court of Appeal for Ontario’s recent decision in Di Nunzio v. Di Nunzio, Mark is entitled to some discount because he raised a bona fide issue with the Will that was worthy of court scrutiny. In that case, the Court of Appeal had all trustee costs paid out of the estate and relieved the unsuccessful challenger of paying any. In this case, I do not fully relieve Mark because of his conduct that I have already noted, and because I reward Chris for his more conciliatory approach to the litigation. Requiring the estate to pay is requiring Chris to pay as a 1/3 beneficiary of the residue. He should not be penalized by having his interest depleted by his brothers’ excessive litigation. Further, Mark chose to pursue Randy in his personal capacity, thereby increasing expense and animosity in the proceedings beyond a mere will challenge. The most just solution is for Mark and the estate to share some of Randy’s cost.

[20] Along those lines, Chris strongly objects to any of Randy’s fees being paid out of the estate because his conduct was “abominable”. Chris submits that Randy refused to negotiate except for one offer that came five years after proceedings had commenced. He argues that Randy acted largely in his own best interest and not for the estate, and that requiring costs to come out of the estate is tantamount to an order against Chris, who took a conciliatory approach and ultimately settled with Mark. I agree with Chris that Randy acted in his own best interest in the litigation, more than that of the estate, was unnecessarily adversarial, and unreasonable in refusing to properly entertain his settlement offers. This warrants a reduction in what Randy can recover from the estate in fees. Having said that, Randy is entitled to some payment from the estate because there was a need to propound the Will due to the suspicious circumstances properly raised by Mark. Propounding the Will simpliciter was for the benefit of the estate. How Randy went about it descended into the personal.

Randy shall recover disbursements shared between Mark and the estate

[21] Randy’s disbursements total $134,168.03 with the largest expense being fees for Dr. Sadavoy of $83,830. Mark’s expert, Dr. Shulman, charged $19,000 for what I agree is the same service. Both experts were equally qualified geriatric psychiatrists to opine on insane delusions, dementia and Alzheimer’s. While Randy can hire whomever he wants, his right to recover that cost is tempered by reasonableness and proportionality. Dr. Sadavoy’s cost is neither proportionate nor reasonably within Mark’s contemplation. An appropriate cost for Dr. Sadavoy is $40,000, thereby reducing recoverable disbursements to $90,338.03.

[22] Relying on the principle in Di Nunzio that a losing party can be relieved from paying costs if they appropriately raised suspicion surrounding the execution of a Will, Mark shall pay $30,000 of this disbursement and Randy can recover $60,338.03 from the estate. Randy shall be personally responsible for the extra $43,830 that he chose to pay Dr. Sadavoy. This was not in the best interest of the estate.

Randy shall not recover any further amounts from the estate, arising from this litigation

[23] Randy suggests that he is entitled to full indemnity from the estate as part of a different judge’s passing of accounts. I disagree. It is the trial judge that is best situated to assess whether the trustee is entitled to recover the cost of litigation from the estate that he could not recover from the losing party. In so doing, the trial judge determines, as I have, whether there are circumstances that warrant deviating from the general principle that trustees acting for the trust should be fully indemnified for all reasonable expenses.

Chris shall be reimbursed $170,000 from the estate for his conciliatory role in the Gift Action

[24] Chris submitted his rights in the Will Action and is not entitled to costs there. However, the Will Action and Gift Action were tried together requiring Chris to participate until he settled with Mark in January of 2022. Prior to his settlement, Chris attempted to engage his brothers in discussing resolution that would eliminate the need for the Gift Action. This required the participation of his co-defendants, Rick and Randy. Randy refused to meaningfully engage in settlement and Chris incurred costs, as an estate trustee. Although Mark also named him personally in the Gift Action, unlike Rick and Randy, there were no personal allegations against Chris. In sum, I accept that Chris attempted to reduce costs and extricate himself from the Gift Action as soon as it was commenced but ran up against a brick wall. He worked for the benefit of the estate and should be reimbursed $170,000 from the estate for his efforts.

Conclusion:

[25] I order as follows:

a. Randy owes Mark $25,114.53 for the Faieta, J. order of July 4, 2019; b. Mark shall pay Randy $330,000 in all inclusive costs; c. Mark shall bear his own costs; d. The estate shall cover $260,338.03 of Randy’s litigation cost; e. Randy cannot recover any other litigation costs from the estate and is personally responsible for the balance of the fees and disbursements; and f. Chris shall be reimbursed $170,000 from the residue of the estate.

P.T. Sugunasiri J.

Released: January 5, 2024

Citations

[1] Di Nunzio v. Di Nunzio, 2022 ONCA 889, 164 O.R. (3d) 796, at para. 9, re-affirming the principles in McDougald Estate v. Gooderham (2005), 255 D.L.R. (4th) 435 (Ont. C.A.), at paras. 78-80.

[2] Trustee Act, R.S.O. 1990, c. T.23, ss. 63-64; Geffen v. Goodman Estate, [1991] S.C.R. 353, at pp. 390-92.

[3] Di Nunzio, at para. 13.

[4] Brown v. Rigsby, 2016 ONCA 521, 350 O.A.C. 236, at para. 11-14.

[5] Davies v. Clarington (Municipality), 2009 ONCA 722, 167 O.R. (3d) 33, at para. 52.

[6] Wasserman, Arsenault Ltd. v. Sone (2002), 164 O.A.C. 195 (Ont. C.A.), at para. 5.

[7] Davies, at paras. 40, 45.

[8] Wasserman, at para. 5.

[9] Tri-S Investments v. Vong, [1991] O.J. No. 2292 (Gen. Div.), at p. 12.