Court File and Parties
COURT FILE NOS.: CV-20-00005058-00ES & CV-20-00005116-00ES DATE: 20241212 ONTARIO SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE ESTATE OF VASILIKI CARREIRA (ALSO KNOWN AS ‘BESSIE CARREIRA’ AND AS ‘VASILIKI KOUTSOVASILIS’), DECEASED
BETWEEN:
ALEXANDRA KOUTSOVASILIS Applicant – and – PAUL CARREIRA, in his personal capacity and in his capacity as ESTATE TRUSTEE OF THE ESTATE OF VASILIKI CARREIRA (ALSO KNOWN AS ‘BESSIE CARREIRA’ AND AS ‘VASILIKI KOUTSOVASILIS’) Respondent
Counsel: Daniel M. Paperny and Matthew A. Rendely, for the Applicant Pia Hundal and Gila Gabay, for the Respondent
HEARD: In Writing
Endorsement on Costs
A.A. SANFILIPPO J.
Overview
[1] In my Reasons for Judgment issued August 30, 2024, I provided that if the parties were unable to agree on the issue of costs, they could deliver written submissions on costs in accordance with a timetable that was established. [1] The parties were not able to agree on the issue of costs and delivered written submissions. [2]
[2] The Respondent, Paul Carreira, sought an award of costs payable by the Applicant, Alexandra Koutsovasilis, on a substantial indemnity basis or, alternatively, costs fixed on a partial indemnity basis. Paul [3] submitted that he was the more successful party in this Consolidated Application because he obtained some relief whereas Alexandra obtained none. Paul claimed costs on an elevated scale on his submission that Alexandra “took unreasonable positions and behaved in an unreasonable manner” in the years of litigation following the death of Paul’s spouse/Alexandra’s daughter, Vasiliki Koutsovasilis, known to family and friends as “Bessie”. Paul submitted, based on his Bill of Costs, that his costs on a substantial indemnity basis quantify at $349,045.06, all inclusive of fees, disbursements and applicable taxes, and on a partial indemnity basis at $269,436.78, all inclusive.
[3] Alexandra responded that she and Paul equally succeeded and equally lost in the Consolidated Application. Alexandra submitted that neither Alexandra nor Paul established their claims for sole ownership of the real estate that was at the core of this dispute, specifically, the property known municipally as 406 Marybay Crescent, Richmond Hill, Ontario (the “Property”); that both Alexandra and Paul were awarded an equal interest in the Property; and that neither party established an entitlement to any payment from the other. Alexandra showed, through her Bill of Costs, that she incurred an almost identical amount in costs as Paul, and submitted that each party should bear their own costs.
[4] For the reasons that follow, I order that each party shall bear their own costs of this Consolidated Application.
I. Analysis
[5] Section 131(1) of the Courts of Justice Act provides the Court with discretion in the determination of costs. The principles to be applied by the Court in the exercise of this discretion includes the factors enumerated in Rule 57.01(1) of the Rules of Civil Procedure. [5] In consideration of these principles, the overarching objective is to determine whether a party has established an entitlement to an award of costs and, if so, “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”. [6]
[6] 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. [7] 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 has well-established that absent special circumstances, “costs follow the event”. [8]
[7] Paul’s claim for costs falters on the determination of success in this Consolidated Application, as I will explain.
[8] By a letter written by Paul’s lawyers to Alexandra on September 10, 2019, Paul sought Alexandra’s cooperation in transferring Alexandra’s interest in the Property to Bessie’s Estate (the “September 2019 Demand Letter”). [9] This was a claim by Paul on behalf of the Estate for sole ownership of the Property. Alexandra refused, and on March 11, 2020, Alexandra commenced an application in court file number CV-20-00005058-00ES against Paul in his personal capacity and as estate trustee for the Estate (“Alexandra’s Application”). Alexandra claimed a declaration that she was the sole beneficial owner of the Property, and that Bessie held title to the Property as a joint tenant in resulting trust for Alexandra or, alternatively, by constructive trust. Alexandra also claimed occupation rent.
[9] On July 8, 2020, Paul initiated an application against Alexandra in court file number CV-20-00005116-00ES (“Paul’s Application”). Paul claimed a declaration that the Estate is the sole beneficial owner of the Property, and that Alexandra holds title to the Property as a joint tenant in resulting trust for the Estate or, alternatively, through a constructive trust as a proprietary remedy for unjust enrichment said to arise from payments made by Paul for the carrying costs, maintenance and updating of the Property. By Order Giving Directions issued on August 13, 2020, Dietrich J. ordered that Alexandra’s Application and Paul’s Application be consolidated and heard at the same time or immediately after each other (the “Consolidated Application”).
[10] These pleadings, and the development of the Consolidated Application for trial showed that the detailed list of issues framed for determination at trial could be distilled to their most concise restatement as follows: [10]
(a) Who is the beneficial owner of the Property? (b) What payments, if any, are owed between Alexandra and Paul?
[11] I found that the parties’ competing claims to the Property relied primarily on the same legal principles. They were mirror images. Alexandra claimed that Bessie held her joint tenancy interest in the Property in resulting trust or constructive trust for Alexandra. Paul claimed that Alexandra holds her joint tenancy interest in the Property in resulting trust or constructive trust for Bessie, and now the Estate. [11]
[12] I determined as follows:
(a) Neither Alexandra nor Paul established that Alexandra and Bessie’s registered ownership of the Property as joint tenants is subject to a resulting trust. [12] (b) Neither Paul nor Alexandra established a claim in equity, here a claim in unjust enrichment, as was required to establish a proprietary remedy of constructive trust. [13] (c) Neither Paul nor Alexandra established a claim in unjust enrichment sufficient to give rise to either a monetary remedy or a proprietary remedy. Alexandra did not establish entitlement to a claim for occupation rent. As a result, no amounts are payable between the parties. [14]
[13] Each party failed in their symmetrical claims for sole ownership of the Property and each party failed in their claims for payments related to the Property. Neither party was more successful than the other in this Consolidated Application. In reaching this determination, I reject Paul’s submission that he was more successful than Alexandra because he established, based on s. 26(1) of the Family Law Act, R.S.O. 1990, c. F.3 (the “FLA”), that the Property is held by Alexandra and Paul, as estate trustee, as tenants in common, each to an equal 50% interest. I will explain why.
[14] First, both Paul, on behalf of the Estate, and Alexandra obtained judgment for a 50% interest as tenants in common in the Property. The s. 26(1) analysis resulted in both parties receiving an identical 50% interest in the Property.
[15] Second, Paul, like Alexandra, brought his Application to seek sole ownership of the Property. Paul took the position that the Estate was the sole owner of the Property from Paul’s September 2019 Demand Letter, and he maintained this position through the years of litigation. This is seen by Paul’s offer to settle, served in the days before trial, wherein Paul proposed settlement through monetary payment by Alexandra to Paul in an amount that equated to 100% of the estimated value of the Property. Neither party delivered an offer to settle that provided for each party owing a 50% interest in the Property as tenants in common. The parties’ competing claims to sole ownership of the Property was, to use the terminology expressed by the Court of Appeal, the dispute that “drove” the proceeding. [15] The finding that the parties held equal 50% interests as tenants in common was the by-product of my determination that neither party established a claim to sole ownership of the Property.
[16] Third, the s. 26(1) analysis depended on my determination of whether Alexandra established that Bessie held her legal interest in the Property in trust for Alexandra, which she did not. The issues were intertwined. Paul’s claim for costs based on the determination of the s. 26(1) issue, alone, is tantamount to a call for a distributive cost award where the major issues addressed at trial are identified and parties are awarded costs on an issue-by-issue basis. [16] The Court of Appeal has made it clear that a distributive cost award should only be made in a rare care. [17] This is not such a case because the s. 26(1) issue depended on the determination of Alexandra’s claim in resulting trust. For the same reason, I decline to “award or refuse costs in respect of a particular issue or part of a proceeding”, as is provided by Rule 57.01(4)(a).
[17] Fourth, in consideration of the issues raised in this Application and argued at trial and stepping back and considering the conduct of the trial and the result produced, [18] I find that it is fair and just that the parties bear their own costs of the Consolidated Application. They have incurred almost identical costs. They equally shared in success and failure, and, in the result, they share co-ownership of the Property. Neither party took steps that unduly prolonged the litigation or the trial. I see no basis on which one party should be ordered to pay costs to the other.
[18] I find that success in this Consolidated Application was equally divided between the parties. Courts have ordered parties to bear their own costs where there is equally divided success. [19] On the basis of these reasons, I conclude, in the exercise of my discretion, that Alexandra and Paul shall bear their own costs of this Consolidated Application.
II. The Costs of the Costs Submissions
[19] Alexandra sought costs against Paul for the costs incurred in preparing her written submissions on costs, submitting that these costs should be fixed in the amount of $10,000.00, all inclusive. In the exercise of my discretion, I decline to grant costs of the issue of costs. I am not satisfied that the purposes for the granting of cost awards support the rendering of a cost award for the argument on costs in this matter.
III. Disposition
[20] On the basis of the reasons set out herein, I order that each party shall bear their own costs of this Consolidated Application.
[21] The lawyers for the parties may deliver to my judicial assistant a form of draft Judgment, after agreeing on its form and content, and filing it on Case Center. It shall comprise the disposition set out in this Endorsement on Costs and in the Reasons for Judgment. In the event of disagreement, any party may request the scheduling of a Case Conference to settle the form of Judgment.
A.A. Sanfilippo J. Released: December 12, 2024