BARRIE COURT FILE NO.: CV-23-0523
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
KERRY KATHERINE MARGARET VARLEY
Plaintiff
– and –
MARY-ANN MCKERNAN as executrix and trustee under the last will and testament of Elizabeth Ann McKernan, and CHRISTINE MCMASTER, KAREN MCMASTER, APRIL GIRARD, DARLENE MCMASTER, HERBERT MCMASTER, JORDAN GIRARD
Defendants
Mary Anne Cummings, for the Plaintiff
No one appearing for the Defendants
HEARD: December 17, 2024 (Virtually, in Barrie)
DECISION REGARDING COSTS
BHANGU, J.:
OVERVIEW
Overview
1This is the costs decision related to the December 17, 2024 uncontested costs motion brought by the Plaintiff related to motions heard by this Court on December 17, 2024 and July 16, 2024 in relation to Court File No. CV-23-00000523-0000.
2As per oral submissions made by Plaintiff’s counsel on December 17, 2024 and as per the Bill of Costs of the Applicant, submitted at that time, the Plaintiff is seeking costs from the Defendant Mary-Ann McKernan for fees on a substantial indemnity basis, as well as disbursements, the total of which is $16,920.20. The costs sought are specifically for the motions brought on December 17, 2024 and July 16, 2024.
3The Bill of Costs of the Applicant sets out a detailed accounting of the work done by counsel on behalf of the Plaintiff Kerry Varley to address the estate rights of her two minor children, whose father died without leaving a will. Kerry Varley was the common law spouse of the deceased Charles McKernan, whose two minor children are the sole beneficiaries of the Estate of Charles McKernan. Kerry Varley is the litigation guardian of the two minor children. The motion before Justice Di Luca and before this Court on December 17, 2024 are in the context of litigation that commenced in August 2022.
4The litigation is based on the following family background which is set out in the affidavit of Kerry Varley dated May 4, 2023. Charles died in May 2022 leaving no will or testament. At the time, Charles, Kerry, and their two children resided at 3706 County Road 124 in Nottawa, (“Nottawa property”). Both children of Kerry and Charles have Marfram Syndrome and heart issues. Mary-Ann McKernan is Charles’ sister and both are the adult children of Elizabeth Ann McKernan, who died in 2008. The other respondents are also the children of Elizabeth Ann McKernan. Mary-Ann McKernan was appointed as the Estate Trustee for the Estate of Elizabeth Ann McKernan, whose will left the Nottawa property to Charles. As the Estate Trustee for Elizabeth, Mary-Ann McKernan was obligated to transfer the Nottawa property to Charles McKernan. That did not occur. On August 31, 2022, the Nottawa property was transferred instead to Mary-Ann McKernan as Estate Trustee. When Kerry Varley discovered this, she commenced these legal proceedings.
5Pursuant to the July 16, 2024 Order of Justice Di Luca, the property located at 3706 County Road 124 was to be transferred to Kerry Varley in her capacity as Estate Trustee of the Estate of Charles. Following Justice Di Luca’s Order, the Plaintiff registered the Order at the Land Registry office and was advised by that office that a transfer from Mary-Ann McKernan was required. The Plaintiff requested Mary-Ann McKernan to sign the transfer and she refused to cooperate. The Land Registry Office advised that an order vesting the property in Kerry Varley’s name as the Estate Trustee of the Estate was required.
6A motion was brought on December 17, 2024 requesting such a vesting order from this Court. Upon reviewing the Application Record, the affidavit of Morgan Letwinka, and upon hearing submissions of Plaintiff counsel, (no one appearing for the defendants), and the Children’s Lawyer being unopposed to the Order, this Court granted the above noted vesting order on December 17, 2024.
7Additionally on December 17, 2024, a motion was brought by the Plaintiff requesting the following Orders, all connected to the submission that Mary-Ann McKernan was in contempt of Justice Di Luca’s Order from July 2024:
a. That the Respondent Mary-Ann McKernan is in contempt of the order of the Honourable Justice Di Luca dated July 16, 2023 for willfully and deliberately failing to do the following:
i. Not delivering the proceeds of the TD bank account #0326-6204222 to Kerry Katherine Margaret Varley in her capacity as the Estate Trustee of the Estate of Charles McKernan;
ii. Not providing a proper accounting of the administration of the Estate of Elizabeth Ann McKernan and the distribution of the Estate of Elizabeth Ann McKernan from the date of her death on January 27, 2008 to the present;
iii. Not providing a proper accounting of her use of Charles McKernan’s TD bank account #0326-6204222 from the time that Mary-Ann McKernan was added as an account holder on the account to the present;
iv. Not delivering the proceeds in the TD bank account #0326-6204222 to the Applicant in her capacity as the Estate Trustee;
v. Not attending to be examined by counsel for the Applicant, although properly served, and;
vi. Not providing an affidavit within 30 days confirming if any of the following Respondents were paid the bequest as provided under the Last Will and Testament of Elizabeth Ann McKernan, deceased: Karen McMaster, April Girard, Darlene McMaster, Herbert McMaster and Jordan Girard.
b. That the sentencing of the Respondent Mary-Ann McKernan for her contempt is scheduled for February 25, 2025, at 9:30 am via Zoom.
c. That the Applicant may move for summary judgment on an urgent basis with no further notice to the Respondent Mary-Ann McKernan.
d. That this matter return for a hearing on February 25, 2025, at 9:30 a.m. via Zoom to determine the issues set out in paragraphs 17 and 18 of the Order of the Honourable Justice Di Luca dated July 16, 2024 and any other issues including costs and damages, on notice to the Ontario Children’s Lawyer and no further notice required to any of the Respondents.
e. That pursuant to s. 61(2) of the Succession Law Reform Act, the time for an application for a dependant support claim against the Estate of Charles McKernan under s. 58 of the Succession Law Reform Act is extended for a further 12 months.
f. That service on the Respondents, Christine McMaster, Karen McMaster, April Girard, Darlene McMaster, Herbert McMaster and Jordan Girard is dispensed with.
g. That the time for service and filing of the motion materials, including the Notice of Motion and supporting affidavit is abridged.
8Upon reviewing the Application Record, the Affidavit of Morgan Letwinka, and the affidavit of personal service of the motion record on the Defendant Mary-Ann McKernan, and upon hearing submissions from counsel for the Plaintiff, this Court granted the above noted orders (paragraphs [7]a to [7]g), significantly finding Mary-Ann McKernan in contempt of Justice Di Luca’s July 2024 Order. This Court was satisfied that no one was in attendance on behalf of the Defendant Mary-Ann McKernan. The Children’s Lawyer advised that it took no position with respect to the Order.
POSITION OF THE PLAINTIFF ON COSTS MOTION
Position of the Plaintiff on Costs Motion
9After granting the Contempt and Vesting Orders on December 17, 2024, this Court heard submissions from Plaintiff counsel seeking costs on a substantial indemnity basis.
10The motion was not contested as no one appeared for any of the defendants.
11The Plaintiff’s submissions urged this Court to consider the Contempt Order in assessing the merits of its costs submissions. Additionally, counsel’s submissions focused the Court’s attention to the vulnerability of Kerry Varley who is the litigation guardian of two young minors with medical and health challenges. The Court was advised that Kerry Varley is of limited economic means.
THE LAW AND ITS APPLICATION TO THE MOTION
The Law and Its Application to the Motion
12During submissions, plaintiff’s counsel provided to this Court the case of Kurt v. Kurt and Sullivan, 2024 ONSC 589, which sets out the jurisprudence related to fixing costs in estate litigation, a decision of Mr. Justice M.J. Valente.
a. At paragraph 8 in Kurt, the Court cites McDougald Estate v. Gooderman, 2005 CanLII 21091 which 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.
b. At paragraphs 9 and 10 in Kurt, the court cites McGrath v. Joy, 2022 ONCA 119, where the Ontario Court of Appeal makes it clear that it 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 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 and Rule 57.01.
13This Court will be guided by the principles set out in Kurt. This Court has reviewed the motion record from December 17, 2024 as well as portions of previous motion records to understand the history and progression of the matter. This Court accepts the submissions of plaintiff counsel with respect to the conduct of the defendant Mary-Ann McKernan, and the fact that Kerry Varley is a vulnerable plaintiff looking after the two children of Charles. In so doing, this Court finds there are exceptional circumstances such that this Court will exercise its discretion with respect to costs pursuant to s. 137 of the Courts of Justice Act RSO 1990, c.C.42 and Rule 57.01 of the Rules of Civil Procedure, R.R. O 1990 Reg. 194.
14Specifically, this Court will exercise its discretion to award costs pursuant to section 131 of the Courts of Justice Act. The discretion must be exercised taking into account the provisions of Rule 57.01 which sets out specific factors to be considered. These include the principle of indemnity, the experience of the lawyer for the party entitled to costs, the rates charged, and the hours spent.
15In Fong v. Chan, 1999 CANLII 2052 ONCA, at paragraph 24, it was observed that modern costs are designed to foster three purposes:
a. To indemnify successful litigants for the cost of litigation;
b. To encourage settlements; and
c. To discourage and sanction inappropriate behaviour by litigants.
16As noted in the Kurt case at paragraph 14, in the case of 394 Lakeshore Oakville Holdings Inc v. Misek, 2010 ONSC 7238, Justice Perell reformulated the purposes of the modern cost rules at paragraph 10:
a. To indemnify successful litigants for the costs of the litigation, although not necessarily completely;
b. To facilitate access to justice, including access for impecunious litigants;
c. To discourage frivolous claims and defences;
d. To discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and
e. To encourage settlements.
17In Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634 (C.A.), the Court held that the objective in fixing costs is to set an amount that is fair and reasonable for the unsuccessful party to pay, rather than the amount of the actual costs incurred by the successful litigant. In determining what is fair and reasonable in the circumstances, a relevant factor is the expectations of the parties, objectively determined. It is a principle of proportionality and is fundamental to a decision as to what constitutes a fair and just order in relation to costs.
18Rule 57.01(1)(0.a) refers to the experience of the lawyer, the rates charged and the hours spent by the lawyer.
19The complexity of the proceeding is a factor to be considered under Rule 57.01(1)(c).
20The importance of the issues is another factor listed in Rule 57.01(1)(d) as meriting consideration on the issue of costs.
CONCLUSION
Conclusion
21In deciding on a costs order, this Court accepts the submissions of Plaintiff counsel related to the importance and relevance of the contemptuous conduct of Mary-Ann McKernan in the face of Justice Di Luca’s very clear order.
22In light of this conduct, any costs order should emphasize the purpose of discouraging the inappropriate behaviour of Mary-Ann McKernan in how she has conducted herself in the proceedings. Not only was the spirit of her own mother’s will ignored by her (in not transferring the Nottawa property to her brother Charles), the clear court order of a Superior Court Judge in July 2024 was something Mary-Ann McKernan was prepared to ignore and disrespect. All of this occurred in the context of a niece and nephew, who are getting through life with health challenges and a single parent.
23The Plaintiff Kerry Varley had the assistance of experienced and able counsel, Ms. Mary Anne Cummins, in securing the order from Justice Di Luca in July 2024 that finally secured what her minor children were entitled to.
24This Court accepts that the Bill of Costs of the Applicant fairly and reasonably sets out the costs incurred by the Plaintiff Kerry Varley who does not appear to be someone with a lot of financial resources.
25I have balanced all of the factors set out in Rule 57.01(1) and taken into account the principles enunciated in the case law on costs. I find that a fair and just order with respect to costs in this case is what is sought by the Plaintiff in the Bill of Costs on a substantial indemnity basis.
Justice Bhavneet Bhangu
Released:December 27, 2024
BARRIE COURT FILE NO.: CV-23-0523
DATE: 20241227
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
KERRY KATHERINE MARGARET VARLEY
Plaintiff
- and -
MARY-ANN MCKERNAN as executrix and trustee under the last will and testament of Elizabeth Ann McKernan, and CHRISTINE MCMASTER, KAREN MCMASTER, APRIL GIRARD, DARLENE MCMASTER, HERBERT MCMASTER, JORDAN GIRARD
Defendants
DECISION REGARDING COSTS
Bhangu, J
Released: December 27, 2024