Tag: costs award
The issue of the payment of costs in an estate litigation matter has seen somewhat of a reshaping recently. Historically, courts generally took the position that the costs incurred by all parties in an estate litigation matter ought to be paid out of the assets of the estate at issue, regardless of the outcome. Whether or not a party was successful in the litigation, that party would not likely be responsible for its own legal costs. More recently, the courts have adopted a modified approach with a view to disincentivizing frivolous claims and to bring the costs principles in estate matters more in line with those in other civil litigation matters. In particular, the principle that the “loser pays”, as opposed to the estate, gained traction.
The recent decision of the Court of Appeal for Ontario in Birtzu v McCron, 2019 ONCA 777, reaffirmed the court’s approach to the “loser pays” principle consistent with other civil matters. The parties to this appeal had endured a 21-day trial in 2016, following which the defendant McCron was held to be entirely successful. However, contrary to the “loser pays” principle, Justice Bloom, in his decision on costs released in 2017, decided instead that the parties would each bear their own costs.
Justice Bloom’s reasons were based on two findings in particular:
- Notwithstanding that the plaintiffs were entirely unsuccessful at trial, they had “reasonable grounds” on which to commence the action; and
- That McCron had lacked credibility with respect to one issue resolved at trial.
McCron successfully appealed the decision, and the Court of Appeal for Ontario awarded her costs of the trial on a partial indemnity basis, consistent in part with the “loser pays” principle.
At the outset, the Court of Appeal noted that costs awards are discretionary. Rarely will litigants be granted leave to appeal except in cases where the lower court is found to have made a “legal error” or, more generally, where the costs award is “plainly wrong.”
The Court of Appeal acknowledged, in respect of the second criteria above, that a litigant’s conduct at trial and her credibility are relevant factors with respect to the issue of costs. However, unless that litigant’s conduct bears on the length or the substance of the trial, it is not appropriate for a court to punish that litigant by denying them their costs. The issue of McCron’s credibility was, in effect, moot given that she was successful “on all fronts” and, in any event, it did not impact the judge’s findings.
The Court held that McCron’s costs “should have followed the result”, but they did not. The costs decision of the trial judge was held to be “plainly wrong” and accordingly overturned.
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In March of last year, I blogged on the decision in Hunt v Worrod which dealt with predatory marriages and an individual’s capacity to marry. There have been several developments in that case since then, most recently in a Court of Appeal decision released in June, concerning the issue of costs.
The facts of the case are set out in greater detail in my earlier blog, but a quick refresher may nonetheless be helpful. The application was commenced by the applicant, by his two litigation guardians, largely for the purposes of challenging the validity of his marriage to the respondent and its effect on her property rights as a spouse of the applicant. The respondent had been granted a legal aid certificate by Legal Aid Ontario (“LAO”), which funded her legal fees through trial. Importantly, LAO was not retained as counsel by the respondent. Rather, the respondent retained private counsel whose fees were funded by LAO.
The applicant was ultimately successful at trial and sought an order for costs against the respondent personally, the respondent’s counsel personally, and LAO. In his decision on costs, Justice Koke ordered the respondent was to pay the applicant’s costs on a full indemnity basis. However, he equally noted that, as a result of her limited means and tenuous financial position, it was unlikely that the respondent would be able to pay any amount of that costs award.
The trial judge then turned his mind to the request for costs payable by LAO. In reviewing the circumstances of LAO’s involvement in the case, the trial judge held that it had failed to carry out its mandate by continuing to fund the respondent’s fees notwithstanding the lack of merit. The trial judge ordered LAO to pay one-half of the amount of the costs award made against the respondent.
LAO appealed the costs award and was successful. In its reasons, the Court of Appeal plainly stated that the decision to award costs against LAO could not stand, as it had been made on a misapprehension of LAO’s role in the matter. While the trial judge had held that LAO purportedly failed to monitor the litigation that it had continued to fund, resulting in an abuse of process, the Court of Appeal took a markedly different view.
Notably, the Court of Appeal identified that LAO’s role was strictly limited to providing funding for the respondent to retain separate counsel in accordance with its statutory mandate. LAO itself did not act for the respondent, nor was it a party to the initial application.
Had LAO been a party to the litigation, the Court of Appeal held that they would properly have been exposed to a potential costs award, subject to the discretion of the trial judge. However, in the absence of evidence of any bad faith on the part of LAO in continuing to fund the litigation, the Court of Appeal held that a costs award against LAO was not appropriate in the circumstances.
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The recent decision of the Ontario Superior Court Justice in Tait Estate v. Singh 2016 ONSC 6472 concerns whether it was in the “interest of justice” to make a determination in the Defendants’ late-stage summary judgment motion.
This case involves a medical malpractice claim. The Plaintiff sued the deceased’s medical providers in her capacity as Estate Trustee and pursuant to section 61(1) of the Family Law Act (the “FLA”) as the deceased’s common law spouse. A trial was scheduled to begin on November 7, 2016.
The Defendants served a notice of motion for summary judgment returnable on July 19, 2016. The motion was adjourned to October 3, 2016, approximately one month before the trial was scheduled to begin. The scope of the motion was limited to the discrete issue of whether the Plaintiff’s claim pursuant to the FLA should be dismissed.
On hearing the motion, the court acknowledged that while Rule 20 of the Rules of Civil Procedure does not impose a time period in which a motion for summary judgment may be brought, nothing could be gained from making a determination in the summary judgment motion. It was the motion judge’s view that it would be more appropriate to litigate the issue at trial, and accordingly dismissed the motion with the issue of costs to be determined at a later date.
This ruling is an important reminder that consideration should be given to the appropriate timing to proceed with a motion for summary judgment. Failure to take the timing of a motion into consideration could lead to an unfavourable cost award.
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Today on Hull on Estates, Moira Visoiu and David Smith discuss a case involving costs award and the decision made by the Court of Appeal. If you have any questions, please email us at email@example.com, or leave a comment on our blog page.
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