



COURT OF APPEAL FOR ONTARIO

CITATION: Neuberger v. York, 2016 ONCA 303

DATE: 20160425

DOCKET: C59813 and C59918

Gillese, van Rensburg and Miller JJ.A.

In the Estate of Chaim Neuberger, deceased

BETWEEN

Edie Neuberger in her capacity as the named
    Estate Trustee of the Primary Will of Chaim Neuberger and in capacity as the
    named Estate Trustee of the Secondary Will of Chaim Neuberger

Applicant (Appellant)

and

Myra York in her personal capacity, in her capacity as the named Estate
    Trustee of the Primary Will of Chaim Neuberger, in her capacity as the named
    Estate Trustee of the Secondary Will of Chaim Neuberger and in her capacity as
    the Attorney for Property or Attorney for Property
de son tort
for Chaim
    Neuberger
,
Adam Jesin-Neuberger
,
Shawna Jesin-Neuberger, Jeremy Jesin-Neuberger,
    Jessica Jesin-Neuberger, Jaclyn Jesin-Neuberger, Sonny York, Spencer York and
    Laura York

Respondents (
Appellant
/
Respondents
)

Chris G. Paliare, Megan E. Shortreed and Jean-Claude
    Killey, for the appellant Edie Neuberger

Kimberley A. Whaley, Benjamin Arkin and Arieh A. Bloom,
    for the appellant Adam Jesin-Neuberger

Guy Pratte, Aaron Blumenfeld and Ewa Krajewska, for the
    respondent Myra York in all capacities

Clare E. Burns and Bianca La Neve, for the respondents
    Sonny York, Laura York and Spencer York

Heard: October 8 and 9, 2015

On appeal from the order of Justice Susan E. Greer of the
    Superior Court of Justice, dated November 21, 2014, with reasons reported at
    2014 ONSC 6706.

Gillese J.A.:

[1]

By judgment dated March 8, 2016, the appeals in this matter were allowed
    and, among other things, the costs award below was set aside.  The parties were
    invited to make written submissions on costs of the appeal and underlying motion,
    if they were unable to resolve those matters between themselves.

[2]

No agreement on costs was reached and the court has now received the individual
    costs submissions of each of Edie Neuberger and Adam Jesin-Neuberger (together,
    the Appellants), and the joint costs submission of the respondents Myra York,
    Sonny York, Laura York and Spencer York (the York Parties).

COSTS OF THE MOTION BELOW

The Parties Positions


[3]

Edie Neuberger asks for costs of the motion below in the amount of $209,066.65,
    which includes almost $24,000 of disbursements and HST.  Fees are calculated on
    a partial indemnity basis.

[4]

Adam Jesin-Neuberger asks for costs of the motion in the amount of $110,424.55,
    all inclusive.  Again, this reflects fees calculated on a partial indemnity
    basis.

[5]

The York Parties submit that the Appellants should be awarded costs of
    the motion in the amount of $300,000, all inclusive.  They say they did not have
    the benefit of scrutinizing the Appellants dockets and ask that the court
    infer that some of the time spent on the motion was unreasonable.

Analysis

[6]

By order dated December 18, 2014 (the Costs Order Below)
[1]
,
    the motion judge ordered that Edie Neuberger and Adam Jesin-Neuberger were
    jointly and severally liable for the costs of Myra York, fixed at $221,765.97,
    and the costs of Sonny York, Laura York and Spencer York, fixed at
    $165,621.00.  Both sums were inclusive of disbursements and HST.

[7]

As the Appellants were successful on their appeals, they are
    presumptively entitled to their costs of the motion below.  The York Parties do
    not contend otherwise.

[8]

In setting the quantum of costs for the motion below, I begin by
    considering that the motion judge ordered costs of almost $390,000 in favour of
    the York Parties.  I have also considered the reasons that the motion judge
    gave in setting that quantum.    Her costs endorsement of December 18, 2014,
    demonstrates a full consideration of the factors set out in rule 57.01(1) of
    the
Rules of Civil Procedure,
R.S.O. 1990, Reg. 194 and gives guidance
    to this court on, among other things, the reasonable expectations of the
    unsuccessful party, the complexity of the proceeding, and the importance of the
    issues.  I note that the costs claimed by the Appellants of almost $320,000 are
    considerably less than the costs order below of $387,386.97.

[9]

I also note that Edie Neubergers claimed amount ($209,066.65), is less
    than the amount claimed by Myra York on the motion ($247,941.25) and less than
    the amount actually awarded to Myra York on the motion ($221,765.97).

[10]

I have further considered the parties combined claims for costs of the
    motion below.  The Appellants combined claim for costs of the motion is for
    $319,491.20 while the York Parties combined claim was for $425,427.46.

[11]

With these considerations in mind and after reviewing the Appellants
    costs outlines, in my view, costs of the motion below should be ordered to the
    Appellants in the amounts sought.

COSTS OF THE APPEAL


The Parties Positions

[12]

Edie Neuberger seeks costs of the appeal, on a partial indemnity basis,
    of $148,903.78, including disbursements and HST.

[13]

Adam Jesin-Neuberger seeks his costs of the appeal on a partial
    indemnity basis in the amount of $197,297.23, inclusive of disbursements and
    HST.  In support of the amount claimed, he says that this court should consider
    that he is waiving his entitlement to a blended costs award on appeal  that
    is, to have his partial indemnity costs paid by the York Parties personally and
    the balance of his full indemnity costs paid out of the Estate.  He contends
    that waiver of his right to a blended costs award is to the benefit of the York
    Parties because the burden of the portion of his costs paid out of the estate
    would have fallen, in part, on them as beneficiaries.  He also says that this
    consideration is relevant to the reasonable expectations of the unsuccessful
    parties.

[14]

The York Parties acknowledge that the Appellants are entitled to costs
    of their appeals but submit that costs should be made payable in the cause or
    in any event of the cause and/or be reduced to $50,000 because:

1.  the main
    legal issue on the appeal (whether the equitable doctrines of estoppel by
    representation and convention apply to bar a challenge to the validity of a
    will) was novel and of public interest;

2.  the York
    Parties were successful on some of the legal issues raised by the Appellants on
    the appeal; and,

3.   the
    quantum of costs sought by the Appellants on their appeals is substantially greater
    than the quantum awarded in similar appeals and, therefore, greater than could
    be reasonably expected.

Analysis

[15]

As the successful parties on appeal, the Appellants are presumptively
    entitled to costs.  While not all of the Appellants arguments were successful
    on the appeals, I do not view the outcome of these appeals as one of divided
    success  the Appellants were wholly successful in having the order under
    appeal set aside.

[16]

While the significance of the legal issues resolved by these appeals goes
    beyond the parties, I do not accept that those issues are of sufficient novelty
    to warrant a departure from the normal rule that a successful party is entitled
    to partial indemnity costs.

[17]

In deciding the quantum of costs, the award must be fair and reasonable
    in all the circumstances, with due consideration for the parties reasonable
    expectations:
Boucher v. Public Accountants Council (Ontario)
(2004),
71 O.R. (3d) 291 (C.A.)
, at para. 38.

[18]

Comparing the parties respective costs of appeal is useful when considering
    the parties reasonable expectations.  I understand that the York Parties
    combined partial indemnity costs of the appeal are approximately $353,000,
    which is similar to the Appellants combined partial indemnity costs of
    approximately $346,000.

[19]

Reasonable expectations are also informed by past costs orders of this
    court.  In that regard, I accept the York Parties submission that the amounts
    claimed by the Appellants are larger than many of the costs awards made by this
    court in typical appeals.  That said, however, costs in any appeal must be decided
    based on the particular circumstances of the case before the court.  I would
    not describe these appeals as typical estate appeals.  They raised legally
    complex issues arising from a factually complex record.  The 6-volume exhibit
    book contained 17 affidavits that set out a lengthy and complicated history and
    included medical records, expert medical evidence, expert appraisal evidence,
    and accounting evidence.  Seven cross-examinations on the affidavits were
    conducted and the appeal itself was heard over a day and a half.

[20]

For these reasons, in my view, a fair and reasonable costs award for
    these appeals would be $100,000 to Edie Neuberger and $75,000 to Adam
    Jesin-Neuberger, both such sums inclusive of disbursements and taxes.

[21]

While these amounts are less than the amounts sought by the Appellants,
    they are significant sums that reflect the results of the appeals, the amounts
    in issue, the complexity of the proceeding, the importance of the legal issues
    disposed of by the appeals, and the distinct interests of the two appellants and
    their respective roles in this litigation and on appeal.

[22]

I would order that costs be payable forthwith, in accordance with this
    courts usual practice.  I do not accept the York Parties submission that the Appellants
    costs should be payable in the cause or in any event of the cause. The effect
    of the Appellants success on these appeals is that they are entitled to
    proceed with this litigation. They should not be required to wait until the
    conclusion of proceedings to recover their costs, nor should their recovery be
    contingent on whether they proceed with, or are ultimately successful in, this
    litigation.

[23]

In setting the quantum of costs for each of the Appellants, I have
    considered Adam Jesin-Neubergers submission based on the proposition that he would
    have been entitled to a blended costs award in respect of his appeal.  I do not
    accept that he would have been entitled to such a costs award.

[24]

In estates litigation in Ontario, the historical approach to costs has
    been displaced in favour of one in which the costs rules in civil litigation
    apply both at first instance and on appeal, unless the court finds that one or
    more of the relevant public policy considerations dictate that costs (or some
    portion thereof) should be paid out of the assets of the estate:
McDougald
    Estate v. Gooderham
(2005), 255 D.L.R. (4th) 435 (Ont. C.A.), at para. 80;
    see also
Sawdon Estate v.

Sawdon,
2014 ONCA 101, 370 D.L.R. (4th)
    686, at para. 101.  The public policy considerations at play in estate
    litigation are primarily of two sorts: (1) where the difficulties or
    ambiguities that give rise to the litigation are caused, in whole or in part,
    by the testator; and (2) the need to ensure that estates are properly
    administered.

[25]

Blended costs awards, in which a portion of costs is payable by the
    losing party and the balance is payable out of the estate, are available at
    first instance and on appeal, in the discretion of the court, where one or more
    of the relevant public policy considerations are found to be engaged:
Sawdon
,
    at paras. 93-100 and 107.

[26]

The availability of estoppel as a bar to a wills challenge was the main
    issue below and on the appeals.  In my view, that issue does not engage the relevant
    public policy considerations. As such, the usual loser pays costs regime in
    civil litigation, which applied at the motion level, ought also to apply on appeal. 
    Consequently, in my view, Adam Jesin-Neuberger would not have been entitled to a
    blended costs award with the balance of his costs of the appeal being paid out
    of the Estate.

DISPOSITION

[27]

Accordingly, I would order that the Appellants are entitled to their
    costs of the motion below, in the amounts sought. I would order costs of the
    appeals fixed at $100,000 and $75,000 in favour of Edie Neuberger and Adam
    Jesin-Neuberger, respectively. Both such sums are all inclusive.  I would
    further order that all the costs orders are payable forthwith by the York
    Parties.

Released: April 25, 2016 (E.E.G.)

E.E. Gillese
    J.A.

I agree. K. van Rensburg
    J.A.

I agree. B.W. Miller J.A.





[1]
Reported at 2014 ONSC 7512.


