



COURT OF APPEAL FOR ONTARIO

CITATION: Birtzu v. McCron, 2019 ONCA 777

DATE: 20191002

DOCKET: C66048

Doherty, Harvison Young and
    Thorburn JJ.A.

BETWEEN

Julian
    Birtzu and Valentin Birtzu

Plaintiffs (Respondents)

and

Constance McCron and the Estate
    of Constantin Birtzu

Defendants (Appellants)

Ian M. Hull and Doreen Lok Yin So, for
    the appellant, Constance McCron

Peter M. Callahan, for the respondent,
    Julian Birtzu

No one appearing for the respondent,
    Valentin Birtzu

Heard: September 19, 2019

On
    appeal from the order on costs in respect of the trial proceedings made on
    April 11, 2017 by Justice Bloom of the Superior Court of Justice, with reasons
    reported at 2017 ONSC 2276.

REASONS FOR DECISION


I



[1]

This appeal is brought with leave from the order
    of the trial judge, directing that the parties should bear their own costs of
    the proceeding. At the end of oral argument, the court advised the parties that
    the appeal was allowed and the cost order varied to award costs to the appellant
    (defendant at trial) on a partial indemnity basis, fixed at $150,000. The court
    indicated that reasons would follow. These are those reasons.


II



[2]

Constantin Birtzu (Mr. Birtzu) died on April
    29, 2009. He had three children, two sons, Julian and Valentin, and a daughter,
    Constance. Mr. Birtzus wife had died in 2005.

[3]

In January 2006, Mr. Birtzu executed a will,
    leaving his entire estate to his daughter, Constance. Previous wills had
    distributed the estate among his three children and his grandchildren.

[4]

In August 2011, Julian and Valentin commenced an
    action against Constance and the estate. They sought:

·

to set aside the 2006 will;

·

a declaration that part of Constances home was
    held in trust for the estate of Mr. Birtzu;

·

an accounting of the assets of the estate; and

·

damages against Constance for conversion of
    estate property and breach of fiduciary duty.

[5]

The trial lasted for 21 days. Ultimately, the
    trial judge dismissed all of the claims made by Julian and Valentin. He held
    that the claims were statute-barred by the
Limitations Act, 2002
. He
    further held that, although Julian and Valentin had shown suspicious
    circumstances in relation to the execution of the 2006 will arising from Mr.
    Birtzus dementia, Constance had discharged her onus to prove testamentary
    capacity. The trial judge further held that Julian and Valentin had failed to
    show undue influence.

[6]

Having determined that the claims were statute-barred
    and that the will was valid in any event, the trial judge did not consider the
    merits of the other claims advanced by Julian and Valentin.

[7]

Julian and Valentin commenced an appeal from the
    trial judges decision. That appeal was dismissed for delay. A motion to set
    aside the dismissal failed. Constance sought and obtained leave to appeal the
    costs order.


III



[8]

Cost awards are discretionary. This court seldom
    grants leave to appeal a cost order and will vary that order only if the
    appellant demonstrates legal error, or that the order is plainly wrong:
Hamilton
    v. Open Window Bakery Ltd.
, [2004] 1 S.C.R. 303, at para. 27.

[9]

Constance was entirely successful at trial. In
    the normal course, she would have received her costs. Nor was this a case for
    costs payable by the estate. Constance was the sole beneficiary of the estate.

[10]

In his brief costs endorsement, the trial judge
    made reference to two features of the trial proceedings before indicating that
    there would be no award as to costs. First, he noted that Julian and Valentin
    had successfully established suspicious circumstances surrounding the 2006
    will, but had failed in their claim on account of the limitation period.
    Second, the trial judge indicated that Constance had given misleading evidence
    about her fathers mental state. He held that Constances attempt to mislead
    the court could not be condoned and was relevant to his costs decision.

[11]

With respect, the trial judges costs
    endorsement, which suggests that Constance was successful only by virtue of the
    limitation period defence, mischaracterizes the trial judges detailed factual
    findings in his reasons for judgment. The trial judge accepted that Julian and
    Valentin had shown suspicious circumstances in respect of the 2006 will.
    However, he went on to find that Constance had rebutted those suspicious
    circumstances and demonstrated her fathers testamentary capacity. The trial
    judge made strong findings of fact in favour of Constance on both the
    testamentary capacity and the undue influence issues. Those findings are set
    out below:

[136] In coming to my conclusion on testamentary
    capacity I have had regard also to the six clinical factors listed by Dr.
    Shulman and the legal factors listed in the case law I have examined,
    particularly
Banks v. Goodfellow
,
supra
.
Constantin knew that he was making a will giving his entire
    estate to his daughter. He did so to reward her for her care and assistance; he
    felt that he had done enough for his sons financially as stated by Mr. Schwind
.

[137] The Plaintiffs have not discharged their
    onus to prove undue influence. Constantin was susceptible to undue influence by
    reason of his age, dementia, and depression as noted by Dr. Shulman. Moreover,
    Connie made the arrangements to have the will drafted and was the sole
    beneficiary.
However, the evidence falls far short of
    establishing the elements set out by the case law I have previously reviewed.
    There is no proof of coercion by Connie, nor is there proof that she subverted
    the testators wishes to borrow phraseology from Dr. Shulman
. The
    testators gratitude to her and the absence of similar sentiments toward his
    sons explain why he made the will in question. [Emphasis added.]

[12]

Julian and Valentin lost at trial on all fronts.
    The implication in the cost endorsement that success had been somehow divided
    at trial is not borne out by an examination of the trial judges reasons for
    judgment.

[13]

The second reason given for denying Constance
    her costs  her misleading evidence at trial  is reflected in the trial
    judges reasons for judgment. He found that Constance lied about her
    recollection of conversations she had with her fathers doctor relating to her
    fathers mental condition in late 2004. She denied that the doctor had told her
    that her father had dementia. The doctor testified that he had told Constance
    about the dementia. The trial judge believed the doctor.

[14]

Counsel for Constance invites us to reconsider
    the trial judges credibility assessment. We will not do so. It was open to the
    trial judge to find that Constance misled him concerning her recollection of 
    the conversations with her fathers doctor.

[15]

The conduct of a litigant in the course of a trial,
    including offering misleading testimony, can be relevant in assessing costs. Costs
    are not, however, used to punish a litigant for giving misleading evidence.

[16]

Constances misleading evidence about her
    recollection of her conversations with her fathers doctor had no effect on
    either the length of the trial, or the conduct of the trial. Her misleading
    evidence also had no impact on the trial judges findings. The trial judge
    accepted the thrust of Constances evidence concerning her fathers testamentary
    capacity, no doubt because that evidence was corroborated by other credible
    independent witnesses.

[17]

Although, as the trial judge properly pointed
    out, misleading evidence can never be condoned, the misleading evidence given
    by Constance cannot justify, on its own, a denial of costs in respect of a
    21-day trial in which Constance was entirely successful in defending the will. The
    trial judge erred in law by focusing his costs analysis almost exclusively on
    the misleading nature of one aspect of Constances evidence.

[18]

Counsel for Constance also argues that the reasons
    for the cost award are so brief as to be entirely inadequate. He submits that inadequate
    reasons constitute a freestanding error in law, justifying appellate
    intervention.

[19]

Trial judges are very familiar with the factors
    that are relevant to costs assessments and have considerable experience in
    blending those factors to meet the needs of a particular case. That experience
    allows trial judges to hone in on the important factors. They should not be expected
    to provide a grocery list of the potentially relevant factors in their
    reasons.

[20]

We think it was, however, incumbent on the trial
    judge in this case, to more fully explain why, despite Constances total
    success, she was denied her costs. Nor does the endorsement refer to other
    factors that added further weight to Constances claim to costs. The trial
    judge made no reference to the offers to settle made by Constance. She made two
    written offers. While both were operative for a relatively brief time period,
    and had been withdrawn by trial, they were nonetheless substantial offers,
    which obviously exceeded the result eventually achieved by Julian and Valentin.
    The trial judge also made no reference to the complexity of the proceedings.
    That complexity, reflected in the length of the trial, flowed in large measure
    from the multi-front challenge Julian and Valentin made to the will and the
    distribution of the estate assets. Constance had to reply to all allegations
    and claims.

[21]

For the reasons set out above, we are satisfied
    that the trial judges costs order was plainly wrong. Appellate intervention
    is warranted.


IV



[22]

Constance was entirely successful at trial. Costs
    should have followed the result. We also see no reason why the award should be
    on anything other than a partial indemnity basis. We would fix the quantum at
    $150,000. In doing so, we are guided principally by the amount claimed by
    Julian and Valentin for costs on a partial indemnity basis.

[23]

Constance is entitled to her costs of the
    appeal. We would fix those costs at a total of $10,000, inclusive of the leave
    application, disbursements and relevant taxes. The costs are payable by both
    Julian and Valentin.

Doherty
    J.A.

A.
    Harvison Young J.A.

J.A.
    Thorburn J.A.


