Brian A. Henley First Applicant And: Janet M. Henley, K.C. Second Applicant/ first respondent And: John J. Henley second Respondent And: Christopher M. Henley third Respondent, 2023 NLSC 48

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Henley Estate (Re) , 2023 NLSC 48 Date : March 28, 2023 Docket : 201301E12144 In The Matter of the Estate of Alec G. Henley, late of the City of St. John's, in the Province of Newfoundland and Labrador, retired businessman Between: Brian A. Henley First Applicant And: Janet M. Henley, K.C. Second Applicant/ first respondent And: John J. Henley second Respondent And: Christopher M. Henley third Respondent Before: Justice Vikas Khaladkar Place of Hearing: St. John’s, Newfoundland and Labrador Dates of Hearing: February 21 and 24, 2023

Summary:

An Offer to Settle was made pursuant to Rule 20A. The Offer to Settle, if accepted, would have been more advantageous to the Offereesthan what they obtained by means of judgment. The Offerors were entitled to costs under Column V to the date of the Offer to Settlebeing filed, and costs equivalent to double Column V thereafter. Appearances: Douglas W. Wright Appearing on behalf of the First Applicant Janet M. Henley, K.C. Appearing on her own behalf Allison S.

Conway Appearing on behalf of the Second and Third Respondents Authorities Cited: CASES CONSIDERED: Henley Estate (Re), 2019 NLSC 54; Henley Estate (Re), 2022 NLSC 103; Henley Estate (Re), 2023 NLSC 47;Mega Roofing & Waterproofing Ltd. v. N.D. Dobbin Ltd. (1996), (NL SC), 143 Nfld. & P.E.I.R. 14, 448 A.P.R. 14(Nfld. S.C.(T.D.)); Cabana v. Newfoundland and Labrador, 2016 NLCA 75 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D REASONS FOR JUDGMENT Khaladkar J.: INTRODUCTION [1] This matter was first heard by Orsborn J. (as he then was) in November, 2018.

However, before he could conclude thehearing, and provide a decision with respect to the matters in controversy, the Second and Third Respondents in this matter (John J.Henley and Christopher M. Henley) sought to have two codicils that had been probated removed from probate, and to have an un-probated codicil substituted therefor. As a result the hearing was delayed. A decision was rendered in the matter concerning the codicilsby Orsborn J. and it is reported as Henley Estate (Re), 2019 NLSC 54.

Orsborn J. was unable to conclude the aspect of the hearingconcerning the construction of the Testator’s Last Will and Testament and the codicils thereto. [2] The hearing resumed before me on October 26, 2020 and continued for five days until October 30, 2020. At that time theSecond and Third Respondents appealed a procedural ruling to the Court of Appeal.

A decision was obtained from the Court of Appealon August 6, 2021. [3] The hearing continued, before me, on March 21, 2022 and was scheduled for five days. [4] Prior to the continuation of the hearing, on February 9, 2022 the First Respondent filed an Offer to Settle pursuant to Rule 20Aof the Rules of the Supreme Court, 1986, S.N.L. c. 42, Sch. D (the “Rules”). While the Offer to Settle was not made more than sevendays before the commencement of the hearing in this matter, it was made 45 days prior to the commencement of the second half of thehearing. [5] The Offer to Settle had three prongs: a.

Valuation of Carpasia Investments Inc. shares and the transfer of Carpasia Properties Inc. shares were to be in accordance with anagreement reached by the Executors/Beneficiaries at a meeting of December 4, 2016; b.

The issue of whether a shareholder’s loan from Carpasia Investments Inc. to Carpasia Properties Inc. was included in a bequest ofCarpasia Investments Inc. to the First, Second and Third Respondents, or whether they remained an asset of Carpasia Investments Inc.was offered to be resolved on a 50/50 basis – that is, half of the shareholder’s loan be distributed to the three Respondents and theremaining half remain an asset of Carpasia Investments Inc.; and

c. The Offerors proposed that the Second and Third Respondents pay the costs on a party and party basis pursuant to Column III of the Scale of Costs, less 10%. [ 6 ] The Offer to Settle was neither accepted nor revoked. [ 7 ] I rendered a decision on the matter on June 23, 2022.

It is reported as Henley Estate (Re) , 2022 NLSC 103 . [ 8 ] The Applicants filed an Application under Rule 20A.10 on July 7, 2022 seeking enhanced costs on the basis of the Second and Third Respondents’ failure to accept the terms outlined therein – which the Applicants say are more favourable than the award made in my decision of June 23, 2022. The Second and Third Respondents applied to have that Application dismissed on the basis that it was not filed at the Court within 15 days of my decision, in contravention of the Rules .

In my decision Henley Estate (Re) , 2023 NLSC 47 , I dismissed the Second and Third Respondents’ Application to Strike. analysis [ 9 ] The salient Rules for the purposes of this Application provide as follows; Where Available 20A.01 A party may serve upon an adverse party an offer to settle (Form 20A(A)) any claim between them in the proceeding and, where there is more than one claim between them, to settle one or more of them, on terms therein specified. Time for Making Offer 20A.02 .

An offer to settle may be made at any time before the commencement of the trial or hearing; but, where an offer to settle is made less than seven days before the day on which the trial or hearing is commenced, the cost consequences prescribed by this rule shall not apply unless the offer to settle is accepted before the commencement of the trial or hearing. … Effect of Failure to Accept 20A.08.

(1) Unless otherwise ordered, when (

a) an offer to settle was made by a plaintiff (

i) at least 7 days before commencement of the trial or hearing of the proceeding, and (ii) was not revoked or accepted prior to commencement of the trial or hearing, and (

b) where that plaintiff obtains a judgment as favourable or more favourable than the terms of the offer to settle, that plaintiff shall be entitled to party and party costs plus taxed disbursements to the date of service of the offer to settle and thereafter to double party and party costs plus taxed disbursements. … …

Discretion of Court 20A.10 . Notwithstanding the provisions of this rule, the court, in exercising its discretion as to costs, may take into account any offer to settle made in writing, the date the offer to settle was served, the terms thereof and any other relevant matters. [ 10 ] In my decision of June 23, 2022 I had ordered no costs. At paragraph 84 of my decision I said: This is a family disagreement that has spiraled out of control. The awarding of costs would only exacerbate the already strained relationships in this family.

All of the parties have sufficient means, and need not be compensating one another because they have sought to express views that they strongly hold. [ 11 ] The object of Rule 20A is to provide the parties with the means to encourage speedy resolution of disputes. Parties are required, however, to make their offers to settle seven days, or more, in advance of the trial or hearing. That was not done in this case – the Offer to Settle having been made after the conclusion of the first half of the hearing, but substantially in advance of the commencement of the second half. Issues 1.

Do I have the discretion to overlook the late service of the Offer to Settle in this matter? 2. If I am able to overlook the deficiency in service, should I exercise my discretion to award enhanced costs? 3. And, if so, on what basis? Issue #1: Do I have the discretion to overlook the late service of the offer to settle in this matter? [ 12 ] I am of the opinion that Rule 20A.10, being a non obstante provision, allows me to overlook any deficiency in the service of the Offer to Settle in this matter.

Specifically, I am allowed to consider any offer to settle made in writing, the date the offer to settle was served, the terms thereof and any other relevant matters. [ 13 ] The Offer to Settle in this matter was made in writing, and was served after the first half of the hearing was adjourned and long before the second half commenced. Although the Offer to Settle would have been of no force and effect had the hearing concluded at the first half, there was functional utility in it being advanced prior to the commencement of the second half of the hearing.

Had the Offer to Settle been accepted, it would have saved five additional days of hearing. [ 14 ] I am inclined to exercise my discretion under Rule 20A.10 and overlook the late filing because the hearing was bifurcated, and the Offer to Settle was made well in advance of the second half of the hearing. The Offer to Settle had the potential to save the parties considerable time and expense had it been acted upon. The Applicants should not be penalized because the Offer to Settle was not made within the strict time limitations contemplated by the Rules .

Issue #2: Should I exercise my discretion to award enhanced costs? [ 15 ] I find, specifically, that the Offer to Settle that was made in this matter was not nominal or trifling. It conveyed a significant advantage to each of the Second and Third Respondents in the event that they chose to accept the terms thereof. The Affidavit of Janet M. Henley, K.C. dated December 18, 2022 contains detailed calculations outlining the precise effect of the Offer to Settle.

I accept her calculations as being accurate. [ 16 ] In accordance with Henley, K.C.’s calculations the Second and Third Respondents would each have received $8,522.35 more than the agreement that they reached on December 4, 2016 and which I upheld in my June 23, 2022 decision. According to John J. Henley’s calculations the Second and Third Respondents would have received $7,616. 04. The difference is not consequential. [ 17 ] This may not seem like a lot of money but, then, the parties had from the beginning been arguing over an insignificant amount relative to the size of the Estate of Alec G. Henley.

In the scheme of things the Offer to Settle was neither trifling nor inconsequential. It was a roadmap to peaceful coexistence within the family, had the Respondents seen fit to accept its terms. [ 18 ] The Applicants offered a reduced Column (Column III) on the Scale of Costs less 10%. They would have not considered that I would exercise my discretion to award no costs. It would not be fair to use my award of no costs to the detriment of the Applicants. The Applicants made a bona fide attempt at resolving the dispute at an amount significantly less than what a court might ordinarily award.

A judge might have easily awarded costs under Column V given the length of time that the Rule 20A Application occupied, the issues that needed to be resolved and the array of senior counsel that had been retained to provide service. [ 19 ] As a result of the Rule 20A Application, my award of costs is suspended and, therefore, of no force and effect. In law my award concerning costs ceases to exist until it is modified or affirmed by a decision in the Rule 20A Application.

It is my view, therefore, that it would be inappropriate, in calculating whether the Applicants’ Offer to Settle offered terms more favourable to the Respondents than they received in my decision, to take into account any amount in respect of costs. [ 20 ] The Respondents ought to have known that the agreements they made on December 4, 2016 were binding upon them. They ought to have known that the agreements could not be overturned without the agreement of the majority of the Executors.

The unyielding positions taken by the Respondents unnecessarily delayed the administration of the Estate and entailed substantial cost and inconvenience to all of the parties. [ 21 ] I have ruled, in Henley Estate (Re) , 2023 NLSC 47 that I am not functus officio , that the present application is properly before me and, therefore, I am free to exercise my discretion pursuant to Rule 20A.

[22] I have found that the Offer to Settle was made in writing, that the date of its service does not derogate from my ability toexercise my discretion in the awarding of costs and that the terms of the Offer to Settle are neither trifling nor inconsequential. [23] In Mega Roofing & Waterproofing Ltd. v. N.D. Dobbin Ltd. (1996), (NL SC), 143 Nfld. & P.E.I.R. 14, 448A.P.R. 14 (Nfld. S.C.(T.D.)), Orsborn J. undertook an extensive review of the Canadian case law dealing with the costs consequences ofoffers to settle.

At the time the Rules were unique in that they left to the discretion of the judge the quantum of costs to award. Since thattime the Rules has been amended effective February 1, 2013 and, now, the quantum of elevated costs is specifically mentioned and thejudge’s discretion has been significantly curtailed. [24] The rationale for granting elevated costs was expressed as follows by Orsborn J. at paragraph 27 of Mega Roofing: Predictable and severe cost consequences serve to focus the mind on a realistic assessment of the offer.

Generally speaking, one canassume that a more favourable outcome at trial reflects positively on the reasonableness of the offer. Thus, in essence, the rulecontemplates that a party who wrongly rejects a reasonable offer will absorb the post-offer costs of the other party. [25] Where Orsborn J. would have granted costs on a solicitor and own client basis after an offer to settle, the amended Rule hascodified the quantum of elevated costs. Prior to an offer to settle the successful party is entitled to party and party costs. After an offer tosettle the successful party is entitled to double party and party costs.

Placement of the costs in the appropriate column is still within thediscretionary purview of the justice hearing the matter. Issue #3: And, if so, on what basis? [26] Counsel for the Applicants requested costs under Column V of the Scale of Costs prior to the date that the Offer to Settle wasmade to the Respondents, and double Column V thereafter with provision for two counsel. [27] In order to determine whether the granting of costs on the basis suggested is warranted, I must look, first to Rule 55.04 and, inparticular to the following factors: a. The amounts claimed and the amounts recovered; b.

The importance of the issues; c. The complexity, difficulty or novelty of the issues; d. The manner in which the proceeding was conducted, including any conduct that tended to shorten or unnecessarily lengthen theduration of the proceeding; e. The failure by a party to admit anything that should have been admitted; f. Seniority of the Bar of counsel; and g. Any other relevant matter. A. The amounts claimed and the amounts recovered. [28] The amounts claimed and recovered were not substantial.

However, the Estate as a whole had a significant value, and theamount in limbo on account of the Executors being unable to agree was almost $1 million. Not an insignificant sum. B. The importance of the issues. [29] The issues were of importance to the parties. Alec G. Henley has now been deceased for over 10 years. The parties are still atloggerheads about how best to deal with the Estate. It is important to all the Beneficiaries to have their dispute finally resolved. C. The complexity, difficulty or novelty of the issues. [30] The issues were not complex or novel.

However, the parties had a very difficult time finding consensus. At one time theymanaged to find it, but soon after the Respondents attempted to renege upon their agreement. The Application, itself, took 11 hearingdays. An appeal relating to an interlocutory order delayed the matter for another year. D. The manner in which the proceeding was conducted, including any conduct that tended to shorten or unnecessarily lengthen theduration of the proceeding. [31] The proceedings became protracted because of the intractable position taken by the parties. Each of them proceeded to stake

their position as a matter of principle and would not yield. Although the Applicants made a reasonable offer to settle the dispute, the Respondents did not see fit to accept the same. The proceedings became inordinately delayed at great cost and inconvenience to all of the parties. E. The failure by a party to admit anything that should have been admitted. [ 32 ] The Respondents did not admit that they had entered into a binding agreement on December 4, 2016 until the hearing resumed in 2022.

This necessitated the Court calling estate counsel as the Court’s witness to testify, in depth, about the December 4, 2016 meeting and what was accomplished on that day. This could have been entirely avoided had an appropriate admission been made in a timely manner. F. Seniority of the Bar of counsel. [ 33 ] All parties were represented by senior counsel with many years of experience at the Bar. Janet M. Henley, K.C. – who represented herself commencing in March, 2022 is, herself, a former senior practitioner. [ 34 ] In Cabana v.

Newfoundland and Labrador , 2016 NLCA 75 , Green C.J.N.L. (as he then was) found that a self-represented litigant who undertook considerable research into and study of the legal materials that he deemed relevant to the case, acted in a serious, respectful and thoughtful manner and made intelligent arguments on the law and facts, was entitled to party and party costs using Column II because the level of his submissions did not reach that of a qualified lawyer. [ 35 ] Janet M. Henley, K.C. was represented by counsel up until the conclusion of the first half of the hearing before me.

It was only thereafter that she began to represent herself. [ 36 ] I note that Janet M. Henley, K.C., although no longer practicing law, has methodically, diligently and competently presented her case at the level of senior counsel. She was jointly involved in the making of the Offer to Settle under Rule 20A.

She should not be prejudiced in costs because she is no longer in active practice. conclusion [ 37 ] If I were to refuse the Applicants’ request for enhanced costs in this matter, I would not do justice to the rationale behind Rule 20A – to afford litigants a means of putting a swift end to needless litigation.

While the Court retains its jurisdiction to make an award that is less than that prescribed by the Rules , its discretion is constrained and should be exercised in only the clearest of cases. [ 38 ] I have held that the Offer to Settle under Rule 20A was effective although it did not comply strictly with the Rule. Accordingly, the Order as to costs that I made earlier is suspended and shall be replaced as follows: • The First Applicant, Brian A.

Henley, shall have his costs to the date of the filing of the Offer to Settle under Column V of the Scale of Costs together with disbursements, and double Column V together with disbursements thereafter. Provision shall be made for two counsel for the portion of time that a second counsel was present at the hearing. The Respondents, John J. Henley and Christopher M. Henley, shall be jointly and severally liable to pay the costs and disbursements awarded to Brian A. Henley; and • The Second Applicant/First Respondent, Janet M.

Henley, K.C., shall have her costs to the date of the filing of the Offer to Settle under Column IV of the Scale of Costs together with disbursements, and double Column IV thereafter together with disbursements. The Respondents, John J. Henley and Christopher M. Henley, shall be jointly and severally liable to pay the costs awarded to Janet M. Henley, K.C. _____________________________ Vikas Khaladkar Justice