2013 ONSC 1106, 2013 ONSC 1106

CITATION : Wercholoz and Tonellotto, 2013 ONSC 1106 COURT FILE NO.: 10-21883 DATE: 2013-02-20 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: ) ) Robert John Wercholoz ) ) ) Andrea M. Hill for the Applicant ) Applicant ) ) - and - ) ) ) Sandra Joan Tonellotto, Joseph Nadasdi, and Katherine Campbell Wercholoz ) ) ) Mary Grosso for the Respondents ) Respondents ) ) ) ) HEARD: January 14, 2013 REASONS FOR RULING ON COSTS Glithero J. [ 1 ] This ruling deals with the cost consequences of an application brought under the Substitute Decisions Act , S.

O. 1992, c. 36 in relation to the property and personal care issues of the respondent, Katherine Campbell Wercholoz (Katherine). The majority of issues were settled in November 2012, and resulted in minutes of settlement.

The application was then to be heard before me on January 14, 2013, on what was expected to be the last remaining issue, a determination by the court of the appropriate amount of compensation to be paid to the respondent, Sandra Joan Tonellotto (Joan), as compensation for the 24 months of care provided by her in her own home to Katherine from July 2010 to July 2012. [ 2 ] At the outset of the proceedings on January 14 th , 2013, I was advised that the parties had settled this last issue.

Accordingly, all that remained to be determined was the issue of costs. [ 3 ] The applicant seeks his costs on a full indemnity basis in the amount of $85,729.98, inclusive of GST and disbursements, to be paid from Katherine’s assets. The applicant also proposes that the respondents, Joan and her son, Joseph Nadasdi

(Joe), be paid their costs on a full indemnity basis, again out of the assets of Katherine. The respondents seek their costs on a full indemnity basis in the amount $80,447.75, but submit those costs ought to be paid by the applicant. In the alternative, they seek an order that the applicant be required to pay their costs on a substantial indemnity basis.

If that order is granted, they then also seek that the difference between substantial indemnity and full indemnity be ordered paid out of Katherine’s assets. [ 4 ] Katherine’s assets are approximately $616,000 less the $60,000 figure payable to Joan for her care, leaving approximately $556,000. In addition, she has annual pension income and interest income of approximately $20,702.

Her current annual expenses are $37,842. [ 5 ] As the applicant’s submissions on costs would lead to a payment amounting to approximately 1/3 of Katherine’s assets, and given that all issues in this matter, except costs, were settled and resulted in consent orders, in my opinion the cost claims require close judicial scrutiny. [ 6 ] Katherine is 90 years of age and resides in a retirement residence in Hamilton, Ontario. She has four children. They are Bob (the applicant), Joan (the first respondent), Kathy Civitarese and Len Wercholoz.

Kathy and Len are not parties to these proceedings, but provided affidavits in support of the applicant and the respondent respectively. [ 7 ] In 1994 Katherine had named Bob and Joan as joint powers of attorney for property. [ 8 ] Katherine’s home was sold in March 2010 with Bob and Joan signing the sale documentation as attorneys for property. In May 2010, Katherine moved into the Meadowlands Retirement Home.

The proceeds of the sale of her home were put into an investment account. [ 9 ] In July of 2010, Bob learned that Katherine had signed a new power of attorney naming Joan and Joe and that they had delivered the new power of attorney to the investment advisor and that they had given Meadowlands 30 days notice of Katherine’s departure. Katherine had decided that she did not like living at Meadowlands and wanted to move in with Joan. [ 10 ] Joan did not give Bob any notice of the new power of attorney.

On the evidence it appears that Bob had little if anything to do with his mother in the four years preceding the summer of 2010. [ 11 ] On August 12, 2010, Bob commenced this application seeking 23 different heads of relief. He then brought an ex- parte motion which resulted in an order dated August 16, 2010, which temporarily suspended the powers of attorney granted to Joan and Joe, and temporarily prohibited them from accessing funds.

On consent the order was extended a further seven days to September 2, 2010. [ 12 ] On that date the parties consented to an order appointing counsel for Katherine under s. 3 of the Substitute Decisions Act , and providing that Katherine be assessed, that the powers of attorney granted to Joan and Joe be suspended pending further order, that Joan and Joe be restrained from accessing Katherine’s bank accounts until further order, and appointing Bob as the acting attorney for property subject to limitations. [ 13 ] Katherine was interviewed by an assessor in November 2010.

The assessor decided that further medical documentation was necessary and in January 2011 a consent order was obtained for the production of the medical records to the assessor.

The assessor’s reports dated March 10, 2011, concluded that Katherine did not have the mental capacity to execute a power of attorney for property or to manage property, but she could execute a power of attorney for personal care, and that she was incapable of instructing counsel. [ 14 ] The primary and dominant issue in these proceedings was the determination of who would act as attorney or guardian of Katherine’s property, and of her personal care. Katherine previously had a power of attorney for property dated April 6, 1994, which named Joan and Bob jointly as attorneys for property.

She did not previously have a power of attorney for personal care. [ 15 ] In July, 2010 Katherine executed a power of attorney for property and personal care, which named Joan and her son Joe as her attorneys for both. [ 16 ] On August 16, 2010, the applicant brought the ex-parte motion for injunctive relief as against the respondents. The applicant had not been in contact with Katherine for four years, but upon learning of the new powers of attorney, he commenced this application and brought the ex-parte motion, alleging a danger to Katherine’s property.

His brother Len had advised the applicant that he was not in agreement. The applicant alleged that Joan and Joe had tried to close Katherine’s investment account, which held the bulk of her worth. That was not true. On July 12, 2010, before the ex-parte motion, the financial advisor to the account in question corrected the applicant and indicated that the respondents had not attempted to move any funds from the account.

This information was not disclosed to the court on the ex-parte motion. [ 17 ] After learning of the new power of attorney for property on July 9, 2010, the applicant made no effort to contact the respondents to discuss the situation before commencing the application and the ex-parte motion. Len tried to convene a meeting of the four siblings, but the applicant would not attend to discuss these issues because his wife was not included.

The proposal for a meeting was not disclosed to the court. [ 18 ] In the motion material, the applicant alleged that the lawyer who prepared the power of attorney for property in July 2010 also prepared a new will for Katherine, which named Joan and Joe as executors and principle beneficiaries. This was not true. He had no evidence that had occurred, but simply asserted it based upon a suggestion by his lawyer that often a will would be executed at the same time as powers of attorney.

He had spoken to the lawyer who had prepared the power of attorney, received no information about a new will, and did not disclose that in the ex-parte motion material. [ 19 ] Upon learning of the ex-parte order, the respondents chose to work towards a resolution without resorting to the courts in respect of concerns about the propriety of the ex-parte order. The respondents sought agreement to a consent interim order

which would permit Katherine to continue to live with and be cared by Joan and to place some limitations on the scope of the order obtained by the applicant on an ex-parte basis. It limited the applicant’s authority under the 1994 power of attorney for property to payment of ongoing financial obligations and care and medical required expenses and required the applicant to report any such steps to counsel appointed by the order for Katherine. With that exception, all parties were enjoined from otherwise dealing with Katherine’s assets.

That consent order was dated September 2, 2010. [ 20 ] On September 21, 2010, the respondents made a written offer to resolve the issues by offering to agree to mediation. They offered to provide confirmation that they took no steps to create a new will for Katherine. They also offered that the applicant (alone) would continue as Katherine’s attorney for property with the exception that the investment account would not be altered without the approval of both Bob and Joan.

They further suggested that Joan and Joseph would act as Katherine’s attorney for personal care and that she would continue to reside with Joan, who would be entitled to a reasonable payment for respite care. The offer also provided that if any of the parties came into dispute with respect to any of the suggested terms, there would be an agreement that the dispute be mediated by counsel for Katherine before anyone would resort to the courts. [ 21 ] The applicant did not accept that offer. [ 22 ] The assessments of Katherine’s capacity were reported on in March of 2011.

By letter dated March 25, 2011, the respondents made a further offer to settle the matter. It provided that the power of attorney for personal care made in July 9, 2010 would be declared valid, and Katherine would continue to live with Joan. Joan would not take any fees or expense reimbursements with respect to her care of Katherine for the period from October of 2009 to July of 2010, when Katherine lived with Joan. For the period commencing July of 2010 up to and including March of 2011, the month of the offer, Joan would be paid $15,000.00 for caring for Katherine in Joan’s home over that eight month period.

Commencing April 1, 2010, Joan would be paid a reasonable monthly fee based on estimates from three nursing homes, with the proposed amount being $3,000.00 per month, out of which Joan would pay all of Katherine’s expenses such as would be included for services provided in retirement homes, and Joan would pay for respite care when required to permit Joan to have a break. The monthly fee would not include extraordinary medical expenses, and Joan would provide written quarterly reports of Katherine’s health condition to all the other siblings, and agree to respond to their reasonable inquiries.

Joan was to have access to a new bank account into which Katherine’s pension cheques would be deposited as a means of funds to pay for Katherine’s ongoing expenses. The offer also provided that the 1994 power of attorney for property (naming Bob and Joan) would be declared valid. Access to Katherine’s investment account would require the written approval of all four siblings. The offer also provided that the applicant would pay the legal fees of the respondents as well as his own, as the offer further asserted that the proceedings had been unnecessary.

The applicant refused the settlement proposal, as he would only accept an outcome that had himself as the sole attorney/guardian for Katherine’s property. [ 23 ] As the applicant refused the respondent’s offer, the respondents proceeded to prepare responding application material and served it in September 2011.

Joan proposed therein that she and the applicant would jointly be involved in the property issues. [ 24 ] Finally, by letter dated September 30, 2011, then counsel for the applicant indicated that he was content to resolve the matter on the basis that the April 1994 power of attorney for property would prevail, namely that he and Joan would act jointly in that capacity. [ 25 ] The net result is that the resolution proposed by the applicant in September of 2011 was the same that the respondents had recommended in April of 2011 and was less favorable to the applicant than the respondent’s offer in September of 2010. [ 26 ] There were other issues in dispute as between Bob and Joan.

For the two year period beginning in July 2010 Katherine lived in Joan’s house and Joan was essentially on duty 24 hours a day and attended to all Katherine’s needs. Joan wanted respite assistance to enable her to have a break. Bob initially ignored the request and then agreed to it in principle but maintained that family members could provide this service instead of any outside agency. But no firm commitments from family members were provided. Finally in mid-2012, Bob agreed to the respite being provided, and paid for out of Katherine’s funds.

In my assessment this was an issue which was made needlessly complicated and prolonged by the applicant. It was ultimately resolved in the respondent’s favour. [ 27 ] Joan required advances from Katherine’s funds in order to pay for ordinary day-to-day living expenses for Katherine while she lived with Joan. He would agree and then change his mind. He was at times, in my assessment, unreasonable. For example when his sister Joan assisted Katherine in getting new hearing aids, Bob challenged the need for them, and the choice of hearing aids selected.

He ultimately took the position that if they failed, Joan would have to personally pay back the cost of the hearing aids. As another example he challenged Joan’s expense claim for diesel fuel for her car, claiming that she did not have a diesel vehicle. In fact she had one for a year by the time of his challenge. [ 28 ] Bob gave Joan five days notice that he intended to hire an accountant to deal with the issue of capital gains payable on the sale of Katherine’s home unless he received a written objection from Joan.

She responded by saying that their mother had an accountant who had done her tax returns and was accordingly familiar with her affairs and ought to look after the issue. Months later and without further communication, Joan learned that Bob had hired a new accountant at a cost of 4-5 times what was estimated to be the cost of the original accountant based on his past billings. [ 29 ] The applicant made several allegations against the respondents which were never withdrawn, and which largely proved ultimately to be unfounded given the basis on which the applicant consented to the resolution of various issues.

For example, his allegations of undue influence and breach of fiduciary obligations as against Joan in respect of the July 2010 power of attorney for property, while never litigated, is essentially belied by his ultimate agreement that he and Joan would so act. His allegations of undue influence, coercion and improper influence regarding the July 2010 power of attorney for personal care, although again never litigated, are essentially belied by his eventual agreement that the document is valid.

He also alleged undue influence, coercion and improper influence in relation to his assertions that Katherine’s will had been changed so as to name the respondents as executors and main beneficiary. There was no evidence to support these accusations.

[30] These serious and hurtful allegations justified the eventual decision by the respondents to prepare significantmaterials in response to the application. This led to significant cost to the respondents. It appears that such cost could have easily beenavoided if the groundless assertions had been withdrawn in a timely way rather than being left out there in furtherance of the adversarialattitude which permeated the dealings between the parties. Legal Principles [32] At one time it was traditional that costs of all parties in estate matters would be ordered paid by the estate. That is no longer thecase.

As set out by the Ontario Court of Appeal in McDougal Estate v. Gooderham (2005), (ON CA), 255 D.L.R. (4th) 435, costs in estate litigation are governed by s. 131 of the Courts of Justice Act and Rule 57 other than in particular circumstancesenumerated therein. One such circumstance is where the litigation was reasonably necessary for the proper administration of the estate. [33] This approach was reconfirmed in the case of Salter v. Salter Estate, [2009] CanLII 28403 where D. M.

Brown J. held that thenormal civil law approach to costs is applicable to estate litigation, utilizing the factors detailed in Rule 57 and any particularcircumstances as recognized in McDougal. As he put it at paragraph 6 “Parties cannot treat the assets of an estate as a kind of ATM bankmachine from which withdrawals automatically flow to fund their litigation. The “loser pays” principle brings needed discipline to civillitigation by requiring parties to assess their personal exposure to costs before launching down the road of a lawsuit or a motion.

There isno reason why such discipline should be absent from estate litigation.” [34] Justice Brown held that such principles apply equally in Substitute Decision cases “with some modification to fit theparticularities of guardianship applications” in the case of Fiacco v. Lombardi 2009 CarswellOnt 5188.

He noted at paragraph 33 that“the exercise of the court’s discretion in respect of cost claims in capacity litigation should reflect the basic purpose of the SDA-toprotect the property of a person found to be incapable and to ensure that such property is managed wisely so that it provides a stream ofincome to support the needs of the incapable person: SDA, sections 32(1) and 37.” Importantly he went on to hold that “a court mustexamine what, if any, benefit the incapable person derived from the legal work which generated those costs. [35] At paragraph 36 he noted that while bona fide disputes may exist on contested guardianship applications, as between interestedfamily members, the court must not lose sight of the fact that the exercise is to be for the benefit of the incapable person and not beallowed to degenerate into a free for all amongst siblings.

In those cases cost claims must be “rigorously” scrutinized against theyardstick of the best interests of the incapable person. [36] Rule 57 makes costs an item of discretion for the court. It provides that in addition to the result obtained and any offers to settle,that the court may consider the experience of counsel and the hours spent and the rates charged, the amounts in issue and what a payorparty could reasonably expect to pay. The complexity of the proceedings and the importance of the issues are other factors.

Conductwhich unnecessarily lengthens proceedings, or which helpfully shortens them can be considered. Denials or refusal to make reasonableadmissions, and steps taken improperly, vexatiously or unnecessarily are factors, as are steps taken negligently, mistakenly or as a resultof undue caution. Discussion [37] In my opinion, this case represents a sad example of the hefty amounts that can be spent by siblings who choose to litigate ratherthan negotiate their differences in respect of a parent’s wellbeing.

In terms of an appropriate costs order, I must be concerned not onlywith the usual considerations as between the combatants, but also, most importantly, with what is fair from Katherine’s perspective. Firstly, the account of Mr. John Kranjc is in the amount of $4,375 for fees, $3,700.75 for disbursements, plus GST for a total of$8,671.35. He was appointed as the s.3 counsel for Katherine by court order, obtained on consent. The order provided that his feeswould be paid from Katherine’s assets. The disbursements include the costs of the two capacity assessments. The account has been paidout of Katherine’s assets.

Joan’s submission is that Bob should have to repay that amount. I disagree. It is an expense incurred byconsent court order. It was appropriate that Katherine have her own counsel given the combative nature of the proceedings. Accordingly, I make no order with respect to that item. [38] In the preceding paragraph I referred to a lack of appropriate communication. Joan did not consult with Bob before obtaining thepower of attorney for property and the power of attorney for personal care in July 2010. The evidence I have indicates that it was herlawyer’s idea to have those documents signed by Katherine.

Katherine at the time clearly had capacity to execute the power of attorneyfor personal care as established by the subsequent assessment. The lawyer who prepared and had executed the power of attorney forproperty thought Katherine had the capacity to sign that document. On the evidence before me, that lawyer was not initially consultedfor the purpose of creating such documents, but rather on the Meadowlands residential issue. I take into account that Bob appears tohave been largely uninvolved with his mother for a period of time leading up to the July 2010 execution date of these documents.

Nevertheless, had Joan seen fit to notify Bob of the lawyer’s recommendation, it may have served to have led to discussion of the issuesrather than resort to litigation by Bob. [39] More significantly, had Bob seen fit to raise his concerns with Joan prior to commencing the application and proceeding with theex parte motion, I think it highly likely that most of these issues could have been resolved in a less combative and less costly manner. Heturned down a proposal to have a meeting of all the family members to talk about the issues, and instead chose to resort to the courts.

Certainly when viewed from Katherine’s perspective, and what was in her best interests, the commencement of these proceedings andthe bringing of the ex parte motion escalated the contest in a manner inconsistent with Katherine’s best interests. [40] Rule 57.01(1) refers to the results in a proceeding as being obviously a factor for consideration. On the personal care issue, inmy opinion, the respondents Joan and Joseph achieved success. Prior to the July 2010 power of attorney for personal care, there hadbeen none. Joan, however, was providing much of the personal care.

The power of attorney executed by Katherine for personal care infavour of Joan and Joseph was eventually declared, on consent, to be valid. There really could be no serious contest about it as it wasJoan who was providing the care. Nevertheless, a good deal of time in this dispute related to not only that final determination, but alsolesser items relating to her personal care and the expenses involved in providing it. In my opinion, the respondents enjoyed success onthat issue.

[41] In respect of the care of property issue, there was originally the 1994 power of attorney for property which named both Joan and Bob. Then the July 2010 power of attorney for property was suggested by the lawyer and signed by Katherine, without notice to Bob. Then Bob brings the application and the ex parte order essentially freezing the power of attorney in favour of Joan and Joe. Then eventually that issue resolves on the basis that Joan and Bob be joint guardians of property for Katherine.

In other words, this issue ends up right back where it started from, with the exception of the change of name of the role necessitated by the assessment report finding Katherine incapable of managing her own property affairs.

Leaving aside considerations arising from offers to settle, on my analysis, Bob enjoyed more success in this matter in that he responded to the one sided change effected by Katherine in favour of Joan and Joe, and had matters resolved on the basis that he and Joan share the responsibility, the position that had prevailed prior to the contest. [42] In respect of the measure of success achieved by Bob, as a result of the ex parte order, I take into account however the fact that it appears to have been obtained on something less than complete disclosure. [43] In terms of offers to settle, another factor enunciated in Rule 57, I take into account from the broad perspective that rather than immediately responding to the application, or attacking the ex parte order, the respondents took a fairly conciliatory approach and started negotiating.

All orders obtained after that initial ex parte order, were obtained on the basis of consent. [44] Shortly after the ex parte order came the respondents’ written offer to not only submit the disputes to mediation, but also to provide evidence that there was no effort to create a new will, and importantly, offered to agree that Bob would alone continue as Katherine’s attorney for property, with Joan and Joe acting as her attorney for personal care. This offer was more favourable to the applicant than the result he achieved in the end. He did not accept it.

As of that date, the applicant’s account for fees was only in the neighbourhood of $12,000 - $13,000. [45] Then the respondents made another offer to settle dated March 25, 2011. It proposed a declaration that the July 2010 power of attorney for personal care be declared valid – which is exactly what eventually happened. It also provided that the 1994 power of attorney for property would be declared valid, which essentially is the final result except that by virtue of Katherine’s declared incapacity, it became a guardianship for property rather than a power of attorney.

The offer also contained provisions relating to the amount to be paid to Joan which were less favourable to Bob than the final result. Nevertheless, on the two big issues, personal care and property issues, the result proposed by the respondents was more favourable to Bob than the result he achieved in the end. He refused that offer and maintained that the only outcome that he would accept was one providing that he be the sole attorney or guardian for Katherine’s property.

In the end he did not achieve that stipulation. [46] Then the respondents prepared responding application material in which Joan proposed that she and the applicant would jointly be responsible for the property affairs and it was not until the end of September 2011 that then counsel for the applicant advised that he would agree that the 1994 power of attorney for property would prevail naming Bob and Joan jointly.

Accordingly, that resolution in September 2011 was the same as the respondent had offered in April of 2011. [47] On the issue of the amount of compensation to be paid to Joan for looking after her mother for the 24 month period, the final result is in between the amount offered by Bob and the amount sought by Joan.

In that sense, success is divided, although from the materials filed it appears that Joan had to contest the matter before any meaningful resolution was proposed. [48] Under Rule 57 I am invited to consider the principle of indemnity, including the experience of the lawyer, the rates charged and the hours spent. I don’t quarrel with the hourly rates claimed by either side given the years of experience for those involved.

However, when hourly rates reflect the degree of experience, then an offsetting factor should be the ability to get work done in an expeditious way and one commensurate with the experience level claimed. Counsel for the applicant spent almost 282 hours on this matter. This is a case where no contested proceedings, other than this issue of costs, proceeded. The first order was ex parte, and every subsequent order was on consent. Taking a notional 40 hour work week, then lawyers on behalf of the applicant spent over 7 weeks of time resolving matters on consent.

The various counsel for the respondents spent 240 hours, or 6 notional 40 hour weeks, again in resolving matters on a consent basis, with the exception of costs. The final result is then that counsel for these two sides spent a total of thirteen 40 hour weeks, or a quarter of a year battling issues that at the end of the day all resolved on consent. In my opinion, far too much time was spent.

I have to assume that counsel were acting in accordance with clients’ instructions, but there clearly has to be a limit on how much time, and accordingly how much expense, can really be said to be of benefit for the person whose affairs lie at the centre of the dispute. [49] Given the roughly comparable amount of time spent by each side, it seems to me that the Rule 57 factor of the amount of costs that an unsuccessful party could reasonably expect to pay has no particular application. [50] In my opinion the factor of the amount claimed compared to the amount recovered is relevant here.

The respondent, Katherine, has the right to enjoy her capital, and to distribute as she wishes the portion thereof not required to maintaining her standard of living while she is alive. Squabbling between two of her children which puts at risk approximately one-third of her capital is simply unreasonable. [51] In terms of the complexity of the proceeding, in my opinion it is not very complex. These kinds of disputes are not unique as amongst families. There is no family business or family trust or such complicating features here. It was simply a battle of wills between siblings.

Any level of reasonable compromise ought to have sorted these issues out quite quickly. [52] The issues were important to Katherine, but not sufficiently complex as to justify the costs run up in this file. [53] As to the conduct of a party tending to shorten or to lengthen the duration of the proceedings, in my opinion reading all of the materials it is Bob who threw up the most obstacles towards an orderly resolution of the issues. In my opinion it was Bob who took unreasonable stances.

The respondents, on the other hand, advanced positions that were more reasonable and more justifiable in the circumstances than those put forward by the applicant. Particularly given the offers to settle by the respondents, declined by the applicants, the applicant is responsible for much of the lengthening of this litigation. [54] In my assessment, some of the allegations in the application and the ex parte motion materials were or at least border on improper and vexatious comments. They were never withdrawn. But they were never proven. They were simply left to fester.

Ultimately, one has to conclude that there wasn’t much to them or presumably the applicant would never have agreed to Joan having the responsibility for his mother’s care if the allegations of misconduct on her part were thought to in fact be true. [55] The applicant’s position is that Katherine should pay the costs of both sides in full. The respondents’ position is that Bob should pay the costs of both sides in full. I don’t think either approach is warranted.

While much of the costs here were incurred as a result of the litigious stance adopted by both sides, some of the time spent by both sides was legitimately in Katherine’s best interests. Obtaining and considering the capacity assessments was a worthwhile step. So too were the development and consideration of the management plan in respect of property and the terms of the personal care plan as developed and incorporated into the minutes of settlement. [56] The bulk of the legal work done on behalf of the applicant was by two counsel whose average combined rate was about $260 an hour.

Nearly all of the work done on behalf of the respondents was at an hourly rate of $300. [57] In my opinion, 25 hours per side would be a reasonable estimate of the number of hours that ought to have been spent performing that portion of the work that was actually of benefit to Katherine, as opposed to the portions spent in conflict with each other. Accordingly, I would order that the applicant receive $6500 for fees paid out of the assets of Katherine.

A review of the disbursements, albeit fairly rough, suggests to me that of the almost $2,800 claimed, approximately two-thirds seem to relate to the above issues beneficial to Katherine.

Accordingly, I order that $1,800 in disbursements be paid to the applicant out of Katherine’s assets, as well as HST on both the fee and disbursement amounts just referred to. [58] I order that $7500 be paid to the respondents out of the assets of Katherine in respect of fees, together with $500 for disbursements, and HST on both. [59] In my opinion, in the balance of the costs claimed fall to be determined on the more normal considerations relevant to the adversarial process as developed in Rule 57. [60] Taking into account those factors and my earlier comments related to them, and in particular the offers to settle, in my opinion Bob should be required to pay costs on a substantial indemnity basis towards the respondents.

However, bearing in mind my earlier remarks concerning the amount of time spent, I order that Bob pay personally the sum of $40,000, inclusive of disbursements and HST to the respondents, Joan and Joe, within 30 days. [61] Given my opinion that much of the effort and costs spent on litigation here were not of benefit to Katherine, I decline to order that the balance of the respondents’ costs be paid out of her assets. [62] Similarly, I decline to order that the balance of Bob’s costs be paid out of Katherine’s assets. ___________________________ Glithero J.

Released: February 20, 2013 CITATION : Wercholoz and Tonellotto, 2013 ONSC 1106 COURT FILE NO.: 10-21883 DATE: 2013-02-20

ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: Robert John Wercholoz Applicant - and – Sandra Joan Tonellotto, Joseph Nadasdi, and Katherine Campbell Wercholoz Respondents REASONS FOR RULING ON COSTS Glithero J. CSG/lr Released: February 20, 2013