IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Ravnyshyn et al v. Drys,

 

2005 BCSC 1716

Date: 20051207
Docket: 01/2947
Registry: Victoria

Between:

Paraskovia V. Ravnyshyn, Maria M. Dzubak, Olen M. Goubchouk, Ivan G. Demediuk, Maria G. Nestorouk, Ganna G. Dymydiuk, Vasyl G. Dymydiuk, Yuri G. Dymydiuk, Vasylyna V. Kermoshchouk, Vasiliy V. Dymydiuk, Oleksi V. Dymydiuk, Petro V. Dymydiuk, Mykola V. Dymydiuk, Olena V. Dymydiuk, Maria S. Aksuk, Ganna S. Tymchouk, Yuri S. Shekeryak, Mychaylo S. Shekeriak, Mykola S. Shekeriak, Vasylyna S. Storoshchouk, Dmytro S. Shekeryak, Nikolay N. Demediuk, Yuri F. Demediuk, Ganna Yu Shkoundeuk, Vasylyna Yu Gavrylchouk, Yevdokia Yu Marfiyevych/Mouratshi, Mychaylo Yu Doutchak, Yekaterina Yu Slyvinskaya, Mariya Yu Labyuk and Paraskoviya Yu Gavrylchouk

Plaintiffs

And:

Igor Drys and Nataliia Drys

 

Defendants

Before: D/Registrar Bouck

Reasons for Decision

Appeared on behalf of the Plaintiffs

James Krahn

Counsel for the Defendants

Heather Wellman

Date and Place of Hearing:

November 29 & 30, 2005 (1½ days)

 

Victoria, B.C.

THE APPOINTMENT

[1]                This is an assessment of the defendants’ special costs pursuant to the order of Warren, J. made August 25, 2005.

[2]                The order followed the court’s dismissal of the plaintiffs’ claims after a 22 day trial. The court’s Reasons for dismissing the claim are found at 2005 BCSC 561. Subsequent Reasons on the matter of costs are found at 2005 BCSC 1216.

[3]                The appointment appends the accounts issued to the defendants by their solicitors between July 31, 2001 and August 31, 2005. The amount claimed in this bill of costs (the “Bill”) is broken down as follows:

Fees                                        $114,199.75

Disbursements                       $  15,010.03

GST                                         $    8,733.95

PST                                         $    8,520.65

                        TOTAL:                       $146,464.38

[4]                In addition to the Bill, the defendants seek special costs relating to this assessment. Supplemental material provided by the defendants includes copies of legal accounts rendered from September 30 to November 25, 2005.The additional fees are estimated at approximately $9,000.  

[5]                The plaintiffs’ representative, James Krahn, is the husband of Paraskovia Ravnyshyn.  Mr. Krahn gave viva voce evidence and was briefly cross-examined.  Mr. G.T. Rhone remains the plaintiffs’ solicitor of record.  

[6]                Mr. L. Armstrong, the more senior counsel to the defendants, gave evidence in support of the Bill. I also accepted Ms. Wellman’s unsworn statements regarding the assessment related charges.

THE PROCEEDING

[7]                This litigation can be broadly described as an estate matter. The events leading up to the lawsuit are described in the court’s first Reasons for Judgment and need not be repeated here. For context, I refer to the court’s Reasons for Judgment on costs in which the cause of action is summarized:

“2.        In their action the plaintiffs, who are the residual beneficiaries under the will of George Demediuk (the “Will”), asked that the portions of the Will benefiting the defendants, who were the executors, trustees, and principal beneficiaries under the Will, be set aside. In pursuit of that end, the plaintiffs alleged undue influence by the defendants over the testator and argued that they had “feloniously” caused the death of the testator. These allegations were contained in the pleadings and were vigorously pursued and argued at trial. The plaintiffs failed to prove any of their allegations and the defendants were successful in their counter-claim.”

[8]                Thus, this is atypical estate litigation in many respects, particularly given the plaintiffs’ attempt to prove that the defendants were responsible for the testator’s death. Indeed the plaintiffs alleged that the defendants murdered the testator in order to benefit under the Will.

[9]                Mr. Armstrong described the proceedings as a “civil murder trial”.  That description is apt.

[10]            The plaintiffs are distant relations of George Demediuk.  Except for Paraskovia Ravnyshyn, all of the plaintiffs continue to reside in the Ukraine. The defendants are a young couple who recently emigrated to Canada from the Ukraine.

[11]            This action gained considerable notoriety in the local Ukrainian community, and indeed beyond. It is suggested that the defendants were ostracized from the community during the course of this litigation.

[12]            Although neither a relation nor acquaintance of the testator (nor for that matter, a member of the Ukrainian community), Mr. Krahn is the “driving force” behind this proceeding.  

[13]            As the court notes, Mr. Krahn took an interest in the circumstances of Mr. Demediuk’s death as a result of a discussion with a neighbour.

[14]            Mr. Krahn filed the statement of claim initiating the action. He married Paraskovia Ravnyshyn sometime during the course of the proceeding.

[15]            Eventually, the plaintiffs were represented by Messrs. D.H. Christie and G.T. Rhone. The statement of claim was subsequently amended three times, with the allegation of murder remaining prominent in the pleading.

[16]            According to the uncontroverted evidence of Mr. Armstrong, the plaintiffs resisted all efforts to resolve this claim. To the contrary, the plaintiffs appear to have instructed their counsel to make the litigation as costly and difficult as possible. Mr. Krahn’s involvement in forging documents and otherwise attempting to subvert the Rules of Court is described in the court’s Reasons for Judgment. Mr. Krahn admitted to this conduct before me.

[17]            Mr. Krahn’s evidence at this hearing was primarily an attempt to re-litigate the issues which I understand are now the subject of an appeal. I disallowed much of this evidence as it was irrelevant to the assessment of special costs.

[18]            One of the few relevant issues raised by Mr. Krahn was a suggestion that the defendants prolonged the trial by resisting making admissions during the lengthy cross-examination by plaintiffs’ counsel.

[19]            In contrast, Mr. Armstrong testified that the trial was unnecessarily prolonged because the cross-examination was ineffectual. In his view, Mr. Christie was generally unprepared and disorganized during the course of the trial.

[20]            Mr. Armstrong further testified that the disorganization of the plaintiffs and their counsel with respect to documents contributed to the prolongation of the trial. Documents from third parties and other proceedings were put to witnesses without advance notice to the defendants. The plaintiffs seldom had copies of those documents available for either defence counsel or the court.

[21]            The result of this disorganization was that Ms. Wellman, the junior counsel for the defendants, became the de facto assistant for the plaintiffs by retrieving documents from the defendants’ files for the plaintiffs’ use.  Ms. Wellman was also responsible for ensuring that the defendants’ many documents were organized and available to Mr. Armstrong for his examination of the various witnesses.

[22]            Mr. Christie withdrew as counsel part way through the trial. Apparently, the withdrawal was necessitated by the discovery that Mr. Christie’s office had prepared a “subpoena” used by Mr. Krahn to obtain documents from third parties. Of course, no such subpoena exists under our Rules of Court. The plaintiffs’ attempts to introduce some of these documents, and dealing with third parties who received the subpoenas, further complicated the litigation and prolonged the trial.

[23]            The cost of the litigation has consumed all of the estate funds, leaving no residue for the plaintiffs.

[24]             The defendants have since been financing the lawsuit from their own resources.

[25]            Mr. Krahn suggests that the law firm has “double billed”, charging the estate and the defendants personally for the same services. This suggestion is groundless.

DISCUSSION

[26]            The seminal case on the assessment of special costs remains Bradshaw Construction Ltd. v. Bank of Nova Scotia (1991), 54 B.C.L.R. (2d) 309, aff’d on the issue of costs (1993) 73 B.C.L.R. (2d) 212 (C.A.).  The test in the assessment of special costs is whether the amount claimed is what a reasonable client would pay for the services of a reasonably competent solicitor based on the factors outlined in the Rule 57(3).

[27]            More recently in Lee (Guardian ad litem of) v. Richmond Hospital Society 2005 BCCA 107, the Court of Appeal considered the proper approach to the assessment of special costs. While citing Bradshaw Construction, supra, with approval, the court also noted that:

“Bradshaw Construction is not authority for the proposition that an assessment of special costs is confined to assessing a reasonable fee for performing the work described in the bill – rather, such an assessment involves the consideration of all of the circumstances…”

[28]            In Bradshaw Construction, supra, it was proposed that as a “rule of thumb” the fees allowed in a special costs assessment might be equivalent to 80 - 90% of what would be allowed under a Legal Profession Act review. However, that is only a rule of thumb. There are instances where special costs are equivalent to the fees charged to the successful party: Sarkodee-Adoo v. Sarkodee-Adoo: 2003 BCSC 950 aff’d 2004 BCCA 105 and Midland Mortgage Corp. v. Jawl and Bundon [1997] B.C.J.  No. 1724 (S.C.) @ para. 7.

[29]            Considering all of the circumstances in this unusual, if not unique, proceeding the defendants’ special costs, excluding those costs related to this assessment, are assessed at 100% of the actual fees charged by their solicitors.

[30]            This “civil murder trial” was indeed a complex and difficult piece of litigation. In addition to the difficult legal issues involved, the trial necessitated the involvement of translators in the Ukrainian and Spanish languages.

[31]             I accept Mr. Armstrong’s evidence that the proceeding was made more difficult by the conduct of Mr. Krahn.

[32]            The litigation clearly necessitated highly skilled counsel to deal with both the expected and the many unexpected evidentiary issues that arose in the course of the proceeding and trial. This is a proceeding where two skilled counsel were required. Mr. Armstrong, and to a lesser degree Ms. Wellman, offered specialized knowledge in estate litigation.  I accept that Ms. Wellman provided assistance to both the parties and the court by maintaining a high level of organization and preparedness during the trial.

[33]            The responsibility to obtain a good result was high given not only the financial repercussions facing the defendants but perhaps of greater importance, the damage done to their reputation in the community.

[34]            The amount involved included four pieces of real property in Victoria, although the value of those properties was not in evidence.  As well, the court found that at the time of his death, Mr. Demediuk has liquid assets of some $170,000.

[35]            I find that the time spent by each Mr. Armstrong and Ms. Wellman to be more than reasonable in the circumstances of this litigation.

[36]            Without hesitation, I conclude that it was the conduct of the plaintiffs which unnecessarily lengthened the duration of the proceeding and the trial. The suggestion by Mr. Krahn that artful cross-examination led to damaging admissions from Mr. and Mrs. Drys is simply untrue. The fact remains that the plaintiffs’ witnesses were discredited, while the defendants were found credible.

[37]            The best result possible was obtained, although at considerable cost financially and otherwise to the defendants.

[38]            The Drys will, of course, have benefited from the result both in terms of having the Will “upheld” and also clearing their names.

[39]            The plaintiffs put the defendants to strict proof for all disbursements, including court filing fees. I find that all of the disbursements incurred were necessary and proper to conduct the proceeding and the amounts claimed for those disbursements reasonable.

[40]            With respect to the costs of the assessment itself, the hearing consumed 1½ days.  Mr. Armstrong gave evidence but Ms. Wellman was counsel at the assessment itself. I would not allow Mr. Armstrong’s fees for his attendance as a witness or observer at the assessment.  Accordingly, I assess the fees related to the preparation and attendance at this assessment at $4,500.

[41]            The defendants argue that the attendance of a court reporter at this hearing was necessary given the distrust between the parties and a history of many misrepresentations made by Mr. Krahn during the proceeding. In  Van Daele v. Van Daele (1984), 56 B.C.L.R. 176 (S.C.), rev’d  56 B.C.L.R. 178 (C.A.), the test for whether a disbursement should be allowed is stated as this:

“…whether at the time the disbursement or expense was incurred it was a proper disbursement in the sense of not being extravagant, negligent, mistaken or a result of excessive caution or excessive zeal, judged by the situation at the time when the disbursement or expense was incurred.”

[42]            It was never suggested that the reporter’s transcript would be relied upon by counsel in argument at this hearing and indeed, was not.  Arguably, the only reason for the court reporter’s attendance was to record the proceedings in anticipation of the plaintiffs’ appeal of my decision.

[43]            Unlike any other matter in the Supreme Court, registrar’s hearings are not recorded. The difficulties which a party might experience on an appeal from a registrar’s decision absent this independent record are addressed in Practice Before the Registrar (Continuing Legal Education Society of British Columbia 2005) at paragraph 10.2.

[44]            Given the conduct of the plaintiffs to date, it is reasonable to assume that the result of this assessment will be appealed. Accordingly, in the absence of an alternative recording process, I find that it was necessary and proper in this case to retain the services of a court reporter.

[45]            As to reasonableness of that charge, the invoice from the reporter was not available when this hearing adjourned. That invoice may be appended to the defendants’ certificate of costs. All other disbursements related to the preparation and attendance at this hearing are allowed.

[46]            In summary, the defendants’ special costs are assessed as follows:

Fees, excluding the assessment:                              $114,199.75

Disbursements, excluding the assessment:             $  15,010.03

Fees regarding the assessment:                               $    4,500.00

Disbursements (including taxes but
excluding court reporters fees)
regarding the assessment:                                         $          75.54

[47]            The defendants’ certificate of costs should append both the court reporter’s invoice and a summary of the amounts allowed.       

“District Registrar C.P. Bouck”