Estate Planning

Estate Litigation and Costs Awards

By Hull and Hull LLP

As noted in past blogs and podcasts, the modern rule that 'costs follow the event' also now generally applies to estate litigation. However, as demonstrated by a recent case out of Alberta, there are still instances where an unsuccessful party will not be held responsible for the costs of the successful party and will also recover their own costs from an estate. 

In Re Foote Estate, the Deceased's widow and children had commenced an application for the advice and direction of the Court as to the Deceased's domicile (i.e. where, legally, the Deceased lived) as well as the validity of a 'poison pill' clause in the Deceased's Will (i.e. a provision disinheriting a beneficiary who challenged the Will). The widow and children wanted to commence support claims against the estate, and were concerned about the poison pill provision. They also realized that the Deceased's domicile at his death would determine the applicable law with respect to their support claims. The Deceased had been born, raised and ultimately died in Alberta, but he had obtained permanent residency status on Norfolk Island during his life. He also had a significant connection to British Columbia. The widow and children argued that the Deceased had been domiciled in Alberta or British Columbia at the time of his death. The executor and the two residuary beneficiaries (both charities) argued in favour of Norfolk Island. A three-week trial was held and Justice Graesser ruled that the Deceased was domiciled on Norfolk Island, an Australian territory, at the time of his death. 

The respondents, as the successful parties, subsequently sought their costs against the applicants, Deceased's widow and children. The latter, although unsuccessful in their application, sought their costs from the estate, valued at over $100 million. 

After a thorough review of the law concerning costs in estate litigation and its application to the case at hand, Justice Graesser ultimately held in his costs decision that the matter clearly fell within the exceptions to the modern rule. Accordingly, the executor and the residuary beneficiaries were not entitled to recover any of their costs from the applicants, the widow and children. As for the applicants, Justice Graesser ruled that this was an appropriate case for them to recover their costs from the estate, as, among other factors, the Deceased's conduct caused the litigation, the applicants prosecuted the litigation in a diligent and efficient manner and there was no basis to criticize their conduct.

Thanks for reading,

Bianca La Neve

Full post as published by Toronto Estate Law Blog on April 08, 2010 (boomark / email).