The Deadly Sin of Costs
Many litigants are disappointed to learn that costs are no longer automatically paid out of an estate. In fact, it is now widely accepted that estate litigation can attract the usual costs consequence. As such, costs are an issue that should be considered by a party before embarking upon estate litigation. Ukrainian Catholic Episcopal Corp. of Easter Canada v. Pidwerbecki, a recent decision of the Ontario Superior Court of Justice, is instructive in this regard.
The respondents were success at trial and sought their costs. The applicant, the Ukrainian Catholic Episcopal Corp. of Easter Canada (the “Church”), argued that no costs should be awarded and that the costs requested were, in any event, excessive.
The court recognized that in estate matters, issues frequently arose upon which “reasonable persons” could “reasonably disagree”. Ambiguity in a testamentary document was cited as one such example. The court held that where there were reasonable grounds for an application, costs should generally be paid by the estate.
However, in the case at hand, there was no dispute arising out of any mistake or lack of clarity or default of the testator. According to the court, the lack of evidence supporting the Church’s position ought to have been apparent from the beginning and certainly at the end of discoveries (a good reminder to counsel to write to clients at the end of discoveries to address the merits of the case). Given the allegations of misconduct, coupled with the lack of evidence, the court held that costs, on a partial indemnity scale, should follow the cause (loser pays the winner).
The fact that the Church was a not-for-profit organization carried no weight with the court. Moreover, even though there was no adversity of interest between the respondents, the court was satisfied, despite the arguments of the Church, that it was reasonable for the parties to be separately represented. The respondents were awarded their separate costs.
Thanks for reading and have a good weekend.
Justin
