Lecky Estate v. Lecky, 2012 ABQB 339

Court of Queen ’ s Bench of Alberta Citation: Lecky Estate v.

Lecky, 2012 ABQB 339 Date: 20120524 Docket: ES01 096832 Registry: Calgary Between: The Personal Representatives The Lecky Foundation Caroline Frances Lecky, Jonathan Robert Stirling Lecky, Christopher Hartpole Lecky, Edward Alexander Macmillan Lecky and William Anton Hardinge Lecky Plaintiffs - and - Euphemia Sarah Ann Lecky Respondent Corrected judgment: A corrigendum was issued on June 11, 2012; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice C. A.

Kent _______________________________________________________ [ 1 ] These reasons were initially meant to deal with a question of costs arising from the applications that resulted in my decision reported at 2011 ABQB 802 . In those reasons, in the context of the passing of accounts application, I noted that the relationship of trust between Mr. Fowlis and Mr. Chan, two of the personal representatives, and Mrs. Lecky, the third personal representative and a beneficiary had broken down. During argument on this costs application, it became apparent that that relationship has soured even further.

The representations from counsel for all parties went beyond the advocacy required to address the costs issue and exacerbated an already difficult relationship amongst the two personal representatives and Mrs. Lecky as a beneficiary. Before dealing with the submissions by counsel, I want to make it clear why I am raising this issue. In most cases, when relations between counsel become testy

during a trial or application, the wise judge lets it go, unless any of the lawyers strays outside of the bounds of civility. That is because in most cases, the decision of the judge ends whatever relationship the parties had, whether it be insurer and plaintiff, two parties to a contract or Crown and accused. The notable exceptions are family law and estate litigation. My decisions on the various issues on the applications I have heard so far will not end the relationship between the parties here. I, or another judge, will need to case manage this file for years into the future.

The best result would be if that case management was restricted to applications to pass accounts. I fear, however, that that may not be the case. [ 2 ] To illustrate the point that all parties appear to have lost their perspective, I first turn to the submissions of counsel for the estate, the Foundation and the children at the costs hearing. To understand those submissions, some background is necessary. In one of Mrs. Lecky's briefs on the costs issue, she made the point that both Mr. Fowlis and Mr. Chan were in a conflict of interest, but for different reasons. First, it was Mr.

Fowlis' drafting of the will that was central to one of the issues I needed to decide. Therefore, some of the legal work done for the estate was his work in relation to his drafting. As a result, the brief said, any comparison between the accounts of the estate and the accounts of Mrs. Lecky was inappropriate. As for Mr. Chan, the submission was that for a time he was both a member of the board of the Foundation and a personal representative and therefore in a conflict. Both of these submissions are correct: it was the will drafted by the Mr. Fowlis that was central to the applications and Mr.

Chan for a short period time did hold those two positions and arguably was in a conflict. When I read the brief before oral argument, I was not shocked by these submissions nor did they change my view of either Mr. Fowlis or Mr. Chan, but I was somewhat underwhelmed about their relevance to the costs issues I needed to decide. I reserved any final decision until I heard oral argument. After submissions by Mrs. Lecky's counsel, I heard from counsel for the estate, the Foundation and the children. By the end of those submissions, a bystander might have thought that Mrs. Lecky has accused Mr. Fowlis and Mr.

Chan of committing criminal offences. The indignation displayed by counsel was misplaced. [ 3 ] Second, I look at two of the submissions made by Mrs. Lecky's counsel on the costs application: whether in future the estate will pay her legal expenses and issues surrounding the artwork. Neither of these issues were before me and were not relevant, but were there to colour the relevant submissions on costs. Those submissions were also misplaced. [ 4 ] It appears that the relationship between the personal representatives, backed by the Foundation and the children on the one hand and Mrs.

Lecky on the other is taking on the characteristics of a high conflict family file. In an attempt to stop it, counsel should keep the following in mind: 1. As I hope was apparent in my reasons, Mrs. Lecky was Mr. Lecky primary focus when he executed his will. The children were not mentioned and reference to the Foundation contemplated the possibility that it would not even exist into the future. Thus, a measure of generosity should be part of the mix when the personal representatives exercise their discretion. 2. The estate created life estates for Mrs. Lecky. It did not give the assets to her beneficially. Mrs.

Lecky must be careful not to treat the assets as her own. 3. Whenever this matter is referred to the court, care needs to be taken that submissions are not duplicative or not focused on the issue at play. [ 5 ] On to the costs decision. The parties had agreed that the reasonable fees and costs of all counsel on these applications should be paid from the estate. While that agreement was reasonable given that the applications centred around the

interpretation of the will, it will not be the norm in this estate that all counsel fees are paid from the estate. The modern view of the payment of legal fees in estate litigation is that if the testator's intentions were unclear, the costs of seeking advice and directions for the parties will likely be born by the estate. Otherwise the surrounding circumstances of any application will be considered to determine what costs are to be paid from the estate: Holzel v. Mjeda [2000] ABQB 549. [ 6 ] In this case, seven law firms submitted accounts.

The amounts were $339,939.00 for counsel for the estate, $189,283.00 for counsel for the children, $269,828.00 for counsel for the Foundation, $528,481.90 for Mrs. Lecky’s Canadian counsel and £132,295.95 ($208,000.00 Cdn). I have not included two small accounts from firms that did not appear on the applications. Neither have I included accounts for Mr. Chan or Mr. Fowlis. Counsel for the estate approved the accounts for the Foundation and the children and paid those amounts. He challenges the amount of the account for Canadian counsel for Mrs.

Lecky and the appropriateness and amount of the account for English counsel for Mrs. Lecky. [ 7 ] Counsel for Mrs. Lecky argues that an expansive view of reasonableness should be applied in considering the appropriate amount of solicitor/client costs. In Anger v. Berkshire Investment Group Inc . 1999 CarswellOnt 4108 , Gillese, J. (as she then was) considered the manner in which an order for solicitor/client costs should be interpreted. At para 15 she summarized the law as providing

that solicitor/client costs are designed to provide full indemnity, they should be reviewed by a judge and subject to reduction on a reasonableness test, and "[t]he range of reasonableness when dealing with solicitor and client costs should be expansively drawn. It is not for the judge to second guess the client's choice of senior or junior counsel or the propriety of counsels' rates.” (Citation omitted). Counsel for Mrs. Lecky says that Mrs. Lecky was required to make submissions on the

interpretation of the will, how to deal with the Venn House replacement issue, and with respect to the manner in which the estate intended to pass accounts. According, it is not unreasonable to have accounts that are higher than any one of the other law firms. [ 8 ] On the issue of the English lawyers' accounts, he said that English counsel was required for two reasons. First, Mrs. Lecky was in England and English counsel was able to facilitate obtaining instructions on various issues.

Second, there were issues of English law that needed to be considered. [ 9 ] Counsel for the estate says that the accounts of Mrs. Lecky's Canadian counsel are excessive, work was done by several lawyers, including lawyers in Toronto, who are not known as estate litigation lawyers and there were too many partners, associates and students working on the file. With respect to the English lawyers, he says that there were no English law issues and with modern communication, she could easily be in touch with Canadian counsel without an English intermediary. [ 10 ] It is not my intention to go through Mrs.

Lecky’s counsel’s accounts line by line to determine whether the right kind of lawyer addressed the issues and whether there was any duplication of work. If I had concluded that that needed to be done, I would have directed a review officer to perform that function. If I had directed that process with respect to Mrs. Lecky’s counsel’s accounts, it would be appropriate to have the other accounts reviewed as well. [ 11 ] A comparative approach is a useful approach. The Foundation’s primary focus was the Venn House issue and the Residual Trust. Their account was $270,000 approximately.

The primary focus of the children was the residual trust. Since that is one of the same issues as the Foundation issues, I will not include their account. The estate’s primary focus was passing the accounts and providing the background for the applications as a whole. Their account was $340,000. Mrs. Lecky had to respond to all these issues. If I take 1/2 of the estate account ($170,000) as a rough estimate of the time spend on the accounting issue, plus all of the Foundation account ($270,000), the total is $440,000. That is about $90,000 less than Mrs. Lecky’s Canadian counsel.

That difference is within the range of reasonableness. Mrs. Lecky’s Canadian lawyers’ accounts are approved. [ 12 ] The accounts for Mrs. Lecky’s English counsel are more problematic. Counsel for Mrs. Lecky said that part of these accounts were in relation to advice on questions of English law. I do not know the issues and to force the question would be to invade solicitor/client privilege. Mr. and Mrs. Lecky had spent much of their time in England and owned substantial property there. I accept counsel’s submission that there were questions of English law that needed to be investigated.

I also accept that not all effective communication between a lawyer and his client can be handled by telephone, letter and email. Mrs. Lecky is not legally trained and some of the issues were complex, either factually - the Venn House trust issues - or legally - the

interpretation of the will. The alternative to having a legally trained person in England interpret and explain these issues would have been travel either by the Canadian lawyers or Mrs. Lecky. Either would have increased the amount of time spent by the Canadian lawyers and travel costs. On the other hand, there was some duplication. To recognize that duplication and on an admittedly arbitrary basis, the English counsel’s accounts are reduced by $25,000. Heard on the 23rd day of April, 2012. Dated at the City of Calgary, Alberta this 23rd day of May, 2012. C.A. Kent J.C.Q.B.A.

Appearances: Bradley G. Nemetz, Q. C. Bennett Jones LLP for the Lecky Children and Caroline Lecky Blair R. Carbert David Cumming Stones Carbert Waite Wells LLP for the Lecky Foundation D. J. McDonald, Q. C. Burnet Duckworth & Palmer LLP for the Personal Representatives Alex Kotkas Fasken Martineau Dumoulin LLP for Euphemia Sarah Ann Lecky _______________________________________________________ Corrigendum of the Reasons for Judgment of The Honourable Mr. Justice C. A.

Kent _______________________________________________________ Please note that the Plaintiff Jonathan Robert Sirling Lecky should read Jonathan Robert Stirling Lecky (page 1). Please note that under the Reasons for Judgment Honourable Mr. Justice C. A. Kent should read Honourable Madam Justice C. A. Kent.