Zahn v. Taubner, 2012 ABQB 636

Court of Queen ’ s Bench of Alberta Citation: Zahn v. Taubner, 2012 ABQB 636 Date: 20121017 Docket: 0203 00280 Registry: Edmonton Between: Dennis Zahn and Randy Zahn Plaintiffs - and - Robert Taubner Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Gerald A. Verville _______________________________________________________ Background [ 1 ] Dennis Zahn and Randy Zahn (plaintiffs) challenged the validity of a will prepared by Kathe Ford (Ford). They raised issues of suspicious circumstances, testamentary capacity and undue influence.

Similar assertions were made by others in two other actions. Robert Taubner (defendant), executor of the estate, denied these assertions. The two other actions were settled but not discontinued; this matter proceeded to trial and the defendant was successful: Zahn v Taubner , 2012 ABQB 504 (Trial Decision).

[ 2 ] The defendant seeks costs against the plaintiffs. The plaintiffs request that their costs be paid out of the Ford estate (Estate) on a party-party basis, relying on a number factors including the fact that this Court found the circumstances reasonably raised suspicions. Facts [ 3 ] Ford executed a will on April 4, 2000, which was partially in handwriting, and a second will on May 5, 2000 (Will), which was fully typed and identical to the April will except for some grammatical changes. Both were prepared and witnessed by a solicitor, Douglas Lynass (Lynass). Ford died of terminal lung cancer on May 25, 2000.

The Will completely changed the beneficiaries and dispositions when compared to her previous will executed in 1985. Ford ’ s brothers, Robert Taubner (Bob), Eric Taubner (Ric) and Rudolph Taubner (Rudy), were the primary beneficiaries under the Will. The plaintiffs and their brother Richard, Ford ’ s step-sons, were the primary beneficiaries in the earlier will. [ 4 ] On January 4, 2002, the plaintiffs filed a statement of claim against the defendant seeking a declaration that the Will was invalid.

The two other actions seeking the same relief were commenced by other parties on February 20, 2003, and February 24, 2004. [ 5 ] On March 14, 2007, Belzil J. granted an order directing that all actions be tried concurrently, with evidence in each action applying in all the other actions (Trial Decision, para 21). The two other actions were settled for $300,000 and $100,000 respectively but not discontinued (Ward action and Ford action).

The defendant took an assignment of any and all causes of action or interest the parties to these actions might have in the Estate, as these parties were beneficiaries under the 1985 will. [ 6 ] The plaintiffs’ action proceeded to trial. This Court determined that the Will could proceed to probate (Trial Decision, para 221). [ 7 ] During the 12 year period between Fords’s death and the trial of this action, numerous attempts were made to settle this action. Neither party attributes blame to the other for this rather inordinate delay.

The parties are in agreement that the “ without prejudice ” privilege expired once the merits of the dispute were decided: Mahe v Boulianne , 2010 ABCA 74 , 81 RFL (6th) 4 at para 9 . [ 8 ] The defendant advised that the net value of the Estate as set out in the NC7 filed on December 17, 2001 was $1,348,292, and that it had grown to approximately $2,000,000 by the time of trial, an increase of approximately $650,000. [ 9 ] The plaintiffs provided a draft bill of costs in which fees (Column 5 of

Schedule C), disbursements, other charges and GST total $140,018. The defendant provided a draft bill of costs totalling $162,579, which includes a claim of $44,500 for double fees from April 13, 2011 when a formal offer was made. [ 10 ] The parties provided written submissions in which they addressed inter alia the six factors to consider in determining whether costs should be awarded to an unsuccessful litigant as set out in Babchuk v Kutz , 2007 ABQB 88 , 411 AR 181 at para 8 , aff'd 2009 ABCA 144 , 457 AR 44 . They subsequently made oral submissions. Positions of the Parties [ 11 ] The defendant seeks costs against the plaintiffs under Column 5 of

Schedule C up to April 13, 2011 (when an offer of settlement which bettered the trial judgment was issued) and double Column 5 costs thereafter as well as disbursements and other charges. The defendant further submits that the unsuccessful plaintiffs are not entitled to costs from the Estate, relying on principles as stated in Babchuk , Petrowski v Petrowski Estate , 2009 ABQB 753 , 476 AR 171, McCullough Estate v McCullough , 1998 ABCA 38 , 212 AR 74 and Paniccia Estate v Toal , 2012 ABQB 367 at para 31 .

[12] The defendant summarizes these principles as follows: - the usual rule in estate litigation is that the unsuccessful party should pay the costs of the successful party: Babchuk at para 5;Petrowski at para 8; - a departure from awarding party/party costs to the successful litigant should only occur on rare occasions: Petrowski at para 13; - stricter costs are traditionally imposed where unsubstantiated allegations of undue influence have been made, especially whenlittle evidence of weight has been adduced in support: Babchuk at para 34; Petrowski at para 9; McCullough Estate; - an estate should not be envisioned as an entity, but rather as a trust to distribute to the beneficiaries; courts need to recognize thatordering costs “out of the estate” is effectively ordering that costs be paid by the residuary beneficiaries: McCullough at para 17; - when determining whether costs should be awarded to an unsuccessful litigant, the following factors are to be considered:Babchuk at para 8 i Did the testator cause the litigation? ii Was the challenge reasonable? iii.

Was the conduct of the parties reasonable? iv. Was there an allegation of undue influence? v. Were there different issues or periods of time in which costs should differ? vi. Were there offers to settle? - the six factors above also govern the analysis of whether an unsuccessful plaintiff should have to pay costs: Babchuk at paras85-89; - costs awards are discretionary, but the Court must exercise its discretion judicially: Babchuk at para 5. [13] The plaintiffs agree that the six Babchuk factors apply in determining the issue of costs.

They seek an order directing that thecosts in this matter be paid out of the Estate on a party-party basis in accordance under Column 5 of

Schedule C. In the alternative theysubmit that the parties should bear their own costs and, in the further alternative, if the plaintiffs are required to pay any costs theyshould only be required to pay a portion of any cost award because there were multiple actions. [14] The plaintiffs submit that there were reasonable grounds to challenge the validity of the Will to ensure that it representedFord’s true testamentary wishes.

In addition to the authorities cited by the defendant they cite: Re Foote Estate, 2010 ABQB 197, 484AR 188, aff’d 2011 ABCA 1, 66 ETR (3d) 183, Gamache v Gamache, 2005 ABQB 944, 389 AR 256, aff’d 2007 ABCA 354, 417 AR 367, Re Marsh Estate (1991), (NS CA), 104 NSR (2d) 266, [1991] NSJ No 230(CA), Allen (Next Friend of) v University Hospitals Board, 2006 ABCA 101, 384 AR 23, Zubick v Alberta Teachers' Association,2008 ABQB 241, 439 AR 28 and Kucher v Seabord Life Assurance Co. (1997), (AB KB), 208 AR 1, [1997] AJ No599 (QB). Issues [15] The Court must make the following determinations:

1. Should the Estate pay the unsuccessful plaintiffs ’ costs on a party-party basis ? 2. If the plaintiffs are required to pay costs, on what basis should those costs be awarded? Analysis [ 16 ] The defendant was successful in this litigation. In the normal course costs are awarded to the winner. I am mindful that the general rule that the unsuccessful party should pay the costs of the successful party applies in estate litigation, and departure from the general rule should only occur on rare occasions.

Further, although costs awards are discretionary, the Court must exercise its discretion judicially. [ 17 ] The plaintiffs submit that while they were unsuccessful, they should nonetheless be awarded costs on a party and party basis from the Estate given the circumstances of this particular estate litigation.

It is therefore necessary to initially conduct an analysis of the merits of plaintiffs' position. [ 18 ] The parties agree that the six factors set out in Babchuk should be applied by the Court in making its determinations. [ 19 ] In my view, these factors must be considered in the context of assertions by the plaintiffs of suspicious circumstances, lack of testamentary capacity and undue influence. I am of the view that no one factor listed in Babchuk necessarily trumps any of the others, and several factors involve overlapping considerations .

The six factors are a good lens through which to assess the matter, but the overarching consideration is whether the plaintiffs ’ actions in challenging Ford ’ s Will were reasonable in all of the circumstances of this case. As stated by Moen J. in Petrowski : 74 ... Society has an interest in probating only those wills which are valid and clear and which have been written by someone who is not under the undue influence of another or suffering from testamentary incapacity. .... [ 20 ] With these principles in mind, I make the following findings in regard to the Babchuk factors. A.

Did the testator cause the litigation? [ 21 ] The defendant acknowledges that where the testator or a beneficiary has caused the litigation by his/her conduct, costs may be properly payable out of the estate - but only if there is a “substantial link” between the impugned conduct and the need for litigation: Babchuk at para 9; Petrowski at para 30 . [ 22 ] The defendant submits that Ford did not cause the litigation through her conduct in any culpable way: - the suspicious circumstances going to testamentary capacity were her alcoholism, her illness, and her treatment (Trial Decision, para 193), all of which were medical issues beyond Ford’s control when the April and May 2000 Wills were executed; - a lack of capacity could only be considered the "fault" of a testatrix in “some obscure sense” and it would take a "leap of logic" to visit this fault upon the Estate: McCullough at para 29 . [ 23 ] The defendant argues that while the trial judge in Babchuk found that the testator's procrastination had, in part, caused the litigation, the facts were significantly different in that Babchuk had been in failing health for years but waited until he was on his

deathbed to execute his will, whereas Ford’s cancer was not long standing and she maintained a hope of recovery for some time after the initial diagnosis.

It is further submitted that neither Bob nor Ric Taubner can be said to have caused the litigation as the allegations of undue influence against them proved to be totally unfounded. [ 24 ] The plaintiffs submit that Ford and two of the three main beneficiaries (Bob and his brother Ric) caused the litigation, arguing that: - where a testator waits until he is ill in hospital before making a will, his procrastination can fairly be said to be conduct which contributes to a reasonable challenge to his will: Babchuk at paras 10-11; - Ford’s personality was such that she liked to play jokes and pranks and create drama (Trial Decision, para 140); - Ford made conflicting comments to a number of people about the disposition of her estate while creating an impression with the plaintiffs that a large portion would be left to them (Trial Decision, paras 60 and 68); - Bob and Ric set in motion the contact between Ford and Lynass, the solicitor who prepared and witnessed the Will; this conduct contributed to the suspicious nature of the circumstances surrounding its execution; the plaintiffs were told about this conduct by others, which, in part, prompted their challenge (Trial Decision, para 193); - a cost award out of the Estate would not unduly impact innocent beneficiaries in light of the significant role played by two of the three main beneficiaries. [ 25 ] Ford was diagnosed with cancer in the fall of 2009.

It is true that she had ample time to make alterations to her will during the time in which she indisputably had testamentary capacity but she did not initiate any steps, nor did she make alterations to her will until after she had suffered severe delirium and had been hospitalized following a coma induced by a medication overdose. [ 26 ] Unlike the situation in Babchuk where the testator had a longstanding intention to disinherit his daughters, the plaintiffs in this case reasonably had the impression - resulting from their relationship and discussions with Ford - that they would be the primary beneficiaries. [ 27 ] Further, the plaintiffs were advised by Ford’s caretaker and close confidant, Nadeza Glavonjic (Nadia), that Ford was being pressured by family members with respect to a will.

Nadia was found at trial to be a credible witness (Trial Decision, para 181). [ 28 ] As events transpired, the plaintiffs learned that Bob and Ric initiated the events that led to Ford signing the Will, and that Ford suffered from bouts of delirium during the material times in question. [ 29 ] I do accept the defendant’s argument that Ford cannot be “faulted” in this analysis for her alcoholism, illness, and treatment. [ 30 ] Therefore, there is some merit to both parties’ submissions with respect to the first factor.

However, I find on balance that the plaintiffs’ actions in challenging Ford’s will were reasonable based on what the plaintiffs knew about the situation and the basis for that knowledge. B. Was the challenge reasonable?

[ 31 ] The defendant notes that while a challenge may initially be reasonable, it may cease being reasonable as further evidence unfolds during the course of the litigation: Babchuk at paras 13, 21 and 23 and Petrowski at para 38 .

The defendant argues that the challenge in this case became entirely unreasonable effective December 19, 2000 when the plaintiffs were given a copy of Lynass’ affidavit, noting that virtually all of his evidence at trial came directly out of the affidavit (Trial Decision, para 180) and his evidence was determinative of every important finding of fact. [ 32 ] The plaintiffs refer to the finding at trial that the circumstances surrounding the execution of the Will created “more than a miasma of suspicion”. They submit that this supports their position that the challenge to the Will was prima facie reasonable.

A number of witnesses including Nadia had witnessed periods where Ford was delirious or confused or not responding, both before and after her admission to hospital. The evidence of the plaintiffs’ expert Dr. Hussein to the effect that Ford lacked testamentary capacity at times was accepted at trial (Trial Decision, para 212).

Further there was evidence that Ford was being subjected to pressure (Trial Decision, paras 72, 83, 85 and 86). [ 33 ] The plaintiffs further submit that the fact that the Ward action was settled for $300,000 suggests the challenge was not entirely without merit. [ 34 ] With respect to the Lynass affidavit, I am mindful that the plaintiffs were aware of a decision by Graesser J. in Taubner Estate (Re) , 2010 ABQB 60 (Graesser Judgment). In that case, Ford’s niece sued Bob and Ric Taubner regarding the sale to Bob of Ford ’ s father ’ s shares in the family company.

When Bob and Ric learned of a will signed by Ford ’ s father, Ric arranged for Lynass to meet with him and Lynass prepared a new will. Lynass was also involved in the sale of the shares. The decision in that case did not cast Lynass (who had not testified at that trial) in the best light in terms of his assessment of Ford ’ s father ’ s capacity at the relevant times. The plaintiffs sought unsuccessfully to introduce the Graesser Judgment as similar fact evidence (Trial Decision, paras 171 - 175).

Although it was not accepted as similar fact evidence, I find that the circumstances of and findings in that case reasonably created or reinforced suspicion by the plaintiffs with respect to the involvement and actions of Bob, Ric and Lynass in relation to Ford. [ 35 ] While I agree that in the end the evidence of Lynass (based on his affidavit) was determinative of the result in this trial, I do not agree that the challenge became entirely unreasonable when the affidavit was produced. Other evidence concerning Ford’s medical condition and pressure on her also unfolded as the litigation proceeded.

Again, while there is some merit to each party’s position, on balance I find that the challenge was reasonable. C. Was the plaintiffs ’ conduct reasonable? [ 36 ] A party may be ordered to pay costs to the other party or may be disentitled from claiming costs from the estate, if that party frustrates the action by conducting himself arbitrarily, in bad faith or by pursuing a position without substance: Babchuk at para 24. [ 37 ] The defendant does not blame the plaintiff for the 12 year delay between Ford’s death and the trial of this action.

However, the defendant submits that the plaintiffs' conduct was questionable and that their motivation in pursuing this litigation had little to do with Ford, and everything to do with the their animus toward Bob and the Taubner family, one illustration being the plaintiffs' unwillingness to even permit Sea Taubner to have the wedding ring promised to her by her aunt.

They say further that as demonstrated by the Formal Offer issued to the plaintiffs, the defendant extended an appropriate and reasonable olive branch, which the plaintiffs stubbornly refused. [ 38 ] The plaintiffs state that judicial mediation was proposed in 2006 in an attempt to resolve the outstanding issues relating to the Will.

Bob rejected this proposal and advised through his then solicitor in a letter dated December 4, 2006 that he was not prepared to consider any mediation whatsoever. [ 39 ] Further, they note that Bob was described by this Court as being “combative and feisty" and Ric as being “arrogant and rude” during cross-examination at trial, and that both raised a number of completely unfounded and inflammatory accusations regarding the conduct and behaviour of Nadia (Trial Decision, paras 182-183).

They note that both plaintiffs were found to be clear and forthright in giving their testimony (Trial Decision, para 181 ). [ 40 ] I note that judicial mediation was voluntary in 2006, and in my view the position taken by Bob at the time is not relevant. I

will address the offers to settle under that factor. Suffice it to say, any losing party (absent a bulletproof ground of appeal) would in hindsight accept virtually any offer if they could roll back time. [ 41 ] Similarly, the fact that the plaintiffs behaved better at trial than Bob and Ric is not in my view of great import when considering this factor. [ 42 ] Having carefully considered all of the facts and circumstances and the evidence at trial, I am not satisfied that this litigation was driven by the plaintiffs’ animus towards Bob or the Taubner family.

In my view there is no merit to the defendant ’ s submission that the conduct of the plaintiffs throughout this litigation was not reasonable; I find that it was in fact reasonable. D.

Was there an allegation of undue influence? [ 43 ] The parties agree that unsuccessful allegations of undue influence may have an adverse effect on a challenger’s ability to recover costs from the estate: Babchuk at para 34; Petrowski at paras 9 and 52 and McCullough at para. 29 . [ 44 ] The defendant states that costs should not be awarded from the estate where little evidence is adduced in support of the allegations and that in the instant case the allegations of undue influence were so offensive and so utterly unsubstantiated that they militate strongly in favour of a costs award against the plaintiffs. [ 45 ] The plaintiffs submit that allegations of undue influence do not act as an absolute bar to an order directing that costs be paid out of the estate, citing Conrad J.A. in Gamache : 9 We would allow costs to the appellant on a party/party basis.

In our view, the issue of testamentary capacity is a very important one in matters of wills and estates and the order of Hembroff J. directing the trial of issues in this case provided for payment of solicitor's costs of the trial. The appellant acted responsibly in not pursuing the issue of undue influence on appeal. Counsel for the appellant argued well and had an issue to argue about. Accordingly we would award some costs, although we would not award full costs.

We conclude, therefore, that the appellant is entitled to party/party costs against the estate. [ 46 ] In my view, Gamache was decided on its own particular facts which included a direction that costs be paid from the estate in an interlocutory proceeding prior to trial. [ 47 ] The plaintiffs submit that the basis for their allegations of undue influence was that Ford’s will was overborne by the possibility of losing access to Nadia.

They alleged that this influence was brought to bear through ongoing, subtle and indirect threats made to Ford concerning the termination of Nadia. [ 48 ] In particular the plaintiffs note that Nadia testified that: - Bob told Ford to get things in place and think about her financial affairs, but that Ford did not think she would die, that she had a will and did not need a new will (Trial Decision at para 83); - Ford was afraid they were going to take Nadia away and Nadia told Ford that the family would not doubt Nadia if everything was in order; Lynass prepared a document to protect Nadia so that the family could not fire her (Trial Decision at para 85); - Nadia recalled Ford saying: “ I need some documents to protect 'my girl ’” ; Lynass requested a list of jewellery but Ford later indicated to Nadia that she was not going to prepare one (Trial Decision at para 88).

[ 49 ] The plaintiffs submit that the above actions combined with Dr. Hussein’s evidence concluding that Ford had been subjected to undue influence by virtue of her condition and situation, made it reasonable for the plaintiffs to allege that she had been unduly influenced. [ 50 ] This Court found that Bob and Ric initiated the execution of the Will (Trial Decision, para 193). Lynass testified that he relied on Ric's advice that Ford was mentally competent, as Ric is a psychiatrist. Otherwise, Lynass would have suggested that Ford be assessed (Trial Decision, para 34).

As stated previously, a number of witnesses including Nadia testified that at times Ford was delirious or confused or not responsive both before and after her admission to hospital. [ 51 ] In my view there is merit to the plaintiffs ’ position. This was not a case where there was scant evidence or mere supposition in support of the plaintiffs ’ position.

While there clearly are situations where unsuccessful allegations of undue influence may have an adverse effect on a challenger ’ s ability to recover costs from the estate and trump the other factors, I find that in the circumstances of this case the unsuccessful challenge should not necessarily deprive the plaintiffs from recovering costs from the estate. E.

Were there different issues or periods of time in which costs should differ? [ 52 ] The defendant submits that the challenge became entirely unreasonable effective December 19, 2000 when the plaintiffs were given a copy of Lynass’ affidavit and that as the bill of costs only includes fees incurred after the plaintiffs commenced their action in 2002 there is no reason to discount any portion of it. [ 53 ] The plaintiffs submit that nothing occurred within the course of the litigation which made their challenge of the Will unreasonable and that if anything, the amount of evidence suggesting that Ford lacked testamentary capacity and was subject to undue influence increased as the litigation progressed. [ 54 ] I have previously discussed the import of the Lynass affidavit when considering whether the challenge was reasonable.

I have rejected the defendant’s submission that it should have brought an end to matters. Clearly, the opinion of Dr. Hussein which was obtained prior to the trial would have encouraged the plaintiffs to continue the challenge. Consequently, I find that there were no different issues or periods of time in which costs should differ. F. Were there offers to settle? [ 55 ] There were a number of attempts to settle this litigation over the years.

The defendant notes that absent special circumstances, the Formal Offer of April 13, 2011 compels an award of double costs against the plaintiffs from that date forward: Paniccia Estate at para 31 , Rubin v Gendemann , 2011 ABQB 466 , 518 AR 128 at paras 22-25 . The offer was for $290,000 all inclusive and was open for a period of two months.

The defendant further submits that there were no special circumstances in this case. [ 56 ] The defendant adds that aside from the Formal Offer that would have given the plaintiffs $200,000 more than Ford had bequeathed to them, they were offered $390,000 (including the specific bequests) on Friday June 8, 2012. The trial commenced on Monday June 11, 2012. [ 57 ] The defendant further submits that the plaintiffs made no offers until the eve of trial.

These offers included an informal offer by telephone sometime in April 2012 to accept $1,000,000 all inclusive; a Formal Offer dated June 7, 2012 to accept $750,000 plus costs, open until June 11, 2012 and an informal, oral offer by telephone on June 8, 2012 to accept $500,000, all inclusive. [ 58 ] The defendant argues that the plaintiffs’ offers, particularly the offers for $1,000,000 and $750,000 plus costs, were completely unrealistic given the size of the Estate and the relative weakness of their case (knowing what Doug Lynass' evidence would be at trial).

The defendant further submits that even if the plaintiffs had been completely successful with their claims and the 1985 Will had gone to probate, they would not have received the Taubner Holdings Ltd. asset, and there would have been a significant issue regarding their entitlement to a GIC worth approximately $500,000 in value.

[ 59 ] The plaintiffs submit that a “genuine” offer must: (1) be reasonable and realistic in the circumstances at the time it was served and remained open; (2) include an element of compromise; (3) be a realistic reflection of the relative merit of the parties' positions at the time it is made; and (4) be made honestly and in good faith: Allen (Next Friend of) at paras 13 - 17 . [ 60 ] The plaintiffs state that on December 2, 2002, they reached an informal agreement with Bob (“2002 Settlement”) under which the Will would be probated and they would be paid $450,000 from the residue of the Estate in full satisfaction of the their claim.

However, on December 6, 2002, Ingrid Ward (Rudy’s first wife) swore a caveat claiming an interest in the Estate on the basis that Ford lacked testamentary capacity and was subject to undue influence at the time the May Will was executed.

The plaintiffs took the position that the 2002 Settlement was still effective notwithstanding the filing of the caveat, but Bob took the position that the 2002 Settlement had lapsed as a result of Ward’s intervention. [ 61 ] The plaintiffs state further that they advanced another settlement offer on June 2, 2006 (the “ 2006 Offer ” ) to resolve the outstanding claims involving the Estate. The Offer provided that 1/6 th of the proceeds from the sale of the Estate's interest in Taubner Holdings Ltd. would go to the claimants in the Ford action.

Aside from certain jewellery distributions, the remainder of the Estate would be distributed equally seven ways among Bob, Ric, Rudy, the plaintiffs, their brother Richard, and Ward. [ 62 ] The 2006 Offer was rejected by Ward, and Bob was not prepared to consider an offer unless it was made jointly by the parties to all three actions.

On April 14, 2009 a further settlement meeting was held between the parties, but Ward again rejected the proposed settlement which arose out of that meeting. [ 63 ] The plaintiffs submit that in the circumstances of this case, given the value of the 2002 Settlement, the April 13, 2011 offer was neither reasonable nor realistic, and did not constitute a genuine offer to settle. [ 64 ] The plaintiffs further note that as of March 30, 2012, the Estate held securities valued at $898,684 and in April of 2012 the GICs had a value of $617,828 and the cash deposits a value of $46,467.

They submit that given the wording of clause 3(

g) in the 1985 will they would have been entitled to the securities and the GICs which had a total value of $1,516,513. They acknowledge that it may be arguable that the GICs held by Ford constitute “money remaining in a bank account” covered by the bequest in clause 3(

e) of the 1985 will, but state that this would still leave $898,684 to them. Accordingly, they submit that the formal offer to settle for $750,000 made on June 7, 2012 was reasonable and constituted a genuine offer to settle. [ 65 ] In this case, the parties were $110,000 apart at the time of trial. Both parties made offers to settle and none of those offers was accepted.

It is apparent that settlement or the possibility of settlement between the plaintiffs and the defendant was at certain points in time frustrated by the actions or positions taken by Ingrid Ward. [ 66 ] In my view, serious offers were made by both the defendant and the plaintiffs. Despite attempts by the courts to define it, “genuine” is a somewhat vague term. However, taking into consideration the factual matrix of this case and the somewhat unusual circumstances, it is my view that the plaintiffs’ failure to beat a settlement offer is not a factor which weighs significantly against them in this analysis. G.

Other [ 67 ] Having considered the six factors listed in Babchuk , I have concluded that the plaintiffs acted reasonably in challenging the Will. [ 68 ] As to whether the unsuccessful party should receive costs from an estate, the size of the estate relative to the costs being claimed by the unsuccessful party is a relevant consideration: Babchuk at para 72. [ 69 ] The plaintiffs submit that while their costs are significant, the costs will not deplete the assets of the Estate and in fact represent a relatively small portion of its overall value.

Further, the plaintiffs note that while payment of costs will reduce the amount

available to residual beneficiaries, the conduct of two residual beneficiaries contributed in part to the commencement of this litigation. [ 70 ] I agree with the plaintiffs’ position and a accordingly, for the reasons set out above, the plaintiffs shall receive their costs from the Estate, and for the same reasons the defendant ’ s application for costs against the plaintiffs is dismissed. [ 71 ] In the event I am wrong and the plaintiffs are required to pay costs to the defendant in this case, I would be required to address the defendant’s assertion that double costs are payable from the time of the Offer. Rule 4.29(4)(

e) provides a discretion to the Court to depart, in exceptional circumstances, from the rule that double costs are payable in these circumstances. The conclusions in relation to the analysis above, in my view, amount to exceptional circumstances warranting a departure from the normal rule on offers. I would award those costs on a party-party basis. [ 72 ] It is my understanding that the residuary beneficiaries have already approved payment of costs out of the estate to the defendant on a solicitor/client basis in the context of the Ward Action Settlement Agreement.

The defendant has leave to apply to this Court for any further determinations as may be necessary to give effect to any such agreement. Conclusion [ 73 ] The plaintiffs shall receive their costs on a party-party basis from the Estate. [ 74 ] The defendant’s application for costs against the plaintiffs is dismissed. [ 75 ] If the parties cannot agree on the plaintiffs’ bill of costs, they may appear before me to make submissions. Heard on the 5 th day of October, 2012. Dated at the City of Edmonton, Alberta this 17th day of October, 2012. Gerald A. Verville J.C.Q.B.A. Appearances: Donald R. Cranston, Q.C.

Laura Inglis Chubb Bennett Jones LLP for the Plaintiffs

Robert M. Curtis, Q.C. Christopher V. Kurata McCuaig Desrochers LLP for the Defendant