Bukkems Estate (Re), 2014 ABQB 678

Court of Queen ’ s Bench of Alberta Citation: Bukkems Estate (Re), 2014 ABQB 678 Date: 20141118 Docket: ES12 35240 Registry: Wetaskiwin Court File Number ES12 35240 Court Court of Queen’s Bench of Alberta (Surrogate Matter) Judicial District Wetaskiwin Estate Name Henriekus Mateus Bukkems Applicant (Plaintiff) Candus Torkelson Respondent (Defendant) Walterus Adrianus Bukkems, Shalin Rae Bukkems and Tanner Henry Bukkems _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice D.L.

Shelley _______________________________________________________ Introduction [ 1 ] The Respondents, Mr. Bukkems’ children and the only beneficiaries under his Will, seek solicitor and client costs personally against Mr. Bukkems’ common law spouse, Ms. Torkelson, the Applicant. Ms. Torkelson had unsuccessfully applied under s. 88 of the Wills and Succession Act , SA 2010, c W-12.2, for a share of Mr. Bukkems’ estate, claiming that the Will did not make adequate provision for her maintenance and support. I dismissed her application on October 1, 2014, on the basis that Mr.

Bukkems had made adequate provision for her when he designated her as the beneficiary under several insurance policies and investments. Background facts

[ 2 ] Mr. Bukkems died in 2013, leaving a net estate of approximately $416,000.00. In his Will he bequeathed his estate equally to his 20 year-old son and his 21 year-old daughter. Upon Mr. Bukkems’ death, Ms. Torkelson received approximately $1,165,000.00 from the insurance policies and investments, as well as a lump sum payment from Workers’ Compensation Board and a payment from Mr. Bukkems’ employer, since his death resulted from a workplace accident. This Application [ 3 ] After I rendered my decision on Ms. Torkelson’s application, the Respondents sought solicitor and client costs, to be paid by Ms.

Torkelson personally. Ms. Torkelson submitted that all costs related to her application should be borne by the Estate. Parties’ Positions [ 4 ] Ms. Torkelson submits that her challenge to the Will was reasonable and warranted in the circumstances. She further submits that just because she was not successful does not mean that she should be personally liable for the costs, nor are solicitor and client costs warranted. [ 5 ] The Respondents submit that it is no longer automatic that costs will be borne by an Estate when there is litigation related to the Estate.

They rely on the Court’s decision in Anderson Estate , 2012 ABQB 517 , in support of their request. [ 6 ] As no other authority was provided to me by the parties in relation to the issue of costs, and I was aware that there have been recent decisions related to these issues, I reserved my decision solely on the issue of costs. Analysis [ 7 ] As was pointed out in Anderson Estate , at para 7 , “Historically, it was common practice in estate matters for courts to award costs of all parties out of the estate.

This approach, however, has been out of favour for several years.” In Anderson Estate , Clark J. referred to the decision of Graesser J. in Re Foote Estate, 2010 ABQB 197 , which dealt with the more “modern” approach to costs in estate litigation and the underlying policy reasons for it.

Clark J. also referred to a number of other cases dealing with this modern approach in specific factual contexts. [ 8 ] In addition to the cases referred to by Clark J., the following additional cases (and the authorities referred to in them) are of assistance in relation to the cost issues raised in this application: • Re Gibbons Estate , 2009 ABQB 587 , affirmed 2011 ABCA 46 ; • Tatum v Tatum , 2011 ABQB 253 ; • Kuliska v Kuliska , 2011 ABQB 528 ; • Bizon v Bizon , 2014 ABCA 174 ; • Holzel v Mjeda , 2000 ABQB 549 ; • Fraser v Menard , 2010 ABQB 208 ; and • Knight v Lucas , 2014 ABQB 8 . A.

Solicitor and Client Costs [ 9 ] From these cases it is clear that, as in the case of other types of litigation, solicitor and client costs are reserved (in the absence of a contractual entitlement) for cases in which there has been some form of misconduct, mala fides , or unreasonable conduct on the part of the unsuccessful party. Only rare and exceptional circumstances will attract an award of solicitor and client costs. [ 10 ] In Gibbons Estate , an executor was found to have breached his fiduciary duty, to have engaged in misconduct, and to have acted irresponsibly and unreasonably.

This attracted an award of solicitor and client costs, both on the application and on the appeal from it. [ 11 ] In Tatum , solicitor and client costs were awarded against the co-executors of their mother’s estate for failing to provide an accounting and for failing to respond to Court Orders. [ 12 ] In Kuliska , solicitor and client costs were awarded against an executor who was found not to have acted faithfully or responsibly but, rather, to have demonstrated self-serving bad faith, contrary to the interests of other beneficiaries. [ 13 ] In Bizon , the Court of Appeal upheld the Chambers Judge’s findings that a co-executor’s autocratic behaviour had unnecessarily increased costs and that he had made numerous derogatory and unfounded comments against his co-executor and her counsel.

In addition, the Court of Appeal concluded that the co-executor’s allegation on appeal (that the Chambers Judge had been biased) was without merit. The Court of Appeal characterized the co-executor’s behaviour as a “diatribe”, and concluded that he ignored the Chambers Judge’s directions and acted in such an offensive manner that it constituted contempt of court. So egregious was his conduct, the Court of Appeal awarded costs against him on a full indemnity basis.

[ 14 ] In Holzel , Rooke J. reconsidered his initial award of solicitor and client costs, concluding that the circumstances in that case did not fall within the rare and exceptional circumstances for which solicitor and client costs are reserved. [ 15 ] In Fraser , Mahoney J. conducted a review of various cases dealing with the issue of solicitor and client costs, particularly in the context of estate matters.

He concluded that, although he was troubled by the manner in which the action had proceeded and there had been “some sloppiness” on the part of the executrix, her actions did not rise to the level of deliberate misconduct. Accordingly, he declined to award the requested solicitor and client costs. [ 16 ] Similarly, in Knight , Veit J. found that the executor had been derelict in his duties and had exhibited distaste for the other beneficiary. Veit J. also found that the beneficiaries should not have been put to the cost of forcing an executor to do his duty.

She removed the executor, but nonetheless declined to award solicitor and client costs, pointing out that there had been no breach of Court Orders and no personal use of estate funds. [ 17 ] While Ms. Torkelson’s application was not successful, there is no evidence that she engaged in any misconduct during the course of bringing it. In the absence of some unreasonable or improper conduct, there is no basis upon which to order solicitor and client costs against her. B.

Payment of Costs [ 18 ] It is clear that costs are no longer automatically ordered to be paid out of estate funds where the estate is involved in litigation. Many of the cases in which costs are ordered to be paid by an unsuccessful party in estate litigation involve successful allegations that an executor or administrator has been derelict in his or her duties or has otherwise engaged in some form of misconduct, regardless of whether or not costs were ordered on a party and party basis or a solicitor and client basis.

However, it is not necessary to find misconduct in order to succeed in a request for costs to be paid personally by an unsuccessful litigant in estate matters. [ 19 ] Ms. Torkelson had status to bring her application. However, the mere fact of status does not determine this issue. Ms. Torkelson submits that the Estate should bear the cost of her application because her challenge to the Will was reasonable and warranted. However, I concluded that it was not reasonable and warranted. To the contrary, I concluded that Mr.

Bukkems had provided adequately for her through the approximately $1,165,000.00 he had taken steps to provide to her on his death. [ 20 ] Mr. Bukkems had prepared a Will, evidencing his intention to leave his Estate to his children. During the course of his relationship with Ms. Torkelson, he substantially reduced the value of his Estate, in her favour, by designating her as the beneficiary on his investments and insurance policies. Having provided adequately for Ms. Torkelson, there was no reason for Mr. Bukkems’ testamentary intentions to be disturbed. At the application Ms.

Torkelson indicated she did not wish to receive all of the Estate, only half of it, but she could not explain why this additional $200,000.00 was necessary to provide her with adequate support. This is particularly relevant because she failed to account for all the monies she had received upon Mr. Bukkems’ death. I do not propose to reiterate my reasons for dismissing her application, but some issues raised by me were unanswered at the application.

These are relevant to the reasonableness of her challenge to the Will, and therefore relevant to her argument that she ought not to bear the expenses of that application. [ 21 ] Ms. Torkelson’s unsuccessful application would operate to Mr. Bukkems’ beneficiaries’ detriment if his Estate were required to bear all the application expenses. As Clark J. pointed out in Anderson Estate , the general approach now in estate litigation is that costs follow the event, unless a challenge to the Will was reasonable or an exception can be justified on public policy grounds. I did not find that Ms.

Torkelson’s challenge was reasonable. I cannot conclude that there is any exception here to the general approach to costs that would justify a departure on public policy grounds. To the contrary, an award of costs against the Estate in these circumstances would be contrary to the objective referred to by Graesser J. in Re Foote Estate , namely, the restriction of unwarranted litigation and the protection of estates from depletion by such litigation. Conclusion [ 22 ] In the result, the Respondents are awarded party and party costs against the Applicant.

If the parties are unable to agree on the amount of such costs, they are to contact my assistant within 30 days of the issuance of these Reasons to arrange a time at which the amount can be addressed. Heard on the 1 st day of October, 2014. Dated at the City of Wetaskiwin, Alberta this 17 th day of November, 2014.

D.L. Shelley J.C.Q.B.A. Appearances: J. Gamez Weir Bowen LLP for the Applicant J. Mohr Sirrs Law Group for the Respondents