Neufeld Estate (Re), 2017 ABQB 802

Court of Queen’s Bench of Alberta Citation: Neufeld Estate (Re), 2017 ABQB 802 Date: 20171221 Docket: ES06 17032 Registry: Lethbridge Court File Number ES06 17032 Court Court of Queen’s Bench of Alberta (Surrogate Matter) Judicial Centre Lethbridge Estate Name Estate of Gerhard Peter Neufeld, Deceased Applicant (Plaintiff) Cheryl Victoria Neufeld Respondent (Defendant) Landon Alexander Delane Neufeld _______________________________________________________ Memorandum of Decision on Costs of the Honourable Madam Justice J.C.

Kubik _______________________________________________________ Background [ 1 ] On November 7, 2017 I gave oral reasons admitting an unsigned copy of the Last Will and Testament of Gerhard Peter Neufeld to probate and appointing the Plaintiff, Cheryl Victoria Neufeld as Personal Representative of the Estate. The matter involved an application by the Plaintiff seeking formal proof of a lost Will, which was contested by the Defendant. The parties were directed to provide written submissions as to costs. This is my memorandum of decision with respect to costs.

Position of the parties [ 2 ] The successful Plaintiff, Cheryl Victoria Neufeld seeks party-party costs from the Defendant pursuant to Column 3 of

Schedule C of the Alberta Rules of Court , Alta Reg 124/2010, with a doubling of the costs with respect to trial and submission of written argument. The Plaintiff relies on a formal offer served on September 25, 2017 wherein the she offered to settle the entirety of the claim by payment of the sum of $10 inclusive of interest and costs to the Defendant. [ 3 ] The unsuccessful Defendant, Landon Alexander Delane Neufeld argues that both parties’ party-party costs should be paid by the Estate. Further, he argues that the Plaintiff’s formal offer was not a true compromise offer and should not be taken into consideration in the assessment of costs. Issues [ 4 ] There are two issues: (

a) Issue one: Whether the Plaintiff is entitled to party-party costs payable by the Defendant (and if not, out of the Estate) and the scale of those costs; and (

b) Issue two: Whether the Defendant is entitled to party-party costs payable by the Estate. Issue one [ 5 ] With respect to the first issue the modern rule governing costs in estate litigation in Alberta is that the successful party is entitled to recover costs from the unsuccessful party: Re Foote Estate , 2010 ABQB 197 . There are exceptions to the general rule in circumstances where the challenge to the Estate is reasonable or based on a public policy exception recognizing society’s interest in only probating valid wills: Petrowski v Petrowski Estate , 2009 ABQB 753 .

However, a departure from awarding party-party costs to a successful party will only occur on rare occasions: Hemmerling Estate v Hemmerling , 2000 ABQB 902 .

The Alberta Court of Appeal in Goold Estate v Ashton , 2017 ABCA 315 , recently applied this same standard with respect to appeal costs in estate matters, noting that the presumption that the successful party is entitled to costs is not displaced because an appeal was brought in good faith or raised important and unresolved issues of law. [ 6 ] There is nothing in this case which would displace the presumption that the successful Plaintiff should receive her party- party costs from the Defendant. Because the original Will was lost, the Plaintiff was required to seek formal proof of the unsigned copy of the Will.

As a result, the Court would have overseen the probity of the Will, even in the absence of litigation. The Defendant filed a Notice of Objection and took an adversarial position, seeking an alternate form of relief – a declaration of intestacy and having him appointed as the administrator of the Estate. He was unsuccessful on both counts. Conclusion of Issue One [ 7 ] Accordingly I am satisfied that the Plaintiff is entitled to recover her party-party costs in accordance with Column 3 of

Schedule C of the Alberta Rules of Court , Alta Reg 124/2010, from the Defendant. [ 8 ] In relation to the formal offer served by the Plaintiff, I agree with the Defendant that it was not a true compromise offer having regard to the issues between the parties. A true compromise offer would not have been based on monetary compensation but rather would have addressed a withdrawal of the Defendant’s Notice of Objection and competing application in exchange for a waiver of costs. As a result the Plaintiff is not entitled to double costs associated with trial.

In addition, it was pointed out that the written submissions were filed prior to any formal offer. It follows that the Plaintiff is not entitled to double costs associated with the written submissions. [ 9 ] The Defendant further argued that the Plaintiff was not entitled to costs associated with filing the Application for Formal Proof of Will and accompanying Affidavit (along with service related costs) as this was a cost associated with the surrogate matter and not the litigation per se: Babchuk v Kutz , 2007 ABQB 88 .

I also agree with that submission. [ 10 ] Finally, is the issue of the costs with respect to the Defendant’s withdrawal, prior to trial, of a previously agreed fact from the Agreed Statement of Facts. I am not satisfied that the withdrawal of agreement to the particular fact in issue increased the Plaintiff’s cost of trial. The Plaintiff consented to the withdrawal, no additional witnesses were required and the trial was completed within the allocated time.

As such I am not prepared to award additional costs in relation to that aspect. [ 11 ] The Plaintiff is hereby ordered to revise her Bill of Costs to reflect the above deductions and accompanying G.S.T. calculations. Issue Two [ 12 ] With respect to the second issue the case law provides that the Court must analyze a number of factors in order to justify the Estate’s liability for the costs of an unsuccessful Defendant. These include: (

a) Whether the testator caused the litigation; (

b) Whether the challenge to the Estate was reasonable; (

c) Whether the conduct of the parties was reasonable;

(

d) Whether there was an allegation of undue influence; (

e) Whether there were different issues or periods of time in which costs should differ; and (

f) Whether there were settlement offers: Petrowski v Petrowski Estate , supra . [ 13 ] In relation to each of the above factors I find the following: (

a) The testator did not cause the litigation. As noted in Babchuk v Kutz , supra there must be a substantial link between the testator’s actions and the need for litigation before the testator will be held to have caused the litigation. This was not a case where there were issues of testamentary capacity or suspicious circumstances, the disinheriting of any party, family relief applications or

interpretation of particular clauses of the Will. Rather, the original of a document purporting to be the testator’s Last Will and Testament, and last known to be in possession of a law firm, could not be found on his death. It is posited by the Defendant that the testator could have obviated the need for litigation had he told his children, other family members or divorce lawyer that he had a Will. That would not however have changed the fact that the original Will could not be located and the unsigned copy was subject to formal proof in any event. (

b) The challenge to the Estate was not reasonable. The Defendant argues that this was a novel issue and therefore litigation was required. Again I note that the Surrogate Rules would have required the Plaintiff to formally prove the lost Will and the unsigned copy even in the absence of a Notice of Objection. The Defendant took an adversarial position which hinged on his mistrust and animosity for the Plaintiff rather than any evidence probative of the material issues before the Court. (

c) The conduct of the parties in managing the litigation was reasonable and timely. (

d) There was no allegation of undue influence. (

e) There were not different issues or periods of time in which costs should differ. (

f) There were settlement offers. The Plaintiff’s offer was as noted above. The Defendant’s offer was for the Plaintiff to concede that the Deceased died intestate and to withdraw her application for formal proof. He was unsuccessful in this position at trial. Conclusion of Issue Two [ 14 ] Having regard to my findings with respect to the above factors, I conclude that the Estate is not liable for the Defendant’s costs. Accordingly, the Defendant will bear his own costs.

Considered by the written submissions, filed by the plaintiff on November 20, 2017; by the defendant on November 28, 2017; and the response submissions filed by the plaintiff on December 5, 2017. Dated at the City of Lethbridge, Alberta this 21 st day of December, 2017. J.C. Kubik J.C.Q.B.A. Appearances: Greg K. Norman, Norman and Company for the Plaintiff Urvil U. Thakor, Torry Lewis Abells LLP for the Defendant