Scott v. Smith Estate, 2015 NSSC 298

in the court of probate for nova scotia Citation: Scott v.

Smith Estate , 2015 NSSC 298 Date: 2015-11-07 Docket: SCY431599 , Probate File No. 2151 Registry: Yarmouth Probate District IN THE MATTER OF An Application for Proof in Solemn Form by Vanessa Smith as Administratrix of the Estate of Everett Daryl and in her personal capacity and IN THE MATTER OF The Probate Act S.N.S. 2000, c. 31 and IN THE MATTER OF An objection to the Application for Proof in Solemn Form by Krista Scott, Applicant in the original Application against the Estate of Everett Daryl Smith and Vanessa Smith as Administratrix and Vanessa Smith in her personal capacity LIBRARY HEADING Judge: The Honourable Justice Pierre L.

Muise Heard: By correspondence, submissions received September 30, 2015

Summary: This is a decision on costs following an Application for proof in solemn form of a handwritten document that had been admitted to probate, brought by the administratrix, who was the daughter of the deceased. It was contested by the deceased’s common law spouse, in her personal capacity, even though she had been added as co-administratrix by then. The document was found not to be a valid holograph or S. 8A will. Result: The daughter was awarded her costs on a solicitor and client basis, to be paid from the Estate, because she brought the application on behalf of the Estate and was successful.

The common-law spouse was awarded costs on a party and party basis, because the litigation was rendered necessary by the nature of the handwritten document left by the deceased and it was not frivolous or vexatious, in the circumstances, for the common-law spouse to continue propounding the document as a valid will. in the court of probate for nova scotia Citation: Scott v.

Smith Estate , 2015 NSSC 298 Date: 2015-11-07 Docket: SCY431599 , Probate File No. 2151 Registry: Yarmouth Probate District IN THE MATTER OF An Application for Proof in Solemn Form by Vanessa Smith as Administratrix of the Estate of Everett Daryl Smith and in her personal capacity

and IN THE MATTER OF The Probate Act S.N.S. 2000, c. 31 and IN THE MATTER OF An objection to the Application for Proof in Solemn Form by Krista Scott, Applicant in the original Application against the Estate of Everett Daryl Smith and Vanessa Smith as Administratrix and Vanessa Smith in her personal capacity DECISION ON COSTS Judge: The Honourable Justice Pierre L.

Muise Heard: By correspondence, submissions received September 30, 2015 Counsel: Rebecca Hiltz-LeBlanc, representing Vanessa Smith Allen Fownes, representing Krista Scott INTRODUCTION [ 1 ] Everett Daryl Smith created a document dated January 5, 2013, in his own handwriting. He passed away on January 19, 2014. On March 17, 2014, Vanessa Smith, daughter of the deceased, filed an application for grant of administration with holograph will annexed in relation to that handwritten document.

On March 14, 2014 she was granted administration. [ 2 ] On August 27, 2014, Krista Scott, common-law widow of the deceased, filed an application seeking

interpretation of the purported holograph will. On October 21, 2014, Vanessa Smith filed a Notice of Objection challenging the validity of the will. In the course of a case management conference, on October 27, 2014, it was agreed that a separate application for proof in solemn form would be filed by Vanessa Smith to deal with the issue of the validity of the will.

That application for proof in solemn form was filed October 31, 2014. [ 3 ] With the consent of Vanessa Smith, an amended grant of administration with holograph will annexed was issued November 26, 2014, adding Krista Scott as co-administratrix with Vanessa Smith. [ 4 ] On that same day, Krista Scott filed a notice of objection to the application for proof in solemn form.

The notice indicated that she was objecting to the application as a person interested in the Estate in her personal capacity. [ 5 ] Since the application for proof in solemn form was filed more than six months after the grant of administration, in order for it to be heard, a judge had to be satisfied, pursuant to section 31(2) of the Probate Act , S.N.S. 2000, c. 31, that it was just to do so. [ 6 ] That point, among others, including the need to advertise in the Royal Gazette, was raised during a court appearance on January 7, 2015, which had been the first date set for the hearing of the application for proof in solemn form. [ 7 ] Vanessa Smith filed a motion for that determination to be made.

It was contested by Krista Scott. I heard the motion on January 14, 2015, and granted it. In determining the question of costs of that motion I concluded that the circumstances of the case were such that it ought to have been clear to Krista Scott that Vanessa Smith would be successful on the motion, and ordered her to pay $1,500 in costs forthwith. [ 8 ] The actual hearing of the application for proof in solemn form commenced April 30, 2015. As the propounder of the disputed writing as a holograph will, Krista Scott presented her case first.

On that day, at the end of her case in chief, she sought to introduce into evidence the deceased’s passport and driver’s license. Those had not been previously disclosed. They were allowed to be introduced into evidence on condition that the continuation of the hearing would be adjourned to allow time for Vanessa Smith to consider the newly disclosed evidence and whether she would be needing additional evidence in response, and on condition that Krista Scott pay her throw-away costs.

The matter was adjourned for continuation to July 16, 2015, and throw-away costs of $3,000 were agreed upon. [ 9 ] The hearing continued on July 16 and July 17, 2015. [ 10 ] On August 31, 2015, I rendered an oral decision in which I found that the disputed writing was not a valid holograph will, nor a valid will under

section 8A of the Wills Act , R.S.N.S. 1989, c. 505. [ 11 ] The parties have been unable to agree on the issue of costs in connection with the application for proof in solemn form. Therefore, I must determine that question.

ISSUE The issue to be determined is what, if any, award of costs the Court should grant in relation to the application for proof in solemn form. POSITIONS OF THE PARTIES [ 12 ] The position advanced by Vanessa Smith is as follows. [ 13 ] Ms. Scott should be responsible for her own costs. She should not receive any amount towards her costs from the Estate. In addition, as the unsuccessful party, she should be personally responsible for paying party and party costs to Ms. Smith in the amount of $42,750.

This position is based upon the grounds which follow. [ 14 ] The issue in dispute did not arise out of the conduct of the deceased nor that of the residual beneficiaries. Ms. Scott pursued the litigation in her own interests, not those of the Estate, nor of the public. Despite being administratrix, she did not propound the will in her capacity as co-personal representative. She had, or had access to, all of the relevant evidence prior to the hearing.

That evidence should have led her to conclude that there was no reasonable prospect of successfully contesting the application to have the purported holograph will declared invalid. [ 15 ] The party and party costs should be based upon an amount involved of $300,900, using the basis scale in Tariff A, which amounts to costs of $34,750 plus $2,000 for each of the four days of trial, for an additional $8,000, resulting in total costs of $42,750. [ 16 ] The position of Krista Scott is as follows. [ 17 ] Vanessa Smith’s costs should be payable from the Estate. Ms.

Scott should be entitled to solicitor and client costs payable from the Estate; but, even though her actual solicitor and client costs exceed the party and party costs calculated under the basic scale in Tariff A, she is prepared to accept, and suggests that she be paid, out of the Estate, party and party costs of $25,750 less the costs awards owed by her to Ms. Smith personally, after deducting the amount of costs owing to her by Ms. Smith in relation to the motion for security for costs.

In addition, HST should be added to the net costs award. [ 18 ] The grounds advanced for this position are as follows. [ 19 ] In objecting to the application, Ms. Scott was not simply advancing her personal interests. She was advancing the public interest in due proof of wills and the interests of other beneficiaries, as well as that of creditors. She was a co-personal representative. Persons in that capacity are generally awarded solicitor and client costs. Even unsuccessful opposing parties usually have their costs paid from the estate on a party and party basis.

The litigation was made necessary by the deceased leaving the disputed document in his handwriting. There were serious, legitimate issues to be tried. Ms. Scott’s objection to the application was not frivolous, nor vexatious. Proof in solemn form became necessary after Ms. Smith had offered the disputed document for probate in common form, making it reasonable for her to rely upon the disputed document as a valid will.

It was reasonable for her to act as a proponent of the validity of the will. [ 20 ] An amount involved of $125,000 should be used, yielding basic scale Tariff A costs of $16,750. $2,000 multiplied by 4.5 days of court should be added, resulting in a total of $25,750 before deducting the cost awards already determined to be owing personally by Ms. Scott to Ms. Smith. LAW AND ANALYSIS [ 21 ]

Section 92 of the Probate Act provides for costs in contested probate matters. It states: “ [92]

(1) In any contested matter, the court may order the costs of and incidental thereto to be paid by the party against whom the decision is given or out of the estate and if such party is a personal representative order that the costs be paid by the personal representative personally or out of the estate of the deceased.

(2) An order made pursuant to subsection (1) may be reviewed by the Nova Scotia Court of Appeal or any judge thereof in chambers, upon notice given in the prescribed manner and form by the party aggrieved to the opposite party, and such order may be made thereon as the Court or the judge considers just and proper.

(3) An order for the costs of an application may be made personally against a personal representative where the application is made as the result of the personal representative failing to carry out any duty imposed on the personal representative by this Act.

(4) An order for costs in an application may be made personally against a personal representative who has made the application where the application is frivolous or vexatious. 2000, c. 31, s. 92 ”. [ 22 ] However, as stated at paragraph 10 of Baird Estate (Re) , 2014 NSSC 444 , “ Section 92(1) of the Probate Act does not limit the Court’s discretion to deal with costs pursuant to Civil Procedure Rule 77”. [ 23 ] Civil Procedure Rules 77.02, 77.03, 77.06 and 77.07 are germane. They state: “ 77.02

(1) A presiding judge may, at any time, make any order about costs as the judge is satisfied will do justice between the

parties.

(2) Nothing in these Rules limits the general discretion of a judge to make any order about costs, except costs that are awarded afteracceptance of a formal offer to settle under Rule 10.05, of Rule 10 - Settlement. 77.03

(1) A judge may order that parties bear their own costs, one party pay costs to another, two or more parties jointly pay costs,a party pay costs out of a fund or an estate, or that liability for party and party costs is fixed in any other way.

(2) A judge may order a party to pay solicitor and client costs to another party in exceptional circumstances recognized bylaw.

(3) Costs of a proceeding follow the result, unless a judge orders or a Rule provides otherwise. …. 77.06

(1) Party and party costs of a proceeding must, unless a judge orders otherwise, be fixed by the judge in accordance withtariffs of costs and fees determined under Costs and Fees Act, a copy of which is reproduced at the end of this Rule 77.

(2) Party and party costs of an application in court must, unless the judge who hears the application orders otherwise, beassessed by the judge in accordance with Tariff A as if the hearing were a trial. …. 77.07

(1) A judge who fixes costs may add an amount to, or subtract an amount from, tariff costs.

(2) The following are examples of factors that may be relevant on a request that tariff costs be increased or decreased after thetrial of an action, or hearing of an application: (

a) the amount claimed in relation to the amount recovered; (

b) a written offer of settlement, whether made formally under Rule 10 - Settlement or otherwise, that is not accepted; (

c) an offer of contribution; (

d) a payment into court; (

e) conduct of a party affecting the speed or expense of the proceeding; (

f) a step in the proceeding that is taken improperly, abusively, through excessive caution, by neglect or mistake, or unnecessarily (

g) a step in the proceeding a party was required to take because the other party unreasonably withheld consent; (

h) a failure to admit something that should have been admitted. ….” [24] The most recent pronouncement from our Court of Appeal on costs in estate matters is Wittenberg v. Wittenberg Estate, 2015NSCA 79. In that case, at paragraphs 91 and 93 to 95, the Court stated: “[91] In Prevost Estate v. Prevost Estate, 2013 NSCA 20, this Court observed: [17] It is often the case that parties in an estate dispute are awarded costs out of the estate. An adverse party may receiveparty-and-party costs; an executor or trustee will usually receive solicitor-client costs by way of indemnity.

One cannot assume judicialgenerosity in all of these cases. Much will turn on whether or not the contested issue arises from conduct of the deceased. Generally, ifthe need for resort to the court was caused by the testator, costs will be borne by her estate, (MacDonell, Sheard and Hull ProbatePractice, 4th ed. (Scarborough, Ont: Carswell, 1996) pp. 372-381). However, courts are not always so indulgent with respect to costs onappeal (Re: Fleck, (1924) 55 O.L.R. 441 (Ont. C.A.); Re: Stuart, Johnson v.

Williams, [1990] All E.R. 80 (C.A.); McDougald Estate v.Gooderham, (ON CA), [2005] 199 O.A.C. 203 at para 89; Patrick v. Telus Communications Inc., 2008 BCCA 246 atpara 43; and for a helpful overview: St. Onge Estate v. Breau, 2009 NBCA 36, at para 52-77). Also see: Casavechia v. Noseworthy, 2015 NSCA 56 at para. 62 and following. …. [93] A helpful review of costs in estate litigation can be found in Ian M. Hull's article, "Costs in Estate Litigation", (1998) 18 E.T.R.(2d) 218. From the case law he extracts two general principles:

In estate litigation, however, the Canadian and English courts have traditionally exercised their discretion by departing fromthe usual cost rule whereby the unsuccessful party pays the costs of the successful party.

Instead, it would seem to be the general practice of the courts in estate litigation is to consider and apply two principles.First, where the difficulty, conflicts or ambiguities which give rise to the litigation are either in whole or in part, the fault of thetestatrix or the fault of those parties interested in the residue, the courts have ordered the parties' costs to be paid out of the estate.Second, there is a public interest in ensuring that wills are valid and that the needs of the deceased's dependants are properlyprovided for.

Accordingly, as the provisions of a will must be properly interpreted and applied its validity or invalidity determined withsome degree of predictability, the courts seem to have relieved the unsuccessful parties to the litigation from paying the costs of thesuccessful party. [Emphasis added] [94] Mr. Hull grounds this statement of competing principles on the 19th century decision of Sir J.P. Wilde in Mitchell v. Gard,(1863), 164 E.R. 1280 at 1281.

After stating the principle that litigation caused by the testator or the residuary beneficiary should beborne by the estate, the court went on to say: But if the testator be not in fault, and those benefited by the will are not to blame, to whom is the litigation to be attributed?In the litigation entertained by other Courts, this question is in general easily solved by the presumption that the losing party must indeedbe in the wrong, and, if in the wrong, the cause of a needless contest. But other considerations arise in this Court.

It is the function ofthis Court to investigate the execution of a will and the capacity of the maker, and having done so, to ascertain and declare what is thewill of the testator. If fair circumstances of doubt or suspicion arise to obscure this question, a judicial inquiry is in a manner forcedupon it. Those who are instrumental in bringing about and subserving this inquiry are not wholly in the wrong, even if they do notsucceed.

And so it comes that this Court has been in the practice on such occasions of deviating from the common rule in other Courts,and of relieving the losing party from costs, if chargeable with no other blame, than that of having failed a suit which was justified bygood and sufficient grounds for doubt. There is still a further class of cases. I speak of those in which, beyond the execution of the will and the capacity of thetestator, the opposing party takes upon himself to question the conduct or good faith of others and to place on the record pleas of undueinfluence or fraud.

These are affirmative charges; they ought not to be made except upon apparently very sufficient ground. Butthough they may and do differ largely in the degree of probability or suspicion to be demanded for their justification, it is not easy to saythat they differ in nature from pleas denying execution or capacity. Both classes of defence are addressed to the same question, what wasthe will of the testator, and both are within the scope of the subject entrusted to the vigilance of the Court.

Here, also, it seems just andmeet, if the circumstances of the case have rendered the inquiry a proper one, that neither party should be condemned in cost.

From these considerations, the Court deduces the following rules for its future guidance: first, if the cause of litigation takesits origin in the fault of the testator or those interested in the residue, the costs may properly be paid out of the estate, secondly, ifthere be sufficient and reasonable ground, looking to the knowledge and means of knowledge of the opposing party, to question eitherthe execution of the will or the capacity of the testator, or to put forward a charge of undue influence or fraud, the losing party mayproperly be relieved from the costs of his successful opponent. [Emphasis added] [95] It is the public interest criterion - the second principle in the forgoing emphasized quotations - which mitigates the usual costsrule that the loser pays the winner.

But the need for such indulgence is now much diminished because civil procedure has substantiallyevolved since 1863. Parties now enjoy an enhanced pre-trial disclosure of documents and witnesses unavailable to 19th century litigants.Pre-trial access to medical records, medical opinions, professional and lay witnesses is commonplace. The likely outcome of litigation ismore apparent now. There is less reason to incur the time and expense of a formal hearing.

For these reasons the second Mitchellprinciple recedes in favour of the usual costs rule”. [25] At paragraph 96, the Court in Wittenberg noted that “the increasing primacy of the usual rule” is expressed in McDougaldEstate v. Gooderham, (ON CA), [2005] O.J. No. 2432 (Ont. C.A.). The Court in Wittenberg cites paragraphs 80and 85 of Gooderham. Paragraphs 78 and 79 of Gooderham are also instructive.

Those four paragraphs state the following: “[78] The practice of the English courts, in estate litigation, is to order the costs of all parties to be paid out of the estate where thelitigation arose as a result of the actions of the testator, or those with an interest in the residue of the estate, or where the litigation wasreasonably necessary to ensure the proper administration of the estate. See Mitchell v. Gard (1863), 3 Sw. & Tr. 275, 164 E.R. 1280 andSpiers v. English, [1907] P. 122. Public policy considerations underlie this approach: it is important that courts give effect to valid wills

that reflect the intention of competent testators. Where the difficulties or ambiguities that give rise to the litigation are caused, in whole or in part, by the testator, it seems appropriate that the testator, through his or her estate, bear the costs of their resolution.

If there are reasonable grounds upon which to question the execution of the will or the testator's capacity in making the will, it is again in the public interest that such questions be resolved without cost to those questioning the will's validity. [79] Traditionally, Canadian courts of first instance have followed the approach of the English courts.

While the principle was that costs of all parties were ordered payable out of the estate if the dispute arose from an ambiguity or omission in the testator's will or other conduct of the testator, or there were reasonable grounds upon which to question the will's validity, such cost awards became virtually automatic. [80] However, the traditional approach has been - in my view, correctly - displaced.

The modern approach to fixing costs in estate litigation is to carefully scrutinize the litigation and, unless the court finds that one or more of the public policy considerations set out above applies, to follow the costs rules that apply in civil litigation. Four cases usefully illustrate this modern approach. .... [85] The modern approach to awarding costs, at first instance, in estate litigation recognises the important role that courts play in ensuring that only valid wills executed by competent testators are propounded.

It also recognises the need to restrict unwarranted litigation and protect estates from being depleted by litigation. Gone are the days when the costs of all parties are so routinely ordered payable out of the estate that people perceive there is nothing to be lost in pursuing estate litigation.” [ 26 ] The Court in Wittenberg at paragraphs 98 to 100, 103 and 104 , stated: “[ 98] The policy reasons for the old rule are weaker now. By contrast, litigation is more expensive than ever. A rule that accommodates a losing party with costs is an inducement to litigation.

Although the public interest component remains in probate litigation, the liberality of contemporary disclosure and the court's policy of encouraging settlement, ( Ameron v. Sable , 2013 SCC 37 ), favours the usual rule that the victor should be indemnified by the vanquished. [99] To the extent that there was a traditional practice of paying costs of all parties out of the estate, those days are over. Provided that a personal representative is discharging her duties and is acting reasonably, she can be expected to be indemnified from the estate.

Not so with an adverse party, who may obtain party-party costs if successful, but may have to bear her own costs or even have to pay them, if unsuccessful. If the court proceeding can be ascribed to conduct of the deceased or residuary beneficiaries, a losing party may still recover costs from the estate, although usually on a party-party basis ( Casavechia, supra; Townsend v. Doherty , 1993 O.J. No. 713 , per Borins J. as he then was; Gamble v. McCormick , [2002] O.J. No. 2694 (S.C.J.) ; Holzel v. Mjeda , 2000 ABQB 549 ; Oldfield v. Oldfield Estate , [1994] O.J.

No. 2529 ). [100] Awarding costs against or out of an estate means that the expense usually is borne by the residuary beneficiaries. It is appropriate to ask whether that is a proper burden for them to bear. Where the personal representative is discharging her duties and there is no other unsuccessful party to share at least some of the burden, there is nothing that can be done to mitigate this indirect charge on the generosity of the testatrix, at the expense of the residuary beneficiaries.

But where, as here, there is an unsuccessful party who is the cause of the litigation, it is proper that the unsuccessful party bear much of the burden. Moreover, in this case, there was very little lay evidence, and no expert evidence, sustaining Mr. Wittenberg's allegations.

Finally, those allegations were not confined to incapacity, but also cast the aspersion of undue influence. …. [103] Solicitor and client costs may even be awarded against a party asserting undue influence: Holzel citing Oldfield . [104] Some of the cases refer to "reasonable grounds" for the litigation or litigation not being "frivolous or vexatious" as reasons to exercise a cost discretion in favour of a losing party. Certainly those may be relevant considerations in the exercise of discretion.

But those considerations should be tempered by the ability of the applying party to assess her case at an earlier stage. As Mr. Hull counsels in his article: However, it is important to note that the timing is everything and in proceedings with estate litigation matters, careful assessment of your case must be made, not just at this [preliminary] stage, but throughout the proceedings up to and including the trial of the issues. Accordingly, a proceeding that may initially look reasonable can appear otherwise when all the circumstances emerge. The prospects of success can disappear as the matter unfolds.

In such cases, parties risk denial of costs out of the estate or even the payment of costs to the estate where the judge considers it appropriate”. [ 27 ] At paragraph 107, the Court noted that the Appellant had made “serious allegations of undue influence for which there was literally no factual foundation”.

Based on that, in addition to his lack of success and the Court concluding that he should not have appealed, the Court ordered him to pay, personally, an increased costs award to the executrix for the estate. [ 28 ] I pause to note that, in the case at hand, there was no allegation of undue influence, nor of incapacity. The questions were whether the disputed writing bore an authenticating signature and whether it expressed a fixed and final testamentary intent. I will return to these issues later when I discuss whether or not it was reasonable for Ms. Scott to maintain her objection to Ms.

Smith’s request for a declaration of invalidity.

[ 29 ] Another case of our Court of Appeal, Casavechia v. Noseworthy , 2015 NSCA 56 , was released just two months before Wittenberg . In my view, Wittenberg does not displace the following principles outlined at paragraphs 66, 71, 72, 84 and 87 of Casavechia , which state: “[ 66] In the costs decision under appeal, the judge quoted para 18 from the 1998 decision in Veinot Estate , where Goodfellow J. stated that an estate representative should, upon acting reasonably, be granted recovery of its legal fees on a solicitor and client basis from the estate.

At the time, Rule 63.12(1) of the 1972 Civil Procedure Rules stated that: Where a person is a party in the capacity of trustee, personal representative . . ., he shall, unless the court otherwise orders, be entitled to costs, insofar as they are not recovered from or paid by any other person, out of the fund held by the trustee or personal representative, . . . …. [71] This Court's most recent statement on costs in estates litigation is found in Prevost Estate . There, Bryson J.A. for the Court stated: [17] It is often the case that parties in an estate dispute are awarded costs out of the estate.

An adverse party may receive party-and-party costs; an executor or trustee will usually receive solicitor-client costs by way of indemnity. One cannot assume judicial generosity in all of these cases. Much will turn on whether or not the contested issue arises from conduct of the deceased. Generally, if the need for resort to the court was caused by the testator, costs will be borne by her estate, ( MacDonell, Sheard and Hull Probate Practice , 4th ed. (Scarborough, Ont: Carswell, 1996) pp. 372-381). ... ]72] The issue before the motions judge was whether, in the particular circumstances of this case, Mrs.

Noseworthy was entitled to solicitor and client costs rather than party and party costs. I turn then to his costs decision. What were his reasons for refusing Mrs. Noseworthy, who successfully brought the application for proof in solemn form, her costs from the estate on a solicitor and client basis, as she requested? …. [84] In my view, entitlement to solicitor and client costs from an estate is not limited to executors and personal representatives and to reprehensible conduct warranting court sanction.

As I will explain, there remains a residual discretion to award costs. .... [87] I would add that in Fort Sackville Foundation , Moir J. commented: [4] Disputes over a fund or an estate may give rise to exceptional circumstances as referred to in Rule 77.03(2). The discretion may be moved because the dispute, and the need for a determination, is created less by the parties than by the instrument that governs the fund or estate.

My identification of this case as one where a judge relied on his discretion to award solicitor and client costs in circumstances other than reprehensible conduct, is not to be taken as acceptance of the first sentence in this passage. Simply because the litigation may involve an estate does not automatically result in solicitor and client costs.

As Veinot Estate and Prevost make clear, the normal rule is party and party costs, unless there are exceptional circumstances”. [ 30 ] In Casavechia , the party bringing the application for proof in solemn form and being successful in propounding the document in question as a valid testamentary instrument was not the personal representative of the estate. However, the Court awarded him solicitor and client costs from the estate because the combination of circumstances were sufficiently exceptionable to justify it.

Those circumstances included that: “it was undisputed that the necessity of an application for proof in solemn form was caused by the acts of the late Mr.

Casavechia, namely, his use of a handwritten document to express his testamentary wishes rather than formally updating his existing will with a lawyer”; “[h]ad the Executor brought the application, it would have been entitled to solicitor and client costs from the estate”; and, the Executor declined to bring the application “because of the particular circumstances pertaining to the administration of the estate”: Casavechia , paragraph 89 . [ 31 ] I respectfully disagree with the submission of Ms. Smith that the contested issue in the case at hand did not arise out of the conduct of the deceased. Ms.

Smith’s submission is based upon the following points. The Court determined the evidence did not establish that the document in dispute was an expression of the deceased’s fixed and final testamentary intentions. The deceased did not advise anyone of the existence of the disputed document. Neither Ms. Scott nor Ms. Smith had any indication the document existed. Given that the Court concluded that it was not the deceased’s intention that the disputed document be taken as his last will and testament, litigation could not have arisen as a result of his conduct. [ 32 ] The fact that I concluded that Ms.

Scott had failed to establish, on a balance of probabilities, that the disputed writing was a valid holograph will or a valid

section 8A will, does not necessarily make it such that the disputed document did not create sufficient ambiguity to justify, or necessitate, the question being determined through litigation. As noted at paragraph 88 of Casavechia , the Court

in Komonen v. Fong , 2011 NSSC 315 , concluded that the document in dispute was not a valid holograph will. However, it awarded the Applicant costs on a solicitor and client basis payable out of the estate. The Applicant was not the personal representative. However, as in Casavechia , the personal representative appeared to be an institutional trustee which did not pursue the application for proof in solemn form, even though it is something that would usually be undertaken by a personal representative. Nevertheless, the granting of costs on a solicitor and client basis indicates the Court in Komonen v.

Fong considered the litigation to have been necessary because of the conduct of the deceased. [ 33 ] Further, as already noted, the Court in Casavechia concluded that the use of a handwritten document to express testamentary wishes, rather than a formal updating of an existing will with a lawyer, made it such that the application for proof in solemn form was necessitated by the acts of the deceased. [ 34 ] In my view, it would not be appropriate to look at whether or not the litigation was necessitated by the conduct of the deceased based only on the ultimate result.

Although in point form, and using informal name references, the disputed document in the case at hand: was dated; was entitled Last Will; and, addressed what was to be done in relation to assets and debts, as well as distribution of money left over, as most wills do. There was also a legitimate dispute over whether or not the handwritten name “Daryl Smith” at the top of the document was his signature in the sense of having been affixed to the document to attest to its authenticity.

In my view, by creating and leaving this document, the deceased created a situation of sufficient ambiguity to justify, and perhaps even necessitate, an application for proof in solemn form to determine its validity. Even though I found it to be invalid, after hearing all of the evidence presented on behalf of both sides, the disputed document was sufficient to cause the proctor of the estate to prepare the documentation required to seek a grant of administration with holograph will annexed, attaching the disputed document, and also to cause that the Registrar of Probate to grant that administration. [ 35 ] Ms.

Smith is one of the residual beneficiaries. I found that her signing the documentation required for the request for grant of administration was due to her age, inexperience, grieving, and not having yet received her own legal advice in relation to the validity of the document. Nevertheless, despite being the product of her own naiveté, the obtaining of a grant of administration in relation to the disputed document, would have played a role in causing Ms. Scott to object to Ms. Smith’s application to have it declared invalid. Up until that point, Ms.

Scott was operating under the understanding that her entitlement to her deceased common-law husband’s estate would be based upon that document. So, though one could not conclude that the litigation was made necessary by the acts of the residual beneficiaries, the act of one residual beneficiary, Ms. Smith, contributed to the circumstances which led to the litigation. [ 36 ] Ms. Smith points to Wittenberg , where the Court highlights that developments in pre-trial disclosure and discovery since 1863, when the English case of Mitchell v.

Gard was decided, make it such that the likely outcome of litigation is more apparent now. Therefore, there is now less reason to award costs to an unsuccessful party, particularly one that is not a personal representative. Ms. Smith submits that Ms. Scott had the documentary evidence showing the deceased’s actual signature and so ought to have been able to glean that the handwriting at the top of the disputed document was not his signature. However, in my view, Ms.

Scott did have, albeit ambivalent, evidence from three witnesses indicating that they recognized what was identified on the disputed document the signature of Daryl Smith to be in his handwriting. She also discovered, before the end of the proceeding, a passport of the deceased in which the digitized writing of his name resembled the writing of his name on the disputed document. She did not provide evidence that that was inserted as his signature, and it was markedly different from his authenticating signature on the line labeled “signature of bearer”.

However, she did have some material to support her view that the handwritten name was the deceased’s signature, and regarding his testamentary intent, making it not frivolous and vexatious for her to continue challenging the request for a declaration of validity. [ 37 ] In my view, it could not be said that Ms. Scott had no reasonable prospect of success. [ 38 ] That makes the case at hand distinguishable from Casavechia and other cases referred to by Ms. Smith in which the unsuccessful party was denied costs. [ 39 ] One example is Barrieau Estate (Re) , 2008 NSSC 162 .

In that case, application was made for proof in solemn form of a 1994 will. The deceased had prepared a will in 2004. However, her physician clearly stated that she was not competent to direct and execute the 2004 will. Only one of the multiple beneficiaries under the 2004 will contested the application. The Court found that his objection was frivolous and vexatious such that it would be inappropriate to allow his costs to be paid from the estate. He was also ordered to pay costs to the applicant. [ 40 ] Another example is Van Kippersluis v. Van Kippersluis Estate , 2011 NSSC 399 .

At paragraphs 39 to 44, the Court concluded as follows: “[ 39 It was not reasonable to continue with the Proof Application after the Estate had provided the pre-hearing disclosure, and the applicant learned (or should have learned) the evidence of witnesses that he intended to call to proof his allegations. It was not reasonable to decline the offer to interview or discover the lawyer. This hearing should not have occurred. Even if it was reasonable to decline the offer to interview or discover Mr. Gordon, by the end of the first day (after Mr.

Gordon's evidence), the applicant clearly had no prospect of succeeding. Instead the hearing was extended beyond the scheduled four days. [40] It would be entirely unfair to the beneficiaries of the Estate to reward the applicant for not taking the opportunity to interview or discover Mr.

Gordon and for persisting in a hearing that was extended far too long and for which there was no real benefit other than as a form of discovery in respect of the outstanding TFMA Application . [ 41 ] It would be unfair to award the applicant costs of this application against the Estate. [ 42 ] The more difficult decision is the Estate's claim for costs against the applicant. [ 43 ] Based on the analysis above, it may appear obvious that the Estate should have some costs against the applicant, if not for failing in this application, then for the inefficient use of seven days, at the expense of the Estate, on matters marginally relevant to the Proof Application .

[[44] However, I decline to so order for the following reasons: i. The applicant's financial resources are clearly very limited and he is responsible for a legal bill to his own counsel which will eatup all or substantially all of his inheritance under the challenged Will; ii The evidence that was advanced in the Proof Application suggests that there may be some merit to the TFMA Application. iii.

It may be more appropriate, and fair, to deal with the effect of this application upon the value of the Estate as a factor in theTFMA Application”. [41] In Wittenberg, the deceased’s son had brought an application to set aside the most recent will on the basis of lack of capacityand undue influence. There were signs of dementia and evidence of a head injury, however, the medical evidence was such that theApplicant failed to establish lack of capacity. There was absolutely no basis for the allegation of undue influence.

To the contrary, theCourt of first instance found that it was the Applicant himself who had exerted such influence on the deceased during her lifetime toconvince her to sell property to him at less than 1/3 of its value. The Court of Appeal indicated that it at least ought to have been clear tohim that he had no chance of success on the appeal and probably should have withdrawn the original application after pre-hearingdisclosure. On that basis, it ordered him to pay costs, personally, to the executrix on behalf of the estate. [42] Ms. Smith argues that, though added as a co-administratrix, Ms.

Scott propounded the will in furtherance of her own interest. Ms. Scott argues that it is not only her who stood to benefit, but also her two children, who were amongst the five children who wouldreceive a share of the value of the home once it was sold following her death, with her only having a life interest in that home.

She alsoadded that the CIBC, who held the mortgage on the house, was also interested in the validity of the will because it provided for theassets being used to pay off the house. [43] On January 7, 2015, the subject of who, if anyone, should be added as interested parties was discussed in open court. Therewas no indication at that time that the CIBC should be added as an interested party. In my view, the CIBC would not be a beneficiaryeven if the disputed document were declared to be a valid will. The purpose of the pay-off clause would not be to provide the CIBCsecurity through the will.

It would simply be to direct payment of estate debts. If the mortgage is not paid, the CIBC can foreclose onthe mortgage and pursue the Estate for any deficiency. Therefore, in my view, more likely than not, Ms. Scott was not propounding thewill on behalf of the CIBC. [44] During the January 7, 2015, court appearance, there was also discussion about whether Ms. Scott’s two children, and thedeceased’s two other children, apart from Vanessa Smith, had received notice, in case they wished to participate. It was noted that thosechildren were aware of the proceedings and Ms.

Scott would be putting forward the interests of her children, while Vanessa Smith wouldput forward the interests of her siblings. As such, Ms. Scott’s efforts at propounding the will were for her and for her children, which areboth in reality in her interest. Further, at least in the short term, she stood to gain more than her own children. She would obtain a lifeinterest in the home, plus one quarter of the other assets left over after debts were paid. Her children would only get a one-fifth share ofthe value of the home upon her death.

Her Affidavit sworn November 21, 2014, indicates her date of birth as being May 23, 1070. Iinfer that was meant to be 1970. Therefore, if she lived an average lifespan, and did not release her life interest, it would be a relativelylong time before anyone got their share of the proceeds of the sale of the home. [45] Ms. Scott left Ms. Smith to attend to the duties of administering the estate until she sought her removal by way of applicationfiled in August of 2014. She was added as co-administratrix by consent on November 26, 2014. However, that same day, she filed theNotice of Objection to Ms.

Smith’s application for proof in solemn form and indicated that she was doing so in her personal capacity. There is no indication that she has cooperated and participated with Ms. Smith in the administration of the estate. To the contrary, duringa discussion which followed the rendering of my decision declaring the disputed document to be invalid as a testamentary instrument, herlawyer was still questioning whether or not she should be required to hand over the key to the home to Ms. Smith. That discussion aroseas a result of Ms. Smith’s repeated requests for the key to the home being refused.

That indicates that, instead of assisting with theadministration of the estate, Ms. Scott was obstructing it. It is also clear that she did not pass over all important papers to Ms. Smith,even though Ms. Smith was the sole administratrix for several months. Some of those were not produced until the end of the first day ofthe hearing of the application for proof in solemn form. [46] Given these circumstances, in my view, even though Ms.

Scott formally became co-administratrix on November 26, 2014, shepursued her objection to the proof in solemn form to propound the disputed document as a valid will primarily in her own personalinterest, and not as representative of the estate. However, given my conclusion that the litigation was rendered necessary by the conductof the deceased and that it was not a situation where Ms.

Scott ought to have known that her case was doomed to fail, I am of the viewthat she should be entitled to receive her costs out of the estate on a party and party basis. [47] Even if I am wrong in my conclusion that she was propounding the will in her personal interest, as opposed to as representativeof the estate, my conclusion that she should receive costs on a party and party basis finds support in the analysis and result outlined inBlinn Estate (Re), 2013 NSSC 10. At paragraphs 23 to 26, the Court stated: “[23] Coughlan J., writing in Jollimore Estate v.

Nova Scotia (Public Archives) 2012 NSSC 8, reviewed the law of costs in estatematters: 21 In Ontario the Court of Appeal considered the issue of costs in McDougald Estate v. Gooderham, (ON CA), [2005] O.J. No. 2432. In giving the court's judgment, Gillese, J.A. describes at paragraph 85 the modern approach to awardingcosts in estate litigation: 85 The modern approach to awarding costs, at first instance, in estate litigation recognises the important role that courts play in ensuring

that only valid wills executed by competent testators are propounded. It also recognises the need to restrict unwarranted litigation and protect estates from being depleted by litigation. Gone are the days when the costs of all parties are so routinely ordered payable out of the estate that people perceive there is nothing to be lost in pursuing estate litigation. 22 Mr. Ian M.

Hull in an article, " Costs In Estate Litigation " (1998), 18 E.T.R. (2d) 218 , set out factors which are favourable or unfavourable to an award of costs from an estate as follows: Some considerations favourable to an award of costs out of the estate are: * where the litigation arises out of the acts or fault of the deceased; * where the order sought is for the protection of the trustee, such as an

interpretation problem or where other directions or advice of the court are sought; * where there are reasonable grounds for the litigation such as proof in solemn form; * where suspicious circumstances are demonstrated; * where the court's scrutiny or supervision is warranted.

Some considerations unfavourable to an award of costs out of the estate are: * proceedings unwarranted or unjustified; * intransigence of a party to a proceeding arising out of extra-legal considerations such as bad feelings between the parties; * actions by a party designed to delay or prohibit the trustee's administration of the estate without proper reasons for such action; * unnecessary proceedings, where for example, a subsequent will is not located by the executor or executrix as a result of an incomplete search therefor.

However, the question that must be foremost in counsel's mind is how to convince the court that the questions raised warrant investigation and inquiry of the circumstances, are sufficient to require proceedings to be taken. Conclusion [24] Applying these principles to the facts as I have found them, I conclude that there were reasonable grounds for the litigation, but that there was significant evidence of "suspicious circumstances" relating to the testatrix's mental capacity which could cause one familiar with her to doubt her testamentary capacity.

However, I am not prepared to say that the litigation was unwarranted, unjustified or frivolous. [25] I conclude that Augustin Blinn's costs should be treated as those of the executor and trustee and they are to be taxed and paid from the estate on a solicitor and client basis. [26] I conclude that Ginette Comeau's costs will be paid from the Estate on a party and party basis. There is a dispute as to what these costs should amount to.” [ 48 ] Mr. Blinn had been the Executor under a prior will admitted to probate. Ms. Comeau was the Executor of the most recent will that was admitted to probate.

The conclusion reached in the application for proof in solemn form was that the deceased had lacked the testamentary capacity at the time she executed the most recent will such that it was invalid. So the result in Blinn Estate shows that an unsuccessful Executor may be awarded costs from the estate on a party and party basis. [ 49 ] Further, an analysis of the considerations outlined as being favourable and unfavourable to an award of costs out of the estate also leads to a conclusion that, even if Ms.

Scott could be considered as having propounded the will on behalf of the Estate, the usual award of solicitor and client costs should be tempered to account for those considerations. On the one hand, as I have found, the litigation arose out of the acts or fault of the deceased and was not frivolous or vexatious. On the other hand, Ms. Scott did conduct herself in a way which interfered with Ms. Smith’s administration of the Estate. No reasonable explanations were offered for such actions. Also, the exchange of SMM messages between Ms. Scott and Ms. Smith, attached as exhibit “A” to the Affidavit of Ms.

Scott sworn November 21, 2014, shows a deterioration in the relationship between Ms. Scott and Ms. Smith which appeared to arise, at least in part, from friction and animosity between one of Ms. Scott’s children and one of Ms. Smith’s siblings. It became exacerbated when Ms. Smith ran into difficulties administering the estate because of uncertainties surrounding the corporate shares and lack of liquid assets. Thereafter, Ms. Scott became more demanding, and less cooperative. In my view, at least in part, as a result of bad feelings between the parties.

Sadly, the exchange of e-mails reveals more mature communications emanating from Ms. Smith, who was only in her mid- twenties, than from Ms. Scott, who was in her mid-forties.

[ 50 ] Balancing these factors, in my view, would still warrant costs being paid out of the estate, but tempered by awarding them on a party and party basis instead of a solicitor and client basis. [ 51 ] The Court in Cassavehia , at paragraphs 70 and 83, stated: “[ 70] In

summary, there is a long line of jurisprudence in this Province that has held that the costs of the executor or personal representative of an estate involved in litigation pertaining to the estate is entitled to costs from the estate on a solicitor and client basis if it has acted reasonably. …. [83] Earlier, I set out Rule 77.03(2) which states that "[a] judge may order a party to pay solicitor and client costs to another party in exceptional circumstances ...".

Moreover, I explained that the case law shows that an executor or personal representative who acts reasonably is entitled to costs from the estate on a solicitor and client basis. The motions judge did not address this jurisprudence which was central to Mrs. Noseworthy's submissions.” [ 52 ] Despite this general rule, in my view, given the considerations that I’ve outlined above, it would not do justice between the parties that Ms. Scott receive her costs on a solicitor and client basis out of the Estate. [ 53 ] However, in my view, Ms.

Smith did bring the application for proof in solemn form as personal representative of the estate. She ran into difficulty administering the estate. She sought advice from a firm independent of the proctor. She obtained advice to the effect that the disputed document was not a valid will, which she had thought previously that she could not question, given that the proctor had prepared the documentation for the grant of administration. She was an administratrix throughout. She is the one who has been executing the duties of administratrix throughout, despite the lack of cooperation from Ms.

Scott after bad feelings arose. [ 54 ] She was the successful party. [ 55 ] In my view, there is nothing in the circumstances of the case at hand which would warrant deviating from the usual rule that she, as representative of the Estate, would receive her costs out of the estate on a solicitor and client basis. CONCLUSION [ 56 ] Based on the foregoing, in my view, both Ms. Scott and Ms. Smith should receive their costs of the application for proof in solemn form payable out of the Estate. Ms. Smith should receive her costs on a solicitor and client basis. Ms.

Scott should receive hers on a party and party basis. [ 57 ] Both parties agree that the basic scale in Tariff A is the applicable scale. There is some dispute in relation to the length of the trial. Ms. Smith argues that it was four days. Ms. Scott argues that it was four and a half days. My review of the record indicates that we appeared in court: for one-half day on January 7, 2015; a full day on April 30, July 16 and July 17, 2015; and, a half day on August 31, 2015. That is a total of four days, which warrants the addition of $2,000 per day or $8,000 total to the basic scale Tariff A costs.

The parties disagree on the amount involved. Ms. Smith argues that it is $300,900. Ms. Scott argues that it is $125,000. Both base their calculations on the total value of the estate, except that Ms. Smith double credits the $117,000 life insurance amount because she includes the full value of the matrimonial home which had a mortgage requiring the amount of the insurance policy, plus a little more, to pay off. [ 58 ] In my view, the full amount of the net value of the estate was not at risk in the litigation. Therefore, it ought not constitute the amount involved.

The disputed document estimates that after all debts are paid, while Ms. Scott would still have her life interest in the home such that it could not yet be sold, there would be $40,000 left over to be divided amongst Ms. Scott, Ms. Smith and her two siblings. That is $10,000 each. Therefore, the only portion of that which Ms. Scott could take away if the document were a valid will is $10,000. [ 59 ] Accurately determining the value of her life estate in the home would require actuarial evidence or calculations. None were provided.

In the absence of such evidence or calculations, as a rudimentary approach, I will take about 15% of the value of the home as the value of her life estate. The tax assessed value is only approximately $134,000. 15% of that amount is about $20,000. I will use that as the value of the life estate. [ 60 ] The other beneficiaries would have to wait for their share of the proceeds of the sale of the home. That makes their share of the home worth less to them than if they had a share they could liquidate immediately. The value of the home is likely to increase by the time the life estate expires.

However, the home will be significantly older. Older homes, particularly in rural areas such as where this home is located, tend to be valued less than newer homes. In addition, the present value of an amount they would receive 30 to 40 years from now, is less than the value which would ultimately be obtained. Again, actuarial evidence/calculations would be required to accurately determine that present value. In the absence of such evidence I will take a similarly rudimentary approach.

I will deduct the $20,000 value which I have assigned to the life estate from the current value of the home and take the remaining portion as the present total value of the interests of residual beneficiaries in the home. That remaining portion is $114,000. [ 61 ] If the will were valid, two fifths of that remaining value would go to Ms. Scott’s two children. That is approximately $46,000. [ 62 ] There was no evidence regarding whether there was any equity in the recently purchased cottage. The cottage was not owned by the deceased when the disputed document was prepared.

Therefore, it was not included in the calculation of net assets. However, if we allow $4,000 for that equity, ¼ of that amount would have gone to Ms. Scott if the document had been a valid will. [ 63 ] Consequently, in my view, the amount in jeopardy in the litigation was approximately $78,000.

[ 64 ] The basic scale Tariff A costs for an amount involved of $65,001 to $90,000 is $9,750. Adding $8,000 in per diem amounts to that produces total Tariff A costs of $17,750. [ 65 ] Ms. Scott was ordered to pay, personally to Ms. Smith, $1,500 in costs arising out of the motion under

section 31 of the Probate Act to allow her to proceed with the application for proof in solemn form after the expiration of six months from the grant of administration. Ms. Scott was also ordered to pay personally to Ms. Smith, $3,000 in throw-away costs arising from her late production of documents she sought to introduce into evidence, which resulted in an adjournment. That is a total of $4,500 in costs owing from Ms. Scott personally to Ms. Smith. However, Ms. Smith was ordered to pay costs to Ms. Scott in the amount of $500, to be deducted from other costs payable by Ms. Scott to Ms.

Smith, as a result of the failed motion for security for costs. So the net amount owing by Ms. Scott to Ms. Smith is $4,000. That amount is to be deducted from the $17,750 in total Tariff A costs, leaving net party and party costs of $13,750 to be paid to Ms. Scott from the Estate. [ 66 ] Ms. Smith’s costs, which are not otherwise covered by costs paid personally from Ms. Scott to her, are to be paid to her on a solicitor and client basis from the Estate. This includes, as has already been previously noted, the costs of the

section 31 motion. [ 67 ] However, it does not include her costs of the motion for security for costs. Ms. Smith will be responsible for those costs herself, personally. In addition to being unsuccessful, in my view, the motion for security for costs was made more as a last minute attempt to pressure Ms. Scott to withdraw her contest to the application for proof in solemn from, than because of a real and substantial concern over recovery of costs post-hearing. ORDER [ 68 ] I ask counsel for Ms. Scott to prepare the order. _____________________________ Justice Pierre L. Muise