Graham Estate (Re), 2023 ABKB 621

Court of King’s Bench of Alberta Citation: Graham Estate (Re), 2023 ABKB 621 Date: 20231110 Docket: ES01 128503 Registry: Calgary Between: Timothy Scott Graham Applicant - and - Daniel Keith Graham Respondent _______________________________________________________ Reasons for Decision (Costs) of the Honourable Justice M.H. Hollins _______________________________________________________ [ 1 ] This decision concerns the award of costs in a disputed estate matter. The substance of the Applicant’s application for

summary dismissal was dealt with by consent on March 2, 2023 but the parties reserved their ability to speak to costs. For the reasons set out herein, costs are awarded to the Applicant as claimed. Background [ 2 ] The Applicant, Timothy and the Respondent, Daniel, are brothers and are children of the deceased, Harold Keith Graham. [1]

Harold died with a will that named Timothy as the Executor and left the assets in equal shares to Harold’s four children; Timothy, Daniel and two other brothers. [ 3 ] Harold had been ill for some time before his death and, in hopes of simplifying the administration of his estate, had distributed much of his wealth prior to his death. In fact, after his death, there was essentially only the net proceeds of the sale of some family property in Nova Scotia left. The value of the estate was in the range of $60,000 – $70,000.

Timothy proceeded to obtain probate and to liquidate and distribute the estate in equal shares to the siblings. This was concluded in 2019. [ 4 ] In January, 2020, Daniel brought an application for, inter alia , “Formal proof of will, determination of Breach of Trust and Misconduct of the respondent” (the “2020 Application”). That application was never pursued. [ 5 ] In 2022, Timothy brought an application to dismiss Daniel’s 2020 Application.

At the first appearance on March 7, 2022, my sister Justice Price discharged the Certificate of Lis Pendens (CLP) that Daniel had registered against title to Timothy’s home and adjourned the rest of the

summary dismissal motion to March 2, 2023 before me. [ 6 ] At the March 2 nd hearing, Mr. Crisfield advised that his client, Daniel, had instructed him to consent to the

summary dismissal of the 2020 Application. However, Daniel was not agreeable to paying Timothy’s solicitor-client costs. In accordance with

section 149 of the Land Titles Act , RSA 2000, c.L-4 , I granted costs of $8,127.94 on that date. It was clear, by reason of the discharge of the CLP effected by Justice Price, that the CLP had been filed “without reasonable cause”. With respect to the remainder of the costs claimed, I asked the parties to file Briefs. [ 7 ] Timothy is asking for solicitor-client costs of $20,041.91 in relation to the legal fees incurred to obtain a dismissal of Daniel’s application and for preparation of the material for this costs application.

Costs Generally [ 8 ] There are some general rules which apply to the determination of an appropriate costs disposition. Under Rule 10.29 of the Alberta Rules of Court , we begin with the assumption that a successful party is entitled to his costs from the unsuccessful party. That is subject to the Court’s discretion, including as to amount. In exercising that discretion, I may consider any number of factors set out in Rule 10.33. 10.33(1) In making a costs award, the Court may consider all or any of the following: (

a) the result of the action and the degree of success of each party; (

b) the amount claimed and the amount recovered; (

c) the importance of the issues; (

d) the complexity of the action; (

e) the apportionment of liability; (

f) the conduct of a party that tended to shorten the action; (

g) any other matter related to the question of reasonable and proper costs that the Court considers appropriate.

(2) In deciding whether to impose, deny or vary an amount in a costs award, the Court may consider all or any of the following: (

a) the conduct of a party that was unnecessary or that unnecessarily lengthened or delayed the action or any stage or step of the action; (

b) a party’s denial of or refusal to admit anything that should have been admitted; (

c) whether a party started separate actions for claims that should have been filed in one action or whether a party unnecessarily separated that party’s defence from that of another party; (

d) whether any application, proceeding or step in an action was unnecessary, improper or a mistake; (

e) an irregularity in a commencement document, pleading, affidavit, notice, prescribed form or document; (

f) a contravention of or non-compliance with these rules or an order; (

g) whether a party has engaged in misconduct; (

h) any offer of settlement made, regardless of whether or not the offer of settlement complies with

Part 4, Division 5. [ 9 ] Where the subject application was an application for formal proof of a will, as was the case here, there is further guidance provided in the Surrogate Rules made under the Judicature Act , Alta. Reg. 130/95 [as amended]. Specifically, Rule 90(

h) of the Surrogate Rules provides that in the context of an application for formal proof of a will, the Court may: (

h) direct the payment of costs, including penalizing any person who required formal proof of the will if it became clear during the proceedings that

(

i) the application was frivolous or vexatious; (ii) the person caused undue delay; or (iii) the person had no substantial basis for requiring the scrutiny of the court. [ 10 ] The Rules include a

Schedule “C”, which is a tariff of suggested fee amounts for various steps taken in typical litigation. While I am not allowed to simply default to that Schedule; McAllister v Calgary (City) , 2021 ABCA 25 at para.27, it remains a tool for assessing reasonable costs, albeit it an out-of-date tool. It is now suggested that a costs award should, prima facie , aim to indemnify the successful party for approximately 40-50% of its actual costs paid; McAllister at para.41. [ 11 ] In this case, Timothy is asking for solicitor-client costs, not party-party costs on

Schedule “C” or anything akin thereto. Solicitor-Client Costs [ 12 ] Notwithstanding the presumption of something below full indemnity costs should be awarded to the successful party, Timothy argues that this is an appropriate case for solicitor-client costs, in other words, an award roughly equal to what he was obligated to pay for legal fees and disbursements. The material before me establishes there were four invoices rendered between March 12, 2020 and March 31, 2023 which total $20,041.39 (this excludes the $8,127.94 I previously ordered).

This amount includes the work done by Timothy’s counsel on this costs brief. [ 13 ] In the absence of a contractual right to recover solicitor-client costs, a party seeking solicitor-client costs must be able to establish one or more extraordinary circumstances entitling them to an enhanced award. In this case, Timothy argues that such circumstances include the unproven allegations of undue influence, as well as Daniel’s undue delay and lack of basis for bringing the 2020 Application.

Allegations of Undue Influence [ 14 ] There is a plethora of case law holding that allegations of undue influence made in estate matters are akin to allegations of fraud. They carry with them the potential of reputational harm, financial loss and stress to relationships.

I agree with all my judicial predecessors who have seen fit to sanction this kind of baseless allegation made in litigation that is already often fraught with negative emotion and damaged relationships. [ 15 ] The fact that the distribution of assets would have been exactly the same with or without proof of the will tells me that the 2020 Application was driven, largely if not entirely, by sibling distrust.

Unfortunately, this is not uncommon where one sibling is physically closer to and caring for an ailing parent prior to their death. [ 16 ] Daniel argues that a lack of merit i.e. the fact that one party loses or capitulates, does not, by itself, entitle the other party to enhanced costs; Ho v Lau , 2023 ABKB 15 at para.7. I agree.

However, the Ho case was not a challenge to a will but rather a corporate shareholder dispute to which the Surrogate Rules did not apply. [ 17 ] I will say that, where a matter is resolved by consent, unproven allegations of fraud or undue influence should not carry as much weight as if the matter had been decided on the merits. However, a consent to dismissal on the day before the hearing should not shield the consenting party from costs consequences.

The objective is to avoid costs – incurring them or paying them to someone else – by examining resolution early in the process, not on the eve of the application. [ 18 ] Further, while it is not desirable to examine the merits of a consent order in detail, lest we discourage mutual resolution, the 2020 Application does not appear to be well founded. Daniel’s real complaint seems to have been the alleged inability to get the financial information he wanted from Timothy. As mentioned, the estate was modest and this level of suspicion on Daniel’s part was disproportionate, even if genuine.

Furthermore, none of the mechanisms available to Daniel under the legislation and the Rules were employed to force disclosure, if indeed that had been the reason for the 2020 Application. [ 19 ] Lastly, in terms of merit of the 2020 Application, Daniel’s challenges to Harold’s will triggered a long legal process from which nothing could have come, even if Daniel had been successful. Harold’s will divided everything equally between his sons, just as would have been the case had the will been declared invalid and the estate distributed as an intestacy.

Undue Delay [ 20 ] Undue delay, or actions which unnecessarily prolonged the litigation, are factors duplicated in both the rules for surrogate practice and civil litigation practice. [ 21 ] On the material before me, it certainly appears that Daniel did not prosecute his challenge to Harold’s will in a timely manner. Once the 2020 Application was filed and a CLP put on title to the house Timothy owned with his wife, Daniel did little to nothing to advance his claims. [ 22 ] For example, Daniel claimed that the estate had an interest in Timothy’s house because Harold helped with improvements to the property.

Even if that were true, Harold’s estate did not acquire a beneficial interest thereby. That claim was without merit and yet, Daniel’s CLP stayed on Timothy’s title for years. When Timothy and his spouse sold their house and needed it removed, Daniel’s lawyer simply did not respond, necessitating the March 7, 2022 court appearance. [ 23 ] While I acknowledge that the costs of that appearance have already been dealt with, it is an example of the pattern on this file

of Daniel failing to respond and failing to take steps to conclude his claims against Timothy. Timothy deposes that he was cross- examined in January, 2021 after which nothing was done until Daniel’s lawyer consented to the

summary dismissal of the 2020 Application on the day before our appearance. [ 24 ] This is a waste of judicial resources, not to mention unnecessarily driving up the costs of both parties. [ 25 ] On that note, the Surrogate Rules also allow me to sanction parties whose proceedings have no “substantial basis for requiring the scrutiny of the court”. I find this to be descriptive of this case. We should discourage baseless litigation.

Even if the 2020 Application was filed without basis in the heat of some family dispute or elevated emotional circumstances, it never gained any traction and ought to have been discontinued much earlier. [ 26 ] Which, in turn, brings me to Timothy’s offer of settlement made February 26, 2020. That was an offer to Daniel to discontinue without costs.

Such an offer can still be a “genuine” offer but that will typically depend on whether extended at a time when the receiving party has sufficient information to assess his risk in rejecting the offer; Union Square Apartments Ltd v Academy Contractors Inc , 2017 ABQB 151 at para.19. [ 27 ] In this case, while the February 26, 2020 offer seems reasonable in retrospect, I cannot infer that Daniel was in a position to accurately assess his risk only weeks after filing his application.

Even though it was his responsibility to pursue financial disclosure through permitted means, and he did not, in my view it would not be fair to penalize him for not having accepted that early offer of a discontinuance without costs. Conclusion [ 28 ] An award of solicitor-client costs is not typical. Generally, a successful party is entitled to his costs at a level designed to allow recovery of some portion of the total costs actually expended but not all. However, in this case, there are multiple reasons why an award of solicitor client costs is justified.

With reference to the applicable rules, Timothy was wholly successful ( Rule 10.33(1)(a)), the amount at issue was minimal and disproportionate to the years of litigation that followed ( Rule 10.33(1)(b), Daniel was responsible for the delay in getting the matter resolved, notwithstanding his eventual consent to dismissal ( Rule 10.33(2)(

a) and Surrogate Rule 90(h). [ 29 ] Timothy will have his costs of $20,041.91, inclusive of this application regarding costs. Heard on the 14 th day of April, 2023. Dated at the City of Calgary, Alberta this 10 th day of November, 2023. M.H. Hollins J.C.K.B.A. Appearances: Predrag Tomic for the Applicant Peter Crisfield for the Respondent