MD Private Trust Company, Executor of the Last Will v. Testament of John Maxwell Edgecombe, 2018 NLSC 244

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Nicholas v. Edgecombe Estate , 2018 NLSC 244 Date : November 30, 2018 Docket : 201801G1175 Between: MD Private Trust Company, Executor of the Last Will and Testament of John Maxwell Edgecombe PLAINTIFF And: Elizabeth Louise Nicholas First DEFENDANT And: Wendy Jane Edgecombe Second DEFENDANT And: Daria Ann Edgecombe Third DEFENDANT And: Scott William Edgecombe Fourth DEFENDANT And: Colin Christopher Edgecombe Fifth DEFENDANT And: John Maxwell Edgecombe Sixth DEFENDANT

Before: Justice Gillian D. Butler Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: November 2, 2018

Summary: Three Applications for costs associated with a Judgment which determined that disputed Accounts did not constitute part of the Estate ofthe late John Maxwell Edgecombe. Held: There was no reason to deprive the Executor of its costs payable from the Estate on a full indemnity basis. The First Defendantwas entitled to party and party costs from the Estate to and including February 22, 2018 and thereafter from the Second through SixthDefendants.

The Second through Sixth Defendants were also entitled to their party and party costs from the Estate to and includingFebruary 22, 2018 but thereafter should bear their own costs. Appearances: Paul M. McDonald Appearing on behalf of the Plaintiff Randell L. Wellon Appearing on behalf of the First Defendant Ashley R. Parsons Appearing on behalf of the Second, Third Fourth, Fifth and Sixth Defendants Authorities Cited: CASES CONSIDERED: Nicholas v. Edgecombe Estate, 2018 NLSC 176; Mega Roofing and Waterproofing Ltd. v. N.D. Dobbin Ltd.(1996), (NL SC), 143 Nfld. & P.E.I.R. 14, 448 A.P.R. 14 (Nfld.

S.C. (T.D.)); Finn v. St. John’s (City), 2007 NLCA46; Burton v. Global Benefit Plan Consultants Inc. (1999), (NL SC), 183 Nfld. & P.E.I.R. 86, 556 A.P.R. 86 (Nfld.S.C. (T.D.)); Hobbs v. Hobbs, 2013 NLTD(G) 130; Comeau v. Gregoire, 2005 NSCA 135; Wittenberg v. Wittenberg Estate, 2015 NSCA79; Mitchell v. Gard (1863), 3 Sw & Tr 275, 164 E.R. 1280 STATUTES CONSIDERED: Trustee Act, R.S.N.L. 1990, c. T-10; Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D;Family Law Act, R.S.N.L. 1990, c. F-2 TEXTS CONSIDERED: Albert H.

Oosterhoff et al., Oosterhoff on Wills, 8th ed. (Toronto: Thomson Reuters Canada Limited, 2016) REASONS FOR JUDGMENT

Butler, J. : INTRODUCTION [ 1 ] Dr.

Maxwell Edgecombe (the “Testator“) died on January 30, 2014 having left a comprehensive Will dated November 2012 in which he named MD Management Trust Company as Executor (the “Executor”). [ 2 ] The Executor probated the Estate in November 2014; the related Inventory valued the Estate property at $4.4 million which did not include four accounts (the “Accounts”) that the Executor believed were subject to a right of survivorship to the First Defendant, the Testator’s common-law partner. [ 3 ] The Executor’s position in this regard was confirmed in a Judgment released earlier this year (see; Nicholas v.

Edgecombe Estate , 2018 NLSC 176 ). [ 4 ] There was included within the $4.4 million, several parcels of real estate and miscellaneous household assets and boats, motors and trailers which were the subject of specific bequests to third parties. For practical purposes, I estimate the residue of Dr. Edgecombe’s Estate (to be distributed to the residuary beneficiaries) at $4 million dollars before Estate taxes and Executor’s fees. [ 5 ] Under the terms of Dr.

Edgecombe’s Last Will and Testament, the residue was to be distributed equally between the Defendants (his common-law partner, and his five children, (“the Children”)). [ 6 ] Dr. Edgecombe’s Will did not reference the Accounts.

Consistent with the conclusions which I made from the evidence presented at the trial, this omission reflects the Testator’s understanding and wish that the funds would be inherited by the survivor of the common-law partners. [ 7 ] In Nicholas I directed that, as to costs, either party may apply. the Applications General [ 8 ] Three Applications for costs were presented: the first was filed by counsel for the First Defendant seeking party and party costs to the date of an Offer to Settle and thereafter solicitor-client costs, to be taxed in both cases against the Second through Sixth Defendants, characterized by the First Defendant as the unsuccessful parties. [ 9 ] The Executor also filed an Application seeking solicitor-client costs against the Second through Sixth Defendants on the basis that while a trustee is entitled to full indemnity (usually from an estate) the trial had been unnecessary. [ 10 ] Counsel for the Second through Sixth Defendants also sought to have their costs on a solicitor-client basis but taxed against and paid by the Executor.

Counsel also suggested that the First Defendant should have her solicitor-client costs paid by the Executor but that the Executor should bear its own costs. The basis for the Second through Sixth Defendants’ respective positions is the assertion that the Executor failed in its duty to the beneficiaries. Counsel for the Second through Sixth Defendants also presented two alternatives for a fair and just cost award which are discussed later herein. [ 11 ] In the discussion that follows I shall address the circumstances relevant to each of the parties’ respective Applications and the Rule that should apply to each.

The Executor [ 12 ] I have already addressed the Executor’s actions in the administration of Dr. Edgecombe’s Estate up to November 2014. [ 13 ] In August 2015 the Executor, through its solicitor, advised all counsel and Mr.

John Edgecombe (who was at that time unrepresented) that there were several accounts passing outside the Testator’s Estate. [ 14 ] In August 2016 the Executor’s solicitor confirmed for all parties that there were four jointly held accounts which would pass outside the Estate because “in the case of assets held jointly with a spouse (common-law or otherwise) the presumption of advancement applies”. [ 15 ] This letter suggested that the Executor would be distributing the Estate on this basis unless a claim was made against the Estate within 45 days. [ 16 ] Two Applications were subsequently filed by the Executor in the Probate file (201401E13429).

The first was in April 2017 and was taken pursuant to

section 25 of the Trustee Act , R.S.N.L. 1990, c. T-10 seeking directions respecting various matters. The second was filed in October 2017 and sought a preservation Order for the Accounts under Rule 22.02 of the Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sch. D. This Application referenced two disputes that had arisen amongst the beneficiaries.

The first was in relation to ownership of the Accounts and the second was in relation to a claim made by the Fourth Defendant related to a September 17, 2008 agreement he had with the Testator. [ 17 ] The first of these Applications led to a Case Management Order in July 2017. [ 18 ] Case Management Meetings in 201401E13429 were held on December 6, 2017, January 31, 2018, February 21, 2018 and March 9, 2018. In the course of this process it became immediately clear that a trial was necessary and I directed that the Executor commence this action.

The Statement of Claim was issued on February 16, 2018. [ 19 ] In March 2017 the First Defendant had commenced an action against the Executor seeking a declaration of ownership on the

basis of unjust enrichment (201701G2125). In December 2017 the Fourth Defendant also initiated an action against the Executor relative to the September 17, 2008 agreement he had with the Testator; he claimed to be entitled to 1/6th of the entire estate and not just the residue (201701G8451). [ 20 ] The First Defendant’s action (201701G2125) was discontinued in February 2018. There has been no activity in 201701G8451 since March 2018. [ 21 ] As Nicholas confirms at paragraph 18 , legal ownership and beneficial ownership of an account are different legal concepts.

Notwithstanding the manner in which the Accounts were held, the Executor therefore had a duty to take steps to determine the depositor’s intention on the Accounts, based on all the circumstances. [ 22 ] In this case, the Executor conducted an extensive search and produced all relevant documents for the Defendants. Discoveries were held. Comprehensive Affidavits were filed by the Defendants in 201401E3429. Once the Executor commenced this action, I directed that the Affidavits would be considered at the trial and most of the affiants were cross-examined.

The Executor took no position at the trial but maintained a watching brief through its solicitor. [ 23 ] The Executor’s August 2016 position on the applicable presumption was found by me to be incorrect; however, its position on how the Estate was comprised (and that the Accounts passed outside the Estate to Ms.

Nicholas) was held to be correct because I concluded from the evidence as a whole that the Testator’s intention was one of survivorship and this rebutted the presumption of resulting trust. [ 24 ] In these circumstances, the applicable Rule for consideration of the Executor’s Application for costs is Rule 55.02 which states: 55.02.

(1) Notwithstanding the provisions of rules 55.02 to 55.14, the costs of any party, the amount thereof, the party by whom, or the fund or Estate or portion of an Estate out of which they are to be paid, are in the discretion of the Court, and the Court may (

a) award a gross sum in lieu of, or a sum in addition to any taxed costs; (

b) allow a percentage of the taxed costs or allow taxed costs from or up to a specific stage of a proceeding; or (

c) direct whether or not any costs are to be set off.

(2) The Court in exercising its discretion as to costs may take into account (

a) any payment into Court and the amount of the payment; or (

b) any Offer of contribution as is mentioned in rule 12.11 which is brought to its attention in pursuant to a reserved right to do so.

(3) The Court may deal with costs at any stage of a proceeding. Ms. Nicholas [ 25 ] Ms. Nicholas has maintained from the outset that the Accounts devolved to her as the survivor of the two parties named on the Accounts. [ 26 ] Like the Executor, Ms. Nicholas’ counsel argued that the applicable presumption was one of advancement. While I held this position to be incorrect, Ms. Nicholas was nevertheless successful overall for the reasons stated in paragraph 22 herein. [ 27 ] Following documentary disclosure and oral discoveries, on February 22, 2018, Ms. Nicholas made an Offer to Settle to the Children.

It proposed that they would each receive $5,000 for a total of $25,000 from the Accounts which she believed she would inherit and which were valued at approximately $1.4 million. The Offer was not accepted and each of the Children received less than $5,000 dollars as a result of my Judgment. [ 28 ] On these facts, I must first ask which Rule applies to Ms. Nicholas’ Application for costs. Is it Rule 55.02 or Rule 20A? [ 29 ] Rule 20A.08 states: 20A.08.

(1) Unless ordered otherwise, when (

a) an Offer to Settle was made by a plaintiff (

i) at least 7 days before commencement of the trial or hearing of the proceeding, and

(ii) was not revoked or accepted prior to commencement of the trial or hearing, and (

b) where that plaintiff obtains a Judgment as favourable or more favourable than the terms of the Offer to Settle, that plaintiff shall be entitled to party and party costs plus taxed disbursements to the date of service of the Offer to Settle and thereafter to double party and party costs plus taxed disbursements.

(2) Unless ordered otherwise, when (

a) an Offer to Settle was made by a defendant (

i) at least 7 days before the commencement of the trial or hearing of the proceeding, and (ii) was not revoked or accepted prior to commencement of the trial or hearing, and (

b) where the plaintiff obtains a Judgment no more favourable than the terms of the Offer to Settle, the plaintiff shall be entitled to party and party costs plus taxed disbursements to the date of service of the Offer to Settle, and the defendant shall be entitled to party and party costs plus taxed disbursements from the date of service of the Offer to Settle.

(2.1) Unless ordered otherwise, when (

a) an Offer to Settle was made by a defendant (

i) at least 7 days before the commencement of the trial or hearing of the proceeding, and (ii) was not revoked or accepted prior to commencement of the trial or hearing, and (

b) where the plaintiffs claim is dismissed, the defendant shall be entitled to party and party costs plus taxed disbursements to the date of service of the Offer to Settle and thereafter to double party and party costs plus taxed disbursements.

(2.2) If a plaintiff or defendant is awarded costs after Judgment under a column of the Scale of Costs pursuant to rule 55.04, the judge shall not change the column if it is later determined that paragraphs (1), (2) or (2.1) apply.

(3) If after a trial or hearing

(

a) an Offer to Settle had been made and not revoked or accepted prior to commencement of the trial or hearing; and (

b) an application for a determination as to costs based on the application of Rule 20A is made by a party within 15 daysfollowing the filing or delivery of the decision or order the decision of a judge with respect to costs shall be suspended pendingdetermination of the application in clause (b).

(4) A determination as to costs resulting from an application pursuant to paragraph (3) shall, to the extent determined by the judge,replace and be deemed to have replaced a determination made by the judge as to costs in the original decision or order.

(5) In place of an application pursuant to paragraph (3), the parties may Settle the issue of costs on a basis different from thatstipulated in the original decision or order by filing, within 15 days following the filing or delivery of the decision or order, a consent inwriting as to the manner of disposition of costs. (6) [Rep. by 26/15 s1] [30] Although Ms. Nicholas was the First Defendant in an action which I directed the Executor to commence as Plaintiff, she waseffectively acting as a Plaintiff and it was her case to settle. Her Offer was directed to the other Defendants and Ms.

Nicholas was,overall, the successful party. The closest provision to such a fact situation is Rule 20A.08(2.1) but this applies when a defendant makesan Offer to a plaintiff and the plaintiff’s claim is dismissed. [31] The policy behind our original Rule 20A was discussed in Mega Roofing and Waterproofing Ltd. v. N.D. Dobbin Ltd. (1996), (NL SC), 143 Nfld. & P.E.I.R. 14, 448 A.P.R. 14 (Nfld. S.C. (T.D.)) and Finn v. St. John’s (City), 2007 NLCA 46 atparagraph 27. [32] I accept that the Rule was intended to:

a) focus the parties’ attention on the primary issues in dispute;

b) encourage and facilitate pre-trial settlement;

c) send to full trial only those issues that properly require further adjudication; and

d) encourage settlements by adverse cost consequences on failure to accept an Offer which is more favorable than the result attrial. [33] Rule 20A was amended after the 2007 Court of Appeal decision in Finn.

The amendment eliminated the general discretion onthe level of cost awards after Offers to Settle and replaced it with a presumptive cost consequence of “double party and party costs plustaxed disbursements”. [34] However, pursuant to Rule 20A.10, “notwithstanding the provisions of this rule, the Court in exercising its discretion as tocosts may take into account any Offer to Settle made in writing, the date the Offer to Settle was served, the terms thereof and any otherrelevant matters”. [35] Relevant to “terms”, counsel for the Second through Sixth Defendants characterizes Ms.

Nicholas’ Offer as “nominal” in thesense that $25,000 of $1.4 million represents less than 2% of the value of the Accounts. [36] Offers without an element of compromise were discussed by this Court in Burton v. Global Benefit Plan Consultants Inc.(1999), (NL SC), 183 Nfld. & P.E.I.R. 86, 556 A.P.R. 86 (Nfld. S.C. (T.D.)). Therein, Orsborn, J concluded atparagraphs 54 and 55: 54.

The determination of the scale of post-Offer costs, in the context of an Offer without an element of compromise will, as I havealready noted, require an examination of all the circumstances, including the nature of the claim, whether liquidated or unliquidated,what the Offer provided to the recipient, if anything, in the way of opportunities for resolution not present before service of the Offer,and an assessment of the merits of the substantive claims or positions of the parties.

Where a claim or a defence clearly lacks merit or isfrivolous, the decisions in Ontario indicate that a non-compromise Offer may still attract costs on a greater basis than party and party. 55. To summarize:

1. An Offer to Settle need not contain an element of compromise in order to be considered an Offer to Settle for the purposes of Rule 20A. 2. For the purpose of rule 20A.08, an Offer to Settle which does not contain an element of compromise, is nominal or which otherwise requires capitulation, should not benefit from any presumptive rule of entitlement to post-Offer costs on "some other greater basis" than party and party costs. 3.

For the purpose of rule 20A.08, in the context of an Offer to Settle which does not contain an element of compromise, is nominal or which otherwise requires capitulation, the basis of post-Offer costs entitlement of the party in question (unless ordered otherwise) should be determined on the basis of the interests of justice and fairness after consideration of all of the relevant circumstances.

These circumstances will include at least the nature of the claim, the merits of the claim and any defence, and any opportunity for resolution which can be attributed solely to the Offer. [ 37 ] As earlier addressed however, Rule 20A.08 was amended after Burton was decided and thus the conclusion that a nominal offer “should not benefit from any presumptive rule of entitlement” would have to be reconsidered in light of the current provision which entitles the successful party to double party and party costs after the date of service of the Offer in such circumstances. [ 38 ] Hobbs v.

Hobbs , 2013 NLTD(G) 130 was decided after the 2013 amendments to Rule 20A but it nevertheless relied upon the principles cited in Burton for the factors to be considered on the scale of costs to be applied in such an instance. [ 39 ] I would not characterize the Second through Sixth Defendants’ claims as frivolous, nor would I characterize the First Defendant’s Offer as totally without compromise, but I agree that it was nominal.

In such circumstances Rule 20A.10 would give the Court discretion and entitle it to override the presumptive rule in Rule 20A.08. [ 40 ] In light of these authorities and my characterization of Ms. Nicholas’ Offer, I therefore conclude that even if Rule 20A applied, the Court has discretion to make a fair and just costs award. As is apparent, this is the same test as I have earlier concluded is applicable under Rule 55. [ 41 ] I conclude therefore that whether Rule 20A or Rule 55.02 applies to the assessment of Ms.

Nicholas’ request for costs, the exercise of my discretion must result in a determination that is fair and just in all the circumstances. The Children [ 42 ] I turn lastly to the position of the Children. The Second through Sixth Defendants advised the Executor in 2015 and also in 2016 that they did not accept the Executor’s position on the presumption applicable to the Accounts.

They have always maintained that it was one of resulting trust and I found them to be correct on that point of law. [ 43 ] However, in Nicholas , I found the presumption rebutted by the evidence as a whole and held that the Second through Sixth Defendants’ position on ownership of the Accounts was not supported by the evidence. [ 44 ] The Second through Sixth Defendants made no Offer to Settle nor made any reply to Ms.

Nicholas’ Offer to Settle. [ 45 ] In such circumstances, Rule 55.02 applies to the Second through Sixth Defendants’ request for costs and the test is as stated above. [ 46 ] The Children collectively suggest that the Executor failed in its duty and that their costs should be taxed on a solicitor-client basis and paid by the Executor directly. They suggest that the First Defendant’s costs should be paid by the Executor or that the First Defendant bear her own costs.

In either event they assert that the Executor should bear its own costs. [ 47 ] Alternatively, counsel for the Second through Sixth Defendants asserts that the Children’s taxed solicitor-client costs should come from the Estate but that the Executor and the First Defendant should each bear their own costs. [ 48 ] In the final alternative, the Children suggest that all six Defendants should have their costs from the Estate but that the Executor should bear its own costs.

Summary [ 49 ] To summarize, in the circumstances of this case, the exercise of my discretion on costs requires consideration of the following factors in the achievement of a fair and just award for all parties.

a) While Ms. Nicholas was not the Plaintiff, she was effectively acting in that role and she was the successful party overall. While she was mistaken on the legal presumption applicable, she was correct in the result.

b) The Children were, overall, unsuccessful although they were correct on the presumption of law to be applied.

c) The Executor was Plaintiff at the direction of the Court, took no position at trial but during the pre-trial process maintained that the Accounts passed outside of the Estate. This was the result of my Judgment in Nicholas .

d) The only Offer to Settle was made by the First Defendant to the Second through Sixth Defendants on February 22, 2018 and was nominal. It was neither accepted nor withdrawn.

analysis Estate Litigation [ 50 ] In Oosterhoff on Wills , 8th ed. (Toronto: Thomson Reuters Canada Limited, 2016) at pages 48 to 51, the authors explain the policy behind the traditional rule in estate litigation that costs of all parties be paid from the estate. In essence, such a practice would be fair if:

a) the dispute arose because problems giving rise to the litigation were created by the Testator and;

b) the parties contesting the issue lacked knowledge of the circumstances that came out at trial [ 51 ] The traditional practice on costs in estate litigation has been modified because we have Rule 55; however, as I have already stated, this Rule requires the exercise of discretion and the factors that lay behind the traditional rule in estate litigation may have bearing in this exercise. [ 52 ] In this particular case, the Children say the Will was unclear; in reality, as previously expressed, the Testator made no mention of the Accounts because (as I concluded in my Judgment) he had never discussed with either of his Children the financial arrangements he had made for or with Ms.

Nicholas. The Testator considered these to be none of their business and he believed that a right of survivorship would apply to the Accounts. [ 53 ] Nevertheless, Dr. Edgecombe could have made reference to the Accounts in his Will. He could have confirmed that they existed, how they were held and his intention/belief that a right of survivorship applied to them. Had he done so, a trial would likely have been avoided. However he was not required to do so. [ 54 ] Can it be said in these circumstances that “the problems giving rise to the litigation were created by the Testator”? Does Dr.

Edgecombe’s omission to reference the Accounts create reasonable grounds upon which to question the issue of survivorship? [ 55 ] While the dispute does not technically arise from an “interpretation of the Will”, I nevertheless conclude that the omission is relevant. I accept that the existence of the Accounts came as a surprise to the Children and led them to question whether the Accounts fell within the Estate. Conduct [ 56 ] Oosterhoff also explains that persons who oppose an

interpretation of a Will (or in this case, take a position on the assets that comprise the Estate) can be denied costs if they acted unreasonably, out of animosity, or by claiming suspicious circumstances and/or claiming undue influence without basis. [ 57 ] I found no actions of Ms. Nicholas or the Executor to fall in this category. [ 58 ] The Children rightfully questioned the Executor’s position on the presumption. However, as my Judgment made clear, I found several of the Children’s positions to be unfounded. On the whole, the Children asserted that Ms.

Nicholas and several of her witnesses lacked credibility and that the 39-year relationship between Dr. Edgecombe and Ms. Nicholas was not based on mutual love and affection. These positions resulted in lengthy cross-examinations and argument and ultimately I concluded were not supported by the evidence. [ 59 ] As my Judgment in Nicholas reflects, the Children’s positions required me to conduct a comprehensive credibility assessment.

The conclusions that I drew in this portion of my Judgment are relevant to the consideration of conduct of the Second through Sixth Defendants and also fall within “other relevant circumstances” as contemplated by Rule 55.02. [ 60 ] The Affidavits that had been filed by the Children in advance of the trial contained harsh and unnecessary comments directed towards Ms. Nicholas. Some of the Children characterized her as an embarrassment. I found evidence of intransigence, speculation and profound hostility which I accepted was based on a deep-rooted resentment for Ms.

Nicholas related to the separation of their parents when the Children were between the ages of 15 months and 13 years of age. In reaching a fair and just costs award (and relying again on Oosterhoff ), I would characterize these actions as both unreasonable and taken out of animosity. In addition, they served to unnecessarily prolong the proceeding. Mixed Success [ 61 ] The Children’s counsel suggest that they had mixed success. Counsel for the Executor and counsel for Ms.

Nicholas assert however that notwithstanding that the Children were correct on the presumption to be applied at law, given the documentary disclosure, discovery procedures, and the witnesses that were otherwise available to the Second through Sixth Defendants in advance of the trial, it should have been obvious that the Second through Sixth Defendants could not succeed in their position that the Accounts would fall within the Estate of Dr. Edgecombe.

In other words, the suggestion is that the Children should have known, or assessed as likely, that the evidence would support rebuttal of the presumption of resulting trust and that the Accounts belonged to Ms. Nicholas. [ 62 ] In response to this, counsel for the Children asserts that it was not obvious through pre-trial procedures that the First Defendant would be successful at trial and that Ms. Nicholas’ pre-trial evidence on the Accounts was confusing and inconsistent. I addressed this assertion in the credibility assessment portion of my Judgment in Nicholas at paragraphs 58 to 62 .

I found that (despite the differences between answers given to questions on discovery and in her Affidavits), Ms. Nicholas was a reliable witness who had consistently maintained that the Testator intended her to be well provided for after his death and had ensured that the Accounts were not only joint but also institutionally recorded to have a right of survivorship.

[ 63 ] On this factor, I favour the positions of counsel for the Executor and Ms. Nicholas. As my Judgment confirms, the Children had no direct evidence to give on their father’s intention respecting the Accounts. The pre-trial discovery process provided a means for them to assess the evidence that Ms. Nicholas intended to present as a whole. Their broad characterization of Ms. Nicholas’ pre-trial evidence as inconsistent or confusing and therefore insufficient to rebut the presumption was not reasonable.

Factors Specific to Trustees [ 64 ] As to the general rule for Executor’s costs, Oosterhoff confirms that Executors are typically entitled to full indemnification for all reasonably incurred costs because to do otherwise would dissuade persons from acting as Trustees. [ 65 ] The Children however rely on the Executor’s position on the presumption of advancement, a suggested lack of impartiality, neglect in failure to advise Dr.

Edgecombe on the terms of his Will and deficient investigation following his death as support for the deprivation of the Executor’s costs. [ 66 ] The test to be applied on the deprivation of costs in such an instance is whether the Executor’s standard of care and diligence fell below that required by a “man of ordinary prudence in managing his own affairs” ( Comeau v. Gregoire , 2005 NSCA 135 ). [ 67 ] Further, Rule 55.11 states: 55.11.

(1) Where a person is a party in the capacity of trustee, personal representative or mortgagee, that person shall, unless the Court otherwise orders, be entitled to costs, in so far as they are not recovered from or paid by any other person, out of the fund held by the trustee or personal representative, or out of the mortgaged property.

(2) Where a trustee, executor, administrator or mortgagee (

a) has acted unreasonably; (

b) has acted for his, her or its own benefit rather than in his, her or its representative capacity; or (

c) has participated in a proceeding unnecessarily because his, her or its interest is small, remote or sufficiently protected by any other interested party, the Court may order the costs under rule 55.11(1) not to be paid out of the fund or mortgaged property. [ 68 ] Firstly, there was no evidence that the Executor played any role in the drafting of the Testator’s Will.

Secondly, I am not satisfied that by suggesting that a presumption of advancement applied, the Executor showed a lack of impartiality. [ 69 ] As to investigations after his death and once the dispute on the Accounts was raised, the Executor had an obligation to make inquiries, report further to the beneficiaries and determine if disagreement remained. [ 70 ] I am satisfied that this is what the Executor did. The Executor’s solicitor wrote to the parties in 2015, made additional inquiries, wrote again in 2016 and there being no agreement, made Application for Directions in 201401E13429.

In the course of that Application, the Executor produced substantial documentary disclosure, and attended discoveries. It participated in the comprehensive Case Management process and ultimately responded to my Direction to file a Statement of Claim. It had reached a conclusion on the ownership of the Accounts but remained impartial at trial. The Executor had no obligation to be right. [ 71 ] Each of these actions was appropriate.

Although the Executor’s position on the presumption was incorrect, even if it had been correct, a trial was inevitable because the Children would not accept that the evidence would rebut a presumption of resulting trust. It cannot be said that the trial resulted from failure or neglect of the Executor. [ 72 ] Finally I received no evidence that the Executor had acted to its own benefit rather than in its representative capacity. To the contrary, if the $1.4 million in the Accounts had formed part of the Estate, the Executor stood to receive a larger Executor’s fee on the probate of the Will.

Conclusion [ 73 ] In light of these considerations, what would be a fair and just result for the litigation as a whole and for each of the participants? [ 74 ] On Ms. Nicholas’ costs, considering that she acted as the effective Plaintiff, Rule 55.03 provides that unless the Court orders otherwise, the costs of the proceeding should follow the cause. [ 75 ] The more troubling question is whether Ms. Nicholas’ entitlement to costs should be taxed against the Second through Sixth Defendants or paid from the Estate? In this respect, Wittenberg v.

Wittenberg Estate , 2015 NSCA 79 , contains a useful review of the principles. Citing Mitchell v. Gard (1863), 3 Sw & Tr 275, 164 E.R. 1280 at 1281 the following rules were stated for guidance. From these considerations, the Court deduces the following rules for its future guidance: first, if the cause of litigation takes its original in the fault of the testator or those interested in the residue, the costs may properly be paid out of the Estate, secondly, if there be sufficient and reasonable ground, looking to the knowledge and means of knowledge of the opposing party, to question

either the execution of the will or the capacity of the testator, or to put forward a charge of undue influence or fraud, the losing party may properly be relieved from the costs of his successful opponent. [Emphasis added] [ 76 ] I accept however (as did the Nova Scotia Court of Appeal in Wittenberg ) that the “knowledge and means of the opposing party” has been enhanced since 1863. Litigants now have pre-trial disclosure of documents and witnesses and the element of surprise is severely curtailed if not eliminated.

There is more opportunity to assess the likely outcome of litigation and less reason to incur the costs of a trial which are substantial. In light of these developments, a rule that saves an unsuccessful party from a costs award, runs contrary to general access to justice principles. [ 77 ] I have already determined that the Children’s decision to question the Executor’s determination on the Accounts was not frivolous but that several positions they maintained prior to the trial were unreasonable.

At what point can it be said that the Second through Sixth Defendants had the knowledge and means to reassess their case and realize that it was likely that the evidence as a whole could rebut the presumption that they believe applied? I conclude that it is fair to accept the date of Ms. Nicholas’ Offer to Settle (February 22, 2018) as the operative date because by this time, all documentary production and oral discoveries were complete. The trial followed on March 14, 16 and June 5-6, 2018. [ 78 ] In these somewhat unusual circumstances, I order that Ms.

Nicholas have her taxed costs to and including February 22, 2018 paid from the Estate and her taxed costs after February 22, 2018 paid by the Second through Sixth Defendants jointly and severally. [ 79 ] The First Defendant’s costs should be taxed on a party and party basis in both instances.

It has not been established that grounds exist for a higher scale particularly in light of the nominal Offer to Settle. [ 80 ] As to the Executor’s taxed costs, I have already concluded that there was no evidence that the Executor acted for its own benefit rather than in its representative capacity or that it participated in a proceeding unnecessarily. [ 81 ] I conclude therefore that there is no reason to depart from the general principle that the Executor should be fully indemnified from the Estate. This would be the equivalent of solicitor-client costs.

As a result of the residue clause, one-sixth of these costs will effectively be borne by the First Defendant (notwithstanding her success) and five-sixths by the Second through Sixth Defendants who were unsuccessful.

I am satisfied however that this is fair given the positions taken by the respective parties on the presumptions and whether they could be rebutted. [ 82 ] As to the Second through Sixth Defendants, who are being relieved of what would otherwise be the requirement of making full indemnification to the Executor, (by my award that the Executor’s costs be paid from the Estate) and will only have taxed costs against them personally for the First Defendant after February 22, 2018, I conclude that a fair and just result is that the Second through Sixth Defendants also have their taxed costs on a party and party basis from the Estate to and including February 22, 2018 and thereafter, that they pay their own costs. [ 83 ] My primary consideration here is the unreasonableness of the position they maintained on ownership of the Accounts after they had the knowledge and means of assessing the strength of the case that Ms.

Nicholas would present. ( Wittenberg at paragraph 104 ). I do not accept that such an award will have a chilling effect for other litigants in current or contemplated Estate litigation. [ 84 ] With the exception of the Executor’s costs, all costs should be taxed on Column 3. [ 85 ] At the conclusion of the hearing on costs, I made several inquiries of counsel designed to avoid disagreement or confusion with respect to steps taken in the related litigation files that may attract costs. Counsel agree that:

a) there should be no costs taxed either in the litigation related to the Fourth Defendant’s action against the Executor (201701G8451) or Ms. Nicholas’ claim for a declaration based on unjust enrichment (201701G2125); and

b) all activity in 201401E13429 after June, 2015 is to be included on the bills of costs presented but taxed at the rate of 50% with the exception of Pauline Downer’s Discovery, which should be taxed at the rate of 66.6%; [ 86 ] I had also enquired if the taxations should be conducted by a taxing officer or by myself but on review of Rule 55, I conclude that they are best conducted by a taxing officer because appeals from taxation are to this Court. [ 87 ] The Executor may need further direction on the distribution of the Estate and if so that Application should be brought to my attention. _____________________________ Gillian D. Butler Justice