2011 NSSC 399, 2011 NSSC 399

COURT OF PROBATE FOR NOVA SCOTIA Citation: Van Kippersluis v Van Kippersluis Estate , 2011 NSSC 399 Date: 20111031 Docket: Probate: Ken No. 12441 Ken No 349015 Registry: Kentville Between: Martin Antonius Van Kippersluis Applicant v. Karena Van Kippersluis , in her capacity as personal representative of the Estate of Margaret Rose Van Kippersluis Respondent LIBRARY HEADING Judge: The Honourable Justice Gregory M. Warner Heard: By Written Submissions Final Written Submissions: October 13, 2011 Written Decision: October 31, 2011 Subject: Costs Decision – Estate Matter

Summary: The applicant, son of the testator, made an application for proof in solemn form. A Testator Family Maintenance Act (TFMA) application, filed at the same time, was deferred to a later date. The Estate provided extensive personal (diaries and phone records), medical (of both the testator and the testator’s now deceased husband) and legal (the lawyer’s notes and previous versions of Will) disclosure to the applicant before the hearing. The applicant declined an offer to interview or discover the lawyer who took the instructions and prepared the challenged will. The hearing was scheduled for four days.

An additional three days were added to the hearing. The application was dismissed. Much of the evidence related to the deferred TFMA application. Issue: Costs The applicant and Estate agree that the costs of the respondent Estate be taxed and paid out of the Estate on a solicitor and client basis. They do not agree on the applicant’s claim for costs against the Estate, or the respondent Estate’s claim for costs against the applicant.

Result: Although the initial reason for filing the proof in solemn form application may have been reasonable, based on the extensive disclosure provided by the Estate before the hearing and the offer to examine the lawyer (whose evidence on the first day of the trial was credible and virtually determinative of the issue), it was not reasonable for the applicant to proceed to a hearing, nor a hearing lengthened to seven days for evidence not relevant to the proof application. The applicant’s request for costs against the Estate was dismissed.

While the applicant’s conduct of the application was unreasonable, the Estate’s request for costs against the applicant was dismissed because (1) the applicant did not appear to have the means to pay; (2) the applicant’s personal legal costs will eat up the gift that the applicant will receive from the Estate and (3) it may be more appropriate to consider the Estate’s costs in defending this application as a factor in the TFMA application. THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET . COURT OF PROBATE FOR NOVA SCOTIA

Citation: Van Kippersluis v Van Kipperslui Estate , 2011 NSSC 399 Date: 20111031 Docket: Probate: Ken No. 12441 Ken No 349015 Registry: Kentville Between: Martin Antonius Van Kippersluis Applicant v. Karena Van Kippersluis , in her capacity as personal representative of the Estate of Margaret Rose Van Kippersluis Respondent Costs Decision Judge: The Honourable Justice Gregory M. Warner Heard: By Written Submissions Final Written Submissions: October 13, 2011 Written Decision: October 31, 2011 Counsel: Trinda L. Ernst QC and Ashley L. Thomas , counsel for the applicant Timothy C. Matthews QC and Tanya L.

Butler , counsel for Karen L Van Kippersluis, in her capacity as personal representative of the Estate of Margaret Rose Van Kippersluis Catherine Watson , watching brief, on behalf of the grandchildren By the Court :

The Issue [1] This is a costs decision respecting an unsuccessful application for proof in solemn form. The applicant and Estate agree thatthe legal costs of the respondent Estate be taxed and paid out of the Estate on a solicitor and client basis. They do not agree on theapplicant’s claim for costs against the Estate, or the respondent Estate’s claim for costs against the applicant. The Litigation [2] Margaret Rose Van Kippersluis died October 7, 2010, at the age of 64, having executed a Last Will and Testament datedAugust 24, 2010.

She was predeceased by her spouse Tony Van Kippersluis, then aged 62, on September 26, 2010. She was survivedby her son Martin, age 39, and daughter Karena, age 34. [3] Margaret Rose Van Kippersluis named her daughter Karena as her personal representative and provided for the transfer ofsome real property to Martin and Karena, payment of $90,000 to Martin, with the residue to be divided as follows: 60% to Karena and40% to the testator’s grandchildren (children of Martin and Karena).

In her 2009 Will, the testator left to each of Martin and Karena 30%of the residue. [4] In April 2010, Martin applied in Probate Court for Proof in Solemn Form of Margaret Van Kippersluis’ Last Will andTestament (called “Proof Application”), alleging that she lacked testamentary capacity, she did not know or appreciate the contents of herWill, and her Will was overborne by the undue influence of her late spouse Tony and by her daughter Karena. [5] At the same time, Martin applied in the Supreme Court of Nova Scotia for an Order that the testator’s Last Will did notadequately provide for him, contrary to the provisions of the Testator’s Family Maintenance Act (called“TFMA Application”). [6] At the hearing of the Motion for Directions on both applications, by telephone conference calls on May 18 and 20, 2011,counsel agreed to proceed with the Proof Application first and to defer setting down the hearing of the TFMA Application.

The ProofApplication was set for a four-day hearing commencing September 6, 2011. Procedural steps, including timelines and particulars fordisclosure, discoveries, expert reports, and pre-hearing briefs, were agreed upon. [7] The hearing commenced as agreed but consumed seven days, not four. The Court rendered an oral decision dismissing theapplication at the end of the hearing. The Submissions [8] The applicant submits that, per CPR 77, the Court has a general discretion to order costs that do justice between the parties. He lists seven options: i.

The applicant pay party-and-party or solicitor-and-client costs to the Estate. ii. The applicant pays his own costs. iii. The Estate pays the applicant’s party-and-party costs. iv. The Estate pays the applicant’s solicitor-and-client costs. v. Costs be calculated and awarded by Tariff A in the Costs and Fees Act per CPR 77.06. vi. An amount be added to or subtracted from the Tariff A calculation per CPR 77.07. vii. Lump sum costs are awarded per CPR 77.08. [9] The applicant submits that the principles for awarding costs in estate litigation differ from other litigation.

Counsel refersthe court to these decisions: i. Morash Estate v Morash [1997] N.S.J. No. 403 (NSCA),¶ 22 ii. Horne Estate, 2003 NSPB 1, ¶ 3 iii. Hand v Hand Estate, 2011 NSSC 53, ¶ 9 iv. Estate of Ruth Smith; Smith v Rostein, 2010 ONSC 4487, ¶¶ 8 -10; v. Davies v Collins, 2011 NSSC 227 vi. Fraser Estate, 2010 NSSC 36, ¶¶ 14, 17 - 18 vii. Ramsay v Ramsay Estate, 2004 NSSC 162, ¶¶ 7 viii. Winters Estate, (¶¶NSPC

ix. Harnum v Moser , 2007 NSSC 351 at para 25 x. Thorsen Estate v Thorsen , 2002 NSSC 97 at ¶¶ 15 - 16 . [ 10 ] My synopsis of the applicant’s submissions is:

a) The application was not frivolous as the circumstances surrounding the Will were suspicious.

b) Karena, the personal representative of the respondent, had a personal interest in the outcome and the opportunity to unduly influence the testator.

c) It was reasonable to question the influence exerted by the testator’s spouse, Tony, and Karena, on the testator for several reasons: i. The applicant’s attempted visits with the testator while she was staying with Karena between mid-July and the end of August were thwarted; ii. From hospital records, it appears that when the Will was executed, the testator was terminally ill, in pain and on morphine, and a “psych report” had been requisitioned; iii. The testator and her spouse had previously declared an intention to treat their children equally and had not indicated a change of intention; and iv. Any confusion about the testator’s true intent was the result of her conduct.

d) After the testator’s death, Karena would not discuss estate matters or the Will with the applicant.

e) In his evidence, the lawyer who prepared the Will testified that the testator was still considering giving the “barn lot” to the applicant when she gave him instructions in June, and when he confirmed her instructions in August he had to remind her about their discussions in June. [ 11 ] Because of these facts, and the applicant’s modest means, and applying the Fraser Estate analysis, counsel submits that the applicant should not be required to pay the respondent Estate’s costs, and should receive his party-and-party costs from the Estate. [ 12 ] As to the quantum, the applicant suggests that the “amount involved” is the decrease in his share in the Estate from the prior

(2009) Will to the challenged Will from, estimated at $200,000 to $300,000. Counsel writes that the applicant’s actual legal expenses exceed $80,000. The applicant seeks costs against the Estate in the range of $25,000 to $30,000. [ 13 ] The respondent Estate submits that the historic assumption that, in estate litigation, all parties, whether successful or not, are awarded costs paid by the estate, no longer applies.

Payment of the respondent Estate’s costs on a solicitor-client basis out of the estate is, in effect, payment by the respondent beneficiaries of their costs in defending the applicant’s unsuccessful attempt to set aside the Last Will. For this reason it is unfair that the unsuccessful party should not pay some of their costs, or get any of his costs from the Estate. [ 14 ] In cases involving the

interpretation of wills, where the testator, not the parties, created an ambiguity or uncertainty resulting in two or more competing, plausible

interpretations, it was appropriate that all parties, regardless of the outcome, be paid costs from the estate. This is not an

interpretation case. [ 15 ] Counsel submits that the approach to costs in proof applications varies. Section 92(1) of the Probate Act applies; it authorizes costs against the loser, the estate, or the personal representative. This provision, part of the Probate Act enacted in 2000, is subsequent to the Nova Scotia Court of Appeal decision in Morash . That is a factual circumstance that makes Morash no longer relevant. [ 16 ] The Estate cites Harnum as an example of the most frequently-applied current approach to estate litigation costs.

The challenge to the Will was unsuccessful; the challengers’ claim for costs against the estate was denied (¶¶39-43). Justice McLellan also denied costs of the successful estate against the unsuccessful applicants.

This was in part because the applicants acted reasonably; they consented to an order dismissing the application before the scheduled hearing and after discovery of the lawyer responsible for the Will and receipt of medical disclosure from those treating the testator at the relevant time. [ 17 ] Counsel notes that, in Winters Estate , Justice Hall made this observation at ¶ 21: “It should be noted, as well, that a party who forces an estate to engage in unnecessary litigation may be required to pay the costs of the proceeding if the decision goes against the party . . .” [ 18 ] The Estate submits that the following factors should guide the Court:

a) doing justice between the parties ( CPR 77.02(1) );

b) costs normally follow the result ( CPR 77.03(3) );

c) the conduct of a party affecting the length or expense of the proceeding ( CPR 77.07(2)(e) ); and,

d) steps in a proceeding that are taken improperly, abusively, through excessive caution, by neglect or mistake, or unnecessarily ( CPR 77.7(2)(f) ). [ 19 ] The Estate states that the applicant made no effort to interview or to discover Garth Gordon, the lawyer who had a long history of service to the testator and her spouse and who had been responsible for their last five wills. Both options were offered to the applicant by the Estate at an early stage. The Estate further states that the applicant received the testator’s medical records, from which

it was obvious that no health professional had expressed any concern about her mental capacity. [ 20 ] Counsel dismisses the applicant’s “theory” of undue influence by the testator’s spouse as “fanciful”. When the testator gave instructions for and executed the challenged Will, her spouse was incapacitated in a nursing home, and the applicant knew it. [ 21 ] Counsel dismisses the applicant’s reliance upon a single e-mail forwarded to Mr. Gordon by Karena on her mother’s behalf as constituting evidence of undue influence by Karena. The evidence of Mr.

Gordon was clear (and would have been clear if he had been interviewed or discovered before the hearing) that the challenged Will was based on discussions and instructions given to Mr. Gordon before the testator went to Halifax to stay with her daughter and receive medical treatment. [ 22 ] Counsel cites MacDonnell Sheard & Hull on Probate Practice , Fourth Edition, and other texts, as suggesting that if a challenger to a Will alleges or attempts to prove undue influence, and is unsuccessful, the general rule is that the challenger should pay the costs of those who propound the Will.

The allegation of undue influence is the equivalent of an accusation of fraud. [ 23 ] The Estate asks the Court to order that the applicant pay party-and-party costs to the Estate for two reasons; he lost, and he unnecessarily lengthened the hearing by the introduction of evidence relevant to the TFMA Application but not to the Proof Application . [ 24 ] The Estate says it should have party-and-party costs based on Scale 2 (Basic) in the amount of $23,750.

This is based on an “amount involved” calculated at 30% of the gross value of the estate, excluding the gifted real estate and $90,000.00 bequest; that is, the difference between the applicant’s entitlement under the disputed Will and the prior Will. [ 25 ] In the alternative, if the Court determines that the allegations were simply ill founded and not credible, but not frivolous, reckless or unnecessary; the applicant should simply bear his own costs, and not pay any costs to the Estate. [ 26 ] In his reply brief, the applicant states that discovery of the lawyer would have added to costs, and not eliminated his testimony at the hearing.

Furthermore the medical disclosure did not foreclose questions about the testator’s competence. He submits that the evidence respecting his relationship with his parents was relevant to the Proof Application . Analysis [ 27 ] Before the hearing of the Proof Application , the Estate had responded to the applicant’s substantial request for information in a full and timely manner. This disclosure included: i. Copies of the six Wills executed by the testator, approximately 200 pages of material notes and records made by Mr.

Gordon, the testator’s solicitor for over 20 years, together with typed translations of his sometimes illegible scribbling; ii. The complete medical records of the testator, including from the Annapolis Valley Health Authority -75 pages beginning in February 2010, and from the Capital Health District - 585 pages from July to October 2010; iii. The diaries (

a) of the testator and her spouse from 2002 to 2009 (371 pages), (

b) of Karena Van Kippersluis from September 2008 (79 pages), and (

c) of records kept at Karena Van Kippersluis’ cottage (84 pages); iv. The home and cell phone records for Karena Van Kippersluis from June to November 2010; v. Reluctantly (the Estate arguing that they were not relevant) the complete medical records of Tony Van Kippersluis from the time he was diagnosed with brain cancer in 2005 until his death in September 2010, including the complete file from his personal doctor (398 pages), the Valley Regional Health Authority (192 pages as an outpatient and 502 pages as an inpatient) and from Blomidon Court, the nursing home to which Mr.

Van Kippersluis was transferred from the hospital in January 2010 and where he remained until his death in September (389 pages). [ 28 ] The Estate offered the applicant the opportunity to interview or discover Garth Gordon, who had been the testator’s lawyer and responsible for all her legal services for over 20 years, and for the preparation of her last five wills. [ 29 ] It is not unusual, or unexpected, that a person in the position of the applicant would be suspicious of how it was that his parents, for whom he had worked for many years (until 2006) and who had, in earlier years, been led to believe that the estate would be shared equally between he and his sister (which the earlier wills appear to have provided), would have his interest in the estate reduced to approximately 10%. [ 30 ] However, there was nothing in the pre-hearing disclosure, when taken as a whole, which confirmed any of the suspicions that the applicant might, reasonably or unreasonably, have held when the application was filed. [ 31 ] In light of the disclosure provided and the opportunity afforded to interview Mr.

Gordon, the applicant acted unreasonably in proceeding with the hearing of this application. [ 32 ] At the trial readiness conference on August 8, 2011, less than a month before the hearing commenced, counsel for the applicant disclosed his witness list. This list included Carol Mooy and Theresa Doyle. At the hearing, it was the respondent Estate, not the applicant, who called these two witnesses.

They were both very close to the testator and her spouse in the years leading up to their death. [ 33 ] The Court assumes that when the applicant disclosed at the trial readiness conference his intention to call them as witnesses that he was aware, or should and could have become aware, of the substance of their evidence. Nothing that these two witnesses testified about assisted the applicant in anyway; on the contrary, their evidence negated any suggestion of the testator’s mental incompetence, lack of knowledge of the contents of the Will, or of undue influence by anyone.

[ 34 ] In short, what the applicant knew, or should have known, before the hearing commenced should have led him to the conclusion that there was no reasonable prospect of success in this application, or basis for continuing with the hearing. Instead the hearing was extended from the intended four days, to seven days. [ 35 ] The circumstances in this case should have been similar to those in Harnum . As noted above, the applicants in Harnum folded their tent after receiving the prehearing disclosure and discovering the lawyer.

That should have happened here. [ 36 ] Garth Gordon testified for most of the first day of the hearing. He had a long association as the family’s solicitor to the testator and her spouse, as well as had been involved in the preparation of their 2005 Wills and four subsequent changes in those Wills. He had an intimate knowledge of their affairs. He was a very competent and thorough solicitor. His evidence was a powerful statement as to the testator’s competence at the time she gave instructions for the Will, her knowledge of her estate and intentions, and the absence of undue influence by Tony or Karena.

The only apparent influence on the testator was Mr. Gordon’s stern warning and advice to the testator respecting the TFMA and the need for her to provide more for Martin than her stated intention. Mr. Gordon’s evidence was not diminished by cross-examination. [ 37 ] If my conclusion that the applicant should have, acting reasonable, folded his tent before the hearing is wrong, he clearly should have at the end of Mr. Gordon’s evidence on the first day of the hearing. Much of the evidence that followed Mr.

Gordon’s evidence was only marginally relevant to the issue of testamentary capacity, knowledge and undue influence. Even that evidence reinforced the conclusion that the testator was competent and had knowledge of her affairs and obligations, and was not unduly influenced by Tony or Karena.

I concluded that there was no factual substance to any of the allegations upon which the applicant sought to have the Will set aside. [ 38 ] While some background or context may have been relevant, significant portions of the evidence advanced over seven days dealt in detail with evidence that was material and relevant to the deferred TFMA Application . Conclusion [ 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 eat up 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 the TFMA Application .

Grandchildren’s Counsel [ 45 ] Counsel for both the applicant and the Estate arranged for Catherine Watson, to be appointed guardian ad litem, to represent the interests of the testator’s three grandchildren (minors), who, under both the challenged Will and the prior 2009 Will, are the beneficiaries of 40% of the residue of the Estate. [ 46 ] At the trial readiness conference on August 8, with Ms. Watson as a participant, it was noted that the grandchildren’s interest in the Estate is unaffected by the Proof Application because their interest is the same under both the challenged Will and the prior Will. Ms.

Watson stated an intention to discuss with the other parties whether it would be appropriate for her to attend all or part of the hearing, with a watching brief, for the purpose of gaining insight into the circumstances that might arise during the deferred TFMA Application . [ 47 ] She did attend but did not participate in the hearing in any way. Counsel for both parties suggested that she should be paid her costs out of the Estate. I leave it to the Registrar of Probate to determine, upon taxation, what is a reasonable amount for the Estate to

pay in these circumstances. J.