All About Estates

The Price of Unreasonableness

In the recent costs decision in Re Zandersons Estate, the Court once again underscored the importance of injecting “some modicum of reasonableness into decisions about whether to litigate estate-related disputes”[1] by imposing the discipline of the ‘loser pay’ principle to cost awards.

In Re Zandersons Estate, the deceased died intestate.  Under the rules of intestacy, the deceased’s two sisters would inherit his estate, leaving nothing for the deceased’s common law spouse.  The spouse therefore advised the deceased’s sisters of her intention to seek dependant’s relief under the Succession Law Reform Act.  

One of the sisters applied for a certificate of appointment of estate trustee without a will.  The spouse objected to the appointment of the sister.   The spouse argued that as a person with a financial interest in the estate, the sister’s interests stood in direct conflict with her interests as a claimant.  This conflict, the spouse maintained, would impair the sister’s ability to administer the estate fairly and impartially.  The spouse did not propose to be appointed herself (recognizing that she would also have a conflict), but proposed two alternatives:  the deceased’s grandmother, and a neutral solicitor who had indicated a willingness to act. 

The Court found in favour of the spouse and proceeded to consider costs of the motion.

The Court resisted the sister’s argument that the costs of the motion were caused by the deceased’s failure to make a will naming an estate trustee and should therefore be borne by the estate.  While the initial motion for directions may have been reasonably required on this basis, the litigation should have ended once a willing and neutral third party was proposed.   The judge found that once the neutral third party came forward, it was unreasonable, in light of her conflict, for the sister to persist with her application to be appointed as estate trustee.

The price of that unreasonableness, the Court found, was that the sister was required to personally pay the partial indemnity costs of the spouse and the other respondent for the motion.    

Tags: Angela Casey, conflict of interest, dependant's relief application, estate trustee, financial interest in an estate