As the only child of my parents’ marriage, there was never really any question as to who my Mum and Dad’s favourite child was (or at least I hope not). But there were certainly a few families in our circle of friends where the parents did indeed play favourites amongst the children. Now, I don’t know what those parents’ wills hold in store for their children but, fingers crossed, they will treat their children fairly and the siblings, in turn, will continue to treat each other with care and respect after their parents pass away. Unfortunately, that doesn’t always happen and the costs, both financial and emotional, are evident.
In a recent case from the BC Court of Appeal, Doucette v. McInnes, the Court considered how costs should be apportioned amongst the parties to an action involving a Wills Variation Act (“WVA”) claim and a resulting trust claim, following the conclusion of an appeal. The Court noted at the outset that “throughout her lifetime, and in her Will, Mildred Doucette, the mother of the four litigants, played favourites with her children”. She named two of the four children, Louie and Diane, as executors of her estate and left them, respectively, her home and the residue of her estate. The other two children, Joslin and John, received gifts of $5,000 each. However, Mildred had, during her lifetime, also put GICs into joint tenancy with each of Louie, Diane and Joslin.
Joslin and John commenced an action in which they claimed that the GICs held by Louie, Diane and Joslin were held in trust for the estate. They also made a WVA claim. A 6 day trial ensured. Louie and Diane defended Joslin and John’s claims in their capacities as beneficiaries but were unsuccessful: the Court awarded Joslin 25% and John 15% of the estate. The trial judge also held that the GICs were all held on resulting trust for the estate and therefore the GICs formed part of the estate.
The next tussle was the award of costs. Typically, an executor is entitled to be indemnified for costs incurred as a result of being embroiled in a WVA action because all the executor does is present information to assist the Court. An executor is not supposed to take an active role in the litigation and has no obligation to defend the testator’s Will. In this case, while Louie and Diane were the executors of the estate, they actively defended the WVA action in their capacities as beneficiaries of the estate. Therefore, since they had been unsuccessful in their defence of the WVA action, the the trial judge disallowed them from claiming any costs from the estate and they were held personally liable for John’s costs as well. Joslin’s costs were ordered to be paid from the estate.
On the issue of the GICs however, the trial judge ordered that Diane and Louie’s costs for dealing with the GIC issue to be paid from the estate.
Louie and Diane appealed the trial judge’s decision to the Court of Appeal and were partially successful. The Court of Appeal overturned the trial judge’s finding that the GICs formed part of the estate. To ensure that the estate was fairly divided, the Court varied the order of the trial judge with respect to the WVA claim but the overall net effect, when the GICs were taken into account, was the same. However, the Court of Appeal refused to interfere with the trial judge’s costs award. The Court held that while the Louie and Diane had achieved superficial success in winning on the issue of the ownership of the GICs, the overall outcome of the trial remained largely unchanged on appeal. In essence, the Court of Appeal and the trial judge took different routes to reach substantially the same result.
At the end of the day, this case required 6 days of trial, 1 day of hearing before the trial judge on the matter of costs, 1 day of hearing before the Court of Appeal on the merits of the appeal, and various written submissions to the Court of Appeal on the issue of costs. I wouldn’t be surprised if the proceedings cost the parties, collectively, well over $100,000 or more. And while their relationships might not have been very strong before the proceedings began, I’d be willing to bet this litigation didn’t bring them closer.
As estate litigators, we love the opportunity to go to trial and sometimes trial is the only option. But I’d much prefer that my clients spend less money, and less emotional capital, to resolve disputes wherever possible. So, parents, think carefully before you prefer one child over another. And children, try to get along.