Costs – Loser Wins?
Taking the risk to litigate through to a trial is a decision that should be made after long and earnest consideration. It is a gamble, no matter the strength of your case. The stakes and the pressure are high, which is why receiving a decision denying your claim can be crushing, both emotionally and financially. Moreover, the question of costs must be faced.
In Driscoll v Driscoll, the Court addresses costs in a set of unfortunate circumstances. The facts in brief are that Shirley Driscoll died leaving one son, five daughters and the children of two other daughters that had predeceased. Ms. Driscoll’s Will, made several years prior, gifted everything to her son. Three of the daughters objected to the validity of the Will. Offers were exchanged, but no settlement was reached.
At trial Rutherford J. found that Ms. Driscoll had the requisite testamentary capacity to make the Will. However, His Honour admittedly reached that conclusion with some difficulty, in view of the evidence of Ms. Driscoll’s cognitive deficits and because the effect of the Will was unfair to the daughters.
The son sought costs as against his sisters (approx. $150,000). The sisters argued that they acted reasonably throughout the litigation, had a reliable body of evidence in support of their position, and were of modest means and should not be defeated by the award sought by their brother. They asked for their disbursement costs plus their costs of a motion brought within the litigation (approx. $50,000), to be paid out of the estate, with the parties otherwise bearing their own costs.
Rutherford J. considered the two public policy considerations laid down in McDougald Estate v. Gooderham meriting costs being paid out of the estate, being (1) where difficulties or ambiguities that give rise to litigation are caused, in whole or in part, by the testator, and (2) the need to ensure that estates are properly administered.
His Honour determined that the first consideration was triggered by Ms. Driscoll not gifting anything to her seven daughters and, more concretely, the second consideration was triggered by the strength of the case against testamentary capacity. Accordingly, His Honour exercised his discretion to grant the relief sought by the sisters, and awarded the brother full indemnity costs out of the estate as well.
This must have been an important victory for the sisters in an otherwise unsuccessful outcome, and should serve as a sobering reminder for litigants that winning doesn’t guarantee costs recovery against the opposing side.
Thanks for reading and have a great long-weekend. Happy 150th birthday Canada!
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