Estate litigation often involves disputes amongst family members. Unfortunately, this can sometimes mean that there is a history of negative feelings amongst the individuals involved, which can lead to allegations made in the course of litigation that are personal in nature.
Setting aside the possible consequences that may flow from this such as hurt feelings, and irreparably damaged relationships, there could also be financial repercussions. A recent costs decision of the British Columbia Supreme Court provides a stark example of just such a situation.
The costs decision of Malacek v Young, 2021 BCSC 2219 followed the decision of the Honourable Justice Giaschi regarding whether the deceased had separated from his wife of 37 years, Carol, and whether to grant leave to the surviving daughters of the deceased to file a claim on behalf of the deceased’s estate against Carol for a division of family property. The Court declined to grant leave, and found that there was “overwhelming” evidence that the deceased and Carol had continued to be in a marital relationship at the time of the deceased’s passing.
The deceased’s daughters agreed that Carol and the executor of the deceased’s estate should be entitled to costs, but took the position that special costs, which had been sought by the executor and Carol, were not warranted. The Ontario equivalent to British Columbia’s “special costs” would be substantial indemnity costs, which are usually in the range of 90% of the actual costs incurred by a party. Unfortunately for the daughters, the Court disagreed, and found that special costs should be awarded to the executor and Carol.
There were five key factors that led to the Court’s decision to award special costs:
1. The daughters had alleged that Carol and her friend, Alice, were involved in a romantic or intimate relationship, which began after the deceased suffered health issues and had to move into a long-term care facility. The Court found that it was “insulting, scandalous, and outrageous” for the daughters to have made these allegations.
2. There was some threatening behaviour by the daughters that the court found constituted bullying, and disclosed conduct that is reprehensible, outrageous, scandalous, and deserving of rebuke.
3. The daughters were attacking a 37-year marriage that neither the deceased nor Carol had taken any steps towards bringing to an end, on the basis of virtually no evidence. The court found that the daughters ought to have known that their claim would fail and that they demonstrated a reckless disregard for the truth from the outset.
4. The daughters were aware that the estate was insolvent.
5. The Court found that prior to the deceased’s death, the daughters had attempted for some time to convince the deceased to divorce Carol, but that he resisted the pressure to do so. In the Court’s view, this disclosed that the daughters’ real motive was to attempt to obtain a share of Carol’s property for themselves.
Although litigants may be tempted to throw around accusations in an attempt to strengthen their position, particularly given that tensions often run high in estate litigation, the Malacek v Young decision highlights the serious risk that comes along with making unfounded allegations.
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