Generally, when the parties to a legal proceeding settle, Minutes of Settlement of all issues are executed and the litigation ends. However, that is not always the case.

In the case of Woloski v Woloski,  one of the parties brought an application challenging the validity of a will on the basis that the deceased lacked capacity at the time he executed the will. The party objected to the estate trustee’s application for a certificate of appointment of estate trustee as well. The matter was resolved by Minutes of Settlement. All essential terms were agreed upon, however the parties could not agree on costs as part of their settlement. The matter of costs was left to the court.

Historically, it was presumed that everyone’s costs in estate litigation would be paid by the estate. However, the courts have since ruled that the modern approach to fixing costs in estate litigation is to carefully scrutinize the litigation and to follow the costs rules that apply in civil litigation. The one exception to this rule is where, for public policy reasons, it is appropriate that the estate bear the litigants’ costs. These public policy reasons are:

1. Circumstances where difficulties or ambiguities in the will that gave rise to the litigation are the fault of the testator; or
2. Where there are reasonable grounds upon which to question the execution of the will or the capacity of the testator.

The court found that in this particular case, there was no public policy reason that might support an order that all parties’ costs be paid from the estate. Even though one of the parties challenged the validity of the will, there was no evidence to conclude that the deceased did not have the capacity to execute the will. Therefore, costs would be based on the general principles of civil litigation.

Rule 57.01 of the Rules of Civil Procedure lists a number of factors the court considers in their assessment of costs, including:

• The result of the proceeding;
• Any offer to settle;
• The complexity of the proceeding;
• The importance of the issues;
• The conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; whether any step in the proceeding was improper, vexatious or unnecessary or taken through negligence, mistake or excessive caution;
• The principle of indemnity; and
• The concept of proportionality, which includes at least two factors:
  • The amount claimed and the amount recovered in the proceeding; and
  • The amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which sots are being fixed.

The court stated that where parties have managed to resolve the substantive issues between them but have left the issue of costs to be litigated, it is important for the court to give meaning to the parties’ agreement and to exercise its discretion to fix costs in accordance with the principles that guide that discretion.

The court found that there would be no award of costs as between the parties in this matter. This was made on the basis that the challenge to the will was ill-conceived, as there was no evidentiary basis that the deceased lacked capacity at the time of execution, and no party had any real success in the proceedings.

When litigants go to court for costs on a settled matter, it is important to remember the factors a judge will consider in making a costs award. More importantly, in a settled matter it is unlikely that one party has been more successful than the other, therefore it is not certain that a costs award will even be made.

Thank you for reading.