Driscoll v Driscoll: Costs Paid by Estate of Testator Who Left Everything to Son, Ignoring Seven Daughters
Originally published in our October 2016 Newsletter
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Ever since McDougald Estate v Gooderham,[1] costs in estate litigation have looked more like costs awards in civil litigation where the “loser pays”.
This is the current expectation, unless one or more of the relevant public policy considerations dictate that costs (or some portion of them) should be paid out of the assets of the estate. Recently the Ontario Court of Appeal[2] confirmed that the public policy considerations at play in estate litigation are primarily of two sorts: 1) where the difficulties or ambiguities that give rise to the litigation are caused, in whole or in part, by the testator; and 2) the need to ensure that estates are properly administrated. Justice Rutherford examined whether the situation in Driscoll v Driscoll,[3] where the mother left everything to her son and nothing to her seven daughters, was one where the Estate should pay the costs of a Will challenge based on alleged lack of testamentary capacity and undue influence.
The Facts
A mother of eight children died in 2014. Her husband had predeceased her and she was the sole beneficiary under his Will. She named her fourth child and only son as her Estate Trustee and the sole beneficiary of her estate (approximate value, $700,000.00), leaving her remaining children (seven daughters) nothing. It was the mother’s long-held view that the daughters were expected to make their way in life through marriage to men who would support them and their offspring.
The deceased’s son applied for a Certificate of Appointment of Estate Trustee with a Will. Three of the daughters objected arguing that the mother did not have testamentary capacity when she executed her Will in 1996; that she did not “know and approve” of the contents of her Will; was unduly influenced by the son; and sought costs of the litigation. After a summary judgement motion, a six day hybrid trial was conducted that involved testimony from over 20 witnesses.
In his trial decision[4] Justice Rutherford found in favour of the son, determining that the mother had testamentary capacity although it was a conclusion he reached “without some difficulty, not only in view of the evidence of cognitive deficits on the part of Mrs. Driscoll, but also because I see the effect of the Will as simply unfair to all of her daughters”.[5] Justice Rutherford also concluded that “a finding that [the son] exercised undue influence on his mother such that she made her Will in his favour is not even close. I cannot possibly find on the balance of probabilities, that there was any undue influence, by [the son] or anyone else in this case.”[6]
Costs Decision
The son felt that the objecting daughters should be jointly and severally responsible for his costs on a substantial indemnity basis ($154,303.43). The daughters argued that they acted reasonably and responsibly throughout, had a credible body of evidence in support of their position, were of very modest means and should not be crushed by the kind of costs award sought by their brother who at the same time inherited the entire estate. They sought their disbursements and costs of the summary judgement motion to be paid by the estate ($50,227.17) and the parties to bear the remainder of their own costs.
Justice Rutherford appeared to be struck by the unfairness of the situation:
While I acknowledge a testator’s right to make unfair, even what may seem cruel decisions in her Will, I am sensitive to [a daughter’s] email cry to her sisters: “I will say this . . . this is the most humiliating thing she could have ever done to any of us. . .”[7]
With respect to whether this situation fell within a public policy exception noted by the Courts, Justice Rutherford had this to say:
In leaving the family assets to the one son and ignoring the seven daughters, it is at least arguable that Mrs. Driscoll may have engaged the first of the public policy considerations that justify awarding costs from the estate to all legitimate parties. But if that is too much of a stretch, the strength of the Objectors’ case against testamentary capacity surely engages the second public policy consideration. In Orfus Estate v Samuel and Bessie Orfus Family Foundation,[8] the Court of Appeal upheld the motion judge who ordered the Objector’s costs paid out of the estate assets because he considered the Objector had reasonable grounds on which to launch and pursue her challenge.[9]
Ultimately, Justice Rutherford determined that “justice and equity may best be met in light of my substantive findings and judgment by acceding to the request of the Objectors”.[10] The daughters were awarded their disbursements and motion costs out of the estate and the son was entitled to be indemnified for his full costs payable out of the estate as well.
Conclusion
While ultimately, Justice Rutherford awarded the costs out of the estate based on the strength of the daughters’ case, clearly the inequity of the situation weighed significantly on the discretion of the court in this cost decision.
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[1] 199 OAC 203, 255 DLR (4th) 435 (Ont CA).
[2] Neuberger Estate v York, 2016 ONCA 303, 131 OR (3d) 143, leave to appeal to SCC refused, 36998 (15 Sept 2016).
[3] 2016 ONSC 6013, 25 ETR (4th) 330 [Driscoll 2 cited to ONSC].
[4] Driscoll v Driscoll, 2016 ONSC 4628, 269 ACWS (3d) 400 [Driscoll 1 cited to ONSC].
[5] Ibid at para 33.
[6] Ibid at para 47.
[7] Driscoll 2, supra note 3 at para 10.
[8] 2013 ONCA 225, [2013] OJ No 1626.
[9] Ibid at para 11.
[10] Ibid at para 12.
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Written by: Kimberly A. Whaley
Posted on: October 15, 2016
Categories: Commentary, WEL Newsletter
Originally published in our October 2016 Newsletter
View full Newsletter Archive
—
Ever since McDougald Estate v Gooderham,[1] costs in estate litigation have looked more like costs awards in civil litigation where the “loser pays”.
This is the current expectation, unless one or more of the relevant public policy considerations dictate that costs (or some portion of them) should be paid out of the assets of the estate. Recently the Ontario Court of Appeal[2] confirmed that the public policy considerations at play in estate litigation are primarily of two sorts: 1) where the difficulties or ambiguities that give rise to the litigation are caused, in whole or in part, by the testator; and 2) the need to ensure that estates are properly administrated. Justice Rutherford examined whether the situation in Driscoll v Driscoll,[3] where the mother left everything to her son and nothing to her seven daughters, was one where the Estate should pay the costs of a Will challenge based on alleged lack of testamentary capacity and undue influence.
The Facts
A mother of eight children died in 2014. Her husband had predeceased her and she was the sole beneficiary under his Will. She named her fourth child and only son as her Estate Trustee and the sole beneficiary of her estate (approximate value, $700,000.00), leaving her remaining children (seven daughters) nothing. It was the mother’s long-held view that the daughters were expected to make their way in life through marriage to men who would support them and their offspring.
The deceased’s son applied for a Certificate of Appointment of Estate Trustee with a Will. Three of the daughters objected arguing that the mother did not have testamentary capacity when she executed her Will in 1996; that she did not “know and approve” of the contents of her Will; was unduly influenced by the son; and sought costs of the litigation. After a summary judgement motion, a six day hybrid trial was conducted that involved testimony from over 20 witnesses.
In his trial decision[4] Justice Rutherford found in favour of the son, determining that the mother had testamentary capacity although it was a conclusion he reached “without some difficulty, not only in view of the evidence of cognitive deficits on the part of Mrs. Driscoll, but also because I see the effect of the Will as simply unfair to all of her daughters”.[5] Justice Rutherford also concluded that “a finding that [the son] exercised undue influence on his mother such that she made her Will in his favour is not even close. I cannot possibly find on the balance of probabilities, that there was any undue influence, by [the son] or anyone else in this case.”[6]
Costs Decision
The son felt that the objecting daughters should be jointly and severally responsible for his costs on a substantial indemnity basis ($154,303.43). The daughters argued that they acted reasonably and responsibly throughout, had a credible body of evidence in support of their position, were of very modest means and should not be crushed by the kind of costs award sought by their brother who at the same time inherited the entire estate. They sought their disbursements and costs of the summary judgement motion to be paid by the estate ($50,227.17) and the parties to bear the remainder of their own costs.
Justice Rutherford appeared to be struck by the unfairness of the situation:
While I acknowledge a testator’s right to make unfair, even what may seem cruel decisions in her Will, I am sensitive to [a daughter’s] email cry to her sisters: “I will say this . . . this is the most humiliating thing she could have ever done to any of us. . .”[7]
With respect to whether this situation fell within a public policy exception noted by the Courts, Justice Rutherford had this to say:
In leaving the family assets to the one son and ignoring the seven daughters, it is at least arguable that Mrs. Driscoll may have engaged the first of the public policy considerations that justify awarding costs from the estate to all legitimate parties. But if that is too much of a stretch, the strength of the Objectors’ case against testamentary capacity surely engages the second public policy consideration. In Orfus Estate v Samuel and Bessie Orfus Family Foundation,[8] the Court of Appeal upheld the motion judge who ordered the Objector’s costs paid out of the estate assets because he considered the Objector had reasonable grounds on which to launch and pursue her challenge.[9]
Ultimately, Justice Rutherford determined that “justice and equity may best be met in light of my substantive findings and judgment by acceding to the request of the Objectors”.[10] The daughters were awarded their disbursements and motion costs out of the estate and the son was entitled to be indemnified for his full costs payable out of the estate as well.
Conclusion
While ultimately, Justice Rutherford awarded the costs out of the estate based on the strength of the daughters’ case, clearly the inequity of the situation weighed significantly on the discretion of the court in this cost decision.
—-
[1] 199 OAC 203, 255 DLR (4th) 435 (Ont CA).
[2] Neuberger Estate v York, 2016 ONCA 303, 131 OR (3d) 143, leave to appeal to SCC refused, 36998 (15 Sept 2016).
[3] 2016 ONSC 6013, 25 ETR (4th) 330 [Driscoll 2 cited to ONSC].
[4] Driscoll v Driscoll, 2016 ONSC 4628, 269 ACWS (3d) 400 [Driscoll 1 cited to ONSC].
[5] Ibid at para 33.
[6] Ibid at para 47.
[7] Driscoll 2, supra note 3 at para 10.
[8] 2013 ONCA 225, [2013] OJ No 1626.
[9] Ibid at para 11.
[10] Ibid at para 12.
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