In Eisenrieder Estate v Eisenrieder, 2020 ABQB 392, the Court of Queen's Bench considered the issue of costs, following a dispute over interpretation of a Will in which one party advanced a weak position.
Joseph Eisenrider ("Joseph") died, leaving behind two children: Roy and Jane. Joseph's Will split his estate equally between them.
The Will contained a clause addressing the situation in which a child survives him but dies before their share of the estate has vested:
9(f) If any child of mine survives me but dies before becoming entitled to receive the whole of his or her share (the date of my child’s death being called the “Date of Division”), the balance of my deceased child’s share shall be divided as follows: [emphasis added]
i. equally among his or her living children at the date of division…
Jane passed away shortly after Joseph, before his will was probated. She left behind her second husband Wayne and her two children, Tanya and Lindsay ("the Granddaughters").
Wayne asserted that at the time of Jane's death, her share of Joseph's estate had vested and therefore goes to him.
The Granddaughters' position was that since Joseph's will had not been probated, Jane's share had not vested and goes to them. Joseph's Estate supported this position.
Joseph's Estate brought an application for direction to the Court of Queen's Bench to settle the interpretation of 9(f). The hearing was scheduled for December 18, 2019, but didn't occur. Wayne never filed materials in support of his position and his lawyer had difficulties getting instructions from his client (who at this point was living in California and unwell).
On December 6, 2019, the lawyer's notes from Joseph's will were discovered and resolved the interpretation of 9(f). Joseph's intention was for Jane's share of the estate to go to the Granddaughters under these circumstances.
The Granddaughters offered to settle on January 21, but this was not accepted. The rescheduled hearing took place on February 4 and decided in the Granddaughters' favour. Wayne had not filed any materials and instructed his lawyer to concede the application.
With no settlment on costs, the Granddaughters got an injunction to freeze Wayne's Canadian assets as security.
Should Wayne's lawyer pay costs for advancing such a weak position? Should Wayne pay enhanced costs?
Costs against counsel
Costs awards against lawyers are reserved for exceptional circumstances (see Quebec v Jodoin, 2017 SCC 26, para 29). This is not one of them.
Wayne's position was weak from the start. But advancing the argument was not frivolous or abusive or dishonest. Lawyers must not be punished for taking difficult cases or positions (see Groia v Law Society of Upper Canada, 2018 SCC 27 at paras 73-76).
The case should have been dropped after the discovery of the lawyer's notes, but the difficulties faced by Wayne's lawyer in getting instructions from his client is an important consideration.
Enhanced costs against Wayne
Advancing a fundamentally unreasonable position merits enhanced costs.
Wayne's argument was weak, as it went against the apparent intention of Joseph (see Re Browne, 1934 SCR 324 at 330). And after the discovery of the lawyer's notes, Wayne's position became impossible. He should have dropped the case at this point but he did not. By not giving timely instructions to his lawyer, he caused the proceedings to drag on and delayed the administration of Joseph's estate.
The Court concluded that significnatly enhanced costs were appropriate against Wayne for his conduct up to and including the hearing, but not for the ex parte motion and injunciton, as these were fair but protective actions taken by the Granddaughters and weren't driven by Wayne's conduct.
The Bottom Line
If you advance an unreasonable position, you pay more in costs when you lose.