In a recent Alberta decision, two daughters tried to pursue their step-father’s lawyer personally for costs based on his handling of the estate case.
Husband and Granddaughters Fight over Estate
The deceased (grand)father was survived by his two children, a son and daughter, who were to share his estate equally.
Unfortunately, his daughter passed away not long after her father, before his will had been admitted to probate and its assets made ready for distribution. Her untimely passing gave rise to a dispute over who became entitled to her half of her father’s estate. That dispute pitted her second husband against her two children (the “granddaughters”).
The second husband took the position that his wife’s share of the father’s estate had vested in her by the time of her passing and, therefore, flowed through her will to him.
The granddaughters argued that their mother’s share devolved to them directly under their grandfather’s will.
A lawyer was initially retained by the daughter to assist her in the administration of the father’s estate.
At some point following the daughter’s death, the same lawyer began to act for the second husband in his claim to 50% of the father’s estate.
Court Procedural History
The father’s estate brought an application for advice and directions to the court. The hearing was set for December 2019.
However, the hearing did not proceed as the second husband’s lawyer advised that he was having difficulties obtaining instructions from his client, who was in the United States and quite unwell. The lawyer also indicated that he was suffering personal complications that impaired his ability to prepare for the hearing. The matter was adjourned until the lawyer could obtain instructions from his client.
Prior to the hearing, on January 21, 2020, the granddaughters made an offer to settle. There was some dispute about what the offer contained regarding costs. The offer was not accepted.
At the hearing, the second husband’s lawyer ultimately stated that his client conceded the application. He also added that the second husband had always intended for his step-daughters to receive the substantial benefit of their mother’s share in any event.
The court therefore issued an order, on consent, favouring the granddaughters’ interpretation of the will. Costs were reserved.
Issue of Costs: Claim Against the Second Husband’s Lawyer Personally
After the February 4 hearing, the father’s estate sought full indemnity costs in the amount of $11,500 for its litigation costs related to the advice and direction application, and a further $13,252 “related to the addressing the Will interpretation issue”. The total claim was $24,752.
The granddaughters sought full indemnity costs of $63,924. The granddaughters argued that both the actions and inactions of the father’s estate, and its lawyer, constituted the sort of sanctionable approach to litigation that warranted a grant of full indemnity costs.
Finally, the granddaughters also pursued the costs claim against the second husband’s lawyer personally, alleging that his conduct in the litigation, including failures to respond or file materials at multiple occasions, as well as having pursued a hopeless claim to the detriment of her clients, constituted misconduct sufficient to warrant this unusual sanction.
Lawyer Not Personally Liable for Costs
The court began by stating that the second husband’s lawyer’s involvement in the entire matter had not been ideal. However, the court found that the problems that arose were largely due to the second husband’s condition and the difficulty this created in receiving instructions; not only was he far away, but he was unwell, and ultimately incapacitated. The court stated:
“This is not counsel’s fault. Faced with the information revealed on December 6, and the inability to readily obtain informed instructions, many counsel might have sought to be removed from the matter at that point. [The second husband’s lawyer] persevered, on a file that offered neither pleasure nor profit. I find no malice or wilful misconduct in his actions, most specifically those relating to the failures to file materials or be ready to move the matter forward in a timely manner. Rather, I find that responsibility for most of the delays falls at the feet of [the second husband] and his circumstances.”
Second, the court found that the lawyer himself suffered unforeseen and serious personal difficulties in the latter part of 2019 and early 2020. The court concluded:
“Therefore, while his failure to be more responsive and timelier in this matter caused both aggravation and delay, these were in large measure the product of external circumstances rather than a wilful and deliberate plan to obstruct or delay the course of these proceedings. I am satisfied that [the second husband’s lawyer] did not engage in any wilful misconduct in this matter, notwithstanding how much frustration, and indeed cost, his (in)actions may have caused for the other people affected by this litigation.”
Finally, the court explained that awarding costs against a lawyer personally is exceptional and is only appropriate in cases involving abuse of process, frivolous proceedings, misconduct or dishonesty, or actions taken for ulterior motives, where the effect is to seriously undermine the authority of the courts or to seriously interfere with the administration of justice.
As a result, the court refused to hold the second husband’s lawyer personally liable for costs.
DBH Law recognizes that there continues to be a concern in Alberta and abroad about the spread of COVID-19. We have implemented several measures to reduce the risk and impact to our employees, clients and the community-at-large.
Please be aware that we are prepared to initiate business continuity protocol for remote work and communications. It is our priority to ensure business continuity for our clients while ensuring the safety of our people. We recognize that the outbreak of COVID-19 is an unprecedented situation globally and we wish to assure you DBH Law is equipped and prepared to maintain and continue business services to our clients during this pandemic.
The highly-experienced and strategic Calgary estate lawyers at DBH Law can help you draft or update your will to reflect the needs of your family and your estate, no matter its size or complexity. Our responsive and concise approach to our work makes the process of will and estate planning easy for our clients.
We take pride in the relationships we have built with our clients, and the opportunities we have to represent their legal needs as they grow and evolve. We understand your need to provide for your family and loved ones while also minimizing the taxation and chances of litigation your estate may face. We can be reached by phone at 403.252.9937 or online and look forward to the chance to learn about what is important to you, and how we can help you achieve that.