“Everything to each other, and if we both go, to the kids”. Sound familiar? Estate planning is actually far more complicated than this. When preparing for your estate planning meeting with Cox & Palmer there are a number of things to consider. The checklist below will serve as a helpful tool. Estate Planning Preparation – […]read more
Who Pays the Costs? Responsibility for Legal Fees in Disputed Estates Matters
In the matter of Prevost v. Prevost Estate, 2015 NSSC 10, Justice Michael Wood was called upon to determine who should pay costs flowing out of a contested Court application which sought an accounting by the personal representative of the Prevost Estate.
Claude Prevost died on August 24, 1996. His will was not probated until May 2, 2006 at which point Tyrone Prevost was appointed personal representative. Joslyn Prevost was the personal representative of the estate of Eric Prevost. The estate of Eric Prevost was a beneficiary under the will of Claude Prevost.
In June 2014 Joslyn Prevost filed a Notice of Application seeking an accounting. The Estate objected on the basis that the application was premature and that the estate would provide an accounting at the appropriate point in time.
At the November 5, 2014 hearing counsel for the estate indicated that the personal representative did not object to providing an accounting but needed time to do so. He suggested that January 31, 2015 was a suitable target and accordingly an Order was issued requiring the accounting to be done by January 31, 2015. The only remaining issue was costs.
Position of the Parties
Joslyn Prevost sought payment of her costs on a solicitor/client basis. She submitted that the application was unnecessary and that all of her costs should be paid by the personal representative personally.
The personal representative also took the position the application was unnecessary as he had always been prepared to provide disclosure of financial records at the appropriate time. He suggested that Joslyn Prevost should bear all of her costs and that he should be reimbursed at least a portion of his legal expenses.
Justice Wood agreed with both parties that the application was unnecessary. He stated:
“One would normally expect that a personal representative and beneficiary would cooperate in the exchange of financial information and that a formal accounting could be avoided. In some cases this will not be possible and that is obviously the situation here. Where an estate has been open for this length of time, it is not unreasonable for a beneficiary to request an accounting if the informal disclosure of financial information is not satisfactory to them.”
Counsel for Joslyn Prevost argued that the personal representative was in breach of the duty to provide an accounting within 18 months as set out in Section 69(1) of the Probate Act and therefore he should be personally liable for the costs of Joslyn Prevost. Section 92(3) of the Probate Act provides that a personal order of costs may be made against a personal representative if an application is the result of the personal representative’s failure to carry out a duty imposed by the Probate Act.
Justice Wood concluded that the personal representative was not in breach of any duty imposed by the legislation. His Lordship noted that the 18 month period for filing an inventory can be extended and in many cases it will not be practical to file an accounting within 18 months. He found there was insufficient evidence before the Court to allow for a conclusion to be drawn regarding the conduct of the personal representative.
Justice Wood ruled that the conduct of the personal representative was not so objectionable to warrant him paying Joslyn Prevost’s costs on a solicitor/client basis. He concluded that Joslyn Prevost should receive a contribution towards her legal fees from the estate.
Justice Wood ordered that the legal expenses of the personal representative be paid personally by him rather than coming from the estate. His Lordship stated:
“As I previously noted, I believe the entire application could have been avoided if Mr. Prevost had acknowledged at an early date that an accounting should be ordered. By taking the position that he did in opposing the application he incurred costs which were unnecessary. If the estate is required to pay the personal representative’s legal expenses, this will diminish the amount to be distributed to the beneficiaries. I would therefore order that the costs incurred by the Proctor, Mr. Harper, in opposing this application be paid by Mr. Prevost personally and not form part of the Proctor’s fees payable by the estate.”
This decision is a further example of other recent decisions on costs in which the Court gives close scrutiny to the conduct of the parties and the merits of the proceeding in assessing to whom and by whom costs should be paid. An estate paying the legal costs of all parties, regardless of the outcome of the case, is no longer the automatic or assumed result. Rather, assessments on costs will be undertaken much as they are in other civil matters and the decisions will flow from the outcome of the case, the merits of the parties’ positions, and the conduct of the parties through the litigation.