September 12, 2013

Justice DiTomaso recently released an interesting costs decision following his reasons in the case of Stevens v. Fisher Estate (blogged on earlier this year by Jasmine Sweatman on All About Estates). Due to the good conduct of the parties, the Court ordered each side to bear its own costs.

By way of quick recap of the facts, when Mark Fisher died, he left behind an insolvent estate and a string of (ex) spouses. Mark had spent the last 11 years of his life living with his common-law spouse Camille Stevens. Prior to Camille, Mark had lived with Debra Hill, mother of Mark’s two (dependent) children Braedon and Allison; Andrea Fisher, mother of Mark’s adult daughter Liana, and Alice Eagles.

Mark’s will made no provision for Camille; in any event, his estate was insolvent. However, Mark owned three life insurance policies: (i) a $50,000 policy benefiting his daughter Liana, (ii) a $250,000 policy benefiting Braedon and Allison, and (iii) a $84,000 policy benefiting Alice.

Camille brought an application for support as a dependent from Mark’s estate under the SLRA. Specifically, she sought to use s. 72 of the SLRA to receive the $84,000 from policy benefiting Alice. (It is interesting to note that Camille sought only to claw back the policy benefiting Alice, not the ones benefitting Mark’s children. The Court held that there was nothing preventing Camille from targeting a particular insurance policy for support.) At trial, Justice DiTomaso ordered that $75,000 be paid to Camille from the insurance policy, leaving $9,000 for Alice.

Following the end of the trial, Camille sought to recover her costs. The first question addressed by Justice DiTomaso was whether costs should be recovered from Alice personally (as argued by Camille) or from the insurance proceeds (as argued by Alice). After reviewing both the wording of s. 72 and the relevant case law, the Court held that insurance funds clawed back into an estate under s. 72 were only available to pay support, not for costs awards.

Justice DiTomaso then turned to the question of quantum of costs. At trial, Alice was unsuccessful on all her main arguments. Applying the “loser pays” principle, Alice should have paid Camille some portion of her costs. However, Justice DiTomaso refused to recognize an outright win by Camille. Despite conceding that Camille had received “most” of the insurance proceeds, he described the outcome at trial as “mixed.” In addition, Justice DiTomaso held that the case involved the determination of a “novel” point of law – the interplay of s. 72 of the SLRA and the right of the designated beneficiary of the insurance policy to receive those funds. As a result, Justice DiTomaso chose to exercise his discretion and ordered the parties to bear their own costs.

This case is perhaps most interesting for the other reasons Justice DiTomaso gave (or implied) for his decision not to order costs. First, Alice was a sympathetic party. Like Camille, Alice was of very modest means. An award of costs would have more than wiped out her $9,000 entitlement. Nor had Alice sought out the beneficiary designation; she was unaware of the existence of the policy until after Mark’s death.

Justice DiTomaso also found that each side had proceeded on the honest and reasonable belief that they were entitled to the insurance proceeds. The Court noted that on several occasions they had tried to resolve the matter as between themselves, but without success. Despite their differences, “[b]oth parties proceeded without the acrimony and rancour often found in these types of cases.” In the result, the Court held: “The circumstances of this case clearly dictate that such a disposition of no costs would be fair, reasonable and proportional given the outcome.”

Perhaps good behaviour is rewarded, even if you are the losing party.

Thanks for reading.