Costs In Estate Litigation: Different Horses For Different Courses

A common question raised by individuals upon entering litigation is how legal fees will be paid if they are successful in court. In estate litigation the answer to this question has more nuance than simply, "loser pays", which is the general rule for costs in legal proceedings.

Historically, costs of parties in disputes involving will challenges or the interpretation of wills were ordered to be paid out of the estate unless the losing party's position was obviously unwarranted. This was explained by the British Columbia Court of Appeal in Vielbig v. Waterland Estate, 1995 CanLII 2544 (BCCA):

"In such cases where the validity of a will or the capacity of the testator to make a will or the meaning of a will is in issue, it is sometimes the case that the costs of all parties are ordered to be paid out of the estate. This is upon the principle that where such an issue must be litigated to remove all doubts, then all interested parties must be joined and are entitled to be heard and should not be out of pocket if in the result the litigation does not conclude in their favour. The estate must bear the cost of settling disputes as a cost of administration."

This perspective on costs has changed over time. The modern approach to costs in estate litigation has been that costs "follow the event", meaning that the unsuccessful party will pay the costs of the successful party (see Sato v Sato, 2018 BCCA 287 at para 56). However, cost awards are highly discretionary and courts continue to have the discretion to award costs pursuant to the traditional approach where it is justified. This article will take a look at two recent court decisions involving differing methods of awarding costs in estate disputes. These cases provide illustrative examples of how costs decisions can vary in will challenges.

In Wilton v Koestlmaier, 2019 BCCA 262, the appellants were three grandchildren of the deceased, Maxine Wilton. The appellants had challenged the validity of a codicil made by the deceased in 2006 which disinherited them. The trial judge found that the deceased had the requisite testamentary capacity in making the codicil. While the trial judge did not hear submissions on the issue of costs, costs were awarded against the appellants, the unsuccessful party.

One of the grounds of appeal was the issue of costs, as the appellants argued that they ought to have been awarded costs of the action out of the estate. The British Columbia Court of Appeal found that...