In 2011, Justice Clark ordered compensation to the Applicants in the amount of $810,000 for their services as Executors of the Anderson Estate (“Estate”) (2011 ABQB 806) (the “Compensation Decision”). The Parties in this Application sought a Decision in respect of the Costs incurred in the Compensation Decision. The Applicants maintained that they should be fully indemnified for their legal costs out of the Estate or from the Respondents.

The Court considered the factors set out in Rule 10.33(1) in making its Decision onCosts. With regard to Rule 10.33(a), the Applicants argued that they were “substantially successful” because they were awarded $810,000 in the Compensation Decision when the Respondents claimed that they should have been awarded no compensation. Justice Clark was not convinced that the Applicants were “substantially successful” because:  (a) the Applicants originally requested $2,900,000 for compensation from the estate, an amount significantly disproportionate to the actual amount awarded; and (b) the Compensation Decision took into account the Applicants’ failure to properly manage the Estate.

With regard to Rule 10.33(2)(a), the Applicants claimed that they should have received full indemnity for their legal costs because the Respondents made “scurrilous allegations of misconduct” throughout the proceedings, and that responding to these allegations unnecessarily lengthened the proceedings. Justice Clark stated that because the Applicants improperly managed the Estate, the Respondents’ allegations were justified.

The Court gave serious consideration to refusing to allow the Applicants any reimbursement of their legal fees because of them:(a) mishandling the Estate; and (b) commencing litigation in an attempt to secure an unrealistic amount of compensation for their services as Executors. However, Justice Clark decided that it would be “too harsh a stance” to deny any Costs for the Applicants since litigation could have been commenced even if the Applicants requested a sum less than $2,900,000 for compensation. The Court considered it reasonable to reimburse the Applicants $50,000.00 for their legal costs, which was to be paid from the Estate.

With regard to Rule 10.33(2)(g) the Court awarded the Respondents Solicitor-Client Costs due to the Applicants’ mismanagement of the Estate and disregard for the interests of the residuary beneficiary by requesting a grossly inflated amount for compensation from the Estate.

The Respondents were disentitled from claiming prejudgment interest under Rule 13.6(2) which states that a Pleading must state any interest claimed, including the basis for the interest, and the method of calculating interest. The Respondents’ Notice of Objection made no mention of prejudgement interest. Accordingly, Justice Clark concluded that an award of prejudgment interest was not appropriate in the circumstances.