ESTATE OF MONTGOMERY, 2019 ABQB 833
10.29: General rule for payment of litigation costs
10.31: Court-ordered costs award
10.33: Court considerations in making costs award
10.49: Penalty for contravening rules
14.88: Cost awards
In October of 2018, Justice Nixon gave oral reasons for Judgment at a Special Chambers hearing (the “Hearing”) concerning the estate of Dorothy Montgomery (the “Estate”). The personal representatives of the Estate were Cecil Allan Myram (“Allan”), Donald John Montgomery (“Donald”), and Neil Montgomery (“Neil”) with the focal point of the underlying litigation being the validity of a transfer of land by the deceased to Neil (the “Estate Litigation”).
The Hearing involved, among other things, enforcement proceedings initiated by Neil against Allan and Donald personally for a previous Costs award (the “Enforcement Proceedings”). In general, Allan and Donald were successful in the Hearing, and were presumptively entitled to Costs pursuant to Rule 10.29. Allan and Donald sought solicitor-client Costs in both their personal capacities and as personal representatives of the Estate. Allan and Donald also sought penalty Costs pursuant to Rule 10.49(1).
Justice Nixon noted that under the Surrogate Rules, AR 130/1995 (the “Surrogate Rules”) the Court may order Costs to be paid from the estate or by any person who is a party to an Application. In addition, the Surrogate Rules state that the Rules apply if the matter is not otherwise dealt with under the Surrogate Rules. Nixon J. reviewed the applicable Rules on Costs, noting that a Trial Judge has wide discretion pursuant to Rule 10.31, and should utilize the considerations enumerated in Rule 10.33.
Justice Nixon reviewed the vast procedural history between the parties and concluded that while Neil’s conduct was at times blameworthy and required deterrence, he did not act in a manner that would be described as reprehensible, scandalous, or outrageous. Justice Nixon found that while there was no basis for the Enforcement Proceedings initiated by Neil, he did raise legal arguments justifying his actions that needed to be addressed. In addition, Justice Nixon noted that personal representatives do not expect that by accepting an appointment they might find themselves out of pocket, or even that there is a risk that that might happen. On this basis, Justice Nixon was satisfied that the Enforcement Proceedings justified enhanced Costs but not solicitor-client Costs.
Justice Nixon found that it would not be fair or equitable to have Allan and Donald left out of pocket for the legal fees that were necessary to discharge the Enforcement Proceedings and regain what was already theirs. His Lordship noted that, as individuals, they were implicated by the very nature of their role as personal representatives, and justice could only be done if they were indemnified for the Costs they incurred. Accordingly, Justice Nixon awarded Allan and Donald 75% of their Costs in their personal capacity and ordered that the remaining Costs could be recovered from the Estate in priority to all other claims.View CanLII Details