The Ontario Court of Appeal’s decision in Hayward v. Hayward1 includes an important reminder of the potential costs consequences in the context of estate litigation.
The appeal concerned the estate of Jeanne Hayward (the “Deceased”) who was survived by her former husband, Alexander Hayward (“Alex”) and their five children. The Deceased’s five children were named as beneficiaries in her last will and testament. Her former husband, Alexander Hayward, however, was not.
At trial, Alex claimed repayment of a loan he purportedly made to the Deceased as well as ownership of a tractor. The trial judge dismissed Alex’s claims and ordered substantial indemnity costs against Alex and three of their five children who supported Alex in his claims.
The major issue in the appeal was the trial judge’s decision to award substantial indemnity costs against Alex and the three children that supported him in his allegations at trial.
The appellants advanced two arguments on appeal, which were dismissed.
First, the appellants argued that the trial judge’s decision was wrong in principle and that substantial indemnity costs were unwarranted in the circumstances. The Court of Appeal disagreed and explained that Alex disputing the authenticity of a document, signed by him and the Deceased as a supplement to their separation agreement, and disposing of some assets was a significant issue at trial and consumed time and resources. Importantly, the Court of Appeal characterized Alex’s behaviour as misconduct. What was the misconduct? It could be the reference to Alex being tenacious and intransigent. More likely it was the fact that the trial judge found that the document was genuine and inferred that Alex knew that the document was valid even though he claimed otherwise. Further, Alex’s allegation was supported by the children the costs were awarded against.
The Court of Appeal’s decision is significant, in part, because it confirmed the trial judge’s characterization of Alex’s allegations as amounting to fraud. Our system of civil litigation operates to induce parties to act reasonably; where a party engages in “reprehensible conduct” (especially in the conduct of the litigation), the court may “chastise” that party by ordering a substantially higher costs award than usual.2“ Alleging wrongful conduct improperly (fraud in this case) may well result in a higher costs award.
Second, the appellants argued that the three children who supported Alex should have been considered non-parties and should not bear any responsibility for the costs ordered against them.
The Court of Appeal rejected this argument as well. They adopted the trial judge’s reasoning that the three children were in this together with Alex and actively participated with their father in these proceedings. Accordingly, the cost consequences should apply to all of them.
The Court of Appeal’s decision serves as a reminder that will challengers do not have carte blanche to make bald, unsupported claims against a deceased or the will. Where those allegations amount to fraud, the court will treat them as such. Perhaps even more significantly, the Court of Appeal makes it clear that it is not just the claimant who will bear the consequences, but anyone who actively supports or participates in advancing the allegations will be is at risk of an adverse cost award.