A recent costs decision out of a British Columbia Supreme Court (BCSC) highlights the dangers of making unsubstantiated allegations in the often high stakes, high emotion, context of estate litigation.
The case in question, Malacek v Young, 2021 BCSC 2219, concerned the judgment on costs following two competing petitions in a highly contentious estate dispute. The petitions pitted a recent widow against the four daughters from her deceased spouse’s first marriage. The daughters had engaged in a long-term campaign to break up the couple’s marriage and had made a plethora of hurtful and unsubstantiated claims against their stepmother. The first petition was brought by David Young, (the “Executor”), in his capacity as executor of the Estate of Olaf Hall Leiren (“Hall”). The second petition was brought by the four daughters of the deceased, Annette Malecek, Erica Leiren, Michelle Neumeyer, and Nicole Leiren, (collectively, “the Daughters”).
The two petitions raised a common issue, namely whether Hall and Carol Leiren (“Leiren”), his wife of thirty-seven years, had separated prior to his death. The daughters sought a declaration that the couple had separated prior to Hall’s death and sought leave pursuant to s. 151 of the Wills, Estates and Succession Act, S.B.C. 2009, c. 13, to file a family law claim on behalf of Hall’s estate against Leiren for a division of family property under Part 5 of the Family Law Act, S.B.C. 2011, c. 25 (FLA).
In his decision on the merits, the honourable, Justice Giaschi, found squarely in favour of the executor’s petition and declined to grant the Daughters leave. He held that they “wholly failed to demonstrate an arguable case and that the proposed FLA action was destined to fail”.
Justice Giaschi further found that the Daughters had made unsubstantiated allegations “concerning a romantic relationship between Leiren and a close friend” that were “scandalous”, and that the Daughters had engaged in a years-long campaign to separate Hall and Leiren. In fact, he found that there was “overwhelming evidence” that the couple’s marriage had continued at the time Hall passed.
After Justice Giaschi’s decision on the merits, the Executor and Lieren sought an order for special costs against the Daughters. Special costs in British Columbia are effectively similar to an order of substantial indemnity costs in Ontario. Substantial indemnity costs are approximately 90 per cent of actual costs incurred by a party as stated by Justice Newbould in his decision in Stetson Oil & Gas Ltd v Stifel Nicolaus Canada Inc. The Daughters did not disagree that the Executor and Leiren should be awarded costs but disagreed that an award of special costs should be made.
In ordering special costs against the Daughters, BCSC’s Justice Giaschi described in great detail the five factors that led to his ultimate decision to award special costs against the Daughters.
- The Daughters’ affidavit evidence was intended to suggest that Lerien was in a romantic relationship with a female friend, Alice, while married to Hall. He found that their claim during the costs hearing, that they had made such allegations, was “disingenuous”. Justice Giaschi was particularly concerned with the fact that the Daughters had made this allegation despite that Hall’s failing health and that he had to be moved to a long-term care home. To make such allegations in light of Lerien’s hardship was inappropriate.
- There was evidence that the Daughters had made threatening statements to Alice in person and through social media posts. Justice Giaschi found that these actions were “bullying and disclose conduct that is reprehensible, outrageous, scandalous, and deserving of rebuke”.
- The Daughters’ attacked Hall and Lerien’s 37-year marriage with a “complete reckless disregard for the truth from the outset”.
- The Daughters knew that Hall’s estate was insolvent from the outset of their petitions.
- The Daughters had engaged in a “long‑term campaign to convince Hall to divorce Carol, but that he resisted their attempts to do so” and that the camp gain revealed the Daughters’ “attempt to obtain, indirectly, a share of Carol’s property to which they are not entitled”.
It is important to note that the Daughters provided a lot of evidence via affidavits and all of their claims and allegations were unsupported by any evidence. The Justice found their conduct highly inappropriate.
Based on these factors, Justice Giaschi ordered that the Executor and Lerien were entitled to special costs not only for the two original petitions but also for the costs applications and appearances.
The ruling by Justice Giaschi should serve as a warning to those involved in a contentious estate litigation. It is understandable that estate litigation is frequently contentious, highly emotional, fraught with unexpected revelations, and allegations. However, all parties should always take care to avoid making unfounded allegations lest they find themselves in the highly unenviable position of being on the wrong side of a substantial indemnity costs award.
At Derfel Estate Law, our experienced team of estate lawyers are always up to date on estate litigation cases and can assist in contesting a will. Contact us by phone at 416-847-3580 or reach us online to discuss your estate needs.