The litigation was self-serving and unnecessary: court
The NS Supreme Court has upheld a decision that Heather Denise Daye cannot enforce a life interest in a property from her late mother's estate due to the estate's insolvency.
This decision reaffirms the lower court’s ruling, allowing the estate's personal representatives to sell the property to pay off the estate's debts.
Daye sought an order enforcing a life interest under clause 3(c) of Laura Wilhemina Daye's Last Will and Testament, which would have allowed her to reside in the estate's residential property. However, the court had to determine if this life interest could be upheld given the estate's financial insolvency.
In the original decision, the judge confirmed that the personal representatives could sell the property to settle the estate's debts. This meant the life interest granted to Daye and another beneficiary, Tina Taylor, had to abate. The matter was initially handled in the Probate Court of Nova Scotia, involving extensive documentation and hearings.
The Supreme Court found that Daye’s litigation was self-serving and unnecessary, aimed at preventing the property sale despite clear evidence of the estate’s insolvency. The court concluded that her actions prolonged the dispute and forced the estate to incur unnecessary expenses.
The court noted that the personal representatives acted appropriately, providing Daye with all requested financial information. Despite this, she continued her litigation, making unfounded allegations of mismanagement against the personal representatives.
The court noted that s. 92 of the Probate Act allows the court to order costs against the losing party or out of the estate. However, this discretion is not limited by the Probate Act and can be guided by the Civil Procedure Rules. Under Rule 77, the successful party is presumptively entitled to costs, and these can be assessed using the established tariffs unless the court decides otherwise.
The court emphasized that costs should contribute substantially toward a party’s legal fees without amounting to full indemnity. The traditional approach of paying all costs from the estate has evolved to discourage unnecessary litigation and preserve the estate's value for beneficiaries.
In aligning with the modern approach to estate litigation costs, the court decided that the litigation costs should not be borne by the estate or its other beneficiaries. Instead, Daye was ordered to bear the estate's costs, ensuring her actions did not unfairly burden the other beneficiaries.
Ultimately, the court awarded lump sum costs of $32,000 to the estate's personal representatives, payable out of Daye’s share of the residue.
