Estate Planning

Offers to Settle in a Will Challenge

By Hull & Hull LLP

Offers to settle and more specifically, Rule 49.10 of the Rules of Civil Procedure, are intended to force the parties in a legal proceeding to consider the settlement of a matter prior to trial failing which, costs consequences will result if an offer is more favourable than the result obtained at the trial.

In the general litigation context, the Ontario Court of Appeal has held that the Court should depart from the prima facie costs consequences in Rule 49.10 only where, after giving proper weight to the policy of the rule and the importance of a reasonable predictability and the even applicability of the rule, the interests of justice require departure.  

The applicability of offers to settle and Rule 49 in a Will challenge context has been considered by Judges with different results. In the often quoted case of Olenchuk Estate, Re.  the Court found, amongst other things, that it would seem somewhat incompatible with the nature of these proceedings to apply rules designed to encourage settlement of adversarial, contentious, proceedings and when there appears to be a reasonable question whether the deceased was mentally capable of making the Will that is propounded; it imposes an obligation on the Court to be satisfied that the Will was the product of a capable testator before putting on it the imprimatur of the Court. In Olenchuk, the Court further held that Rules designed to encourage settlement of contentious litigation can be applied in estate matters, but the difference between certain kinds of estate litigation and other forms of litigation can make it difficult to apply Rules of Civil Procedure to estate proceedings.

The Ontario Court of Appeal discussed the traditional approach and modern approach to awards of costs in estate litigation in its 2005 decision of McDougald Estate v. Gooderham. The Court found that the modern approach to fixing costs in estate litigation is to carefully scrutinize the litigation and, unless the Court finds that one or more of the public policy considerations, set out in its decision applies, to follow the costs rules that apply in civil litigation.

The Court of Appeal noted that “Gone are the days when the costs of all parties are so routinely ordered payable out of the estate that people perceive there is nothing to be lost in pursuing estate litigation.”

In a Will challenge, offers to settle, whether informal or formal can be an important tool in regard to the disposition of costs; perhaps more so in light of the approach for costs set out in McDougald v. Gooderham.

Enjoy the Holidays! Craig

Full post as published by Toronto Estate Law Blog on December 30, 2008 (boomark / email).