IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
Kellogg Estate, |
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2018 BCSC 1978 |
Date: 20181109
Docket: 16-0571
Registry: Victoria
In the Matter of the Estate of Lisa Eriksen Kellogg, Deceased
Before: The Honourable Mr. Justice Johnston
Reasons for Judgment
(On Costs)
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Counsel for Inga Kellogg Rouches: |
P. B. Newman |
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Appearing on her own behalf: |
V. P. Kellogg |
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Place and Date of Submissions: |
Victoria, B.C. August 2, 2018; |
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Place and Date of Judgment: |
Victoria, B.C. November 9, 2018 |
BACKGROUND
[1] Vivian Kellogg’s application to pass over Inga Kellogg Rouches as executrix of the estate of their mother Lisa Eriksen Kellogg was dismissed for reasons delivered orally on July 26, 2018. Inga Kellogg Rouches seeks her costs of the failed application as special costs, or in the alternative, ordinary costs with an uplift. The unsuccessful applicant, Vivian Kellogg, concedes liability for costs, but says they should be assessed at Scale B.
[2] Inga Rouches Kellogg provided written submissions August 2, 2018, and Vivian Kellogg responded in writing August 24, 2018, and filed September 5, 2018.
SPECIAL COSTS
[3] In support of her claim for special costs, Inga Kellogg Rouches relies on Garcia v. Crestbrook Forest Industries Ltd. (1994), 119 D.L.R. (4th) 740 (B.C.C.A.), and Mayer v. Osborne Contracting Ltd., 2011 BCSC 914. Garcia sets out that special costs should be awarded only where it can be said that the payor has conducted herself reprehensibly, and that the word reprehensible in this context has a wide meaning. Osborne lists circumstances where an award of special costs may be appropriate, and in her argument Inga Kellogg Rouches develops ways in which the application in this case meets each of the Osborne circumstances. I will follow the same approach in these reasons, bearing in mind that it is the cumulative effect of all of the circumstance that is important.
a) Meritless Claim
[4] Vivian Kellogg and Inga Kellogg Rouches are sisters, the daughters of Robert Kellogg, who died in 1999, and of Lisa Eriksen Kellogg, who died in 2010. In his will, Robert Kellogg named his wife Lisa as his executor. Lisa Kellogg named Inga Kellogg Rouches as her executor. Vivian Kellogg and Inga Kellogg Rouches have another sister, Vivian’s twin, who took no part in this application.
[5] All of the Kelloggs live in the United States. When he died, Robert Kellogg owned an interest in real estate in British Columbia, and had some small additional assets here in British Columbia.
[6] Vivian Kellogg’s main argument in her application was that as executor of their father’s estate, Inga Kellogg Rouches would be in a conflict of interest were she to be named executor of their mother’s estate. The basis of the conflict is said to stem from Lisa Kellogg’s failure to deal with Robert Kellogg’s estate in a timely fashion after his death. That delay has exposed Robert Kellogg’s estate to taxes, interest and penalties on real property owned by him in British Columbia at the time of his death. Vivian Kellogg argues that Robert Kellogg’s estate has a claim against Lisa Kellogg, or her estate, for at least any interest and penalties incurred by Robert Kellogg’s estate as a result of Lisa Kellogg having ignored her duties toward his estate.
[7] But any such claim would accrue to Robert Kellogg’s estate, and be pursued, or not pursued, against Lisa Kellogg’s estate at the election of Inga Kellogg Rouches as executor of her father’s estate, and no part of this application or these proceedings can affect Inga Kellogg Rouches’ capacity as executor of her father’s estate.
[8] In Berthin v. British Columbia (Registrar of Land Titles), 2017 BCCA 181, the court said at para. 53:
In rare circumstances an entirely meritless claim may attract special costs as observed in McLean v. Gonzalez-Calvo, 2007 BCSC 648 (B.C. S.C. [In Chambers]), but those circumstances invariably have an extra element, for example, a case that was utterly without hope so as to amount to misconduct or an abuse of process.
[9] The fact that the application failed is not determinative of whether there was sufficient merit to bring the application in the first place. There was at least a sufficient appearance of conflict that it cannot be said that the application was without merit. This is not one of those “rare circumstances” referred to in Berthin, nor can it be said the application was so utterly without hope as to amount to misconduct or abuse of process.
b) Improper Allegations
[10] Inga Kellogg Rouches argues that Vivian Kellogg suggested that Inga Kellogg Rouches deliberately concealed assets or neglected her duties as named executor of Lisa Kellogg’s estate. The assets in issue were a boat and a small bank balance I have found barely exceeded $5,000 in combined value which could be reported as estate assets as part of the probate process. The controversy over these assets, or personal effects distributed outside the estate, is small if any support for a claim for special costs.
c) Reckless Indifference
[11] The argument here centers around the small size of Lisa Kellogg’s estate in British Columbia, which has been known to Vivian Kellogg for some years now, as compared to funeral and testamentary expenses that would have a first call on these small assets. I agree that Vivian Kellogg has unreasonably persisted in pursuing her argument that Inga Kellogg Rouches should be passed over as her mother’s executor in the face of the obvious lack of value to Lisa Kellogg’s estate in British Columbia. However, I do not find that her behaviour reaches the threshold of “reckless indifference”.
d) Resolution More Difficult than Necessary
[12] Inga Kellogg Rouches’ argument under this heading largely duplicates her immediately previous argument, with the same result.
e) Financial Superiority
[13] The argument here is that Vivian Kellogg has the advantage of representing herself and thus avoiding legal fees in British Columbia, whereas Inga Kellogg Rouches has retained counsel in spite of the lack of appreciable value in Lisa Kellogg’s estate. Neither Vivian Kellogg nor Inga Kellogg Rouches has led evidence as to their personal financial circumstances, making it impossible to know whether either has a financial advantage outside the Lisa Kellogg estate. This factor does not support a claim for special costs because of the deficiencies in the evidence of financial circumstances.
f) Continuation of Meritless Claim
[14] Inga Kellogg Rouches points to the lack of British Columbia assets in Lisa Kellogg’s estate and argues that Vivian Kellogg ought to have abandoned her objection to the grant of probate to Inga Kellogg Rouches. She also argues that Lisa Kellogg’s estate can be properly litigated in Washington State. Vivian Kellogg says this last point was raised for the first time during argument, and ought not to affect costs. I agree. As to the first point, although I have found that it cannot be said that the claim was without merit, I agree that any merit was dubious at best, which should have become more and more obvious to Vivian Kellogg as time passed.
g) Improper Motive
[15] Inga Kellogg Rouches here brings in other litigation brought by Vivian Kellogg concerning their father’s estate to suggest that Vivian Kellogg is unable to accept judicial rulings in that other litigation, and pursues this application in the hope that success will give her some advantage in that other litigation. Even if this were accepted, and I do not say that it is, it would fall short of improper motive for bringing this application in my view.
h) Allegations of Fraud or Dishonesty
[16] Inga Kellogg Rouches adopts her argument under b) Improper Allegations set out earlier. I repeat my conclusion set out under the same heading.
[17] Finally, Inga Kellogg Rouches argues that because there is nothing in Lisa Kellogg’s estate from which she can indemnify herself for the costs of defending this application, it would be unfair not to award her special costs.
[18] It is appropriate to restate here that the test for special costs is reprehensible conduct, or conduct meriting reproof or rebuke by the court. Even with an expanded or broad definition of what constitutes reprehensible conduct warranting reproof or rebuke, I do not conclude that the circumstances here rise to that level. While Vivian Kellogg may at times have behaved unreasonably, on the evidence before me I cannot say that her actions are reprehensible.
[19] The application for special costs is dismissed.
Uplift
[20] Inga Kellogg Rouches cites Berthin v. British Columbia (Registrar of Land Titles), 2016 BCSC 1522, in support of the proposition that uplift costs may be ordered where a party has shown casual disregard for the reality of a situation. Vivian Kellogg responds that Berthin was reversed on appeal on the award of increased costs: see Berthin v. British Columbia (Registrar of Land Titles), 2017 BCCA 181 at paras. 43-5.
[21] Section 2(5) of Appendix B to the Supreme Court Civil Rules provides for an increase in a costs award if the court finds unusual circumstances that would make costs on the ordinary scale inadequate or unjust. Section 2(6) provides that an award of ordinary costs is not inadequate or unjust merely because of the difference between costs awarded and actual legal expenses.
[22] I find nothing in this case by way of unusual circumstances, nor circumstances that would make ordinary scale costs inadequate or unjust.
[23] I order Vivian Kellogg to pay one set of costs assessed on Scale B.
“The Honourable Mr. Justice Johnston”