No Special Costs Awarded in Lost Undue Influence Claim

Special Costs NOT Awarded in Losing Undue Influence Claim

In Webber v Sullivan 2019 BCSC 1784 the court declined to award special costs to a defendant who successfully defended a claim brought by plaintiff alleging undue influence on the part of the defendant.

The court instead awarded costs in favor of the defendant on a party and party basis, which is substantially a lesser amount of money.

For several years now the general rule of thumb with respect to the matter of undue influence allegations and costs, is while the court always has a discretion in the matter of costs, an allegation of undue influence was tantamount to that of fraud, and a failure to succeed at trial, often resulted in an award of special costs against the losing party.

There are plenty of cases to support that general proposition. ( see Stewart v McLean 2010 BCSC 64 for example)

The facts in this case were such that the court varied the will pursuant to the wills variation act portions of WESA ( S.60) , but dismissed the plaintiff application for a declaration that the inter vivos transfer of property by the testator, the party’s mother, was the result of undue influence of the defendant.

The defendant brought application for an award of special costs, but the losing plaintiff on the issue of undue influence successfully argued that special costs should not be awarded and the court agreed with the latter.

The Law

The court referred to in the decision of Allart Estate v Allart 2016 BCSC 768, where the court summarize the principles that guide court’s jurisdiction to award special costs:

15 “ The court is also empowered to order special costs in exceptional circumstances. In the leading decision of Garcia v. Crestbrook Forest Industries (1994) 9 BCLR (3d) 242 (CA) , the court established reprehensible as the single standard for the award of special costs. In recognition of the broad meaning of the word reprehensible, the court explained that in order for an award of special costs to be justified, “something more” is required, such as improper allegations of fraud, or an improper motive for bringing the proceedings, or improper conduct of the proceedings. An action that has little merit is not, without more, reason for awarding special costs (para.23)

Undue Influence and Special Costs

The party seeking special costs must demonstrate exceptional circumstances to justify a special costs order. The court should show restraint in awarding special costs. Westsea Construction LTD v 0759553 BC LTD 2013 BC SC 1352 at paragraph 73.

The court found that the plaintiff allegation of undue influence in this decision was tenuous, but that is different from saying it was bound to fail. The plaintiff did have reason to question the testator’s intent in transferring the apartment to the defendant. Given the statement in her will that she did not intend to create a joint tenancy with the defendant. This is not a case in which there was no evidence whatsoever to support the claim. The court also accepted that the plaintiff did not have improper or ulterior motives in advancing it.

The court merely criticized the plaintiff for bringing a weak claim and that they ought to have exercised greater caution in doing so, but bearing in mind the need to exercise restraint in an award of special costs, the court did not find that the plaintiff’s conduct in pursuing the claim of undue influence was sufficiently reprehensible to give rise to an award of special costs.

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