Wilson v. Lougheed, 2012 BCSC 1166 – Court Awards Special Costs Against Executor in Wills Variation Claim

In order to discourage improper conduct during the course of litigation, “special costs” may be imposed on litigants that have acted reprehensibly during the course of litigation. Special costs are a much higher award of costs- typically at least 80 percent of actual costs of the party awarded them; sometimes even higher. This percentage is significantly higher then awards of costs that  are typically awarded in cases where the court does not signifiy it’s censure of the conduct of the offending litigant.

One type of estate litigation where executors are almost never fixed with special costs are Wills Variation Act (WVA) claims. Because an executor (who is a fiduciary) has the duty to be neutral in WVA claims, special costs are rarely imposed on the executor. Nevertheless, in Wilson v. Lougheed [Wilson], a recent decision of the British Columbia Supreme Court, the Court found occasion to award special costs against an executor due to his “flagrant violation of his duty to not prefer his person interests (and grudges) over his fiduciary obligations.”

The Wilson case involved an extensive and bitter dispute between Ms. Wilson, a daughter seeking to vary her mother’s will, and her father, Mr. Lougheed, who was both the executor of his wife’s estate and sole residual beneficiary under the will. Of course Ms. Wilson’s claim was not against Lougheed personally, but he nevertheless chose to involve himself personally.

Lougheed launched a counterclaim to the WVA claim in his capacity as executor and then launched a separate debt claim in his personal and executor capacities. The Court held that portions of both the counterclaim and the debt claim were “flimsy”. Further, the Court held that Lougheed breached his duty to be impartial in the WVA claim when he provided inaccurate information to the Court and neglected to openly disclose other information which should have been volunteered to the Court.

 Instead of acting impartially, the Court held that Lougheed, motivated by his spite for Ms. Wilson and her husband, used his position as executor to engage in “litigation warfare” with them in order to advance his personal interests.

Although Lougheed was permitted to engage in “litigation warfare” in his personal capacity, he violated his fiduciary duties when he did so as executor. Thus Lougheed’s conduct attracted an award of special costs.

The Wilson case serves to remind executors that they must always act impartially when involved in WVA claims. An executor that is unable to do so may be unfit for the role of executor and may be punished with special costs for performing it improperly.

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