Walsh v. Walsh

2018 BCSC 617 Walsh v. Walsh

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Walsh v. Walsh, 2018 BCSC 617 Date: 20180417 Docket: S138489 Registry: New Westminster Between: Moira Eleanor Walsh Plaintiff And Stephen Kerry Walsh and Ronald Stewart Walsh, Also known as Ronald Steward Walsh, Executors of the Estate of Lindsay Clinton Walsh, Lynda Gail Walsh, Stephen Kerry Walsh and Dana Leanne Miller Defendants Before: The Honourable Mr. Justice A. Saunders Reasons for Judgment on Costs Counsel for the Plaintiff: J. Wingson, Q.C. Counsel for the Defendant, D.L. Miller: R. Josephson Counsel for all other Defendants: N. Muirhead Counsel for Ms. Wingson: D. Moseley Place and Date of Hearing: New Westminster, B.C. September 1, 2016 Written Submissions Received: September 23, 2016 Place and Date of Judgment: New Westminster, B.C. April 17, 2018 [1] This is a decision on costs in respect of applications brought in estate litigation. The plaintiff, Moira Walsh - now deceased - commenced this action, suing her sons, the defendants Stephen and Ronald Walsh (the "Defendant Executors"), in their capacity as executors of the estate of their father, her late husband Lindsay Clinton Walsh ("Mr. Walsh Sr."). Stephen Walsh is also named in his personal capacity. Linda Walsh, spouse of Ronald Walsh and a contingent beneficiary under Mr. Walsh Sr.'s will, is also named. I refer to them herein as the "Walsh Defendants". The

final defendant, Dana Miller, is a grandchild, also named as a contingent beneficiary. Background [2] In the action the plaintiff sought, inter alia, a declaration of invalidity in respect of the severance and transfer of Mr. Walsh Sr.'s joint tenancy half-interest in the matrimonial home to the defendant executors Stephen and Ronald Walsh, allegedly as a result of undue influence on their part; declarations concerning alleged transfers of Mr. Walsh Sr.'s personal property to Stephen and Ronald Walsh; and claims made under the Wills Variation Act, R.S.B.C. 1996, c. 490. [3] The action was purportedly settled at a mediation in November 2013, and a settlement agreement was eventually executed (the "2013 Settlement Agreement"). However, there were delays in execution of the documentation, including delays in the Defendant Executors effecting transfer of Mr. Walsh Sr.'s half-interest to the plaintiff. [4] In the interim, on January 10, 2016, the plaintiff died. Her death gave rise to an issue between the parties as to who was competent to direct cancellation of the Certificate of Pending Litigation ("CPL") filed by the plaintiff against Mr. Walsh Sr.'s half-interest in the property. The defendant Dana Miller is executrix of the plaintiff's will, but to the date of the hearing before me had not been substituted as a party under the Supreme Court Civil Rules. [5] There were three

applications before me, as follows: 1. An application purportedly brought in the name of the plaintiff by her former counsel Ms. Wingson, seeking an order cancelling the CPL and obliging the defendant executors to transfer the one-half interest in the property. That application (the "Plaintiff's Application") also sought an order for special costs against the Defendant Executors. The Defendant Executors opposed that application, and asked that their costs be payable by the late plaintiff's counsel Ms. Wingson personally, on the basis that Ms. Wingson had acted without instructions, her client having died and no executor or administrator having been substituted as a party; 2. An application by the defendant Dana Miller (the "Miller Application"), mirroring the relief sought in the Plaintiff's Application with respect to cancellation of the CPL and transfer of the property, and also seeking special costs. The grounds for opposing the Miller Application stated in the Defendant Executors' filed application response included Ms. Miller's personal lack of standing to apply for cancellation of the CPL. The Miller Application was originally to be heard on May 26, 2016, but was adjourned, as there were no judges available to hear applications on that date. Counsel for Ms. Miller then reset the application for May 30, 2016, despite having been told that Mr. Muirhead, counsel for the

Walsh Defendants, was not available until dates in June. Mr. Muirhead was obliged to make an application for adjournment of the Miller Application (the "Adjournment Application). On May 26, 2016, Master Tokarek adjourned the Miller Application generally to a date in June 2016, to be heard simultaneously with the Undertaking Application. He further ordered that the costs of this Adjournment Application would be determined at the same time as the Miller Application was heard.

3. An application by the Defendant Executors (the "Undertaking Application") for an order that copies of the signed November 2013 Settlement Agreement, which was attached as an Exhibit to affidavits of the defendant Dana Miller and of a Ms. Seifried, a legal assistant in Ms. Wingson's offices, be destroyed. This application was founded on claims that the attaching of the settlement agreement to Ms. Seifried's affidavit, and the forwarding of a copy of the signed agreement to Ms. Miller, were breaches of an undertaking given to the Defendant Executors' counsel Mr. Muirhead by Ms. Wingson. The Undertaking Application sought costs against Ms. Wingson personally; special costs were sought against the defendant Dana Miller, on the grounds that she had proceeded to attach the agreement to her own affidavit while knowing of the Defendant Executors' objection to it having been attached to the affidavit of Ms. Seifried. Proceedings of September 1, 2016 [6] On hearing the application on September 1, 2016, I dealt with the Undertaking Application as a threshold issue. I dismissed that application with costs. I deal herein with the nature of that costs order. [7] The parties then proceeded to make submissions on the Plaintiff's Application and the Miller Application. [8] Following the mid-day break, counsel returned to court and advised that they had reached an accommodation with respect

to the matters in issue, but wished to address the matter of special costs. Ms. Wingson, who had separate representation on the applications in respect of the cost issues, sought special costs against the Defendant Executors on the Undertaking Application. Generally, her position was that the accusations made against her in the Undertaking Application tarnished her professionalism and her credibility, as the request that costs be paid by her personally implied that she had engaged in reprehensible conduct deserving of the personal sanction. [9] Ms. Miller sought special costs against the Walsh Defendants, including Stephen Walsh and Ronald Walsh personally, in respect of all of the applications before the court. Generally, her position was that those defendants had taken overly technical and meritless positions throughout the litigation for ulterior purposes, simply to delay the matter or pressure Ms. Miller into acceding to their requests, and that there had been undue delay on the part of the Defendant Executors in the conduct of the litigation generally. [10] The Walsh Defendants' position was that in respect of the Undertaking Application, costs should be payable only at Scale B. In respect of the Miller Application and the Plaintiff's Application, they submitted that the applications were ultimately resolved on terms proposed by the Defendant Executors, and that they

should therefore receive their costs at Scale B. Alternatively, they submitted that as the applications were neither granted nor refused, no costs should be awarded. In respect of the Adjournment Application, they also sought costs at Scale B. [11] I asked the parties to summarize their positions on costs in brief written memoranda, which were filed with the court September 23, 2016. Subsequent Submissions, and Hearing of November 15, 2016 [12] Subsequent to the filing of those memoranda, I received correspondence from Mr. Muirhead, counsel for the Walsh Defendants, seeking leave to make further brief written or oral submissions regarding the admissibility, in respect of the costs applications, of certain without-prejudice correspondence. The basis of the request was that without prejudice-correspondence, which I had ruled was inadmissible during the hearing on September 1, was disclosed in Ms. Miller's memorandum of argument. [13] No further submissions are necessary on this point. I have disregarded that portion of Ms. Miller's memorandum (para. 1(d)). As will be seen, that correspondence has, in any event, proven to be irrelevant to my determination of the costs issues. [14] The parties appeared before me again on November 15, 2016. Issues had arisen as to the terms of the settlement reached on September 1, 2016. It appeared necessary to receive further affidavit evidence,

and the hearing of an application to enforce the terms of the September 1, 2016 at settlement was adjourned generally. Counsel asked that I hold my reasons on the present costs applications in abeyance until that matter was dealt with. [15] That application was ultimately heard by Mr. Justice Riley, who issued reasons for judgment on February 13, 2018 (indexed at 2018 BCSC 199). I sought submissions from the parties as to whether the cost issues before me should now be determined by me, or by Riley J., and all parties asked that I proceed to give judgment. I have not found any of the determinations made by Riley J. to be pertinent to my decision. Costs - The Undertaking Application [16] As to the Undertaking Application, some further background is, unfortunately, necessary. By way of a letter dated January 20, 2015, Mr. Muirhead sent Ms. Wingson an executed Form A Transfer; and five original 2013 Settlement Agreements executed by the Walsh Defendants, for execution by Moira Walsh and Dana Miller. Mr. Muirhead's letter set out the following undertaking: These documents are sent to you on your undertaking to release them or deal with them in any way, except to have Moira Walsh and Dana Miller execute the Settlement Agreements, without my written consent. [17] I note that the undertaking was not properly drafted; it meant to say - and all parties have proceeded on the basis that

it meant - Ms. Wingson was undertaking NOT to deal with the documents. [18] Subsequently, as I have stated, the finalized 2013 Settlement Agreement in that form, executed by all parties, was attached as an exhibit to affidavits sworn by Ms. Miller and by one of Ms. Wingson's assistants, Ms. Seifried. Mr. Muirhead took the position that this was a breach of undertaking. After receipt of the affidavit of Ms. Seifried, Mr. Muirhead wrote to Mr. Josephson and Ms. Wingson, in a letter dated April 22, 2016, in which he made the following remarks: Affidavit #1 of D. Seifried, which has been filed with the notice of application, is also most improper. Ms. Wingson is in breach of the undertaking she accepted when I sent the signed settlement agreement to her under cover of my letter dated 20 January 2015 by filing the signed settlement agreement with the court as Exhibit A to that affidavit. To mitigate the effect of Ms. Wingson's breach of undertaking, my clients require that an application be made with the Court for an order that all copies of this affidavit be destroyed. [19] Ms. Wingson moved quickly to respond to Mr. Muirhead's objection. Her inquiries of the Registry disclosed that an affidavit could not be withdrawn once filed, but she provided her consent to the original affidavit being sealed in the Registry file. [20] In the course of hearing Mr. Muirhead's submissions

concerning the Undertaking Application, I observed that Ms. Seifried and Ms. Miller could, without breaching the undertaking, have attached to their affidavits a draft copy of the settlement agreement, not signed by any parties, and could then have deposed that the form of the agreement reflected the terms of the settlement agreed to by all parties; and further deposed to having seen an original of the settlement agreement executed by all the parties. Once the 2013 Settlement Agreement had been executed, there was no basis for requiring any sort of undertaking, or objecting to the agreement itself being disclosed. Mr. Muirhead conceded those points. [21] In short, notwithstanding Mr. Muirhead's letter of April 22, 2016, there was no "effect of Ms. Wingson's breach of undertaking" that required mitigation. [22] In dismissing the Undertaking Application, I stated: Mr. Muirhead, the undertaking you put Ms. Wingson on ought never to have been accepted by her, because it was an undertaking that had no end date to it. On its face, it would still be in effect today. She would still require your consent to be dealing with the settlement agreement in any way. That can't possibly be right. That can't possibly be what was intended by her. It was an undertaking she never should have accepted, but at the same time, Mr. Muirhead, it was an undertaking you never should have put a fellow

counsel under an obligation to accept. And it was never an undertaking you should have sought to enforce. I remarked that I was appalled by the attempt to enforce the undertaking and seek costs against Ms. Miller and against Ms. Wingson personally. [23] Mr. Muirhead apologized for the undertaking, saying that it was entirely an error of judgment on his part, for which he took full responsibility, and that it was through no fault on the part of his clients. [24] I find that the costs awarded to Ms. Wingson and Ms. Miller in respect of the Undertaking Application should be paid by Mr. Muirhead personally. [25] I further find that those costs should be assessed as special costs. Contrary to Ms. Wingson's submissions, I do not do so on the basis that the Undertaking Application, in seeking costs against her personally, was an attack on her professionalism. Clearly, the Undertaking Application sought costs against Ms. Wingson personally only because her client was deceased, and there was no other person to whom a costs order against the plaintiff could attach. Ms. Wingson had acted without instructions, putting herself in a position where she had to expect to be found personally responsible for costs, were the Walsh Defendants successful on the Undertaking Application. [26] I do find, however, that the allegation of breach of undertaking, and in particular the steps taken to enforce

an undertaking that never should have been sought in the first place, is conduct deserving of rebuke. Mr. Muirhead's clients were not prejudiced in any manner by the executed 2013 Settlement Agreement having been attached to the affidavits. The application was entirely unnecessary and misconceived. Costs - Adjournment Application [27] As to the Adjournment Application, no good reason has been shown why the Walsh Defendants ought to have been put to the cost of making a formal application to the court for adjournment of the Miller Application. The Walsh Defendants will have their costs of that application as against Ms. Miller, assessed at Scale B. Costs - Other Issues [28] As to the balance of the costs issues, both arising out of the Plaintiff's Application and the Miller Application - and, as urged by counsel for Ms. Miller, arising out of the conduct of the litigation generally - I do not find it appropriate to make any costs award in the face of the settlement concluded by the parties on September 1, 2016. Costs normally follow the event, and in this case there is no "event" - no determination on the merits - to which a costs order could attach. While I might find that the terms of the settlement agreed to amongst the parties on September 1st may have reflected the position taken by one or more of them on the merits, settlements are by their very nature a matter of

compromise. A party may accede to an opposing party's view for the purposes of settlement, without being taken to have acknowledged the legal merits of that other party's position. Likewise, a court should not, except in the most unusual circumstances, look behind the terms of the settlement to decide if another outcome might have resulted from a full argument on the merits, for the prospect of being "second guessed" is inimical to the process of negotiation. [29] While the court has some residual discretion under Supreme Court Civil Rules 14-1(12) and (14) to award costs on a basis other than determination of the cause, I do not find that the circumstances warrant it in this case. All parties appear to bear some responsibility for the delays in implementing the September 2013 settlement. The position taken by the Walsh Defendants, and the Defendant Executors in particular, as to the procedure to be followed upon the death of the plaintiff, was technical but not unreasonable. The matter was hard fought, at times aggressively, but I do not find that positions were taken for an improper purpose. In hindsight - and I say this with respect - it may have been the case that counsel for the plaintiff and for the Walsh Defendants became too focused at times on asserting the technical correctness of their positions on matters of procedure, and lost focus on the need to find a cost-effective means of resolving the substantive issues in the litigation. [30] Therefore, except as to the foregoing rulings, each party will bear their own costs in respect of all matters before me, to and including Mr. Muirhead's letter of September 29, 2016. "A. Saunders J."