Winning The Battle But Losing The War - The Risk Of Selective Disclosure In Litigation
I have written before about the risks involved in litigation including having to pay the costs of the opposing party. An Ontario Superior Court decision, Prelorentzos v Havaris, which was just upheld by the Court of Appeal demonstrates yet another way to win the battle but lose the litigation war.
In the case, the deceased's common-law wife sued for dependent's support under the Succession Law Reform Act. The estate, represented by the deceased estranged wife and children opposed claiming that the plaintiff had never had a common-law relationship with the deceased (allegedly they were only roommates) and that she was not entitled to any money. The trial judge took a exhausting look at the facts and ruled that the plaintiff had a common-law relationship with the deceased and was potentially entitled to dependent's support.
Having won the first battle, the plaintiff's case fell apart. As one can imagine, a key element to obtaining dependent's support is establishing that the deceased was supporting you and that you continue to need the support. It was here that the plaintiff failed.... miserably. She relied primarily on her oral testimony without proper documentation. She attempted to establish her income with Notices of Assessment rather than proper income tax statements. This failed to properly show sources of income and what deductions, other than the standard ones had been claimed. These gaps, troubled the judge who was also troubled by a lack of bank statements. The few bank statements produced were not consecutive and left more gaps as to the source of balance increases. The plaintiff, rather foolishly, claimed that three major banks had refused to produce the statements.
To make the situation worse, the plaintiff had been under a judicial order to produce the statements. Her failure to do so drew the ire of the judge who awarded a relatively small lump sum of support ($30,000.). The judge awarded the estate's costs of $20,000 to be paid by the plaintiff personally.
The plaintiff appealed and, not surprisingly, the Court of Appeal upheld both the decision and the cost award. Additionally, the Court of Appeal awarded the estate a further $18,000 in costs. This means that the plaintiff had to pay her lawyer plus $38,000 in costs to the estate for an award of $30,000. Clearly, this is a loss despite having won on the issues of being both a common-law wife and being entitled to dependent's support.
The case is also important because the Court of Appeal upheld awarding costs against the litigant personally without requiring the costs to be paid out of estate assets. This shows that if you wrongly challenge an estate, the costs could be visited on you and not on the estate.
The Lesson: Selective disclosure is dangerous. Being involved in litigation means showing all the relevant documents, both those that hurt you and those that help you. To refuse to do so and to rely only on your word could, as it did in this case, be perceived as dishonest and end up destroying your credibility. You could lose more than you possibly win.
Prelorentzos v Havaris, 2015 ONSC 2844 https://www.canlii.org/en/on/onsc/doc/2015/2015onsc2844/2015onsc2844.pdf aff'd 2016 ONCA 727
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