Executive Summary: Key Legal and Evidentiary Issues

• This costs decision follows a successful petition by Janet and Gordon Robertson to liquidate and dissolve Lauchlin Enterprises Inc. ("LEI"), a family-owned holding company.
   
• At issue is whether costs should be borne personally by Carolynne Cassidy, or whether she is entitled to indemnification from the Estate of Evelyn Beatrice Robertson in her capacity as executor.
   
• Carolynne argued that she did not act unreasonably in defending the petition, and that an executor defending litigation is entitled to indemnification from the estate absent a finding of unreasonable conduct.
   
• Petitioners relied on Rasner v. Berger, 2026 BCCA 166 and Levi-Bandel v. McKeen, 2011 BCSC 247 to support their position that costs should be paid by Carolynne personally.
   
• The court distinguished both cases on their facts, finding that Carolynne's defence of the petition was not unreasonable and that her interests were not purely personal.
   
• Scale B party and party costs were awarded to the petitioners, to be paid by the petition respondents — without a specific order requiring Carolynne to pay personally.

Facts of the case

On March 25, 2026, Justice Gottardi of the Supreme Court of British Columbia heard a petition under s. 324(1)(b) of the Business Corporations Act, S.B.C. 2002, c. 57, seeking the liquidation and dissolution of Lauchlin Enterprises Inc. ("LEI"), a family-owned holding company ostensibly established for tax and estate planning purposes. The dispute arose among four siblings who were shareholders of LEI: Janet Robertson, Gordon Robertson, Carolynne Wilda Cassidy, Peter Lauchlin Robertson, and the Estate of Evelyn Beatrice Robertson (the "Estate"). Evelyn Robertson was the late mother of Janet, Gordon, Carolynne, and Peter. Carolynne served as the executrix of the Estate and was also the sole director of LEI at the time of the hearing. Janet and Gordon (the "Petitioners") brought the petition; Carolynne and Peter opposed it as respondents, with Carolynne contesting both in her personal capacity and as executor and trustee of the Estate.

On April 17, 2026, Justice Gottardi delivered oral reasons ordering the liquidation and dissolution of LEI, with the effect of that order suspended for 120 days. The court also invited written submissions on costs, with petitioners' submissions due May 18, 2026, and the respondent's reply due June 1, 2026. The present decision, dated June 18, 2026, addresses solely the question of costs.

Policy and legislative provisions at issue

The costs analysis was governed by Rules 14-1(1) and 14-1(9) of the Supreme Court Civil Rules, which provide that costs payable to a party must be assessed as party and party costs in accordance with Appendix B unless certain exceptions apply. The petitioners sought Scale "B" costs, paid personally by Carolynne rather than from LEI or the Estate. Carolynne did not dispute that Scale B costs were appropriate, nor that LEI itself should not bear the costs, as LEI was never a petition respondent under Rule 16-1(1). The key dispute concerned whether Carolynne should be denied indemnification from the Estate.

The principle of trustee indemnification was central to the analysis. The court considered the rule established in Geffen v. Goodman Estate, [1991] 2 S.C.R. 353, that trustees are entitled to indemnification for all costs, including legal costs, reasonably incurred, unless the trustee was acting unreasonably or in substance for their own benefit rather than for the benefit of the estate or trust.

Reasoning and analysis

The petitioners relied on Rasner v. Berger, 2026 BCCA 166, arguing that Carolynne, as executor, should bear costs personally. The court rejected this analogy. In Rasner, the executor had commenced litigation after distributing the entire estate — including significant annuities to herself — leaving no funds to pay a cost award; the litigation was commenced nearly ten years after the deceased died; and the executor was the only person who stood to benefit. None of those factors were present here. Justice Gottardi noted that had Carolynne succeeded, all LEI shareholders, including the Estate, would have avoided the not insignificant costs of a liquidation, meaning the defence served broader interests than Carolynne's own.

The petitioners also relied on Levi-Bandel v. McKeen, 2011 BCSC 247, a case in which one co-executor sought removal of the other. The court found that case to be quite different: in Levi-Bandel, McKeen's self-interest in remaining a trustee was clear and opposed not only by the co-trustee but by the other beneficiaries as well. In contrast, here Carolynne was joined by Peter Robertson in defending the petition, and the other shareholders had not aligned themselves with either side. The court agreed with Carolynne that her defence raised issues appropriate for judicial consideration and that her submissions were reasonable. Crucially, the Petitioners themselves acknowledged in their written submissions that "while the case was hard fought, the parties and their counsel conducted themselves properly during the litigation."

Justice Gottardi found no basis to conclude that Carolynne's decision to defend the petition was unreasonable or was made solely in service of her personal interests. The court observed that the petitioners' written submissions did not articulate how or on what basis the defence was unreasonable — they simply asserted in a conclusory way that as a trustee and beneficiary, Carolynne should not be indemnified. That assertion was rejected.

Ruling and overall outcome

Justice Gottardi declined to order that Carolynne pay the petitioners' costs in her personal capacity, finding the evidentiary record insufficient to support such an order. The petitioners were nonetheless the successful party on the underlying petition and were awarded party and party costs of the proceeding assessed at Scale B, to be paid by the petition respondents. No specific monetary quantum was identified in the judgment; the costs award is subject to assessment.