Can An Estate Recoup Money Lost After Objection Without Merit?
Being named the executor of an estate is a serious responsibility that leaves the executor making decisions that may impact anyone who stands to benefit from a will or trust. Executors may also find themselves tied up in courts if they find themselves involved in estate litigation. Going to court can cost individuals and estates substantial amounts of money. A recent decision from the Ontario Superior Court of Justice looks at what remedies, if any, an estate has if someone brings a notice to objection without merit.
A Brother Scorned: Three Sisters Named as Estate Trustees & Beneficiaries
The situation arose after the deceased passed away on August 23, 2013. His will was dated four days before his death. In it, his sisters were named as estate trustees and beneficiaries, but his brother was not. The brother filed a Notice of Objection to the issuance of a Certificate of Appointment of Estate Trustee within a Will. The brother decided to abandon his claim at the last minute, but the sisters sought costs. The matter went before a motions judge who ruled in favour of the sisters. When the motion judge awarded costs, they included costs against the brother for estate administration costs for interest and penalties owed by the estate to the CRA.
The reason for this was that the Notice of Objection prevented the sisters from being able to liquidate the estate’s assets in order to pay a tax debt owed by the estate. This led to a larger tax debt than necessary due to penalties and interest amounting to $26,475.44.
The Appeal: Can Estate Administration Costs for Estate Litigation Be Awarded?
The brother appealed the motion judge’s decision. The court noted that the sisters, in their counterclaim, sought damages “resulting from the litigation commenced.” However, the court wrote that this is not a cause of action, stating “Commencing and pursuing litigation is not an actionable wrong. Commencing and pursuing losing litigation is not an actionable wrong. Commencing and pursuing vexatious and frivolous litigation or litigation that is an abuse of process is not an actionable wrong.”
The court noted that there is no statute, regulation, or common law principle to award estate administration costs (other than legal costs or disbursements) resulting from estate litigation. The court wrote,
“On the findings of the motions judge, the (brother) brought unmeritorious litigation which he eventually abandoned. The consequence of these findings may be an adverse costs award. If there is litigation misconduct, that award could be on an elevated scale. But these findings do not give rise to a cause of action. There is nothing in the factual matrix of this case to suggest that the counterclaim is bad merely as a result of deficient pleading. The counterclaim is dismissed as failing to disclose a cause of action.”
Contact the experienced estate litigation lawyers at Lex Arbesman Legal in Toronto to learn how we can protect your interests and achieve the best possible resolution of your estate dispute. Contact us online or at 416-481-5604 to book a consultation today.