One of the factors that must be given consideration when entering into estate litigation is that there could be substantial costs associated with the process. On one hand, the assets of the estate could be depleted by ongoing litigation, leaving those who stand to be beneficiaries with less than the testator intended to provide to them. On another hand, if a party is unsuccessful in litigation, whether with estate law or otherwise, they could be made to pay back the other party for costs. As seen in a recent decision from the Ontario Superior Court of Justice, these costs can be severe.

Sister wins estate litigation against brothers

The parties involved in the matter are the children of a married couple who died in 2016 and 2018. Following the death of the mother in 2018, the daughter was successful in an application to remove her brothers as co-executors and trustees of the estate, leaving her as the sole estate trustee. The original trial’s decision was issued on December 4, 2020, leaving the sister with 21 days to file her cost submissions. The sister did this, which then meant the brothers had 14 days to respond. The brothers did not respond, leaving the court to rely solely on the sister’s submission of facts.

Sister incurred legal fees of $93,865

In her submission, the sister stated that she was on the hook for $93,865 (before tax). She told the court that she was only seeking $71,000 because the rest of the fees incurred had to do with costs related to the administration of the estate. She said she wanted to presented the court with a “reasonable” request rather than the full amount.

The courts turned to the Courts of Justice Act in their analysis, explaining that the Act gives the court discretion to determine how much should be awarded in costs.

In turning to common law, the court explained that the general objective in estate costs is to provide the trustee with fees related to costs reasonably incurred in the administration of the estate.

Brothers’ conduct leaves them on the hook

In this case, the court noted that the applicant was seeking substantial costs, and that such an award is authorized “where the losing party has engaged in behaviour worthy of sanction.”

The court found that the conduct of the brothers was detrimental to the beneficiaries of the estate, stating they had:

  1. Not fulfilled their obligations as co-estate trustees;
  2. Preferred their own self-interest;
  3. Failed to comply with court orders, even orders made on consent;
  4. Refused to take any meaningful steps to facilitate the realization of the estate; and,
  5. By their conduct, brought the administration of the estate to a standstill. For those and other reasons set out in the Reasons, the respondents were removed as estate trustees.

Adding to that list, the court summarized that the brothers had failed in their obligations as estate trustees and deliberately interfered with the sister’s ability to complete the administration of the estate. As such, the court found their conduct worthy of sanction, characterizing it as “reprehensible.” As a result, the court ordered the brothers to pay the sister a total amount of $60,821.

If you are involved in a matter related to estate litigation, contact the experienced estate litigation lawyer at NULaw 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.

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