Costs Paid from the Estate

May 2, 2017 David Freedman Executors and Trustees, Litigation, Passing of Accounts 0 Comments

A point of contention in almost all civil litigation is the awarding of costs. In recent years the costs rules dealing with estate litigation have mirrored conventional civil litigation with a persistent issue being whether costs in the litigation at issue should be paid out of the Estate on the basis that the proceedings were unavoidable.

In a recent case, Elines v Ollikainen, 2017 ONSC 2620 (Ont. S.C.J.), Muligan J. dealt with a contested Passing of Accounts. At issue between the parties were the compensation and indemnification claims of the Estate Trustee as well as the question of whether a resulting trust attached to a joint bank account. The objectors were substantially successful. Mulligan J. held that costs should be paid out of the Estate as the determination of the resulting trust question was required in order to administer the Estate properly:

[7]               The objectors seek costs for legal fees, disbursements, HST of $11,560.84.  The objectors form the majority of the residual beneficiaries of this substantial Estate.  The Respondent… [Ms.] Ollikainen is also a beneficiary of the Estate.  She takes no position with respect to the quantum of costs sought by the applicant objectors, and submits that the costs ought to be paid by the Estate, and not by the Estate Trustees personally.

[8]               The objectors request costs either from… [Ms.] Ollikainen personally, or by the Estate of … [Ms.] Elines.  Under the circumstances, I am not satisfied that Dorothea Elines’ conduct in the administration of this Estate rose to the level requiring costs to be paid by her personally.  It is therefore ordered that costs of the objectors be paid from the Estate in the amount of $11,560.84, all inclusive.

[9]               … [Ms.] Ollikainen seeks legal costs in the amount of $15,715.84 to be paid from the Estate.  The Respondent relies on the principles enunciated by Gillese J. in the Sawdon Estate at para. 85:  “…the need to ensure that estates are properly administered.”  In this case, the Estate Trustee took the position that the joint bank account was hers.  In my view, that was not an unreasonable position to advance, although she was unsuccessful.  It was an issue that the parties acknowledged required a judicial determination as part of the due administration of this estate.  I am satisfied that this is not one of those cases where the Estate Trustee ought to bear costs personally for the passing of accounts, and the judicial determination of one of the assets of the estate.  The Respondent… [Ms.] Ollikainen is entitled to her legal costs in the amount of $15,715.84, all inclusive, from the Estate.

[10]           In the result, the Objectors are entitled to their costs from the Estate in the amount of $11,560.84, all inclusive, and, the Respondent… [Ms.] Ollikainen is entitled to her legal costs in the amount of $15,715.84, all inclusive, from the Estate.

 While always contentious, costs awards in estate litigation do in fact (and in law) sometimes reflect the need to have the Court determine a point rather than leave the question to the parties.

Have a nice day all,


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