A recent Ontario Superior Court of Justice decision serves as a cautionary tale for estate litigants not to lose sight of the bigger picture. In Hernandez v. Hernandez, 2026 ONSC 1136, the Court awarded costs against a party who was successful on the legal issue before it, emphasizing the importance of proportionality and reasonableness in estate litigation.
As Justice Nicholson observed in reasons released on February 23, 2026, “sometimes a party can be ‘right’ and still lose.” The decision highlights that success on a legal point may not shield a party from adverse cost consequences where their conduct has generated unnecessary expense and complexity in the administration of an estate.
Background
The deceased, Anna Hernandez, died on March 1, 2020, leaving six children. Three of her children were initially appointed as Estate Trustees, but long‑standing conflict among the siblings, which predated the deceased’s death, continued into the administration of the estate. On consent, all three were removed as Estate Trustees in February 2022, and a neutral third‑party lawyer was appointed to administer the estate, with compensation capped by Court order.
Difficulties nevertheless persisted. One beneficiary and former Estate Trustee, Cheri, (the “Respondent”), objected to numerous aspects of the Estate Trustee’s administration, including minor disbursements such as a $198 software charge and a $16 paralegal fee. An interim distribution occurred in 2023, and by July 2025 the Estate Trustee was ready to complete the final distribution.
All beneficiaries except the Respondent agreed to sign the release for the final distribution. At that time, the Respondent’s share of the residue was less than $5000. During a meeting to discuss final distribution, the Respondent became confrontational, resulting in police being called in relation to an incident that occurred at the Estate Trustee’s office. When the Respondent continued to refuse to execute a release, the Estate Trustee commenced an Application under Rule 75.06 of the Rules of Civil Procedure to distribute the estate and pay the Respondent’s share into Court. By the time of the January 2026 hearing date, both parties had incurred legal fees approaching $27,000 each.
Shortly before the hearing, the Respondent raised a last‑minute jurisdictional argument that the Estate Trustee’s Application was improperly commenced under Rule 75.06 and instead should have been brought as an Application to pass accounts.
The Decision
The Court agreed that the Estate Trustee ought to have proceeded by way of a passing of accounts rather than an Application under Rule 75.06, and dismissed the Application. However, Justice Nicholson was highly critical of the Respondent’s conduct, emphasizing that she waited until the eve of the hearing to raise the jurisdictional objection. By that point, substantial costs had already been incurred.
Although the Application was dismissed, the Court held that the Respondent was entirely to blame for the legal fees that have been incurred and ordered her to personally pay the Estate Trustee’s costs on a full indemnity basis of $27,000. The Court concluded that awarding costs in her favour would improperly reward unreasonable and disproportionate litigation over issues of minimal financial significance.
Key Takeaways
Hernandez underscores that estate litigation must remain focused on the efficient and proportionate administration of the estate as a whole. Parties who lose sight of that broader objective risk significant adverse cost consequences, even where they ultimately succeed on the legal issue.
The decision also highlights the importance of choosing the right procedural vehicle in estate litigation. Passing of accounts applications remain a fundamental tool for resolving disputes over estate administration, and jurisdictional objections should be raised promptly to avoid unnecessary expense and delay.