The Court’s decision in Anton v. Rogovsky, ONSC 2025 915 and 6025 and the subsequent costs endorsement, offer a detailed illustration of how contentious estate litigation can attract significant and adverse cost consequences.
Background
The litigation arose from the Estate of Faina Rogovsky who died in December 2016. Her Will, which was not at issue, appointed her son, Josef, as the sole estate trustee, and named both him and his sister, Elena as equal residuary beneficiaries. While the administration of the estate began amicably, a break down in the sibling’s relationship led to Elena commencing an application to remove Josef as estate trustee, to compel an interim passing of accounts, and seek directions on multiple aspects of estate administration. Josef, in turn, brought an application to pass accounts.
The passing of accounts application proceeded, and Elena made 71 objections. However, by the time of the hearing in February of 2025, Elena abandoned all but two of her objections: Josef’s claim for trustee compensation and reimbursement to Josef of certain “loans” he provided to the estate.
The Merits Decision
Justice Sanfillippo dismissed the removal application and approved the interim passing of accounts, subject to specific modifications. The Court was critical of the scope and manner in which the litigation was conducted, noting that extensive legal resources had been deployed for relatively limited substantive disputes.
On trustee compensation, Elena attempted to rely on two emails from Josef nearly 8 years apart, which she argued served as evidence of his renounciation of trustee compensation. The Court was not convinced. It stated that Josef’s entitlement to seek compensation was not subject to the beneficiary’s consent. Reviewing Josef’s conduct alongside the five factor test, Justice Sanfillippo found that Josef did not engage in serious misconduct however reduced his compensation by 25% to reflect administrative choices that needlessly complicated the estate and contributed to conflict.
The Costs Endorsement
The costs decision is where the case carries its most significant cautionary weight. In deciding costs, the Court drew a sharp distinction between the removal application and the passing of accounts.
With respect to the removal application, the Court ordered Elena to pay Josef’s costs on a substantial indemnity basis, fixed at $70,000, payable personally. The Court emphasized that estate litigation is no longer governed by the presumption that all parties’ costs will be paid from the estate. Rather, modern costs jurisprudence seeks to prevent the unnecessary depletion of estates through unwarranted litigation. The removal application did not attract any public policy exception that would justify insulating the applicant from adverse costs.
Of particular significance was the Court’s treatment of unproven and impugning allegations. Justice Sanfilippo found that Elena advanced allegations suggesting dishonesty and self-interest on the part of the estate trustee, without evidentiary support. Such allegations, where unfounded and ultimately abandoned, justified an elevated costs award. The Court reiterated that substantial indemnity costs may be appropriate where a party makes serious allegations that unfairly impugn the character or reputation of another litigant.
In contrast, the costs of the passing of accounts application—fixed at $80,000—were ordered to be paid from the estate. While most of Elena’s objections were unsuccessful, the Court also found that Josef’s administrative decisions had unnecessarily increased the complexity and cost of the accounting. In those circumstances, a blended approach was rejected in favour of estate-paid costs, particularly given that Elena had already been sanctioned through the substantial indemnity award on the removal application.
Practical Takeaways
These decisions underscore several points of continuing relevance in estate litigation. First, parties should expect the court to scrutinize the proportionality and necessity of estate-related litigation, particularly where claims are narrowed or abandoned late in the process. Second, allegations of misconduct against estate trustees must be carefully grounded in evidence. Where such allegations are not proven, they may expose the moving party to punitive cost consequences. Third, estate trustees are not immune from criticism or cost consequences of their own; administrative decisions that unnecessarily complicate estate administration can affect both compensation and costs outcomes.
Taken together, Antzon v. Rogovsky reinforces the court’s expectation that estate litigation be conducted efficiently, responsibly, and with appropriate restraint, bearing in mind costs may catch up with you in the end.
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