All About Estates

Trustees Ordered to Pay Costs Personally

In a recent court decision, the court declined to order costs payable from a modest estate and instead ordered the two parties (both trustees) to pay costs personally.

A testamentary trustee, Mr. Cardinal, brought an application to compel estate trustee, Mrs. Perreault, to pass her accounts in her capacity as an estate trustee and power of attorney for the late Mr. Beaulieu.  However, while Mrs. Perreault consented to bring her application, consent was only given on the eve of the hearing, causing Mr. Cardinal to incur legal fees.

The application to pass accounts was heard and the outcome largely favourable to Mrs. Perreault. The parties were unable to resolve the issue of costs.  Both Mr. Cardinal and Mrs. Perreault sought recovery of their costs from the estate and/or from each other.

The court awarded Mr. Cardinal partial indemnity costs of $18,000.00 for his application to compel the passing.  Noting her initial reluctance to agree to a passing, Mrs. Perreault was to pay this sum to Mr. Cardinal personally. However, the Court also awarded Mrs. Perreault $48,000.00 in costs for her application to pass her accounts. Mr. Cardinal was to pay Ms. Perreault’s the net sum of $30,000.00 personally.

The Court noted that Mr. Beaulieu’s estate was modest ($339,000.00 before estate liabilities) and if both parties were indemnified from the estate, there would be little left for the beneficiaries.  Additionally, the Court found that both parties lost perspective over the litigation and missed opportunities to reach a settlement. In particular, Mr. Cardinal made serious allegations that Mrs. Perreault misappropriated funds and acted in bad faith. Justice Tzimas wrote: “Impugning somebody’s integrity in the absence of a credible evidentiary foundation is reprehensible. The estate and the remaining beneficiaries should not be burdened by Mr. Cardinal’s decision to pursue allegations that lacked any evidentiary foundation.”

When determining costs, the Court rejected Mrs. Perreault’s claim that Mr. Cardinal should cover her translation costs for having her court material translated from English into French.  Mr. Cardinal had a right to request a proceeding in French and should not have to cover translation costs for the other party. Mrs. Perreault was free to retain new counsel that could conduct the proceedings in French or to bear her own counsel’s translation costs.

About Diane Vieira
Diane has practiced in the area of estate, trust and capacity litigation since she was called to the Ontario Bar in 2006. Diane obtained her law degree from Queen’s University after completing an Honours Bachelor of Arts degree from the University of Toronto. She also recently received the Certificate in Elder Law from Osgoode Hall Law School. She is a member of the Trusts & Estates Section of the Ontario Bar Association, the Advocates’ Society, and the Toronto Lawyers Association. Diane has chaired various continuing legal education programs regarding estate, trust and capacity matters. She can be reached at dvieira@devrieslitigation.com

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