Who should pay costs in estate matters?
Who should pay costs in estate matters?

Kurt v. Kurt and Sullivan, 2024 ONSC 589:

Estate litigation is a costly process and a common question that litigants often ask is how can they recover costs at the end of the process?

Costs of a legal proceeding are delt with at the end of the litigation process, where a judge will make a determination if one party should bear the substantial or partial cost of the other party. The traditional approach was that the estate was to be ordered to pay the costs of all parties is now a way of the past. 100% of legal costs are very rarely awarded in estate litigation matters. Deviation from this traditional approach mean that the perceived notion that there is nothing to be lost in pursing estate litigation matters is no more. The modern approach which deviates from the once traditional approach recognizes the need to restrict unwarranted litigation and protect estates from being depleted by litigation proceedings.

The modern guiding principles for addressing costs in estate litigation matters comes from the Court of Appeal in its 2005 decision of McDougald Estate v. Gooderham, 2005 CanLII 21091 (ON CA). The modern approach to fixing costs in estate litigation is to carefully scrutinize the litigation, and unless the court finds that a public policy consideration is at play, the cost rules that normally apply in civil litigation should be followed in the estate litigation. McDougald Estate’s modern approach refers to two public policy considerations for deviating from the standard civil cost rules:

1. Where the litigation was reasonably necessary to ensure the proper administration of the estate, as in the case where there are reasonable grounds on which to question the execution of a will or the testator’s capacity to make a will; and

2. Where the litigation arose as a result of the actions of the testator or those with an interest in the residue of the estate.
Should one of these public policy considerations for deviating from the standard civil cost rules arise, the Courts have a greater incentive to award costs payable by the estate.

    The procedure of awarding costs is also found in statues. Section 131 of the Courts of Justice Act, Rso 1990, c C.42 provides that costs of an incidental to a proceeding or a step in proceeding are in the discretion of the courts, and the courts can determine by whom and to what extent of costs shall be paid. Sub-Rule 57.01(1) of the Rules of Civil Procedure provides factors for the court to consider in the exercise of its discretion of costs :

    1. The principle of indemnity, including where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged, and the hours spent by that lawyer;
    2. The amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed.

    The recent case of Kurt v. Kurt and Sullivan, 2024 ONSC 589 the Court stated that the modern cost rules are designed to foster three fundamental purposes:

    1. To indemnify successful litigants for the cost of litigation;
    2. To encourage settlements; and
    3. To discourage and sanction inappropriate behaviour by litigants.
    In the case of Kurt v. Kurt, the Plaintiff’s public policy considerations were rejected by the Court. The judge found that the conduct of the Plaintiff was not to be awarded as it was less than laudable. As a result, the Plaintiff’s costs were not to be paid by the Estate, but rather normal civil cost rules were to apply and as the unsuccessful party the Plaintiff was to bear her own cost of the action.

    The Defending parties, while considered the successful parties were also not awarded costs, as the Defendant failed to admit and error until the Plaintiff’s actions was well advanced.

    The judge’s decision and reason for not awarding costs to the Plaintiff, highlights the importance of one’s conduct as a litigant throughout the estate litigation process from start to finish. Litigants who display less than laudable conduct, will not be awarded costs, even if they may be the successful party. It is important as a litigant to follow proper procedures and made great effort to not delay or incur additional or excessive litigation costs. The case of Kurt v. Kurt illustrates how at the end of estate litigation when costs are being discussed one’s actions and conduct throughout the process will be observed and considered by the judge.

    Article Written by
    Nicole Sharma


    Marcela S. Aroca

    Stephen Yoker

    Eric Florjancic

    Lisa Grant

    Krystal Taylor

    Jacob Burling

    Nicole Sharma

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