Court File and Parties
Barrie Court File No.: CV-15-0352ES Date: 2017-04-27 Superior Court of Justice - Ontario
The Estate of Dorothea Elzina Elines, deceased
Re: Michael Elines, et al, Applicants And: Jane Ollikainen et al, Respondents
Before: Mulligan J.
Counsel: Judith L. Turner, Counsel, for the Beneficiary Objectors/Applicants Barrie M. Hayes, Counsel, for the Respondents
Heard: By written submissions
Endorsement
1This matter was dealt with as a Passing of Accounts. There were three issues before the court, including the level of executor’s compensation for the Respondent Jane Ollikainen, whether a joint bank account owned by the deceased, and Jane Ollikainen became property of the Estate upon the deceased’s death, and whether certain disbursements incurred by the executor ought to be deducted from the executor’s compensation.
2The issues were dealt with and an endorsement was released on March 8, 2017.
3Both the Respondent Jane Ollikainen and the Applicants seek costs for these proceedings. The Applicant Objectors achieved a level of success on this application. The issue of the joint bank account was resolved in favour of the objectors. It was determined that the account was an asset of the Estate. In addition, the executor’s compensation claimed was reduced by some of the legal fees incurred by her. These fees were determined to be solicitor’s fees for administration work that would normally be done by an Estate Trustee.
Analysis
4Modern costs rules with respect to estates were the subject of a review and summary by Strathy J. (as he then was) in Zimmerman v. McMichael Estate, 2010 ONSC 3855. As Strathy J. stated at paragraph 4:
The following principles are applicable to this issue:
(a) the costs of a proceeding are in the discretion of the court and the court may determine by whom and to what extent costs should be paid.
(b) estate litigation, like any other form of civil litigation, operates subject to the general civil litigation costs regime.
(c) as a general proposition, the principle that the “loser pays” applies to estate litigation.
(d) in the determination of costs, the court must have regard to the factors set out in Rule 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, but, at the end of the day, the court’s responsibility is to make an award that is fair and reasonable, having regard to all the circumstances, including the reasonable expectations of the parties;
(e) the court’s discretion to award costs on a full indemnity basis is preserved by rule 57.01(4)(d);
(f) full indemnity costs are reserved for those exceptional circumstances where justice can only be done by complete indemnity. [citations omitted)
5In Zimmerman the Estate Trustee was required personally to bear the costs incurred in connection with this passing of accounts. In noting his conduct, Strathy J. stated at paragraph 14:
A trustee who presents accounts that are, as I described them, “manifestly inaccurate, incomplete and false,” and who, as I found, delayed and obstructed the beneficiaries in their search for answers, should pay all the costs involved in getting to the truth.
6In Sawdon Estate v. Sawdon, 2014 ONCA 101, Gillese J.A. speaking for the Ontario Court of Appeal provided further guidance in paragraph 85 and 86:
The public policy considerations at play in estate litigation are primarily of two sorts: (1) the need to give effect to valid wills that reflect the intention of competent testators; and (2) the need to ensure that estates are properly administered. In terms of the latter consideration, because the testator is no longer alive to rectify any difficulties or ambiguities created by his or her actions, it is desirable that the matter be resolved by the courts. Indeed, resort to the courts may be the only method to ensure that the estate is properly administered.
In any event, where the problems giving rise to the litigation were caused by the testator, it is appropriate that the testator, through his or her estate, bear the cost of their resolution. In such situations, it ought not to fall to the Estate Trustee to pay the costs associated with having the court resolve the problems….
Costs of the Objectors
7The 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 Jane 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.
8The objectors request costs either from Jane Ollikainen personally, or by the Estate of Dorothea 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.
Costs of the Respondent Jane Ollikainen
9Jane 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 Jane Ollikainen is entitled to her legal costs in the amount of $15,715.84, all inclusive, from the Estate.
10In the result, the Objectors are entitled to their costs from the Estate in the amount of $11,560.84, all inclusive, and, the Respondent Jane Ollikainen is entitled to her legal costs in the amount of $15,715.84, all inclusive, from the Estate.
MULLIGAN J. Date: April 27, 2017