Court File and Parties

COURT FILE NO.: CV-2300695726-00ES DATE: 20240710 SUPERIOR COURT OF JUSTICE – ONTARIO (ESTATES LIST)

RE: IN THE ESTATE OF JOHN DENNIS DRENNAN, DECEASED MELISSA MARY DRENNAN, Applicant

-and-

DAVID JOHN DRENNAN, JESSICA DRENNAN, AND NICHOLAS DRENNAN, Respondents

BEFORE: FL Myers J

COUNSEL: Dorota Irena Hagel, for the applicant

HEARD: July 9, 2024

Endorsement

[1] The applicant is the daughter of the deceased. The respondent David Drennan is her brother. The other two respondents are the niece and nephew of the applicant and David Drennan. They are the surviving children of a third child who predeceased his father.

[2] Under the father’s will, the applicant is entitled to 50% of the residuary estate. The respondent David Drennan receives 25% and the nephew and niece share the final 25%. The respondents think the estate should be divided 1/3 : 1/3 : 1/3.

[3] In my endorsement of January 5, 2024, reported at 2024 ONSC 141, I provided the following background:

[1] At a motion heard November 21, 2023, the applicant sought an order removing the respondent David Drennan as estate trustee of the estate of the parties’ late father. Alternatively, she sought the appointment of an Estate Trustee During Litigation.

[2] The respondents represented themselves at the hearing. They did not deliver material despite the prior scheduling of steps. I heard them without objection by the applicant.

[3] By endorsement released later that day, I granted the applicant’s alternative relief by appointing an Estate Trustee During Litigation. He will function as a neutral administrator authorized to exercise stewardship over the assets of the estate while the litigation proceeds.

[4] David Drennan advised during the hearing that he had prepared a lengthy narrative document answering the applicant’s claims. He also indicated that the respondents may want to bring one or more claims to challenge their father’s will and to seek an accounting from the applicant for actions allegedly taken by her while she was their father’s attorney for property under a power of attorney.

[5] My endorsement once again describes procedural steps required by the respondents to participate in this proceeding. I strongly urged and urge the respondents to seek legal advice at least to help them decide how they wish to go forward (if not to perform the actual steps for them).

[6] If they wish to take part in this proceeding, I required the respondents to deliver notices of appearance and their sworn evidence by December 31, 2023. If they chose not to do so, the applicant was authorized to bring an early case conference to schedule the return of the application. If the respondents delivered responding evidence, then I set out a partial schedule for cross-examination and I encouraged the parties to try to resolve their differences by mediation as they had discussed.

[7] I also advised the respondents that I was not imposing a time limit on their entitlement to bring whatever applications they choose to bring. Only the regular limitations periods limit their rights to sue. I warned however, that if they did not bring their claims quickly, so as to try to combine their new litigation with this existing litigation, they may find this application heard before they are ready to go with their new claims (if any).

[8] Finally, I directed that if new claims are brought by the respondents, then the parties will need to speak about combining procedural steps in all claims to minimize delay and expense. A case conference will be required to implement an agreed schedule or for a judge to decide what scheduling directions may be appropriate if the parties do not agree.

[9] Finally, for the reasons set out in my endorsement, I made a costs order against David Drennan. His failure to disclose important facts and to abide by the timeline previously set required an otherwise unnecessary motion to be brought.

[4] On January 5, 2024, the applicant asked the court to approve the formal order appointing the ETDL. I went through the draft order in great detail. I gave the respondents something of a primer on signing orders. I indicated that the respondents could not just ignore the need to finalize the order. I warned them, again, of the risk of costs associated with litigation.

[5] Nevertheless, in the ensuing months, Mr. Drennan and the other respondents remained mute. They did not approve the November 21, 2023 order as to form and content once redrafted by Ms. Hagel in accordance with my January 5, 2024 endorsement. They did not deliver a notice of appearance to participate in this litigation. They have not commenced litigation to challenge deceased’s will.

[6] Worse still, by his inaction as the named estate trustee and holding up the entry of the order appointing the ETDL, David Drennan allowed the mortgage on his deceased father’s house to fall into arrears. The mortgagee has now moved to enforce its rights.

[7] As a result of David Drennan’s continued inaction, by order dated July 2, 2024, Faieta J appointed an estate trustee in place of David Drennan. The respondents appeared at the hearing despite never having filed notices of appearance. Faieta J. said that the order was not opposed. He deferred to another day any remaining issues for this application.

[8] The case conference today had been scheduled previously to settle the November 21, 2023 order appointing an ETDL. I will sign the order in the form proposed by Ms. Hagel as it meets the terms I required on January 5, 2024.

[9] This application is now over as the relief sought by the applicant has been granted by the appointment of the replacement estate trustee. There is no need for mandatory mediation as the proceeding is completed.

Costs

[10] The only remaining issue left under the endorsement of Faieta J. is costs of the application.

[11] The applicant has incurred almost $65,000 in costs. She was required to have Ms. Hagel come to court for six appearances to deal with the respondents’ inaction. As a result of Mr. Drennan’s failure to act, he put the estate at risk and then impeded the appointment of an ETDL.

[12] None of the respondents was ever willing to put their allegations in writing under oath despite making clear their views that the applicant stole jewelry and money from the deceased and that she importuned him to sign a will that failed to conform to his own views. They simply delayed the application and then did not oppose the relief sought by the applicant originally.

[13] In the court’s effort to assist unrepresented parties, we all too often ignore procedural niceties. Judges, including me, repeatedly let the respondents participate and make unsworn, nasty allegations while failing to take even the most basic steps required of them. For example, Rule 38.07 of the Rules of Civil Procedure provides:

38.07 (1) A respondent who has been served with a notice of application shall forthwith deliver a notice of appearance (Form 38A).

(2) A respondent who has not delivered a notice of appearance is not entitled to,

(a) receive notice of any step in the application;

(b) receive any further document in the application, unless,

(i) the court orders otherwise, or

(ii) the document is an amended notice of application that changes the relief sought;

(c) file material, examine a witness or cross-examine on an affidavit on the application; or

(d) be heard at the hearing of the application, except with leave of the presiding judge.

(3) Despite subrule (2), a party who is served with a notice of application outside Ontario may make a motion under subrule 17.06 (1) before delivering a notice of appearance and is entitled to be served with material responding to the motion.

[14] The respondents did not attend this case conference. They had notice of it and the topics for consideration as it was discussed in the endorsement of Faieta J. and Ms. Hagel served the respondents with her factum, Bill of Costs, and draft order. They were not technically entitled to even that much notice. But, having chosen not to attend today, they are surely not entitled to any further notice in this proceeding.

[15] This is a case warranting a costs award on a substantial indemnity basis. The respondents made the applicant incur a very significant amount of costs without ever participating properly or justifying their allegations. It seems to be a case of scorched earth as they blocked the signing of the ETDL order and thereby caused the house to fall to the mortgagee even to their own prejudice.

[16] The court gave lengthy explanations of the need for the respondents to appear and to file evidence. They did not challenge the court’s jurisdiction under Rule 37.08 (3). Rather they attorned by participating in several motions and conferences on the merits.

[17] It seems that the respondents just wanted to make scurrilous allegations and then to delay so as to hurt the applicant even if it prejudiced them. This is an abuse of the litigation process and deserving of enhanced costs. See: Mars Canada Inc. v. Bemco Cash & Carry Inc., 2018 ONCA 239 at para. 43.

[18] The estate was always subject to its mortgage debt. But David Drennan’s acts have caused the estate to incur costs liability to the mortgagee in respect of its enforcement efforts. I agree with the applicant that her costs of this proceeding ought to include recovery from the David Drennan’s share of proceeds of the estate the costs payable by the estate to the mortgagee in respect of its enforcement of the mortgage.

[19] Finally, the applicant seeks recovery as a disbursement the interest on her litigation loans. There is evidence that the loans were necessitated by David Drennan’s failure to administer the estate. The funds borrowed were used solely to pay the costs of this application. While the applicant did not put David Drennan on notice of her need to borrow or her intent to hold him liable for the cost of doing so, litigants do not tell the other side before they retain experts or incur other disbursements for litigation for which they seek reimbursement. Moreover, it should not surprise David Drennan that his failure to pay anything from the estate to his sister would necessitate her to need funds to compel him to do his duty.

[20] In this case, the loan amount is modest. The evidence is simple and straightforward. The loan was needed and used for the applicant’s legal fees to prosecute this application. Coupled with the David Drennan’s abuse of the process of the court, this a prime case for recovery of the applicant’s interest costs as a disbursement reasonably incurred to carry the litigation.

[21] I have reviewed the applicants Bill of Costs. The hours claimed and the rates charged are reasonable and well within market. Moreover, they are within a range that the respondents ought to have considered realistic had they thought about the costs they were requiring the applicant to incur by their acts especially since they were warned about the risk of costs liability.

[22] David Drennan is the principal bad actor. But the other respondents are entitled to share 25% of the estate – the same as David Drennan. They apparently objected to their aunt, the applicant, being entitled to 50% of the estate. The nephew and niece stood to gain by David Drennan’s actions and they stood in common cause with him. In my view it is fair and reasonable that they share the cost burden with David Drennan jointly and severally.

[23] In my January 5, 2024 endorsement, I specifically warned the respondents about the potential costs consequences for continued inaction. I wrote:

The thing the respondents cannot legitimately do is to just ignore steps and thereby require others to bear excess costs. If that happens, the respondents may find themselves being ordered to pay costs to the applicant again.

[24] In my view it is fair and reasonable to order the respondents to be jointly and severally liable to pay costs of the applicant on a substantial indemnity basis in on this application that I fix at $60,000 all-inclusive. The funds should come first from their share of the estate if anything remains of it after enforcement by the mortgagee, payment of the mortgagee’s costs, and payment of interest on the applicant’s litigation loan.

[25] I have signed the draft order submitted by Ms. Hagel and bring this proceeding to an end.

FL Myers J Date: July 10, 2024