Court File and Parties

COURT FILE NO.: CV-24-014 (Picton) DATE: 20240719 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: The Estate of Gary Frederick Sheffield by the Estate Trustee, Katherine Markolefas, Applicant AND: Bradley Frederick Sheffield, Respondent

BEFORE: Mew J.

COUNSEL: Peter Hackenbeck, for the Applicant William Procter, for the Respondent

HEARD: In Writing

Endorsement on costs

[1] In my endorsement dated 24 June 2024 in this matter (Sheffield (Estate) v. Sheffield, 2024 ONSC 3627), I directed that the applicant’s costs should be payable from the Estate, and invited written submissions on costs.

[2] Both parties have made submissions, and a costs summary has been provided by the applicant.

[3] The applicant seeks costs on a full indemnity basis pursuant to s. 23.1 of the Trustee Act, R.S.O. 1990, c. T.23, pursuant to which an estate trustee may be indemnified for costs reasonably incurred to administer the estate, which includes reasonable litigation costs: Santos v. Coghlan, 2023 ONSC 4862, at paras. 23-27.

[4] In the alternative, the applicant seeks substantial indemnity costs, on the basis that the respondent has engaged in reprehensible, scandalous or outrageous conduct in acting to disrupt the timely administration of the estate by issuing threats against the applicant, which threats are said to have ultimately escalated to the respondent’s physically interfering with Ms. Markolefas’ person. Moreover, the respondent is alleged to have removed valuables from the Estate property.

[5] The applicant’s costs summary asserts full indemnity costs of $10,814.50, substantial indemnity costs of $8,391.04, and partial indemnity costs of $5,808.99.

[6] Although I have already directed that the applicant’s costs should be paid by the Estate, the respondent submits that there should be no costs ordered in this matter, and that each party should bear its own costs. I have considered the submissions made by the respondent in that regard, even though they go to the issue of entitlement to costs, rather than just the quantum of the indemnification provided by the Estate to the applicant.

[7] The respondent’s position is grounded on the argument that the dispute is really between Katherine Markolefas personally and the respondent, rather than between the Estate and the respondent.

[8] I observe that the right of indemnity provided by the Trustee Act can be extended even when the estate trustee is also a beneficiary, who has pursued personal interests alongside those of the trust: Geffen v. Goodman Estate, [1991] 2 S.C.R. 353.

[9] There were apparently settlement discussions, although no offers complying with the Rules of Civil Procedure were made. It is, indeed, regrettable that the parties had to resort to judicial determination of their dispute.

[10] The application was ultimately necessary because of the impasse that had been reached between the parties. The application advanced the administration of the Estate. This may have resulted in the preferred outcome for Ms. Markolefas personally. However, that should not, in the circumstances, disentitle her to indemnification by the Estate for legal expenses reasonably incurred.

[11] The respondent does not challenge the costs summary.

[12] I find the costs claimed to be reasonable, and order that the applicant’s full indemnity costs of $10,814.50 should be paid out of the Estate.

Mew J. Date: 19 July 2024