Bacic v. Halar et al, 2026 ONSC 4095

CITATION: Bacic v. Halar et al, 2026 ONSC4095

COURT FILE NO.:CV-20-00004474

DATE: 2026 07 14

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Olga Bacic

Plaintiff

Melisa Rupoli, for the Plaintiff

• and -

Mladen Halar

Defendant

-and-

Gurinder Jaspal, for the Defendant

CV-18-00005210

Zorka Halar and Mladen Halar

Plaintiff

-and-

Olga Halar Bacic

Gurinder Jaspal, for the Plaintiff

Defendant

James S.G. Macdonand, Melisa Rupoli, for the Plaintiff

HEARD: In Writing

COST ENDORSEMENT

LeMay J.

1In July of 2024, I conducted a pre-trial at which this matter resolved. It was an estates matter, and the final order that I signed required the distribution of most of the estate funds, a hold back of $100,000 that was to be kept in trust by Ms. Bacic’s counsel, and the completion of the tax returns for the Estate.

2Unfortunately, there were subsequent proceedings in this matter, primarily as a result of Mr. Halar’s failure to have various estate management tasks completed. Given these failures, a series of case conferences were before me on July 25^th, 2025, October 7^th, 2025, January 13^th, 2026, and February 23^rd, 2026.

3Ultimately, given the additional steps that had to be taken, Ms. Bacic’s counsel requested that I consider the issue of costs. I directed a timetable for costs submissions and have now received and reviewed those submissions.

4I have determined that Mr. Halar should personally pay substantial indemnity costs to Ms. Bacic for the post-settlement proceedings. He is not entitled to be reimbursed for these costs from the Estate’s funds. In order to explain the reasons for my decision, it is necessary to set out the events since the matter was resolved and then set out the positions of the parties and my disposition of them.

Background

5The parties were the beneficiaries of the will of the late Zorka Halar. There were difficulties with the administration of the Estate’s affairs. Litigation ensued, and had been ongoing for a number of years prior to 2024.

6On July 17^th, 2024, the matter came before me for a pre-trial. Ultimately, the matter was resolved with full and final minutes of settlement. As part of those minutes of settlement, there was a holdback of $100,000, which was held in trust pending the completion of the tax returns. Completing the tax returns was Mr. Halar’s responsibility, through the accountant who had previously managed the Estate’s affairs.

7Between July and November of 2024, I am not aware of anything having been done by Mr. Halar in order to address the need to complete the tax returns. Then, in November of 2024, counsel for Ms. Bacic wrote to Mr. Halar’s counsel and asked for an update. She was advised that the tax returns were being worked on by the accountant.

8There were two further occasions, January 22^nd, 2025, and April 3^rd, 2025, where requests for updates on the tax returns from Ms. Bacic’s counsel were answered in the same way: the accountant was working on preparing the returns. Ms. Bacic’s counsel was not satisfied with that response and observed that it was the same response as in January. There was still no indication from Mr. Halar’s counsel as to when the tax returns would be completed. Ms. Bacic’s counsel asked for the accountant’s contact information, but it was refused.

9By the end of May 2025 there had been no information about the tax returns. Ms. Bacic’s counsel requested a case conference before me in order to address the issue of the tax returns. A case conference was held before me on July 25^th, 2025. At that time, Mr. Halar, through his counsel, asked for a further six months to complete the tax returns. Given that he had already had a year to complete the tax returns, I denied that request and directed that the tax returns be completed by September 21^st, 2025. I also warned counsel for Mr. Halar that his clients would face an order for costs if the work was not done in a timely way.

10A further case conference was held on October 7^th, 2025. At that time, I was advised that the tax returns had been completed but that there was an outstanding issue in respect of a pension statement. The fact that there was an issue in respect of a pension statement had not really been clarified prior to that date. I directed that the accountant was to advise by October 14^th, 2025, as to whether a re-statement of the tax returns would be required as a result of this pension statement.

11After the October 7^th, 2025, appearance, Ms. Bacic’s counsel sought confirmation that the tax returns had been filed as well as confirmation as to whether the pension information would require a restatement of the tax returns. Copies of the tax returns were eventually provided. As of December 19^th, 2025, the Notices of Assessment had not been provided, and Mr. Halar’s counsel was taking the position that Ms. Bacic’s counsel had been given the contact information from the accountant and could follow up with him directly.

12In the meantime, at the October 7^th, 2025, hearing, counsel for Ms. Bacic had also indicated that she might be seeking costs for the various post-settlement proceedings. I subsequently received confirmation that she was, in fact, seeking costs. As a result, I set a timetable for written submissions, which I received at the end of December 2025.

13I had also given the parties a further date, January 16^th, 2026, for a follow-up case conference to ensure that everything had been completed. At that case conference, everything had not been completed. The issue of a pension statement, and the possibility that there had been an overpayment, was still outstanding. In my endorsement, I made it clear that I had grave concerns about the way that Mr. Halar was handling this file.

14Therefore, at the conclusion of the January 16^th, 2026, hearing, I directed Mr. Halar to answer the following questions:

a) What pension statement?

b) What organization paid the pension?

c) When was it supposed to have been paid?

d) Why is this information necessary to complete the administration of the Estate?

15On January 20^th, 2026, Mr. Halar’s counsel wrote to Ms. Bacic’s counsel and attached some documentation. One of those documents was a letter from Service Canada that indicates that there was an overpayment of CPP and OAS, and that this overpayment had already been recouped from the death benefit that was being paid. Counsel took the position that this document and the letter answered the questions that I had set out.

16Counsel for Ms. Bacic took the position that the letter did not answer my questions. A further case conference was held on February 23^rd, 2026. I had the advantage of counsel for Mr. Halar’s January 20^th, 2026, letter prior to the February 23^rd, 2026, case conference. From my perspective, the letter did not answer the questions. All it had done for me was create more confusion.

17During the February 23^rd, 2026, hearing, I pointed out to counsel for Mr. Halar that his client was running the risk of being cited in contempt if the questions were not answered. The hearing had been scheduled for 9:30 a.m. that morning. By 10:10 a.m., the questions had not yet been answered, and I had a different matter that I had to deal with. As a result, I held this matter down until noon. I finally got answers to the questions and provided further directions. I believe that those directions have been complied with.

18In that endorsement of February 23^rd, 2026, I set out a timetable for any additional costs submissions, as I had already received one set of submissions as of the end of December. I have now received and reviewed those costs submissions.

The Positions of the Parties

19Ms. Bacic’s counsel argues that the costs of the various case conferences should be paid, on a full indemnity basis, by Mr. Halar. She takes this position on the basis that the delays in resolving the outstanding issues were the responsibility of Mr. Halar, that the costs incurred would not have been necessary if Mr. Halar had taken the steps that needed to be taken, and that Mr. Halar’s conduct therefore justifies an enhanced award of full indemnity costs. Counsel seeks the sum of $9,206.90 inclusive of HST and disbursements.

20Mr. Halar takes the position that he should be entitled to partial indemnity costs on the basis that the Case Conferences were not necessary and that Ms. Bacic improperly attributed the delays to him. In the alternative, if I am inclined to order costs against Mr. Halar, I should only order them on a partial indemnity basis and should order them payable out of the Estate. He seeks costs in the amount of $3,840.00 plus HST, which would be a total cost of $4,339.20 all inclusive.

Issues

21Based on the submissions of the parties, the issues that I am required to determine are:

a) Who should pay costs in this case?

b) What should the scale of the costs be?

c) Should the Estate pay the costs or should they be paid by a party?

22I will address each issue in turn.

Who Should Pay the Costs?

23I have set out a detailed history of the events since the mater was resolved in July of 2024. A review of that history shows, in my view, that Ms. Bacic was attempting to have Mr. Halar finalize the management of the estate and, in particular, file the tax returns. I am of the view that the case conference in July of 2025 was entirely necessary, as I do not believe that Mr. Halar would have gotten the tax returns completed without having his hand forced by the Court.

24It is no answer for Mr. Halar to say that it was the accountant’s responsibility to get the tax returns done. Ultimately, Mr. Halar was providing the instructions to the accountant. If the accountant was unable to do the work for a year, then it would have been incumbent on Mr. Halar to retain a different accountant. However, I also note that there is no evidence before me that Mr. Halar had been following up with the accountant prior to June of 2025.

25Indeed, in his submissions, counsel for Mr. Halar notes that his client “actively pursued resolution through repeated engagement with Service Canada and the Pension Office beginning in June 2025”. June 2025 was almost a year after Mr. Halar was supposed to engage with Service Canada, engage with the accountant and resolve these matters. It was also after counsel for Ms. Bacic had requested the case conference. I would have expected Mr. Halar to begin resolving these matters in August or September of 2024 at the latest. It was only in the shadow of a hearing before me that Mr. Halar belatedly began to carry out his assigned responsibilities.

26Further, it required three additional hearings and the threat of being cited in contempt before Mr. Halar actually complied with all of the various directions that I provided. This was a simple matter, and completing the administrative work to finalize the affairs of this estate should have been done long ere since.

27Mr. Halar also argues that the fact that Ms. Bacic’s counsel did not release the amounts owing to Service Canada before a further Order was made by me is grounds for me to award costs against Ms. Bacic. There are two problems with this argument. First, the Order I had made in July of 2024 does not give the Davis Webb firm any authority to pay out monies other than on account of assessments from Revenue Canada. Service Canada is not Revenue Canada, and any overpayment was not an overpayment of taxes. A further Court order was necessary. Second, the letter that was provided was not at all clear as to whether there was an overpayment that was actually owing. The text of the letter suggests that the benefits payable had been reduced to account for the overpayment.

28I should also briefly address the submission of Mr. Halar that the decision to invest the monies that Davis Webb was holding in trust in the names of Mr. Halar and Ms. Bacic was improper. There is also a suggestion that it was done without Mr. Halar’s knowledge or consent and that this somehow justifies costs against Ms. Bacic. I disagree.

29Although the property normally vests in the Trustee, in this case the administration had been going on for a very long time, and the requirement to file a further tax return for the Estate would have been too onerous. Further, given the difficulties that we had had in having Mr. Halar file the previous years’ tax returns, I was concerned that introducing the possibility of having to file another tax return might turn the administration of this estate into an endless affair. As a result, it is not unreasonable for Davis Webb to have attributed the income the funds earned to the two beneficiaries is an entirely reasonable step to have taken. If my memory serves, I explicitly approved this step. If not, I hereby approve it nunc pro tunc.

30Finally, Mr. Halar argues that costs should not be awarded because the July 17^th, 2024, order contained a provision that says the various proceedings are dismissed without costs. I reject that argument as well. The costs covered by the award are the costs up to the point where the matter is settled. The proceedings after July 17^th, 2024, are best thought of as proceedings taken by Ms. Bacic to enforce the terms of the settlement and have Mr. Bacic finish the assignments that he had been tasked to do. There is no basis in this Order to preclude Ms. Bacic from claiming costs for the post-July 2024 legal work.

31For these reasons, I conclude that the costs of the post-settlement events should be paid by Mr. Halar.

Issue #2- The Scale of the Costs

32Ms. Bacic argues that the costs should be paid on a full indemnity basis. She advances this submission on the basis that the delay in this case was caused by Mr. Halar, and that the combination of the delay and the dealings with the Court justify an award of costs on an elevated scale. In support of this submission, counsel directs my attention to Net Connect Installation Inc. v. Mobile Zone Inc., 2017 ONCA 766. In that decision, the Court noted (at para 8):

8While we would not interfere with the costs award made by the motion judge, we would express a cautionary note on this issue. In this case, the motion judge awarded costs on a full indemnity basis. There is a significant and important distinction between full indemnity costs and substantial indemnity costs. An award of costs on an elevated scale is justified in only very narrow circumstances – where an offer to settle is engaged or where the losing party has engaged in behaviour worthy of sanction: Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.) at para. 28. Substantial indemnity costs is the elevated scale of costs normally resorted to when the court wishes to express its disapproval of the conduct of a party to the litigation. It follows that conduct worthy of sanction would have to be especially egregious to justify the highest scale of full indemnity costs.

33Counsel’s submissions refer to an “elevated” award of costs. The actual quantum of costs that Ms. Bacic is seeking is the full indemnity amount, and I will consider the parties’ positions on that basis.

34I start with the observation that full indemnity costs are only awarded in extremely rare circumstances. I did not have to make a finding of contempt in this case, nor did I have to conduct a contempt hearing. As a result, I am not persuaded that full indemnity costs are appropriate in this case.

35Even substantial indemnity costs are only awarded in exceptional circumstances. In Davies v. Clarington (Municipality) et. al., 2009 ONCA 722, (2009) 100 O.R. (3d) 66 (C.A.), the Court provided a detailed explanation of these principles (at paras 29-31):

29In Young v. Young, 1993 CanLII 34 (SCC), [1993] 4 S.C.R. 3, [1993] S.C.J. No. 112, at p. 134 S.C.R., McLachlin J. described the circumstances when elevated costs are warranted as "only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties".

30The same principle was expanded upon in Mortimer v. Cameron (1994), 1994 CanLII 10998 (ON CA), 17 O.R. (3d) 1, [1994] O.J. No. 277 (C.A.), at p. 23 O.R., where Robins J.A., speaking for the court, set out the restricted circumstances in which a higher costs scale is appropriate with reference to Orkin, at para. 219. [page75 ]

An award of costs on the solicitor-and-client scale, it has been said, is ordered only in rare and exceptional cases to mark the court's disapproval of the conduct of a party in the litigation. The principle guiding the decision to award solicitor-and-client costs has been enunciated thus:

[S]olicitor-and-client costs should not be awarded unless there is some form of reprehensible conduct, either in the circumstances giving rise to the cause of action, or in the proceedings, which makes such costs desirable as a form of chastisement. [See Note 2 below]

31The narrow grounds justifying a higher costs scale were further reinforced by Abella J.A. in McBride Metal Fabricating Corp. v. H. & W. Sales Co. (2002), 2002 CanLII 41899 (ON CA), 59 O.R. (3d) 97, [2002] O.J. No. 1536 (C.A.) where, at para. 39, she said:

Apart from the operation of rule 49.10 (introduced to promote settlement offers), only conduct of a reprehensible nature has been held to give rise to an award of solicitor and client costs. In the cases in which they were awarded there were specific acts or a series of acts that clearly indicated an abuse of process, thus warranting costs as a form of chastisement. See, also, Walker v. Ritchie, 2005 CanLII 13776 (ON CA), [2005] O.J. No. 1600, 197 O.A.C. 81 (C.A.), at para. 105, vard 2006 SCC 45, [2006] 2 S.C.R. 428, [2006] S.C.J. No. 45.

36I have already noted that the administration of this estate would not have been completed by Mr. Halar in the absence of my intervention. This conclusion is supported by the fact that Mr. Halar did not deal with Service Canada until after a case conference had actually been booked.

37Further, at the hearing on January 13^th, 2026, I expressed grave concerns about the manner in which the Estate was being administered. At the February 23^rd, 2026, hearing, I had to threaten Mr. Halar with a citation for contempt before we finally got clear and comprehensible answers to the questions that I had posed.

38As I have noted above, a finding of contempt would almost invariably attract an award of full indemnity costs. In this case, while I have not made a finding of contempt and was not required to conduct a contempt hearing, I do have conduct that was egregious, as described in the facts section and summarized in the previous paragraph. Court orders were not being followed and had not been followed for a lengthy period of time. Mr. Halar was not doing the estates administration work that he should have been doing. Ms. Bacic should not be out of pocket for chasing Mr. Halar to do the work that he was required to do.

39I should also make a brief comment about the quantum of the costs. Ms. Bacic is seeking full indemnity costs in the range of $9,000.00 for the work that has been done. When the bill of costs is considered, the substantial indemnity costs that are being sought would be approximately $8,400.00, inclusive of HST and disbursements.

40The bill of costs provided by Mr. Halar’s lawyer has costs of approximately $4,300.00 inclusive of HST. While there is a considerable difference between the two bills, I have reviewed the details of Ms. Bacic’s bill of costs, and I am satisfied that the costs were both actually incurred and reasonably incurred. I suspect that part of the reason why the costs for Ms. Bacic’s lawyer are higher is that she was working to try and understand what was going on. There were also numerous appearances in this case, including one that would have been docketed for three hours.

41As a result, I am of the view that the substantial indemnity costs sought by Ms. Bacic ($8,400.00) are reasonable and should be paid by Mr. Halar, subject to the third issue to which I now turn.

Issue #3- Should the Costs Be Paid Out of the Estate?

42Counsel for Mr. Halar argues that his client, as the Estate Trustee, should be entitled to indemnification of reasonably incurred costs unless they act unreasonably. The current state of the law on this point is described in Tarantino v. Galvano, 207 ONSC 6635, where the Court stated (at para. 15):

15The general rule regarding estate trustees is that they are entitled to be fully indemnified by the estate for their reasonably incurred legal costs to the extent they are not recovered from any other person: Brown v. Rigsby, 2016 ONCA 521. However, “a court may order otherwise if an estate trustee has acted unreasonably or in substance for his or her own benefit, rather than for the benefit of the estate”: Geffen v. Goodman Estate, 1991 CanLII 69 (SCC), [1991] 2 S.C.R. 353, at 391; Brown v. Rigsby, para. 14.

43Originally, the costs of every party were paid out of the Estate. However, that rule has evolved so that there are circumstances in which a party, even an Estate Trustee, will be responsible for the costs: McDougald Estate v. Gooderham, 2005 CanLII 21091 (ON CA) at paras. 78 to 80.

44The circumstances in which costs will be ordered payable from the Estate are described in Sawdon v. Sawdon Estate, 2014 ONCA 101, (2014) 119 O.R. (3d) 81 (C.A.). In that case, the Court stated (at para. 85):

85The 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.

45Conversely, where the conduct of a trustee is ill-advised, it is unlikely that their costs will be compensated from the Estate. In this case, I have explained in detail why I have concluded that Mr. Halar has not managed the affairs of the estate reasonably. I would also note that neither of the two policy grounds set out in Swadon for awarding costs payable by the Estate are present in this case. Proper administration of the Estate would not have required the Court’s intervention. As a result, the costs are to be paid out of Mr. Halar’s portion of the funds held in trust.

Conclusion

46For the foregoing reasons, Mr. Halar is to pay the sum of $8,400.00 out of his portion of the monies being held in trust by Davis Webb, LLP. For clarity, this will mean that Mr. Halar will end up with $8,400.00 less than he would otherwise have received and Ms. Bacic will end up with $8,400.00 more than she would have otherwise received.

47This additional amount will go to Ms. Bacic’s law firm. They are holding the funds in trust and are authorized to transfer those funds to their general account once they have tendered an account to Ms. Bacic.

48I remain seized to deal with any final implementation issues that may be outstanding. The parties may contact me through the Trial Office should there be a need for a further appearance.

W.M. LeMay J.

Released: July 14, 2026

CITATION: Bacic v. Halar et al, 2026 ONSC4095