Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: IN THE ESTATE OF WANDA OTOWSZYC, deceased
Alexandra Witoslawski, Applicant
AND:
Pawel Podsiadly, Objector/Respondent
BEFORE: Horvat, J.
COUNSEL: James Spiroff, for the Applicant/Estate Trustee
Pawel Podsiadly, self-represented
HEARD: In Writing
ENDORSEMENT ON COSTS
1On May 6, 2026, I released my decision on the passing of accounts application brought by the estate trustee for the Estate of Wanda Otowszyc, Alexandra Witoslawski, for the accounting period from June 12, 2019, to March 27, 2025. Pawel Podsiadly, one of the three beneficiaries of the Estate and the Trustee’s brother, raised over 150 objections to the Estate’s accounts. For reasons reported at Witoslawski v. Podsiadly, 2026 ONSC 2713. I did not accept any of the Mr. Podsiadly’s objections and passed the accounts of the Estate. I also found that Ms. Witoslawski was entitled to indemnification from the Estate for the costs of the application in the amount of $52,210.88, inclusive of H.S.T. and disbursements.
2I invited written submissions on the question of whether any of the costs payable of the application should be payable by Mr. Podsiadly personally. Ms. Witoslawski argued that Mr. Podsiadly should be personally responsible for $45,000 in costs on a substantial indemnity basis because of an offer to settle that would have been better for Mr. Podsiadly than the outcome of the application and because of his unreasonable litigation conduct.
3In my view, the offer proposed no real incentive for Mr. Podsiadly to accept it and in those circumstances, costs on a substantial indemnity scale are not appropriate. Mr. Podsiadly should only be responsible for those portions of the legal fees that were incurred in response to his objections. I found no basis to award costs on a scale other than partial indemnity.
4For the reasons that follow, it is fair and reasonable for Mr. Podsiadly to be personally responsible for costs in the amount of $12,500, inclusive of H.S.T. The remainder of the legal costs of this application, being $39,710.88, shall be payable from the Estate.
General Principles
5In estate litigation, the court’s first step in determining costs is a careful scrutinization of the litigation to determine whether any public policy considerations apply. This is to ensure that the Estate is being properly administered, in which case the parties’ reasonable costs are to be paid from the Estate. These public policy considerations include:
(a) If there are reasonable grounds on which to question the execution of a will or the testator’s capacity to make the will, it is in the public interest that such questions be resolved without cost to those questioning the will’s validity.
(b) Where the difficulties or ambiguities that gave rise to the litigation are caused by the testator, it is again appropriate for the testator’s estate to bear the costs of their resolution: McGrath v. Joy Estate, 2022 ONCA 119, 471 D.L.R. (4th) 211, at paras. 91-96; McDougald Estate v. Gooderham (2005), , 255 D.L.R. (4th) 435 (Ont. C.A.), at paras. 78-79.
6Estate trustees are obligated to defend litigation against the estate. Accordingly, they are generally entitled to be fully indemnified for all reasonably incurred costs in mounting a reasonable defence in proceedings: Geffen v. Goodman Estate, , [1991] 2 S.C.R. 353, at 390-391. Where, however the estate trustee is found to have acted unreasonably or for their own benefit, rather than for the benefit of the estate, then their claim for indemnification may fail: Geffen, at 391.
7Where the public policy considerations are not at play, the ordinary civil rules are applied to determine the issue of costs. The general principles governing costs in civil litigation are well established:
(a) Costs are in the court’s discretion under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43.
(b) Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides factors for consideration in the exercise of discretion to award fair and reasonable costs.
(c) Fairness and reasonableness are the overriding principles that govern costs awards: Boucher v. Public Accountants Council for the Province of Ontario (2004), , 71 O.R. (3d) 291 (C.A.).
8On the appropriate scale of costs, full indemnity costs are only awarded where there has been reprehensible, scandalous, or outrageous conduct by one of the parties: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 26; Net Connect Installation Inc. v. Mobile Zone Inc., 2017 ONCA 766, 140 O.R. (3d) 77, at paras. 8-9.
9Similarly, substantial indemnity costs are reserved for exceptional cases, such as where there is reprehensible conduct or misconduct by a party or counsel, or where proceedings are vexatious, frivolous, or an abuse of process: Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66, at para. 40; Lewis v. Lewis, 2019 ONCA 690, at para. 17. “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”: Net Connect, at para. 8; Pinder Estate v. Farmers Mutual Insurance Company (Lindsay), 2020 ONCA 413, at paras. 147, 150, and 153.
Analysis
10I found as part of my decision on the passing of accounts application that Ms. Witoslawski was entitled to indemnification from the Estate for the costs of this application in the amount of $52,210.88, inclusive of H.S.T. and disbursements. I invited written submissions on the question of whether any of the costs payable of the application should be payable by Mr. Podsiadly personally.
11There is no public policy ground present that would justify Ms. Witoslawski’s costs being payable entirely by the Estate. I am mindful, and remind the parties, of the court’s obligation to “guard against allowing their processes to be used to unnecessarily deplete a testator’s estate”: McGrath, at para. 92. The objections raised by Mr. Podsiadly were not reasonably necessary to ensure the proper administration of the Estate. The objections also were not reasonable or necessary in the factual circumstances of the case. Mr. Podsiadly was given the opportunity to review the supporting receipts and vouchers for the expenses claimed. None of his objections were accepted by me at the passing of accounts. Mr. Podsiadly also maintained his allegations of misspending, self-dealing, fraud, and that Ms. Witoslawski acted as a dishonest and reckless fiduciary despite the evidence to the contrary. I made no findings of wrongdoing as against Ms. Witoslawski, apart from her pretaking, but then repaying compensation. In these circumstances, Mr. Podsiadly must be responsible for at least a portion of the legal costs associated with this application.
12An offer to settle the passing of accounts application was served on Mr. Podsiadly in February 2026, prior to the completion of the factum and oral hearing. If the offer was accepted and Mr. Podsiadly consented to the passing of accounts, then under the terms of the offer, Ms. Witoslawski would have received $8,271.35 in compensation. This would have been $5,000 less than I ultimately approved in compensation. Mr. Podsiadly did not accept the offer and the hearing proceeded.
13The offer technically satisfied the requirements of r. 49.10 given that it was made at least seven days before the commencement of the hearing, was not withdrawn, was not accepted by Mr. Podsiadly, and Ms. Witoslawski obtained a judgment more favourable than the terms of the offer. The offer, however, lacked any real compromise which r. 49 was intended to foster. In my view, there was very little incentive for Mr. Podsiadly to accept the offer. In these circumstances, in my view, it is appropriate to exercise my discretion and order that any costs payable by Mr. Podsiadly should not be paid on a substantial indemnity scale under r. 49.10.
14Ms. Witoslawski would have been required to bring an application for a passing of accounts regardless of Mr. Podsiadly’s involvement or position on the application. Additional costs were incurred by Ms. Witoslawski for those portions of the factum and the preparation for the oral hearing that were responsive to Mr. Podsiadly’s objections. Mr. Podsiadly should only be personally reasonable for the payment of those legal costs, on a partial indemnity basis. Considering the factors in r. 57.01, it is fair and reasonable in the circumstances of this case that Mr. Podsiadly be personally reasonable for legal fees in the amount of $12,500.00, inclusive of H.S.T.
Conclusion
15Mr. Podsiadly shall pay to Ms. Witoslawski $12,500, inclusive of H.S.T., for the legal costs of this application within 30 days of today’s date. The remainder of the legal costs of this application, being $52,210.88 - $12,500.00 = $39,710.88, shall be payable from the Estate.
Jacqueline A. Horvat
Justice
Date: July 20, 2026
CITATION: Witoslawski v. Podsiadly, 2026 ONSC 4225
COURT FILE NO.: CV-25-81 (Woodstock)
DATE: 20260720
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
IN THE ESTATE OF WANDA OTOWSZYC, deceased.
Alexandra Witoslawski
Applicant
– and –
Pawel Podsiadly
Respondent
Endorsement on costs
Horvat J.
Released: July 20, 2026