In a series of two recent decisions, the Honorable Justice Myers addressed the rising cost of estate litigation through his award of substantial indemnity costs and by making the interest on a litigation loan payable as a disbursement.
In Fanelli v. Fanelli-Bruno1(Fanelli), Mrs. Lina Fanelli’s will left 50% of her estate to each of her two adult children, Sonia and Damiano. About a year before she passed away, Mrs. Lina Fanelli changed her will so that Sonia, Damiano and Sonia’s two children would each receive 25% of her estate. Upon learning that his share of the estate was reduced under the new will from $160,000.00 to about $75,000.00, Damiano commenced a claim against Sonia, in her personal capacity as well as in her capacity as the estate trustee, and her two minor children based on what Justice Myers describes as “bald assertions” of undue influence and incapacity.
Damiano incurred almost $60,000.00 in legal fees to “chase a maximum claim of $85,000.00 [and, in so doing,] put his sister to an expense of $90,000.00 to protect the gifts to her children intended by their grandmother.”
Justice Myers opined that tying up the estate in four years of litigation and depriving it of the ability to make distributions was “an example of scorched earth litigation.” He went on to award Sonia substantial indemnity costs in the amount of $74,000.00 (all-inclusive) which is close to the entire amount that Damiano stood to inherit under the new will.
In Drennan v. Drennan2 (Drennan), the deceased had 3 adult children. In his will, he left 50% of the residuary estate to his daughter, Maria, 25% to his son, David, and 25% to the children of his third adult child who had predeceased him. David and the grandchildren of the deceased believed that the estate should be equally divided between his adult children so that each would receive 1/3 of the residue of the estate. An application was commenced by Maria against David and the deceased’s two grandchildren (“Respondents”). All of the Respondents were self-represented.
Justice Myers noted that the deceased’s daughter incurred almost $65,000.00 in costs and was required to have her lawyer attend six court appearances to deal with the Respondents’ inaction. He opined that “it seems 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.”
Citing the Respondents’ blocking of an Order regarding the appointment of an estate trustee during litigation which thereby caused the mortgage on the deceased’s house to fall into arrears, Justice Myers described David as the principal bad actor whose abuse of the process made this “a case of scorched earth litigation.”
The Respondents were jointly and severally liable to pay costs on a substantial indemnity basis fixed at $60,000.00 (all-inclusive). Justice Myers further awarded Maria the interest on the litigation loan that was necessitated by David’s failure to administer the estate and his inaction during the litigation process.
Besides the extraordinary award of the interest on Maria’s litigation loan, Justice Myers also commented on the difficulties faced by some litigants and their counsel when the opposing party(ies) are self-represented. At paragraph 13 of his decision, Justice Myers acknowledged that:
“In the court’s efforts 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.”
Key Take Aways
- The cost of scorched earth litigation can result in not only an award of substantial indemnity costs but also the interest on a litigation loan as a disbursement.
- While self-represented litigants may benefit from additional time to comply with timelines and procedural steps, where delays by a self-represented party amount to an abuse of process, this can be addressed during cost submissions.
If you are interested in hearing more about the Drennan case and the interest on litigation loan being awarded, consider attending the Women’s Law Association of Ontario’s Access to Justice Week (A2J) program with the Law Society of Ontario entitled “A2J Week 2024: The Missing Middle: The rising cost of legal fees for individuals who do not qualify for legal aid | Law Society of Ontario (lso.ca).” This free, virtual program is taking place on October 30, 2024, from 4:00 p.m.- 5:00 p.m. The panel will be moderated by Jocelyn Tatebe. Speakers include Mills & Mills LLP’s very own Cassandra Fafalios and Amanda Bafaro, Chief Risk Office & General Counsel at Bridgepoint financial, which funded the litigation loan in Drennan!
- Fanelli v. Fanelli-Bruno, 2023 ONSC 6501 (CanLII) https://canlii.ca/t/k16jc ↩︎
- Drennan v. Drennan, 2024 ONSC 3905 (CanLII) https://canlii.ca/t/k5qjz ↩︎
At Mills & Mills LLP, our lawyers regularly help clients with a wide range of legal matters including business law, real estate law, estate law, employment law, health law, and tax law. For over 140 years, we have earned a reputation amongst our peers and clients for quality of service and breadth of knowledge. Contact us online or at (416) 863-0125. The material provided through the Mills & Mills LLP website is for general information purposes only. It is not intended to provide legal advice or opinions of any kind.
2 St Clair Ave West
