Costs Denied: Executors Behaving Badly Must Pay


When will an Estate Trustee (also known as an Executor) be responsible for her own costs? That was the issue before the Court of Appeal in Brown v Rigsby.

The Original Decision

The original action was brought by the children of the deceased against their mother’s estate trustees, seeking the removal of the estate trustees, an order requiring a passing of accounts and that the estate trustees repay amounts that the beneficiaries said were improperly taken out of the estate.

Those issues were settled between the parties and the only issue left to the motion judge was the parties’ costs. The convention in court proceedings is that the “loser pays”, meaning the winner will usually get some portion of their legal costs covered by the losing side. Here, the motion judge found that the settlement reflected divided success and there was no clear-cut winner or loser.  She held that the respective parties should bear their own costs.

The Appeal

The estate trustees appealed and argued that the motion judge erred in failing to order that their costs be paid out of the estate. The Court of Appeal allowed this appeal, even though the estate trustees failed to make that argument before the motion judge.

In Ontario, estate trustees are entitled to be reimbursed for all reasonable costs incurred in the course of administering an estate, including the costs of an action that reasonably required a defence. However, not all estate trustees can be said to have acted properly. In this case, the Court of Appeal set out general rules regarding the ability of estate trustees to recover their legal fees from the estate:

  • estate trustees are entitled to recover all reasonably incurred legal costs from the estate;


  • if the estate trustees act unreasonably or in their own self-interests, they are not entitled to indemnification from the estate; and


  • if an estate trustee recovers a portion of his or her costs from another person or party, he or she is entitled to indemnification from the estate for the remaining  reasonably incurred costs.

Here, the Court of Appeal denied the estate trustees’ claim to recover their costs on the basis of unreasonableness and self-interest. The Court of Appeal found that the litigation was largely due to the estate trustees’ failure to make disclosure to the beneficiaries. In addition, the estate trustees failed to exhibit “timely candour” and that they worked to protect their own interests at the expense of the estate. As a result, the estate trustees’ appeal was dismissed (and they had to pay the respondents’ costs of $5,000, in addition the their own costs of the appeal).

It is always a good idea to get legal advice about your duties and obligations as an estate trustee. Similarly, if you are a beneficiary, you have a right to information and have the power to hold a trustee to account.

At Eisen Law, we advise both estate trustees and beneficiaries on issues similar to those raised in this case, and have many years of experience in assisting individuals with understanding their rights, protecting their interests, and ensuring that they are being treated fairly. Contact us at 416-591-9997 or online to set up a consultation with one of our knowledgeable and skilled lawyers.