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Failure to Follow the Court’s Orders and Continued Inaction Results in Substantial Indemnity Costs

Drennan v. Drennan 2024 ONSC 3905

In Drennan v. Drennan,[1] the Court ordered against the Respondent, payment of substantial indemnity costs for his failure to participate in the litigation process, despite making allegations against the Applicant. The conduct of this litigation was described by the Court as scorched earth litigation, resulting in the Court ordering the Respondent to pay for the interest accumulated on the litigation loans of the Applicant.[2]

The Deceased had two children, a daughter (the “Applicant”) and a son (the “Respondent”). Under the Deceased’s will, the Applicant was entitled to 50% of the residuary estate, while the Respondent was entitled to 25%, and his two children, were entitled to the final 25%.[3]  The Respondent was of the position that the estate should be divided equally in 1/3 shares. Due to the increasing tension amongst the parties, the Applicant sought the removal of the Respondent as the Estate Trustee of the Deceased and requested an Estate Trustee During Litigation (“ETDL”). During the hearing of the motion seeking the removal of the Estate trustee on November 21, 2023, the Respondents were self-represented and failed to file their materials. Additionally, the Respondent had pleaded that he had “prepared a lengthy narrative document answering the Applicant’s claims”.[4]

Following the hearing, the Court’s endorsement outlined the procedural steps required for the Respondents’ continued participation in the proceedings. This included the Respondent’s required filing of a notice of appearance and sworn evidence, as well as a case conference to combine the procedural steps. The Court ordered costs against the Respondent for the motion that took place on November 21, 2023, due to his failure to abide the timeline previously set, and his failure to disclose important facts.[5]

Following this motion, the Respondent continued to ignore the orders made by the Court. The Respondents failed to finalize the order and deliver a notice of appearance, despite the Court’s warning of the risk of increased costs.[6] Moreover, the Respondents did not commence a will challenge as they had previously threatened and had essentially remained “mute” for months following the hearing that took place in November of 2023.[7] Lastly, the appointment of the ETDL was delayed due to the Respondent’s silence as an Estate trustee. This resulted in the mortgage of the Deceased’s home falling into arrears, and the mortgagee enforcing its rights.[8]

The Court addressed the final and only remaining issue involving the application, costs. The court awarded the Applicant costs on a substantial indemnity basis. The Court outlined the reasons previously stated for such a cost award, including the Respondents delay of the application and, their failure to “oppose the relief sought by the applicant”. [9]

The Court also notably, stated the following:

[17] It seems that 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. See: Mars Canada Inc. v. Bemco Cash & Carry Inc., 2018 ONCA 239 (CanLII) at para. 43.[10]

Lastly, the Applicant sought to recover the interest taken on her litigation loan as a disbursement. The Court allowed such disbursement on the basis that there was evidence to prove that the loans were taken due to the Respondent’s failure to administer the estate.[11] The court went on to find:

[20] In this case, the loan amount is modest. The evidence is simple and straightforward. The loan was needed and used for the applicant’s legal fees to prosecute this application. Coupled with the [Respondent’s] abuse of the process of the court, this a prime case for recovery of the applicant’s interest costs as a disbursement reasonably incurred to carry the litigation.

The Applicant’s costs amounted to $65,000, and the Respondent was required by the Court to pay $60,000 of such amount. Drennan v. Drennan demonstrates the court’s disapproval of scorched earth litigation and bad faith conduct through cost awards.

[1] Drennan v. Drennan, 2024 ONSC 3905 (CanLII)

[2] Ibid at para 19.

[3] Ibid at para 2.

[4] ibid at para 4.

[5] Ibid at para 3.

[6] Ibid at para 4

[7] Ibid at para 5

[8] Ibid at para 6

[9] ibid at para 12

[10] ibid at para 17.

[11] Ibid at para 19.

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