Costs Awarded Against The Successful Party: Hernandez v. Hernandez, 2026 ONSC 1136
Introduction
In Hernandez v. Hernandez, 2026 ONSC 1136 (“Hernandez”), the Superior Court of Justice dismissed the estate trustee’s application under Rule 75.06 of the Rules of Civil Procedure. However, it ordered the Respondent to personally pay $27,000.00 in full-indemnity costs because her actions unnecessarily escalated a minor dispute and increased litigation expenses.
Background
Anna (the “Deceased”) passed away on March 1, 2020, leaving six children (the “beneficiaries”). Three of her children were initially appointed as the co‑estate trustees of the Deceased’s Estate (the “Estate”), including her daughter, Cheri (the “Respondent”). On February 15, 2022, the court removed the siblings as estate trustees on consent, and appointed lawyer Sebastien S. (the “Applicant”) as Estate Trustee, with compensation capped at $4,000.[1]
Following the Applicant’s appointment as estate trustee, he began administering the Estate. However, the Respondent was dissatisfied with the Applicant’s decisions and requested an accounting of the Estate’s accounts in March of 2023.[2]
In September of 2023, an interim distribution of the Estate took place. On July 31, 2025, all parties met to discuss the final distribution. All the beneficiaries had signed the release, except for the Respondent, as she had taken issue with minor disbursements. Such issues included a $198 software charge and a $16 paralegal fee, which split amongst each beneficiary totalled to $35.67. The Respondent also raised concerns about a $561.53 commission on a share transaction facilitated by the Applicant as Estate trustee, claiming she could have completed the task without the fee. During the meeting the Respondent became aggressive with the Applicant, and a confrontation at the meeting led to the police being called.[3]
The residue available for distribution was $27, 211.33, equalling to $4,535.22 per beneficiary. On August 25, 2025, the Applicant commenced an application to distribute the beneficiaries remaining share of the Estate and to deposit the Respondent’s share into court, as she refused to sign the Release. Application and responding records, as well as factums, were exchanged by the parties, followed by cross-examination, bringing the total costs for each party to approximately $27,000.[4]
Issue
The court addressed two main issues:
- Whether the Applicant could obtain the requested relief under Rule 75.06 rather than by a passing of accounts; and
- How to allocate costs given the disproportionate litigation over minor disbursements.
Analysis
The Court accepted that, technically, the application for substantive relief should not have proceeded under Rule 75.06 and should have been brought as a passing of accounts, relying on the procedural nature of Rule 75.06. However, the court found the Respondent’s timing in raising this jurisdictional objection, which was on the evening of the return date, far too late. Full disclosure had been provided, and the substantive issues were already resolved. [5]
On the merits of administration complaints, the court found the Applicant’s disbursements fell within the scope of the order appointing him as estate trustee. The court rejected the Respondent’s argument that the Law Society restricted such disbursements as the amounts in dispute were minimal relative to the Estate. The court emphasized proportionality and criticized both the escalation of the litigation (including going through with cross‑examinations) and the insistence on litigating over what amounted to one‑sixth of $214.[6]
Turning to costs, the court applied the traditional estates costs principles, which are that trustees are entitled to indemnification for reasonably incurred costs unless acting unreasonably or in self‑interest. The court also asserted that civil costs rules govern absent public‑policy reasons to charge costs to the estate.[7]
The judge concluded the Applicant acted in good faith but chose the wrong procedural route. Nonetheless, the court determined that the Respondent’s unreasonable conduct was the real driver of the costs. Exercising the broad discretion under section 131 of the Courts of Justice Act and Rule 57.01(2), the court awarded costs against the technically “successful” party in the circumstances.[8]
The court dismissed the application for want of proper procedure under Rule 75.06 but ordered the Respondent to pay $27,000.00 in full‑indemnity costs to the estate trustee personally, given her disproportionate and unreasonable litigation conduct over trivial disbursements.[9]
Concluding Remarks
Hernandez highlights that costs may be awarded against a technically successful party when their conduct has unnecessarily prolonged proceedings.
—
[1] Hernandez v. Hernandez, 2026 ONSC 1136
[2] Ibid at para 21
[3] Ibid at para 23
[4] Ibid at para 25
[5] Ibid at para 36
[6] Ibid at para 60
[7] Ibid at para 51
[8] Ibid at para 47
[9] Ibid at para 62
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Written by: Gabriella Banhara
Posted on: March 18, 2026
Categories: Commentary, WEL Newsletter
Introduction
In Hernandez v. Hernandez, 2026 ONSC 1136 (“Hernandez”), the Superior Court of Justice dismissed the estate trustee’s application under Rule 75.06 of the Rules of Civil Procedure. However, it ordered the Respondent to personally pay $27,000.00 in full-indemnity costs because her actions unnecessarily escalated a minor dispute and increased litigation expenses.
Background
Anna (the “Deceased”) passed away on March 1, 2020, leaving six children (the “beneficiaries”). Three of her children were initially appointed as the co‑estate trustees of the Deceased’s Estate (the “Estate”), including her daughter, Cheri (the “Respondent”). On February 15, 2022, the court removed the siblings as estate trustees on consent, and appointed lawyer Sebastien S. (the “Applicant”) as Estate Trustee, with compensation capped at $4,000.[1]
Following the Applicant’s appointment as estate trustee, he began administering the Estate. However, the Respondent was dissatisfied with the Applicant’s decisions and requested an accounting of the Estate’s accounts in March of 2023.[2]
In September of 2023, an interim distribution of the Estate took place. On July 31, 2025, all parties met to discuss the final distribution. All the beneficiaries had signed the release, except for the Respondent, as she had taken issue with minor disbursements. Such issues included a $198 software charge and a $16 paralegal fee, which split amongst each beneficiary totalled to $35.67. The Respondent also raised concerns about a $561.53 commission on a share transaction facilitated by the Applicant as Estate trustee, claiming she could have completed the task without the fee. During the meeting the Respondent became aggressive with the Applicant, and a confrontation at the meeting led to the police being called.[3]
The residue available for distribution was $27, 211.33, equalling to $4,535.22 per beneficiary. On August 25, 2025, the Applicant commenced an application to distribute the beneficiaries remaining share of the Estate and to deposit the Respondent’s share into court, as she refused to sign the Release. Application and responding records, as well as factums, were exchanged by the parties, followed by cross-examination, bringing the total costs for each party to approximately $27,000.[4]
Issue
The court addressed two main issues:
Analysis
The Court accepted that, technically, the application for substantive relief should not have proceeded under Rule 75.06 and should have been brought as a passing of accounts, relying on the procedural nature of Rule 75.06. However, the court found the Respondent’s timing in raising this jurisdictional objection, which was on the evening of the return date, far too late. Full disclosure had been provided, and the substantive issues were already resolved. [5]
On the merits of administration complaints, the court found the Applicant’s disbursements fell within the scope of the order appointing him as estate trustee. The court rejected the Respondent’s argument that the Law Society restricted such disbursements as the amounts in dispute were minimal relative to the Estate. The court emphasized proportionality and criticized both the escalation of the litigation (including going through with cross‑examinations) and the insistence on litigating over what amounted to one‑sixth of $214.[6]
Turning to costs, the court applied the traditional estates costs principles, which are that trustees are entitled to indemnification for reasonably incurred costs unless acting unreasonably or in self‑interest. The court also asserted that civil costs rules govern absent public‑policy reasons to charge costs to the estate.[7]
The judge concluded the Applicant acted in good faith but chose the wrong procedural route. Nonetheless, the court determined that the Respondent’s unreasonable conduct was the real driver of the costs. Exercising the broad discretion under section 131 of the Courts of Justice Act and Rule 57.01(2), the court awarded costs against the technically “successful” party in the circumstances.[8]
The court dismissed the application for want of proper procedure under Rule 75.06 but ordered the Respondent to pay $27,000.00 in full‑indemnity costs to the estate trustee personally, given her disproportionate and unreasonable litigation conduct over trivial disbursements.[9]
Concluding Remarks
Hernandez highlights that costs may be awarded against a technically successful party when their conduct has unnecessarily prolonged proceedings.
—
[1] Hernandez v. Hernandez, 2026 ONSC 1136
[2] Ibid at para 21
[3] Ibid at para 23
[4] Ibid at para 25
[5] Ibid at para 36
[6] Ibid at para 60
[7] Ibid at para 51
[8] Ibid at para 47
[9] Ibid at para 62
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