SILVA ESTATE (RE)

The Respondent sought full-indemnity solicitor-client costs against the Applicant personally, following a decision that removed the Applicant as the personal representative of her mother’s Estate for failing to comply with her duty to account. The Applicant argued there was no reprehensible conduct to justify solicitor-client costs and therefore costs should be assessed under Schedule C and paid from the Estate.

As the successful party, the Respondent was presumptively entitled to costs under Rule 10.29. In considering the factors set out in Rule 10.33, the Court found that the Applicant had unnecessarily prolonged and complicated the litigation. Specifically, despite a prior Court Order, the Applicant failed to account for international assets and funds and produced highly disorganized records, requiring the Respondent to retain an accountant to reconstruct the Estate’s financial information. Justice McLeod concluded that the Applicant’s conduct reflected “self-benefit, dishonesty, and gross negligence,” rather than mere incompetence.

Although Rule 10.31 generally contemplates partial-indemnity costs through Schedule C, Justice McLeod held that this was one of the rare cases warranting an award of solicitor-client costs. Such an award was necessary to deter “positive misconduct,” including self-dealing by a fiduciary and the refusal to comply with a Court Order.

The Court further ordered that the costs be paid personally by the Applicant, rather than from the Estate, to prevent the successful party’s recovery from being unfairly diminished by the depletion of Estate assets.