Case snapshot
At a glance
- Case
- Can an Estate Trustee Be Ordered to Pay Costs Personally in Ontario?
- Court / Tribunal
- Ontario Superior Court of Justice
- Citation
- 2026 ONSC 4095 ↗
- Date
- July 14, 2026
- Area of law
- Wills Estates
- Key issue
- Whether an estate trustee who delayed completing tax returns and complying with court directions should be personally liable for costs rather than having those costs paid from the estate.
- Outcome
- The court ordered the estate trustee to pay costs personally at the substantial indemnity scale, denying any reimbursement from the estate.
- Why it matters
- If you are an estate trustee in Ontario, this decision is a clear warning that repeated delays and non-compliance with court directions can cost you money out of your own pocket.
Legal principle
The rule from this case
An estate trustee is entitled to be reimbursed from the estate for reasonable legal costs incurred while properly administering the estate. However, that right to indemnification disappears when the trustee acts unreasonably. Ontario courts have consistently held — drawing on cases like Tarantino v. Galvano and Brown v. Rigsby — that a trustee who forces unnecessary court involvement through their own inaction or non-compliance cannot expect the estate to foot the bill. On the question of scale, Ontario courts generally award costs on a partial indemnity basis unless the losing party's conduct crosses into something egregious or reprehensible. The court in this case found that while the trustee's behaviour did not rise to the level of contempt, it was serious enough to warrant disapproval — and substantial indemnity costs were the appropriate response.
Important limits
What this does not mean
This decision does not mean that every estate trustee who makes a mistake will face a personal costs award. Courts distinguish between honest errors in a complex administration and a pattern of delay or disregard for court directions. A single oversight, a missed deadline caused by circumstances outside the trustee's control, or a good-faith dispute about how to administer the estate will not automatically expose a trustee to personal liability. The ruling also does not mean that substantial indemnity costs are the new default in estate litigation. The court was careful to apply the existing threshold — egregious or reprehensible conduct — and found this case met that bar on its specific facts. Ordinary estate disputes where both sides have legitimate positions will still typically attract partial indemnity costs.
Can an estate trustee be forced to pay legal costs personally in Ontario?
Yes — Ontario courts have the power to order an estate trustee to pay costs out of their own pocket rather than from the estate, and a 2026 Superior Court decision makes clear exactly when that will happen. In Bacic v. Halar et al, 2026 ONSC 4095 (CanLII), the court found that a trustee who dragged their feet on tax returns and repeatedly ignored court directions had forfeited any right to have the estate cover their legal costs.
If you are serving as an estate trustee — or if you are a beneficiary frustrated by a trustee who won’t move things along — this decision is worth understanding.
What did the estate trustee do wrong?
The trustee failed to complete the estate’s tax returns on time and did not follow through on steps the court had already directed. The delays were serious enough that multiple case conferences were needed just to push the administration forward. Case conferences are not routine check-ins; they require court time, lawyer preparation, and real money. The court found that this level of intervention would not have been necessary if the trustee had simply done the job properly.
What is the rule on trustee indemnification in Ontario?
An estate trustee is generally entitled to be reimbursed from the estate for legal costs they reasonably incur while doing their job. That protection exists because trustees take on real responsibility and should not be personally out of pocket for costs that arise from proper administration. However, the right to indemnification is not unlimited. Courts applying authorities such as Tarantino v. Galvano and Brown v. Rigsby have consistently held that a trustee who acts unreasonably — especially one whose conduct forces unnecessary court involvement — loses the protection of the estate’s funds.
The principle is straightforward: the estate pays when the trustee is doing their job; the trustee pays when the trustee is the problem.
When does a court award substantial indemnity costs instead of partial indemnity?
Substantial indemnity costs are a step up from the ordinary partial indemnity scale and are meant to signal serious judicial disapproval. Drawing on the principles from Net Connect Installation Inc. and Davies v. Clarington, courts require conduct that is egregious or reprehensible before moving to that higher scale. In this case, the court stopped short of finding the trustee in contempt — but it found the pattern of delay and non-compliance serious enough to warrant substantial indemnity costs anyway. The message is that a trustee does not have to be found in contempt before the court will use costs to express its disapproval.
Does the estate pay if the trustee is found personally liable?
No. When a court orders personal costs against an estate trustee, the estate does not reimburse those costs. The whole point of a personal costs order is to hold the individual accountable rather than letting the beneficiaries absorb the financial consequences of the trustee’s conduct. In this case, the court specifically denied any indemnification from the estate, confirming that the trustee would bear the full cost personally.
This matters for beneficiaries because it means the estate’s value is protected — the trustee’s misconduct does not come at the beneficiaries’ expense.
What does this mean for beneficiaries dealing with a slow estate trustee?
Beneficiaries have real legal tools available when a trustee is not moving the estate forward. Ontario courts take estate administration seriously and will intervene when a trustee’s inaction is causing harm. If you are a beneficiary watching deadlines slip and court directions being ignored, you are not powerless. Our Ontario wills and estates lawyers can help you understand your options, including whether a court application to compel the trustee — or to seek costs against them personally — is appropriate in your situation.
Practical takeaways for estate trustees and beneficiaries
- File tax returns on time. Delays in completing the estate’s tax obligations are one of the clearest ways to trigger personal liability for costs.
- Comply with court directions promptly. If a court has already told you to do something, doing it late or not at all is a fast track to a personal costs order.
- Avoid forcing unnecessary case conferences. Each conference that exists only because the trustee hasn’t acted is evidence of unreasonable conduct.
- Beneficiaries: document the delays. If you are tracking a trustee’s non-compliance, keep records — dates, missed deadlines, unanswered communications — because courts rely on that evidence.
- Get legal advice early. Whether you are a trustee unsure of your obligations or a beneficiary concerned about mismanagement, early advice from a Burlington wills and estates lawyer can prevent a costly dispute later.
If you are dealing with an estate where the trustee’s conduct is causing delays or financial harm, UL Lawyers offers a free initial consultation from their Burlington office and serves clients across Ontario. Reach out to our estate litigation and probate team to discuss your situation.
This article is automated commentary on a public court decision and is for general information only — not legal advice. Decisions rely on facts unique to each case. If you are affected by a similar issue, contact a lawyer for advice specific to your situation.
FAQ
Frequently asked questions
Yes. Ontario courts have the authority to remove an estate trustee who is not properly administering the estate. Persistent delays, failure to follow court directions, and conflicts of interest are all grounds that courts have considered when deciding whether removal is appropriate.
Partial indemnity costs cover roughly 50–60% of a party's actual legal fees and are the default in most Ontario litigation. Substantial indemnity costs are higher — typically around 90% — and are reserved for cases where the court wants to signal serious disapproval of a party's conduct.
There is no fixed deadline, but trustees are generally expected to complete administration within one year of the deceased's death — sometimes called the 'executor's year.' Delays beyond that require a legitimate reason, and unexplained delays can expose the trustee to personal liability for costs or losses.