Case snapshot
At a glance
- Case
- Who Pays Legal Costs in Ontario Estate Litigation?
- Court / Tribunal
- Ontario Superior Court of Justice
- Citation
- 2026 ONSC 4290 ↗
- Date
- July 22, 2026
- Area of law
- Wills Estates
- Key issue
- Whether public policy justified awarding legal costs payable out of the estate, and whether the scale of costs should be elevated beyond partial indemnity based on an offer to settle or the conduct of the parties.
- Outcome
- The court awarded costs on a partial indemnity scale payable by the estate, fixing fees at $26,963.13 and disbursements at $2,081.76, while declining to order costs against the estate trustee personally or to elevate costs to full or substantial indemnity.
- Why it matters
- Anyone involved in an Ontario estate dispute needs to understand that courts carefully control how legal fees are paid from estate funds, and that winning a case does not automatically mean the other side pays all your costs.
Legal principle
The rule from this case
In Ontario estate litigation, courts have broad discretion over who pays legal costs and at what scale. The default is partial indemnity — meaning the winning party recovers only a portion of their actual legal fees, not the full amount. Courts can order those costs paid out of the estate itself when public policy reasons support it, such as when the litigation was reasonably necessary to sort out genuine difficulties in the estate or its administration. Higher cost awards — substantial indemnity or full indemnity — are reserved for exceptional situations. Full indemnity requires conduct that is reprehensible, scandalous, or outrageous. Substantial indemnity requires meaningful misconduct. Courts are also mindful that ordering large cost awards against an estate depletes what beneficiaries ultimately receive, so they guard against unnecessary erosion of estate assets.
Important limits
What this does not mean
This decision does not mean that everyone who brings or defends an estate application will automatically have their legal fees paid by the estate. The court still exercises discretion, and costs can be denied or ordered against a party personally if their conduct warrants it. It also does not mean that making a formal offer to settle guarantees an elevated cost award if the other side refuses. A Rule 49 offer must represent a genuine compromise with real incentive to settle. An offer that lacks meaningful compromise — or where the law governing the dispute was genuinely unsettled — will not automatically trigger substantial indemnity costs from the date of the offer.
Who pays legal costs when an Ontario estate is disputed?
In most Ontario estate disputes, the estate itself pays at least some of the legal costs — but the amount and who bears it depends heavily on the circumstances. Courts do not simply hand the winning party a blank cheque for their legal bills. Instead, a judge weighs public policy, the conduct of everyone involved, and the need to protect what remains in the estate for beneficiaries.
The decision in Kunka Estate v. Giasson, 2026 ONSC 4290 (CanLII), provides a useful illustration of how Ontario courts work through these competing considerations.
Can an estate be ordered to pay legal fees in litigation?
Yes — Ontario courts regularly order that reasonable legal costs be paid out of the estate when the litigation was genuinely necessary. The court applied the framework from McGrath v. Joy Estate, which recognizes that where an estate’s own circumstances or administration created the need for litigation, it is fair to treat the legal costs as an expense of the estate rather than a burden on any one party.
In this case, the judge found that difficulties arising from the testator and the administration of the estate justified having the estate bear the costs. This is a common outcome in estate disputes where the litigation serves the interests of all beneficiaries by resolving genuine uncertainty.
When can a court order costs against an estate trustee personally?
Personal cost orders against an estate trustee are not the default — they require something more than simply losing the litigation. Courts distinguish between an estate trustee who makes an honest mistake or faces a genuinely difficult situation, and one whose conduct crosses into misconduct or bad faith.
In this case, the court declined to order costs against the estate trustee personally. That outcome reflects the general principle that executors and trustees should not be financially punished for acting in good faith, even when a court ultimately disagrees with their decisions. If you are concerned about executor conduct in your family’s estate, our Ontario wills and estates lawyers can help you assess whether personal liability is a realistic issue.
What does partial indemnity mean, and why is it the default?
Partial indemnity means the winning party recovers only a fraction of their actual legal fees — typically somewhere between 50% and 60%, though the exact amount varies. It is the default scale in Ontario civil litigation, including estate matters.
The rationale is proportionality and fairness. Full reimbursement of every dollar spent on lawyers would discourage people from defending legitimate positions, and in the estate context it would also deplete the very fund that beneficiaries are counting on. Courts treat partial indemnity as the baseline that keeps litigation costs manageable and predictable.
When are full indemnity or substantial indemnity costs available?
Full indemnity costs — where the losing party pays essentially everything — are reserved for conduct that is reprehensible, scandalous, or outrageous. The bar is deliberately high, and the court in this case confirmed that standard by reference to Hamilton v. Open Window Bakery.
Substantial indemnity (roughly 1.5 times the partial indemnity rate) is also exceptional. As the court noted, drawing on Davies v. Clarington, it requires real misconduct — not just aggressive litigation or a failed legal argument. Neither elevated scale was awarded here because the conduct did not meet those thresholds.
Does a formal settlement offer guarantee higher costs if refused?
Not automatically. Under Rule 49 of the Rules of Civil Procedure, a party who makes a formal offer to settle and then does better at trial can claim substantial indemnity costs from the date of the offer. But the rule has limits.
The court found that the offer in this case lacked a meaningful compromise and gave the other side little real incentive to accept. On top of that, the law governing the dispute was genuinely unsettled, which meant it was reasonable for the estate to proceed rather than accept. The court refused to treat non-acceptance of the offer as a basis for punishing the estate with elevated costs. This is an important reminder that drafting an effective Rule 49 offer requires strategy, not just paperwork.
Practical takeaways for estate beneficiaries and trustees
- Costs from the estate are not automatic. You need to show the litigation was reasonably necessary — courts will not simply rubber-stamp a request to have the estate pay your legal bills.
- Personal liability for an estate trustee is rare but real. If an executor’s conduct is genuinely improper, a court can order them to pay costs out of their own pocket. Document concerns early.
- Full or substantial indemnity is a high bar. Unless the other side’s conduct is truly egregious, expect costs on the partial indemnity scale.
- Rule 49 offers must be genuine. A settlement offer that doesn’t give the other side a real reason to settle will not trigger elevated costs if refused.
- Proportionality matters. Courts look at whether the time and money spent on the dispute was reasonable relative to what was at stake. Disproportionate legal fees may be trimmed even on a partial indemnity basis.
If you are navigating an estate dispute in the Hamilton or Burlington area, our Burlington wills and estates team understands the local court landscape and can help you assess your position before costs spiral.
UL Lawyers offers a free initial consultation from our Burlington office and works with clients across Ontario on estate disputes, executor issues, and probate matters. Whether you are a beneficiary questioning how an estate is being managed or a trustee facing a challenge, reach out to our wills and estates legal 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, but only in limited circumstances. Ontario courts will order an estate trustee to pay costs personally when their conduct has been improper, in bad faith, or amounts to misconduct — not simply because they lost the litigation.
In most cases, you will recover costs on a partial indemnity scale, which typically covers roughly 50–60% of your actual legal fees. Full recovery is only available where the other side's conduct was reprehensible or outrageous.
A formal Rule 49 offer can entitle you to elevated costs if you do better at trial than your offer — but only if the offer represented a genuine compromise. An offer with no real incentive to settle will likely be disregarded by the court when it comes to costs.