In April 2026, I wrote about the decision in Kunka Estate v. Giasson, which considered whether resulting trust principles apply to beneficiary designations on registered accounts such as TFSAs and RRIFs. Angela Giasson (“Angela”) was the named beneficiary of the accounts at issue, and was successful on the application. As such, the Court ordered that she was entitled to her costs, payable about of the assets of the Estate.
However, as the parties could not agree on the quantum of those costs, the Court invited them to make brief written submissions.
On July 22, 2026, the Court released is costs endorsement. Angela sought roughly $43,583 in full indemnity costs, arguing she was a necessary party who should not be out of pocket for defending the beneficiary designations in her favour, or alternatively, costs of $34,556.42 based on a settlement offer she had made to the Estate. In contrast, the Estate sought a $10,000 cap on Angela’s legal fees, arguing that her legal fees were excessive.
In estate litigation, a court will first determine whether the litigation engages any public policy considerations, such as whether there are reasonable grounds on which to question the execution of a Will or the testator’s capacity to make a Will, or whether the difficulties or ambiguities that gave rise to the litigation were caused by the testator. In such cases, it is appropriate for the estate to bear the costs of the litigation.
Where the public policy considerations are not in engaged, the ordinary civil litigation rules apply to the determination of costs, which dictate that under s.131 of the Courts of Justice Act, costs are in the court’s discretion, taking into account the factors listed under Rule 57.01 of the Rules of Civil Procedure, and the principles of fairness and reasonableness.
Full indemnity costs are only awarded where there has been reprehensible, scandalous and outrageous conduct by one of the parties. Substantial indemnity costs are similarly reserved for exceptional cases, to sanction reprehensible conduct or misconduct by a party or counsel, or where proceedings are vexatious, frivolous, or an abuse of process.
In dismissing the Estate’s application in the present case, the Court found that the public policy considerations were in play and therefore costs were payable by the Estate (and not the estate trustee personally). However, the Court was not prepared to order that Angela’s full-indemnity costs be paid. There was no reprehensible conduct by the Estate or the estate trustee, and the costs must still be “reasonable”. Costs on a partial indemnity scale were therefore more appropriate.
As for whether the Court should order that Angela receive partial indemnity costs up to the date she served an offer to settle, and substantial indemnity costs after the offer, Angela’s offer amounted to an insignificant compromise and provided little incentive for the Estate to accept it in light of the unsettled law that caused the application. The Court therefore disregarded the offer to settle.
As the Court found that the costs incurred by Angela’s lawyers were fair and reasonable, it ordered that the Estate pay her costs on a partial indemnity scale in the amount of $26,963.12, inclusive of HST, plus just over $2,000 in disbursements.
Take Away:
This costs decision is a prime example of the Court’s exercise in discretion in awarding costs. While a successful party may be entitled to payment of their costs from the estate if certain public policy considerations are engaged, the Court will still assess the reasonableness of those costs and award them on a partial indemnity scale absent egregious conduct from the other side. Moreover, offers to settle must demonstrate a true compromise in order to attract the costs consequences and benefits under Rule 49.
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