Losers in Toller Cranston estate litigation ordered to pay $325,000 in costs

Most people who are considering suing someone are advised that if they should lose their case, they may be ordered by the court to pay costs. But can you imagine if the amount of costs you were ordered to pay was $325,000?

This is what happened to the brothers of Canadian skating legend and Olympian, Toller Cranston. His sister, Philippa Baran, was the administrator of his estate, which was valued at just over 6 million. His brothers, Goldie and Guy, who were the beneficiaries, brought the estate to court with more than 300 objections to how their sister was handling the estate. Most of their objections were about expenses she incurred.

Expenses were high, but this was mostly because Mr Cranston lived in Mexico. His sister had to go to Mexico to deal with the estate. There were two houses, an extensive art collection to valuate, sell and/or ship, and over 18,000 household items to be sold. The administrator was first appointed in Mexico, then the appointment was confirmed in the Ontario court.

Once the court reviewed the objections, it found that only five of the objections had any merit. This was a big factor, since our courts tend to use the "loser pays" rule.

The court said that the brothers had acted unreasonably. They had made a relatively straightforward estate into a tangled mess for no real reason. The judge said that the brothers' behaviour was "reprehensible". Some of the specific things done by the brothers that the court mentioned as being unreasonable were:

-  raising over 300 objections and forcing their sister to incur substantial legal expenses to prepare and respond to each one and then to abandon approximately half of them at the hearing. The abandonment of their unreasonable objections at the hearing was appropriate, however it should have been done much earlier.

- bringing an application to have the Trustee pass her accounts only 3 ½ months after she was appointed as the Estate Trustee in Ontario.

- insistence on exchanging affidavits of documents, conducting examinations for discovery and spending three days cross-examining the sister on her affidavits and conducting additional written discoveries, turning what should be a summary proceeding into a complicated hearing.

- refusal to narrow the issues to be decided before the hearing as requested by the court, which required each of the over 300 objections to be addressed separately during the hearing.

The cost award if $325,000 was slightly less than what the sister had asked for and much, much higher than what the brothers thought should be paid. However, the judge indicated that he was making a punitive order that is intended to deter other people from behaving unreasonably. Read more in a story from CBC by clicking here. 

This is something that happens frequently in estates. The psychology behind it is complex and I don't pretend to fully understand it. Why would someone with five real objections pad out their complaint to include an additional 295 unfounded, silly complaints? Was it malice or anger or something else? Whatever the motivation, the court clearly stated that it will not tolerate this sort of time-wasting litany of pointless objections. If the brothers had stuck to the real issues, they would not have been required to pay $325,000 in legal costs.

This is something for all beneficiaries to keep in mind as they contemplate taking an executor to court. If it isn't a real, unsolvable issue, don't waste the court's time and everyone else's time. This doesn't mean you can't bring genuine issues to court, but you have to be reasonable not just in what you claim, but in how you conduct yourself during the court process.

To read the case for yourself, click here. Attached image of Toller Cranston from Wikipedia.