Ontario Superior Court of Justice

Court File No.: 5223/11
Date: 2012-03-30

ONTARIO
SUPERIOR COURT OF JUSTICE

In the Matter of the Estate of Eleanor Veronica McCarvell, Deceased

RE: Eleanor Ann Kar, Applicant.

and:

James Dennis McCarvell, William Joseph McCarvell and Judith Marie Stocki., Respondents .

BEFORE: McDermid, J.

COUNSEL:
J. D. Skinner, for the Applicant.

L. F. Farrell, for the Respondent, James Dennis McCarvell.

No one appearing for William Joseph McCarvell.

No one appearing for Judith Marie Stocki.

HEARD: March 30, 2012.

Application under rule 14.05(3) of the Rules of Civil Procedure and Sections 5 and 37 of the Trustee Act. R.S.O. 1990, c. T.23 .

ENDORSEMENT

[ 1 ] I have now received and read submissions about costs from Mr. Skinner and Ms. Farrell. I received no submissions from Mr. William Joseph McCarvell or from Ms. Stocki.

[ 2 ] Ms. Farrell submits that the costs of the applicant and of James Dennis McCarvell should be paid from the Estate on a full indemnity basis. She provides a number of authorities to support her submission that an estate trustee should be entitled to indemnification for his or her legal fees unless he or she has done something wrong and that the failure of the estate trustees in this case to cooperate and actually administer this simple estate does not amount to such wrongful conduct. I have taken note of those cases.

[ 3 ] She also submits that because her client made reasonable efforts to resolve the matter and made an offer to settle and William Joseph McCarvell did not, that the latter “should not be treated more favourably than himself (and that the Offer to Settle referred to below would be grounds to treat him less favourably)”. Her client’s “offer to settle” was contained in Part IV of his factum under the heading, “Order Requested”. In my opinion, it does not entitle him to treatment different from William Joseph McCarvell regarding his liability for costs.

[ 4 ] As noted in my reasons, I found fault on both trustees. The assets had been converted into liquid form ready for distribution some five years ago. Each was engaged in blaming the other and justifying his own recalcitrance. Notwithstanding the cases referred to by Ms. Farrell, in the face of such total disregard of their duties as trustees to distribute such a simple estate, I see no reason why the applicant and Ms. Stocki should suffer by having the estate pay the costs of the motion, which would result in their distributive shares of the estate being thereby diminished through no fault of their own but entirely due to the fault of the estate trustees.

[ 5 ] Accordingly, William Joseph McCarvell and James Dennis McCarvell shall pay and contribute equally to the full indemnity costs of the applicant. I have nothing before me to indicate that Ms. Stocki took any active part in the motion or is seeking costs.

[ 6 ] Ms. Farrell submits that given my ruling that “costs incurred prior to the application”, as she describes them, should be dealt with on the passing of accounts, the costs claimed by the applicant should be reduced accordingly. However, that claim was for reimbursement of legal fees allegedly incurred by James Dennis McCarvell in his capacity as an estate trustee. It was in the nature of an administrative expense of the estate. In my opinion, that claim falls into a different category from costs awarded on a contested motion against estate trustees who failed egregiously in their duty.

[ 7 ] Accordingly, I order William Joseph McCarvell and James Dennis McCarvell to pay full indemnity costs in the sum of $10,299.99, as claimed, to the applicant. Each of them shall pay one half of this amount from his share from the estate. Any deficiency shall be paid personally by them equally.

“ Justice D. R. McDermid”

Mr. Justice D. R. McDermid

Date: March 30, 2012.