Court File and Parties
COURT FILE NO.: 15-63812 DATE: 2016/09/02 SUPERIOR COURT OF JUSTICE – ONTARIO
IN THE ESTATE OF THOMAS MICHAEL EDWARD CAHILL, Deceased
RE: PATRICK CAHILL Applicant
AND
KEVIN CAHILL, in his personal capacity and as Estate Trustee of the ESTATE OF THOMAS MICHAEL EDWARD CAHILL, SHEILA KEHOE in her personal capacity and as Estate Trustee of the ESTATE OF THOMAS MICHAEL EDWARD CAHILL, TOM CAHILL MEMORIAL FUND, ALCOHOLICS ANONYMOUS, JESSICA KEHOE, CRAIG KEHOE, CALVIN CAHILL, KEVIN DOUGLAS OLSON and CORY ROBERT OLSON Respondents
BEFORE: Madam Justice Sylvia Corthorn
COUNSEL: Miriam Vale Peters, Counsel for the Applicant William R. Hunter, Counsel for the Respondents Sheila Kehoe, Jessica Kehoe and Craig Kehoe
HEARD: By written submissions
Costs Endorsement
Overview
[1] This ruling with respect to costs follows my reasons for decision dated February 25, 2016. The applicant was successful in obtaining relief with respect to a trust fund to be set up pursuant to the will of Thomas Cahill. The relief obtained requires the respondents, Kevin Cahill and Sheila Kehoe to:
a) Fund the trust in the amount of approximately $83,000;
b) Unless and until the trust is funded, make certain lump sum payments ($11,700 in total, plus interest) and a monthly payment of $500, commencing in March 2016; and
c) Take a number of steps with respect to the administration of the Estate of Thomas Cahill.
[2] Following the release of my reasons, the parties were given an opportunity to reach an agreement with respect to costs. They did not do so. The applicant and Sheila Kehoe (“Sheila”) have each made submissions with respect to costs. Kevin Cahill (“Kevin”) did not respond to the application and did not make submissions with respect to costs.
[3] The applicant seeks his costs on a substantial indemnity basis or, in the alternative, on a partial indemnity basis. The substantial indemnity costs claimed are as follows:
Fees $ 16,177.50 HST on Fees $ 2,103.08 Disbursements $ 2,025.34 HST on Disbursements $ 200.87 Total $ 20,506.79
[4] Partial indemnity fees claimed in the alternative are calculated as follows:
Fees $ 10,785.00 HST on Fees $ 1,402.05 Disbursements $ 2,025.34 HST on Disbursements $ 200.87 Total $ 14,413.26
[5] In response, Sheila does not take any issue generally with the number of hours of work for which fees are claimed or with the hourly rate charged by each of the timekeepers whose work is included in the costs claimed. Sheila also does not take issue generally with the amount claimed for disbursements.
[6] Sheila’s position is as follows:
a) The costs associated with the motion for an order granting the applicant leave to effect substitutional service of the application record on Kevin should not be Sheila’s responsibility; and
b) The applicant is entitled to his costs on a partial indemnity basis.
[7] I agree with Sheila’s position. For the reasons that follow, the applicant is awarded his costs of the application on a partial indemnity basis. Kevin and Sheila are jointly and severally liable for those costs. Kevin is solely liable, over and above said costs, for the applicant’s costs on a partial indemnity basis of the motion for an order for substitutional service.
Scale of Costs
a) Offers to Settle
[8] In support of his claim for costs on a substantial indemnity basis, the applicant relies on two offers to settle made on his behalf. He submits that the relief granted is more advantageous to him than were the terms of either offer to settle.
[9] In response, Sheila argues that neither offer may be considered for the purpose of Rule 49. Her position is based entirely on the timing of each offer.
[10] In my view, not only is the timing of the offers problematic; by virtue of their respective substantive terms, the offers do not entitle the applicant to an award of costs on a substantial indemnity basis.
[11] The first offer is dated January 21, 2015 – prior to the date on which the notice of application was commenced. Regardless of the timing of the offer, the substantive terms proposed are as follows, “[the applicant] is prepared to accept the sum of $75, 000 in full and final settlement of his claim.” The monetary amount offered is less than the amount for which Kevin and Sheila are jointly and severally responsible pursuant to my reasons for decision. However, the outcome on the application is that Kevin and Sheila are jointly and severally responsible to fund the trust (i.e. not to make a direct payment to the applicant with respect to the balance owing from the trust). Kevin and Sheila were not found directly liable to the applicant because the terms of the trust provide for distribution of the funds, if any, remaining in the trust when the applicant dies. On the death of the applicant, the balance of the funds, if any, are to be divided equally between the grandchildren of Thomas Cahill, then alive.
[12] The second offer was made on September 14, 2015 (five calendar days subsequent to the second day of the hearing of the application). The timing of this offer is such that it falls outside the scope of Rule 49. Once again, the substantive terms of the offer do not in my view give rise to an entitlement to costs on a substantial indemnity basis.
[13] The second offer calls for payments to the applicant in the amount of $500 per month, in keeping with the terms of the trust. However, the offer does not address the secondary purpose of the trust – the entitlement of the grandchildren to equal shares in the balance of the funds, if any, remaining in the trust fund as of the date of death of the applicant.
[14] In summary, I find that neither offer supports an entitlement to costs on a substantial indemnity basis.
b) Conduct of the Respondents
[15] The applicant raises, as a matter of ‘conduct’ on Sheila’s part, the timing of the production of a copy of the application made to London Life when the funds intended for the trust were initially invested. That document was produced on the first day of the hearing and resulted in an adjournment of the hearing to allow for cross-examinations.
[16] I find that the timing of production of the application form was beyond Sheila’s control. Sheila secured a copy of the document from Kevin. I am mindful of the level of disregard which Kevin demonstrated for the process to the point in time that a copy of the application was produced. An order for substitutional service had to be obtained and once served Kevin failed to respond to the application. The timing of the production of a copy of the application to London Life is yet another example of the disregard which Kevin has for this process and is not a reflection in any way on Sheila’s conduct as a litigant.
[17] In summary, I find that there has been no conduct on Sheila’s part that entitles the applicant to costs on a substantial indemnity basis.
[18] Although Kevin has demonstrated disregard for this process, there is evidence in the record of him facing long-standing personal and financial difficulties. It appears that these difficulties are a significant contributing factor to the loss of the funds intended for the trust fund. In other circumstances, Kevin’s conduct as a litigant might support a finding that the applicant is entitled to costs on a substantial indemnity basis from Kevin. However, in light of what I understand to be Kevin’s circumstances, I am of the view that there would be no purpose served by finding Kevin severally liable for the difference between the applicant’s costs of the application on a partial indemnity basis and the applicant’s costs of the application on a substantial indemnity basis.
Costs of Motion for Substitutional Service
[19] I agree with Sheila’s position that it is Kevin who is responsible for the applicant’s costs, on a partial indemnity basis, of the motion for an order with respect to substitutional services.
[20] The solicitor-client fees claimed in that regard are $590.00. The partial indemnity fees are therefore $354.00. [1] The disbursements associated with the motion are limited to the filing fee of $127.00. [2]
[21] The costs for which Kevin is severally liable are calculated as follows:
Fees $ 354.00 HST on Fees $ 46.02 Disbursements $ 127.00 Total $ 527.02
Costs of Application
[22] Kevin and Sheila are jointly and severally liable to the applicant for his costs of the application on a partial indemnity basis. The costs are calculated based on the solicitor-client fees identified of $17,975. From that amount, the $590 in solicitor-client fees for the above-noted motion is deducted. Therefore, the partial indemnity fees are based on 60 percent of $17,385 ($17,975 - $590).
[23] In addition, an adjustment needs to be made to the disbursements claimed because of the inclusion in the costs for the motion of the $127 filing fee. The disbursements payable with respect to the application are therefore $2,099.21 ($2,226.21 - $127.00).
[24] The costs of the application on a partial indemnity basis for which Kevin and Sheila are jointly and severally liable are calculated as follows:
Partial indemnity fees $ 10,431.00 [3] HST on fees $ 1,356.03 Disbursements $ 2,099.21 Total $ 13,886.24
Summary of Award of Costs
[25] In summary, the applicant is entitled to costs as follows:
For the application, on a partial indemnity basis in the amount of $13,886.24 and for which Kevin Cahill and Sheila Kehoe are jointly and severally responsible; and
For the motion for an order for substitutional service, on a partial indemnity basis in the amount of $527.02 and for which Kevin Cahill is solely responsible.
The order with respect to costs bears post-judgment interest from the date of this ruling and in accordance with the Courts of Justice Act, R.S.O. 1990, c. C.43 as amended.
Madam Justice Sylvia Corthorn Date: September 02, 2016
Footnotes
[1] $354 = $590 x 0.60. [2] Note : My office confirmed with the Court that HST is not applicable to the filing fee. [3] $10,431 = $17,385 x 0.6.