Murray v. Murray [Indexed as: Murray v. Murray]
79 O.R. (3d) 147
[2005] O.J. No. 5379
Court of Appeal for Ontario,
Catzman, Laskin and Armstrong JJ.A.
December 15, 2005
Family law -- Practice -- Costs -- Husband satisfying provisions of rule 18(14) and rule 24(1) of Family Law Rules -- Wife impecunious -- Court ordering each side to bear own costs -- Family Law Rules, O. Reg. 114/99, rules 18(14), 24(1).
A trial judgment in favour of the wife was set aside on appeal. The husband sought his costs on a partial indemnity scale to the date of his offer to settle and on a substantial indemnity costs thereafter. [page148]
Held, each side should bear their own costs.
The husband satisfied the provisions of rules 18(14) and 24(1) of the Family Law Rules. However, the wife was impecunious, and a costs award would have a devastating effect on her. Moreover, her claim was not dismissed outright; the trial judge's analysis was flawed, but the wife might succeed in a second trial. In all the circumstances, the appropriate order at trial and on appeal was that each side should bear their own costs.
RULING as to costs.
Cases referred to Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303, [2003] S.C.J. No. 21, 66 O.R. (3d) 736n, 224 D.L.R. (4th) 193, 302 N.R. 201, 34 R.F.L. (5th) 255, 2003 SCC 24 (sub nom. M. (L.S.) v. M. (E.S.)) Rules and regulations referred to Family Law Rules, O. Reg. 114/99, ss. 18(14), 24(1)
Brinley Evans and D. Smith, for appellant. Patrick D. Schmidt and George Karahotzitis, for respondent.
Background
1Costs endorsement BY THE COURT:-- In our judgment released on August 29, 2005 [reported at 2005 30422 (ON CA), 76 O.R. (3d) 546, [2005] O.J. No. 3563], we set aside a trial judgment in favour of the respondent, Mrs. Murray, which awarded her retroactive and future spousal support, interest and costs but without prejudice to her right to move for spousal support based on an appropriate Stage II Miglin analysis [Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303, [2003] S.C.J. No. 21].
Costs Sought
2The appellant, Mr. Murray, now seeks his costs for the trial fixed at $251,751.22 on a partial indemnity scale to the date of his offer to settle and on a substantial indemnity scale thereafter. He also seeks his costs of the appeal fixed at $49,669.84 on a partial indemnity scale.
Analysis
3In considering the issue of costs, we must bear in mind that this is not a case where we overturned the trial judge and dismissed Mrs. Murray's claim. Rather, we held that the trial judge's analysis was flawed; and that on a proper Miglin analysis Mrs. Murray might succeed in a second trial. In these circumstances, it seems somewhat unfair to ask Mrs. Murray to bear the burden of the costs of the first trial.
4In addition to the above, this is a case where we think that the financial circumstances of Mrs. Murray raise a significant issue.
5There was evidence before the trial judge which supported her finding that Mrs. Murray was living in "impoverished circumstances". Mrs. Murray, according to the evidence at trial, is a candidate for social assistance. [page149]
6In our view, the costs awards that are sought by the appellant are grossly excessive. They are not fair and reasonable. However, even if we were to make costs awards that we consider to be appropriate, we are satisfied that Mrs. Murray would be unable to pay them. This begs the question as to whether the impecuniosity of Mrs. Murray in this case justifies an order that each side is to be responsible for his or her own costs.
7Rule 18(14) of the Family Law Rules, O. Reg. 114/99 provides:
Costs consequences of failure to accept officer
18(14) A party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:
If the offer relates to a motion, it is made at least one day before the motion date.
If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
The offer does not expire and is not withdrawn before the hearing starts.
The offer is not accepted.
The party who made the offer obtains an order that is as favourable as or more favourable than the offer.
(Emphasis added)
8Rule 24(1) of the Family Law Rules provides:
Successful party presumed entitled to costs
24(1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.
9Although Mr. Murray satisfies the provisions of rule 18(14) and rule 24(1), neither rule 18(14) nor rule 24(1) requires us to make a costs award. We are aware that the presumption contained in rule 24(1) marked a new approach to the awarding of costs in family law cases. "No costs" awards were thought to encourage unmeritorious and expensive litigation.
10That said, this is a case in which a costs award would have a devastating effect on Mrs. Murray -- it would likely destroy whatever chance she may have to achieve financial self- sufficiency.
Conclusion
11Taking into account the financial situation of both parties and, in particular, the complete lack of financial resources of Mrs. Murray, and the result of this appeal, we believe that [page150] the appropriate order both at trial and on appeal is that each side should bear their own costs.
Order accordingly.
