COURT FILE NO.: FC-19-532 DATE: 2023/09/20

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Boshra Mikhail, Applicant -and- Eman Mikhail, Respondent

BEFORE: Justice P. MacEachern

COUNSEL: Melisande Galipeau, agent for Christian Pilon, for the Applicant Shawn Duguay, for the Respondent

HEARD: September 18, 2023

Decision

Overview

[1] This matter was called to trial on September 18, 2023, but adjourned on the same day because of the Applicant’s counsel’s unavailability due to health issues.

[2] The Respondent seeks several orders due to this adjournment. This is my decision on the terms of the adjournment.

Disclosure

[3] The Respondent’s notice of motion includes seeking an order striking the Applicant’s pleadings on the financial issues because of alleged deficiencies in disclosure. The Respondent did not pursue this relief on September 18, 2023, but raised concerns about the Respondent's alleged continued failure to meet his disclosure obligations.

[4] I have not reviewed the disclosure issues, as to do so would involve reviewing significant material, which was not before me today. I have noted the previous endorsements dealing with disclosure, including Justice Engelking's August 25, 2023 endorsement.

[5] The disclosure issues were discussed. While it appears that the Applicant’s counsel’s health issues may have hampered some of the disclosure efforts, the impact of this factor has been minimized, given that Ms. Galipeau has been involved with many of the Applicant’s disclosure efforts. She continues to be able to assist with this disclosure.

[6] In any event, the Applicant is on notice that the Respondent takes issue with his conduct concerning disclosure and may seek several remedies at trial due to any failings on his part, historically or between now and trial, to meet his obligations to provide full and frank disclosure on a timely basis. These remedies may include adverse inferences, preventing the Applicant from introducing material at trial, costs, and even striking his pleadings on the financial issues.

Costs Thrown Away

[7] The Respondent seeks her costs thrown away in the amount of $19,343.62. She has provided a bill of costs in support. This amount represents her total costs, including HST and disbursements, that her counsel states will be wasted due to the adjournment. These costs were incurred from June 29, 2023, to September 11, 2023. The Respondent’s counsel advises that these costs do not include all of her costs incurred during this period but just portions that, in the Respondent’s view, will need to be redone.

[8] The Applicant’s position is that costs thrown away should be deferred to the trial judge when it will be better known what costs were wasted.

[9] The leading case for “costs thrown away” is Caldwell v. Caldwell, 2015 ONSC 7715. Quinlan J. held at paras. 8 through 13:

[8] The phrase “costs thrown away” refers to a party’s costs for trial preparation which have been wasted and will have to be re-done as a result of the adjournment of the trial: Pittiglio v. Pittiglio, 2015 ONSC 3603 at para. 7; Middleton v. Jaggee Transport Ltd., 2014 ONSC 3041, at para. 5.

[9] There are three general categories of cases in “costs thrown away” decisions:

(i) the first category deals with fault where, for example, one of the parties or their counsel neglect to call a witness or a last-minute amendment is required. The court will grant the adjournment on conditions, including the payment of costs thrown away;

(ii) the second category is where the trial is adjourned because of the court’s scheduling problems. No costs are awarded in this circumstance as no party bears responsibility for the adjournment; and

(iii) the third category deals with adjournments sought by one of the parties as a result of no fault on their part. Costs thrown away are still awarded against the party applying for the adjournment, notwithstanding lack of fault: Goddard v. Day, 2000 ABQB 799.

[10] The court noted in Goddard, at para. 20:

The third category… is really one of responsibility for the adjournment as opposed to fault or lack of fault… situations where someone is responsible for an adjournment but cannot be faulted for that responsibility… [B]eing responsible for an adjournment…carries with it a costs consequence.

[11] Costs thrown away are generally payable on a full recovery basis: Pittiglio, at para. 5; Milone v. Delorme, 2010 ONSC 4162, 2010 CarswellOnt 5535, at para. 12; Straume v. Battarbee Estate, 2001 CarswellOnt 6225, at paras. 2-3; Middleton, at para. 5. This is because the purpose of such an award of costs is to “indemnify a party for the wasted time for trial preparation arising from the adjournment”: Pittiglio, at para. 6; Legacy Leather International Inc. v. Ward, at para. 9. Such an award is not to punish the party seeking the adjournment, but to indemnify the other party for the wasted time for trial preparation arising from the adjournment: Incandescent Revolution Manufacturing Co. v. Gerling Global General Insurance Co., at para. 12; Pittiglio, at para. 6, citing Kalkanis v. Kalkanis, 2014 ONSC 205, at para. 3.

[12] The court must determine what costs have actually been wasted. This is not an easy task: some witnesses will require little further preparation while some will require much: Straume, at para. 4. It has been described as an “intuitive”, rather than a scientific, process: Pittiglio, at para. 17.

[13] An award of costs thrown away can be revisited at the end of the trial to determine if further costs should be awarded: Straume, at para. 37; Middleton, at para. 23; Laudon v. Roberts & Sullivan, at para. 20.

[10] This situation falls within the third category. While no fault is attached to this adjournment, the Applicant is still responsible for the adjournment and the associated cost consequences.

[11] The issue then is what costs of the Respondent have been wasted because of the adjournment. While assessing costs thrown away always involves a lack of precision, I do not accept the Applicant’s argument that this question should be deferred to trial. An award of costs thrown away can be revisited at the end of the trial to determine whether further costs should be awarded. That is what should be done in this case, but this does not mean that an order for costs thrown away should not be made at this time.

[12] I am advised that this trial has been added to the November 2023 trial list. This means that there will be a delay of approximately 2.5 months. It is possible, however, that this trial will not be reached on the November 2023 trial list, whereas but for the adjournment, the trial had been called and would have proceeded as of September 18, 2023. In determining costs thrown away, I have assumed the trial will be reached during the November 2023 trial sitting. If not, a further adjustment by the trial judge of cost thrown away may be warranted.

[13] Assuming this matter proceeds to trial in November of 2023, therefore, while I accept that the Respondent will need to redo some tasks because of this adjournment, I do not accept that all of the costs incurred in her bill of costs will be wasted. Instead, it appears that many of those costs relate to the Respondent’s concerns about the Applicant’s disclosure. In other words, her position is that her counsel has had to take several steps, and will have to redo certain steps, because of these disclosure concerns. Costs related to disclosure issues may be recoverable at trial as a result of any disclosure issues, but do not make up the costs thrown away due to the trial adjournment.

[14] I accept that as a result of the adjournment, the Respondent will need to:

• update her financial statement;
• prepare revised proposed exhibits (due to the Applicant’s delay in providing his);
• prepare a revised casebook (due to the Applicant’s delay in providing his);
• redo some, but not all, of the witness preparation completed to date; and
• redo some, but not all, of counsel’s general preparation for trial.

[15] I also accept that the Respondent’s costs thrown away include correspondence dealing with the adjournment issue.

[16] Considering all the preceding, a fair and reasonable award to the Respondent for her costs thrown away in this family law matter, which all parties acknowledge is complex, is $10,000, plus HST, for a total of $11,300.

Advance on Equalization

[17] As a term of the adjournment, the Respondent seeks a further advance on equalization of $58,639.69. The Respondent has already received a $200,000 advance on equalization. The Respondent’s position is that she is owed an equalization payment of $414,647.61, but the amount of the advance she seeks is based on the Applicant’s position that he owes her an equalization payment of $258,639.69.

[18] The Respondent’s position is that the Applicant owes her more money. She claims a larger equalization payment and is making a trust claim against the matrimonial home, which was in the Applicant’s sole name, to claim against the home's increased value after separation. The Respondent also claims child support and spousal support from the Applicant, while the Applicant claims occupation rent and contribution to costs he paid for the home. Both parties have also made tort claims seeking damages awards from the other.

[19] The Applicant opposes a further advance because he seeks to set off his claim against the Respondent for occupation rent and the costs related to the home. But this position ignores that the Applicant’s claims on these issues will consider the Respondent’s claim for child and spousal support during the same period.

[20] Under the Family Law Act, R.S.O. 1990, c.F.3, the Court has discretion to order advances on equalization payments (see Zagdanski v. Zagdanski, [2001] O.J. No. 2886). The factors to be considered in determining whether to order an advance on equalization are set out in the Zagdanski decision as follows:

• Whether there will be little or no realistic chance that the amount of the contemplated advance will exceed the ultimate equalization amount;
• Whether there will, therefore, be some considerable degree of certainty about the right to, and likely minimum amount of, an equalization payment;
• Whether there is a need, not necessarily in the sense of poverty, but a reasonable requirement for funds in advance of the final resolution of the equalization issue, including funds to enable the continued prosecution or defence of the action; and
• Whether there may be other circumstances such that fairness requires some relief for the applicant; frequently, but not necessarily, there will have been a delay in the action, deliberate or otherwise, prejudicing the applicant by, for example, running up the cost.

[21] Considering these factors, I find it appropriate to order the Applicant to pay the Respondent a further advance on equalization fixed at $58,000. The Applicant owes at least this much to the Respondent for equalization based on his position. While I acknowledge the Applicant’s claims for occupation rent and contribution to expenses, these are tempered by the Respondent’s claims for larger amounts being owed to her, including for support. Given the circumstances of this adjournment, which lies within the Applicant’s responsibility, I find it fair and just for the parties' respective positions to be evened out to a greater extent than now by requiring the Applicant to pay the minimum equalization payment owed.

[22] In deciding this, I have considered the Applicant’s arguments that the Respondent is not “in need” of a further advance because she has savings in the bank. I am not making this decision for a further advance based solely on need. I find, though, that the Respondent needs these funds – the Respondent requires financial stability to provide for herself and the children—and this advance assists, in part, this need. But more so, in considering all of the factors, particularly the adjournment, I find that fairness requires this further advance.

Child Support

[23] The Respondent seeks a way to enforce the Applicant’s child support obligation under Justice Audet’s interim order of June 17, 2022. This order has not yet been issued because the parties dispute the wording. Given the trial's proximity, the Respondent did not pursue clarifying the order before Justice Audet.

[24] This has led to some delays in child support being paid, although the Applicant provided a cheque for child support of $14,686 on September 15, 2023. The Respondent’s position is that this payment still falls a few months short of the child support owed. This is because there is a dispute about whether Justice Audet’s order requires child support to be paid as of October 1, 2022, or January 1, 2023.

[25] If clarification is needed of Justice Audet’s order, and I am not saying that is, that issue needs to go back to her. I am not determining this, nor do I need to do so. Given the payments provided above, the issue of whether there are three months of support arrears under the interim order does not need to be decided before trial. Also, because Justice Audet’s June 17, 2022, order is temporary, the trial judge will revisit the issues of what support should have been paid for what period, in any event.

[26] However, in the meantime, there is no enforceable child support order. The Applicant does not object to an enforceable interim child support order being made on the same terms as provided by Justice Audet. Therefore, I have made this order below.

[27] Accordingly, I make the following orders:

Under the Family Law Rules

1. The Applicant shall pay the Respondent her costs thrown away due to adjourning trial on September 18, 2023, fixed at $11,300, inclusive of disbursements and HST. These costs shall be payable forthwith.
2. The issue of whether further costs should be awarded to the Respondent for costs thrown away due to the adjournment on September 18, 2023, is left to the trial judge.

Under the Family Law Act

3. The Applicant shall pay the Respondent a further equalization payment of $58,000, payable forthwith.

Under the Divorce Act

4. On consent, and on a without prejudice basis, including without prejudice to the issue of when child support began to be payable under Justice Audet’s June 17, 2022 order, a temporary order shall issue requiring the Applicant to pay child support to the Respondent for the benefit of J.M., born [redacted], JOA.M., born [redacted], and JO.M., born [redacted], commencing January 1, 2023 and continuing on the first day of each subsequent month until further order of the court, of $2,098 per month, being the table amount payable for three children based on $113,300 annual income.

Costs

5. If the parties cannot agree on the costs of the motion on the terms of the adjournment of trial, the Respondent may file cost submissions on or before September 25, 2023. The Applicant may file cost submissions on or before September 29, 2023. The Respondent may file a reply, if needed (proper reply only), on or before October 3, 2023. Cost submissions of both parties shall be no more than three pages in length (except for reply submissions, limited to 1 page), plus any offers to settle and bills of costs and shall be spaced one point five spaces apart, with no less than 12-point font.

Justice P. MacEachern Date: September 20, 2023