COURT OF APPEAL FOR ONTARIO

CITATION: Green v. Green, 2015 ONCA 541

DATE: 20150721

DOCKET: C58093 and C58101

Sharpe, Pepall and van Rensburg JJ.A.

BETWEEN

Diana Freda Green and Charles David Green Jr.

Applicants (Respondents/Appellant by way of cross-appeal)

and

Charles David Green Sr., Lisa Maxwell and Brenda Yurko

Respondents (Appellant and Respondent by way of cross-appeal/

Respondents by way of cross-appeal)

and

Strike Furlong Ford LLP

(Appellant)

AND BETWEEN

Diana Freda Green and Charles David Green Jr.

Applicants (Respondents)

and

Charles David Green Sr., Lisa Maxwell and Brenda Yurko

Respondents (Respondents)

AND BETWEEN

Diana Freda Green, Charles David Green Jr.

Applicants (Respondent/Appellant)

and

Charles David Green Sr., Brenda Yurko and Lisa Maxwell

Respondents on Application (Appellant)

and

Strike Furlong Ford LLP and Robert James Lorne Ford

Respondents on Application (Appellants)

Aaron Franks and Michael Zalev, for the appellant Charles David Green Sr.

Mathew H. Hilbing and Frank Coscarella, for the appellant by way of cross-appeal Charles David Green Jr.

Sanjeev P. Mitra and Miranda Spence, for the appellants Strike Furlong Ford LLP and Robert James Lorne Ford

Margot Poepjes, for the respondent Diana Freda Green

Russell Alexander, for the respondent Lisa Maxwell

Brenda Yurko, acting in person

Heard: April 20, 2015

On appeal from the order of Justice Lydia M. Olah of the Superior Court of Justice, dated November 22, 2013, with reasons reported at 2013 ONSC 7265, [2013] O.J. No. 6396, and from the costs order, dated August 28, 2014, with reasons reported at 2014 ONSC 5000, 50 R.F.L. (7th) 155.

By the Court:

[1] This appeal arises from a matrimonial proceeding involving a number of contested issues relating to property rights and support. At trial, Diana Freda Green, (“Diana”), a respondent in this appeal, succeeded in having a separation agreement that limited her entitlement to support and equalization set aside. She was awarded a substantial equalization claim and a lump sum support award. The appellant husband, Charles David Green Sr. (“Charles Sr.”) does not appeal the order setting aside the separation agreement, but he does appeal the equalization, the quantum of the lump sum support award, and the costs award.

[2] As we will explain, the proceeding was significantly complicated by Diana’s assignment into bankruptcy.

FACTS

[3] The parties had been married for 48 years and they had three children. During the children’s early years, Diana did not work outside the home. Once the youngest child was ten years old, she started working and earned a modest wage. Charles Sr. worked at a series of jobs throughout the marriage. He was an employee of Ontario Power Generation for approximately ten years. It was a traditional marriage. Diana cared for the children, while Charles Sr. had primary responsibility for the financial well-being of the family.

[4] In 1981, the parties purchased an island on Georgian Bay (the “Island Property”) that was just over four acres. It was registered in Charles Sr.’s name. Over the years, the parties developed the Island Property by expanding the main cottage and adding cabins and docks. The Island Property became their matrimonial home. Each of the adult children was assigned the use and occupation of a cabin or a portion of the main residence.

[5] In 1995, at Charles Sr.’s instigation, he and Diana transferred the Island Property to their adult children with a view to saving estate taxes. In the years following the transfer, all parties, including the children, treated the Island Property as property owned by the parents. By the time of separation, everyone, including the parents and the children, appeared to have forgotten about the transfer.

[6] In 2006, Charles Sr. and Diana executed a separation agreement. Diana surrendered any right to claim support. The agreement provided for the sale of the Island Property, with Charles Sr. and Diana each to receive half of the net proceeds of the sale. Diana waived her entitlement to any further equalization of family property.

[7] When she commenced this proceeding in February 2008, Diana was represented by the appellant Robert James Lorne Ford (“Ford”), of the appellant firm Strike Furlong Ford LLP (“SFF”). In her application, she sought: to accelerate the sales process for the Island Property that was also the matrimonial home; to set aside the separation agreement that contained a release of equalization and support; and the equalization of net family properties between herself and Charles Sr. She also sought spousal support.

[8] On November 26, 2009, after she commenced this proceeding, but well before it had proceeded to trial, Diana made a voluntary assignment into bankruptcy. This was not done on the advice of her legal counsel. It is common ground that Diana’s claims for an interest in the Island Property and equalization vested in her Trustee in Bankruptcy pursuant to the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”).

[9] Immediately following the assignment into bankruptcy, Ford and SFF had themselves removed as solicitors of record in the matrimonial proceeding. SFF filed a proof of claim for its unpaid fees of approximately $15,000 which was admitted by the Trustee. Diana’s total indebtedness to all creditors was approximately $40,000.

[10] The Trustee declined SFF’s request that it prosecute Diana’s property claims in the matrimonial proceeding. SFF then sought and obtained an order pursuant to s. 38 of the BIA, authorizing it to continue and prosecute that proceeding. Under that order, and consistent with the scheme and language of the BIA, after payment of SFF’s claim and its costs, and the costs of the bankruptcy proceedings, any surplus was to be paid to the Trustee in augmentation of Diana’s estate. Pursuant to s. 38(2), the Trustee then assigned to SFF all its right, title, and interest in the property that was the subject matter of the matrimonial proceeding.

[11] SFF assumed carriage of the property claims in the matrimonial proceedings from the date of the s. 38 order, May 31, 2010. SFF was added as a party to the matrimonial proceedings on June 9, 2010. After assessing the claims made in that proceeding, SFF determined that it would only advance a claim for a one-half interest in the Island Property, and would not pursue the claim for equalization.

[12] Some two years later, SFF purported to assign its s. 38 BIA rights to Charles Green Jr. (“Charles Jr.”), the son of Charles Sr. and Diana, for the sum of $90,000. From that sum, SFF paid itself approximately $57,500 for the claim it had filed in the bankruptcy and for the costs of prosecuting the matrimonial proceeding up to the time of the assignment to Charles Jr. SFF remitted the remaining sum of $32,434 to the Trustee.

[13] From the correspondence between SFF and Charles Jr. concerning the assignment, and from the submissions before this court, it is clear that SFF thought that it was assigning, and that Charles Jr. thought he was acquiring, whatever interest Diana had in the Island Property, free and clear of any obligation to account to the Trustee for any surplus value recovered in the matrimonial litigation. In other words, SFF and Charles Jr. take the position that by virtue of the assignment, if Charles Jr. succeeds in demonstrating that Diana is entitled to a one-half ownership interest in the Island Property, Charles Jr. would acquire that interest in his own right. In his request for relief in this appeal, Charles Jr. asks for an order vesting title in the Island Property in his and Charles Sr.’s names in equal shares. The solicitor at SFF who arranged the assignment to Charles Jr. was Mathew Hilbing (“Hilbing”). Hilbing then became Charles Jr.’s solicitor in the matrimonial proceeding.

[14] Just as Charles Jr. became aligned in interest with his father, the other two children, Lisa Maxwell (“Lisa”) and Brenda Yurko (“Brenda”), became aligned in interest with their mother. To resist the claim advanced by Charles Jr., they took the position that the Island Property had been transferred to the three children as a gift, and they resisted Charles Sr.’s claim that the Island Property reverted to him by way of resulting trust.

[15] Regrettably, what could have been a contentious but relatively manageable and straightforward matrimonial proceeding disintegrated into a major battle involving both spouses, all three children and complex issues arising from the bankruptcy and from the actions taken by Diana’s former solicitors, Ford and SFF.

[16] On February 9, 2012, Diana was discharged from bankruptcy. On February 21, 2012, Magda J. granted an order “to continue recognizing the transmission” to Charles Jr. of all of SFF’s title and interest to Diana’s property that was the subject matter of the family court proceeding.

[17] The trial commenced on May 22, 2012, and was heard over the course of 15 days.

THE TRIAL

[18] At trial, the parties took the following positions. Diana sought: (1) to set aside the separation agreement; (2) an award of lump sum spousal support; (3) an equalization payment; and (4) to accelerate the sale process for the Island Property.

[19] Charles Jr., asserting Diana’s property claims as assignee, did not advance the equalization claim but did claim a one-half interest in the Island Property.

[20] Charles Sr. resisted Diana’s claim to set aside the separation agreement and her claim for spousal support. Given Diana’s assignment in bankruptcy and the position taken by Charles Jr. as the assignee of Diana’s property claims, Charles Sr. argued that Diana had no right to claim equalization. He conceded the claim asserted by Charles Jr. for a half interest in the Island Property, submitting that the beneficial interest in the Island Property after the transfer of legal title to the children reverted to him and Diana by way of resulting trust.

[21] If successful, the cumulative effect of the positions advanced by Charles Sr. and Charles Jr. was that each would own one-half of the Island Property to the exclusion of Diana and the two daughters.

[22] Lisa and Brenda argued that the Island Property was a gift to the three children which disposed of their parents’ beneficial and legal interests in the property. If successful, the position advanced by Lisa ad Brenda would result in each of the three children owning one-third interests in the Island Property, while neither parent would retain any interest.

TRIAL JUDGMENT

(1) Separation Agreement

[23] The trial judge found there had been undue influence on Diana to execute the separation agreement. The agreement was neither just nor reasonable, and she set it aside. That order is not appealed.

(2) Island Property

[24] The trial judge found that Charles Sr. was the sole owner of the Island Property. He transferred the property to the three children for estate purposes and the trial judge concluded that the beneficial interest in the Island Property reverted to Charles Sr. by way of resulting trust.

[25] The trial judge held that any claim by Diana to the Island Property had to be determined by way of equalization under the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”). As she made no determination of Diana’s “equitable” interest in the Island Property, there was nothing to transfer to Charles Jr. Thus, she rejected Charles Jr.’s request that Diana’s interest in the Island Property be transferred to him. Diana had no equitable interest to transfer and Charles Jr. would receive a windfall for his payment of $90,000 if half the Cottage Property were transferred to him. Such a windfall was not contemplated by the BIA.

[26] The trial judge concluded that the bankruptcy did not preclude Diana from pursuing an equalization claim. Neither the first assignee, SFF, nor the second assignee, Charles Jr., chose to pursue the equalization claim. The trial judge found that they were legally obliged to do so. Since they had not pursued the equalization, this was effectively unrealizable property that could be returned to the bankrupt upon discharge. The trial judge found that the Island Property was worth $700,000. When the other assets were accounted for, the trial judge ordered Charles Sr. to pay Diana an equalization claim of $433,388.86.

(3) Spousal Support

[27] The trial judge considered the objectives of the Divorce Act, R.S.C. 1985, c.3 (2nd Supp.) in ordering spousal support. The trial judge noted that at the time of separation, Diana was of advanced age and had health concerns. She also noted that Charles Sr. had a history of non-disclosure, some unreported income from a “cash job,” and a significant shortfall between his reported income and the budget sworn on his financial statement. Charles Sr. was 67 years old at the time of separation and 74 years old now, which would limit his employability. She also noted that it was a lengthy, traditional marriage.

[28] The trial judge imputed an income of $60,000 to Charles Sr. at the date of separation, and fixed Diana’s income at $4,815 as per her filed income tax return.

[29] The trial judge then considered the principles for awarding lump sum spousal support. She noted that Charles Sr. had resisted paying periodic spousal support in the past. Factors making a lump sum award appropriate in the current case included: providing capital for Diana’s immediate need; ensuring adequate support where there is a real risk of non-payment of periodic support; the lack of proper financial disclosure made by Charles Sr., and immediately satisfying a retroactive support award. The trial judge ordered a lump sum payment of $173,136, based on the high end of the range of the Spousal Support Advisory Guidelines, from the date of separation to September 1, 2013 (a seven-year period).

(4) Assessment Order

[30] The trial judge ordered an assessment before her of both SFF’s provable claim of approximately $15,000 and its s. 38 BIA account. The provable claim represented the legal fees charged by SFF for representing Diana in the matrimonial action prior to the bankruptcy. The trial judge reasoned that SFF was able to get an order as a creditor under s. 38 because of the legal fee indebtedness. The trial judge noted that a superior court has inherent jurisdiction to direct the assessment of lawyers’ fees as part of its disciplinary authority over lawyers. She noted that s. 4(1) of the Solicitors Act, R.S.O. 1990, c. S.15 is also an avenue by which Diana could pursue an assessment of costs. Section 4(1) allows courts the discretion under “special circumstances” to order the assessment of costs after the judgment is delivered. The trial judge also ordered the assessment of the Trustee’s accounts.

(5) Costs

[31] The trial judge made a number of costs awards the details of which are discussed later in these reasons. In brief, Diana was to recover from Charles Sr. costs of $231,087.13, inclusive of HST and disbursements, and additional legal fees for costs submissions and attendance. Lisa was to recover $40,643.24 plus HST and disbursements from Charles Jr. and half of her legal costs of $61,580.67 plus HST on fees and half of the disbursements in the amount of $782.88 plus HST from Ford personally.

ISSUES

[32] The parties raise the following issues on appeal:

1. Property Issues:

i. Charles Sr. submits that the trial judge erred by making an equalization order. He submits that the trial judge should have ordered that he and Diana each had a one-half interest in the Island Property;

ii. Charles Jr. submits that the trial judge erred by failing to order that Diana’s one-half interest in the Island Property belonged to him.

2. Support: Charles Sr. argues that the quantum of the lump sum spousal support order was excessive.

3. Assessment: SFF submits that the trial judge had no jurisdiction to order assessment of its legal fees incurred before the bankruptcy and for prosecuting Diana’s property claim under its s. 38 assignment.

4. Costs:

i. Charles Sr. seeks to appeal the costs order in favour of Diana, arguing that it was excessive;

ii. Ford seeks to appeal the costs order against him personally as he was not a party and was not afforded procedural fairness;

iii. Charles Jr. seeks to appeal the costs order against him in favour of Lisa as her claim was dismissed.

5. Mainland Property: Diana asks, and Charles Sr. agrees, that this court order the immediate sale and equal division of the proceeds of sale of the Mainland Property (a property jointly owned by Diana and Charles Sr.).

ANALYSIS

(1) Charles Sr.’s Claim

[33] The trial judge faced a dilemma. She had to reconcile a challenging array of facts with bankruptcy and family law principles that sometimes seem to reflect unaligned objectives. This was not an easy task.

[34] The trial judge concluded that Charles Sr. was the sole beneficial owner of the Island Property. She also determined that as neither SFF nor Charles Jr. had pursued the equalization claim, it constituted unrealizable property that could be returned to Diana on her discharge from bankruptcy. On this basis, the trial judge ordered Charles Sr. to pay $433,388.86 to Diana in satisfaction of her equalization claim.

[35] Charles Sr. submits that the trial judge erred in awarding Diana an equalization payment. He submits that: (i) no claim for equalization was before the trial judge, since both SFF and Charles Jr., as assignees of her claim, had repeatedly advised that they were not pursuing an equalization claim; (ii) the s. 38 order of Registrar Nettie was permissive in nature and not mandatory as found by the trial judge, and as such, neither SFF nor Charles Jr. was required to pursue an equalization claim; and (iii) Diana had no capacity to assert such a claim herself.

[36] Charles Sr. also submits that the trial judge erred in disregarding his and Diana’s admission that each held an equal beneficial interest in the Island Property.

[37] We reject Charles Sr.’s first submission. Equalization was a live issue before the trial judge in so far as, rightly or wrongly, it was being pursued by Diana. Indeed, the trial management conference judge’s March 22, 2011 endorsement identified equalization as an issue: “Wife seeking to set aside settlement agreement to seek [spousal support]/equalization.” At that time, a possible problem flagged by the trial management conference judge for the trial judge was that Diana had no property claims of her own. Counsel for Diana, Charles Sr. and SFF were all in attendance at this conference.

[38] In an exit pretrial memorandum of SFF, signed by Hilbing on May 4, 2011, SFF complained that Diana appeared to continue to pursue property claims despite the fact that she had made an assignment in bankruptcy. He wrote that SFF had limited its claim to property to the recovery of the proceeds of sale of Diana’s half interest in the Island Property and would not be pursuing other claims at trial. The pre-trial judge did not list equalization as an issue to be tried in the trial then scheduled for June 27, 2011. In its subsequent written opening submissions prepared for that scheduled trial date (which predated the assignment to Charles Jr.), SFF reiterated its position but also wrote that Diana:

…has raised the prospect of advancing the equalization claims on behalf of the bankrupt because [SFF] has chosen not to. This is an abuse of process. While this court is free to hear her submissions, having assigned herself into bankruptcy, [Diana] formally assigned all of her property rights, including equalization rights to the Trustee in Bankruptcy. She has no lawful duty or capacity to advance those claims.

While there may have been good reason to challenge Diana’s capacity to assert an equalization claim, at trial the issue continued to be unresolved. Put differently, at trial, equalization remained a live issue.

[39] That said, we agree with Charles Sr.’s second submission. Neither SFF nor Charles Jr. was required to pursue the equalization claim. Contrary to the trial judge’s interpretation, the language of the s. 38 order granted by Registrar Nettie was permissive and did not require the assignee to pursue the equalization claim. SFF, and later Charles Jr., had both made it clear that they were not pursuing any equalization claim.

[40] We also agree with Charles Sr.’s third submission. By the time of trial, Diana was a discharged bankrupt. Nonetheless, she had no capacity to assert an equalization claim, since it had vested in the Trustee on her assignment into bankruptcy: s. 71 of the BIA and Blowes v. Blowes (1993), 1993 CanLII 8521 (ON CA), 16 O.R. (3d) 318, [1993] O.J. No. 2022 (C.A.).

[41] Furthermore, while s. 40(1) of the BIA requires the Trustee, prior to his or her application for discharge, to return to the bankrupt any property found incapable of realization, the Trustee was not discharged. Section 40(2) provides that where a Trustee is unable to dispose of any such property, the court may make such order as it may consider necessary. Diana was discharged from bankruptcy on February 9, 2012, but no steps were ever taken to have any property declared to be incapable of realization or to compel the Trustee to return any property to her. The BIA does not provide for the automatic return of any property or surplus to a bankrupt following his or her discharge. Some positive act is required to return property to the bankrupt: Deloitte & Touche LLP v. Marino (2004), 2004 CanLII 4324 (ON CA), 72 O.R. (3d) 274 (C.A.), at para. 15.

[42] For these reasons, it was not open to the trial judge to make an equalization order.

[43] Turning to Charles Sr.’s fourth submission, the trial judge correctly determined that the Island Property had not been gifted to the three children. At para. 144 of her reasons, the trial judge concluded that, given Diana’s rights to a division of net family properties, a concurrent analysis of the claim to a beneficial ownership in the Island Property, and matrimonial home was unnecessary. She went on to conclude that the Island Property was available to fund the equalization payment that she had ordered in Diana’s favour.

[44] Based on this court’s decisions in McNamee v. McNamee, 2011 ONCA 533, 106 O.R. (3d) 401, at para. 56 and Martin v. Sansome, 2014 ONCA 14, 118 O.R. (3d) 522, the trial judge was required to settle questions of title before calculating any equalization entitlement. More significantly however, the trial judge improperly disregarded the ownership admissions made by Charles Sr. and Diana. They both admitted that they held an equal beneficial interest in the Island Property. In the absence of any ownership interest by the children, Charles Sr. was not the sole owner, but rather a one-half owner of the Island Property. Charles Sr. conceded that the remaining half accrued to Diana’s benefit and that ownership should be as directed by this court.

[45] We conclude that the Island Property was held from November 24, 1995, the date of transfer of legal title to the parties’ three children, on a resulting trust in favour of Charles Sr. and Diana. Diana’s one-half interest in the Island Property vested in the Trustee on the date of her bankruptcy, November 26, 2009.

[46] This then brings us to a consideration of the entitlement to Diana’s one-half interest in the Island Property at the date of trial.

(2) Charles Jr.’s Claim

[47] As a result of the trial judge’s analysis, Charles Jr. had no entitlement to Diana’s one-half interest in the Island Property. Charles Jr. submits that this was in error. He reiterates many of the same arguments advanced by Charles Sr. Additionally, he claims that as assignee and purchaser of Diana’s interest, he is the rightful owner of one-half of the Island Property.

[48] We note that the right to pursue an action otherwise available to a Trustee is conferred on the assignee and defined by the BIA. The assignee must be a creditor of the bankrupt, and after payment of its claim and costs, must remit any surplus to the Trustee. This preferential right to recover its claim in full is conferred by statute, not by the Trustee: Traders Finance Corporation Ltd. v. Levesque, 1960 CanLII 80 (SCC), [1961] S.C.R. 83.

[49] Before the trial judge, the validity of the assignment from SFF to Charles Jr. was not challenged. Moreover, an order made by Magda J. on February 21, 2012, confirmed the recognition of the transmission of SFF’s title and interest to Diana’s property to Charles Jr. pursuant to an Assignment Agreement dated January 23, 2012. No one appealed or challenged that order. Furthermore, before this court, no one contested the validity of the assignment to Charles Jr. In these circumstances, we do not propose to rule on that issue.

[50] However, without determining whether such an assignment is permissible at law, at a minimum, the assignment was subject to an obligation to account for any surplus to the bankrupt’s estate. This is clear from the language of s. 38 of the BIA, the terms of Registrar Nettie’s s. 38 order, and at common law.

[51] First, section 38(3) states:

Any benefit derived from a proceeding taken pursuant to subsection (1), to the extent of his claim and the costs, belongs exclusively to the creditor instituting the proceeding, and the surplus, if any, belongs to the estate. (Emphasis added.)

[52] Secondly, paragraph 6 of the s. 38 order dated May 31, 2010 stated:

This court orders that in case there shall be a surplus after paying the applicant its said claim and costs, and the costs of the bankruptcy proceedings herein, and the claims of such other parties, if any, entitled to participate, according to the priority of the same respectively, as determined by paragraph 5 hereof, such surplus shall be paid to the trustee in augmentation of the said bankrupt’s estate. (Emphasis added.)

[53] Thirdly, at common law, an assignor may not assign more than it has or, put differently, nemo dat quod non habet, no one gives who does not possess. Further, “an assignee cannot take any better title than that held by the assignor”: Coba Industries Ltd. v. Millie's Holdings (Canada) Ltd. (1985), 1985 CanLII 144 (BC CA), 20 D.L.R. (4th) 689, 65 B.C.L.R. 31 (C.A.), at p. 702.

[54] In the normal course, a s. 38 assignee is entitled to recovery of the value of its claim in the bankruptcy and its costs incurred in the proceeding. Any surplus is to be remitted to the bankrupt estate. SFF recognised this scheme in its exit pre-trial memorandum of May 2011, stating that “once the creditors are paid, the balance will be paid to [Diana] by the Trustee.” SFF could not confer any greater entitlement on Charles Jr. by assigning its claim to him. Neither SFF nor Charles Jr. was entitled to recover a windfall to the detriment of the bankrupt estate. As such, neither was entitled to Diana’s half-interest in the Island Property.

[55] In this case, Charles Jr. paid SFF $90,000. From this sum, SFF paid itself $15,566 on account of its claim and $42,000 in costs. The trial judge ordered that the proceeds from the sale of the Island Property were to be paid into court and, after payment of creditors and the costs, charges and expenses of the bankruptcy proceeding, Diana was to pay, from the proceeds she received, the sum of $90,000 to Charles Jr. in satisfaction of his payment to SFF.

[56] Absent any objection having been made to the assignment to Charles Jr. and absent any cross-appeal, we do not propose to disturb this aspect of the trial judge’s order. In conclusion, although Charles Jr. will recover his payment of $90,000, he is not entitled to a one-half interest in the Island Property.

(3) Lump Sum Spousal Support

[57] The trial judge ordered lump sum spousal support of $173,136, based on the high end of the range of the Spousal Support Advisory Guidelines for a seven-year period from the date of separation to September 1, 2013.

[58] Charles Sr. argues that the spousal support order reflected two errors: (1) the trial judge undervalued Diana’s income, and (2) she failed to consider Charles Sr.’s ability to pay. He submits that the lump sum award should be reduced by approximately one-third to $113,492.

[59] This was a long-term traditional marriage. At the time of separation, Diana was 63 years old and had significant health concerns. The trial judge found that Charles Sr. had failed to comply with his obligation to make full financial disclosure. He was in receipt of unreported income from a “cash job”, and there was a significant shortfall between his reported income and the budget sworn on his financial statement. Several factors made a lump sum award appropriate. Diana was in immediate need and Charles Sr. had resisted making periodic support payments.

[60] On the other hand, the trial judge recognized that given his age, Charles Sr.’s employability was limited.

[61] The trial judge imputed an income of $60,000 to Charles Sr. at the date of separation, and used Diana’s income for the year 2006, which was $4,815.

[62] We agree that the trial judge erred in the manner in which she calculated the lump sum support award. Diana’s income increased after 2007, as she was in receipt of CPP and OAS benefits. However, we do not agree that the trial judge ignored Charles Sr.’s ability to pay, and we conclude that despite the error she made in the manner in which she calculated the lump sum award, the amount she ordered is entirely appropriate when all the circumstances of this case are fully and fairly considered.

[63] First, the trial judge certainly took into account Charles Sr.’s age and limited employability. She was faced with the problem posed by his failure to make full financial disclosure. The amount he claimed for expenses in what the trial judge described as a “pique of candor”, as well as the fact that he had managed to purchase another property and make substantial payments on lines of credit, were inconsistent with his reported income. The amount the trial judge used to calculate Charles Sr.’s income was limited to the amount he claimed in his budget for expenditures. It could well have been higher.

[64] Secondly, given the length and traditional nature of this marriage, limiting spousal support to a period of seven years was very generous to the husband.

[65] Thirdly, the trial judge noted that Diana’s lump sum award was made to align with the fact that Charles Sr. would be making a substantial equalization payment. We are setting aside the equalization payment and Diana will now receive significantly less from her share.

[66] We conclude that, despite the error in the precise manner in which the trial judge calculated the amount of the lump sum award for spousal support, when all factors are considered, it remains a fit and appropriate award in the circumstances of this case.

(4) Assessment of SFF’s Accounts

[67] The trial judge ordered an assessment of both SFF’s provable claim and of their s. 38 costs. The provable claim reflected the legal fees incurred for representing Diana in the matrimonial action prior to the bankruptcy. The s. 38 costs reflected SFF’s legal fees incurred to obtain the s. 38 order and to pursue the claim for a one-half interest in the Island Property.

[68] SFF submits that the trial judge erred in ordering these assessments.

[69] We deal first with SFF’s provable claim in the bankruptcy. SFF filed a proof of claim in the bankruptcy for its fees prior to the bankruptcy. The claim was for $15,566 and was supported by “draft” accounts that had never been issued to Diana (as Ford’s agreement with Diana was that he would only be paid when the Island Property was sold). SFF’s claim was admitted by the Trustee.

[70] Section 135(5) of the BIA provides that where the bankrupt or another creditor challenges a claim and the Trustee refuses to interfere, the “court may expunge or reduce a proof of claim.” Absent a successful challenge, a claim accepted by the Trustee is deemed a provable claim in the amount accepted by the Trustee, and this determination is “final and conclusive”: BIA, ss. 135(1.1), 135(4). No one challenged SFF’s claim in the bankruptcy under s. 135.

[71] In our view, the trial judge erred by ordering an assessment of a claim that had been resolved in the bankruptcy in accordance with the BIA. The BIA provides a procedure for the resolution of disputed claims. The orderly administration of bankruptcies requires that claims be resolved in the manner prescribed by the BIA. Allowing claims accepted by the Trustee to be attacked in collateral proceedings would disrupt that orderly administration.

[72] Accordingly, we allow the appeal from the order requiring SFF to assess its accounts for fees incurred by Diana prior to her bankruptcy.

[73] We now turn to the order regarding the assessment of SFF’s account for fees incurred in, and incidental to, the s. 38 proceedings. Paragraph 6 of the Registrar’s order of May 31, 2010, which authorized SFF to proceed with the s. 38 claim, provides that SFF’s costs are to paid from the proceeds of the matrimonial proceedings, and, if there is any surplus after paying SFF’s claim and costs and the claims of creditors who have agreed to contribute to the expense and risk of the proceedings (no other creditors participated), the surplus is to be paid to the Trustee in augmentation of the bankrupt estate.

[74] After SFF purported to assign the s. 38 claim to Charles Jr., it provided the Trustee with an accounting of its proceeds. From the $90,000 received from Charles Jr., SFF paid its provable claim for the fees incurred prior to the bankruptcy ($15,566) and its legal costs (that is, fees charged by SFF to SFF) in pursuing the s. 38 claim ($42,000), and remitted the balance of $32,434 to the Trustee. The claim for costs was supported by an SFF account dated February 3, 2012. There is nothing in the record before us to indicate that the Trustee formally approved that accounting, but it is clear that the Trustee accepted the surplus and did nothing to question the $42,000 claim for costs.

[75] It is our view that the trial judge erred in ordering an assessment of SFF’s s. 38 account. While the trial judge certainly had the right to assess any party and party costs in the action, it was for the Trustee to question or challenge the s. 38 account. The Trustee accepted and dealt with the surplus on the basis of SFF’s accounting. In our view, in these circumstances, the trial judge erred by ordering the assessment.

COSTS

[76] Charles Sr., Charles Jr., and Ford each seek to appeal the trial judge’s orders of costs against them. We deal with each in turn.

[77] An order of costs is discretionary and entitled to deference. The Courts of Justice Act,R.S.O 1990, c. C.43 affords broad discretion to trial judges with respect to costs. This discretion must fit within the framework created by the Family Law Rules, O. Reg. 114/99; M. (C.A.) v. M.(D.) (2003), 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (C.A.).

[78] An appellate court should set aside a costs award only if the trial judge has made an error in principle or if the costs award is plainly wrong: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303. Thus, the threshold for appellate interference with a trial judge’s award of costs is high.

(1) Charles Sr.’s Costs Appeal

[79] Charles Sr. appeals the costs award of $231,087.13 in favour of Diana. He asserts that the amount of the costs was excessive and should be reduced to $110,000, an amount consistent with his own legal costs. He further submits that the obligation to pay costs to Diana should be shared equally with the other parties who were unsuccessful at trial, namely Charles Jr. and Lisa. He asserts that the trial judge ignored his inability to pay, and that the costs were disproportionate to the amount at stake in the litigation.

[80] We would not give effect to any of these arguments. The trial judge found that Diana had been completely successful, as the separation agreement was set aside and she obtained both an order for spousal support and an equalization of property award. Charles Sr. made no offers to settle, showed unreasonableness and bad faith with regard to financial disclosure, impeded the sale of the Island Property for three years, and refused to pay a modicum of support despite Diana’s illness and needs following the separation.

[81] While we acknowledge that the equalization payment has now been set aside, nonetheless, the decision of the trial judge to award all of Diana’s costs against Charles Sr. and the determination of the amount reveal no error in principle, nor do they result in any injustice. The trial judge properly exercised her discretion under s. 131 of the Courts of Justice Act, and Rule 24 of the Family Law Rules. She considered and applied the various factors under r. 24(11), including the importance, complexity, and difficulty of the issues, the reasonableness of each party’s behaviour in the case, and the lawyers’ rates.

[82] The issues between Charles Sr. and Diana that were determined at trial included the enforceability of the separation agreement, ownership of the Island Property, equalization, and spousal support. Diana was largely successful in her claims against Charles Sr. The trial judge concluded that Charles Sr. had behaved unreasonably in the proceedings. She described evidence of significant problems with disclosure as being overwhelming and not accidental, and noted that it was his misconduct concerning financial disclosure, impeding the sale of the Island Property, and refusing to pay support that ultimately pushed Diana into bankruptcy. The trial judge also rightly concluded that Charles Sr.’s failure to make any settlement offers impeded an earlier resolution. None of these findings, including the finding that Charles Sr. acted in bad faith, are challenged on appeal.

[83] There is no reason to interfere with the decision of the trial judge with respect to the amount of Diana’s costs. The trial lasted 15 days; the litigation, more than five years. Even if the costs exceeded what Charles Sr. paid his own lawyer, they were proportional to the issues in dispute and the length and complexity of the proceedings.

[84] Charles Sr. takes issue with the costs incurred by Lisa in the litigation, although he was not ordered to pay Lisa’s costs. The thrust of his argument seems to be that there was duplication in the work performed by Lisa’s and Diana’s lawyers, and that this should reduce the amount of costs he is obliged to pay. Whether or not there was an overlap with the work performed by Lisa’s counsel, Diana is entitled to the costs she necessarily incurred in her litigation against Charles Sr. The fact that Lisa incurred costs, for which Charles Sr. is not responsible, does not affect his obligation to pay Diana’s costs, or reduce the amount of such costs.

[85] Charles Sr. also contends that the trial judge ignored his inability to pay costs, which, according to MacDonald v. MacDonald (1997), 1997 CanLII 14515 (ON CA), 109 O.A.C. 19 (C.A.), at para. 28, is an error in principle. This argument cannot succeed. Charles Sr.’s own refusal to provide proper financial disclosure throughout the proceedings, including at trial, prevented the court from having an accurate picture of his financial circumstances. There was little reliable evidence before the trial judge to support Charles Sr.’s contention that he was unable to pay Diana’s costs.

[86] Finally, Charles Sr. contends that, because Lisa and Charles Jr. did not obtain any of the relief they sought at trial, they should contribute to their mother’s costs. This position was not advanced in Charles Sr.’s costs submissions before the trial judge and was raised for the first time on appeal. The family law proceedings were necessary because of Charles Sr.’s initial refusal to co-operate in the sale of the Island Property, and his refusal to pay spousal support. The proceedings were prolonged and made more difficult by his conduct, including his refusal to make financial disclosure and his failure to make any settlement proposal in the course of the proceedings.

[87] We would therefore dismiss Charles Sr.’s costs appeal.

(2) Charles Jr.’s Costs Appeal

[88] Charles Jr. was ordered to pay costs to Lisa in the sum of $40,643.24, disbursements of $782.88, plus HST. This represented Lisa’s assessed costs from February 21, 2012 (when Charles Jr. was added as a party), and one half of her costs at trial up to and including costs submissions, on a partial indemnity basis, less a 15% reduction due to the added complexity of the bankruptcy.

[89] In his supplementary notice of cross-appeal, Charles Jr. seeks to appeal the costs order against him in favour of Lisa, as well as the trial judge’s refusal to award costs in his favour. He seeks an order setting aside the costs decision of the trial judge as it affects him, and substituting an order requiring Lisa, Brenda, and Diana to jointly and severally pay his costs.

[90] Charles Jr. contends that the trial judge exceeded her jurisdiction in awarding costs in favour of an unsuccessful party, and that she erred in finding that Lisa’s offers to settle were superior to his own. He also argues that the trial judge erred in finding that Lisa was aligned with her mother, and that he was aligned with his father. He argues that the trial judge erred in reasoning that, because Lisa was aligned with her mother, and her mother was a successful party at trial, Lisa was entitled to costs.

[91] Rule 24(1) of the Family Law Rules contains a presumption that a successful party is entitled to costs. Neither Charles Jr. nor Lisa was successful in obtaining an order reflecting their claim to an ownership interest in the Island Property. Accordingly, neither of them is presumed to be entitled to a costs award.

[92] The trial judge found that all the children, including Lisa, pursued their self-interest in the Island Property to the detriment of their mother. At para. 100 of her reasons, the trial judge stated that Lisa “could not countenance the idea that the cottage property would be owned in part by the Applicant Son to the exclusion of the two sisters and their families.”

[93] The trial judge was also very critical of Charles Jr. In her costs reasons, at para. 35, she concluded that Charles Jr. did not encourage settlement, acted irresponsibly, did not accept offers that were more favourable to him than the ultimate judgment, and was not successful in obtaining a transfer of the requested one-half interest.

[94] The trial judge went on to find that Lisa and Brenda were entitled to costs because they were aligned with Diana, they provided reasonable offers to settle, and were more successful than Charles Jr. In our view, these findings of the trial judge are either unsupported by the evidence or are overstated. Lisa was not more successful in her claim than Charles Jr. Both she and Brenda clung to the position that they were owners of the Island Property, despite evidence that the transfer from Charles Sr. to the children was never intended to affect the parents’ beneficial interest in the property. Ultimately, Lisa was wholly unsuccessful in her claim. Her offers, while reasonable, required the participation of numerous other parties. Moreover, the alignment in interest with a party already adequately represented by legal counsel cannot serve to justify an award in Lisa’s favour. The costs award against Charles Jr. in favour of Lisa must be set aside. Given the lack of success of both Lisa and Charles Jr., as between each other, each should bear his or her own costs. Finally, there is no basis for an award of costs in favour of Charles Jr. against Diana or Brenda.

(3) Ford’s Costs Appeal

[95] Lisa incurred total costs in excess of $200,000 plus HST. Of this, Ford was ordered to pay half of her legal costs of $61,580.67 plus HST on fees and half of the disbursements in the amount of $782.88 plus HST. Ford was also ordered to pay a portion of the Trustee’s witness fees, in the sum of $2,053.33.

[96] As mentioned, Ford seeks to appeal this order made against him personally. To place this award in context, it is useful to summarize Ford’s involvement in the proceedings.

[97] Ford and SFF had acted for Diana when she commenced her matrimonial proceeding in February 2008. Unbeknownst to Ford, Diana made a voluntary assignment in bankruptcy on November 26, 2009. Ford subsequently sought and obtained an order on January 22, 2010 removing himself as Diana’s solicitor of record. On May 11, 2010, Ford swore an affidavit in support of the s. 38 order in favour of SFF which was granted on May 31, 2010. SFF became a party to the matrimonial proceeding in June 2010 and then moved to have Lisa and Brenda added as parties. As previously outlined, SFF took an adversarial approach to Diana in the matrimonial proceedings. (Indeed, SFF asserted that she had committed an abuse of process, and Ford wrote stating that Diana appeared to be attempting to defraud creditors, himself included.) For 20 months, SFF was both a party to the matrimonial proceedings, and acted as its own legal counsel, continuing to accrue legal fees and disbursements under the s. 38 order. SFF made the purported assignment in favour of Charles Jr. in February 2012. Hilbing, in the capacity of a sole practitioner, then went on the record for Charles Jr. in the matrimonial proceedings. The trial commenced about two and a half months later.

[98] The only two lawyers who were associated with SFF and who were involved in the proceedings were Ford and Hilbing. Ford acknowledged that he was a partner in SFF and he described Hilbing as a “subcontractor” and a “self-employed contractor”. It can be inferred from all the circumstances, including Ford’s evidence at trial, led by Hilbing, that Ford directed the steps taken by SFF in its dual role as party to the litigation and as its own legal counsel. In essence, he was the directing mind of SFF in this dual capacity.

[99] The trial judge awarded costs against Ford under Rule 24(8) and (9) of the Family Law Rules. Rule 24(8) states that:

If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the other party to pay them immediately.

[100] Rule 24(9) states:

If a party’s lawyer or agent has run up costs without reasonable cause or has wasted costs, the court may, on motion or on its own initiative, after giving the lawyer or agent an opportunity to be heard,

(a) order that the lawyer or agent shall not charge the client fees or disbursements for work specified in the order, and order the lawyer or agent to repay money that the client has already paid towards costs;

(b) order the lawyer or agent to repay the client any costs that the client has been ordered to pay another party;

(c) order the lawyer or agent personally to pay the costs of any party; and

(d) order that a copy of an order under this subrule be given to the client.

[101] It is clear from the language of rule 24(9)(c) that a lawyer may be ordered to personally pay the costs of any party (emphasis added). There is no requirement that that party be successful in the proceedings. That said, as the trial judge observed, a court must exercise extreme caution in awarding costs against a solicitor personally (at para. 49). See also Galganov v. Russell (Township) (2012), 2012 ONCA 410, 350 D.L.R. (4th) 679, at para. 22.

(a) Appeal of Lisa’s Costs

[102] Ford advances various arguments in support of his appeal of the costs order in favour of Lisa.

[103] First, he argues that he was deprived of procedural fairness because Lisa’s claim for costs was against SFF and not against him.

[104] Ford did not press the procedural fairness argument in oral submissions before this court. Diana sought costs against SFF, Ford and Hilbing in her notice of motion. Lisa’s affidavit in support of her claim for costs clearly stated that she was seeking costs against SFF, Ford and Hilbing and the affidavit filed in response to her request stated that Lisa and Diana were seeking costs against Ford personally.

[105] Ford was given notice of the claim against him personally and was also given the opportunity to present evidence and to make submissions. Indeed, there was a separate hearing conducted by the trial judge into the issue of costs against lawyers in which Ford participated fully. We would not give effect to Ford’s argument that there was a lack of procedural fairness.

[106] Secondly, Ford submits that in making her costs award against him, the trial judge erred by relying on certain evidence and findings of fact from the trial. In substance, he challenges three such findings: the failure to pursue the equalization payment; SFF’s improper pursuit of the collection of their accounts as a creditor of Diana; and the failure to pursue the maximum yield for Diana’s bankrupt estate.

[107] Admittedly, as previously discussed, and interpreted narrowly, some of these factors would no longer apply. As a creditor, SFF was legally entitled to seek and obtain a s. 38 order, there was no contravention of the s. 38 order, and SFF was not required to pursue an equalization payment.

[108] However, the trial judge did not confine her costs award against Ford to these findings, and the findings must be considered in the larger context of the duties owned by Ford and SFF as Diana’s former legal counsel. In describing the basis for her costs decision against Ford, the trial judge identified other factors including:

• based on Ford’s affidavit, SFF was added as an applicant;
• SFF was responsible for adding Lisa and Brenda as parties to the proceedings;
• because of Ford’s focus on recovering his legal fees, he lost sight of his professional responsibilities to the parties and to the court;
• his actions “as a party” rose to the level of bad faith; and
• he brought the integrity of the bankruptcy process into question.

[109] While lawyers of a bankrupt are not precluded from pursuing a s. 38 claim, they must be cautious not to breach professional obligations owed to their former client: see Ezard (Trustee of) v. Zgradgen, 2011 ONSC 4474, 80 C.B.R. (5th) 231, at para. 143. Ford’s lack of caution and focus on recovery of legal fees served to unduly complicate the matrimonial proceedings and resulted in increased costs for all parties. His focus on fee recovery at the expense of his professional responsibilities is reflected in his approach to the matrimonial proceedings and to Diana, his former client.

[110] On February 28, 2008, Diana commenced her proceeding to set aside the separation agreement which had waived spousal support and equalization. She made an assignment in bankruptcy on November 26, 2009. At that time, her total debts amounted to $41,999.58 of which the debt in favour of SFF comprised $10,000. (Later, Ford swore a statement and filed a proof of claim for $15,566.17).

[111] Being a first-time bankrupt, in the normal course, Diana would have been eligible for an automatic discharge nine months after her bankruptcy (that is, on September 1, 2010) unless an opposition was filed or she was required to make payments from her income to her Trustee for distribution to her creditors. There was never any suggestion of any such latter requirement. However, on December 16, 2009, Ford wrote to the Trustee advising that SFF was opposing Diana’s discharge and also noted that Diana had not listed her interest in the Island Property in her statement of affairs. However, she had disclosed her matrimonial proceeding and her claim to an equalization payment and an interest in the Island Property to the Trustee.

[112] The objection filed by Ford on behalf of SFF (and by logical extension, on his own behalf as a partner) served to delay Diana’s discharge for about one and a half years. It also served to delay her potential receipt of surplus property after payment of all the creditors’ claims and expenses in the bankruptcy.

[113] In the meantime, on Ford’s direction and based on his affidavit, SFF obtained the s. 38 order. This would enable Ford’s firm, SFF, to recover its fees and to earn more fees. It was only when SFF made the assignment to Charles Jr. and was paid in full that it withdrew its objection to Diana’s discharge.

[114] Throughout, Ford and SFF aligned themselves with Charles Jr. who was already aligned with Diana’s adversary, Charles Sr. As Ford testified at trial, SFF’s intention “all along” was to sell its half interest to Charles Jr. He testified about the rationale for the assignment to Charles Jr.: “we only wanted to be paid.”

[115] During this period of time, SFF had added Lisa as a party to the proceedings. Lisa had a dual purpose in the litigation. As found by the trial judge, she pursued her self-interest in that she did not want the Island Property to be owned by her brother to the exclusion of her and her sister and their families. Secondly, as also found by the trial judge, Lisa wished to support her mother. Any ability her mother had to effectively pursue her property claim had been neutralized both by her bankruptcy and then by the conduct of Ford, her former solicitor.

[116] Once in the action, although Lisa made a number of offers to resolve the litigation on a global basis, it was not feasible for her to extricate herself from the action – an action that was made more complex due to the misguided assignment in favour of Charles Jr., which was effected by Ford and SFF to secure payment of their outstanding account to Diana and claim for additional accumulated fees.

[117] Ford and SFF’s conduct was contrary to the interest of their former client Diana and served to increase the costs of all parties. Ford and SFF ran up costs without reasonable cause and wasted costs incurred by the other parties. A cause that was designed to serve his and his firm’s self-interest and that was contrary to the interest of his and their former client, is not reasonable. Moreover, by so acting and complicating and extending the proceedings, Ford wasted the costs of the other parties including those of Lisa. The trial judge found that because of Ford’s focus on recovering his legal fees, he lost sight of his professional responsibilities to the parties and to the court. The trial judge found that his actions rose to the level of bad faith. In the highly unusual circumstances of this case, there was ample evidence to support this conclusion and we see no reason to interfere with her findings in that regard.

[118] While costs orders might have been made against Ford and SFF in favour of the other parties to the litigation, only Diana and Lisa pursued such a claim. The trial judge concluded that while a costs award against Ford in favour of Diana was justified, Diana was already fully compensated by the award against Charles Sr. Accordingly, she limited the costs award against Ford to a contribution toward Lisa’s costs. We will not interfere with the trial judge’s award in this regard.

[119] Lastly, we would observe that the quantum ordered to be paid by Ford is most modest relative to his and his firm’s recovery of in excess of $50,000 in fees and Lisa’s overall costs of $200,000.

(b) Appeal of the Trustee’s Witness Fees

[120] Ford also contends that the trial judge erred in requiring him to pay $2,053.33, being one-third of the Trustee’s fees to attend as a witness at trial, when Ford did not have the ability to summons her as a witness.

[121] It was the trial judge who, after hearing the evidence about the bankruptcy and s. 38 dealings, including Ford’s own evidence, decided it was necessary to hear from the Trustee. The decision to allocate one-third of the costs of the Trustee’s attendance to Ford (and one-third to each of Diana and Charles Jr.) was in all the circumstances a reasonable exercise of the trial judge’s discretion. We would not interfere with the trial judge’s exercise of discretion in the contribution Ford was required to make towards the Trustee’s witness fees.

[122] Ford’s costs appeal is therefore dismissed in full.

THE MAINLAND PROPERTY

[123] Both Charles Sr. and Diana have requested that the Mainland Property that they own jointly be sold, and that the proceeds be divided between them. Given that there will not be an equalization payment, we agree that the Mainland Property ought to be listed for sale and sold, under the same conditions as the Island Property, with the net proceeds of sale of this property divided equally between Charles Sr. and the Trustee.

DISPOSITION

[124] In conclusion, the appeals and cross-appeals are allowed in part in the terms provided in these reasons, and otherwise are dismissed. We refer any issues respecting the sale of the Island Property and the Mainland Property and the distribution of the proceeds of sale to the trial judge. Furthermore, any additional issues that may arise from this court’s disposition are referred to the trial judge for resolution.

[125] The comprehensive and detailed order of the trial judge dated November 22, 2013, and the costs order dated August 28, 2014 are varied as set out in the following paragraphs. For convenience, a black-lined version of the trial judge’s order of November 22, 2013, showing the necessary changes, is attached as an appendix to these reasons.

[126] Paragraph 2 of the November 22, 2013 order is set aside.

[127] Paragraph 4 is varied to insert “his share of the” before the word “proceeds.”

[128] Paragraph 5 is varied to read: “Finding there is a resulting trust in favour of the Respondent Charles David Green Sr. and the Applicant Diana Freda Green, all of the right, title and interest of Charles David Green Jr., Brenda Yurko and Lisa Maxwell in the matrimonial home described as PIN 52243-0599 – PCL 18454, SEC NS, Island 3A, Harrison Opposite LT 33, Con 4, Township of Harrison, the Archipelago is vested jointly nunc pro tunc to November 24, 1995 in the Respondent Charles David Green and the Applicant Diana Freda Green, and from November 26, 2009, the date of bankruptcy of Diana Freda Green, jointly in the Respondent Charles David Green and BDO Canada Limited, the Trustee in Bankruptcy of Diana Freda Green (the “Trustee”).

[129] Paragraph 6 is varied to read: “The Respondent Charles David Green and the Trustee shall forthwith jointly list the matrimonial home for sale, on MLS with an experienced and reputable real estate agency/agent agreed between the Trustee, the Applicant Diana Freda Green and the Respondent Charles David Green and their solicitors, on terms agreed between the said parties. The said agent shall report monthly to the said parties and the Trustee.”

[130] Paragraph 9 is varied to replace the words “the net equalization payment to the Applicant Diana Freda Green” in line 6 with “the Applicant Diana Freda Green’s share of the net proceeds to the Trustee” and to add the word “said” before “parties” in line 4.

[131] Paragraph 10 is deleted.

[132] Paragraph 11 is deleted.

[133] Paragraph 12 is varied by inserting, after the words “Applicant Diana Freda Green”, the words “against the Respondent Charles David Green’s interests in”.

[134] Paragraph 13 is replaced by the following: “Upon the sale of the property more particularly described as: PIN 52243-0599-PCL 18454, SEC NS, Island 3A, Harrison Opposite LT 33, Con 4, Township of Harrison, the Archipelago, Ontario; and PIN 52246-0019-1664 Hwy 69, Pointe-au-Baril-Station, PCL 6168, SEC NS, Pt LT 25, Con 4, Harrison, as in LT 35802 except LT 37123, the Archipelago, Ontario, the charge is to be vacated and the proceeds of the sale are to be paid as follows: The Respondent Charles David Green shall be reimbursed any amount payable to him under para. 9 hereunder; one-half of the remaining net proceeds of sale shall be paid to the Trustee; the other half of the remaining net proceeds of sale shall be applied first in payment to Diana Freda Green of the sum of $173,136.00, or the remaining balance payable by Charles David Green to Diana Freda Green as lump sum spousal support ordered by the trial judge, plus interest at the rate of 3 per cent per annum from February 28, 2008 and then to Diana Freda Green in payment of the sum of $231,087.13 in costs ordered by the trial judge, plus interest at the rate of 3 per cent per annum from August 28, 2014; with the remaining balance to be paid to Charles David Green”.

[135] Paragraph 14 is varied to delete the words “the net equalization payment and”.

[136] Paragraph 15 is deleted.

[137] Paragraph 16 is replaced by the following: “The Trustee shall retain from the net proceeds of sale of the matrimonial home/cottage property such funds as are necessary for payment in full of the bankrupt’s creditors with interest and the cost, charges and expenses of the bankruptcy proceedings as already determined by the trial judge, and shall pay the balance to the Applicant Diana Freda Green, being the surplus of the estate. From such surplus, the Applicant Diana Freda Green shall then pay the Applicant Charles David Green Jr. the sum of $90,000 together with interest from February 3, 2012 to the date of payment, in satisfaction of the Applicant Charles David Green Jr.’s $90,000 payment to Strike Furlong Ford, Barristers & Solicitors”. For greater certainty, none of the parties to this action is to be considered to be a creditor in the bankruptcy.

[138] Paragraph 17 is deleted.

[139] Paragraph 18 is deleted.

[140] Paragraph 20 is varied to indicate that Diana is named the irrevocable beneficiary pending full payment of the lump sum spousal support award, and to delete the reference to “the net equalization payment owing”.

[141] Paragraphs 22, 23, 26, 27, and 28 are deleted.

[142] A new paragraph is added to the final order reading as follows: “The mainland property shall be listed for sale and sold under the same terms and conditions as are applicable by this order to the matrimonial home/cottage property, and the net proceeds of this sale equally divided between Charles David Green Sr. and the Trustee. The mainland property is more particularly described as PIN 52246-0019-1664 Hwy 69, Pointe-au-Baril-Station, PCL 6168, SEC NS, Pt LT 25, Con 4, Harrison, as in LT 35802 except LT 37123.

[143] Paragraph 2 of the August 28, 2014, costs order is set aside.

APPEAL COSTS

[144] If the parties are unable to agree on the costs of the appeals and cross-appeals, we will receive and consider written submissions on costs as follows: Any party seeking costs will deliver a bill of costs together with any submissions in writing, in support of the requested order for costs within 15 days of the release of this decision. Responding submissions, if any, to be delivered within 15 days thereafter, with reply submissions, if any, delivered within five days of any responding submissions. The bills of costs and costs submissions are to be filed in triplicate, together with proof of service, to the attention of the Appeals Scheduling Unit. Unless the court orders otherwise, any material received in relation to costs of the appeal, will be forwarded to the panel for consideration 40 days after the release of the decision. The parties will be notified of the decision as to costs by way of a costs endorsement.

Released: (KMvR) July 21, 2015

“Robert J. Sharpe J.A.”

“S.E. Pepall J.A.”

“K. van Rensburg J.A.”

APPENDIX

THIS COURT ORDERS THAT:

1. The Separation Agreement dated November 28, 2006 is set aside in its entirety.

2. The Respondent Charles David Green is to pay a net family property equalization payment to the Applicant Diana Freda Green the sum of $433,388.86 ($443, 388.86 - $10,000), together with interest to accrue on the sum commencing February 28, 2008, the date of the initial Application.

3. The Respondent Charles David Green is to pay to the Applicant Diana Freda Green lump sum spousal support in the sum of $173,136, together with interest to accrue on the sum commencing February 28, 2008, the date of the initial Application.

4. In the event the lump sum support has not already been paid by the Respondent Charles David Green, his share of the proceeds of sale of the matrimonial home/cottage property, more particularly described as: PIN 52243-0599-PCL 18454, SEC NS, Island 3A, Harrison Opposite LT 33, Con 4, Township of Harrison, the Archipelago, Ontario, shall be applied to the payment of the Respondent Charles David Green’s obligation to pay lump sum support, together with interest.

5. Finding there is a resulting trust in favour of the Respondent Charles David Green Sr. and the Applicant Diana Freda Green, all of the right, title and interests of Charles David Green Jr., Brenda Yurko and Lisa Maxwell in the matrimonial home described as PIN 52243-0599-PCL 18454, SEC NS, Island 3A, Harrison Opposite LT33, Con 4, Township of Harrison, the Archipelago is vested jointly nunc pro tunc to November 24, 1995 in the Respondent Charles David Green and the Applicant Diana Freda Green, and from November 26, 2009, the date of bankruptcy of Diana Freda Green, jointly in the Respondent Charles David Green and BDO Canada Limited, the Trustee in Bankruptcy of Diana Freda Green (the “Trustee”).

6. The Respondent Charles David Green and the Trustee shall~~, then,~~ forthwith jointly list the matrimonial home for sale, on MLS with an experienced and reputable real estate agency/agent agreed between the Trustee, the Applicant Diana Freda Green and the Respondent Charles David Green and their solicitors, on terms agreed between the said parties. The said agent shall to report monthly to the said parties and the Trustee Rebecca Sudano of BDO Canada Limited.

7. Forthwith the parties shall be permitted to inspect the property more particularly described as PIN 52243-0599-PCL 18454, SEC NS, Island 3A, Harrison Opposite LT 33, Con 4, Township of Harrison, the Archipelago, including all abodes and the boat house, to identify the contents to remain pending the sale.

8. The Applicant Charles David Green Jr. and Respondent Lisa Maxwell are to remove their personal contents from their respective cabins/cottages within 30 days.

9. In the event necessary repairs are to be made to the matrimonial home/cottage property in order to enhance its saleability, these will only be addressed by the Respondent Charles David Green upon written request by the realtor to both parties. Only with the consent of the said parties will any repairs, other than “wear and tear items”, be undertaken by the Respondent Charles David Green. The costs of such consented repairs will be at the expense of the Respondent Charles David Green and the costs shall be reimbursed to him from the proceeds of sale, before distribution of the net equalization payment to the Applicant Diana Freda Green Applicant Diana Freda Green’s share of the net proceeds to the Trustee, and subject to a strict accounting. Routine costs of his occupation of the matrimonial home/cottage property, including but not limited to “wear and tear” improvements, taxes, utilities and insurance, shall continue to be at the expense of the Respondent Charles David Green.

10. This Order shall create a charge in the amount of $433,388.86 bearing interest at a rate of 3 per cent annum in favour of the Applicant Diana Freda Green, against the properties more particularly described as PIN 52243-0599-PCL 18454, SEC NS, island 3A, Harrison Opposite LT 33, Con 4, Township of Harrison, the Archipelago, Ontario; PIN 52112-0016-59 Church Street, Parry Sound, Pt Lot 22 E/S Church Street, Pl 22, as in R0151903, Parry Sound, Ontario; and PIN 52246-0019-1664 Hwy 69, Pointe-au-Baril-Station, PCL 6168, SEC NS, Pt LT 25, Con 4, Harrison, as in LT 35802 except LT 37123, the Archipelago, Ontario.

11. The Applicant Diana Freda Green’s trustee in bankruptcy has a claim to the net equalization payment owing to the Applicant Diana Freda Green which is to be paid from the sale proceeds to satisfy creditors with proven claims in the bankruptcy. Moreover, the trustee may be asserting a claim to compensation for outstanding fees associated with the administration of the estate. Accordingly, on notice to the trustee, the trustee is to attend to make submission at the accounting of the s. 38 assignment accounts and costs to address her claim to those funds.

12. This Order shall create a charge in the amount of $173,136.00 bearing interest at a rate of 3 per cent per annum in favour of the Applicant Diana Freda Green, against the Respondent Charles David Green’s interests in the properties more particularly described as: PIN 52243-0599-PCL 18454, SEC NS, Island 3A, Harrison Opposite LT 33, Con 4, Township of Harrison, the Archipelago, Ontario; PIN 52112-0016-59 Church Street, Parry Sound, Pt Lot 22 E/S Church Street, Pl 22, as in R0151903, Parry Sound, Ontario; and PIN 52246-0019-1664 Hwy 69, Pointe-au-Baril-Station, PCL 6168, SEC NS, Pt LT 25, Con 4, Harrison, as in LT 35802 except LT 37123, the Archipelago, Ontario, pursuant to s. 34 (1) (k) of the Family Law Act R.S.O. 1990 c. F.3.

13. Upon the sale of the property more particularly described as: PIN 52243-0599-PCL 18454, SEC NS, Island 3A, Harrison Opposite LT 33, Con 4, Township of Harrison, the Archipelago, Ontario; and PIN 52246-0019-1664 Hwy 69, Pointe-au-Baril-Station, PCL 6168, SEC NS, Pt LT 25, Con 4, Harrison, as in LT 35802 except LT 37123, the Archipelago, Ontario the charge is to be vacated and the proceeds of the sale are to be deposited to the credit of the action with the Accountant of the Superior Court of Justice, on notice to the bankruptcy trustee Rebecca Sudano of BDO Canada Limited paid as follows: The Respondent Charles David Green shall be reimbursed any amount payable to him under para. 9 hereunder; one-half of the remaining net proceeds of sale shall be paid to the Trustee; the other half of the remaining net proceeds of sale shall be applied first in payment to Diana Freda Green of the sum of $173,136.00, or the remaining balance payable by Charles David Green to Diana Freda Green as lump sum spousal support ordered by the trial judge, plus interest at the rate of 3 per cent per annum from February 28, 2008 and then to Diana Freda Green in payment of the sum of $231,087.13 in costs ordered by the trial judge, plus interest at the rate of 3 per cent per annum from August 28, 2014; with the remaining balance to be paid to Charles David Green.

14. In the event the Respondent Charles David Green pays out the entirety of the net equalization payment and the lump sum spousal support together with the interest owing, the charges against his share of the properties shall be discharged at his expense.

15. Upon the full payment of the net equalization payment from the net proceeds of sale of the matrimonial home/cottage property to the Applicant Diana Freda Green by the Respondent Charles David Green, the Applicant Diana Freda Green shall pay to the Applicant Charles David Green Jr. the sum of $90,000 together with interest from the monies paid to her with respect to the net equalization payment.

16. Once the trustee establishes what monies are to be directed to her for payment in full of the bankrupt’s creditors with interest as well as the cost, charges and expenses of the bankruptcy proceedings, from the net monies, being the surplus of the estate paid out of court to the Applicant Diana Freda Green The Trustee shall retain from the net proceeds of sale of the matrimonial home/cottage property such funds as are necessary for payment in full of the bankrupt’s creditors with interest and the cost, charges and expenses of the bankruptcy proceedings as already determined by the trial judge, and shall pay the balance to the Applicant Diana Freda Green, being the surplus of the estate. From such surplus, the Applicant Diana Freda Green shall pay the Applicant Charles David Green Jr. the sum of $90,000 together with interest from February 3, 2012 to the date of payment, in satisfaction of the Applicant Charles David Green Jr.’s $90,000 payment to Strike Furlong Ford, Barristers & Solicitors.

17. In the event the lump sum support has not already been paid out by the Respondent Charles David Green, the balance of the proceeds of sale of the matrimonial home/cottage shall be applied to the payment of the Respondent Charles David Green’s obligation to pay lump sum support, together with interest.

18. The balance of the net proceeds of the sale of the matrimonial home/cottage property, shall remain to the credit of this action, pending determination of the liability for costs of this action after which, the remaining balance, if any, shall be released to the Respondent Charles David Green.

19. One-half of the Respondent Charles David Green’s Ontario Power Generation and Labourer’s Union pensions shall be transferred to the Applicant Diana Freda Green as calculated by the respective pension fund. The Respondent Charles David Green is to cooperate in the execution of all documentation required by the respective pension funds to effect such transfers of one half the values calculated from date of the marriage to date of separation.

20. The Applicant Diana Freda Green is named irrevocable beneficiary pending full payment of both the net equalization payment owing and the lump sum spousal support owing, on all policies owned by the Respondent Charles David Green including Canadian Premier, Cooperators and Clarica insurance policies, pursuant to s. 34(1)(i) of the Family Law Act R.S.O. 1990, c. F.3.

21. A copy of the Judgement of Madam Justice L. Olah dated November 22, 2013 shall be served on the bankruptcy trustee Rebecca Sudano, BDO Canada Limited and on Strike Furlong Ford, Barristers & Solicitors, by the Applicant Diana Freda Green’s counsel.

22. Strike Furlong Ford, Barristers & Solicitors, shall attend before Madam Justice L. Olah for the purpose of her assessment of its Bankruptcy and Insolvency Act section 38 account, as arranged with the trial coordinator, after serving the parties with a copy of the same.

23. Strike Furlong Ford, Barristers & Solicitors, shall attend before Madam Justice L. Olah for the purpose of her assessment of Strike Furlong Ford’s provable claim/solicitor’s accounts filed with the trustee in bankruptcy proceedings of the Applicant Diana Freda Green.

24. The bankruptcy trustee Rebecca Sudano of BDO Canada Limited, shall attend before Madam Justice L. Olah for the purpose of her assessment of the trustee’s accounts, if any, as arranged with the trial coordinator, after serving all parties a copy of same, failing which, the trustee’s accounts shall be deemed to have been paid and the trustee shall arrange for the discharge of her registered interest in the joint mainland property.

25. Notification shall be given to all parties to attend and make argument on the two accounts, as arranged with trial coordinator.

26. In the event the assessments of Strike Furlong Ford’s provable claim and Bankruptcy and Insolvency Act section 38 account result in an overpayment to Strike Furlong Ford, Barristers & Solicitors, these monies shall be reimbursed by Strike Furlong Ford, Barristers & Solicitors, to the credit of Diana Freda Green’s bankrupt estate for distribution by the bankruptcy trustee to the creditors, the trustee and to the surplus, if any, of the bankrupt Diana Freda Green estate.

27. Assessment of solicitor’s accounts, Bankruptcy and Insolvency Act section 38 accounts and the bankruptcy trustee’s accounts, if any, to be arranged with the Oshawa trial coordinator within 15 days of November 22, 2013. Counsel is to submit three page typed submissions for costs of the proceedings within 15 days of November 22, 2013 together with their offers to settle and bill of costs with proof of service electronically to Tara Lynn Mountney at taralynn.mountney@ontario.ca and to file the originals including proof of service, with the Family Court in Oshawa.

28. Submissions on the bill of costs and the assessments of the solicitor’s and bankruptcy trustee’s accounts to be conducted on the same day.

29. Submissions by each counsel will be limited to 30 minutes each.

30. Support deduction order to issue.

31. Divorce order to issue.

32. This Court orders that unless the Order is withdrawn from the Office of Director for the Family Responsibility Office, it shall be enforced by the Director and that amount owing under the Order shall be paid to the Director, who shall pay them to whom they are owed.

33. This Order bears post-judgment interest at a rate of 3.0 % per annum effective from the date of this order. Where there is a default in payment, the payment in default shall bear interest only from the date of the default.

34. The mainland property shall be listed for sale and sold under the same terms and conditions as are applicable by this order to the matrimonial home/cottage property, and the net proceeds of this sale equally divided between Charles David Green and the Trustee. The mainland property is more particularly described as PIN 52246-0019-1664 Hwy 69, Pointe-au-Baril-Station, PCL 6168, SEC NS, Pt LT 25, Con 4, Harrison, as in LT 35802 except LT 37123.