Court of Appeal for Ontario

Date: 2019-01-31 Docket: C64351

Panel: Hoy A.C.J.O., van Rensburg and Pardu JJ.A.

Between

Scott Timothy Pustai Applicant (Respondent)

and

Christine Marie Pustai Respondent (Appellant)

Counsel

Michael H. Tweyman, for the appellant

Stephen P. Kirby and William Abbott, for the respondent

Heard: July 16, 2018

On appeal from: The final order of Justice Hugh K. O'Connell of the Superior Court of Justice, dated August 30, 2017.

Costs Endorsement

[1] This court allowed the appeal of a judgment that was primarily with respect to spousal support: Pustai v. Pustai, 2018 ONCA 785. In the result, the trial judge's order, which reduced for one year and then terminated the monthly $3,000 spousal support payment to which the parties had previously agreed, was replaced by an order reducing the appellant's spousal support to $2,350 per month from June 1, 2013 to December 31, 2017 and fixing support at $2,250 per month effective January 1, 2018. The trial judge's order requiring the appellant to pay the respondent one half of the proceeds of the sale of the matrimonial home was set aside. The court fixed the costs of the appeal, and invited the parties, if they were unable to agree, to provide written submissions on their costs in the court below.

[2] The court has now received and considered these submissions.

[3] The appellant does not seek costs of the first trial, which resulted in a successful appeal to this court, reported at Pustai v. Pustai, 2014 ONCA 422, 319 O.A.C. 403. In respect of the second trial, the appellant seeks costs of $30,000, inclusive of HST and disbursements, enforceable by the Family Responsibility Office (FRO) as support and payable forthwith. She submits that she was substantially successful at trial, that her settlement offer was much more reasonable than the respondent's, and that the costs she is seeking are both reasonable and proportionate.

[4] The respondent agrees that no costs should be ordered in respect of the first trial. With respect to the second trial, he submits that the parties should bear their own costs. He contends that success was divided and that the appellant should not be rewarded for her bad faith conduct in withholding court-ordered financial disclosure (about her employment). He says that the appellant's offer to settle contained no element of compromise on the termination of support payments. He also argues that the amount of costs sought by the appellant is too high, as it approaches full recovery of her actual legal costs, which were $36,198.42 plus disbursements of $778.30.

[5] Having considered the parties' detailed written submissions, and for the following reasons, we order that the appellant is entitled to costs of $24,000, inclusive of applicable taxes and disbursements, enforceable by FRO as support.

Reasons for Costs Award

[6] First, we are satisfied that the appellant was the more successful party and is presumptively entitled to her costs, according to the Family Law Rules, O. Reg. 114/99, r. 24(1). The primary issue at trial was spousal support. The respondent sought an order terminating spousal support as of June 2013. The appellant relied on the parties' agreement for indefinite spousal support of $3,000 per month. Although her argument that support should not be reduced did not prevail, she was successful in that her continued entitlement to some support was recognized. In fixing the level of support, the court imputed minimum wage level income to the appellant and rejected the respondent's position that his income had significantly decreased.

[7] Second, there is nothing in the conduct of either party in relation to settlement that enhances the appellant's costs, or that reduces or eliminates her claim to costs. The parties exchanged written offers to settle before the second trial. Both offers contained an element of compromise. With respect to spousal support, the appellant offered to accept a reduced level of support, without termination for life, and the respondent offered to continue to pay support, but only until June 30, 2015. Neither party beat their offer.

[8] Third, we reject the respondent's argument that the appellant engaged in bad faith conduct sufficient to disentitle her to costs. With respect to the conduct relied on by the respondent, this court noted, at para. 49 of the reasons on the merits, that "[w]hile Ms. Pustai was at fault for not providing complete financial disclosure from the start of these proceedings, this is not a case of egregious non-disclosure". However, the appellant's failure to provide proper disclosure of her financial circumstances and the unexplained increase in her fortunes resulted in the finding that her financial circumstances had materially changed, the imputation of an annual income to her, and a reduction in her monthly support entitlement.

[9] Finally, we agree with the respondent that the amount sought by the appellant is too high. The costs of the second trial were fixed, on consent, at the inclusive amount of $23,068.10 payable by the appellant to the respondent. This amount is a useful benchmark to determine reasonable and proportionate costs consistent with both parties' expectations. We also note that the respondent does not challenge the work done or the hourly rates reflected in the appellant's bill of costs.

[10] In the circumstances, and having considered the parties' submissions, we fix the appellant's costs in the court below at $24,000, inclusive of HST and disbursements. We order that the costs award is recoverable as spousal support by FRO.

"Alexandra Hoy A.C.J.O."

"K. van Rensburg J.A."

"G. Pardu J.A."