Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20210519 DOCKET: C67869

Roberts, Trotter and Thorburn JJ.A.

BETWEEN

Tatiana Nemchin Plaintiff (Appellant)

and

Yvonne Green Defendant (Respondent)

Counsel: Joseph Y. Obagi and Elizabeth A. Quigley, for the appellant Stephen G. Ross, Thomas Macmillan and Meryl Rodrigues, for the respondent

Heard: October 27, 2020 by video conference

On appeal from the order of Justice Sylvia Corthorn of the Superior Court of Justice, dated October 28, 2019, with reasons reported at 2019 ONSC 6243.

COSTS ENDORSEMENT

[1] On April 16, 2021 we allowed the appeal and amended various paragraphs of the trial judge’s October 28, 2019 order. The trial judge had ordered the appellant to pay to the respondent an additional amount to “top up” the appellant’s assigned benefits under the Sun Life income continuation plan to account for Sun Life’s deduction of income taxes at source. We set aside that portion of the order and required the respondent to reimburse the appellant for any “top up” amounts paid by the appellant pursuant to the order. We granted the appellant her partial indemnity costs in the agreed upon amount of $30,000.

[2] We invited the parties to make further written submissions about the costs of the motion before the trial judge if they could not agree on their disposition in the light of our decision. They could not and we have reviewed their costs submissions.

[3] In her March 3, 2020 endorsement, reported as Nemchin v. Green, 2020 ONSC 1375, the trial judge disposed of the costs related to two motions: she awarded the respondent costs for its successful assignment and prejudgment interest motion but concluded that there should be no order with respect to costs for the second motion dealing with various aspects of the treatment of the Sun Life benefits which culminated in her October 28, 2019 “top up” order (“the top up motion”). The trial judge was of the view that both parties were responsible for the lack of agreement reached with respect to the terms of the assignment of the appellant’s rights under the Sun Life plan.

[4] The appellant seeks costs related to the top up motion. The respondent says there should be no costs. In the event that we award costs to the appellant, the parties have agreed that costs should be in the amount of $10,000.

[5] We agree that the appellant is entitled to costs.

[6] While, as the respondent points out, the parties’ respective submissions were developed somewhat differently on appeal, this was understandable in the circumstances as the parties had to respond to the trial judge’s unanticipated top up order. As the trial judge noted, the terms of her order “differ from the specific terms proposed by counsel for the parties during submissions”.

[7] The tax treatment of the assigned benefits proved a stumbling block for the parties’ agreement on the terms of the assignment. Had the parties sought an advance ruling from the CRA on the tax treatment of the benefits, as suggested by the appellant, the tax treatment issue could have been ascertained and an agreement more likely achieved. The top up motion could have been avoided or, at the very least, could have proceeded on a more certain factual footing. Instead, both the top up motion and the resulting appeal were argued without a concrete understanding of the tax consequences of the assignment from the CRA’s perspective.

[8] Moreover, as we noted in paragraph 41 of our reasons disposing of the appeal, the appellant should be relieved of the financial burden related to the implementation of the assignment of her rights under the Sun Life plan for the period of the assignment. As a result, she is entitled to her costs of the motion to deal with the mechanical aspects of the assignment.

[9] Accordingly, the respondent shall pay to the appellant the agreed upon amount of $10,000 for her costs in relation to the top up motion.

“L.B. Roberts J.A.”

“Gary Trotter J.A.”

“J.A. Thorburn J.A.”