BRACEBRIDGE

COURT FILE NO.: FC-10-112-01

DATE: 20130114

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

JAMES ANDREW MacDONALD

Applicant

– and –

KRISTI-LYNN MacDONALD

Respondent

J.A.S. Armstrong, for the Applicant

M.A. Reid, for the Respondent

HEARD: by written submissions

Reasons for Decision on Costs and Support Overpayment

R. MacKinnon, J.

[1] The parties advise they have been unable to agree on costs and on the calculation of support overpayment from September 30, 2011. I have fully considered their written submissions on both issues.

Support Overpayment Issue

[2] In their October 5, 2007 Separation Agreement the applicant husband agreed to pay to the respondent $4,000 per month for spousal support and a further $2,000 for child support. There were no arrears by the end of November 2012. Effective September 30, 2011, I ordered the husband to pay $3,337 per month for child support plus $2,430 spousal support. This results in an overpayment by the applicant of $233 per month for 15 months to the end of December, 2012. In his submissions on this issue, counsel for the husband suggested that both her client and the respondent are able to file their 2012 Income Tax Returns to reflect the 2012 support ordered at trial and that the husband is content to fully resolve this issue without any adjustment for overpayment. This makes sense. Accordingly I order that, unless the parties otherwise forthwith agree in writing to proceed in that fashion, the wife shall forthwith pay to the husband the overpayment for that 15 month period which I calculate at $3,495.

[3] This Court heard no evidence at trial about the cost of life insurance or the manner in which its cost was allocated and paid as between the parties. At trial neither party argued that there should be a change to those terms of the separation agreement requiring the parties to share special or extraordinary children’s expenses equally or to make equal contributions to the children’s RESP. The reference in para. 28 of my December 4, 2012 trial judgment was not an invitation to the parties to now make submissions on these issues which were at no time part of the trial proceedings.

Costs

[4] Rule 24(1) of the Family Law Rules provides for a presumption that a successful party is entitled to costs. I have now had a chance to review the parties’ pretrial offers to settle. I find that the respondent is the more successful litigant. The most contentious trial issue was the Husband’s obligation to pay spousal support – how much and for how long. At trial, he sought termination of that obligation retroactive to September 30, 2011. The Court’s judgment obligated him to pay spousal support to June 30, 2017.

[5] The trial decision was actually less favourable to both parties than their respective pretrial offers to settle. In her last offer before trial the wife would have accepted spousal support of $2,900 per month commencing October 1, 2011 and continuing until March 2019. The husband’s best offer of $90,745 support to the end of August, 2014 did not factor in the income tax consequences to him. He had been paying spousal support of $4,000 per month – which provided him with an annual spousal support deduction of $48,000. He is now ordered to pay spousal support of $2,430 per month leaving him with a substantially reduced spousal support deduction of $29,160 – and which will in turn reduce his overall income tax obligation much less than was previously the case.

[6] Counsel for the Applicant submits that her client had every reason to expect his spousal support obligation would terminate September 2011 because both parties agreed in their separation agreement that they intended spousal support to terminate at that time. She argues that he was prepared to negotiate and took reasonable positions throughout. He succeeded in part on the reduction of life insurance but overall he was not, in the final result, as successful as was the Respondent.

[7] It is also argued by Dr. MacDonald that the respondent behaved unreasonably in her conduct of the litigation. I reject that submission. I do not find unreasonableness on this record.

[8] I have considered all the Rule 24(11) factors including importance of issues, time spent, expenses paid and all other relevant matters. This was a relatively short trial of average complexity. At trial all counsel presented their case in a focused, well organized fashion.

[9] In fixing costs, a judge is not assessing costs as if he or she were performing a function of an assessment officer. The object of fixing costs is to avoid the delay and added costs of a full assessment. A court determines what the services devoted to the proceedings are worth. The incurring of costs and time spent by counsel in litigation is essentially the exercise of judgment. The prudence, foresight and imagination of their judgment must be considered at the time the disbursement was incurred or the work was done. It is inappropriate to apply a test of hindsight to determine whether a service or charge was for an extra not reasonably necessary to advance the client’s position. The time to view the decision to commit services to the issue is before the trial.

[10] It is clear that the trial could have lasted longer had all counsel not focused their efforts as they did. Mr. Reid’s partial indemnity rate of $225 is entirely appropriate. I am not persuaded that he engaged in any excessive billing. The explanations related to each docket and the items are sufficiently detailed to allow the Court to properly assess the claimed items. I have a latitude under the Rule and do not consider it to be my role to second guess the time spent by counsel unless the time is manifestly unreasonable in the sense that the total time spent or disbursements incurred were clearly excessive or that a matter was the subject of an unwarranted number of legal personnel. None of those exceptions are demonstrated in this case.

[11] I have considered the principle of indemnity and the amount of costs an unsuccessful party could reasonably expect to pay in relation to this proceeding. While judges should not attempt, in my view, to act as arbiters in the abstract of what disbursement amounts are appropriate, the witness charges in this case bear a reasonable relationship to prevailing market rates and I hold that the claimed disbursements are not excessive or unreasonable.

[12] In coming to the conclusion that I have, I have attempted to be fair to both sides. As I have noted, in fixing costs I am not meticulously assessing them as if I were performing the function of an assessment officer. I have, however, conducted a critical examination of the work performed by the respondent’s counsel.

[13] I have considered as well that the costs of the May 7, 2012 settlement conference and the August 24, 2012 settlement/trial management conference were reserved to me as trial judge.

[14] I fix partial indemnity fees including HST at $17,000. I fix disbursements at $6,195.16. The total of disbursements, partial indemnity fees, and HST which I order is $23,195.16. Finally I award the Respondent Wife an additional $500 in costs for work in performing the cost fixing itself. All costs are ordered payable forthwith.

R. MacKINNON J.

Released: January 14, 2013