Court File and Parties

COURT FILE NO.: FS – 12 - 379966

DATE: 20131230

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Lily Ann McMillan Muruve, Applicant

AND:

Richard Gabriel Muruve, Respondent

BEFORE: Kiteley J.

COUNSEL:
Henry C.R. Krol, for the Applicant

Valois Ambrosino, for the Respondent

ENDORSEMENT AS TO COSTS OF MOTIONS HEARD

AUGUST 27, 2013

Endorsement

[1] On August 27, 2013 I heard the Applicant’s motion for temporary child support and a contribution to the s. 7 expenses and the Respondent’s motion dealing with custody, residential schedule and other relief. On September 23, 2013, I released an endorsement[^1] in which I made an order that the Applicant and Respondent shall have temporary joint custody of the children; the children shall continue to reside primarily with the Applicant; the children shall reside with the Respondent on a schedule that included alternate weekends from Friday to Sunday evening (extended to Monday if a school holiday) and Tuesday and Thursday evenings; that directed the Respondent pay temporary child support in the amount of $2206 per month based on an imputed income in the amount of $123,000; that dismissed the request for temporary s. 7 expenses; that directed the issuance of a Support Deduction Order; and that established a timetable for written submissions as to costs if counsel were otherwise unable to agree as to costs. As indicated in paragraphs 24 to 27 of the endorsement, I anticipated that the settlement conference that had been scheduled for October 18th would proceed and some of the issues that I had not addressed would be considered on that occasion.

[2] Counsel for the Applicant served written submissions on October 9th and counsel for the Respondent submitted his dated October 22nd. I had not made provision for reply submissions but counsel for the Applicant made a brief response dated October 25th.

[3] Counsel for the Applicant takes the position that the Respondent should pay costs on a substantial indemnity basis in the amount of $15,000 payable within 30 days. Counsel for the Respondent takes the position that the court should make one of the following orders: neither party pay costs to the other; alternatively, costs be determined by the trial judge; and in the further alternative, costs be fixed in the amount of $3,500 and paid in the cause.

Success on the motions

[4] On July 23, 2013 on the original return date of the motions, the parties reached an agreement described as “Temporary/Final Minutes of Settlement” in which the Respondent agreed to pay a lump sum on account of his obligation to pay spousal support. The endorsement by Horkins J. incorporated that agreement into a court order and reserved costs of that day to the motion judge on August 27th. Counsel for the Applicant does not ask for any order as to costs of that attendance.

[5] Prior to the hearing of the motion on August 27th, the parties agreed that an order should be made for joint custody of the children. The issue at the motion was residential sharing. The Respondent asked for an equal parenting schedule while the Applicant asked that the status quo continue which included alternate weekends and two evenings during the week. I did not accept the submission that the residential schedule should result in the children spending equal time with each parent at that time. The Applicant was successful on that aspect of the motion. However, I left open the possibility that the Respondent could renew his motion for an equal parenting schedule after the settlement conference on October 18th and accordingly the Respondent was not unsuccessful in advancing his position.

[6] The issue which was the focus of submissions was the amount of child support the Respondent should pay which was a function of the income earned by the Respondent. As indicated above, I imputed income to the Respondent in the amount of $123,000 annually. The Applicant had asked that I impute income in the amount of $182,000 on the basis that he was intentionally underemployed. I did impute income to the Respondent in the amount of $123,000 however I specifically held that I was not persuaded that the Respondent was intentionally underemployed. The Applicant was partially successful but the Respondent was at least equally successful by sustaining his position that he was not intentionally underemployed.

[7] The Applicant asked that the child support order be made retroactive to January 2013 on the basis that the Respondent had made no contribution to the support of the children since December 2012. I made the order retroactive to June 1, 2013 and left any further retroactive payment to the decision of the trial judge. The Applicant was partially successful as was the Respondent.

[8] The Applicant asked that I make an order directing the Respondent to pay s. 7 expenses based on his imputed income and that the order be made retroactive to January 2013. I dismissed that request on the basis of the record before me. On this issue, the Respondent was more successful than was the Applicant.

Analysis

[9] Rule 24(1) provides that a successful party is entitled to costs of a motion. Pursuant to rule 24(6), if success is divided, the court may apportion costs as appropriate. Counsel for the Applicant argues that there is a significant differential in success in favour of the Applicant and that that warrants an order for costs.

[10] Pursuant to rule 24(11), the factors relevant to the amount of costs that should be ordered include the importance, complexity or difficulty of the issues, the reasonableness or unreasonableness of each party’s behaviour; the lawyer’s rates; the time properly spent on the case and the expenses properly paid; and any other relevant matter.

[11] Counsel for the Applicant took the position that the conduct of the Respondent was inappropriate and unreasonable in that he failed to make any payment toward child support after December 2012 and it was his conduct that led to the motion. I do not accept the submission that the Respondent’s conduct was unreasonable within the meaning of rule 24(11). It is unacceptable for a parent to unilaterally stop fulfilling his financial obligation to his children. However there are unique circumstances of this family including the purchase of Belsize motivated by the prospect of reconciliation and the substantial debt incurred as a result and including the timing of the separation in the context of the life-cycle of his business which was the research and development of products and technology to sell to pharmaceutical and industrial companies. In these unique circumstances, I am not persuaded that the conduct of the Respondent was unreasonable.

[12] Rule 18(14) provides the costs consequences of failure to accept an offer if made at least one day before the motion date, namely that the party is entitled to costs to the date the offer was served and full recovery of costs from the date the offer was served if the party who made the offer obtains an order this is as favourable as or more favourable than the offer. Pursuant to rule 18(15), the burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14). In accordance with rule 18(16) the court may take into account any written offer to settle, including the date it was made and its terms.

[13] On August 23, 2013, counsel for the Applicant served an offer to settle issues in the pending motion on a temporary basis: temporary joint custody; primary residence with the Applicant; the children would be with the Respondent every other weekend and two evenings a week to include overnights on the weeks where the Respondent would not have the children the following weekend; the Applicant would retain the children’s passports; commencing August 1, 2013, the Respondent would pay child support in the amount of $1750 per month based on an imputed income of $94,000; the parties would share special or extraordinary expenses on a ratio of $94,000 to $20,000; the Respondent would pay retroactive child support for the period December 1, 2012 to and including July 1, 2013 in the amount of $14,000 together with retroactive s. 7 expenses in the amount of $5,555.90.

[14] The Respondent did not make an offer to settle the motions. Counsel for the Respondent provided copies of his letters dated October 25, 2012, February 19, 2013, April 25, 2013, May 3, 2013 and his client’s offer to settle dated August 16, 2013 in which the Respondent offered to settle all child support issues on a final basis. In that offer to settle, he proposed to pay child support in the amount of $1356 based on an imputed income of $70,000 retroactive to January 1, 2013; he would pay his proportionate share of the net cost of agreed upon s. 7 expenses; and he would receive credit for all third party payments he had made from January 1, 2013.

[15] As indicated above, rule 18(16) provides that the court may consider any written offer to settle. Mr. Ambrosino appropriately included only correspondence on behalf of his client because to include correspondence on behalf of the Applicant would have breached privilege. Even without correspondence from both sides, it is apparent that there were active negotiations over a prolonged period of time. I am satisfied that the Respondent was making efforts to resolve matters although his focus was on settling at least some matters on a final basis while the Applicant’s focus in her offer was to settle the issues in the impending motion for temporary orders.

[16] On the key issue as to the amount of child support, the result was clearly more favourable than was the offer made by the Applicant on August 23rd in that the amount of the imputed income and therefore the monthly table amount of support was greater than she had proposed. However, that does not warrant a conclusion of a substantial differential of success for two reasons. First, the basis upon which she pursued her motion was that the Respondent was intentionally underemployed. I did not make that finding. Second, the Applicant’s non-severable offer included other aspects on which she was not successful, namely the s. 7 expenses and the retroactive payment for table amount and s. 7 expenses.

[17] It is the case that the result with respect to the primary residence and the residential schedule was more favourable than her offer to settle. However, as indicated in the earlier endorsement at paragraphs 21-22 and paragraph 24-26, there were important differences in the evidence of the Applicant and the Respondent as to their respective historical parenting roles and responsibilities. I did not make findings of credibility on those issues. I expected that the parties would focus on the settlement conference, failing which the parenting schedule could be revisited. While the result was more favourable, the basis upon which the Applicant pursued her motion was that she had historically been the primary parent. I did not make that finding.

[18] On balance, the Applicant achieved modestly more success than did the Respondent. The Family Law Rules direct that success be recognized in an award of costs. The modest success results in a modest award of costs.

[19] In his written submissions, Mr. Ambrosino challenged several aspects of the bill of costs provided by counsel for the Applicant. Mr. Krol responded only on the issue of duplication of services. I need not review the bill of costs nor the challenges. Suffice it to say that I accept the alternative submission that costs should be fixed in the modest amount of $3,500.

[20] I do not accept the submission that the costs should be payable in the cause because that would be contrary to the expectation in rule 24(10). Nor do I accept that the costs be paid within 30 days as proposed by Mr. Krol. As indicated above, one of the issues that affects this family is debt, for which the Respondent has been shouldering the responsibility. I am not prepared to make an order that he might not be in a position to fulfill immediately and which might provoke a motion to strike his Answer, thereby becoming a barrier to his continued participation in the case.

ORDER TO GO AS FOLLOWS:

[21] The Respondent shall pay costs to the Applicant of the motions heard August 27, 2013 fixed in the amount of $3,500 payable after the decision of the trial judge is released or upon settlement whichever is earlier.

Kiteley J.

Date: December 30, 2013

[^1]: Muruve v. Muruve, 2013 ONSC 5981