COURT FILE AND PARTIES

COURT FILE NO.: 10-7489M

DATE: 2014-06-04

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Laura Marie McCombe, Applicant

AND:

David Thomas McCombe, Respondent

BEFORE: Sproat J.

COUNSEL:
Carol Allen, for the Applicant

Erroll Treslan, for the Respondent

COSTS ENDORSEMENT

[1] In summary, on the principal issues at trial, I decided that:

(a) to date David had underpaid child support and overpaid spousal support such that no arrears were owing;

(b) no s.7 arrears were payable and going forward a $9,500 annual budget should be shared (81% David / 19% Laura) according to income, which amounts to David paying $641 per month;

(c) David to pay spousal support of $800 per month from February 1, 2014;

(d) David to pay child support of $1,232 per month from February 1, 2014;

(e) no occupation rent payable by Laura;

(f) David was not proven to be in contempt;

(g) Laura is responsible to pay certain line of credit amounts;

(h) Laura is responsible to pay taxes on the matrimonial home; and

(i) David’s club membership does not have value today for equalization purposes.

[2] Laura claims costs of approximately $108,000 on a substantial indemnity basis and $86,000 on a partial indemnity basis.

[3] Laura’s September 10, 2012, offer to settle included $81,000 in support arrears, spousal support of $1,869 per month for 15 years paid in the lump sum of $165,000, plus compensatory spousal support of $300,000.

[4] Laura’s March 17, 2014, offer to settle included arrears of child support and s.7 expenses totalling approximately $40,000 and $197,000 for lump sum spousal support.

[5] Laura’s April 2, 2014, offer to settle included no support arrears but a lump sum spousal support payment of $261,000 or a combination of monthly and lump sum payments presumably intended to be roughly equivalent.

[6] The result achieved by Laura at trial fell short of her offers to settle.

[7] David claims that the pre-trial offers he made indicate that he is the only party who made a serious attempt to settle and, having regard to his final offer, he should receive costs in the range of $23-$32,000 related to the period from and after March 21, 2014.

[8] David served six formal offers. The June 9, 2011, offer included child support of $1,000 per month, David paying $10,000 per annum for s.7 expenses, 100% of the parental contribution to a first degree or diploma, transferring his interest in the matrimonial home to Laura and $75,000 cash. This offer was, however, only open to June 15, 2011, after which an earlier offer was revived.

[9] David made further offers of February 19, 27 and March 21, 2014. The latter offer included no child support or s.7 arrears, $1,293 per month child support, $400 per month s.7 expense, spousal support of $655 per month (subject to automatic judicial review on March 31, 2018) or a lump sum spousal support payment of $50,000 non-taxable, with David waiving adjustments related to the matrimonial home taxes and the line of credit. This offer did not include any amount for costs.

[10] While a more reasonable offer, I find that David’s final offer also fell short of the result he achieved at trial. I awarded higher spousal support and s.7 payments. Whether the $50,000 lump sum offer on spousal support, would or would not be beneficial to Laura requires speculation as to her future income. David’s offer was less favourable in that it provided for automatic judicial review of spousal support and it did not offer anything for costs which, even on a partial indemnity basis, probably exceeded $30,000 by that date. I am not satisfied that the adjustments waived by David would equal or exceed the shortfalls in spousal support, and s.7 payments and costs.

[11] While in hindsight Laura would have been better off to accept the June 9, 2011, offer I give it little weight in determining costs. It was only open for six days and that was at a time that Laura was seeking additional disclosure and she was aware David had provided her with an altered or inaccurate version of the Wallace contract which would justifiably cause her to distrust David.

[12] Laura points to continuing difficulty in obtaining full disclosure from David and this is supported by the number of motions and court orders for disclosure. I agree these difficulties caused costs to increase and is a relevant factor.

[13] Any lack or delay in disclosure does not, however, account for the fact that Laura pursued various arguments concerning David’s 2010-11 income which I have concluded were flawed and which occupied considerable time at trial.

[14] I accept that this matter was extremely important to Laura. At present she has an extremely limited ability to earn income so obtaining proper support and s.7 expenses was of great concern.

[15] While Laura’s result at trial exceeded David’s final offer, I find that the costs awarded to her should be on a reduced basis having regard to the following factors:

(a) Laura’s offers were unreasonable;

(b) if Laura had been more reasonable, I think it quite possible the case would have settled;

(c) considerable trial time was devoted to the issue of David’s income for the years 2010-2014 and my finding was much closer to the income proposed by David than Laura.

(d) considerable trial time was devoted to other issues such as s.7 arrears, and the responsibility for matrimonial home taxes which were resolved against Laura.

[16] Costs of two motions were reserved to the trial judge.

[17] I agree that Laura was successful on the motion before van Rensberg J. and that costs of the motion should be fixed at $3,500 plus H.S.T.

[18] With respect to the motion before Snowie J. the property tax arrears should have been paid by Laura pursuant to previous court orders. There should be no costs awarded in relation to this motion.

[19] In my view the fact David submitted an altered version of the Wallace contract, intending it to be relied upon by Laura, was clearly improper. That naturally contributed to heightened distrust and antagonism on the part of Laura and had the effect of increasing the difficulty and complexity of the proceeding. Explanations that might otherwise have been accepted at face value could not be. I factor this in to increase my costs award.

[20] I do not, however, regard the altered Wallace contract as itself justifying substantial indemnity costs. Nor do I view the disclosure issues as justifying a blanket order for substantial indemnity costs.

[21] Laura’s Bill of Costs seeks, on a partial indemnity basis, approximately $36,000 prior to trial (net of approximately $4,000 for the two motions) and $23,000 for “trial matters” (after deducting approximately $500 for an opinion regarding an appeal).

[22] Having regard to the factors mentioned I conclude that Laura is entitled to the pre-trial costs as claimed of $36,000. At trial, however, there were a number of issues that Laura was not successful on and which in my estimation occupied 40 per cent of the trial time. I, therefore, reduce the amount claimed for trial to $14,100 ($23,000 x 60%=$13,800).

[23] As such I award Laura costs as follows:

(a) fees $49,800;

(b) disbursements $12,366; and

(c) plus applicable tax.

OTHER MATTERS

[24] In my May 2, 2014, Reasons I indicated that counsel could email me if there were any outstanding issues that needed to be addressed in order to prepare a comprehensive order. By May 6, 2014, counsel had approved a Final Order as to form and content. I do not know if this order has been issued.

[25] Mr. Treslan has, however, addressed a number of additional matters related to Timberlane in his May 20, 2014, submission on costs and filed a May 12, 2014, affidavit from David. Laura has filed a responding affidavit. Laura objects to orders that funds held for Timberlane by Ms. Allen and Mr. Vandergust be paid to Timberlane.

[26] At the outset of trial it was agreed that I was not to deal with the state of accounts within Timberlane or any claims that David or Laura may have against Timberlane. The reference in paragaraph 84 of my Reasons to Ms. Allen holding the funds in trust for Timberlane pending further court order contemplated that the parties would either resolve the Timberlane issues or the further order would be made in a proceeding related to Timberlane. The additional orders sought requiring Ms. Allen and Mr. Vandergust to pay funds held in trust to Timberlane are in my opinion beyond the scope of what I was to decide at trial.

[27] I did order that Laura pay $17,299 to Timberlane. That order stands and that amount shall be paid out of the funds held by Mr. Renken.

Sproat J.

Date: June 04, 2014