Vogler v. Vogler, 2015 ONSC 1341

COURT FILE NO.: FC-10-454-0

DATE: 2015/03/10

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: SOPHEANY VOGLER, Applicant

AND

RALPH KERSTEN VOGLER, Respondent

BEFORE: M. Linhares de Sousa J.

COUNSEL: Meredith Holmes, for the Applicant

Thomas Marshall, for the Respondent

HEARD: By Written Submissions

ENDORSEMENT WITH RESPECT TO COSTS

[1] I have now had the opportunity to examine and consider the written submissions of both parties in this matter.

[2] There were a number of issues in this very high conflict matrimonial trial that took a number of days of hearing. The parties were able to settle, before trial and during trial, a number of the issues, namely those relating to parenting and to the s. 7 expenses of the two children of the marriage.

[3] A substantial portion of the trial was dedicated to hearing evidence relating to the property issues, to the accurate evaluation of Mr. Vogler’s business and to a finding regarding an accurate expectation of Mr. Vogler’s employability and earning capacity. With respect to those issues there is no question that Ms. Vogler was substantially successful at trial. She also succeeded on the question of spousal support and there was much evidence presented on that issue. She did not succeed on the question of child support and Mr. Vogler succeeded on that issue. Consequently, with respect to the issues that took up the majority of trial time, Ms. Vogler is presumptively entitled to her costs or to a substantial portion of her costs, pursuant to Rule 24(1) and (6) of the Family Law Rules, O. Reg. 114/99 (“FLR”).

[4] While in this case there are mutual recriminations from each party that the other party has acted in bad faith I cannot come to any such conclusion against either party, both of whom believed in the “rightness” of their position throughout this litigation. I also cannot conclude that Ms. Vogler in any way acted unreasonably, so as to deprive her of her presumed entitlement to her costs based on her substantial success in this litigation pursuant to Rule 24(4) and (6) of the FLR.

[5] Pursuant Rule 24(5) of the FLR the Court, in deciding the question of costs, must consider whether a party behaved reasonable or unreasonably, which necessarily involves the consideration of any offers to settle which a party may or may not have made. Rule 18 of the FLR provides for the formal requirements of offers to settle. Rule 18(14) of the FLR provides for certain costs consequences of failure to accept offers.

[6] In this matter, Ms. Vogler submits that she made a number of offers. Mr. Vogler submits that he did not receive some of these offers and he also submits that Ms. Vogler’s offers do not meet the formal requirements to be considered for the purposes of costs. I have examined Ms. Vogler’s various offers to settle and their contents. I am not able to conclude that any one of them would trigger the operation of Rule 18(4) which would result in a mandatory consequence of a costs order. Nonetheless, the Court may consider any offers to settle made by the parties in deciding the question of costs. Mr. Vogler concedes that he did receive one offer to settle.

[7] I conclude that Ms. Vogler acted reasonably in this litigation by attempting to resolve this matter by way of making at least one offer to settle and possibly more. This does not appear to be the case with Mr. Vogler, who made no reference in his written submissions to any offer to settle made by him in the course of the litigation. In this, he acted unreasonably. Mr. Vogler also consented to arbitrate certain property issues and later cancelled the arbitration.

[8] Pursuant to Rule 24(10) of the FLR, costs awards should generally be determined at each step in the case. In this case, as I referred to in my judgment, there were multiple interim proceedings leading to the trial. Costs awards at those stages were awarded, although in a few proceedings the costs decisions were reserved to the trial judge (the motion for questioning and the motion relating to the fraudulent conveyance of the Mississauga property). While Ms. Vogler’s motion for a finding of fraudulent conveyance was dismissed, the ultimate finding with respect to the Mississauga property was also a rejection of Mr. Vogler’s argument that he had no beneficial interest in that property. Ms. Vogler was ultimately successful on this issue.

[9] Rule 28(11) of the FLR directs the Court to consider a number of factors.

The importance, complexity or difficulty of the issues

[10] This case did not raise any particularly important nor difficult legal issues, although I do not doubt that the case was important to the parties. It was somewhat complex with regard to the issues of the evaluation of Mr. Vogler’s business and the finding of what income Mr. Vogler could reasonably be expected earn. In view of Mr. Vogler’s decision not to seek employment for nearly two years while he concentrated his efforts in conducting his own matrimonial litigation, the expert testimony regarding his employability was very helpful to the Court in determining this issue. This was an expert retained by Ms. Vogler at her expense. Similarly, the one business evaluation of Mr. Vogler’s business was also provided by Ms. Vogler at her expense. Mr. Vogler clearly was under an obligation to provide complete financial disclosure of all of his assets and he did not. This was unreasonable conduct on his part. Ms. Vogler at a minimum should receive a reimbursement for the expenses of her expert witnesses.

Lawyer’s rates and time properly spent on the case

[11] Throughout this long litigation Ms. Vogler has been represented by counsel. Mr. Vogler represented himself, more or less, throughout, as was his right, until the trial, at which point he retained counsel to attend the trial management conference and to conduct the trial. Both parties, however, put forward comparable total costs for engaging in this litigation. (Ms. Vogler: $107,987.70 and Mr. Vogler: $103,078.80). Given the experience of counsel, the high conflict nature of this case and the multi-proceedings that took place leading to trial, I cannot take serious issue with the bill of costs relating to both counsel’s work on this matter. I accept the submissions of counsel for Mr. Vogler in paragraph 18 of his written submissions that certain items included by counsel for Ms. Vogler in her bill of costs are not proper trial costs and treat them accordingly. Mr. Vogler lists in his costs the amount of $43,243.33 for “Client’s Fees and Disbursements as Self-Represented”. For this he relies on the case of Blustein v. Kronby, 2010 ONSC 1718. In that decision, Mr. Justice Belobaba awarded a self-represented litigant costs in the amount of $1,800, relying on the Court of Appeal decision Fong v. Chan (1999), 46 O.R. (3d) 330, 1999 CanLII 2052 (ONCA) ruling that where a lay litigant can demonstrate “that they devoted time and effort to do work ordinarily done by a lawyer retained to conduct the litigation, and that as a result, they incurred an opportunity cost by foregoing remunerative activity.” Mr. Vogler’s costs for this item I find to be excessive. I also observe that ultimately, his foregoing “remunerative activity” for almost two years so as to conduct this litigation on his own only intensified the conflict relating to one of the significant issues on this trial, namely his employability and earning capacity.

Expenses properly paid or payable

[12] I have already commented on the expert testimony and its usefulness to the Court, retained by Ms. Vogler and Mr. Vogler’s reply to this.

Any other relevant matter

[13] I consider under this category the high cost of this litigation to both parties. It is clear that neither party could afford this litigation. Both parties incurred substantial debt to conduct this litigation. Mr. Vogler has had the benefit of the generosity of his parents who, for many years, have been willing to support their son financially. This litigation may be one example of where their generosity may have done their son a disservice. Ms. Vogler has also borrowed from her family. The funds could clearly have been put to better use, such as meeting the needs of their children. Nonetheless, in the final analysis and after weighing all of the factors already mentioned, it would be unfair to Ms. Vogler, in all of the circumstances of this case, not to grant her a substantial contribution to her costs.

[14] In the case of Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O. R. (3d) (Ont. C. A.), the Ontario Court of Appeal indicated that a costs award should be a “fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs of the successful litigant”. A “fair and reasonable amount” is that amount which the unsuccessful party could reasonably have expected to pay in the event of lack of success in the litigation. I therefore order Mr. Vogler to make a contribution to Ms. Vogler’s costs in an amount that I fix at $55,000, in addition to $12,000 disbursements for expert fees and costs for a total costs award of $67,000 inclusive of HST.

[15] Given his own declared costs, I am persuaded that Mr. Vogler certainly could reasonably have expected to pay such costs in the event of lack of success in the litigation.

M. Linhares de Sousa J.

Released: March 10, 2015

CITATION: Vogler v. Vogler, 2015 ONSC 1341

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: SOPHEANY VOGLER

Applicant

AND

RALPH KERSTEN VOGLER

Respondent

BEFORE: M. Linhares de Sousa J.

COUNSEL: Meredith Holmes, for the Applicant

Thomas H. Marshall, for the Respondent

ENDORSEMENT WITH RESPECT TO COSTS

M. Linhares de Sousa J.

Released: March 10, 2015