CITATION: Hathaway v. Hathaway, 2015 ONSC 2383

COURT FILE NO.: FD1344/08

DATE: April 14, 2015

SUPERIOR COURT OF JUSTICE – ONTARIO

FAMILY COURT

RE: Michelle Suzanne Hathaway, Applicant/Recipient

AND:

Randall Lee Hathaway, Respondent/Payor

BEFORE: MITROW J.

COUNSEL: Thomas G. Chalmers, for the Applicant/Recipient

Genevieve M. Samuels, for the Respondent/Payor

HEARD: Written submissions filed

COSTS ENDORSEMENT

[1] I have reviewed the parties’ written costs submissions received following the release of my decision on January 13, 2015 in relation to the garnishment hearing.

[2] The respondent seeks costs “on a full-indemnity basis”, which according to his bill of costs, is $9,568.74; the “partial indemnity” costs is shown as $6,550.87; both amounts are inclusive of fees, disbursements and HST.

[3] The applicant submits there should be no costs, or in the alternative, if costs are awarded, the amount should not exceed $350.

[4] I have considered all the factors in rule 24(11). The most striking feature of this case is that both parties lost all focus on the principle of proportionality. The time and effort expended by both parties including the amount of affidavit material, was substantially disproportionate to the issues at stake.

[5] The applicant had issued two notices of garnishment. The source of the money sought to be garnished was the respondent’s share of the matrimonial home sale proceeds held in trust by the solicitor who had acted on the sale. It is noted that the support order was withdrawn from the Director’s Office.

[6] The respondent was successful in setting aside the notice of garnishment that related to s. 7 expenses for hockey and university. In relation to the hockey expenses, the applicant was ordered to pay back to the respondent the sum of $1,192.50 that had been garnished. In relation to university expenses, although an amount of just under $3,200 had been garnished, the respondent did not seek repayment, as he acknowledged that he did owe money for s. 7 university expenses, but that he needed to satisfy himself as to the amount he owed after examining all the necessary documents that the applicant needed to produce to verify the expenses, some of which had not been produced when the applicant issued her notice of garnishment.

[7] The other notice of garnishment related to ongoing periodic support payments. Although that notice of garnishment was found to have been properly issued, it was ordered that no further periodic child support payments would be attached by the notice of garnishment.

[8] The flurry of legal activity achieved the following: the respondent got a refund of $1,192.50; however the sum of just under $3,200 that had been garnished still remained with the applicant; for the reasons mentioned above, even though the notice of garnishment had been set aside as to the periodic payments, the respondent will still have to make those payments ($2,248 per month), but instead of those payments coming out of his share of the net sale proceeds held in trust (it being noted that the total of the net sale proceeds was a little under $42,000 with the respondent’s share being 50 percent), the respondent instead will receive his remaining share of the net sale proceeds and then he can access those funds to pay the child support. Practically, what has the respondent gained? Little, it seems – a somewhat pyrrhic victory, perhaps.

[9] For her part, the applicant sought to garnish the periodic child support payments because the support order, which provided for payments to start September 2014, required payments to be made on the first of each month, whereas the respondent was making his payments around the middle of the month. I stated as follows at paras. 30 and 31 of the reasons:

[30] Notwithstanding the above, the immediacy with which the applicant sought to garnish the periodic child support payments appears somewhat heavy-handed. The respondent merely wanted to coincide his child support payment with his pay-day. There was a history of that. Even in her email to the respondent dated October 1, 2014, the applicant suggested that he bring the cheque not later than October 5, 2014.

[31] Given the circumstances, and considering the volume of material filed and time spent by both counsel on this matter, it may have been prudent for the applicant to exercise some discretion and forbearance prior to attempting to garnish the periodic child support payments.

[10] The respondent submits that the applicant has acted in bad faith and relies on r. 24(8) which provides that if a party has acted in bad faith the court shall award costs on a full recovery basis. I reject the respondent’s submission that the applicant’s conduct rises to a level of bad faith. The respondent also submits that the applicant’s conduct was unreasonable. I do agree with that submission for two reasons: first there was absolutely no basis upon which a notice of garnishment should have been issued for s. 7 expenses because there was no underlying court order quantifying those expenses; second, the respondent’s only transgression in relation to the periodic payments was that he paid them mid-month (rather than at the beginning of the month), for several months, and in those circumstances, resort to the notice of garnishment was “heavy-handed”, as set out above. I take the unreasonable aspects of the applicant’s conduct into account in quantifying the costs.

[11] I do find that the respondent was successful in large measure, and that he is presumptively entitled to costs.

[12] Each party served one offer to settle; although the applicant’s offer was not signed by her, I can still take it into account: rule 14(16). The respondent’s offer, which was signed December 12, 2014, included an amount of $3,000 for costs to be paid by the applicant; I find that this offer does not engage the automatic costs consequences of rule 18(14) as the respondent has failed to meet the burden imposed on him to prove that the conditions of paragraph 5 of rule 18(14) have been met.

[13] While the respondent was at liberty to instruct and pay his lawyers (over $9,000 in the present case) to mount whatever vigorous defence he desired to set aside the notices of garnishment, the costs that he incurred in doing so do not, alone, define what a court should order for costs. The Court of Appeal for Ontario has made clear that in awarding costs, the court should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party, rather than any exact measure of the actual costs of the successful party: Davies v. Clarington (Municipality), 2009 ONCA 722, 2009 CarswellOnt 6185 (Ont. C.A.) at para. 52. In the present case, the principle of proportionality is also a relevant consideration as discussed earlier: see for example the decision of G.P. Smith J., Rea v. Rea, 2008 CanLII 735 (Ont. S.C.J.).

[14] I find that $2,500 is a reasonable amount for the applicant to pay.

[15] I order the applicant to pay to the respondent forthwith his costs of the garnishment hearing fixed in the amount of $2,500 inclusive of assessable disbursements and HST. If the applicant’s share of any net proceeds from the sale of the matrimonial home remains held in trust by the solicitor who acted on the sale, then those funds shall be applied towards the payment of this costs order.

“Justice Victor Mitrow”

Justice Victor Mitrow

Date: April 14, 2015