Toth v. Toth, 2015 ONSC 2789
COURT FILE NO.: D1085-13
DATE: 2015-04-30
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Deborah Lynne Toth
Applicant
– and –
Steven Joseph Toth
Respondent
Stuart M. Law, Counsel for the Applicant
Sandra Majic, Counsel for the Respondent
SUPPLEMENTARY ENDORSEMENT RE: COSTS
THE HONOURABLE MR. JUSTICE D.J. GORDON
[1] In my reasons for decision, released February 27, 2015 (2015 ONSC 1174), I invited written submissions from counsel on the issue of costs.
Trial and Decision
[2] The issues at trial involved spousal support, equalization of net family properties and related matters. The parties had resolved other issues.
[3] In my reasons for decision, I concluded this was an unnecessary trial, the issues being straightforward. The final order granted included the following provisions:
(a) respondent to pay spousal support to the applicant in the monthly amount of $1,903, being the midrange SSAG on incomes of $33,904 and $88,285; and
(b) equalization payment by applicant to respondent of $1,619.82 and similar payment for adjustments of $7,320.63.
Request for Cost Award
[4] The applicant was successful on all issues at trial. In result, on her behalf, Mr. Law seeks full recovery costs in the amount of $56,477.47.
[5] Despite losing on every issue at trial, the respondent also seeks a cost award, presumably on a substantial indemnity basis, of $52,505.44, as suggested by his counsel, Ms. Majic.
Overview
[6] As previously stated, the issues at trial requiring determination were straightforward and should have been resolved long before. The trial occurred due to the unreasonable position of Mr. Toth, with respect to the issues and with his unwarranted and unsupportable allegations of fraud by Ms. Toth. Neither Mr. Toth nor Ms. Majic were prepared for trial. The position advanced was based on speculation with no evidence whatsoever in support. They ignored the applicant’s request to admit, that became fatal to Mr. Toth’s position. No due diligence was performed despite their serious allegations. Ms. Majic also misinterpreted the evidence and applicable legal principles in her final submissions.
[7] Despite the findings in my reasons for decision, Ms. Majic attempts to re-argue the case in her costs submissions. She says for example:
(a) The applicant was unreasonable in demanding not just support, but high end SSAG for life plus the respondent’s pension and downplaying her own financial health and investments (para. 9);
(b) The applicant came to court demanding an order for support commensurate with high end SSAG. The applicant’s position in this regard was untenable, unsubstantiated as a reasonable request at trial and mathematically impossible for the respondent to pay in light of his take home pay. The applicant’s stance was rendered all the more inflammatory by the fact that she was not and will not be in need as her investments as of the trial date, for that which she did disclose exceeded $60,000; this is over the equalization payment of the house and the respondent’s pension. The applicant’s demand for more was inequitable, mathematically impossible to honour given the respondent’s monthly take home pay. As the applicant was implacable to the fact that her demands would leave the respondent destitute, the trial of this matter was inevitable (para. 12);
(c) The applicant’s obsession during the marriage and continued greed after its dissolution served as the impetus for her insatiable demand for more from the respondent, irrespective of the financial impossibility of her demands or the impoverished state her demands and his existing payments had left him in (para. 13);
(d) The applicant’s further demand that she be awarded spousal support even after she is in receipt of her substantial share of the respondent’s pension was not granted by the court. Such a demand would be double dipping and speaks to the applicant’s greed and determination to leave the respondent destitute (para. 14); and
(e) The applicant does not have a right to render the respondent a pauper because he found the marriage intolerable and left (para. 15). (emphasis added)
[8] Ms. Majic goes on to describe her client “as the more reasonable litigant”.
[9] The aforementioned submissions of Ms. Majic are simply wrong and completely ignore the evidence at trial. The continued attack on the character of Ms. Toth is unprofessional, inappropriate and unacceptable.
Offers to Settle
[10] Having regard to Ms. Majic’s submissions, as noted above, the offers to settle are of particular importance with respect to the issue of “reasonableness”.
[11] Ms. Toth served two offers to settle regarding the issues at trial, dated April 11, 2014 and September 24, 2014. The relevant terms were as follows:
(a) spousal support of $2,078 monthly; and
(b) equalization payment to Mr. Toth of $1,733.85 (first offer) and $3,400 (second offer).
[12] The spousal support offer was the midrange SSAG based on the incomes of the parties. Mr. Law correctly points out that Mr. Toth had then only disclosed his 2012 income tax return. Disclosure of his 2013 income tax return was not made until November 21, 2014, shortly before the commencement of trial.
[13] Ms. Toth’s offer on spousal support was consistent with the ultimate ruling, the key item being midrange SSAG. Indeed, at para. 157 of my reasons, I opined there was “… a strong argument in favour of a higher award”.
[14] Ms. Toth’s offer on equalization of net family properties exceeded the award at trial. The adjustments issue only arose at trial. It was not pleaded by Mr. Toth. The issue of adjustments was essentially resolved on consent. The only problem was Ms. Majic’s demand for a full credit, not one-half, an error in accounting principles or lack of understanding the proper methodology.
[15] Mr. Toth served two offers to settle as well, dated September 25, 2014 and November 19, 2014. The relevant terms were as follows:
(a) spousal support of $1,803 monthly to continue (the temporary order granted January 20, 2014) until the month Ms. Toth starts receiving payments from Mr. Toth’s pension;
(b) equalization payment by Ms. Toth of $27,930.43 (first offer) and $11,069.86 (second offer); and
(c) a further payment from Ms. Toth for monies “diverted from joint family accounts to herself” of $32,469.79 (first offer) and $26,646.02 (second offer).
[16] While the spousal support amount offered was essentially mid-range SSAG, it must be noted the motions judge concluded actual midrange SSAG was $2,078, but reduced the amount payable having regard to imputed rental income from the children and Mr. Toth’s voluntary payments to one child pursuing a post-graduate university degree.
[17] Mr. Toth’s equalization and diversion offer were unreasonable on its face and bore no relationship to the evidence either at trial or as known at the time of the offers.
[18] On the basis of the offers to settle, I conclude that Ms. Toth, at the very least, is entitled to substantial indemnity costs. Her offers were reasonable, his were not.
Allegations of Fraud
[19] The offers to settle of Mr. Toth above introduce formally the issue of “diversion” of funds. Obviously, I am unaware of correspondence or other exchanges between counsel. I do note that, in his answer, Mr. Toth sought an accounting but did not claim an unequal division in his favour of net family properties.
[20] Ms. Majic presented allegations of misappropriation of monies by Ms. Toth in her opening remarks. These and other allegations of fraud and dishonesty persisted throughout the trial. Indeed, it took up most of the trial time.
[21] Ms. Majic aggressively challenged Ms. Toth in cross-examination regarding mystery accounts and diverting funds. Ms. Majic repeatedly accused Ms. Toth of lying. The cross-examination was not effective. It was also improper as Ms. Majic had no evidence to support the accusations.
[22] Mr. Toth did not offer any evidence whatsoever. All he could say was that it was his “belief”. He had not even reviewed the documents in preparation for trial.
[23] Of further interest, in her request to admit, dated September 25, 2014, Ms. Toth stated the respondent has no evidence that she has not made full disclosure and offered to provide directions to any financial institution he chose. Mr. Toth, and Ms. Majic, neglected to respond. Deemed admissions arose by virtue of Rule 22(4), Family Law Rules. Yet, the attack on Ms. Toth continued throughout the trial.
[24] An unsuccessful attempt to prove allegations of fraud and dishonesty invites scrutiny. When such rises to the level, as here, of being “reprehensible, scandalous or outrageous conduct” by or on behalf of Mr. Toth, the invitation also rises to consider full indemnity costs. See: Young v. Young, 1993 CanLII 34 (SCC), [1993] 4 S.C.R. 3 (S.C.C.), at p. 134; and Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303 (S.C.C.), at para. 26.
[25] The allegations of fraud and dishonesty were presented throughout the trial, and long before. No evidence was tendered in support of these allegations and, indeed, none existed. Mr. Toth and Ms. Majic had to know they had no such evidence. The aggressive cross-examination of Ms. Toth failed.
[26] These serious allegations were potentially damaging to Ms. Toth. She was accused of deception. Her character was improperly attacked.
[27] This blatant and unacceptable attack necessitates an award of full indemnity costs at the very least. In my view, conduct of this nature ought also lead to a further punitive award. Such, however, is not yet permitted under Rule 24.
Reasonable Expectations on Costs
[28] There can be no issue as to the reasonable expectations, a concept set out in Rule 57.01(1), Rules of Civil Procedure. The costs incurred by Mr. Toth are comparable to those sought by Ms. Toth.
Ability to Pay
[29] Likewise, there is no issue with respect to the ability to pay costs. The proceeds from the sale of the matrimonial home remain in the trust account of the real estate solicitor, Mr. Dudzic.
Quantum
[30] Ms. Toth claims costs of $56,477.47. Having regard to the claim of Mr. Toth of $52,505.44 (his actual costs being $60,293.24), the amount sought is clearly reasonable.
[31] Nevertheless, I have reviewed the Cost Outline presented by Mr. Law. The time docketed and hourly rates are appropriate for this case. I note the claim is restricted to the trial, trial preparation and related matters. While costs were likely determined for prior motions, the within cost claim could have included other matters pertaining to the action.
[32] In result, I conclude the cost award claims is reasonable.
Summary
[33] For the foregoing reasons, costs are awarded to the applicant, Ms. Toth, on a full recovery basis, fixed in the amount of $56,477.47.
[34] In my reasons for decision, at para. 216, I directed the monies held in trust by Mr. Dudzic were not to be disbursed until the resolution of the issue of costs. I now direct the above cost award be paid to Ms. Toth, or as she may direct, from Mr. Toth’s share of those trust funds.
[35] Presumably, counsel will be able to calculate the remaining division of the trust funds and will provide a direction to Mr. Dudzic in this regard. I may be spoken to if there is any disagreement.
D.J. Gordon J.
Released: April 30, 2015
COURT FILE NO.: D1085-13
DATE: 2015-04-30
ONTARIO
SUPERIOR COURT OF JUSTICE
Deborah Lynn Toth
Applicant
– and –
Steven Joseph Toth
Respondent
SUPPLEMENTARY ENDORSEMENT RE: costs
D.J. Gordon J.
Released: April 30, 2015
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