Marshall v. Collins, 2015 ONSC 2850

NEWMARKET COURT FILE NO.: FC-13-042782

DATE: May 4, 2015

ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY COURT

BETWEEN:

Roderick George Andrew Marshall

Applicant

– and –

Mary Patricia Collins

Respondent

Cindy Scharff, for the Applicant

James H. Herbert, for the Respondent

HEARD: April 13, 2015

REASONS FOR DECISION ON COSTS

JARVIS J.

[1] By Separation Agreement having an effective date of May 7, 2007, the spousal parties (hereinafter referred to as the “husband” and “wife”, as the record is unclear whether they are divorced) resolved all issues arising from their marriage and its breakdown, including parenting of their son, equalization of net family properties, child support (spousal support was released) and ancillary related matters. Both parties were represented by independent counsel.

[2] Paragraph 5 of the Agreement dealt with child support. Paragraph 5.21 provided that in addition to a yearly review either party could “seek a change in child support if there is a material change in circumstances” and paragraph 5.22 specifically alluded to material changes in circumstances affecting either of the parties or their son.

[3] Paragraph 6 of the Agreement dealing with “Dispute Resolution” set out a protocol for resolution of a reviewable aspect of the Agreement, of which paragraph 5 was identified as one of the provisions captured. Paragraphs 6.5 to 6.8 of the Agreement provided as follows:

6.5 If Rod and Patricia cannot agree within 60 days of the request for disclosure under section 6.2(c), they will try mediation first and then arbitration.

6.6 The parties will share proportionately to their respective incomes in any calendar year the costs of mediation.

6.7 If Rod and Patricia cannot resolve an issue that has been the subject of mediation, they will arbitrate the dispute.

6.8 When the mediator and the arbitrator are the same person, Rod and Patricia waive section 35 of the Arbitration Act.

[4] It is clear from the Agreement that, in the overall resolution of the issues arising from the breakdown of their marriage, the parties clearly turned their minds to, and agreed upon, the process to be followed in the event of review. That process was mandatory, not expressed as permissive.

[5] Paragraphs 16.8 and 16.12 of the Agreement also provided:

16.8 Any amendments to this Agreement must be in writing, signed by the parties, dated and witnessed.

16.12 Rod or Patricia’s failure to insist on the strict performance of any terms in this Agreement will not be a waiver of any term.

[6] In this matter, the husband commenced an Application for, essentially, a determination of his child support obligation, requesting (as he was entitled to request) a review of the child support arrangements. Between the date that his Application was commenced (February 5, 2013) and the Trial Management Conference on April 13, 2015, the husband’s employment was terminated. In his Application the husband adverted to having proposed mediation “as per the parties’ Separation Agreement” (paragraph 7 of “Important Facts”: Vl 1, Tab 1 C.R.).

[7] The wife delivered an Answer dated May 16, 2013. No reference was made to the husband’s proposal about mediation.

[8] No reply was delivered by the husband.

[9] Apart, then, from the reference to “mediation” in the husband’s Application and a desultory exchange of correspondence in that regard, it seems clear that both parties chose to ignore the terms of their Agreement requiring a reviewable issue such as a variation of child support to be arbitrated. It is unclear why that happened. The wife submits that she first proposed mediation: the parties challenged each other’s choice for a mediator and when the wife did not reply to the husband’s additional suggestion for a mediator, the husband commenced his Application. What is clear is that while both parties considered mediation they ignored without any reasonable explanation the mandatory terms of their Agreement dealing with mediation/arbitration. What then was the purpose of including in their 2007 Agreement paragraph 6 dealing with “Dispute Resolution”?

[10] In this case, even after the court raised the issue of jurisdiction, the parties could not agree whether to formally waive paragraph 6 of their Agreement or to comply with it (in writing by amending the Agreement) and proceed with the litigation (see paragraph 16.8 of the Agreement above). That the issue may not have been raised before some conferences had been held is not a satisfactory answer to the question of jurisdiction nor is it any more acceptable to “deem” the delivery of pleadings between the parties as constituting some kind of amendment to their Agreement.

[11] The parties are now proceeding to mediation/arbitration in accordance with the provisions of their Agreement. The wife seeks costs of these proceedings in an amount ranging between $5,633.96 (partial indemnity) to $8,721.06 (full indemnity) and principally relies on Benson v. Crawford[1] a decision of Justice Perkins of this court. The husband seeks costs ranging between $10,120.81 (partial indemnity) $16,868.03 (full indemnity).

[12] In Benson the court was tasked with assessing the costs of an Application that the husband in that case was obliged to commence after the wife disputed the validity of an earlier Separation Agreement. That Agreement contained a provision mandating mediation, and ultimately arbitration. The husband had wished a change in child support arrangements (as in this case) and only commenced his Application after the wife challenged the Agreement: an arbitrator had earlier declined to proceed without a court ruling on that issue.

[13] The husband sought a declaration that the Agreement was valid, and for an order that the parties proceed to mediation/arbitration on the support issues. The wife filed an Answer, the husband a Reply, and two Case Conferences were held before the wife withdrew her Answer. The husband sought costs on a full recovery basis in the amount of $22,698. The court awarded $7,500 costs, all inclusive.

[14] In the case at bar, the husband relies on Benson and, in particular, Justice Perkins’ analysis of the civil rules (RCP) dealing with “costs thrown away” as guiding the court’s approach to the appropriate scale of recoverable costs under the Family Law Rules, specifically Rule 6(3). Unlike Benson, however, the husband in this case, even after raising the issue of mediation, ignored the mandatory mediation/arbitration provision in the parties’ Separation Agreement. As did the wife. The parties proceeded as if the Dispute Resolution provision of their Agreement was not binding on them. As already noted there was no written amendment to the Agreement.

[15] Neither party served an Offer to Settle that in any way addressed the issue of mediation/arbitration, and much of the husband’s written costs submissions in this case dealt with his efforts to resolve the child support issues.

[16] The wife seeks costs which involve two Case Conferences and one Trial Management Conference. There was no questioning. Considerably more time seems to have been spent by the husband’s counsel but, when comparing the respective Bills of Cost submitted, they differed little in terms of what, apart from the conferences, counsel for either party undertook.

[17] The record does not disclose that any Endorsement respecting costs was made at either of the Case Conferences. Absent such Endorsement, no costs may be awarded for those steps: Islam v. Rahman, 2007 ONCA 622, [2007] O.A.C. 371, 41 R.F.L. (6th) 10 (O.C.A.) at para 2.

[18] Rule 18 of the Family Law Rules (FLR) dealing with Offers to Settle isn’t applicable. Rule 24 of the FLR presumes entitlement to costs in favour of a successful party. There is none here.

[19] Rule 24(11), however, sets out various factors to be considered by the court. Subparagraphs 24(11)(b) dealing with “reasonable” and (f) “any other relevant matter” considerations provide the court with sufficient discretion to make an order that rewards neither party for, without reasonable explanation, ignoring the mandatory mediation/arbitration provisions of their Agreement. Either the husband should have, as was done in Benson, sought a declaration that would have led to mediation/arbitration or, in answering the Application, the wife could have challenged the court’s jurisdiction.

[20] A decision to litigate should never be taken casually. While both parties are responsible for pursuing their case as they did, it was the husband who chose to commence this Application. He shall pay to the wife costs fixed and payable forthwith in the amount of $1,750 all inclusive.

Justice D.A. Jarvis

Released: May 4, 2015

[1] 2012 ONSC 5932.