SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: FS-08-15577-0001
DATE: 20150630

RE: DAVID CHARLES OLSON, Applicant

AND:

MARY KATHLEEN ANDERSON, Respondent

BEFORE: McWatt J.

COUNSEL:
Jonathan Kline, for the Applicant

Allan M. Goldstein, for the Respondent

HEARD: March 2,3,4 and 5, 2015

ENDORSEMENT ON COSTS

Respondent’s Motion to Change

[1] Ms. Anderson brought a motion to end the spousal support payments to her husband of 26 years. As well, she asked to recoup what she claimed was an overpayment of that support. The Wife altered her claim at the end of the trial to, instead, have the payments stepped down and then eliminated over time. There was no suggestion by her at the end of the proceedings that the Husband owed any overpayment.

[2] I found that there was a material change because Mr. Olson admitted that he should have been able to find work in the prior 5 years and had not done so. As a result, I could not dismiss the Wife’s claim, but found that the Wife had been paying less support than that which could have been ordered against her pursuant to the Spousal Support Guidelines. I declined to reduce the spousal support, but was prevented from increasing it because the Husband had brought no motion of his own to vary the award upward.

[3] Mr. Goldstein, for the Wife, submits that since I accepted her claim and did not dismiss the motion, success was divided and the Husband did not achieve total success which would entitle him to costs pursuant to Rule 24(1) of the Family Law Rules. I disagree for the following reasons.

[4] The Husband was successful in defending against the Wife’s claim notwithstanding his admission of the material change. I agree with the written submissions from Mr. Kline that “The outcome for the Wife was worse than if her case had been dismissed. Because $30,000 in income was imputed to the Husband, he can now earn up to $30,000 without triggering a material change in circumstances. Further, because of the finding of a material change, the Wife’s opportunity to vary the order in the future based on the same grounds is diminished if not impossible. The Husband submits that the Wife would have been in a much better position had she accepted his January 28, 2015 offer at any point before it was withdrawn.” For this reason, alone, the Husband is entitled to costs on a full recovery basis.

[5] Without finding the Wife’s actions in the trial were done in bad faith, I have taken into account the fact that she filed an incomplete financial statement by failing to disclose the value of her Federal Government pension and rental income she receives from a second condominium unit she owns.

[6] The Wife accepted child support from the Husband for a period of two years even though she was not entitled to receive it because the couple’s child had become independent. Again, without going so far as to call her actions in this regard bad faith, I take them into consideration when I consider the reasonableness of her behaviour in the litigation.

[7] I also adopt paragraph 8 of the Husband’s Cost Submissions outlining the six factors to be considered in ordering costs as set out in Rule 24(11). They include the following and I quote directly from that paragraph:

8. There are six factors to be considered in ordering costs, which are set out in Rule 24(11). They include:

a. Importance of Outcome: The outcome of the trial was of enormous importance to the Husband. His lifestyle would be seriously impacted by even a small drop in support. The outcome had a disproportionate effect on the Husband: the Wife's higher income, benefits, and retirement assets provide her with significantly more financial security than the Husband.

b. Reasonableness of Parties: In addition to the Wife's conduct in bad faith, the Wife's offers to settle, up until 7 days before the trial was set to begin, were unreasonably low. This effectively stifled any opportunity for settlement. Her offers were to provide the Husband with:

i. March 27, 2014: 12 months x $500/month = $6,000.

ii. May 22, 2014: (6 months x $750) + (6 months x $350) + (six months x $250) = $8,100.

iii. August 7, 2014: same as ii

iv. September 19, 2014: same as ii.

v. October 2, 2014: All offers withdrawn.

vi. January 28, 2015: same as ii., plus $3,500 at time of acceptance = $11,600. This offer included costs penalties of $7,500 if accepted after February 9, and $20,000 if accepted after February 16.

vii. February 23, 2015: ($1,500 x 24 months) + ($1,000 x 24 months) + ($750 x 42 months) = $91,500.

If the Wife retires at age 65, then from the date of trial to the likely date of retirement, she will pay to the Husband approximately 7.5 years or $1,790 per month x 12 months x 7.5 years = $161,100 in spousal support before retiring.

c. the lawyer's rates: Mr. Kline's hourly rate was $300. He was called to the bar in 2008, and has practiced exclusively family law since that time, in Toronto. Mr. Gershuny charged Mr. Olson $300 per hour, which was later reduced to $150 per hour. Mr. Gershuny practices in Toronto.

d. time and expenses properly spent on the case: the Husband's bill of costs sets out in detail all fees and disbursements incurred in this matter from Mr. Gershuny and Mr. Kline. It excludes administrative work, and work done by Mr. Kline's assistant. The Husband submits that all matters that have been billed were required to conduct the case.

Because this is the final determination of the matter, the bill of costs properly includes Mr. Gershuny's preparation of pleadings, attendance at Questioning, correspondence with client and opposing counsel, compliance with undertakings and preparation of exhibits, preparation of trial management conference brief and attendance at the first TMC. The Husband submits that attendance at TMC's should be included, particularly the February 20, 2015 conference that was scheduled by the court, but also the case conferences and settlement conferences, at which costs of those days were not addressed, and which should be considered expenses of carrying on the case as stated in Rule 24(12) of the Family Law Rules.

The Husband further submits that the amount is prima facie reasonable, as the total cost of both lawyers' work ($35,315.33) is significantly lower than Mr. Goldstein's estimate of how much he would seek in costs if the Wife had been successful at trial. Mr. Goldstein's letter to Mr. Kline threatening that the Wife's costs would be approximately $45,000.00 is attached hereto.

In Mr. Goldstein's letter, he also threatens to enforce any costs order by obtaining a writ of seizure and sale against the Husband's home, even though the Husband's inheritance would be adequate to pay such a costs order. This, in addition to the emphasis Mr. Goldstein's letter put on the enclosed offer being the Wife's "final" offer, contributed to the chilling effect on settlement discussions.

[8] I agree with Mr. Kline that the Wife’s Offers to settle were unreasonable and I accept that, in the circumstances, they “put a chilling effect on the opportunities to settle” the case. The husband beat his offer at trial. His legal fees and expenses were reasonable. Finally, the outcome of the trial was disproportionally important to the Husband and had a far greater impact on him than the Wife.

[9] The Husband is entitled to an order for costs on a full recovery basis in the amount of $35, 315.33 to be paid forthwith,

McWatt J.

Date: June 30, 2015