SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: FC-10-398-02
DATE: 20150729
RE: LEANNE ASHLEY WALTERS, Plaintiff
AND:
KENLOCK EARL WALTERS, Respondent
BEFORE: THE HON. MADAM JUSTICE S.E. HEALEY
COUNSEL:
M. Miller, for the Applicant
The Respondent Self-Represented
HEARD: By written submissions
COSTS ENDORSEMENT
[1] This is the endorsement on costs following the trial decision in this matter (Walters v. Walters, 2015 ONSC 3336). As set out in the Reasons for Decision, this was a motion to change a final order dated April 23, 2012 which set support at $775 per month, based on an income $100,000 per annum attributed to Mr. Walters.
[2] The respondent, Mr. Walters, was successful in this proceeding by having the support reduced for the years 2013, 2014 and ongoing, although not to the level that he sought in his motion to change. But, significantly, the respondent was seeking to have the support reduced to a set-off amount of $34.86 from January 1, 2014 only. It was the applicant who sought to have an upward variation take place beginning from January 1, 2012, although ultimately at trial it was conceded that there was no evidence on which to argue an increase for the year 2012. In the result, the order made after trial was to have support reduced from $775 to $272 for 2013, and $314 for 2014 and ongoing. Had the applicant not taken the position that she did, and allowed the change to be considered from 2014 only, she would be further ahead by $6,036 for year 2013.
[3] As indicated in my Reasons, the applicant sought to have support reviewed from 2012 onward because of what she argued was a significant increase in the respondent’s income beginning in 2011. Primarily, this position was taken because of information found in the respondent’s corporate tax returns for 2011 to 2013. At paragraph 7 of my Reasons I attempted to explain how this informed the applicant’s approach to this motion to change:
Before starting this Motion to Change, Mr. Walters provided Mrs. Walters with his corporate financial statements and income tax returns to the end of 2013. Some of the information contained therein caused Mrs. Walters and her counsel to have concerns. In the result, inquiries were made of Mr. Walters' long-time accountant, who is Helen Power of MDS LLP, Chartered Accountants. Essentially, two large sums of money were questioned by Mrs. Walters. These sums largely formed the basis of Mrs. Walters' claims in this proceeding, and contributed to her resistance to Mr. Walters' Motion to Change.
[4] In her submissions on costs, the applicant asserted that the only information that she received from the respondent’s accountant was contained in a letter dated November 5, 2014, an excerpt of which is found at paragraph 8 of this court’s Reasons. For purposes of evaluating costs, it is important to note that the respondent cooperated fully with the applicant’s counsel’s request that Ms. Power provide this information. Further, the respondent ensured that Ms. Power was available to testify at the trial so that any questions about his income could be answered. The applicant is critical of the fact that it was only at trial that Ms. Power explained that the large sums of money referred to in her letter were strictly journal entries, and not true earned income. However, no evidence was led by the applicant that she had attempted to clarify any of these issues with the respondent, or Ms. Powers directly, before proceeding to trial. The income found by the court to have been earned by Mr. Walters in the years 2013 and 2014 was nowhere near the amount set out in that correspondence. It is not understandable how the applicant could doggedly maintain that there had been an increase in income to this level in the face of evidence that:
The respondent had closed his business;
The respondent’s parents had both mortgaged their homes to assist his struggling business; and
The respondent’s own home is the subject of power of sale proceedings.
[5] The applicant argued that it was the respondent’s lack of financial disclosure that caused her to resist the motion and which drove up costs, citing as examples:
His financial statement sworn February 13, 2015, which indicates that he had no income;
An affidavit stating that his 2013 total gross income was $30,000;
His financial statement sworn September 2, 2014, in which he indicated that his annual income at that time was $25,000; and
His change information form, which stated that his 2013 income was $30,269.38.
[6] While the applicant noted that the respondent did not produce his 2014 income tax return, for which he had an explanation, nor did she, without explanation. She also did not disclose her common-law spouse’s income in her financial statement, as required.
[7] Throughout this proceeding, I do find that the respondent attempted to understate his income. Undoubtedly this tactic thwarted settlement. However, as earlier stated, I find it was primarily the applicant’s fixation on the large 2009 and 2011 income figures set out in the November 5, 2014 letter from Ms. Power that was the true driver behind the failure to settle. No attempts were shown to this court of efforts made by the applicant to understand or clarify the information contained in that letter prior to trial. If there were such attempts, and the applicant simply rejected the explanations as being unreliable, the court has reached a different conclusion on that point and the applicant’s failure to concede the main issue of the respondent’s reduction of income now must be addressed in an award of costs in favour of the respondent.
[8] In fixing costs, I have disregarded the information provided by the respondent from the settlement conference and exit pretrial, as this information is inadmissible.
[9] The respondent made an offer to settle dated May 14, 2015, one day beyond the seven days required to trigger the costs consequences in subrule 18(14) of the Family Law Rules. However, pursuant to subrule 18(16), I find that it is a comprehensive offer to settle intended as a meaningful compromise of the support issues, and should be taken into consideration in fixing costs.
[10] The respondent has correctly pointed out in his submissions that, if accepted, the offer would have provided the respondent with a total of only $348 less than the court’s order for child support for 2014 and 2015 combined. It was a reasonable offer to settle.
[11] The applicant made no offer to settle that was brought to the court’s attention.
[12] The respondent seeks costs of Ms. Powers’ attendance even though she did not prepare an expert’s report. He has attached an invoice from Ms. Powers’ in the amount of $8,028.09, which includes her review of court documents and preparation of correspondence, preparation of information required for court appearance, one day’s attendance at the trial, and meetings and correspondence with her client.
[13] The court has jurisdiction pursuant to subrule 24(12) to make “an order that a party pay an amount of money to another party to cover part or all of the expenses of carrying the case, including a lawyer’s fees”. This rule permits the granting of an order for interim disbursements such as retaining experts, and nothing in the rule prohibits costs being awarded for such an expert’s involvement at trial, even without a report being served.
[14] The costs claimed by the respondent are reasonable for the case in that Ms. Powers’ knowledge and evidence were vital to his motion. Having regard to all of the factors in Rule 24(11), including the fact that both parties behaved unreasonably at times – the respondent in providing misleading financial statements and court documents, and the applicant being intransigent in her position that the respondent’s income had increased despite compelling evidence to the contrary – I find it fair to award costs of this proceeding to the respondent fixed in the amount of $8,362.24, which is comprised entirely of disbursements and the invoice of Ms. Powers.
[15] Accordingly, this court orders that the applicant shall pay costs of this case to the respondent fixed in the amount of $8,362.24, inclusive of HST.
HEALEY J.
Date: July 29, 2015