Dodman v. Preston, 2015 ONSC 767

COURT FILE NO.: (Welland) D23715/12

DATE: 2015-02-03

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Janis Arlene Dodman (formerly Preston), Applicant

AND:

Mitchell Lewis Preston, Respondent

BEFORE: The Honourable Mr. Justice Robert B. Reid

COUNSEL: K. Sah, Counsel, for the Applicant

T. Pedwell, Counsel, for the Respondent

HEARD: November 10, 12, 13, 17, 18 & 19, 2014

COSTS ENDORSEMENT

[1] The trial in this application involved unresolved disputes between the parties as to the custody of and access to their daughter, and a variety of financial issues. There was no dispute that a divorce order should issue.

[2] Following my oral decision on December 4, 2014, the parties filed written submissions as to costs. What follows is my costs award.

[3] The court’s discretion to award costs is found in section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 and the exercise of that discretion is guided by the provisions of Rule 24 of the Family Law Rules. O. Reg. 114/99.

[4] The applicant seeks costs in the amount of $33,300.14 on a partial indemnity basis or in the alternative amount of $40,042.89 based on a partial indemnity scale up to the date of an offer to settle and thereafter on a substantial indemnity basis. In each case there is a claim for an additional $4,922.39 for disbursements inclusive of HST.

[5] The respondent seeks costs in the amount of $37,968.55 inclusive of disbursements on a partial indemnity basis or alternatively the amount of $53,226.03 for costs on a substantial indemnity basis.

[6] Since the initial presumption under Rule 24 is that the successful party is entitled to costs, it is helpful to review briefly the results at trial on each contested issue, as compared with the offers to settle, which were reflective of the parties’ positions at trial:

a. Custody: sole custody of the child was awarded to the applicant. The applicant proposed sole custody and the respondent offered joint custody.

b. Access: no access order was made. A regime of counselling for the child was ordered, with a view to facilitating access at some point in the future. The applicant wanted no access and the respondent wanted unlimited access by letter, telephone and electronic means plus access in person in accordance with the child’s wishes.

c. Spousal support: the applicant was ordered to pay spousal support in the amount of $800 per month, retroactive to March 1, 2014. The applicant offered $600 per month and the respondent offered $827 per month. The applicant proposed a lump sum reflecting retroactive spousal support in the amount of $10,000 while the respondent proposed retroactivity to July 15, 2012 which totals about $23,500. The retroactive portion of my order amounts to about $7,200.

d. Child support and section 7 expenses: no order of child support was made against the respondent but the respondent was required to pay 27% of the cost of counselling for the child. The applicant proposed child support in the amount of $160 per month based on imputed income to the respondent, while the respondent proposed to pay no child support.

e. Occupation rent: the respondent’s claim for occupation rent was dismissed. The respondent had sought occupation rent in the amount of $19,500 while the applicant offered to pay no amount for occupation rent.

f. Division of property: the parties agreed on the value of most items contained in the Net Family Property Statement. I added the sum of $13,000 to the applicant’s asset total representing the value of the Canyon motor vehicle. The applicant had resisted any increase in the assets concerning the vehicle while the respondent sought an addition of $20,000. The applicant’s calculation of RRSP value was increased by 5.6% as a result of a reduction in the notional cost of disposition from the amount claimed by the applicant. The applicant had proposed a 22% reduction for taxes while the respondent sought a direct transfer to him of the RRSP funds with no reduction for costs of disposition. There was uncertainty about whether an actual agreement was reached as to the division of household goods and furniture and therefore an order was made that the household goods and furniture are to be sold, unless a property transfer is concluded.

g. I ordered an equalization payment which after inclusion of the net sale proceeds of the matrimonial home, and after various other adjustments resulted in a payment to the respondent of $183,911. The applicant had proposed a payment of $197,400 and the respondent had proposed a payment of about $182,000 plus $65,673.42 as compensation for the reduced sale price of the home. The respondent’s two figures total about $247,000.

[7] Comparing the offers to settle to the award, the applicant was successful on the issues of custody and access. Neither party anticipated the counselling requirement which I imposed. As to spousal support, neither party’s offer to settle was superior to the ultimate court order. As to retroactivity, the applicant was successful. The respondent was successful on the issue of child support and neither offer anticipated the section 7 expense for counselling. The applicant was successful in resisting the occupation rent claim. Neither party’s offer correctly anticipated the vehicle value adjustment or the reduction in the disposition cost of the RRSPs, although once other property issues and adjustments were made, the terms of payment set out in the applicant’s offer to settle were superior to those set out in the court order.

[8] Since neither party made an offer to settle that exceeded the court order in each of the areas of dispute, there is no clear justification for an order of full recovery of costs based on the offers. However, I am entitled to consider the making of offers under the provisions of sub-rule 18(16). Viewing the matter through that lens, the applicant’s offer was by far the more reasonable of the two.

[9] I note that the rules do not mandate scales of costs, whether partial or substantial indemnity, but rather anticipate a flexible approach to the amount of costs claimed.

[10] I have no difficulty in concluding that the applicant was successful on most of the contentious issues and in particular on those that occupied the majority of the trial time. By contrast, it appears that the respondent did not behave reasonably, especially on the issue of property division. He attempted to rely on a prior agreement as to the distribution of net proceeds of the sale of the matrimonial home and then sought to include the same proceeds in the net family property statement in order to have the funds double-counted. I attempted to be clear in my oral reasons that, in accepting the respondent’s request that the matrimonial home asset and related debt be added back into the NFP statement, I could not also accede to a suggested separate division of the proceeds being held in trust. I have already noted that, even with the adjustment in the respondent’s favor for the disposition cost of the RRSPs and the Canyon vehicle, the proceeds to which he is entitled after all adjustments is less than the sum contained in the applicant’s offer to settle.

[11] I knowledge that the issues, particularly as regards the custody of and access to the child, were complex in the circumstances and important to the parties. A substantial amount of time at trial was taken in the examination of those issues.

[12] I do not have the same confidence that the time was well spent arguing over financial matters not related to the child. For example, significant time and effort was expended both in court and out-of-court on the issue of dividing household goods. The apparent agreement was fraught with compliance problems, with the respondent seeking the return of items that were no longer in the applicant’s possession or control.

[13] Counsel for the applicant has submitted that a substantial amount of correspondence was forwarded by her office to that of the respondent’s counsel attempting to resolve or delineate issues for trial but that often no responses were received in a timely way. It was clear in court that the respondent had not disclosed his position to the applicant on certain issues with the result that the applicant had to prepare those matters for trial assuming no agreement even if ultimately they did not need to be litigated.

[14] Neither counsel has criticized the hourly rate charged by the other and, in the case of the applicant’s counsel, some work was performed by students-at-law or a junior lawyer resulting in a reduction in the overall hourly rate. Likewise the time spent by each counsel was not criticized by the other.

[15] In the result, based on the foregoing I am satisfied that there should be a costs order in favor of the applicant. She achieved substantial success and the respondent’s carriage of the matter resulted in greater than necessary time at trial and therefore increased costs.

[16] As to disbursements, the applicant has included the sum of $1,200 paid for an expert report which was not accepted at trial. The disbursement claim should therefore be reduced by that amount plus HST.

[17] Costs are to be payable by the respondent to the applicant fixed in the amount of $40,500 inclusive of HST and disbursements. Costs are payable within 30 days.

[18] In my oral reasons for judgment, I suggested that if any arithmetical errors had crept into my decision of December 4, 2014, those matters could be addressed to me at the same time as the costs submissions.

[19] Counsel for the respondent has quite correctly pointed out that there is a typographical error in the Net Family Property Statement which I prepared as a schedule to my reasons. The correct figure is $144,703.48 in Total Six rather than $143,703.48 as shown. The correct figure was identified in my decision.

[20] Counsel for the respondent suggests that my reasons for judgment indicated a payment to the respondent of both $183,911.76 and $165,896.10 which latter amount was the adjusted figure agreed to by the parties in relation to the payment of the matrimonial home proceeds. In fact, in my reasons I identified the amount that the parties had proposed to divide by agreement. In accepting the request of the respondent to add back the matrimonial home proceeds into the joint NFP statement (Exhibit 3), I made it clear that my calculation included the funds previously identified by the parties for division so that no double counting would occur. As a result, the stated figure of $183,911.76 payable to the respondent out of the proceeds held in trust is the total figure payable in satisfaction of the judgment and any purported agreement as to division of the proceeds.

Reid J.

Date: February 3, 2015