Court File and Parties

Court File No.: FC-14-1549 Date: 2016/06/24 Superior Court of Justice - Ontario

Re: Kenneth MacKenzie Nye, Applicant And: Shirleen Derilda Nye, Respondent

Before: Shelston J.

Counsel: Suzanne Cote, counsel for the Applicant John E. Summers, counsel for the Respondent

Heard: In Writing (at Ottawa)

Costs Endorsement

[1] The applicant is seeking full recovery costs in the amount of $19,712 calculated from March 2014 at the time he retained counsel to vary the spousal support up to and including these costs submissions.

[2] The respondent submits that she should be awarded costs in the amount of $3,084.45.

[3] I note that in the case conference held before Master McLeod on February 3, 2015, the costs of the case conference were reserved to the judge determining this matter. I will consider those costs.

Issues Before the Court

[4] On July 9, 2014, the applicant filed a Motion to Change the order of Justice Seppi dated January 22, 2004 seeking to terminate his spousal support obligation effective May 27, 2014.

[5] On October 6, 2014, the respondent signed her Response to the Motion to Change where she sought an adjustment of support based on cost of living retroactive to the date of Justice Seppi’s order on January 22, 2004 and an order that the applicant maintain life insurance naming the respondent as the irrevocable beneficiary in an amount sufficient to provide the respondent with security for spousal support.

[6] By Notice of Motion returnable on September 2, 2015, the applicant sought an order that the spousal support be terminated effective May 27, 2014. That motion was adjourned.

[7] By Notice of Motion returnable February 9, 2016, the applicant sought an order that the spousal support be terminated effective May 27, 2014. That motion proceeded before me.

[8] On November 12, 2015, at questioning, the applicant gave notice that he intended to pay some spousal support and was no longer seeking a termination of spousal support. The applicant did not amend his Motion to Change or the Notice of Motion returnable on February 9, 2016.

[9] In the applicant’s factum for the motion of February 9, 2016, the applicant sought to vary the spousal support as follows:

(a) that the spousal support of $1,500 per month be varied effective June 1, 2014 to $809 per month; (b) that spousal support of $1,500 per month be varied effective January 1, 2015 to $597 per month and on the first day every month thereafter; (c) costs on a full indemnity basis; and (d) such further and other order as the court deems just.

[10] As a result of that motion, I ordered that:

(a) the spousal support be varied to $809 per month commencing June 1, 2014. (b) commencing January 1, 2015, the spousal support be varied to $683 per month. (c) the indexation of the spousal support be effective from October 1, 2011.

[11] I rejected the respondent’s request to maintain the spousal support at $1,500 per month, for an order compelling the applicant to obtain life insurance to secure his obligation of spousal support and for a retroactive cost of living adjustment of spousal support back to January 2004.

Applicant’s Position On Costs

[12] The applicant argues that the respondent refused to reduce the spousal support after the applicant retired leaving the applicant with no option but to commence proceedings. He argues that he was successful in having the spousal support reduced; that he was successful on defending the respondent’s request for a life insurance policy to secure her spousal support and that he was partially successful on defending her claim for a retroactive spousal support adjustment for cost of living.

[13] The applicant made three attempts to settle as follows:

(a) In his counsel’s letter dated May 27, 2014, prior to the commencement of legal proceedings, the applicant offered to pay $500 per month in spousal support as of July 2014 subject to a material change in circumstances; (b) In the first offer to settle dated May 25, 2015, the applicant offered to pay spousal support of $500 per month commencing June 1, 2015; and (c) In the second offer to settle dated February 2, 2016, the applicant offered to pay spousal support of $700 per month commencing March 1, 2016.

[14] The respondent declined all three offers. The respondent made one Offer to Settle dated February 2, 2016 where she offered that:

(a) the applicant would continue to pay the spousal support of $1,500 per month with an indexation starting on January 1, 2017; (b) other than the adjustment for inflation, the spousal support would not be varied before March 1, 2021 and after that date only the quantum of support may be reviewed; and (c) the applicant shall maintain life insurance in an amount not less than $100,000 naming the respondent as the irrevocable beneficiary.

[15] The applicant submits that he should be awarded costs on a full recovery basis from the time he hired his first counsel, Ms. Debora Scholey in 2014 up to and including the costs for his current counsel, Ms. Suzanne Cote.

Respondent’s Position On Costs

[16] The respondent submits that the applicant was unsuccessful in achieving the results sought in his Motion to Change and that the respondent was a successful party in relation to the pleadings as filed. Specifically, the respondent argues that since the applicant never amended his Motion to Change where he claimed a termination of spousal support, and since spousal support continued, he was not successful.

[17] The respondent admits that at the questioning on November 12, 2015, the applicant put the respondent on notice that he would be seeking to reduce the support and that he was no longer pursuing a termination of spousal support. However, the Motion to Change was not amended nor were there any communications from counsel advising, in writing, that the applicant’s position at the hearing would change.

[18] The first time that there was formal written notice that the applicant’s position to terminate spousal support was changed was contained in the applicant’s factum served and filed on February 4, 2016.

[19] The respondent argues that she was successful in obtaining a retroactive increase of spousal support based on the cost-of-living adjustment, but was not successful on the issue of life insurance. Since she was partially successful in relation to her pleadings, she should be entitled to some costs.

[20] Further, she argues that due to the failure of the applicant to amend the formal Motion to Change and the late change in the applicant’s actual position, the applicant should not be entitled to costs.

[21] Finally, she submits that she should have her costs up to February 2, 2016 less the applicant’s costs from February 2, 2016.

The Law

[22] Under Rule 24(1) of the Family Law Rules, O. Reg. 114/99, there is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.

[23] Rule 24(5) states that in deciding whether a party has behaved reasonably or unreasonably, the court is then directed to examine a party’s behaviour in relation to the issues from the time they arose including whether the party made an offer to settle, the reasonableness of any offer the party made and any offer the party withdrew or fail to accept.

[24] Rule 24(11) states that a person setting the amount of costs shall consider:

i. the importance, complexity or difficulty of the issues; ii. the reasonableness or unreasonableness of each party’s behaviour in the case; iii. the lawyer’s rates; iv. the time properly spent on the case, including conversations between the lawyer and the party or witness, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of order; v. expenses properly paid or payable; and vi. any other relevant matter.

[25] Rule 24(11)(f) allows the court to take into account “any other relevant matter” in determining costs that appear just in the circumstances of the case while giving effect to the Family Law Rules: Cawdrey v. Cawdrey, 2011 ONSC 416, 92 R.F.L. (6th) 99, at para. 6.

Analysis

Success

[26] This case started out as a motion to terminate spousal support. In November 2015, the applicant advised the respondent that he was no longer pursuing that relief. The applicant was successful in varying the support after he changed his position.

[27] The respondent was not successful in seeking to maintain the spousal support nor was she successful with respect to the request for life insurance. She was partially successful on her request for a cost-of-living adjustment as I granted the adjustment as of October 1, 2011 and not as of January 2004.

[28] With respect to the applicant’s failure to amend his Motion to Change, the purpose of pleadings is to set out the legal issues for the parties and the court. When one looks at the Notice of Motion returnable on February 9, 2016, it seeks the termination of spousal support effective May 27, 2014. However, the Notice of Motion is dated October 29, 2015. Questioning took place on November 12, 2015. It is admitted by the respondent that the applicant put her on notice that he was no longer seeking a termination of spousal support, but rather a variation of spousal support. Even though the pleadings were not formally amended, the respondent had notice in November 2015 that the applicant no longer sought a termination of support. The issue as of November 12, 2015 was variation of spousal support. The decision varied spousal support. Consequently, I reject the respondent’s submission.

[29] The respondent incurred costs in defending the motion to terminate spousal support in the amount of $7,225 up to February 2, 2016.

Importance, Complexity or Difficulty

[30] The issue before the court was the effect of retirement of a payor in face of an obligation to pay spousal support. I agree that the issue was very important to both parties.

[31] The issue of variation of a spousal support order when the payor retires is a difficult legal problem.

Reasonableness

[32] The applicant made three attempts to settle. All the offers proposed a continuation of support with the last offer setting the support at $700 per month without any retroactive variation.

[33] The respondent argued that the applicant was retiring for malicious reasoning and that he was hiding money. These submissions were rejected.

[34] The respondent submitted one Offer to Settle dated February 2, 2016, one week before the motion which maintained the spousal support at $1,500 per month with an annual indexation; required the applicant to maintain a life insurance policy of $100,000 and provided for no variation of the amount of spousal support except for inflation until March 1, 2021.

[35] The respondent admits that her Offer to Settle dated February 4, 2016 was not reasonable in light of my decision. I find that the applicant’s position to terminate support was unreasonable as was the respondent’s position of no variation.

Offers to Settle

[36] The applicant submitted an offer contained in a letter before the commencement of proceedings. This offer contained in the letter did not meet the formal requirements of an offer to settle under the Family Law Rules. The applicant made two formal offers.

[37] The respondent concedes that the applicant should have his costs from the date of the applicant’s February 2016 offer until the date of the motion and that Ms. Cote’s hourly rate is reasonable.

Lawyer’s Hourly Rate

[38] I find that the hourly rates claimed by the applicant’s lawyers to be reasonable. I find that Mr. Summers’ rate actually charged was $275 an hour and that this rate was reasonable.

Time Properly Spent

[39] I have reviewed both Bills of Costs. I will not consider any time prior to the commencement of proceedings on July 9, 2014.

[40] According to the applicant’s Bill of Costs, Ms. Scholey’s legal fees and disbursements from March 29, 2014 to August 25, 2015 total $4,818.11 which included meeting with the applicant, drafting the Motion to Change, attending at the first appearance and case conference, preparing the Notice of Motion and affidavit scheduled for September 2, 2015. The legal fees incurred during this period were related to seeking the termination of spousal support. I will not grant the applicant any costs for the period of time he sought to terminate support.

[41] With respect to Ms. Cote, her costs inclusive of HST total $13,988.69 for time spent from September 11, 2015 to attendance on the motion. Her disbursements total $1,808.06 of which $852.13 was paid to Catana Reporting Services for questioning and the transcript.

[42] In reviewing Ms. Cote’s Bill of Costs, I note that her account dated January 4, 2016 covers the period of November 9, 2015 to December 15, 2015 and the legal fees are $1,740. Her next account dated February 9, 2016 covers the period January 7, 2016 to February 9, 2016 with legal fees totalling $6,200.

[43] Ms. Cote’s total legal fees after the notice that the applicant sought to vary the spousal support rather than terminate the support total $7,940 without disbursements or HST.

[44] Ms. Cote’s total legal fees from February 2, 2016 to February 9, 2016 total $5,100. The disbursements total $849.41 for a subtotal of $5,949.41 without HST.

Other Relevant Factors

[45] The respondent submits that she does not have an ability to pay an award of costs and she is in poor health. The applicant argues the respondent’s lack of ability to pay should not be a factor in awarding costs. I found that the applicant has no financial concerns while the respondent has significant financial issues.

Disposition

[46] After considering the above factors, the applicant should have costs as ultimately he was the more successful party.

[47] However, his original pleading sought a termination of spousal support which was not changed until November 12, 2015. I find that the applicant must be accountable for the original position.

[48] I find that the respondent is entitled to her costs up to and including November 12, 2015. Mr. Summers accounts from the commencement of the proceedings to and including November 12, 2015 total approximately $4,700 with no disbursements. Adding HST brings the amount to $5,311 rounded to $5,300. I find that the respondent is entitled to partial indemnity costs totalling $3,180.

[49] From November 12, 2015 forward to February 1, 2016, I find that the applicant is entitled to partial indemnity costs of $600 plus HST totalling $678.

[50] The applicant is entitled to full recovery indemnity from February 2, 2016 to February 9, 2016 plus his disbursements and HST total $6,722.83.

[51] The applicant is entitled to costs of $7,400.83 less $3,180 costs credit to the respondent leaving the respondent owing the applicant the sum of $4,220.83 for costs.

[52] Consequently, I order the respondent to pay to the applicant costs fixed in the amount of $4,220.83. The enforcement of such costs is stayed pending the release of my decision in this matter regarding the methodology of the repayment by the respondent of the spousal support overpayment as well as these costs.

Shelston J. Released: June 24, 2016