ONTARIO SUPERIOR COURT OF JUSTICE
COURT FILE NO.: FS-12-7837M DATE: 20160614
BETWEEN:
Paul Douglas Berberich Applicant
- and -
Cynthia Maria Berberich Respondent
COUNSEL: Lawrence K. Greaves, for the Applicant William Humphrey, for the Respondent
HEARD: April 6, 8, 11, 14, 15, 18, 19, 20, 21 & 22, 2016
REASONS FOR DECISION ON COSTS
Conlan J.
I. Introduction
[1] After a ten-day family law trial, in Reasons for Judgment reported at 2016 ONSC 2841, I ruled in favour of the wife, Cynthia Berberich (now Wand), on issues arising from the couple’s former business, Majestic Garden Centre & Landscaping Inc. (“Majestic”).
[2] In particular, I found that the husband, Paul Berberich, was responsible for missing money from the business and owes to Majestic the sum of $76,275.00. Further, I held that the husband owes to the wife an equalization payment in the amount of $122,340.22.
[3] At paragraph 86 of my Reasons for Judgment, I stated as follows.
[86] I agree with the wife that Mr. Berberich shall pay that money, forthwith, to Majestic; Majestic will then remit to the revenue authorities HST on those unreported sales; the balance will then be kept by the wife (none of it will go to Mr. Berberich as that would reward him for his misconduct). So ordered.
[4] The wife, through her counsel, has asked for clarification as to whether Majestic or Mr. Berberich alone is responsible for paying any penalties, fines and/or interest that may result from the late payment of those taxes. As his conduct is the cause of the late payment of those taxes, the husband, alone, shall pay any such penalties, fines and/or interest. Quite responsibly, his counsel has made no written submissions to the contrary.
[5] As I indicated at paragraph 107 of my Reasons for Judgment, “[t]he wife has been largely successful in the end result”.
[6] At paragraph 108 of my Reasons for Judgment, I invited the parties and their counsel to settle the issue of costs. They have not done so. I have received and reviewed their written submissions on costs.
[7] At paragraph 100 of my Reasons for Judgment, I stated that I was inclined to award to the wife her costs on a substantial indemnity basis, on account not only of her success at trial but also because of the husband’s misconduct in keeping money for himself that was paid by customers for landscaping work done by Majestic.
[8] Nothing in the written costs submissions has altered that view, although the quantum of fees will be very close to full recovery and limited to the trial (including preparation for it).
II. The Position of the Parties
Cynthia Berberich
[9] On a substantial indemnity basis, the wife seeks costs in the total amount of $152,282.06: $129,531.75 for fees, plus HST on fees of $16,839.12, plus $5911.19 for disbursements (including the extra items submitted after the initial package was received by the Court).
[10] It should be noted, however, that when one looks at the Bill of Costs it appears that the $129,531.75 is the actual (full recovery) amount of the fees accumulated from April 26, 2012 through to May 3, 2016.
[11] On a partial indemnity basis, the total quantum sought by the wife is $111,701.22.
Paul Berberich
[12] On a substantial indemnity basis, the husband seeks costs in the total amount of $162,249.87: $141,590.00 for fees, plus HST on fees of $18,406.70, plus $1990.73 for disbursements.
[13] Again, however, the Bill of Costs reveals that the $162,249.87 is the actual (full recovery) amount of the fees accumulated from May 14, 2012 through to April 22, 2016.
[14] On a partial indemnity basis, the total quantum sought by the husband is $129,250.53.
III. Analysis and Conclusion
[15] Costs are discretionary. There are three fundamental purposes of a costs award: (i) to partially indemnify the successful litigant, (ii) to encourage settlement, and (iii) to discourage and sanction inappropriate behaviour by a litigant. The Court must consider what is a fair, reasonable and just amount taking into consideration all of the circumstances including the reasonable expectations of the losing side. Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905 (C.A.).
[16] As the successful party at trial, it is presumed that the wife is entitled to costs: 24(1) of the Family Law Rules.
[17] There is nil merit to the husband’s claim for costs. He was unsuccessful at trial. I have reviewed the settlement offers made by the husband that were attached to the costs submissions. None of them attracts the full recovery costs consequences of 18(14) of the Family Law Rules, and because they include issues that were not before me at trial and which were settled by the parties in March 2016, none of them is relevant under 18(16) of the Family Law Rules.
[18] The wife will be awarded some costs. The only questions are quantum and from when to when.
[19] Costs shall be decided at each step of the proceeding: 24(10) of the Family Law Rules. Generally speaking, a party cannot go back and seek costs for something prior to trial unless the judge hearing that prior event reserved costs to the trial judge, and if the record emanating from that prior event is silent as to costs then it is assumed that costs of that prior event were not reserved to the trial judge. Bordin v. Bordin, 2015 ONSC 4943, at paragraph 4; MacPherson v. Auld (2008), 60 R.F.L. (6th) 429 (Ont. S.C.), at paragraph 21; Delrina Corp. v. Triolet Systems Inc. (2002), 165 O.A.C. 160 (Ont. C.A.).
[20] I have undertaken the terribly tedious task of reviewing all prior Endorsements and Orders in the file. There are no outstanding costs from prior steps in the proceeding that were reserved to the trial judge. Further, prior to trial, the parties reached a comprehensive settlement of all issues in the case that were not decided by me in my Reasons for Judgment. That settlement is reflected in the Final Order of Thompson J. made on March 17, 2016, which Order is silent on costs. I can tell from reviewing the terms of that Order that the husband was successful on at least some of those issues.
[21] For those reasons, I am not considering anything in the wife’s Bill of Costs prior to March 18, 2016, the first docket entry after the Trial Management Conference on March 17th that resulted in the Final Order referred to immediately above, except items that can clearly be attributed to preparation for trial on the issues that were in fact tried.
[22] The total fees claimed from March 18 to May 3, 2016, inclusive, which fees are all related to the trial (including preparation for it and review of the Judgment afterwards), are $32,000.00. In the husband’s written costs submissions, he concedes that there were fees incurred by the wife between January and March 2016 that relate to trial preparation and are therefore recoverable, bringing the total figure up to $41,800.00 (full recovery). I agree.
[23] For the same reasons indicated above regarding the husband’s settlement offers, the wife’s offers to settle (attached to the written submissions on costs) are not that helpful. As they contain extraneous matters not dealt with at trial, under subrule 18(14), I cannot conclude that the wife did equal to or better than those offers. I will say this, however, which observation is relevant under subrule 18(16) to the overall quantum of costs to be awarded to the wife: the very early overture presented to the husband from the wife’s then counsel, in a letter dated August 31, 2012, would have seen the wife receive less money on account of the issues decided at trial than what I awarded to her in my Judgment. That goes to the wife’s benefit in terms of costs of the trial.
[24] The wife is not alleging, explicitly, bad faith on the part of the husband, entitling her to costs on a full recovery scale: 24(8) of the Family Law Rules. But there is no question in my mind that the wife is entitled to her costs from January to May 2016 on a substantial indemnity scale, approaching close to full recovery. Why? Because the husband misappropriated money from the business, betraying the trust of his wife and partner; then he frustrated her legitimate efforts to recover the money; then he stubbornly forced the wife to call a string of witnesses at trial (former customers of the business) to testify about having paid for the work that they had hired Majestic to do for them. It is a pattern of conduct unbecoming of a good father and role model for the couple’s daughter, which I think Mr. Berberich likely is.
[25] Thus, on that total fees figure of $41,800.00, the husband will receive only a slight discount. He can call it “substantial substantial indemnity costs”.
[26] Fees are awarded to the wife in the amount of $40,000.00, plus HST.
[27] All of the disbursements claimed by the wife are properly recoverable – they relate to the trial and are not disputed by the husband. Those total $5911.19.
[28] The husband shall pay to the wife total costs in the amount of $51,111.19 ($40,000.00 for fees, plus $5200.00 in HST, plus $5911.19 for disbursements). So ordered.