COURT FILE NO.: FC-14-2768 DATE: 2016/08/23 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Christie Leigh Macartney Applicant – and – Jason Allen Macartney Respondent
Julie J. Gravelle, for the Applicant Diana Carr, for the Respondent
HEARD: By written submissions
DECISION REGARDING COSTS
L. SHEARD, J.
Overview
[1] This cost award is in respect of a motion brought by the Applicant wife for a variety of relief including financial disclosure, interim spousal, and child support. Although many of the issues had been resolved on consent on the day of the motion, my notes indicate that the motion still took approximately two hours to argue. Much of the time spent on the motion was on the issues of whether to impute corporate benefits as income to the Respondent husband and on the failure of the Applicant wife to meaningfully search for new and full-time employment. As explained in my endorsement, in the time available for the motion and on the materials before me, it was not possible to assess those claims.
[2] On an interim and without prejudice basis, I ordered the Respondent to pay spousal support based on his reported income and benefits of $141,400 and $3,862 respectively and the Applicant’s reported income of $35,000 plus $7,200. Those figures were also used to determine the set-off child support amount payable by the Respondent for the parties’ younger son, Jackson Macartney. I also encouraged the parties to press ahead with the mediation that they had been considering.
[3] The Applicant had sought support for the older son, Jason Macartney. That order was not granted as Jason was out of the province at the time of the motion and there was uncertainty about the timing of his return.
[4] The parties were asked to submit written costs submissions not to exceed three pages, which were received.
Positions of Parties
[5] The Applicant seeks an order that the Respondent pay costs to her on a substantial indemnity basis in the amount of $11,041.18. The Applicant argues that the motion would not have been necessary had the Respondent made timely financial disclosure. She points to the fact that the Respondent did not serve his updated financial statement until two days prior to the motion. The Applicant attached her formal Offer to Settle dated June 16, 2016 and her email of June 20, 2016. In the latter, the Applicant was prepared to adjourn the motion sine die and to proceed to mediation provided the Respondent agree to pay spousal support at the mid-range; pay child support for Jackson; and to release to the Applicant her share of the net sale proceeds of the matrimonial home that were held in trust.
[6] All three of those orders were made at the motion. I assume, but it is not entirely clear, that the Applicant’s support offer was based on the Respondent’s most currently-disclosed income, referenced in paragraph 2, above.
[7] The Respondent seeks full recovery of his costs, in the amount of $14,088.39. He attached correspondence between counsel setting out offers to settle the motion and argues that, with the exception of the some of the disclosure ordered, his offer is equal to or exceeds the award on the motion.
Factors
[8] The factors to be considered when fixing costs are set out in Rule 24 of the Family Law Rules and include that the successful party is presumed to be entitled to costs, the reasonableness of the behaviour of each party and any offer to settle, any acts of bad faith by any party, the importance, complexity or difficulty of the matter, the scale of costs, hourly rates and time spent, and the reasonable expectations of the losing party.
Success
[9] In this case the Applicant had mixed success on the disclosure issue. Although she did not get as much disclosure as she had asked for, the order does require the Respondent to provide more disclosure relating to his remuneration from the family business than he had offered to provide. As mentioned above, the disclosure order was not argued as the parties had reached consent terms. The Applicant argues that she had to bring this motion in order to obtain the consent order therefore the Court should take into account the outcome of the motion, whether argued or made on consent.
[10] A central issue argued on the motion was the amount of income to be imputed to the Respondent from the family business. Financial disclosure in this case is important to the Applicant: the evidence showed a history of financial and other benefits (e.g. food) received by family members from the family business. For mediation to be productive, both sides need full financial disclosure. I find that the Applicant was reasonable in pursuing an order for that disclosure, which was resolved on consent, but only on the day of the motion.
[11] The Respondent argues that on the issues of spousal and child support, his offer either equals or is slightly better than what was ordered. For example, the amount ordered for spousal support - $2,076 was close to his offer to pay $2,000. The child support ordered was $818 compared to his offer of $896. However, he offered to pay as of May 1, 2016 and the Order starts those payments on July 1, 2016. With the different tax treatment given to spousal and child support, the Respondent argues that net amount ordered may actually result in less after-tax money in the hands of the Applicant.
[12] The Applicant asserts that she would have sought a lower amount had the Respondent provided his updated financial statement in a more timely way. The Respondent’s Costs Submissions attached an email from his counsel to the Applicant’s counsel dated May 13, 2016. The email provided a recent pay stub from the Respondent from which it appeared his 2016 income would be $141,400.00 as well as his 2015 T4, on which he had reported benefits of $3,862. Those two amounts were used on the June 21, 2016 motion when determining the Respondent’s spousal support obligation. While he may not have provided an updated financial statement until just prior to the motion, in the May 13 correspondence the Respondent provided reliable documentation from which the Applicant could have determined the income reported on by the Respondent for income taxes.
Complexity and Importance
[13] In their submissions, counsel for both parties submit that the issues on the motion were not complex. I agree.
Unreasonable Behaviour or Bad Faith
[14] I do not find that either party acted engaged in unreasonable behaviour. The Respondent suggests that the Applicant should have agreed to go to mediation and that it was unnecessary to spend a collective $20,000 on this interim motion. The Applicant argues that the Respondent was taking a “hard-ball’ approach by offering only to pay low-range support.
[15] Neither party was acting in bad faith in taking the positions they took. While it might have been reasonable for the Applicant to accept a slightly lower amount in spousal support than she was seeking, she also knew that that would be the starting point at the mediation, which was to take place soon after the motion. By contrast, there is little flexibility in the amount of child support, given the Guidelines.
[16] Similarly, the Respondent refused to provide financial information relating to his family members, an order sought, but not granted, on the motion. However, it was not until the day of the motion that the Respondent agreed to expand the corporate/documentary information he was willing to provide. Again, he would have understood that it would be too late at the mediation for that information to be produced to and reviewed by the Applicant, which could put her at a disadvantage or jeopardize the success of the mediation.
Scale of Costs and Offers to Settle
[17] I have compared to the Offers to Settle exchanged by the parties counsel and conclude that Respondent’s offers as set out in the letter of May 13, 2016 and in his Formal Offer to Settle were close enough to the Order granted to entitle the Respondent to some costs of the motion. However, as much of the consent and concessions reached between the parties came as a result of the motion and shortly prior to the hearing of the motion, that has a bearing on the scale of costs to which he is entitled.
Hourly rates, Time Spent and Proportionality
[18] The fees of the parties as set out in their respective Bills of Costs are very similar. The time spent less so, given the higher hourly rate charged by the lawyer for the Respondent. The Respondent’s lawyer has 27 years of experience and I accept that her hourly rate of $350.00 is fair and appropriate.
Amount the unsuccessful party would reasonable expect to pay
[19] While I agree with the sentiment expressed in the Respondent’s submission that it is unfortunate that $20,000+ was spent on this motion, that is what was spent. Given the similarity between the parties’ Bills of Costs, I conclude that each party would have reasonably expected to pay costs in the range of $7,900 (partial indemnity costs plus disbursements as sought by the Applicant) to $8,701.68 (partial indemnity costs of the Respondent, before fees incurred on the costs submissions).
Disposition
[20] Having considered the above, and, in particular, the Respondent’s Offers to Settle, the Applicant is order to pay costs fixed in the amount of $9,049.04 plus disbursements of $166.79, for a total of $9,215.83, inclusive of H.S.T.
L. Sheard, J.