NEWMARKET COURT FILE NO.: FC-13-00043164 DATE: 20160926 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
KARINA COSENTINO Applicant – and – BENITO COSENTINO Respondent
Hugh M. Evans, for the Applicant Leonardo Mongillo, for the Respondent
HEARD: Written Submissions
RULING ON COSTS AND OTHER ISSUES
DOUGLAS, J.
[1] I released reasons for judgment in the above matter on June 16, 2016.
[2] The issues before me were child and spousal support, the parties’ incomes for support purposes and six specific components of an equalization calculation.
[3] As to the issue of value of the matrimonial home, I found in favour of the Applicant.
[4] As to value of the Respondent’s Book of Business at date of separation I accepted the value supported by the Respondent’s expert Mr. Figov although I did not deduct notional costs of disposition for reasons set out in my reasons for judgment. On balance the Respondent was the more successful party on this issue.
[5] Regarding value of personal property owned by the Respondent on the date of marriage, as earlier explained, the evidence at trial was scant and ultimately I accepted a figure advocated by the Respondent although the Applicant had been prepared to accept a higher figure. It was the Respondent’s responsibility to adduce more meaningful evidence. The lower figure is more favourable to the Applicant’s position. This was not a significant issue at trial. I treat the success as marginally in favour of the Applicant with respect to this issue.
[6] Regarding value of the Respondent’s loans from his father at date of separation, I accepted the Applicant’s position that no value ought to be attached to this alleged debt. Therefore the Applicant was successful on this issue.
[7] As to value of the Respondent’s interest in ABC at date of separation, the experts were essentially agreed as to the gross value of this asset. They disagreed with respect to notional disposition costs. I received no evidence as to likely date of disposition and similarly there were no submissions on the issue of disposition costs. As a result I did not deduct any disposition costs and thus the Applicant was on balance the more successful party on this issue.
[8] Regarding value of the Respondent’s interest in Dagmar at date of separation, this was a relatively minor issue. I did not deduct notional disposition costs for reasons explained, to the Respondent’s detriment and to Applicant’s benefit. I treat resolution of this issue as marginally in favour of the Applicant for costs purposes.
[9] Regarding the issue of the Applicant’s income, she submitted that her income should be treated as zero for support purposes while the Respondent submitted that income of $40,000.00 should be imputed to her. For reasons earlier explained, I imputed income to her of $23,000.00. Success on this issue was mixed.
[10] Regarding the issue of the Respondent’s income, I largely accepted the Applicant’s position and thus she was successful on this issue.
[11] The issue of child support was resolved on the basis of the finding with respect to the Respondent’s income, supplemented by an award of s.7 expenses to the Applicant’s benefit.
[12] As to the issue of spousal support, the Applicant sought high end spousal support for an indefinite period while the Respondent, conceding entitlement on both compensatory and non-compensatory grounds, submitted that spousal support should be payable at the low end of the range for a maximum of four years.
[13] In the result I awarded mid-range spousal support for an additional six years approximately. Results on this issue were thus mixed.
Applicant’s Position
[14] Regarding the issue of equalization the Applicant has, as directed by me, submitted an amended Net Family Property Statement incorporating my findings on the six equalization issues addressed in my reasons for judgment.
[15] The Applicant raises a new equalization issue that was not identified to me as one requiring determination by the court, being the date of marriage value of the Respondent’s Book of Business. The Net Family Property Statement provided by the Applicant at trial made no reference to this line item and similarly the Respondent’s Net Family Property Statement presented at trial was silent on this issue. In any event the Applicant submits that the date of marriage value for the Respondent’s Book of Business should be treated as $40,428.00, being half of the $80,856.00 in value ascribed by Mr. Figov in his evidence. In this regard the Applicant argues that Mr. Figov has doubled the Respondent’s share of the recurring annual commissions (which was 50% under the then agreement with Dagmar Insurance) in his date of marriage calculation and then Mr. Figov uses the entire commission amount before applying his 0.5 multiplier thus doubling the value of Mr. Cosentino’s date of marriage Book of Business as Mr. Cosentino was only entitled to 50% of the commissions.
[16] It is submitted by the Applicant that if Mr. Figov’s unadjusted value for the date of marriage Book of Business is utilized the Respondent’s Net Family Property becomes $848,936.00 and with the Applicant’s Net Family Property at $20,200.00, this results in an equalizing payment owing to the Applicant of $414,368.00.
[17] On the other hand if the court uses one half of Mr. Figov’s figure for the date of marriage Book of Business then the equalizing payment owing by the Respondent to the Applicant becomes $434,582.00.
[18] The Applicant submits that she should be entitled to remain in the matrimonial home until such time as the equalizing payment is paid to her.
[19] The Applicant also seeks prejudgment interest on equalization from the date this proceeding was commenced (April 2013) pursuant to the Courts of Justice Act.
[20] The Applicant further requests that the equalization payment constitute a charge against the Respondent’s interest in the matrimonial home pursuant to s.9 of the Family Law Act.
[21] Regarding costs the Applicant seeks full indemnity costs including disbursements in the amount of $35,534.00 excluding HST.
[22] The Applicant submits that her settlement position as identified in two offers to settle were more reasonable and closer to the mark than the Respondent’s position on the issues. It is submitted that the Applicant obtained an equalization payment and both spousal and child support and was successful on all issues on fact and law in dispute except for the issue of the value of Respondent’s Book of Business.
Respondent’s Position
[23] The Respondent’s submissions were received much later than I directed as a consequence of the Respondent’s decision to change counsel and the ensuing confusion between old and new counsel as to who was responsible for preparing the cost submissions.
[24] The Respondent has submitted an amended Net Family Property statement designed to reflect my findings at trial on the six specified issues identify to name and resulting in an equalizing payment owing by the Respondent to the Applicant of $398,490.00. The difference between the parties’ respective positions on equalization is attributable to several relatively minor differences to which I did not direct my attention at trial (because those issues were not identified to me by counsel) but most significantly the issue of value of the Respondent’s date of marriage Book of Business. As both parties had identified the value of this item as $97,000.00 in their respective Net Family Property Statements filed at trial and as neither party advanced any argument at trial as to this item, the Respondent submits that it should remain at the agreed value of $97,000.00.
[25] The Respondent raises an issue with respect to the Applicant’s ongoing occupation of the matrimonial home. It is the Respondent’s position that a divorce judgment having been granted, the home no longer has the status of a “matrimonial home” under the Family Law Act. The Applicant was to leave the home by mid-summer but has not done so. Ongoing issues of maintenance of expenses and repairs arise.
[26] On September 16, 2016, I conducted a teleconference with counsel on these issues. I noted then that there is an interim order for exclusive possession of the home to the Applicant and that there was nothing in my judgment which did or intended to change the status of that order. References in my Reasons to the Applicant’s intention to depart the matrimonial home in the summer of 2016 were contextual only. The only issues that I addressed at trial were those of equalization and support, as set out above. The parties are free to litigate the remaining issues in the normal course including issues pertaining to possession of the home. As those issues were not before me I decline to make any orders in this respect.
[27] Regarding costs, the Respondent submits that the Applicant was not as successful as she claims in her submissions. The value of the equalization payment was between each party’s position for settlement. The Respondent’s expert evidence was accepted. It is argued that overall on the equalization issue the Respondent was more successful than the Applicant.
[28] Regarding spousal support the Respondent argues that success was divided given then time limited duration of support and my finding that the value of the Respondent’s income was closer to his calculated value than to the Applicant’s calculated value.
[29] Regarding child support the Respondent acknowledges that the Applicant was the more successful party but notes that the s.7 expense issue was resolved in line with the Respondent’s position and offer.
[30] The Respondent submits that there were no offers served that triggered cost consequences.
[31] As to the costs claimed by the Applicant, the Respondent submits that costs related to the BDO expert (Mr. Kertzman) should be borne by the Applicant as her expert’s evidence was not accepted, he provided only a critique and not a full report and the scope of review clearly states that the report does not contain a conclusion as to the value of shares, assets or any business interest of the Respondent. It is further submitted that the value of the Respondent’s business and income were the most complex and costly aspects of the trial and the Respondent’s valuation and position was accepted by the court, the only difference being the court’s decision on disposition costs.
[32] As to costs claimed by the Respondent, the Respondent seeks 100% of his costs with respect to Mr. Figov ($5,614.00) and 40% of costs for counsel ($7,097.00) for a total of $12,711.00.
[33] Alternatively the Respondent argues that the parties should bear their own costs to reflect divided success at trial.
[34] In the further alternative, the Respondent submits that costs claimed by the Applicant of $35,534.00 should be reduced by $12,966.00 on a count of the BDO account for Mr. Kertzman. It is further argued that fees claimed by Applicant’s counsel in the amount of $20,038.00 should be reduced at a rate of 40% to consider partial indemnity recovery and the likely double counting of recovery for legal aid. It is further submitted that $5,614.00 for Mr. Figov’s account should be payable to the Respondent.
[35] Finally, the Respondent submits that the quantum of spousal support determined by me was prepared based on previous tax and benefit rates. The Respondent provides an updated calculation utilizing the same inputs for income but resulting in a midrange spousal support figure of $1,121.00 per month compared with the $1,589.00 per month found in my calculation. At the same time, with the reduced amount of spousal support the Applicant has net disposable income of $5,456.00 compared with $5,181.00 under my calculation. Therefore it appears that with the Respondent paying the lower amount of spousal support proposed by the Respondent the net benefit to the Applicant is greater.
Applicant’s Reply
[36] Regarding the issue of the date of marriage value of the Respondent’s Book of Business the Applicant indicates she felt at liberty to provide submissions as the court had requested submissions on equalization and made no findings on the date of marriage value.
[37] Regarding relative success, the Applicant disputes that the Respondent was more successful than she on equalization. She notes that the Respondent’s position on equalization was about $253,500.00 while the Applicant’s initial figure for settlement was $470,000.00. It is submitted that the ultimate result will be much closer to the Applicant’s settlement position.
[38] Regarding the Respondent’s income, the Respondent’s position was that his income was about $70,000.00, being approximately $50,000.00 less than the court found. The Applicant’s figure was closer to the figure found by the court in the Applicant’s submission.
[39] It is also submitted that partial indemnity costs would fall between 50 and 67% of full indemnity rather than the Respondent’s figure of 40%.
[40] Finally on the spousal support issue, the Applicant submits that the Respondent is attempting to re-litigate this issue and takes the position that there ought to be no change in the support quantum established.
Spousal Support
[41] My calculation of spousal support was inadvertently based upon a stale Divorcemate program. The Applicant does not appear to take issue with the accuracy of the Respondent’s submitted calculation on this issue pursuant to the 2016 Divorcemate program.
[42] My objective was to target spousal support at the midrange figure produced by the Divorcemate program. The 2016 program confirms that the Applicant will have the benefit of approximately $275.00 more per month in after tax dollars with the lower amount of spousal support being paid than I had calculated she would be receiving pursuant to the 2013 guidelines I inadvertently utilised.
[43] Utilization of the 2013 guidelines represents a mistake on my part and one which I intend to correct.
[44] Therefore, my Reasons for Decision will be amended at paragraph 189 to read as follows:
Midrange spousal support based upon the Applicant’s income imputed at $23,000.00 and the Respondent’s income at $119,319.00 is $1,121.00 per month. This results in the Applicant retaining 54.3% of the parties’ net disposable income versus the Respondent’s 45.7%. I find this to be a reasonable amount of spousal support.
[45] Paragraph 191(6) of my Reasons for Decision will be amended to read as follows:
a. Commencing July 1, 2016 and through February 28, 2022 the Respondent shall pay to the Applicant the sum of $1,121.00 per month by way of spousal support.
Date of Marriage Value of Respondent’s Book of Business
[46] At the commencement of trial both counsel confirmed to me the issues with respect to which they sought adjudication by the court. The confirmed that there were no other financial issues in dispute between the parties.
[47] The fact that there was no dispute on the date of marriage value of the Respondent’s Book of Business was confirmed by the fact that the parties had each utilized the same figure in their respective Net Family Property Statements filed with the court (i.e. $97,000.00).
[48] It was clearly a common understanding that there was no issue with this particular asset and 31 of my Reasons for Decision. Therefore, there will be no change to the calculation in this regard.
Other Equalization Items
[49] As no other issues of equalization were identified to me at trial as requiring the court’s intervention, I do not intend to determine same now. The new issues touched on by both parties in their submissions strike me as relatively minor and of a variety that should be resolved through minimal negotiation between the parties.
[50] If the parties are unable to do so they should proceed to mediation or other dispute resolution mechanism to determine the ultimate quantum of equalization. Trial of these issues is also an option, though likely disproportionate to the amount in dispute.
[51] At the very least the quantum of equalization payable by the Respondent to the Applicant is as calculated in the Respondent’s Net Family Property Statement submitted with his written submissions in the amount of $398,490.00. Any further amount owing beyond this arises as a result of the parties’ disagreement on the additional issues not raised at trial.
Costs
[52] On the issue of costs, Rule 24 of the Family Law Rules governs.
[53] While there has been some mixed success, on balance, I find that the Applicant was more successful than the Respondent. In this respect however I accept the Respondent’s submission that a substantial portion of this trial was focused on the Respondent’s income and business valuation issues with respect to which Mr. Figov testified and with respect to which I largely accepted Mr. Figov’s evidence.
[54] While the issues were important to the parties, they were not particularly complex. Similarly, legal issues were straightforward.
[55] I have no basis to conclude that either party conducted him or herself unreasonably or in bad faith.
[56] The lawyers’ rates appear to be reasonable and consistent with their respective levels of experience.
[57] I see no basis for the Applicant’s position that full indemnity costs ought to be payable in these circumstances. In my view partial indemnity costs is the appropriate measure of compensation to consider in this case.
[58] The Applicant’s legal fees were $20,038.00. I would not be inclined to consider compensation for costs in respect of Mr. Kertzman’s participation given my findings. Additional costs sought by the Applicant relate to fees paid for the Applicant’s Real Estate Appraiser whose evidence I did accept and a disbursement to pass the record. These are appropriate disbursements. 60% of these costs amounts to approximately $13,500.00.
[59] Competing with this claim is the need to reflect the Respondent’s success and associated expenses on the issues pertaining to valuation of this business. Mr. Figov’s expenses amounted to $5,600.00, but a portion of this is presumably related to the issue of the Respondent’s income.
[60] Given all the foregoing due consideration I find that the appropriate and reasonable and proportionate result is an award of $10,000.00 costs payable by the Respondent to the Applicant within 60 days.
Conclusion
[61] For the foregoing reasons further judgment to issue:
a. My reasons for decision shall be amended as set out above with respect to spousal support;
b. The Respondent shall pay to the Applicant by way of equalization the sum of $398,490.00 subject to adjustment as the parties otherwise agree or as may be otherwise ordered by the court upon determination of any remaining equalization issues not addressed at trial before me.
c. The equalizing payment owing by the Respondent to the Applicant shall be secured by way of charge against the Respondent’s interest in the former matrimonial home pursuant to s.9 of the Family Law Act.
d. The Respondent shall pay to the Applicant the sum of $10,000.00 by way of costs within 60 days inclusive of HST and disbursements.
e. The equalization payment shall be subject to pre and post judgment interest pursuant to the Courts of Justice Act calculated from April 2013.