Richard John Sowa v. Susanne Babic, 2016 ONSC 7257

COURT FILE NO.: FS-668-14

DATE: 2016/11/22

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Richard John Sowa, Applicant

AND:

Susanne Babic, Respondent

BEFORE: The Honourable Mr. Justice G. A. Campbell

COUNSEL: Brian R. Kelly, for the Applicant

Colin Still, for the Respondent

REASONS REGARDING COSTS

Process

[1] This Application was issued August 7, 2014. On motion, the Applicant sought and was granted an ex parte Order on September 26, 2014 for substituted service on the Respondent. Of course, no costs were ordered on that step.

[2] A Case Conference was held before Braid, J. on February 27, 2015. Disclosure and Questioning under oath were ordered/granted inter alia. No costs were ordered at that step.

[3] A Settlement Conference was held before Hambly J. on December 21, 2015. No costs were ordered at that step.

[4] A Trial Management Conference was held before Nightingale, J. on March 30, 2016. No costs were ordered at that step.

[5] Another Trial Management Conference was held before Nightingale J. on June 27, 2016. The matter was placed on the September trial list for three days. No costs were ordered at that step.

[6] Rule 24(10) is a mandatory direction (“shall decide”), and if no costs are ordered at any step (any conference is indeed ‘a step’) then cost cannot later be sought (see Husein v. Chatoor, (2005) O.N.C.J. 487 and Al-Mutter v. Al-Ekabi, (2003) 2003 1945 (ON SC), O.J. No. 2605.

[7] No motions were brought by either party. Questioning under oath of the Respondent took place on April 16, 2015. Despite requests for same, the Respondent did not comply with her seven undertakings given at that questioning, until immediately before the trial (some were never produced).

[8] No one attended for the Respondent at the Trial Scheduling/Speak-to date on September 6, 2016 despite the Nightingale endorsement of June 27, 2016. No costs were ordered at that step.

[9] Counsel and the parties attended to commence the trial on September 19, 2016. They settled the matter, except for costs.

[10] I have now received, read and considered the written costs submissions from both counsel.

The Issues

[11] Depending upon whose evidence was more believable, the parties cohabited for either seven or sixteen years.

[12] During that cohabitation, the Applicant was terminated from his $70,000 per year employment with IBM. He allowed the Respondent to support him for almost seven years leading up to their separation in October 2013.

[13] The parties settled their property issues on April 17, 2014.

[14] After resolution of their property claims, the Applicant disclosed assets of just over $630,000 and the Respondent of just over $230,000.

[15] The Applicant sought spousal support from the Respondent, asserting medical issues that prevented him earning any employment income in 2013. At that time, the Respondent was earning “in excess of $120,000 annually.”

[16] As well as resisting paying any spousal support (neither compensatory or needs based), the Respondent cross-claimed for $38,000 which purportedly had been agreed to by the Applicant (she asserted) and which amount apparently was to represent the Applicant’s one-half of the pre-separation expenses incurred by the Respondent for the condo in Markham (inter alia) in which they both lived (plus interest thereon).

[17] Despite repeated demands and an undertaking to produce same at her questioning in April 2015, the Respondent did not produce any evidence of this alleged “debt acknowledgement” until on/about September 14, 2016 (after the speak-to court, only five days before the trial was scheduled, and after the Applicant offered to settle the entire case).

[18] Indeed, counsel agree that despite earning $124,866 in 2014, the Respondent was terminated from her employment apparently on March 7, 2016, just before her Questioning under oath in April 2016. Perhaps not unreasonably, Mr. Kelly was suspicious regarding the timing of the Respondent’s “loss” of employment, just before the March 30, 2016 Trial Management Conference before Nightingale, J. He demanded proof of the letter of termination and particulars of all of the severance terms.

[19] In his costs submissions, Mr. Kelly asserts that that “proof” was withheld/not disclosed/only made available to him until September 14, 2016 (five days before trial).

[20] Despite not yet receiving that documentation, Mr. Kelly wrote Mr. Still on September 2, 2016 that he had “firm and written instructions” to settle the entire case based upon a withdrawal of all claims/cross claims, without costs.

[21] Unfortunately, by then, (on August 26, 2016), the Respondent had prepared and served two huge Volumes of Income tax returns 2004-2015; extensive condo documentation; Applicant’s Income/Assets and ability to work documents; cohabitation dates/documents; and miscellaneous documents including her Line of Credit Statements/Bill of Sale/Toronto Dominion Bank Statements; which Volumes appear to accumulate to hundreds and hundreds of pages (unfortunately un-paginated).

[22] Despite sending a formal Offer to Settle dated November 10, 2014, in which the Respondent offered to settle, based upon both parties withdrawing both of their claims entirely, without costs, she was, at that time earning over $124,000 per year. Despite that early offer to settle, the Applicant wished to press on with his application because he believed that the Respondent “owed him support”. His position was that he was medically disabled and that despite her assertion, he had never agreed to pay one half (or any) of the condo expenses (and that the Respondent’s cross-claim was “concocted” only to counter his “entitlement” to her continued support).

[23] Neither party “blinked”, not even after the Respondent had lost her employment and not even after September 14, 2016 when she produced the documentation to confirm and validate that reality.

[24] If ever there was a case that demanded settlement before trial, this is it. However, distrust and disbelief continued to prevail and neither party would back off their claim from the other.

[25] Over the life of this proceeding, from time to time, both parties withheld important productions of documents essential to each of their cases. The Applicant came to trial without current medical evidence to support his claim that he couldn’t become self-sufficient, and the Respondent wouldn’t produce evidence of “the clincher” that she was unemployed (due to no fault of her own) until the “eve” of trial. What a waste of their lawyer’s time, talent and energy and their own financial resources.

[26] Relying on her early Offer to Settle, the Respondent seeks costs of between $39,888.09 and $42,933.92.

[27] On the other hand, the Applicant’s counsel, in a well-reasoned analysis argues that the Respondent was self-represented until March 30, 2016 (and again from June 23, 2016 to July 6, 2016) and that, at best, an order for $17,336.63 might be justified, if costs were ordered on a substantial/full indemnity basis. However, Mr. Kelly further submits that the Applicant should not bear that much of the Respondent’s costs when “the action is (was) rendered moot by the act of the …. Respondent having lost her employment and failed to produce documentation supporting same until the eve of trial.”

[28] I agree with that submission and accept Mr. Kelly’s argument that … “if any award of costs is appropriate, … same should be no costs to either party or a nominal award in favour of the Respondent.”

[29] Having regard to r. 24(10) inter alia and there being no “successful party”, I agree that the Respondent should recover some of the costs that she expended for her counsel’s August 2016 documentation organization, service and filing.

[30] Taking into account the principle of proportionality (see Pagnotta v. Brown (2002)) and deciding the issue “in a summary manner” as well as using the “flexible v. rigid adherence to hours billed times the hourly rate charged” approach (see Hackett v. Leung, 2005 42254) and also assessing the circumstances, positions, offers and tactics to arrive a sensible and fair result, consistent with what the Applicant might reasonably have expected to have to pay should he persist with his claim, (post-March 2016, after the Respondent lost her job but stubbornly and unreasonably refused to disclose to him documentary proof of same) (see Moon v. Sher, 2004 39005 (ON CA), 2004 246 D.L.R. (4th) 440) a balanced and fair costs award of $5000 including HST is ordered payable by the Applicant to the Respondent, forthwith.

G.A. Campbell J.

Released: November 22, 2016