Court File and Parties

COURT FILE NO.: FC-13-1298 DATE: 2017/02/22 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Alexander Neil Birkett, Applicant AND Darlene Beverley Pamela Love, Respondent

BEFORE: Justice A. Doyle

COUNSEL: Geneviève Lalonde, Counsel for the Applicant Lorna F. Baldwin, Counsel for the Respondent

HEARD: In Writing

Endorsement

[1] The Court rendered a final decision on a motion to change as follows:

i) commencing, January 1, 2017, the Respondent would pay the table amount of child support in the amount of $230 per month based on annual income of $28,2013; ii) the Applicant would pay spousal support to the Respondent in the mid-range in the amount of $1,835 per month; iii) there would be a payment of $1,952.64 for the transfer of the shares; and iv) a determination of income for the purposes of setting child and spousal support for 2016.

[2] The parties resolved the retroactive support issues for the years 2014 and 2015.

[3] If the parties could not agree on costs, the parties were to provide written submissions.

[4] After considering the parties’ written submissions, the respective Bills of Costs and offers to settle, the Court orders no costs.

Applicant’s position

[5] The Applicant seeks costs on a substantial indemnity basis in the amount of $13,229.65 representing $8,259.59 for costs thrown away for the attendance at the initial motion on September 27, 2016 and $4,970.06 representing costs from his offer to settle dated December 3, 2016 to the date of the motion on December 20, 2016.

[6] He submits that he was the successful party based on the offers to settle and, hence, is presumptively entitled to costs.

[7] In addition, the Respondent acted in bad faith by failing to plead her claim that the Applicant’s income should be imputed at $175,000 per annum and that this was raised for the first time at the motion returnable on September 27, 2016. The motion was adjourned to allow her to properly amend and plead this claim and allow the Applicant to respond to this allegation. The Applicant retained an expert to prepare income determination reports for the years in question. Ultimately the Court accepted the reports in its determination of the Applicant’s income.

[8] Had the Applicant known that the Respondent was seeking to attribute an income of $175,000 per annum to the Applicant for support purposes, he would have arranged to seek an expert opinion prior to the initial motion.

[9] His offer to settle dated December 3, 2016 provided for the following:

(i) retroactive adjustment of support and that the Applicant owed the Respondent $7,068.10 (for years 2014 to 2016); (ii) ongoing child support from the Respondent to the Applicant was $498 per month based on income of $55,000 per year; (iii) ongoing spousal support payable by the Applicant to the Respondent in the amount of $1,169 per month the mid-range support based on the Applicant’s income of $104,000 and the Respondent’s income of $55,000; and (iv) the Applicant would pay the Respondent $6,000 for the shares.

Respondent’s Position

[10] The Respondent disputes that the Applicant was successful and is entitled to costs. She states that she was successful and the total amount of arrears was $15,151.03 which would warrant costs in the amount of $10,000.00.

[11] She cites the Applicant’s delay in providing disclosure as required under the Divorce Order. He was also unreasonable in continuing to state that his 2014 income was $89,531. His expert found his 2014 income to be $119,000.

[12] She denies bad faith on the motion returnable September 2016 by alleging that his income was $175,000. The Respondent consistently questioned the Applicant’s financial disclosure and the income available through the corporation. Historically, the Applicant arranged his affairs to minimize tax and split his income with the Respondent and the children.

[13] The costs were not thrown away at the September 2016 appearance on the motion. The Applicant filed 5 lengthy affidavits from October 16 2015 to December 2016, which were repetitive and not in accordance with the Family Law Rules, O. Reg. 114/99 (the “FLRs”).

[14] The Respondent’s income for 2016 was calculable as her income and EI payments were received and provided to the Applicant. Yet, the Applicant continued to take the position that her income was $48,000 when all that she earned was $42,229.00 as found by the Court.

[15] Given the Court’s finding that the Respondent’s income for support purposes was $28,203 for 2017, there is no need to return to court in 2017 and it is open for interpretation which offer is closer to the final decision for that year. His offer to settle imputed income of $55,000 to the Respondent.

The Law

[16] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395 at para. 8 stated that the cost rules are designed for these fundamental purposes:

(1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement, and (3) to discourage and sanction inappropriate behavior by litigants

[17] FLR 24(10) indicates that costs should be decided at each step.

Decision

[18] The Court has considered FLR 24 (11). The issues were not complex. The parties, to their credit, were able to resolve some of the retroactive issues and withdrawals from the RESP. The issue of support was important to the parties and the court had to make income determination for both parties which involved expert evidence.

[19] The Court is concerned when there are allegations of delay in providing financial disclosure. Given the findings of the expert, it was certainly reasonable for the Respondent to be concerned of the Applicant’s self-reporting of income. The Applicant is to be commended in providing the final income determination report but until then the Applicant was certainly entitled to question his position and numbers.

[20] Regarding the success of the parties, for the year 2016, the Court found the Applicant’s income to be $104,000 and the Respondent’s income to $42,229 (compared to the $48,000 that he claimed should be imputed).

[21] On an ongoing issue, commencing January 1, 2017, the Court found that the Applicant’s income was $104,0000 and the Respondent’s income was $28,203.33 (whereas the Applicant’s offer contained the Respondent’s income as $55,000 and his income at $104,000, whereas the Respondent’s offer had her income at $13,200 and the Applicant’s income at $121,000).

[22] On the issue of the shares, the Court ordered the Applicant to pay the Respondent the amount of $1,952.64 for the shares (the Applicant had offered to pay $6,000 and the Respondent asked for $15,000).

[23] The Court has considered the offers to settle and neither of them qualifies for a solicitor and client costs under Rule 18, as the parties did not obtain a more favourable order than their offer to settle.

[24] The Court has reviewed the respective parties’ offers to settle with respect to the amount alleged to be owing as retroactive support. The Applicant states it is $7,068.10 up to January 1, 2017 and the Respondent alleges it is $15,151.03. The parties resolved this issue and hence the Court was not required to determine this issue. Based on the record before it, the Court cannot determine who was successful on this issue and will not consider this factor in the determination of costs.

[25] The Court finds that both parties have, through their behavior, not been committed to moving this matter forward. The Applicant did not provide timely disclosure and misstated his income. It could be said that he did not have the benefit of an expert to advise him of his true income for the purposes of determining support, but it is incumbent on him as provided in the FLRs, to be frank and candid with producing his income and obtain professional assistance if that is what is required to ensure that the Court has the proper and full information to make a finding with respect to income.

[26] The Respondent was unreasonable in amending her position at the motion returnable in September 2016.

[27] The Court finds that there has been divided success and there will be no costs.

Madam Justice Adriana Doyle

Date: February 22, 2017

COURT FILE NO.: FC-13-1298 DATE: 2017/02/22 ONTARIO SUPERIOR COURT OF JUSTICE RE: Alexander Neil Birkett, Applicant AND Darlene Beverley Pamela Love, Respondent BEFORE: Justice A. Doyle COUNSEL: Geneviève Lalonde, Counsel for the Applicant Lorna F. Baldwin, Counsel for the Respondent HEARD: In Writing ENDORSEMENT Madam Justice Adriana Doyle

Released: February 22, 2017