COURT FILE NO.: 08/D-222 DATE: 2017/03/13 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Peggy Lynn Mahoney (Tanner) Applicant – and – David Wyllie Tanner Respondent
Altynay Teshebaeva, for the Applicant Respondent, self-represented, in part, and represented, in part, by Joseph P. Hamon HEARD: Written Submissions
COSTS DECISION
L. SHEARD J.
Introduction
[1] This costs decision follows the trial heard on May 9, 10 and 11, 2016 and written submissions respecting the trial received in May 2016. Written submissions regarding costs were received in December 2016.
[2] Three main issues were determined at trial:
(a) the amount to be paid to equalize the Husband’s pension;
(b) retroactive and ongoing spousal support to be paid by the Husband to the Wife and security of those payments by way of life insurance; and
(c) reimbursement of the Wife’s past medical expenses and contribution by the Husband toward the Wife’s ongoing and future medical expenses.
[3] In addition to the above, on the second day of trial, the Court heard the Husband’s motion to amend his Answer to change his admission respecting the date of separation. His motion was dismissed.
[4] The pension division issue arose because the Wife refused to allow the division of the Husband’s pension as per the Order of Justice Lalonde made July 25, 2008. At the opening of trial, the Wife acknowledged that she should have allowed the Husband to complete the pension transfer as per the Lalonde Order. However, the parties could not agree on whether, and how much, interest should be added to the pension equalization payment. The parties had exchanged offers to settle. In the offers to settle, the Wife had offered to accept $107,764 in satisfaction of the pension division. The Husband offered to pay the amount of the pension as per the Lalonde Order but without interest. I ordered the Husband to pay simple interest at the rate of 2% per annum. The amount I ordered was higher than the Husband’s offer but lower than the Wife’s offer.
[5] The Wife sought a retroactive increase in spousal support. I determined that spousal support ought not to be increased retroactively. In her offer, the Wife had agreed to accept $34,932 as retroactive spousal support. The Husband offered nothing by way of a retroactive increase in support. The Wife was not awarded a retroactive increase in spousal support. On that issue, the Husband was clearly successful.
[6] The Wife sought an order for ongoing spousal support. At trial, the Husband had sought the termination of spousal support but in his offer he had offered to pay ongoing spousal support of $667 per month. The Wife had sought support in the higher range of the Spousal Support Advisory Guidelines (the “SSAGs”) in the amount of $1,180. I awarded ongoing spousal support in the low range of the SSAGs which I determined to be $788.00 based on his expected income of $61,215.00 following division of his pension. In addition, the Husband was also ordered to pay a monthly “medical top-up” amount in the maximum amount of $277.00. Using those figures, the post-pension division monthly support to be paid by the Husband was estimated at $1,066. If that figure is looked at in reference to the amount the Wife was seeking in support and medical costs, it is lower than her offer and higher than the Husband’s offer.
[7] When he retired from his employment, the Husband no longer provided the Wife with extended health coverage. At trial, the Wife asked for reimbursement of the amounts she had incurred in the 16 months prior to trial during which she had no extended health coverage. She calculated those expenses to be approximately $11,362. As per my Reasons for Judgment, the Husband was ordered to pay 50% of the sum of $8,894.87 ($4,447.44), which amount was to be added to his monthly spousal support payments and, thus, deductible by him and included by the Wife in her income.
[8] In her offer to settle, the Wife asked for payment of $8,445. In his offer, the Husband offered nothing. The amount ordered was approximately 50% of the Wife’s offer to settle, added to the monthly support payments. Again, neither party achieved the amount offered in their offer to settle.
[9] The Wife was also asking for future contributions by the Husband toward her extended medical coverage. She sought an order that he pay for private extended medical coverage in the amount of $350 per month. In his offer to settle, the Husband did not offer to contribute toward these expenses. As referenced above, the Husband was ordered to pay a monthly “medical top-up” amount in the maximum amount of $277.00.
[10] In her written submissions, the Wife submits that, though success was viewed as divided, she was more successful than the Respondent.
[11] Success was divided. The Husband was unsuccessful on his motion to amend his Answer. In comparing his Offer to Settle to the result at trial, the Husband was unsuccessful in resisting the Wife’s claim for contribution toward her medical expenses but was ordered to pay only a small amount more in spousal support. The Wife was unsuccessful in obtaining a retroactive increase in spousal support and obtained a spousal support order much lower than offered. She came close to meeting her offer on future health coverage, but had less success on the reimbursement of historic medical expenses.
[12] In his submissions, the Husband stated that he had suggested to the Applicant that he would not seek his costs if she was willing to do the same. As the Applicant did seek her costs, he also sought his costs. His costs totaled $61,873.11. Some of those costs include monies spent on trying to persuade the Applicant to provide him with receipts for spousal support so that he could deduct those amounts from his income. The Husband also correctly identifies that the issue over the pension and the payment of interest on the pension was entirely attributable to the conduct of the Wife. Although the low prejudgment interest awarded to the Wife on that pension amount did take her conduct into account, had she accepted the pension transfer before trial, both parties might have saved legal and accounting costs.
[13] In her costs submissions, the Wife reports having incurred legal fees of $25,490. There is a marked discrepancy between the legal fees incurred by the Husband and the Wife. That is even more so given that the Husband was not represented by counsel for much of the trial: he had a retainer agreement with his lawyer which “unbundled” the legal services. As a result, the Husband marshalled the trial evidence and his counsel only participated for the legal arguments on the motion and at the end of trial. By contrast, the Wife was represented by counsel throughout the trial.
[14] The Wife is seeking costs of $16,351, inclusive of HST, which represents full indemnification for her costs subsequent to her offer and 50% recovery of legal fees prior to that date.
Factors
[15] The factors to be considered when fixing costs are set out in Rule 24 of the Family Law Rules, O. Reg. 114/99, 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
[16] As stated above, success in this case was mixed. Viewed as a whole and taking into account the Husband’s unsuccessful motion to amend his Answer, the Wife was marginally more successful than the Husband.
Complexity and Importance
[17] There is no question that these issues are important to the parties, both of whom are now living on fixed incomes. The matters were not overly complex although there was some complexity to the issues of retroactive increase in spousal support and to the disposition of the issue of how to determine what interests, if any, should be payable on the pension division.
Unreasonable behaviour or bad faith
[18] As stated in these reasons and in the trial decision, the Wife did behave unreasonably in refusing to allow the pension to be equalized. Had she allowed the equalization in 2008 or 2009, she would have been in a better position financially and, possibly, the amount of support awarded by the Husband could have been lower. However, the delay in the equalization of the payment might have worked somewhat to the benefit of the Husband, whose pension income was likely increased by an amount greater than what he was ordered to pay in prejudgment interest, although he was required to incur legal fees to litigate that issue.
[19] I find no bad faith on the part of the Husband in believing that he had no obligation to continue health coverage for the Wife after his retirement; the Lalonde Order was less than clear on that issue.
Offers to Settle
[20] As stated above, neither party met nor exceeded their respective offers to settle.
Scale of costs, hourly rates, and proportionality
[21] For the reasons stated above, the amount of costs incurred by the Husband seems disproportionately high. However, I accept that one reason for the higher costs incurred by the Husband is the refusal of the Wife to respond to or to provide the Husband with receipts for her spousal support. Notwithstanding that, I find that the legal fees incurred by the Wife are more in keeping with expectations and proportionality.
Amount the unsuccessful party would expect to pay
[22] Again, for the reasons set out above, the amount of costs incurred by the Husband are in excess of any costs which the Wife would expect to pay, whereas the amounts claimed by the Wife in costs would certainly be less than the Husband might expect to have to pay.
Disposition
[23] In view of the foregoing, I have determined that the Husband should pay costs to the Wife in the amount of $7,500 plus HST, plus disbursements in the amount of $671 together with HST on that amount. In arriving at that figure for disbursements, I have not included the $940 claimed and for which there is no breakdown or explanation, nor have I awarded recovery of hotel accommodation, counsel travel time, or mileage as set out in the Wife’s Bill of Costs.
Sheard J.
Released: 2017/03/13
COURT FILE NO.: 08/D222 DATE: 2017/03/13 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Peggy Lynn Tanner Applicant – and – David Wyllie Tanner Respondent COSTS DECISION
Released: 2017/03/13