Gregory v Holmes, 2017 ONSC 1510

COURT FILE NO.: FS-97-34074-01 DATE: 20170317

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: SIMON GREGORY, Applicant v. GERALDINE CARMEN HOLMES (GREGORY), Respondent

BEFORE: EMERY J.

COUNSEL: Sofia Dharamshi, for the Respondent Geraldine Carmen Holmes Rory W. Krenz, for the Applicant Simon Gregory

HEARD: In writing

COSTS ENDORSEMENT

1This court considered the application of the applicant Simon Gregory to confirm the provisional order he obtained from the Supreme Court of British Columbia under section 18 of the Divorce Act on two occasions. In my endorsement released on December 9, 2015, I adjourned the confirmation hearing and requested the Supreme Court of British Columbia to take or otherwise obtain further evidence under section 19(6) of the Divorce Act. In my second endorsement released on January 31, 2017, I made the following orders:

(a) The provisional order terminating the ongoing child support payable by the applicant, Simon Gregory to Geraldine Carmen Holmes for Jordan Elizabeth Gregory under the Federal Child Support Guidelines as of May 1, 2013 is confirmed.

(b) The provisional order terminating the ongoing child support payable by the respondent, Geraldine Carmen Holmes to Simon Gregory for Bailey Victoria Gregory under the Federal Child Support Guidelines as of April 16, 2014 is confirmed.

(c) The provisional order with respect to arrears for ongoing child support owed by Mr. Gregory to Ms. Holmes shall be offset by any child support arrears owed by Ms. Holmes to Mr. Gregory as confirmed, subject to the variation that Mr. Gregory owes arrears in child support to Ms. Holmes in the amount of $8,7767.29 as of January 15, 2014, plus interest after setoff, instead of $1,255.71 claimed. Those arrears for child support shall be paid by Mr. Gregory at the rate of $1,000.00 per month commencing March 1, 2017 as required by paragraph 5 of Justice Lemon’s final order made on March 4, 2011.

2Ms. Holmes seeks an award of costs in the amount of $5,138.79 for substantial indemnity fees, HST and disbursements for responding to, and the success she claims to have achieved in the confirmation process. In response, Mr. Gregory seeks costs totaling $3,472.61 for fees, GST, the PST chargeable on fees in British Columbia, and disbursements.

3The disposition of the competing claims for costs turns on two essential elements. The first is the nature of the inter-jurisdictional procedure Mr. Gregory initiated and the parties followed under sections 18 and 19 of the Divorce Act. The second is what success was achieved by whom on the actual matters at issue.

4It is important to keep in mind that neither party incurred the expense of having counsel appear in person before this court for the confirmation hearing. The confirmation hearing initially proceeded on the written record that was put before Justice Brian M. Joyce of the Supreme Court of British Columbia on March 23, 2015 when he made the provisional order, and the responding materials Ms. Holmes filed in this court at the initial confirmation hearing. These materials included her affidavit sworn on October 19, 2015.

5After I adjourned the confirmation hearing with the request for further evidence, Mr. Gregory filed his affidavit sworn on January 22, 2016. Several months later, Ms. Holmes filed an affidavit in response dated December 21, 2016 in which she gave further evidence.

6It is important to remember the nature of the confirmation hearing when considering the claims of each party for costs. The provisional order varied the final order of Justice Lemon of this court dated March 4, 2011, and consisted of three parts. The termination of the child support Mr. Gregory is to pay to Ms. Holmes for their daughter Jordan was terminated as of May 2013 when Jordan turned 18 and after she completed her postsecondary program. The obligation of Ms. Holmes to pay child support to Mr. Gregory for their daughter Bailey was terminated as of May 2014 after Bailey turned 18 and became financially independent. Those parts of the provisional order were made on consent.

7The third part of the provisional order, that any child support arrears owed by either party would be offset by any child support arrears owed by the other up to April 2014, was contested. Mr. Gregory took the position that the $10,251.00 in arrears for Jordan’s support according to the Family Maintenance Enforcement Program (FMEP) in British Columbia should actually be $1,255.71 after set-off. Ms. Holmes provided an accounting for child support she admittedly owes to him for Bailey’s support in 2013 and 2014, claiming Mr. Gregory’s net arrears for ongoing child support to be $8,767.29 as of January 15, 2014.

8Mr. Gregory had also requested the Supreme Court in British Columbia to order that he pay those arrears found owing at the rate of $200.00 a month, instead of the $1,000.00 a month required by the previous order made by Justice Lemon.

9As a preliminary matter, I must first decide if the (Ontario) Family Law Rules apply to arrive at any costs award in this matter. According to Family Law Rule 1(2), the Family Law Rules apply to any proceeding under the Divorce Act. In fact, Family Law Rule 37.1 specifically prescribes the procedure to follow for the making of provisional orders and the conduct of confirmation hearings for provisional orders made by the courts of another province. Therefore, the Family Law Rules apply to this confirmation hearing as a procedure brought in this court under section 18 of the Divorce Act.

10The confirmation hearing was limited to the provisional order obtained by Mr. Gregory in British Columbia. I made it clear in my first endorsement that enforcement of the equalization payment out of Mr. Gregory’s pension with McDonald’s Restaurant Canada fell outside the scope of the confirmation hearing as a matter determined under the Family Law Act. That matter that was not before the court in British Columbia as it was not a matter subject to variation under the Divorce Act. Nor was Mr. Gregory’s request to the courts in British Columbia to retire any outstanding arrears at the rate of $200 a month.

11After I received the further affidavits filed by Mr. Gregory and Ms. Holmes, I declined to make any order as to the respective contributions that Mr. Gregory or Ms. Holmes should make towards Jordan’s postsecondary expenses. Making that determination would require the court to make assessments of credibility based on the affidavit evidence given by the parties, which would be difficult at best, and impossible without evidence from Jordan herself. That issue was not before the court in British Columbia in any event, and therefore fell outside the scope of those matters I was to determine on the confirmation hearing.

12The only contested issue within the bounds for me to decide was whether to confirm the setoff provisions of the order without requiring further payment from Mr. Gregory. All of the other legal expense incurred to provide affidavit material in relation to other issues were not relevant except to provide background on that issue.

13This is not a situation where Ms. Holmes had brought an application before this court to make a provisional order that would then be sent to British Columbia for confirmation under the Divorce Act. It is not an application to enforce any outstanding amounts arising from or previously ordered by Justice Lemon in 2011. In this procedure, Ms. Holmes is simply responding to a provisional order made elsewhere, and making her position known whether to confirm the order with or without variation.

14Since the Family Law Rules apply, I must determine the more successful party in order to give effect to Family Law Rule 24(1) that the successful party in a case is presumed to be entitled to the costs of that case. To do so, I have made the following findings:

a. The provisions of the provisional order that relate to the termination of child support for Jordan and Bailey would be available to each party as a matter of law if those children had ceased being children of the marriage within the meaning of the Divorce Act. Each of the parties obtained a benefit from the operation of that provisional order to terminate support. Those parts of the provisional order were obtained by Mr. Gregory without notice or objection, and Ms. Holmes agreed to the confirmation of those parts. Those parts are therefore neutral to the position of either party as to costs.

b. Ms. Holmes was the more successful party with respect to the confirmation of that part of the provisional order setting off one set of arrears against the other. My finding that Mr. Gregory owed $8,767.29 to her for arrears in child support as of January 15, 2014 favoured Ms. Holmes as it exceeds Mr. Gregory’s claim that he only owes $1,255.71 in arrears;

c. This court made no order with respect to the evidence found in the first affidavit of Ms. Holmes to enforce Justice Lemon’s order with respect to the division of Mr. Gregory’s pension, or in the second endorsement to make an additional order with respect to the proportionate amount Mr. Gregory owes in special or extraordinary expenses for Jordan’s postsecondary education.

15Having regard to the results achieved by the parties, it is my view that Ms. Holmes is the more successful party on the issues placed before this court for confirmation because she achieved a determination that Mr. Gregory owes more in arrears for child support for Jordan than he claimed. Ms. Holmes was therefore the more successful party on the only contested issue relevant to the confirmation hearing. Accordingly, she is presumed to be entitled to costs by operation of Family Law Rule 24(1).

16When awarding costs, this court is exercising a discretion under section 131(1) of the Courts of Justice Act. This discretion, while wide, is subject to the provisions of any statute or rules of court. In the family context, this court must consider the factors set out under Family Law Rule 24(11) in particular.

17In addition to the statutory framework, this court exercises its inherent jurisdiction to control its own process when awarding costs in a step of a proceeding. In the exercise of this discretion, the court must follow the guiding principles that have been established by the appellate courts. Two such decisions provide principles that are universally applied for this purpose.

18First, Fong v. Chan (1999), 46 O.R. (3d) 330 (Ont. C.A.) sets out the three fundamental objectives that the modern costs rules are designed to serve:

a. To partially indemnify successful litigants for the cost of litigation;

b. To encourage settlement; and

c. To discourage and sanction inappropriate behaviour by litigants.

19Second, it is a fundamental principle in the law of costs that the court should only grant what is a fair and reasonable amount for costs. A measure of what is fair and reasonable is generally considered to be what amount the unsuccessful party could reasonably expect to pay for those costs: Boucher v. Public Accountants Council for the Province of Ontario et al, [2004] 71 O.R. (3rd) 291.

20Substantial indemnity costs are generally not awarded by the court unless the parties seeking costs at that level can satisfy the court that the party against whom costs are sought has behaved in a reprehensible or egregious manner, or in such other manner deserving chastisement. The court must consider these factors as the threshold for awarding costs at a higher level: Mortimer v. Cameron and reviewed with approval by the Court of Appeal in Davies v. Clarington (Municipality of), 2009 ONCA 722.

21I do not see anything in the record that suggest that Mr. Gregory has conducted himself in bad faith, or in any other manner that would entitle Ms. Holmes to an award of costs on any other basis than on a partial indemnity scale. When I look at the contents of the affidavits filed by Ms. Holmes, I consider that effectively half the time and services described in the one general paragraph in the Bill of Costs filed by her counsel were incurred on issues that fell outside the four corners of the provisional order. I am unable to discern with any more precision how much of the time and effort claimed was attributable to specific issues. Such is the danger of including all legal time in one block description of services rendered.

22This court therefore awards costs on a partial indemnity basis to Ms. Holmes in the amount of $1,263 for fees that reflect one half of the $2,526 claimed at that level, plus $164 for HST on those fees. The disbursements being fixed costs in the amount of $376.68 and HST are also awarded. These costs totalling $1,804.00 shall be paid by Mr. Gregory within 30 days.

Emery J