Court File and Parties

COURT FILE NO.: 826/07 DATE: 2017-07-11 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

WILLIAM TAYLOR Applicant – and – AMY NICOLE SIST Respondent

COUNSEL: C. Fitzgerald, for the Applicant P. E. Skeggs, for the Respondent

HEARD: July 6, 2017

Gareau J.

Reasons on Motion

[1] Before the court is the respondent’s notice of motion at Tab 5 of the continuing record. In that motion the respondent is seeking an order deeming 100% percent of the costs and interest in the final order granted February 29, 2012 to be considered a debt in relation to the support of the child Owen Sist-Taylor, born June 20, 20014.

[2] Essentially, the respondent is seeking an order declaring that the cost order arising from an eight-day trial is a debt not discharged by the applicant’s bankruptcy, pursuant to section 178(1) (c) of the Bankruptcy and Insolvency Act, R.S.C. 1985, C. B-3.

[3] The position of the applicant is that the cost order made on February 29, 2012 arises from a trial that primarily focused on the appropriate custody and access arrangements of the child, not child support, and therefore the cost order is a debt that is extinguished by his bankruptcy.

BACKGROUND

[4] The parties are the parents of Owen Sist-Taylor, born June 20, 2004. The time the parties spent with Owen was first governed by a separation agreement dated January 28, 2005 and then by a court order granted on November 27, 2008 by Justice G. Tranmer on the terms of minutes of settlement executed by the parties. Paragraph one of that order provides for Owen to be with the applicant on a specific schedule based on a two-week cycle. Paragraph six of the November 27, 2008 order provides that the level of child support is set having regard to the amount of time that Owen is spending with each parent. In particular, paragraph six of the order of November 27, 2008 reads as follows:

The applicant shall pay to the respondent for the support of Owen the sum of $400.00 per month commencing December 1, 2008, based on a compromise of the guideline amount or amount indicated having regard to the time spent by each parent with the child, the applicant’s guideline income of $61,502.30 and the respondent’s guideline income of $55,981.00. [Emphasis added.]

[5] By way of a motion to change, the applicant sought a variation of both the custody and child support provisions of the order granted on November 27, 2008. That motion to change dated March 31, 2010 proceeded to trial before me for eight days in the fall of 2011. My reasons for judgment, spanning 92 paragraphs and 35 pages, is reproduced as Exhibit C to the affidavit of the respondent sworn on May 30, 2017 (Tab 7 of the continuing record).

[6] The claim by the applicant in his motion to change is set out in paragraph two of my reasons for judgment, dated January 20, 2012 as follows:

In that motion to change, the applicant seeks an order for shared custody of his son Owen Sist-Taylor, born June 20, 2004, whereby Owen would be in the care of each parent on a week-about schedule with the exchange to take place each Monday. At paragraph 5 of the motion to change, the applicant also seeks “an order for child support to be paid in accordance with section 8 of the Federal Child Support Guidelines”. [Emphasis added.]

[7] In my decision dated January 20, 2012, at paragraph 87, I awarded the respondent sole custody of Owen with specified access to the applicant on alternating weekends from Thursday after school to Monday mornings when Owen would be brought to school from his home.

[8] In the end result, the previous joint custody arrangement set out in the order of November 28, 2008 was varied to one of sole custody to the respondent and the applicant’s time with Owen was varied to an alternate weekend access arrangement.

[9] As to the issue of child support, that is dealt with in paragraphs 90 and 91 of my reasons. Child support was adjusted to reflect the applicant’s current earnings and on an arrangement reflecting that the respondent was the sole custodial parent of Owen. As noted in paragraph 90 of my reasons:

In his motion to change, the applicant father requests that child support be paid on the basis of the parties having shared custody of Owen pursuant to the Federal Child Support Guidelines. The court declined to order shared custody but child support should be adjusted based on the respondent having custody of Owen Sist-Taylor born June 20, 2004 and based on the most current income information for the applicant father.

[10] The cost order granted with respect to the motion to change and trial is produced as Exhibit E to the affidavit of the respondent sworn on May 30, 2017 (Tab 6 of the continuing record). That order for costs provides that the applicant pay costs to the respondent with such costs fixed at $20,875.00 plus applicable taxes of $2,713.75. That cost order is dated February 29, 2012. The applicant was given until June 1, 2012 to pay the costs ordered.

[11] Although the cost order was reproduced in the continuing record, the decision on costs, which is four pages, was not in the continuing record. I have reviewed my written reasons on costs and it is clear from those reasons that the respondent received costs primarily because she succeeded at trial and received a more favourable result than contained in the offer to settle she submitted to the applicant prior to trial.

[12] As calculated by counsel for the respondent, the total costs owing under the cost order of February 29, 2012, with interest, is $27,156.04 as of July 14, 2017.

DISCUSSION/ANALYSIS

[13] The applicant, William Taylor, made an assignment in bankruptcy on September 7, 2012. Mr. Taylor was discharged from bankruptcy on June 8, 2013. As indicated in that discharge, Mr Taylor “is released from all debts, except those matters referred to in section 178(1) of the Act” (referring to the Bankruptcy and Insolvency Act).

[14] Section 178 of the Bankruptcy and Insolvency Act sets out the debts which an order for discharge does not release the bankrupt from. Relevant to the case at bar is section 178(1)(c) the Act which reads as follows:

Any debt or liability arising under a judicial decision establishing affiliation or respecting support or maintenance, or under an agreement for maintenance and support of a spouse, former spouse, former common-law partner or child living apart from the bankrupt. [Emphasis added.]

[15] Counsel for the respondent provided the court with two cases, Beaumont v. Beaumont, O.J. No. 2433, and Philip v. Philip, O.J. No. 3067, to consider. These are both cases of the Ontario Superior Court of Justice. There appears to be no appellate authority that would assist the court in determining the issue before it.

[16] In the case of Beaumont v. Beaumont, the moving party was seeking an order that the court specify that 50% of the costs awarded related to costs in consequence of a quantification of spousal support. If that order was made then the portion of the cost order would not be discharged through bankruptcy pursuant to section 178(1) (c) of the Bankruptcy and Insolvency Act.

[17] The court in Beaumont found its jurisdiction to make such an order under Rule 15(14). The first consideration of the court in Beaumont was whether the court had an “adequate evidentiary base” to assist the judge’s independent recollection of the trial. In Beaumont the court was satisfied that the transcript of the trial proceedings, the notes in the bench book, and counsel’s account of the trial provided the evidentiary base to assist the trial judge’s independent recollection of the trial. This first consideration, as set out in Beaumont, was followed and applied in the case of Philip v. Philip. In the Philip case, Henderson J. first satisfied himself that he had an independent recollection of the trial proceedings by reviewing his bench book notes. Once he refreshed his memory in this fashion, Henderson J. was satisfied that he was in a position to realistically determine the portion of costs that relates to the support issues.

[18] As to the first consideration as set out in the Beaumont and Philip decisions, I have reviewed my extensive reasons, which were reproduced as Exhibit C to the affidavit of Amy Nicole Sist-Aceti, sworn on May 30, 2017 (Tab 6 of the continuing record). Apart from the review of my reasons, I have a clear and independent recollection of this trial, the issues at the trial, the evidence led and the result. I indicated in court, on the record, the basis of my recollection and in doing that counsel were satisfied that I could proceed to the second stage of the inquiry, that is, the apportionment of the costs ordered as it related to the child support issue.

[19] I agree with the comments made by Henderson J. in the Philip case as to why it is important that this inquiry be made. As stated by Justice Henderson at paragraphs 26 and 27 of his reasons:

Clearly, the Bankruptcy and Insolvency Act provides that liability for costs that relate to child and spousal support should not be extinguished by the bankruptcy of the debtor. Clearly, in the present case, part of the global costs order relates to child and spousal support. It is, therefore, fair and just for the court to identify those costs that will survive bankruptcy and those costs that will not survive bankruptcy. Clarification as to the portion of the costs order that relates to the support issues can only assist all of the parties in dealing with the husband’s bankruptcy.

In my view, it would not be fair or just to the parties for me to leave the global costs order unchanged, when the allocation of some of the costs to support issues would clarify the wife’s entitlement to recover those costs given the husband’s bankruptcy.

[20] Counsel for the respondent urged the court to apply equity to do what is fair and just for Amy Nicole Sist-Aceti. I see nothing in the cases of Beaumont and Philip which would convince me that the application of the second phase of the inquiry, that is the apportionment of costs, is done on the basis of equity. In both the Beaumont and Philip case the court took a realistic view as to how much time was spent on the issues and how they were interrelated to the other and apportioned the costs accordingly. As Henderson J. stated at paragraph 32 of the Philip decision:

It is difficult to make a mathematical determination of the amount of trial time spent on each issue, as the evidence was often intertwined between two or more issues. Thus, I must estimate the net effect that each piece of evidence had on each issue. Overall, I find that approximately 60% of the trial time dealt with spousal and child support issues.

[21] Similarly, at paragraph 20 in the Beaumont decision, Scott J. stated:

Consequently, I am satisfied that on a review of the conduct of the trial at least, balancing the topics and time each witness testified, that the quantification by counsel for the applicant of 50% of the costs expended at trial to be have expended on issues material to spousal support is not unreasonable.

[22] In the case at bar, the applicant raised the issue of child support in his motion to change. Paragraph six of the order of November 27, 2008 ordered child support “having regard to the time spent by each party with the child”. At paragraph five of the motion to change the applicant sought “an order for child support to be paid in accordance with Section 8 of the Federal Child Support Guidelines”. Section 8 of the Federal Support Guidelines permits the deviation of grid child support in the case of split custody and Section 9 permits the deviation of grid child support in the case of shared custody, where one parent has the child in his care not less than 40% of the time.

[23] Clearly the issue of parental time with Owen was inseparable from the issue of child support given the way the applicant’s claim for relief in the motion to change was framed. In fact, the issue of parental time was determinative of the issue of child support. The result on the shared custody claim of Mr. Taylor determined the result of the child support issue. If shared custody was ordered it would determine one result on the issue of child support. If sole custody to one parent was ordered it would determine another result on the issue of child support. Although it is accurate to say that the vast majority of the time spent at trial and the evidence led by the parties were on the issue of the shared custody claim, it is also fair to say that all the time spent on that issue was material to the issue of child support. I am of the view that the issue of child support was inextricably linked to the shared custody claim of Mr. Taylor and the two go hand in hand and cannot be separated. Although it is true that only two paragraphs of my 92 paragraph written reasons resulting from the trial deal with the issue of child support, not much turns on that given that the decision reached in the previous 89 paragraphs on the issue of the shared custody claim determined the issue of child support, leaving little to say on that issue apart from adjusting the full grid amount to reflect the current income of William Taylor.

[24] The time expended on the shared custody issue at trial was material to the child support issue. The two issues are so intertwined they cannot be separated. The shared custody issue determined the result on the child support issue. Every piece of evidence on the issue of shared custody was in the end material to the issue of child support. I find that it is reasonable to apportion the costs ordered equally between the shared custody claim and the child support claim. Accordingly, I declare that 50% of the costs ordered on February 29, 2017 are to be considered to be a debt in relation to the support of a child living apart from the applicant, William Taylor.

[25] If costs of the motion at Tab 5 of the continuing record are in issue, counsel are permitted to file written submissions no longer than five typed pages, excluding offers to settle and bills of costs, with these submissions to be served and filed with the court by Friday, July 21, 2017 at 12:00 noon.

Gareau J. Released: July 11, 2017

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: WILLIAM TAYLOR - and – AMY NICOLE SIST REASONS ON MOTION Gareau J. Released: July 11, 12017