NEWMARKET COURT FILE NO.: FC-13-043349-00
CORRECTED DATE: 20170811
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ANNE MILLISON MITCHELL
Applicant
– and –
DUFF GREGORY MITCHELL
Respondent
Cheryl Suann Williams and Farnaz Mirshahi, for the Applicant
Helen Kurgatnikov Miller, for the Respondent
HEARD: By written submissions
Corrected decision: The text of the original decision was corrected on August 11, 2017 and a description of the corrections is appended
COSTS DECISION
Issue
1Anne Mitchell seeks costs in the amount of $457,000 for a 28-day family law trial.
2Duff Mitchell argues that no costs should be ordered.
Background
3The trial decision in this matter is located at 2016 ONSC 8083.
4At the commencement of the trial, on November 16, 2015, both counsel informed the court that the parties agreed to joint custody of their eight year-old child, R, except with respect to extracurricular activities and counselling for the child, which required determination by the court. They also advised that the other issues for judicial determination were: a parenting schedule, child support since separation, spousal support since separation, equalization of property, and a division of certain post-separation property-related income and expenses.
5The early part of November 16 was spent addressing a variety of trial-related issues. The remainder of the day was used by counsel to draft a Statement of Agreed Facts that was filed the next day (Exhibit 4).
6Ms. Mitchell’s counsel made her opening statement on November 17. A report by Karen Guthrie-Douse, a clinical investigator for the Ontario Children’s Lawyer (OCL), was filed that day (Exhibit 6).
7Ms. Mitchell testified in chief on November 17 and 18. She was cross-examined on November 18, 19, and 20. She was re-examined on November 20.
8Jason Kwiatkowski, an expert witness relating to the vesting of restricted stock units (RSUs), called by Ms. Mitchell about the quantum of Mr. Mitchell’s income, testified in chief on November 20 and 24 and was cross-examined and briefly re-examined on November 24.
9Adrienne Ambrozic, an expert witness about child-related issues, called by Ms. Mitchell, testified in chief on November 24, 25, and 26 and was cross-examined on November 26, 27, December 1 and 2. She was not re-examined.
10Paul Raymer, an expert witness concerning the value of the matrimonial home, called by Ms. Mitchell, testified on November 30. At the start of the trial, Ms. Mitchell advised the court that she did not intend to call Mr. Raymer. Mr. Mitchell, however, insisted that Mr. Raymer be called, because he was on Ms. Mitchell’s witness list.
11Mr. Mitchell’s counsel made her opening statement on November 30. Mr. Mitchell testified in chief on November 30, December 1, 2, and 3. He was partially cross-examined on December 3 and 4.
12At the end of the day of December 4, the 14^th^ day of the trial, the trial was adjourned to continue in either February or May of 2016, depending on the availability of the court.
13On January 20, 2016, the court sent a letter to counsel stating, “Please be advised that, despite your clients’ agreement to a joint custody regime, the evidence led at trial thus far has raised a concern for the court whether joint custody would be in [R]’s best interest. Accordingly, please be advised that custody may be a live issue at trial” (Exhibit O).
14The trial continued on May 16, 2016. At that time, Ms. Mitchell advised that court that although she still agreed to joint custody, she sought final decision-making authority for extracurricular activities and counselling for R. Mr. Mitchell advised that court that he was no longer agreeable to joint custody and that he was seeking sole custody.
15As a result, both parties were recalled to give additional evidence-in-chief that was restricted to the issue of custody and events during the adjournment of the trial.
16Ms. Mitchell gave additional evidence-in-chief on May 16, 2016. She was cross-examined on May 16, 17, and 18. She was briefly re-examined on May 18.
17Mr. Mitchell gave additional evidence-in-chief on May 18 and 19. He was cross-examined on the entirety of his evidence on May 19, 20, 24, and 25. He was re-examined on the entirety of his evidence on May 25 and 26.
18On May 24, 2016, the 20th day of the trial, the parties, by way of Minutes of Settlement, resolved all the property issues, the issue of the quantum of Mr. Mitchell’s income for the purpose of child support, and the amount of table child support from the date of separation until the end of 2015 (based in part on information provided by Mr. Mitchell concerning the vesting of RSUs). The Minutes also stipulated a sale of Mr. Mitchell’s interest in the jointly owned matrimonial home to Ms. Mitchell at an agreed price. The court was presented with the Minutes on May 25 and that day, on consent, a final order was made upon its terms.
19Mr. Mitchell subsequently called the following witnesses: Brian Knuff (R’s hockey coach), who testified in chief on May 25and was cross-examined and re-examined on May 26; Ruth Mitchell (Mr. Mitchell’s mother), who testified on May 26; Krista South (Mr. Mitchell’s sister), who testified on May 27; and Sue Bridge (Mr. Mitchell’s intimate partner), who testified in chief on May 27 and 30 and was cross-examined on May 30. She was not re-examined.
20Ms. Mitchell was briefly recalled on May 30 in relation to some new evidence about her income.
21On May 31, Ms. Guthrie-Douse, called by the court, presented and testified about a Voice of the Child Report.
22Final submissions were heard on June 2 and 3. Ms. Mitchell’s submissions in relation to spousal support from the date of separation to the end of 2015 were based on the annual incomes for Mr. Mitchell agreed to on May 24 for child support purposes.
23On November 24, 2016, the court reconvened in relation to Ms. Mitchell’s request to re-open her case due to newly disclosed evidence concerning Mr. Mitchell’s RSUs that vested between the date of separation and the end of 2015. He had not disclosed earlier that the RSU amounts he provided to Ms. Mitchell and the court were in U.S. dollars. After the court disagreed with Mr. Mitchell’s argument that Ms. Mitchell should have realized that the RSUs were in U.S. dollars and that the evidence that those amounts were in U.S. dollars should not be admitted, the parties negotiated a new agreement with respect to Mr. Mitchell’s income in 2013, 2014, and 2015, for the purpose of child and spousal support. They also agreed upon both parties’ incomes in 2016 for support purposes.
Law in relation to Costs
Rule 18 – Offers to Settle
24Rule 18 of the Family Law Rules, O. Reg. 114/99 sets out various rules with respect to written offers to settle that have been signed by the party making the offer and by that party’s lawyer, if any, and served upon another party.
25Rule 18(9) stipulates that the only valid way to accept such an offer is by serving an acceptance on the party who made the offer, before the offer is withdrawn and before the court begins to give a decision that disposes of the claim dealt with in the offer.
26Rule 18(14) sets out a special rule that if a party serves an appropriately signed written offer to settle at least seven days before the commencement of a trial, the offer is not accepted in the required manner before the offer expires or the trial starts, and the party making the offer obtains an order at trial that is as favourable or more favourable than the offer, then the party who made the offer is entitled to costs to the date the offer was served and to full recovery of costs from that date onward.
27Rule 18(15) stipulates that the burden of proving that an order is as favourable as or more favourable than an offer to settle is on the party who claims the benefit of Rule 18(14).
28Rule 18(11) provides that if an accepted offer does not deal with costs, either party is entitled to ask the court for costs.
29Rule 18(16) stipulates that the court may take into account any written offer to settle when exercising its discretion over costs, even if the offer does not fall within the parameters of Rule 18(14).
Rule 24 – Costs Generally
30In the absence of offers to settle that meet the criteria of Rule 18(14), Rule 18(16) and Rule 24 govern the determination of costs.
31Rule 24(1) and (4) provide that there is a presumption that a successful party is entitled to the costs of a case, although a successful party who has behaved unreasonably during a case may be deprived of all or part of the party’s own costs or ordered to pay all or part of the unsuccessful party’s costs.
32Rule 24(5) stipulates that in determining whether a party has behaved reasonably or unreasonably, the court must examine: the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle, the reasonableness of any offer the party made, and any offer the party withdrew or failed to accept.
33Rule 24(6) provides that if success in a step in a case is divided, the court may apportion costs as appropriate.
34Rule 24(7) requires that if a party is not properly prepared to deal with the issues at that step or otherwise contributes to that step being unproductive, the court shall award costs against the party unless the court orders otherwise in the interests of justice.
35Rule 24(8) stipulates that if a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.
36Rule 24(10) requires that the court shall make a decision promptly after dealing with a step or reserve the decision on costs for determination at a later stage in the case.
37Rule 24(11) provides that in setting the amount of costs, the court shall consider,
(a) the importance, complexity or difficulty of the issues,
(b) the reasonableness or unreasonableness of each party’s behaviour in the case,
(c) the lawyer’s rates,
(d) the time properly spent on the case,
(e) expenses properly paid or payable, and
(f) any other relevant matter.
38The Ontario Court of Appeal stated in Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6^th^) 40, at para. 8, that the current costs rules are intended to promote three fundamental goals: to partially indemnify successful litigants for the cost of litigation, to encourage settlement, and to discourage and sanction inappropriate behaviour by litigants.
39These three goals and Rules 18 and 24 guide the court in determining a proportional, fair, and reasonable amount that should be paid for costs in this case.
Costs Analysis
Family Law Rule 18
40On January 24, 2014, Mr. Mitchell made a non-severable Rule 18 offer that included, for example, joint custody of R. The court’s final order that Ms. Mitchell has sole custody of R was less favourable to Mr. Mitchell than his offer.
41On April 16, 2014, Ms. Mitchell made a non-severable Rule 18 offer that included, for example, a term that R would not stay with Mr. Mitchell overnight until an unspecified future date. This offer was overtaken by events as R commenced having overnight stays with Mr. Mitchell in November of 2014.
42On June 5, 2015, Ms. Mitchell made a non-severable offer in a settlement conference brief. The parties have agreed, however, that the offer did not fall within Rule 18 because settlement conference offers are mandatory and confidential – as explained by Woodley J. in Owen-Lytle v. Lytle, 2015 ONSC 7673, 71 R.F.L. (7^th^) 364, at paras. 16-19. Regardless, even if this offer had been a Rule 18 offer, it stipulated incomes for Mr. Mitchell for support purposes that exceeded the amounts eventually settled upon.
43On October 22, 2015 (24 days before the trial started), Ms. Mitchell made a severable Rule 18 offer on property and equalization issues.
44Part 1 of the offer related to a transfer of Mr. Mitchell’s share of the matrimonial home to Ms. Mitchell for a stated price. A transfer between the parties was not a trial issue. As the court reminded the parties during the trial, particularly during Mr. Raymer’s testimony, the court did not have jurisdiction to order Mr. Mitchell to sell his share of the home to Ms. Mitchell for a particular price. As a result, this offer is not relevant to costs. In any event, the eventual transfer was for a higher price.
45Part 2 of the offer was that Ms. Mitchell would be solely responsible for paying the mortgage and utilities at the matrimonial home from the date of separation to the date of a transfer to her, and the parties would be equally responsible for payment of the insurance on the home, property taxes, and mortgage insurance during that period. Mr. Mitchell included this term in a non-severable and non-rule 18(14) offer he made on November 16, 2015 (the first day of the trial). Ms. Mitchell’s offer became part of the May 24 settlement. Accordingly, this offer will be discussed below in an analysis of issues settled during a trial.
46Part 3 of the offer related to payment of joint expenses and entitlement to rent from the cottage. Mr. Mitchell made a very similar offer on the first day of the trial, and he made this precise offer on May 21, 2016 (between the 19th and 20th days of the trial). This term became part of the May 24 settlement. Accordingly, this offer will be discussed below as an issue settled during the trial.
47Also on October 22, 2015 (24 days before the trial started), Ms. Mitchell made a severable offer about parenting issues.
48Part 1 of the offer was that the parties would have joint custody of R. This offer will be discussed below in relation to custody.
49Part 2 of the offer was non-severable within itself with respect to Mr. Mitchell’s parenting time during the school year and the summer. Ms. Mitchell did not obtain as favourable a result with respect to the summer.
50Part 3 of the offer was non-severable within itself with respect to a parenting schedule for school holidays. Ms. Mitchell did not obtain as favourable a result with respect to some of the terms.
51Part 4 of the offer was non-severable within itself with respect to parenting rules. Ms. Mitchell did not obtain as favourable a result with respect to some of the terms.
52Part 5 of the offer was non-severable within itself with respect to joint custody, dispute settlement with respect to joint custody, parental communication with R, obtaining relevant information about R, and interactions with R’s school. This offer will be discussed below in relation to custody.
53Part 6 of the offer was non-severable within itself with respect to address and telephone number sharing. The court made these orders at trial based on evidence that Mr. Mitchell did not share his change of address information with Ms. Mitchell in an appropriate manner. Ms. Mitchell obtained an order as favourable as the order she sought and is entitled to full recovery of her costs in relation to this issue from October 22, 2015 onward. However, very little time was spent on this issue at trial.
54Part 7 of the offer was non-severable within itself with respect to travel issues. The court made these orders at trial. Accordingly, Ms. Mitchell is entitled to full recovery of her costs in relation to this issue from October 22, 2015 onward. Once again, however, very little time was spent on this issue at trial.
55Part 8 of the offer stipulated that R’s name would not be changed without consent. The court made this order, but it was not the subject of evidence or submissions at trial. No costs are appropriate for this issue.
56Part 9 of the offer addressed custody of R in the event either parent dies. The court did not make this order, and it was not the subject of evidence or submissions at trial. No costs are appropriate for this issue.
57Part 10 of the offer provided a mechanism for dispute resolution about parenting issues. The court did not make this order, and it was not the subject of evidence or submissions at trial. No costs are appropriate for this issue.
Issues Settled During Trial
58The parties disagree about whether costs may be ordered in relation to issues settled during trial.
59Mr. Mitchell suggests that the court does not have jurisdiction to order costs for matters that settle during a trial unless the settlement explicitly reserves the issue of costs to the trial judge.
60A significant difficulty with this argument is that settlements made during a trial are made during the final step of the litigation process. It is not possible to reserve costs to a later step because there is no later step. The trial judge is the last judicial officer to deal with a case at the trial level. Accordingly, it falls within the jurisdiction of the trial judge to determine costs in relation to all issues addressed during the trial. It may be that in some instances the trial judge will not have enough information to address costs. For example, if an issue settles on the first day of trial, before any evidence is called on that issue, and without any offers to settle that issue having been made. The trial judge will be in the best position to determine whether the court has enough information to determine costs in each particular situation.
61In the current case, prior to the May 24 settlement, the court heard considerable evidence on all of the issues being tried, including the entire evidence-in-chief of both parties.
62C.S. v. M.S., 2007 CanLII 20279 (ONSC), affirmed 2010 ONCA 196, 76 R.F.L. (6^th^) 14 is frequently cited in family law costs decisions including, for example, Jackson v. Mayerle, 2016 ONSC 1556, 130 O.R. (3d) 683, which both parties cited in their cost submissions. In C.S., Perkins J. ordered full recovery of the successful party’s costs of about $320,200 after an 18-day trial in relation to costs that were incurred over a four-year period, including preparation of the application, financial disclosure, oral questioning, preparation for the trial, and the trial itself, including financial issues that were settled during the trial. In relation to the full recovery of costs for issues that settled during the trial, Perkins J. commented, at para. 38, “The economic issues that remained outstanding did not settle until well through the trial, and it was only at the end that the father’s lawyer conceded the issue of the mother’s income potential”.
63Similarly, in the current case, the property issues did not settle until the 20^th^ day of the trial, and the issue of Mr. Mitchell’s proper income for support purposes was not conceded by Mr. Mitchell until the final day of the trial.
64Mr. Mitchell argues further, however, that the wording of the settlements precludes the court from determining costs for the settled issues.
65He suggests that the following language in the May 24 settlement addressed costs:
(g) the [parties] agree to settle all issues relating to equalization, sale of the matrimonial home, release of sale proceeds from the sale of the cottage, responsibility for the payment of joint expenses relating to the property and retroactive Table child support for the period March 2013 to December 2015 on a FINAL basis on the following terms;
(h) the transfers and payments….are in full and final satisfaction of all property and equalization claims at common law, in equity or by statute, by the parties, against each other, including any and all claims under the Family Law Act;
(i) in full and final satisfaction of all claims for retroactive Table child support for the period of March, 2013 to December 31, 2015. There shall be no further claims relating to retroactive Table child support for this period [emphasis added]
66Similarly, he suggests that the following language in paragraph 6 of the November 24 settlement addressed costs, “All issues pertaining to child support for the period March, 2013 to December, 2015 have been settled on a final basis and shall hereby be dismissed” [emphasis added].
67Mr. Mitchell submits that the words “all” and “no further” in the May 24 settlement and “all” in the November 24 settlement have the effect of including the issue of costs and, as a result, costs for those issues are settled.
68Ms. Mitchell argues that the language does not have that effect.
69The court agrees with Ms. Mitchell’s position for several reasons.
70First, a plain reading of the phrases in context indicates that the settlements relate to the substantive issues mentioned and not to costs.
71Second, given that the parties disagree about the meaning of the language, even if Mr. Mitchell intended the passages to include costs (despite its plain reading otherwise), it is evident from Ms. Mitchell’s position (consistent with a plain reading), that Ms. Mitchell did not have the same intention. In other words, there was never a meeting of the parties’ minds that costs were included in the settlements, and, as a result, the settlements cannot be binding agreements with respect to costs.
72Third, as noted above, Rule 18(11) stipulates that if an accepted offer does not deal with costs, either party is entitled to ask the court for costs. Even though this may not be a Rule18 situation, the rule provides guidance. Silence about costs does not mean that the issue of costs has been settled.
73Having rejected Mr. Mitchell’s position that the court cannot order costs for matters that settled during the trial, the court will now address the issues that settled.
74The first issue settled in the May 24 settlement, was the transfer of Mr. Mitchell’s share of the jointly owned matrimonial home to Ms. Mitchell for an agreed price. As noted earlier, this was not a trial issue. As a result, the fact that Ms. Mitchell agreed to Mr. Mitchell’s proposed valuation of the home, contained in an offer made by him on May 21, 2016 (between the 19^th^ and 20^th^ days of the trial), is not a relevant consideration for costs.
75On the other hand, the fact that Mr. Mitchell forced Ms. Mitchell to call Mr. Raymer as a witness at trial, even though he gave no evidence relevant to issues at trial, is an appropriate consideration for costs.
76Another issue addressed in the settlement was that Ms. Mitchell would be solely responsible for paying the mortgage and utilities at the matrimonial home from the date of separation to the date of the transfer to her, and the parties would be equally responsible for payment of the insurance on the home, property taxes, and mortgage insurance during that period. As a result, Mr. Mitchell agreed to pay Ms. Mitchell $9,197.43. Ms. Mitchell originally made this offer, without specifying the amount owed, by way of letter from her counsel to Mr. Mitchell’s counsel at the time on May 14, 2014. She repeated the same offer subsequently, including by way of a severable Rule 18 offer on October 22, 2015 (24 days before the trial started), as mentioned above. As noted above, Mr. Mitchell made the same offer in a non-severable offer made on November 16, 2015 (the first day of the trial). As a result of obtaining the same result as her Rule 18 offer, Ms. Mitchell is entitled to be paid costs immediately on this issue, on a full recovery basis from October 22, 2015 onward. However, very little time was spent on this issue at trial.
77Another issue addressed in the settlement was that the proceeds of the sale of the parties’ cottage that were being held in trust would be divided equally between the parties, and that the parties would be equally responsible for payment of the mortgage, property taxes, insurance, and utilities, and that the parties had already jointly shared in the rent received, from the date of separation until the sale of the cottage. As a result, Ms. Mitchell agreed to pay Mr. Mitchell $9,451.72 by way of set off against equalization. Ms. Mitchell made the same offer in relation to sharing the expenses and the rent, without stipulating the amount, by way of a severable Rule 18 offer on October 22, 2015 (24 days before the trial started). Mr. Mitchell made the same offer in a non-severable offer made on November 16, 2015 (the first day of the trial), and he made this precise offer on May 21, 2016 (between the 19^th^ and 20^th^ days of the trial). Given that Ms. Mitchell made a severable Rule 18 offer upon these terms, she is immediately entitled to costs on this issue, on a full recovery basis from October 22, 2015 onward. However, a limited amount of time was spent on this issue at trial.
78Another issue addressed in the settlement was that Ms. Mitchell would assume responsibility for a Mazda car loan, Mr. Mitchell would reimburse Ms. Mitchell $8,200 for half the payments owed on the loan as at the date of separation, and Ms. Mitchell would pay off the loan by July 31, 2016. The court was not directed to any offers to settle or evidence called on this specific issue. Accordingly, there will be no order for costs for this issue.
79Another issue addressed in the settlement was that Ms. Mitchell would be responsible for repaying a $20,000 withdrawal she made from a joint line of credit after separation and that she would pay off any amount owing, including interest, upon receipt of an agreed equalization payment from Mr. Mitchell. It was also agreed that neither party would draw on the line of credit in the interim. It was also agreed that the parties would close their joint bank accounts. By way of letter from her counsel to Mr. Mitchell’s counsel at the time, on September 17, 2014, Ms. Mitchell undertook to make this repayment with the additional provision that the $20,000 would be set off against either equalization or support owed. Ms. Mitchell also sought the closure of the joint accounts at that time. Mr. Mitchell made the same offer on a non-severable basis on November 16, 2015 (the first day of the trial). Ms. Mitchell is entitled to costs on this issue given her early undertaking to repay the withdrawal. There were some references to the withdrawal during the trial, mainly in the context of support owing, but a limited amount of time was spent on this issue.
80Another issue addressed in the settlement was that Mr. Mitchell would transfer half of his Aeroplan points to Ms. Mitchell, the parties’ timeshare points would be divided equally, they would each be responsible for half of the carrying costs of the timeshare in the interim, and the loose change collection at the matrimonial home would be divided equally. Mr. Mitchell made this offer as part of non-severable offers made on November 16, 2015 (the first day of trial) and May 21, 2016 (between the 19^th^ and 20^th^ days of trial). Mr. Mitchell is entitled to some costs on these issues. However, these issues were mentioned only very briefly during the trial.
81Another issue addressed in the settlement was that Mr. Mitchell would make an equalization payment of $64,034.93 to Ms. Mitchell. Mr. Mitchell made this non-severable offer on May 21, 2016 (between the 19^th^ and 20^th^ days of trial). On November 16, 2015 (the first day of trial), he offered $50,000 as part of a non-severable offer. Mr. Mitchell is entitled to some costs on this issue. However, very little time was spent on this issue during the trial and only three days passed between the offer and the settlement.
82The final part of the settlement of May 24 related to child support from the date of separation to the end of 2015. It was agreed that Mr. Mitchell’s income for child support purposes was $243,000 in 2013, $284,820 in 2014, and $283,941 in 2015. Child support owing to Ms. Mitchell was calculated based on Section 3 of the Child Support Guidelines (CSG). The total amount owing was agreed to be $14,393.41. On November 15, 2015 (the day before the trial started), Mr. Mitchell offered to pay child support based on an income of $237,000 in 2013, $249,000 in 2014, and $201,318 in 2015. These amounts were all lower than the incomes in the settlement. Ms. Mitchell is entitled to costs in relation to this issue, because she achieved a better result. A significant amount of time was spent on this issue during the trial.
83At the end of September of 2016, while judgment was on reserve, the court reminded the parties, by way of a letter to counsel, of the parties’ mutual obligation to disclose any new 2016 income information which had not been available on the date the matter was last in court; June 3, 2016. The court sent the reminder, because parties both testified that they expected to receive significant new income information before the end of September of 2016.
84As a result of new 2016 income information received from Mr. Mitchell in October of 2016, Ms. Mitchell realized that the figures on a document created by Mr. Mitchell and filed into evidence by Mr. Mitchell during the trial (Exhibit 119), in relation to the vesting of RSUs in 2014 and 2015, which formed part of the basis for the May 24 child support settlement, were in U.S. dollars rather than Canadian dollars. As a result, the settlement and the evidence before the court were based on understated incomes for Mr. Mitchell.
85Ms. Mitchell suggested to Mr. Mitchell that the court should be informed of the correct amounts in Canadian dollars. Mr. Mitchell’s response was that Ms. Mitchell’s counsel should have cross-examined Mr. Mitchell to ascertain what currency was indicated by the “$” signs on the exhibit, the issue was settled on May 24 and was, therefore, res judicata: it was too late to correct the court’s record, because the trial was over, and Mr. Mitchell would seek costs on a substantial indemnity basis if Ms. Mitchell sought to bring this information to the attention of the court.
86Ms. Mitchell subsequently brought at motion to re-open her case to provide the court with the currency information. As indicated earlier, the court did not accept Mr. Mitchell’s arguments that Ms. Mitchell should not be permitted to re-open her case. At that point, the parties reached the November 24, 2016, settlement.
87That settlement stipulated that Mr. Mitchell’s income was $288,037 in 2014 (rather than $284,820) and $305,027.53 in 2015 (rather than $283,941), and that, as a result, Mr. Mitchell owed an additional $2,232 to Ms. Mitchell for child support during those two years. The previous day, November 23, 2016, Mr. Mitchell offered to settle the issue on the basis that he would pay an additional $2,220 in child support for those two years. His offer did not include a restatement of his income for those years. The settlement was more favourable for Ms. Mitchell than Mr. Mitchell’s offer. Ms. Mitchell is entitled to costs in relation to time spent on this issue in October and November of 2016.
88On November 24, 2016, the parties also agreed, orally in the courtroom, that Ms. Mitchell’s 2016 income for support purposes was $121,145.11 and that Mr. Mitchell’s 2016 income for support purposes was $270,652.39. On November 4, 2016, Mr. Mitchell made a non-severable offer, by way of letter, to advise the court that Mr. Mitchell’s income for 2016 was that precise amount. However, the offer also included an income amount for Ms. Mitchell for 2016 that was higher than the settled amount. Accordingly, the parties had mixed success on this issue that was settled orally, and no costs are appropriate.
Issues Decided by the Court
Child Support for 2016 and Forward
89The court used the 2016 income for Mr. Mitchell stipulated by the parties’ oral agreement on the last day of the trial to determine that child support for 2016 and going forward would be $2,156 per month. On November 15, 2015 (the day before the trial started), Mr. Mitchell offered to pay child support in the amount of $1,458 per month commencing January 1, 2016, based on an estimated 2016 income of $179,318 for Mr. Mitchell. As noted earlier, Mr. Mitchell’s income was a significant issue during the trial. Ms. Mitchell is entitled to costs in relation to this issue.
Special or Extraordinary Expenses – Section 7 CSG
90Ms. Mitchell sought $9,965 for section 7 CSG expenses to the end of 2015. Mr. Mitchell argued that he should pay $6,352. The court found that Mr. Mitchell should pay $7,488. The court also found that Mr. Mitchell should pay 64 percent of the after tax cost of R’s daycare and 64 percent of the cost of R’s hockey and other special or extraordinary expenses commencing January 1, 2016. On November 15, 2015 (the day before the trial started), Mr. Mitchell offered to pay $6,352 for these expenses to the end of 2015 and 61.4 percent of daycare and any other expense to which Mr. Mitchell consented to in advance.
91The amount ordered for 2013 to 2015 was $2,477 closer to Mr. Mitchell’s offer and his position at trial. The percentage ordered to be paid by Mr. Mitchell for 2016 and going forward was higher than his offer and his position at trial and was not constrained by requiring his consent to various expenses including hockey-related activities, certain other extracurricular activities, counselling, uninsured health and dental expenses, and the process for setting summer parenting schedules.
92The parties achieved mixed success on this issue.
Motion Costs
93Ms. Mitchell sought $9,570.76. Mr. Mitchell argued that he should pay nothing. The court ordered Mr. Mitchell to pay $4,000. The amount ordered was $1,570.76 closer to Mr. Mitchell’s position than Ms. Mitchell’s position.
94Mr. Mitchell achieved more success on this issue.
Spousal Support
95Ms. Mitchell argued that she had compensatory and non-compensatory entitlements to spousal support. Mr. Mitchell submitted that she had neither. The court found that she had both. Although Mr. Mitchell made some offers for spousal support, as discussed below, none of the offers explicitly conceded entitlement. Accordingly, Ms. Mitchell was successful on this issue.
96Ms. Mitchell submitted that spousal support should be at the mid to high-range of the Spousal Support Advisory Guidelines (SSAG). Mr. Mitchell argued that support should be at the low end of the SSAG.
97The court ordered $3,700 per month for 2013, which was very close to the mid-range; $4,500 per month for 2014, which was also very close to the mid-range; $4,700 per month for 2015, which was between the low and mid-ranges (but closer to the mid-range); and $1,900 per month commencing in January of 2016, which was about mid-way between the low and mid-ranges.
98On November 15, 2015 (the day before the trial), Mr. Mitchell made two alternative non-severable offers in relation to spousal support.
99The first option was that he would pay support in the amount of $3,160 per month for 2013; $3,454 per month for 2014; $2,080 per month for 2015; and $1,446 per month commencing in January of 2016, with termination by 2023 at the latest. He characterized all of those amounts as being in the mid-range of the SSAG based on his position, at that time, about his income.
100The second option was that he would pay the same amounts for 2013 to 2015 and a lump sum of $87,000 for spousal support from January of 2016 onward.
101On May 21, 2016 (between the 19^th^ and 20^th^ days of the trial), Mr. Mitchell offered to pay lump sum spousal support in the amount of $200,000 for 2013 and onward.
102Overall, Ms. Mitchell achieved success in relation to spousal support. The amounts ordered exceeded the amounts offered by Mr. Mitchell. None of the amounts ordered were in the low-range of the SSAG as sought by Mr. Mitchell. And although the amounts ordered were at the mid-range or lower than the mid-range, the amounts exceeded Mr. Mitchell’s offers, because his income was higher than stipulated in his offers.
103The court ordered a step down termination beginning in 2026 and ending in 2029. As noted above, a termination date of 2023 at the latest was offered by Mr. Mitchell in one of his non-severable offers. Neither party made submissions about duration. As a result, neither party achieved success with respect to duration.
Extracurricular Activities and Counselling for R
104As discussed earlier, the parties advised the court at the start of the trial that they had agreed to joint custody except in relation to extracurricular activities and counselling for R. Ms. Mitchell sought an order that R would receive counselling after the trial. Mr. Mitchell opposed counselling for R. Mr. Mitchell sought to register R in a different hockey league – closer to his home. Ms. Mitchell opposed a change in hockey league. The court ordered that Ms. Mitchell will have final decision-making authority about whether R has counselling and where R plays hockey. Ms. Mitchell was successful on this issue.
Custody
105As discussed earlier, in January of 2016, after having read the OCL report (Exhibit 6) and having heard testimony from Ms. Mitchell (chief, cross, and re-examination), Ms. Ambrozic (chief, cross, and re-examination), Mr. Mitchell (chief and partial cross-examination), the court advised the parties of a concern that joint custody might not be in R’s best interests and that custody might be a live issue at the trial.
106In response, Ms. Mitchell continued to seek joint custody but changed her position about extracurricular activities and counselling from the court should decide those issues to that she should have final decision-making authority on those issues, and Mr. Mitchell changed his position to seeking sole custody.
107Mr. Mitchell argues that costs for this issue are not appropriate, because the court “forced” the issue of custody to trial after the parties agreed to joint custody. The court, however, did not “force” anything. The court merely informed the parties of a concern that joint custody might not be in R’s best interests and that custody might be a live issue. The parties were at liberty to respond to the court’s concern as they deemed appropriate. For example, they could have chosen to jointly submit that joint custody was in R’s best interests and that the court’s concern was misplaced. In fact, Ms. Mitchell continued to seek joint custody, except with respect to extracurricular activities and counselling which had never been part of the parties’ joint custody agreement. Mr. Mitchell, on the other hand, decided to completely abandon the parties’ agreement about joint custody and seek sole custody instead. He had every right to make that decision, but the court did not force him to do so. Like any other decision in litigation, he should have turned his mind to the possible costs consequences if he did not succeed.
108On October 22, 2015 (24 days before the trial started), Ms. Mitchell made a Rule 18 offer for joint custody (Part 1 of the offer). She also made a Rule18 offer in relation to some ancillary matters (Part 5 of the offer).
109On November 10, 2015 (6 days before the trial started), Mr. Mitchell made a non-severable offer for joint custody and other terms, including some of the same ancillary offers made by Ms. Mitchell.
110The court ordered that Ms. Mitchell has sole custody of R.
111Accordingly, Ms. Mitchell achieved a result that was as favourable as or more favourable than her offer.
112As a result, she is entitled to full recovery of her costs in relation to the issue of custody starting January 20, 2016, when the court advised the parties that custody might be a live issue.
Parenting Schedule
113The main issue in contention about parenting time was whether R should spend two overnights per week during the school year with Mr. Mitchell. He sought to increase his parenting time in this manner. Ms. Mitchell opposed the change. Part 2 of her Rule 18 offer made on October 22, 2015 (24 days before the trial started), included her position but also included an offer about the summer schedule that she did not achieve. The court decided not to order the change sought by Mr. Mitchell. Accordingly, Ms. Mitchell was successful on this issue.
114The issue of next importance was the summer school holiday parenting schedule. Ms. Mitchell sought to continue the school year schedule subject to R being in the care of each parent for two weeks, consecutive or non-consecutive, although she felt that consecutive weeks were not in R’s best interests. Mr. Mitchell suggested an equal division of the summer, with up to two consecutive weeks at a time with a parent. After hearing that Ms. Mitchell had secured new and less flexible employment, however, he testified that the regular school year schedule should be reversed in the summer. The court ordered that R should spend at least 55 percent of the school summer holiday with Ms. Mitchell and at least 40 percent with Mr. Mitchell and that 9 consecutive days was the longest period she should be away from either parent. Both positions put forward by Mr. Mitchell involved R being with him at least half of the summer. The court’s order was less favourable to him than his positions. The court’s order was also less favourable to Ms. Mitchell than her position, but it was much closer to her position. Overall, she achieved more success on this issue.
115The issue of next importance was the parenting schedule for various shorter school vacations.
116Ms. Mitchell submitted that R should be with Ms. Mitchell every Christmas Eve to Christmas morning. Mr. Mitchell sought an annually alternating schedule. He made this offer on November 10, 2015 (six days before the trial started) as part of a non-severable offer that contained other terms that he did not achieve. Mr. Mitchell achieved success on this issue.
117Ms. Mitchell sought an equal division of the March school break. Mr. Mitchell sought an annually alternating schedule. Ms. Mitchell achieved success on this issue.
118Ms. Mitchell sought a division of Easter weekend, without including Easter Monday as part of the weekend. Mr. Mitchell sought an annually alternating schedule, including Easter Monday. The court ordered a third alternative, a division of Easter weekend, including Easter Monday. Neither party achieved success on this issue.
119Mr. Mitchell sought a special rule for Canada Day. Ms. Mitchell did not. Ms. Mitchell achieved success on this issue.
120Mr. Mitchell sought an extension of weekend parenting time on five long weekends: Family Day, Victoria Day, Civic Holiday, Labour Day, and Thanksgiving Day. Ms. Mitchell opposed this. The court agreed with Mr. Mitchell in relation to the three of these long weekends that fall during the school year and ordered the parties to try to schedule the summer so that R is with the same parent for the entire Civic Holiday and Labour Day weekends if possible. Accordingly, Mr. Mitchell achieved some success on this issue.
121Mr. Mitchell sought an extension of weekends to include PA days. Ms. Mitchell opposed this change. Mr. Mitchell was successful on this issue.
122The issue of next importance was Ms. Mitchell’s attendance at R’s extracurricular activities during R’s time in Mr. Mitchell’s care. Mr. Mitchell wanted Ms. Mitchell to be barred from attending certain events, to be required to sit in certain locations, and to be required to act in a certain way at other events, while he had care of R. Ms. Mitchell opposed such restrictions. The court did not make the orders sought by Mr. Mitchell. The court did, however, order that Ms. Mitchell must leave such events as soon as reasonably practicable when the event is over. Subject to that minor stipulation, Ms. Mitchell was successful on this issue.
Importance, Complexity or Difficulty of the Issues
123The issues of R’s extracurricular activities and counselling, custody, her mid-week parenting schedule, as well as her holiday schedule taken as a whole, were of great importance to the parties. The child and spousal support issues, including a determination of Mr. Mitchell’s income, were also quite important. The property issues, taken separately or even together, were significantly less important.
124The issues of extracurricular activities, counselling, custody, and mid-week parenting schedule, were complex and difficult, because they were inter-related, and because of the degree of anger and frustration the parties were experiencing. Expert evidence from the OCL social worker and the family therapist was very helpful but added to the complexity and difficulty of the case.
Reasonableness or Unreasonableness of Each Party’s Behaviour in the Case
125Generally speaking, it is surprising that a trial of issues such as these would require 28 days of court time. As a result, both parties submitted that the other party unreasonably extended the trial, due to lack of preparation or unnecessarily lengthy cross-examinations.
126Some time was lost the first day waiting for an Agreed Statement of Fact to be drafted. That should have been done before trial. Mr. Mitchell was mainly responsible for that delay.
127Both parties were examined in chief and cross-examined at length. It may be that the questioning could have been more efficient, but neither counsel prolonged the questioning to the point of unreasonableness given the history of the matter and the way the parties conducted themselves on the witness stand. Ms. Mitchell often, at times unnecessarily, demanded absolute clarity about questions she was being asked during cross-examination. Mr. Mitchell was repeatedly evasive during cross-examination and was not a credible or reliable witness. As a result, more time than usual was needed for cross-examination.
128Mr. Mitchell acted unreasonably by providing Ms. Mitchell and the court with a self-created document explaining the vesting of his RSUs (Exhibit 119) without disclosing that the amounts were in U.S. dollars. The court finds that Mr. Mitchell must have known that the figures were in U.S. dollars, and that he intentionally did not disclose that to Ms. Mitchell or the court. He signed the Minutes of Settlement of May 24which contain calculations of his income prepared by Ms. Mitchell on the basis that the RSUs were in Canadian dollars. He signed the Minutes knowing that she had been misled and that the Minutes would be presented to the court for an order to be issued based on misleading information. Not only was this unreasonable behaviour on his part, it was an intentional act of concealment and deception done in bad faith. The misleading information he provided affected the calculation of child support and would have affected the calculation of spousal support if the issue had not been brought to the court’s attention by Ms. Mitchell seeking to re-open her case. Mr. Mitchell’s motive for misleading Ms. Mitchell and the court was financial; he hoped to improperly reduce the appropriate amount of child and spousal support payable, thus causing R and Ms. Mitchell financial harm.
129While the annual difference in child support was not great, the aggregate difference to child support over time was not insignificant. The annual difference to spousal support would have been significant, and the aggregate difference to spousal support over time would have been quite significant.
130Remarkably, Mr. Mitchell’s submissions in relation to bad faith include, “The Respondent provided all [the disclosure] that was required, such that the parties settled….the parties’ incomes….on a final basis” (paragraph 5 of the Respondent’s costs submissions at Volume 7, Tab 1 of the Continuing Record).
131More remarkably, Mr. Mitchell also submitted that the November 24, 2016 appearance, where he argued that Ms. Mitchell should not be allowed to re-open her case to establish that his RSU income in 2014 and 2015 reported on Exhibit 119 was in U.S. dollars, was “unnecessary and demonstrative of unreasonableness in the manner that the litigation was conducted and a factor in favour of there being no costs ordered by either party, or costs in favour of the Respondent” (paragraph 37 of the Respondent’s costs submissions at Volume 7, Tab 1 of the Continuing Record) [emphasis added].
132Evidently, Mr. Mitchell is completely unrepentant about his bad faith conduct.
Ms. Williams’ Rates
133The court has reviewed the Statement of Experience of counsel, the articling student, law clerks, and legal assistants, as set out in Ms. Williams’ Bill of Costs at Volume 6, Tab 1 of the Continuing Record. The hourly rates are reasonable.
Time Properly Spent on the Case
134The court has carefully reviewed Ms. Williams’ lengthy Bill of Costs in detail. The court finds that Ms. Williams’ reduction of her fees by $114,322 to $412,645 inclusive of tax was fair and eliminated any concern the court otherwise would have had with the time spent on the case by herself and other members of her firm.
135Mr. Mitchell submitted a Bill of Costs from Ms. Miller to support a submission that Ms. Williams and her firm spent a disproportionate amount of time on the case. The court observed, however, that Ms. Miller had different persons assisting her with note-taking throughout the trial, yet the full extent of that assistance does not appear to be reflected in her Bill of Costs. Furthermore, a comparison of the amount billed is misleading, because Ms. Williams’ hourly rate was higher than Ms. Miller’s hourly rate.
136The court is satisfied that Ms. Williams’ reduced fees were not disproportionate to the importance and complexity of the trial.
Expenses Paid or Payable
137The court has carefully reviewed Ms. Williams’ expenses and finds, given the nature of the proceeding, that the disbursements paid in the amount of $44,359 were reasonable. Mr. Kwiatkowski’s expert witness fees were high, but his testimony was necessary given the dispute about Mr. Mitchell’s income. The eventual settlement of that issue was undoubtedly facilitated by Mr. Kwiatkowski’s evidence. Mr. Mitchell suggested that it was unreasonable for Ms. Mitchell to order a transcript of the first half of the trial, particularly since Ms. Williams had a junior counsel with her to make detailed notes. The court is unable to find that ordering the transcript was unreasonable given the detailed nature of the testimony and the significant hiatus in the trial. In any event, even if the court had found that the expenses in relation to Mr. Kwiatkowski and the transcripts were excessive, Ms. Williams’ substantial reduction of her fees would eliminate that concern.
Any Other Relevant Matter
138Mr. Mitchell submits that any order for costs will “limit the payor’s ability to provide for their child, increase the animosity and tension, and prevent this family from healing” (paragraph 5 of the Respondent’s cost submissions at Volume 7, Tab 1 of the Continuing Record).
139He does not mention that Ms. Mitchell’s ability to provide for R is currently restricted by the large debt she has as a result of the fees and disbursements she has paid her counsel. Furthermore, given the high degree of animosity Mr. Mitchell exhibited toward Ms. Mitchell during his testimony, as discussed in the judgment, his professed concern about animosity and tension in the context of costs is disingenuous. Similarly, his reference to “this family”, supposedly comprised of himself, Ms. Mitchell, and R, being in need of healing is misleading. Mr. Mitchell is fully aware that he and Ms. Mitchell are no longer members of the same family. R has two families.
140Remarkably, later in his costs submissions, Mr. Mitchell adds, “If costs are ordered, animosity and resentment will continue for these parties, which may be played out in front of the child” (paragraph 63 of the Respondent’s cost submissions at Volume 7, Tab 1 of the Continuing Record). This is a disturbing statement. Obviously, it would not be Ms. Mitchell who would exhibit animosity and resentment if costs are ordered. Mr. Mitchell is essentially threatening the court that he will continue to exhibit animosity and resentment toward Ms. Mitchell if he is ordered to pay costs, and only by not ordering him to pay costs can the court avoid the possibility of him harming R by acting in this manner in her presence.
141Mr. Mitchell also argues that he cannot afford to pay costs. He says that he has $80,000 in debts and he needs his unvested RSUs to pay support. Mr. Mitchell earns about $300,000 per annum. He also had about $250,000 in unexercised options at the start of the trial. The court considered his ability to pay support in the judgment. Undoubtedly, he will have to use capital to pay a costs award; he must have known that when the trial started. As noted in the judgment, Ms. Mitchell’s net worth decreased by about $75,000 from the date of separation to the start of the trial. Her net worth was about $250,000 at the start of the trial. That was amount was likely significantly depleted by the end of the trial. Mr. Mitchell’s net worth, on the other hand, increased by about $165,000 between the date of separation and the start of the trial to about $650,000. The court does not accept his submission that he will be unable to pay a substantial costs award.
Summary
142Ms. Mitchell achieved considerable success at trial.
143She had complete success in relation to the two most important issues during the trial: custody (including decision-making authority for extra-curricular activities and counselling) and the mid-week parenting schedule. A significant amount of trial time was spent on these issues. Furthermore, Ms. Mitchell is entitled to full recovery on the custody issue from January 20, 2016 onward.
144She achieved more success than Mr. Mitchell in relation to her right to attend extra-curricular activities during R’s time with Mr. Mitchell, and the summer parenting schedule. She was also successful in relation to March break and the minor issue of Canada Day.
145She also succeeded fully in relation to the significant issues of entitlement to spousal support and quantum. She also achieved success in relation to the quantum of child support. A significant amount of trial time was spent on the issue of Mr. Mitchell’s income.
146Further, she succeeded fully in relation to financial issues respecting the matrimonial home and the cottage, and, as a result, she is entitled to full recovery on these two issues from October 15, 2015 onward, although the issues required very little trial time and settled during the trial.
147Finally, Ms. Mitchell is entitled to costs for being forced to call Mr. Raymer as a witness.
148Mr. Mitchell had limited success at trial.
149He succeeded in relation to the parenting schedule for Christmas Eve, some long weekends, and PA days.
150He also achieved more success with respect to costs for the motion that settled.
151In addition, he had success with respect to the equalization payment, timeshare costs, some loose change, and Aeroplan points, although these issues required very little trial time and settled during the trial.
152On the other hand, Mr. Mitchell acted unreasonably and in bad faith by concealing his full income in an effort to reduce his obligation for child and spousal support.
153As set out above, the court is satisfied that Ms. William’s reduced account was reasonable.
Decision
154Having considered Rules 18 and 24, the Court of Appeal’s direction in Serra, and all of the circumstances, Mr. Mitchell is ordered to immediately pay Ms. Mitchell costs in the amount of $400,000 inclusive of disbursements and tax.
155The court attributes $200,000 of the costs ordered to support issues. Accordingly, a support deduction order shall issue for $200,000.
156Ms. Mitchell may have an order issued upon these terms immediately without approval as to form or content.
F. GRAHAM J.
Date: August 11, 2017
August 11, 2017 – Corrections:
Paragraph 66 corrected to now read “[emphasis added]”
Paragraph 67 corrected to now read “words all…”
Paragraph 91 corrected to now read “$2,477 closer to…”
Paragraph 92 corrected to now read “The parties achieved mixed success…”
Paragraph 111 corrected to now read “favourable as…”
Paragraph 112 corrected to now read “live issue.”
Paragraph 113 corrected to now read “her position…”
Paragraph 117 corrected to now read “schedule. Ms. Mitchell…”
Paragraph 120 corrected to now read “three of these…”
Paragraph 132 corrected to now read “about his…”
Paragraph 139 corrected to now read “context of costs…”
Paragraph 144 corrected to now read “Mr. Mitchell, and the summer parenting schedule.
She was also successful in relation to March break and the minor…”
Paragraph 145 corrected to now read “child support. A significant…”
Paragraph 149 corrected to now read “Eve, some long…”
Paragraph 151 corrected to now read “costs, some loose change, and Aeroplan…”
Paragraph 154 corrected to now read “Serra”