ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FC-11-2879

DATE: 20180619

BETWEEN:

ROBBYN MCKAY

Applicant

– and –

PATRICK MCKAY

Respondent

Katherine A. Cooligan, for the Applicant

Self-represented

HEARD: May 28, 2018

AMENDED REASONS FOR decision

The text of the original Reasons for Decision was corrected on June 19, 2018 and the description of the corrections is appended.

audet j.

[1] This trial proceeded before me on an uncontested basis. At the outset of the trial hearing and for oral reasons given, the respondent father’s Answer was struck and he was not permitted to participate in the trial although he was permitted to continue to listen in if he wanted. The father was not physically present, but he had called in from the Bahamas.

[2] The parties resolved the issues related to parenting by way of a Final Order made on consent of the parties by Justice Trousdale on May 11, 2018, during the trial management conference. In addition, the mother, at the outset of trial, withdrew her claim for spousal support. Therefore, the trial proceeded only on the following financial issues:

• Ongoing child support including contributions to special and extraordinary expenses;

• Property issues, which included:

• equalization of the parties net family property;

• post-separation adjustments;

• disposition of jointly owned property;

• pre-judgment interest;

• method of payment of amounts owing, if any.

Background and History of Proceeding

[3] The parties were together for 16 years and were married for almost 8 years. They began cohabiting in 1995 and married on September 26, 2003. Their marriage ended on July 6, 2011, when the father was removed from the matrimonial home by the police after assaulting the mother.

[4] The parties are the parents of Morgan (14) and Carson (12), who have been in their mother’s sole care since the date of separation. Morgan is a healthy teenager who is doing well in school and is participating in many extracurricular activities including competitive basketball and recreational horseback riding. Carson is a special needs’ child. He was diagnosed with a global developmental disability and apraxia of speech. He is nonverbal, with significant adaptive and cognitive delays as well as aggressive behaviours which make integration in the classroom and in social settings very difficult. He requires significant attention and one-on-one assistance as well as a stable routine with a solid home base. He also requires specialized treatments and therapies.

[5] Due to his current age, Carson no longer qualifies for daycare and a special needs worker will have to be hired during summer and other school holidays as subsidized day camps will no longer support Carson’s needs.

[6] The mother’s application was issued on November 30, 2011, almost 7 years ago. The history of this proceeding, as will be further detailed in the cost portion of this decision, reveals protracted litigation which was made complicated and overly expensive by the father’s lack of cooperation and failure to abide by several orders made against him, including disclosure orders. The father was legally represented by counsel throughout the proceedings (with the exception of a five month period), until his second and last lawyer obtained an order removing herself as counsel of record in October 2017. On or about April 2013, the father had left everything behind to move to the Bahamas, with no explanation or notice to the mother. He has been living and working there since.

[7] On February 1, 2012, the parties consented to a temporary order by way of which the father agreed to pay child support in the amount of $1465 per month as well as $901 per month for his proportionate share of the children’s s. 7 expenses. The order was made by Master McLeod (as he then was), without prejudice to the mother’s claim for retroactive support or to the eventual adjustment of the respondent’s income. The father did not pay any support to the mother pursuant to that consent order and quickly fell into arrears. Enforcement proceedings by the Family Responsibility Office (FRO) ensued, and the father’s passport was suspended for the first time in the summer of 2014. The father made lump sum payments in August 2014 to bring his arrears down, and his passport was reinstated.

[8] In March 2017, FRO suspended the father’s passport for the second time because of accumulated child support arrears. Although duly represented by legal counsel, the father never brought a motion to change his child support obligations pursuant to Master McLeod’s 2012 Order. Since he could not travel back to Canada without a passport, the father participated in all subsequent court appearances by telephone conference, including the trial management conference which took place in May 2018. His request to adjourn the trial on the basis that he could not be physically present was denied. The mother was permitted to file her evidence in chief by way of affidavits, which she did.

[9] It is important at this point to note that, as a result of the father’s chronic disobedience of disclosure orders made against him, this Court did not have the benefit of a complete evidentiary record upon which to base its support and property findings. As a result, when necessary, an adverse inference in favour of the mother was drawn from the father’s failure to disclose.

Child Support

[10] The mother is not seeking a retroactive adjustment of the father’s child support obligations. She is content to accept Master MacLeod’s Temporary Order of February 1, 2012, as a final order for the purpose of child support payable from that date to and including May 2018.

[11] As for ongoing child support, the mother is seeking an order imputing to the father income in the amount of $106,579 per annum, being the average of his reported incomes in Canada for the years 2011 and 2012 pursuant to section 18 (1) of the Federal Child support Guidelines, S.O.R./97-175 as amended (“Guidelines”). In Zigiris v. Foustanellas 2016 ONSC 7528, 92 R.F.L. (7th) 197, Justice Shelston summarized the applicable legal principles as follows:

30 In this case, the relevant part of Section 19 of the Federal Child Support Guidelines, is as follows:

19. Imputing income. — (1) The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include,

a. the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;

31 The Court of Appeal in Drygala v. Pauli (2002), 2002 41868 (ON CA), 61 O.R. (3d) 711 (Ont. C.A.), at para. 23, set out a three-part test for determining whether income should be imputed on the basis of intentional under-employment or unemployment as follows:

1. Is the spouse intentionally under-employed or unemployed?

2. If so, is the intentional under-employment or unemployment required by virtue of his reasonable educational needs?

3. If the answer to question #2 is negative, what income is appropriately imputed in the circumstances?

32 A spouse is intentionally under-employed if he or she chooses to earn less than he or she is capable of earning having regard to all of the circumstances (Drygala, at para. 28). There is no requirement that the under-employment or unemployment be undertaken in bad faith or with the intention of avoiding support payments (Drygala, at paras. 29-36).

33 The onus is on the party seeking to impute income to establish an evidentiary basis that the other party is intentionally under-employed or unemployed (Homsi v. Zaya (2009), 2009 ONCA 322, 65 R.F.L. (6th) 17 (Ont. C.A.), at para. 28).

[12] Prior to moving to the Bahamas in April 2013, the father was the sole shareholder of City View Flooring. He earned in excess of $100,000 of income per annum as the sole owner of that company. The evidence filed by the mother at trial reveals that he earned $109,000 in 2011 and $104,158 in 2012. The father also ran personal expenses through his business, but due to the father’s lack of disclosure, his true income for child support purposes could never be definitely assessed, including by the expert retained by the mother for that purpose.

[13] Before moving to the Bahamas in April 2013, the father sold City View Flooring, and personally received all of the proceeds from its sale. He found employment in the Bahamas working for fuel industries, and claims that his total annual income is 48,000 Bahamian (or $65,000 Canadian), on a tax-free basis. Although required by various court orders to explain the reason behind his move to the Bahamas, the father never provided an explanation.

[14] As no evidence was provided to justify such a career change, I find that the father is intentionally under-employed and that such under-employment is not required by the needs of any child or by the reasonable educational or health needs of the parent or spouse. I find that the mother’s request that he be imputed an income of $106,579 per annum, being the average of his reported incomes in Canada in 2011 and 2012, is reasonable and fully supported by the evidence (or lack thereof) before me.

[15] Based on that income, the father shall pay child support in the amount of $1,552 per month for the two children of the marriage, beginning on June 1, 2018, and every month thereafter until varied.

[16] In her evidence, the mother has provided comprehensive and detailed evidence confirming all of the s. 7 expenses incurred by her for the children since the date of the parties’ separation. They include the following:

For Carson: special-needs worker to support him in an afterschool program and in the summer (while the mother is at work), summer and other camps, therapeutic treatments, prescribed drugs, therapeutic riding lessons, dental expenses and swimming lessons.

For Morgan: prescribed drugs and other health expenses, dental expenses, orthodontic treatments, summer camps and various extracurricular activities including ski lessons, soccer, competitive basketball, and horseback riding lessons.

[17] The most significant expense relates to caregiving services for Carson. From 2011 to present, they have ranged between a low of approximately $6,000 per year to a high of over $27,000 per year. As subsidized day camps will no longer support Carson’s needs, caregiving costs (particularly for the summer months) will significantly increase in the future. The mother provided a detailed summary of expenses she incurred on account of s. 7 expenses for the years 2011 to present, and what the parties’ respective contributions should have been based on their respective income (actual for the years 2011 and 2012 and imputed for the years 2013 forward for the father). I find that the expenses claimed are reasonable given the income of the parties and Carson’s significant special needs, and I accept that evidence which is based on extensive documentary evidence. It can be summarized as follows:

• from February 1, 2012 to and including December 1, 2012, the father should have paid a monthly contribution of $1,038 towards the net cost of special and extraordinary expenses (instead of $901);

• from January 1, 2013 to and including December 1, 2013, the father should have paid a monthly contribution of $717 per month towards the net cost of special and extraordinary expenses (instead of $901);

• from January 1, 2014 to and including December 1, 2014, the father should have paid a monthly contribution of $505 towards the net cost of special and extraordinary expenses (instead of $901);

• from January 1, 2015 to and including December 1, 2015, the father should have paid a monthly contribution of $344 towards the net cost of special and extraordinary expenses (instead of $901);

• from January 1, 2016 to and including December 1, 2016, the father should have paid a monthly contribution of $352 towards the net cost of special and extraordinary expenses (instead of $901);

• from January 1, 2017 to and including December 1, 2017, the father should have paid a monthly contribution of $443 towards the net cost of special and extraordinary expenses (instead of $901).

[18] As a result, the father should be given a credit in the amount of $24,221 towards arrears that accrued under the February 1, 2012 Temporary Order. However, the father did not pay any child support from the date of separation (July 6, 2011) to the date of the Temporary Order (February 1, 2012), nor any contributions towards the children’s special and extraordinary expenses. Based on his income at the time and the evidence before me, I find that he would owe the mother roughly the same amount ($19,750.52). The father did not participate in this trial and therefore, advances no claim for retroactive adjustments. The mother is not seeking any retroactive adjustments. On the basis of the evidence before me, I am satisfied that the Temporary Support Order of Master McLeod dated February 1, 2012 was adequate and I accept it on a final basis for the period of July 6, 2011 to and including May 1, 2018 as it relates to the father’s contributions to the children’s s. 7 expenses.

[19] With regards to the father’s ongoing contribution towards the children’s special and extraordinary expenses, the mother asks that it remains at $901 per month. She argues that it represents a fair contribution based on past expenses (which I averaged at $566 per month over the past six years), and in light of the fact that Carson’s care costs will significantly increase beginning this year (as explained above). The mother indicated that Carson is too old for daycare and the community center where he attended in the past. She anticipates that she will have to incur additional care costs in the amount of $425 per month (September to June), which will increase as of September 2018 due to the increase in the minimum wages in Ontario. A special needs worker will also be required for the entire summer as subsidized day camps will no longer support Carson’s needs.

[20] The mother is currently employed with Innovation, Science and Economic Development and earns an annual base income of $116,000. Since February 2017, she has been in an acting position and earns an annual income of $119,125. Based on the mother’s current income of $119,125 and the father’s imputed income of $106,579, the father’s proportionate share of the children’s special expenses would be 47%.

[21] Based on all of the above, I find that it is reasonable for the father’s contribution to remain at the rate of $901 per month, beginning on June 1, 2018 and every month thereafter until varied. This is without prejudice to the father’s right to ask for a retroactive reduction should the evidence show in the future that the children’s yearly s. 7 expenses were less than $23,000 (net).

[22] The father’s child support obligation shall be secured by a policy of life insurance having a face value of not less than $200,000.

Property

Equalization of Net Family Property

[23] While the father’s failure to provide full and frank financial disclosure resulted in an inability on the part of the mother to establish the fair market value of some assets, significant evidence was led by her which allows the court to make an order for the equalization of the parties’ net family property. In addition, by order of Justice Kershman dated September 19, 2017, all debts and assets allegedly owned/owed by the father at the date of marriage have been struck to zero as a result of his failure to provide back-up documentary evidence of same. The father’s claims that certain dates of separation assets were gifted to him were also disallowed by Justice Kershman.

[24] I find that the values of the debts and assets listed in the Net Family Property Statement attached to this decision as Schedule “A” have been satisfactorily proven by the mother. The resulting equalization payment owing by the father to the mother is $216,625.69.

[25] It is to be noted that one of the mother’s assets, which is found in the attached Net Family Property Statement as a date of valuation asset of the mother, is a loan in the amount of $50,000 that she extended to City View Flooring (the father’s company) on May 23, 2011. This loan was made only a few months prior to the parties’ separation to assist the father with ongoing expenses while he was defending himself against a wrongful dismissal/sexual discrimination claim made by a former employee. When the company was sold, the father received all of the net proceeds from its sale and the mother’s loan was not repaid to her. Since this loan is included as an asset owned by the mother at the valuation date, and as the father received all of the net proceeds from the sale of the company without repaying that loan, I find that he must reimburse the mother the sum of $50,000.

[26] The mother was and continues to be the sole owner of the matrimonial home located at 4120B Riverside Drive, Ottawa, Ontario, and she shall continue to hold title to this property free from any claim and interest on the part of the father.

[27] The family law value of the mother’s pension entitlement under the Public Service Superannuation Act, R.S.C., 1985, c. P-36 was included in the equalization calculation and therefore the father has no further interest or entitlement in this asset.

Post-Separation Adjustments and Disposition of Jointly Owned Property

[28] The mother retained the entire content of two joint bank accounts post-separation, a Scotiabank account containing $18,542.44 and a TD Canada Trust account containing $707.58. The amount of $9,625.01 (50% of the above) shall be credited against the equalization payment owing by the father to the mother.

[29] The parties own three joint rental properties which were purchased by them using the matrimonial home as equity; 27 Charles Street and 28 Charles Street, in Vanastra, Ontario as well as 30 #4 Park Street, St. John, New Brunswick. The rental properties are in a rental pool of owners and are managed by a property management company. They have been operating at a loss for some time.

[30] After the parties’ separation, the mother was solely responsible for paying the carrying costs of all three properties, as the father refused to assist with the payment of these joint expenses. In March 2014, the father agreed to take on the carrying costs of one of the three properties. In February 2014, the mother found a purchaser for one of the properties, but the father refused to sell.

[31] On June 24, 2015, Justice Robertson ordered that all three rental properties be sold immediately, and that the proceeds be divided equally, but only after a proper accounting of expenses was completed at trial. Despite this comprehensive Order, the father failed to comply and cooperate with the sale. This resulted in mortgage and tax payments running into arrears.

[32] During the trial, the mother led detailed evidence confirming all payments made by her during the years following the parties’ separation towards each of these three rental properties. The father’s share of expenses incurred by her and established during trial is $39,103.66. Although ordered to provide evidence confirming the expenses assumed by the father over the years for the same purpose, the father failed to do so. This Court is therefore unable to determine the amount that might be owing by him to the mother with regards to joint rental expenses.

[33] An order will therefore issue confirming that the father owes the mother $39,103.66 on account of joint carrying costs assumed by her with respect to the parties’ three rental properties from the date of separation to present. Given the father’s lack of cooperation in the sale of the rental properties in the past, including in breach of Justice Robertson’s 2015 Order, a final order will issue incorporating the provisions of Justice Robertson’s Temporary June 24, 2015 Order related to the sale of all three rental properties. An order shall also issue giving the mother sole authority and control over the sales and dispensing with the father’s consent to the sale of each of these properties. Once sold, the father’s share of the net proceeds, or of the shortfall, as the case may be, will be dealt with as detailed in my final order below.

[34] The parties also jointly own a timeshare located at Diamond Resorts International Timeshare, which the mother asked be transferred to the father’s sole name, at his cost. This request is granted.

[35] The parties’ joint account with the TD Canada Trust account no. (XXX852) shall be closed immediately and the balance of the account, in the approximate amount of $1,250, will be retained by the mother.

Pre-Judgement Interests

[36] The mother seeks pre-judgement interests on the equalization payment owing to her (as adjusted by my Order), from the date of the parties’ separation, and on the father’s share of the carrying costs assumed by her with regards to the three rental properties, from April 2014. The applicable pre-judgment interest rate is 1.3%.

[37] Section 128 of the Court of Justice Act, R.S.O. 1990, c. C.43 (“CJA”) provides that a party to whom an amount of money is payable under an order of the court may claim an award of interest thereon at the pre-judgement interest rate calculated from the date the cause of action arose to the date of the order. Section 130 of the Act confirms that the court’s authority to do so is discretionary, and sets out a number of factors that the court may take into account in exercising its discretion.

[38] In this particular case, I find that the father’s uncooperativeness and numerous breaches of his obligation to provide full and fair financial disclosure resulted in a seven year protracted and costly litigation. No advance payments were ever made by him, and the mother was left to assume much of the carrying costs related to the parties’ three rental properties on her own, without timely compensation by the father.

[39] I find that the mother is entitled to pre-judgement interest on the equalization payment owing to her ($207,000.68, as adjusted) from the date of the parties’ separation, being July 6, 2011, to May 29, 2018 (2,621 days) at the rate of 1.3%, resulting in prejudgment interests in the amount of $19,323.65.

[40] For the same reasons, the mother is entitled to pre-judgment interest on the father’s share of carrying costs assumed by her with regards to the parties’ rental properties. These costs were assumed by her during the years leading up to April 2014, and for that reason it is appropriate that pre-judgment interest starts running only as of April 1, 2014. The mother is entitled to pre-judgement interest on the amount of $39,103.66 from April 1, 2014 to May 29, 2018 (1,622 days) at the rate of 1.3%, resulting in prejudgment interest in the amount of $2,259.01.

Method of Payment

[41] Section 9(d) of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”) provides that the court may order that property be transferred to or vested in a spouse absolutely if the court is of the view that it would be appropriate to satisfy an obligation imposed by an order made under s. 7 of the Act (equalization). Section 34 of the FLA confers upon the court a similar power in order to satisfy a support order.

[42] The following payments are now owed to the mother by the father pursuant to this Order:

• $207,000.68 representing the equalization payment, as adjusted;

• $19,323.65 in pre-judgment interest in the above;

• $39,103.66 representing the father’s share of carrying costs for the rental properties;

• $2,259.01 in pre-judgment interest on the above;

• $50,000 representing the corporate loan made by the mother to City View Flooring;

which totals $317,687.00. In addition to the above, the father has an obligation to pay ongoing child support in the amount of $2,453 per month (inclusive of s. 7 expenses).

[43] There are only few assets still owned by the father in Canada and which may be used to satisfy the payments owed by him to the mother. They are:

• The three rental properties;

• The Walton Investments RRSP account XX310 and Canada Western Bank account no. XX22C;

• The father’s inheritance from his parents.

[44] I find it appropriate in the circumstances of this case to make a vesting order to insure payment by the father of monies owing to the mother.

[45] With regards to the parties’ three rental properties, I order that the father’s 50% share of the net proceeds, if any, shall be paid to the mother in partial satisfaction of the payments owed by the father pursuant to this order. Should there be a shortfall, as opposed to a net profit, for either property, each party shall be solely responsible for their one half of the remaining debt, subject to the terms of any existing debt agreements signed by the parties providing otherwise.

[46] The father’s Walton RRSP and Canada Western Bank accounts shall also be transferred to the mother in her sole name, in partial payment of the monies owing pursuant to this Order.

[47] The father’s parents passed away in 2009 (father) and 2010 (mother). The father is one of the beneficiaries of his parents’ estates, along with his other three brothers. Jeffrey McKay and Gary McKay, two of the father’s brothers, are the Estate Trustees. The father has refused to provide disclosure with regards to the status and amount of his inheritances. In January 2014, he confirmed that he had received approximately $73,000.

[48] As part of his September 19, 2017 Order, Justice Kershman ordered the father to question the Estate Trustees with regards to the status and share of his inheritances, and to provide the mother with a copy of the transcript. He failed to do so. The Estate Trustees have refused to provide disclosure, although Gary McKay has confirmed verbally to the mother that any questions could be directed to the estate lawyers. Without a court order, it is obvious that the estate lawyers will not share information.

[49] It was confirmed by the mother’s counsel, although no affidavit of service was provided to me, that the Estate Trustees had been notified of the details of the order that the mother was seeking in the context of this trial, which details are provided below. In summary, the mother is seeking disclosure directly from the Estate, as already ordered by Justice Kershman, and an order that any future monies payable to the father as part of his inheritances be paid to the mother until all payments owing under my order are fully satisfied. I am prepared to make that order, however, since I did not have proof of formal notice to the Estate Trustees, they will be permitted to bring a motion before me within 30 days of service of my Order, on notice to the mother only, if they wish to change any provisions of my order as it relates to them or the Estates.

[50] The father also owns a condominium in Fort Lauderdale, Florida, in his sole name. Although this Court does not have jurisdiction to make an order affecting title of a property located outside of Ontario, I allow the mother to provide a copy of my Order to the relevant authorities in Florida should it be necessary and/or advisable to do so for the purpose of enforcing same upon that property as well.

Costs

[51] The applicant mother is seeking costs on a full recovery basis, in the amount of $149,110.43. This includes costs in the amount of $15,000 which was awarded to the mother by Justice Kershman on September 19, 2017 for two settlement conferences and the motion before him. These costs were not paid by the father.

[52] In support of her claim for full recovery costs for the other steps in the case (totaling $134,110.43 inclusive disbursements and HST), the mother relies on Rule 18 and 24 of the Family Law Rules, O. Reg 114/99. She takes the position that the father behaved unreasonably and in bad faith throughout the proceeding, all of which resulted in significantly increased costs to her. She also presents three offers to settle which in her view entitle her to full recovery costs.

[53] The family law costs rules are designed to foster three important principles:

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. See Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40.

[54] Under rule 24 (1) of the Family Law Rules, there is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal. Rule 24(11) of the Family Law Rules outlines that the court shall take into consideration the following factors in setting an amount for costs: the importance, complexity or difficulty of the issues; the reasonableness of each party’s behaviour; the lawyer’s rates; the time properly spent on the case; and, any other relevant matter.

[55] Rule 24 (5) states that in deciding whether a party has behaved reasonably or unreasonably, the court shall examine:

a. The parties’ behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;

b. The reasonableness of any offer the party made; and

c. Any offer the party withdrew or failed to accept.

[56] Rule 18(14) dictates that a party is entitled to costs from the date of an offer on a full recovery basis if the criteria contained therein are met.

[57] 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. (Rule 24(8) of the Family Law Rules).

[58] In Erickson v. Erickson, 2001 39078 (ON SC), 2000 29675, Justice Mackinnon said the following about bad faith:

Bad faith can be established by conduct that is intended to deceive or mislead another. It can also be established by the intentional failure to fulfill an agreement in order to achieve an ulterior motive.

[59] In S. (C.) v. S. (M.), (2007), 2007 20279 (ON SC), 38 R.F.L. (6th) 315 (Ont. Sup. Ct.), Justice C. Perkins further defined “bad faith” as follows:

The essence of bad faith is the representation that one's actions are directed toward a particular goal while one's secret, actual goal is something else, something that is harmful to other persons affected or at least something they would not willingly have supported or tolerated if they had known. However, not all bad faith involves an intent to deceive. It is rare, but not unknown in family law cases, for bad faith to be overt — an action carried out with an intent to inflict harm on another party or a person affected by the case without an attempt to conceal the intent.

[60] It has taken almost 7 years to bring this application to a conclusion. In those seven years there have been two case conferences, one settlement conference which required two appearances to allow the father to provide his disclosure, a motion to strike the father’s pleadings, and five orders for disclosure. At the time of trial, the father was still in breach of three different orders geared at forcing him to provide proper financial disclosure.

[61] The evidence makes it clear that the father, through his own actions, created many delays over the past seven years. He consistently failed to comply with the Family Law Rules and forced the mother to proceed to trial without evidence which the father had in his control, and which the mother had no means to obtain without further expensive motions to the court.

[62] The father maintained his claim for joint custody of the children all the way up to the May 2018 trial management conference, despite the fact that he had left the jurisdiction four years prior.

[63] The evidence also makes it clear that the father repeatedly misrepresented facts in his pleadings and in his financial statements to the court. He denied having an ownership interest in City View Flooring and never included the value of this company in his financial statement. The mother was able to provide clear evidence of the father’s sole ownership in the company, and was put to great expense to prove this fact as well as the value of the father’s corporate interest. The father claimed significant date of marriage assets which he consistently failed to support by way of documentary evidence, only to see his claims being struck by Justice Kershman years into the litigation.

[64] I find that the father behaved unreasonably in this proceeding, and showed significant bad faith. As a result, I find that the mother is entitled to her cost on a full recovery basis for most of this proceeding.

[65] In addition to the above, the mother made three different Offers to Settle throughout the past seven years. The first one dated March 23, 2016, would have resulted in monetary payments more beneficial to the father then the outcome he achieved at trial. The global amount of child support sought by the mother in that offer ($2,000 including s. 7 expenses) was lower than what was ultimately ordered. Even if I had not found bad faith on the part of the father, I would have found that the mother was entitled to full recovery costs from the date of that offer on.

[66] The father made one informal Offer to Settle throughout this proceeding, in November 2014. This Offer to Settle represented his settlement position right up to the trial. It was an unreasonable position to maintain, in light of the evidence before me.

[67] I have thoroughly reviewed the mother’s Bill of Costs provided to me at the end of the trial. The mother was initially represented by Mrs. Drummond who was called to the bar in 1996. Her hourly rate was $250 at the time. Since April 2013, the mother is represented by Ms. Cooligan. Ms. Cooligan is certified as a specialist in family law by the Law Society of Ontario, and was called to the bar in 1991. Her hourly rate throughout the proceeding varied from $495 to $520. Several associates also worked on the mother’s case over almost 7 years of litigation. All of them had less than 10 years of experience at the respective times and charged between $195 and $260 per hour. Finally, a law clerk also worked on the file charging an hourly rate of $185. I find that the hourly rates of the various law professionals who worked on this file from April 2013 and on were in the very high end of what is charged by family lawyers in the Ottawa Region.

[68] I acknowledge that the mother’s legal team had to spend significantly more time on this file than what would have been necessary had the father cooperated and provided disclosure. I also find that the time charged for the work involved in the various steps in the case leading to the trial was reasonable. However, I find that the time spent preparing for and attending trial was somewhat excessive.

[69] The court’s role in assessing costs is not necessarily to reimburse the litigant for every dollar spent on legal fees but the award of costs must be fixed in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings (see Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.). The case law directs that a cost award must represent a fair and reasonable amount that should be paid, rather than an exact measure of the actual costs, must be consistent with what the unsuccessful party might reasonably have expected to have to pay, and must reflect some form of proportionality to the actual issues argued, rather than an unquestioned reliance on billable hours and documents created (see Mason v. Smissen, 2013 ONSC 5928 at paras. 5 and 6 and the cases referred to therein).

[70] It was clear since the trial management conference that the father would not be present for trial. However, prior to that counsel for the mother proceeded on the basis that the trial would go ahead in the normal course of things. Ultimately, the mother’s evidence was allowed to be presented by way of affidavits. A total of 217.8 hours were spent by four different professionals to prepare for the trial itself. This included 57 hours by the lead counsel on the file over a period of some five months. The total cost claimed for the trial itself exceeds $60,000. Although I acknowledge the somewhat higher level of complexity of the financial issues presented by the case, I do not believe that an unsuccessful litigant might reasonably have expected to have to pay that much for this trial which ultimately lasted one half day, although I acknowledge that preparation work was necessary before it became known that the trial would proceed on the basis of affidavits, and then on an uncontested basis. As a start, I would reduce the cost claimed for trial by $30,000. I would also adjust hourly rates slightly downwards to reflect what an unsuccessful litigant with somewhat complex financial issues to resolve would have been expected to pay for family law professionals in the City of Ottawa. I also do not grant any cost related to the parties’ failed attempt at mediation since the parties’ inability to participate as planned was not caused by either party.

[71] In light of all the above, I find that the mother is entitled to costs in the amount of $100,000 for all steps in this matter up to and including trial, inclusive of Justice Kershman’s cost award in the amount of $15,000, disbursements and HST.

[72] The mother seeks an order that these costs be enforceable by FRO. The case law makes it clear that the court has considerable discretion over how to deal with a request that legal costs be designated as support for the purposes of enforcement by FRO (see Sordi v. Sordi, 2011 ONCA 665, 13 R.F.L. (7th) 197; Wildman v. Wildman (2006), 2006 33540 (ON CA), 82 O.R. (3d) 401 (C.A.); Drygala v. Pauli (2002), 2002 41868 (ON CA), 61 O.R. (3d) 711. C.A.) such designation is often complicated by the fact that a number of other issues were litigated in addition to the issue of support. Once the portion of the trial that was consumed by the support dispute is identified, the judge may assign a cost amount to it and order that this amount be designated as support.

[73] In this particular case, I find that approximately 40% of the costs incurred by the mother in the context of this case related to the mother’s efforts to obtain child support, to establish her claim for special and extraordinary expenses and to ascertain the father’s income for support purposes. I therefore assign the amount of $40,000 of the mother’s cost award as support for the purpose of enforcement by FRO.

[74] My costs award in the amount of $100,000 shall be added to the amount of $317,687.00 (equalization, pre-judgment interests and post-separation adjustments) and be enforced against the father as set out in para. 41 to 50 above, in addition to the method of enforcement provided at para. 73.

Orders

[75] Based on the above, the following order shall issue:

1. The Respondent’s pleadings are struck.

2. Income shall be imputed to the Respondent in the amount of $106,579 per annum, being the average of his reported incomes in Canada in 2011 and 2012 pursuant to s. 18 (1) of the Federal Child Support Guidelines.

3. Commencing on June 1, 2018, and on the first day of each month thereafter, the Respondent shall pay child support to the Applicant for the children of the marriage, namely, Morgan McKay, born on February 26, 2004 and Carson McKay, born on September 30, 2005, in the amount of $1,552 per month based on the Respondent’s imputed income of $106,579 and in accordance with the Federal Child Support Guidelines.

4. Commencing on June 1, 2018, and on the first day of each month thereafter, the Respondent shall pay the amount of $901 to the Applicant for his fixed share of the children’s s. 7 expenses. The Family Responsibility Office shall enforce this provision as child support.

5. The Family Responsibility Office shall continue to enforce all accumulated arrears owing by the Respondent to the Applicant for child support and s. 7 expenses under the Order by Master MacLeod dated February 1, 2012.

6. The Respondent shall maintain a life insurance policy having a face value of not less than $200,000 naming the Applicant as the irrevocable beneficiary in trust for Morgan and Carson for so long as the Respondent is obligated to pay child support to the Applicant.

7. The Applicant’s claim for spousal support is withdrawn.

8. The Applicant shall retain sole ownership of the matrimonial home located at 4120B Riverside Dr., Ottawa ON.

9. The Respondent’s rights to the matrimonial home are terminated.

10. The terms of Justice Robertson’s Order dated June 24, 2015 are hereby incorporated into this final Divorce Order, namely, that the three jointly owned rental properties shall be listed for sale, namely:

11. 27 Charles St., Vanastra ON;

12. 28 Charles St., Vanastra ON; and,

13. 30 #4 Park St., St. John NB.

14. The Applicant shall have sole exclusive authority to effect the sales as required by paragraph 11 above on the following terms:

15. The Respondent’s signature for listing the properties, agreements of purchase and sale, and any and all closing documents to register a transfer from the joint ownership of the parties to a purchaser, retaining a real estate agent, real estate lawyer, and any contractors for repair to the properties, collecting rents, dealing with tenants under any tenancy agreements, is and shall hereby be dispensed with. The Applicant has full sole authority to sign all such documents relating to the maintenance, repair, and preparation for sale of the jointly owned properties without the Respondent’s consent or involvement in any way, except that she must provide him with an accounting of the final disposition of the sale proceeds as set out in the paragraph immediately following. A certified copy of this Divorce Order shall be sufficient authority to give effect to the terms herein;

16. The Applicant has full sole authority to disburse the sale proceeds as follows, and this shall constitute the direction to the real estate lawyer to whom the net proceeds of sale are provided to do so, namely:

i. To reimburse the Applicant for any out of pocket expenses incurred for the carriage, maintenance, repair and preparation for sale, incurred after the date of this order;

ii. To pay real estate commission and legal fees relating to the sales (and other ancillary legal issues that may arise to sell the properties);

iii. To pay any arrears of taxes, utilities, or other debts relating to the properties;

iv. To pay any registered liens or charges against the properties; and,

v. To pay the full balance to herself, 50% of which shall be deemed to be a partial payment from the Respondent to the Applicant against the equalization payment, arrears of support and/or other monetary payments owing from the Respondent to the Applicant hereunder, provided that she must provide a sworn declaration to the real estate lawyer receiving the proceeds of sale on behalf of the parties indicating the amount still outstanding under this final Divorce Order.

12. In the event that there is a shortfall on the sales or any of the properties, or there is money owed by the parties by reason of their ownership of the properties for any reason whatsoever, the Applicant’s obligation to pay those amounts shall be limited only to her one-half interest in the properties, subject to the terms of any existing debt agreements signed by the parties to the contrary.

13. To the extent that any liability may arise against the Applicant in Ontario by reason of the Respondent’s sole ownership of the condominium located at 601 N Fort Lauderdale Beach Boulevard, unit 813, Fort Lauderdale, Florida, the Respondent shall indemnify the Applicant for any such liability.

14. A certified copy of this Divorce Order may be provided to the appropriate authorities in Fort Lauderdale, Florida, to allow the Applicant to enforce the payments hereunder against the said property.

15. The jointly owned timeshare located at Diamond Resorts International Timeshare (formerly Sunterra Reports) shall be transferred into the name of the Respondent, the costs of which shall be borne by the Respondent, and the Respondent shall indemnify the Applicant with respect to any claims relating to the costs of the timeshare from the date of separation, as well as all costs associated with the timeshare from the date of transfer.

16. Paragraph 3 of the Order of Justice Kershman dated September 19, 2017 shall be incorporated and hereby varied to provide that the Estate Trustees and/or counsel for the estates of the late Theresa Ann McKay and the late John Louis McKay shall provide a full accounting of the value of the estates, all distributions that have been made and the Respondent’s remaining entitlements under the estates to the Applicant within 30 days.

17. This Divorce Order shall be served on the Estate Trustees, Jeffrey McKay and Gary McKay forthwith. The Estate Trustees may bring a motion before me within 30 days from service in the event that they wish to ask for a variation of any of the terms of this order which relates to them or the Estates.

18. Upon confirmation of the amount owing to the Respondent under the immediately preceding paragraph, the Estate Trustees are hereby ordered to pay to the Applicant the full sum of the monies owed to the Respondent on a final wind up of the estate. Before paying such amount to the Applicant, the Applicant will sign a sworn declaration confirming the amount still owing to her by the Respondent under this Divorce Order. Any payment made to the Applicant from the estates shall be partial payments towards the amounts owed by the Respondent to the Applicant hereunder.

19. The Respondent shall pay to the Applicant, forthwith, the amount of $417,687.00, which is inclusive of the following:

a. An equalization payment of $207,000.68 (as reduced for post-separation adjustments);

b. Plus $19,323.65 as pre-judgment interest on the equalization payment of $207,000.68 from July 6, 2011 (date of separation) to May 29, 2018, (based on a rate of 1.3% and 2,621 days);

c. Plus $39,103.66 for the Respondent’s share of the costs with respect to the joint rental properties

d. Plus $2,259.01 as pre-judgment interest on the expenses relating to the jointly owned rental properties from April 2014 to May 28, 2018 (based on a rate of 1.3% and 1,622 days);

e. Plus $50,000.00 as repayment of the loan by the Applicant to the Respondent for City View Flooring provided in May 2011;

f. Costs in the amount of $100,000.

20. The Respondent has no interest in or entitlement to the Applicant’s pension registered under the Public Service Superannuation Act, the value of which has been included in the calculation of the equalization payment set out herein.

21. The joint TD Canada Trust account no. 6299852 shall be closed immediately with the balance of the account, approximately $1,250.00, being transferred to the Applicant solely.

22. Any surplus balances contained in the Respondent’s RRSP held by Walton Investments bearing account no. 75310 and Canada Western Bank account no. 6000022C shall be transferred into the Applicant’s name solely by way of a spousal rollover pursuant to s. 73 of the Income Tax Act. The amount received, net of tax, shall be credited towards the equalization payment owing by the Respondent to the Applicant. Service of a certified copy of this Divorce Order on Walton Investments and on Canada Western Bank shall constitute notice and direction to them to freeze the account owned by the Respondent pending the transfer into the Applicant’s name as ordered herein, and to immediately process all paperwork necessary to complete the transfers. The Respondent’s signature on any such transfer documents shall be and is hereby dispensed with.

23. In the event that the Respondent’s Walton Investments RRSP account no. 75310 and/or Canada Western Bank account no. 6000022C cannot be transferred to the Applicant as owner, the Applicant shall be designated as the sole irrevocable beneficiary thereof.

24. With the exception of the Respondent’s Walton Investments RRSP account no. 75310 and Canada Western Bank account no. 6000022C, each party shall retain all bank accounts, investments and/or life insurance policies registered in their name solely as reflected in the Applicant’s Financial Statement sworn April 12, 2018 and the Respondent’s Financial Statement sworn June 19, 2015.

25. Each party shall retain sole exclusive ownership, free of any claim by the other, of all assets currently in their possession and disclosed in this proceeding.

26. Either party may apply for a division of the Canada Pension Plan benefits.

27. Neither party shall contract in the name of the other or bind the other in any way for any debts or obligations.

28. If debts or obligations are incurred by either of the parties on behalf of the other before or after the date of this Divorce Order, he or she shall indemnify the other from such debts or obligations and any related damages or costs.

29. In the event that any technical issues arise out of the implementation of any terms of this Divorce Order, the Applicant may request adjustment in writing to the trial judge without the need to serve a formal motion and without notice to the Respondent.

30. Out of the $100,000 of costs awarded to the Applicant, the amount of $40,000 shall be enforced by the Family Responsibility Office.

Madam Justice Julie Audet

Released: June 19, 2018

COURT FILE NO.: FC-11-2879

DATE: 20180619

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ROBBYN MCKAY

Applicant

– and –

PATRICK MCKAY

Respondent

amended REASONS FOR decision

Audet J.

Released: June 19, 2018