CHRISTMANN v. CHRISTMANN, 2019 ONSC 1793

Court File and Parties

Court File No.: 46176-12 Date: 2019-03-21 Superior Court of Justice - Ontario

Re: Steven Henry Christmann, Applicant And: Laura May Christmann, Respondent

Before: Mr. Justice D.A. Broad

Counsel: Tania Harper, Counsel for the Applicant Theodore C. Dueck, Counsel for the Respondent

Costs Endorsement

Background

[1] The parties have been unable to settle the issue of costs and have delivered their respective submissions on costs.

[2] To their credit the parties with the assistance of their counsel were able to settle a number of primarily property issues prior to trial and entered into a lengthy Agreed Statement of Facts and filed a joint Document Brief, both of which were of significant assistance to the court.

[3] Following the trial I released Reasons for Judgment which addressed a number of issues which the parties had been unable to resolve by agreement, including the following:

(a) The value of certain chattels retained by the applicant following separation; (b) Entitlement to certain chattels that had been brought into the marriage; (c) The value of the applicant’s OMERS pension; (d) Whether the respondent’s net family property should reflect certain traffic fines incurred in the United Arab Emirates (UAE) prior to separation; (e) Whether a loan claimed by the applicant’s parents’ estates should be reflected in the parties’ Net Family Property statements; (f) Should there be post-separation adjustments allowed to the respondent in respect of the proceeds of sale of the matrimonial home; (g) Should income be imputed to either party; (h) Amounts to be paid by the parties at various times post-separation for child support; (i) Spousal support payable by the respondent to the applicant and for what periods; (j) Impact of tax-free income of the respondent in the UAE; (k) Inclusion of certain employment benefits in the UAE in the respondent’s income.

[4] Following release of my Reasons for Judgment counsel for the parties consented to an Order revising the amount of the payment for equalization and post-separation adjustments and hence the amount of the one-time payment to be made by the respondent to the applicant inclusive of equalization and post-separation adjustments and arrears of child and spousal support. The revisions were necessitated by an error in the figures provided by the parties to the court as the agreed net family property amounts of the parties subject to adjustment for findings to be made by the court.

[5] In the result the Judgment provided that the respondent make a one-time payment to the applicant in the sum of $69,106.72 comprised of an underpayment of child support on an off-set basis to the end of 2018 of $15,717.15, spousal support arrears of $44,136 and equalization of $9,253.57.

[6] The Judgment also provided that the respondent pay ongoing child support for the child Noah in the sum of $905 per month and that the applicant to pay ongoing child support for the child Kayleigh in the sum of $408 per month, for an offset amount to be paid by the respondent in the sum of $497 per month.

Position of the Respondent

[7] The respondent submits that in consideration of the various offers to settle served by the parties in the course of the proceeding she was the more successful party. She argues that the applicant ought to have accepted her original Offer to Settle of August 10, 2017 made by her to reflect the joint recommendation negotiated by the parties’ counsel. She states that, had the applicant accepted counsel’s joint recommendation as she did, the entire trial process could have been avoided. Hence, she argues that she should be entitled to costs of preparing for and conducting the trial, arguably both before and following her August 10, 2017 offer.

[8] The respondent claims costs on a substantial indemnity scale in the total sum of $119,518.84, comprised of fees in the sum of $102,019.50, HST on fees of $13,262.54 and total disbursements, inclusive of HST, in the sum of $4,236.80. In the alternative, she claims costs on a partial indemnity scale in the sum of $81,091.49, comprised of fees in the sum of $68,013, HST on fees of $8,841.69 and total disbursements, inclusive of HST, in the sum of $4,236.80.

Position of the Applicant

[9] The applicant submits that, in recognition of the mixed success of the parties at trial on the various issues determined by the court, neither party should be required to pay costs for steps taken from and after January 2017 when the respondent’s financial disclosure was provided. However, he submits that the respondent should pay costs for the period prior to completion of her financial disclosure. He says that the total costs he incurred for that period was $21,779.62, inclusive of fees, disbursements and HST.

Guiding Principles

[10] Pursuant to subrule 24(1) of the Family Law Rules, the successful party is presumed to be entitled to recover costs. Subrule 24(11) requires the court, in setting the amount of costs, to consider a number of factors including the importance, complexity and difficulty of the issues, the reasonableness or unreasonableness of each party's behavior in the case, the lawyer's rates, the time properly spent on the case, expenses properly paid or payable, and any other relevant matter. These factors are to be applied flexibly (see M. (C.A.) v. M. (D.) at para. 42).

[11] Rule 18 deals with the impact of Offers to Settle which may have been served by the parties on the costs determination. Subrule 18(14) provides that, unless the court orders otherwise, a party who makes an offer at least seven days before the trial, and obtains an order as favorable as, or more favorable than the offer, is entitled to costs to the date that the offer was served and full recovery of costs from that date. Even if subrule (14) does not apply, the court may, under subrule 18(16), take into account any written offer to settle served by a party, the date the offer was made and its terms.

[12] Consideration of the relative success of the parties on the issues in the case is the starting point in determining costs (see Butty v. Butty at para. 4, citing Sims-Howarth v. Bilcliffe). In the case of Johanns v. Fulford, 2010 ONCJ 756 (Ont. C.J.) at para. 13, it was held that, for the purpose of subrule 24(1), "success" is assessed by comparing the terms of an order against the relief originally requested in the pleadings and against the terms of any offers to settle.

[13] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan at para. 24).

[14] Importantly, the case law directs that a costs 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 4229 at paras. 5 and 6 and the cases therein referred to).

Discussion

[15] It is common ground between the parties that none of the Offers to Settle served by the parties during the course of the proceeding satisfied the requirements of rule 18(14) of the Family Law Rules. However, as indicated, rule 18(16) provides that the court may take into account any written offers to settle.

[16] Based upon a consideration of the various offers exchanged in comparison to the results following trial, I find that, from and after July 24, 2017 when the parties’ counsel met to negotiate a joint recommendation for settlement, the respondent was more settlement-focused than the applicant.

[17] The essentials of the respondent’s Offer to Settle dated August 10, 2017, designed to implement the parties’ counsels’ joint recommendation, closely mirror the outcome at trial. It provided for payment by the respondent of the sum of $80,000 in respect of equalization, retroactive and future spousal support, retroactive child support up to an including August 17, 2017, on the basis that this amount was to be satisfied by way of a tax-free roll-over from the respondent’s LIRA to the applicant’s LIRA. It also provided for payment of child support by the respondent of $859 per month and by the applicant of $474 per month for an offset payment by the respondent of $385 per month. The respondent’s offer called for each party to bear their own costs.

[18] The applicant responded with an Offer to Settle served October 3, 2017 calling for payment by the respondent of the sum of $164,231, only $40,000 of which would be effected by a LIRA transfer, with the balance to be paid in cash. The applicant’s offer also called for the respondent to pay $1,384 per month in child support for Noah with no amount to be paid by him for support of Kayleigh. The applicant’s offer provided for the respondent to pay the sum of $20,000 for “costs and lost wages.”

[19] On October 9, 2017 the applicant revised his proposal to provide for payment by the respondent of $120,000 rather than $164,231.

[20] The applicant’s settlement position was almost double the amount which the respondent was ordered to pay him following trial. In this regard it is noted that, of the global sum of $69,106.72 ordered to be paid by the respondent, $5,964 reflected the net child support payable by the respondent between January, 2018 and the date of the judgment. Moreover, the applicant’s settlement position failed to recognize his obligation to pay child support for his daughter Kayleigh for periods that she resided with the respondent and remained a child of the marriage.

[21] Moreover the applicant continued to maintain through trial a claim that the parties’ respective net family property statements should reflect a joint obligation to repay a debt to his parents’ estates notwithstanding that it would have no impact of the financial obligations between them and the lack of legal support for such a claim. A disproportionate and unjustified amount of trial time was consumed by this issue.

[22] The applicant was also found to have engaged in discreditable conduct during the proceeding by making false representations to Justice Campbell to obtain an ex parte order and by attempting to claim a false pre-marriage credit for a boat which was fully encumbered.

[23] It is noted that during the period prior to Mr. Dueck being retained to represent the respondent there was significant delay in the completion of her financial disclosure. Although this can largely be ascribed to the respondent’s former counsel and not to any deliberate conduct or intransigence on the respondent’s part, responsibility for providing proper disclosure ultimately rested with the respondent during this period and the delay in completing her disclosure contributed to the delay in resolving the issues between the parties. Balanced against this factor is the applicant’s conduct in delaying the sale of the matrimonial home. Although it was found that the law did not support a post-separation adjustment in favour of the respondent for this delay, it was reflective of what I would consider the applicant’s “hardball” approach to the litigation.

Disposition

[24] Balancing all of these factors I find that respondent was the successful party and is entitled to costs. I would fix those costs on a substantial indemnity scale in the sum of $100,000 inclusive of fees, disbursements and HST (reduced from the respondent’s substantial indemnity claim of $119,518.84), less the sums of $13,000 to reflect the respondent’s delay in completing her disclosure and $1,500 being the amount fixed for costs in the July 2014 Order, for a net amount payable by the applicant to the respondent of $85,500, inclusive in respect of costs.

[25] This amount shall be offset against the amount found to be owing by the respondent to the applicant in the sum of $69,106.72, resulting in a net amount to be paid by the applicant to the respondent in the sum of $16,393.28. This amount is to be paid by the applicant within 30 days hereof.

[26] I decline the respondent’s request that the applicant’s obligation to pay costs be enforceable as child support. Only a relatively small amount of the costs incurred by the respondent could be considered attributable to the issue relating to the applicant’s child support obligation.

D.A. Broad Released: March 21, 2019