Court File and Parties
Court File No.: FS-17-417800 Date: 2019-06-06 Superior Court of Justice - Ontario
Re: Katherine Elaine Laurent And: Paul Robert Laurent
Before: J.T. Akbarali J.
Counsel: Oren Weinberg and Sara Mintz for the Applicant Aaron Franks and Kirsten Chapman for the Respondent
Heard: May 29, 2019
Endorsement
[1] There are two motions before me. The applicant wife, Katherine Laurent, seeks disclosure and interim security for interim spousal support. The respondent husband, Paul Laurent, seeks disclosure.
[2] I will first address the disclosure motions of both parties, and then turn to the issue of security.
Disclosure
[3] At the outset of the motion, I asked the parties to determine the disclosure orders that could go on consent. They identified certain items sought by the wife, which appear in the chart at the wife’s factum beginning on p. 6, as the following numbers: 7-14, and 16. Accordingly, on consent, I order that the husband produce the following disclosure within thirty days of the release of these reasons:
a. If the documentation exists, the 2013 financial statements and 2013 corporate income tax return for Dundas Partners Inc., and if not, the value of the husband’s shareholder loan receivable from Dundas Partners Inc. with supporting documentation for value as at December 31, 2013. b. Value of and supporting documentation for the shareholder loan receivable for R.E.G.L. Holdings Limited as at December 31, 2013. c. Value of and supporting documentation for the management loan receivable from Grammont Investments Limited as at December 31, 2013. d. Credit card statement for TD Visa as at April 7, 2010 and December 31, 2013. e. Credit card statement for CIBC Classic Visa as at April 7, 2010 and December 31, 2013. f. Credit card statement for Hudson’s Bay account as at April 7, 2010 and December 31, 2013. g. Capital gains tax liability for the cash surrender values of the life insurance as at April 7, 2010 and December 31, 2013. h. For R.E.G.L., continuity of the shareholder loan account for the year ended December 31, 2013.
[4] The husband objects to the remaining disclosure sought by the wife. The wife’s remaining disclosure requests raise three main issues:
a. Should the husband have to disclose financial documentation relating to the wife’s alleged date of separation? In particular, is it proportional to require the disclosure sought at this time? b. Is it sufficient for the husband to produce MPAC appraisals in support of his valuation of his property interests, or must he obtain real estate appraisals? c. Should the husband be ordered to produce a tracing report with respect to his claim for excluded property before questioning takes place?
[5] In addition to these issues, the wife seeks disclosure relating to other deductions and exclusions; disclosure regarding her uncle’s estate, of which the husband was the estate trustee; and a copy of all documentation the husband has provided to his expert. She also seeks an order for authorization to contact the husband’s personal and corporate accountants, if necessary.
[6] Both the wife and the husband seek disclosure from the other relating to matters over which the parties claim solicitor-client privilege. The wife seeks an order that the husband provide dates of any consultations with a family lawyer, and the identity of the participants in the consultation(s), from before the husband’s alleged date of separation on April 7, 2010, until the date on which he retained his current counsel. The husband seeks production of the file of a family lawyer who the wife pleads she saw in 2012, before her alleged date of separation of December 31, 2013, and production of an email chain between the wife and her current counsel that includes an email the wife pleads was sent by someone who hacked into her account.
Must the husband produce financial disclosure relating to the wife’s alleged date of separation?
[7] The parties disagree as to the separation date. The parties’ positions on the date of separation may be briefly summarized as follows: the husband argues that he left the home in April, 2010 and never again spent the night there. He purchased another home for himself in September 2009, into which the wife has never set foot. The wife argues that the parties continued to jointly file tax returns as a married couple for several years after the husband claims they separated, and that they continued their financial affairs as a married couple. She alleges they separated on December 31, 2013, but that she did not know about it until April 2014 when she saw that her 2013 tax return, prepared by the husband’s accountant at his instruction, indicated that the parties were separated.
[8] The husband states that he has produced some disclosure relating to the wife’s alleged date of separation, where it was easy and convenient to do so. However, he states that the wife is seeking significant disclosure for her date of separation that will be time-consuming and expensive to complete, and that to do so is not proportional. The husband states that if no resolution can be reached between the parties, he intends to bring a motion to bifurcate the trial, to proceed first to have a trial of the issue of the separation date.
[9] The wife argues that the husband cannot avoid disclosing the value of his assets and liabilities as at her date of separation simply by challenging the date.
[10] In my view, the question as to the scope of disclosure is premature. The scope of disclosure the wife seeks is broad. I agree with the husband it will be expensive and time-consuming to obtain. It is preferable that the parties first determine whether the issue of date of separation should be bifurcated before determining what disclosure is necessary.
[11] The husband states he has not yet brought a bifurcation motion because he was hoping to resolve matters. However, this application was issued almost two years ago. In that time, the parties have had one case conference and this motion. The matter is proceeding at what appears to be an unacceptably glacial pace.
[12] Accordingly, if the husband seeks to bring a bifurcation motion, he shall serve motion materials within thirty days of the release of these reasons, to have the motion heard within 40 days thereafter (or 70 days from the release of these reasons). If he fails to serve motion material within thirty days of the release of these reasons, the husband shall produce financial disclosure for the wife’s date of separation within 70 days of the release of these reasons. For clarity, that disclosure includes the following items from the wife’s disclosure chart beginning at p. 6 of her factum: 5 and 6. It also includes item 3 from the wife’s notice of motion. These items are:
a. Valuation of the husband’s business interests as at December 31, 2013; b. Contingent disposition costs for the husband’s business interests as at December 31, 2013; and c. A sworn financial statement with a December 31, 2013 date of separation with all supporting documentation not previously provided.
[13] I will deal with the question of the real estate appraisals below.
[14] If there is any issue with the timetable set out herein, either party may convene a case conference to address the planning, management, and scheduling of the bifurcation motion.
Are the MPAC assessments sufficient?
[15] The husband has a significant real estate portfolio, held both personally and through corporate interests. He seeks to provide MPAC statements to support their value. The wife argues that MPAC statements are not sufficient and third party real estate appraisals are required.
[16] In Goyal v. Municipal Property Assessment Corp, Region No. 15, 2004 CarswellOnt 9405 (Ont. Assessment Review Board) at para. 11, the Ontario Assessment Review Board acknowledged that “MPAC’s valuations are based on a mass appraisal system and can generate inaccurate results for individual properties”.
[17] I accept the Ontario Assessment’s Review Board’s description of MPAC assessments. MPAC assessments are not reliable indicators of the fair market value of a particular property. In this case, the husband’s real estate portfolio is significant. It is his obligation to provide credible evidence as to its value. Assets and debts and liabilities must be authentic and properly valued. The onus is on the party asserting a value for an asset under his control to provide credible evidence in support of it. If it cannot be readily ascertained, an independent valuation must be obtained: Conway v. Conway (2005), , 16 R.F.L. (6th) 23 (Ont. S.C.) at para. 13.
[18] I appreciate that disclosure must be relevant and proportional: Boyd v. Fields (2006), 2006 CarswellOnt 8675 (S.C.J.) at paras. 11-13. However, where the party has the means and ability to ascertain a credible value for significant assets, he ought to be required to do so.
[19] Accordingly, I agree with the wife that MPAC assessments are not sufficient, and third party appraisals must be obtained for the husband’s personal and corporate real estate interests.
[20] However, as I described above, it is not proportional to require two sets of appraisals to be obtained for both parties’ separation dates at this time. The husband has indicated his intention to move to bifurcate the issue of the date of separation from the rest of the trial. Accordingly, I direct as follows:
a. If the husband brings his motion for bifurcation and is successful such that there is a trial of the issue on the question of the separation date, he shall produce third party appraisals for his personal and corporate real estate portfolio within 45 days of the release of reasons adjudicating the date of separation for the date of separation that is found to be correct at the trial of the issue. b. If the husband does not bring his motion for bifurcation, he shall produce third party real estate appraisals for the properties in his personal and corporate real estate portfolio for both dates of separation within 70 days of the release of these reasons.
[21] For clarity, these orders address the following items in the wife’s chart at p. 6 of her factum: 1-4, 15, which are described as follows:
a. Appraisal of 93 Mervyn Avenue, Toronto b. Appraisal of 6103 Highway 35, Kawartha Lakes City c. Appraisal of 6101 Highway 35, Kawartha Lakes City d. Appraisal of 34 Clematis Road, Toronto e. For Grammont, JESP, REGL, Aventura, and EPHL, third party real estate appraisals for all properties held
Tracing
[22] The wife seeks disclosure supporting a number of the husband’s claimed deductions and exclusions and a tracing analysis of his excluded property for net family property as at both parties’ dates of separation. She states she requires this information before questioning, because otherwise she will have to question the husband twice and there will be increased costs.
[23] The husband argues that it is his burden to prove his exclusions, and he cannot be ordered to produce an expert report, which he cannot be compelled to rely on in any event, on the wife’s timeline.
[24] In my view, the husband has an obligation to establish the value of his deductions and exclusions in a timely and orderly fashion to enable the parties to proceed to a fair trial.
[25] However, I agree with the husband that he cannot be compelled to produce a report the sole purpose of which is to support the exclusions he claims. If he fails to prove his exclusions, only he will suffer.
[26] Accordingly, I order the husband to produce the following items from the wife’s chart at p. 6 of her factum: 21, 22 and 23, described as:
a. Gifts of Deed or other documentation confirming that each of the 14,700 third preference shares in Grammont provided to the husband between December 11, 1972 and December 15, 1978 were a gift; b. Supporting documentation that the 12 common shares of Grammont the husband purchased from his mother in 1988 were paid for using funds that can be traced to excluded assets; c. Continuity of the husband’s shareholder loan account with Grammont from December 30, 1990 to December 31, 2008.
[27] These items are relevant to either party’s date of separation and so must be produced in any event.
[28] However, the husband argues that the tracing is complicated and he objects to the wife’s timeline. I accept that the tracing sought is complicated given the age of the items sought. Accordingly, I direct that the disclosure identified above be produced within 120 days of the release of these reasons.
[29] The wife also seeks disclosure to support exclusions for both parties’ dates of separation at numbers 24 and 25 of the chart at p. 6 of her factum as follows:
a. Supporting documentation that indicates the funds loaned by the husband to REGL, and the amounts outstanding at April 7, 2010 and December 31, 2013; b. Supporting documentation that indicates the funds loaned by the husband to EPHL, and the amounts outstanding at April 7, 2010 and December 31, 2013.
[30] This disclosure is relevant. The question again is proportionality because the disclosure is sought for two separation dates. Accordingly, if the husband proceeds with his bifurcation motion and is successful, he shall produce this disclosure for the date of separation that is determined at the trial of the issue within 120 days of the release of the reasons that determine the date of separation. If he does not proceed with a motion to bifurcate, he shall disclose the supporting documentation sought for both parties’ dates of separation by October 31, 2019.
[31] With respect to the wife’s request, at item 26 of her chart, for a tracing analysis of the husband’s excluded property for net family property, I conclude that it not appropriate to require the husband to produce an expert report. However, he may wish to rely on an expert report to support his claimed exclusions. Accordingly, if the husband brings his bifurcation motion and is successful, he shall produce any expert report regarding his exclusions on which he seeks to rely within 120 days of the release of reasons in which the date of separation is determined. If he does not bring his bifurcation motion, he shall produce any expert report on which he seeks to rely regarding his exclusions by October 31, 2019.
The Wife’s Miscellaneous Disclosure Requests
[32] The wife seeks other items of disclosure, which I deal with herein:
a. Request for authorizations to contact the husband’s personal and corporate accountants if necessary (item 17 on the wife’s chart at p. 6 of her factum) – the husband argues that this is appropriate only after the wife’s expert has delivered a report and has committed to a position. Otherwise, any questions for the husband’s accountants can be delivered in writing. I agree with the husband. The parties’ experts can discuss their conclusions with a view to narrowing issues once they have each completed their reports. Until then, either party may pose questions in writing to the other’s expert through counsel. This ensures that each expert reaches their own, independent conclusion, consistent with the duties they owe to the court. b. Value of the husband’s interest in the Paul Laurent Trust I and Paul Laurent Trust II as of September 30, 1972 (item 18 on the wife’s chart at p. 6 of her factum) – this item relates to the respondent’s claimed date of marriage deduction, the value of which is currently listed as TBD. I agree the values the wife seeks are relevant and must be disclosed, along with any supporting documentation, within 90 days of the release of these reasons. c. Calculations of the husband’s income for 2017 and 2018 (item 19 on the wife’s chart at p. 6 of her factum) – the husband argues that his expert is working on these but he does not know how much longer it will take. The husband was aware that this was an issue on the motion and should have sought information from the expert as to the expected timeline. I direct that the report shall be produced within 90 days of the release of these reasons, which should be ample time. d. 2018 financial statements and corporate tax returns for all the husband’s direct and indirect business interests, being Grammont investments Limited, JESP Holdings (1997) Limited, R.E.G.L. Holdings Limited, Eastwood Park Holdings Limited, Aventura Corporation, McBride Wallace Laurent & Cord LLP, Dundas Partners Inc. (item 20 on the wife’s chart at p. 6 of her factum) – these are also relevant documents and must be produced. I direct that they be produced within 90 days of the release of these reasons which should be ample time to conclude their preparation. e. The terminal income tax return, estate asset distribution list and any other documentation for the estate of Walter Reid Blakely, along with copies and details of all communication with both the estate accountant and the CRA to obtain the documentation requested herein (paragraphs 5 and 6 in the wife’s notice of motion) – these items relate to the wife’s claimed excluded property from her uncle’s estate, of which the husband was the estate trustee. It is relevant and the wife is entitled to it from the husband in his capacity as estate trustee. The husband does not object to producing it, but he is having difficulty doing so. The husband must make reasonable efforts to obtain this information. I direct him to produce these items within 90 days of the release of these reasons. f. A copy of all documentation that the husband has provided to his expert, Alla Levit, except was has previously been disclosed (para. 7 of the wife’s notice of motion) – if the husband has provided other information relevant for Ms. Levit’s preparation of reports in this litigation, that information is relevant for the wife’s purposes as well. These items shall be disclosed within 30 days of the release of these reasons.
The information regarding the parties’ contact with lawyers
[33] There are three items in dispute over which the parties claim privilege. These may be described as follows:
a. The husband seeks disclosure from the wife of the file of a family lawyer, Julia Tremain, with whom the wife consulted in 2012, before her alleged date of separation but after the husband’s alleged date. He states she has waived privilege over this file because she pleaded that she met with the family lawyer but did not retain her “as the parties were not separated”. He argues she placed her state of mind as to date of separation in issue. The wife argues that reference to legal advice is not a waiver of privilege over the advice. b. The husband seeks disclosure from the wife of a chain of correspondence between her and her current lawyer because she pleads, in support of a claim for a restraining order, that someone she alleges to be the husband hacked her email and, in response to a meeting request from counsel, wrote “I am no longer interested. Thank you.” The husband, who denies hacking her email, argues that this email relevant to date of separation and to the question of whether, if the limitation period in this case has expired, the wife can meet the test to extend it. Specifically, he argues it is relevant to the branch of the test that requires that the delay in advancing a claim was incurred in good faith. The wife argues that she specifically pleads that she did not send the email in question, so it cannot be a waiver of privilege over legitimate communications between herself and her solicitor. c. The wife seeks disclosure of the dates on which the husband contacted a family lawyer, as well as the identity of the people who participated in the consultation, from before the husband’s alleged date of separation up to the date he retained his current counsel. She also seeks disclosure of the date on which the husband retained his current counsel. She argues that this information is relevant to the question of the date of separation and is not privileged, because privilege applies only to communications, not acts.
[34] The parties articulate two privilege issues with respect to these requests. First, did the wife waive privilege over the items sought by the husband by virtue of her pleadings? Second, is the information sought by the wife covered by solicitor-client privilege?
Waiver of Privilege
[35] Solicitor-client privilege is a fundamental right that serves to promote open and honest communication in obtaining legal advice without fear of intrusion from other parties. However, the privilege is not absolute. It can be waived expressly or impliedly by the client: Martin v. GiesbrechtGriffin, 2018 ONSC 7794 at para. 11, citing Solosky v. R., , [1979] S.C.J. No. 130 (S.C.C.).
[36] In Martin, the court considered waiver of privilege and noted that the principles of fairness and consistency temper and guide when waiver is deemed to occur. The determination is case-specific and depends on the facts. Full disclosure for purposes of a fair trial must be balanced with the importance of preserving the privilege: Martin, at paras. 12, 14.
[37] Deemed waiver and disclosure are limited to circumstances where the relevance of the evidence in question is high and the principles of fairness and consistency require disclosure to allow a party to adequately defend. Privilege will be waived when a communication between a solicitor and client is legitimately brought into issue in an action. In addition, privilege will be waived when a party places its state of mind in issue and has received legal advice to help form that state of mind: Martin, paras. 13, 14.
[38] In Benson v. Kitt, 2018 ONSC 7552 at para. 16, Monahan J. considered waiver of privilege. He wrote:
A party will be deemed to have waived privilege when he or she makes their communication with a lawyer an issue in the proceeding. There is no express waiver in this case. A deemed waiver and an obligation to disclose a privileged communication requires two elements: (i) the presence or absence of legal advice must be relevant and material to a claim or defence; and (ii) the party who received the legal advice must make the receipt of it an issue in the claim or defence [cites omitted].
[39] The onus to prove a waiver of privilege lies with the party seeking the disclosure: Spicer v. Spicer, 2015 ONSC 4175 at para. 11.
[40] The first question is whether the wife has waived privilege over Ms. Tremain’s file. In my view, she has.
[41] Although the wife did not explicitly plead the legal advice she obtained from Ms. Tremain, she pleaded that she met with Ms. Tremain in 2012, but did not retain her at that time as the parties were not separated. This pleading places the wife’s state of mind in issue, and makes Ms. Tremain’s file relevant to that question. Moreover, I accept that the evidence in question is relevant, not just to the date of separation, but to the wife’s argument to extend the limitation period, if it becomes necessary to make it. The wife has pleaded the meeting with Ms. Tremain, and the resultant non-retainer, to support her contention that the parties were not separated in 2012. Fairness requires that the husband be entitled to test that contention. The wife cannot use solicitor-client privilege to shield the meeting from disclosure when she is, at the same time, using the solicitor-client consultation as a sword to support her alleged date of separation.
[42] The husband also seeks leave to question Ms. Tremain by way of written interrogatory, or by questioning if necessary. Very little if any argument was made with respect to questioning Ms. Tremain as distinct from the production of her file.
[43] In my view, this request is not proportional. I am not satisfied that the requirements of r. 20(5) of the Family Law Rules, O. Reg. 114/99 are made out. There is no evidence or argument before me as to why it would be unfair to require the husband to carry on the case without questioning Ms. Tremain, or why the information is not easily available through another method, like production of her file which I have ordered, or questioning of the wife. Nor is there any evidence as to whether the questioning will not cause unacceptable delay or undue expense. I dismiss this request.
[44] The second question is whether the wife has waived privilege over the communication chain between her and her current counsel in pleading that the husband hacked her email and responded to her lawyer’s meeting invitation with an email that read “I am no longer interested. Thank you.”
[45] The husband argues that this pleading opens the door to the entire communication, which is relevant to the date of separation and the wife’s argument to extend the limitation period, should she have to assert it.
[46] The wife argues that she cannot waive privilege over the communication chain when she has pleaded that she did not send the email. She did not disclose anything privileged, she states, because it is not a communication between her and lawyer, but rather, between a hacker and her lawyer. I note that this pleading arises in the wife’s application not in respect of date of separation or limitation period issues, but with respect to her claim for a restraining order.
[47] In effect, the email chain in question is a document. The wife has pleaded part of the document. If she is correct that she did not send the email, she has pleaded a non-privileged part of the document. But whether that is correct is a disputed fact. How can the husband defend against the wife’s claim that he hacked her email when only the alleged hacked email has been disclosed?
[48] The entire document is relevant. In my view, by specifically pleading the email, fairness requires that the wife disclose the entire chain. She has put the communication as a whole in issue in her pleading, even if the part she has disclosed is not a privileged communication.
The Husband’s Consultations with Lawyers and Retainer of Counsel
[49] The wife seeks disclosure of the dates of the husband’s consultations with family law counsel, the people present at those consultations, and the date of his retainer of his current counsel. She states that this information is relevant to the date of separation. The husband argues that the information is privileged. The wife counters that there is no privilege in retaining a solicitor, because doing so is an act, not a communication, and privilege applies only to communications.
[50] I have doubts as to whether the information sought is privileged, but I need not decide the point. In my view, the wife is not entitled to the information she seeks because she has not demonstrated that it is relevant.
[51] Unlike the wife, who linked her state of mind in her pleading to her consultation with Ms. Tremain, the husband has nowhere pleaded his consultations with counsel or linked them to his state of mind. At most, one could say that the content of any file maintained by a lawyer the husband consulted might illuminate the husband’s state of mind as to whether the parties were separated. But those would be communications, and clearly privileged. The wife rightly does not seek the communications.
[52] The date or fact of the consultations, or the date of the retainer of the husband’s current counsel, does not, on their own, assist in answering the question of when the parties separated. Parties may meet with counsel to understand their rights if they separate from their spouse, or to prepare to separate from their spouse. They may be seeking advice about domestic contracts. They may be seeking advice or representation because they have separated from their spouse. Without the communications between the party and counsel, which are clearly privileged, the disclosure of the dates does not aid in understanding the date of the parties’ separation. The wife has not proven that the disclosure request is relevant. I decline to order it.
Affidavits Regarding Disclosure
[53] The wife seeks an order that, for certain disclosure requests, if the husband is unable to produce the requested disclosure, he deliver an affidavit within 30 days detailing the efforts he made to produce the disclosure, and when it will be provided.
[54] In my view, where a party has been ordered to produce disclosure and is unable to do so, the party should produce an affidavit explaining his or her efforts to obtain the disclosure, why it is unavailable, and when it will be available, if it will be. I thus order both parties to produce such affidavits, if they are unable to produce any of the disclosure I have ordered. The affidavits shall be produced on the date the disclosure was ordered to be produced if the disclosure cannot be produced on that day.
Interim Security for Interim Spousal Support
[55] The wife seeks interim security for interim spousal support. In particular, she seeks an order that the husband make her the irrevocable beneficiary of his life insurance policies. In her notice of motion she identifies four policies, but the husband deposes that one policy is no longer in existence. At the moment, the wife is the beneficiary of a $25,000 policy. The husband has two additional policies: one for $1 million and one for $10,000. His estate is the beneficiary of each of these.
[56] The parties have entered into a temporary separation agreement under which the husband pays the wife $20,000 in monthly spousal support. The agreement binds the husband’s heirs and executors.
[57] The wife argues that, even if she is designated the beneficiary of all the husband’s life insurance policies, she is under-secured. She states that the husband is in his 70s and has been in poor health recently. She argues that she must be designated the beneficiary on all the policies to provide her with interim security. Her SSAG calculation suggests that, to secure her current spousal support payments, life insurance of $2.165 million should be in place.
[58] The husband agrees that the wife is entitled to some security. However, he states that she is seeking too much, and life insurance as security is not meant to be a windfall. He argues that $500,000 in life insurance is sufficient, and is willing to designate her as the beneficiary of half of his $1 million policy. If she wishes to pay half the premium for the $1 million policy, the husband is willing to designate her as the beneficiary of the entire amount. The husband argues that his estate is bound by the temporary agreement in any event, and that even at $500,000 in life insurance, the wife will receive at least four years’ worth of spousal support payments up front should he die, which is ample time to negotiate arrangements with the estate. He also notes that, while he has health concerns, these do not affect his anticipated life span.
[59] There is no question that the court has jurisdiction to order a support payee be designated as the beneficiary of a life insurance policy to provide interim security for support: Family Law Act, R.S.O. 1990, c. F.3, s. 34(1)(i) and (k), Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), s. 15.2(3), Katz v. Katz, 2014 ONCA 606, 324 O.A.C. 326, at para. 67, Dagg v. Cameron Estate, 2017 ONCA 366, 136 O.R. (3d) 1, at para. 64.
[60] However, life insurance is not meant to be a windfall: Dagg, supra. In these circumstances, it is meant to act as appropriate security for spousal support, which has yet to be determined on a final basis.
[61] The wife pointed me to a decision wherein the court accepted the Divorcemate calculation to determine the appropriate amount of life insurance: Colivas v. Colivas, 2017 ONSC 4730 at paras. 407-408. However, that calculation was accepted at trial, and the order made was a final order.
[62] Neither party was able to direct me to any law on the question of the principles to apply when calculating interim security for interim spousal support.
[63] When calculating interim spousal support, the court does rough justice at best: Driscoll v. Driscoll, , citing Robles v. Kuhn, 2009 BCSC 1163, [2010] B.C.W.L.D. 1935. Equally, in my view, the court can only do rough justice at best when determining interim security for interim support.
[64] Interim security for interim support is determined at a time when much is uncertain. In this case, for example, it is unknown whether there will be an equalization payment. There are live issues regarding the date of separation and the limitation period. Whether there is an equalization payment will have an important bearing on the calculation of spousal support in this long-term, traditional marriage.
[65] In my view, rough justice requires that the husband designate the wife as the beneficiary of his life insurance in the amount of $500,000. I reach this conclusion because:
a. The life insurance proceeds represent more than four years of spousal support at the current agreed-upon level. The temporary separation agreement provides that the monthly support payments are taxable to the wife and deductible to the husband, while the life insurance proceeds would not be taxable to the wife; b. The husband is 73, and the wife is almost 72. The husband has health issues but they do not impact his life span; c. The current temporary separation agreement binds the husband’s estate and can only be terminated on 60 days’ written notice, which would give the wife ample time to take steps to protect her interests in the event that the husband, or his estate, terminates the agreement; d. The husband has significant assets from which his estate could meet his obligations; e. It is currently unclear whether the wife will receive an equalization payment and if so, how it will impact support; f. At the trial of this matter, the court will be in a better position to determine, having regard to the income, means and needs of the parties, the quantum of final spousal support that is appropriate and determine the appropriate security for that obligation; g. Because many issues remain to be determined and the appropriate amount of coverage to secure spousal support may change, it is appropriate that the beneficiary designation not be irrevocable.
[66] In addition, I also direct that the wife may elect, within ten days of release of these reasons, to bear the cost of an additional $500,000 in life insurance, and if she elects to do so, the husband shall designate her as the irrevocable beneficiary of an additional $500,000 of his insurance, for a total of $1 million dollars of life insurance to secure the husband’s interim support obligation. Should the wife elect to pay the premiums in respect of $500,000 of the husband’s life insurance, the husband may set off the monthly cost to the wife of so doing against his monthly spousal support obligation.
[67] If the wife pays the monthly cost to obtain the second $500,000 in life insurance, the cost of her doing so shall be subject to reapportionment by the trial judge once the appropriate amount of final security is determined.
[68] In addition, I direct that the husband provide written proof of the beneficiary designations within fourteen days of the date of this order with respect to the $500,000 of security I have ordered, and written proof of the beneficiary designations of the additional $500,000 of security I have ordered in the event the wife elects to pay for the cost of the second $500,000 of security.
[69] I further direct that the husband shall keep the life insurance of which the wife is the beneficiary in full force and effect, with premiums paid.
[70] To the extent the wife is a revocable beneficiary of the life insurance, the husband shall maintain the beneficiary designation(s) in her favour until further written agreement between the parties or court order.
[71] The wife seeks additional orders in her notice of motion regarding the cash surrender value of the policy or policies of insurance. The parties made no submissions on whether this relief was necessary or appropriate. I make the following orders out of an abundance of caution, but should there be any issue with these orders, the parties may write to me to address them:
a. The husband shall provide to the wife the current cash surrender value of the policy or policies of which the wife is or becomes the beneficiary of to comply with this order within fourteen days of the release of these reasons. b. The husband shall not encumber the policy or policies of which the wife is the beneficiary and shall not borrow, withdraw or otherwise take any steps to reduce the cash surrender value of those policies.
Costs
[72] Modern family costs rules are designed to foster four fundamental purposes: to indemnify successful litigants for the cost of litigation, to encourage settlements, to discourage and sanction inappropriate behaviour by litigants, and to ensure that cases are dealt with justly: Mattina v. Mattina, 2018 ONCA 867 at para. 10. The cornerstone of costs awards are proportionality and reasonableness: Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at para. 12.
[73] Subject to the provisions of an Act or the rules of court, costs are in the discretion of the court pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. By r. 24(10)(a) of the Family Law Rules, the court is directed to make a decision on the costs of a step in the case promptly after dealing with the step, in a summary manner.
[74] Pursuant to Rule 24 the successful party on a motion is presumptively entitled to costs, subject to the factors set out in Rule 24 – a caveat the Court of Appeal recently called “important”: Beaver v. Hill, at para. 10.
[75] The factors to consider are set out in r. 24(12), and include the reasonableness and proportionality of a number of enumerated factors as they relate to the importance and complexity of the issues. These factors include each party’s behaviour, the time spent by each party, any written offers to settle, including those that do not meet the requirements of r. 18, any legal fees and any other expenses, and any other relevant matter.
[76] There is no general approach in family law of “close to full recovery costs”: Beaver, at paras. 9-13. Rather, full recovery is only warranted in certain circumstances, such as bad faith under r. 24(8) or besting an offer to settle under r. 18(14): Beaver, para. 13.
[77] I now turn to the parties’ claims for costs which I evaluate using the legal framework described above.
[78] At the hearing of this motion, the parties handed up bills of costs and advised that there were offers which may impact the costs determination. The parties agreed to deliver the offers to me shortly after the hearing on the understanding that I would not review the offers until I had made a determination on the merits of these motions. I received a brief from the husband and two briefs from the wife. Once I decided the motions on their merits, I reviewed the parties’ offers to settle.
[79] In my view, while each party had some success on this motion, the husband was more successful, such that he is the party entitled to costs. The husband’s position on the privilege issues prevailed. The husband’s proposal as to the interim security was substantially successful. On the question of disclosure (apart from the privilege issues), success was divided. The husband succeeded in resisting duplicate disclosure for both dates of separation pending the result of the bifurcation motion, although the wife succeeded in obtaining orders for disclosure, both on consent and on adjudication.
[80] The wife did not beat her offers to settle. The husband beat his offer with respect to the life insurance but did not beat any offer he made that had to do with any of the disclosure requests.
[81] The bills of cost filed by the parties are substantial. The husband’s bill of costs seeks all-inclusive costs on a partial indemnity scale of $14,008.16, on a substantial indemnity scale of $27,718.34, and on a full indemnity scale of $23,346.93. The wife’s bill of costs discloses partial indemnity costs of $28,340.40, and full indemnity costs of $38,557.30. Given the quantum of the wife’s costs, I conclude that the husband’s costs fall within her reasonable expectations.
[82] Costs must also be proportional. I am not convinced that either party’s costs are proportional to the issues raised in this motion. Moreover, the parties made no attempt to conference the issues on this motion. I appreciate it was not strictly required, but the only case conference in this file was in 2017, and a conference may have assisted the parties in streamlining the issues. Certainly a conference judge would have been able to deal with many of the of disclosure requests. In addition, the threshold question of the bifurcation motion could have been addressed at a conference, or earlier in these proceedings.
[83] In these circumstances, my view is that costs of $12,500 all-inclusive are fair and reasonable for this motion. The wife shall pay these costs to the husband within thirty days.