COURT FILE NO.: FS-17-90445-00
DATE: 2019 11 28
CORRECTED: 2020 01 28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
David Shaw Wardlaw
E. Iacobelli, Counsel for the Applicant
Applicant
- and -
Jana Wardlaw
Self-Represented
Respondent
HEARD: November 19, 2019
REASONS FOR DECISION
Correction Notice
January 28, 2020: Minor typographical error to the front page “HEARD” date. The heard date on the original endorsement dated November 28, 2019 has been changed from June 26^th^, 2018 to November 19, 2019.
LEMAY J
[1] I heard this family law matter, and released reasons (2019 ONSC 5829) on October 8^th^, 2019. In those reasons, I identified the following issues for follow-up:
a) My arithmetical calculations on the equalization payments were to be made within seven (7) calendar days of the release of my reasons. No submissions were received, and I confirmed with the parties in court that no submissions had been made.
b) Whether the spousal support order that I made should be paid as a lump sum rather than a monthly amount.
c) Costs, which are addressed below.
[2] In addition, Jana raised procedural issues about my judgment, which I will address first. I will then address the other two outstanding issues.
[3] I had originally advised the parties that the costs issues would likely come at the same time, but in separate reasons. On reflection, it is more efficient to address all of the issues in one decision and I have done so. I also note that I will refer to the parties by their first names, just as I did in the trial reasons.
Procedural Issues
[4] Jana stated that she could not appeal my decision because the Court of Appeal thought it was a “bogus” decision. In support of this submissions, she advances the following points:
a) The decision lists June 26^th^, 2018 as the hearing date on the front cover, and this is wrong as the matter was heard on January 7^th^ to 11^th^, 2019.
b) The decision does not list the location where the case was heard.
c) The Court paperwork does not include Ms. Iacobelli’s Law Society number.
[5] I start with the June 26^th^, 2018 date. It is in error, and my assistant will amend the date on the reported reasons and issue a corrigendum. I also note that I see no reason why the problems with this date would prevent Jana from appealing my decision, but any procedural issues in respect of an appeal rest with the Court of Appeal.
[6] I can confirm that the matter was heard in Brampton, although I fail to see why it is necessary for the decision to indicate that fact. In that regard, I note that I have issued decisions and had them appealed to the Court of Appeal without the decision identifying the location that the matter was heard. See, for example, Sandhu v. Sikh Lehar International Organization (2017 ONSC 5680, aff’d 2018 ONSC 866). I fail to see why this information is necessary or relevant, but I have now addressed it specifically in these reasons.
[7] Finally, there is the question of Ms. Iacobelli’s law society number. Jana argues that she cannot proceed with an appeal without this number. I am aware of no reason why the Court of Appeal would need Ms. Iacobelli’s law society number for an appeal where Ms. Iacobelli is not Jana’s counsel. I am not prepared to provide any further directions in this regard.
[8] As a final matter, Jana claimed that she was waiting for these procedural issues to be addressed before she responded to the various parts of my decision. As I said in Court, I reject this submission. My decision was clear about what my expectations were in respect of the submissions on arithmetical errors. Those were due seven (7) calendar days after my judgment was released. As I indicated in Court, I am not prepared to adjust my calculations any further.
Lump Sum v. Periodic Spousal Support
a) Positions of the Parties
[9] David seeks to have spousal support paid as one lump sum for three reasons:
a) David wishes to claim a set-off of the spousal support amounts against any costs that I find owing from Jana to David.
b) This is a high conflict case, and a lump-sum payment would ensure finality.
c) Jana has demonstrated a desire to litigate every issue, and if periodic payments were provided, there is a risk that she would return to Court on a regular basis in order to have the amounts changed.
[10] Jana opposes the payment of spousal support as a lump sum, stating that someone has been accessing her bank accounts. She also advises that she has made complaints about identity theft to the police in Orangeville. Finally, she advises that someone at the Orangeville CIBC told her that she has a doppelganger.
b) Law and Analysis
[11] In Davis v. Crawford (2011 ONCA 294), the Court of Appeal has held that lump sum awards of spousal support are not to be limited to only “very unusual circumstances”. The Court of Appeal also observed that both the Family Law Act R.S.O.1990 c. F.3 and the Divorce Act R.S.C. 1985 c. 3 (2^nd^ Supp) permit lump sum awards of spousal support to be made.
[12] In Davis, the Court set out the advantages and disadvantages of a lump sum award of spousal support as follows (paras 67 and 68):
The advantages of making such an award will be highly variable and case-specific. They can include but are not limited to: terminating ongoing contact or ties between the spouses for any number of reasons (for example: short-term marriage; domestic violence; second marriage with no children, etc); providing capital to meet an imeediate need on the part of a dependant spouse; ensuring adequate support will be paid in circumstances where there is a real risk of non-payment of periodic support, a lack of proper financial disclosure or where the payor has the ability to pay lump sum but not periodic support; and satisfying immediately an award of retroactive spousal support.
Similarly, the disadvantages of such an award can include: the real possibility that the means and needs of the parties will change over time, leading to the need for a variation; the fact that the parties will be effectively deprived of the right to apply for a variation of the jump sum award; and the difficulties inherent in calculating an appropriate award of lump sum spousal support where lump sum support is awarded in place of ongoing indefinite periodic support.
[13] It is also appropriate for a judge to award a lump sum spousal support where there was a high level of animosity between the parties (Racco v. Racco 2014 ONCA 330), or where it was appropriate to facilitate a ‘clean break’ between the parties (Greenberg v. Daniels (1995) 2005 CanLII 456 (ON CA), 194 O.A.C. 115 (C.A.)).
[14] In this case, there are considerable advantages to providing a lump sum payment. First, this is a high conflict case. Jana has litigated over issues such as the clearance certificate and over the date that particular documents had been served. Jana has pursued these issues even after she has been told that the Court has ruled on them. On this point, see the discussion on clearance certficiates at paragraphs 46 and following of the trial judgment.
[15] I did not put an end date on spousal support in my trial decision. Given the fact that this was a seventeen-year marriage, the SSAG calculations produce indefinite support, and I accept that conclusion. The problem is that an indefinite period of support produces an indefinite opportunity for Jana to continue litigating this case. If support is ongoing, she can bring motions to vary the support or attempt to relitigate other claims or issues, including procedural issues.
[16] The significance of this concern needs to be assessed in light of Jana’s testimony at trial that “I don’t want to work right now because I want to fight you people” (see paragraph 157 of my trial decision). If indefinite support is paid, it is reasonable to assume that Jana will continue to litigate issues relating to this case rather than getting on with her life. This is a factor that strongly favours a lump-sum award of spousal support.
[17] In other words, this is the type of case where a “clean break” between the parties is both necessary and desirable.
[18] This brings me to the disadvantages of providing a lump sum to Jana rather than continuing with periodic payments. Jana argues that I should not provide a lump sum because she has been the victim of identity theft, and has a doppelganger in Orangeville.
[19] There are two problems with Jana’s argument. First, I have no evidence whatsoever in the record that would substantiate either any claim of identity theft or a claim that a doppelganger exists. More specifically, Jana has accounts at RBC that are her sole property and were found to be such at trial. In the evidence at trial, I had statements for these accounts that showed in excess of a million dollars in investments. If Jana had been the subject of identity theft and had lost any of her money, it was open to her to provide additional statements or other information to show this fact.
[20] The second problem is that, even if Jana was the victim of identity theft, this is not one of the disadvantages of a lump sum payment. There is no connection between identity theft and how support is paid. As a result, I reject Jana’s argument on this issue.
[21] However, there is one other issue that must be considered in deciding whether to order a lump sum payment. Specifically, if a lump sum is granted there could be a change in the means and needs of the parties over time. In this case, however, I am not persuaded that this is a significant concern.
[22] David has retired. It is unlikely that his means are going to change significantly, as he continues to live frugally on the proceeds of his investments. Indeed, as I noted at paragraph 164 of the trial judgment, David’s income has been slowly trending down over the past couple of years.
[23] Jana’s means and needs are not likely to change either. Her income from investments has been slowly trending up over the past three years. The additional income that I have deemed that Jana should earn is at a minimum wage, and is only approximately 40% of Jana’s total income. In addition, Jana is in her early 50’s. Therefore, barring any unforeseen event that caused Jana to be disabled from working entirely, her means are not likely to change either. Indeed, given Jana’s education level, it is more likely that I have underestimated her potential income rather than overestimating it.
[24] In the end, I am of the view that the advantages of ordering a lump sum payment of spousal support considerably outweigh the drawbacks. As I have noted, it is unlikely that David’s situation will change, as he is retired. Jana also has a considerable amount of money in savings that can be used to fund her ongoing needs, and she has the ability to go to work and earn an income.
[25] It is, however, equally clear to me that Jana will continue to litigate whatever issues she can find in this case. This continued litigation should be discouraged, and providing a lump sum award of spousal support will reduce the items to litigate over.
c) Quantum of the Lump Sum
[26] As I indicated in my reasons, I am of the view that support on the low end of the range is appropriate in this case. The SSAG’s produced a range of $540.00 per month to $721.00 per month. I tentatively set the support amount at $540.00 per month.
[27] I am of the view that this is the appropriate amount to base the lump sum on. The SSAG’s produce a lump sum range between $113,323 and $114,064. One of the risks associated with providing a lump sum is the difficulty inherent in calculating an appropriate lump sum award. Given that David is in favour of a lump sum award, the top end of this range should be awarded to ameliorate any difficulties or risks associated to Jana with awarding a lump sum amount.
[28] In the result, I am awarding Jana lump sum spousal support in the sum of $114,064. This amount will accrue interest at the rate of 3% if it is not paid by January 1^st^, 2020.
Costs Submissions
a) Procedural Issues on Costs
[29] At the hearing on November 19^th^, 2019, an issue arose as to whether Ms. Iacobelli’s costs submissions had been filed with the Court office. Jana took the position that these submissions had not been filed because they were not listed in the continuing record. While in Court, I had staff review the computer system to see whether these submissions had been filed. Staff confirmed that they had been filed, although I did not have them.
[30] I subsequently inquired of my judicial assistant as to whether she had the original submissions, and she confirmed that she did have them. She had been waiting to provide them to me until Jana’s submissions were received. As a result, having reviewed Ms. Iacobelli’s original submissions, I can confirm that they were both properly served and properly filed.
[31] Jana claimed not to have received Ms. Iacobelli’s submissions on costs. The Affidavits of Service confirm that they were sent both electronically and by mail. As a result, given the history of this case and Jana’s fixation on minute details in the file as justification for not completing certain tasks, I view this claim as being less than fully supported.
[32] However, I directed Ms. Iacobelli to serve a further copy of her costs submissions on Jana, which was done in court on November 19^th^, 2019. I then gave Jana seven additional days to provide her responding submissions on costs.
[33] I should also note that, in my original decision, Jana was also invited to provide costs submissions. She chose not to do so, and took the position that she was waiting for the procedural deficiencies in my decision to be fixed. As I noted above, I reject that submission. My decision set out clear expectations, and I was not prepared to permit Jana to make any additional submissions of her own to address costs.
b) Positions of the Parties
[34] David seeks full recovery costs in the sum of $116,659.32 on the following grounds:
a) The presumption is that the successful party should be entitled to his or her costs, and David was the successful party.
b) David conducted the litigation reasonably, and took reasonable positions in the litigation.
c) David was more successful than his offers to settle.
[35] As I noted above, Jana did not file costs submissions within the deadline that I had originally set. I provided Jana with a further time period in which to file costs submissions. Those submissions would have been due on Tuesday. Nothing has been filed with the Court office as of the release of these reasons. I have both checked the computerized filing system and made inquiries of staff, and no one has received anything.
[36] However, in addition to addressing the three arguments that were advanced by David, I will also consider whether the costs sought are unreasonable in light of the nature of the issues and the length of the litigation. I am of the view that this is an issue that would have likely been raised by a responding party in a case such as this. It is also one of the factors that Rule 24(12) requires me to consider in fixing costs.
a) The Presumption of Success
[37] One of the key principles that a Court should consider in a costs award is success. Which party got what they wanted. In this case, Jana sought to relitigate issues relating to the clearance certificate, sought an investigation into the sale of the Wardlaw’s dairy farm which took place more than ten years ago, and sought to pursue other procedural issues. Her position on all of these issues was rejected.
[38] On the substantive issues, David was successful on the issue of who should be entitled to possession of the matrimonial home. He was also successful in establishing that the funds in the RBC accounts that were in Jana’s name were her funds.
[39] The only substantive issues where success was divided were spousal support and equalization. On spousal support, Jana had sought $6,000.00 per month. A much more modest amount was ordered in my decision.
[40] On equalization, David had sought no equalization payment, and I ordered a small one in the sum of just less than $19,000.00. Given that both parties have assets in excess of $1 million, this payment is a very small amount indeed.
[41] In other words, when the results of the case are considered, David was more successful than Jana. This is a factor that supports an award of costs in David’s favour.
b) Conduct of the Litigation
[42] David argues that he conducted the litigation reasonably, and took reasonable positions. I agree. Two examples will suffice to illustrate this point. First, there was a marriage contract that, if it was valid, might have produced a better result for David. However, David chose not to argue the validity of the marriage contract. Second, David was prepared to forgive a spousal loan that he had made to Jana, which simplified both the evidence and the equalization calculation.
[43] In assessing reasonableness, the positions that Jana took must also be considered. As I have discussed elsewhere, Jana took the position that a divorce should not be granted pending an investigation into several procedural issues. In addition, as set out at paragraph 53 of the trial judgment, Jana made it clear that she wanted to investigate other issues relating to David’s involvement with his law firm. Neither of these positions were reasonable.
[44] In short, David conducted the litigation in a reasonable way and Jana did not. As a result, this factor also favours an award of costs to David.
c) Offers to Settle
[45] During the course of the litigation, David made offers to settle. All four of them took positions that were reasonable. However, the last two offers, which were made on October 15^th^, 2018 and January 3^rd^, 2019 require more detailed consideration.
[46] In the October 15^th^, 2018 offer, David agreed to provide lump sum spousal support in the amount of $300,000.00. The rest of the terms in this offer are substantially similar to what was achieved at trial, with the exception of the equalization payment. David’s offer proposed no equalization payment. When the equalization payment that was actually awarded is deducted from the lump sum spousal support that David offered, this offer would have produced a net amount of approximately $282,000.00 on account of spousal support.
[47] The January 3^rd^, 2019 offer is even more generous. It contains the same terms as are in the October 15^th^, 2018 offer with the exception that the Respondent’s vacating of the matrimonial home is to be enforced by the Peel Police. The only other change is that the lump sum payment of spousal support was increased to $400,000.00. Again, when the equalization payment that was actually ordered is deducted from the proposed lump sum amount, it produces a payment to Jana of approximately $382,000.00 on account of spousal support.
[48] In both cases, the total amount of money that Jana would have received if she had accepted these offers is significantly greater than what she is entitled to receive pursuant to the trial judgment.
[49] It could be argued that the offers did not make provision for equalization payment and, therefore, David did not do better than his offers at trial. I reject that argument. As the Court of Appeal noted in Skye v. Matthews ((1996) 1996 CanLII 1187 (ON CA), 47 C.P.C. (3d) 222 at para 17) there is nothing that requires or suggests that offers should be considered on an issue by issue basis. See also Baldwin v. Funston ([2004] O.J. No. 3555 at para. 3 (S.C.J.)).
[50] Certainly, in this case there is no reason why I would consider the outcome on financial issues on an issue by issue basis. Equalization and lump sum spousal support are both money amounts. David was willing to pay Jana significantly more money than Jana actually recovered at trial. As a result, the consequences under Rule 18(14) of the Family Law Rules should apply.
[51] Under Rule 18(14), David would be entitled to costs up to October 15^th^, 2018 and then full recovery costs from that point to the end of the litigation.
d) Are the Costs Sought Reasonable?
[52] Answering this question requires a consideration of the factors under Rule 24(12). Most of those factors have already been addressed above. Before turning to Ms. Iacobelli’s Bill of Costs, I would only add two observations.
[53] First, while the issues in this case seem relatively simple, they were made considerably more complex by the positions that Jana took. This is a factor that supports both an increase in the amount of time, and an award of costs in David’s favour.
[54] Second, had Jana proceeded in a reasonable way, the assistance of the experts would likely not have been required. Certainly, if Jana had accepted the value of the dairy farm as of the date of marriage, the testimony of Dino Bottero would have been unnecessary. For this reason, I am of the view that the entirety of the costs associated with the experts should be borne by Jana.
[55] This brings me to the account itself. I start with the disbursements. There are less than $4,000.00 in disbursements exclusive of the expert’s reports. I have reviewed those amounts and am of the view that they are reasonable amounts. The most expensive amount is photocopying fees. However, given the amount of documentation that was in the file and the production of case books, I am of the view that the amount claimed is reasonable.
[56] I am of the view that David is entitled to full recovery of his fees from October 15^th^, 2018 to the conclusion of the trial. There is only one exception to this amount. I am of the view that only Ms. Iacobelli should be paid for her attendance at trial, and am not prepared to permit the amounts claimed by her law clerk for attendance as well.
[57] This results in costs of $40,979.50 plus HST for the period from October 15^th^, 2018 to the conclusion of the trial. It does not account for the costs of preparing either the costs submissions or of the submissions on the lump sum amount. As a result, this amount is entirely reasonable in my view.
[58] In addition, there is the costs for the time period prior to October 15^th^, 2018. The amount left to consider is $44,335.50. This amount should be reduced in order to account for two facts.
[59] First, there has already been some costs ordered on account of a couple of matters (see paragraphs 183 (b) and (c) of the trial decision). The time spent on those issues should be deducted as it has already been compensated by the Court.
[60] Second, in my view there should be a modest further deduction to account for the fact that there may have been some limited duplication of work. I make this finding not to be critical, as I view the bill of costs as entirely reasonable. However, David is not entitled to full recovery costs in the time period prior to October 15^th^, 2018. The deduction should only be very modest, however, as the Bill of Costs does not account for the work subsequent to the trial.
[61] In the result, an additional $38,000.00 on account of fees should be payable by Jana to David for the work performed by Ms. Iacobelli prior to the October 15^th^, 2018 offer.
[62] The overall totals then are as follows:
a) $78,979.50 on account of fees
b) $10,267.33 on account of HST on fees
c) $15,315.27 on account of disbursements.
[63] As a result, Jana owes David costs in the sum of $104,562.10 in addition to the costs of $8,000.00 ordered in paragraph 185(n) of my trial reasons.
[64] Costs awards can be set off against lump sum amounts for spousal support. As an example of where this has been done, see Hindocha v. Patel (2009 CanLII 23871 (Ont. Div. Ct.)). In this case, I am persuaded that setting off the costs against the lump sum support owing is appropriate for three reasons.
[65] First, Jana will have to pay the costs at some point in any event. It does not make sense to transfer money back and forth, which might require the parties to liquidate investments and trigger capital gains, when the amounts can be set off.
[66] Second, Jana has failed to pay the $8,000.00 in costs that I ordered as a result of my trial decision. I received no explanation for Jana’s failure to pay these costs.
[67] This brings me to my third reason for ordering a set-off in this case. If I do not order a set-off, it is entirely possible that David will pay Jana the lump sum support and Jana will make it very difficult for David to collect the costs award. I reach this conclusion because of the manner in which the litigation has been conducted to date.
[68] As a result, David is entitled to set off the total costs award of $112,562.10 against the lump sum support that he owes to Jana.
Conclusion and Order
[69] The following Orders are being made:
a) Jana’s entitlement to spousal support now and in the future is to be fully satisfied by the payment of a lump sum of $114,064.00,
b) The lump sum in paragraph (a) is to be set of against the costs of $112,562.10 that Jana owes to David.
c) As a result, David is required to pay Jana the sum of $1,501.90 on account of the remaining amounts owing. This sum is to be paid within thirty (30) days of today’s date.
[70] I have accounted for the costs of the appearance before me on this motion. There will be no further costs in this matter, and I have decided all of the outstanding issues between the parties. As a result, there is no need for any further submissions to me.
[71] The terms of the Order that should flow from this decision is clear. Once again, however, Jana’s consent to the form and content of the order flowing from these reasons is dispensed with.
LEMAY J
Released: November 28, 2019
Corrected: January 28, 2020
COURT FILE NO.: FS-17-90445-00
DATE: 2019 11 28
CORRECTED: 2020 01 28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
David Shaw Wardlaw
Applicant
- and -
Jana Wardlaw
Respondent
REASONS FOR JUDGMENT
LEMAY J
Released: November 28, 2019
Corrected: January 28, 2020