Matthew Ramcharan Parkinson v. Maryanne Margaret Parkinson
KINGSTON COURT FILE NO.: 455/15
DATE: 20191203
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Matthew Ramcharan Parkinson, Applicant
AND
Maryanne Margaret Parkinson, Respondent
BEFORE: Mr. Justice Timothy Minnema
COUNSEL: Lulama M. Kotze, for the Applicant
Rachel Stephenson, for the Respondent
HEARD: In Chambers (Written Submissions)
COSTS ENDORSEMENT
MINNEMA, J.
[1] The parties resolved this proceeding (Motion to Change) by way of a consent order (based on Minutes of Settlement) which indicated "[t]he parties shall make written submissions with respect to costs of this Motion to Change and Contempt Motion" by a certain date. However, the Contempt Motion has yet to be heard. A subsequent order was therefore made clarifying that I am only to decide the issue of costs relating to the Motion to Change. Written submissions on that have now been received.
Background Facts
[2] On November 29, 2017, I made a Final Order on consent resolving the original application, which included issues of equalization of property, spousal support, parenting, and child support (including section 7 expenses) for the three children, the latter being the issue in question on the Motion to Change. The Final Order provided that the applicant would pay the respondent $3,389 per month for child support, 80 percent of all medical and dental expenses, $500 per month for child care expenses, and 80 percent of extra-curricular activities over and above $3,000 annually (the "threshold"). The order was based on the applicant's current income of $204,000 per year and the respondent's 2016 income of $49,200 per year. On May 1 of each year the parties were to exchange income information for the prior calendar year and "use this information" to adjust child support and the proportionate sharing of special or extraordinary expenses commencing on July 1.
[3] On July 20, 2018, the respondent brought her Motion to Change seeking to have the applicant pay $4,959 per month child support and 81.6 percent of all the special and extraordinary expenses commencing July 1, 2018, based on their respective incomes of $304,829 and $68,656 for 2017. This request sought to eliminate the different treatments for medical and dental expenses, child care expenses, and extra-curricular activities. In particular, the set $500 per month for child care expenses would be eliminated in favour of the straight proportional sharing, and the $3,000 threshold for extra-curricular activities would also be eliminated.
[4] The applicant in his Response to Motion to Change disagreed with the relief sought in the Motion to Change. While he acknowledged that his income had increased, he indicated that the respondent's had as well, and he took the position that full table child support and the usual inclusions under section 7 expenses under the Child Support Guidelines ("CSGs") would not be reasonable and appropriate. He relied on section 4 of the CSGs which allows for a departure from the table support for incomes over $150,000 and took the position that at the expected level of child support fewer expenses should now qualify as "extraordinary" under section 7.
[5] The following is a brief summary from the court record of the litigation history. A motion was brought on consent in November of 2018 and a corresponding order was made to strike a sentence in the respondent's affidavit and an attached exhibit. The parties had a case conference on November 30, 2018. On March 4, 2019 a settlement conference date was set for May 30, 2019. On March 7, 2019, a consent order was made regarding the applicant's access (to enforce an arbitration decision; access is not an issue in this proceeding). On March 22, 2019, the applicant brought a Contempt Motion alleging breaches by the respondent of both the Final Order and the March 7, 2019 access order, and a hearing date was set for May 21, 2019 for two hours. A consent motion was brought for disclosure with the corresponding order made on April 9, 2019. On April 17, 2019, the respondent changed counsel. A motion was brought on consent and granted to vary the litigation schedule for the Contempt Motion. On May 21, 2019, at the request of counsel, the Contempt Motion was adjourned to July 10, 2019 to be spoken to, and the settlement conference on the Motion to Change was adjourned to August 16, 2019. On July 8, 2019, the Contempt Motion was adjourned on consent to September 18, 2019. On July 19, 2019 the Motion to Change was resolved by way of a consent. There was some confusion at that time about whether the Contempt Motion was also resolved, but it is continuing on a separate track.
[6] The parties attended lawyer-assisted mediation on June 24 and 25, 2019, which led to the Minutes of Settlement. Those minutes indicate that the factors that were considered in the resolution included the applicant's travel expenses for access, the "emotional turmoil" of the court proceedings and negotiations, the financial cost to each party of the court proceedings and their negotiations, their mutual desire to reduce their ongoing engagement with each other, and their mutual wish to have predictable cash flow.
[7] The agreement is somewhat unique. The applicant is to pay a global adjustment of $24,000 for his child support, section 7 expenses, and daycare expenses for the period from July 1, 2018 to June 30, 2019. He is to pay $6,000 per month for child support from July 1, 2019 to October 1, 2022 (three years), with restrictions on either party seeking to vary that amount, namely it is "non-variable" unless either party loses their job or the applicant's income exceeds $475,000. Child care expenses are to be split proportionally (80/20) with an up-front prepayment subject to accounting and adjustment. Medical and dental expenses not covered by a plan are to continue to be proportionally split (80/20). Lastly, the threshold to be reached before the applicant has to pay for extra-curricular activities was increased to $5,750 per year, after which they shall be split 80/20 percent.
[8] The applicant's 2017 Notice of Assessment shows a Line 150 income of $304,828. His August 24, 2018 Financial Statement indicates a current income of $412,800 although, with no exhibits to back it up, his May 6, 2019 Financial Statement indicates that his gross income for that year (2018) was $183,511.76. That last Financial Statement also indicates that his current (2019) income is $412,800.
[9] The respondent's Notice of Assessment for 2017 indicates a Line 150 income of $68,655. Her April 29, 2019 Financial Statement indicates that her income for 2018 was $86,295, and her current income is $104,720.
Positions
[10] The respondent is seeking "substantial indemnity costs". She provides two figures for her total costs, namely $30,743 including mediation, and $17,039 without. Both include H.S.T. She has not made a case for mediation costs and there is no evidence of the mediation agreement. She argues that she was successful on her Motion to Change as she obtained more child support than she sought. She asserts that the applicant acted unreasonably in failing to adjust support based on his income and that he used his financial position to intimidate her. She maintains that he failed to provide timely disclosure. She also indicates that he "historically" denigrated her in his materials.
[11] The applicant submits that each party should be responsible for their own costs. He points out that there was no agreement as to the weight to be given to the various factors noted in the Minutes of Settlement and touched on in paragraph 6 above. He argues that other issues were dealt with in their negotiations in addition to the ones noted in the pleadings, and these were not adequately parsed out in the applicant's counsel's Bill of Costs. He denies being tardy with disclosure. He argues that the only reason the support has increased is because of a change in his earnings that occurred after the Motion to Change was commenced. Lastly, he points out that the Respondent sought to eliminate the $3,000 threshold and have him pay 81.6 percent of section 7 expenses and was not successful.
Law
[12] Following the amendments to Rule 24 of the Family Law Rules in July of 2018, the decisions in Beaver v. Hill, 2018 ONCA 840 and Mattina v. Mattina, 2018 ONCA 867 have clarified the law relating to costs in a family law proceeding. The excerpt below is from paragraphs 9, 10, and 12 to 15 from Mattina (citations and excerpts from the Family Law Rules omitted):
Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides that cost orders are in the discretion of the court. Rule 24 of the Family Law Rules sets out a framework for awarding costs for family law cases in the Family Court of the Superior Court of Justice …
This court has held that modern family cost rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement, and; (3) to discourage and sanction inappropriate behaviour by litigants: … Rule 2(2) adds a fourth fundamental purpose: to ensure that cases are dealt with justly: … And Rule 24(12), which sets out factors relevant to setting the amount of costs, specifically emphasizes "reasonableness and proportionality" in any costs award.
Rule 24(1) creates a presumption of costs in favour of the successful party …
Consideration of success is the starting point in determining costs. This presumption does not, however, require that the successful party always be entitled to costs. An award of costs is subject to: the factors listed in r. 24(12), r. 24(4) pertaining to unreasonable conduct of a successful party, r. 24(8) pertaining to bad faith, r. 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party.
Rule 24(12) sets out a list of factors the court shall consider in determining an appropriate amount of costs.
The Family Law Rules only expressly contemplate full recovery costs in specific circumstances, e.g. where a party has behaved unreasonably, in bad faith or has beat an offer to settle under r. 18(14).
Rule 24(4) addresses the situation in which a successful party has behaved unreasonably.
Rule 24(5) provides guidance on how to evaluate reasonableness.
Rule 24(8) discusses the cost consequences for a party who has acted in bad faith.
[13] In assessing what is just, reasonable, and proportional, considerations may include the impact that the cost award will have on the party ordered to pay (Murray v. Murray (2005), 79 O.R. (3d) 147 (C.A.)) and its effect on the care, maintenance or interests of children (C.A.M. v. D.M. (2003), 67 O.R. (3d) 181 (Ont. C.A.)).
[14] Although the parties did not supply the court with law relating to costs following settlement, I am aware of the following. While it can be difficult to know who has had success and who has behaved unreasonably when the court did not adjudicate the matter on its merits, the court can still determine costs on a settled court process if there is a sufficient record with supporting documentation: Shah v. Irvine, 2018 ONSC 7359 at paragraph 28. Where the parties put the issue of costs before the court on consent, it is still incumbent on them to provide the information necessary for a determination: Gibeau v. Parker and Rivard, 2017 ONSC 545 at paragraph 34.
Analysis
Success
[15] I cannot figure out, because it contains three variables and there is no breakdown, how the global amount of arrears of $24,000 from July 1, 2018 to June 30, 2019 was calculated or who was successful.
[16] There is a sense that the child care expenses have gone up, and that the proportional sharing in the new agreement will be more advantageous to the respondent than the set amount of $500 per month in the Final Order.
[17] While section 7 expenses did not appear to be controversial given that both parties seemed to agree to proportionate sharing, the respondent sought to eliminate the extra-curricular expenses threshold of $3,000. Instead it increased to $5,750. This seems to favour the applicant. Further the Motion to Change sought to have the applicant contribute 81.6 percent of the various expenses, and the agreement is for a continued 80/20 split.
[18] The major issue related to costs was the resolution related to ongoing child support. When the Motion to Change was issued (July 20, 2018), the respondent was focussed on the 2017 incomes and seeking straight CSG section 3 child support. The applicant was seeking less than table amount. It is important to note that while the Final Order (at paragraph 25) indicates that the previous year's "income information" is to be used to "adjust child support payable", it does not say that the straight table amount is to be applied.
[19] The respondent suggests that as the final order is for $6,000 per month and she claimed $4,959 per month in her pleading, she was successful. However, the agreement is for three years going forward, and it is therefore highly unlikely that in 2019 when the parties entered into it that the prospective payment was based on the applicant's 2017 income. At his current income ($412,800) the straight table amount of child support for three children would be $6,535 per month (calculated by me as $2,698 plus 1.46% on the amount over $150,000) which suggests that, if anything, the settlement favored the applicant's position seeking an amount lower than the table.
[20] Overall I do not see a clear case of success by the respondent. It appears that compromises were being made by both sides in their 'outside of the box'[^1] final resolution.
Offers
[21] As noted, the requirements for an Offer to Settle that has direct cost consequences are set out in Rule 18. The party seeking full recovery costs must meet the burden of proving he or she has done as well or better than all the terms of any offer. While the applicant indicates that he made three formal offers, he concedes that the way they were framed would make it difficult to assess them against the settlement. In my view those offers do not meet the test and do not attract Rule 18(14) costs consequences.
Bad Faith
[22] Neither party has specifically alleged bad faith by the other related to the Motion to Change.
Setting Costs Amounts: Subrule 24(12)
[23] As noted in Rule 24(12)(a), when setting the amount of costs the court is to consider the reasonableness and proportionality of each of the factors under the following general headings as they relate to the importance and complexity of the issues. Child support issues are always important. Since the implementation of the CSGs they are rarely complex. That is the case here.
Behaviour
[24] The respondent suggests that the applicant delayed in providing full disclosure and was unwilling to negotiate. The applicant denies that. After a review of the record I am unable to determine this issue and make a finding of poor behaviour that attracts costs consequences.
[25] The respondent alleges that the applicant has used denigrating remarks to attack her character. I see no evidence of that in the Continuing Record related to this Motion to Change. Similarly, there is nothing to support her allegation that he used his financial position to intimidate her.
Written Offers to Settle
[26] In assessing reasonableness, neither the offers made nor the lack of other offers on the motion impacts my decision.
Time Spent by Each Party, Legal Fees and Rates, Expenses Incurred (Subrules 24(12)(a) (ii), (iv) to (vi))
[27] As noted above the respondent indicates her fees and disbursements were $17,039. The applicant indicates that his best estimate of his own fees and disbursements related to the Motion to Change were similarly $17,077.69, although he confusingly adds "[o]nly half of the mediation costs have been included". The respective lawyers' years of calls are within a few years, although much of the respondent's fees were for her formal counsel who had a lower hourly rate.
Any Other Relevant Matter
[28] The issues the respondent raised under this heading have already been addressed above under 'Behaviour'. I would only note that in addition to the information above about incomes. I have reviewed the most recent Financial Statements (the respondent has a positive net worth and the applicant a negative net worth), and the relative means and need of the parties has little impact on my decision.
Analysis/Summary
[29] I see nothing in the fundamental purposes of the costs rule that calls out for an order in this case. It is not clear to me who was more successful or that one party behaved unreasonably, and the purpose of encouraging settlement has limited impact given that the parties engaged in negotiations and resolved the matter creatively on their own.
Decision
[30] No order as to costs.
Mr. Justice Timothy Minnema
Date: December 3, 2019
[^1]: There is nothing pejorative to be taken from this characterization. To the contrary, their settlement appears to be a reasonable resolution arrived at with the assistance of counsel and mediation that is designed to meet the specific needs of these particular parties in a way that a litigated decision likely could not.