COURT FILE NO.: 1107/17
DATE: 2019-01-31
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Robert Ryan
Ms. Alisa P. Williams, for the Applicant
Applicant
- and -
Cheryl Ryan
Mr. Frank Lanza, for the Respondent
Respondent
RULING ON COSTS
TURNBULL J.
[1] On December 12th, 2018, after a two-day trial, I issued written Reasons for Judgment. In the concluding paragraph of that judgment, I determined that there had been divided success between the parties and that in the circumstances, each party should bear his/her own costs. In particular, I noted that the respondent had been denied her claim for retroactive spousal support, but had been successful in having increased spousal support paid to her for a period to and including December 31st, 2022. I also noted that I did not find it was unreasonable that the applicant had brought the Motion to Vary in light of the definition of material change of circumstances in the parties’ separation agreement.
[2] Thereafter, I was contacted by Mr. Lanza to determine if I would consider receipt of written submissions on costs from counsel. I acceded to that request. As a result, this is my Ruling.
Nature of the Case
[3] The applicant and the respondent exchanged correspondence through counsel commencing in the month of June 2017. Basically, the applicant sought to terminate his spousal support obligations and the respondent sought an increase in spousal support payable retroactive to 2015.
[4] It was determined by counsel for the applicant and the respondent that an order would be requested on consent to have the motion to change to terminate spousal support be heard in the Superior Court of Justice in the City of Hamilton.
[5] An order was obtained on September 14th, 2017 from Justice McLaren granting leave for the motion to be heard in the City of Hamilton.
[6] The motion to change was issued on October 25th, 2017.
[7] The respondent served a response to motion to change. The document was sworn on December 13th, 2017. The respondent sought an increase in spousal support, determination of the amount owing by the applicant to the respondent with respect to the equalization payment and payment of child support pursuant to the Separation Agreement.
[8] In these proceedings the applicant and the respondent respectively swore two affidavits, as well as, two financial statements. They also provided extensive financial disclosure, including the incomes of their respective partners.
[9] A case conference was held on February 12th, 2018 before a Dispute Resolution Officer.
[10] A settlement conference was held on April 18th, 2018. On consent, there was no order as to costs for the settlement conference.
[11] On May 30th, 2018, a trial management conference was held. A trial scheduling endorsement form was completed on this date and signed by the parties and Justice Brown. It was determined that the issue before the court was spousal support, duration and quantum.
[12] The applicant submitted an offer to settle dated February 12th, 2018. In it, he offered to pay the applicant the lump sum of $16,250.00 within 20 days of the acceptance of the offer as a full and final settlement of the litigation. That offer was not accepted by the respondent.
[13] The applicant then submitted an offer to settle dated April 18th, 2018. It specified that the spousal support obligation of the applicant as contained in the parties’ separation agreement of November 23rd, 2006 shall continue to be paid to and including December 31st, 2022. Each party was to bear his/her respective legal costs. That offer to settle was not accepted before it was withdrawn by an offer to settle made by the respondent dated May 15th, 2018.
[14] The May 15th, 2018 offer specified that all previous offers to settle were withdrawn. It further provided that on January 1st, 2018, the applicant would be obliged to commence paying mid-range spousal support in the amount of $1,734.00 per month based on his income of $107,568.00 and imputed income to the respondent in the amount of $45,000.00 per annum. Those monthly payments were to continue to and including December 31st, 2022.
[15] Paragraph 6 of that offer to settle of May 15th, 2018 contained the following provision:
The respondent shall accept a lump sum payment in the amount of $80,000.00, “net”.
[16] As pointed out by Ms. Williams in her submissions, the word “net” was added in handwriting. The May 15th, 2018 offer was on a without-costs basis until January 1st, 2018, on a partial indemnity basis from June 1st, 2018 until the commencement of trial, and then deemed withdrawn one minute after the trial commenced.
[17] The applicant and respondent respectively filed copies of the orders they sought at the outset of trial. The applicant sought an order that his spousal support obligations to the respondent be terminated effective June 30th, 2021. The respondent sought an order that spousal support be paid until December 31st, 2022. She sought spousal support pursuant to the Spousal Support Advisory Guidelines in the mid-range amount, based on the applicant’s income of $105,995.00 to $105,568.00 retroactive to 2015.
[18] In the judgment issued by this court, the applicant was ordered to pay the respondent spousal support in the mid-range of the Spousal Support Advisory Guidelines of $1,700.00 per month, commencing January 1st, 2018 until December 31st, 2022. The claim for retroactive spousal support was dismissed for reasons articulated in the judgment.
Position of the Respondent
[19] The respondent is seeking substantial indemnity costs to the date that her offer to settle, dated May 15th, was served, namely May 17th, 2018, in the amount of $250.00 per hour, and full indemnity costs from May 17th, 2018 to the present time at the rate of $350.00 per hour. I reviewed the bill of costs submitted by Mr. Lanza on behalf of his client and find from my review of it that the time spent and the hourly rates are reasonable. Mr. Lanza was called to the bar in 1970 and has extensive experience as a family law lawyer.
Position of the Applicant
[20] Ms. Williams produced copies of her solicitor/client bills rendered to Mr. Ryan and they roughly total $20,000. As I reviewed them, it appears that her billing rate was approximately $250 per hour and her daily rate charged for trial was somewhat lower than that of Mr. Lanza.
[21] Ms. Williams, in her submissions on costs, submits that the original determination made by me at paragraph 57 of the judgment that each party shall bear his/her costs should be ordered.
[22] In support of that position, Ms. Williams has argued that the position taken by the respondent that she substantially achieved the relief sought in her May 15th, 2018 offer to settle is incorrect. She argues that the respondent did not achieve a greater result at trial than what she requested in her offer dated May 15th, 2018. The offer did not contain severable terms. It included a term that the applicant shall pay the respondent “$80,000.00 net”. She submits there is no indication in the respondent’s offer of May 15th, 2018 that the monthly periodic amount of support should be paid in the alternative to the $80,000.00 net, nor is there any indication that any of the terms in the offer are severable.
[23] I concur with the submissions of Ms. Williams.
Law
[24] The Ontario Court of Appeal has stated that costs awards should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties”. Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 at para. 24.
[25] In Serra v. Serra, 2009 ONCA 395, the court noted at paragraph 8 that there are three fundamental purposes to costs orders: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants: Fong v. Chan (1999), 1999 CanLII 2052 (ON CA), 46 O.R. (3d) 330 at para. 22.
[26] In exercising its discretion to award costs, the court must consider the following factors specified in Rule 24(11) of the Family Law Rules, O. Reg. 114/99: (a) the importance, complexity or difficulty of the issues; (b) the reasonableness or unreasonableness of each parties’ behaviour in the case; (c) the lawyer’s rates; (d) the time properly spent on the case; (e) expenses properly paid or payable; and (f) any other relevant matter.
Analysis
[27] In the case at bar, the matter was reasonably straightforward, subject to the vexing issue of “double-dipping”. I do find that the respondent was slow in producing the financial information she was required to provide under the terms of the separation agreement and during the time leading up to trial. I do not think she acted reasonably, as stated in the judgment, in failing to disclose her living relationship with Archie Young and then even at trial denying that she was going to continue living with Archie Young. Her behaviour made it difficult for the applicant to discern her financial situation and he was not able to truly assess what case he had to meet until evidence was elicited at trial. Even then, Archie Young was not called as a witness by the respondent but by counsel for the applicant.
[28] Paragraph 28(g) of the parties’ separation agreement contemplated that the cohabitation of either party, inter alia, would be a material change of circumstances. It set out that the parties would notify each other in regard to a material change of circumstances where it impacts child or spousal support.
[29] The applicant, Mr. Ryan, was exemplary in his adherence to his obligations under the separation agreement. I noted in the judgment that he did not miss any payments and not only made them on a regular basis, but kept them up to date. He provided information that he was cohabiting with his partner as evidenced by the production of that information in one of his income tax returns.
[30] On July 17th, 2018, the applicant requested that the respondent provide copies of her partner’s income tax returns from 2015, 2016, and 2017. In an email of August 7th, 2018 to the applicant’s counsel, the respondent informed the applicant that she had been living on her own since the month of July 2018 and the position was being taken that her partner’s income was no longer relevant.
[31] On August 16th, 2018, the respondent provided Mr. Young’s 2016 and 2017 income tax returns with an accompanying letter, which specified that the respondent and Mr. Young were in a relationship and “though they are in a relationship they do not reside together”.
[32] The respondent also swore a financial statement on August 23rd, 2018, indicating she was not living with Archie Young.
[33] This information made it clearly uncertain to the applicant as to whether or not the respondent was residing with Mr. Young both during the litigation and at trial. I have no doubt that this impacted upon the applicant’s ability to assess his position in the case or to entertain any offers.
[34] I further find that the offer to settle dated May 15th, 2018 submitted by the respondent was ambiguous. The respondent indicated that she wanted a lump sum of “$80,000.00 net”. The offer provided that if she received a spousal support result of at least $80,000.00 net and payment of $1,734.00 per month, the case would be settled. Mr. Lanza has submitted that a reasonable person reading the offer would understand that the offer to settle for “$80,000.00 net” was in lieu of the demand for $1,734.00 per month of spousal support to and including December 31st, 2022.
[35] I agree that the principle of contra proferentem applies to offers to settle. Certainly, the interpretation of the offer suggested by Mr. Lanza is possible but it is not clear. The Rules of Construction specify that an ambiguity should be construed against the party who drafted it. P.M. v. S.M., 2014 ONCJ 541 at para. 11.
[36] I further note that the respondent’s offer to settle, dated May 15th, 2018 did not specify that the provisions were severable. I find that the respondent has not met the conditions set out in Rule 18(14) of the Family Law Rules since she did not obtain an order that was as favourable as or more favourable than the offer. First, she received an award of $1,700.00 per month of spousal support and not the $1,734.00 contained in the offer. While I recognize this is a minimal difference, it is less than what she demanded as a condition of settlement. Furthermore, she did not receive “$80,000.00 net”.
[37] I do not find that the behaviour of the respondent has been reasonable throughout the proceedings. She has not provided proper financial information during the term of the separation agreement. Even leading up to trial, she only produced her financial information shortly before the trial. At the trial itself, she contradicted the evidence of her partner Archie Young with respect to their living arrangements.
[38] Rule 24(6) provides that in cases where success has been divided, there can be an offsetting of costs and I find that is the appropriate disposition of costs in this matter. The claims for retroactive spousal support contained in the respondent’s requested order filed at the outset of trail were significant and sought a large award to be made against the applicant. The respondent was substantially unsuccessful in that claim.
Conclusion
[39] I confirm my judgment that each party shall be responsible for the payment of their own costs.
___________________________
Turnbull J.
Released: January 31, 2019
COURT FILE NO.: 1107/17
DATE: 2019-01-31
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Robert Ryan
Applicant
- and -
Cheryl Ryan
Respondent
RULING ON COSTS
Turnbull J.
Released: January 31, 2019