Court File and Parties

NEWMARKET COURT FILE NO.: FC-16-50874-00 DATE: 20190208

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Alla Levin, Applicant AND: Nikolay Levin, Respondent

BEFORE: The Honourable Madam Justice M. E. Vallee

COUNSEL: Sam Zaslavsky, Counsel for the Applicant Matthew J. Armstrong, Counsel for the Respondent

HEARD: In Writing

COSTS ENDORSEMENT

Introduction

[1] The trial of this matter proceeded for eight days in May 2018. Pursuant to my direction, counsel have served and filed written submissions on costs.

[2] Ms. Levin made two offers to settle prior to trial. The first is dated July 4, 2017. The second is dated January 14, 2018. It replaced the first offer. The second is less generous than the first. Ms. Levin states that the reason for this is that she had paid the retainer for trial in the meantime and therefore no longer had the means to pay the equalization payment set out in the first offer.

[3] In considering the factors in r. 18(14) of the Family Law Rules, O. Reg 114/99, I note that both offers were made well in advance of trial. The second offer did not expire and was not withdrawn before the trial began. Mr. Levin did not accept either offer. When assessed globally, the result at trial was significantly better for Ms. Levin than the terms of her last offer. Rule 18(14) provides that Ms. Levin is entitled to costs up to the date that the offer was served and full recovery of costs from that date. Ms. Levin does not request costs up to the date that the first offer was served, only full recovery costs afterwards.

[4] Despite this, Mr. Levin raises certain issues that he states ought to impact on the costs awarded to Ms. Levin.

Should Mr. Levin be awarded costs for his motion returnable at trial?

[5] Mr. Levin states that Ms. Levin refused to attend for questioning on October 30, 2017, just days before the November trial sittings when the matter was expected to be called for trial, because he would be present at the questioning. He had to bring motion to preclude Ms. Levin from relying on the transcript of his questioning at the upcoming trial. He states that after the second trial management conference held on January 18, 2018, Ms. Levin abandoned her refusal to attend and agreed to be questioned in his presence. No consent or order was made withdrawing Mr. Levin’s claim for costs for the non-attendance or for the motion.

[6] Ms. Levin states that she agreed to be questioned only after McGee J. gave specific directions as to how Mr. Levin was to conduct himself. The issue became moot. The motion was never argued. No costs award was made against her.

[7] Rule 24(11) states that the failure of the court to determine costs or reserve costs after a step in the case does not prevent the court from awarding costs in relation to that step at a later stage in the case. At trial, there was some evidence regarding why Ms. Levin did not wish to be questioned in Mr. Levin’s presence. She is the successful party at trial. Accordingly, I decline to award Mr. Levin costs associated with this motion.

Should Ms. Levin be awarded costs of the trial management conferences held on July 20, 2017 and January 18, 2018?

[8] Mr. Levin states that the costs of these conferences were not reserved to the trial judge so they should not be awarded to Ms. Levin.

[9] Again, Rule 24(11) does not require that costs be reserved to the trial judge. She is the successful party at trial. Accordingly, I decline to deny her the costs of the trial management conferences.

Should Ms. Levin be awarded costs of the mid-trial conference?

[10] I suggested that the parties attend the mid-trial conference. It did not significantly lengthen the trial. The parties were unable to settle. Because Ms. Levin is the successful party at trial, the costs of the mid-trial conference are properly payable by Mr. Levin.

Should Ms. Levin be awarded the costs of the third party records motion?

[11] McGee J. reserved the costs of this motion to the trial judge. Mr. Levin states that no costs should be awarded to Ms. Levin for the motion. Ms. Levin had to bring this motion regardless of Mr. Levin’s position because he did not have authority to consent to it.

[12] I note that the result of this motion was that Mr. Levin’s partner, Helen Sanders, was ordered to produce certain financial records. McGee J. stated that trial unfairness would result if the records were not produced. Although Mr. Levin’s counsel did not represent Ms. Sanders and nobody attended for her, Mr. Levin opposed the motion. Mr. Levin states that Ms. Levin delayed in bringing this motion so it had to be heard on an urgent basis. The parties waited all day for the motion to be heard.

[13] This motion did not request an order against Mr. Levin. He correctly states that he could not consent to it. Ms. Sanders could have opposed the motion. She did not attend. Therefore, the motion could have proceeded on an uncontested basis which would have resulted in a modest amount of costs[^1]. The costs of this motion resulted from Mr. Levin’s opposition to it. The order was granted. Ms. Levin is entitled to the costs of this motion.

Would Mr. Levin suffer hardship if costs were awarded against him?

[14] Mr. Levin states that his only significant asset on the valuation date was the investment property. He sold it and obtained approximately $180,000. He now has to earn an additional $37,320.61 outside of his regular work to pay support based on $118,033 of income. At his hourly rate, he has to work 20 more hours per week beyond his regular 40 hours. He states that Ms. Levin is the sole owner of a $1,000,000 home and she is entitled to a payment from Mr. Levin of $40,000, as well as $32,630.64 in support for at least 2.5 years.

[15] Mr. Levin’s submissions on this point ignore my findings at trial. To name a few, Ms. Levin’s house is subject to encumbrances. She does not have $1,000,000 at her disposal. The support amount was determined based on findings that Mr. Levin’s credit card spending showed that he earned considerably more than his stated and declared income. At trial, Mr. Levin ultimately admitted that Ms. Levin’s return to school was reasonable. The support is reviewable when Ms. Levin is expected to complete her RN degree.

Bad Conduct

[16] Mr. Levin points to certain issues that he states show unreasonable conduct and bad faith on the part of Ms. Levin “throughout the proceedings”. He states that her position on the Ukraine property was untenable. It lengthened the trial. She was ultimately unsuccessful on this issue. He raises several specific issues regarding post-separation adjustments which were claimed by Ms. Levin but not awarded to her. He requests an order that the parties bear their own costs.

[17] When r. 18(14) applies, it is not appropriate to pick over every specific amount requested by the successful party that was not awarded to her. Although Ms. Levin was unsuccessful on the issue of land in Ukraine, it was a very small part of the dispute between the parties. It did not consume much trial time. Ms. Levin made an offer to settle. The global result at trial was much more favourable to her than the offer.

[18] Even if Ms. Levin had not achieved a result that was as favourable or more favourable than her offer, I would have still been inclined to award her full indemnity costs because of Mr. Levin’s bad behaviour. The following are some examples:

• Mr. Levin denied that certain events took place, such as his assaulting Ms. Levin, in the face of conviction certificates. He behaved as though he did not know what certain documents “meant” because English is not his first language, when his testimony showed that he speaks and reads English very well. He did not request to have an interpreter at trial.

• His 2017 tax return showed income of employment income of $40,000 and net rental income of $10,521. He conceded that support should be calculated on income of $85,761. Nevertheless, his spending and travel clearly showed that his income was much higher. His income evidence was misleading.

• He sent emails to the parties’ friends to “update them” on the status of the litigation, which included denigrating remarks about Ms. Levin.

• He threatened Ms. Levin that if she pursued the litigation, she would receive nothing. He threatened to feign illness to justify decreasing his income.

• He attempted to steal Ms. Levin’s clothes and jewellery. The parties’ eldest daughter had to call the police.

• He withheld the actual sale price of the investment property as a litigation tactic.

• He maintained that he owed debts to his mother without any supporting evidence.

• He withdrew money from the parties’ joint account which meant that a mortgage payment was not made. Penalties resulted.

• Most significantly, he was in breach of a 2016 order because he had not paid any s. 7 expenses and had stopped paying spousal support in December, 2017.

[19] Mr. Levin’s submission that the positions taken Ms. Levin forced the trial is perverse.

Conclusion

[20] I have reviewed Ms. Levin’s bill of costs. Counsel’s hourly rate is reasonable. As noted above, Ms. Levin does not request any litigation costs up to July 4, 2017 when her first offer was served. I find that the hours spent by counsel on the various steps after July 4, 2017 are reasonable. He appropriately charged a flat rate of $3,000 for each day of trial based on 10 hours. The fees total $55,860 plus tax. The disbursements total $1,689.14 plus tax. With tax included, the total amount is $65,030.53.

[21] In fixing an amount for costs, the overriding principles are fairness and reasonableness. See Boucher v. Public Accountants, 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291.

[22] In my view, a fair, reasonable and proportionate costs award for this trial is $65,030.53 all inclusive, which Mr. Levin shall pay to Ms. Levin within 60 days.

Madam Justice M.E. Vallee

Date: February 8, 2019

[^1]: Interestingly, there was evidence at trial that Ms. Sanders evaded service of the order. She did not produce any records nor did she attend at trial, contrary to McGee J.’s order.