COURT FILE NO.: 19-1117-00
DATE: 20200306
CORRECTED DATE: 20200312
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Holly Ann Rushton, Applicant
AND: Cody Sheldon Cuff, Respondent
BEFORE: McDermot J.
COUNSEL: Sheila Gibb and Samantha Eisen, for the Applicant Mary Ann Cummings, for the Respondent
HEARD: By written submissions
ENDORSEMENT
Corrected decision: the text of the original endorsement was corrected on March 12, 2020, and the description of the correction is appended
Introduction
[1] On January 9, 2019, I heard a motion brought by the Respondent for temporary spousal support. My endorsement was issued on January 23 when I ordered temporary spousal support in the amount of $2,000 per month.
[2] On the basis of the argument at the motion alone, the Applicant was clearly the successful party and entitled to costs. She acknowledged the Respondent’s entitlement to spousal support and argued that the quantum of support should be dictated by the Spousal Support Advisory Guidelines (the “SSAGs”). On the other hand, the Respondent argued that an income split maintained prior to separation should continue, warranting a departure from the SSAGs. I agreed with the Applicant that the income should be determined by the SSAGs and ordered spousal support calculated on that basis.
[3] Notwithstanding this, both parties request costs. The Applicant’s counsel (not counsel who argued the motion) asks for costs of $4,149.36 on a partial recovery basis. This would be based on the Applicant’s success on the motion noted above. Respondent’s counsel, however, also asks for costs of $7,328.79, again on a partial recovery basis. She says that there is a significant “back story” which makes it apparent that if the motion had not been brought, Ms. Rushton would never have paid spousal support on a voluntary basis, and only acknowledged entitlement late in the day.
Analysis
[4] The court must first determine entitlement to the costs of the motion, and then, if necessary, quantum.
Entitlement to Costs
[5] Both parties served offers to settle, but neither offer was bettered at the motion. The differences between the parties was illustrated by the offers: Mr. Cuff offered to accept spousal support of $4,000 per month, and Ms. Rushton offered to pay $1,600 per month. Both offers contained life insurance clauses; that issue was not argued at the motion and no order was made for support life insurance. Only Ms. Rushton’s offer was severable.
[6] As neither party beat the other’s offer, the major issue in determining entitlement to costs is success on the motion as costs generally follow the event: Family Law Rules,[^1] Rule 24(1).
[7] Mr. Cuff says that he had to bring the motion, and if he had not, no spousal support would have been forthcoming from Ms. Rushton. However, his lawyer also says that “[b]efore the hearing of the motion, there was not even an acknowledgement that spousal support should be paid.” That is not, strictly speaking, correct. Ms. Rushton’s affidavit filed in response to the motion confirmed that she was expecting to pay support; the only issue was how much support would be paid.[^2] The Respondent’s offer served approximately a week prior to the motion also confirms that entitlement was acknowledged as the Respondent offered to pay $1,600 per month in spousal support. There was no motion brought by the Applicant to dismiss Mr. Cuff’s motion.
[8] Based upon the affidavits and pleadings filed, this motion was therefore not about whether support was payable, but what amount was payable. And a review of the offers shows that the result at the motion was much closer to the offer of the Applicant than that of the Respondent. Offers to settle are not only for the purpose of determination of costs; they should also be a basis for settlement discussions and should constitute a bona fide attempt to settle issues between the parties: Beaver v. Hill, 2018 ONCA 840 at para. 16. The Applicant’s offer of $1,600 per month is an attempt to compromise and was obviously closer to the result of $2,000 per month than the Respondent’s offer of $4,000 per month. Pursuant to Rule 18(16), the court can take an offer into account even where the offer does not comply with Rule 18(14) and I do so.
[9] The Respondent also suggests in his submissions, that he was successful because “The Fund” in the Cayman Islands was frozen at the motion. That again is, strictly speaking, incorrect. Mr. Cuff did not request an order at the motion to freeze the account. It was not mentioned in his Offer to Settle. In fact, Mr. Cuff wished his support based upon all of the Applicant’s employment income including her profit share that was placed into that account. However, during argument, when it became apparent that the Applicant did not have access to those funds, there was a discussion as to freezing that account; my recollection is that the concern was expressed that The Fund could not be subject to an Ontario preservation order because it was in the Cayman Islands. I suggested the joint retainer of a lawyer in the Cayman Islands to freeze that account and counsel agreed. The freezing order and joint retainer were not argued issues and neither was raised any of the pleadings.
[10] The freezing order therefore actually removed the profit-sharing income from the support calculation which was not a success for the Respondent, who wished support to be paid on the basis of the income placed in that account. In fact, Ms. Rushton took the position that support could not be based upon the profit-sharing income paid into The Fund as she received no benefit from those monies[^3] and in the end she was successful on that issue.
[11] Finally, it is important to note where the majority of the efforts and time was spent by counsel: see Jackson v. Mayerle, 2016 ONSC 1556. This was essentially an argument as to quantum and that was the only issue which was spoken to at the motion. The affidavits also concentrate on quantum, not entitlement. On this basis alone, the Applicant was the successful party.
[12] Therefore, contrary to the Respondent’s submissions, it would not be venturing into a “parallel universe”[^4] to find that the Applicant was the successful party on the motion. In fact, based upon the argument, the affidavits and the pleadings filed and the result at the motion, the Applicant was largely the successful party. I say largely because the Applicant sought imputation of income to the Respondent which was not a finding on the motion.[^5]
[13] I do not find unreasonable conduct on the part of the Respondent as suggested by the Applicant. That is not a factor in assessing entitlement (or for that matter quantum) of costs.
[14] I therefore find that the Applicant is entitled to her costs of the motion.
Quantum of Costs
[15] The Applicant claims costs on a partial recovery basis of $4,149.36, being 50% of the full recovery costs of the motion.
[16] The entries on the Bill of Costs are restricted to the motion in issue. The hourly rates of counsel are reasonable and the amount of the costs are reasonable considering that the issues in this matter were somewhat complex considering the Respondent’s claim for an equalization of income and the nature of the Applicant’s income.
[17] Therefore, the Applicant shall have her costs as requested fixed in the amount of $4,149.36. Those costs shall be payable within 60 days, and if not paid may be enforceable as support.[^6]
McDERMOT J.
Date: March 12, 2020
In the second sentence of paragraph 12, Respondent changed to Applicant.
In footnote 4 the case should Scipione v. Del Sordo.
[^1]: O. Reg. 114/99
[^2]: In para. 69, the Applicant says she is paying support of $1,100 per month: although the Respondent denies that Ms. Rushton actually paid support prior to the motion, the statement is, in itself, an acknowledgment of entitlement for the purpose of the motion. In para. 74, the Applicant says that she wants to pay support at the lower end of the SSAGs, which is again is an acknowledgment of entitlement and confirms that the parties differed as to quantum of spousal support, not entitlement.
[^3]: See para. 73 of the Applicant’s affidavit sworn January 3, 2020.
[^4]: Pazaratz J. in Scipione v. Del Sordo, 2015 ONSC 5982.
[^5]: I note that, in his submissions, the Respondent says that he has literacy issues which required counsel to go through the affidavits with him and which increased his costs. Although he mentioned that he did not have his high school equivalency, those literacy issues were not mentioned in any of the affidavits filed by Mr. Cuff in support of his motion, and in a motion where imputation of income was an issue, it would be expected that this would be a fact to be brought to the attention of the court. It is concerning that the Respondent is only now raising that issue.
[^6]: I would have ordered this to be transferred from the dividend income which is being controlled by the Respondent but as this is complicated by the fact that this is joint income. To obtain the costs from The Fund would also be complicated requiring a possible court order in the Cayman Islands and would also attract tax consequences.