NEWMARKET COURT FILE NO.: FC-17-53812-00

DATE: 20200117

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ROCHELLE STEINFELD

Applicant

– and –

GEORGE KOENIGSBERG

Respondent

Ken H. Nathens, for the Applicant

S. Lawrence Liquornik, for the Respondent

HEARD: In Writing

REASONS FOR DECISION ON COSTS

DiTOMASO J.

INTRODUCTION

[1] This was a bitterly contested family law dispute primarily focused on the Respondent’s claim for spousal support. After a five-day trial (May 24, 27, 28, 29 and 31, 2019) Reasons for Judgment were delivered on October 16, 2019. Written submissions regarding costs were completed and delivered on November 5, 2019.

[2] The ultimate outcome of the trial is summarized at the CONCLUSION section, paragraph 258 of my Reasons for Judgment. I have reviewed my reasons and all written submissions on costs. Here are my reasons for decision on costs.

TRIAL PROCEEDINGS

[3] The trial of this matter proceeded for five days. The primary issue was the Respondent’s claim for spousal support. He claimed he was in need and the Applicant had the ability to pay. The Applicant disputed the Respondent’s need for spousal support and maintained she was obliged to pay him nothing. She took the position that her husband’s own irresponsible lifestyle left him in the position he now found himself.

[4] The underlying problem regarding the spousal support claim was that the Respondent claimed $500,000 lump sum payable for spousal support out of the Applicant’s assets. The Applicant denied this claim asserting that if any spousal support was owing, such support ought to be based on income derived from her assets and not a lump sum payment out of those assets.

[5] For the most part, because of this divergence in approach, the trial took five days. The evidence went as far back as 1995 reviewing the married lives of the parties, their backgrounds, lifestyles and financial transactions.

[6] The Respondent contended on compassionate grounds that the Applicant ought to pay spousal support to him out of her assets. The Applicant asserted that significant spousal support claimed by the Respondent, if any, was not intended to be a substitute for property division and compassion was not a relevant consideration.

[7] I found that the notion of compassion as a moral obligation on which to found spousal support entitlement was irrelevant and not based upon the provisions of the Divorce Act. I rejected this argument. See Reasons for Judgment at paras 172, 173.

[8] Further, I found under the Divorce Act, there was no authority for the transfer of assets/capital in the guise of support. See Reasons for Judgment para. 179.

[9] On the critical issue of the basis on which spousal support was to be paid, I found in favour of the Applicant. While I found the Respondent had financial need and the Applicant had the ability to pay spousal support given her means, I found spousal support was based upon the Applicant’s income and income derived from her assets and not on the value of those assets themselves. See Reasons for Judgment para. 202.

[10] There were other issues decided at trial. While of importance, those issues became part of the vortex of trial but were by no means why the case went to trial.

[11] Simply put, the Respondent sought significant spousal support lump sum payments out of the Applicant’s assets. The Applicant refused to pay him any spousal support.

[12] As I will explain further, in the end, there was divided success at trial.

POSITION OF THE PARTIES

Position of the Applicant

[13] The Applicant submits she is entitled to partial indemnity costs in the amount of $113,000 asserting she was the more successful party at trial.

[14] She submits the Respondent took unreasonable positions throughout the litigation which significantly increased the time and costs for the parties. She relied upon r. 24(3), (5) of the Family Law Rules.

[15] The Applicant submits the main issue was whether the Respondent was entitled to spousal support and if so, whether spousal support was to be paid by way of lump sum or monthly periodic payments. She denied spousal support was to be paid out of her assets/capital.

[16] The Applicant submits the Respondent’s offers to settle were not reasonable and not close to the amount awarded at trial. Although the Respondent was awarded spousal support in the lump sum of $46,000, this was numerically closer to the Applicant’s offer to settle that neither party would be entitled to spousal support.

[17] The Applicant submits that should costs be awarded to the Respondent, such costs be set off against the lump sum amount awarded to him.

Position of the Respondent

[18] The Respondent blames the Applicant for causing this matter to proceed to trial. He asserts that even though there was divided success at trial, he was the more successful party. He claims partial indemnity costs in the amount of $17,000 for a five-day trial. Although the Applicant took the position at trial that he was not in need of spousal support and she was not obliged to pay any spousal support, she was unsuccessful.

[19] Although the Respondent was unsuccessful in obtaining an award of spousal support lump sum in the amount of $500,000 (or later in the amount of $350,000) out of the Applicant’s assets, he did obtain at spousal support lump sum award of $46,000.

[20] The Respondent submits that he had not taken unreasonable positions throughout the conduct of this litigation. Rather, he took positions to abandon certain claims with a view to narrowing the issues for trial.

ANALYSIS

[21] An award of costs is discretionary. See s. 131 of the Courts of Justice Act, 1990 cC.43.

[22] In family law cases, r. 24 of the Family Law Rules is to be taken into consideration.

[23] In this case, each side blames the other for the conduct of a five-day trial, lengthy proceedings, and all the expenses associated with this action. Ultimately, the trial resulted in divided success.

[24] The primary issue at trial and the most time spent at trial was devoted to the Respondent’s claim for spousal support. The Applicant asserted throughout the action and throughout the trial, that the Respondent was entitled to no spousal support. The Respondent asserted throughout that he was entitled to significant spousal support payable lump sum out of the Applicant’s assets/capital. Both parties refused to move off these positions.

[25] Both parties now blame each other that each is solely responsible for the prolonged trial in this matter.

[26] The fact of the matter is, and I so find, that each of the parties are responsible for the positions that they took. Those positions forced the inevitable – namely a five-day trial which was unnecessarily prolonged by reason of their divergence in approaches.

[27] In the Applicant’s written submissions at paragraph 5, where the Applicant submits she is the more successful party, there is a table which summarizes the issues, the parties’ positions at trial, their respective offers and the trial result. See Applicant’s written submissions at Tab 1 para. 5. This table is reproduced below.

Issue(s)	RS Position at Trial	RS Offers	GK Position at Trial	GK Offers	Trial Result
Spousal Support Payable	No support payable or periodic support at range of $200-288	No support payable by either party	RS to pay Lump sum of $500,000 payable out of assets (at para. 108 RFJ)	April 27, 2018 offer: RS to pay $500,000 in lump sum support May 27, 2019 offer: RS to pay $350,000 in lump sum support	Lump sum of $46,000 based on a periodic amount $288 per month.
RS’s income	Somewhere between $18,000-36,000 (at para. 149, RFJ)	N/A	$100,000 per year (at para. 181, RFJ)	N/A	$36,000
Child Support	$69.00 per month	None – RS will assume all responsibility	None	None	None

[28] I find this table reflects an accurate summary.

[29] Rule 24 (1) of the Family Law Rules provides that a successful party is entitled to the costs of a motion, enforcement, case or appeal.

[30] In this case, despite the claims of the Applicant and Respondent that they were the more successful party, I find the painful reality is that neither of them were.

[31] I find there was divided success. On the primary issue of spousal support, the Respondent was successful. He was awarded a lump sum payment of spousal support in the amount of $46,000, but not $500,000 and not $350,000 payable out of the assets of the Applicant. This was the critical issue in the case which prolonged the trial. The approach taken by the Respondent was rejected on both “compassionate” and legal grounds.

[32] The Applicant was successful in maintaining that if spousal support was awarded it ought to be based only on income derived from her assets. Much of the trial was spent on this issue. The Applicant’s approach was correct in law. Further, the Applicant was correct in as much as a distribution of assets should not be made in the guise of a support order.

[33] Success regarding the secondary issues such as child support and repayment of the sum of $35,000 by the Applicant to the Respondent was divided as well.

[34] In the end, I made the following orders[^1]:

a. George’s claim seeking an order that Rochelle pay him $500,000 in lump sum spousal support, both compensatory and otherwise, under the Family Law Act and the Divorce Act, out of her assets is hereby dismissed.

b. George’s claim that Rochelle reimburse him 50% of the joint funds which he withdrew from the Meridian joint bank account in November 2016, in the amount of $35,000 as an incident of support, is also dismissed.

c. Rochelle’s claim for child support for Alex Koenigsberg, born May 8, 2000, in the amount of $69 per month is dismissed.

d. Rochelle shall pay George the sum of $46,000, representing lump sum spousal support on a non-compensatory (needs) basis, payable within 60 days of the date of this decision, or arrangements for payment are to be made within that time period.

e. The parties may proceed to obtain a divorce order through the normal administrative process.

CONCLUSIONS

[35] For these reasons, given the divided success of the parties, there shall be no award of costs to either party. Rather, each party shall bear their own costs of the entire proceedings including the costs of trial.

Mr. Justice G.P. DiTomaso

Released: January 17, 2020

[^1]: See para. 258 of Reasons for Judgment