COURT FILE NO.: FS-16-86653 DATE: 2020 06 22 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Natalia Makeeva, Applicant and: Andrey Makeev, Respondent
BEFORE: Justice E. Ria Tzimas
COUNSEL: Ruslana Korytko, Counsel, for the Applicant Galyna Pribytkova, Counsel for the Respondent
HEARD: In Writing
COSTS ENDORSEMENT
INTRODUCTION
1A Final Judgment in the family dispute between these parties was released on July 18, 2019, following a 10-day trial in January 2019. At the conclusion of my decision, I identified certain outstanding issues and requested some clarifications. I also urged the parties to come to a resolution over costs, having regard for the limited means of both sides. Alternatively, I provided the parties with a timetable for the submission of costs.
2I did not receive submissions until late in September. Before I could rule on the various issues, I was alerted to the Applicant’s intention to bring a Fresh Evidence motion. That had the effect of postponing decision. Moreover, due to conflicting schedules, that motion was not heard until December 16, 2019. My decision in that motion is contained in my endorsement of June 19, 2020.
3I turn to the outstanding issues and my decision on costs.
a) Outstanding trial issues
4In the concluding paragraph to my Reasons for Judgment, I requested clarification regarding the treatment of the matrimonial home. I also invited the parties to make specific submissions with respect to the possibility of a spousal lump sum payment, the costs associated with the disposition of the matrimonial home, and the reconciliation of any past payments, having regard for the adjustments they would have to make, given my findings. Counsel were asked to limit their submissions to four pages double-spaced.
5It is clear from the content of the submission that counsel misunderstood the focus of my additional inquiries. My invitation for supplementary submissions was not an open invitation to revisit or reconsider my findings, especially as those related to the Respondent’s professional designation and the income that I imputed to him. Regrettably, the Applicant’s counsel understood otherwise and proceeded to challenge my findings as they related to the Respondent’s employment designation as an “electrician”. Although I decline to engage in any such review, I am obliged to underscore the concern I expressed in my companion endorsement to the Applicant’s fresh evidence motion, over the persistent attempt by the Applicant to mischaracterize the Respondent’s professional designation to something more than he ever was. This is a mythology that the Applicant sought to establish to impute a higher income to the Respondent that I rejected, and stand by that finding, for the lengthy reasons I outlined in my Reasons for Judgment.
6My request for certain focused supplementary submissions, was also not an invitation for counsel to provide additional submissions disputing my treatment of Ricchetti J.’s interim order on the Respondent’s income and the corresponding child support. These submissions were perplexing and to be clear, I decline to revisit any of my findings.
7Turning to the specific issues for which I invited supplementary submissions, I am troubled by the fact that counsel for both parties failed to respond to my specific outstanding questions.
8Beginning with the issue of possible lump sum spousal support payment, my inquiry was focused exclusively on the issue of whether or not such a payment would be appropriate. It was not concerned with the retroactivity of spousal support payments, as I considered that to be implicit in my decision. The Applicant submitted that she was not agreeable to a lump sum payment. But more significantly, challenged the decision on the appropriateness of any retroactive spousal support payments. The Respondent was silent on a lump sum payment and instead responded to the Applicant’s position concerning retroactivity.
9In light of the submissions, there shall be no lump sum payment on account of spousal support and there is nothing to add to my order at paragraph 113 fixing spousal support for the Respondent at $905 per month. Insofar as retroactivity is concerned, at no time during the trial was there any submission or suggestion that such an award ought not to be retroactive. Although I did not expressly state that such support was to be retroactive to the date of separation that was my intention. To remove any potential doubt or confusion, spousal support in favour of the Respondent is retroactive to the date of separation.
10The next issue over which I sought clarification concerned the disposition of the matrimonial home. It was only after I released my decision that I was advised that the parties had gone ahead and sold the matrimonial home. In her supplementary submissions, the Applicant sought contribution from the Respondent towards the outstanding mortgage payments, property taxes, and home insurance. She reported that from the date of separation until December 2018, the Respondent owed her $44,973.37. From January 2019 until the closing of the sale, she claimed an additional $9,633.32, bringing her total claim against the Respondent to $54,606.69.
11The Respondent disputed the Applicant’s claim and reminded the court that the matrimonial home expenses were linked to the issue of occupation rent. Counsel on behalf of the Respondent explained that she did not lead any evidence on the subject of occupation rent and the appropriate value because the parties agreed that the Respondent’s obligation to share in the matrimonial home expenses would be set-off against the Applicant’s obligation to pay occupation rent. For the purposes of this reconciliation, they agreed to an occupancy rent of $2,100 per month. Finally, counsel submitted that they reached this agreement having regard for the decisions, Surana v. Surana, [2016] O.J. No. 3789 and Higgins v. Higgins, [2001] O.J. No. 3011.
12In light of these submissions, I revisited the evidence and verified that the Respondent’s counsel had indeed put on the record the fact of the agreement. Curiously, in her supplementary submissions, the Applicant’s counsel was silent in relation to the subject of the occupancy rent. Given this clarification and confirmation, there is no further order to make with respect to the matrimonial home or the associated expenses.
13The third subject for clarification and reconciliation concerned the probable adjustment of past child support and s.7 special expenses given my determination of the Respondent’s income and the apportionment of s.7 obligations. As with the other issues, my request for supplementary submissions was not an open invitation to revisit the retroactivity of child support or s.7 expenses, which is what the Applicant did. The Respondent was no more helpful with the submission of confusing numbers, and effectively a request that I undertake an accounting and a tracing of funds to figure out the ultimate reconciliation. Perhaps counsel misunderstood the court’s invitation to assist with any specific disagreements over the reconciliation of specific payments. I feel obliged to remind the parties that they, and their counsel, are expected to do that homework. If there is any disagreement over a specific figure or payment, a judge may consider the differences and come to a decision.
14Insofar as the parties produced a dizzying set of numbers with calculations and aspirational projections that are inconsistent with my findings, I decline to make any further order regarding the reconciliation of outstanding payments. Instead, I direct the parties to my findings concerning the Respondent’s income, the corresponding sum of for child support, and the proportionate s.7 obligations and leave it to them to undertake the associated arithmetic. See specifically, paragraphs 84, 115, 118, and 157(a), (e), and (f) of my Reasons for Judgment, 2019 ONSC 4334.
b) Costs
15As I noted in my closing paragraph to my Reasons for Judgment, the success in this case was divided. The parties were encouraged to consider the settlement of this issue. Their submissions make it obvious that they were unable to settle.
16As between the parties, the Respondent submits that he was the successful party and furthermore, that in light of his offer of March 20, 2018, that being approximately one year before the trial, he should receive his costs on a full indemnity basis. The Applicant disputes that position and says that the Respondent’s persistent representations as an electrician, his inadequate disclosure, his poor conduct during the course of the litigation and other misrepresentations and inappropriate behaviour warranted an award of costs in favour of the Applicant on the basis of full indemnity.
Authorities
17In Mattina v. Mattina, 2018 ONCA 867, our Court of Appeal recently said:
9Section 131(1) of the Courts of Justice Act, 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, in the Superior Court of Justice and in the Ontario Court of Justice. Although the Family Law Rules do not expressly govern costs awards in the Court of Appeal, they have been used to guide this court’s analysis on costs in family law disputes.
10This 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.
12Rule 24(1) creates a presumption of costs in favour of the successful party of a motion, case, or appeal and the presumption that a successful party is entitled to costs applies equally to custody and access cases.
13Consideration 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.
14Rule 24(12) sets out a list of factors the court shall consider in determining an appropriate amount of costs:
(a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues:
(i) each party’s behaviour,
(ii) the time spent by each party,
(iii) any written offers to settle, including offers that do not meet the requirements of rule 18,
(iv) any legal fees, including the number of lawyers and their rates,
(v) any expert witness fees, including the number of experts and their rates,
(vi) any other expenses properly paid or payable; and
(b) any other relevant matter.
15The 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). [Citations removed]
18Just because an award of costs may be on a full indemnity basis does not mean that the successful party is entitled to whatever costs were incurred. The court assessing costs is still required to consider all of the factors in such an award. United Soils Management Ltd. v. Mohammed, 2019 ONCA 128.
19Costs awards, at the end of the day, should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties”. (See: Boucher v. Public Accountants Council for the Province of Ontario, 71 O.R. (3d) 291, at para. 24).
Analysis
20This was trial that went for ten days but should not have been any longer than two or three days. The only real issue for the court’s determination concerned the Respondent’s income. Instead, the Applicant pursued a theory that was not supported by her actual experience or spending practises. For the reasons already discussed, the Applicant’s claim that the Respondent be imputed an income anywhere between $70,000 and $120,000 did not have a rational basis or connection to their actual experiences and spending patterns. The persistent characterization of the Respondent as an “electrician”, in the face of evidence that supported a very different finding, was very problematic and likely informed a misguided approach to the litigation.
21The Respondent could be thought of as the more successful of the two parties, especially having regard for the coincidence between his offer of March 2018 and my various findings. However, the outcomes were in spite of his efforts and largely the result of the Applicant’s own admissions.
22Most significantly, he enabled the Applicant to pursue the theory of his professional designation as an “electrician”, without any regard for his actual reality by failing to produce the appropriate documents to explain his actual qualifications as only a journeyman electrician. He could have been far more forthcoming about his actual qualifications long before the trial. Instead, his inadequate disclosure, followed by the realization that he had very little to disclose, compounded the Applicant’s fishing expedition.
23The shortcomings by both parties are highly problematic. Both must take responsibility for the way they conducted themselves through the course of this Application and trial.
24The respective Bills of Costs are roughly on par in terms of the time that each counsel claimed. However, they both reveal excessive time spent on e-mails, communications back and forth and multiple drafts of affidavits and motions. If anything, they tell a tale of both counsel losing sight of the forest for the trees.
25In light of the foregoing, having regard for all the applicable principles, I exercise my discretion to conclude that each party be responsible for their own costs.
Tzimas J.
DATE: June 22, 2020