Court File and Parties

Court File No.: 687/12 Date: 2020-07-20 Ontario Superior Court of Justice – Family Court

Between: Michael Drach, Applicant – and – Toscha Traboulay, Respondent

Counsel: Self-represented, for the Applicant M. G. Lucarelli, for the Respondent

Submissions Due: July 13, 2020

Before: The Honourable Justice Robert B. Reid

Decision on Costs

[1] The applicant, Michael Drach brought a motion to change the final separation agreement between the parties dated August 6, 2012. The matter was heard over the course of a two-day trial.

[2] I invited the parties to resolve the issue of costs consensually. They were unable to do so and therefore filed written costs submissions.

[3] Ms. Traboulay seeks costs in the amount of $37,500 inclusive of disbursements and HST. That is an amount greater than a partial indemnity rate and less than a substantial indemnity rate. Her full indemnity costs were about $50,000.

[4] Mr. Drach submits that he was partially successful and inferentially suggests that there be no order as to costs. He indicates that he incurred legal expenses of about $60,000 leaving aside personal expenses, lost wages and the expert report cost.

[5] At trial, Mr. Drach sought a reduction in his child support obligations retroactive to January 1, 2014, and a retroactive reduction in his share of section 7 expenses including fees for private school. He asked that current child support be adjusted to reflect his present income with corresponding proportional sharing of section 7 expenses including private school and post-secondary education costs.

[6] The respondent, Toscha Traboulay sought an order fixing child support arrears and section 7 expense arrears and setting ongoing child support in accordance with the Child Support Guidelines. As well, she requested proportional sharing of future section 7 expenses in accordance with the parties’ respective current incomes.

[7] The parties agreed that there had been a material change in the financial circumstances of Mr. Drach after they signed the separation agreement.

[8] The parties disputed the appropriate amount that should have been paid by Mr. Drach for child support and section 7 expenses (including private school) from January 2014 to the date of the trial.

[9] In my decision dated June 5, 2020, I determined Mr. Drach’s obligations from January 1, 2014 to trial, and thereafter on an ongoing basis. I made findings of: a. his income for support purposes; b. the amount payable pursuant to the Child Support Guidelines; c. the reasonable section 7 expenses (including private school costs); and d. the appropriate proportion of section 7 expenses payable by Mr. Drach based on his income and that of Ms. Traboulay.

Costs Considerations

[10] The court’s discretion to award costs is guided by the factors set out in rule 24 of the Family Law Rules. The successful party is presumptively entitled to costs. If there is divided success, costs may be apportioned. In settling the amount of costs, as set out in subrule 24(12)(a), the court is required to consider the reasonableness and proportionality of certain factors as they relate to the importance and complexity of the issues, including each party’s behaviour, the time spent by each party, any written offers to settle, and any legal fees.

[11] The purpose of the costs rules are to indemnify (in full or in part) successful litigants for the costs of the litigation, to encourage settlement, to discourage and sanction inappropriate behavior by litigants and to ensure that cases are dealt with justly.

Analysis as to Success

[12] As to income for support purposes, I accepted the evidence of Mr. Drach’s expert witness even though Mr. Drach himself did not base his position on the views of his own expert. I applied the Child Support Guidelines to arrive at an adjusted figure for child support arrears. I adjusted child support downwards for the time that one daughter was away from home attending university. The decision as to responsibility for past section 7 expenses was based on a proportional sharing, consistent with the position of Ms. Traboulay. That finding was not consistent with Mr. Drach’s position that he should bear no responsibility for private school expenses to the extent that they were beyond the family’s means. Ongoing child support was based on the Guidelines applied to the income for support purposes gleaned from the analysis of Mr. Drach’s expert witness with an adjustment for the child who was away from home attending university.

[13] My decision was that Mr. Drach pay arrears for support and section 7 expenses totaling approximately $169,000 with a repayment schedule of $750 per month increasing to $2,000 per month after child support ends. His proposal was to pay about $26,000. Ms. Traboulay proposed a payment of about $197,000. Mr. Drach proposed monthly support payments of $2,000 while Ms. Traboulay proposed $4,093 per month. I ordered the monthly amount of $1,951 (for one child), increasing to $3,165 (for two children) for the months of May through August inclusive based on an annual income of $240,647. As to ongoing section 7 expenses, Mr. Drach proposed a “reasonable” sharing by the parties with his university-aged daughter to contribute 25% of her postsecondary expenses. Ms. Traboulay proposed proportional sharing of 77% and 23%. My order was based on 75% and 25%.

[14] As is obvious from the foregoing, success was divided. Neither party received the result that they sought, although the past and ongoing financial obligation of Mr. Drach was closer to the position of Ms. Traboulay than to his own.

Analysis as to Reasonableness

[15] Ms. Traboulay submits that significant legal expenses in the range of $7,500 were incurred by her due to the unreasonable behavior of Mr. Drach in failing to provide timely disclosure. It appears that there was in fact a slow response by Mr. Drach to the disclosure requests over almost three years leading up to January 2019.

[16] Ms. Traboulay also submits that costs were increased as a result of Mr. Drach’s failure to attend mediation despite his having agreed to do so. The failure to attend mediation may have resulted in increased costs and a lost opportunity for resolution, although whether a settlement would have been reached through mediation is a matter of speculation.

[17] Both sides made offers to settle. In Mr. Drach’s case, his settlement position was not significantly different from that advanced at trial. Offers made by Ms. Traboulay were not more favorable than the result in court although her most recent offer, made on February 28, 2020 shortly before trial, proposed $130,000 arrears of child support and section 7 expenses payable within 60 days with ongoing child support based on an annual income of $210,000. Other than the requirement of a full payment of arrears within 60 days, those terms were superior to the trial result. I am entitled to consider offers even when they do not meet the requirements of rule 18. Ms. Traboulay deserves credit in this costs decision for her non-rule 18 offer.

[18] Both parties have expended substantial resources on their legal representation and in the case of Mr. Drach, he incurred a disbursement of about $14,000 for the income analysis.

[19] In summary as to reasonableness, I conclude that the conduct of Mr. Drach in delaying full disclosure and the preparation of the income analysis report led to the unnecessary increase in costs for Ms. Traboulay.

Summary and Conclusion

[20] The parties have expended substantial resources on this case. It has been a frustrating experience for both of them. Their disagreement about Mr. Drach’s income for support purposes potentially could have been resolved much earlier if full details of his income and an income analysis had been prepared when initially requested. Ms. Traboulay showed good faith in making a serious attempt to resolve the matter shortly before trial.

[21] There was no suggestion that the motion to change should not have been made. In fact, there was an agreement that the financial circumstances of Mr. Drach had changed since the separation agreement was signed. The case was always about quantum of arrears and ongoing support. The two major impacts on quantum were based on a decision about Mr. Drach’s income for support purposes and on his responsibility to share in private school expenses. Ms. Traboulay was successful on both those issues.

[22] Even though, as noted above, success was divided, it is appropriate that Ms. Traboulay receive a contribution towards her costs from Mr. Drach.

[23] There will be an order that Mr. Drach pay the sum of $20,000 to Ms. Traboulay on account of costs. Since this case was entirely focused on support, those costs are properly recoverable as support and enforceable through the Family Responsibility Office. Costs are payable at the rate of $100 per month commencing August 1, 2020.

Reid J. Released: July 20, 2020