Superior Court of Justice - Ontario
DATE: 20200922
RE: Omar Hamam, Applicant
AND:
Lisa Mantello, Respondent
BEFORE: M. Kraft, J.
COUNSEL: Sarah Boulby and Oren Weinberg, for the Applicant
Jaret Moldaver and Lindsay Konkol, for the Respondent
HEARD: In writing
COSTS ENDORSEMENT
[1] This is the costs endorsement in respect of the motion of the applicant (“husband”) for temporary child and spousal support from the respondent (“wife”), calculated by applying an annual income of $240,000 (his salary) for him and imputing the wife’s 2019 income of $1,087,231 to her, and the wife’s cross-motion, in which the wife sought an order continuing the financial status quo such that the husband would not receive temporary spousal or child support but she would continue to pay 100% of the expenses associated with the parties’ matrimonial home and 100% of the children’s s.7 expenses. Alternatively, the wife sought an order for a support regime to be calculated by using an annual income of $240,000 for the husband and an imputed income of $710,000 for her and also setting off a portion of the expenses of the parties’ matrimonial home and requiring the husband to pay her a monthly amount on account of funds that the husband had withdrawn in the Spring of 2020 on consent.
[2] My Order, dated August 18, 2020 (“August 18th Order) granted the husband temporary spousal and child support, calculated by imputing an income to the wife of $1,076,652 for 2020 and applying an income of $240,000 for the husband for 2020. I ordered the wife to pay the husband child support in the sum of $6,714 a month and the husband to pay 50% of the children’s s.7 expenses. I also ordered the wife to pay temporary spousal support to the husband in the sum of $5,567 a month, on a “without prejudice” basis. I ordered that a case management judge be assigned to this matter; the next step in the case be a Settlement Conference; and the trial be expedited.
[3] To arrive at the child support quantum, the Reasons for Order set out that I applied section 9 of the Child Support Guidelines (“Guidelines”), also referred to by the parties in their costs submissions as “the Contino analysis”. I set off the amounts of Table child support owing by one parent to the other. In this case, the parties share temporary custody of the children, pursuant to an order of Moore, J., dated April 14, 2020. I further reduced the amount to have the parties equitably share the increased housing expenses being borne by the wife and associated with the shared custody arrangement. The wife has a consent order for temporary exclusive possession of the matrimonial home. To arrive at the spousal support quantum, the Reasons for Order set out that $5,567 a month represents the low end of the Spousal Support Advisory Guidelines (“SSAGs”). I ordered that the husband pay 50% of the children’s s.7 expenses, at the husband’s request. He would otherwise have been required to pay 23.3% of the children’s s.7 expenses according to the Child Support Guidelines (“Guidelines”).
[4] Both parties are seeking costs.
[5] The four central issues on the motion were: 1) the determination of the income to be imputed to the wife and/or husband for purposes of calculating child and spousal support; 2) the calculation of the quantum of child support, given the shared custody schedule and s.9 of the Guidelines; 3) the determination of the parties’ sharing of the children’s s.7 expenses, including the cost of the nanny employed solely by the wife; and 4) the determination of whether the husband has a prima facie entitlement to spousal support and, if he did, the quantum of temporary spousal support to be ordered.
Was Either Party Successful on the Motions?
[6] Notwithstanding the fact that I did not award temporary child support to the husband in the amount he sought in his Notices of Motion and during the oral submissions and I did not order an earlier start date for the support, when one considers the level and nature of the husband’s success otherwise on the other issues and the level of success and the nature of the wife’s lack of success, although success was divided, an order of costs can and should be made in the husband’s favour; r.24(6) of the Family Law Rules, O. Reg. 114/99 (“FLRs”).
[7] Of key and substantial importance in the costs consideration relating to the motion and cross-motion is that the husband was successful in obtaining a temporary order for spousal support in the face of the wife’s position that the husband did not have a prima facie entitlement to spousal support and thus an order for temporary spousal support ought not to be made. The wife’s main position on the cross-motion she brought in response to the husband’s motion was that no temporary child and/or spousal support should be ordered, given that the husband was unable to establish entitlement to spousal support either on a compensatory and/or needs basis. Thus, she sought an order that she simply continue to fund the house and children’s expenses on a temporary basis, even though, according to her, she would be paying more by doing so than the husband would receive on the motion if temporary support were ordered. The husband satisfied this Court that he does have a prima facie entitlement and I made a temporary spousal and child support order. The husband was also successful in obtaining a temporary order that the wife pay child support to him for the parties’ three children, albeit, again, not in the amount he was seeking. I ordered that he pay 50% of the children’s s.7 expenses as he requested.
[8] On her cross-motion, the wife sought orders in the alternative, should she not succeed in her position that no order should be made in the husband’s favour for child and spousal support. What is common to the alternative requests is that she asked the court to order the husband to pay $3,987.36 to her, to essentially cover one-half of the expenses she was incurring in the matrimonial home over and above the rent that the husband was paying for accommodation, and to pay $3,333.33 a month to her, to essentially require him to pay off one-half of the amount that she had consented to him borrowing from the joint line of credit in late April 2020. The wife was not successful in respect of the request that the husband pay the $3,333.33 amount but was successful in obtaining an order that effectively required him to pay at least $3,987.36 to her monthly on account of her housing expenses. The child support order that I made ($6.714) resulted from the reduction of the order that would otherwise have been made ($12,215), but for the determination that I made under s.9 of the Guidelines that the set-off amount of child support would not be appropriate, given the substantially greater costs the wife had in relation to the children, most particularly as it related to the cost of the wife’s housing. Having imputed the wife with an income of $1,076,652 for support purposes, in ordering monthly child support payable by the wife to the husband, I had reduced the set-off child support amount by about $5,500.
[9] While the husband had not specifically proposed that he would pay a share of the significant housing expenses the wife had, which were substantially greater than his own accommodation costs and would have left the wife with materially less net disposable income in comparison with his, if he did not contribute to them, he did take the position that he would pay 50% of the children’s substantial s.7 expenses (which total about $98,000 a year before any tax benefit the wife would receive on account of child care costs). According to his Divorce Mate calculations, he would only have had to contribute 23.3% of the after-tax costs of the children’s s.7 expenses. Even if this Court were to infer that the offer to pay 50% of the after-tax section 7 expenses included a contribution to the expenses, I roughly calculate that the extra contribution (that is, the difference between 50% of the total after-tax s.7 expenses costs (about $8,042 a month) and 23.3% of that amount would equate to about $2,147 a month.
[10] The contribution to the wife’s housing costs that I ordered the husband to make was significantly greater than $2,147 a month, and at least as much as the wife had sought on account of the shared housing costs. (To be clear, the reduction did not result from a decision to have the husband make payments on account of the capital amount that he had borrowed on consent against the line of credit). Thus, even if the greater percentage of s.7 expenses the husband sought to pay effectively contributed to the wife’s costs resulting from the shared custody arrangements, the amount did not do so sufficiently. Thus, the wife was successful on that issue.
[11] In order to compare the positions each party took on the long motion with the spousal and child support order that I made, I have estimated the net effect to the husband of the positions taken and the order I made. To do so, I converted the spousal support ordered into an after-tax amount of $5,477, by deducting 50% from the amount I ordered; added the child support that I had ordered in the amount of $6,714 a month and then deducted $4,021, being 50% of the after-tax anticipated amount of s.7 expenses being and to be incurred, to calculate the net amount that the husband would receive on a monthly basis, which is rounded up to $5,477. Effectively, then, the husband received an order that was about $5,848 less in net dollars to him than the order he had sought on the motion. Essentially, his position did not either factor in sufficiently or at all. It is this fact that results in my determination that success on the motion was divided.
[12] It is the wife’s position that had she simply been permitted to continue paying the house-related expenses and the children’s s.7 expenses, the husband would have done better financially than he has done under the August 18th Order. If one assumes that the benefit to him would have been the $3,987.36 amount that the wife sought from him on account of her housing expenses in her alternative positions, plus the 50% share of the s.7 expenses that I had ordered him to pay, then the difference between those two amounts and the net amount he effectively received under my Order would be $2,531 a month. Thus, the wife is correct in her position that the net monthly financial result to the husband would have been somewhat better, if she were to have maintained control over the house-related the children’s s.7 expenses.
[13] Further, if one considers the net financial impact on the husband of an order made in accordance with the wife’s first alternative position, which is that she would pay $223.00 a month in spousal support; $6,862 in set-off child support based on an income of $710,000 being imputed to her; and the husband being obliged to contribute $2,085 monthly toward the children’s s.7 expenses, should the court not see fit to simply leave the financial status quo in place pending trial, the result of this first alternative would have been that the husband would have owed the wife about $1,173 monthly, given his obligation under the alternative proposal to pay her $3,987.36 on account of her housing expenses and $3,333.33, to purportedly repay her $40,000 over a 10-month period in relation to money that she asserts belonged to her because the husband had borrowed $80,000 against the joint line of credit on consent. [Pursuant to a consent order, dated April 20, 2020, the parties were entitled to each borrow $80,000 against the parties’ joint line of credit. It appears that this arrangement was entered into in order to enable the husband to borrow $80,000, but permitted the wife to do so as well, if she decided to do so at a future time. The line was to service the interest payments on the withdrawals. The consent order provided that the withdrawals were to be “without prejudice” to “either party’s position regarding support and responsibility for repayment”. The responsibility for repayment had to be agreed upon by the parties or determined by the court at either party’s request or both. The order also provided that the party’s obligations to contribute to these expenses was to be reviewed at the time of the support motion, if requested by either party.] The net difference to the husband between this alternative and the August 18 Order is about $7,904.
[14] Although the second alternative proposed by the wife on her cross-motion is not completely clear, assuming that, in making an order in accordance with it, the husband’s net spousal support to be paid was $111.50; he received child support in the amount of $6,714, as ordered; and he was ordered to pay 50% of the children’s s.7 expenses (about $4,021 a month), then after also paying the $3,987.36 and $3,333.33 amounts to the wife, the husband would have owed the wife about $4,675 a month. In effect, the net difference to the husband between this alternative position and the order he obtained is about $10,152 a month.
[15] Finally, according to the wife’s further alternatives, which were effectively her position that, if the court ordered child and spousal support in amounts other than the $223.00 in spousal support and $6,862 in child support amounts that she proposed to pay the husband, then in addition to an order also being made, requiring the husband to pay 50% of the children’s s.7 expenses, she was seeking an order that the husband also pay to the wife the $3,987.36 and $3,333.33 monthly sums on account of the housing expenses and repayment of the alleged debt. Without consideration of the fact that the August 18th Order reduced a child support amount based on an imputed income for the wife of $1,076,652, by about $5500, to $6,714 (to take the wife’s significant housing expenses into account), the husband would have owed about $1,844 a month to the wife. Thus, the difference between the amount the husband would receive under this alternative position, and the net result to the husband under the order that was made, is about $7,321 a month. If the intent of the wife’s position was not that there effectively be a double counting in this circumstance, given that the support amount ordered took her housing costs into consideration, then the wife would have owed the husband about $2,144 in net support, which would have been about $3,333 less a month than the court ordered.
[16] Although the wife had sought an order for costs of the April 9th 2020 urgent motion relating to custody and support in her motion material and all of the above positions in the alternative to the request that she was making – that is, that no order be made for support for the husband or children, but that she maintain the house-related expenses and pay all of the children’s s.7 expenses, during the course of this motion, the wife really only pursued the position her main position and addressed the first alternative position that is set out above. While the husband would have received some more money monthly, had the status quo been left in place, that is not the relief that he sought. He sought an order for temporary spousal support and temporary child support. He was successful in obtaining that relief. Further, the relief was based on an imputation of income to the wife in an amount far closer to his position regarding the wife’s position than the wife’s. As well, the order he obtained for spousal support was very close to the request that he made. The s.7 expense term that he sought to have ordered was ordered.
[17] It was clear throughout that the most important issue to both parties was the issue of whether a support order would be made or not. An order was made for both spousal and child support. Thus, the wife was unsuccessful on the most important issue to both parties. Most particularly, this court found that the husband had a prima facie right to spousal support. This court did not see fit at this time to make an order requiring the husband to pay back capital to the wife based on her position that because the funds he received came out of the line of credit, that one-half were her funds. There is no reason to believe, based on the evidence before this Court on the long motion, that the funds borrowed would not be repaid down the road out of the husband’s one-half share of the home.
While success was divided, given that the wife succeeded in obtaining an order that effectively required the husband to contribute to the additional housing costs she bears while living in the matrimonial home with the children, when one considers the positions taken by the wife, upon which she did not succeed – in particular, the attempt to starve off any order requiring her to pay temporary support to the husband and the fact that the alternative position that she took in terms of the husband receiving $223 in spousal support; $6,862 in child support; paying $2,085 to the wife on account of the children’s s.7 expenses, but also requiring him to pay the wife $3,987.36 plus $3,333.33 a month, which was an order that was even further apart from the result the husband obtained on the long motion than the order the husband sought on the motion, satisfies this court that the husband’s success on the motion entitles him to an order for costs.
Legislative framework
[18] Subject to the provisions of an Act or the rules of court, costs are in the discretion of the court, pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43.
[19] Pursuant to r. 24(10)(a) of the FLRs, the court is directed to decide the costs of a step in the case promptly after dealing with the step, in a summary manner.
[20] Modern family costs rules are designed to foster four fundamental purposes: to indemnify successful litigants for the cost of litigation, to encourage settlements, to discourage and sanction inappropriate behaviour by litigants: and to ensure that cases are dealt with justly: Mattina v. Mattina, 2018 ONCA 867, 299 A.C.W.S. (3d) 770, at para. 10. The touchstone considerations of costs awards are proportionality and reasonableness: Beaver v. Hill, 2018 ONCA 840, 17 R.F.L. (8th) 147, at para. 12.
[21] The factors to consider in setting the amount of costs are listed in r. 24(12). The court must consider the reasonableness and proportionality of the factors enumerated in the sub rules as they relate to the importance and complexity of the issues. These factors include each party’s behaviour; the time spent by each party; any written offers to settle, including those that do not meet the requirements of r. 18; any legal fees; any other expenses; and any other relevant matter.
[22] In Sims-Howarth v Bilcliffe, 2000 CanLII 22584 (ON SC), [2000] O.J. No. 330 (S.C.J.), Aston J. held that the two traditional scales of costs are no longer an appropriate way to quantify costs under the FLRs. He stated that, having determined that one party is liable to pay costs, the court must fix the amount at some figure between a nominal sum and full recovery, having regard to the factors set out in Rule 24, without any assumptions about categories of costs. This characterization of costs under the FLRs was approved of by the Ontario Court of Appeal in C.A.M. v D.M., 2003 CanLII 18880 (ON CA), [2003] O.J. No. 3707 (C.A.), at para. 42.
[23] The FLRs do not explicitly provide for costs on either a partial or substantial indemnity scale. Rule 24(8) refers to “costs on a full recovery basis,” where a party has acted in bad faith. The husband is effectively seeking costs approaching full recovery. In a family law case, the court need not find “special circumstances” before ordering costs on a full recovery basis, see Sordi v. Sordi, 2011 ONCA 665, 283 O.A.C. 287. The Court has a range of costs awards open to it, from nominal to just short of full recovery.
[24] There is no general approach in family law of “close to full recovery costs”: Beaver, at para. 11. Rather, full recovery is only warranted in certain circumstances, such as bad faith under r. 24(8), or beating an offer to settle under r. 18(14): Beaver, at para. 13.
[25] Costs must always be proportional to what is at stake in the case, and to the unsuccessful party’s reasonable expectation as to what costs he/she may face, if he/she is unsuccessful. In appropriate circumstances, unreasonable behavior will result in a higher award of costs.
Factors to be considered
[26] The husband seeks costs on a “substantial indemnity” basis, in the amount of $55,000, inclusive of HST and disbursements, which, according to him, is slightly less than full recovery and accounts for some minor items on which he was not fully successful. Alternatively, the husband seeks costs on a “partial indemnity” basis, in the amount of $34,860.11.
[27] I have considered the factors set out in Rule 24 (12) of the FLRs, which reads as follows:
24(12) In setting the amount of costs, the court shall consider,
(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. O. Reg. 298/18, s.14.
Importance and complexity of the Issues
[28] In addressing the enumerated factors in the rule, I have kept the following considerations in mind. This motion was of significant importance to both parties. First, it was an important matter for the husband in that he was seeking temporary spousal support based on the roles played by the parties during their marriage and on the basis of need, given the significant disparity in the incomes of the parties. Establishing entitlement to spousal support is critical to the husband’s claims. Further, the parties differed significantly as to the income over which the wife had reasonable access and control for support purposes. The husband’s support claim was clearly an equally important matter for the wife. The wife clearly wanted to prevent a temporary spousal support order, if not also a child support order, from being made. The wife also did not accept that the income to be imputed to her should be more than $710,000. Further, the wife wanted to ensure that her obligation to pay temporary support took into consideration the high housing expenses she was incurring.
[29] Counsel for the wife submits that the husband caused the issues to be complex and caused unnecessary expense, by refusing to produce a current budget and accurate information regarding his spending, which the wife maintains was required for the Contino analysis. I disagree. The Questioning was not required only to obtain “truthful information regarding the husband’s expenses under oath”, as the wife asserts in her costs submissions. Rather, the Questioning of both parties was necessary because the issues on the long motion were important to both of them and not straight-forward. The wife’s information about her income was unclear to this Court and quite likely, to the husband. She maintained throughout the Questioning that she did not know whether she could expect to receive any draws from Osler’s, other than her monthly draw; however, upon analysis of the April 2020 projected budget schedule provided by Osler’s, this Court determined that the wife had, in fact, received a distribution of $123,112 from Osler’s in April, as per the April 2020 projected budget, in addition to her monthly draw. It was not the amount of the April distribution initially projected by Osler’s in the December projected schedule but it was the amount set out in the Osler’s April 2020 projected budget schedule.
[30] The motion and cross-motion were of moderate complexity, owing to the challenges of determining the appropriate income figure for the wife, and determining the child support issue under s.9 of the Guidelines, particularly given the housing-related costs the wife was incurring.
[31] Both parties filed extensive material on the motions. Each party was Questioned in relation to the motion only and incurred the costs of producing transcripts. The volume of material filed was indicative of both the importance of the issues on the motion to the parties and the somewhat complex nature of the issues.
Each Party’s Behaviour
[32] Rule 24(4) of the FLRs explicitly authorizes the use of costs orders to express the court’s disapproval of a litigant’s unreasonable conduct. It provides as follows:
24(4) Despite sub-rule (1) [which provides that a successful party is presumed to be entitled to the costs of a motion], a successful party who has behaved unreasonably during a case may be deprived of all or part of the party’s own costs or ordered to pay all or part of the unsuccessful party’s costs.
[33] Further, Rule 24(5) provides criteria for determining the reasonableness of a party's behaviour. It provides as follows:
DECISION ON REASONABLENESS
(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,
(a) the party's behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;
(b) the reasonableness of any offer the party made; and
(c) any offer the party withdrew or failed to accept.
[34] Further, r.24(12)(a)(i) requires the court to consider each party’s behaviour in setting the amount of costs.
[35] The husband seeks costs on a “substantial indemnity” basis on the grounds that the wife acted in bad faith in misleading the court as to her 2020 income and in raising procedural issues, which she later abandoned.
[36] The wife did frustrate the Court’s process to a degree by addressing the level of her income for support purposes in what I realized, on a close review of her affidavit and the Exhibits attached to her material, was an ambiguous and misleading manner. In her affidavit, the wife deposed that Osler’s had been negatively affected by the Covid-19 health crisis; that the partnership income was reduced, and the December 2019 projections did not come to fruition. Osler’s did produce a revised Projected Schedule to its Partners in April 2020. In particular, the wife deposed that the amount projected for the April distribution (other than the monthly draw) set out in Osler’s December projection was “not made”. However, what she does not say, and what is clear from her evidence in paragraph 25 of her July 20, 2020 affidavit - that “to date, [she] has received $610,000, gross” - is that she did, in fact, receive a distribution in April 2020, in the sum of $123,112 as per the updated April 2020 Projection. While the wife deposed that Osler’s December 2019 Projections did not come to fruition, she failed to point out that Osler’s revised April 2020 Projection had come to fruition. This ambiguous representation of “changed” circumstances did undoubtedly cause the husband to incur some additional costs on the motion.
[37] The Court can order costs on a higher scale to express disapproval of unreasonable conduct: Mullin v. Sherlock 2018 ONSC 6933. Put another way, the amount of costs ordered may be higher where a party has had to incur unnecessary added expense due to the other party’s unreasonable conduct.
[38] At the start of the hearing on August 5th, 2020, two procedural issues were raised by the parties namely: 1) the wife sought to strike the husband’s July 22nd affidavit, or a portion of it, or alternatively, the affidavit being sealed as a result of confidentiality concerns relating to certain Exhibits attached to it; and 2) the husband sought to strike the wife’s July 27th affidavit from the record or an order refusing to admit it into the evidence on the motion and cross-motion because it was filed after the wife’s Questioning took place and was an attempt by her to fix the answers she had given at her Questioning.
[39] In his costs’ submissions, the husband submits that the wife behaved unreasonably and caused unnecessary expense because she brought a motion to strike parts of the husband’s July 20th affidavit and Exhibits under Rule 1(8) of the FLRs and/or for a sealing order, but then abandoned her motion to strike on the hearing before me. This is not quite accurate. On the date of the hearing (August 5, 2020), the wife did not proceed with her motion for a sealing order because she did not comply with the Notice to the Profession by notifying the media, as required. However, the wife advised the Court that she intended to proceed with the striking motion, to be heard in advance of the release of my decision. The Court staff apparently reached out to counsel for both parties the following week to schedule the wife’s motion. The wife chose to abandon the motion.
[40] The wife amended her Notice of Motion, dated July 31, 2020, adding a paragraph specifically seeking an order striking or sealing Exhibit “N” to the husband’s affidavit, sworn on April 6, 2020, and 11 exhibits attached to the husband’s affidavit, sworn July 22, 2020. In the wife’s affidavit sworn on July 27, 2020, which was the subject of the husband’s concern addressed above, the wife spends 7 paragraphs discussing the confidentiality of the documents the husband attached to his April 6th, 2020 and July 22, 2020 affidavits. In paragraph 9 of the wife’s July 27, 2020, she deposed that the husband attaching these confidential documents to his affidavits “pose[d] a serious risk to her [her] work and the privacy of her [her] clients”. She deposed that these confidentiality concerns were what led her to amend her Notice of Motion, to include a request to strike and/or seal the said exhibits to the husband’s July 22, 2020 affidavit. The wife then filed a Supplementary Factum dealing with the striking/sealing motion. The husband was put to the expense of having to address the wife’s procedural motion in this regard by filing a Factum and then expending time addressing the procedural steps that were going to be taken to have the issue heard.
[41] As far back as in her April 2020, material, the wife sought an order either striking portions of the husband’s affidavit or sealing the file. Although she had a right to withdraw her motion, time had been spent in preparing a Factum on the issue and in Court addressing the manner in which the motion should proceed, the issue was addressed in the husband’s oral submissions. I was advised that the husband did not oppose an order sealing the court file. It was the wife’s initial position – that is, that allegations the husband had made in relation to his contribution to her work that was of concern to the husband, who was relying on the allegations in support of his spousal support claim. The requests made in the alternative were both serious and required the husband to pay serious attention to them. After tentative arrangements were made to have the motion heard on another day, the wife withdrew her requests for the above-mentioned relief.
[42] As for the husband’s behaviour, the husband opposed the admissibility of the wife’s July 27th reply” affidavit. I dealt with that issue at the time of the hearing and the Reasons for my August 18th Order sets out my reasons for the admission of the wife’s affidavit notwithstanding his objection. It would be fair to say that I found the husband’s position respecting the admissibility of the wife’s “reply” affidavit to be somewhat unreasonable in all of the circumstances.
[43] There is no doubt that the wife’s decision to abandon the request to strike various paragraphs in the husband’s July 22, 2020 affidavit and/or for a sealing order at the hearing of the long motion and abandoning the motion in its entirely later added wasted legal resources and time.
[44] The wife’s “success” in the Court allowing her July 22nd affidavit to be admitted into the record of evidence is offset by the expense to which she put the husband in pursuing the relief relating to the motion for an order sealing the file, an order which he did not oppose, or striking evidence he adduced on the motion. As a result, this costs order neither increases nor deceases the level of costs being ordered on the basis that a party behaved unreasonably. Both parties wasted the other’s time and resources dealing with the procedural issue he or she raised at the start of the August 5, 2020, hearing before me. . It suggests that the wife had perhaps been more concerned initially about the inclusion of the material in the evidence as opposed to it being in a possible court file. For this reason, I decline to order costs in relation to either procedural issues raised by each party.
[45] In considering each party’s behaviour, it is the wife’s behaviour respecting the way in which she dealt with her income that is of more concern that the other two issues, which more or less caused each party to incur additional unnecessary costs, unnecessarily.
[46] Rule 24(8) of the FLRs provides as follows:
(8) If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately. O. Reg. 114/99, r. 24 (8).
[47] The wife’s evidence about her income was misleading. Having said that, despite my concern that the evidence put forward in the July 20, 2020 affidavit respecting the April 2020 payment was addressed in a deliberately misleading way, my concern did not rise to the level of a finding that this was the case. I note that the husband did not raise this issue with the court during the course of the motions – either in writing or during the oral submissions. It was clearly ambiguous to the point it was misleading.
Offers to Settle
[48] Pursuant to Rule 24(12)(a)(iii), I turn to each party’s written offers to settle.
[49] The husband made an offer to settle, which used as its base the income of $710,000, to which the wife was content to concede, but provided for an adjustment to the support amount once the wife’s 2020 income tax return became available. Thus, no harm was occasioned to the husband other than in relation to the costs incurred ascertain what the wife’s minimum income for 2020 was likely to be.
[50] The level of the wife’s income was not the only important or somewhat complex issue in the motion. As stated above, while her behaviour does not, in and of itself, call for an order that she pay costs of the motion to the husband on a full recovery basis, it is factor that militates in favour of a costs order that is greater than the order would otherwise have been.
[51] The husband made an offer to settle on June 11, 2020, as follows:
a. He proposed a support regime based on an imputed annual income of $710,000 for the wife, such that she would pay “without prejudice” child support of $6,716 a month by way of a strict set-off of the Table amounts of child support under s.9 of the Guidelines; and $2,264 a month in spousal support.
b. He proposed that he pay 50% of the nanny costs to the wife in the sum of $1,337 a month, and that the parties equally share the remainder of the children’s s.7 expenses.
c. He proposed that starting in April 2021, and every April pending trial, the parties would review their respective incomes and set-off child support payable, based on the wife’s actual income earned in the preceding year, and the parties would adjust the husband’s contribution to the nanny expense, based on a 50/50 net disposable income (“NDI”) using the parties’ actual incomes; and
d. He proposed that he would reimburse the wife for 50% of the property taxes, property insurance, and mortgage principal from his share of the proceeds of sale of the matrimonial home (essentially, the costs associated only with the wife preserving his capital in the matrimonial home).
[52] The wife is also seeking costs of this matter. According to the her, while neither party was entirely successful on the motion, she should receive costs, based on the second of two offers she made. The wife made two offers to settle. The first offer, dated July 6, 2020, provided two options. The second offer was dated August 5, 2020, the day before the long motion was heard. The second offer did not replace the first offer, leaving the husband with the option of selecting either offer.
[53] The wife concedes that the terms of her July 6th offer, on either of the two options proposed by her, were not as favourable as the August 18th Order. The wife submits, however, that the terms of her second offer, dated August 5th, 2020, were more favourable than the terms of the August 18th Order.
[54] The wife asked this Court to consider the fact that the husband had to that point not advised the wife of the amount of support he was seeking on the long motion when she made the July 6th offer and that this was not clear to her until he delivered his Notice of Motion on July 31, 2020. I reject this assertion. As set out in the Procedural History of the Reasons I gave for the August 18th Order, the parties had had a number of case conferences before Nakonechny, J. in April and May 2020. In the husband’s Case Conference Brief for the April 16, 2020 attendance, the husband set out that his position was that the wife’s annual income for support purposes was $1,093,000, and that, based on that level of income, he would be seeking $12,454 in child support and spousal support in the sum of $8,499 a month, applying the low end of the SSAGs ranges. In the husband’s Case Conference Brief for the May 22, 2020 attendance, the husband maintained the same position. Accordingly, the wife was well aware of the approximate level of child and spousal support the husband would be seeking on the long motion when she made her first offer on July 6th, 2020.
[55] In her August 5,2020, offer, the wife offered as follows:
a. That she pays the husband a lump sum payment of $160,000, the nature of the payment to be characterized by the trial judge, with a review of support to occur on or after May 1, 2021, if the trial had not been heard by that time;
b. That the husband pays $1,396 a month toward the wife’s nanny expense and 50% of the children’s s.7 expenses;
c. That the $40,000 advance on the joint line of credit to which the wife had consented in April 2020 (after the separation) be treated as a credit at Trial; and
d. That the wife pays 100% of the matrimonial home expenses, with the expenses to be addressed at a future motion for the sale of the matrimonial home or support, or at trial, if either party brought such a motion.
[56] The wife maintains that the $160,000 lump sum offered in her August 5th offer was based on the orders sought by the husband in his Notice of Motion, dated July 31, 2020, which are set out as follows:
a. That the wife pays the husband temporary Table child support of $12,370 a month and spousal support of $5,705, with the after-tax amount of spousal support netting approximately $2,852.50 in net disposable income (“NDI”) to the husband. [I note that she applied a 50% notional tax rate to explain her position in net terms.]
b. The wife explains in her costs submissions that she calculated the total amount of net support payable for ten months (August 2020 to May 2021, inclusive) to be $152,225 (or $12,370 + $2,852.50 X 10). Based on these calculations, she was offering the husband more than what he was seeking on the motion.
[57] The wife maintains that the August 18th Order requires her to pay the husband Table child support of $6,714 a month and spousal support of $5,567 a month, which will result in the husband receiving $2,783.50 in after-tax spousal support, or a total amount of after-tax temporary child and spousal support of $9,497.50 a month. Multiplied by ten months, this would amount to $94,975. The wife submits, therefore, that her August 5th offer was better than the result of my August 18th Order because my August 18th Order, calculated in lump-sum terms, totals less than the $160,000 she offered for 10 months. Essentially, the wife calculates that the lump sum she offered is the equivalent of about 14.7 months the child and spousal support that this Court ordered, inclusive of the husband paying 50% of the children’s s.7 expenses, including the cost of the wife’s nanny, for that period.
[58] The husband disputes the wife’s position that her August 5th offer was more favourable than the August 18th Order. He claims that the wife offered an uncharacterized lump sum of $160,000 to be characterized later by the trial judge or on a review of support on or after May 21, 2021. The husband submits that a judge does not have the authority on a temporary motion to make an order for an uncharacterized lump sum, followed by an interim “review” and, therefore, the wife’s offer cannot be characterized as being more favourable or less favourable than the August 18th Order, particularly where, according to him, a trial date had not been set, which trial date was not only out of the control of the husband but also placed the entire risk of the delay of the trial to be borne only by the husband.
[59] I have considered the parties’ respective offers in the context of their relative success or lack of success on the motion. Both parties’ Offers present challenges in terms of considering the level of success he or she had in comparison with the Offer he or she made. While on its face, the husband’s offer seems reasonable, given his position that he was prepared to accept payments and pay nanny and s.7 expenses, which would result in his netting about $4,898 a month in support. However, the offer requires an automatic adjustment to the support, retroactively, when the wife’s 2020 income is known. Moreover, he did not propose to provide any relief to the wife in terms of her housing-related costs until trial. If the wife’s income turns out to be in the range that this Court determined it to be for support purposes, for example, then it appears that the wife effectively be required to pay support at a level where her net disposable income would be significantly less than that of the husband after paying the house-related expenses until trial. Further, this Court could not consider the fairness of the extent to which the husband was prepared to reimburse the wife for the house-related expenses in the absence of details as to the proportion of the monthly mortgage payment that relates to principal versus interest.
[60] The wife’s second offer to settle, dated August 5th, 2020, is also problematic in terms of assessing its impact on the costs issue. What is clear from the wife’s offer is that she remained intent not to pay the husband spousal or child support. The husband sought an order for spousal support and child support. The wife did not make an offer of either. Instead, she offered a lump sum, which was to be characterized in due course, with a review next year potentially. The wife did not indicate in her offer whether it was uncharacterized as to spousal and child support or could well be considered to be an advance against a property claim of the husband in due course. The husband did not seek an advance on account of property, interim disbursements or anything of the like on the motion. Further, it is difficult to understand how the $40,000 amount being a credit at trial was an offer of anything at all, given the terms of the consent order.
[61] The purpose of a temporary support order is to provide a party entitled to support with relief that is intended to last until trial. The wife’s offer appears to have been made in an effort to resolve the temporary support issue without a spousal, if not also a monthly child, support order being made in favour of the husband before trial. Given the husband’s success and the difficulty in determining how reasonable the offer was, given the lack of information as to how the wife might seek to characterize the lump sum payment or part of it down the road, it was of minimal value to the Court, if not to the husband also.
[62] Further, it is impossible to determine whether the wife’s August 5th offer can be characterized as more favourable or less favourable than the August 18th Order as it is not possible to say when the trial will take place with any certainty at this time. While the August 18th Order expedited the trial, in light of the Covid-19 health crisis and the suspension of normal Court operations, it is still unclear and unknown as to when the Court will be able to hear the trial of this matter, which is a multi-issue trial. More importantly, the husband was not in a position to assess the reasonableness of the offer in light of the uncertainty of a future trial date.
Any Other Relevant Matter
[63] The wife’s position - that the determination of her income is not relevant to the costs determination - is not correct. I agree with the husband’s costs submissions, that the determination of the wife’s income was the starting point for the Court’s analysis from which both the child and spousal support orders were made. The determination of the wife’s income formed a great deal of evidence provided by both parties on the long motion and was a significant part of the Questioning that took place.
[64] The wife’s position on the long motion was that her best-known current income in 2020 is $710,000. As I have stated above, the manner in which the wife dealt with her current income was ambiguous, at best, and as a result it was misleading. She deposed that she had received $610,000 gross income by the time she swore her affidavit on July 20th, 2020. She further deposed that she is not guaranteed to receive any further disbursements from Osler, Hoskin & Harcourts LLP (“Osler’s”), over and above her regular gross monthly draws of approximately $20,000 a month between the months of August and December 2020. The Reasons for the August 18th Order found the wife’s evidence in this regard to be misleading. In particular, I determined that the April 2020 Osler’s Projected Schedule was the only objective third-party evidence the court had upon which it could fairly rely. This was held to be the case, particularly, because the wife’s evidence that she had received $610,000 gross as of the date she swore her July 20th, 2020 affidavit proves that she received all anticipated payments set out in the April 2020 projection from Osler’s, including the April 2020 disbursement. On this basis, the August 18th Order imputes an income of $1,076,652 for the wife, not the $710,000 she put forward.
[65] While I would not describe the problem as one of unreasonable or bad faith, the ambiguous and misleading evidence undoubtedly caused the husband to incur time and expense that he might well not have had to incur otherwise.
Time properly spent on the case and any legal fees, including the number of lawyers and their rates, etc.
[66] The husband’s lawyer, Ms. Boulby, was called to the Bar in Ontario in 1993. She has practiced law for 27 years. Ms. Boulby was assisted by Mr. Weinberg, who was called to the Bar in 2006 (14 years’ experience), and by Ms. Belfon, who was called to the Bar in 2014 (6 years’ experience).
[67] The hourly rate for Ms. Boulby is $625.00; for Mr. Weinberg is $525.00; and for Ms. Belfon is $225.00.
[68] Ms. Boulby spent 41.1 hours of 75 hours; Mr. Weinberg billed 35.5 hours; and Ms. Belfon billed 8.4 hours. Based on the submissions made at the hearing, and the significant material submitted, I find that the time spent by the husband’s lawyers to have been reasonable and proportionate to the amounts at stake in the proceeding, particularly given that he was not in control of the information relating to the wife’s income and it would thus have taken his counsel more time.
[69] The husband claims $2,259.61 for disbursements, inclusive of H.S.T., for the attendance at the Questioning. I find the disbursements to be reasonable. The wife did not take issue with them.
[70] Mr. Moldaver was called to the Bar in Ontario in 1994. He has practiced law for 21 years. Ms. Moldaver was assisted by Ms. Konkol, who was called to the Bar in 2011 (9 years’ experience), by Ms. Shuen, who was called to the Bar in 2016 (4 years’ experience), by Ms. Elia, a law clerk with 12+ years’ experience, and an articling student, as of January 2, 2020.
[71] Mr. Moldaver billed 16.6 hours of 117 hours; Ms. Konkol billed 52.4 hours; Ms. Yuen billed 21.2 hours; Ms. Elia billed 22.2 hours; and an articling student billed 4.5 hours.
[72] The hourly rate for Mr. Moldaver is $650.00; for Ms. Konkol is $450.00; for Ms. Yuen is $375.00; for Ms. Elia is $295.00; and for the articling student is $200.00.
[73] While the wife’s lawyer delegated more to others than the husband’s did, Ms. Boulby’s total fees and disbursements billed to the husband totalled $59.295.54; Mr. Moldaver’s total fees and disbursements charged to the wife were $58.937.94. It was not unreasonable for the parties to retain senior family lawyers. Further, the motions involved the delivery of substantial material and Questioning. The motions involved the calculation of a party’s professional income; entitlement to spousal support and the application of s.9 of the Guidelines.
[74] Accordingly, the costs that the husband incurred are reasonable in the circumstances of this case. They are proportional to what was at stake and to the wife’s reasonable expectation as to what costs she might face, if she was unsuccessful. The wife’s fees and disbursements were roughly identical to those of the husband. Further, the parties are lawyers and are, therefore, aware of the significant costs of litigation. As well, this motion was not the parties’ first motion-related experience in this case.
[75] I accept the record of time set out in the husband’s Bill of Costs. An issue raised in the wife’s cost submissions was the possible inclusion of amounts not strictly related to the motion for support. In particular, the wife takes issue with the husband including in his Bill of Costs fees charged to prepare his pleadings and affidavits in support of the parenting motion heard by the Court in April. Although the husband did rely on the April affidavits at the long motion before me (as did the wife), the wife submits that these affidavits primarily dealt with the parenting and exclusive possession issues. The wife acknowledges that the husband’s Bill of Costs discounts the fees related to some of the items she disputes, but she maintains that most of the charges ought to have been either excluded in their entirety or discounted at a far greater rate.
[76] The husband’s Bill of Costs discounted fees by 50% for the time spent on preparing his Application and by 70% for the time spent on preparing the March and April affidavits that pertain to parenting. The husband submits that his affidavits from March and April were necessary and relevant to the long motion before me, particularly as they related to the wife’s income, the husband’s income, and the basis for his entitlement to spousal support. To the extent that the material was prepared for the support-related motion, the charges are properly considered at this time.
CONCLUSION AND ORDER
[77] Having decided that, in light of the extent of the husband’s success on the motion, albeit, divided; the reasonableness and proportionality of the work performed by the husband’s counsel, the fact that the wife should have expected to pay costs, if the husband succeeded in obtaining an order for temporary support in the face of her resistance to such an order being made (which was underlined to this Court by the nature of the wife’s second offer to settle); his clear success on the entitlement issue; the difficulty this Court had in assessing the reasonableness in the context of the August 18th Order that was made in my view, an order that the wife pay 65% of the husband’s costs of $55,000 to him, represents a reasonable and fair contribution to the costs he incurred on the motion.
[78] Accordingly, this Court orders that Lisa Mantello shall pay costs of the long motion to Omar Hamam in the amount of $33,000, inclusive of fees, disbursements and HST, within 45 days.
M. Kraft, J.
Date Released: September 22, 2020