Court File and Parties
COURT FILE NO.: FC-17-421 DATE: 2020/10/16
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Ronald James MacIntrye Applicant
– and –
Igor Alexander Winter Respondent
COUNSEL: Michele D. Blais for the Applicant Carol Craig for the Respondent
HEARD: In Writing
COST AWARD
SHELSTON J.
[1] On June 8, 2020, I released my reasons for judgment in McIntyre v. Winter, 2020 ONSC 4376. I requested that the parties attempt to settle the issue of costs and if they could not, they were to provide me with their costs submissions. The parties could not resolve costs and I have received the parties’ written submissions.
Position of the Parties
[2] The applicant submits that he was the most successful party in relation to the core issues in this proceeding and as such is entitled to his costs. He submits that the respondent acted unreasonably. He seeks partial indemnity costs of $172,078 to $249,396 as full indemnity costs. Finally, he seeks that the costs be paid from the respondent’s share of the proceeds of sale of the Arnprior property.
[3] The respondent seeks costs on a full recovery basis for the applicant’s abandonment of his claim regarding the respondent’s antiques and the reapportionment of the line of credit. The respondent submits that success was divided because the largest issue in relation to exhibits, testimony and trial time was the applicant’s claim for spousal support based on a compensatory basis. This claim was denied but support was ordered based on a non-compensatory basis. The respondent submits that his offer to settle dated August 10, 2018, provides the applicant with a better result than the trial decision, thereby entitling the respondent to his costs on a full recovery basis.
[4] In reply, the applicant submits that the most time-consuming issue was the property claim. Further, the applicant was successful in obtaining periodic spousal support, which the respondent opposed. Finally, the applicant submits that the respondent did not pursue claims for occupation rent and a restraining order at trial despite these claims being made in his pleadings.
Successful Party
[5] As there were multiple issues in this trial, I need to consider each issue and determine which party was successful.
Spousal Support
[6] The applicant sought spousal support both on a non-compensatory and compensatory basis while the respondent denied that the applicant had any entitlement to spousal support. I found that the applicant was entitled to non-compensatory support on an indefinite basis. He was the successful party on this issue.
Reimbursement of Spousal Support
[7] The respondent sought to be reimbursed all of the spousal support that he paid to the applicant from February 1, 2018 to the date of the decision. The applicant opposed this relief. I ordered the applicant to pay back $72,558 for the overpayment of spousal support. While the amount ordered was not all of the support paid, it was a substantial amount. I find that the respondent was the successful party on this issue.
Security for the Payment of Spousal Support
[8] The applicant sought life insurance in the amount of $129,725 or $115, 480 depending on the quantum of spousal support, while the respondent made no submission on the quantum of the life insurance as he argued that a lump sum was appropriate. I ordered the respondent to secure the present amount of spousal support with a life insurance policy of $50,000.
[9] I rejected the respondent’s request for a lump sum payment of spousal support as it was not formally pled and was not raised as an issue until the respondent’s closing submissions. I considered it unfair to the applicant to allow such a claim to be made as a surprise during final submissions. I also found that even if I was to consider a lump sum payment, I found it was inappropriate as I have found that the applicant was entitled to periodic non-compensatory spousal support on an indefinite basis, subject to variation in the event of a material change in circumstances.
[10] In the end, the applicant was successful on this issue.
Property Claim
[11] The respondent argues that the applicant’s abandonment of his claim regarding the respondent’s antiques and the reapportionment of the line of credit entitles him to costs on a full recovery basis. However, the respondent claimed occupation rent and a restraining order. None of these claims were pursued at trial. No cost award is appropriate on these issues.
[12] The applicant claimed $5,693.12 for his alleged overpayment of post separation expenses paid for the Arnprior property. This claim was withdrawn after the respondent provided his chart of expenses during the trial. No cost award is appropriate on these issues as well.
[13] The applicant sought an equal division of the net proceeds of sale of the Arnprior property while the respondent sought a repayment of $480,248.82, with the balance to be shared equally. I ordered that the applicant was entitled to half of the proceeds of sale of the Arnprior property. He was successful on this issue.
Conclusion
[14] The applicant was successful on obtaining periodic spousal support, obtaining security for support and being entitled to half of the proceeds of sale. The respondent was successful on the repayment of spousal support.
[15] The time spent on the issue of repayment of spousal support was a fraction of trial time. I find that the applicant was the more successful party and is entitled to his costs.
Importance and Complexity of the Issues Before the Court
[16] The two main issues of the trial, being spousal support and the property claim were very important to both parties. I did not find that any of the issues were difficult or complex.
The Reasonableness or Unreasonableness of Each Party’s Behaviour
[17] In Mattina v. Mattina, 2018 ONCA 867, the court set out the four fundamental purposes of costs being to partially indemnify successful litigants, to encourage settlement, to discourage and sanction inappropriate behaviour by litigants and to ensure that cases are dealt with justly.
[18] In Beaver v. Hill, 2018 ONCA 840, the court indicated that cost awards are discretionary and two important principles in exercising discretion are reasonableness and proportionality.
[19] Parties are responsible for their conduct during this litigation. Failure to comply with court orders are serious matters that the court will not condone. In family law, to permit the court to deal with matters justly and fairly, complete financial disclosure must be made by both parties. Trials are intended to be the final adjudication of the various issues between the parties based on the full financial picture of each party. If a party attends a trial without providing full financial disclosure, they are engaging in unreasonable behavior.
[20] Both parties allege unreasonable conduct against the other. In my view, both parties exhibited signs of significant stress during the trial. In the applicant’s case, his testimony was suspended because he could no longer continue to testify. The respondent also had difficulty testifying when he recounted the events that both men were subjected to when they bought their home in Arnprior. The respondent produced documents for the first time during the trial. While I heard evidence on how both parties’ mental health has been affected by their mutual experience, it was only the respondent who failed to comply with disclosure orders. This conduct is unacceptable and is unreasonable.
[21] With respect to the applicant, the respondent submits that the applicant engaged in unreasonable conduct by claiming compensatory support, that a significant amount of time was spent advancing evidence regarding the sale of the home which was irrelevant to property and support issues. I do not find that it was unreasonable for the applicant to claim support on a compensatory basis, but I do agree that there was evidence presented by the applicant regarding the listing and eventual sale of the Arnprior property which could have been shorter and more focused.
[22] I find that the respondent’s conduct set out herein was unreasonable:
a. his removal of the antique furniture from the Arnprior property despite a letter from the applicant’s lawyer not to remove any contents;
b. his failure to comply with disclosure orders to provide reconciliation of the joint line of credit, the expenses incurred for the Arnprior property post separation and the joint investment account with Scotia McLeod until the trial;
c. his failure to comply with the order of Engelking, J. requiring the respondent to designate the applicant as the beneficiary of $200,000 of life insurance until just before the trial; and
d. his failure to provide financial information as to his 2018 and 2019 income from all sources including OHIP when spousal support was a central issue.
Offers to Settle
[23] The court is not required to examine each term of the offer as compared to the terms of the order and weigh with microscopic precision the equivalence of the terms. What is required is a general assessment of the overall comparability of the offer as contrasted with the order. (see Wilson v. Kovalev, 2016 ONSC 163.)
[24] The applicant provided four offers. I have highlighted the main clauses:
a. August 26, 2017
the Arnprior property to be sold and the proceeds shared equally;
provision for the equal sharing of carrying costs for the property with an accounting after any such sale;
periodic spousal support commencing February 1, 2017, in the amount of $3123 per month subject to variation in the event of a material change in circumstances;
retroactive payment of $13,949 from February 1, 2017 to August 31, 2017;
life insurance of $300,000.
b. July 30, 2018
the offer was divided into two options being A or B. Option A, the respondent would pay a lump sum spousal support payment of $265,000 at which time periodic spousal support of the temporary order of Engelking, J. would cease. Further, the respondent would pay a one-time lump sum spousal support payment of $25,000.
Option B would require the respondent to pay periodic spousal support up to July 31, 2018 and thereafter the monthly amount of $3171 per month, subject to variation in the event of a material change in circumstances. The Arnprior property would be divided equally with additional payments owed by the respondent to the applicant.
c. September 2, 2019
this offer was divided into two sections as well, being part A and part B.
part A addressed the issue of spousal support. The respondent would pay to the applicant a one-time lump sum spousal support payment of $161,182 plus $16,524 for retroactive payment to be paid either from the respondent’s share of the Arnprior property or a spousal rollover of his RRSP’s.
part B addressed property issues. The Arnprior property would be divided with the respondent receiving the first $100,000 and the balance to be shared equally.
d. September 18, 2019
commencing October 1, 2019, the respondent would pay spousal support of $64 per month to the applicant, subject to variation at either party’s request in the event of a material change in either of their own circumstances.
there would be no adjustment of spousal support prior to September 30, 2019;
the respondent would maintain a satisfactory amount of life insurance coverage to secure his monthly spousal support obligation of no less than $14,000;
the proceeds of sale of the Arnprior property would be divided with the respondent receiving the first $50,000 and the balance to be shared equally.
[25] The respondent made one offer to settle dated August 10, 2018. In the offer, the respondent addressed the various issues as follows:
a. a one-time lump sum payment of $146,954 for spousal support or in the alternative, periodic spousal support of $1918 per month commencing September 1, 2018, for the duration of seven years;
b. in addition, the respondent would pay the applicant retroactive spousal support in the amount of a one-time lump sum payment of $16,524 to be considered taxable income to the applicant and tax-deductible to the respondent;
c. the respondent to receive the first $300,000 from the sale of the Arnprior property with the remaining balance to be divided equally between the parties.
[26] The respondent submits that the global net result of the trial for the applicant is that he receives $309,192.18 calculated as follows:
a. non-compensatory spousal support that over its entire duration requires $50,000 in security and thus is a present value of $50,000;
b. the applicant was ordered to reimburse the respondent $72,558 for the overpayment of support;
c. the net proceeds of sale to be divided equally which at the time of the trial was a value of $331,750.
[27] The respondent submits that his offer dated August 10, 2018, has a global value of $345,228.18 calculated as follows;
a. periodic spousal support of $1918 per month for seven years or lump sum of $146,954;
b. the respondent would pay the applicant retroactive support of $16,524;
c. the respondent would receive the first $300,000 of the proceeds of sale and the parties would split the balance.
[28] As result, the respondent submits that his offer to settle was more favourable to the applicant than the trial results thereby entitling the respondent to costs on a full recovery basis. I disagree that the applicant’s entitlement to spousal support is valued at $50,000. The amount of periodic spousal support is based on the facts presented at the trial that are variable in the event of a material change in circumstances. Prior to separation, the respondent earned significant income in excess of $200,000 and at the date of the trial was only 55 years of age. To attempt to value an indefinite periodic entitlement to spousal support at $50,000 is not justified. I do not find that the respondent’s offer dated August 10, 2018, is a better trial result than his offer.
[29] I find that none of the applicant’s offers to settle are better than the trial result.
Lawyers’ Rates
[30] I find that hourly rates indicated in both parties’ bill of costs to be fair and reasonable based on the experience of the respective lawyers.
Time Properly Spent and Expenses Properly Payable
[31] In Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), the court stated that the Court’s role in assessing costs is not necessarily to reimburse the litigant for every dollar spent on legal fees, but the award of costs must be fixed in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings.
[32] The claims for partial indemnity costs were very similar with the applicant seeking $169,411.58 and the respondent seeking $172,078. On the claim for substantial indemnity, the applicant claims $247,443.99, while the respondent claims $249,396.22.
[33] I find that the time spent by the parties was reasonable as both parties spent almost the same amount of time on the issues.
Disposition
[34] I find that the applicant was the successful party and is presumptively entitled to his costs. I have taken into consideration the offers to settle and the conduct of the parties in the litigation.
[35] I order the respondent to pay the applicant costs fixed in the amount of $150,000, inclusive of HST and disbursements to be paid from the respondent’s share of the net proceeds of sale of the Arnprior property.
Released: October 16, 2020
COURT FILE NO.: FC-17-421 DATE: 2020/10/16
ONTARIO SUPERIOR COURT OF JUSTICE
RE: Ronald James MacIntrye Applicant
AND
Igor Alexander Winter Respondent
BEFORE: Shelston J.
COUNSEL: Michele D. Blais for the Applicant Carol Craig for the Respondent
COST AWARD
Shelston J.
Released: October 16, 2020