Court File and Parties
Court File No.: FS-20-18507-0000 Date: 2021-04-07 Superior Court of Justice - Ontario
Re: Mirela Cela Nani, Applicant And: Altin Nani, Respondent
Before: Kimmel J.
Counsel: David Tobin, for the Applicant Harold Niman and Chloe van Wirdum, for the Respondent
Heard: January 21, 2021 and February 9, 2021 (Supplementary submissions as to costs received March 12 and 19, 2021)
Costs Endorsement: Interim support and mortgages motions
[1] Two motions came before me on January 21, 2021 in this matter, as follows:
a) The applicant’s motion seeking temporary spousal support in the amount of $15,000.00 per month, based on annual income to be allocated to the respondent of $653,000.00, retroactive to the date of separation of March 1, 2020 and security for the past and ongoing support payments (the “interim support motion”); and
b) The respondent’s motion relating to the renewal of an existing first mortgage and the registration of a proposed second mortgage on the matrimonial home and for declarations regarding the characterization of the past and ongoing mortgage payments and other carrying costs associated with the matrimonial home paid by the respondent (the “mortgages motion”).
[2] At the request of the applicant, I adjourned the respondent’s mortgages motion to an urgent hearing date before me on February 9, 2021 so it could be heard and decided prior to the expiry of the existing first mortgage registered against the matrimonial home that is the subject of that motion. I heard the applicant’s interim support motion on January 21, 2021 and took my decision under reserve based on submissions by the respondent that there was some overlap between the issues on the two motions and they should be decided together, even if heard separately. I released my decision on these two motions on February 23, 2021 (Nani v. Nani, 2021 ONSC 1368).
[3] I made the following orders on these motions:
a. the respondent’s adjusted income is determined to be $550,000.00 for temporary spousal support purposes;
b. the s. 7 expenses are deemed to be $95,000.00 for temporary spousal support purposes;
c. there shall be no income imputed to the applicant for temporary spousal support purposes;
d. insofar as the respondent continues to cause Duka to pay the applicant her current level of salary ($65,000.00) and benefits and maintains the expenses on the matrimonial home, no order for temporary without prejudice spousal support is made;
e. if the applicant ceases to receive her current salary and benefits from Duka (if they are terminated or deemed terminated by any material reduction) she will be entitled to receive temporary without prejudice spousal support of $8,100.00 per month (gross) going forward, taxable to the applicant and tax deductible to the respondent (and, unless the respondent can establish that this termination is due to a material change in the respondent’s financial circumstances, the applicant will not be required to pay 50% of the first mortgage and it will continue to be paid by the respondent along with the other monthly carrying costs of the matrimonial home in accordance with sub-paragraph (h) below);
f. no order for retroactive support is made at this time but this may be revisited at trial;
g. no order is made for security for the respondent’s support obligations but the applicant may seek an order to be designated as the beneficiary of the respondent’s existing life insurance policy upon further evidence and submissions being made if the parties are unable to reach agreement on this. This may proceed by a 14B motion returnable to me, to be followed by oral submissions if I ask for them after receiving the in-writing motion;
h. the monthly carrying costs for the first mortgage, property taxes and home and construction insurance shall be paid by the respondent and shall be credited to the respondent in the reconciliation of the parties property claims and/or the respondent’s right to seek to have them characterized as support at trial is preserved;
i. the respondent’s motion requesting an order dispensing with the applicant's consent to register a second mortgage in favour of 8044015 Canada Inc. in the amount of $1M against the matrimonial home is dismissed;
j. if the respondent finances the settlement of the litigation with CT Restore Inc. and/or the completion of the renovation of the matrimonial home through means other than the equity in the home, he may ask to be credited for those expenses in the reconciliation of the property claim and/or the respondent’s right to seek to have them characterized as support at trial is preserved, and his right is also preserved to argue at trial that the applicant should not participate in any increase in the value of the matrimonial home that is attributable to the completion of the renovation; and
k. if the respondent does not finance the settlement of the litigation with CT Restore Inc. and/or the completion of the renovation of the matrimonial home through means other than the equity in the home, his right is preserved to argue at trial that the applicant’s refusal to co-operate in the proposed second mortgage arrangements diminished the value of the matrimonial home and to claim damages as a result.
[4] The best way to summarize the outcome of these motions is to say that neither party succeeded on their own motion (or they each succeeded in their opposition to the other’s motion). Part of the respondent’s motion (relating to a first mortgage held on the property) was settled after the motion was brought, the applicant having eventually consented to the relief sought so that the mortgage could be renewed.
[5] At the conclusion of my endorsement I suggested that, with the benefit of knowing the outcome of both motions, the parties consider trying to settle the costs issues. They had asked for the opportunity to make written cost submissions and, failing agreement, I allowed for them to do so. They did.
The Positions of the Parties
[6] The applicant seeks $8,000.00 in costs for her interim support motion on the basis that she claims to have done better than her second settlement offer made on January 19, 2021. She claims to have done better because she offered to stop receiving employment income and instead receive $6,750 per month in support (taxable in her hands and tax-deductible by the respondent) and the court ordered that if she stops receiving employment income she will receive $8,100.00 per month in spousal support. She also seeks $7,000.00 in costs for the respondent’s mortgages motion, which she argues was initially short served because it was delivered after 4:00 p.m. (hence the adjournment) and she offered to allow him to withdraw it before it was ultimately dismissed.
[7] The respondent disagrees that the result achieved by the applicant on the interim support motion was a better outcome than what she had offered because her offer contained a term that required the third party payments that the respondent had been and would continue to make in respect of the matrimonial home to be non-taxable (whereas the order left that as an open question for trial and reserved the respondent’s right to seek to have them characterized as support and to seek post-separation adjustments in respect of all of the amounts he has been and continues to pay to and on behalf of the applicant and their children). The respondent also disagrees with how the applicant has characterized what she offered in terms of the tax consequences which.
[8] The respondent points to the fact that he is bearing the entire responsibility for the children’s expenses, as well as all of the carrying costs of the matrimonial home and the expenses associated with the ongoing renovation of the matrimonial home. He also points to certain observations made in my endorsement on the motions concerning the applicant’s unwillingness to deal with the first mortgage until after the respondent’s motion had been brought, and her refusal to co-operate in the efforts of the respondent to resolve the litigation that both parties are facing with respect to the renovation of the matrimonial home, and my finding that I did not consider the applicant’s withholding of consent to be reasonable or practical even though the relief requested was not granted.
[9] The respondent seeks $11,000.00 in costs for the interim support motion and $12,000.00 in costs for his mortgages motion. In the alternative, the respondent suggests that there be no award of costs to either party on either of their motions.
[10] The parties exchanged Costs Outlines for both motions after the hearing. The amounts they are seeking are roughly in line, although the applicant is critical of the respondent for some extra “lawyering” and multiple factums. Neither party is seriously challenging the amount of costs and disbursements claimed for the work done. On a full indemnity basis, the applicant’s costs outline indicated total fees, disbursements and taxes for both motions of $26,921.45 and the respondent’s costs outline indicated total fees, disbursements and taxes of $28,323.74.
Guiding Rules and Principles
[11] Rule 24(1) of the Family Law Rules creates a presumption of costs in favour of the successful party. Costs awards are discretionary. An award of costs is subject to: the factors listed in Rule 24(12), Rule 24(4) (unreasonable conduct of a successful party), Rule 24(8) (bad faith), Rule 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party: Berta v. Berta, 2015 ONCA 918 at para. 94.
[12] The principles to consider in determining costs on motions such as these are not controversial. These are summarized in the applicant’s initial submissions as follows:
Modern family law cost rules are based on broad objectives. These objectives are: to partially indemnify successful litigants, to encourage settlement, to discourage improper behaviour by litigants and to ensure cases are dealt with justly (Mattina v. Mattina, 2018 ONCA 867, at para. 10).
The factors in determining costs are set out in Rule 24(12). The court is to consider the importance, complexity or difficulty of the issues, the lawyer’s rates, the time properly spent on the case, and the reasonableness or unreasonableness of each party’s behaviour in the case.
Cost awards are discretionary. In the exercise of discretion, the court must consider two important principles: proportionality and “the ‘reasonableness’ evaluation of the ultimate award” (Beaver v. Hill, 2018 ONCA 840, at para. 4).
Rule 18(14) sets out that a party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date; If it is made at least one day before the motion date; The offer does not expire; The offer is not accepted; The party who made the offer obtains an order that is as favourable as the offer. O. Reg. 114/99, r. 18 (14).
[13] The respondent cited similar principles, in addition to the following:
Even where there is “divided success”, it does not necessarily mean “equal success.” And “some success” may not be enough to impact costs. Rules 24(6) requires a contextual analysis. Most family court cases involve multiple issues, not all issues are equally important, equally time-consuming or equally expensive to determine. See Scipione v. Del Sordo, 2015 ONSC 5982, at para. 68.
[14] The respondent also points to r. 24(4), (5) and (12) and the factors that the court can consider in deciding to deprive a successful party of costs or even awarding a successful party to pay costs, including the importance of the issues and the reasonableness of a party’s behaviour.
Costs Analysis
[15] The outcome of the interim support motion, which was to maintain the status quo and not order any spousal support while the respondent continues to pay for all of the expenses of the family, the matrimonial home and the applicant continues to receive her salary, was not a better outcome for the applicant than what she had offered. She was not offering to maintain that status quo. Further, it is not comparing apples to apples to look at the support amount that was calculated by me (that would only apply if the status quo was not maintained) without taking the tax consequences into account. The court’s operative ruling was consistent with the respondent’s position. The alternative support analysis that was undertaken by the court did not align with either party’s position.
[16] Accordingly, there is no r. 18 offer that needs to be taken into account in my costs analysis.
[17] The applicant consented to part of the relief that the respondent was seeking on the mortgages motion (in relation to the first mortgage) after the motion was brought. I made observations in my endorsement relating to the mortgages motion about the unreasonableness of the applicant’s behaviour. Although the applicant’s unwillingness to co-operate was viewed by the court as highly impractical, the law ultimately was on her side.
[18] In the end, and as I noted earlier, both parties lost their motions, or successfully opposed the other’s motion. That is akin to divided success. Having considered the positions and submissions of the parties and the applicable principles and rules, in the exercise of my discretion under r. 24 of the Family Law Rules and s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, there shall be no costs awarded to either party on these motions. Each shall bear their own costs.
[19] I would encourage the parties to try to co-operate on the many financial and other matters that they will face over the course of this litigation and to adopt practical approaches to what will no doubt be a complicated process of disentangling their financial and personal affairs.
[20] This endorsement is an order of the court, enforceable by law from the moment it is released without the necessity of formal issuance and entry.
Kimmel J.
Date: April 7, 2021