Superior Court of Justice - Ontario

Date: 2021-07-13

Re: Gregory Howard Borschel, Applicant And: Debaroti Mullick Borschel, Respondent

Before: Kiteley J.

Counsel: Applicant, Self-represented Harold Niman and Jen-Yii Liew, counsel for the Respondent

ENDORSEMENT AS TO COSTS

[1] In paragraph 132 of the endorsement dated June 3, 2021 [ONSC 4051] I noted that pursuant to rule 24(1) of the Family Law Rules, the Respondent was presumptively entitled to costs and I directed the parties to make written submissions as to costs. The elements of the endorsement relevant to costs are as follows:

paragraph 121: the Applicant shall pay temporary child support in the amount of CAD $8,874 per month commencing July 1, 2021;

paragraph 122: commencing March 1, 2021, the Applicant shall pay 72.3% of specified s.7 expenses;

paragraph 123: by June 30, 2021 the Applicant shall pay $136,437 for retroactive child support for the period August 1, 2019 to and including June 1, 2021 without prejudice to the Respondent’s claim for child support prior to August 1, 2019;

paragraph 124: by June 30, 2021, the Applicant shall pay CAD $97,794.89 for retroactive s. 7 expenses for the period August 1, 2019 to February 28, 2021 without prejudice to the Respondent’s claim for retroactive s. 7 expenses prior to August 1, 2019.

[2] In her submissions dated June 16, 2021, the Respondent provided a bill of costs that reflected full indemnity costs in the amount of $19,924.73; 80% indemnity in the amount of $15,939.78 and 65% indemnity in the amount of $12,951.07. In paragraph 3 of her submissions, the Respondent asked for full indemnity costs.

[3] The Respondent provided a copy of an offer to settle dated March 18, 2021 in which she proposed that the Applicant pay child support commencing March 1, 2021 in the amount of $8,874 CAD per month on a without prejudice basis, to be adjusted once the Applicant’s 2021 income could be determined. She also proposed that, on a without prejudice basis, she would pay 50% of specified expenses associated with the Applicant’s travel to and from Memphis for the purpose of exercising regular access. She took the position that the Applicant should pay 72.3% of specified s.7 expenses. She proposed that the Applicant pay retroactive child support in the amount of $114,941 CAD within 30 days for the period August 1, 2019 to February 28, 2021, without prejudice to her claim for child support retroactive to the date of separation. She also proposed that the Applicant pay $97,794.89 CAD within 30 days for retroactive section 7 expenses for the period August 1, 2019 to January 31, 2021, without prejudice to her claim retroactive to the date of separation.

[4] The Respondent took the position that she had obtained a more favourable result than the offer and, pursuant to rule 18(14), she was entitled to full recovery of costs.

[5] The Respondent argued that the issues were important and were legally complex. The parties had exchanged comprehensive and detailed materials. While the Respondent was assisted by two lawyers in the motion, Ms. Liew had prepared all of the costs submissions and a junior lawyer had been involved in legal research. No fees had been attributed to Mr. Niman in connection with the costs submissions.

[6] The Respondent referred to rule 24(5) and noted that full recovery is only warranted in certain circumstances, such as bad faith under rule 24(8). She did not take the position that the Applicant had acted in bad faith but did make submissions that he had acted unreasonably and had contributed to her costs. In paragraph 23, she asked for partial indemnity costs in the amount of $15,939.78 that was not consistent with the request in paragraph 3 of the costs submissions. The inconsistency is addressed below.

[7] In his submissions dated June 23, 2021, the Applicant took the position that the Court should award only partial costs to the Respondent. He did not specify whether he referred to the partial indemnity costs in the Respondent’s bill of costs or some other partial amount. He made no comment on the calculation of the Respondent’s costs.

[8] The Applicant asks the Court to take into consideration some of the same factors listed in paragraph 4 of the costs endorsement dated June 4, 2021 [ONSC 4087]. He emphasized what he considers to be the Respondent’s unreasonable behaviour during the case. He reiterated some of the submissions he had made in the merits of the motion, particularly his argument that the costs of living in Memphis were substantially lower, that the Applicant had contributed to s. 7 expenses, that the Respondent had refused to provide disclosure, and that the Respondent had failed to consult with him regarding s.7 expenses. In his concluding comments, he pointed out that he had “solely absorbed the $250,000 loan” that his former employer had provided which was a joint debt, that he had incurred exceptionally high access costs, that he had “consistently provided child support for 6 years without any court order”, that he has two other dependents for whom he is financially responsible, that the Respondent has lived mortgage free while he had 2 mortgages before he sold the Toronto home, that he had offered to pay 100% of the tuition for their daughter to attend Indiana University, that he has extended many good faith offers to settle spanning over years and that he provided full disclosure. He attached copies of his offers and of his or his counsel’s correspondence for the period October 30, 2018 to and including August 14, 2020. He also repeated that he had provided full disclosure of all monies paid to him last year, including the two lump sum, one time non-re-occurring payments for work done in previous years. In light of all of that, he asked that the Court award only partial costs.

[9] In his submissions, the Applicant also provided a copy of a letter to the Respondent’s lawyers dated March 27, 2021 in which he rejected her offer to settle dated March 18, 2021 (served on March 19, 2021) and he listed eight reasons for the rejection of the offer. Included in that list was that he had paid the $250,000 CAD loan to his former employer of which the Respondent should have paid 50% and that the Respondent owed the Applicant an equalization payment of approximately $50,000 which she never paid. Having rejected her offer to settle, he enclosed his offer to settle on these terms:

paragraph 1: commencing March 1, 2021, he would pay temporary child support in the amount of $4000 CAD until their daughter commenced university at which time, child support will be re-assessed and adjusted;

paragraph 2: commencing March 1, 2021, the Respondent would reimburse the Applicant for 50% of his access costs;

paragraph 3: commencing March 1, 2021, the Applicant would pay 50% of specified s.7 expenses;

paragraph 4: within 10 days of accepting the offer the Respondent would provide a current statement and/or statements of the 529 account(s) created and held by the maternal grandmother;

paragraph 5: commencing March 1, 2021, the Applicant would pay 50% of mutually agreed upon extracurricular activities and expenses for the children;

paragraph 6: the Applicant would not re-open the “equalization issue” nor commence a new action to collect any of the approximately $200,000 CAD in equalization monies owed by the Respondent;

paragraph 7: both parties would agree that neither owes the other any child support arrears or retroactive s.7 for the period August 1, 2019 to March 1, 2021.

[10] In her reply submissions dated June 30, 2021, the Respondent pointed out that the Applicant was re-arguing the motion and that many of his allegations were irrelevant for the purposes of determining costs. She noted that his historic offers to settle were attempts to settle all outstanding issues and were not limited to the motions heard in writing and, to the extent that they dealt with issues on the motion, his offers were less favourable than the order dated June 3, 2021.

[11] The Respondent noted that, in relation to the motion in writing, the Applicant had failed to produce relevant information regarding his income which caused her to incur additional costs in having to pursue the disclosure, amend her notice of motion, revise her affidavit and recalculate support based on the disclosure that the Applicant did produce. On that basis, as indicated in paragraph 69 of the endorsement, the Court had drawn an adverse inference that, had he properly disclosed his current income, it would have been prejudicial to him.

[12] The Respondent noted that even in the absence of bad faith, costs may be ordered on a full recovery basis having considered conduct by a party that contributed unnecessarily to the lengthening of the litigation and to the costs incurred. The Respondent resisted the Applicant’s allegations of bad faith on her part. She disagreed with the Applicant’s reference to correspondence sent by counsel on May 1, 2021. She insisted that she had voluntarily produced disclosure and insisted that there were no redactions made to her tax returns. She also insisted that the link for the Respondent’s employer’s benefits booklet was provided. And she pointed out that in an endorsement dated March 1, 2021, the Court had dismissed his motion for disclosure.

[13] The Respondent agreed that she had not produced her 2019 income tax return until March 8, 2021 but she had provided her pay stubs, updated financial statements and the information necessary to determine income for 2019 in a prompt and timely manner.

[14] The Respondent clarified that she should be entitled to her full costs in the amount of $19,924.73 including HST.

Analysis

[15] In paragraphs 19 to 21 of the June 3rd endorsement, I summarized the steps taken by the parties to comply with the timetable established for written submissions. As indicated in paragraph 23 of that endorsement, in her reply affidavit dated March 12, the Respondent had made amendments to the relief sought in reaction to his income disclosure. The Respondent was successful in recovering amounts for retroactive and ongoing child support table amount and s.7 expenses, consistent with her amended notice of motion. Rule 24(1) applies.

[16] The Respondent filed her reply affidavit sworn March 12, 2021. On March 19, 2021, she served an offer to settle dated March 18 the terms of which are indicated above in paragraph 3. The order made was more favourable than her offer with respect to access costs and it was as favourable with respect to retroactive and ongoing child support table amount and s.7 expenses. Rule 18(14) applies.

[17] In comparison, the Applicant’s offer to settle dated March 27, 2021 was dramatically different from and significantly less than the order that was granted.

[18] I am satisfied that the Applicant has behaved unreasonably in relation to the motion for temporary child support for these reasons. First, he did not provide evidence of his current income. Second, he continues to include irrelevant considerations, including the allegation with respect to the debt owed to his former employer and the allegation with respect to an unpaid equalization payment. Neither is relevant to this motion for child support. Third, he persists in making submissions that the behaviour of the Respondent “in the case” is relevant even though that submission was not accepted in relation to the costs endorsement dated June 4, 2021 [2021 ONSC 4087 at paragraph 19]. Fourth, his March 27, 2021 offer to settle was unreasonable because it incorporated a term related to the allegation with respect to the debt and the unpaid equalization payment. Fifth, as a result of the disclosure he provided in his February 23rd material, the Respondent incurred extra legal expenses to reconsider and revise her notice of motion and her responding affidavit and factum. Sixth, in his submissions as to costs, he repeated submissions he had made on the merits, including the cost of living issue. Rule 24(4) and (5) apply.

[19] Without deciding whether his behaviour demonstrated bad faith, I am satisfied that on the basis of the Applicant’s unreasonable behaviour, the Respondent is entitled to full indemnity costs.

ORDER TO GO AS FOLLOWS:

[20] By August 16, 2021, the Applicant shall pay to the Respondent full indemnity costs with respect to the motion for temporary child support fixed in the amount of $19,924.73 including HST.

[21] Support Deduction Order to issue with respect to those costs all of which were incurred in relation to child support.

[22] The Applicant is permitted to withdraw from the account ending 1629 at the Chase Bank the amount referred to in paragraph 20 above. After payment of that sum, and as security for any financial obligations to the Respondent including retroactive child and/or spousal support, contributions to section 7 expenses and costs, the Applicant is restrained from directly or indirectly depleting, transferring, disposing of, removing or otherwise dealing with the proceeds of sale of his residence in Toronto held in account ending 1629 at the Chase Bank pending further court order.

[23] Paragraph 2 of the signed order dated October 27, 2020 continues to apply until a decision by the trial judge or further agreement.

[24] This order takes effect immediately without a formal order being signed and entered.

[25] This order bears interest at the rate provided by the Courts of Justice Act.

Kiteley J.

Date: July 13, 2021