Superior Court of Justice – Ontario
Court File No.: FS-19-19-00 Date: 2023 07 13
BETWEEN:
Rolfe Bernard Jahnke Applicant
AND:
Mary Catherine Obermaier Respondent
Counsel: R. Ian Robertson, for the Applicant J. Barry Eakins, for the Respondent
Heard: In Writing
Endorsement
LEMAY J
[1] This is the final step in a matter that I have been seized of for approximately three years. Some of the background history is explained in my reasons dated March 16th, 2023 (Jahnke v. Obermaier, 2023 ONSC 1744). In essence, the parties reached a settlement in January of 2020 and there have been issues since that time in the implementation of the settlement.
[2] Those issues came to a head in May of 2021 when I made an Order in respect of ongoing spousal support payments as well as the benefits that the Applicant was seeking. The Respondent did not participate in the hearing that led to me making that order. She subsequently brought a motion to have the Order set aside. I granted the motion to set the May 10th, 2021 Order aside, and the litigation is now at an end with the exception of two questions.
[3] First, I have to determine whether I should vary the costs Order that I made at the May 10th, 2021 hearing. Second, I have to determine whether I should grant the Respondent costs of the motion to set aside my May 10th, 2021 Order. I will set out the background facts and then deal with each issue in turn.
Background Facts
[4] The parties began cohabiting in 1993. They were never married. They separated in November of 2017 and this proceeding was commenced in February of 2019.
[5] The parties attended at a settlement conference before me on January 22nd, 2020. The issues between them were resolved. That resolution included a commitment on the part of the Respondent to make efforts to have the Applicant restored to her benefits plan. The Respondent had benefits through the Ontario Teachers Insurance Plan (“OTIP”).
[6] There were efforts made to reinstate the Applicant on the benefits plan. However, as detailed in my March 16th, 2023 reasons, the Respondent stopped responding to e-mails from the Applicant’s counsel in February of 2021. She also did not respond to an e-mail sent from the Court in April of 2021 fixing the hearing date in May of 2021.
[7] The Respondent did not attend the hearing on May 10th, 2021. She advises that she was inadvertently not checking the e-mail account that she had provided to the Court and to the Applicant for the service of documents. She only checked the e-mail account on May 27th, 2021.
[8] She then retained counsel and brought a motion to set aside the May 10th, 2021 Order. After some delays, as described in my March 16th, 2023 reasons, that motion was granted.
[9] After my March 16th, 2023 decision, the issue that remained to be addressed was whether there would be any further litigation. Specifically, whether the Applicant would be advancing any claims against the Respondent for failing to attempt to have the Applicant put back on benefits or whether the Applicant would be advancing a claim against OTIP or Manulife, the insurer that administers the plan. As part of my March 16th, 2023 decision, I made an order that it be served on counsel for these third parties and requested that they consider disclosure.
[10] A further case conference was arranged to discuss disclosure on April 25th, 2023. At that point, the Applicant was considering whether he was going to continue with the litigation. A further case conference was scheduled for May 15th, 2023. Approximately a week after the second case conference, counsel for the Applicant advised that his client would not be proceeding any further with this matter. There was also an issue raised by the Respondent in respect of a debt from an account at the local hardware store. That issue was also abandoned.
[11] Given some of the confusion over the evolving issue agenda, the Applicant missed the deadline for costs submissions by approximately two days. Over the objections of the Respondent, I determined that I would still receive the costs submissions. As discussed below, I also asked the parties for additional submissions on the issue of whether the Respondent had received an indulgence and should, therefore, be precluded from receiving costs for her mostly successful motion to set aside the May 16th, 2021 Order.
The Costs of the May 16th, 2021 Order
[12] The costs that I ordered on May 16th, 2021 were, in my view, full indemnity costs. I had ordered full indemnity costs as a result of what I viewed at the time to be the Respondent’s failure to participate in the proceedings. The Respondent now seeks to have the costs reduced to nothing because she has satisfied the test to have the May 10th, 2021 Order set aside. In the alternative, she argues that there should be only a very nominal order for costs.
[13] The Applicant, on the other hand, seeks to have the costs order from May 16th, 2021 kept in place. He advances two submissions in this regard. First, he argues that the motion on May 10th, 2021 would not have been necessary except for the Respondent’s conduct. Second, he argues that the Respondent was not entirely successful in having the May 10th, 2021 order set aside.
[14] While the Applicant is correct in both his positions, I am of the view that the costs should be reduced from $12,000.00 to $6,000.00 for the May 10th, 2021 motion. I reach that conclusion on the basis that I have accepted the Respondent’s explanation that her failure to respond to the motion was inadvertent rather than deliberate. However, I also accept the Applicant’s view that the May 10th, 2021 motion was necessary. I also note that the Applicant was ultimately successful in having some of the support I ordered payable to be upheld even after the Applicant brought her motion to set aside the original Order.
[15] As a result, partial indemnity costs are appropriate for the May 10th, 2021 appearance and I fix those costs in the sum of $6,000.00 inclusive of HST and disbursements. Those costs are to be paid within thirty (30) days. Those costs were incurred in pursuit of benefits, which are a form of spousal support. They are, therefore, enforceable through the Family Responsibility Office.
The Costs of the Motion to Set Aside
[16] The Respondent argues that she should be entitled to costs for the motion to set aside the May 10th, 2021 Order on a substantial indemnity basis in the sum of $35,771.28 on the basis that she did better than an offer to settle. In the alternative, the Respondent seeks partial indemnity basis in the sum of $23,960.52 inclusive of HST and disbursements on the basis that she was successful on the motion to set aside This raises two issues for my consideration:
a) Did the Respondent beat her offer to settle?
b) If not, should the Respondent be entitled to partial indemnity costs.
[17] I will deal with each issue in turn.
a) Did the Respondent Beat her Offer to Settle?
[18] No.
[19] The Respondent’s offer to settle has two features that were not addressed in any way by my reasons. First, as discussed in my March 16th, 2023 reasons, there was an issue over some cemetery plots. In the Respondent’s offer to settle, there was a reduction in the amount that the Respondent would pay if the Applicant was unable to transfer the cemetery plots that had been owned by the parties. I addressed that issue by way of a Court order instead.
[20] Second, the Respondent’s offer to settle requires full and final releases to be signed. Again, that is not a provision that I ordered in my May 16th, 2023 endorsement.
[21] In addition to these issues, my May 16th, 2023 endorsement required the Respondent to pay, for a second time, the June 2021 spousal support amount as she had failed to follow my Order, even after she received it. As a result, the Applicant received more money than he would have received if he had accepted the Respondent’s offer.
[22] For the foregoing reasons, I find that the Respondent cannot rely on her Offer to Settle as triggering enhanced costs consequences.
b) Should the Respondent be Entitled to Partial Indemnity Costs for the Motion to Set Aside?
[23] No.
[24] In preparing my reasons, I noted that the Applicant made the observation that the motion would not have been necessary but for the Respondent failing to monitor her e-mail address. I was aware of case-law that deals with costs in the context of a party seeking an indulgence from the Court, and I invited counsel to provide further submission on that case-law. I have now received those submissions and considered them in reaching my decision.
[25] In Mollicone v. Town of Caledon, 2011 ONSC 883, M.G. Quigley J. explains the term indulgence as follows (at para. 14):
Although the roots of the word “indulgence” and its signification of an ecclesiastical dispensation for sin can be traced to Canon Law in the 14th century and the liturgy of the Catholic Church, it has also come to have a secular meaning that is relevant here. An indulgence is something that is granted as a favour or privilege. It contemplates liberal or lenient treatment to the person who receives it, embracing notions of tolerance. In the context of business or the law in which it is used here it signifies the granting of permission to do something that is time or performance related that would not otherwise be permissible, such as extending a period of time to permit what would otherwise be out of time payment of a sum or performance of an obligation. It connotes notions of forbearance. Indeed, in this sense and in a legal context, it can be seen as the extension of the equity of the Sovereign’s grace and mercy to permit an oversight or failure on the part of a litigant to be overlooked.
[26] The key part of this passage is the end, where it refers to an indulgence as the permission to have the oversight or failure of a litigant overlooked. The same principles were adopted by Thomas R.S.J. in Algra v. Mingay and Feltham v. Mingay, 2019 ONSC 5410. The consequence of a litigant receiving an indulgence is usually (but not always) either an award of no costs or an award of costs against the successful party: See also Egredzija v. Gullett, 2019 ONSC 7150 at paras. 33-37.
[27] I am of the view that the Respondent obtained an indulgence to have the Order set aside. As I noted in my March 16th, 2023 decision:
[37] The one area of the test that gives me some pause is the question of whether there is a plausible explanation for the Respondent’s default and failure to participate in the motion. The Respondent says that she had decided to represent herself towards the end of the litigation. She also says that she set up a specific e-mail address to receive service on this file and then did not monitor it because she thought the action was over. I have some concerns with this explanation, in large part because the action was clearly not over as the Applicant had not been reinstated on the Respondent’s benefits and the Respondent ought to have known that this was likely going to be an ongoing issue.
[38] The Respondent argues that her failure to monitor the e-mail address was inadvertent and not an intentional or deliberate omission. In support of this argument, the Respondent cited the decision in Nadarajah v. Lad, 2015 ONSC 4626, in which Molloy J. set out the view that inadvertence was a one-time error and not a deliberate act.
[39] In considering the Respondent’s explanation, I must keep in mind that she is self-represented in this litigation and might very well have thought that the matter was nearly resolved. Therefore, I am of the view that the explanation offered by the Respondent is plausible and that the test to set aside the Order is met.
[28] In other words, while I accepted the Respondent’s submission, I did have some concerns about it. One of the key concerns is that she should have known that this matter was not concluded and should have been checking her e-mail address regularly.
[29] While I accepted that the Order could be set aside, it is an indulgence. As counsel for the Applicant correctly notes, this motion would not have been necessary if the Respondent had properly responded to the Applicant’s counsel (and the Court) between February and May of 2021. The undoing of the May 10th, 2021 order was necessary because of the Respondent’s failure to properly participate in the proceeding. She should not be entitled to recover any costs for the work that had to be done to address her oversight.
[30] Counsel for the Respondent advances a number of arguments as to why an indulgence was not granted. One of those arguments was that an appeal of the Order would have found it to be defective. The problem with that argument is that Courts are reluctant to permit a party to appeal an order where they did not participate in the proceeding. The proper procedure is to return before the Court that made the determination.
[31] More generally, the Respondent’s arguments all suffer from one fatal flaw. The motion in May of 2021 only took place because the Respondent was not responding to communications from either the Court or the Applicant that were properly served upon her. What flowed from that inadvertence was the May 2021 Order. To repeat- the Respondent should not be entitled to recover costs for the time spent undoing an Order that flowed from her inadvertence.
[32] The other question is whether the Applicant should be entitled to some costs as a result of these proceedings. Given the Applicant’s lack of success on this motion, I am not persuaded that he should receive any costs for the work done since May 10th, 2021 order either. I am fortified in that conclusion by the ultimate outcome of the litigation, which is that the Applicant has decided not to pursue any further remedies against anyone. That suggests to me that each side should bear their own costs.
Conclusion
[33] For the foregoing reasons, I order as follows:
a) The costs of the proceedings leading up to the May 10th, 2021 Order should be reduced from $12,000.00 to $6,000.00 inclusive of HST and disbursements. Those costs remain payable by the Respondent to the Applicant and may be enforced as support through the Family Responsibility Office.
b) There are to be no costs to either party for the proceedings after May 10th, 2021.
[34] I confirm that I retain jurisdiction to deal with any issue arising from the minutes of settlement. However, given that there is no ongoing litigation, I do not expect to be involved in this file further.
LEMAY J Released: July 13, 2023