COURT FILE NO.: FS 21-031 (Walkerton) DATE: 2024-04-22 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Rachna Kalra Applicant
-and-
Sanjay Kalra Respondent
Counsel: Eli Cohen, for the applicant William Clayton, for the respondent
Justice. R. Chown
14B motion and Costs Endorsement
[1] This endorsement relates to the respondent’s 14B motion form dated March 19, 2024, the applicant’s responding 14B motion form dated March 25, 2024, and the parties’ costs submissions relating to the trial dated February 15, 2024 and March 7, 2024.
14B motion
[2] In his 14B motion form, the respondent seeks an order for “Reconsideration of spousal support, specifically, a reconsideration of Chown J’s Order finding that the Respondent will be eligible for retirement with a full pension.” The respondent says I made a mistake when I stated that the respondent would be entitled to a full pension in 2025.
[3] In his examination in chief, the respondent said that as of 2022 he was eligible for early retirement, and in 2025 he will be eligible for “full pension retirement.” Both counsel and the respondent used this phrase. The respondent gave this evidence in the context of explaining his decision to pursue his licence to sell life insurance. He said that he was pursuing this licence to supplement the loss of half of his pension. He said that although his efforts to obtain this licence were on hold, once this litigation was resolved he intended to resume his efforts to obtain this licence. He was asked about his intentions regarding retirement from Bruce Power, and he said that he had been contemplating early retirement due to medical (mental health) issues. It was at this point that he was asked if 2025 represented early retirement from Bruce Power or if that was his full pension retirement, and he replied that this was his full pension retirement.
[4] The respondent did not suggest, and I did not assume, that “full pension” meant something close to his current income. Indeed, I do not believe I received evidence as to what the respondent’s pension income will be when he retires, whether before, at, or after 2025. As such, the respondent’s future pension income did not feature in my disposition of the case. There are two caveats to this.
[5] The first caveat is that the uncertainty of the respondent’s future income was part of the reason why I declined to order lump sum spousal support. To expand on that, the respondent’s future income is uncertain because his retirement date from Bruce Power is uncertain and because he may start earning income selling life insurance. There is also some uncertainty because the respondent suggested that he might be unable to continue working due to his mental health, although I did not accept that as likely. What I did say is that both parties’ future means and needs are difficult to predict. Hence a lump sum support award was not appropriate. This was consistent with the respondent’s position.
[6] The second caveat is that the respondent’s entitlement to a full pension in 2025 was a factor in determining where within the range I should set spousal support. I said that there would be a benefit to maintaining the respondent’s work incentive. The inference I made from the respondent’s evidence is that working at Bruce Power beyond 2025 will not increase his pension, or at least it will not increase it as much as working until 2025 would. The fact that the respondent will soon be entitled to his full pension will reduce his incentive to work and this consideration supported placing support lower in the range. This benefited the respondent.
[7] In result, I agree with the applicant’s position on the 14B motion that the order does not “contain a mistake.” I therefore do not have the authority under rule 25(19) of the Family Law Rules or otherwise to change my decision. If I have made a mistake, it needs to be corrected by the Court of Appeal.
[8] The applicant asks for costs of $2,500 for the 14B motion. This is excessive but I accept that she is entitled to some costs for the motion. I assess her costs for the 14B motion at $600.
Costs of Application
[9] The costs of the application on the issues of equalization and property are dealt with in the final order of Mandhane J. dated June 24, 2022. It states: “Any claims by either party relative to the issues contained herein are dismissed with prejudice and without costs.” The trial was about spousal support, generally, but there were sub-issues including entitlement, amount, duration, and whether it was appropriate to award a lump sum.
Basis for Determination of Costs
[10] In his costs submissions, the respondent relies on Malec v. Malec, 2020 ONSC 7621, in which Sah J. adopted the reasoning in MC v. MAC, 2020 ONSC 3845. I agree that MC provides an excellent roadmap for fixing costs after a trial.
[11] I also agree that the costs determination in this case must be decided primarily based on “success.” The objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay: Boucher v. Public Accountants Council for the Province of Ontario, [2004] O.J. No. 2634 (Ont. C.A.), at para. 24.
Offers Not Material
[12] The respondent offered $1,000 per month in spousal support until he retires. Specifically, he offered “spousal support the sum of $1,000.00 per month until the Respondent retires, at which point spousal support will be subject to review and if the Respondent's income is from his pension and he is not working on contract for Bruce Power or at other employment, spousal support will cease based on the pension credit split.” This is less than what I ordered, and I did not set an end date or a definitive right of review upon the respondent’s retirement.
[13] The applicant’s 2022 offer would have required the respondent to pay $2,800 per month. This is more than what I ordered.
[14] Because neither party received a result at trial that was more favourable than their offer to settle, the offers are not a significant factor in the determination of costs in this case. If one party had an offer that was very close to the result at trial, I might be influenced by it. But that is not the case.
Success
[15] To assess who was successful at trial, I look to the parties’ pleadings, as narrowed by previous orders resolving some of the issues in the pleadings. The parties’ opening statements reflect what issues were outstanding at trial and the parties’ positions prior to trial. Therefore, in this case, the opening statements are another good source for considering success.
[16] Overall, the applicant was more successful than the respondent and the costs award needs to reflect that. I say this primarily because the respondent denied that the applicant’s entitlement to any spousal support, and the support award is significant. To be sure, the applicant claimed more support than she received, but she was successful on the threshold issue.
[17] The applicant was not successful in her claim for lump sum support. She was not successful in justifying most of the deductions from her income that she claimed. I assessed her income for support purposes much higher than she submitted was an appropriate income. So there was some divided success. The costs award should reflect that as well.
Dockets
[18] I have reviewed the dockets of applicant’s counsel carefully as part of determining the amount of time spent on the issues that remained outstanding at trial. The time spent is just one factor in determining an amount that is fair and reasonable for the unsuccessful party to pay, but it is an important factor.
[19] Partially redacted docket entries of counsel for the applicant have been provided in support of the costs claimed. These include dockets going back to January of 2020. For understandable reasons, the dockets are not broken down into time devoted to various issues, but the best I can do is to estimate a reasonable figure that is attributable to the spousal support issue, bearing in mind that the applicant has the onus of proving what costs are attributable to the issue.
[20] The dockets are broken down into categories, following the chronology of the dockets and of this proceeding, as follows:
pre-litigation 4,297.50
application preparation 3,157.50
reply and case conference 1,582.50
negotiation 553.50
settlement conference and undertaking brief 441.00
negotiation and 14B 7,138.50
2022 motion 3,040.00
June 2022 settlement conference 3,674.00
negotiation Jul to Nov 2022 5,421.00
TMC 6,088.50
trial prep and divorce 16,513.00
trial sittings 37,290.50
post-trial 3,915.00
93,112.50
[21] These dockets reflect the full rate of applicant’s counsel, not the partial indemnity rate. From my review of the dockets, it appears that a very large majority of the dockets before December 2023 did not relate to the spousal support issue. The exception to this is the dockets directed towards the motion decided by Bloom J., but Bloom J. dealt with the costs of that motion. For my purposes, by far the most important elements of the dockets are the trial prep beginning in December 2023, trial attendance, and post trial dockets. At a partial indemnity rate, these total about $34,000 to $38,000.
Result on Costs
[22] Bearing all the foregoing in mind, including the divided success, I assess the recoverable partial indemnity costs for fees for the applicant to be $30,000 plus HST, for a total of $33,900.
[23] The only disbursement that is properly recoverable is the disbursement to file the trial record of $445. This amount is not subject to HST. The other disbursements are not adequately related to the spousal support issue.
Other Issues
[24] In her costs submissions, the applicant asked me to order that the costs award be ordered payable from the proceeds of the sale of the matrimonial home that are currently being held in trust. This relief was not specifically requested in a motion or in the pleadings. She also asks me to order that the costs be recoverable as support.
[25] I would hope that these issues can be resolved, but if not they will need to be the subject of a motion. Any required motions should be brought before me and scheduled through the trial coordinator for a 9:00 a.m. hearing before my regular court day begins.
Disposition
[26] This court orders:
(1) The respondent’s 14B motion is dismissed.
(2) The respondent shall pay the applicant the costs of the 14B motion fixed in the amount of $600.
(3) The respondent shall pay the applicant the costs of this proceeding, fixed in the amount of $33,390 for fees including HST and $445 for disbursements, for a total of $34,345. This is separate from and in addition to:
a) the costs referred to in paragraph (2); and
b) any costs previously awarded to either side in any prior order.
(4) Any further required motions in this proceeding shall be heard by Chown J. and may be scheduled through the trial coordinator for a 9:00 a.m. hearing.
Chown J. Released: April 22, 2024