SUPREME COURT OF Nova Scotia
FAMILY DIVISION
Citation: Ward v. Lucis, 2018 NSSC 249
Date: 2018-10-10
Docket: 1201-066723
Registry: Halifax
Between:
Martin Charles Ward
Petitioner
v.
Ilze Lucis
Respondent
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Judge: |
The Honourable Justice R. Lester Jesudason |
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Written Decision:
Final Submission on Costs: |
October 10, 2018
September 21, 2018 |
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Counsel: |
Julia E. Cornish, Q.C., and Gillian R. Lush, for Mr. Ward Angela Walker, for Ms. Lucis
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By the Court:
[1] This is a decision on costs following my written decision released on June 29, 2018: 2018 NSSC 131. The relevant background was summarized in my earlier decision so I won’t repeat it.
[2] The parties filed written submissions on costs on August 29, 2018, and September 21, 2018, respectively. There was a delay in Ms. Lucis filing her submissions as she retained new counsel to assist her in this matter and to finalize the Divorce Order and Corollary Relief Order. Those Orders were issued on October 3, 2018.
Parties’ Positions:
[3] Mr. Ward seeks costs of $60,000.
[4] Ms. Lucis requests that each party bear his or her own costs or, in the alternative, seeks that costs be awarded to Mr. Ward pursuant to Tariff A of the Civil Procedure Rules. With respect to the latter, she says the amount in dispute should be set at $60,000 resulting in a costs award of $13,250.
Parties’ Arguments:
[5] In support of his position, Mr. Ward advances several arguments. I summarize his main ones as follows:
• He should be considered the successful party and, as such, Ms. Lucis should pay a substantial contribution to his legal fees.
• If one applies Tariff A, the “amount involved” which was in dispute before the trial started was $1,507,095. This doesn’t include Ms. Lucis’ claim for prospective spousal support.
• He made three offers to settle to Ms. Lucis on October 26, 2016, February 24, 2017, and May 15, 2017. He says that the latter two offers were more favourable to Ms. Lucis than what I awarded.
• Ms. Lucis’ conduct affected the speed and expense of this proceeding. She cancelled the continuation of settlement conferences twice before two different judges without providing any meaningful explanation for doing so. She also required him to call his appraiser to testify about the value of the matrimonial home. This proved unnecessary because, after his appraiser testified, Ms. Lucis agreed to accept his suggested mid-point value between the parties’ competing appraisals. Thus, he says he unnecessarily incurred costs of $1478 associated with his appraiser having to testify while Ms. Lucis avoided the cost of having her appraiser testify.
• He has incurred fees of approximately $82,763 in this proceeding from September 2015 onward consisting of legal fees, taxes and disbursements. He should therefore receive a substantial contribution to his legal fees which takes into consideration his settlement offers. He relies on Armoyan v. Armoyan, 2013 NSCA 136 to suggest it would be appropriate to award him costs based on 66% of his fees incurred before his February 2017 offer to settle (i.e. 66% of $25,080) and 80% of his fees incurred after his February 2017 offer to settle (i.e. 80% of $44,763) for a total costs award of $60,890.
[6] In support of her position, Ms. Lucis advances several arguments. I summarize her main ones as follows:
• There was mixed success on the various issues which were litigated. She was more successful on the largest property issue which had to be determined (i.e. how to value the pensions earned by each party post-separation). While she wasn’t successful in her claim for prospective and retroactive spousal support, her claim wasn’t frivolous.
• While it took the parties a decade after separating to litigate their issues, Ms. Lucis cannot be faulted for causing delay. To the contrary, she asserts that Mr. Ward delayed in providing necessary disclosure and points out that it was she who filed the Request for Date Assignment Conference two years after Mr. Ward filed the Petition for Divorce.
• There were three full days of trial. Applying a “rule of thumb” of equating each day of trial to an amount of $20,000, the amount involved in dispute should be $60,000. If one applied Scale 2 of Tariff A, this would result in costs of $13,250 (i.e. $7,250 plus $2,000 for each day of trial).
• Many of the property issues weren’t in dispute so shouldn’t be included in calculating the amount involved. She says that the property issues in dispute were relatively small in value. She says that the value of the items awarded to Mr. Ward is roughly $72,600. If this was considered the “amount involved”, an application of Scale 2 of Tariff A would result in a costs award of $15,750.
• While she didn’t complete two settlement conferences, Mr. Ward wasn’t prepared to make any concession on spousal support until shortly before the trial after the settlement conferences had already occurred. He then only offered a smaller lump sum figure. Thus, she shouldn’t be faulted for not continuing with the settlement conferences.
• Mr. Ward’s claim for costs exceeds her total annual income. Thus, allowing such a claim would be a “crushing blow” to her.
The Law:
[7] Civil Procedure Rule 77 deals with the awarding of costs. It gives the court a wide discretion to award costs to do “justice between the parties”.
[8] There is a wealth of jurisprudence written on the awarding of costs. I have nothing novel to add.
[9] In Armoyan v. Armoyan, supra, our Court of Appeal provided helpful guidance on the principles that should be considered when determining costs. Justice Fichaud stated:
1. The court’s overall mandate is to do “justice between the parties”: para. 10;
2. Unless otherwise ordered, costs are quantified according to the tariffs; however, the court has discretion to raise or lower the tariff costs applying factors such as those listed in Rule 77.07(2). These factors include an unaccepted written settlement offer, whether the offer was made formally under Rule 10, and the parties’ conduct that affected the speed or expense of the proceeding: paras. 12 and 13.
3. The Rule permits the court to award lump sum costs and depart from tariff costs in specified circumstances. Tariffs are the norm and there must be a reason to consider a lump sum: paras. 14-15;
4. The basic principle is that a costs award should afford a substantial contribution to, but not amount to a complete indemnity to the party’s reasonable fees and expenses: para. 16;
5. The tariffs deliver the benefit of predictability by limiting the use of subjective discretion: para. 17;
6. Some cases bear no resemblance to the tariffs’ assumptions. For example, a proceeding begun nominally as a chambers motion, signaling Tariff C, may assume trial functions; a case may have “no amount involved” with other important issues at stake, the case may assume a complexity with a corresponding work load, that is far disproportionate to the court time by which costs are assessed under the tariffs, etc.: paras. 17 and 18; and
7. When the subjectivity of applying the tariffs exceeds a critical level, the tariffs may be more distracting than useful. In such cases, it is more realistic to circumvent the tariffs, and channel that discretion directly to the principled calculation of a lump sum which should turn on the objective criteria that are accepted by the Rules or case law: para. 18.
[10] Ms. Lucis argues that courts have frequently departed from a mechanical application of the tariffs in family matters which are treated differently than other matters. For example, she relies on Murphy v. Hancock, 2012 NSSC 219, where Associate Chief Justice O’Neil stated in paragraph 13:
Arriving at a costs assessment in matrimonial matters is difficult given the often mixed outcome and the need to consider the impact of an onerous costs award on families and children in particular. The need for the court to exercise its discretion and to move away from a strict application of the Tariffs is often present.
[11] Similarly, she relies on A.R. v. G.R., 2010 NSSC 424, in which Associate Chief Justice O’Neil stated:
[18] …I agree with Justice Williams in Grant, who stated at paragraph 42 that an “amount involved” analysis has limited applicability in complex, multi-issue matrimonial proceedings.
[19] As stated at paragraph 13 in Grant, Justice Williams observes that divorce and family law proceeding “often involve a multitude of separate and inter-related problems”. The result is that determination of success is also more complex.
[12] In my view, the cases relied upon by Ms. Lucis do not support the notion that the tariffs should be frequently departed from in family law matters. Indeed, Armoyan was a family law case. Rather, those cases simply emphasize that judges have a wide discretion when it comes to awarding costs and, as was done in the Murphy and A.R. cases, can consider the negative financial impact of a costs award on families and children. Furthermore, in many family law cases involving issues such as parenting arrangements for children, there is often no clear “amount involved” in dispute for the purpose of applying the tariffs.
[13] In the present case, there are no children which would be negatively impacted by a costs award. Furthermore, there were some clear amounts which were in dispute. Contrary to what Ms. Lucis asserts, there is no credible suggestion that a reasonable costs award would be a “crushing blow” to her financially. As I noted in paragraph 206 of my decision, after the division of Mr. Ward’s pension and the significant equalization payment owed to her, Ms. Lucis will likely have over $1,000,000 in liquid assets. Indeed, the Corollary Relief Order signed by counsel provides that by September 28, 2018, Mr. Ward would pay a one-time balancing payment of $447,873.70 to Ms. Lucis. I understand that this amount has now been fully paid.
Analysis:
[14] The trial required approximately three days of court time. Both parties filed extensive pre- and post-trial written submissions. There were several other court appearances to deal with pre-trial issues.
[15] While I agree with Ms. Lucis that if viewed individually, the parties had mixed success on the numerous issues raised during the trial, not all of those issues were of equal importance in terms of outcome and use of court time. While I have considered the relative success on all issues, I will comment on three of the issues which took up significant court time.
a) Ms. Lucis’ Claim for Spousal Support
[16] In my view, this was the most contentious and time-consuming issue. Ms. Lucis sought prospective spousal support of $7,866 per month and retroactive spousal support of $305,436 from May 2012 to December 2016.
[17] Mr. Ward was entirely successful in resisting these claims. While Ms. Lucis argues that her claims were not frivolous, this doesn’t provide an appropriate basis on which to deny Mr. Ward costs. Furthermore, if one were to simply apply Tariff A using the $305,436 she sought in retroactive spousal support as the “amount involved”, the basic costs award under Scale 2 would be $34,750.
[18] I also note that approximately two weeks before the trial, Mr. Ward’s counsel sent an offer to settle to Ms. Lucis’ counsel in which Mr. Ward offered to pay a one-time lump sum amount of $30,000 for spousal support in order to save the costs of litigating the issue at trial. Ms. Lucis didn’t accept same although I recognize that this was a fairly late concession by Mr. Ward which was part of an overall comprehensive offer to settle all issues in an effort to avoid a trial.
b) Pension Division
[19] In my view, how to value and divide the parties’ pensions was the most complex issue. It was also the second most contentious and time-consuming one.
[20] As I indicated in my decision, this issue was made even more complex because the parties waited many years to come to court to divide their pensions which had been in pay for many years and were treated by each party as being solely owned.
[21] Ultimately, I didn’t accept either party’s position as to how to value and divide the post-separation pensions. While I accepted the use of the average marginal rate as suggested by Ms. Lucis, I accepted Mr. Ward’s use of the “pro rata” approach when dividing Ms. Lucis’ teacher’s pension. I also denied Ms. Lucis’ request that pre-judgment interest be awarded to her for the pension reimbursement amount. Thus, I consider the parties to have mixed success on the pension issue.
[22] I also note that in Mr. Ward’s offer to settle dated February 24, 2017, he offered to settle the offsetting pension amount at $171,179 which is higher than the amount of $161,065 the parties agree results from my decision.
c) Value of Matrimonial Home
[23] A good portion of the morning of the first day of the trial was spend receiving the evidence of Mr. Ward’s appraiser as to the value of the matrimonial home. In paragraphs 34-39 of my decision, I commented on how the parties eventually reached agreement as to the value of the matrimonial home only after Mr. Ward’s appraiser testified and Ms. Lucis changed her pre-trial position.
Conclusion:
[24] I exercise my discretion to award Mr. Ward costs in the amount of $30,000 which shall be paid by Ms. Lucis within 60 days. I conclude that such an award does justice to the parties when I consider all the relevant factors including, but not limited to:
• the monetary value of the amounts in dispute;
• the relative success of the parties on the various issues;
• the offers to settle made by Mr. Ward;
• the length of the proceeding and the fees which would have been reasonably incurred;
• the conduct of the parties which affected the speed or expense of the proceeding; and
• Civil Procedure Rule 77, the tariffs and the guidance from the case law as they apply to the unique facts of this case.
[25] I direct that Mr. Ward’s counsel prepare the appropriate form of Order reflecting my decision on costs which should be consented to as to form only by both parties and sent to me within ten days.
Jesudason, J.