Rubin v. Gendemann, 2011 ABQB 466

Court of Queen ’ s Bench of Alberta Citation: Rubin v. Gendemann, 2011 ABQB 466 Date: 20110714 Docket: FL03 18439 Registry: Edmonton Between: Glenna Jean Rubin Plaintiff - and - Klaus Dieter Gendemann Defendant _______________________________________________________ Reasons for Decision (Costs) of the Honourable Madam Justice A.B. Moen _______________________________________________________ I. Introduction.............................................................................................................. Page: 2 II.

The Present Application........................................................................................ Page: 3 III. Costs....................................................................................................................... Page: 4 A. Preliminary Issue - Characterization of the $118,958.93 Amount........ Page: 4 B.

Schedule C Party and Party Costs.......................................................... Page: 5 C. Double Costs.............................................................................................. Page: 6 D. Adjustment to the

Schedule C, Column 5 Party and Party Costs......... Page: 7

IV. Occupation Rent..................................................................................................... Page: 8 V. Personal Property.................................................................................................. Page: 9 VII. Costs on this Application.................................................................................... Page: 11 I.

Introduction [ 1 ] This decision addresses trial costs and auxiliary issues that flow from dissolution of a common-law relationship between the Plaintiff, Glenna Jean Rubin (“Rubin”), and the Defendant, Klaus Dieter Gendemann (“Gendemann”). [ 2 ] At trial Rubin sought: 1. a share of various properties owned by Gendemann, 2. child support for her two daughters, and 3. ‘spousal’ support as an adult interdependent partner. [ 3 ] The trial judgment is reported as Rubin v. Gendemann , 2011 ABQB 71 [“the Trial Judgment”].

I concluded that: 1. the parties were in an adult interdependent relationship between July 2003 and January 2009; 2. Rubin had no right in equity to an interest in the home [“Butchart Drive”] occupied by both parties during their relationship (para. 111), or any of the other real property in which Gendemann had an interest (paras. 187-191); 3. Rubin’s notational domestic contributions did not warrant an equitable award (paras. 251, 257); 4. Rubin and Gendemann did not operate in a “joint family venture”, as that term is defined in Kerr v. Baranow , 2011 SCC 10 (Trial Judgment, at paras. 286-287); 5.

Gendemann did not act as a parent for Rubin’s two teenaged daughters (“ in loco parentis ”) and had no obligation to provide child support (para. 322); and 6. no ‘spousal’ support was due to Rubin as an alternative support claim if I rejected the equitable claims advanced against Gendemann (para. 350). [ 4 ] Rubin advanced a spousal support claim for $180,000.00 - $240,000.00 for the period between January 2009 and January 2010. Gendemann made a total of $118,958.93 in payments to Rubin during that period. At trial I concluded that Rubin did not have to repay that amount to Gendemann (para. 359).

I will further comment on that aspect of the Trial Decision result later in this decision.

II. The Present Application [ 5 ] The parties returned to court on several issues. Both parties request assistance in calculation of the costs due to Gendemann following his success at trial. Rubin also seeks an order staying enforcement of the Trial Judgment.

Gendemann asks the court to resolve ownership and occupation of the Butchart Drive property, specifically an order: 1. that Rubin vacate Butchart Drive; 2. compensating Gendemann for Rubin’s unlawful post-trial occupation of Butchart Drive; 3. discharging or invalidating Rubin’s encumbrances to Gendemann’s title to Butchart Drive and a cottage at Pigeon Lake; and 4. distributing some personal property items and furniture. [ 6 ] Several points were decided at the hearing itself: 1. the $118,958.93 amount paid to Rubin by Gendemann should be characterized as a lump-sum spousal support payment rather than as periodic spousal support payments; this has significant implications for the parties’ tax obligations; 2. a stay of enforcement of the judgment was denied but a temporary stay of enforcement of judgment was granted to either June 30, 2011 to enable Rubin to seek a stay at the Alberta Court of Appeal; 3.

Rubin was ordered to remove the encumbrances by July 2, 2011, or July 31, 2011 if a stay application was advanced at the Alberta Court of Appeal; and 4. Rubin was ordered to vacate Butchart Drive by July 31, 2011, unless Rubin obtained a stay of the Trial Judgment from the Alberta Court of Appeal. [ 7 ] On June 23, 2011 Rubin applied at the Alberta Court of Appeal for a stay of the Trial Judgment and the May 25, 2011 order that Rubin vacate the Butchart Drive property. In his written decision of July 5, 2011, Rubin v.

Gendemann , 2011 ABCA 212 , Watson J.A. concluded at para. 9 that there was literally nothing in the Trial Judgment to stay, as Rubin had been entirely unsuccessful in that action. That said, Justice Watson concluded that my May 25, 2011 instruction that Rubin vacate Butchart Drive could be subject to appellate review (para. 10). [ 8 ] The stay was denied (para. 25). Justice Watson concluded that Rubin would not suffer irreparable harm if she were required to vacate Butchart Drive and remove the caveats to Butchart Drive and the Pigeon Lake cottage (para. 17).

Further, the balance of convenience favours Rubin’s vacating the property and discharge of the encumbrances (para. 18). [ 9 ] This decision relates to the remaining three issues: 1. calculation of costs, specifically:

a. the appropriate column of

Schedule C used to calculate party and party costs; b. whether double costs are triggered by a February 1, 2010 offer to settle by Gendemann; c. whether a further increase or decrease in the costs award is warranted by the character of the proceeding or the parties’ conduct; 2. compensation to Gendemann for Rubin’s post-trial occupation of Butchart Drive; and 3. allocation of personal property and furniture. III. Costs [10] Court costs go to the successful party. That is Gendemann. He argues he should receive party and party costs of $111,579.01:Column 5 of

Schedule C, Alta. Reg. 390/1968 [the “Old Rules”, or individually an “Old Rule”], doubled for steps taken after a formaloffer of February 1, 2010. Rubin accepts she is generally obliged to pay costs but argues party and party costs should be based onColumn 4 of

Schedule C, with a total bill of $56,889.32. A. Preliminary Issue - Characterization of the $118,958.93 Amount [11] In the Trial Judgment I indicated that Rubin should not have to repay Gendemann the $118,958.93 that he provided to herbetween January 2009 and January 2010. I characterized that as a grant of ‘spousal’ support (paras. 349, 356). During the hearing for thisdecision Rubin’s counsel argued this result meant that Rubin had been partially successful in her claim for spousal support. [12] Nothing could be further from the truth.

The amounts that she received per Justice Yamauchi’s June 15, 2009 order andcontinued under Justice Lee’s September 29, 2009 order were either made on a without prejudice basis, or were voluntary paymentsmade by Gendemann. Succinctly, those pre-trial orders did not mean Rubin had any legal right to those funds. [13] To be explicit, I concluded at trial that Rubin had no legal right to any payment of spousal support from Gendemann. Herclaim on that point was unsuccessful.

In the alternative, if I was in error and Rubin did have some residual right to support fromGendemann then that right to support would be easily discharged by the pre-trial $118,958.93 payments she had already received. [14] The reason that I did not order repayment of the $118,958.93 is because I concluded those funds had already been spent (para.355) and that recovery of that sum would be impractical and disruptive to these parties who now move into separate lives (para. 356).

Putanother way, Rubin did not retain those funds because she had any right to them in law, but rather because their recovery would beunlikely and difficult and it is better for both parties that I not enforce Gendemann’s rights on that point. [15] In

summary, Rubin was totally unsuccessful at trial. She did not establish any of the rights to any of the property, ‘spousal’ orchild support that she had alleged, see also Rubin v. Gendemann, 2011 ABCA 212 at para. 9. In V.A.H. v. Lynch; H. (V.A.) v. Lynch;Huet v. Lynch, 2001 ABCA 37 at para. 6, 277 A.R. 104, Wittmann J.A. (as he then was) endorsed the Skidmore v. Blackmore (1995), (BC CA), 122 D.L.R. (4th) 330 (B.C.C.A.) restatement of some of the purposes for an award of costs: Party and party costs serve many functions.

They partially indemnify the successful litigant, deter frivolous actions and defences,encourage both parties to deliver reasonable offers to settle, and discourage improper or unnecessary steps in the litigation. [16] I will not characterize Rubin’s retention of the $118,958.93 amount in a manner that negates the fact that Gendemann was

forced to defend a complex and costly legal action that established he had not in any way treated his now former companion or her daughters in an inequitable manner. B.

Schedule C Party and Party Costs [ 17 ] The Court has a broad authority to order parties pay or do not pay costs: Old Rule , 601(1). Costs may be calculated with the assistance of amounts indicated in

Schedule C: Old Rule , 601(2)(a)). Column 4 is used where risk to a defendant is between $500,000.00 and $1,500,000.00. Column 5 is used where the maximum possible loss to the defendant is over $1,500,000.00. The present Alberta Rules Of Court , Alta. Reg. 124/2010 [the “ New Rules ” or individually a “ New Rule ”] references a

Schedule C with the same items and associated costs. [ 18 ] The Plaintiff says Gendemann’s maximum risk based on her claim against his property was about $1.4 million, and that she would not have enforced her claim for spousal support if she had received half the increase in Gendemann’s worth that accrued during the adult interdependent partnership. She is silent on the claim for child support. [ 19 ] The Defendant’s counsel notes that the parties agreed that between June 2003 and January 2009 Gendemann’s property had increased in value by approximately $2,897,000.00; Rubin claimed half ($1,448,500.00).

She at trial advanced an additional minimum claim for ‘spousal’ support for January 2009 to January 2010 of $180,000.00 to $240,000.00 (Trial Judgment, para. 326). Together those risks total $1,628,500.00 to $1,688,500.00. Additionally, Rubin also advanced a claim for child support ($3,000.00 per month, of indeterminate length) (para. 305)). [ 20 ] I therefore conclude party and party costs ought to be calculated under

Schedule C, Column 5. C. Double Costs [ 21 ] On February 1, 2010, Gendemann offered to settle the action for: 1. a payment to Rubin of $100,000.00; 2. title to a Grand Caravan; and 3. allowing Rubin to retain the $5,000.00 payments made between May 2009 and April 2010. That offer was not accepted. On March 29, 2010 Rubin offered to settle the action for a combination of property and cash which the Plaintiff’s counsel estimated had a total value of about $1.2 million. Gendemann chose to proceed to trial. [ 22 ] Rubin was entirely unsuccessful at trial.

Old Rule 174.1(1.1) states that when a plaintiff does not recover an amount that is more than an offer to settle by a defendant: and the action is dismissed entirely, those costs shall, unless for special reason , be double the amount of costs (excluding disbursements) the defendant would otherwise have recovered for all steps in relation to the defence after the service of the notice of payment or the offer. [Emphasis added.] [ 23 ] The analogous provisions in the New Rules are New Rules 4.29(2)-(3) which state the trigger for double costs is where “the action or claim that is the subject of the formal offer to settle is dismissed” unless there are “... special circumstances the Court orders

that this rule is not to apply.” (New Rule 4.29(4)(e)). [24] Justice Erb in Chapell v. Canadian Pacific Railway Company, 2011 ABQB 74 at para. 26 applied the New Rules double-costs provisions in a manner consistent with that in the Old Rules. I agree that in this sense the Old and New Rules operate in the samemanner, and this was not disputed by the parties. [25] Since Gendemann was entirely successful at trial he shall receive double

Schedule C costs for all activities after February 1,2010, unless I find some “special reason” (Old Rule 174.1(1.1)) or “special circumstances” (New Rule 4.29(4)(e)) which would notwarrant that adjustment. I will address that possibility in the part of the judgment that follows. D. Adjustment to the

Schedule C, Column 5 Party and Party Costs [26] The Defendant argues that if I do not conclude that double costs are warranted that I should consider the manner in which thetrial was conducted and still order increased costs to address the failure of the Plaintiff to admit relevant facts, the self-serving andinaccurate nature of Rubin’s testimony, the necessity of many Defence witnesses to refute that Plaintiff’s spurious evidence, and theallegations advanced at pre-trial hearings.

The Plaintiff responds that the relevant law in this domain was unsettled and complex prior tothe Supreme Court of Canada’s decision of Kerr v. Baranow, that the matter proceeded in a timely and efficient manner, facts wereadmitted as appropriate, and no conduct of the Plaintiff could be construed as fraud, scandalous, or outrageous. [27] I do not need to further evaluate these arguments in light of my conclusion that Gendemann should presumptively receivedouble party and party costs in the post-February 1, 2010 period.

That said, I wish to confirm that the trial proceeded in a timely,efficient manner, and that the conduct of counsel for both parties deserves complement. [28] What remains is Rubin’s argument that a special reason or special circumstance exists that means this Court should notenforce the presumption in Old Rule 174.1(1.1) and New Rule 429(3). She argues poverty and says that her only remaining assets are herRRSPs, and that “[t]he Judgment has left the Plaintiff in a position where she must essentially start over ...

She must pay her own legalcosts and those of the Defendant.” [Plaintiff’s written arguments, at p. 8]. She says to demand increased costs is unfair; Gendemann is amulti-millionaire with twenty times her annual income. [29] Rubin initiated this action and maintained it to the bitter end. As is her right she now appeals its result. Gendemann did notadvance a counterclaim in equity, even though I have concluded that he very likely could have been successful if he had.

Rubin had theopportunity to ‘cut her losses’ with Gendemann’s February 2010 offer and would have received a sum that would likely have covered herentire legal costs to that date. [30] If Rubin is now in difficult times then she is entirely the architect of her own financial distress. In the Trial Judgment I, on anumber of occasions, commented on the tenuous nature of Rubin’s claims and the gross ‘trade imbalance’ between the Plaintiff andDefendant.

I ordered Gendemann effectively forgive the $118,958.93 in an attempt to separate the parties finances, but at leastGendemann did voluntarily offer to forgive those debts. Now, Rubin argues she should be sheltered from the consequences of herunsuccessful legal action - because that will mean she cannot live in the manner she desires. She will be forced to “start over”. [31] In Doman v.

British Columbia (Superintendent of Brokers) (1996), (BC CA), 85 B.C.A.C. 210, 31B.C.L.R. (3d) 357 (B.C.C.A.), Justice Southin commented on the character of parties who complained about slow proceedings where thedelay been caused by the unsuccessful attacks launched by those very same parties: ... [this] constitutes an abuse of process calls to my mind the delightful Yiddish word "chutzpah" which is sometimes explained as a manwho has been convicted of murdering his parents seeking mercy on the ground that he is an orphan. [32] I receive the Plaintiff’s argument on poverty in a similarly bemused manner.

No “special reason” or “special circumstance”exists in this case. Gendemann is due party and party costs of $111,579.01 which includes a doubling of the costs after the formal offer.

IV. Occupation Rent [ 33 ] In the Trial Judgment I concluded that Rubin had no legal interest in Butchart Drive, which means she also has no legal right to occupy and use that property. The parties agreed that Rubin has remained in that house up to the date of this hearing; she has refused to vacate that property. Gendemann now plans to sell his property, however he says his real estate agent has not been able to gain access to view that property.

Gendemann has continued to pay certain costs (mortgage, insurance, municipal taxes) associated with Butchart Drive. [ 34 ] I have previously concluded that unless Rubin has obtained a stay of enforcement of the Trial Judgment she is ordered to vacate that property by July 31, 2011. That date has crystalized as a consequence of Justice Watson’s rejection of Rubin’s stay application. That instruction does not mean that Rubin has a legal right to live in someone else’s house without paying compensation for occupying and using that space.

My order to vacate sets out a explicit timeline that Rubin must follow or risk being found in contempt of court. [ 35 ] Gendemann asks that he be awarded all his post-trial costs associated with the property, which he indicates is $40,599.16. Rubin argues that if Gendemann should receive anything it is only fair market rent less costs incurred by Rubin to preserve the property.

I have not received evidence on the fair-market value of Butchart Drive as a rental home. [ 36 ] I agree that since Gendemann owns and has the right to use or dispose of the Butchart Drive property that his mortgage, insurance, and municipal tax payments are not expenses that flow from Rubin’s unlawful occupation of that property. Rubin should not be liable for those amounts. [ 37 ] However that still means that Rubin has received a benefit to Gendemann’s detriment, without legal right.

I therefore order that Rubin pay Gendemann occupation rent at fair market value for a property such as Butchart Drive for the period between the end of trial and the end of July, 2011. I order that Rubin cooperate with persons retained by Gendemann to evaluate a fair-market rent for that property. [ 38 ] Rubin has provided invoices for costs that she claims were incurred to maintain Butchart Drive. Gendemann notes that certain of these invoices are for costs incurred in the period before trial; I conclude those payments are irrelevant.

However, costs incurred by Rubin after trial are fairly deducted from the occupation rent due between May 2010 and July 2011. [ 39 ] Gendemann notes that certain of the other invoice services, such as lawn-cutting, may alternatively have been provided by Rubin herself. I disagree that these costs are unreasonable as both Rubin and Gendemann are busy professionals who would likely have sought hired assistance with those kinds of tasks - in other words if Gendemann had lived or had exclusive use of Butchart Drive then he too would have incurred those costs.

Below I conclude that Gendemann owns the contents of Butchart Drive, including the lawnmower for which Rubin paid to repair. He will therefore bear repair costs for that item. [ 40 ] I therefore order that Rubin pay fair-market occupation rent for her post-trial residence in the Butchart Drive property between May 2010 and July 2011, less Rubin’s post-trial invoiced costs as set out in her argument on this application. V. Personal Property [ 41 ] Rubin claims that certain items located in the Pigeon Lake cottage, the Kelowna holiday home, and in Amanda Gendemann’s suite belong to her and should be returned.

She also provides an itemized list of what she says are Gendemann’s furniture and other personal property that he moved into the Butchart Drive property. She asks to retain several sound system and televisions that she agrees were purchased during the adult interdependent relationship. [ 42 ] Gendemann argues that the contents of Butchart Drive are his property, noting the Trial Judgment found that he effectively paid for everything during the shared tenancy. Gendemann does not attempt to itemize what that property contribution would be.

He does, however, agree that he would return Rubin’s furnishings that were shifted to the Pigeon Lake and Kelowna properties.

[ 43 ] Gendemann complains that he has not been able to collect his personal effects and property from Butchart Drive. [ 44 ] The ownership of the contents of Butchart Drive and the other properties was not argued at trial, though some evidence was adduced that relates to this issue. The parties were in general agreement that when Gendemann moved into Butchart Drive he brought with him furnishings from his previous home. The ‘surplus’ furniture which belonged to Rubin was then used in other locations such as the Pigeon Lake and Kelowna properties.

In the Trial Judgment I concluded that during the relationship the vast majority of household costs were paid for by Gendemann (para. 251). [ 45 ] On that basis I conclude that Gendemann owns the property in Butchart Drive, including furniture, household items, and the televisions and sound systems. Rubin’s spending habits all but assured that the turnover of property during the adult interdependent relationship was total, and that Gendemann paid for those expenditures. [ 46 ] I therefore order: 1.

Gendemann will return the items identified by Rubin as her property and located in the Pigeon Lake cottage, Kelowna holiday property, and Amanda Gendemann’s Wedman House Suite; and 2. Rubin will upon vacating Butchart Drive leave all the furnishings and household items other than her personal effects and those of her children. [ 47 ] I will also allow Rubin to remove property from Butchart Drive if she can provide receipt evidence that establishes that she alone paid for a particular item. In the absence of that evidence I conclude that Gendemann paid for and owns the contents of that property. VI.

Conclusion [ 48 ] Gendemann is entitled to his costs on Column 5 of

Schedule C doubled after the Formal Offer in the total amount of $111,579.01. [ 49 ] Gendemann is entitled to occupation rent by Rubin from the date of trial to July 31, 2011 which shall be fair market rent less costs incurred by Rubin to preserve the property as detailed above. [ 50 ] Gendemann shall return to Rubin certain items of personal property as set out above but shall retain all of that property in the Butchart Drive home save and except items of a personal nature for Rubin and her children. [ 51 ] In addition, Rubin is to vacate the Butchart Drive property on or before July 31, 2011. VII.

Costs on this Application [ 52 ] Since Gendemann has been successful in this application for costs and other auxiliary matters he is awarded the costs of this application to be taxed.

Heard on the 25 th day of May, 2011. Dated at the City of Edmonton, Alberta this 14 th day of July, 2011. A.B. Moen J.C.Q.B.A. Appearances: Debbie A. Yungwirth, Q.C. for the Plaintiff Tina Huizinga Barr Picard for the Defendant