Donselaar v Donselaar, 2013 ABQB 276

Court of Queen ’ s Bench of Alberta Citation: Donselaar v Donselaar, 2013 ABQB 276 Date: 20130508 Docket: 4801 138393 Registry: Calgary Between: Patricia Ann Donselaar Plaintiff - and - Reginald Ernest Benjamin Donselaar Defendant _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice B. L. Veldhuis _______________________________________________________ [ 1 ] This decision concerns the costs consequences of the trial of this action. The trial took place between June 4-6, 2012 and I gave an oral judgment on June 7, 2012.

Counsel spoke to costs on January 9, 2013, having submitted written materials. [ 2 ] The defendant, Mr. Donselaar, sought costs on the ground that he was substantially successful at trial. His counsel submitted a draft bill of costs claiming $23,800.00 in legal fees, under column 3,

Schedule C, Division 2 of the Rules of Court , disbursements of $4521.55 and G.S.T. of $1409.23. He also sought double costs for steps taken after serving offers to settle on the plaintiff shortly before the trial began. [ 3 ] The plaintiff, Ms. Donselaar, argued that no costs should be awarded because the parties enjoyed mixed success at trial and

[ 3 ] The plaintiff, Ms. Donselaar, argued that no costs should be awarded because the parties enjoyed mixed success at trial and because both parties were responsible for the length of the proceedings. Alternatively, if costs were due to the defendant, the plaintiff opposed double costs on the grounds that the offers to settle were not served within the time limits prescribed for formal offers by the Rules of Court and that, in any event, neither offer was more favourable than the trial judgment.

General [ 4 ] The basic rule, which is subject to the court’s discretion, is that a successful party is entitled to an award of costs against the unsuccessful party: Rule 10.29 of the Alberta Rules of Court . A party is entitled to costs if he or she is substantially successful at trial. It is not necessary to succeed entirely: Adams v Adams, 2011 ABQB 812 at para 5 . [ 5 ] The main issues at trial were the division of the matrimonial property and spousal support.

The plaintiff also sought a proportionate contribution from the defendant to the post-secondary education of one of their children. [ 6 ] The defendant was substantially successful on those issues. [ 7 ] The trial judgment set spousal support at $2000.00 per month. At trial, the disputed issue was how much spousal support the defendant should pay.

In the result, the sum payable was closer to the defendant’s position than the plaintiff’s and was less than the defendant had been paying in interim spousal support. [ 8 ] The two disputed issues in relation to the matrimonial home were who would be entitled to stay there and how much it would cost that party to buy out the other party’s equity. In the result, the defendant was given first option to purchase the plaintiff’s interest, based on a $475,000 valuation. The defendant has purported to exercise that option.

In this, again, the defendant achieved a substantial measure of success. [ 9 ] The most significant item of debt was owed on a credit card in the defendant’s name, which the plaintiff had used. I accepted the defendant’s position that the plaintiff was responsible for $28,000 of the debt and that this amount should be set off against other amounts payable by the defendant to the plaintiff. [ 10 ] The plaintiff’s claim for a proportionate contribution of certain

section 7 expenses was unsuccessful. [ 11 ] Given the defendant’s substantial success at trial, he is entitled to an award of costs unless other relevant factors weigh against it. Considerations relevant in making a costs award [ 12 ] Rule 10.33(1) of the Rules of Court sets out various criteria which a court may consider in making a costs award. They are the following: (

a) the result of the action and the degree of success of each party; (

b) the amount claimed and the amount recovered; (

c) the importance of the issues;

(

d) the complexity of the action; (

e) the apportionment of liability; (

f) the conduct of a party that tended to shorten the action; (

g) any other matter related to the question of reasonable and proper costs that the Court considers appropriate. [ 13 ] Rule 10.33(2) sets out further criteria which a court may consider in making a costs award. These include: (

a) the conduct of a party that was unnecessary or that unnecessarily lengthened or delayed the action or any stage or step of the action; (

b) a party’s denial of or refusal to admit anything that should have been admitted; (

c) whether a party started separate actions for claims that should have been filed in one action or whether a party unnecessarily separated that party’s defence from that of another party; (

d) whether any application, proceeding or step in an action was unnecessary, improper or a mistake; (

e) an irregularity in a commencement document, pleading, affidavit, notice, prescribed form or document; (

f) a contravention of or non-compliance with these rules or an order; (

g) whether a party has engaged in misconduct. [ 14 ] I have addressed the relative success of the parties above (Rule 10.33(1)(a)). [ 15 ] Addressing the other factors, the value of the assets at stake in the matrimonial property action clearly exceeded $150,000. Moreover, given the defendant’s exercise of the option to buy out the plaintiff’s equity in the matrimonial home, under the trial judgment he will have to pay a net sum to the plaintiff of approximately $250,000. The value of action suggests that costs should be quantified under Column 3 of

Schedule C, Division 2 of the Rules of Court . [ 16 ] The matters in dispute were not complex, legally or factually. However, this matter took 4½ years to reach trial. There were several interim applications (interim spousal support, to set trial dates, to pay money into court), questioning by both parties, and multiple rounds of disclosure. At the costs hearing, counsel for both parties made extensive submissions on the reasons for the delay. [ 17 ] The plaintiff’s counsel submitted that a significant portion of the delay was caused by the defendant.

He pointed out that the defendant failed to respond to a request for financial disclosure made on October 28, 2010 for a considerable amount of time and submitted that a full response was not given until November 28, 2011, over a year after the request. [ 18 ] The evidence before me did not support that submission. The defendant provided disclosure in response to the October 28,

2010 request by letter dated March 7, 2011. That is still a significant delay, of course, and may well have hindered attempts to settle this matter. But there was not a year of delay as urged by the plaintiff’s counsel. The plaintiff requested further financial disclosure from the defendant by letter dated September 29, 2011, which enclosed an application returnable within 30 days.

The defendant filed the requested disclosure on November 28, 2011, which was two days after the return date. [ 19 ] The plaintiff’s counsel also suggested that the financial disclosure provided by the defendant was incomplete in one respect, even intentionally so, but I have found nothing in the record before me to confirm that allegation. [ 20 ] The defendant’s counsel submitted that much of the delay was caused by the plaintiff. She pointed to the following, among others: (

a) that the plaintiff had five different counsel during this matter, which slowed progress; (

b) that the plaintiff took a considerable amount of time to comply with undertakings she gave at questioning; (

c) that the plaintiff’s previous counsel sought to have the matrimonial property action decided at a special chambers hearing on affidavit evidence, which resulted in the defendant having to make two applications to have the action set down for trial, the later one abandoned when the plaintiff’s counsel consented. [ 21 ] The issue of delay should be kept in proper perspective. It is one factor to consider in an award of costs. Some responsibility for the delay falls on both sides. It was not so one-sided that it should defeat the defendant’s entitlement to costs.

The question is whether any adjustment to the costs that would otherwise be paid to the defendant is warranted. [ 22 ] The defendant’s late response to the plaintiff’s request for financial disclosure initially made on October 28, 2010 contravened Rule 12.41(7) of the Rules of Court , which requires a person served with a Notice to Disclose to respond within one month. Here, there was a delay of several months, which is a relevant consideration in determining the amount of costs (see Rule 10.33(3)(b)).

However, the plaintiff breached the Rules by late replies to undertakings at questioning, so one might fairly take the position that the breaches by the plaintiff and the defendant cancel one another out. [ 23 ] The defendant’s draft bill of costs properly included an item for the “thrown away” costs of the second discontinued application to

schedule a trial date, which was, or should have been, unnecessary (Rule 10.33(2)(a)). I allow that item. At the costs hearing, the defendant did not seek additional costs for non-compliance with the Rules of Court by the plaintiff and, accordingly, none will be awarded. [ 24 ] As an interim conclusion, I find that the defendant is entitled to his legal costs quantified under Column 3 of

Schedule C. All of the fee items listed in the draft bill of costs submitted, in the amount of $23,800.00 are reasonable. [ 25 ] The plaintiff’s counsel did not argue that any disbursements listed in the draft bill of costs should be disallowed. Accordingly, I find that the defendant is entitled to those disbursements. Double or enhanced costs [ 26 ] The remaining issue is whether the defendant should be awarded double or enhanced costs for the steps that his counsel took after serving offers to settle before trial, which the plaintiff did not accept.

The defendant submitted that the offers were more favourable to the plaintiff than the final decision of the trial judge. The plaintiff disputed that. [ 27 ] The defendant served an initial offer to settle on Wednesday, May 30, 2012, which was due to expire two days later, on the

Friday. The plaintiff’s counsel suggested that a differently structured offer might be more attractive to his client, so the defendant’s counsel served an amended offer on Friday, June 1, 2012. It was due to expire on Monday, June 4, 2012, the first day of the trial. [ 28 ] Neither of these offers was served 10 or more days before the trial was scheduled to start. In this respect, they failed to comply with the provisions in the Rules of Court which govern formal offers to settle: see Rule 4.24(1).

One effect of that is that Rule 4.29, which mandates certain costs consequences for failure to accept a favourable formal offer, does not apply: see Rule 4.29(4)(c). [ 29 ] The defendant’s counsel conceded that the mandatory costs consequences in Rule 4.29 do not apply. She cited authority for the proposition that a court may still impose a costs penalty on a party who did not accept a favourable, pre-trial settlement offer, even if the offer did not meet the requirements for formal offers.

Relying on that authority, the defendant’s counsel sought double legal costs for steps taken after serving the informal offers. [ 30 ] I decline to award double, or enhanced costs, to the defendant for the reasons that follow. [ 31 ] If the defendant had made the offers in the time frame set by the Rules , he would not have been entitled to double costs. A defendant who makes a formal offer to settle, which is not accepted, and then obtains a more favourable trial judgment is entitled to single costs for steps taken after serving the offer: see Rule 4.29(2).

A defendant is entitled to double costs for those steps only if he or she was totally successful at trial and the action was dismissed: Rule 4.29(4); see also W.A. Stevenson & J.E. Côté, Alberta Civil Procedure Handbook 2012, vol. 1 (Edmonton: Juriliber, 2012) at 4-37. [ 32 ] In this case, as in almost all matrimonial property actions, the plaintiff’s action was not dismissed at trial. Even if the defendant had complied with the rules on formal offers, he would have been entitled to single costs only. One might wonder whether that is good policy.

But a number of cases have said that matrimonial litigation is subject to the same costs rules as are other types of litigation: Cador v Chichak , 1998 ABQB 81 at para 8 ; aff’d 2000 ABCA 10 ; Yap v Supramaniam, 2006 ABQB 37 at para 13 ; Tropmann v Tropmann , 2000 ABQB 236 at para 11 . [ 33 ] No authority was provided to me, nor have I located any, in which a court awarded double costs to a defendant even though Rule 4.29(2), or its predecessors, entitled the defendant to single costs only.

The discretion to impose a costs consequence different from that mandated in Rule 4.29(2) is actually provided for by the rules on formal offers. Rule 4.29(4)(

e) states that the costs consequences set out in Rule 4.29 do not apply “if in special circumstances the Court orders that this rule is not to apply”. [ 34 ] In this case, there was no evidence of “special circumstances” as referred to in Rule 4.29(4)(e). [ 35 ] I conclude that even if the defendant’s offers to settle had satisfied the requirements for formal offers, the defendant would not have been awarded double costs for the steps taken after serving them. The defendant did not comply with the formal rules and should not be better off. Accordingly, I deny the request for double or increased costs.

Conclusion [ 36 ] The defendant is awarded costs of $23,800.00 and disbursements of $4521.55, plus GST of $1409.23. Dated at the City of Calgary, Alberta this 8th day of May, 2013.

B. L. Veldhuis J.C.Q.B.A. Appearances: L. S. Heald for the Plaintiff L. P. Campbell, Q.C. for the Defendant