DBF v BF, 2016 ABQB 708

Court of Queen’s Bench of Alberta Citation: DBF v BF, 2016 ABQB 708 Date: 20161215 Docket: 4801 145426 Registry: Calgary Between: DBF Plaintiff - and - BF Defendant Corrected judgment: A corrigendum was issued on December 19, 2016; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Ruling on Costs of the Honourable Madam Justice G.A.

Campbell _______________________________________________________ Background [ 1 ] This lengthy three-week trial determined the division of the parties’ matrimonial property, retroactive and ongoing spousal support, retroactive and ongoing child support, the parties’ respective incomes for child and spousal support purposes and parenting issues. [ 2 ] At trial, it was determined that it was in the best interests of TP that she continue to reside in Calgary with her father BF, when her mother DBF moves to Turkey.

Until DBF moves to Turkey, it was determined that the current shared parenting arrangement would continue, with some minor modification made to the parenting schedule, such as parenting times during the summer months. DBF was awarded spousal support for a period of 10 years from date of separation. Both parties were imputed an income for the purposes of child and spousal support. DBF was also awarded retroactive child support based on the parties’ new imputed incomes.

The parties’ most significant matrimonial asset, BF’s shareholdings in Pera Investments Ltd (“Pera”), was divided equally in specie between the two former spouses. [ 3 ] Reasons for decision (the “Trial Decision”) were issued August 29, 2016.

[ 4 ] Each party now claims costs. [ 5 ] This decision on costs was based on the results of the Trial Decision, a consideration of the settlement offers and the parties’ written submissions. The Parties’ Positions [ 6 ] DBF argues that she was the person substantially successful at trial and thus should be awarded costs calculated under Column 5 of Division 2,

Schedule C, of the Alberta Rules of Court , Alta Reg 124/2010 (the “ Rules or Rule ”). [ 7 ] DBF also points to her success on many of the numerous interlocutory applications made by the parties throughout the course of this proceeding, including: (

a) her success on applications she was forced to bring because BF attempted to prevent her from travelling outside of Canada with their child TP, notably obtaining approval for her to travel with the child to the United States of America in 2013 and to Turkey in 2015; (

b) her success on applications to obtain interim support from BF; and (

c) her success on an application to have a voice of the child report completed prior to trial and the use of that report at trial. [ 8 ] DBF points to the formal offer (the “Formal Offer”) she made to BF on March 28, 2014 under Rule 4.24. The Formal Offer proposed that TP would remain living in Calgary with the same shared parenting

schedule and that the parents would be permitted to travel internationally with the child. The Formal Offer was subject to a review condition that provided for this parenting arrangement to continue until such time as TP attained the age of 12 years when a voice of the child assessment would be completed, with TP’s views, preferences and wishes as to custody and mobility as determined in the voice of the child report to be the sole determining factor with respect to custody, parenting and mobility. DBF points out that the Formal Offer was substantially the same as the Trial Decision on mobility.

DBF further argues that if her Formal Offer had been accepted, two of the key trial issues – mobility and international travel – would not have been heard, resulting in significant cost savings to both parties. DBF also points to the other informal offers she made to BF in an attempt to resolve this matter before trial. [ 9 ] DBF seeks reimbursement of the money she paid to for the expert evidence provided by Dr.

Bahadir Erdem and Douglas Conway during the trial. [ 10 ] DBF argues that BF did not succeed in besting either of the offers he put forward as the Trial Decision was more favourable to her. [ 11 ] DBF also points out that BF had access to significant matrimonial assets that he was able to use to fund this litigation whereas she was without assets and forced to rely on charity. [ 12 ] BF argues that he was the person substantially successful at trial and thus should be awarded costs calculated under Column 5 of Division 2,

Schedule C of the Rules . [ 13 ] BF argues that the positions taken by DBF unnecessarily prolonged the trial. For example, extensive trial time, and exhibits were devoted to DBF’s claim that BF’s financial interest in Bordeaux Properties Inc (“BPI”) should be attributed a higher value than that reflected by BF’s Pera shareholdings.

BF points out that the Trial Decision agreed with his position that the value of his interest in BPI was represented in entirety within his Pera shareholdings and whatever that value was could be fairly resolved by the transfer of half of his Pera shares to DBF together with half of the debt owed by Pera for its purchase of the BPI shares. [ 14 ] Further, BF points to the two offers of settlement he made to DBF, one on May 5, 2014 (the “May 2014 Offer”) and one on September 8, 2015 (the “September 2015 Offer”), neither of which DBF accepted (collectively referred to as “BF’s Informal Offers”).

The May 2014 Offer addressed only the matrimonial property issues. The September 2015 Offer addressed most of the issues determined at trial but in many respects BF’s proposed terms less favourable than those awarded to DBF. BF contends that had either of the Informal Offers been accepted, the need for a trial would likely have been avoided or at least the number of trial days required to address the remaining minor issues trial would have been reduced. Analysis [ 15 ] The Court has wide discretion in ordering costs, which discretion must be exercised judicially and according to established legal principles.

Rule 10.33(1) provides a number of considerations that a court may take into account in making a costs award: (

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. [ 16 ] As in any legal proceeding, costs are awarded to the successful party in a matrimonial law proceeding. However, unlike many other types of legal proceedings, matrimonial law proceedings often result in divided or mixed success, with each party being successful on some but not all of their claims. The result is that it is often difficult to assess who was the successful party.

In such cases, the court awards costs to the party that it finds had “substantial success” based on a balanced assessment of the trial outcome: Mitrovic v Mitrovic , 2007 ABQB 107 at para 2 . Thus, the party who achieves substantial success will be awarded costs even though that party was not successful on every issue or argument. Typically, costs follow the ultimate result and are not usually apportioned to success on the individual issue or claim. [ 17 ] At trial, DBF was awarded retroactive and ongoing spousal support but not for the amount or duration argued for by either party.

DBF was not awarded the compensatory support of $1.4 million she had claimed for BF “holding her hostage” in Canada. BF was imputed income for child and spousal support purposes but not near the $400,000 annual amount argued for by DBF. DBF too was imputed income but not the amount argued for by either party. DBF was awarded retroactive child support, which was a direct result of the adjustment made to BF’s income to reflect his actual and imputed annual income.

The most significant matrimonial property asset, BF’s Pera shareholdings, was divided equally in specie as proposed by BF as opposed to the cash payment proposed by DBF. DBF was also unsuccessful in having any part of the MW Home determined a distributable matrimonial asset. Most of the parenting issues were resolved in BF’s favour. The most significant issue determined was that TP was not permitted to relocate to Istanbul Turkey with DBF at this time but DBF was successful in obtaining the right to travel to Turkey with TP on reasonable terms and not on the terms sought by BF.

BF was also successful in resisting DBF’s request to move away from a shared parenting arrangement to one in which BF would have seen his parenting time significantly reduced, whether as the parent of TP living in Calgary or as an access parent, if TP was living in Istanbul. [ 18 ] The majority of the trial time was spent on three issues: the first was the parenting issue, notably the mobility issue and the appropriate parenting arrangement while DBF remained in Calgary; the second was the issue of BF’s income, notably whether he had undisclosed income which was not proven; and the third issue involved the identification and valuation of the parties’ matrimonial property, notably the value of BF’s interest in BPI and whether the MW Home was a distributable matrimonial asset. [ 19 ] BF was substantially successful on all of these major aspects of the case. [ 20 ] Notwithstanding DBF’s effort to advance herself as having been the successful party, the ultimate result at trial undeniably leads to a finding that BF was the party that had “substantial success”, entitling him to costs. [ 21 ] That does not end the inquiry. [ 22 ] There are the offers of settlement to consider.

There was DBF’s Formal Offer and BF’s Informal Offers. As is not unusual in matrimonial cases, none of these settlement offers matched exactly the results of the trial decision. The trial results were less favourable to each of the proposing parties’ respective offers. If either one of the party’s offers had been accepted it is highly likely that costs incurred to conduct the trial may have been avoided or at least reduced. Unfortunately, that did not occur. In the result, this consideration does not affect BF’s entitlement to costs calculated in accordance with the appropriate column under

Schedule C of the Rules . Decision on Costs [ 23 ] The parties agree that the proper column of

Schedule C of the Rules to apply is column 5 of Division 2. Indeed, the circumstances confirm that Column 5 is the appropriate tariff to apply. [ 24 ] For the reasons set out above, I find that BF was substantially successful at the trial of this action and he is therefore entitled to a costs award as calculated under column 5 of

Schedule C of the Rules , subject to the following adjustments. [ 25 ] DBF shall be entitled to the following costs to be deducted from BF’s costs award:

a) The expert evidence of Dr. Bahadir Erdem was accepted and relied on by the Court during trial. DBF is entitled to credit for one- half of the disbursements paid for Dr. Erdem’s attendance at trial and his expert report. Despite DBF’s suggestion, the same use was not made of the evidence of Douglas Conway and thus is a cost to be borne by DBF.

b) As discussed in the Trial Decision, the voice of the child report and the evidence of Ms. Sheldon was accepted and relied on by the

Court at trial. DBF is entitled to credit for her

Schedule C costs of the application to obtain the voice of the child report;

c) Any interlocutory orders in which DBF was explicitly awarded costs;

d) Pursuant to paragraph 448 of the Trial Decision, the costs of preparing the Turkish Deed in the amount of $2618.70. [ 26 ] BF’s ultimate costs award may be set off against the monies owing to DBF pursuant to the Trial Decision, but not as against the retroactive and ongoing spousal and child support awards ordered therein. Other Costs Matter [ 27 ] On January 8, 2013, Justice Jones issued a Memorandum of Decision Regarding Costs (the “2013 Costs Award”) arising from BF’s application for shared parenting. Justice Jones ordered DBF to pay BF’s costs of the application computed in accordance with column 1 of Division 2,

Schedule C of the Rules (in the 2013 Costs Award, BF had calculated this amount as $1,875; DBF had calculated this amount as $1,500) and one-half of the cost of the Lux Report (both parties agree the cost was $3100), with these total costs to be paid from DBF’s share of the matrimonial property, when determined. [ 28 ] BF seeks a direction that the total amount of the 2013 Costs Award be confirmed and set off as against the amount he was directed to pay as a result of the distribution of the parties’ matrimonial property. [ 29 ] DBF agrees that the 2013 Costs Award should be set off as against BF’s matrimonial property equalization payment.

However, DBF provided correspondence in which it is suggested that DBF’s counsel had paid part of the cost of the Lux Report. DBF proposes that prior to setting off any of the 2013 Costs Award, that the actual amount paid to Ms. Lux by the parties should be ascertained. [ 30 ] DBF presents a reasonable proposition. The parties should also ascertain the correct amount of BF’s costs as calculated in accordance with column 1 of Division 2,

Schedule C of the Rules . [ 31 ] In the result, I direct DBF to contact Ms. Lux and obtain from Ms. Lux an accounting of which party paid her and the amount they paid for the preparation of the Lux Report. DBF is directed to provide the Lux information to BF or his counsel together with DBF’s accounting of BF’s costs of the application on or before January 30, 2016.

In the event this information is not received by BF by January 30, 2016, BF is permitted to set off the amount of $3,425 ($1,875 + $1,550) as being the amount of the 2013 Costs Award from his matrimonial property equalization payment to DBF. [ 32 ] BF is entitled to $1,000 for this application to settle costs. Dated at the City of Calgary, Alberta this 15 th day of December, 2016. G.A. Campbell J.C.Q.B.A. Appearances:

Robert W. Calvert for the Plaintiff Elaine L. Lenz, Q.C. for the Defendant _______________________________________________________ Corrigendum of the Reasons for Ruling on Costs of The Honourable Madam Justice G.A. Campbell _______________________________________________________ This judgment was changed by replacing the following paragraph as follows: [26] BF’s ultimate costs award may be set off against the monies owing to DBF pursuant to the Trial Decision, but not as against the retroactive and ongoing spousal and child support awards ordered therein.