Peach v. Melnick, 2011 NSSC 377

Editor’s Note: Corrigendum released on November 9, 2011. Original judgment has been corrected with text of corrigendum appended. SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: Peach v. Melnick, 2011 NSSC 377 Date: 20111020 Docket: 1201-058389 Registry: Halifax Between: Melvin Kyle Peach Applicant v. Beverly Gail (Tibbo) Melnick Respondent LIBRARY HEADING Judge: The Honourable Associate Chief Justice Lawrence I. O’Neil Submissions: Written Submission on costs were received to August 30, 2011 Related Decision: June 16, 2011 Issues: Contempt Application; and

Interpretation of parties’ Corollary Relief Judgment Keywords: Costs Legislation: Rule 77 - Costs

Summary: The application was for a contempt order and for enforcement of the parties’ Corollary Relief Judgment. The court granted leave to bring the contempt application which sought to require the disclosure of certain information. The Court disagreed with the Applicant’s

interpretation of the Corollary Relief Judgment concerning the sharing of proceeds flowing from the sale of the former matrimonial home. The court ordered the Applicant to pay costs of $5,000, an amount less than might otherwise be payable because the Respondent employed tactics that served to unnecessarily delay a consideration of the merits of the case.

THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET. IN THE SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: Peach v. Melnick, 2011 NSSC 377 Date: 20111020 Docket: 1201-058389 Registry: Halifax Between: Melvin Kyle Peach Applicant and Beverly Gail (Tibbo) Melnick Respondent Judge: The Honourable Associate Chief Justice Lawrence I. O’Neil Submissions: Written Submissions on costs were received to August 30, 2011 Related Decision: June 16, 2011 Counsel: Phillip Whitehead, for the Applicant Gordon R. Kelly, Q.C. and Adrienne Bowers, for the Respondent By the Court : Background

[1] This is a costs decision. The parties litigated Mr. Peach’s application to “enforce” the terms of the parties’ SeparationAgreement/Minutes of Settlement subsequently incorporated with the parties’ Corollary Relief Judgment. The final hearing lasted oneday. A written decision followed. It is reported as Peach v. Melnick, 2011 NSSC 220. [2] The limited issue at the time of the hearing was whether Ms. Melnick’s decision to sell the parties’ former matrimonial hometriggered an obligation to pay Mr. Peach any amount of the proceeds of sale. [3] The Court found that Ms.

Melnick was not subject to such an obligation. [4] Issue 1. If the court is to make a costs award, what is the appropriate order? General Principles Governing Costs [5] The new Rule on costs is Rule 77. It contains the tariffs when applying an amount involved assessment to determine costspayable by a party. Justice Dellapinna, in Tamlyn v. Wilcox, 2010 NSSC 363 , 2010 NSSC 363, reviewed the transition fromthe 1972 Rules to the new Rules. His commentary is a helpful guide in tracing the changes. [6] Justice B.

MacDonald of this court summarized the applicable principles to apply when determining an appropriate costsaward in L. (N.D.) v. L. (M.S.), 2010 NSSC 159 , 2010 NSSC 159. She stated the following at paragraph 3: 3. Several principles emerge from the Rules and the case law. 1. Costs are in the discretion of the Court. 2. A successful party is generally entitled to a cost award. 3. A decision not to award costs must be for a "very good reason" and be based on principle. 4.

Deference to the best interests of a child, misconduct, oppressive and vexatious conduct, misuse of the court's time, unnecessarilyincreasing costs to a party, and failure to disclose information may justify a decision not to award costs to a otherwise successful party orto reduce a cost award. 5. The amount of a party and party cost award should "represent a substantial contribution towards the parties' reasonable expenses inpresenting or defending the proceeding, but should not amount to a complete indemnity". 6.

The ability of a party to pay a cost award is a factor that can be considered; but as noted by Judge Dyer in M.C.Q. v. P.L.T. 2005NSFC 27 , 2005 NSFC 27: "Courts are also mindful that some litigants may consciously drag out court cases at little or noactual cost to themselves (because of public or third-party funding) but at a large expense to others who must "pay their own way". Insuch cases, fairness may dictate that the successful party's recovery of costs not be thwarted by later pleas of inability to pay. [See Muirv. Lipon, 2004 BCSC 65 , 2004 BCSC 65]." 7.

The tariff of costs and fees is the first guide used by the Court in determining the appropriate quantum of the cost award.

8. In the first analysis the "amount involved", required for the application of the tariffs and for the general consideration of quantum, isthe dollar amount awarded to the successful party at trial. If the trial did not involve a money amount other factors apply. The nature ofmatrimonial proceedings may complicate or preclude the determination of the "amount involved". 9. When determining the "amount involved" proves difficult or impossible the court may use a "rule of thumb" by equating each day oftrial to an amount of $20,000 in order to determine the "amount involved". 10.

If the award determined by the tariff does not represent a substantial contribution towards the parties' reasonable expenses "it ispreferable not to increase artificially the "amount involved", but rather, to award a lump sum". However, departure from the tariff shouldbe infrequent. 11. In determining what are "reasonable expenses", the fees billed to a successful party may be considered but this is only one factoramong many to be reviewed. 12.

When offers to settle have been exchanged, consider the provisions of the civil procedure rules in relation to offers and also examinethe reasonableness of the offer compared to the parties position at trial and the ultimate decision of the court. [7] Justice Gass, in Pelrine v. Pelrine, 2007 NSSC 123 , 2007 NSSC 123, a decision of this court dated April 18, 2007,considered the issue of costs claimed by both parties, following a divorce proceeding which was heard over four days. Post-trialsubmissions were filed.

The petitioner sought approximately $11,000.00 in costs, including HST and disbursements, and the respondentsought approximately $9,000.00 plus disbursements of approximately $3,600.00. [8] Of particular interest is that Justice Gass found a failure to timely disclose on the part of the petitioner. She also assessed therelative “success” of the parties and the presence or absence of offers to settle. Justice Gass ordered costs to the respondent in theamount of $3,031.00 plus $2,000.00 towards disbursements. [9] I have recently ordered costs in a number of cases. [10] In Robar v.

Arseneau, 2010 NSSC 175 , 2010 NSSC 175, I ordered costs of $5,138.00 inclusive of HST anddisbursements to be paid at a rate of $150.00 per month. In that case, the applicant’s case to set aside the parties’ separation agreementwas dismissed and Ms. Robar was found to have been unreasonable. She was also found to have rejected offers to settle. The matterrequired court time on two days. I applied scale 1 of Tariff “A.” The amount involved was within the $40,001.00 -$65,000.00 range. Ms. Robar was subject to significant financial hardship at the time.

This was a factor weighing against a higher costs award. [11] The case of Provost v. Marsden, 2009 NSSC 365 involved an assessment of child support obligations. I applied Tariff “A”,there being a decision following a half-day hearing. The amount involved was in the $40,001.00 - $65,000.00 range. Success on theissues was mixed but Mr. Marsden was found to have been the more successful party. This case also involved an offer to settle. Coststotalling $3,000.00 inclusive of HST and disbursements were ordered (2010 NSSC 423). [12] The case of R. (A.) v.

R.(G.), 2010 NSSC 377 resulted in a costs award of $3,000.00 inclusive of HST and disbursements. Thehearing concerned the parenting arrangement for the parties’ two children. The conduct of the applicant was found to have beenaggravating. The amount involved was $20,000.00 this representing the amount involved when a full day of court time is consumed(2010 NSSC 424 (cost decision). [13] In Burchill v. Savoie, 2011 NSSC 163, I ordered costs of $35,000 inclusive of taxes and disbursements.

[14] In Shurson v. Shurson, 2011 NSSC 344, I ordered the parties to pay their own costs given the mixed success of the parties. [15] Finally, Justice Jollimore, in Peraud v Peraud, 2011 NSSC 80 , 2011 NSSC 80, reviewed the law governing when alitigant may be permitted to deduct legal expenses from total income for income tax purposes. At paragraph19, she wrote: [19] The amount of fees, disbursements and taxes billed to a party are not necessarily the same as the amount the party pays when theexpenses are incurred in matters relating to support.

The Income Tax Act, R.S.C. 1985 (5th Supp), c. 1, s. 18, allows that legal andaccounting fees may be deducted from total income to determine taxable income. Canada Revenue Agency's Income Tax TechnicalNews Release Number 24 of October 10, 2002 changed the terms of the Agency's

Interpretation Bulletin IT-99R5: Legal andAccounting Fees, making it possible for a party to deduct expenses incurred to obtain spousal support under the Divorce Act, R.S.C.1985 (2nd Supp.), c. 3, the Maintenance and Custody Act, R.S.N.S. 1989, c. 160 and other similar provincial legislation across Canada.If a litigant is able to deduct legal expenses from total income, the resulting reduction in total income serves to diminish the litigant's taxbill. [16] Arriving at a costs assessment in matrimonial matters is difficult given the often mixed outcome and the need to consider theimpact of an onerous costs award on families and children in particular.

The need for the court to exercise its discretion and to moveaway from a strict application of the Tariffs is often present. Position of the Parties [17] Ms. Melnick’s counsel seeks an award of costs valued at $10,000 inclusive of disbursements. Mr. Peach argues no costsshould be awarded or if costs are payable they should be $4,688. Conclusion [18] As mandated by Rule 77.06, party and party costs will be fixed in accordance with the tariffs. I am satisfied that tariff “A” ofthe Costs and Fees Act, R.S.N.S. 1989, c. 104 is the governing tariff for the purpose of determining an appropriate costs award.

Thetariff is reproduced following Rule 77.18. [19] This proceeding required time on several days but the final hearing required one day of court time. [20] The parties’ success was mixed. Mr. Peach did get leave to bring his contempt application. Ms. Melnick provided the soughtafter information before a hearing and a contempt hearing was therefore not necessary. However, she should have provided theinformation when requested to do so by Mr. Peach. [21] Had Ms. Melnick not complied with Mr. Peach’s request for information, she would have been ordered to do so. [22] Mr.

Peach can not be “faulted” for pursuing the litigation given their circumstances when the hearing commenced. [23] The second part of the proceeding required the court to interpret and apply a clause of the parties’ Corollary Relief Judgment. Preliminary objections were raised by Ms. Melnick to a hearing of the merits of Mr. Peach’s application. Those objections required anadjournment of the hearing and were an unnecessary burden on the Court’s docket and the parties. These objections served to increasethe cost of the proceeding for both parties. Ultimately, on April 20, 2011 the Court rejected Ms.

Melnick’s request to further adjournproceedings and proceeded with the hearing.

[ 24 ] Mr. Peach was successful in obtaining the sought after information. Ms. Melnick was successful on the main issue;

interpretation of the parties’ Corollary Relief Judgment. However, her use of technical objections served to unnecessarily delay a consideration of the main issue on its merits. [ 25 ] I determine the appropriate amount of court time consumed for purposes of the tariffs to be one day. The monetary value of the dispute was between $25,000 and $35,000 depending upon what disposition costs were deductible from the sale proceeds. [ 26 ] I will apply Scale 1 of Tariff A which sets the costs at $3,000 plus $2,000 for each day of trial. [ 27 ] I therefore fix costs at $5,000 inclusive of disbursements and HST.

They are payable at the rate of $175 per month beginning January 15, 2012 and on the 15 th of the month thereafter until paid in full. [ 28 ] The Respondent is asked to prepare a revised order to reflect the foregoing and dismissal of Mr. Peach’s motion for an execution order. ACJ

SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: Peach v. Melnick , 2011 NSSC 377 Date: 20111020 Docket: 1201-058389 Registry: Halifax Between: Melvin Kyle Peach Applicant and Beverly Gail (Tibbo) Melnick Respondent Revised Decision: The text of the original decision has been corrected according to the appended erratum dated November 9, 2011 Judge: The Honourable Associate Chief Justice Lawrence I. O’Neil Heard: Written Submissions on costs were received to August 30, 2011 Counsel: Philip Whitehead, for the Applicant Gordon R. Kelly, Q.C. and Adrienne Bowers, for the Respondent Erratum:

Library Sheet, where it reads “Written Decision”, it should read “Related Decision”. Decision, page 1, where it reads “Decision: June 16, 2011”, it should read “Related Decision: June 16, 2011”.