MacPhee v. MacPhee, 2012 NSSC 43

SUPREME COURT OF NOVA SCOTIA Citation: MacPhee v. MacPhee, 2012 NSSC 43 Date: 20120130 Docket: 1201-063942 Registry: Halifax Between: Karen Anne MacPhee Petitioner and Norman Bernard MacPhee Respondent Judge: Justice Carole A. Beaton Written Submissions: Received from Petitioner on January 11, 2012 and from Respondent on January 17, 2012 Date of Written Decision: January 30, 2012 Counsel: Judith Schoen, Counsel for Karen MacPhee Graydon D. Lally, Counsel for Bernard MacPhee By the Court : Introduction [ 1 ] This is a decision on costs arising from the divorce trial held on May 30-31, 2011.

The trial lasted approximately 1 ½ days, following which I delivered an oral decision later on the second day of trial. [ 2 ] The entire trial was devoted to the issue of division of matrimonial assets and debts. Mrs. MacPhee's position was that all of the parties various real property holdings (including their matrimonial home), save the property at 99 Old Annapolis Road, HRM occupied by their son, should be sold and the proceeds divided equally. She also sought equal division of all of the matrimonial debt arising from the 33 year marriage.

[3] Regarding real property, Mr. MacPhee maintained that one lot should be subdivided, one lot should be sold and the OldAnnapolis Road property should be sold. Mr. MacPhee was prepared to purchase Mrs. MacPhee’s interest in the matrimonial home,however he disputed the value of that asset and argued its value should be significantly reduced owing to Mrs. MacPhee’s failure toproperly maintain the asset during her interim occupation of it. [4] Mr. MacPhee also disagreed with the values listed by Mrs.

MacPhee in her Statement of Property in relation to variousvehicles, however he did not provide any evidence, in advance of being cross examined, to assist the court in understanding what valuehe placed on those items. Further, he challenged that one of two joint lines of credit ($85,000) should be equally divided arguing thatMrs. MacPhee should be responsible for a significant portion of that debt. [5] The parties advised the Court at the outset of the trial that there were certain issues they had been able to agree upon inadvance.

Submissions to the Court on the issue of costs now gives me to understand that in relation to one of those items - division ofMrs. MacPhee’s severance - agreement was achieved only very shortly prior to trial. Applicable Law [6] Rule 77 of the Civil Procedure Rules governs the matter of costs; it identifies the relevant Tariff to be applied once amonetary amount equating to the issue(

s) in play has been determined by the Court, in order to arrive at a calculation of costs payable bya party. [7] There is also a mechanism found in decisions of this Court for assessing an amount outside the Tariff in family law cases. Asnoted by Lynch, J. in Darlington v. Moore 2011 NSSC 425 at paragraph 21: [21] In some family law cases, particularly where the major issue is custody and access, it is difficult to use the tariff as it isdifficult to determine the amount involved. Because of this difficulty the amount of $20,000 per day of trial is used in some cases.

However, in this case, custody was not the major issue. The major issues dealt with were property and financial matters. See also Harrington v. Coombs [2011] NSSC 141; Urquhart v. Urquhart (1998) (NS SC), 169 N.S.R. (2d) 134;Jachimowicz v. Jachimowicz 2007 NSSC 303. [8] The issues before the Court here concerned property and financial matters, and specifically, the question of disposition ofreal property and the question of equal division of certain debt.

Therefore, it is possible to assess and assign a monetary value to thecompeting claims, thereby triggering application of Tariff A found in Rule 77. [9] Counsel agreed in their submissions that this Court should rely on the principles enunciated by MacDonald, J. in Fermin v.Yang 2009 NSSC 222 wherein a

summary of the principles of costs that have emerged from the Civil Procedure Rules and case law wasprovided: [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 no actual cost to themselves (because ofpublic or third-party funding) but at a large expense to others who must “pay their own way”. In such cases, fairness may dictate that thesuccessful party’s recovery of costs not be thwarted by later pleas of inability to pay. [See Muir v. Lipon, 2004 BCSC 65 , 2004BCSC 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 quantumis the dollar amount awarded to the successful party at trial. If the trial did not involve a money amount other factors apply. The natureof matrimonial 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 dayof trial 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. [10] Guided by these principles, I turn to an examination of the positions and outcomes in this case. Petitioner’s position [11] Mrs.

MacPhee argues that while there was “mixed success” and that she “was not successful on every single issue to beaddressed” nonetheless she was successful on “the significant majority of them and the ones that consumed the most amount of attentionduring the trial and the submissions”. On that basis Mrs. MacPhee maintains that the “amount involved” for purposes of applying theTariff in Rule 77 may be assessed as the amount required to be paid to her by Mr. MacPhee as an equalization payment. Mrs. MacPheesays that amount is $91,650.64, which I am left to presume is the final accounting arising from Mr.

MacPhee having elected to exercise

the purchase options set out in the Corollary Relief Judgment. Those options permitted him to buy out all, some or none of Mrs. MacPhee’s interest in the various real property holdings by July 15, 2012 after which time Mrs. MacPhee would be in control of the disposition of the real property, the equity in which was to be divided equally between the parties. [ 12 ] Mrs. MacPhee maintains she has incurred “legal fees and disbursements in the amount of $18,002.00 not including the fees associated with doing the submission on costs”.

I have not received any breakdown of the portion of that sum related to fees and the portion related to expenses. [ 13 ] Mrs. MacPhee also maintains that Tariff A does not adequately address the costs associated with this particular action, especially in light of the post trial conduct of Mr. MacPhee. Among other things, the Corollary Relief Judgment required the parties to equalize their RRSP holdings and at a review hearing on December 13 th , 2011 Mr. MacPhee advised Mrs.

MacPhee and the Court that he had collapsed the RRSPs held in his name after trial, in July 2011 in order to facilitate his exercise of the option to buy out Mrs. MacPhee’s interest in the real property of the parties as contemplated in the Corollary Relief Judgment. Respondent’s position [ 14 ] Mr. MacPhee maintains that a trial was inevitable given that Mrs. MacPhee had agreed some time prior to trial to accept Mr. MacPhee’s offer to purchase her interest in the matrimonial home yet she refused to cooperate in disposing of the property at 99 Old Annapolis Road which was being occupied by the parties’ son.

The 99 Old Annapolis Road property was financed by a mortgage secured against the matrimonial home. 99 Old Annapolis Road was itself posted as security against the disputed $85,000 line of credit. [ 15 ] At trial Mrs. MacPhee argued that 99 Old Annapolis Road should be preserved for the parties’ son who occupied the home and was making the monthly debt payments associated with that property. She wished to maintain the status quo arrangement which had their son occupy the property and service the debt against it (which debt encumbered the matrimonial home).

That was an untenable position given the need to divide the equity of the parties and the obvious need to dispose of the property in order to retire the debt associated with it, as that debt affected disposition of the matrimonial home. [ 16 ] Mr. MacPhee maintained at trial that the 99 Old Annapolis Road property should be sold. Mr. MacPhee now submits his ability to refinance and thereby buy out Mrs. MacPhee’s interest in the matrimonial home prior to trial was “ambushed” by Mrs. MacPhee’s refusal to dispose of the 99 Old Annapolis Road property prior to trial. Further, at trial Mr.

MacPhee was steadfast, despite ample evidence to the contrary, in his untenable position that the $85,000 joint line of credit encumbering 99 Old Annapolis Road was a matrimonial debt for which the parties were not equally responsible. He failed to discharge the burden on him to establish that an unequal division of that debt would be appropriate. [ 17 ] Mr.

MacPhee submits because success was divided, at trial the Court should not award costs, or in the alternative the Court should consider that the most “financially significant issue in dispute” was the question of disposition of 99 Old Annapolis Road and as Mr. MacPhee was successful on that point, he is “at least as deserving of an award of costs as Mrs. MacPhee.” He argues that the “reasonable amount” associated therewith would be $145,000.00 which he says represents the amount of debt associated with the construction of that property, less what had been previously repaid on the debt.

Analysis [ 18 ] There can be little doubt and I agree that success at trial was mixed for both parties.

Despite the pre-trial positions of each party and various informal settlement offers advanced (as discussed in the submissions of both parties) the majority of trial time was consumed with the evidence and argument advanced by each party in relation to the two issues identified above. [ 19 ] There were other minor or by comparison considerably less significant assets dealt with by the Court (e.g. motor vehicles) at trial however all of those paled in comparison to the dollar amounts associated with the joint line of credit balance and the property at 99 Old Annapolis Road. The Court ruled against Mr.

MacPhee on the question of the line of credit and ruled against Mrs. MacPhee on the question of disposition of 99 Old Annapolis Road. As disposition of that property was intertwined with the related question of

disposition of other real estate holdings (which Mrs. MacPhee sought to dispose of and Mr. MacPhee opposed), neither party can suggestthey were the successful party at trial. I agree that a trial was inevitable due to each party’s respective positions on these two issues. [20] In Smith v. Smith 2011 NSSC 304 Jollimore, J. considered the relative success of each party where their respective claims wereunsuccessful, and reviewed the offers exchanged by the parties prior to trial.

The Court noted: [13] In Drozdowska, 2011 NSSC 211 , 2011 NSSC 211, Justice Gass declined to award costs where success was mixed, in acase with a “multitude of issues”. I agree with Justice Gass’ conclusion at paragraph 17 of Drozdowska, 2011 NSSC 211 , 2011NSSC 211, “with a result that was mixed, the issues being so numerous, and the nature of the pre-trial discussions themselves somewhatconflicted and confusing, I must conclude that the parties should bear their own costs in these circumstances.” See also Lilly v.

Lilly 2011 NSSC 162. [21] While there were not a large number of issues in this particular case, there were a number of discrete assets and debts discussedand adjudicated upon. Both parties concede in their submissions that the success of the parties was mixed and can only be specificallyidentified or measured by attending to the valuation of a particular asset or the amount of a particular debt.

The submissions on costslead me to understand there were numerous discussions and offers pertaining to various assets of the parties exchanged prior to trial. [22] The parties had requested at the close of trial that a review date be set and in light of that I had directed that if there was to bean issue about costs, counsel could file their written submissions two weeks in advance of that date. Counsel, by mutual agreement, re-scheduled the review hearing several times and it was eventually held December 13, 2011. To that date I had not received submissionson costs.

While this Court made its views plain at the review hearing regarding certain post-divorce conduct on the part of Mr.MacPhee, nonetheless the question of costs was not able to be dealt with at the review hearing as neither party had filed submissions inadvance as requested. [23] As in Lilly (supra) the parties here both maintained an unreasonable position with respect to two significant issues which,regardless of their ultimate agreement on other matters prior to trial, nonetheless clearly propelled the matter to a hearing. At trial, eachparty enjoyed “mixed success”.

Accordingly it is appropriate for each party to bear their own costs in this proceeding. J.