Kalkman v. Beveridge, 2018 NSSC 178

SUPREME COURT OF Nova Scotia Citation: Kalkman v. Beveridge , 2018 NSSC 178 Date: 2018-07-20 Docket: 1204-006521 Registry: Kentville Between: Cinda Lee Kalkman Petitioner v. William Kellock Beveridge Respondent Judge: The Honourable Justice Gregory M. Warner Final Written Submissions: July 6, 2018 Counsel: Marion Hill, counsel for the petitioner G. Douglas Sealy Q.C., counsel for the respondent By the Court: [ 1 ] This is a cost decision.

The divorce decision is reported as 2018 NSSC 122 . [ 2 ] This proceeding related to a five-year (short), modern marriage between two older adults, who were each a single parent with teenage children when they met and married. The respondent was a surgeon; the petitioner, a massage therapist. The respondent’s income was substantially greater than the petitioner’s and the assets at the time of separation were basically the same assets that the respondent brought into the marriage.

Trial positions versus court’s decisions [ 3 ] In February 2017, this court heard the petitioner’s interim spousal support motion and suit costs application. [ 4 ] By reason of an arithmetic error, petitioner’s counsel had sought interim spousal support of $10,000.00 per month, which was corrected to $5,000.00 by the time of the hearing. She sought suit costs of $75,000.00. [ 5 ] The respondent submitted that the low, medium and high ranges under the Spousal Support Advisory Guidelines (“SSAG”), were $2,176.00, $2,538.00 and $2,901.00.

He proposed $2,538.00 for six months, if the petitioner would participate in a settlement conference within that time or, alternatively, argued that spousal support should be $1,800.00 with no suit costs.

[ 6 ] The court ordered interim spousal support of $3,300.00 per month, beginning February 1, 2017, and suit costs of $2,500.00. [ 7 ] At trial, the issues were property division and spousal support.

Matrimonial Property Issues [ 8 ] In her pretrial brief, the petitioner claimed that all the parties’ assets, except the respondent’s medical practice and her massage therapy business, were matrimonial and she sought an equal division, which at that time she estimated an equalization payment to her of about $495,000.00. [ 9 ] The respondent claimed that two of the three parcels associated with his residence, his RRSP, a hover craft owned by his numbered company and some household contents were not divisible matrimonial assets.

He sought an unequal division of assets, that would effectively require no equalization payment; that is, he would keep all the assets he owned at separation. In addition, he sought reimbursement from the petitioner of about $14,000.00 in loans that he claimed the petitioner’s three daughters owed him, and release from his guarantee of one daughter’s line of credit or loan. [ 10 ] In post-hearing submissions, the petitioner submitted that both of their RRSPs - the petitioner’s totaled $8,000.00; the respondent’s, $247,000.00, be excluded from divisible property.

This reduced her equalization claim to about $410,000.00. Her submission appeared to be a partial concession to the respondent’s claim for an unequal division of matrimonial assets in his favour. [ 11 ] In post-hearing submissions, the respondent amended his calculation of an unequal division and submitted that he should pay the petitioner an equalization payment of $6,369.00. [ 12 ] The court found that there were divisible matrimonial assets of about $779,000.00. The court agreed held that the respondent established that there should be an unequal division in his favor.

The court ordered an equalization payment of $75,000.00 to the petitioner. Success was divided with regards to the categorization of assets that were exempt from division, but the respondent was substantially successful in his claim for an unequal division. Spousal Support Issues [ 13 ] The petitioner claimed entitlement to spousal support on a compensatory and non-compensatory basis. She sought spousal support for the length of the marriage – she says 67 months – at the high-end of the SSAG range.

She submitted that some of the spousal support should be retroactive for the period preceding the interim spousal support order. [ 14 ] The respondent acknowledged only a non-compensatory entitlement and contested the claim for retroactive spousal support. He calculated the SSAG range at the low-, mid- and high-range as $2,405.00, $2,806.00 and $3,207.00. He submitted that spousal support should be at the lowest end of the range, both for quantum ($2,400.00) and duration (30 months).

He sought credit against this amount for the amount paid under the interim spousal support order for 15 months, at $3,300.00 and for the $14,000.00 that he claimed the petitioner’s three children owed him. [ 15 ] The court awarded the petitioner spousal support in the mid-range in terms of quantum; that is, $2,700.00, for 36 months - close to the low end of the range for duration.

The court gave credit to the respondent for the payment of 15 months at $3,300.00 under the interim order but did not give credit to him for the amounts he says the petitioner’s children owed him. [ 16 ] The petitioner was mostly successful in her interim spousal support claim and mostly unsuccessful in her suit costs claim; the respondent was slightly more successful than the petitioner at trial on the spousal support issue. [ 17 ] While the respondent was not entirely successful in the property division issues, he was much closer to the court’s decision than the petitioner.

Costs Submissions [ 18 ] The respondent directs the court’s attention to two cost decisions of this court: Lake v Lake , 2016 NSSC 255 (“ Lake ”) and Chipman v Chipman , 2017 NSSC 293 (“ Chipman ”), for the proposition that costs should be based upon Civil Procedure Rule 77 , Tariff A, and either Scale 2 or Scale 3.

He claims to have been successful at trial and seeks costs in respect of the trial of $90,096.00, together with the $250.00 already ordered with respect to a successful pretrial motion requiring the petitioner to answer interrogatories. [ 19 ] His claim includes $6,000.00 for three days of trial; about $4,000.00 in disbursements and Tariff A, Scale 2 in the amount of $80,596.00, based on the “amount involved” being $1,239,958.00.

He gets this figure by adding what he says were the total value of property in issue ($946,348.00), the total amount of claimed spousal support ($221,100.00) and the portion of the suit costs claimed, but not awarded ($72,500.00). [ 20 ] The petitioner claims costs in her favor per Tariff A, Scale 2, based on the property claim of $779,792.00 plus three days of trial, in the amount of $70,750.00. [ 21 ] Each party claims that they were successful, with the other party more responsible for the lack of cooperation and missteps in the pretrial procedures. [ 22 ] For example, the respondent’s counsel identifies that the petitioner and her counsel refused to participate in early settlement discussions.

The petitioner’s response was that she never knew the respondent’s finances until full disclosure was given, which was not, basically, until after October 2017. The parties had an unequal bargaining position and it was appropriate to seek full disclosure before agreeing to any settlement discussions. [ 23 ] Both parties argued about issues of disclosure and production, including what was relevant or not relevant.

[ 24 ] It appeared that counsel acted towards each other in a somewhat dysfunctional manner. This court would not describe either party as being entirely responsible the dysfunction but found the petitioner’s initial positions to be more problematic of the two, and the reason that the proceeding could not be settled before trial. [ 25 ] What is more relevant to the costs analysis is the success or lack of success at trial, and the pretrial offers to settle.

Pretrial Offers to Settle [ 26 ] Each party made offers to settle. [ 27 ] On April 17, 2017 (a few days after a failed settlement conference and several months before full financial disclosure by the respondent), the petitioner made a formal CPR 10 offer to settle as follows: 1. fixed spousal support of $3,300.00 per month for three years (total: $118,800.00); 2. a $100,000.00 cash settlement to the petitioner; and, 3. an RRSP rollover from the respondent to the petitioner of half his RRSP (that is, about $123,000.00). [ 28 ] Apparently, the offer was withdrawn on October 6, 2017. [ 29 ] On April 21, 2017, the respondent made an offer to settle as follows: 1. payment of spousal support totalling $73,200.00 - four months at $3,300.00 per the interim order, and the remaining $63,000.00 over whatever period, between one and two years, that the petitioner wished, or alternatively, converting that spousal support into a lump sum payment at a 50% discount; 2. forgiveness of the education loans that the respondent claimed the petitioner’s daughters owed him in exchange for obtaining his release as guarantor on one daughter’s student line of credit; 3. $12,500.00 in cash to the petitioner for her interest in the respondent’s assets; 4. each party keep their own assets; 5. payment to the petitioner of $5,000.00 or, alternatively, by RRSP rollover $7,500.00. [ 30 ] The offer was open for acceptance for three weeks (to May 8) after which it would be reduced by any legal costs incurred by the respondent for his counsel on a solicitor-client basis. [ 31 ] On November 21, 2017, the respondent resubmitted his April 21 st offer - this time on a without prejudice basis and gave a deadline for acceptance of December 1, 2017. [ 32 ] None of the offers of settlement were close to the court’s final spousal support award, totaling $98,100.00 over 36 months, or the court’s order of a property equalization payment of $75,000.00. [ 33 ] The spousal support award was $20,000.00 (before tax consequences) less than the petitioner’s April 17 th offer to settle and $24,800.00 (before tax consequences) more than the husband’s offer of April 21 st . [ 34 ] The court’s decision respecting property issues did not include a determination of the divisibility of the parties’ RRSPs because of the petitioner’s withdrawal of her claim as part of her partial concession to an unequal property division during her post trial submissions.

The court’s property decision was about $325,000.00 less than the petitioner’s post trial submission and about $70,000.00 more than the respondent’s post trial submission. Analysis [ 35 ] While this court stands by its general principle set out in the Lake and Chipman decisions: that, in contested hearings involving viva voce evidence, Tariff A is an appropriate matrix for the determination of costs, neither of the fact circumstances in Lake or Chipman have any relevance to the circumstances in this trial. [ 36 ] In Lake , dad applied to vary parenting and child support.

He lost and was ordered to pay costs of $7,000.00, which were one- half of mom’s estimated solicitor-client costs. The basis for the decision, set out in paragraphs 43 and 44 of that decision, was the complete unreasonableness of dad’s application from start to finish. [ 37 ] The circumstances in the Chipman decision varied significantly from those in this case. [ 38 ] It involved a three-day divorce hearing. The court had made an order for interim spousal support in favor of the petitioner but, at trial, the petitioner did not seek the continuation of spousal support. The sole issue was property division.

The court excluded some of the husband’s assets from division but rejected his claim for an unequal division and awarded the wife one-half of the matrimonial assets by way of a payment of $251,000.00. [ 39 ] The wife had made an early offer to settle for $250,000.00 that was not accepted. The husband made a last-minute offer before trial of $125,000.00 plus some other benefits that may have totalled $200,000.00. [ 40 ] Most importantly, Mr. Chipman failed and/or refused to provide basic financial disclosure, even to the time of trial. Ms.

Chipman had to subpoena three financial institutions to the trial to get basic disclosure. [ 41 ] In that case, the wife sought Tariff A, Scale 1 costs of $37,313.00, plus $6,000.00 for three days of trial plus $1,000.00 for her successful interim spousal support application. The court awarded total costs of about $44,000.00. In that case, Ms. Chipman was almost entirely successful and had made an early offer to settle that was $1,000.00 less than the amount awarded to her at trial. Most important, Mr. Chipman failed to make appropriate financial disclosure. [ 42 ] In this case, there was divided success.

The petitioner was mostly successful at the interim spousal support hearing, but mostly unsuccessful in the suit costs application. The court’s final decision on spousal support was midway between the position of both parties.

Neither party should be awarded costs in respect of these two parts of this proceeding. [ 43 ] The respondent was substantially, but not entirely, successful with regards to the matrimonial property issues which, by the end of the trial, involved about $800,000.00 (excluding the party’s RRSPs). [ 44 ] The respondent should receive costs respecting the property issues, based on his more substantial success. [ 45 ] Costs awards are specific to the circumstances of the case.

Important principles include: a. costs should normally follow the result (that is, loser pays); b. as a starting point, the appropriate Tariff should be applied to the result, unless the factors in CPR 77.07 should result in an increase or decrease; c. costs should constitute a substantial contribution to the successful party’s reasonable costs, and d. cost awards are subject to the overriding consideration of doing justice between the parties. [ 46 ] Counsel for the petitioner refers the court to the circumstances of the petitioner and CPR 77.04 , which sets out a process to give relief from liability for costs.

That Rule does not assist the petitioner in this case. Immunity from costs must be applied for and approved or disapproved early in the litigation, as it should be. See this court’s decision in Canadian Residential Inspection Services Ltd v. Swan , 2013 NSSC 226 . [ 47 ] The respondent’s costs brief states that his actual solicitor-client legal costs (fees and disbursements) to date total $89,735.42.

The court does not award solicitor-client costs, except in the very exceptional circumstances, none of which exist to this case. [ 48 ] As in other civil proceedings, costs should, subject to the circumstances of each case and the factors enumerated in CPR 77.07 , seek to make a substantial contribution to reasonable solicitor-client costs of a successful party.

Since the respondent was substantially successful in the property issues, but not all the issues, I am prepared to make an award that will reflect the extent of his success. [ 49 ] Keeping in mind Tariff A, Scale 2, as well as the obligation of courts to use costs awards to contain process and encourage reasonable behaviour, to do justice between the parties, and to make a substantial contribution to the reasonable costs of a party with respect to those issues in which the party was most successful , I award lump sum costs to the respondent in the amount of $25,000.00, inclusive of the $250.00 awarded in respect of the interrogatories motion.

Warner, J.