MacLean v. Miller, 2020 NSSC 224

SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: MacLean v. Miller , 2020 NSSC 224 ENDORSEMENT Christina Margaret MacLean v. Paul Alexander Miller August 14, 2020 Court file no. 1201-071892 Michelle Axworthy on behalf of Christina Margaret MacLean William M. Leahey on behalf of Paul Alexander Miller Appearances: In September 2015 Christina MacLean applied to vary child support, retroactive to 2011. Ms. MacLean’s application was amended in May 2017 to include a retroactive and prospective claim for

Section 7 expenses to 2011. 1 . February, 2016 – Simplified Process Docket appearance before another Judge of the Family Division, no resolution. 2 . April, 2016 – Conference before another Judge of the Family Division. Mr. Miller appeared with his legal counsel, and Ms. MacLean was self represented. The Court reviewed disclosure obligations, and the issue of Mr. Miller’s health difficulties. The Court identified disclosure as Mr. Miller’s burden, indicating Mr. Miller would need to satisfy Ms.

MacLean re: disclosure in order to settle the matter; discussed the issue of costs / benefits when requesting additional disclosure. The Court suggested Mr. Miller have his accountant attend the settlement conference to answer Ms. Maclean’s questions, or arrange for Ms. MacLean’s accountant to sit with Mr. Miller’s accountant or the parties exchange interrogatories. The Court directed a chart be provided by Mr. Miller to Ms. MacLean re: disclosure / structure. Both parties advised the Court they would be seeking costs. 3 . May 2016 – Originally scheduled before me for a Settlement Conference, adjourned. 4 .

September 16, 2016 – Scheduled for a Hearing of Motion for Interim Relief before another Judge of the Family Division. Ms. MacLean granted an adjournement. 5 . September 26, 2016 – Settlement Conference before another Judge of the Family Division. Ms. MacLean granted an adjournement. 6 . October 24, 2016 – Notice of New Counsel filed on behalf of Ms. MacLean. 7 . November 2016 – Hearing of Motion for Interim Relief scheduled before another Judge of the Family Division. On date of the hearing a letter was received from Mr. Miller re: settlement of interim issue reached by the parties. 8 .

December 2016 – Settlement Conference scheduled before another Judge of the Family Division. Adjourned. 9 . January, 2017 – Settlement conference before another Judge of the Family Division. Discussions took place, adjourned to March 7, 2017, parties needing more time, then to further discussions in April 2017. 10 . Settlement offer made at Settlement Conference Per 10.03 was not considered. Ms. MacLean suggested $30,000.00 in retroactive child support to December 31, 2016. Payable at $1000.00 per month. At trial Mr. Miller was ordered to pay $46,141.92. Mr.

Miller sought costs of $8000.00, with no retroactive child support award for Ms. MacLean. The Court awarded $46,141.92 in retroactive child support. In his submissions on costs Mr. Miller argued Ms. MacLean’s offer to settle was not complete and the same weight should not be assigned to the offer to settle.

11 . April, 2017 – Notice of Intention to Act on One’s Own, filed by Ms. MacLean. 12 . April, 2017 – Continuation of Settlement conference with another Judge of the Family Division. Adjourned. 13 . May, 2017 – Notice of New Counsel. 14 . May, 2017 – Conference. The parties appeared before me for the first time. They were reminded of the Court’s direction given in April 2016. Ms. Maclean amended her pleadings to include retroactive and prospective

section 7 expenses. 15 . August, 2017 – Conference. The parties appeared before me for further discussions regarding Mr. Miller’s disclosure. Ms. MacLean indicated she did not have the funds to conduct discoveries. Ms. MacLean identified specific documents missing including a Notice of Assessment for 2011, and missing notices for Mr. Miller’s family trusts. The Court cautioned about adverse inferences being drawn if full financial disclosure was not provided. Mr. Miller directed to file updated Statement of Income. 16 . December, 2017 – Pre-trial conference – The parties appeared before me.

There were ongoing discussions regarding disclosure, including the request to file an expert accounting report. The Court extended filing deadlines to January 9, 2018. The issue of upcoming prospective

section 7 expenses, specifically upcoming post-secondary expenses, was raised by the parties. 17 . January 19, 2018 – Conference call – Following receipt of the expert report, Ms. Maclean requested time to have her expert review the report. 18 . January 23 – 25, 2018 Trial dates released. 19 . February, 2018 – Pre trial conference call – discussion with respect to the possibility of the trial proceeding May 1-5, 2018 as scheduled. Trial dates adjourned to further Conference in June 2018. 20 . June, 2018 – Conference – The parties appeared before me for ongoing discussions regarding disclosure necessary to establish Mr. Miller’s income in 2017, and disclosure regarding contributions to

section 7 post secondary expenses. 21 . Settlement offer from Ms. MacLean indicating she would accept $35,000.00 in retroactive child support up to December 31, 2016. Ms. MacLean noted Mr. Miller had not provided sufficient disclosure for her to make an offer for the amount of child support owing in 2017, or for prospective child support. As noted above, the Court awarded $46,141.92 in retroactive child support. In his submissions on costs Mr. Miller argued that Ms. MacLean’s offer to settle was not complete and should therefore not be given much weight in determining a costs award. 22 . August, 2018 – Hearing.

The parties appeared before me for a determination regarding the contribution by Mr. Miller and Ms. MacLean to post-secondary expenses. The parties reached an interim agreement on the record. 23 . Settlement offer from Ms. MacLean to share

section 7 expenses 80/20 for child support of $2,085. Final disposition, Mr. Miller to pay 88% of

section 7 expenses, and child support of $3,776.50. 24 . September 10 – 12, 2018 Trial dates. Consent adjournment. 25 . January 28 – 30, 2019 Trial dates . 26 . Februry 25, 2019 trial continuation, submissions, decision reserved. Additional day requested for Mr. Miller’s submissions.

August 26, 2019 – written decision released by the Court. Decision: Mr. Miller to pay costs of $56,653.16 to Ms. MacLean forthwith. Reasons: 1. Costs are in the discretion of the Court. A successful party is generally entitled to a cost award, and a decision not to award costsmust be for a “very good reason,” and be based on principle. Ms. MacLean was successful overall. 2. When determining costs, I must consider factors that increased the cost of litigation, and therefore the party’s entitlement to costs. 3. I find Mr.

Miller should have taken more care to inform himself about his obligations when discussing possible increases in childsupport. For instance, the need to include any disability income and to “gross up” the non-taxable income received. I find key pieces ofrelevant disclosure was not provided by Mr. Miller to Ms. MacLean in a timely way. I also find Mr. Miller failed to reassure Ms.MacLean regarding his expenses. For instance, he could have done so by having his accountant meet with Ms. MacLean’s accountant assuggested by the Court at the first Court Conference in 2016. At times, Mr.

Miller also provided inaccurate information such as when hestarted receiving disability insurance, which contributed to Ms. MacLean’s mistrust of Mr. Miller’s disclosure. 4. Ms. Miller suggests that in determining an award of costs this Court should rely on Tariff C, relied on for applications in chambers. I disagree. 5. In the alternative Mr. Miller suggests that if I choose to characterize this matter “as more in the nature of a proceeding” and rely onTariff A, which I do, that the amount involved would fall between $65,001.00 and $95,000.00. Mr.

Miller suggests that using scale two,and factoring in a total of three days of trial would result in a cost award of $16,750.0 or if the Court relied on scale three, the total costaward would be $18,188.00. 6. Ms. MacLean’s reported costs were $93,611.04. Ms. MacLean provided a chart suggesting the “range of recovery for costs isbetween $52,836.91 - $72,017.63”. a. Ms. MacLean agrees that if this Court relies on the “amount involved approach”, the Court should find the amount to be between$65,001.00 and $95,000.00. However, using Tariff A, Ms.

MacLean suggests I should rely on scale three (not scale 2) I agree, +$2000.00 for four days of trial (not three), and thereafter I should increase the cost award by 25% as a result of the settlement offer madeby Ms. MacLean + disbursements + expert expenses, for a total costs award of $52,836.91. b. In the alternative, Ms. MacLean argues that if this Court relies on the Rule of Thumb Approach, that the amount involved should be$120,000.00.

Accounting for six court days including January 28, 29, 30, February 25, 2019 and an additional two days for other courtappearances, + $2000.00 per court day + apply Rule 10 to increase costs by 25% + disbursements + expert costs, for a total cost award of$56,653.16. c. Ms. MacLean suggests the Armoyan Approach is the most appropriate in this instance. Considering the total cost of $93,611.04. Ms. MacLean seeks costs in the amount of $72,017.63. Suggesting fees incurred before her settlement offer of June 12, 2018 were$22,488.25 and Mr.

Miller should cover 66% of that cost = $14,842.245.00, and costs incurred after the settlement offer were $56,256.51and Mr. Miller should cover 88% of those costs = $49,505.72 + disbursements + the cost of the expert for a total award of $72,017.63. 7. In McPhee, Hill and MacLean v. CUPE, 2008 NSCA 104. Justice Cromwell, writing for the unanimous court said at paragraph 76: [76] The reasons why costs should generally be awarded to the successful party were set out by Saunders, J. (as he then was) inLandymore v. Hardy (1992), (NS SC), 112 N.S.R. (2d) 410 (S.C.): [17] Costs are intended to reward success.

Their deprivation will also penalize the unsuccessful litigant. One recognizes the linkbetween the rising cost of litigation and the adequacy of recoverable expenses. The parties who sue one another do so at their peril.

Failure carries a cost . There are good reasons for this approach. Doubtful actions may be postponed for a sober second thought. Frivolous actions should be abandoned. Settlement is encouraged. ...” [Emphasis added by Counsel] 8. Justice B. MacDonald of this court summarized the applicable principles when assessing costs in L. (N.D.) v. L. (M.S.) , 2010 NSSC 159 and more recently in Gagnon v. Gagnon , 2012 NSSC 137 . She stated the following at paragraph 3 in L. (N.D.) : 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, unnecessarily increasing costs to a party, and failure to disclose information may justify a decision not to award costs to an otherwise successful party or to reduce a cost award. 5.

The amount of a party and party cost award should "represent a substantial contribution towards the parties' reasonable expenses in presenting 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 . 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 of public or third-party funding) but at a large expense to others who must "pay their own way".

In such cases, fairness may dictate that the successful party's recovery of costs not be thwarted by later pleas of inability to pay. [ See Muir v. Lipon , 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, is the dollar amount awarded to the successful party at trial. If the trial did not involve a money amount other factors apply.

The nature of 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 day of 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 is preferable not to increase artificially the "amount involved", but rather, to award a lump sum". However, departure from the tariff should be infrequent. 11.

In determining what are "reasonable expenses", the fees billed to a successful party may be considered but this is only one factor among 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 examine the reasonableness of the offer compared to the parties position at trial and the ultimate decision of the court. 9. There was no specific monetary amount involved.

10. I have considered the parties’ financial circumstances, the parties’ conduct throughout the proceeding, the nature of the evidenceinvolved in the proceeding, all issues raised with respect to disclosure, adjournments, and all other relevant factors. 11. Justice Jollimore in Moore v. Moore, 2013 NSSC 281 at paragraph 14 addressed the applicability of Tariff “C” to applications in theFamily Division: [14] Initial guidance in determining costs is the tariff of costs and fees. The proceeding before me was a variation application. Formally, Tariff C applies to applications. As I said in MacLean v.

Boylan, 2011 NSSC 406 at paragraph 30, applications in the FamilyDivision are, in practice, trials. Rule 77’s Tariffs have not changed from the Tariffs of Rule 63 of the Nova Scotia Civil Procedure Rules(1972). Despite the distinction between an action and application created in our current Rules, the Tariffs have not been revised. Myview has not changed since I decided MacLean v.

Boylan, 2011 NSSC 406: I don’t intend to give effect to the current Rules and theirincorporation of the pre-existing Tariffs where this routinely results in lesser awards of costs for the majority of proceedings in theFamily Division, such as corollary relief applications, variation applications and applications under the Maintenance and Custody Act orthe Matrimonial Property Act. In these situations I intend to apply Tariff A as has been done by others in the Family Division: JusticeGass’ decision in Hopkie, 2010 NSSC 345 and Justice MacDonald in Kozma, 2013 NSSC 20. 12. In Armoyan v.

Armoyan, 2013 NSCA 136 the court of appeal stated at paragraphs [12] Rule 77.06 says that, unless ordered otherwise, party and party costs are quantified according to the tariffs, reproduced in Rule77. These are costs of a trial or an application in court under Tariff A, a motion or application in chambers under Tariff C (see also Rule77.05), and an appeal under Tariff B.

Tariff B prescribes appeal costs of 40% trial costs “unless a different amount is set by the NovaScotia Court of Appeal”. [13] By Rule 77.07(1), the court has discretion to raise or lower the tariff costs, applying factors such as those listed in Rule77.07(2). These factors include an unaccepted written settlement offer, whether or not the offer was made formally under Rule 10,and the parties’ conduct that affected the speed or expense of the proceeding. (my emphasis) [14] Rule 77.08 permits the court to award lump sum costs.

The Rule does not specify the circumstances when the Court shoulddepart from tariff costs for a lump sum. Tariff or Lump Sum? [15] The tariffs are the norm, and there must be a reason to consider a lump sum. [16] The basic principle is that a costs award should afford substantial contribution to the party’s reasonable fees and expenses. InWilliamson, while discussing the 1989 tariffs, Justice Freeman adopted Justice Saunders’ statement from Landymore v.

Hardy (1992), (NS SC), 112 N.S.R. (2d) 410: The underlying principle by which costs ought to be measured was expressed by the Statutory Costs and Fees Committee in these words: “… the recovery of costs should represent a substantial contribution towards the parties’ reasonable expenses in presenting or defendingthe proceeding, but should not amount to a complete indemnity.” 13. Justice Freeman continued: In my view a reasonable

interpretation of this language suggests that a “substantial contribution” not amounting to a completeindemnity must initially have been intended to mean more than fifty and less than one hundred per cent of a lawyer’s reasonablebill for the services involved. A range for party and party costs between two-thirds and three-quarters of solicitor and client costs,objectively determined, might have seemed reasonable.

There has been considerable slippage since 1989 because of escalating legalfees, and costs awards representing a much lower proportion of legal fees actually paid appear to have become standard and acceptedpractice in cases not involving misconduct or other special circumstances. (my emphasis) [17] The tariffs deliver the benefit of predictability by limiting the use of subjective discretion. This works well in a conventionalcase whose circumstances conform generally to the parameters assumed by the tariffs.

The remaining discretion is a mechanism forconstructive adjustment that tailors the tariffs’ model to the features of the case. [18] But some cases bear no resemblance to the tariffs’ assumptions. A proceeding begun nominally as a chambers motion,signalling Tariff C, may assume trial functions, contemplated by Tariff A. A Tariff A case may have no “amount involved”, otherimportant issues being at stake. Sometimes the effort is substantially lessened by the efficiencies of capable counsel, or handicapped byobstructionism. The amount claimed may vary widely from the amount awarded.

The case may assume a complexity, with acorresponding workload, that is far disproportionate to the court time, by which costs are assessed under provisions of the Tariffs. Conversely, a substantial sum may turn on a concisely presented issue. There may be a rejected settlement offer, formal or informal,that would have saved everyone significant expense. These are just examples.

Some cases may combine several such factors to thedegree that the reflexive use of the tariffs may inject a heavy dose of the very subjectivity – e.g. to define an artificial “amount involved”as Justice Freeman noted in Williamson – that the tariffs aim to avoid. When this subjectivity exceeds a critical level, the tariff may bemore distracting than useful. Then it is more realistic to circumvent the tariffs, and channel that discretion directly to the principledcalculation of a lump sum.

A principled calculation should turn on the objective criteria that are accepted by the Rules or caselaw. (my emphasis) [19] In my view, this is such a case for a lump sum award. I say this for the following reasons. [20] Justices of the Family Division have stated that trial-like hearings in matrimonial matters are more appropriate for Tariff A than

Tariff C: Hopkie v. Hopkie , 2010 NSSC 345 , para 7 , per Gass, J.; MacLean v. Boylan , 2011 NSSC 406 , paras 29-30 , per Jollimore, J.; Kozma v. Kozma , 2013 NSSC 20 , para 2 , per MacDonald, J.; Robinson v. Robinson , 2009 NSSC 409 , para 10 , per Campbell, J.. 14. Under Tariff A, I would allow for four days of trial, and another two days to account for preparation for other court appearances. I find the “amount involved” to be $20,000.00 x 6 = $120,000.00. I find the appropriate scale is three $15,313.00 + $2000.00 x 6 days = $27,313.

I would increase the award by 25% under Rule 10 + disbursements of $1,806 + $20,705.91 for the Price Waterhouse Report and expert testimony, for a total award of $56,653.16. 15. With costs of $93,611.04 (or $79,569.38 discounting for GST), an award of $56,653.16 would be 71% of the net legal fees, disbursements, expert costs, and does afford a substantial contribution to the party’s reasonable fees and expenses 16. I order Mr. Miller to pay costs of $56,653.16 to Ms. MacLean forthwith. Directions: Ms. Axeworthy shall prepare the Order for Costs. _____________________________ Cindy G. Cormier, J.S.C.(F.D.)