Hiscott v. Hall, 2015 NLCA 1

Date: 20150114 Docket: 13/70 Citation: Hiscott v. Hall , 2015 NLCA 1 IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR COURT OF APPEAL BETWEEN: RHONDA HISCOTT APPELLANT AND: ARDEN HALL RESPONDENT Coram: Welsh, Barry and White JJ.A. Court Appealed From: Supreme Court of Newfoundland and Labrador, Family Division, 2013 NLTD(F) 28 , 340 Nfld. & P.E.I.R. 245 Appeal Heard: June 12, 2014 Judgment Rendered: January 14, 2015 Reasons for Judgment by White J.A. Concurred in by Welsh and Barry JJ.A. Counsel for the Appellant: Robert R. Regular Counsel for the Respondent: Padraig J. Mohan White J.A.:

[1] This appeal deals with aspects of the requirement for leave to appeal, the degree of deference that should be accorded todiscretionary decisions of a trial judge, and the basis for deciding success in determining a costs award. BACKGROUND [2] The appellant and the respondent began cohabitating during the fall of 2010 in a home owned exclusively by the respondentsince 2002 (the matrimonial home). The appellant had also owned her own home since 1997, which the parties planned to renovate anduse for rental income. The appellant and the respondent were married in mid-October 2010.

They separated three months later, inJanuary 2011, and the appellant returned to her home. [3] In March 2011, the appellant commenced an application for equal division of the parties’ matrimonial assets, including thematrimonial home. The respondent filed a response in which he sought a divorce and unequal division of the matrimonial assets.

In herreasons, the trial judge ordered an unequal division of the matrimonial home on a 90/10 split in favour of the respondent, whichamounted to a $15,662 payment to the appellant. [4] The trial judge concluded her decision by stating that the respondent, “being the successful party shall be entitled to party andparty costs”. The appellant seeks to appeal only the costs award. ISSUES [5] Three issues arise on this appeal:

(1) Is leave to appeal warranted in this case?

(2) Did the trial judge err in fact by stating that the appellant sought equal division of the matrimonial home?

(3) Did the trial judge err in fact and law by awarding the respondent party and party costs? STANDARD OF REVIEW [6] This Court considered an appeal from a party and party costs award in F.F.R. v. K.F., 2013 NLCA 8, 332 Nfld. & P.E.I.R. 262,noting that: [67] An award of costs is a discretionary order to which deference to the decision of the trial judge applies, absent an error in principlewhich may warrant intervention on appeal: Defence Construction

(1951) Limited v. Air-Tite Sheet Metal Limited, 2011 NLCA 67, atpara. 63. … [7] In Martin v. Martin, (1998) (NL CA), 168 Nfld. & P.E.I.R. 181 (Nfld.

C.A.), Cameron J.A. also noted thatcosts are “a discretionary matter for the trial judge.” She wrote the following about the appropriate standard of review applicable to acosts award in a family law case: [5] It is well established that in family law cases a trial judge’s decision should not be interfered with absent an error in principle, afailure to consider all relevant factors, a consideration of an irrelevant factor or a lack of factual support for the judgment. … [8] Cromwell J. set out a similar standard of review for costs awards in Sun Indalex Finance, LLC v.

United Steelworkers, 2013SCC 6, [2013] 1 S.C.R. 271, where he cited Rothstein J.’s comment in Nolan v. Kerry (Canada) Inc., 2009 SCC 39, [2009] 2 S.C.R. 678that “costs awards are quintessentially discretionary.” Cromwell J. continued to state that: [247] … Discretionary costs decisions should only be set aside on appeal if the court below “has made an error in principle or if the costsaward is plainly wrong”: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27. [9] Similarly, LeBel J. noted and found in British Columbia (Minister of Forests) v.

Okanagan Indian Band, 2003 SCC 71, [2003]3 S.C.R. 371 that: [42] The discretion of a trial court to decide whether or not to award costs has been described as unfettered and untrammeled, subjectonly to any applicable rules of court and to the need to act judicially on the facts of the case …. [The trial judge]’s decision in the presentcase was based on his judicial experience, his view of what justice required, and his assessment of the evidence; it is not to be interferedwith lightly. [10] In considering an appeal court’s role, LeBel J. wrote that: [43] … An appellate court may and should intervene where it finds that the trial judge misdirected himself as to the applicable law ormade a palpable error in his assessment of the facts. … [11] Fish J., writing for the majority in L.(H.) v.

Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401, summarized: [56] … that appellate intervention will only be warranted where the court can explain why or in what respect the impugned finding isunreasonable or unsupported by the evidence. And the reviewing court must of course be persuaded that the impugned factual finding islikely to have affected the result. (Emphasis in original.)

[12] In respect of findings of fact, this Court may review the trial judge’s findings for palpable and overriding error. As the OntarioCourt of Appeal held in Waxman v. Waxman (2004), (ON CA), 186 O.A.C. 201: [297] An “overriding” error is an error that is sufficiently significant to vitiate the challenged finding of fact. Where the challengedfinding of fact is based on a constellation of findings, the conclusion that one or more of those findings is founded on a “palpable” errordoes not automatically mean that the error is also “overriding’.

The appellant must demonstrate that the error goes to the root of thechallenged finding of fact such that the fact cannot safely stand in the face of that error: Schwartz v. Canada, (SCC),[1996] 1 S.C.R. 254 at 281. See also Ross Estate v. Hiscock, 2007 NLCA 2, 262 Nfld. & P.E.I.R. 343 and Drew v. Newfoundland and Labrador (Minister ofGovernment Services and Lands), 2006 NLCA 53, 260 Nfld. & P.E.I.R. 1. [13] This Court thus owes considerable deference to the trial judge’s costs award, including her findings of fact supporting herdiscretionary decision.

APPELLANT’S CASE ON APPEAL [14] The appellant claims that the trial judge mischaracterized her position regarding equal division. She says that the originatingapplication did not indicate whether the appellant was seeking equal or unequal division, but merely division. Further, the appellant’strial brief sought equal division or, in the alternative, division as the court deemed appropriate.

Accordingly, she says it wasinappropriate for the trial judge to conclude that the respondent had been substantially successful. [15] The appellant also contends that the respondent refused to entertain that she was entitled to a claim in any amount and she onlypursued litigation when the parties failed to reach a settlement. The appellant says the respondent took the position at trial that sheshould be awarded nothing and her entire claim should be dismissed for being grossly unjust and unconscionable.

On this basis, theappellant claims that any division, including the 10% interest in the matrimonial home that the trial judge awarded, ought to be seen as a“success” for the appellant. She argues that it was more than the appellant would have received but for the litigation. [16] As costs “go with the event” according to the measure of success enjoyed by a party, the appellant argues that the trial judgeerred in law in determining how success is to be measured and that she erred in fact and law by not finding the appellant was thesuccessful party.

The appellant asks this Court to find that she was the successful party at trial and to award party and party costs againstthe respondent. RESPONDENT’S CASE ON APPEAL [17] The respondent submits that the trial judge has not erred. He contends that the appellant always conducted herself as though shewas seeking equal division, and not unequal division, of the matrimonial assets. He claims the appellant relied primarily on thepresumption of equal sharing listed at s. 8 of the Family Law Act, RSNL 1990, c. F-2, and made no submissions for unequal division.

Hefurther states that it was open to the appellant to seek or consent to unequal division instead of relying on the principle of equal division,which she termed a necessary default position. [18] The respondent says the appellant maintained her claim for equal division throughout her written submissions, including in thewritten supplement requested by the trial judge during the trial.

He says the appellant was steadfast in seeking equal division in her oralarguments as well, with the exception of one occasion when the trial judge pressed her to name a figure for unequal division, at whichtime her counsel suggested an unequal award of $50,000, with no context or reasons. [19] With this, the respondent submits that the trial judge did not commit a palpable and overriding error in understanding theappellant’s claim or in determining that he was substantially successful in the case.

He further submits that the trial judge did not awardcosts in favour of the respondent on the sole basis that the appellant was unsuccessful, but also because of the lack of evidencesubstantiating the appellant’s claims and the trial judge’s preference for the respondent’s evidence (regarding the length of time theparties’ cohabitated and their financial contributions). The respondent argues that the trial judge had an unfettered discretion to awardcosts based on her judicial experience, what justice required, and her assessment of the evidence.

He states that the trial judge’s findingsin this regard ought not to be interfered with. DISCUSSION OF THE ISSUES AND THE LAW Leave to Appeal [20] Rule 57.02(1)(

b) of the Rules of the Supreme Court, 1986 requires leave to appeal from an order “as to costs only”. [21] In Newfoundland and Labrador (Workplace, Health, Safety and Compensation Commission) v. Mandavia, 2006 NLCA 38, 256Nfld. & P.E.I.R. 334, Wells C.J.N.L. described the test for granting leave to appeal a costs award under rule 57.02(1)(

b) as follows: [8] … the intended appellants quoted four factors, identified by the British Columbia Court of Appeal in Pierce, Van Loon v. DavroInvestments Ltd. (1994), 76 W.A.C. 309, as being matters properly to be considered on an application for leave to appeal an order as tocosts only. Those four factors are: (1) the applicant must identify a good arguable case having enough merit to warrant scrutiny by the court; (2) the issues must be important, both to the parties and in general; (3) the appeal must have practical utility; (4) the court should consider the effect of the delay in proceedings caused by the appeal.

[9] Although in a particular case there may be other factors, I agree that the foregoing would, in most cases, be the appropriate factors.… … [12] … Whether leave to appeal should be granted or refused depends on the potential answers to two threshold questions: (

i) whetherthe trial judge was exercising a conferred discretion; and (ii) if he were, whether he did so judicially. Therefore, leave to appeal shouldbe granted only if the intended appellants can establish that there is an arguable case that the trial judge was not so exercising discretion. [22] Earlier jurisprudence in this Court has held that leave to appeal a costs order was not required where the issue is whether theimpugned decision was made in excess of jurisdiction or whether the discretion to award costs had not been exercised judicially inaccordance with fixed principles: Dorset Seafoods Ltd. v.

Newfoundland (Registrar of Companies) (1988), (NL CA),69 Nfld. & P.E.I.R. 105; Sooley v. Canadian Home Insurance Co. (1994), (NL CA), 115 Nfld. & P.E.I.R. 47; Houseof Haynes (Restaurant) Ltd. v. Snook (1995), (NL CA), 134 Nfld. & P.E.I.R. 23; Portugal Cove - St. Phillips (Town)v. Willcott (1997), (NL CA), 150 Nfld. & P.E.I.R. 183. The leave requirement, on such an analysis, would onlyapply where the issue was whether the costs order was made in the exercise of discretion within the parameters of the proper applicationof the applicable legal principles. [23] Each of the foregoing four cases was decided on an

interpretation of the wording of the leave requirement when it wascontained in

section 37 of the Judicature Act, RSNL 1990, c. J-4. The provision, since repealed, then read: “An order made by a judge… as to costs only, is not subject to appeal, except by leave of the judge who has made the order” (emphasis added). One of therationales for the judicial development of the exceptions to the leave requirement was that if leave were required in such cases, the judgewho made the original order could effectively preclude appellate review of any cost order even if it was made without jurisdiction orcontrary to the applicable legal principles. See, e.g.

House of Haynes, per Marshall J.A. at paragraphs 20-23. The rationale no longerapplies because under rule 57.02(1)(b), it is this Court, not the judge who made the original order, to whom application for leave must bemade. It follows that the distinction drawn in the earlier cases is no longer relevant or needed. [24] Accordingly, I would rely on the principles enunciated in Mandavia and consider the factors set out by Wells C.J.N.L. inexercising discretion to grant or refuse leave to appeal an order as to costs only.

I would note that these factors are not exhaustive. [25] Appling these factors to the current case, I am satisfied that the issues relating to the manner in which the judge characterizedthe degree of success of the parties with respect to the ultimate outcome of the case, in the context of dealing with the issue of allegingand responding to claims for unequal division of a matrimonial home in a family dispute, are sufficiently important to them, as well as ingeneral, to justify the granting of leave.

Was Equal Division Sought? [26] The trial judge noted that “[t]he burden of proving that dividing the assets equally would be grossly unjust or unconscionablelies on the spouse who claims this” (at paragraph 35). She proceeded to state that the respondent sought unequal division “because ofthe short marriage, and the relatively short period of cohabitation prior to the marriage” (at paragraph 37).

The trial judge found theappellant was “arguing for an equal division of property … [because] the [Family Law Act] provides that, upon marriage, she is entitledto a one-half interest in the matrimonial home by operation of law, and that the [r]espondent has not established that it would be eithergrossly unjust or unconscionable to depart from that presumption” (at paragraph 38). [27] The record clearly shows that the appellant’s position throughout the proceedings, as her counsel stated at the start of the trial,was that “an unequal division is not appropriate” in this case.

The trial judge confirmed this with the appellant’s counsel and theappellant maintained this position throughout the trial. The trial judge also clarified that the respondent sought unequal division of thematrimonial home and that he proposed giving a very minor share of it to the appellant. The respondent maintained his argument infavour of unequal division throughout the trial. [28] The trial judge’s finding that the appellant sought equal division, while the respondent sought unequal division, is reasonable inthe circumstances.

There is no basis for this Court to interfere with her finding, as it is clear from the record and pleading that theappellant sought equal division. Costs [29] The general rule is that a successful party is entitled to costs (see rule 55.03(1)). In Portugal Cove, Green J.A. set out thefollowing framework for costs appeals: [10] One starts with the general principle that costs will normally follow the event: rule 55.03(1). However, because costs are alwaysin the discretion of the court (Judicature Act, s. 53; rule 55.02(1) a successful litigant can never be said to have a “right” to costs.

All heor she has, as emphasized by Morgan J.A. in Sooley at [para. 13] is, in the absence of special circumstances, a “reasonable expectation”of obtaining an order for the payment of his or her costs. The court may therefore in its discretion depart from this general principlebased on the particular circumstances of the case. [30] Green J.A. proceeded to consider awarding costs in a single-issue case; he wrote: [11] Where a case involves only one issue, resolution of which will decide the outcome, the determination of costs will usually bequite simple.

The result of the case will flow from the resolution of the dispute on the outstanding issue. Even if a plaintiff is not totallysuccessful, he or she will generally be awarded full costs if it can be said that he or she was, “substantially successful”. See, e.g. Kolonelv. Kenny (1992), (NL SC), 98 Nfld. & P.E.I.R. 1 (Nfld. T.D.) per Puddester, J. at p. 73. [31] Green J.A. continued to discuss cases involving multiple issues and stated:

[12] Where multiple issues or different factual scenarios are presented but only some are ultimately established, either by way ofclaim or defence, the question becomes more complicated. The circumstances justifying an award of costs can be viewed on a continuumwith a single issue total success by a plaintiff at one end and a single issue total success by a defendant at the other. Either of these will,absent some special circumstances, attract the principle that costs follow the event.

In between, there will be an array of differentgradations of success both in respect of an individual issue or as between different issues in a multi-issue case. [32] Green J.A. held that the trial judge’s decision not to order costs recognized the appellant’s success in Portugal Cove and “waswithin the range of discretionary options available to [the trial judge] in the circumstances” (at paragraph 20). [33] The British Columbia Court of Appeal canvassed the meaning of “substantial success” in Marquez v.

Zapiola, 2014 BCCA 35,54 B.C.L.R. (5th) 1, holding that: [16] Success in the event has been interpreted as “substantial success”: see Fotheringham v. Fotheringham, 2001 BCSC 1321, 13C.P.C. (5th) 302, leave to appeal ref’d 2002 BCCA 454 [In Chambers]. In Fotheringham, Mr.

Justice Bouck described this standard asfollows: [45] … [S]ubstantial success in an action should be decided by the trial judge looking at the various matters in dispute and weighing theirrelative importance. … [I]t is meant to serve as a rough and ready guide when [looking] at all the disputed matters globally. [17] When success is divided and no one party enjoys “substantial success” on appeal, this Court’s practice is to order that each partybears their own costs …, or to award the more successful party, as determined by their success on the more important and time-consuming issues, a portion of their costs … . (Emphasis added.) [34] There, the British Columbia Court of Appeal found that the appellant’s level of success did not rise to being “substantialsuccess”: there were ten points at issue and on appeal, the appellant had mixed success with two, was successful with one, abandonedone, and was unsuccessful on one issue while the respondent was successful with three and abandoned one issue.

After considering theimportance of the issues and the time spent on the issues during the appeal, the Court ordered that the appellant would receive half of hercosts (at paragraphs 20-21). [35] Handrigan J. assessed success of family law litigants in Bruckmuller v. Bruckmuller, 2012 NLTD(F) 15, 329 Nfld. & P.E.I.R.93. In that case, Mr. Bruckmuller had petitioned for a divorce and Mrs. Bruckmuller had claimed spousal support and an unequaldivision of the matrimonial assets, which the trial judge understood to mean she claimed “a greater share of the matrimonial assets thanher husband” (see paragraphs 2 and 35).

The trial judge held that: [45] While costs are always in the Court’s discretion, they are normally awarded to the successful party, even in family matters. Mr.Bruckmuller succeeded here: he asked only for a divorce and I granted it. Ms. Bruckmuller asked for both spousal support and anunequal division of the marital property and I rejected both claims. … [36] Ms. Bruckmuller was ordered to pay Mr. Bruckmuller’s costs on a party-and-party basis. [37] Factors other than the success of the parties may also play into a costs award.

For example, LeBel J. considered the purpose ofcosts awards in British Columbia (Minister of Forests) and found that modern costs awards are broadly intended to indemnify asuccessful party, encourage settlement, and deter frivolous actions or defences or steps in proceedings (at paragraph 22). [38] Similarly, Cameron J.A. noted in Martin that “it can be said that in considering whether there should be an award of costs, thereare factors taken into consideration in family matters which are not taken into consideration in most civil litigation” (at paragraph 71). She cited Andrews v.

Andrews (1980), (ON CA), 120 D.L.R. (3d) 252 (Ont. C.A.) in support of also considering thefollowing factors: i. The success of the parties; ii. The conduct of the parties prior to the commencement of the litigation, including such issues as support, and,without cause, refusal to grant access; iii. The conduct of the parties during the litigation; and iv.

The income and assets of each party, touching upon their ability to bear their own costs and the effect of anaward of costs on the ability of the party to meet the obligations imposed by the judgment. [39] Cameron J.A. found that settlement offers must also be considered, as well as the novelty of the issues (see paragraphs 72-74). [40] This approach is consistent with rule 56A, which applies to family law matters, and provides that the court has discretion todeny costs to a successful party who behaved unreasonably or in bad faith (see rule 56A.26(2)-(3)).

ANALYSIS [41] In this case, the trial consisted of one primary issue: whether or not the appellant ought to receive equal division of thematrimonial home as the appellant posited. Determining success, and substantial success, is not an exact science: as endorsed by theBritish Columbia Court of Appeal in Marquez, “substantial success” is a “rough and ready guide” to ordering costs. [42] Here, the respondent argued for unequal division of the matrimonial home. He sought that a very minor share of the homewould be awarded to the appellant.

Meanwhile, the appellant maintained a claim for equal division of the matrimonial home throughoutthe trial. The trial judge divided the matrimonial home based on a 90/10 split favouring of the

respondent. Put differently, the respondent asked for unequal division and it was granted; the appellant asked for equal division and her claim was denied. The trial judge also preferred the respondent’s evidence. [ 43 ] Based on the matters in dispute, the importance of the issues, and the time spent by each of the parties on the various issues, it was reasonable for the trial judge to conclude that the respondent was substantially successful at trial and entitled to costs.

It has not been shown that the trial judge in awarding costs made an error in principle and, accordingly, there is no basis for this Court to interfere with her exercise of discretion. In these circumstances, there is no reason to explore mixed success or other factors that may inform a costs award. [ 44 ] I would grant leave to appeal and dismiss the appeal with costs to the respondent based on Column 3 of the scale. _________________________ C. W. White J.A. I Concur: _________________________ B. G. Welsh J.A. I Concur: _________________________ L. D. Barry J.A.