Docket: CACV2267 Pamela Jean Phipps Appellant - v. -, 2013 SKCA 49

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2013 SKCA 49 Date: 2013-05-03 Between: Docket: CACV2267 Pamela Jean Phipps Appellant - and - John Robert Phipps Respondent Coram: Klebuc C.J.S. and Richards and Caldwell JJ.A. Counsel: Mervin C. Phillips and Leane E.G. Phillips, for the appellant W. Timothy Stodalka, for the respondent Appeal: From: 2012 SKQB 166 , 2012 SKQB 478 Heard: January 15, 2013 Disposition: Dismissed Written Reasons: May 3, 2013 By: The Honourable Mr. Justice Caldwell

In Concurrence: The Honourable Chief Justice Klebuc The Honourable Mr. Justice Richards Caldwell J.A. [1] The appellant, Pamela Jean Phipps appeals from the trial judge’s decision ordering an equal division of family property pursuantto ss. 21 and 22 of The Family Property Act, S.S. 1997, c. F-6.3 (see: 2012 SKQB 166) and that she pay the respondent his taxable costs(see: 2012 SKQB 478). She puts forward five grounds for setting aside the trial decision in this respect and one ground related to theaward of costs against her.

For the reasons below, I would dismiss the whole of the appeal. [2] The appeal engages ss. 20, 21, 22, 25 and 28 of The Family Property Act and, tangentially, the decision in Penteluk v. PentelukEstate (1992), (SK CA), 100 Sask. R. 178, where this Court held that the fact one spouse in a shorter-term marriageowned the family home prior to the marriage is not an “extraordinary circumstance” within the meaning of s. 22(1) of The FamilyProperty Act. [3] The factual background here is relatively straightforward.

Ms Phipps, a widow, and John Robert Phipps, a divorcé, cohabited fora number of years and became spouses for the purposes of The Family Property Act. After six years their relationship broke down andMs Phipps sought an unequal division of family property and of the family home. The family home is the parties’ only asset of value. Ithad been Ms Phipps’s home prior to her relationship with Mr. Phipps and at the commencement of that relationship it had been subjectonly to a $20,000 mortgage.

It is now subject to a $95,000 mortgage, having been refinanced on more than one occasion to pay off theparties’ respective debts. [4] To support her claim for unequal division, Ms Phipps asserted, among other things, that Mr. Phipps had dissipated familyproperty during their cohabitation. For his part, Mr. Phipps stated his opposition to an unequal division of family property, except inrespect of certain property which he said he had owned prior to the marriage. The trial was not otherwise complicated by any claim forspousal support and there were no children of the marriage. Mr.

Phipps offered to settle his claim to the property family for a $70,000equalisation payment, which offer remained outstanding throughout trial. [5] After trial, the judge ordered an equal division of family property, subject only to attendant liabilities and certain exemptionswhich had been proven by each party. In the result, the trial judge ordered Ms Phipps to pay $89,255.57 to Mr. Phipps by way ofequalisation. [6] In this Court, Ms Phipps essentially reasserted her claim to an unequal division of family property on the basis that the trial judgehad erred after trial in rejecting her claim by: (

a) failing to render a finding of fact to the effect that the parties had agreed in 2005 not to incur further debt; (

b) failing to find Mr. Phipps had breached the alleged 2005 agreement as to debt and that this constituted “dissipation” or“squandering” under The Family Property Act; (

c) failing to render a determination as to the impact on the equal division of family property of the sale of Mr. Phipps’s formerhome at less than fair market value; (

d) failing to determine whether the discoverability principle applies to the two year limitation period set out in s. 28 of The FamilyProperty Act; and (

e) failing to consider equitable factors other than dissipation in relation to the debts of the parties in the determination of whether toaward an unequal division of property. She also claimed the trial judge had erred by awarding costs against her given the foregoing principal allegations of error and an “overallfairness analysis”. [7] Given the nature of these grounds of appeal and the argument which came before us, I am compelled at the outset to underscorethat an appellate court cannot simply revisit the evidence and make its own findings of fact as it pleases.

The findings of fact made by atrial judge are not open to disturbance by an appellate court unless they result from a palpable and overriding error or are clearly wrong,unreasonable or unsupported by the evidence: Gallop v. Mulatz, 2008 SKCA 29, [2008] 5 W.W.R. 231 at para. 33. I underline this pointbecause the first five of the foregoing grounds of appeal are each predicated, to no small degree, on a supposition that this Court will,firstly: (

a) make afresh certain findings of fact on the basis of evidence which was rejected by the trial judge; and (

b) reject certainfindings of fact made by the trial judge on the basis of the evidence which was before her; and then, secondly, apply the law afresh to thenew set of facts as found by this Court. In short then, the fetter that is the appellate standard of review with respect to questions of factpresents a significant impediment to the success of the appeal. [8] The provisions of The Family Property Act relevant in this appeal are found in Parts IV and V of that Act: Purpose

20 The purpose of this Act, and in particular of this Part, is to recognize that child care, household management and financial provision are the joint and mutual responsibilities of spouses, and that inherent in the spousal relationship there is joint contribution, whether financial or otherwise, by the spouses to the assumption of these responsibilities that entitles each spouse to an equal distribution of the family property, subject to the exceptions, exemptions and equitable considerations mentioned in this Act.

Distribution of family property 21(1) On application by a spouse for the distribution of family property, the court shall, subject to any exceptions, exemptions and equitable considerations mentioned in this Act, order that the family property or its value be distributed equally between the spouses.

(2) Subject to

section 22 , where, having regard to the matters mentioned in subsection (3), the court is satisfied that it would be unfair and inequitable to make an equal distribution of family property or its value, the court may: (

a) refuse to order any distribution; (

b) order that all the family property or its value be vested in one spouse; or (

c) make any other order that it considers fair and equitable.

(3) For the purposes of subsection (2), the court shall have regard to the following: (

a) any written agreement between the spouses or between one or both spouses and a third party; (

b) the length of time that the spouses have cohabited; (

c) the duration of the period during which the spouses have lived separate and apart; (

d) the date when the family property was acquired; (

e) the contribution, whether financial or in some other form, made directly or indirectly by a third party on behalf of a spouse to the acquisition, disposition, operation, management or use of the family property; (

f) any direct or indirect contribution made by one spouse to the career or career potential of the other spouse; (

g) the extent to which the financial means and earning capacity of each spouse have been affected by the responsibilities and other circumstances of the spousal relationship; (

h) the fact that a spouse has made: (

i) a substantial gift of property to a third party; or (ii) a transfer of property to a third party other than a bona fide purchaser for value; (

i) a previous distribution of family property between the spouses by gift or agreement or pursuant to an order of any court of competent jurisdiction made before or after the coming into force of this Act or The Miscellaneous Statutes (Domestic Relations) Amendment Act, 2001 (No. 2) ; (

j) a tax liability that may be incurred by a spouse as a result of the transfer or sale of family property or any order made by the court; (

k) the fact that a spouse has dissipated family property; (

l) subject to subsection 30(3), any benefit received or receivable by the surviving spouse as a result of the death of his or her spouse; (

m) any maintenance payments payable for the support of a child; (

n) interests of third parties in the family property; (

o) any debts or liabilities of a spouse, including debts paid during the course of the spousal relationship; (

p) the value of family property situated outside Saskatchewan; [and] (

q) any other relevant fact or circumstance. Distribution of family home 22(1) Where a family home is the subject of an application for an order pursuant to subsection 21(1), the court, having regard to any tax liability, encumbrance or other debt or liability pertaining to the family home, shall distribute the family home or its value equally between the spouses, except where the court is satisfied that it would be: (

a) unfair and inequitable to do so, having regard only to any extraordinary circumstance; or … …

Immoral or improper conduct 25 For the purposes of making any determination pursuant to

section 21 , 22 or 23, no court shall have regard to immoral or improper conduct on the part of a spouse unless that conduct amounts to dissipation or has otherwise been substantially detrimental to the financial standing of one or both spouses. … Return of gift of property when insufficient consideration 28(1) Where an application has been made for a family property order, the court has the powers conferred by subsection (2) where it is satisfied that: (

a) a spouse has, before or after the coming into force of this Act or The Miscellaneous Statutes (Domestic Relations) Amendment Act, 2001 (No. 2) : (

i) dissipated family property in whole or in part; (ii) transferred family property to a third person for less than adequate consideration with the intention of defeating a claim that the other spouse may have pursuant to this Act or The Matrimonial Property Act ; or (iii) without the consent of the other spouse, made a substantial gift of family property to a third person; and (

b) the dissipation occurred, or the transfer or gift was made, not more than two years before the day on which either spouse commenced the application for the family property order.

(2) For the purposes of subsection (1), the court may do any of the following: (

a) when the court makes a family property order, consider the family property dissipated, transferred or gifted to be part of the share of the spouse who dissipated, transferred or gifted the property; (

b) subject to any terms and conditions that the court thinks fit, order the donee or, subject to subsection (3), the transferee to pay or transfer all or part of the family property to a spouse; (

c) give judgment in favour of a spouse against the donee or, subject to subsection (3), the transferee for a sum not exceeding the amount by which the share of that spouse pursuant to the family property order is reduced as a result of the transfer or gift. [ 9 ] Having regard for the evidence before her and the applicable statutory provisions, and with regard for the reasons given by this Court in Penteluk and in Phillips v.

Phillips , 2010 SKCA 117 , 324 D.L.R. (4th) 534, the trial judge properly rejected Ms Phipps’s arguments to the effect that the fact she owned the family home prior to the marriage and had paid a greater portion of the household and living expenses constituted “extraordinary circumstances” within the meaning of s. 22(1) of The Family Property Act . In her

summary, at para. 106, the trial judge correctly found “nothing in these circumstances to be extraordinary” and then appropriately ruled that the family home was “subject to equal division subject to a consideration of any outstanding liabilities within the meaning of s. 22(1).” The trial judge also rejected Ms Phipps’s alternative assertions that Mr. Phipps’s joint ownership of the family home was the subject of a resulting trust or that the family home was itself trust property.

The trial judge found no evidence to contradict the conclusion that each spouse was intended to have a one-half beneficial interest in the family home on severance of the joint tenancy. The trial judge further found no evidence to support Ms Phipps’s claim that the house was trust property, and therefore not subject to division, by reason that Ms Phipps had used the proceeds of insurance on her first husband’s life to acquire the family home. While Ms Phipps has not appealed from any of these findings, they are material to the analysis which follows. [ 10 ] When addressing the specific allegation that Mr.

Phipps had dissipated family property within the meaning of s. 25 of The Family Property Act , the trial judge was not satisfied he had done so. In that respect, she had this to say: 6. Should any of the property which is subject to distribution not be distributed equally, having regard to the equitable considerations mentioned in the Act ? A. Pamela’s claims for equitable relief 1. Dissipation (gifts to adult child) [132] Pamela asserts that at the time of the marriage, John still owned an interest in a house on Rink Avenue. John and his first wife sold this house to their son in October of 2003.

John’s share of the net proceeds was $36,883.00. He used $35,500.00 of this money to purchase the truck he is currently driving. [133] John testified that he and his first wife sold the Rink Avenue house to their son Robert for $101,000.00. The house was fully furnished. John acknowledged this was a really good deal for their son. He estimated the actual value of the house at $149,000.00 to $159,000.00. 2.

Dissipation during the marriage by John [134] Pamela asserts that John spent money on many items without her knowledge and consent which were for his own personal enjoyment and use and not for their joint benefit.

[135] John testified that he did not drink or gamble, but that he did smoke during their spousal relationship. [136] The balance on John’s Canadian Tire Mastercard account was $1,550.98 in May of 2007 and $3,910.78 in May of 2009. [137] The balance on John’s Aerogold Visa card account was $9,670.92 in May of 2007 and $29,436.31 in May of 2009. [138] The balance on John’s CIBC Personal Line of Credit May 9, 2007 was $8,425.96 and $13,866.31 in May of 2009. [139] John was asked to describe in a general way how he spent the money leading to this level of debt. None of his answers are particularly remarkable.

He described the Canadian Tire Mastercard debt as comprising expenditures for gas and general expenditures at Walmart. He described the Aerogold Visa card debt as including vehicle insurance, home insurance, licence places for the truck and the car and a trip to Edmonton for Pamela’s surgery. [140]

Section 2 of the Act defines dissipation in the following way: “dissipate” means to jeopardize the financial security of a household by the squandering of property; [141] In Phillips , supra Klebuc C.J.S. held at para. 14: [14] for dissipation to exist a spouse must have “squandered” a significant portion of the family property and the squandering must have jeopardized the financial security of the family unit. In other words, it must put the financial security of the spouses at risk. [142] It would appear that both parties were “spenders”. In 2003, the mortgage was used to pay their credit card debts.

In 2005, both had once again accumulated personal debt. And a review of the financial circumstances of both parties at the time of the petition and at the time of the trial reflects that their expenses once again exceeded their income. [143] However, I am not satisfied that this placed their financial security at risk, nor that John’s activities were significantly more egregious than Pamela’s.

As stated earlier, Pamela asserts that she spent more on the household than John did — but I find that he also contributed to the payment of household expenses and utilities and that he did purchase food for the home. [144] I am not satisfied that there should be an unequal division of the family property on the basis of dissipation by John. [ 11 ] It falls to Ms Phipps to point to where in these reasons the trial judge committed a palpable and overriding error of fact or made a finding of fact that is clearly wrong, unreasonable or unsupported by the evidence.

In this respect, Ms Phipps chiefly says the trial judge failed to find the parties had entered into an agreement in 2005 not to incur further debt. There is certainly no rejection of the existence of this alleged agreement or even any mention of this issue in the trial judge’s decision. Mr. Phipps submits this is because Ms Phipps did not raise the existence of this supposed agreement as an issue at trial. Mr. Phipps’s assertion is supported by the transcript of evidence which contains absolutely no reference to this supposed agreement.

In argument before us, Ms Phipps solely and somewhat obliquely pointed to an, at best, equivocal statement made by Mr. Phipps under cross-examination as the evidence supporting the existence of such an agreement between the parties. In the most damning of his testimony, he said (at p. T426): Q What discussion did you have after the refinance of the debt about future debt arrangements? A We didn’t have any discussions about future debt arrangements because we didn’t think we were going to have any future debts. Q Did you – you knew that Ms. Phipps had cut up her credit cards? A Yes, I did.

Q And you’re indicating, given that – indicating to the Court that given that event, that there was no discussion wherein Ms. Phipps asked you not to incur debt? A Not to incur debt? Q Yes. That you were subsequently going to seek from her through the house? A We – we both talked about not incurring any more debt. Q Can you describe that to the Court? A (No audible response) Q What was your discussions about not incurring any more debt? A Oh, I would probably think that we said that, “Now, that we’re out of debt, let’s try not to get back into debt again.

Let’s just try to keep everything going as it should go.” Okay? [ 12 ] In my opinion, this is scant and dubious evidence upon which to find that the trial judge made the palpable and overriding error of failing to find that a binding, interspousal agreement not to incur debt had been reached between the parties in 2005; especially given Ms Phipps’s own testimony contains no reference whatsoever to such an agreement. In fact, in her direct examination, Ms Phipps testified seemingly to the contrary, and quite tellingly, at p. T63:

Q … I understand John had approached you in 2009 with a request to refinance; is that correct? A That’s correct, yes. Q Can you, please, explain what impact that had? A I was getting in debt again, but very little. I had a $10,000 line of credit, and $5,000 on a MasterCard. And I knew John was stressing over his debts, also. And he told me that he had over $60,000 on his credit cards again, and that we needed to take out another mortgage on the home to consolidate our debts one more time.

And I did agree with it to begin with, but the more I thought about it, the more it scared me to take more mortgage out on my home, and I would have nothing left of my investments by the time we were done paying off this mortgage. It was going to be a hundred – he wanted another – consolidate another $80,000 on the mortgage. He actually made an appointment with the bank, and we were going to go on the Monday morning, but I backed out of that appointment, and told John that I was not going to go ahead with the new mortgage.

And that’s – at that time, I sought assistance with my financial advisor on the matter of my debts and what was happening. And he suggested I speak with a lawyer about my debts and the situation -- MR. STODALKA: That’s hearsay. THE WITNESS: -- with the -- MR. STODALKA: -- My Lady. THE WITNESS: -- extra mortgage. [ 13 ] Ms Phipps can point to few other places in the transcript of evidence, and none better than the above-referenced testimony of Mr. Phipps, to support her allegation of error in this respect.

Regardless, on the whole of it, there was simply no evidence before the trial judge of the terms and conditions of the supposed 2005 agreement, let alone evidence of any intention by both parties to be bound by them. As such, it suffices to say, I cannot put my finger on a single crucial flaw, fallacy or mistake made by the trial judge in support of this ground of appeal: H.L. v. Canada (Attorney General) , 2005 SCC 25 , [2005] 1 S.C.R. 401, at para. 70 .

As the record simply does not admit of any error in this respect, let alone a palpable and overriding one, I would dismiss the first ground of appeal. [ 14 ] It follows that the second ground of appeal must also fail as the trial judge could not have erred by failing to find Mr. Phipps had breached a non-existent agreement or by failing to consider whether that supposed breach constituted dissipation of family property under The Family Property Act . [ 15 ] As to the third ground of appeal, I conclude the trial judge did not err by ignoring the less-than-fair-market-value sale of Mr.

Phipps’s former home in her determination of whether to order an unequal division of family property. This fact is, quite simply, not an extraordinary circumstance within the meaning of s. 22(1) of The Family Property Act . Moreover, the sale took place outside the two- year limitation period set out in s. 28 of The Family Property Act (see: Phillips ) and is, therefore, outside consideration under s. 21(1).

I would dismiss this ground. [ 16 ] The fourth ground of appeal as to the judge’s failure to consider the principle of discoverability is wholly without merit; first, because Ms Phipps’s testimony clearly indicates she was well aware of the acts she alleges constitute dissipation of family property by Mr. Phipps or those acts were reasonably discoverable by her; and, second, because this ground too is predicated on the existence of the supposed 2005 agreement not to incur debt.

Put simply, the facts of this matter did not call for the trial judge to determine whether the principle of discoverability applies to the limitation period set forth in s. 28 of The Family Property Act . I would dismiss this ground. [ 17 ] The final principal ground of appeal is a broad allegation that the trial judge failed to direct her attention to the equitable factors, other than dissipation, set out in s. 21 of The Family Property Act in relation to the debts of the parties.

In this respect, Ms Phipps says the trial judge should have addressed s. 21(3)(b) - duration of cohabitation, s. 21(3)(d) - date family property was acquired, s. 21(3)(k) - fact a spouse has dissipated family property, s. 21(3)(o) - debts or liabilities of a spouse, including those paid during the relationship, and s. 21(3)(q) - any other relevant fact or circumstance. She further says the trial judge should have given “special regard” to the following circumstances: (

i) the debts of Mr. Phipps paid off throughout the six-year relationship of the parties by the refinancing of the family home, (ii) Ms Phipps voluntarily paid-off some of Mr. Phipps’s debts prior to marriage, (iii) Ms Phipps transferred the family home into joint names “without consideration”, and (iv) Mr. Phipps and his first spouse sold their family home to their son at less than fair market value. As can be seen, this ground substantively reworks earlier unsuccessful arguments or collaterally challenges rulings made by the trial judge from which Ms Phipps has not appealed.

Regardless, having considered the submissions, I am in no way persuaded the trial judge failed to consider all of the relevant factors enumerated under s. 21(3) of The Family Property Act . While she may not have specifically set out each s. 21(3) factor which she found to be relevant, she was certainly alive to the factual and equitable matters raised by Ms Phipps and undoubtedly aware of the scope of s. 21. [ 18 ] Moreover, in that this argument supports an unequal division of the family home on the basis of the equitable factors set out in s. 21(3) , it is clearly offside. Section 22(1) (

a) provides that an unequal distribution of the family home or its value may occur where it would be unfair or inequitable to order an equal distribution “having regard only to any extraordinary circumstance.” As such, when the trial judge determined, at para. 106, that nothing in the circumstances raised by Ms Phipps was “extraordinary”, she correctly ended the inquiry. I would, therefore, dismiss this fifth ground of appeal. [ 19 ] I turn now to the final ground of appeal which stands apart from the first five as it arises from an award of costs against Ms Phipps made subsequent to the trial decision.

In her later-issued reasons ( 2012 SKQB 478 ), the trial judge awarded Mr. Phipps his costs on Column 3 of

Schedule I “B” to November 23, 2011 and double costs thereafter, the latter on the basis that he had offered to settle the property claim for a lesser amount than he received after trial (see: Queens Bench Rule 184B(1)). Ms Phipps puts three questions to the Court under this ground of appeal:

(

a) Should the trial judge have awarded costs while this appeal was pending? (

b) If not, and Ms Phipps is successful on appeal, what costs, if any, should be awarded to Mr. Phipps? (

c) Regardless, does interest accrue on the costs award while the appeal is pending? [ 20 ] With respect to the first question, Ms Phipps submits the award of costs was premature by reason of Rule 554 of The Queen’s Bench Rules , which provides that “[t]he costs of an appeal, and of the proceeding appealed from, shall follow the event of the appeal.” Although she noted an absence of case law, Ms Phipps says Rule 554(1) precludes an award of costs being made in the face of an appeal. This argument is without merit.

Rule 554(1) applies only in the context of an appeal brought before the Court of Queen’s Bench qua appellate court against the decision of an inferior tribunal. Rule 554(1) could not, as Ms Phipps’s

interpretation suggests of it, bind the hands of a panel of this Court with respect to the costs of an appeal which came before this Court. As such, Rule 554(1) has no bearing on the trial judge’s decision to award costs at first instance. [ 21 ] Given that I would dismiss Ms Phipps’s appeal from the trial judge’s decision with respect to the division of family property, I find no reason to answer the second question Ms Phipps put to the Court under the costs appeal. The third question, however, remains relevant.

And, in answer to it, I find that interest does accrue on a costs award while the decision under which the costs were awarded is subject to an appeal. [ 22 ] I will first address the issue of whether interest accrues on costs awards. Unlike other jurisdictions in which statute law expressly provides for interest to accrue on awards of costs, there is no statutory provision to that effect in Saskatchewan. Nevertheless, the same result is achieved through caselaw and a number of statutory provisions and rules of court. I start with the premise that an award of costs forms part of the judgment of the court.

Although not directly on point, this proposition is found in Po v. McCarthy (1911), 5 Sask. L.R. 17 (Sask. Sup. Ct., en banc ), where Newlands J. held as follows at pp. 19-20: As to the counterclaim being double, the learned Judge was of opinion that it contained in the one paragraph a claim on a judgment in the District Court and one for costs to be taxed in the Supreme Court; but a perusal of the paragraph shews that it does not really contain two causes of action, but only one, the fault being that it is badly drawn by the pleader.

What is set out is a judgment in the District Court affirmed on appeal in the Supreme Court, with costs, which costs were taxed. When the judgment was affirmed by the Supreme Court and the costs taxed, it became, in my opinion, one judgment for the full amount of both judgment and costs, and therefore, only one cause of action. [ 23 ] Given that premise, there are a number of statutory provisions and rules of court which provide good indication that an award of costs bears interest. Here, I speak of: (

a) The Executions Act , R.S.S. 1978, c. E-12, s. 30 (now repealed), which provided that interest accrued on all judgment debts: Judgment debts to carry interest 30 Every judgment debt shall carry interest at the rate of five per cent per annum from the time of entering the judgment until the judgment is satisfied, and interest at the same rate may be levied under a writ of execution on the judgment. (

b) The Enforcement of Money Judgments Act , S.S. 2010, E-9.22, ss. 2(1)(aa) and 113, which replace the foregoing repealed

section of The Executions Act , and provide: 2(1)(aa) “judgment” means a judgment that, in whole or in part, requires a person to pay money, including: (

i) a subsisting judgment of the [Court of Queen’s Bench], the Court of Appeal or the Supreme Court of Canada; (ii) a subsisting order, decree, certificate or other right for the payment of money that may be enforced as, or in the same manner as, a judgment of the [Court of Queen’s Bench]; and … … Interest on judgments 113(1) Every judgment shall carry interest at the prescribed rate from the time of entry of the judgment until the judgment is satisfied.

(2) For the purposes of enforcing a judgment pursuant to this Act, interest at the rate mentioned in subsection (1) is included in the judgment. (

c) The Queen’s Bench Act, 1998 , S.S. 1998, c. Q-1.01, s. 77, which addresses the time that interest begins to accrue on a judgment debt but also addresses the effect of an appeal on the accrual of interest in these terms: Interest on judgments 77 Unless otherwise ordered, a verdict or judgment bears interest from the time the verdict is rendered or judgment is given, notwithstanding that entry of the judgment is suspended by any proceeding in the action, including an appeal. (

d) The Court of Appeal Rules (Civil), Rule 15(4), which sets forth an automatic stay of proceedings in certain circumstances, but limits the effect of the stay in the following terms: 15(4) Where the execution of a judgment or order is stayed pending an appeal, all further proceedings in the action, other than the issue

of the judgment and the taxation of costs under the judgment, are stayed unless otherwise ordered. [24] On the basis of the foregoing it is clear to me that interest must accrue on an award of costs made by a judge of the Court ofQueen’s Bench. If awarded in the decision after trial, the interest would accrue from the date of pronouncement of the judgment andcontinue to accrue thereafter notwithstanding that the judgment under which the costs were awarded may be subject to an appeal to thisCourt.

The point-form analysis is as follows: judgments carry interest (The Executions Act, s. 30; and The Enforcement of MoneyJudgments Act, s. 113); a judgment includes an award of costs (Po v.

McCarthy and The Enforcement of Money Judgments Act, s. 2(1)(aa)); interest begins to run from the time the judgment is rendered or given, notwithstanding that its entry is suspended or an appeal islaunched (The Queen’s Bench Act, 1998, s. 77); and the issuance of a judgment and the taxation of costs thereunder is not automaticallystayed by an appeal therefrom (Court of Appeal Rule 15(4)). [25] This would seem to answer the question put by Ms Phipps; however, the procedural facts of this matter leave open a secondaryquestion: What effect does the bifurcation of the judgment on the merits and the award of costs have on the accrual of interest on thecosts award? [26] Mr.

Phipps suggests that we follow the decision in Millott Estate et al. v. Reinhard et al., 2003 ABQB 147, 347 A.R. 228, wherehe says a similar question was put to the court. There, the court had trifurcated its judgment by ruling separately on two points of law andthen later ruling on the issue of costs. The court’s decision on costs left open the issue of whether the costs award attracted statutoryinterest and, if so, when it began to accrue.

When these issues were raised with the court, the court reviewed the relevant legislation andrules of court and said, in its fourth decision: [6] The judgment of the Court of Appeal in Miller (Ed) Sales & Rentals Ltd. v. Caterpillar Tractor Co. et al., [1998] A.J. No. 404;1998 ABCA 118 , 216 A.R. 304; 175 W.A.C. 304, is also of assistance. The judgment in this case states in paragraph 19 that: 19 The remaining question is when post-judgment interest should start to run on the Queen’s Bench costs.

Rule 520 says that interestruns from the date of trial judgment on a new or amended appellate judgment for a sum of money. If that does not apply directly to acosts judgment, then it would have to apply by close analogy under Rule 4. The general principle of appeals is that the appeal court givesthe judgment which the trial judge should have given. Indeed, it is certified to the Clerk and enforced as a Queen’s Bench judgment:Rule 528(2). … We repeat that the interest in question is on Queen’s Bench costs. And of course the plaintiff who is to pay the costs hashad the use of the money in the interval.

And post-judgment interest rates are very low now anyway; they are far lower than a businesscould earn on its capital. So post-judgment interest on the Queen’s Bench costs should run from the date of pronouncement of theQueen’s Bench judgment. It is also of interest that the court in [Madge v. Meyer (2002), 2002 ABCA 73 , 303 A.R. 41 (C.A.)] went on to note that theAppellants in that case had had the use of the costs in the meantime. [7] The clear implications from all of the quotations set out above is that interest on costs should run from the date ofpronouncement of a Queen’s Bench judgment.

That is logical given the statements that judgment interest forms part of the judgmentdebt. That being the case, it is also logical that interest on costs should run from the same date as the date on which interest runs on theremainder of the judgment debt of which the costs are a part which, unless otherwise directed, will be the date of pronouncement of thejudgment.

There is no reason in this case to direct otherwise, if indeed it is open to the court to give such a direction. [27] Given that the relevant legislation and rules of court in this jurisdiction are of the same thrust as those of Alberta, the logic evidentto the court in the Millott Estate decision should be similarly compelling in this jurisdiction. The primary principle there being that aparty’s liability to pay trial costs to another party arises under the judgment on the merits after trial when that judgment is “with costs”(but see: United States v. Yemec (2007), (ON SCDC), 85 O.R. (3d) 751 (Ont. Div.

Ct.), where the court foundotherwise). The fact that the taking out of the judgment awarding costs is delayed or that the award is subject to taxation has no effect onthe liability of a party to pay such costs. Furthermore, while the prescribed 5% interest rate may be more attractive in today’s investmentclimate than that described in Millott Estate, the underlying principle remains sound: the party liable to pay costs will have had the use ofthe funds from the date the liability arose to the date costs are paid.

As such, the approach of starting the interest clock at the date ofjudgment on the merits “with costs” is rational as it recognises that the party who bears the liability to pay costs should have aneconomic incentive to address the time value of money. Moreover, absent some unusual circumstance, I fail to see why a successfulparty should have its award of costs eroded by delay, whether arising by reason of appeal or taxation or both. [28] However, Millott Estate may be distinguished from the facts of this matter.

There, the court went on, after the passages quotedabove, to say: [8] It is also relevant that as was stated in paragraph 11 of the judgment of Blair J., in LaPlante (Guardian ad litem of) v. LaPlante,[1996] B.C.J.

No. 277 (S.C.), “the fact that the amount of the costs was yet to be determined as of [the date of pronouncement of thejudgment obtained by the plaintiff] does not detract from the defendant’s liability to pay costs as of the judgment date.” It would followthat each of the earlier Reasons for Judgment published in the case at bar gave rise to a separate obligation to pay costs as of the date ofthe judgment, even if the amount of the costs involved had not been determined as of that date. [emphasis added] Therefore, notwithstanding the absence of an express declaration that costs were payable award, for the purpose of calculating accrual ofinterest on the costs awards, the court treated its two earlier decisions as judgments “with costs”.

I take this to mean the court treated theplaintiff’s success in the matter (which was a motor vehicle accident negligence claim) as entitling the plaintiff to an award of costs eventhough none was expressly made in either of the earlier sets of reasons. [29] Here, however, the judgment on the merits is not obviously a “with costs” judgment; rather the trial judge merely granted theparties leave to speak to her on the issue of costs. Furthermore, in that the case at bar is a family law matter, an award of costs cannot be

considered to necessarily follow on success on the merits. Put another way, the trial judge had full discretion respecting the costs of and incidental to the proceedings before her. She was entitled to make the direction or order respecting costs that she considered appropriate or to make no direction or order at all. Moreover, she was not precluded from delaying the exercise of her discretion as and when she did by any statute, regulation or rule.

See: The Queen’s Bench Rules , Rules 545 and 608; and s. 56 of The Family Property Act . [ 30 ] In practical terms then, an award of costs is a discretionary matter and the judge here did not exercise that discretion at the time of her judgment on the merits; rather, she reserved the exercise of her discretion to do so to a later date. As such, it is difficult for me to conclude that Ms Phipps’s liability to pay costs to Mr. Phipps in fact arose at the time of the judgment on the merits.

I would have concluded otherwise if the trial judge had indicated she had rendered her judgment “with costs” and simply granted the parties leave to make an application with respect to double costs or other special costs. In such circumstances the Millott Estate logic would prevail; but, barring that, it seems to me Ms Phipps’s liability to pay costs to Mr. Phipps could not have arisen earlier than November 16, 2012, when the trial judge issued her reasons on the issue of costs.

This conclusion too logically fits within the framework of rules set out by the applicable legislation and rules of court. [ 31 ] Of course, this matter is yet further complicated by the circumstances of Mr. Phipps’s application for his costs pursuant to Rules 184C and 545 of The Queen’s Bench Rules . Mr. Phipps served and filed his application on May 23, 2012, by which time Ms Phipps had already filed her notice of appeal of the April 12, 2012 judgment on the merits. It appears one of Ms Phipps’s arguments in response to Mr.

Phipps’s application for costs was to say double costs should not be awarded because she had grounds to appeal the judgment. This argument was without merit; but, it nevertheless seems to have prompted the trial judge to further delay her award of costs to November 16, 2012. I say this because in the course of her order for costs she wrote: [12] I have delayed my decision on this application for some time in the event that the appeal might be heard and disposed of.

However as that has not occurred, I make an order that Pamela Phipps pay to John Phipps his costs assessed in accordance with the Rules including November 23, 2011. After that date Pamela Phipps shall be assessed double costs. For the purposes of assessing costs, Column 3 of

Schedule I “B” shall be used. The bill of costs filed is referred to the Local Registrar for taxation. One can only wonder, then, at what earlier date the judge might have made her order as to costs. Albeit that the prejudice attendant on the approximately six month delay falls squarely at the feet of Mr.

Phipps, it does not give rise to a remedy on an appeal by Ms Phipps. [ 32 ] I conclude, therefore, in the particular circumstances of this case, interest began to accrue on the award of costs from the date of the trial judge’s judgment on the issue of costs, being November 16, 2012, and, to forestall any further dispute, that interest has accrued without interruption therefrom notwithstanding that the liquidated amount of the costs award was not ascertained at that time. [ 33 ] The respondent shall have his costs in the usual manner.

DATED at the City of Regina, in the Province of Saskatchewan, this 3 rd day of May, A.D. 2013. “Caldwell J.A.” ________ Caldwell J.A. I concur. “Caldwell J.A.” For Klebuc C.J.S. I concur. “Richards J.A.” Richards J.A.