E.B.G. v. S.M.B.

2017 BCSC 1783 E.B.G. v. S.M.B. IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: E.B.G. v. S.M.B., 2017 BCSC 1783 Date: 20171005 Docket: 07 3121 Registry: Victoria Between: E.B.G. Claimant And S.M.B. Respondent Before: The Honourable Mr. Justice Pearlman Reasons for Judgment - Costs Counsel for Claimant: K. Berge, Q.C. Counsel for Respondent M. Guy Claimant's written submissions on costs: March 17 and April 19, 2017 Respondent's written submissions on costs: April 4, 2017 Place and Date of Judgment: Victoria, B.C. October 5, 2017 Table of Contents INTRODUCTION. 3 BACKGROUND: RESULTS AT TRIAL. 3 Claimant's Position at Trial 3 Respondent's Position at Trial 5 Results on Variation of Parenting Arrangements. 5 Results on Variation of Child and Spousal Support 8 positions of the parties. 10 Claimant's Position. 10 Respondent's Position. 11 DISCUSSION AND ANALYSIS. 11 Success in the Litigation. 11 CONCLUSION. 18 INTRODUCTION [1] At the trial of this family law proceeding, the claimant, E.B.G., applied to vary the terms of the consent order pronounced by the Honourable Madam Justice Dorgan on January 14, 2010 (the "Consent Order") relating to child support and spousal support, both prospective retroactive. She also sought variations to the custodial and parenting arrangements for the two children of the marriage, M.S.B., born January 11, 1998, and A.B., a child with special needs for constant care, born June 19, 2004. [2] By reasons for judgment indexed as E.B.G. v. S.M.B., 2015 BCSC 541, this Court determined all issues other than the retroactive variation of child and spousal support. After requesting and receiving further submissions from the parties, the Court issued supplemental reasons, indexed as E.B.G. v. S.M.B., 2016 BCSC 2434 determining those issues. [3] As is frequently the case in family law proceedings, success was divided. The parties were unable to resolve costs. The claimant maintains she achieved substantial success, and should have her costs. For his part, the respondent says each party should bear their own costs. BACKGROUND: RESULTS AT TRIAL Claimant's Position at Trial [4] At trial, the claimant sought to vary the joint custody order initially pronounced by Metzger J. on April 6, 2009, so as to obtain sole custody of the children. Alternatively, if the order for joint custody of the children remained in effect, E.B.G. sought a variation providing that A.B.'s primary residence was with the claimant. The claimant also sought cancellation of the appointment of the parenting coordinator made pursuant to the Consent Order. In addition, E.B.G. sought an order that in the event the parties were unable to reach agreement regarding any major decision concerning the children, the claimant would have final decision-making authority, and the respondent would have the right under s. 45(1) of the Family Law Act, S.B.C. 2011, c. 25 to apply to the court for a review of any decision he considered to be contrary to the best interests of the children. [5] Before the trial, S.M.B. had resigned from his employment as a commercial airline pilot flying international routes. In response to S.M.B.'s announcement of his new plan to work as a commercial pilot trainer overseas in alternate months, and to remain in Victoria every second month, the claimant sought a variation of the Consent Order to redefine the respondent's parenting time as comprising the first and third weeks of each alternate month that he was in Victoria. E.B.G. also sought orders replacing the provisions of the Consent Order concerning the children's travel and A.B.'s care during the claimant's parenting times. [6] A.B.'s care when the claimant was at work was a contentious issue at trial. E.B.G. sought variations of the Consent Order that would enable her to make all care arrangements necessary when the respondent was not available to look after A.B. The claimant requested an order that the respondent pay $600 per month to her as his proportionate share of anticipated special and extraordinary expenses for third-party care of A.B. during the claimant's parenting time. The claimant also sought a variation of the Consent Order to define certain special and extraordinary expenses for each of the children to be shared by the parties in proportion to their respective Guidelines incomes. [7] With respect to child and spousal support, E.B.G. sought extensive variations of the Consent Order. Under the Consent Order, spousal support was time-limited, and terminated on December 31, 2014. The claimant applied for an order continuing spousal support in such amount and for such duration as the Court determined. E.B.G. also sought an increase in ongoing child support from the monthly payments of $1,765 provided by the Consent Order to $2,462.50 per month, and orders for retroactive child and spousal support for the years 2010 through 2013. The claimant also sought to vary the Consent Order by adding a provision requiring the claimant and the respondent to exchange income tax returns, notices of assessment and reassessment, and business or corporate financial statements annually. Respondent's Position at Trial [8] The respondent maintained that there had been no material change of circumstances warranting any of the variations sought by the claimant. S.M.B. took the position that no variation of the Consent Order was required to accommodate his plan to work overseas in alternating months. He contended that members of his extended family were available to assist the claimant with A.B.'s care while the claimant was at work during the months he was away from Victoria. S.M.B. submitted that when the parties made the Consent Order, they contemplated that his schedule as an international commercial pilot would vary, and agreed on terms for his parenting time that were sufficiently flexible to permit shared parenting of A.B. by the claimant and respondent on his proposed month on/month off alternating schedule. [9] With respect to spousal support, the respondent's position at trial was that his Guidelines income was set in the Consent Order at $147,000 following extensive negotiations between the parties and their respective counsel. S.M.B. maintained that by providing that no spousal support would be payable after December 2014, regardless of any change in the parties' circumstances, the Consent Order was intended to be final. He contended that the court should not interfere with the bargain made by the parties concerning time-limited spousal support. [10] Regarding child support, the respondent maintained the claimant had not established any material change in his Guidelines income from the amount stated in the Consent Order. He argued that no variation for child support, whether prospective or retroactive, was warranted. Results on Variation of Parenting Arrangements [11] The claimant was successful in establishing material changes of circumstances relating to parenting arrangements. At paras. 148 to 150 of my reasons for judgment, I found that S.M.B.'s plan to provide flight training services abroad for a month at a time in alternating months and to accommodate his new work by shared parenting with the claimant on a month on/month off basis would significantly change the parenting arrangements in effect since the parties made the Consent Order. The new schedule would also fundamentally alter the ability of the parents to meet A.B.'s needs. At para. 178, I found that the members of the respondent's extended family had not been available to care for A.B. to the extent contemplated by the parties when they entered into the Consent Order, and that the failure of these arrangements constituted a material change of circumstances. Accordingly, the claimant was successful in establishing that a fresh inquiry into the best interests of A.B. was warranted. [12] While the Court did not grant the claimant sole custody of the children, the claimant did succeed in obtaining an order varying Metzger J.'s order for joint custody to provide that A.B.'s principal residence is with the claimant. [13] The Court also ordered that M.S.B., who was 16 years old at the time of trial, would make his own decisions about when he resided with the claimant or the respondent. [14] S.M.B. was successful in opposing the claimant's application for a variation of the Consent Order to provide that the claimant and the respondent would each be entitled to two separate periods of a minimum of seven days each of individual parenting time with M.S.B. each year. At para. 195, I concluded that the claimant had not shown any material change in circumstances that would warrant this variation in the Consent Order. [15] The claimant succeeded in obtaining the variation of the Consent Order addressed at para. 189 of my reasons for judgment. Paragraph 2a of the Consent Order was deleted and replaced with the following: The respondent will have parenting time with [A.B.] during those alternate full weeks when the respondent is in Victoria and is available to care for [A.B.] personally. [16] Para. 191 of my reasons defined the respondent's parenting time when he is working his month on/month off schedule. [17] With respect to arrangements for A.B.'s care during the claimant's parenting times, S.M.B. was successful in opposing E.B.G.'s request for an order requiring him to pay $600 per month for third-party caregiver expenses. [18] The Court also varied para. 7 of the Consent Order by replacing it with a new provision intended to clarify the process by which the claimant will obtain assistance for A.B.'s care while she is at work or pursuing vocational training. The Consent Order as varied provides the claimant will first seek the assistance of the respondent. If the respondent is not available, the claimant will then contact members of the respondent's extended family directly for assistance. If neither the respondent nor members of his extended family are available to assist with A.B.'s care, the claimant will engage a care provider, agreed upon by the parties. The cost of third-party care is to be shared by the claimant and respondent in proportion to their respective incomes. The respondent, who sought to maintain his extended family's involvement in A.B.'s care, was successful on this issue. [19] With respect to the parenting coordinator, the Court varied the Consent Order to provide for the parties to engage a replacement parenting coordinator to assist them in reaching agreement on significant decisions relating to the children. The respondent was successful on this issue to the extent that he had argued for the continuing assistance of a parenting coordinator. [20] The Court varied para. 3 of the Consent Order to provide that neither party will travel outside of Canada with the children during their parenting time without the consent of the other party, which consent will not be unreasonably withheld. The variation of para. 3 also clarified the information to be provided by the travelling parent in seeking the consent of the non-travelling parent, and established timelines for providing and responding to notice of intended travel. This variation was intended to prevent the recurrence of a dispute which arose between the parties in the summer of 2013 when the respondent sought and the claimant refused consent to M.S.B's travel abroad to attend a soccer school in Italy. The claimant, who sought the variation of arrangements for the children's travel, enjoyed success on this issue. [21] Conversely, the respondent was successful in opposing the claimant's request for a variation of the Consent Order providing her with exclusive authority to coordinate all of A.B.'s medical appointments. At para. 222 of my reasons for judgment, I concluded that it continued to be in A.B.'s best interest that both her parents remain closely involved in arrangements for her medical and therapeutic care; that the Consent Order achieved that objective; and that the claimant had not shown that the variation sought was warranted. Results on Variation of Child and Spousal Support [22] I turn next to the results at trial concerning the variation of child and spousal support. [23] Under s. 14(a) of the Federal Child Support Guidelines, a change in the income of the payor spouse constitutes a change of circumstances warranting a variation of child support under s. 17(4) of the Divorce Act. I found that for 2014, the respondent was a resident of Canada for tax purposes and determined his 2014 Guidelines income in the amount of $144,853.53. The Court varied the Consent Order to provide that commencing January 1, 2014, the respondent would pay to the claimant monthly basic child support in the table amount $2,042. [24] The claimant sought a reduction in the Guidelines income imputed to her under the Consent Order. I concluded she had the capacity to earn annual income of $16,500 and accordingly made no variation to her Guidelines income for 2014. [25] With respect to ongoing spousal support, I found that E.B.G.'s inability to become financially self-supporting within the five years contemplated by the parties at the time they entered into the Consent Order was a significant and continuing change in the condition, means and circumstances of the parties that warranted a variation of the Consent Order. In the result, the Court varied both the duration and quantum of spousal support. The respondent was ordered to pay spousal support of $2,100 per month commencing on January 1, 2015 and continuing indefinitely on the first day of each month thereafter, with either party having the right to apply for a review of entitlement and/or quantum of spousal support at any time after December 31, 2015. The claimant succeeded in obtaining an order for the continuation of spousal support beyond December 31, 2014. [26] The Court declined the claimant's request for a variation of para. 6(1) of the Consent Order, relating to the payment of special and extraordinary expenses. [27] In light of the difficulties which had arisen between the parties concerning the determination of their Guidelines incomes, the Court varied the Consent Order to provide for the annual exchange and review of financial information necessary to ensure that children received support commensurate with their parents' means to pay that support. The claimant enjoyed success on this variation of the Consent Order. [28] From 2010 through September 2013, S.M.B. worked outside of Canada as a commercial airline pilot and paid no Canadian income tax. In order to determine E.B.G.'s claims for the retroactive variation of child and spousal support for the years 2010 through 2013 it was necessary to "gross up" the respondent's income to account for Canadian tax rates. Before determining E.B.G.'s claims for retroactive child and spousal support, the Court sought and received further submissions from the parties concerning the appropriate method for grossing up the respondent's income. [29] The claimant calculated the respondents' grossed up income as follows: 2010 $215,848 2011 $266,525 2012 $255,724 2013 $192,526 [30] The respondent made the following calculations of his gross income: 2010 no calculation provided 2011 $182,900 2012 $203,700 2013 $225,050 [31] Ultimately I found that for the years 2010 through 2013, S.M.B. had the following Guidelines incomes: 2010 $215,848 2011 $215,000 2012 $230,000 2013 $225,050 [32] With regard to the amount of retroactive child support payable to the claimant, success was divided. E.B.G. established she was entitled to retroactive child support based on the amount payable calculated on her method of grossing up the respondent's Hong Kong-based income. However the award of $15,420 for child support retroactive to December 28, 2012 was substantially less than the arrears of $114,642 she claimed for the period from April 2010 through June 2014. S.M.B. was successful in obtaining a significant reduction in his liability for retroactive child support. [33] The Court concluded that any award of retroactive spousal support would jeopardize the respondent's ability to meet his ongoing support obligations, and would compromise his capacity to pay the full amount of support for his children. On that basis, the Court exercised its discretion to make no award of retroactive spousal support. S.M.B. succeeded in opposing E.B.G.'s claim for retroactive spousal support. positions of the parties Claimant's Position [34] E.B.G. submits that she achieved substantial success on the matters in dispute at trial, and that accordingly she is entitled to the costs of this family law case. The claimant notes that the Court found the respondent engaged in blameworthy conduct by failing to disclose his substantially increased income after 2010 and to adjust child support accordingly. She argues those findings and the respondent's alleged misconduct in protracting the proceedings and exploiting his superior financial position, demonstrate reprehensible behaviour on the part of S.M.B. deserving of rebuke by an order for special costs. Alternatively, the claimant submits her costs should be assessed under Appendix B of the Supreme Court Family Rules on the basis that this case involved more than ordinary difficulty. [35] On April 21, 2014, the claimant made an offer to settle pursuant to Rule 11-1. Section A of the claimant's offer to settle addressed parenting arrangements, while section B dealt with child and spousal support. Under the terms of the offer to settle, it was open to the respondent to accept section A without accepting section B. The claimant submits the respondent ought to have accepted her offer to settle relating to parenting arrangements. She contends the respondent should pay double costs from April 22, 2014 in respect of all parenting issues. Respondent's Position [36] The respondent submits that, overall, success was divided and that each party should bear his or her own costs. Alternatively, if the court determines the claimant was substantially successful in the event, S.M.B. submits that costs should be assessed on the scale of ordinary difficulty; that the claimant is not entitled to special costs; and that the Court ought not to award E.B.G. double costs from the date of her offer to settle of April 21, 2014. DISCUSSION AND ANALYSIS [37] Before considering E.B.G.'s claims for special costs, costs on an increased scale, or double costs, it is necessary to determine whether she was the successful party. Success in the Litigation [38] Rule 16-1(7) of the Supreme Court Family Rules provides: (7) Subject to subrule (9), costs of a family law case must be awarded to the successful party unless the court otherwise orders. [39] The principle that costs normally follow the event, and go to the party who has enjoyed "substantial success" in the litigation applies in family law litigation: Gold v. Gold (1993), 82 B.C.L.R. (2d) 180 (C.A.) at para. 19; Karpodinis v. Kantas, 2006 BCCA 400 at para. 4. [40] In both family law cases and civil proceedings, the court's discretion to depart from the general rule and to order otherwise must be exercised judicially: Gold v. Gold, at para. 19. [41] In determining whether to award costs to the successful party, courts apply the four part test stated by Bouck J. in Fotheringham v. Fotheringham, 2001 BCSC 1321 at para. 46: 1. First, by focusing on the "matters in dispute" at trial. These may or may not include "issues" explicitly mentioned in the pleadings. 2. Second, by assessing the weight or importance of those "matters" to the parties. 3. Third, by doing a global determination with respect to all the matters in dispute and determining which party "substantially succeeded," overall and therefore won the event. 4. Fourth, where one party "substantially succeeded," a consideration of whether there are reasons to "otherwise order" that the winning party be deprived of his or her costs and each side then bear their own costs. [42] Thus, in determining which party is "successful" under Rule 16-1(7), the court must consider, in a case involving multiple issues, whether one party has been "substantially successful". That requires an objective comparison of the relief granted and results obtained by the parties with the submissions made at trial: Fotheringham, at paras. 28, 60; Rattenbury v. Rattenbury, 2001 BCSC 593 at paras. 20, 21; MacLean v. Mio, 2011 BCSC 148 at para. 30. [43] In Fotheringham, at para. 45, Bouck J. described substantial success as 75 % or better, to be determined by the trial judge looking at the disputed matters globally, and weighing their relative importance to the parties. The gauge of 75% or better serves as a "rough and ready" measure of substantial success, and does not require the court to engage in a "meticulous mathematical examination" of the matters in dispute. [44] The variations sought by the claimant concerned four matters in dispute at trial: custody and primary residence of the children; parenting arrangements; child support; and spousal support. Those matters raised 17 issues of varying importance to the parties. [45] Issues #1 and 2 were custody and primary residence of the children. The respondent prevailed in opposing the claimant's request for sole custody of A.B., while the claimant succeeded in obtaining an order that she have the primary residence of A.B. These issues were significant to the parties, who are each devoted to their children. Both parents wish to be closely involved in A.B.'s care. However, the dispute concerning custody and primary residence consumed relatively little trial time. Further, by the conclusion of the trial, there was no serious dispute about M.S.B. making his own decisions concerning living arrangements with his parents. [46] Issue #3 concerned parenting time with A.B. This was a closely contested issue. I estimate that the time consumed by this issue accounted for between one and one and a half days of the eight days of trial time. The claimant succeeded in varying the Consent Order to provide that the respondent will have parenting time with A.B. during alternate weeks when he is in Victoria and is available to care for her personally. The respondent had urged the Court to order month on/month off parenting time for A.B. [47] On issue #4, parenting time with M.S.B., the respondent successfully opposed the variation sought by the claimant. The resolution of this issue required little time at trial and was of less importance to the parties than the dispute over parenting time with A.B. [48] Issue #5 concerned the provision of care for A.B. while the claimant was working. This issue was important to both parties. The claimant needed reliable and predictable care for A.B. in order to increase the time available to her to work outside the home or to retrain, and thereby improve her prospects for achieving financial self-sufficiency. Her engagement of third party care providers without first obtaining S.M.B.'s approval was a significant source of conflict between the parties. For his part, the respondent wanted his extended family involved in A.B.'s care. Overall, success was divided on this issue. The claimant succeeded in establishing that the respondent's extended family had not been available to provide care to the extent contemplated when the parties entered into the Consent Order. However, the variation granted provided for continued involvement of the respondent's extended family in A.B.'s care. Further, in the event that neither the respondent nor his extended family was available to care for A.B., third party care would be provided by a care giver approved of by both the claimant and the respondent. [49] Issue #6 concerned final decision-making authority in the event the parties disagreed on a major decision concerning the children. The respondent was successful in opposing the claimant's request for final decision-making authority and in supporting the appointment of a replacement parenting coordinator. [50] The claimant succeeded on issue #7, which concerned the variation of the Consent Order to clarify arrangements for the children's travel. [51] Issue #8 concerned the coordination of medical care for A.B. The respondent succeeded in resisting the claimant's request for exclusive authority to coordinate all medical and therapeutic appointments for A.B. [52] While issues #6, 7 and 8 were all important to the parties, they were less significant than the disputes regarding A.B.'s parenting time, and arrangements for A.B.'s care while the claimant was working. I would estimate that evidence and submissions on these three issues, collectively, consumed about one day of trial time. [53] I turn now to the issues related to the variation of child and spousal support. [54] The court determined issue #9, the respondent's 2014 Guidelines income, in the amount of $144,853.53. The respondent enjoyed success in this issue. S.M.B. had argued for a Guidelines income in the amount of $147,000. The claimant had urged the Court to fix the respondent's 2014 Guidelines income at a substantially higher level and had suggested that SMB's income for 2014, when grossed up for Canadian taxes, was $353,921. [55] On issue #10, the claimant's 2014 Guidelines income, the respondent successfully argued there should be no variation from the Consent Order, which imputed to E.B.G. an annual Guidelines income of $16,500. [56] Issue #11 was the variation of prospective child support. Here, the claimant achieved some success in obtaining an increase in basic child support to $2,042 per month. [57] Issue #12 concerned ongoing spousal support. This was another issue that was highly significant to both parties. The claimant sought the extension of spousal support beyond December 31, 2014 to provide her with continuing financial support while she endeavored to augment her limited employment income. The respondent was strongly opposed to any extension of spousal support and fought hard to maintain the finality of the Consent Order. While the award of ongoing spousal support from January 1, 2015 in the amount of $2,100 per month was less than the range of $4,800-$6,068 per month advocated by the claimant, E.B.G. was the successful party on this issue. [58] On issue # 13, the claimant's application to vary the definition of special and extraordinary expenses under the Consent Order, the respondent was successful. However, this issue was of no great significance to the parties and occupied a minimal amount of trial time. [59] Issue # 14 was the variation of the Consent Order to provide for the exchange of financial information for the annual review child support. E.B.G. succeeded on this issue, which consumed relatively little time at trial. Nonetheless, this issue deserves some weight because its resolution should facilitate the annual adjustment of child support, and thereby reduce one source of conflict between the parties. [60] Issue #15 concerned the respondent's failure to disclose the change in his anticipated status as a Canadian taxpayer and the determination of the respondent's 2010 through 2013 Guidelines incomes. This issue was significant to both parties and was time-consuming. Its resolution required the Court to request and consider supplemental submissions from the parties. There was some division of success on this issue. The claimant prevailed in establishing the respondent had failed to disclose material information concerning increases in his income after 2010 and his status as a foreign taxpayer. Ultimately, the claimant was also successful in persuading the Court her methodology for grossing up the respondent's income accounted for certain expenses claimed by the respondent and included an adjustment for spousal support. With respect to the determination of the respondent's grossed up incomes for the years 2010 through 2013, the parties' success was mixed. The court determined the respondent's 2010 Guidelines income in the amount proposed by the claimant and the respondent's 2013 Guidelines income in the amount advocated by S.M.B., and fixed the respondent's Guidelines incomes for 2011 and 2012 in amounts that exceeded the income asserted by the respondent but fell below those estimated by the claimant. Overall, the claimant enjoyed the greater success on this issue. [61] With respect to issue #16, retroactive child support, the claimant was successful, although the amount awarded was substantially less than the amount she sought. [62] On issue #17, retroactive spousal support, E.B.G. sought an award for the period April 2010 through October 2013 in the range $110,757 to $150,130. The issue of retroactive spousal support was highly significant for both parties. E.B.G. advanced a claim for a substantial amount of retroactive support. The respondent opposed any payment of retroactive spousal support, arguing that he had met his spousal support obligations under the Consent Order and that he lacked the capacity to pay retroactive support. Ultimately, the court declined to make any award of retroactive spousal support. Accordingly, the respondent was successful on this issue. [63] I have found that the claimant was successful on eight of the 17 issues in dispute. On issues #5 and 15 I have found success was divided, although on the latter issue the claimant enjoyed greater success than the respondent. [64] Considering all of the matters in dispute globally, the issues that were most significant to the parties, and which are deserving of the most weight in determining whether a party achieved substantial success and won the event, are issues #3, 5, 12, 15 and 17. On two of those issues, parenting time with A.B., and ongoing spousal support, the claimant achieved success. On issue #5, care for A.B. while the claimant was working, success was divided. As I have already observed, there was also some division of success on issue #15, although the claimant enjoyed the greater success there. On issue #17, retroactive spousal support, the respondent succeeded. [65] Taking into account the result on the principal issues in dispute, and the division of success between the claimant and the respondent on all of the remaining issues, I conclude that the claimant did not succeed on 75% of the matters in dispute viewed globally, and did not achieve substantial success overall. CONCLUSION [66] Accordingly, each party will bear their own costs of this proceeding, except for any interlocutory applications where the court ordered costs to a successful party in any event of the cause. [67] Since there is no award of costs to the claimant, it is unnecessary to address E.B.G.'s requests for special costs, costs on the scale of more than ordinary difficulty, and double costs. "PEARLMAN J."