Ludmer v. Ludmer et al., (2014) 327 O.A.C. 133 (CA)

• Judge: Blair, Juriansz and Epstein, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: October 21, 2014
• Jurisdiction: Ontario
• Citations: (2014), 327 O.A.C. 133 (CA);2014 ONCA 827

Ludmer v. Ludmer (2014), 327 O.A.C. 133 (CA)

MLB headnote and full text

Temp. Cite: [2014] O.A.C. TBEd. NO.017

Lisa Ludmer (applicant/respondent) v. Brian Ludmer (respondent/appellant) and Gary Spira (third party/respondent)

(C56795; 2014 ONCA 827)

Indexed As: Ludmer v. Ludmer et al.

Ontario Court of Appeal

Blair, Juriansz and Epstein, JJ.A.

November 21, 2014.

Summary:

The Ludmers separated after nearly 20 years of marriage. The family law proceeding related to the financial and property issues, including child and spousal support and the equalization of family property. A separate proceeding commenced by Mr. Ludmer against a former neighbour, Mr. Spira, was heard at the same time.

The Ontario Divisional Court, in a decision reported at [2013] O.T.C. Uned. 784, determined the issues. Mr. Ludmer was successful in some respects; Ms. Ludmer, in others. The Court dismissed the claims against Mr. Spira. The Ludmers were each ordered to bear their own costs. As between Mr. Ludmer and Mr. Spira, costs were ordered in favour of Mr. Spira. Mr. Ludmer appealed the issues on which he was unsuccessful.

The Ontario Court of Appeal allowed the appeal only to the extent that the judgment below was varied to reflect the trial judge's failure to attribute an amount of spousal support to Ms. Ludmer in the calculation under s. 7 of the Child Support Guidelines. In the result, Ms. Ludmer owed Mr. Ludmer $219,886.36 for her contribution to special expenses incurred by him.

Family Law - Topic 966

Husband and wife - Actions between husband and wife - Practice - Costs (incl. interim costs) - The parties "engaged in scorched-earth litigation" relating to the financial and property issues arising out of their separation - The husband was successful on the claims involving the validity of the marriage contract and the family trust - The wife, on balance, was successful on the income and support issues - The trial judge ruled that the parties each bear their own costs - The husband appealed, arguing that he was successful on the "key" issues, including the exclusion of his beneficial interest in the trust from equalization of property and support calculations - The Ontario Court of Appeal held that there was no error in law or in principle in the trial judge's ruling - "A trial judge has a broad discretion in awarding costs, both as to quantum and as to payor and recipient. Here, success was divided and, as the trial judge noted, 'both parties appear to have [waged] their litigation war without heed to the costs' and in 'an all-out, ruinous' fashion. ... It is true that the trial judge did not deal specifically with the costs of a number of motions reserved to him. I am satisfied, nonetheless, that his decision was designed to deal with the costs of the entire litigation war and took into account those earlier skirmishes." - See paragraphs 51 to 58.

Family Law - Topic 2210

Maintenance of spouses and children - General principles - Calculation or attribution of income - For spousal support purposes, the husband led evidence from his accountant to establish that the business deductions claimed for his one-person law practice, commenced in 2005, were proper for income tax purposes - He argued that his expenses in the years 2009, 2010 and 2011, were high because he was required to spend large amounts on publications, technology, secretarial staff and paralegal staff, in order to build his new practice - The trial judge accepted that argument for the early years, but concluded that once the law practice was established, closer scrutiny was warranted - In the end, he found that the business expenses, for support purposes, could not reasonably exceed 50 per cent of gross revenue - On appeal, the husband argued that the trial judge erred in arbitrarily arriving at a 50 per cent threshold - The Ontario Court of Appeal disagreed - "Determining child and spousal support is not an exact science. The trial judge lived with this case through 13 days of trial. Indeed, he had had prior exposure to the litigation through various interlocutory proceedings. He was well aware of the dynamics of the litigation, the relationship between the [parties] and the particulars of their lifestyle." - See paragraphs 15 to 20.

Family Law - Topic 2210

Maintenance of spouses and children - General principles - Calculation or attribution of income - The trial judge excluded both parties' RRSP proceeds from the calculation of their income for child support purposes, on the basis that they were "non-repeating encroachments on capital" - The inclusion of the amounts in income would have favoured the husband - The Ontario Court of Appeal saw no error in the decision to exclude the RRSP proceeds from income - "This Court has held that RRSP income is 'presumptively part of a spouse's income for child support purposes.' That is because section s. 16 of the Guidelines provides that a person's annual income for child support purposes is determined using the sources of income set out under the heading 'Total income' on the T1 tax form. RRSP income is included as part of 'Total income' on the T1 tax form ... . The inclusion of RRSP proceeds is not mandatory, however, and the court has the discretion in appropriate circumstances to do otherwise. Section 17(1) of the Guidelines provides this flexibility ... [The trial judge's] reasons show that he was alive to the need to arrive at income levels that 'fairly reflected' the financial capacities of the spouses for the purpose of support." - See paragraphs 21 to 25.

Family Law - Topic 2416

Maintenance of spouses and children - Practice - Costs (incl. suit money or interim costs) - [See Family Law - Topic 966 ].

Family Law - Topic 2483

Maintenance of spouses and children - Awards - Lump sum payments - The trial judge's lump sum award of $432,000 for spousal support represented the total of the monthly and annual support amounts that he had found to be payable for the eight year time-limited period for support - The $432,000 amount was not adjusted for tax consequences, present value considerations, and future contingencies - The trial judge had concluded that in this case, such an adjustment was not needed: "The period in question is relatively short. The lump sum I have awarded was determined based on my discretion taking into account a wide range of factors, not least of which [were] the consequences for the applicant of equalization and property division in this case. Five of the eight years have already gone by. Had there been discounting on account of taxes, the amount of support awarded would have been proportionately higher." - On appeal, the husband argued that the trial judge erred in failing to adjust the lump sum - The Ontario Court of Appeal held that the trial judge's conclusion was reasonable in the circumstances - See paragraphs 32 and 33.

Family Law - Topic 4022

Divorce - Corollary relief - Awards - To spouse - Considerations - The parties separated after nearly 20 years of marriage - They had two children, both attending university at the time of trial - During their marriage, they enjoyed an upper middle-class lifestyle - The wife worked as a consultant, with some interruption for her child-rearing responsibilities - After the separation, she began, once again, to work outside the home - The trial judge awarded spousal support to the wife on both compensatory and needs-based grounds - On appeal, the husband argued that the wife was not entitled to any spousal support - The Ontario Court of Appeal disagreed - "It was open to the trial judge to find, as he did, that [the wife] 'was financially disadvantaged, at a personal level, by the allocation of roles during the marriage,' that this affected her consulting business, and that she was 'unlikely to be able to replicate on her own' the standard of living that the 'complete merger of [their] economic lifestyles' had enabled the [parties] to enjoy. This was sufficient, in my opinion, to justify a 'compensatory claim' component in the spousal support award." - See paragraphs 27 to 31.

Family Law - Topic 4045.4

Divorce - Corollary relief - Maintenance - Child support guidelines (incl. nondivorce cases) - Special or extraordinary expenses - From 2005 to 2012, the husband paid a total of $606,577 for special expenses under s. 7 of the Child Support Guidelines - The trial judge did not allocate any of the s. 7 expenses for the year 2005 (almost $85,000) to the wife - The husband had no income in 2005 - He funded the s. 7 expenses through loans made to him by his father - In the trial judge's view, s. 7 expenses of almost $85,000 in a year when the husband had zero income (and the wife, only $66,809) were not reasonable - Requiring the wife to reimburse the husband for those payments, in the circumstances, was not appropriate - The Ontario Court of Appeal held that it was open to the trial judge to come to that conclusion - In any event, because the expenses were funded through a loan, the amount in question would only be the wife's share of the interest on the amount of the loan for 2005 - In the overall balancing of the financial issues between the parties, that would be a relatively insignificant amount - See paragraphs 35 to 40.

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Child support guidelines (incl. nondivorce cases) - Calculation or attribution of income - [See both Family Law - Topic 2210 ].

Practice - Topic 6931

Costs - General principles - Discretion of court - [See Family Law - Topic 966 and Practice - Topic 7160 ].

Practice - Topic 7160

Costs - Party and party costs - Liability for party and party costs - Liability of an unsuccessful plaintiff for costs of third party - The third party in family law proceedings between the Ludmers was successful in defending Mr. Ludmer's claim for invasion of privacy - Ludmer had sought damages of $50,000 - The trial judge awarded costs of $125,000 in favour of Spira - While Ludmer had made offers to settle, Spira had done so as well - Spira's offer, which was not accepted, was more favourable than the result obtained by Ludmer in the third party action - The claim against Spira was "a form of intimidation and punishment for 'siding' with [Ms. Ludmer] in the dispute" - The claims had "no hope of success" and "were instituted for emotional and purely strategic purposes" and "to inflict emotional and financial harm" - The trial judge concluded that Spira was entitled to costs on a full indemnity basis, but awarded less than the $300,000 sought by Spira's counsel - Ludmer appealed, contending that the amount awarded was unreasonable - The Ontario Court of Appeal disagreed - Spira was drawn into the Ludmer's dispute for extraneous reasons - He had to defend - The trial judge reduced counsel's bill considerably, finding that the time spent was excessive, the amount claimed was disproportionate in relation to the amount at stake and the amount of trial time consumed - "A trial judge has broad discretion in fixing costs." - See paragraphs 59 to 65.

Torts - Topic 5545

Invasion of privacy - Accessing, collecting and using personal information - Actions - Common law - Claims as between the husband and wife (the Ludmers) revolved around financial and property issues arising out of their separation - The husband's third party claim against a former neighbour (Spira) for invasion of privacy was heard at the same time - Mr. Ludmer claimed that Spira had invaded his privacy by intercepting and reading his private, and in some cases privileged, electronic communications and forwarding them to Ms. Ludmer's lawyers - The trial found as a fact (a) that Spira had neither "hacked into" nor had access to Mr. Ludmer's email account; (b) that Spira had never, himself, intercepted any of Mr. Ludmer's emails; and (c) that Spira had never read any of the emails - The fact that Spira had forwarded certain emails to Ms. Ludmer's lawyer at her request was not sufficient to ground a claim for invasion of privacy - It was Ms. Ludmer, not Spira, who had intentionally intruded upon Mr. Ludmer's private affairs, and that whatever assistance Spira provided was not for the purpose of assisting in her intrusion upon those private affairs - The Ontario Court of Appeal held that the trial judge correctly identified the elements of the cause of action, there was ample support in the record for the findings of fact, and there was no basis for interfering with them on appeal - See paragraphs 47 to 50.

Cases Noticed:

Fraser v. Fraser (2013), 311 O.A.C. 351; 40 R.F.L. (7th) 311; 2013 ONCA 715, refd to. [para. 22].

Frame v. Smith and Smith, [1987] 2 S.C.R. 99; 78 N.R. 40; 23 O.A.C. 84, refd to. [para. 42].

York Region Condominium Corp. No. 890 v. RPS Resource Property Services Ltd. et al., [2012] O.A.C. Uned. 530; 6 B.L.R.(5th) 171; 2012 ONCA 670, refd to. [para. 43].

Jones v. Tsige (2012), 287 O.A.C. 56; 346 D.L.R.(4th) 34; 2012 ONCA 32, refd to. [para. 47].

Authors and Works Noticed:

American Law Institute, Restatement of the Law (Second), Torts (2010), § 652B [para. 48].

Counsel:

Gary S. Joseph and Rebecca Winninger, for the appellant;

Lisa Ludmer, acting in person;

Rebecca Grosz, for the third party/respondent.

This appeal was heard on October 21, 2014, before Blair, Juriansz and Epstein, JJ.A., of the Ontario Court of Appeal. In reasons written by Blair, J.A., the Court delivered the following judgment, released on November 21, 2014.