



COURT OF APPEAL FOR ONTARIO

CITATION: Green v. Green, 2015 ONCA 541

DATE: 20150721

DOCKET: C58093 and C58101

Sharpe, Pepall and van Rensburg JJ.A.

BETWEEN

Diana Freda Green and
Charles David Green Jr.


Applicants (Respondents/
Appellant
    by way of cross-appeal
)

and

Charles David Green Sr.,
Lisa Maxwell and
    Brenda Yurko

Respondents
    (Appellant and Respondent by way of cross-appeal/

Respondents
    by way of cross-appeal
)

and

Strike Furlong Ford LLP

(Appellant)

AND BETWEEN

Diana Freda Green and Charles David Green Jr.

Applicants (Respondents)

and

Charles David Green Sr., Lisa Maxwell and Brenda
    Yurko

Respondents
    (Respondents)

AND BETWEEN

Diana Freda Green,
Charles David Green Jr.


Applicants
(Respondent/
Appellant
)

and

Charles David Green Sr.
, Brenda Yurko and
    Lisa Maxwell

Respondents on
    Application
(
Appellant
)

and

Strike Furlong Ford LLP and Robert James Lorne
    Ford

Respondents on
    Application
(Appellants)

Aaron Franks and Michael Zalev, for the appellant
    Charles David Green Sr.

Mathew H. Hilbing and Frank Coscarella, for the appellant
    by way of cross-appeal Charles David Green Jr.

Sanjeev P. Mitra and Miranda Spence, for the appellants
    Strike Furlong Ford LLP and Robert James Lorne Ford

Margot Poepjes, for the respondent Diana Freda Green

Russell Alexander, for the respondent Lisa Maxwell

Brenda Yurko, acting in person

Heard: April 20, 2015

On appeal from the order of Justice Lydia M. Olah of the Superior
    Court of Justice, dated November 22, 2013, with reasons reported at 2013 ONSC
    7265, [2013] O.J. No. 6396, and from the costs order, dated August 28, 2014,
    with reasons reported at 2014 ONSC 5000, 50 R.F.L. (7th) 155.

By the Court:

[1]

This appeal arises from a matrimonial proceeding involving a number of
    contested issues relating to property rights and support. At trial, Diana Freda
    Green, (Diana), a respondent in this appeal, succeeded in having a separation
    agreement that limited her entitlement to support and equalization set aside.
    She was awarded a substantial equalization claim and a lump sum support award.
    The appellant husband, Charles David Green Sr. (Charles Sr.) does not appeal
    the order setting aside the separation agreement, but he does appeal the
    equalization, the quantum of the lump sum support award, and the costs award.

[2]

As we will explain, the proceeding was significantly complicated by Dianas
    assignment into bankruptcy.

FACTS

[3]

The parties had been married for 48 years and they had three children.
    During the childrens early years, Diana did not work outside the home. Once
    the youngest child was ten years old, she started working and earned a modest
    wage. Charles Sr. worked at a series of jobs throughout the marriage. He was an
    employee of Ontario Power Generation for approximately ten years. It was a
    traditional marriage. Diana cared for the children, while Charles Sr. had
    primary responsibility for the financial well-being of the family.

[4]

In 1981, the parties purchased an island on Georgian Bay (the Island
    Property) that was just over four acres. It was registered in Charles Sr.s
    name. Over the years, the parties developed the Island Property by expanding
    the main cottage and adding cabins and docks. The Island Property became their
    matrimonial home. Each of the adult children was assigned the use and
    occupation of a cabin or a portion of the main residence.

[5]

In 1995, at Charles Sr.s instigation, he and Diana transferred the Island
    Property to their adult children with a view to saving estate taxes. In the
    years following the transfer, all parties, including the children, treated the
    Island Property as property owned by the parents. By the time of separation,
    everyone, including the parents and the children, appeared to have forgotten
    about the transfer.

[6]

In 2006, Charles Sr. and Diana executed a separation agreement. Diana
    surrendered any right to claim support. The agreement provided for the sale of
    the Island Property, with Charles Sr. and Diana each to receive half of the net
    proceeds of the sale. Diana waived her entitlement to any further equalization
    of family property.

[7]

When she commenced this proceeding in February 2008, Diana was
    represented by the appellant Robert James Lorne Ford (Ford), of the appellant
    firm Strike Furlong Ford LLP (SFF). In her application, she sought: to accelerate
    the sales process for the Island Property that was also the matrimonial home; to
    set aside the separation agreement that contained a release of equalization and
    support; and the equalization of net family properties between herself and
    Charles Sr. She also sought spousal support.

[8]

On November 26, 2009, after she commenced this proceeding, but well
    before it had proceeded to trial, Diana made a voluntary assignment into
    bankruptcy. This was not done on the advice of her legal counsel. It is common
    ground that Dianas claims for an interest in the Island Property and
    equalization vested in her Trustee in Bankruptcy pursuant to the
Bankruptcy
    and Insolvency Act
, R.S.C. 1985, c. B-3 (
BIA
).

[9]

Immediately following the assignment into bankruptcy, Ford and SFF had
    themselves removed as solicitors of record in the matrimonial proceeding. SFF
    filed a proof of claim for its unpaid fees of approximately $15,000 which was
    admitted by the Trustee. Dianas total indebtedness to all creditors was
    approximately $40,000.

[10]

The
    Trustee declined SFFs request that it prosecute Dianas property claims in the
    matrimonial proceeding. SFF then sought and obtained an order pursuant to s. 38
    of the
BIA
, authorizing it to continue and prosecute that proceeding. Under
    that order, and consistent with the scheme and language of the
BIA
,
    after payment of SFFs claim and its costs, and the costs of the bankruptcy
    proceedings, any surplus was to be paid to the Trustee in augmentation of
    Dianas estate. Pursuant to s. 38(2), the Trustee then assigned to SFF all its
    right, title, and interest in the property that was the subject matter of the
    matrimonial proceeding.

[11]

SFF
    assumed carriage of the property claims in the matrimonial proceedings from the
    date of the s. 38 order, May 31, 2010. SFF was added as a party to the
    matrimonial proceedings on June 9, 2010. After assessing the claims made in
    that proceeding, SFF determined that it would only advance a claim for a one-half
    interest in the Island Property, and would not pursue the claim for
    equalization.

[12]

Some
    two years later, SFF purported to assign its s. 38
BIA
rights to
    Charles Green Jr. (Charles Jr.), the son of Charles Sr. and Diana, for the
    sum of $90,000. From that sum, SFF paid itself approximately $57,500 for the
    claim it had filed in the bankruptcy and for the costs of prosecuting the
    matrimonial proceeding up to the time of the assignment to Charles Jr. SFF
    remitted the remaining sum of $32,434 to the Trustee.

[13]

From
    the correspondence between SFF and Charles Jr. concerning the assignment, and
    from the submissions before this court, it is clear that SFF thought that it
    was assigning, and that Charles Jr. thought he was acquiring, whatever interest
    Diana had in the Island Property, free and clear of any obligation to account
    to the Trustee for any surplus value recovered in the matrimonial litigation.
    In other words, SFF and Charles Jr. take the position that by virtue of the
    assignment, if Charles Jr. succeeds in demonstrating that Diana is entitled to
    a one-half ownership interest in the Island Property, Charles Jr. would acquire
    that interest in his own right. In his request for relief in this appeal,
    Charles Jr. asks for an order vesting title in the Island Property in his and
    Charles Sr.s names in equal shares. The solicitor at SFF who arranged the
    assignment to Charles Jr. was Mathew Hilbing (Hilbing). Hilbing then became Charles
    Jr.s solicitor in the matrimonial proceeding.

[14]

Just
    as Charles Jr. became aligned in interest with his father, the other two
    children, Lisa Maxwell (Lisa) and Brenda Yurko (Brenda), became aligned in
    interest with their mother. To resist the claim advanced by Charles Jr., they
    took the position that the Island Property had been transferred to the three
    children as a gift, and they resisted Charles Sr.s claim that the Island
    Property reverted to him by way of resulting trust.

[15]

Regrettably,
    what could have been a contentious but relatively manageable and
    straightforward matrimonial proceeding disintegrated into a major battle
    involving both spouses, all three children and complex issues arising from the
    bankruptcy and from the actions taken by Dianas former solicitors, Ford and
    SFF.

[16]

On
    February 9, 2012, Diana was discharged from bankruptcy. On February 21, 2012,
    Magda J. granted an order to continue recognizing the transmission to Charles
    Jr. of all of SFFs title and interest to Dianas property that was the subject
    matter of the family court proceeding.

[17]

The
    trial commenced on May 22, 2012, and was heard over the course of 15 days.

THE TRIAL

[18]

At
    trial, the parties took the following positions. Diana sought: (1) to set aside
    the separation agreement; (2) an award of lump sum spousal support; (3) an
    equalization payment; and (4) to accelerate the sale process for the Island
    Property.

[19]

Charles
    Jr., asserting Dianas property claims as assignee, did not advance the
    equalization claim but did claim a one-half interest in the Island Property.

[20]

Charles
    Sr. resisted Dianas claim to set aside the separation agreement and her claim
    for spousal support. Given Dianas assignment in bankruptcy and the position
    taken by Charles Jr. as the assignee of Dianas property claims, Charles Sr.
    argued that Diana had no right to claim equalization. He conceded the claim
    asserted by Charles Jr. for a half interest in the Island Property, submitting
    that the beneficial interest in the Island Property after the transfer of legal
    title to the children reverted to him and Diana by way of resulting trust.

[21]

If
    successful, the cumulative effect of the positions advanced by Charles Sr. and
    Charles Jr. was that each would own one-half of the Island Property to the
    exclusion of Diana and the two daughters.

[22]

Lisa
    and Brenda argued that the Island Property was a gift to the three children
    which disposed of their parents beneficial and legal interests in the
    property. If successful, the position advanced by Lisa ad Brenda would result
    in each of the three children owning one-third interests in the Island
    Property, while neither parent would retain any interest.

TRIAL JUDGMENT

(1)

Separation Agreement

[23]

The
    trial judge found there had been undue influence on Diana to execute the
    separation agreement. The agreement was neither just nor reasonable, and she
    set it aside. That order is not appealed.

(2)

Island Property

[24]

The
    trial judge found that Charles Sr. was the sole owner of the Island Property.
    He transferred the property to the three children for estate purposes and the
    trial judge concluded that the beneficial interest in the Island Property
    reverted to Charles Sr. by way of resulting trust.

[25]

The
    trial judge held that any claim by Diana to the Island Property had to be determined
    by way of equalization under the
Family Law Act
, R.S.O. 1990, c. F.3
    (
FLA
). As she made no determination of Dianas equitable interest
    in the Island Property, there was nothing to transfer to Charles Jr. Thus, she
    rejected Charles Jr.s request that Dianas interest in the Island Property be
    transferred to him. Diana had no equitable interest to transfer and Charles Jr.
    would receive a windfall for his payment of $90,000 if half the Cottage
    Property were transferred to him. Such a windfall was not contemplated by the
BIA
.

[26]

The
    trial judge concluded that the bankruptcy did not preclude Diana from pursuing
    an equalization claim. Neither the first assignee, SFF, nor the second assignee,
    Charles Jr., chose to pursue the equalization claim. The trial judge found that
    they were legally obliged to do so. Since they had not pursued the
    equalization, this was effectively unrealizable property that could be returned
    to the bankrupt upon discharge. The trial judge found that the Island Property
    was worth $700,000. When the other assets were accounted for, the trial judge
    ordered Charles Sr. to pay Diana an equalization claim of $433,388.86.

(3)

Spousal Support

[27]

The
    trial judge considered the objectives of the
Divorce Act,
R.S.C. 1985,
    c.3 (2nd Supp.) in ordering spousal support. The trial judge noted that at the
    time of separation, Diana was of advanced age and had health concerns. She also
    noted that Charles Sr. had a history of non-disclosure, some unreported income
    from a cash job, and a significant shortfall between his reported income and
    the budget sworn on his financial statement. Charles Sr. was 67 years old at
    the time of separation and 74 years old now, which would limit his
    employability. She also noted that it was a lengthy, traditional marriage.

[28]

The
    trial judge imputed an income of $60,000 to Charles Sr. at the date of
    separation, and fixed Dianas income at $4,815 as per her filed income tax
    return.

[29]

The
    trial judge then considered the principles for awarding lump sum spousal
    support. She noted that Charles Sr. had resisted paying periodic spousal
    support in the past. Factors making a lump sum award appropriate in the current
    case included: providing capital for Dianas immediate need; ensuring adequate
    support where there is a real risk of non-payment of periodic support; the lack
    of proper financial disclosure made by Charles Sr., and immediately satisfying
    a retroactive support award. The trial judge ordered a lump sum payment of
    $173,136, based on the high end of the range of the Spousal Support Advisory
    Guidelines, from the date of separation to September 1, 2013 (a seven-year
    period).

(4)

Assessment Order

[30]

The
    trial judge ordered an assessment before her of both SFFs provable claim of
    approximately $15,000 and its s. 38
BIA
account. The provable claim
    represented the legal fees charged by SFF for representing Diana in the
    matrimonial action prior to the bankruptcy. The trial judge reasoned that SFF
    was able to get an order as a creditor under s. 38 because of the legal fee
    indebtedness. The trial judge noted that a superior court has inherent
    jurisdiction to direct the assessment of lawyers fees as part of its
    disciplinary authority over lawyers. She noted that s. 4(1) of the
Solicitors
    Act
, R.S.O. 1990, c. S.15 is also an avenue by which Diana could pursue an
    assessment of costs. Section 4(1) allows courts the discretion under special
    circumstances to order the assessment of costs after the judgment is
    delivered. The trial judge also ordered the assessment of the Trustees
    accounts.

(5)

Costs

[31]

The
    trial judge made a number of costs awards the details of which are discussed
    later in these reasons. In brief, Diana was to recover from Charles Sr. costs
    of $231,087.13, inclusive of HST and disbursements, and additional legal fees
    for costs submissions and attendance. Lisa was to recover $40,643.24 plus HST
    and disbursements from Charles Jr. and half of her legal costs of $61,580.67
    plus HST on fees and half of the disbursements in the amount of $782.88
    plus HST from Ford personally.

ISSUES

[32]

The
    parties raise the following issues on appeal:

1.

Property Issues:


i.

Charles
    Sr. submits that the trial judge erred by making an equalization order. He
    submits that the trial judge should have ordered that he and Diana each had a
    one-half interest in the Island Property;


ii.

Charles
    Jr. submits that the trial judge erred by failing to order that Dianas
    one-half interest in the Island Property belonged to him.

2.

Support: Charles Sr. argues that the quantum of the lump sum spousal
    support order was excessive.

3.

Assessment: SFF submits that the trial judge had no jurisdiction to
    order assessment of its legal fees incurred before the bankruptcy and for
    prosecuting Dianas property claim under its s. 38 assignment.

4.

Costs:


i.

Charles
    Sr. seeks to appeal the costs order in favour of Diana, arguing that it was
    excessive;


ii.

Ford
    seeks to appeal the costs order against him personally as he was not a party
    and was not afforded procedural fairness;


iii.

Charles
    Jr. seeks to appeal the costs order against him in favour of Lisa as her claim
    was dismissed.

5.

Mainland Property: Diana asks, and Charles Sr. agrees, that this court
    order the immediate sale and equal division of the proceeds of sale of the
    Mainland Property (a property jointly owned by Diana and Charles Sr.).

ANALYSIS

(1)

Charles Sr.s Claim

[33]

The
    trial judge faced a dilemma. She had to reconcile a challenging array of facts
    with bankruptcy and family law principles that sometimes seem to reflect
    unaligned objectives. This was not an easy task.

[34]

The
    trial judge concluded that Charles Sr. was the sole beneficial owner of the
    Island Property. She also determined that as neither SFF nor Charles Jr. had
    pursued the equalization claim, it constituted unrealizable property that could
    be returned to Diana on her discharge from bankruptcy. On this basis, the trial
    judge ordered Charles Sr. to pay $433,388.86 to Diana in satisfaction of her
    equalization claim.

[35]

Charles
    Sr. submits that the trial judge erred in awarding Diana an equalization
    payment. He submits that: (i) no claim for equalization was before the trial
    judge, since both SFF and Charles Jr., as assignees of her claim, had
    repeatedly advised that they were not pursuing an equalization claim; (ii) the
    s. 38 order of Registrar Nettie was permissive in nature and not mandatory as
    found by the trial judge, and as such, neither SFF nor Charles Jr. was required
    to pursue an equalization claim; and (iii) Diana had no capacity to assert such
    a claim herself.

[36]

Charles
    Sr. also submits that the trial judge erred in disregarding his and Dianas
    admission that each held an equal beneficial interest in the Island Property.

[37]

We
    reject Charles Sr.s first submission. Equalization was a live issue before the
    trial judge in so far as, rightly or wrongly, it was being pursued by Diana. Indeed,
    the trial management conference judges March 22, 2011 endorsement identified
    equalization as an issue: Wife seeking to set aside settlement agreement to
    seek [spousal support]/equalization. At that time, a possible problem flagged
    by the trial management conference judge for the trial judge was that Diana had
    no property claims of her own. Counsel for Diana, Charles Sr. and SFF were all
    in attendance at this conference.

[38]

In
    an exit pretrial memorandum of SFF, signed by Hilbing on May 4, 2011, SFF
    complained that Diana appeared to continue to pursue property claims despite
    the fact that she had made an assignment in bankruptcy. He wrote that SFF had
    limited its claim to property to the recovery of the proceeds of sale of
    Dianas half interest in the Island Property and would not be pursuing other
    claims at trial. The pre-trial judge did not list equalization as an issue to
    be tried in the trial then scheduled for June 27, 2011. In its subsequent written
    opening submissions prepared for that scheduled trial date (which predated the
    assignment to Charles Jr.), SFF reiterated its position but also wrote that
    Diana:

has raised the prospect of advancing the equalization claims
    on behalf of the bankrupt because [SFF] has chosen not to. This is an abuse of
    process. While this court is free to hear her submissions, having assigned
    herself into bankruptcy, [Diana] formally assigned all of her property rights,
    including equalization rights to the Trustee in Bankruptcy. She has no lawful
    duty or capacity to advance those claims.

While there may have been good reason to challenge
    Dianas capacity to assert an equalization claim, at trial the issue continued
    to be unresolved. Put differently, at trial, equalization remained a live
    issue.

[39]

That
    said, we agree with Charles Sr.s second submission. Neither SFF nor Charles
    Jr. was required to pursue the equalization claim. Contrary to the trial
    judges interpretation, the language of the s. 38 order granted by Registrar
    Nettie was permissive and did not require the assignee to pursue the
    equalization claim. SFF, and later Charles Jr., had both made it clear that
    they were not pursuing any equalization claim.

[40]

We
    also agree with Charles Sr.s third submission. By the time of trial, Diana was
    a discharged bankrupt. Nonetheless, she had no capacity to assert an
    equalization claim, since it had vested in the Trustee on her assignment into
    bankruptcy: s. 71 of the
BIA
and
Blowes v. Blowes
(1993), 16
    O.R. (3d) 318, [1993] O.J. No. 2022 (C.A.).

[41]

Furthermore,
    while s. 40(1) of
the
BIA
requires the Trustee, prior to his or
    her application for discharge, to return to the bankrupt any property found
    incapable of realization, the Trustee was not discharged. Section 40(2)
    provides that where a Trustee is unable to dispose of any such property, the
    court may make such order as it may consider necessary. Diana was discharged
    from bankruptcy on February 9, 2012, but no steps were ever taken to have any
    property declared to be incapable of realization or to compel the Trustee to
    return any property to her. The
BIA
does not provide for the automatic return of any property or surplus to a
    bankrupt following his or her discharge. Some positive act is required to
    return property to the bankrupt:
Deloitte & Touche LLP v. Marino
(2004),
    72 O.R. (3d) 274 (C.A.), at para. 15.

[42]

For
    these reasons, it was not open to the trial judge to make an equalization
    order.

[43]

Turning
    to Charles Sr.s fourth submission, the trial judge correctly determined that
    the Island Property had not been gifted to the three children. At para. 144 of
    her reasons, the trial judge concluded that, given Dianas rights to a division
    of net family properties, a concurrent analysis of the claim to a beneficial
    ownership in the Island Property, and matrimonial home was unnecessary. She
    went on to conclude that the Island Property was available to fund the
    equalization payment that she had ordered in Dianas favour.

[44]

Based
    on this courts decisions in
McNamee v.
    McNamee
, 2011 ONCA 533, 106 O.R. (3d) 401, at para. 56 and
Martin v. Sansome
, 2014 ONCA 14, 118 O.R. (3d)
    522, the trial judge was required to settle questions of title before
    calculating any equalization entitlement. More significantly however, the trial
    judge improperly disregarded the ownership admissions made by Charles Sr. and
    Diana. They both admitted that they held an equal beneficial interest in the
    Island Property. In the absence of any ownership interest by the children,
    Charles Sr. was not the sole owner, but rather a one-half owner of the Island
    Property. Charles Sr. conceded that the remaining half accrued to Dianas
    benefit and that ownership should be as directed by this court.

[45]

We
    conclude that the Island Property was held from November 24, 1995, the date of
    transfer of legal title to the parties three children, on a resulting trust in
    favour of Charles Sr. and Diana. Dianas one-half interest in the Island
    Property vested in the Trustee on the date of her bankruptcy, November 26,
    2009.

[46]

This
    then brings us to a consideration of the entitlement to Dianas one-half
    interest in the Island Property at the date of trial.

(2)

Charles Jr.s Claim

[47]

As
    a result of the trial judges analysis, Charles Jr. had no entitlement to
    Dianas one-half interest in the Island Property. Charles Jr. submits that this
    was in error. He reiterates many of the same arguments advanced by Charles Sr. Additionally,
    he claims that as assignee and purchaser of Dianas interest, he is the
    rightful owner of one-half of the Island Property.

[48]

We
    note that the right to pursue an action otherwise available to a Trustee is
    conferred on the assignee and defined by the
BIA
. The assignee must be
    a creditor of the bankrupt, and after payment of its claim and costs, must
    remit any surplus to the Trustee. This preferential right to recover its claim
    in full is conferred by statute, not by the Trustee:
Traders Finance
    Corporation Ltd. v. Levesque
,

[1961] S.C.R. 83.

[49]

Before
    the trial judge, the validity of the assignment from SFF to Charles Jr. was not
    challenged. Moreover, an order made by Magda J. on February 21, 2012, confirmed
    the recognition of the transmission of SFFs title and interest to Dianas
    property to Charles Jr. pursuant to an Assignment Agreement dated January 23,
    2012. No one appealed or challenged that order. Furthermore, before this court,
    no one contested the validity of the assignment to Charles Jr. In these
    circumstances, we do not propose to rule on that issue.

[50]

However,
    without determining whether such an assignment is permissible at law, at a
    minimum, the assignment was subject to an obligation to account for any surplus
    to the bankrupts estate. This is clear from the language of s. 38 of the
BIA
,
    the terms of Registrar Netties s. 38 order, and at common law.

[51]

First,
    section 38(3) states:

Any benefit derived from a proceeding taken pursuant to
    subsection (1),
to the extent of his claim and the costs
, belongs
    exclusively to the creditor instituting the proceeding, and
the surplus
,
    if any,
belongs to the estate
. (Emphasis added.)

[52]

Secondly,
    paragraph 6 of the s. 38 order dated May 31, 2010 stated:

This court orders that in case there shall be a surplus after
    paying the applicant its said claim and costs, and the costs of the bankruptcy
    proceedings herein, and the claims of such other parties, if any, entitled to
    participate, according to the priority of the same respectively, as determined
    by paragraph 5 hereof,
such surplus shall be paid to the trustee in
    augmentation of the said bankrupts estate
. (Emphasis added.)

[53]

Thirdly,
    at common law, an assignor may not assign more than it has or, put differently,
nemo dat quod non habet
, no one
    gives who does not possess. Further, an assignee cannot take any better title
    than that held by the assignor:
Coba Industries Ltd. v. Millie's Holdings
    (Canada) Ltd.
(1985), 20 D.L.R. (4th) 689, 65 B.C.L.R. 31 (C.A.), at p.
    702.

[54]

In
    the normal course, a s. 38 assignee is entitled to recovery of the value of its
    claim in the bankruptcy and its costs incurred in the proceeding. Any surplus
    is to be remitted to the bankrupt estate. SFF recognised this scheme in its
    exit pre-trial memorandum of May 2011, stating that once the creditors are
    paid, the balance will be paid to [Diana] by the Trustee. SFF could not confer
    any greater entitlement on Charles Jr. by assigning its claim to him. Neither
    SFF nor Charles Jr. was entitled to recover a windfall to the detriment of the
    bankrupt estate. As such, neither was entitled to Dianas half-interest in the
    Island Property.

[55]

In
    this case, Charles Jr. paid SFF $90,000. From this sum, SFF paid itself $15,566
    on account of its claim and $42,000 in costs. The trial judge ordered that the
    proceeds from the sale of the Island Property were to be paid into court and,
    after payment of creditors and the costs, charges and expenses of the
    bankruptcy proceeding, Diana was to pay, from the proceeds she received, the
    sum of $90,000 to Charles Jr. in satisfaction of his payment to SFF.

[56]

Absent
    any objection having been made to the assignment to Charles Jr. and absent any
    cross-appeal, we do not propose to disturb this aspect of the trial judges
    order. In conclusion, although Charles Jr. will recover his payment of $90,000,
    he is not entitled to a one-half interest in the Island Property.

(3)

Lump Sum Spousal Support

[57]

The
    trial judge ordered lump sum spousal support of $173,136, based on the high end
    of the range of the Spousal Support Advisory Guidelines for a seven-year period
    from the date of separation to September 1, 2013.

[58]

Charles
    Sr. argues that the spousal support order reflected two errors: (1) the trial
    judge undervalued Dianas income, and (2) she failed to consider Charles Sr.s
    ability to pay. He submits that the lump sum award should be reduced by
    approximately one-third to $113,492.

[59]

This
    was a long-term traditional marriage. At the time of separation, Diana was 63 years
    old and had significant health concerns. The trial judge found that Charles Sr.
    had failed to comply with his obligation to make full financial disclosure. He
    was in receipt of unreported income from a cash job, and there was a
    significant shortfall between his reported income and the budget sworn on his
    financial statement. Several factors made a lump sum award appropriate. Diana
    was in immediate need and Charles Sr. had resisted making periodic support
    payments.

[60]

On
    the other hand, the trial judge recognized that given his age, Charles Sr.s employability
    was limited.

[61]

The
    trial judge imputed an income of $60,000 to Charles Sr. at the date of
    separation, and used Dianas income for the year 2006, which was $4,815.

[62]

We
    agree that the trial judge erred in the manner in which she calculated the lump
    sum support award. Dianas income increased after 2007, as she was in receipt
    of CPP and OAS benefits. However, we do not agree that the trial judge ignored
    Charles Sr.s ability to pay, and we conclude that despite the error she made
    in the manner in which she calculated the lump sum award, the amount she
    ordered is entirely appropriate when all the circumstances of this case are
    fully and fairly considered.

[63]

First,
    the trial judge certainly took into account Charles Sr.s age and limited
    employability. She was faced with the problem posed by his failure to make full
    financial disclosure. The amount he claimed for expenses in what the trial
    judge described as a pique of candor, as well as the fact that he had managed
    to purchase another property and make substantial payments on lines of credit,
    were inconsistent with his reported income. The amount the trial judge used to
    calculate Charles Sr.s income was limited to the amount he claimed in his
    budget for expenditures. It could well have been higher.

[64]

Secondly,
    given the length and traditional nature of this marriage, limiting spousal
    support to a period of seven years was very generous to the husband.

[65]

Thirdly,
    the trial judge noted that Dianas lump sum award was made to align with the
    fact that Charles Sr. would be making a substantial equalization payment. We
    are setting aside the equalization payment and Diana will now receive
    significantly less from her share.

[66]

We
    conclude that, despite the error in the precise manner in which the trial judge
    calculated the amount of the lump sum award for spousal support, when all
    factors are considered, it remains a fit and appropriate award in the
    circumstances of this case.

(4)

Assessment of SFFs Accounts

[67]

The
    trial judge ordered an assessment of both SFFs provable claim and of their s. 38
    costs. The provable claim reflected the legal fees incurred for representing
    Diana in the matrimonial action prior to the bankruptcy. The s. 38 costs reflected
    SFFs legal fees incurred to obtain the s. 38 order and to pursue the claim for
    a one-half interest in the Island Property.

[68]

SFF
    submits that the trial judge erred in ordering these assessments.

[69]

We
    deal first with SFFs provable claim in the bankruptcy. SFF filed a proof of
    claim in the bankruptcy for its fees prior to the bankruptcy. The claim was for
    $15,566 and was supported by draft accounts that had never been issued to
    Diana (as Fords agreement with Diana was that he would only be paid when the
    Island Property was sold). SFFs claim was admitted by the Trustee.

[70]

Section
    135(5) of the
BIA
provides that where the bankrupt or another creditor
    challenges a claim and the Trustee refuses to interfere, the court may expunge
    or reduce a proof of claim. Absent a successful challenge, a claim accepted by
    the Trustee is deemed a provable claim in the amount accepted by the Trustee,
    and this determination is final and conclusive:
BIA
, ss. 135(1.1),
    135(4). No one challenged SFFs claim in the bankruptcy under s. 135.

[71]

In
    our view, the trial judge erred by ordering an assessment of a claim that had
    been resolved in the bankruptcy in accordance with the
BIA
. The
BIA
provides a procedure for the resolution of disputed claims. The orderly
    administration of bankruptcies requires that claims be resolved in the manner
    prescribed by the
BIA
. Allowing claims accepted by the Trustee to be attacked
    in collateral proceedings would disrupt that orderly administration.

[72]

Accordingly,
    we allow the appeal from the order requiring SFF to assess its accounts for
    fees incurred by Diana prior to her bankruptcy.

[73]

We
    now turn to the order regarding the assessment of SFFs account for fees
    incurred in, and incidental to, the s. 38 proceedings. Paragraph 6 of the
    Registrars order of May 31, 2010, which authorized SFF to proceed with the s.
    38 claim, provides that SFFs costs are to paid from the proceeds of the

matrimonial proceedings, and, if there is any
    surplus after paying SFFs claim and costs and the claims of creditors who have
    agreed to contribute to the expense and risk of the proceedings (no other creditors
    participated), the surplus is to be paid to the Trustee in augmentation of the
    bankrupt estate.

[74]

After
    SFF purported to assign the s. 38 claim to Charles Jr., it provided the Trustee
    with an accounting of its proceeds. From the $90,000 received from Charles Jr.,
    SFF paid its provable claim for the fees incurred prior to the bankruptcy
    ($15,566) and its legal costs (that is, fees charged by SFF to SFF) in pursuing
    the s. 38 claim ($42,000), and remitted the balance of $32,434 to the Trustee. The
    claim for costs was supported by an SFF account dated February 3, 2012. There
    is nothing in the record before us to indicate that the Trustee formally approved
    that accounting, but it is clear that the Trustee accepted the surplus and did
    nothing to question the $42,000 claim for costs.

[75]

It
    is our view that the trial judge erred in ordering an assessment of SFFs s. 38
    account. While the trial judge certainly had the right to assess any party and
    party costs in the action, it was for the Trustee to question or challenge the s.
    38 account. The Trustee accepted and dealt with the surplus on the basis of
    SFFs accounting. In our view, in these circumstances, the trial judge erred by
    ordering the assessment.

COSTS

[76]

Charles
    Sr., Charles Jr., and Ford each seek to appeal the trial judges orders of
    costs against them. We deal with each in turn.

[77]

An
    order of costs is discretionary and entitled to deference. The
Courts of
    Justice Act
,

R.S.O 1990, c. C.43 affords broad discretion to
    trial judges with respect to costs. This discretion must fit within the
    framework created by the
Family Law Rules
, O. Reg. 114/99;
M.
    (C.A.) v. M.(D.)
(2003), 67 O.R. (3d) 181 (C.A.).

[78]

An
    appellate court should set aside a costs award only if the trial judge has made
    an error in principle or if the costs award is plainly wrong:
Hamilton v.
    Open Window Bakery Ltd.,
2004 SCC 9, [2004] 1 S.C.R. 303. Thus, the
    threshold for appellate interference with a trial judges award of costs is
    high.

(1)

Charles Sr.s Costs Appeal

[79]

Charles
    Sr. appeals the costs award of $231,087.13 in favour of Diana. He asserts that
    the amount of the costs was excessive and should be reduced to $110,000, an
    amount consistent with his own legal costs. He further submits that the
    obligation to pay costs to Diana should be shared equally with the other
    parties who were unsuccessful at trial, namely Charles Jr. and Lisa. He asserts
    that the trial judge ignored his inability to pay, and that the costs were
    disproportionate to the amount at stake in the litigation.

[80]

We
    would not give effect to any of these arguments. The trial judge found that
    Diana had been completely successful, as the separation agreement was set aside
    and she obtained both an order for spousal support and an equalization of
    property award. Charles Sr. made no offers to settle, showed unreasonableness
    and bad faith with regard to financial disclosure, impeded the sale of the
    Island Property for three years, and refused to pay a modicum of support
    despite Dianas illness and needs following the separation.

[81]

While
    we acknowledge that the equalization payment has now been set aside,
    nonetheless, the decision of the trial judge to award all of Dianas costs
    against Charles Sr. and the determination of the amount reveal no error in
    principle, nor do they result in any injustice. The trial judge properly
    exercised her discretion under s. 131 of the
Courts of Justice Act,
and
    Rule 24 of the
Family Law Rules
. She considered and applied the
    various factors under r. 24(11), including the importance, complexity, and
    difficulty of the issues, the reasonableness of each partys behaviour in the
    case, and the lawyers rates.

[82]

The
    issues between Charles Sr. and Diana that were determined at trial included the
    enforceability of the separation agreement, ownership of the Island Property,
    equalization, and spousal support. Diana was largely successful in her claims
    against Charles Sr. The trial judge concluded that Charles Sr. had behaved
    unreasonably in the proceedings. She described evidence of significant problems
    with disclosure as being overwhelming and not accidental, and noted that it was
    his misconduct concerning financial disclosure, impeding the sale of the Island
    Property, and refusing to pay support that ultimately pushed Diana into
    bankruptcy. The trial judge also rightly concluded that Charles Sr.s failure
    to make any settlement offers impeded an earlier resolution. None of these
    findings, including the finding that Charles Sr. acted in bad faith, are
    challenged on appeal.

[83]

There
    is no reason to interfere with the decision of the trial judge with respect to
    the amount of Dianas costs. The trial lasted 15 days; the litigation, more
    than five years. Even if the costs exceeded what Charles Sr. paid his own
    lawyer, they were proportional to the issues in dispute and the length and
    complexity of the proceedings.

[84]

Charles
    Sr. takes issue with the costs incurred by Lisa in the litigation, although he
    was not ordered to pay Lisas costs. The thrust of his argument seems to be
    that there was duplication in the work performed by Lisas and Dianas lawyers,
    and that this should reduce the amount of costs he is obliged to pay. Whether
    or not there was an overlap with the work performed by Lisas counsel, Diana is
    entitled to the costs she necessarily incurred in her litigation against
    Charles Sr. The fact that Lisa incurred costs, for which Charles Sr. is not
    responsible, does not affect his obligation to pay Dianas costs, or reduce the
    amount of such costs.

[85]

Charles
    Sr. also contends that the trial judge ignored his inability to pay costs,
    which, according to
MacDonald v. MacDonald
(1997), 109 O.A.C. 19 (C.A.),
    at para. 28, is an error in principle. This argument cannot succeed. Charles
    Sr.s own refusal to provide proper financial disclosure throughout the
    proceedings, including at trial, prevented the court from having an accurate
    picture of his financial circumstances. There was little reliable evidence
    before the trial judge to support Charles Sr.s contention that he was unable
    to pay Dianas costs.

[86]

Finally,
    Charles Sr. contends that, because Lisa and Charles Jr. did not obtain any of
    the relief they sought at trial, they should contribute to their mothers
    costs. This position was not advanced in Charles Sr.s costs submissions before
    the trial judge and was raised for the first time on appeal. The family law
    proceedings were necessary because of Charles Sr.s initial refusal to co-operate
    in the sale of the Island Property, and his refusal to pay spousal support. The
    proceedings were prolonged and made more difficult by his conduct, including
    his refusal to make financial disclosure and his failure to make any settlement
    proposal in the course of the proceedings.

[87]

We
    would therefore dismiss Charles Sr.s costs appeal.

(2)

Charles Jr.s Costs Appeal

[88]

Charles
    Jr. was ordered to pay costs to Lisa in the sum of $40,643.24, disbursements of
    $782.88, plus HST. This represented Lisas assessed costs from February 21, 2012
    (when Charles Jr. was added as a party), and one half of her costs at trial up
    to and including costs submissions, on a partial indemnity basis, less a 15%
    reduction due to the added complexity of the bankruptcy.

[89]

In
    his supplementary notice of cross-appeal, Charles Jr. seeks to appeal the costs
    order against him in favour of Lisa, as well as the trial judges refusal to
    award costs in his favour. He seeks an order setting aside the costs decision
    of the trial judge as it affects him, and substituting an order requiring Lisa,
    Brenda, and Diana to jointly and severally pay his costs.

[90]

Charles
    Jr. contends that the trial judge exceeded her jurisdiction in awarding costs
    in favour of an unsuccessful party, and that she erred in finding that Lisas
    offers to settle were superior to his own. He also argues that the trial judge
    erred in finding that Lisa was aligned with her mother, and that he was aligned
    with his father. He argues that the trial judge erred in reasoning that, because
    Lisa was aligned with her mother, and her mother was a successful party at
    trial, Lisa was entitled to costs.

[91]

Rule
    24(1) of the
Family Law Rules
contains a presumption that a successful
    party is entitled to costs. Neither Charles Jr. nor Lisa was successful in
    obtaining an order reflecting their claim to an ownership interest in the Island
    Property. Accordingly, neither of them is presumed to be entitled to a costs
    award.

[92]

The
    trial judge found that all the children, including Lisa, pursued their
    self-interest in the Island Property to the detriment of their mother. At para.
    100 of her reasons, the trial judge stated that Lisa could not countenance the
    idea that the cottage property would be owned in part by the Applicant Son to
    the exclusion of the two sisters and their families.

[93]

The
    trial judge was also very critical of Charles Jr. In her costs reasons, at
    para. 35, she concluded that Charles Jr. did not encourage settlement, acted
    irresponsibly, did not accept offers that were more favourable to him than the
    ultimate judgment, and was not successful in obtaining a transfer of the
    requested one-half interest.

[94]

The
    trial judge went on to find that Lisa and Brenda were entitled to costs because
    they were aligned with Diana, they provided reasonable offers to settle, and
    were more successful than Charles Jr. In our view, these findings of the trial
    judge are either unsupported by the evidence or are overstated. Lisa was not
    more successful in her claim than Charles Jr. Both she and Brenda clung to the
    position that they were owners of the Island Property, despite evidence that
    the transfer from Charles Sr. to the children was never intended to affect the
    parents beneficial interest in the property. Ultimately, Lisa was wholly unsuccessful
    in her claim. Her offers, while reasonable, required the participation of
    numerous other parties. Moreover, the alignment in interest with a party
    already adequately represented by legal counsel cannot serve to justify an
    award in Lisas favour. The costs award against Charles Jr. in favour of Lisa
    must be set aside. Given the lack of success of both Lisa and Charles Jr., as
    between each other, each should bear his or her own costs. Finally, there is no
    basis for an award of costs in favour of Charles Jr. against Diana or Brenda.

(3)

Fords Costs Appeal

[95]

Lisa
    incurred total costs in excess of $200,000 plus HST. Of this, Ford was ordered
    to pay half of her legal costs of $61,580.67 plus HST on fees and half of the
    disbursements in the amount of $782.88 plus HST. Ford was also ordered to
    pay a portion of the Trustees witness fees, in the sum of $2,053.33.

[96]

As
    mentioned, Ford seeks to appeal this order made against him personally. To
    place this award in context, it is useful to summarize Fords involvement in
    the proceedings.

[97]

Ford
    and SFF had acted for Diana when she commenced her matrimonial proceeding in
    February 2008. Unbeknownst to Ford, Diana made a voluntary assignment in
    bankruptcy on November 26, 2009. Ford subsequently sought and obtained an order
    on January 22, 2010 removing himself as Dianas solicitor of record. On May 11,
    2010, Ford swore an affidavit in support of the s. 38 order in favour of SFF
    which was granted on May 31, 2010. SFF became a party to the matrimonial
    proceeding in June 2010 and then moved to have Lisa and Brenda added as
    parties. As previously outlined, SFF took an adversarial approach to Diana in
    the matrimonial proceedings. (Indeed, SFF asserted that she had committed an
    abuse of process, and Ford wrote stating that Diana appeared to be attempting
    to defraud creditors, himself included.) For 20 months, SFF was both a party to
    the matrimonial proceedings, and acted as its own legal counsel, continuing to
    accrue legal fees and disbursements under the s. 38 order. SFF made the purported
    assignment in favour of Charles Jr. in February 2012. Hilbing, in the capacity
    of a sole practitioner, then went on the record for Charles Jr. in the
    matrimonial proceedings. The trial commenced about two and a half months later.

[98]

The
    only two lawyers who were associated with SFF and who were involved in the
    proceedings were Ford and Hilbing. Ford acknowledged that he was a partner in SFF
    and he described Hilbing as a subcontractor and a self-employed contractor.
    It can be inferred from all the circumstances, including Fords evidence at
    trial, led by Hilbing, that Ford directed the steps taken by SFF in its dual
    role as party to the litigation and as its own legal counsel. In essence, he
    was the directing mind of SFF in this dual capacity.

[99]

The
    trial judge awarded costs against Ford under Rule 24(8) and (9) of the
Family
    Law Rules
. Rule 24(8) states that:

If a party has acted in bad faith, the court shall decide costs
    on a full recovery basis and shall order the other party to pay them
    immediately.

[100]

Rule 24(9)
    states:

If a partys lawyer or agent has run up costs without
    reasonable cause or has wasted costs, the court may, on motion or on its own
    initiative, after giving the lawyer or agent an opportunity to be heard,

(a)     order that the lawyer or agent shall not charge the
    client fees or disbursements for work specified in the order, and order the
    lawyer or agent to repay money that the client has already paid towards costs;

(b)     order the lawyer or agent to repay the client any
    costs that the client has been ordered to pay another party;

(c)     order the lawyer or agent personally to pay the
    costs of any party; and

(d)     order that a copy of an order under this subrule be
    given to the client.

[101]

It is clear from
    the language of rule 24(9)(c) that a lawyer may be ordered to personally pay
    the costs of
any
party (emphasis added). There is no requirement that
    that party be successful in the proceedings. That said, as the trial judge
    observed, a court must exercise extreme caution in awarding costs against a
    solicitor personally (at para. 49). See also
Galganov v. Russell (Township)
(2012), 350 D.L.R. (4th) 679, at para. 22.

(a)

Appeal of Lisas Costs

[102]

Ford advances various
    arguments in support of his appeal of the costs order in favour of Lisa.

[103]

First, he argues
    that he was deprived of procedural fairness because Lisas claim for costs was
    against SFF and not against him.

[104]

Ford did not
    press the procedural fairness argument in oral submissions before this court. Diana
    sought costs against SFF, Ford and Hilbing in her notice of motion. Lisas
    affidavit in support of her claim for costs clearly stated that she was seeking
    costs against SFF, Ford and Hilbing and the affidavit filed in response to her
    request stated that Lisa and Diana were seeking costs against Ford personally.

[105]

Ford was given
    notice of the claim against him personally and was also given the opportunity
    to present evidence and to make submissions. Indeed, there was a separate
    hearing conducted by the trial judge into the issue of costs against lawyers in
    which Ford participated fully. We would not give effect to Fords argument that
    there was a lack of procedural fairness.

[106]

Secondly, Ford
    submits that in making her costs award against him, the trial judge erred by
    relying on certain evidence and findings of fact from the trial. In substance,
    he challenges three such findings: the failure to pursue the equalization
    payment; SFFs improper pursuit of the collection of their accounts as a
    creditor of Diana; and the failure to pursue the maximum yield for Dianas
    bankrupt estate.

[107]

Admittedly, as
    previously discussed, and interpreted narrowly, some of these factors would no
    longer apply. As a creditor, SFF was legally entitled to seek and obtain a s. 38
    order, there was no contravention of the s. 38 order, and SFF was not required
    to pursue an equalization payment.

[108]

However, the
    trial judge did not confine her costs award against Ford to these findings, and
    the findings must be considered in the larger context of the duties owned by
    Ford and SFF as Dianas former legal counsel. In describing the basis for her costs
    decision against Ford, the trial judge identified other factors including:

·

based on Fords affidavit, SFF was added as an applicant;

·

SFF was responsible for adding Lisa and Brenda as parties to the
    proceedings;

·

because of Fords focus on recovering his legal fees, he lost
    sight of his professional responsibilities to the parties and to the court;

·

his actions as a party rose to the level of bad faith; and

·

he brought the integrity of the bankruptcy process into question.

[109]

While lawyers of
    a bankrupt are not precluded from pursuing a s. 38 claim, they must be cautious
    not to breach professional obligations owed to their former client: see
Ezard
    (Trustee of) v. Zgradgen
, 2011 ONSC 4474, 80 C.B.R. (5th) 231, at para.
    143. Fords lack of caution and focus on recovery of legal fees served to
    unduly complicate the matrimonial proceedings and resulted in increased costs
    for all parties. His focus on fee recovery at the expense of his professional
    responsibilities is reflected in his approach to the matrimonial proceedings
    and to Diana, his former client.

[110]

On February 28,
    2008, Diana commenced her proceeding to set aside the separation agreement
    which had waived spousal support and equalization. She made an assignment in
    bankruptcy on November 26, 2009. At that time, her total debts amounted to
    $41,999.58 of which the debt in favour of SFF comprised $10,000. (Later, Ford
    swore a statement and filed a proof of claim for $15,566.17).

[111]

Being a
    first-time bankrupt, in the normal course, Diana would have been eligible for
    an automatic discharge nine months after her bankruptcy (that is, on September
    1, 2010) unless an opposition was filed or she was required to make payments from
    her income to her Trustee for distribution to her creditors. There was never
    any suggestion of any such latter requirement. However, on December 16, 2009,
    Ford wrote to the Trustee advising that SFF was opposing Dianas discharge and also
    noted that Diana had not listed her interest in the Island Property in her
    statement of affairs. However, she had disclosed her matrimonial proceeding and
    her claim to an equalization payment and an interest in the Island Property to
    the Trustee.

[112]

The objection
    filed by Ford on behalf of SFF (and by logical extension, on his own behalf as
    a partner) served to delay Dianas discharge for about one and a half years. It
    also served to delay her potential receipt of surplus property after payment of
    all the creditors claims and expenses in the bankruptcy.

[113]

In the meantime,
    on Fords direction and based on his affidavit, SFF obtained the s. 38 order. This
    would enable Fords firm, SFF, to recover its fees and to earn more fees. It
    was only when SFF made the assignment to Charles Jr. and was paid in full that
    it withdrew its objection to Dianas discharge.

[114]

Throughout, Ford
    and SFF aligned themselves with Charles Jr. who was already aligned with Dianas
    adversary, Charles Sr. As Ford testified at trial, SFFs intention all along
    was to sell its half interest to Charles Jr. He testified about the rationale
    for the assignment to Charles Jr.: we only wanted to be paid.

[115]

During this
    period of time, SFF had added Lisa as a party to the proceedings. Lisa had a
    dual purpose in the litigation. As found by the trial judge, she pursued her
    self-interest in that she did not want the Island Property to be owned by her
    brother to the exclusion of her and her sister and their families. Secondly, as
    also found by the trial judge, Lisa wished to support her mother. Any ability
    her mother had to effectively pursue her property claim had been neutralized both
    by her bankruptcy and then by the conduct of Ford, her former solicitor.

[116]

Once in the action,
    although Lisa made a number of offers to resolve the litigation on a global
    basis, it was not feasible for her to extricate herself from the action  an
    action that was made more complex due to the misguided assignment in favour of
    Charles Jr., which was effected by Ford and SFF to secure payment of their outstanding
    account to Diana and claim for additional accumulated fees.

[117]

Ford and SFFs
    conduct was contrary to the interest of their former client Diana and served to
    increase the costs of all parties. Ford and SFF ran up costs without reasonable
    cause and wasted costs incurred by the other parties. A cause that was designed
    to serve his and his firms self-interest and that was contrary to the interest
    of his and their former client, is not reasonable. Moreover, by so acting and
    complicating and extending the proceedings, Ford wasted the costs of the other
    parties including those of Lisa. The trial judge found that because of Fords
    focus on recovering his legal fees, he lost sight of his professional
    responsibilities to the parties and to the court. The trial judge found that
    his actions rose to the level of bad faith. In the highly unusual circumstances
    of this case, there was ample evidence to support this conclusion and we see no
    reason to interfere with her findings in that regard.

[118]

While costs
    orders might have been made against Ford and SFF in favour of the other parties
    to the litigation, only Diana and Lisa pursued such a claim. The trial judge
    concluded that while a costs award against Ford in favour of Diana was
    justified, Diana was already fully compensated by the award against Charles Sr.
    Accordingly, she limited the costs award against Ford to a contribution toward
    Lisas costs. We will not interfere with the trial judges award in this
    regard.

[119]

Lastly, we would
    observe that the quantum ordered to be paid by Ford is most modest relative to
    his and his firms recovery of in excess of $50,000 in fees and Lisas overall costs
    of $200,000.

(b)

Appeal of the Trustees Witness Fees

[120]

Ford also contends
    that the trial judge erred in requiring him to pay $2,053.33, being one-third
    of the Trustees fees to attend as a witness at trial, when Ford did not have
    the ability to summons her as a witness.

[121]

It was the trial
    judge who, after hearing the evidence about the bankruptcy and s. 38 dealings,
    including Fords own evidence, decided it was necessary to hear from the
    Trustee. The decision to allocate one-third of the costs of the Trustees
    attendance to Ford (and one-third to each of Diana and Charles Jr.) was in all
    the circumstances a reasonable exercise of the trial judges discretion. We
    would not interfere with the trial judges exercise of discretion in the
    contribution Ford was required to make towards the Trustees witness fees.

[122]

Fords costs
    appeal is therefore dismissed in full.

THE MAINLAND PROPERTY

[123]

Both Charles Sr.
    and Diana have requested that the Mainland Property that they own jointly be
    sold, and that the proceeds be divided between them. Given that there will not
    be an equalization payment, we agree that the Mainland Property ought to be
    listed for sale and sold, under the same conditions as the Island Property, with
    the net proceeds of sale of this property divided equally between Charles Sr.
    and the Trustee.

DISPOSITION

[124]

In conclusion, the
    appeals and cross-appeals are allowed in part in the terms provided in these
    reasons, and otherwise are dismissed. We refer any issues respecting the sale
    of the Island Property and the Mainland Property and the distribution of the
    proceeds of sale to the trial judge. Furthermore, any additional issues that
    may arise from this courts disposition are referred to the trial judge for
    resolution.

[125]

The comprehensive
    and detailed order of the trial judge dated November 22, 2013, and the costs
    order dated August 28, 2014 are varied as set out in the following paragraphs.
    For convenience, a black-lined version of the trial judges order of November
    22, 2013, showing the necessary changes, is attached as an appendix to these
    reasons.

[126]

Paragraph 2 of
    the November 22, 2013 order is set aside.

[127]

Paragraph 4 is
    varied to insert his share of the before the word proceeds.

[128]

Paragraph 5 is
    varied to read: Finding there is a resulting trust in favour of the Respondent
    Charles David Green Sr. and the Applicant Diana Freda Green, all of the right,
    title and interest of Charles David Green Jr., Brenda Yurko and Lisa Maxwell in
    the matrimonial home described as PIN 52243-0599  PCL 18454, SEC NS, Island
    3A, Harrison Opposite LT 33, Con 4, Township of Harrison, the Archipelago is
    vested jointly
nunc pro tunc
to November 24, 1995 in the Respondent
    Charles David Green and the Applicant Diana Freda Green, and from November 26,
    2009, the date of bankruptcy of Diana Freda Green, jointly in the Respondent
    Charles David Green and BDO Canada Limited, the Trustee in Bankruptcy of Diana
    Freda Green (the Trustee).

[129]

Paragraph 6 is
    varied to read: The Respondent Charles David Green and the Trustee shall
    forthwith jointly list the matrimonial home for sale, on MLS with an
    experienced and reputable real estate agency/agent agreed between the Trustee,
    the Applicant Diana Freda Green and the Respondent Charles David Green and their
    solicitors, on terms agreed between the said parties. The said agent shall
    report monthly to the said parties and the Trustee.

[130]

Paragraph 9 is
    varied to replace the words the net equalization payment to the Applicant
    Diana Freda Green in line 6 with the Applicant Diana Freda Greens share of
    the net proceeds to the Trustee and to add the word said before parties in
    line 4.

[131]

Paragraph 10 is
    deleted.

[132]

Paragraph 11 is
    deleted.

[133]

Paragraph 12 is varied by inserting,
    after the words Applicant Diana Freda Green, the words against the
    Respondent Charles David Greens interests in.

[134]

Paragraph 13 is replaced by the following: Upon the
    sale of the property more particularly described as: PIN 52243-0599-PCL 18454,
    SEC NS, Island 3A, Harrison Opposite LT 33, Con 4, Township of Harrison, the
    Archipelago, Ontario; and PIN 52246-0019-1664 Hwy 69, Pointe-au-Baril-Station,
    PCL 6168, SEC NS, Pt LT 25, Con 4, Harrison, as in LT 35802 except LT 37123,
    the Archipelago, Ontario, the charge is to be vacated and the proceeds of the
    sale are to be paid as follows: The Respondent Charles David Green shall be
    reimbursed any amount payable to him under para. 9 hereunder; one-half of the
    remaining net proceeds of sale shall be paid to the Trustee; the other half of
    the remaining net proceeds of sale shall be applied first in payment to Diana
    Freda Green of the sum of $173,136.00, or the remaining balance payable by
    Charles David Green to Diana Freda Green as lump sum spousal support ordered by
    the trial judge, plus interest at the rate of 3 per cent per annum from
    February 28, 2008 and then to Diana Freda Green in payment of the sum of
$231,087.13
    in

costs ordered
    by the trial judge, plus interest at the rate of 3 per cent per annum from
    August 28, 2014; with the remaining balance to be paid to Charles David Green.


[135]

Paragraph 14 is varied to delete the
    words the net equalization payment and.

[136]

Paragraph 15 is deleted.

[137]

Paragraph 16 is replaced by the following: The
    Trustee shall retain from the net proceeds of sale of the matrimonial
    home/cottage property such funds as are necessary for payment in full of the
    bankrupts creditors with interest and the
cost, charges and expenses of
    the bankruptcy proceedings as already determined by the trial judge, and shall
    pay the balance to the Applicant Diana Freda Green, being the surplus of the
    estate. From such surplus, the Applicant Diana Freda Green shall then pay the
    Applicant Charles David Green Jr. the sum of $90,000 together with interest
    from February 3, 2012 to the date of payment, in satisfaction of the Applicant
    Charles David Green Jr.s $90,000 payment to Strike Furlong Ford, Barristers
    & Solicitors. For greater certainty, none of the parties to this action is
    to be considered to be a creditor in the bankruptcy.

[138]

Paragraph 17 is deleted.

[139]

Paragraph 18 is deleted.

[140]

Paragraph 20 is
    varied to indicate that Diana is named the irrevocable beneficiary pending full
    payment of the lump sum spousal support award, and to delete the reference to
    the net equalization payment owing.

[141]

Paragraphs 22,
    23, 26, 27, and 28 are deleted.

[142]

A new paragraph
    is added to the final order reading as follows: The mainland property shall be
    listed for sale and sold under the same terms and conditions as are applicable
    by this order to the matrimonial home/cottage property, and the net proceeds of
    this sale equally divided between Charles David Green Sr. and the Trustee. The
    mainland property is more particularly described as PIN 52112-0016  59 Church
    Street, Parry Sound, Pt Lot 22 E/S Church Street, Pl 22, as in R0151903, Parry
    Sound, Ontario.

[143]

Paragraph 2 of
    the August 28, 2014, costs order is set aside.

APPEAL COSTS

[144]

If the parties
    are unable to agree on the costs of the appeals and cross-appeals, we will
    receive and consider written submissions on costs as follows: Any party seeking
    costs will deliver a bill of costs together with any submissions in writing, in
    support of the requested order for costs within 15 days of the release of this
    decision. Responding submissions, if any, to be delivered within 15 days
    thereafter, with reply submissions, if any, delivered within five days of any
    responding submissions. The bills of costs and costs submissions are to be
    filed in triplicate, together with proof of service, to the attention of the
    Appeals Scheduling Unit. Unless the court orders otherwise, any material
    received in relation to costs of the appeal, will be forwarded to the panel for
    consideration 40 days after the release of the decision. The parties will be
    notified of the decision as to costs by way of a costs endorsement.

Released: (KMvR) July 21, 2015

Robert J. Sharpe
    J.A.

S.E. Pepall J.A.

K. van Rensburg
    J.A.



APPENDIX

THIS
    COURT ORDERS THAT:

1. The Separation Agreement dated November 28, 2006 is set
    aside in its entirety.

2.
The Respondent Charles David Green is to pay a net
    family property equalization payment to the Applicant Diana Freda Green the sum
    of $433,388.86 ($443, 388.86 - $10,000), together with interest to accrue on
    the sum commencing February 28, 2008, the date of the initial Application.

3. The Respondent Charles David Green is to pay to the
    Applicant Diana Freda Green lump sum spousal support in the sum of $173,136,
    together with interest to accrue on the sum commencing February 28, 2008, the
    date of the initial Application.

4. In the event the lump sum support has not already been
    paid by the Respondent Charles David Green,
his share of the
proceeds of
    sale of the matrimonial home/cottage property, more particularly described as:
    PIN 52243-0599-PCL 18454, SEC NS, Island 3A, Harrison Opposite LT 33, Con 4,
    Township of Harrison, the Archipelago, Ontario, shall be applied to the payment
    of the Respondent Charles David Greens obligation to pay lump sum support,
    together with interest.

5. Finding there is a resulting trust in favour of the
    Respondent Charles David Green Sr.
and the Applicant Diana Freda Green
,
    all of the right, title and interests of Charles David Green Jr., Brenda Yurko
    and Lisa Maxwell in the matrimonial home described as PIN 52243-0599-PCL 18454,
    SEC NS, Island 3A, Harrison Opposite LT33, Con 4, Township of Harrison, the
    Archipelago is vested
jointly
nunc pro
    tunc
to November 24, 1995
in the Respondent Charles David Green
and
    the Applicant Diana Freda Green, and from November 26, 2009, the date of
    bankruptcy of Diana Freda Green, jointly in the Respondent Charles David Green
    and BDO Canada Limited, the Trustee in Bankruptcy of Diana Freda Green (the
    Trustee).

6. The Respondent Charles David Green
and the Trustee
shall
,
    then,
forthwith jointly list the matrimonial home for sale, on MLS with an
    experienced and reputable real estate agency/agent agreed between the
Trustee,
    the
Applicant Diana Freda Green and the Respondent Charles David Green and
    their solicitors,
on terms agreed between the said parties. The
said
    agent
shall

to
report monthly to the
said
parties and the
    Trustee
Rebecca Sudano of BDO Canada Limited
.

7. Forthwith the parties shall be permitted to inspect the
    property more particularly described as PIN 52243-0599-PCL 18454, SEC NS,
    Island 3A, Harrison Opposite LT 33, Con 4, Township of Harrison, the
    Archipelago, including all abodes and the boat house, to identify the contents
    to remain pending the sale.

8. The Applicant Charles David Green Jr. and Respondent Lisa
    Maxwell are to remove their personal contents from their respective
    cabins/cottages within 30 days.

9. In the event necessary repairs are to be made to the
    matrimonial home/cottage property in order to enhance its saleability, these
    will only be addressed by the Respondent Charles David Green upon written
    request by the realtor to both parties. Only with the consent of the
said
parties will any repairs, other than wear and tear items, be undertaken by
    the Respondent Charles David Green. The costs of such consented repairs will be
    at the expense of the Respondent Charles David Green and the costs shall be
    reimbursed to him from the proceeds of sale, before distribution of the
net
    equalization payment to the Applicant Diana Freda Green
Applicant Diana
    Freda Greens share of the net proceeds to the Trustee,
and subject to a
    strict accounting. Routine costs of his occupation of the matrimonial
    home/cottage property, including but not limited to wear and tear improvements,
    taxes, utilities and insurance, shall continue to be at the expense of the
    Respondent Charles David Green.

10.
This Order shall create a charge in the amount of
    $433,388.86 bearing interest at a rate of 3 per cent annum in favour of the
    Applicant Diana Freda Green, against the properties more particularly described
    as PIN 52243-0599-PCL 18454, SEC NS, island 3A, Harrison Opposite LT 33, Con 4,
    Township of Harrison, the Archipelago, Ontario; PIN 52112-0016-59 Church
    Street, Parry Sound, Pt Lot 22 E/S Church Street, Pl 22, as in R0151903, Parry
    Sound, Ontario; and PIN 52246-0019-1664 Hwy 69, Pointe-au-Baril-Station, PCL
    6168, SEC NS, Pt LT 25, Con 4, Harrison, as in LT 35802 except LT 37123, the
    Archipelago, Ontario.

11.
The Applicant Diana Freda Greens trustee in
    bankruptcy has a claim to the net equalization payment owing to the Applicant
    Diana Freda Green which is to be paid from the sale proceeds to satisfy
    creditors with proven claims in the bankruptcy. Moreover, the trustee may be
    asserting a claim to compensation for outstanding fees associated with the
    administration of the estate. Accordingly, on notice to the trustee, the
    trustee is to attend to make submission at the accounting of the s. 38
    assignment accounts and costs to address her claim to those funds.

12. This Order shall create a charge in the amount of
    $173,136.00 bearing interest at a rate of 3 per cent per annum in favour of the
    Applicant Diana Freda Green, against
the Respondent Charles David Greens
    interests in
the properties more particularly described as: PIN
    52243-0599-PCL 18454, SEC NS, Island 3A, Harrison Opposite LT 33, Con 4,
    Township of Harrison, the Archipelago, Ontario; PIN 52112-0016-59 Church
    Street, Parry Sound, Pt Lot 22 E/S Church Street, Pl 22, as in R0151903, Parry Sound,
    Ontario; and PIN 52246-0019-1664 Hwy 69, Pointe-au-Baril-Station, PCL 6168, SEC
    NS, Pt LT 25, Con 4, Harrison, as in LT 35802 except LT 37123, the Archipelago,
    Ontario, pursuant to s. 34 (1) (k) of the Family Law Act R.S.O. 1990 c. F.3.

13. Upon the sale of the property more particularly
    described as: PIN 52243-0599-PCL 18454, SEC NS, Island 3A, Harrison Opposite LT
    33, Con 4, Township of Harrison, the Archipelago, Ontario; and PIN
    52246-0019-1664 Hwy 69, Pointe-au-Baril-Station, PCL 6168, SEC NS, Pt LT 25,
    Con 4, Harrison, as in LT 35802 except LT 37123, the Archipelago, Ontario the
    charge is to be vacated and the proceeds of the sale are to be
deposited to
    the credit of the action with the Accountant of the Superior Court of Justice,
    on notice to the bankruptcy trustee Rebecca Sudano of BDO Canada Limited

paid
    as follows: The Respondent Charles David Green shall be reimbursed any amount
    payable to him under para. 9 hereunder; one-half of the remaining net proceeds
    of sale shall be paid to the Trustee; the other half of the remaining net
    proceeds of sale shall be applied first in payment to Diana Freda Green of the
    sum of $173,136.00, or the remaining balance payable by Charles David Green to
    Diana Freda Green as lump sum spousal support ordered by the trial judge, plus
    interest at the rate of 3 per cent per annum from February 28, 2008 and then to
    Diana Freda Green in payment of the sum of
$231,087.13 in

costs ordered by the trial judge, plus
    interest at the rate of 3 per cent per annum from August 28, 2014; with the
    remaining balance to be paid to Charles David Green.

14. In the event the Respondent Charles David Green pays out
    the entirety of
the net equalization payment and
the lump sum spousal
    support together with the interest owing, the charges against his share of the
    properties shall be discharged at his expense.

15.
Upon the full payment of the net equalization payment
    from the net proceeds of sale of the matrimonial home/cottage property to the
    Applicant Diana Freda Green by the Respondent Charles David Green, the
    Applicant Diana Freda Green shall pay to the Applicant Charles David Green Jr.
    the sum of $90,000 together with interest from the monies paid to her with
    respect to the net equalization payment.

16.
Once the trustee
    establishes what monies are to be directed to her for payment in full of the
    bankrupts creditors with interest as well as the cost, charges and expenses of
    the bankruptcy proceedings, from the net monies, being the surplus of the
    estate paid out of court to the Applicant Diana Freda Green

The Trustee
    shall retain from the net proceeds of sale of the matrimonial home/cottage
    property such funds as are necessary for payment in full of the bankrupts
    creditors with interest and the cost, charges and expenses of the bankruptcy
    proceedings as already determined by the trial judge, and shall pay the balance
    to the Applicant Diana Freda Green, being the surplus of the estate. From such
    surplus,
the Applicant Diana Freda Green shall pay the Applicant Charles
    David Green Jr. the sum of $90,000 together with interest from February 3, 2012
    to the date of payment, in satisfaction of the Applicant Charles David Green
    Jr.s $90,000 payment to Strike Furlong Ford, Barristers & Solicitors.

17.
In the event the lump sum support has not already
    been paid out by the Respondent Charles David Green, the balance of the
    proceeds of sale of the matrimonial home/cottage shall be applied to the
    payment of the Respondent Charles David Greens obligation to pay lump sum
    support, together with interest.

18.
The balance of the net proceeds of the sale of the
    matrimonial home/cottage property, shall remain to the credit of this action,
    pending determination of the liability for costs of this action after which,
    the remaining balance, if any, shall be released to the Respondent Charles
    David Green.

19. One-half of the Respondent Charles David Greens Ontario
    Power Generation and Labourers Union pensions shall be transferred to the
    Applicant Diana Freda Green as calculated by the respective pension fund. The
    Respondent Charles David Green is to cooperate in the execution of all
    documentation required by the respective pension funds to effect such transfers
    of one half the values calculated from date of the marriage to date of
    separation.

20. The Applicant Diana Freda Green is named irrevocable
beneficiary
pending full payment of
both the net equalization payment owing and
the
    lump sum spousal support owing, on all policies owned by the Respondent Charles
    David Green including Canadian Premier, Cooperators and Clarica insurance
    policies, pursuant to s. 34(1)(i) of the Family Law Act R.S.O. 1990, c. F.3.

21. A copy of the Judgement of Madam Justice L. Olah dated
    November 22, 2013 shall be served on the bankruptcy trustee Rebecca Sudano, BDO
    Canada Limited and on Strike Furlong Ford, Barristers & Solicitors, by the
    Applicant Diana Freda Greens counsel.

22.
Strike Furlong Ford, Barristers & Solicitors,
    shall attend before Madam Justice L. Olah for the purpose of her assessment of
    its Bankruptcy and Insolvency Act section 38 account, as arranged with the
    trial coordinator, after serving the parties with a copy of the same.

23.
Strike Furlong Ford, Barristers & Solicitors,
    shall attend before Madam Justice L. Olah for the purpose of her assessment of
    Strike Furlong Fords provable claim/solicitors accounts filed with the
    trustee in bankruptcy proceedings of the Applicant Diana Freda Green.

24. The bankruptcy trustee Rebecca Sudano of BDO Canada
    Limited, shall attend before Madam Justice L. Olah for the purpose of her
    assessment of the trustees accounts, if any, as arranged with the trial
    coordinator, after serving all parties a copy of same, failing which, the
    trustees accounts shall be deemed to have been paid and the trustee shall
    arrange for the discharge of her registered interest in the joint mainland
    property.

25.
Notification shall be given to all parties to attend
    and make argument on the two accounts, as arranged with trial coordinator.

26.
In the event the assessments of Strike Furlong Fords
    provable claim and Bankruptcy and Insolvency Act section 38 account result in
    an overpayment to Strike Furlong Ford, Barristers & Solicitors, these
    monies shall be reimbursed by Strike Furlong Ford, Barristers & Solicitors,
    to the credit of Diana Freda Greens bankrupt estate for distribution by the
    bankruptcy trustee to the creditors, the trustee and to the surplus, if any, of
    the bankrupt Diana Freda Green estate.

27.
Assessment of solicitors accounts, Bankruptcy and
    Insolvency Act section 38 accounts and the bankruptcy trustees accounts, if
    any, to be arranged with the Oshawa trial coordinator within 15 days of
    November 22, 2013.

Counsel is to submit three page typed submissions for
    costs of the proceedings within 15 days of November 22, 2013 together with
    their offers to settle and bill of costs with proof of service electronically
    to Tara Lynn Mountney at taralynn.mountney@ontario.ca and to file the originals
    including proof of service, with the Family Court in Oshawa.

28.
Submissions on the bill of costs and the assessments
    of the solicitors and bankruptcy trustees accounts to be conducted on the
    same day.

29.
Submissions by each counsel will be limited to 30
    minutes each.

30. Support deduction order to issue.

31. Divorce order to issue.

32. This Court orders that unless the Order is withdrawn
    from the Office of Director for the Family Responsibility Office, it shall be
    enforced by the Director and that amount owing under the Order shall be paid to
    the Director, who shall pay them to whom they are owed.

33. This Order bears post-judgment interest at a rate of 3.0
    % per annum effective from the date of this order. Where there is a default in
    payment, the payment in default shall bear interest only from the date of the
    default.

34.
The mainland property shall be listed for sale and sold
    under the same terms and conditions as are applicable by this order to the
    matrimonial home/cottage property, and the net proceeds of this sale equally
    divided between Charles David Green and the Trustee. The mainland property is
    more particularly described as PIN 52112-0016  59 Church Street, Parry Sound,
    Pt Lot 22 E/S Church Street, Pl 22, as in R0151903, Parry Sound, Ontario.


