



COURT OF APPEAL FOR ONTARIO

CITATION: Climans v. Latner, 2020 ONCA 554

DATE: 20200904

DOCKET: C66766

Gillese, Brown and Paciocco JJ.A.

BETWEEN

Lisa Jean Climans

Applicant (Respondent)

and

Michael Elliot Latner

Respondent (Appellant)

Chris G. Paliare and Andrew K. Lokan, for the appellant

Bryan R.G. Smith and Jennifer Cook, for the respondent

Heard: June 24, 2020 by video conference

On appeal from the order of Justice Sharon Shore of the Superior
    Court of Justice, dated February 25, 2019, with reasons reported at 2019 ONSC
    1311.

Gillese J.A.:

[1]

In this family law appeal, three significant issues are explored.

[2]

The first issue revolves around the meaning of spouse and cohabit in
    s. 29 of the
Family Law Act
,
R.S.O. 1990, c. F.3 (the FLA). Cohabit
    is defined in s. 1(1) of the FLA as to live together in a conjugal
    relationship. Where the parties in a long-term romantic relationship never
    marry, do not have children together, and choose to maintain their own homes
    rather than live together, was the time they spent together sufficient to
    amount to living together in a conjugal relationship?

[3]

The second issue relates to the Rule of 65. The Rule of 65 applies
    where the length of cohabitation in years plus the recipients age at the date
    of separation equals or exceeds 65:
Spousal Support Advisory Guidelines

(Ottawa: Department of Justice, 2008), (the SSAGs), s. 7. If the Rule of
    65 applies, indefinite spousal support is appropriate:
Djekic v. Zai
,
    2015 ONCA 25, at para. 9.

[4]

The third issue relates to the costs award at trial. What is the effect
    of partial success on appeal on that costs award? How are the trial judges findings
    on the reasonableness of one partys conduct dealt with on a reconsideration of
    that costs award?

OVERVIEW

[5]

Lisa Climans and Michael Latner were in a romantic relationship from
    October 2001 to May 2015, a period of almost 14 years. Throughout their
    relationship, they maintained separate homes in Toronto where each resided. They
    never married or moved in together. Both had children from previous marriages.
    Mr. Latner was very wealthy. Early in their relationship, Mr. Latner told Ms.
    Climans that he would not marry her or live with her unless she first signed a
    domestic contract. At times, he prepared draft contracts and presented them to
    her but no such contract was ever signed.

[6]

During their relationship, Ms. Climans and Mr. Latner lived together in July
    and August at Mr. Latners Muskoka cottage. They spent weekends in Florida in
    the winter months. Sometimes, they spent March break week in Florida. The
    parties also vacationed together. Beginning early in their relationship, Mr.
    Latner supported Ms. Climans financially. During their relationship, he
    provided her and her children with a lavish lifestyle. The parties personal
    and social lives were closely interwoven and they presented as a couple in
    public.

[7]

When their relationship ended, Ms. Climans brought an action in the
    Superior Court of Justice, asking that she be recognized as Mr. Latners spouse
    and that he be required to pay her spousal support. Mr. Latner resisted the
    claim, arguing that while they had had a romantic relationship, as they had
    never married or cohabited, Ms. Climans was not his spouse.

[8]

Following an eight-day trial, by order dated February 25, 2019 (the
    Order), the parties were declared to be spouses within the meaning of s. 29
    of the FLA. Mr. Latner was ordered to pay Ms. Climans spousal support of
    $53,077 per month, commencing January 1, 2019, for an indefinite duration.

[9]

As the successful party at trial, Ms. Climans was found to be entitled
    to costs. The trial judge ordered costs on a substantial indemnity basis for
    two reasons. First, she viewed Mr. Latners position that he and Ms. Climans
    had not been spouses to be unreasonable. Second, she found that Mr. Latner had
    not been forthcoming in his financial disclosure. By further order dated
    September 10, 2019 (the Costs Order), Mr. Latner was ordered to pay Ms.
    Climans costs in the total amount of $324,179.

[10]

Mr.
    Latner appeals. He says that the trial judge erred in finding that he and Ms.
    Climans were spouses. He also contends that the trial judge erred in concluding
    that the Rule of 65 applied, which was the basis for ordering that he pay spousal
    support indefinitely. Finally, he argues that the trial judge erroneously
    awarded costs on an increased scale.

[11]

For
    the reasons that follow, I would allow the appeal in part. I see no basis on
    which to interfere with the trial judges finding that the parties were spouses
    within the meaning of s. 29 of the FLA. However, in my view, the trial judge
    erred in principle in concluding that the Rule of 65 applied. Consequently, I
    would set aside the order for indefinite spousal support and substitute an
    order requiring that spousal support be paid for a period of ten years. Further,
    I would vary the Costs Order, substituting an order for costs on a partial
    indemnity basis.

BACKGROUND IN BRIEF

[12]

The
    following account of the parties and their relationship is based on the trial
    judges findings, as set out in her reasons for decision (the Trial reasons).

[13]

Ms.
    Climans and Mr. Latner had a passing acquaintance before they met by chance, on
    October 17, 2001, at a gas station.

[14]

Ms.
    Climans was 38 years old when the chance meeting took place. She was separated
    from her husband
[1]
and lived in Toronto. Her two children were aged 8 and 11 at that time and their
    primary residence was with her. Ms. Climans was working in sales and marketing for
    her brothers construction business, earning approximately $5,000 per month.
    She was also receiving $850 per month in child support, which increased to
    $2,000 per month at some point and ended in 2018, when the children finished
    school and started working.

[15]

Mr.
    Latner was 46 years old at the time of the chance meeting. He was divorced and lived
    in Toronto. His three children from his marriage were aged 12, 16, and 18. Mr.
    Latner was a very wealthy man when the parties met and remains so.

[16]

Mr.
    Latner actively pursued Ms. Climans and they quickly began a relationship. By November
    2001, Ms. Climans began sleeping at his home on alternate weekends when her
    children were with their father. She also quit her job so that she could be
    available to run errands for Mr. Latner, travel with him, or spend time with
    him. Ms. Climans did not work again until after her relationship with Mr.
    Latner ended.

[17]

The
    first several years of the parties relationship were intense although there
    were periods in which they were not speaking and a few short breakups.

[18]

However,
    theirs was a committed relationship. In 2002, Mr. Latner gave Ms. Climans a 7.5
    carat diamond ring; he proposed to her on several occasions, which Ms. Climans
    accepted; and he gave Ms. Climans several rings, which she wore throughout the
    relationship. Ms. Climans also gave Mr. Latner a ring that he wore throughout
    their relationship. Each year, they celebrated the anniversary of the day that
    they met. He sent her many cards and letters in which he declared his love for
    her. He often referred to her by his last name. When Mr. Latner was in hospital
    dealing with a health issue, Ms. Climans slept at the hospital, occasionally
    alternating with Mr. Latners children. She drove him to his follow-up medical
    appointments. The parties were sexually active throughout their relationship.
    They introduced each other to their respective children early on. While there
    was no melding of their children into one family, the parties and their
    children did celebrate special occasions together. The parties also attended
    extended family functions together, went out socially, and held themselves out
    as a couple.

[19]

In
    the early years of their relationship, Ms. Climans and Mr. Latner interacted
    daily. They usually ate dinner together at one home or the others, often with whichever
    of their children were around. They had coffee together in the morning, walked
    their dogs together, and talked on the phone frequently.

[20]

The
    parties agree that something in their relationship changed in 2006, though they
    disagree on the reason. In any event, after 2006, Ms. Climans slept very infrequently
    at Mr. Latners home. (Throughout the relationship, Mr. Latner seldom stayed
    over at Ms. Climans home.) Other than that, their relationship remained
    unchanged.

[21]

Beginning
    in 2012, the parties attended counselling for two to three years, to work on
    their relationship and on Ms. Climans strained relationship with Mr. Latners
    daughter.

[22]

The
    parties never merged their finances. They maintained separate bank accounts and
    had no joint bank accounts. Nor did they own property jointly. However,
    beginning in November 2001, Mr. Latner gave Ms. Climans $5,000 per month, later
    increased to $6,000. Soon after, in 2002, Mr. Latner started covering Ms.
    Climans home expenses and gave her a credit card for other expenses. Later, he
    paid off a mortgage on Ms. Climans home and paid for renovations to it. He
    gave her expensive gifts of jewellery and fur coats, cars to drive, and
    extravagant holidays. He was also extremely generous in terms of her children,
    paying for many of their expenses. Mr. Latner provided Ms. Climans and her
    children with a lavish lifestyle throughout the parties relationship.

[23]

The
    parties always maintained their separate residences in Toronto but stayed
    together when they travelled outside of Toronto. They spent July and August together
    each year in Mr. Latners Muskoka cottage. In the winter months they spent time
    together in Florida  from Thursday until Monday morning on alternate weeks when
    Ms. Climans children were with their father and sometimes during the winter school
    break. The parties also frequently vacationed together.

[24]

In
    2007, Mr. Latner bought the property next to his home in Toronto (the New
    Property). The parties discussed moving into the New Property together.
    Renovations to the house on the New Property began during the parties
    relationship but were not completed. Neither party lived in that house during
    their relationship. Mr. Latner now lives in it.

[25]

When
    their relationship ended on May 11, 2015, Ms. Climans was almost 52 years old.
    She became qualified as a yoga instructor and was expected to earn $24,000 in
    2019 from teaching yoga. At the time of trial, Ms. Climans was 55 years old.
    Her position was that the parties had been spouses and she sought indefinite
    spousal support.

[26]

Mr.
    Latner was 63 at the time of trial and chairman of his familys group of
    companies. He acknowledged his romantic relationship with Ms. Climans and described
    her as his girlfriend and travel companion. Because they had never married or lived
    together, his position was that they were not spouses. He said that he had been
    clear throughout his relationship with Ms. Climans that he would never marry her,
    or move in with her, without a domestic contract. He presented Ms. Climans with
    a draft contract in 2002, which she took to a lawyer but never signed. In 2013,
    when problems had developed in the relationship, Mr. Latner again gave Ms.
    Climans a domestic contract. There were discussions between the parties and
    their lawyers and a second draft was prepared. However, again, no domestic contract
    was ever signed.

[27]

After
    Ms. Climans began this proceeding, under the terms of a consent order entered
    into in April 2016, Mr. Latner agreed: to pay Ms. Climans $6,000 per month; Ms.
    Climans could spend up to $5,000 per month on the VISA he had provided to her
    during their relationship; and that he would pay for an enumerated list of her other
    expenses. He made all the payments under the consent order. Pursuant to its terms,
    between May 2015 and December 2018, Mr. Latner paid Ms. Climans $621,783.88.

THE RELEVANT LEGISLATION

[28]

Sections
    29 and 1(1) of the FLA are the relevant provisions in this matter. Section 29
    falls within Part III of the FLA and defines spouse for the purpose of support
    obligations as follows:

29
In this Part,



spouse means a spouse as defined in subsection
    1(1), and in addition includes either of two persons who are not married to
    each other and have cohabited,

(a) continuously for a period of not less than
    three years,

Section 1(1) defines cohabit as follows:

1(1)
In this Act,



cohabit means to live together in a conjugal
    relationship, whether within or outside marriage[.]

THE TRIAL DECISION

[29]

After
    describing the parties, their relationship, and the evidence of the witnesses
    that each had called, the trial judge set out her legal analysis. She began by determining
    whether the parties were spouses within the meaning of ss. 29 and 1(1) of the FLA.
    As the parties never married and their relationship lasted longer than three
    years, the trial judges analysis focused on whether the parties had cohabited,
    which is defined in s. 1(1) to mean to live together in a conjugal
    relationship.

[30]

The
    trial judge referred to
Molodowich v. Penttinen

(1980), 17
    R.F.L. (2d) 376 (Ont. Dist. Ct.), which sets out a non-exhaustive list of
    criteria to be considered in determining whether a conjugal relationship exists:
    shared shelter, sexual and personal behaviour, services, social activities,
    economic support, children as well as the social perception of the couple:
Campbell
    v. Szoke

(2006), 45 R.F.L. (5th) 261, at para. 51. She observed
    that in
M. v. H.
, [1999] 2 S.C.R. 3, at paras. 59-60, the Supreme
    Court of Canada adopted and affirmed the
Molodowich
criteria and its contextual
    and flexible approach to determining whether a relationship is conjugal.

[31]

Based
    on the
Molodowich
criteria, the trial judge had no doubt that the
    parties had been in a conjugal relationship. At para. 120 of the Trial reasons,
    she wrote:

They were in a long term committed relationship. Mr. Latner
    treated Ms. Climans as his wife. Their relationship was sexual in nature. They
    held themselves out as a committed couple and were perceived as a couple by
    their family and friends. Ms. Climans was considered family by the extended
    Latner family. The parties participated in social activities as a couple. Mr.
    Latner supported Ms. Climans financially. They travelled extensively together.
    They lived together at the cottage each summer.

[32]

At
    para. 121 of the Trial reasons, the trial judge said that the one issue that
    gave her pause was whether the parties had a shared shelter. She posed the
    question: had Ms. Climans and Mr. Latner lived together, even though they
    maintained separate residences in Toronto?

[33]

In
    answering this question, the trial judge canvassed caselaw which establishes
    that the fact the parties maintained separate residences was not the end of the
    inquiry. She observed that in
Stephen v. Stawecki

(2006), 32
    R.F.L. (6th) 282 (Ont. C.A.), this court declined to impose a bright-line rule
    requiring that two people must move in together to be considered as living together
    or cohabiting. She noted that, at para. 4 of
Stephen v. Stawecki
, this
    court said [T]he specific arrangements made for shelter are properly treated as
    only one of several factors in assessing whether or not the parties are cohabiting.

[34]

At
    para. 128 of the Trial reasons, the trial judge stated:

To determine whether the parties lived together in a conjugal
    relationship, all the factors must be considered in conjunction with one
    another. However, there needs to be some element of living together under the
    same roof. The very definition of cohabit requires that the parties
live
    together
in a conjugal relationship. [Emphasis in original.]

[35]

The
    trial judges conclusion, at para. 139 of the Trial reasons, that the parties
    were spouses, plays an important role in this appeal. For that reason, I set it
    out now in its entirety.

[139]  I find that Ms. Climans and Mr. Latner were spouses for
    the purpose of spousal support having regard to all the factors. The dynamic of
    their relationship was such that all of the elements were present to some
    degree or another, but when viewed all together, lead to the conclusion that
    they were spouses:

a. Committed relationship: The parties were in a committed [14-year]
    relationship, as set out in more detail above, having exchanged rings (even if
    only commitment rings, as described by Mr. Latner), celebrated their
    anniversary each and every year, exchanged numerous love letters with
    expressions of deep commitment, Mr. Latner calling [Ms. Climans] Mrs. Latner
    (or other similar names), and Ms. Climans caring for Mr. Latner during hospital
    stays. There was an expectation that Ms. Climans be available to Mr. Latner,
    and run errands for him.

b. Financial Arrangements: Mr. Latner paid for Ms. Climans
    expenses for the entirety of the relationship, provided her with a lavish
    lifestyle, paid off one of her mortgages and created a financial dependency.

c. Extended Family and Social Perception: Ms. Climans was
    treated as family by the extended Latner family. The parties held themselves
    out as a couple in a long-term committed relationship to both family and
    friends. They have referred to each other as spouses in public. Ms. Climans participated
    in the extended Latner family lifecycle events and even walked down the aisle
    with Mr. Latner at his daughters wedding, standing under the chuppah (canopy)
    with him.

d. Living together:

i. I find that every summer, Mr.
    Latner and Ms. Climans moved up to and lived together at the cottage. This was
    their summer home, where they could be located throughout the summer for almost
    the entire 14 years.

ii. I also find that for the
    first several years of the relationship, Ms. Climans was residing at Mr.
    Latners home on a regular basis, when her children were not in her care, being
    alternate weekends. I accept that she maintained a separate home for her
    children, to be close to their school, and by the time they graduated the
    parties were already in the process of building a home together. This may have
    changed later in the relationship but was certainly present in the first few
    years.

iii. The parties also lived
    together as spouses when in Florida.

Had these been the only factors, I would not have concluded
    that they were spouses. However, when taken into account along with all the other
    dynamics in this relationship (summarized above), I conclude that they were
    common law spouses.

[36]

The
    trial judge then considered the issue of spousal support and concluded that Ms.
    Climans was entitled to both non-compensatory and compensatory spousal support.

[37]

In
    terms of non-compensatory support, she based entitlement on the difference
    between the needs and means of the parties, saying: The circumstances of this relationship
    clearly created a pattern of economic dependency: at para. 143. As Ms. Climans
    only source of income is from teaching yoga, she needs support payments to meet
    her needs.

[38]

The
    trial judge found that Ms. Climans was entitled to compensatory support because
    she had suffered economic loss or disadvantage as a result of the role she played
    during the relationship. She noted that Ms. Climans had given up her job at the
    start of the relationship to be available to Mr. Latner and had been out of the
    workforce for 14 years as a result.

[39]

However,
    the trial judge found that Ms. Climans compensatory claim was weak: she had
    not contributed to Mr. Latners success nor did he owe his success to her role
    in the relationship. While Mr. Latner did receive some benefit from Ms.
    Climans during the relationship, when the parties met, Mr. Latner was already
    well established in his familys business. Ms. Climans played no role in the
    acquisition or improvement of the family business and any benefit she conferred
    did not survive the breakdown of the relationship.

[40]

The
    trial judge next considered Mr. Latners income. She noted that he had not
    taken a position on his true income for support purposes because he
    acknowledged that his ability to pay support was not an issue. She found the
    quantum of spousal support was driven mainly by Ms. Climans needs but stated
    it was still necessary to make some finding as to Mr. Latners income. After
    discussing some of the complex financial arrangements that impacted Mr.
    Latners income, she found he had an average annual income of over $6.5 million
    in the preceding three years. She was satisfied that he had sufficient income
    from which to pay support and that it was Ms. Climans needs, measured against
    her standard of living during the relationship, that was the driving factor in
    determining the quantum of spousal support.

[41]

The
    trial judge then addressed the duration for which spousal support was payable. At
    para. 181 of the Trial reasons, she noted that under the SSAGs, spousal support
    was payable for between 7 and 14 years, unless the years of their relationship
    and Ms. Climans age total 65 or more, in which case the Rule of 65 applied
    and spousal support was payable indefinitely. However, she noted, by ordering
    indefinite support, she was not necessarily making a finding that Ms. Climans
    was entitled to permanent spousal support.

[42]

Ms.
    Climans was 51 years, 9 months, and 13 days of age when the parties
    relationship ended. Her position was that she and Mr. Latner started cohabiting
    on November 1, 2001, and separated on May 11, 2015. On Ms. Climans
    calculation, she met the Rule of 65 (65 years and 5 months) and was entitled to
    indefinite spousal support.

[43]

At
    para. 181 of the Trial reasons, the trial judge said, While I may not agree
    that they started cohabiting as early as November 1, 2001, there is a
    five-month leeway. She found that at some point in those first five months of
    the relationship, the parties did start cohabiting.

[44]

After
    weighing the relevant factors and considerations  including lifestyle, ages,
    contribution to expenses, a weak compensatory claim, the duration of support
    and length of the relationship  the trial judge concluded that Ms. Climans was
    entitled to indefinite spousal support of $53,077 per month.

THE COSTS DECISION

[45]

In
    her reasons for the Costs Order (the Costs reasons), the trial judge set out
    the four fundamental purposes of costs rules: to partially indemnify successful
    litigants; to encourage settlement; to discourage and sanction inappropriate
    behaviour by litigants; and to ensure that cases are dealt with justly. She
    noted that in family law cases, costs are addressed by rule 24 of the
Family
    Law Rules
, O. Reg. 114/99 (the Family Law Rules). She further noted this
    courts recent decision in
Beaver v. Hill
, 2018 ONCA 840, 143 O.R.
    (3d) 519, which emphasized the need for reasonableness and proportionality in
    the exercise of discretion when making a costs award.

[46]

The
    trial judge considered the factors in rule 24. She found Ms. Climans to have
    been successful on the central issue of whether she was a spouse, and on the
    issues of quantum and duration of spousal support. She noted Mr. Latners success
    on the smaller issue of life insurance. The trial judge observed that both
    parties had made various offers to settle but found that the offers were
    neutral on the issue of costs. She concluded that, as Ms. Climans had succeeded
    at trial, she was entitled to costs.

[47]

The
    trial judge also considered the time spent by each party and the legal fees
    they had incurred. Each had spent in excess of $430,000 in legal fees. While
    she described those amounts as high, she found they were reasonable in this
    case. She also found them to be proportionate to the quantum of money at stake
    for both parties and to the legal fees spent by one another.

[48]

In
    considering each partys behaviour during the legal proceedings, the trial
    judge rejected Ms. Climans invitation to find that Mr. Latner had acted in bad
    faith. However, she found his conduct had been unreasonable in two ways: (1) his
    position that Ms. Climans was nothing more than a travel companion or
    girlfriend; and (2) he had not been forthcoming in his disclosure.

[49]

Because
    of her determination that Mr. Latner had been unreasonable in these ways, the
    trial judge ordered costs in favour of Ms. Climans on a substantial indemnity
    basis, fixed at 70% of actual costs. Of Ms. Climans total legal fees of $463,114,
    Mr. Latner was ordered to pay her costs of $324,179.

THE ISSUES

[50]

Mr.
    Latner raises three issues on appeal. He says that the trial judge erred in:

1.

concluding that he and Ms. Climans met the definition of spouse in s.
    29 of the FLA;

2.

concluding that the parties began cohabiting in the first five months
    of their relationship so as to meet the Rule of 65; and

3.

awarding Ms. Climans costs on a substantial indemnity basis.

ANALYSIS

ISSUE #1:   Were the parties spouses within the meaning of s.
    29 of the                        FLA?

The Parties Positions

[51]

Mr.
    Latner acknowledges that he and Ms. Climans had a long-term romantic
    relationship. However, he submits, as they never married or lived together in
    a conjugal relationship, they were not spouses within the meaning of s. 29 of
    the FLA and the trial judge erred in concluding that they were. His submission
    rests on two lines of argument: first, that the parties did not live together;
    and second, that the other factors indicating a conjugal relationship did not
    establish that they had lived together.

[52]

The
    first line of argument runs as follows. Relying on
Stajduhar v. Wolfe
,
    2017 ONSC 4954, at para. 65, affd 2018 ONCA 256, leave to appeal refused,
    [2018] S.C.C.A. No. 431, to live together means to have a common abode in the
    sense that there is a readily identifiable place where
both
are ordinarily
    to be found most of the time when they are at home (emphasis in original). As
    the parties maintained separate residences throughout their relationship, Mr.
    Latner says that the evidence does not support a conclusion that they had a
    common abode.

[53]

Mr.
    Latner acknowledges that maintaining separate residences does not automatically
    lead to the conclusion that the parties did not live together. However, he
    contends that Ms. Climans did not sleep over at his home with anything like the
    frequency that characterizes the cases relied on by the trial judge in which
    cohabitation was found. In the early years, Ms. Climans only slept at his home on
    alternate weekends when her children were with their father. Further, she
    stayed over at his Toronto home with even less frequency when her children were
    older. On Ms. Climans evidence, between 2006 and 2013, she slept over at Mr.
    Latners Toronto home no more than 10 to 20 times.

[54]

Mr.
    Latner notes that, in considering whether the parties lived together, the trial
    judge also relied on the time they spent together in the summer at the Muskoka
    cottage and on trips to Florida in the winter months. But, he says, the cottage
    only accounted for approximately eight weeks each year and the time in the
    Florida condo was basically only alternate weekends. He argues that in the
    cases relied on by the trial judge, there was much stronger and more tangible
    evidence that the parties lived together at a common abode and that Ms.
    Climans failed to demonstrate that they lived together at a common abode or under
    the same roof on a continuous and consistent basis.

[55]

The
    second line of argument can be summarized as follows. Cohabitation and a
    conjugal relationship, while overlapping and interwoven concepts, are
    separate concepts. Ms. Climans had to show both that she and Mr. Latner lived
    together, and that they did so in a conjugal relationship. He contends that the
    interwoven nature of the concepts cannot be permitted to overwhelm the plain
    language of the statutory test and that the
Molodowich

factors
    pointing to a conjugal relationship should not be applied so as to read out the
    legislative requirement that the parties live together. In short, he says, the
    factors pointing to a conjugal relationship do not make up for the basic fact
    that he and Ms. Climans chose not to live together.

[56]

Ms.
    Climans position on this issue can be summarized simply. The trial judge made
    no error in her articulation of the legal principles for determining whether
    the parties were spouses and her findings of fact are not challenged. As the
    trial judge considered the different elements of the parties relationship, and
    applied the correct legal principles, there is no basis to interfere with her
    determination, on the totality of the evidence, that the parties were spouses.

Analysis

[57]

I
    accept Ms. Climans submission on this issue.

[58]

I
    reject Mr. Latners submission that the trial judge erred in finding that the
    parties had lived together in a conjugal relationship. Lack of a shared
    residence is not determinative of the issue of cohabitation. As the trial
    judges review of the caselaw demonstrates, there are many cases in which
    courts have found cohabitation where the parties stayed together only
    intermittently.

[59]

The
    trial judge recognized that cohabitation requires not only that the parties had
    a conjugal relationship but also that they lived together. As she stated at para.
    128 of the Trial reasons, all of the
Molodowich

factors must be
    considered in conjunction with one another when determining whether the parties
    cohabited, however, there needs to be some element of living together under
    the same roof.

[60]

As
    the trial judge observed, whether the parties lived together  despite having
    chosen to maintain separate residences  was a question that gave her pause.
    She wrestled at length with whether the intermittent periods during which the
    parties shared a roof  including Ms. Climans overnight stays, the summers at
    the cottage, and the time spent in Florida  could, in all the circumstances,
    constitute living together in a conjugal relationship. She was entitled to
    conclude that they did and to find cohabitation. A review of para. 139 of the
    Trial reasons (set out above) shows that she took into consideration both the
Molodowich

factors for a conjugal relationship and her findings of fact on the
    parties relationship that led her to conclude that they had lived together.

[61]

The
    trial judge correctly interpreted the legislation and articulated the governing
    legal principles in deciding whether the parties had been spouses. We have been
    pointed to no errors in her factual findings, much less ones that are palpable
    and overriding. In effect, on this ground of appeal, Mr. Latner asks this court
    to reweigh the evidence  that is, to apply the law to the facts and come up
    with a different result than that of the trial judge. But that is not the role
    of this court. Absent reversible error, this court must defer to the trial
    judges application of the law to the facts as she found them.

[62]

As
    Mr. Latner has not established a basis for appellate intervention with the
    trial judges determination that the parties had been spouses, her determination
    must stand. I would dismiss this ground of appeal.

ISSUE #2:   Was the Rule of 65 met?

The Parties Positions

[63]

The
    trial judge concluded that Ms. Climans satisfied the Rule of 65 based on her finding
    that the parties began cohabiting at some point in the first five months of
    their relationship  that is, prior to March 17, 2002 (the Finding). Mr.
    Latner submits that the trial judge erred in that Finding. He says that by mid-March
    2002, the parties had not yet spent any time together at his Muskoka cottage 
    that first occurred in July 2002. Further, he points out that they had spent only
    a few nights together at his home in Toronto. In this regard, it will be
    recalled that because of Ms. Climans responsibilities to her children, in the
    early years of their relationship, she slept at Mr. Latners Toronto home only
    on alternate weekends when the children were with their father. And, as the
    trial judge found, Mr. Latner did not stay over at Ms. Climans home. Moreover,
    Mr. Latner says, very few of the indicia of a conjugal relationship that the
    trial judge relied on to conclude that the parties ultimately became spouses had
    actually occurred by mid-March 2002.

[64]

Thus,
    Mr. Latner submits, even if the parties met the statutory requirement that they
    live[d] together in a conjugal relationship at a later stage in their
    relationship, they were not cohabiting within the first five months of their
    relationship and the Rule of 65 was not met.

[65]

Ms.
    Climans begins by observing that Mr. Latner has not made clear the basis on
    which he appeals the Finding: is he alleging that the trial judge made an error
    of fact, of law, or of mixed fact and law? Ms. Climans contends that the
    question of when the parties started to cohabit is a question of fact that
    attracts the highest standard of review: appellate intervention is warranted
    only where the trial judge made a palpable and overriding error or a finding
    which is clearly wrong. She submits that there was ample evidence before the
    trial judge, which she was entitled to accept, that the facts indicative of
    each of the
Molodowich

factors existed within the first five
    months of the relationship. Therefore, she says, the trial judge made no error
    in finding that the parties began cohabiting within that period.

Analysis

[66]

I
    accept Ms. Climans complaint that Mr. Latner fails to make clear his position
    on the appropriate appellate standard of review on this issue. Having said
    that, I find it unnecessary to decide that matter. For the purpose of this
    appeal, I will accept Ms. Climans submission that this issue revolves around
    the Finding (i.e. that the parties started cohabiting at some point in the
    first five months of their relationship) and that the Finding is a question of
    fact which attracts the highest standard of appellate review.

[67]

Applying
    that standard, it is my view that the Finding cannot stand because it is the
    result of palpable and overriding error. Ms. Climans could only meet the Rule
    of 65 if the parties were found to have begun cohabiting in the first five
    months of their relationship. As the Finding to that effect must be set aside,
    the trial judge erred in principle in concluding that Ms. Climans met the Rule
    of 65.

[68]

The
    full text of the trial judges reasons on this issue is found at para. 181 of
    the Trial reasons. Paragraph 181 reads as follows:

Under the SSAGs, spousal support is payable for a duration of
    between 7-14 years, unless the years of their relationship and Ms. Climans age
    total 65 or more (the Rule of 65). Ms. Climans was 51 years of age at
    separation (or to be exact, 51 years, 9 months and 13 days). Ms. Climans has
    taken the position that they started cohabiting as of November 1, 2001 and
    separated May 11, 2015. This means that they cohabited, by her calculations,
    for 13 years, 6 months and 24 days. By her calculations she hits the Rule of
    65 (65 years and 5 months), and is asking for indefinite spousal support.
    While I may not agree that they started cohabiting as early as November 1,
    2001, there is a five-month leeway. It was Mr. Latners position that the
    parties never cohabited, so he did not provide any evidence or take a position
    as to the start date. I find that at some point in those first five months of
    the relationship, the parties did start cohabiting.

[69]

The
    trial judge gave no reasons in para. 181, or elsewhere in the Trial reasons, for
    why she concluded that the parties began cohabiting in the first five months of
    their relationship. She referred to no legal principles, factual findings, or
    evidence in support of that Finding.

[70]

However,
    in concluding that the parties were spouses within the meaning of ss. 29 and
    1(1) of the FLA, the trial judge relied on her extensive factual findings to
    determine that the parties had cohabited. On those findings, the parties did
not
begin cohabiting within the first five months of
    their relationship. Accordingly, the Finding is the result of palpable and
    overriding error.

[71]

As
    I explain on the first issue, the trial judge found that the parties were
    spouses within the meaning of s. 29 of the FLA because they cohabited for a
    period of not less than three years. To determine whether the parties had cohabited,
    the trial judge applied s. 1(1) of the FLA and asked: did the parties live
    together in a conjugal relationship. She readily found that the parties had a
    conjugal relationship but struggled with whether they had lived together. A
    review of paras. 120, 128, and 139 of the Trial reasons makes this evident.

[72]

At
    para. 120, the trial judge said:

They were in a long term committed relationship. Mr. Latner
    treated Ms. Climans as his wife. Their relationship was sexual in nature. They
    held themselves out as a committed couple and were perceived as a couple by
    their family and friends. Ms. Climans was considered family by the extended
    Latner family. The parties participated in social activities as a couple. Mr.
    Latner supported Ms. Climans financially. They travelled extensively together.
    They lived together at the cottage each summer.

[73]

It
    is notable that there is no timeline for the findings in para. 120. Rather,
    they reflect the trial judges findings about the relationship over its duration
    of almost 14 years. While some aspects of their conjugal relationship began
    right away  for example, its sexual nature  others did not. For instance, the
    first time the parties lived together at the Muskoka cottage was in the summer
    of 2002. Self-evidently, the summer of 2002 is later than March or April of
    that year. And, the trial judges findings that underpin her conclusion that
    the relationship was a committed one include Mr. Latners proposal to Ms.
    Climans and gift of a ring. However, those events took place in October 2002 
    again, well after the first five months of their relationship. Other matters
    that the trial judge refers to in para. 120 are based on findings she made
    about the parties relationship as it progressed over time. Examples of this
    include the evidence on which the trial judge found that family and friends perceived
    the parties as a couple. Again, those events occurred later than the first five
    months of their relationship.

[74]

Importantly,
    the trial judge did
not
conclude in para. 120 that
    the parties had cohabited  she concluded that they had been in a conjugal
    relationship. This is made clear at para. 128 of the Trial reasons, where the
    trial judge notes that it was not sufficient to find that the parties had a conjugal
    relationship  it was necessary to find that they lived together in a
    conjugal relationship. As she explained, [T]here needs to be some element of
    living together under the same roof. The very definition of cohabit requires
    that the parties
live together
in a conjugal relationship (emphasis
    in the original).

[75]

Thus,
    it is significant that when the trial judge ultimately concluded, at para. 139
    of the Trial reasons, that the parties were spouses for the purpose of spousal
    support, she did so based on the entirety of their relationship, with specific consideration
    of the periods of time that they lived together: the almost  14 years that
    they spent summers together at the Muskoka cottage; the first several years
    of their relationship when Ms. Climans stayed at Mr. Latners Toronto home on
    alternate weekends; and, the time they spent together in Florida in the winter
    months.

[76]

Two
    points of significance arise from this review of para. 139 of the Trial
    reasons. First, the time the parties spent together over the duration of their relationship
    was a critical consideration for the trial judge in reaching her conclusion that
    the parties had cohabited. Second, the trial judge found that the living
    together requirement necessary to establish cohabitation was met, in part,
    because the parties lived together at the cottage each summer  and they first
    lived together at the cottage in the summer of 2002, a time later than the first
    five months of the parties relationship.

[77]

As
    the parties did not begin cohabiting within the first five months of their
    relationship, the Rule of 65 does not apply and it was an error in principle to
    find that it did. Consequently, time-limited support is warranted.

[78]

As
    the Rule of 65 was not met, spousal support under the SSAGs

is payable
    for between 7 and 14 years: see Trial reasons, at para. 181. Having regard to
    the purposes of a support order set out in s. 33(1) of the FLA, and the trial
    judges findings on Ms. Climans contributions to the relationship, as well as
    the economic consequences of the relationship to her, I would order that
    spousal support be paid for a period of ten years. In my view, such an order
    will relieve the financial hardship Ms. Climans is experiencing and make fair
    provision to assist her in becoming able to contribute to her own support.

ISSUE #3:   Reconsidering the Costs Order

The Parties Positions

[79]

Mr.
    Latner seeks leave to appeal the Costs Order on the basis that the trial judge
    erred in principle in awarding costs against him on a substantial indemnity
    basis. He submits that she erred in finding his position that he had not been
    in a spousal relationship with Ms. Climans to be unreasonable. He points to the
    jurisprudence and the evidence to argue that he had a reasonable basis for his position.

[80]

Mr.
    Latner also contends that the trial judge erred in finding his approach to
    financial disclosure was unreasonable. He set out the various ways in which he
    was forthcoming about his finances during the relationship and provided
    financial information during the proceedings and at trial. He highlights the
    extremely complex nature of his financial affairs and points out that Ms.
    Climans produced hundreds of documents only on the eve of trial. Based on the
    overall principles of reasonableness and proportionality, he submits that costs
    on an enhanced basis were not warranted.

[81]

Ms.
    Climans position is that Mr. Latner needs leave to appeal the Costs Order and that
    leave should not be granted because Mr. Latner has not established an error in
    principle that warrants appellate interference.

[82]

In
    terms of the merits of the Costs Order, Ms. Climans points out that as the
    successful party at trial, she was presumptively entitled to partial indemnity
    costs. In awarding her costs equal to 70% of the legal fees that she incurred, Ms.
    Climans says that the trial judge addressed the relevant factors  including
    reasonableness and proportionality  and made findings about Mr. Latners
    behaviour that were justified. As the trial judge found that Mr. Latner had
    acted unreasonably, Ms. Climans says that the enhanced costs award was warranted.

Analysis

Leave to
    Appeal the Costs Order is not Required

[83]

Section
    133(b) of the
Courts of Justice Act
, R.S.O. 1990, c. C.43, provides
    that leave is required where the appeal is only as to a discretionary costs
    order. However, when the disposition on appeal changes the decision under
    appeal, leave to appeal from a costs order is not necessary:
Tadayon v.
    Mohtashami
, 2015 ONCA 777, at para. 70; see also
Beaver v. Hill
,
    2018 ONCA 840, at para. 2, leave to appeal refused, [2019] S.C.C.A. No. 82.

[84]

Since
    I would allow the appeal on the issue of the duration of spousal support, my
    disposition would change the decision below. Consequently, leave to appeal the
    Costs Order is not required.

Reconsidering the Costs Order

1.The General
    Principle

[85]

The
    general principle is that when an appeal is allowed, the order for costs below
    is set aside and the appellant is awarded costs below and on appeal:
St.
    Jean (Litigation Guardian of) v. Cheung
, 2009 ONCA 9, at para. 4. However,
    on my determination of the appeal, Mr. Latner would enjoy only partial success
    on appeal. Thus, the general principle does not apply. However, partial success
    on appeal still requires this court to reconsider the costs disposition at trial.

2.Factoring in the
    Effect of the Appeal

[86]

Reconsidering
    the Costs Order begins by factoring in the effect of the appeal on the decision
    below. This leads to the conclusion that Ms. Climans enjoyed a reduced level of
    success at trial.

[87]

At
    trial, Ms. Climans was successful on the issue of whether she and Mr. Latner
    were spouses within the meaning of s. 29 of the FLA. She remains successful on
    this important issue. Ms. Climans also succeeded on the quantum of support at
    trial, a matter that was not challenged on appeal. However, as I would order
    time-limited rather than indefinite spousal support, Mr. Latner is successful
    on the issue of the duration of spousal support.

3.The
    Reasonableness of Mr. Latners Conduct

[88]

The
    next step in reconsidering the Costs Order is to review the two aspects of Mr.
    Latners conduct that the trial judge found to be unreasonable and justified awarding
    costs on an elevated scale: Mr. Latners legal position that he and Ms. Climans
    had not been spouses, and his financial disclosure. On both matters, it is my
    view that the trial judge erred in principle in finding Mr. Latner acted unreasonably.

a.

Mr. Latners
    Legal Position

[89]

The
    trial judges criticism of Mr. Latners legal position is found at para. 17 of
    the Costs reasons where she says, His position at trial  that [Ms. Climans]
    was nothing more than a travel companion or girlfriend  was unreasonable.
[2]
Respectfully, I disagree.

[90]

A
    basic principle in our legal system is that a defendant is entitled to require
    the plaintiff to prove its claim  something more than advancing a reasonable
    position at law is required to attract heightened costs consequences. Thus, an unsuccessful
    party will not incur heightened costs consequences if his or her conduct,
    including the legal position advanced, is reasonable:
Hunt v. TD Securities
    Inc.

(2003), 66 O.R. (3d) 481 (C.A.), at para. 153; see also
Foulis
    v. Robinson; Gore Mutual Insurance Co., Third Party

(1978), 21 O.R.
    (2d) 769 (C.A.), at p. 776.

[91]

Importantly,
    this basic principle does not result in a party litigating with total immunity:
Hunt v. TD Securities
, at para. 153 (citations omitted). Where one
    party forces the other to prove its case and is unsuccessful, the length of the
    trial will be reflected in the bill of costs of the successful party. That is what
    happened in the present case. Because Mr. Latner required Ms. Climans to prove
    that they had been spouses within the meaning of s. 29 of the FLA, Ms. Climans
    had to spend significant time at trial introducing evidence about their
    relationship. In large measure, this accounts for the fact that the trial
    lasted for eight days.

[92]

In
    light of this basic principle, when determining whether to make an elevated
    costs award, the question for the trial judge was whether Mr. Latners conduct,
    including his legal position, was reasonable.

[93]

Mr.
    Latners legal position was that he and Ms. Climans had not been spouses within
    the meaning of s. 29 of the FLA because they had not lived together during
    their relationship  they maintained separate residences throughout, never
    married, and never moved in together. He said that he was clear throughout the
    relationship that he would not marry Ms. Climans or move in together with her
    unless and until they first entered into a domestic contract. This was not an
    after-the-fact justification for his legal position; the various draft domestic
    contracts he gave Ms. Climans during their relationship and which were
    introduced into evidence at trial bear witness to that. In this regard, it is
    notable that Mr. Latner again raised the issue of a domestic contract when he
    purchased the New Property that the parties had discussed as a future shared
    residence. Ms. Climans never signed the draft domestic contract and they never
    moved in together.

[94]

In
    my view, Mr. Latners legal position was reasonable. This is evident from the
    Trial reasons in two ways. First, as I explain in my analysis on the first
    issue, the trial judge expressly acknowledged that she struggled with whether
    the time the parties spent together during their relationship was sufficient to
    find that they lived together in a conjugal relationship. Second, the trial
    judges review of the caselaw demonstrates that where parties neither marry nor
    move in together, it is an open question as to whether they will be found to
    have cohabited. The fact that Mr. Latner lost on the issue of whether the
    parties had been spouses does not mean his legal position was unreasonable.

[95]

Did
    Mr. Latner otherwise act unreasonably in his conduct of the litigation? Setting
    aside the issue of financial disclosure, to which I return below, on the
    findings of the trial judge he did not. Rule 24(5) of the Family Law Rules
    provides that in deciding whether a party has behaved reasonably or
    unreasonably, the court shall examine  the partys behaviour in relation to
    the issues from the time they arose, including whether the party made an offer
    to settle  and the reasonableness of any offer. In this case, the trial
    judge found that Mr. Latner made offers to settle that show[ed] a desire to
    settle: Costs reasons, at para. 14.

[96]

When
    considering whether Mr. Latner acted reasonably in relation to the issues, I
    would add this. The biggest issue in this case was whether he and Ms. Climans had
    been spouses  without that, he had no obligation to pay her spousal support. Recall
    that, early in the proceedings, Mr. Latner entered into a consent order in
    which he agreed to provide Ms. Climans with significant financial support. Recall
    also that he fully complied with the terms of the consent order, providing Ms.
    Climans with over $620,000 between May 2015 and December 2018. In light of his
    legal position on the issue of whether the parties had been spouses, this conduct
    also shows that he acted reasonably.

[97]

For
    these reasons, the trial judge erred in principle in finding that Mr. Latner acted
    unreasonably in terms of his legal position.

b. Mr. Latners Financial Disclosure

[98]

Respectfully,
    I am of the view that the trial judge also erred in principle in finding that Mr.
    Latner acted unreasonably in terms of his disclosure. At para. 18 of the Costs reasons,
    she states:

Mr. Latner was not forthcoming in his disclosure. There is an
    absolute obligation in family law to provide reasonable disclosure. Mr.
    Latners response to his lack of disclosure was that [Ms. Climans] did not
    bring a motion asking for the disclosure. This is not an acceptable excuse.
    [Mr. Latners] unreasonable behaviour will increase the costs award.

[99]

I
    fully agree with the trial judge that Mr. Latner had an obligation to make
    reasonable disclosure. The question is whether he did.

[100]

In deciding whether
    Mr. Latners disclosure was reasonable, r. 24(12)(a)(i) of the Family Law Rules
    is of assistance. It directs the court, when setting the amount of costs, to
    consider the reasonableness and proportionality of [each partys behaviour] as
    it relates to the importance and complexity of the issues.

[101]

The trial judge was
    critical of Mr. Latners position that his annual income was not relevant
    because he conceded from the outset that he had the ability to pay any amount
    of spousal support: Costs reasons, at para. 15. In my view, that position was
    not unreasonable.

[102]

Mr. Latner disclosed
    the standard items used to establish annual income, such as his income tax
    returns from 2012 to 2017. He also candidly admitted that through the complex
    financial dealings of his family-controlled companies, in any given year, his
    actual annual income was substantially higher than that shown on the tax
    returns. He directed his corporate counsel to provide detailed information to
    Ms. Climans lawyer on those matters and this was done.

[103]

Further, Mr. Latners
    disclosure needs to be considered in context. He made extensive financial
    disclosure to Ms. Climans and her lawyers during their relationship, especially
    when they attempted to negotiate a domestic contract in 2002 and again in 2013
    and 2014.

[104]

He also provided extensive
    disclosure during the proceedings, including various financial statements
    disclosing his personal net worth. True, those statements varied in terms of
    how many hundreds of millions of dollars he was worth, as did the evidence on
    the effect of his being a discretionary beneficiary of a family trust. And, on
    the sole occasion that Ms. Climans lawyer took the issue of disclosure before
    a judge, the matter was resolved on consent and Mr. Latner fully complied with
    the terms of the consent order.

[105]

Further, the
    reasonableness of Mr. Latners disclosure must be considered in relation to the
    issues. Two points warrant mention in that regard. First, as the trial judge
    found, the quantum of support to which Ms. Climans was entitled was based
    largely on her need, as disclosed by her financial information, and the difference
    in the needs and means of the two parties. There was no question that Mr.
    Latner was a person of extraordinary means  financial disclosure beyond that
    which he provided was not necessary to demonstrate that. Second, as the trial
    judge found, Ms. Climans played no role in Mr. Latners financial success or in
    the acquisition or improvement of the family business. To the extent she had a
    compensatory claim, it was weak and related only to the fact that, as a result
    of the relationship, she had been out of the workforce for its duration (Trial
    reasons, at para. 145). Accordingly, Mr. Latners means  beyond his ability to
    continue to support Ms. Climans at the level he had during the relationship 
    were not relevant.

[106]

Finally, when
    considering the reasonableness of his disclosure, it cannot be overlooked that Mr.
    Latner directed his corporate counsel and the internal and external accountants
    for the Latner familys group of companies to deliver all requested documents
    and to meet with Ms. Climans counsel before trial. He also arranged for both
    the Latner groups internal and external accountants to be available to be
    cross-examined at trial.

[107]

Was Mr. Latner
    unreasonable because he took the position that his actual annual income was
    irrelevant given that his ability to pay was not in issue? In my view, in the
    circumstances of this case, he was not. Reasonableness and proportionality are
    to be judged in context, which includes a consideration of the matters in issue
    and the positions taken by the parties. These factors should also reflect a consideration
    of the other partys disclosure. In this case, Ms. Climans produced hundreds of
    documents only shortly before trial, a matter to which the trial judge did not
    advert.

4. Conclusion on Reconsidering the
    Costs Order

[108]

After factoring in the
    result of the appeal, in my view, Ms. Climans remains the more successful party
    at trial and, consequently, is presumptively entitled to costs: see r. 24(1) of
    the Family Law Rules. For the reasons given, I see no basis for an elevated
    level of costs. Consequently, I would order costs of the trial in her favour on
    a partial indemnity basis. Her total legal fees at trial were $463,114. On the usual
    approach of treating partial indemnity costs as 60% of full indemnity costs, I
    would award her trial costs of $277,868, all inclusive.

DISPOSITION

[109]

Accordingly, I would
    allow the appeal in part.

[110]

I would vary para. 4
    of the Order by adding the words for a period of ten years to the end of the
    first sentence. Thus, the amended first sentence of para. 4 of the Order would
    read as follows:

The Respondent shall pay the Applicant, spousal support in the
    sum of $53,077 per month, commencing January 1, 2019 and on the first day of
    each month thereafter, for a period of ten years.

[111]

Further, I would vary
    para. 1 of the Costs Order by substituting the figure of $277,868 for $324,179.

[112]

In light of the
    divided success on appeal, I would make no order as to costs of the appeal.

Released: September 4, 2020 (E.E.G.)

E.E. Gillese J.A.

I agree. David Brown J.A.

I agree. David M. Paciocco
    J.A.





[1]
H
er divorce was finalized in September 2005.



[2]

At para. 17, the trial judge also said that Mr. Latner was
    deliberately evasive and inconsistent in his trial testimony. However, those
    comments go to the issue of his credibility, not to whether his legal position
    was reasonable.


