Court File and Parties
Ontario Court of Justice
Date: 2018-06-25
Court File No.: Toronto DFO-11-11079-01
Between:
Helena Janik Applicant
— And —
Jerzy Drotlef Respondent
Before: Justice Alex Finlayson
Heard on: December 20, 2017, January 10 & 19, 2018, and February 14, 2018
Reasons for Judgment released on: May 2, 2018
Ruling on Costs released on: June 25, 2018
Counsel:
- Helena Janik on her own behalf
- Marek Z. Tufman, counsel for the respondent
In Chambers – Ruling on Costs
ALEX FINLAYSON J.:
A. Nature of this Ruling
[1] I heard a trial concerning the Respondent father's Motion to Change child support over several days in late 2017 and early 2018. I released a decision on May 2, 2018. In that decision, I determined the father's income to be $100,000 in most years in issue (except for 2013), I varied child support retroactively to December 1, 2016, I fixed the father's arrears and I ordered a repayment schedule.
[2] I invited written submissions concerning costs. This is my ruling on costs.
[3] The mother claims costs of the trial and disbursements in the aggregate amount of $7,758.53. This amount consists of three components:
(a) The mother was self-represented at the trial. She asks the Court to award her $2,000.00, which she says is 40 hours of her time, charged at $50.00/hour. She says that she spent many hours to prepare for the trial, but she claims only 40 hours at $50/hour, which she says relates to the time she spent "deciphering, categorizing and analyzing the copious submissions of the Respondent's "business receipts"";
(b) Separately, the mother claims $3,455.50 that she says she paid to two different lawyers prior to, and during the trial; and
(c) Third, the mother claims various disbursements for travel and car rentals to get between Fredericton, NB (where she lives) and Toronto, ON for the trial, and for a courier to send documents here.
[4] As I explained at ¶ 63-69 of my reasons dated May 2, 2018, on December 20, 2017, the first day of trial, I heard the mother's motion relating to the father's non-compliance with a prior disclosure order of Justice Murray dated July 14, 2017. I made a finding that the father had breached that order. I fixed costs of $400 in favour of the mother but reserved them. I also deal with those costs in these reasons.
[5] The father resists the costs claims for four principal reasons. First, he says that the mother should not be awarded the $2,000 she claims because she, as a self-represented litigant, has not proven that any remunerative activity was lost to do the work that she did relating to the receipts. Regarding the fees she paid to lawyers, the father says that the mother has not proven that they were actually incurred for the trial. Regarding the disbursements for travel, the father argues that the mother chose to move to New Brunswick prior to trial knowing that there would be a trial, and so he should not have to pay for her travel. And finally, he says there is insufficient information about whether the courier bill that she claims actually pertains to this proceeding.
B. Applicable Legal Principles and Analysis
(1) Entitlement to Costs
[6] In Serra v. Serra, 2009 ONCA 395, the Ontario Court of Appeal confirmed that modern costs rules are designed to foster three fundamental purposes, namely to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants, bearing in mind that the awards should reflect what the court views is a fair and reasonable amount that should be paid by the unsuccessful party.
[7] Costs in family law cases are governed by Rules 18 and 24 of the Family Law Rules, O. Reg. 99/114 as amended. It is well established law that costs are awarded to the successful party. Rule 24(1) of the Family Law Rules makes it clear that success is the pre-eminent factor.
[8] There is no question that the mother was the successful party. The father was substantially unsuccessful. The father did enjoy some modest success on certain points. He succeeded in convincing the Court that there had been a change in his circumstances such that the Order of Jones J. should be varied. The Court also determined his income to be $100,000 in most years in question, which was a reduction from the amount that Jones J. imputed to him in 2012. However, this success was modest as he did not succeed in reducing the income to close to the level that he advocated for, nor did he succeed in eliminating the arrears. As well, the Court declined to retroactively vary the Order as far back as the father asked. In the result, the Court reduced only a small amount of the arrears in relation to the father's claim.
[9] The assessment of success is contextual. See Browne v. Cerasa, 2018 ONSC 2242 at ¶ 8-11. While the father did enjoy some modest success, I note that the father has not argued that I should apportion costs based on divided victory in accordance with Rule 24(6). I would not have discounted the mother's cost claim to account for any divided success in this case in any event. When comparing the relief sought to the ultimate result, the mother was clearly the successful party and as I will explain, her costs claim is very modest to begin with.
[10] Nor have any arguments been made that the mother behaved unreasonably, such that she should be deprived of all or part of her costs in accordance with Rule 24(4).
[11] I was not given any Offers to Settle as part of the costs submissions, from either party. The failure to make an Offer can be considered unreasonable behaviour. But no submissions were made as to the reasonableness of the presence or absence of offers from either party. In view of this and the fact that no Offers from either party were presented during the submissions, I decline to say anything further about Offers except that Rule 18 has no applicability in light of this.
[12] Nor did the mother argue that the father behaved in bad faith in her submissions such that the Court should order costs on an increased scale in her favour. I am not making an order for full recovery costs under rule 24(8) of the Family Law Rules. I do however note that I did make findings concerning the father's conduct in my reasons dated May 2, 2018. I consider certain findings concerning the father's conduct to be relevant when considering the amount of costs to order under Rule 24(11). I will address that below.
[13] In the result, I find that the mother is entitled to costs.
(2) The "Step" for Which the Mother Claims Costs
[14] Rules 24(10) and 24(10.1) provide that costs are either to be determined in a summary manner after each step in the case by the presiding judge or reserved to a later stage in the case. A "step" in the case is one of the discrete stages recognized by the rules such as a case conference, settlement conference, or in this case a trial. See Husein v. Chatoor, 2005 ONCJ 487.
[15] The mother's claim for $2,000 relates to trial preparation. Her claim for $2,000 is properly before the Court as part of this "step", being the trial. As set out above, the issue raised by the father is not that these costs pertain to something other than trial preparation and so they are not properly claimable under rule 24(10), but rather he argues that she should not be able to recover these costs because of her failure to prove that she lost a remunerative opportunity.
[16] Regarding the fees the mother paid to two different lawyers, if they relate to something for which the mother has not been afforded the opportunity to seek costs yet, such as trial preparation or the trial, then those fees may be claimed within the meaning of Rule 24(10) also. I will say more about the fees the mother paid to the two different lawyers below as the father has raised issues about those fees.
(3) Quantum of Costs
[17] Rule 24(11) sets out the factors the Court should consider when determining quantum. Rule 24(11) reads as follows:
24(11) In setting the amount of costs, the court shall consider,
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness or unreasonableness of each party's behaviour in the case;
(c) the lawyer's rates;
(d) the time properly spent on the case, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order;
(e) expenses properly paid or payable; and
(f) any other relevant matter.
[18] This trial was heard over 4 days. By way of a general comment, the Court finds the amount of costs the mother claims to be very reasonable for a trial of this length. However, in the result, I am discounting some of the costs claimed by the mother based on the analysis that follows.
[19] Considering the factors in Rule 24(11), the issues in the case were important to the parties. The matter was of moderate complexity. As income was imputed to the father back in 2012, the issue for the Court to decide now was not merely a matter of comparing the father's declared income in subsequent years to his declared income in 2012. The Court had to apply the analysis in Trang v. Trang, 2013 ONSC 1980 on this point, and Gray v. Rizzi, 2016 ONCA 152, respecting the father's request for a retroactive variation.
[20] The fact that the father failed to participate in, and comply with disclosure orders made in the first proceeding before Jones J., and again in the Brampton proceeding, added to the complexity of the case. This was the father's second Motion to Change. His first Motion to Change was dismissed in 2016 for reasons based on his non-compliance. It thus became an issue for the Court to consider the extent to which this history and his past conduct impacted the relief he sought.
[21] The father relied on expert evidence respecting his income that the Court did not base its decision on to arrive at the result. At ¶ 147-178 of my reasons dated May 2, 2018, I set out the approach that the valuator took to the determination of the father's income and I set out why aspects of that approach, including the valuator's reliance on the father's own explanation of his business expenses, was problematic. In short, this was because the father's own evidence of his business expenses was not credible.
[22] At ¶ 32 to 44 of my reasons dated May 2, 2018, I made adverse credibility findings against the father. I found that he attempted to mislead the Court about his business expenses and that he "put the mother to the time consuming expense of combing through his receipts. She did a good job drawing the deficiencies to my attention in her cross-examination of the father". In my view, this all added to the complexity of the case. It is also unreasonable behavior on his part. It informs my decision about the reasonableness of the costs claimed for the work done by the mother.
[23] In terms of the work the mother had to undertake relating to the expenses, again the father did not provide the mother with only legitimate business receipts in an organized fashion. Rather he supplied her (and the Court) with misleading documents. The mother had to undertake the laborious exercise of combing through the receipts to try to make sense of what she received and to try to determine which receipts were actually business receipts. As I found at ¶ 143-145 of my reasons dated May 2, 2018, it was the father's obligation to undertake this exercise, not the mother's.
(4) Whether the Mother Has Proven Lost Opportunity Cost
[24] The real question I must decide respecting the mother's claim for $2,000 is whether to deny recovery of these costs based on the father's argument that she had not given up remunerative activity to undertake the analysis of his receipts. The father relies on Fong v. Chan, and Mustang Investigations v. Ironside et al, 2010 ONSC 3444, to support his argument. These are two cases decided pursuant to the costs rules in the Rules of Civil Procedure.
[25] I disagree with the father's argument for several reasons.
[26] In part, Fong v. Chan resolved a historic debate about whether there remained any continuing justification to limit a self-represented litigant from claiming only solicitor's fees, and not counsel fees. The decision brings an end to any such distinction in light of the purpose behind modern costs rules. Fong v. Chan provides that a self-represented litigant may claim costs.
[27] However, the Court in Fong v. Chan also sets out various factors to consider when a self-represented litigant claims costs. The father relies on certain passages from Fong v. Chan:
(a) There is no automatic right of a self-represented litigant to recover costs. The matter remains fully within the discretion of the trial judge. For example, a trial judge may deny costs to a self-represented litigant where she has behaved unreasonably;
(b) Self-represented litigants are entitled to costs calculated on the same basis as a litigant who retains counsel. All litigants suffer a loss of time through their involvement in the legal process. The self-represented litigant should not recover costs for the time and effort that any litigant would have to devote to a case. Costs should only be awarded to those lay litigants who can demonstrate they devoted time and effort to do the work ordinarily done by a lawyer retained to conduct the litigation and that, as a result, they incurred an opportunity cost by forgoing remunerative activity; and
(c) A self-represented lay litigant should receive only a "moderate" or "reasonable" allowance for loss of time devoted to preparing or presenting the case.
[28] Regarding (a) and (c), there is no argument that the mother behaved unreasonably to dis-entitle her to costs. Nor is there any argument that the rate of $50/hour multiplied by 40 hours that she claims is not "moderate" or "reasonable". I do find that the hourly rate claimed and the hours spent to be very reasonable. I also find that the work the mother did is not the kind of work that any litigant would have to undertake as a result of being involved in litigation. Rather, the review and analysis of the father's financial records that the mother undertook is the precise kind of work that a lawyer would have done to both prepare the mother for her evidence in chief, and more importantly to prepare for cross-examination of the father.
[29] The father's argument that the mother should not receive any costs for this work that she did, focuses specifically on (b). He argues that she failed to prove lost opportunity cost by having to do this work.
[30] In Mustang Investigations v. Ironside, 2010 ONSC 3444, the second case upon which the father relies, the Divisional Court interpreted the requirement to prove lost opportunity cost strictly. The Court held that one may not assume opportunity cost. As a matter of policy, the Divisional Court was somewhat concerned about the "far-reaching consequences" of compensating self-represented litigants at rates for legally trained persons, even if at a law student rate.
[31] But various cases since Mustang Investigations have dealt with that concern by awarding a more modest hourly rate. And in this case, the mother has claimed an hourly rate that is much less than what even a law student's rate would be.
[32] In my view, the case law has been further developed since Fong v. Chan and Mustang Investigations v. Ironside.
[33] In Jordan v. Stewart, 2013 ONSC 5037 at ¶ 89-128, Justice George Czutrin undertook a 14 year review of costs decisions involving self-represented litigants. In so doing, Czutrin J. set out a number of principles that apply when self-represented litigants claim costs. And as Czutrin J. also said in Jordan v. Stewart, it is important to remember that this case is governed by the Family Law Rules. As Czutrin J. said, Fong v. Chan, although complimentary, pre-dates the Family Law Rules.
[34] Many of the principles that Czutrin J. highlighted in Jordan v. Stewart were summarized in the very recent decision of Justice Laura Fryer in Browne v. Cerasa, 2018 ONSC 2242. In Browne v. Cerasa, Fryer J. states that if the Court does not have the option of awarding meaningful costs to self-represented litigants, its ability to encourage settlements and discourage inappropriate behavior will be greatly diminished.
[35] Parties must remember that Rules 18 and 24 equally apply in cases involving self-represented litigants. The principle of indemnification is only one principle enshrined in the Family Law Rules. As Fryer J. says, if costs are not ordered, access to justice by self-represented litigants is undermined and the administration of justice may be frustrated.
[36] In specifically discussing how lost opportunity cost should be dealt with, Fryer J. said:
…costs for self-represented parties are not the same as damages for lost income. Remunerative loss is not a "condition precedent" to an award of costs.
To require proof of lost income would disqualify litigants who are homemakers, retirees, students, unemployed, unemployable and disabled; and deprive courts of a tool required re administration of justice.
Lost income may be one measure. But even if no income was lost, the self-represented party's allocation of time spent working on the case may still represent value. The fact that a self-represented litigant is not a lawyer who charges a standard and commonly accepted hourly rate makes it more difficult – but not impossible – to assess their costs. However, the difficulty in valuing the time and effort of the lay litigant is not a good reason to decline to value it.
[37] In this case, I find I must consider the reality of this family when considering whether to award the mother costs. But separately, the Court does not need to assume opportunity cost in this case. There was evidence of lost opportunity cost before me.
[38] The mother is self-employed as a Yoga and Pilates Instructor. She has struggled without proper child support to make ends meet. She is the primary parent of two children, ages 14 and 12. At ¶ 16, 17 and 26 of my reasons dated May 2, 2018, I found that there was no evidence that the father has any meaningful relationship with the two children. I found that the mother has been their sole caregiver since their births.
[39] The mother and the children moved to New Brunswick in the summer of 2017 due in part to financial constraints. The time she spent in Toronto for this trial is the longest she has been away from the children.
[40] The time she spent working on this case is time away from her children and time that she could have devoted to earning self-employment income as a Yoga and Pilates Instructor. Being a mother does not have an economic value in terms of an hourly rate, but it is a vitally important job. This is part of the difficulty in quantifying the value of certain work that Fryer J. referred to. It is also hard to quantify her lost income from self-employment, since the mother's income has fluctuated over the years. It is also hard to quantify the lost remunerative opportunity from self-employment, as the mother testified that she pursued this form of self-employment to make the children a priority.
[41] But as Fryer J. said, the difficulty to quantify lost opportunity in such a case does not mean that an award of no costs is the correct result.
[42] I note that in White v. Ritchie, a case decided pursuant to the cost provisions of the Rules of Civil Procedure, the claimant was not able to prove lost income because he did not have a job. But the Court nevertheless made an award of costs, choosing to discount the amount of the claim rather than denying it outright.
[43] In the result in this case, the Court must make an award of costs that is fair, proportionate and reasonable. It must take into account all of the objectives of the Family Law Rules, including indemnification, awarding success, proportionality, encouraging settlement and discouraging certain types of behaviour. The costs award is designed in part to discourage the type of conduct in which the father engaged concerning his disclosure obligations.
[44] I find that the time that the mother spent analyzing the receipts is work that a lawyer would have done. The mother spent time working on this case that she could have spent with her family or that she could have spent trying to earn an income.
[45] I find that the amount the mother claims is modest and very reasonable. I find that it is appropriate to award the mother the $2,000 that she has claimed.
(5) The Fees the Mother Paid to Lawyers
[46] I also find that the quantum of costs the mother paid to lawyers prior to and during the trial to be reasonable. However, I agree, but only in part, with the father's submission that it is not possible to determine whether the amounts claimed relate to this matter.
[47] In the result, I am only allowing some of the fees paid by the mother to lawyers.
[48] The mother claims $2,655.50 that she paid to Paul Pellman. Mr. Pellman was the mother's lawyer when she had the uncontested trial before Jones J. back in 2012.
[49] The mother provided a copy of a bank draft showing that she paid Mr. Pellman $3,000 on September 27, 2017. This appears to be related to fees that began perhaps as far back as May 23, 2017, but I am not sure because I do not have the detail.
[50] Then, on November 23, 2017, Mr. Pellman refunded the mother $344.50, being the remaining unused amount from the initial $3,000 she provided.
[51] To support her claim to recover the net amount of $2,655.50 that she paid to Mr. Pellman, all the mother provided me with was two letters from Mr. Pellman dated May 23, 2017 and November 23, 2017, plus the copy of the $3,000 bank draft dated September 27, 2017.
[52] I was not given any Bill of Costs or dockets from Mr. Pellman to understand what these charges pertain to. His letter of May 23, 2017 says that he met with the mother to discuss her family law matter concerning the variation of a support order. By that letter, he asked her for some documents and he indicated that he looked forward to working with the mother to "negotiate an appropriate settlement of this matter".
[53] I cannot determine if all of the money the mother paid Mr. Pellman related to negotiation or if some of it related to trial preparation. The problem with the claim is that as of May 23, 2017, when the letter says that the mother had first met Mr. Pellman, this case was not then even listed for trial yet. As of May 23, 2017, the next event in the case was a case conference, booked for July 14, 2017. It was only at that case conference that Murray J. sent this case the Assignment Court. And it was only at the Assignment Court on September 27, 2017 that Murray J. scheduled this matter for trial to commence December 20, 2017. Some of the money that the mother paid Mr. Pellman could have related to preparation for the July 14, 2017 and/or September 27, 2017 attendances, for which no costs orders were made, nor were costs reserved. Or the fees could have related to advice about settlement. But I do not know as I do not have the detail. And again, the mother obtained a refund of the money she had left in trust on November 23, 2017, almost one month before the trial started.
[54] In the result, I am unable to determine that the money spent with Mr. Pellman relates to trial preparation, the trial or some other step that is properly claimable now. Based on what I was given, it does appear that the mother retained Mr. Pellman for some other purpose rather than for trial preparation. In the absence of being provided with a specific breakdown of what the fees pertained to by way of a Bill of Costs or some other dockets, I am not prepared to guess.
[55] However, I am awarding the mother the full $800 that she paid to John Silvester. In her submissions, the mother has explained that she paid money to Mr. Silvester, who she says has an LL.B. for "consulting on case law; next steps". She has provided proof of three email transfers to Mr. Silvester totaling the $800 paid. The timing of the payments are also noteworthy. She paid these fees to Mr. Silvester entirely during the trial (the payments were made between December 28, 2017 and January 19, 2018).
[56] Unbundled legal services are a way for a litigant of very modest means, such as the mother in this case, to obtain access to justice.
[57] I accept the mother's submission that this disbursement properly relates to obtaining assistance with the trial.
(6) Disbursements
(a) The Courier Bill
[58] Disbursements are recoverable pursuant to Rule 24(11)(e). The father disputes the courier bill that the mother has submitted. On February 7, 2018, the mother sent a FedEx to CPS Inc. at 701 Evans Avenue in Toronto. The father says that this "apparently is some company that advertises itself as medical malpractice lawyers. There seems to be no explanation at all why this shipment has anything to do with this proceeding."
[59] The father did not provide any documentation that CPS Inc. is a firm of medical malpractice lawyers. And, in her submissions, the mother has indicated that she sent courier relating to the upcoming February 14, 2018 Court date. February 14, 2018 was the last day that I heard evidence in the trial and the day I heard closing submissions.
[60] I do not find it to be out of the ordinary in any way that the mother would have sent a mid-trial courier in advance of a court date.
[61] The courier of $38.31 is allowed.
(b) Costs Incurred by the Mother to Travel Between Fredericton, New Brunswick and Toronto, Ontario
[62] Finally, the father disagrees with the mother's claims for flights and car rentals to travel to Toronto from New Brunswick. He says she chose to move to New Brunswick prior to the trial and so he should not have to pay for her travel back here to participate in the trial.
[63] Again, I have already found that the mother was having difficulty making ends meet in Toronto. The father was not paying child support properly and he owes considerable arrears. The mother had refinanced her Toronto home on several occasions to make ends meet. Then she decided to move to New Brunswick to be with her partner, Norman Foster. The timing of her move relates to the fact that she wanted to have the children start the school year. It so happens that this was a few months before the trial.
[64] I am allowing all of the mother's claim for air fare, except for her travel costs relating to the September 27, 2017 court date and the December 20, 2017 date. See White v. Ritchie, regarding recovery of travel costs. I am not allowing the travel costs she has claimed relating to September 27, 2017 attendance, as they were not reserved to the trial judge. And on December 20, 2017, I already fixed costs of $400, but reserved them. In her submissions, the mother concedes that the costs I reserved of $400 should apply respecting December 20, 2017 and so she does not really claim the additional travel costs for December 20, 2017.
[65] I have considered the father's argument that on January 19, 2018, the mother incurred plane fare, not just for herself, but also for the two children to accompany her to Toronto. The father disputes the propriety of claiming air fare for the children. But the mother says she did not have alternate care arrangements for the children on that occasion. And she had to be in Court.
[66] Again, in my reasons, I found that the father had left the mother to be the sole caregiver for the children. He never properly paid child support. The children are now 14 and 12. The mother had no choice; she could not very well have left 14 and 12 year old children home alone while she came here to Toronto to participate in the trial in which the father sought to eliminate all of the arrears of child support that had accumulated.
[67] In the result, I am allowing the mother's full claim for air fare on January 10, 2018, January 19, 2018 and February 14, 2018.
[68] I am not allowing the car rental charges she claims. These charges relate to car rentals for the September 27, 2017 and December 20, 2017 attendances. I decline to allow recovery of these charges for the same reasons I have not allowed recovery of air fare on those dates, explained above.
(7) Costs Previously Reserved
[69] Finally, the mother is entitled to the $400 of costs I reserved relating to the December 20, 2017 attendance. The father has not made any submissions to argue why the mother should not now be entitled to these costs, previously reserved in her favour.
C. Order
[70] Based on the foregoing, I make the following Order:
The father shall pay the mother costs of $4,603.97, which is inclusive of any disbursements and tax on the disbursements. These costs shall be paid forthwith. If the mother wishes she may file this Order for enforcement with the Family Responsibility Office and costs may be enforced as an incident of support.
Released: June 25, 2018
Signed: Justice Alex Finlayson
Footnotes
[1] I am not able to read a portion of this letter because the mother has copied a bank draft over the bottom part of the page.
[2] For clarity, the sum of $4,603.97 is the aggregate of costs of $2,000, plus the sum of $400 that I reserved on December 20, 2017, plus the $800 the mother paid to Mr. Silvester, plus air fare of $1,365.66 for the January 10, 2018, January 19, 2018 and February 14, 2018 attendances, plus the courier charge of $38.31.