CITATION: McCarthy v. Labonté, 2017 ONSC 2775

COURT FILE NO.: FC-14-787

DATE: 2017/05/05

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Diane McCarthy

Applicant

– and –

Marcel Labonté

Respondent

Bruce F. Simpson, for the Applicant

Stéphane MonPremier, for the Respondent

HEARD: In writing

COSTS ENDORSEMENT

LABROSSE, J.

[1] This was a motion by the Respondent for the removal of the Applicant’s solicitor due to a potential conflict of interest. The Applicant then brought a cross-motion for summary judgment with respect to the parties’ joint ownership of a condominium, a trailer and a boat. Both parties also sought other ancillary orders. In my Endorsement dated January 3, 2017, the Respondent’s motion to remove the Applicant’s solicitor was granted and the Applicant’s motion for summary judgment was refused. I indicated that if the parties could not resolve the issue of costs, they could provide written submissions. I have now considered these submissions prior to making my decision on costs.

[2] The Respondent was the successful party on the motions and as such, there is a presumption that he is entitled to an award of costs pursuant to Rule 24 of the Family Law Rules, O. Reg. 114/99 (the “FLRs”), subject to possible offers made by the parties and the other criteria discussed below.

Position of the Parties

[3] The Respondent claims that he incurred legal fees for a motion which he should never have been required to bring. Further, the Respondent states that legal fees were wasted on responding to the cross-motion for summary judgment which had no merit and should not have been brought.

[4] The Respondent states that he made several offers to have the Applicant’s solicitor remove himself from the record and that this warrants full indemnity costs. Further, the Respondent’s counsel states that the Applicant’s counsel made repeated inflammatory remarks which inhibited the parties’ ability to have constructive negotiations, and impeded the administration of justice.

[5] The Respondent claims full indemnity costs of $6,955.80 (inclusive of HST and disbursements).

[6] The Applicant agrees that the Respondent is presumptively entitled to an award of costs however she states that the costs should remain in the cause. The Applicant denies that the comments made in the correspondence were inflammatory. She states that the comments referred to by the Respondent refer to the position advanced by the Respondent and, as such, they do not attract cost consequences.

[7] The Applicant takes no issue with the Respondent’s counsel’s hourly rate but states that if costs are awarded, they should be on a partial indemnity basis. Further, that any entitlement to costs must be limited to those costs which are clearly related to the motions.

[8] When considering proportionality, the Applicant states that any award of costs should not exceed $3,500.

[9] Finally, the Applicant states that the Applicant’s reliance on the offers to settle is not applicable as they were essentially “no-cost” offers which do not trigger the usual costs consequences under the FLRs.

Applicable Law on Costs

[10] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395 has provided guidance to the courts in identifying the three fundamental purposes of the costs rules:

(1) to indemnify successful litigants for the costs of litigation;

(2) to encourage settlement; and

(3) to discourage and sanction inappropriate behaviour by litigants.

[11] Further, Rule 2(2) of the FLRs adds a fourth fundamental purpose for costs: to ensure that the primary objective of the rules is met – that cases are dealt with justly. (See Blanchard v. Walker, 2012 ONCJ 799 at paras 15‑16).

[12] Where offers to settle have been made, Rule 18 provides that where a party makes an offer to settle and where the order is as favourable as or more favourable than the offer, the party who made the offer is entitled to full recovery costs from the date the offer was served provided the other requirements of the rule have been met.

[13] Rule 24 of the FLRs also calls for the consideration of the following factors:

(1) the reasonableness of each party, any Offers to Settle;

(2) any acts of bad faith by any party;

(3) the importance, complexity or difficulty of the matter;

(4) the scale of costs; hourly rates and time spent; and

(5) the reasonable expectations of the losing party.

[14] Rule 24(5) provides criteria for determining the reasonableness of a party’s behaviour in a case. Of relevance here is Rule 24(5)(a) which requires that the court shall examine the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle.

Analysis

[15] The analysis on the issue of costs need not be made overly complicated. The Respondent has a prima facie entitlement to the costs of the motion. I have reviewed the correspondence exchanges relied upon by the Respondent and I disagree that the comments by counsel for the Applicant warrant an enhanced award of costs or a finding that the Respondent behaved unreasonably. While I disagree with the aggressive nature of the Applicant’s correspondence, the comments made were directed at the merits of the litigation.

[16] When considering the offers made by the Respondent on the removal of the Applicant’s counsel, I accept the Applicant’s submission that a “no-cost” offer does not automatically trigger the cost consequences of an offer to settle as set out in Rule 18: Crete v. Carleton Condominium Corporation #47 (Chateau Vanier Towers), 2008 475. However, the presence or absence of an offer to settle is a relevant factor to consider under Rule 24.

[17] While the cross-motion was clearly retaliatory, it was brought in the context of proceedings where the Respondent has a significant onus to meet before being successful. It is clear that the Applicant is frustrated by this ongoing litigation but in the end, I do not find her behaviour to merit an enhanced cost award.

[18] Finally, the time spent does seem to include certain items which were not directly related to the motions. A small reduction is thus warranted.

[19] The assessment of costs is not a mechanical issue. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case: see Boucher et al v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA) at para 26.

[20] I conclude that this is a proper case for costs to be payable in an amount which is slightly higher than the partial indemnity rate given the offers to settle and that there should be a reduction for some time which is not directly related to the motions. I exercise my discretion to fix the costs payable by the Applicant to the Respondent $4,400.00 (inclusive of HST and disbursements).

Conclusion

[21] I thereby conclude that the Respondent is entitled to a costs award for the motions in the amount of $4,400.00, inclusive of taxes and disbursements.

Justice Marc R. Labrosse

Released: 2017/05/05

CITATION: McCarthy v. Labonté, 2017 ONSC 2775

DIVISIONAL COURT FILE NO.: FC-14-787

DATE: 2017/05/05

BETWEEN

Diane McCarthy

Applicant

– and –

Marcel Labonté

Respondent

COSTS ENDORSEMENT

M. Labrosse, J.

Released: 2017/05/05