Court Information

Court File No.: D70515/14

Date: 2015-06-08

Ontario Court of Justice 47 Sheppard Avenue East Toronto, Ontario M2N 5N1

Parties

Between: Irene V. Goryn, Applicant (mother)

- and - Eric Neisner, Respondent (father)

Before: Justice Robert J. Spence

Costs Submissions received in chambers: May 28, 2015

Reasons for Decision released on: 8 June 2015

Counsel

Ms. Heather Hansen — for the applicant, mother

Mr. Steven Benmor — for the respondent, father

Introduction

[1] On April 13, 2015 I released my reasons for judgment,[1] dismissing the father's motion wherein he had sought an order that the mother's claim for child support ought to be dealt with solely by way of the Interjurisdictional Support Orders Act, rather than by way of the process she had chosen, namely, the Family Law Act.

[2] As part of that decision I invited the parties, should they choose to do so, to make submissions on the costs of the motion.

[3] The mother now seeks her costs.

Position of the Parties

[4] The mother filed a three-page costs submission, together with Bill of Costs and an Offer to Settle. She seeks a costs order in the amount of $15,480.65, inclusive of legal fees, disbursements and H.S.T.

[5] The father responded with a three-page costs submission, wherein he requests an order for no costs or, in the alternative, costs in the amount of $1,367.87.

Rules 24 and 18 – The Costs Rules

[6] For the purpose of this discussion, I set out the applicable rules of the Family Law Rules ("Rules"), beginning with relevant portions of Rule 24 [my emphasis]:

SUCCESSFUL PARTY PRESUMED ENTITLED TO COSTS

24. (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal. O. Reg. 114/99, r. 24 (1).

SUCCESSFUL PARTY WHO HAS BEHAVED UNREASONABLY

(4) Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party's own costs or ordered to pay all or part of the unsuccessful party's costs. O. Reg. 114/99, r. 24 (4).

DECISION ON REASONABLENESS

(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,

(a) the party's behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;

(b) the reasonableness of any offer the party made; and

(c) any offer the party withdrew or failed to accept. O. Reg. 114/99, r. 24 (5).

ABSENT OR UNPREPARED PARTY

(7) If a party does not appear at a step in the case, or appears but is not properly prepared to deal with the issues at that step, the court shall award costs against the party unless the court orders otherwise in the interests of justice. O. Reg. 114/99, r. 24 (7).

BAD FAITH

(8) If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately. O. Reg. 114/99, r. 24 (8).

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

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

(d) order that a copy of an order under this subrule be given to the client. O. Reg. 114/99, r. 24 (9).

FACTORS IN COSTS

(11) A person setting the amount of costs 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. O. Reg. 114/99, r. 24 (11).

[7] In this case, as the mother served an Offer to Settle, I must also have regard to Rule 18, which deals with Offers to Settle. I set out the relevant portions of that Rule [my emphasis]:

APPLICATION

(2) This rule applies to an offer made at any time, even before the case is started. O. Reg. 114/99, r. 18 (2).

WITHDRAWING AN OFFER

(5) A party who made an offer may withdraw it by serving a notice of withdrawal, at any time before the offer is accepted. O. Reg. 114/99, r. 18 (5).

TIME-LIMITED OFFER

(6) An offer that is not accepted within the time set out in the offer is considered to have been withdrawn. O. Reg. 114/99, r. 18 (6).

COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER

(14) A party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:

1. If the offer relates to a motion, it is made at least one day before the motion date.
2. If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
3. The offer does not expire and is not withdrawn before the hearing starts.
4. The offer is not accepted.
5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer. O. Reg. 114/99, r. 18 (14).

COSTS CONSEQUENCES — BURDEN OF PROOF

(15) The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14). O. Reg. 114/99, r. 18 (15).

COSTS — DISCRETION OF COURT

(16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply. O. Reg. 114/99, r. 18 (16).

The Purpose of the Cost Rules

[8] Modern cost rules are designed to foster three fundamental purposes:

1. to indemnify successful litigants for the cost of litigation;
2. to promote and encourage settlement; and
3. to control behaviour by discouraging frivolous suits and defences that lack merit.

Fong v. Chan, [1999] O.J. No. 4600 (Ont. C.A.)

[9] What this means is that the days when courts often gave short shrift to claims for costs, particularly in family law cases, are a thing of the past. There is now recognition in the Rules, and the corresponding case law, that litigation is expensive; and the Rules are designed, in part, to minimize those expenses, and to encourage settlement by requiring the parties to act reasonably.

Father's Argument

[10] The essence of Mr. Benmor's argument is that father brought a "legitimate legal issue" to the court and that there should be "no penalty" imposed on him for having this "novel and important" issue raised for judicial consideration.

[11] Mr. Benmor argues that, given the length of the mother's factum, as a merely "cut and paste" document, the expenditure of 51 hours of time by the various counsel/law clerks representing mother, would send "shockwaves" if those dockets were being examined by an "independent auditor". He characterizes mother's claim for costs as "egregious".

[12] Citing esteemed jurists, Mr. Benmor points out that the family law justice system has long been more difficult to access for the "middle class and the poor" due to the high costs involved for legal representation. In particular, Mr. Benmor notes [my emphasis]:

On February 10, 2011, at the University of Toronto's Access to Civil Justice for Middle Income Canadians Colloquium, Chief Justice Beverley McLachlin stated "we have wonderful justice for corporations and for the wealthy. But the middle class and the poor may not be able to access our justice system. How can there be public confidence in a system of justice that shuts people out . . . that does not give them access?"

[13] I suspect that most courts would agree with those sentiments. However, what Mr. Benmor fails to address in his argument is how that sentiment is applicable to his client, a person who, on the facts as I have found him in my reasons for judgment on the motion itself is neither "middle class" nor "poor". In fact, it would appear that Mr. Benmor's client is one of those fortunate individuals who is well able to access our family law justice system quite nicely due to his relative financial largesse.

[14] With those comments as the backdrop, I now proceed to discuss the considerations set out in Rules 24 and 18.

Rule 24

[15] The starting point is the presumption in subrule 24(1) that the mother, as the successful party, is entitled to her costs. Sims-Howarth v. Bilcliffe, [2000] O.J. No. 330 (Ont. S.C.)

[16] This presumption can be displaced by the considerations set out in subrules 24(4), (7) and (8). Mr. Benmor did not argue that any of those subrules apply and, in any event, I find that none of them apply on the facts of this case.

[17] I disagree with Mr. Benmor's argument that this motion was so "novel" that the father should be given what amounts to a free pass. I will return to the request for no costs (or nominal costs) later in these reasons.

[18] The next step for the court is to consider the factors set out in subrule 24(11).

Subrule 24(11)(a) – The Importance, Complexity or Difficulty of the Issues

[19] Both the mother and the father agreed that this issue was of great importance to them. It bore directly on which court/jurisdiction/set of laws would preside over the determination of the child support issue. In turn, that determination would directly impact the length of time it would take for the substantive issue to be decided.[2]

Subrule 24(11)(b) – The Reasonableness or Unreasonableness of Each Party's Behaviour

[20] In March 2014, the mother filed her application in this court seeking, inter alia, a determination of the appropriate amount of child support which the father ought to pay to her. The initiation of this application was a straightforward and typical process seen by our courts every day when one parent seeks child support from another parent.

[21] The father then took what I consider to be the ill-advised step of turning what should have been an uncomplicated process into something far more time-consuming, complex and expensive. Instead of simply providing his financial disclosure and then entering into good faith negotiations to settle the child support issue, he challenged the very jurisdiction of this court to proceed under the Family Law Act.

[22] As a result of the father's actions, and his insistence on bringing his jurisdiction motion, the mother's claim for child support, issued almost 15 months ago, which by now should have either been resolved, or well on the way to resolving, is only just getting to the financial disclosure stage.

[23] More than three weeks prior to the argument of the motion, the mother served an Offer to Settle. In doing so, she sought to resolve the motion without the expense of preparing facta, preparing for court and attendance on argument. The father not only failed to accept that Offer but, additionally, failed to make any offer of his own.

[24] I find on the facts that the mother acted reasonably. The father did not. As I noted earlier, one of the purposes of the modern cost rules is to promote and encourage settlement, something which the mother did; something which the father failed to do.[3]

Subrule 24(11)(c) – The Lawyer's Rates

[25] There were a number of lawyers and law clerks involved in representing mother. The rates of all the lawyers and the law clerks are clearly set out in the mother's Bill of Costs. I do not find it necessary to reproduce those rates here, primarily because the father himself did not take issue with any of those rates in his submissions. I find those rates to be reasonable.

[26] That said, I am mindful that the determination of the amount of costs is "not simply a mechanical exercise", namely, multiplying the time spent by the hourly rate. In Delellis v. Delellis and Delellis, Justice David Aston stated at paragraph 9 [my emphasis]:

However, recent cases under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended, have begun to de-emphasize the traditional reliance upon "hours spent times hourly rates" when fixing costs. In Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291, the Ontario Court of Appeal stated that "fixing costs does not begin or end with the calculation of hours times rate". Costs must be proportional to the amount in issue and the outcome. 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, rather than an amount fixed by the actual costs incurred by the successful litigant. In that vein, the reasonable expectation of the losing party concerning the quantum of costs is a relevant factor to consider.

[27] Accordingly, when assessing cost submissions, the court must make its determination based on "proportionality", "fairness" and what is "reasonable".

Subrule 24(11)(d) – The Time Properly Spent on the Case

[28] It is with respect to this factor that the father takes the greatest exception to the mother's Bill of Costs. As I earlier stated, the primary objection to the time spent by the mother's lawyers is based on the amount of "paper" her lawyers produced – that is, the size of the factum and affidavit.

[29] It would be odd indeed, if a lawyer was able to successfully argue that costs should be greater[4] because he/she provided the court with more pages of documentation, as compared to the lawyer who provided fewer pages. Getting paid for verbosity and an inability to succinctly distill an argument is not only counter-intuitive but surely must be wrong in principle. I take judicial notice that it can take as much time – perhaps considerably longer – to give reflective thought to an issue and to distill it into fewer pages, than simply throwing everything imaginable onto multiple pages of paper with the hope that something sticks to the judge's pen.

[30] Furthermore, there is an internal contradiction in Mr. Benmor's argument. On the one hand he argues that this motion involved a "legal issue that is novel, important and open to differing views",[5] and on the other hand he argues that the entire case, from start to finish ought not to have taken mother's lawyers more than 3 hours of time.[6] In my view, these positions are logically inconsistent.

[31] Lawyers of differing experience and differing work habits will spend different amounts of time on a given case. Lawyering, and particularly litigation, is much more of an art than a science. In my view, in the determination of costs, it is not the duty of the court to scrutinize every docket entry and decide (for example), that a particular task should have taken 45 minutes, rather than 60 minutes. Rather, the court should consider the time spent by the lawyers, holistically, and decide whether the "bottom line" is within reason. Delellis, supra

[32] I note that mother initially retained the firm of Gelman and Associates ("Gelman"). That firm remained mother's legal representatives until February 2015. Then, for whatever reason, mother changed firms and retained the services of Martha McCarthy & Company ("McCarthy").

[33] Prior to this change, Gelman spent a total of 21.9 hours on mother's case, comprised of 15.2 hours of lawyer time, and 6.7 hours of law clerk time. In my review of Gelman's detailed dockets, it is apparent to me that much of this time was spent on matters other than the lead-up to the motion itself.

[34] Additionally, I take judicial notice that when a client changes law firms, there is a necessary overlap and duplication of time for the new lawyer on matters considered and work done by the previous firm. That overlap and duplication is not something for which the opposite party ought to be held ultimately responsible.

[35] Gelman's total bill to the mother, inclusive of H.S.T. amounted to $4,737.11. It is impossible to determine with any degree of accuracy how much time is reflected in the foregoing considerations with respect to Gelman's total bill. However, reviewing the docket entries, I have determined that it is likely more than half of that total bill and, accordingly, I reduce the claimed costs by $3,000 of the total Gelman bill, being an amount which I consider to be fair in the circumstances.

Subrule 24(11)(e) – Expenses Properly Paid or Payable

[36] The disbursements in this case were very minor. The father did not take issue with them and I find them to be reasonable, as set out in the Bill of Costs.

Subrule 24(11)(f) – Any Other Relevant Matter

[37] Under this heading the court is able to take into account any other relevant matter which is not covered by the other factors under subrule 24(11), and which goes to the issue of quantum of costs, including the party's ability to pay.[7] I have not been directed to any other relevant considerations which, in my opinion, would impact on the ultimate determination of costs. Accordingly, I find that this factor does not come into play in my decision.

Rule 18 – Offers to Settle

[38] As I noted earlier, subrule 18(14) presumptively favours an award of costs to the successful litigant who made an offer, as well as full recovery of costs from the date of the offer forward.

[39] The mother's Offer to Settle, served more than three weeks prior to the date of argument, was actually more favourable to the father than the order which I ultimately made, in that the mother offered to pay her own costs of the motion if the father accepted the Offer to Settle.[8]

[40] I conclude that the mother's Offer to Settle falls within subrule 18(14).

[41] However, even if that offer technically fell outside of subrule 18(14),[9] the court, in its exercise of discretion over costs, may take into account under subrule 18(16) any written offer to settle, even if subrule 18(14) does not apply.

The Court's Residual/Overriding Discretion

[42] In addition to all of the foregoing, there is a residual discretion in the court to decide not only the liability for costs, but also the quantum. In other words, regardless of the precise wording of Rules 18 and 24, the court retains the jurisdiction to make cost awards which are proportional, fair and reasonable in all the circumstances. In Boucher v. Public Accountants Council for the Province of Ontario, the court stated at paragraph 38 [my emphasis]:

In deciding what is fair and reasonable, as suggested above, the expectation of the parties concerning the quantum of a costs award is a relevant factor. See Toronto (City) v. First Ontario Realty Corp., [2002] O.J. No. 2519 (S.C.J.) at p. 574 O.R. I refrain from attempting to articulate a more detailed or formulaic approach. The notions of fairness and reasonableness are embedded in the common law. Judges have been applying these notions for centuries to the factual matrix of particular cases.

[43] The "expectation of the parties" would, in this case, include the expectation of the father himself. In that regard, it might have been instructive for Mr. Benmor to file with the court his own bill to the father.[10] So if, for example, his total bill for all the work he performed was $2,000, he might have been able to advance the argument that the father would be "shocked" and would find it "egregious"[11] that the opposite party was claiming seven times that amount. On the other hand, if Mr. Benmor's bill was in the amount of $20,000, the father might be breathing a sigh of relief at the Bill of Costs submitted by the mother.[12]

[44] Obviously, as the Court of Appeal has stated, the parties' expectations are not determinative of the issue but, instead, are a relevant factor for the court to consider.

[45] The residual discretion of the court to determine a fair costs award is also embedded in section 131 of the Courts of Justice Act, which provides [my emphasis]:

Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

[46] None of this is to suggest that a fair and reasonable costs award cannot be arrived at by examining Rules 18 and 24 alone, as it would appear that those two Rules taken together would certainly give the court sufficient tools to arrive at a just award of costs.

[47] Instead, I prefer to look at the residual discretion aspect of this consideration as simply one more mechanism – a final check if you will – to assist the court in arriving at a fair outcome.

Conclusion

[48] In arriving at the determination of an appropriate costs award, I have taken into account:

1. All of the relevant considerations provided for in Rule 24, as discussed in these reasons;
2. All of the relevant considerations provided for in Rule 18, as discussed in these reasons; and
3. The court's obligation, in the exercise of its residual discretion, to consider holistically what would be a proportionate, fair and reasonable award of costs, in all of the circumstances of this case.

[49] Based on all of the foregoing, I have concluded that, subject to my comments about the Gelman bill (specifically my decision to reduce that bill by $3,000), the father should be required to fully reimburse the mother for what she had to spend on her legal fees. He is a litigant with relatively deep pockets who ill-advisedly decided to roll the dice instead of doing what should be done in child support cases, namely, to promptly provide full financial disclosure and then make all reasonable attempts to settle.

[50] Accordingly, there will be an order that the father pay the mother her costs in the amount of $12,480.65 within 30 days of the date of this decision.

Justice Robert J. Spence

June 8, 2015

Footnotes

[1] Goryn v. Neisner, 2015 ONCJ 191

[2] Which I found as a fact in my reasons for judgment in the substantive motion

[3] I recognize that the parties did settle some of the other child-related issues prior to the motion; but there is no evidence that the father showed any willingness to settle the very issue which was the subject of the motion itself, a motion which ought never to have been launched in the first place.

[4] Or that the opposite party's costs should be correspondingly lower

[5] While I earlier found that the issue was important to the parties, I do not agree with the characterization that it was "novel".

[6] Per his costs submissions, including the request that costs, if ordered, be capped at $1,367.87

[7] A factor which does not apply on the facts of this case.

[8] The only other difference is that the Offer sought financial disclosure from the father within 30 days, whereas my order allowed the father 45 days to make his disclosure. However, this is a difference which is not material to the substance of the Offer to Settle.

[9] See footnote 8

[10] Subject to redacting for matters pertaining to solicitor and client privilege

[11] The adjectives Mr. Benmor used in his submissions, as noted earlier in these reasons

[12] Having fully acquainted myself with the extensive materials Mr. Benmor filed with this court in support of his client's motion, including multiple briefs of facta and authorities, I suspect his bill to the father would be much closer to $20,000 than to $2,000.