Court File and Parties
Date: May 3, 2017
File No.: D70067/14
Ontario Court of Justice 47 Sheppard Avenue East Toronto, Ontario M2N 5N1
Between: Pedro Alves, Applicant (father)
And: Julia Quintana Londron, Respondent (mother)
Applicant: Father in person
Counsel for Respondent: Ms. Pamila Bhardwaj
Before: Justice Robert J. Spence
Costs submissions received in Chambers
Reasons released on May 3, 2017
Endorsement
Introduction
[1] On July 28, 2016, I released my judgment following a seven-day trial. The mother was substantially successful on all issues. She now seeks her costs of that trial.
Parties' Respective Positions
[2] The mother is requesting costs on a full recovery basis, totaling $60,340, inclusive of disbursements and H.S.T.
[3] The father takes the position that he should receive costs from the mother. He seeks costs in the amount of $157,330.
The Trial Issues
[4] The trial, which lasted for seven days, and concluded on July 20, 2016, centered on the issues of custody, parenting time, and incidents of custody/access, including such things as the right to obtain information, restrictions and permissions on parents' rights to attend certain functions, including school activities, and so on.
[5] Each party also sought child support from the other.
The Outcome at Trial
[6] The mother was the successful party. Subsequent to the trial, the court made the following order:
- Sole custody to mother;
- A defined parenting schedule;
- Incidents of custody/access; and
- Child support payable by the father to the mother in the amount of $207 per month.
Father Submits He Is Entitled to Costs
[7] Both parties made offers to settle. I will have more to say about the mother's offer later in these reasons.
[8] The father in fact attempted to settle the case by serving multiple offers to settle.
[9] A review of those offers demonstrates to the court that he made a bona fide attempt to settle the case. That said, his offers to settle did not come close to what the court eventually ordered.
[10] More specifically, the father was seeking sole custody and primary residence of the child to himself. As I noted, the court ordered sole custody to the mother with primary residence to her.
[11] The father filed very extensive material in support of his request for costs. His material included a factum as well as, what he referred to, as a Bill of Costs.
[12] The Bill of Costs sought recovery, inter alia, for the following:
- $20,250 paid to lawyer Allen Goldstein;
- $17,500 paid to lawyer Glenda Perry;
- $18,750 paid to lawyer Warren Tobias; and
- $90,000 for self-representation, based on 900 hours of his time, at $100 per hour.
[13] No supporting documents for any of the foregoing were included with the father's material.
[14] A review of the father's costs submissions reveals to the court that many of his complaints in those submissions were a repetition of his complaints about the evidence adduced at trial itself.
[15] For example, he accused the Office of the Children's Lawyer of intentionally misrepresenting evidence and engaging in Libel and Slander.
[16] He also made similar accusations about the mother's counsel and counsel's law clerk.
[17] The following are just some of the father's comments respecting the mother's counsel and her clerk:
Their actions have caused tremendous hardship; they broken [sic] the law knowingly; undue influence; harassment and failure to disclose valuable information to courses and ill intent to mislead the court and intentionally failed to disclose their conflict of interest.
Given the severity and number of the breaches, bad faith, perjury, fraud and intention to cause serious harm to the applicant father in this litigation, I believe an appropriate amount for damages for pain and suffering applies.
They [counsel and her clerk] broke the law knowingly and abused their power and therefore the litigation costs elevated.
[counsel] is not shy to fraud, conflict of interest and failing to guard her staff.
[18] It appears to the court that the father sees himself as a victim and is looking to the court to compensate him for having been victimized by a number of persons, including the mother, mother's counsel, counsel's law clerk, the Office of the Children's Lawyer and the father's former spouse, who testified against him at the trial.
[19] This court, however, does not see the father as a victim. Rather, in many respects he is the author of his own misfortune.[1]
Costs Rules
[20] Costs in family law cases are governed by Rules 18 and 24 of the Family Law Rules.
[21] The relevant portions of Rule 18 provide [emphasis added]:
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:
- If the offer relates to a motion, it is made at least one day before the motion date.
- 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.
- The offer does not expire and is not withdrawn before the hearing starts.
- The offer is not accepted.
- 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).
[22] The relevant portions of Rule 24 provide [emphasis added]:
SUCCESSFUL PARTY PRESUMED ENTITLED TO COSTS
- (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).
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).
[23] The starting point in this decision must take into account two undisputed facts. First, the mother was the successful party. And, accordingly, subrule 24(1) presumptively entitles her to her costs of the trial. See: Sims-Howarth v. Bilcliffe, [2000] O.J. No. 330 (SCJ- Family Court).
[24] Second, the mother did serve an Offer to Settle more than one year prior to the trial. That Offer was not withdrawn prior to the start of trial.
[25] The court must take into account how the order made at trial compares to any settlement offers that were made. See: Lawson v. Lawson, [2008] O.J. No. 1978 (SCJ).
[26] The mother achieved a better result at trial than the Offer which she served on the father. The father neither accepted the Offer, nor any part of the Offer.
[27] Accordingly, pursuant to subrule 18(14), the mother is presumptively entitled to full recovery costs, "unless the court orders otherwise".
[28] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395, [2009] O.J. 1905 (Ont. C.A.) stated 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. See also Fong v. Chan.
How to Decide the Amount of Costs When Rule 18 Has Been Engaged
[29] As I noted earlier, mother's Offer to Settle does effectively engage Rule 18. However, Rule 18 does not automatically mean that the successful party has carte blanche to charge the losing side whatever costs she decides.
[30] Even if the successful party's lawyer actually charges her own client the fees and disbursements which are set out in the Bill of Costs, it does not necessarily mean that the losing party should be required to pay those costs.
[31] In M. (A.C.) v. M. (D.), [2003] O.J. No. 3707 (Ont. C.A.), the court stated the following at paragraph 43 [emphasis added]:
I am also of the view that the court has a discretion not to make an award of full recovery even where the party has met the conditions in Rule 18(14). The rule makes that clear since it provides that "unless the court orders otherwise" the party is entitled to full recovery. Again, a relevant consideration would be the financial condition of the parties, especially an unsuccessful custodial parent. See Church v. Church, [2003] O.J. No. 2811 (S.C.J.) at paras. 14 - 18. Finally, I am of the view that even when making an award of full recovery the trial judge must ensure that the costs sought by the successful party are reasonable.
What Costs Are Appropriate Here?
a. Lawyer's Fees
[32] As I noted earlier, the court must look at the factors in subrule 24(11) (a) – (f).
[33] The issues of custody and access were very important to both parties.
[34] Notwithstanding this, the issues were not conceptually complex.
[35] Despite certain negative findings which I made at trial about the father – findings which were an important consideration leading to an order of sole custody to the mother – I do not conclude that either of the parties acted unreasonably overall in the conduct of the litigation.[2]
[36] The lawyer's rates are reasonable, as acknowledged by the father himself.
[37] This was a seven-day trial, which involved the testimony of a number of witnesses, including a number of professional witnesses. The lawyer's total time for preparation was 54 hours. I consider this to be reasonable for a seven-day trial, for which the lawyer charged a further 46 hours of time.
[38] The disbursements consisted primarily of photocopies amounting to $500 and transcripts amounting to a further $728.
[39] As to the factor, "any other relevant matter", the court in M. (A.C.), supra, made it clear that the financial circumstances of the paying party is a consideration in the overall award of costs.
[40] I have specifically referred to subrule 24(11)(f), and M. (A.C.), supra, because of the father's submission that costs, if awarded against him, should be fixed at a low amount due to his own financial constraints.
[41] In that regard, I note that the father is paying support to the mother based on his annual income of about $20,000.
[42] It is obvious to the court that an annual income in this amount is very modest, falling below even minimum wage.
[43] Were the court to order full recovery costs, the amount requested by the mother would be equivalent to about three times the father's annual income. This would impose a very real hardship on the father, a burden which would make such an order, in my view, excessive.
[44] All of that said, M. (A.C.) does not stand for the proposition that financial hardship can be used as a shield against a claimed award of costs. Liability for costs is not dependent upon financial means. Rather, financial means is a consideration in determining the amount of costs.
b. Paralegal/Law Clerk Fees
[45] According to the Bill of Costs, the paralegal spent 28 hours on this case. Her time is charged out at $225 per hour.
[46] I have three difficulties with the paralegal's fees.
[47] First, the Bill of Costs simply sets out a block fee for "Preparation and attended at Trial" followed by 10 lines of narrative. Nowhere in the Bill of Costs are any of the different tasks broken down individually and by time spent. Instead, these 10 lines of narrative simply state: [lawyer's name], 54 hours, $24,300[3]; [law clerk's name], 28 hours, $6,300.
[48] In Fettes v. Wojcik, 2017 ONCJ 13, the same lawyer submitted an almost identical Bill of Costs, for the same law clerk, the only difference being the number of hours spent by the law clerk. This is what I said in respect of that Bill of Costs, beginning at paragraph 39 of that decision:
[39] It is impossible to tell from the Bill of Costs what tasks were performed by the lawyer and what tasks were performed by the paralegal.
[40] For certain kinds of law firm tasks, it is more cost-effective for the client to have those tasks performed by a paralegal rather than a lawyer.
[41] By way of just one example, a properly trained paralegal can obtain financial information which goes into the preparation of a financial statement, and to actually prepare that financial statement. However, there was no such financial information required for this trial.
[42] As I examine the 10 lines of narrative I cannot identify any items which obviously stand out as necessarily having been performed by a paralegal, as opposed to a lawyer.
[43] In my view, when a lawyer seeks costs in respect of her law clerk/paralegal's time, there should be at least some detail, including time spent by the clerk for the individual law-related tasks. And the more detail that is provided, the greater likelihood the court will understand the duties which the law clerk performed which, in turn, will increase the probability that costs will be awarded for those duties.
[44] Second, my recollection is that in this case, the paralegal attended at the trial each day. She sat beside the lawyer and made notes and/or assisted the lawyer to locate certain documents or other evidence as the trial unfolded.
[45] I recognize that the 22 hours of time spent by the law clerk was not entirely in respect of her court attendance during those three days of trial. Nevertheless, to the extent that any of the 22 hours spent by the law clerk were to assist the lawyer at trial, in my view it is unreasonable to expect the other side to pay for this time.
[46] In my view, the lawyer seeking costs has a significant hurdle to overcome if she expects the court to require the other side to pay for what would effectively be $675 per hour of trial time, in the circumstances of this particular case.
[47] Had this been a trial where complex evidence needed to be examined "on the fly", such that the lawyer could not have been reasonably capable of doing this on her own, then a court could possibly consider the appropriateness of a law clerk's assistance at trial.
[48] However, the kind of work performed by the law clerk at this particular trial could easily have been performed by a law student at closer to $20 per hour, as opposed to a law clerk at $225 per hour.
[49] That is not to say that the lawyer isn't free to charge her own client for those services, but those considerations are different than what this court is required to take into account in the current circumstances where a lawyer seeks to recover those costs from the other side.
[50] And third, even if the paralegal was performing work which did not suffer from the previously-stated deficiencies, I consider the hourly rate to be simply too high.[4]
[54] The cumulative impact of all the foregoing considerations is such that I consider it inappropriate to allow any of the $6,300 claimed for the law clerk, as set out in the Bill of Costs. I disallow those fees in their entirety.
[49] It is regrettable that the lawyer chose to submit a Bill of Costs in this case, in virtually the same format as in Fettes, supra, as though this court had never spent the time to write on the law clerk issue earlier.
[50] I disallow the law clerk fees in their entirety.
Conclusion
[51] In the result, the court awards costs payable by the father to the mother as follows:
Based on the lawyer's Bill of Costs in the amount of $60,340 less the law clerk's fees in the amount of $7,120 (inclusive of H.S.T.), for a total of $53,220;
From the total of $53,220 I deduct a further $8,220, which, although a somewhat arbitrary figure, is nevertheless designed to reduce father's overall costs burden to $45,000.
Costs are payable forthwith and shall be enforced by the Family Responsibility Office as child support.
[52] I recognize that this amount will be viewed by father as excessive, given his modest stated financial circumstances. Nevertheless it is an amount which I consider to be fair and reasonable to both parties having regard to the principles and the facts which I have discussed in these reasons.
[53] In the event I have made any errors in my arithmetical calculations, I may be spoken to by Form 14B within 10 days.
Justice Robert J. Spence May 3, 2017
Footnotes
[1] See, for example, the court's comments at paragraphs 114 and following, in the trial decision cited as Alves v. Londron, 2016 ONCJ 466.
[2] Although some of the father's more extravagant behavior brought him very close to the line of what this court would consider to be unreasonable. See, for example, my comments at paragraphs 138-141 of the trial decision in Alves, supra, footnote 1.
[3] As well as a separate entry in the Bill of Costs for the lawyer's 46 hours of actual court attendance during trial.
[4] Here I cited two cases, namely, C.R. v. L.A., 2015 ONCJ 152, and Chan v. Town, 2014 ONSC 2217.
