Court File and Parties

Court File No.: FS-06-FD-315212-02 Date: 2017-05-12 Ontario Superior Court of Justice

Between: Penelope Kay Sickinger, Applicant – and – Ralph Thomas James Sickinger, Respondent

Before: McWatt, J.

Counsel: Maxine Kerr, for the Applicant Ralph Thomas James Sickinger, Self-Represented Carol J. Smith, for the City of Toronto, Legal Services

Heard: February 28, 2017

COSTS RULING

Introduction

[1] The parties both brought motions on February 28, 2017. The respondent was unsuccessful on his Motion to Change the Order of Perkins J., dated March 30, 2012. The applicant was successful on her motion to have income imputed to the respondent and change the child and spousal support orders that had previously been put in place by Justice Perkins.

[2] The City of Toronto, Legal Services, also took part in the motion by virtue of an assignment by the applicant of arrears owed to the City from payment of social assistance to her from November 1, 2014 to January 1, 2017. By the dismissal of the respondent’s motion, the City has achieved success in maintaining its stated interest of $17,361.

[3] The Applicant asks for costs on a full recovery basis in the total amount of $76,360.87, consisting of fees of $65,917.50 ($54,907.50 + $11,010), disbursements of $1,658.49 and HST of $8,784.88 ($7,353.58 + $1,431.30). In the alternative, she asks for costs on a partial recovery basis in the amount of $50,398.17.

[4] The City has asked for its costs of the motion in the amount of $7,000.

[5] The respondent’s Costs submissions were delivered late. He brought a 14B Motion to extend the time for filing those submissions. I have granted the motion and accepted his reply submissions for costs on the motion.

The City

[6] The respondent did not reply at all to the City’s submissions as to costs. In the circumstances, he should pay part of those costs. The applicant was forced to go on public assistance from the municipal government partly due to the respondent’s non-payment of support. The City has acted appropriately in this matter and its costs are fair and reasonable. The hourly rate of $400 per hour charged by counsel for the City is fit, taking into consideration Ms. Smith’s year of call to the Bar of 1991. This issue was not a difficult one for the City, but it succeeded in retaining its entire interest in the money owed to it by the applicant, Ms. Sickinger.

[7] The respondent is ordered to pay $5,000 in costs, including disbursements and HST, to the City of Toronto within 90 days of the date of this endorsement.

Costs to the Applicant

[8] The applicant asks for costs on a full recovery basis, payable within thirty days and enforceable as support. In the alternative, she asks for recovery of 66% of her costs, representing costs on a partial recovery basis. She asks for costs on a full recovery basis, pursuant to Rules 18 and 24 of the Family Law Rules, for the following reasons:

a. she was entirely successful on the motions;

b. the issues were important, involving the parties' imputed incomes, alleged material changes in circumstances, the respondent's retroactive and ongoing child and spousal support obligations, including his requested termination thereof, and credits requested by the respondent. The respondent sought to eliminate his substantial arrears of support, found by me to be in the amount of $83,544. The outcome of the motion was critical to the applicant, who is on social assistance, and who has failed to achieve self-sufficiency in light of the respondent's non-payment of support. The issues were all highly contested;

c. the applicant was reasonable in her litigation conduct throughout. She made two offers to settle the motion to change, dated August 5, 2016 and February 27, 2017, respectively. She withdrew the former offer only on February 10, 2017, when she learned that Roto-Gro International Limited ("Roto-Gro") had officially listed on the Australian Securities Exchange that day; and

d. the respondent acted unreasonably in this litigation:

i. He failed to produce key financial information, which forced me to draw an adverse inference against his credibility. The respondent did not disclose his 2014 and 2015 Income Tax Returns or his 2015 Notice of Assessment. He did not disclose his true income as of June, 2016 of $158,160 from Roto-Gro, plus reimbursement of all reasonable expenses, which was more than double the income imputed to him by the Final Order dated March 30, 2012 of Justice Perkins. He did not disclose the February 10, 2017 Roto-Gro listing on the Australian Securities Exchange;

ii. The financial disclosure that the respondent did make was misleading, indicating an absence of actual income and a potential imminent further bankruptcy;

iii. He has shown a disregard for Court Orders. He failed to comply with his support obligations, such that various judges of this Court threatened to strike his motion. He disobeyed costs and other Orders. The respondent met his obligations in December 2016 so his motion would not be struck. Notwithstanding the clear and unambiguous "one final, peremptory opportunity" language of Justice Glustein' s Order, dated December 22, 2016, the respondent brought a Form 14B motion, asking for permission to file additional numerous, voluminous affidavits, which became a preliminary issue at the hearing of this motion to change. That motion was dismissed;

iv. He attempted to re-litigate the issues that had been decided by Justice Perkins in the Final Order;

v. He failed to accept the applicant's offer to settle dated August 5, 2016 even when he most likely knew the truth of his Roto-Gro income (and the applicant did not). The terms of that offer were severable and he could have accepted the offer in part, thereby narrowing the scope of the outstanding issues and reducing costs, but he did not;

vi. He did not serve a formal offer to settle, but did send an email after business hours the night before the hearing proposing terms of settlement. He was not successful in achieving any of those proposed terms;

vii. The respondent was not successful on any of his claims;

e. The position that the applicant took in her Response to Motion to Change, prior to Ms. Kerr's involvement, was successful. The applicant dedicated many hours to the proceeding. Answering the applicant's ongoing demands for financial disclosure was time consuming. The work that the applicant did on her own directly correlated to the motion result;

f. Ms. Kerr's hourly rate is reasonable, having regard to her year of call and experience;

g. The final result of the motion is more favourable to the applicant than the terms of her offers to settle, as follows:

a. The applicant was prepared to accept child support ranging from $468 per month to $539 per month in her first offer, and ranging from $468 per month to $750 per month in her Rule 18 offer. The child support ordered ranges from $468 per month to $1,264 per month;

b. The applicant was silent on Thomas' medical expenses in both of her offers. For the period December 19, 2014 through May 2016, my Endorsement requires the respondent to pay the applicant 83% of Thomas' medical expenses in the annual amount of $10,850;

c. The applicant was prepared to accept spousal support ranging from $1,200 per month to $900 per month in her first offer, and of $968 per month in her Rule 18 offer. The spousal support ordered ranges from $968 per month to $3,698 per month;

d. The applicant offered a credit on account of the child support arrears of $7,500 in her Rule 18 offer. No credit is provided for in the Endorsement; and

e. Both offers provided an opportunity for acceptance within which the parties would pay their own costs. Acceptance after that timeframe meant that costs would be as determined by this court.

The Law

[9] Costs are governed by Rule 24 of the Family Law Rules. Rule 24(1) confirms that a successful party is presumed to be entitled to her costs. Under Rule 24(5), the court can consider a party's behaviour in relation to the issues from the time they arose, including whether a party made an offer to settle or any offer a party failed to accept when deciding whether a party has behaved reasonably or unreasonably.

[10] Offers to settle are important to the possible resolution of cases. They are important to determining costs. In deciding whether a party has acted reasonably or unreasonably in a case, the court shall examine the reasonableness of any offer the party made. Offers to settle are significant in determining both liability for costs and quantum (L.NA. v. G.F.A, [2014] No. 5272 (O.C.J), paras. 31 to 33 and 37 to 38).

[11] Modern costs rules are designed to foster three fundamental purposes: 1) to partially indemnify successful litigants for the cost of litigation; 2) to encourage settlement; and 3) to discourage and sanction inappropriate behaviour by litigants (Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905 (C.A.), para. 8).

[12] The preferable approach in family law cases is to have cost recovery generally approach full recovery, so long as the successful party has behaved reasonably and the costs claimed are proportional to the issues and the result (Biant v. Sagoo, [2001] O.J No. 3693 (S.C.J), para. 20) and there need not be a finding of special circumstances to make a costs award approaching substantial indemnity (Sordi v. Sordi, 2011 ONCA 665, [2011] O.J. No. 4681 (C.A.), para. 21).

[13] Evidence that a party has failed to make complete, frank and early disclosure, has put roadblocks in the way of the other party's disclosure requests, and has been evasive generally in providing the information required to determine the issues in the case may fall within the definition of "bad faith". Failure to make financial disclosure alone supports both a finding of bad faith and a determination of unreasonable behaviour, such that full recovery of costs is the appropriate outcome. However, a finding of bad faith is not the only basis upon which a court can consider a costs award in the full recovery range (Reisman v. Reisman, [2007] O.J No. 5538 (S.C.J), para. 3; KC. v. S.B., [2008] O.J No. 523 (S.C.J); DePace v. Michienzi; and Bourgeois v. Bourgeois; [2011] O.J No. 4034 (S.C.J)).

[14] Unrepresented litigants may be awarded costs and such costs may include allowances for counsel fees (Fang v. Chan (1999), 46 O.R. (3d) 330 (Ont. C.A.), para. 23).

[15] An hourly rate of $100, $150 or $200 for a self-represented litigant is reasonable and appropriate for a well prepared self-represented litigant and it is appropriate that a costs order be made in relation to the time and effort devoted to making cost submissions (Green v. Green, [2008] O.J No. 3778 (S.C.J), para. 37).

[16] In this case, the applicant asks for $30 per hour.

Costs to Be Awarded to the Applicant

[17] I agree with much of the applicant’s position. The respondent acted unreasonably in not providing basic financial disclosure, which, in my estimation, dictated findings of lack of credibility against him and failure at the motion. Nonetheless, the applicant’s Offer to settle, dated February 27, 2017, was not better than what the applicant achieved on the motion in terms of child support for Thomas from May 1, 2014. Also, the Offer to settle was served on the eve of the motion, which did not give the respondent time to consult counsel about its reasonableness. Although, I highly doubt that if he had consulted with counsel, the respondent would have settled. I believe that he hoped to achieve some reduction in his support obligations before news of his interests in Roto-Gro crystalized and his threats that he would have to file for bankruptcy showed to be false.

[18] The applicant’s Bill of Costs for the period of April 21, 2014 to January 22, 2016 is for $12,441.30. Two Case Conferences and four Settlement Conferences were held during that period. Two of the Settlement Conferences did not proceed. One, as a result of the applicant’s request and the other due to failure of both parties to confirm the proceeding.

[19] The applicant has not included daily dockets to substantiate and explain the almost 300 hours of work that she submits she spent to prepare for the Case Conferences and Settlement Conferences. Costs for the matters were not reserved.

[20] The applicant shall have costs for her preparation for the matters in the amount of $2000.00 plus HST and disbursements, which would be about 67 hours work at a rate of $30 per hour. That amount is more reasonable than what she has asked for in relation to the motion.

The Lawyer’s Fees

[21] The amount requested in fees for this motion is excessive. The Bill of Costs does not list dates or proper docket entries. It, instead, lists a total time spent on a summary of work done and how long each task took. As a result, it is impossible to accurately assess the quantum of the costs or each step in the case in accordance with Rule 24(10). There is no evidence of any Endorsements under which costs were reserved to the adjudication of the motion. Various costs have already been ordered in the proceedings, including those for a summary judgment motion on May 31, 2016 before Justice Stevenson; an adjournment motion before Justice Harvison-Young, dated December 13, 2016; and an adjournment motion before Justice Glustein, dated December 22, 2016.

[22] The respondent claims that he has debts in excess of $330,000. Although I find that I cannot wholeheartedly believe him, based on his behavior on this motion, I have accepted that he did not have and may not yet have the money he will probably acquire from his investment in the medical marijuana company in which he is now involved. I have taken that fact into account in awarding costs against him in this matter.

[23] Rather than the $5,000.00 proposed by the respondent as reasonable for the motion, I find that the applicant should be awarded $20,000.00 plus HST and disbursements for the costs of her solicitor to prosecute the motion on her behalf. The respondent did not behave reasonably from the inception of his motion to change.

[24] Those costs to the applicant and on behalf of Ms. Kerr’s expenses shall be paid within thirty days, enforceable as support.

McWatt, J. Released: May 12, 2017