Court File and Parties

COURT FILE NO.: 97-24089-2 DATE: 2019/05/30 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Christopher J. Simon, Applicant AND Lauri Lynne Smith, Respondent

BEFORE: J. Mackinnon J.

COUNSEL: Jack E. Pantalone, for the Applicant Margaret E. Hawkins, for the Respondent

HEARD: April 25, 2019

Costs ENDORSEMENT

[1] This endorsement addresses the costs of a settled case. Both parties claim to have been the successful party and both claim costs. In the alternative the Respondent submits that no costs should be awarded to either party.

[2] Minutes of Settlement signed on February 27, 2019, provided that the Applicant’s obligation to pay child support was terminated effective December 31, 2013, all arrears of support were rescinded and the Respondent’s claim for retroactive support was dismissed. The issue of costs was reserved to the court and assigned to me as the judge who had been scheduled to hear the motions to change. The terms of the Minutes of Settlement establish the Applicant as the successful party based on the positions of the parties articulated in each of their Notices of Motion. The Applicant achieved exactly what he sought in his motion to change; the Respondent’s motion to change was dismissed.

[3] The Respondent’s claim to have been the more successful party is without merit. It was based on the child support award she received in 1999 from the Court of Appeal. It was also based on her submission that she settled for personal reasons, not on the merits of the case. Whatever her motivation this is not a case where it is difficult to determine success or relative success. The Minutes of Settlement reflected a complete capitulation on her part.

[4] Several cases have held that “clear capitulation” or “overwhelming success” provide a compelling reason to award costs of a settled case: Hassan v. Hassan, 2019 ONSC 1199; Palumbo v. Palumbo, 2018 ONSC 7246; Atkinson v. Houpt, 2017 ONCJ 316.

[5] As I will explain, the Respondent has not rebutted the presumption that the successful party is entitled to an award of costs.

[6] The Respondent argued that by going into arrears of child support the Applicant had engaged in blameworthy conduct that should disentitle him to costs. I disagree. To entertain that submission would be tantamount to going behind the Minutes of Settlement to litigate the merits of the case as part of the costs inquiry. I am firmly of the view that should not be done.

[7] The Respondent submitted the Applicant’s Offer to Settle dated November 20, 2018 contained what she described as “bullying tactics” or “scare tactics” intended to coerce her. She argued this type of conduct should detract from a costs award in his favour. The Offer, which was to grant his motion and dismiss hers, was only open to be accepted for three days without any costs consequences. Thereafter at set intervals she would be required to pay increasing amounts of costs in order to accept the Offer. Contrary to the Respondent’s description of the Offer, it reflected the Applicant’s view of the strength of his position and his serious intention to require costs as the hearing date drew closer and his actual costs increased. It may have been prudent for the Applicant to leave the Offer open for acceptance without costs for a longer time, but the staged approach to costs in the Offer does not constitute unreasonable litigation conduct.

[8] In a similar vein the Respondent submitted that the Applicant’s refusal to settle on a no costs basis was unreasonable conduct. The position he took is not frequently taken, but it is a legitimate position to take in appropriate circumstances, and in my view is not one which on its face disentitles a litigant to costs or reduces the amount of costs to which it may be entitled.

[9] The Respondent also submitted that the Applicant failed to make full or timely financial disclosure to such an extent that he should be denied costs. The materials before me did not support this contention. Rather it appears that the Applicant made regular and ongoing financial disclosure through his previous lawyer starting in 2009. On October 16, 2018 his current counsel wrote to his counterpart listing in detail all of the disclosure that had been provided to the Respondent to date with the specific note that if she required him to resend any material to please let him know. No response was forthcoming. The materials listed subsequently formed two volumes of a Disclosure Brief compiled for the motion.

[10] In August 2018, Justice Audet made a disclosure order. I am satisfied from the materials reviewed that the Applicant complied with this order. Justice Audet made a second disclosure order in November 2018. The Respondent relies on this order as proof that the items required by it had not yet been produced. Ordinarily, this would be a compelling argument. Here, there are several problems with the Schedule prepared by the Respondent which purports to itemize outstanding disclosure and that forms part of the order.

[11] The Schedule calls for the production of “tax declaration cards”. No one was able to tell me what a tax declaration card is. The Schedule calls for US tax information for all years from 2008 to 2016, whereas the October 16 letter confirmed that all such US returns had already been produced. Similarly, Canadian income tax information for 2008 to 2016 was required, whereas all of the Canadian returns as of 2012 forward had already been produced. Additionally, an income report prepared by Mr. Pittman in January 2009 provides some explanation as to why there may not have been Canadian returns for prior years. Mr. Pittman states that the Applicant did not file in Canada in 2007 because he was residing and working in the US that year. This continued to be the case up until sometime in 2008 when the Applicant was suspended from the NHL and started playing in Russia.

[12] The Schedule calls for Russian income tax information. The Applicant played in Russia commencing in 2008 until sometime in 2013. To prove the income earned from this source he produced translated copies of his Russian contracts and 24 wire transfers of funds covering the years in question. Some of his US tax returns also showed his Russian income. The Applicant filed an affidavit deposed by his agent at the time, setting out the difficulties with getting paid by the Russian team and what may be described as its less formal standard of record keeping when compared to North American teams.

[13] Russian income tax returns were not produced but I am satisfied that what was produced was satisfactory evidence of income and what was reasonably available to the Applicant.

[14] The Schedule also required First Nations Tax Claims and exemptions for each and every year. Mr Pittman’s report advised that the Applicant did not work on or derive income from services performed in relation to a reserve and accordingly was not exempt from Canadian income tax. This report was written at a point in time, but the Respondent did not make submissions to the contrary.

[15] For these reasons I cannot accept the second order made by Audet J as supporting the Respondent’s claim that the items listed in her Schedule A as outstanding in November 2018 were in fact outstanding.

[16] Overall I found the disclosure made by the Applicant was extensive and persuasive as to his financial circumstances.

[17] In 2013 the Applicant sustained a career ending knee injury. His counsel made a timely request for the child support payments to be terminated as of December 2013. At the same time, she requested information from the Respondent with respect to her compliance with the order made by Whalen J. on June 22, 1995. That order required the Respondent to put $750 per month from the child support received into a trust account in the child’s name, to appoint two trustees for the account, and to use the funds towards the support of the child at such time as the father was no longer earning as a hockey player.

[18] Despite many requests over the years the Respondent did not provide the requested information. I was advised that an account containing $80,000 listed in her financial statement dated November 13, 2008 was the trust account. It was not described as such, and in any event would not have been responsive to the requests made in and after 2013.

[19] The record shows that the Applicant filed for bankruptcy in 2016 and was discharged in 2017. He has been in receipt of ODSP since 2017. In support of his application for ODSP his physician described the many, serious medical problems the Applicant has, related to both his physical and mental health. He did not think the Applicant was capable of employment.

[20] From a total Bill of $23,875.69 the Applicant seeks partial recovery costs prior to his Offer and full recovery costs thereafter for a total of $19,761.93 inclusive of HST and disbursements. As noted his Offer was only open for acceptance without costs for three days until November 23rd. It remained open thereafter but with $5,000 costs required as of November 23rd, increasing to $10,000 on December 21st and to $17,500 on February 21, 2019. The Applicant submits this Offer attracts the consequences of Family Law Rules, O.Reg. 114/99 as am, r. 18(14) which provides:

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).

[21] For the rule to apply it would require substituting “enters into Minutes of Settlement” for “obtains an order”, and to overlook that r. 18(14).3 contemplates a hearing. On the facts the Offer to Settle as it remained open for acceptance when the result was achieved was not as or more favourable to the Applicant than the Offer. As it stood at that time the Offer required $17,500 to be paid for his costs. The provision in the Offer that would have attracted r. 18(14) assuming it did apply, was to settle without costs. That provision was only open for a very short time, and was no longer open to be accepted when the Minutes of Settlement were signed.

[22] I would not apply r. 18(14) to these facts but the Offer is still important to the consideration of costs.

[23] The Respondent’s Offer dated February 7th, mirrored the Minutes of Settlement except required for acceptance that there would be no costs if accepted by February 15, 2019. Thereafter her Offer also required costs to herself on an increasing basis. The Respondent amended this Offer on February 25, 2019 by returning to the position of no costs to either party. This outcome was not achieved.

[24] The Applicant’s claim for costs relates only to the provision of services by his present counsel who took over the file in July 2017. The Respondent challenges the fees of $20,127.50 as excessive. I disagree. I find the hourly rate and time spent to be reasonable and proportional to the matter at hand. The fees claimed are only some of the fees incurred by the Applicant in relation to the duration of the litigation. And, while the Respondent was self-represented for a period of time, the fees she incurred starting in August 2018 to date were $12,177. The amount the Applicant is claiming was well within her reasonable contemplation.

[25] A procedural error was made which added $425.50 to the fees incurred by the Respondent. This will be deducted from the Applicant’s allowable fees.

[26] The Court of Appeal sent a strong message of caution in Beaver v. Hill 2018 ONCA 840, [2018], O.J. No. 5412 against awarding costs approaching full recovery indemnity, in that case 85%, where no specific rule expressly contemplates full recovery. In Mattina v. Mattina, 2018 ONCA 867, [2018] O.J. No. 5625 the Court of Appeal said in paragraph 35, “Having considered the reasonableness and proportionality of the relevant factors, in our view the mother should receive 60 to 70 % of her costs.”

[27] My assessment of the reasonableness and proportionality of the FLRs r.24 factors, including the importance and complexity of the case, is that an award of partial indemnity in the range of 70% is appropriate. The Applicant had complete success after protracted and expensive litigation. The disclosure he made was compelling in support of the claims he made.

[28] The Respondent’s final submission was that she lacks ability to pay costs. Her income has been in the range of $54,800 per annum, but as of next month her entitlement to spousal support which represents $18,000 of that amount will come to an end. This will reduce her annual income to $36,791. Her most recent financial statement shows a net worth of $361,248. I am not persuaded that her financial circumstances provide a reason to reduce the amount of costs but they do justify terms of repayment. I do not know the renewal date for the Respondent’s home mortgage. If it is within the next three years and the Respondent enters into an enforceable, secured agreement with the Applicant to refinance that mortgage at its next renewal date and to discharge any balance then owing to the Applicant in full, including post judgment interest, the monthly payments shall be $250. Failing such an agreement being reached within 30 days, the monthly payments shall be $500.

[29] The Applicant’s costs are fixed at $16,700 inclusive of fees, disbursements and HST.

J. Mackinnon J.

Date: May 30, 2019

COURT FILE NO.: 97-24089-2 DATE: 2019/05/30 ONTARIO SUPERIOR COURT OF JUSTICE

RE: Christopher J. Simon, Applicant AND Lauri Lynne Smith, Respondent

BEFORE: J. Mackinnon J.

COUNSEL: Jack E. Pantalone, for the Applicant Margaret E. Hawkins, for the Respondent

COSTS ENDORSEMENT J. Mackinnon J.

Released: May 30, 2019