Court File and Parties

COURT FILE NO.: FS-16-0223 DATE: 2023 10 06

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: W. S., Applicant - and - P.I. A., Respondent

BEFORE: McGee J

COUNSEL: Gary Gottlieb and Ryan Alto, for the Applicant Gary S. Joseph, for the Respondent

COSTS ENDORSEMENT ON SUPPLEMENTAL COSTS ORDER

Background and Positions of the Parties

[1] In a supplemental Costs Endorsement released August 16, 2023, I granted Mr. S’s claim that outstanding costs payable to him by Ms. A be set off against an amount of child support payable to Ms. A that had been held back from his share of their house sale proceeds. I also confirmed that costs payable to Mr. S were to be set off against ongoing spousal support. Currently, there is no Order for ongoing child support.

[2] The costs owing to Mr. S now include a contempt penalty of $10,000, costs of $25,000 on the dismissal of Ms. A’s appeal, and costs of $7,500 on a motion for the sale of the home as well as the trial costs of $677,610. On December 13, 2022, Ms. A filed an assignment in bankruptcy.

[3] Ms. A first brought an oral motion to adjourn the hearing until the claims in the bankruptcy were determined. For oral reasons given, I dismissed the motion to adjourn. Mr. S relates how he incurred significant costs to prepare for those submissions, including the costs of retaining a bankruptcy lawyer who attended the hearing. During the hearing, both parties raised several additional issues that were not before me. I dismissed those issues in oral reasons.

[4] Mr. S was successful on the substantive issue and is entitled to his costs. He obtained an Order that the $100,000 held back from his share of the sale proceeds as security for child support, plus any accrued interest, be paid to him forthwith. I then gave directions on the set off of the balance of costs owed to Mr. S against ongoing child and spousal support, and the need for both parties to seek a variation of the terms of my final Order within a Rule 15 Motion to Change.

[5] Mr. S now asks for a full recovery of his costs in the amount of $53,466.23 inclusive of HST or in the alternative, a partial recovery of $32,079.73.

[6] He also asks that the costs be awarded in a manner that preserves them from being assigned to Ms. A’s Trustee in Bankruptcy. He proposes that I do so by ordering that costs be paid as “a post-bankruptcy debt” that survive bankruptcy. I was given no authority for such an Order, or the basis for my jurisdiction to make such an Order.

[7] Ms. A disputes that Mr. S was the more successful party on the motion, despite failing in her attempt at an adjournment and having achieved none of the terms set out in her draft Order. She argues that the costs claimed of $53,466.23 are excessive and disproportionate. She points to his three lawyers in attendance, inappropriate billings (one entry of 1.5 hours being withdrawn in reply) and her own costs incurred of $15,718.87 for the same period. She proposes that each party bear their own costs and, in the alternative, that $13,000 be paid in costs. [1]

[8] Neither party served an Offer to Settle the hearing, or any aspect of it.

Analysis

[9] I need not extensively recite the applicable caselaw except as directly relevant to these reasons. The parties have previously received a lengthy costs endorsement from me, as well as costs endorsements from other Superior Court Justices, and the Ontario Court of Appeal.

[10] I agree with Ms. A’s submission that the costs incurred by Mr. S to advance the issues that were not before me on the July 27, 2023 hearing, should not attract an award of costs. Nor should the overall award be disproportionate to the result obtained. This decision is in effect, a costs award on costs submissions.

[11] Both parties raised issues at the July 27, 2023 hearing that can only be advanced within a Motion to Change. While I can appreciate the parents’ preference for “one-stop shopping,” the hearing before me was neither a Conference nor a Motion to Change.

[12] The costs incurred by Mr. S to response to Ms. A’s assertions that the bankruptcy annulment motion must proceed first, that issue estoppel was engaged and that there was a duplicity of proceedings can be included. It was not unreasonable for Mr. S to vigorously respond to those issues. Because Ms. A raised them and failed to obtain an adjournment they may be compensated by an award of costs within this decision.

[13] Ms. A’s third objection to the amount of costs sought deserves some attention. She asks that she not be held responsible for Mr. S’s decision to retain multiple counsel for the hearing. Both Mr. Gottlieb and Mr. Alto billed for the preparation for and attendance on the hearing, as well as the costs of the bankruptcy lawyer’s involvement.

[14] The reasonableness of including the costs of multiple counsel is a matter of discretion. As set out in a trio of 2020 decisions, the court will start with the general premise that costs for a second counsel are not recoverable. In Diamond v. Berman, 2020 ONSC 4301, I expressed a view that the costs of multiple counsel cannot be claimed against another party absent compelling circumstances. Citing Diamond, Justice McDermot later that year disallowed the costs for a second counsel. He wrote at paragraph 47 of Iacobelli v. Iacobelli, 2020 ONSC 6128 that:

“The complexity of the matter also would dictate where co-counsel would be permitted at trial. If a matter is sufficiently complex or the efficient presentation of evidence requires two counsels, an exception might very well be made. However, the message has to be given that, where co-counsel is employed at trial, the client risks those costs being disallowed unless the particular matter warrants it. The matter must be extremely complicated for the court to find that there is a need for second counsel, and this is particularly so in family law matters where the affordability of trials and the cost of representation for matrimonial clients is increasingly in issue and the affordability of family law counsel has resulted in some 70% of matters involving unrepresented parties.”

[15] Justice Grace found such compelling circumstances in M.P.M. v. A.L.M., 2020 ONSC 3491, and he permitted the costs of a second counsel. Specifically, he made allowance for the costs of a junior lawyer, finding that his contributions made the trial “exceedingly efficient, organized and commendable.”

[16] Here, I do not find that the costs of both Mr. Gottlieb and Mr. Alto meet the test of compelling circumstances. The proceeding was not sufficiently complex, nor the process made more efficient by the presence of both counsels. Because Mr. Alto ultimately argued the substance of the motion, I will not include Mr. Gottlieb’s half day attendance within this award of costs.

[17] Neither do I allow any duplication of time between the two counsel for the preparation and review of the materials used on the motion, or the printing of materials for each of their personal use at the motion. In doing so, the full recovery range of the account for permissible time reduces to $30,000 - $35,000. I cannot be more exact given the nature of the account and the difficulty of identifying which dockets relate solely or partially to the bankruptcy proceeding.

[18] I find that the costs of Mr. Harris, the bankruptcy lawyer are properly included in the range of permissible time because Ms. A directly questioned whether there was a duplication of the bankruptcy proceeding. In my view, it was necessary for Mr. S to retain Mr. Harris and to have him attend to fully respond to the request for an adjournment. However, in adding his costs to the recoverable amount, I have not included the 10 hours afforded below to the parties’ respective counsel. Mr. Harris did not speak to the motion and his preparation time would have been accordingly limited.

[19] I now look at the Bill of Costs submitted by the respondent. As set out by the Divisional Court in Zhang v. Guo, 2019 ONSC 5767 a useful benchmark for determining whether costs claimed are fair, reasonable, and proportionate is to consider the amount that the unsuccessful party paid for their own legal fees and disbursements in the same matter.

[20] I note that Ms. A’s account does not include Mr. Joseph’s appearance fee for July 27, 2023. His hourly rate is $725, (Mr. Alto’s is $400 per hour.) Mr. Alto charged a flat rate of 10 hours for the day, which at Mr. Joseph’s rate would be $7,500. Assuming the 10 hours included preparation and travel for the day as well as the full day appearance, for comparison purposes I would add $7,500 to Ms. A's applicant’s account of $13,910.50, for a total of $21,410.50 in fees. (No disbursements are included in her Bill of Costs.) HST thereon of $2,783.37 bring the total incurred to $24,193.87.

[21] In reviewing the amount of costs sought, I must also consider the fact that no Offer to Settle was made by either party despite my request at paragraph 62 of my August 16, 2023 reasons that counsel try to resolve the issue of costs. The materials before me set out no efforts whatsoever to attempt to resolve costs. Rule 2(4) of the Family Law Rules imposes a duty on parties and their lawyers to promote the primary objective of the Rules to deal with cases justly, which includes taking appropriate steps to save time and expense. Offers to Settle play a critical role in saving time and expense by promoting settlements, focusing parties, and narrowing issues in dispute.

[22] Although there is no statutory obligation to make an Offer to Settle, in its absence, a judge is entitled to increase or decrease what would otherwise be the appropriate quantum, see Beaver v. Hill, 2018 ONCA 840.

Conclusion

[23] Mr. S was the successful party and is presumptively entitled to an award of costs. An award of costs must be fair, proportionate, and reasonable to the circumstances of the case as presented on the record giving rise to the determination.

[24] In these circumstances, I grant Mr. S a partial recovery of $27,685 in costs, being $24,500 in fees, no recovery for disbursements and $3,185 in HST. A partial recovery in these circumstances is appropriate because no attempts were made to resolve the issue of costs. Efforts to resolve the issue in dispute is a factor to consider in an award of costs, see Rule 24(12)(iii) of the Family Law Rules. Given that Ms. A made no efforts to resolve costs, incurred approximately $24,000 of her own costs, and inserted the additional issue of bankruptcy; it would not be unreasonable for her to expect to pay costs in, and above this range were she unsuccessful.

McGee J. DATE: October 6th, 2023

COURT FILE NO.: FS-16-0223 DATE: 2023 10 06

ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: W. S. Applicant - and - P. I. A Respondent

SUPPLEMENTAL COSTS ENDORSEMENT McGee J. DATE: October 6th, 2023

[1] Green v Cook 2012 CarswellOnt 8075 at para 44 is cited by Ms. A as authority that no Order for costs can be a fair, just, and reasonable result, “particularly in this case as the respondent is bankrupt.” The citation offered is from an Owen Sound decision of Justice Conlan. The costs decision is at 2012 ONSC 3731. Costs were not granted on this modest parenting and NFP dispute because there were mixed results. There was no bankruptcy.