Court File and Parties

Court File No.: City of North Bay, FO 148-08 Date: 2012-06-01 Ontario Court of Justice

Between: Linda Lucille Gail Rowe, Applicant

— And —

Michael Piche, Respondent

Before: Justice L.J. Klein

Heard on: January 3, 4, 5, 6 and February 10, 2012

Reasons for Judgment released: February 24, 2012

Costs Decision released: June 1, 2012

Counsel: E. Rae, for the Applicant Michael Piche on his own behalf

Costs Decision

Introduction

[1] The decision in this case was released on February 24, 2012. The trial dealt with issues of eligibility for spousal support and the quantum thereof. The parties were invited to make written submissions on the issue of costs and have done so. Given the unique manner in which this matter proceeded on consent, with evidence from the first trial being received by way of transcripts and the trial essentially continuing before me (with certain modifications) from that point forward, the issue of costs is somewhat complicated.

The Costs Claims

[2] The Applicant seeks costs for two phases of proceedings: the original trial which was heard on December 4, 2008, January 9, 2009, March 2 and 11, 2009, April 14, 2009 and May 1, 2009 when a final order was made in the absence of the Respondent due to his having improperly diarized the continuation date; and the trial before me on January 3, 4, 5, 6 and February 10, 2012. Costs of all phases of the trial were ordered to be determined by this court as part of the terms of the appeal order pronounced by Justice Valin of the Superior Court of Justice on November 24, 2009. The initial phase of the costs claim of the Applicant arising from the original trial of this matter amount to $18,131.32 billed by the late Ms. Judy Shea, Applicant's counsel at the original trial, to Legal Aid on behalf of the Applicant following the initial final order made by Justice Duchesneau-McLachlan on May 1, 2009. The final phase of the costs claim relates to the involvement of Mr. Ed Rae at the trial before me this year and is in the amount of $14,793.96. The total costs claim on a substantial indemnity basis being made by the Applicant is $32,925.28.

[3] The Respondent in his submissions provided a number of alternatives: (a) No costs order be made; (b) Costs to the Respondent based on legal fees in the original trial of $20,677.41 and his costs as a self-represented litigant of $31,410.00 for a total of $52,087.41; and (c) A reduction in any costs ordered payable by the Respondent to the Applicant on the basis of the Respondent's inability to pay such costs. Undoubtedly due to his inexperience and lack of knowledge of the law and procedure, the Respondent submitted material and argument on the issue of costs that were not before me at the trial and that were inappropriate given the limited purposes of submissions as to costs. I have ignored those submissions and have focused on the sole issue that remains to be determined by me, the issue of costs.

Legal Framework for Costs Awards

[4] The Ontario Court of Appeal in Serra v. Serra, [2009] O.J. No. 1995, clearly stated that "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" while also bearing in mind that such costs awards should reflect what the court views as a fair and realistic amount that should be paid by the unsuccessful party.

[5] Rule 24(3) of the Family Law Rules (the "rules"), creates a presumption of costs being awarded in favour of the successful litigant. This consideration of success is the starting point for arriving at the costs award. In determining whether a party has been successful, the court should take into account how the order compares to any offers of settlement that may have been made by either party. The positions taken and advanced by the parties at trial should also be considered.

[6] Neither party made an offer to settle or, at least, a formal offer to settle in writing. Thus the final order stands alone.

Success at Trial

[7] Turning next to the positions taken at trial, this is where the Applicant was successful. Her claim to be eligible for spousal support was upheld by this court. The issue as to quantum of support required relatively little court time but it was complicated by the overlapping issue of eligibility and the actions of both parties during their relationship, especially when dealing with other legal proceedings. In short, the positions espoused by both the Applicant and Respondent in two motor vehicle accident claims and in the Applicant's divorce proceeding led to considerable evidence and subsequent argument to determine the issue of eligibility. Those earlier actions greatly hardened the positions taken by the parties and the length of time required at trial to untangle the web of deceit that was woven by the parties. What should have been a relatively uncomplicated matter was made less so thus adding significantly to the ultimate costs of this trial. In some ways the position taken by the Respondent, (although ultimately unsuccessful), was made more reasonable by the opportunities presented to him as a result of the earlier positions taken by the Applicant. In other words, the Applicant's denial of being in a common law relationship with the Respondent prior to the fall of 2003 during the course of more than one court proceeding, opened the door for the Respondent to argue the position that that was indeed the case. It was my decision that, despite the obvious tailoring of the evidence by both parties in earlier proceedings, that in fact a common law relationship did exist for a period well beyond the three years required by the Family Law Act.

Basis for Costs Award

[8] Having said all that, it is still appropriate to award the Applicant her costs on a partial indemnity basis.

[9] The rate claimed by the Applicant's lawyer was reasonable for someone with his experience as was that claimed by trial counsel at the initial trial for the same reasons. It is well settled law that the Applicant is not restricted to seeking costs at the legal aid rate that was paid to Ms. Shea at the initial trial. See Alvarez v. Smith, [2008] O.J. No. 941. This, of course, must be considered in light of all other factors when arriving at an appropriate costs award.

Bad Faith Allegation

[10] The Respondent argues that, as the Applicant acted in bad faith, she should be denied her costs or that they should be reduced. R. 24(8) states: "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." His chief allegation on this point was that the Applicant perjured herself in sworn affidavits during earlier court proceedings thus benefitting financially from those false statements. I did make findings that both parties tailored their evidence in more than one previous court proceeding to meet their needs on those occasions and dismissing those previous statements as being determinative of the issue before me as to whether a common law relationship did exist for the requisite three year period. To come within the meaning of bad faith in R. 24(8) the Applicant's behaviour in this case must be shown to conceal information relevant to the issues or to deceive the other party or the court. S(C) v. S(M), [2007] O.J. No. 2164. My decision at trial was clear that I did not consider either party to be intentionally deceiving the court in this proceeding but that the actions of both parties in previous proceedings did unduly complicate the matter before me. In other words, there is no bad faith finding to be made just bad judgment on the part of the litigants.

The Ex Parte Order

[11] The decision to proceed with the original trial in the absence of the Respondent on May 1, 2009 clearly contributed to some unnecessary duplication of effort and costs and no small amount of delay in bringing this relatively uncomplicated matter to a conclusion. The Respondent, self-represented at the time, had confused the starting time for the continuation of trial that day thus arriving for the afternoon session to discover that a final order had been made in his absence earlier that day. That decision to proceed was clearly ill-taken given that the Respondent was self-represented, that he had not been unaccountably absent from court on earlier occasions during the five previous days of the trial and he had not indicated any intention not to attend court to complete the trial. The resultant decision amounted to an ex parte order (subsequently overturned by consent on appeal) that could have been avoided, along with the attendant duplication of costs, simply by contacting the Respondent prior to proceeding or by adjourning the trial to another day. The decision to forge ahead on that occasion can only be laid at the feet of the Applicant.

Calculation of Costs

[12] None of the findings above would disentitle the Applicant from receiving some portion of her costs. In reviewing the material before the court as to legal costs incurred by the Applicant, this court has been presented with two documents: the first being a Final Demand Notice sent from Legal Aid Ontario to the Applicant dated June 2, 2011 advising her of an outstanding balance owing to Legal Aid Ontario in the amount of $18,131.32 in relation to the fees incurred at the first trial; and the Bill of Costs submitted by Applicant's counsel at this trial, Mr. Rae, in the amount of $14,793.96. Given the lack of particulars set out in the Legal Aid Ontario letter it is very difficult to review the basis for that account. Most specifically, it is difficult to determine what portion of the final day of trial on May 1, 2009 and the time spent preparing the court orders arising therefrom, all of which this court determines should not, for reasons set out above, have been incurred. On that basis I am reducing Ms. Shea's account by $1,000.00 as an estimate of the cost of performing those ultimately unnecessary services. Ms. Shea's account shall be fixed at $17,131.32. Mr. Rae's Bill of Costs has been itemized more completely and it is clear that some of the quantum of his account was as a result of the duplication that necessarily follows from new counsel being required to "get up to speed" by acquainting himself with the file and, most specifically, reading transcripts of all or parts of five previous days of trial. As I indicated above, I am of the firm belief that some of this duplication would not have been necessary had this matter been completed in the presence of both parties in May of 2009 or shortly thereafter. Mr. Rae's very reasonable account for costs purposes only shall be reduced by the sum of $1,500.00 leaving that claim at $13,273.96. That reduction recognizes the duplication of efforts (and costs) inherent in trial preparation and the necessary pre-trial attendances to set dates and to attend at the settlement conference. Subject to further analysis, the total costs of the Applicant are $30,405.28.

Proportionality and Fairness

[13] Again turning to Serra v. Serra (para. 12) "costs awards, at the end of the day, should reflect what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties: see Boucher v. Public Accountants Counsel for the Province of Ontario, 71 O.R. (3d) 291, at para. 24." Assessing costs is not simply a mechanical exercise. Justice David R. Aston in Delellis v. Delellis and Delellis, [2005] O.J. No. 4345 (Ont. Fam. Ct.) (para. 9) wrote: "costs must be proportional to the 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."

[14] Where the successful litigant contributes to the complexity and longevity of the proceedings through that party's actions, even ones that occurred in the years leading up to the actual trial on the issues, that behaviour and those decisions must be reflected in the ultimate costs award. The Applicant over the course of a number of unrelated proceedings tailored her evidence to meet the exigencies of the day by effectively denying the existence of a common law relationship with the Respondent, a key issue in these proceedings. What should have been a relatively short and simple trial over quantum of support that might have lasted three days at most became a ten day marathon which was unduly lengthened and complicated by other decisions taken along the way. For those reasons I am fixing costs payable by the Respondent at $12,000.00 inclusive of fees, disbursements and HST.

Respondent's Financial Circumstances

[15] I have been mindful throughout of the Respondent's financial circumstances which involve his supporting his new spouse, Angela Montreuil, their daughter Johanna, and with another child due in July 2012. His annual income is in excess of $90,000.00. He has the ability to pay the costs awarded although not a lump sum. On that basis these should be periodic payments to mirror the bi-weekly periodic spousal support payments awarded by this court at trial.

Costs Order

[16] The Respondent shall pay the sum of $12,000.00 to the Applicant by way of costs with bi-weekly payments to be made in the amount of $175.00 every second Thursday to be on the same schedule as the spousal support payments and to commence on the first spousal support payment date in July 2012.

[17] Costs are payable as support and may be enforced as an incident of support by the Director, Family Responsibility Office.

Released: June 1, 2012

Signed: "Justice L.J. Klein"