Court File and Parties
Court File No.: 525/12 Date: November 12, 2013 Amended: November 13, 2013
Ontario Court of Justice
Re: Debra Leigh Vanderaar – Applicant And: Dennis Frederick Forand – Respondent
Before: Justice Roselyn Zisman
Counsel: Gloria Nardi-Bell for the Applicant Dennis Frederick Forand for himself, the Respondent
Heard On: By written submissions
Introduction
[1] On August 16th, I heard a motion to change commenced by the Applicant ("mother") to change the terms of a separation agreement dated November 11, 2005 and specifically to obtain an order for the Respondent ("father") to pay his proportionate share of the children's extraordinary expenses. The father sought an order for the motion to change to be dismissed.
[2] On consent of the parties, the motion to change was heard based on the affidavits filed without questioning and the document briefs. Both parties filed facta and a brief of authorities.
[3] My decision was released on October 1, 2013. Any party seeking costs was requested to file written submissions in writing by October 18, 2013 and response to be submitted by October 31, 2013. Counsel for the mother served the father with her cost submissions on October 17th and filed them with the court on October 18th. The father has not filed any response.
Mother's Position
[4] The mother seeks full recovery of her costs of $29,896.76 plus applicable taxes on the basis that:
a. the mother served a reasonable offer to settle and the results in court were as or more favourable than her offer;
b. it is against public policy to permit the father to eschew his contractual obligation to abide by the terms of the separation agreement which he signed and to put the mother to great costs in enforcing the contract;
c. support recipients in similar circumstances may be disinclined to pursue child support because the costs of doing so are onerous; and
d. if the mother is required to bear any portion of her legal costs, the children will be the financial losers since money spent on an unnecessary court process is not available to support and otherwise benefit the children.
Settlement Attempts and Offer to Settle
[5] The mother attempted to settle the issues informally by correspondence with the father directly and then through counsel.
[6] On June 18th, 2013 the mother's counsel served the father with a comprehensive, fully severable offer to settle. In that offer to settle the calculations were fully set out, along with a budget for post-secondary expenses and the Divorcemate calculations for ongoing extraordinary expenses.
[7] The motion to change involved several issues. It is useful to briefly compare the mother's offer to settle with the court order on the issues before the court. They are as follows:
a. Father's income: The mother's offer made and the court order accepted that father's 2012 income to be $119,807.
b. Credits: The offer and the court order both gave the father credit for amounts he had already paid towards tuition and other contributions he made directly to the mother for some extraordinary expenses.
c. Benoit's college expenses: The court accepted that the mother's calculations regarding the child, Benoit's college expenses. In particular the court accepted the mother's position that it was reasonable for Benoit to live away from home and in residence and not with the father. Therefore, his residence expense was held to be reasonable. The offer to settle required each child to contribute 25% of his/her earnings to the cost of their education and any grants and interest on RESP funds to be applied to reduce the cost of education. The court order did not provide the father with any such reduction. The order required the father comply with the terms of the separation agreement namely, that the child would not be required to contribute to the cost of post-secondary through his own earnings, grants or loans. The court order also gave the mother credit for the RESP contribution she made. If the father had accepted the mother's offer to settle he would have paid about $5,000 less than he was ordered to pay. There would have also been a future savings as the terms of the offer to settle applied to all of the children who are all anticipated to obtain a post-secondary education.
d. Children's other section 7 expenses: The court order required the father to pay retroactive extraordinary expenses in an amount double what the mother had offered. Based on the formula ordered the father's ongoing obligation will also be higher.
e. Future section 7 expenses: The mother offered to pay all expenses initially and then be compensated by the father at the end of each year. The court ordered the father to pay his before tax share of such expenses within 7 days of receiving the receipts and then adjustments to be made after tax returns were filed. The mother was not successful in her plan to estimate each child's post-secondary expenses in advance and require the father to pay his proportionate share. The court agreed with the father that these expenses were too speculative. However, the mother's offer to settle was severable so that the father could have rejected this term.
f. Payment Plan: The mother's offer to settle did not include a payment plan whereas the court permitted the father to pay at the rate of $750 per month.
g. Ongoing child support: The court order fixed the amount of ongoing support based on the father's line 150 income for the preceding year and based on Benoit residing away at school for portions of the year. In the mother's offer to settle she used a slightly different approach but overall the amount she was prepared to settle for from the time the motion to change was commenced to the time of the order was slightly lower than the amount ordered by the court. With respect to ongoing child support I find that the amount offered was as favourable as the court order.
h. Annual adjustments, notifications and disclosure: Nothing turns on these issues as the court order clarified and made more specific terms in the hope of avoiding future motions to change.
[8] Overall, the mother was the successful party and the results obtained in court were far more favourable to her than the offer to settle she made the father.
Applicable Legal Principles
[9] Rule 24(1) of the Family Law Rules provides guidance on costs on a family law context. Rule 24(1) sets out the basic assumption that a successful party is entitled to costs. This provision still permits a court broad discretion in determining if costs should be paid, by whom and in what amount.
[10] Rule 24(11) provides a further list of factors a court should consider in dealing with costs:
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 behavior in the case;
c. the lawyer's rates;
d. the time properly spent on the case, including conversations between the lawyer and the party, 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.
[11] In Serra v. Serra, 2009 ONCA 395, the Ontario Court of Appeal confirmed that costs rules are designed to foster three important principles:
to partially indemnify successful litigants for the cost of litigation;
to encourage settlement; and
to discourage and sanction inappropriate behavior by litigants.
[12] I also agree with the comments by Justice Perkins in Biant v. Sagoo that:
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.
[13] I am also mindful that the court's role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees. As was pointed out in Boucher v. Public Counsel (Ontario), the award of costs must be fixed in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings rather than an exact measure of actual costs to the successful litigant.
[14] Subsection (b) of Family Law Rule 24(11) relates to the reasonableness of each party's behavior in a case.
[15] In considering if a party acted reasonably, Family Law Rule 24(5) directs the court to consider if a party served made an offer to settle and the reasonableness of any offer to settle.
[16] Rule 24(5) provides that:
(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.
[17] Offers to settle are an essential part of family litigation. The parties and counsel have a positive obligation to conduct their cases to ensure that the primary objective of the Family Law Rule 2(2) is met that is, to deal with cases justly. This includes taking appropriate steps to save time and expenses, per Rule 2(3). Offers to settle play an integral role in saving time and expenses by promoting settlements, focusing parties and often narrowing the issues in dispute. Offers to settle are therefore important in any consideration of the issue of costs. In my view it is unreasonable behavior for a party not to make an offer to settle.[1]
[18] The consequences of an offer to settle are set out in Family Law Rules 18(14) as follows:
(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.
Application of Legal Principles to the Facts
[19] In this case the mother's offer to settle meets all of these conditions and she is therefore entitled to her costs from the date the offer was served and on a full recovery basis from that date. In this case, the mother's counsel prepared a severable offer to settle something that many counsel neglect to do in an attempt to narrow the issues. She further explained the calculations and the method of arriving at the calculations in another attempt to narrow the issues. I do not know anything else the mother and her counsel could have done in an attempt to settle the issues before the court. The father did not respond to the offer to settle but instead chose to litigate each issue. Having chosen to litigate and being unsuccessful, he should be required to pay the mother's costs.
[20] In determining the amount of costs, I have considered the legal principles and the following factors as set out in Rule 24(11) as follows:
a. The importance, complexity or difficulty of the issues: This motion to change proceeded on written materials and submissions for a final determination. It was very important to the parties as it would determine the extent of each party's past and ongoing support obligations for their children. It was somewhat complex as there were many issues to deal with and a great deal of documentary evidence filed. It also involved the interpretation and enforcement of the parties' separation agreement.
b. The reasonableness or unreasonableness of each party's behavior in the case: The mother acted reasonably and appropriately. As previously indicated the father did not act reasonably in not serving an offer to settle or not accepting portions of the mother's offer to settle. I find this factor to be particularly relevant in this case as a great deal of time was spent on the issue of the father's income and the father could have accepted the mother's offer to settle in this issue (which was based on his actual income) and saved a considerable amount of time. The father's attempt to recoil from the terms of the separation agreement that had been negotiated with counsel and clearly stated that the children would not be required to contribute to the cost of their education was ill advised and unnecessarily wasted court time.
c. The lawyer's rates: Ms Nardi-Bell practices exclusively family law and has been in practice for almost 20 years and although her usual hourly rate is $325, she only charged the mother $250 per hour. To keep costs down much of the work was done by an associate counsel and her law clerk at hourly rates of $157 and $105 respectively. The rates charged are reasonable in view of the years of experience.
d. The time properly spent: A great deal of time was spent by mother's counsel in preparation of documents and in preparing the calculations. I note that mother's counsel also spent a great deal of time preparing the comprehensive offer to settle with calculations which she hoped would settle at least part of the case and thereby save her client expenses. I cannot fault the mother's counsel with these attempts even if they were not fruitful in settling or narrowing the issues in this case. Although other counsel may have spent less time, I do not see that the court's role in assessing costs should be to second guess how thorough counsel prepares for a case. The time spent was proper and dealt with the preparation of affidavits, financial statements, document briefs, a factum of facts and law, the preparation of a brief of legal authorities, many calculations dealing with different factual scenarios and oral submissions.
e. The expenses properly paid and payable: The usual disbursements are claimed. The cost of photocopies is high but there were a great deal of documents and briefs involved and counsel prepared extra copies for the court which were useful and appreciated. As the father was self-represented there was an increased cost to serve him by courier or process server. The disbursements claimed of $1,686 are therefore reasonable.
f. Any other relevant matter: Mother's counsel submits that the court should consider that prior to this court proceeding the father had only paid $3,500 voluntarily for the children's section 7 expenses whereas the mother had incurred costs in excess of $39,000 for the children's education medical dental and extracurricular activities. The effect of the order made required the father to pay $24,208 with respect to his share of the children's retroactive section 7 expenses and ongoing child support. The father's income for 2012 was determined to be $119,807 whereas the mother's income was only $49,129. I have also considered having now seen the mother's offer to settle that this proceeding was not necessary and should have been settled.
[21] In considering all of these factors, I find that the mother is entitled to close to full recovery of all of her costs as she served a comprehensive offer to settle and she was the successful party on this motion. The father should have examined the offer to settle and at the very least accepted the terms favourable to him. Further, the father should have considered the consequences of attempting to disregard a term of the separation agreement that was negotiated in good faith with counsel. The father cannot be permitted to litigate with impunity in view of the financial consequences to the mother and thereby to the children. I find that a fair and reasonable amount of costs in this case is $25,000 inclusive of disbursements and applicable taxes. As the motion involved support issues, it is appropriate to require enforcement by the Family Responsibility Office.
Order
The Respondent, Dennis Frederick Forand shall pay to the Applicant, Debra Leigh Vanderaar costs fixed at $25,000.00 inclusive of disbursements and applicable taxes.
The Family Responsibility Office shall enforce this order as a support order.
Support Deduction Order to issue.
Ms Nardi-Bell shall prepare this order and the approval of the Respondent as to form and content is hereby dispensed with.
Justice Roselyn Zisman
Date: November 12, 2013
[1] J.V.M. v. F.D.P., 2011 ONCJ 616; Menchella v. Manchella, 2013 ONSC 367; Clarke and Collymore [2013] O.J. No. 4138 (OCJ)