Court File and Parties
Court File No.: 409/11 Date: March 20, 2014
Ontario Court of Justice
Re: Danielle Lynn Dupuis – Applicant And: Charles Denis Desrosiers – Respondent
Before: Justice Roselyn Zisman
Counsel:
- Novalea Jarvis - for the applicant
- Marc Charrier – for the respondent
Heard On: By written submissions
Introduction
[1] A trial in this matter was heard on 6 days non-consecutive dates between December 2012 and September 2013. The issues determined at trial related to child support, spousal support, including the issue of entitlement and imputing income to both parties, payment of any section 7 guideline expenses, the determination of the respondent's income for support purposes and ancillary orders. For most of the trial the respondent was not represented. The respondent also brought two motions between the trial dates one for further disclosure that was dismissed with costs and another motion for a lengthy adjournment because he had retained counsel. This motion was also dismissed.
[2] The parties, prior to trial, had resolved on a final basis the issues of custody and access and parenting terms.
[3] My decision was released on December 20, 2013. The applicant, if seeking costs, was to prepare her written submission within 30 days and any response within 30 days thereafter. The applicant served and filed her submissions as to costs, the respondent served and filed his response and the applicant served and filed a reply.
Position of the Applicant
[4] The mother seeks full recovery of her costs of $65,774.81 plus $4,143.00 for the preparation of costs submissions on the basis that the applicant acted reasonably throughout and the respondent acted unreasonably since the separation and throughout the court proceedings. The applicant relies on the following specific factors in seeking full recovery of her costs:
a. The applicant was very successful at trial;
b. The applicant served an offer to settle prior to trial that was either the same or more favourable to the respondent than the result at trial;
c. The respondent failed to negotiate in good faith a separation agreement drafted and revised between April 2011 and July 2011, prior to the commencement of this court proceeding;
d. The respondent failed to pay the temporary order for spousal support;
e. The respondent failed to provide disclosure in a timely manner or at all with most of the disclosure being provided on the eve of trial;
f. The respondent fabricated evidence and/or relied upon false documents to mislead the court and the applicant including an employment letter which he knew to be false;
g. The respondent brought numerous motions which were voluminous and largely unmeritorious;
h. The respondent misled the applicant as to his not working; and
i. The respondent was found to be intentionally underemployed or unemployed in order to frustrate the applicant's entitlement to child and spousal support.
Position of the Respondent
[5] It is the position of the respondent that the applicant is not entitled to full recovery of her costs and relies on the following factors:
a. Although the successful party is entitled to costs, Rule 24 of the Family Law Rules does not eliminate the court's unfettered discretion to not award costs or to not award full recovery;
b. The applicant was not required to commence court proceedings as the parties were working towards resolution;
c. The issues of custody were settled before the trial and the respondent was successful as he wished joint custody and an equal parenting schedule;
d. The respondent was reasonable in his position regarding support as he was not working;
e. The respondent did not act in bad faith nor did he act extravagantly;
f. The respondent was self-represented for most of the trial and therefore did not fully understand the court process; although ignorance is no excuse, he should be shown some leeway;
g. The applicant's counsel did not have to file such voluminous materials or send such excessive correspondence; the respondent's counsel submits that the applicant's counsel inflated her costs;
h. The number of hours spent, namely 131, for a 6 day trial is excessive and there is duplication in some of the charges;
i. Both parties inflamed the situation and were acrimonious. Not all the blame for the conflict should be attributed to the respondent; and
j. The respondent is of limited financial means. At the time of the trial, both parties were in receipt of social assistance. Prior to the trial, the respondent's mother paid his legal bills, for counsel who represented him on the temporary motions, and his mother has throughout assisted him with his living expenses.
[6] Respondent's counsel has attached to his cost submissions an affidavit from the respondent's mother confirming she paid for his legal fees and living expenses and explaining some discrepancies in the financial information that was before the trial. I agree with counsel for the applicant that such an affidavit is totally inappropriate. The respondent could have called his mother as a witness at trial and chose not to. He cannot now attempt to correct or explain her finances or the respondent's current circumstances. The affidavit and supporting documents are struck from the respondent's response to the applicant's cost submissions.
Settlement Discussions and Offers to Settle
[7] The mother attempted to settle the issue, prior to initiating court proceedings, through counsel. The applicant's counsel prepared several versions of a draft separation agreement and submits that she made several attempts to negotiate a settlement.
[8] On November 5, 2012 the mother's counsel served the father with a comprehensive offer to settle. The terms of which were the same or substantially better for the respondent than the trial decision. The respondent has not provided proof of any offer to settle that he served or even any proof of any attempts he made to resolve the child and spousal support issues.
[9] The applicant was successful in having income imputed to the respondent, no income imputed to her, as requested by the respondent. She was also successful in obtaining spousal support based on an imputed income to the respondent.
[10] Overall, the mother was the successful party and the results obtained in court were more favourable to her than the offer to settle she made the father.
Applicable Legal Principles
[11] 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.
[12] 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.
[13] In Serra v. Serra 2009 ONCA 395, [2009] O.J. No. 1905 at para. 8, 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.
[14] I also agree with the comments by Justice Perkins in Biant v. Sagoo, [2001] O.J. No. 3693 (S.C.J.) 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.
[15] 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) (2004), 2004 CarswellOnt 2521, [2004] O.J. No. 2634 (Ont. C.A.), 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.
[16] Subsection (b) of Family Law Rule 24(11) relates to the reasonableness of each party's behavior in a case.
[17] 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.
[18] 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.
[19] 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]
[20] 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
[21] 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.
[22] 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:
The issues involved in this matter were very important to the applicant as she is subsisting on income below the poverty level and she had been, until September 2012 when the schedule changed to a shared parenting arrangement, a full time parent to the parties' severely disabled child. It was very important for the applicant to receive spousal support to enable her to become retrained and enter the workforce and provide a decent standard of living for their child. The proceedings were made more complex and difficult by the positions taken by the respondent, his lack of timely disclosure and the divergence between the respondent's testimony and the previous affidavits he had filed. His changing evidence resulted in much lengthier cross-examinations.
b. The reasonableness or unreasonableness of each party's behavior in the case:
The applicant acted reasonably from the inception of the separation and throughout the proceedings.
On the other hand, the respondent did not act reasonably. Despite a relationship of seven years during which the applicant took full time care of their disabled child, the respondent took the position that the applicant was not entitled to any spousal support. It was not until the final submission of counsel for the respondent that he agreed that the applicant was entitled to support and then took the position that the respondent did not have the funds to pay. The respondent had been ordered to pay spousal support, pursuant to a temporary order, and within about a week of this order being made he went on sick leave. He was also ordered to pay costs of $8,000 and then within several weeks brought a motion to vary that order that was dismissed. The respondent never paid any spousal support. The respondent never called his doctor as a witness in the trial to substantiate his inability to work. The respondent then testified that although technically he could return to work he had no intention to doing so. The respondent left his employment where he earned about $51,000.00 and also had extended medical and dental benefits. I found that his behavior was unreasonable, that he was not a credible witness and his actions were calculated to defeat the claim for spousal support by the applicant. I found that the respondent had told the applicant that if he was ordered to pay spousal support that he would quit his job and that is exactly what he did. As a result income was imputed to him on the basis that he was able to work.
During the trial, the respondent spent a considerable amount of time cross-examining the applicant in an effort to prove that their daughter was not that disabled and questioning how the applicant spent the subsidies she received as a result of the disability of their daughter. This line of questioning was obviously quite stressful for the applicant. However, at the end of the trial, counsel for the respondent then submitted that as their daughter was so disabled the respondent was limited in the employment he could obtain. Accordingly, I find that the respondent acted unreasonably both before and during the trial and that the positions he took were unreasonable and significantly increased the amount of time of these proceedings.
c. The lawyer's rates:
Ms. Jarvis has practiced law for 16 years and her hourly fee of $300 is reasonable. The hourly rate of $100 for her law clerks is also reasonable.
d. The time properly spent:
The bill of costs submitted is extremely detailed and the time dockets are attached. Counsel for the respondent submits that there is some duplication in the bill of costs and that costs for prior motions are included. He submits that the time spent is excessive. In her reply submission, counsel for the applicant has responded and explained some of the entries and denies any duplication of costs. Although the trial took six days over multiple months that naturally increases costs as counsel need to review the evidence and transcripts, I find that the time spent was excessive. I do not question that counsel for the applicant spent this time but just that in all of the circumstances it was excessive and not reasonable for the respondent to be expected to pay this amount.
I also note that the motion judge reserved costs of the motion by the respondent to vary the temporary spousal support order to the trial judge, it would have been more appropriate for the motion judge to deal with those costs. But in order to avoid sending this issue back to the motion judge, I would include costs to the applicant for this motion as in the trial the applicant was successful in obtaining an order for spousal support based on the imputed income rather than the actual income of the respondent. With respect to the costs of the two other motions by the respondent that were dismissed by me, I would only order minimal costs as these were either dealt with by a Form 14B or by a telephone conference call. I agree with counsel for the respondent that there should be no further costs for motions in which costs were already awarded.
I would permit costs for the trial management conference as this is part of the trial process and not otherwise compensated for.
I also find that the time devoted to the preparation of the bill of costs is excessive.
e. The expenses properly paid and payable:
The usual disbursements are claimed. But counsel for the respondent questions the amount for photocopies. But counsel explained in her reply that her office copier provides the number of copies made during specific time periods and accordingly, her bill of costs notes costs for the motions and trial.
f. Any other relevant matter:
The most difficult issue is the financial circumstances of the parties. The respondent cannot litigate with impunity, take unreasonable positions, mislead the court and lengthen the trial and then claim he is impecunious and costs should not be awarded against him. The respondent claims that it is his mother that has assisted him in the past with his legal fees and living expenses and that he has now returned to school to upgrade his education. It is submitted that the respondent did not act reasonably, acted in good faith and is of limited means and therefore that a reasonable award should only be $10,000 to $15,000.
As outlined in my decision and this endorsement regarding costs, I did not find the respondent acted reasonably, or in good faith rather I made the opposite findings of fact. The respondent had a good job and chose to leave it to avoid his responsibilities to the applicant.
[23] The applicant was the successful party and served an offer to settle, she is entitled to close to full recovery of costs. However, as indicated, I find that the costs claimed were excessive and exercise my discretion to reduce the amount. Although, I have considered the current financial position of the respondent, there is no reason that in the future he will not be able to obtain employment and earn at least the income he previously earned. I have also considered that at trial there was evidence that he may be entitled to an inheritance. The court needs to balance the financial circumstances of the respondent with the need to control its process and not permit litigants to assume that they can take unreasonable positions and lengthen trials and not incur any monetary consequences.
[24] Considering all of these factors, I find that a fair and reasonable order for costs is $35,000.00.
[25] Based on the financial circumstances of the Applicant, I assume that her legal fees are paid through the Ontario Legal Aid Plan. I have been advised that the Family Responsibility Office will not collect costs on behalf of legal aid and that the preference of legal aid is an order that costs be payable directly to legal aid so that the plan can take their own enforcement measures. If either counsel do not agree to this term, a telephone conference call should be arranged with the judicial secretary and I will hear submissions on this issue.
[26] Order as follows:
- Costs fixed at $35,000.00 inclusive of disbursements and applicable taxes to be payable by the Respondent, Charles Denis Desrosiers, directly to Legal Aid Ontario.
Justice Roselyn Zisman
Date: March 20, 2014
[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)