Court File and Parties
Court File No.: 468/11 Date: 2014-04-22
Ontario Court of Justice
Re: Richard Strifler – Applicant And: Carolyn Strifler - Respondent
Before: Justice S. O'Connell
Counsel:
- Richard Strifler, self-represented
- Paul Groulx, for the Respondent
Costs Endorsement
Trial Decision
[1] On February 3, 2014, following a trial of the issues, I made the following final order:
Mr. Strifler's motion to set aside the parties' separation agreement dated May 30, 2011 is dismissed.
Effective March 1, 2012, the parties' separation agreement dated May 30, 2011 are varied as follows: the financial provisions regarding child and spousal support are replaced with the following:
Commencing March 1, 2012, the father shall pay child support to the mother in the amount of $659.00 per month, on the first day of each month thereafter. This is the child support guideline table amount based on the father's imputed income of $76,947.00 and the mother's imputed income of $12,000.00, based on the parties' split custody arrangement, pursuant to section 8 of the Child Support Guidelines.
If either party is seeking a contribution from the other for any extraordinary expenses for the children, then that party shall provide the other party with written proof of the anticipated cost and the other party shall confirm in writing if he or she consents to the expense, such consent not to be unreasonably withheld. The parties shall pay their proportionate share of any agreed upon expenses.
Commencing March 1, 2012, Mr. Strifler shall pay spousal support to Ms Strifler in the amount of $1,039.00 per month, to be reviewed when Mr. Strifler reaches the age of 65 or when there is a material change in the circumstances of either party.
The total arrears of support that are created as a result of this court order are fixed at $16,000.00 effective today's date. The Family Responsibility Office's record of arrears shall be adjusted accordingly. Mr. Strifler shall be entitled to pay the arrears owing at a rate of $300.00 per month, commencing March 1, 2014. Nothing in this order precludes the Family Responsibility Office collecting support arrears from any government source (refunds) or prize winnings.
The parties shall exchange full financial disclosure by June 1st of each year, including but not limited to, their year-end financial statements for their sole proprietorships or corporations, including supporting documentation, their year-end statement of revenues, their complete corporate (if any) and personal income tax returns and notices of assessment, and a letter from their respective accountants setting out how the personal income has been calculated.
If either party seeks costs, then he or she shall serve and file costs submissions, with a bill of costs and offers to settle attached, within 30 days. The other party may serve and file his or her written response to the submissions within 20 days.
Costs Submissions
[2] At trial, Mr. Strifler sought to terminate spousal support and the arrears of support owing and to set child support owed by him at an income in the amount of $28,000.00 per annum. Ms Strifler sought spousal support to continue, the arrears owing, and child support based on an income imputed to Mr. Strifler in the amount of $98,000.00.
[3] Ms Strifler was clearly the more successful party in this matter. Ms. Strifler submits that she must be indemnified as the successful litigant for the costs of responding to Mr. Strifler's claims.
[4] Ms Strifler seeks her costs of the trial of this matter on a full recovery basis in the amount of $6,424.03. She relies upon on her substantial success at the trial and her offer to settle served which she submits was more favourable to Mr. Richard Strifler than the outcome of the trial.
[5] Ms Strifler served her costs submissions, including the bill of costs and a copy of her offer to settle on March 14, 2014. I granted both parties an extension to serve and file any costs submissions. To date, I have not received any response from Mr. Strifler to the costs submissions received from Ms Strifler. His response should have been served and filed by April 5, 2014, in accordance with the extension granted.
The Law and Governing Principles
[6] Rule 24 of the Family Law Rules, O. Reg. 114/99, governs the determination of costs in family law proceedings and the sections relevant to the circumstances of this case are as follows:
- (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.
(4) Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party's own costs or ordered to pay all or part of the unsuccessful party's costs.
(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.
(6) If success in a step in a case is divided, the court may apportion costs as appropriate.
(7) If a party does not appear at a step in the case, or appears but is not properly prepared to deal with the issues at that step, the court shall award costs against the party unless the court orders otherwise in the interests of justice.
(8) 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.
(10) Promptly after each step in the case, the judge or other person who dealt with that step shall decide in a summary manner who, if anyone, is entitled to costs, and set the amount of costs.
[7] Rule 24(11) provides a further list of factors that a court must consider when setting the amount of costs:
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness or unreasonableness of each party's behaviour in the case;
(c) the lawyer's rates;
(d) the time properly spent on the case, including conversations between the lawyer and the party or witnesses, 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.
[8] Rule 18(14) and 18(16) of the Family Law Rules, which address the cost consequences of offers to settle, provide the following:
18(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.
18(16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.
[9] In Serra v. Serra, 2009 ONCA 395, the Ontario Court of Appeal confirmed that costs rules are designed to foster three important principles:
(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.
[10] Rule 24 created a new framework for determining costs in family law proceedings. The presumptive nature of Rule 24 has significantly curtailed the court's discretion regarding costs in family law proceedings and absent compelling circumstances or the exceptions set out in the rule itself, costs are generally awarded to the successful party. The Ontario Court of Appeal in C.A.M. v. D.M. held that while the Rules have not completely removed a judge's discretion, the rules nonetheless circumscribed the broad discretion previously granted to the courts in determining costs. Courts must not only decide liability for costs, but also the amount of those costs.
[11] 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 et al. v. Public Accountants Council for the Province of 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.
[12] If a successful party has behaved unreasonably "in relation to the issues from the time they arose (Rule 24(5))," then pursuant to Rule 24(4), they may be "deprived of all or part of the [their] costs or ordered to pay all or part of the unsuccessful party's costs." Behaviour under Rule 24(5) is not restricted to behaviour associated with offers to settle. See Family Law Rules, Rule 24(4), (5) and 11(b); Lawson v. Lawson, 2004 CarswellOnt 3154 (S.C.J.), para. 44.
[13] Finally, in deciding the amount of costs to be paid, I must also consider clause 24(11)(f) which requires the court to consider any other relevant matter, including the ability to pay costs. See Biant v. Sagoo. In C.A.M v. D.P., Justice Rosenberg for the Ontario Court of Appeal states the following:
I am also of the view that the financial situation of the parties can be taken into account in setting the amount of the costs award either under Rule 24 or Rule 18. Thus, while subrule 24(11) enumerates a number of factors that must be taken into account, the person setting the amount of the costs is directed to take into account "any other relevant matter". I agree with Aston J. in Sims-Howarth at para. 4, that the "Family Law Rules demand flexibility in examining the list of factors in subrule 24(11) without any assumptions about categories of costs". In my view, a consideration of particular relevance may be the financial position of the parties, especially of an unsuccessful custodial parent. See Biant at para. 17 and Brennan v. Brennan, [2002] O.J. No. 4743 (S.C.J.) at para. 11. In fixing costs the courts cannot ignore the best interests of the child and thus cannot ignore the impact of a costs award against a custodial parent that would seriously affect the interests of the child. [par. 42]
Analysis
[14] As noted, Rule 24(1) of the Family Law Rules presumptively entitles a successful party to costs. As indicated earlier, I find that Ms Strifler was the successful party in this matter. She did not behave unreasonably.
[15] Ms Strifler was represented at trial by Paul Groulx. He is a family lawyer with fourteen years of experience. I find that Mr. Groulx's hourly rate of $300.00 is reasonable for a lawyer of his experience and expertise.
[16] The case was moderately complex. It required an analysis of Richard Strifler's incomplete income information. The analysis was made more difficult by Mr. Strifler's refusal to provide the financial disclosure ordered by Justice Roselyn Zisman, the case management judge in this proceeding. Mr. Strifler produced the following: two updated financial statements, sworn March 2, 2013 and July 16, 2013, his 2009, 2010, 2011 complete income tax returns and notices of assessment and re-assessment, a five year comparative review of his gross income and net income after deductions of business expenses prepared by his accountant, a transaction journal listing the income received and fuel surcharge deducted for his truck in 2012 and part of 2013. The first time much of this information was produced was at this trial and in the trial record.
[17] Mr. Strifler did not produce his 2012 income tax return at trial. This information was provided well after the trial and counsel was provided an opportunity to make further written submissions regarding the documentation provided.
[18] Mr. Strifler did not produce any of his business receipts or invoices supporting the business expenses deducted from his gross income for any of the years in question, as ordered by Justice Zisman several months prior to the trial. During the course of the trial, Mr. Strifler expressed the firm belief that Ms Strifler was not entitled to anything else, in particular, his business receipts. He did not think it was any of her business. As he put it to me during the course of the trial, "If Revenue Canada believes me, why can't she?"
[19] The bill of costs provided, which I reviewed carefully, is for the preparation and attendance at the trial only. The costs claimed were not excessive. The quantum of costs is reasonable.
[20] Ms Strifler provided a copy of her offer to settle in her cost submissions. It was apparent that the offer to settle was set out under Part 4 of Form 17C, her Settlement Conference Brief, and served on November 7, 2012 for the settlement conference held on November 13, 2012 before Justice Zisman. In that offer, Ms Strifler proposed that Mr. Strifler's income be imputed at $70,000 and that her income be imputed at $14,576. She further proposed that spousal support be payable at the rate of $850.00 per month and that arrears be set at $10,000.00.
[21] The terms of the offer are more favourable than the outcome at trial. However, the offer to settle does not meet the requirements of Rule 18 of the Family Law Rules. The Offer should have been served separately and signed by both Ms Strifler and her lawyer, in accordance with Rule 18(4) of the Rules. Offers to settle in settlement conference briefs cannot be relied upon. Rule 17(22.2) and (23) of the Family Law Rules provides as follows:
CONTINUING RECORD, SETTLEMENT CONFERENCE BRIEFS
(22.2) Settlement conference briefs do not form part of the continuing record and shall be returned at the end of the conference to the parties who filed them or be destroyed by the court staff immediately after the conference.
CONFIDENTIALITY OF SETTLEMENT CONFERENCE
(23) No brief or evidence prepared for a settlement conference and no statement made at a settlement conference shall be disclosed to any other judge, except in,
(a) an agreement reached at a settlement conference; or
(b) an order.
[22] Ms Strifler is therefore not entitled to full recovery costs. However, in my view, given Ms Strifler's substantial success and Mr. Strifler's failure to make full financial disclosure, costs in this matter should be fixed at $5,000.00. This is a fair and appropriate order in all of the circumstances.
[23] Therefore, there will be an order for costs payable by Richard Strifler to Carolyn Strifler in the amount of $5,000.00, inclusive of all taxes and disbursements, to be payable no later than 90 days from the date of this Order.
Justice Sheilagh O'Connell
Date: April 22, 2014