Court File and Parties
Court File No.: D30891/02 Date: 2015-03-23
Ontario Court of Justice
Between:
C.R. Applicant
- and -
L.A. Respondent
Counsel
Alex Novak, agent for Coulson Mills, for the Applicant
Poroshad Mahdi, for the Respondent
Jean Hyndman, for the Office of the Children's Lawyer, for the Children
Heard: In Chambers
Justice: S.B. Sherr
Costs Endorsement
[1] On February 23, 2015, the court released its reasons for decision after a four-day trial. The respondent (the father) was granted custody of the parties' four children and the applicant (the mother) was given specified access to them.
[2] The court gave the parties the opportunity to make written costs submissions. The father made submissions and seeks costs of $36,692.31. The mother also made submissions and asked that costs be fixed in favour of the father in the sum of $20,321.36.
[3] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395 stated that modern costs rules are designed to foster three fundamental purposes, namely: to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants bearing in mind that the awards should reflect what the court views is a fair and reasonable amount that should be paid by the unsuccessful party.
[4] Subrule 24(1) of the Family Law Rules (all references to rules in this endorsement are the Family Law Rules) creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs. See: Sims-Howarth v. Bilcliffe. To determine whether a party has been successful, the court should take into account how the order compares to any settlement offers that were made. See: Lawson v. Lawson.
[5] Subrule 18(14) reads as follows:
Costs Consequences of Failure to Accept Offer
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The offer does not expire and is not withdrawn before the hearing starts.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.
[6] The father made an offer to settle dated January 5, 2015. The mother did not make an offer to settle.
[7] The mother conceded that the father's offer to settle met all the requirements of subrule 18(14). The offer was more favourable to her than the final result.
[8] The mother should have accepted the father's offer to settle.
[9] The mother did not rebut the presumption that the father is entitled to costs to the date the offer was served and full recovery of costs from that date.
[10] The father claimed costs of $10,642 for the period from January 6, 2014, until the date the offer was made, on January 5, 2015. This, he said, represented 50% of his actual legal costs for this period.
[11] In her submissions, the mother correctly points out that the father includes time spent at prior steps in the case, such as two case conferences. Subrule 24(10) sets out that costs are to be determined in a summary manner after each step in the case by the presiding judge. A "step" in the case is one of the discrete stages recognized by the rules such as a case conference, settlement conference and the like. See: Husein v. Chatoor, 2005 ONCJ 487. The trial judge should not deal with requests for costs that were addressed or should have been addressed at these prior steps in the case. See: Islam v. Rahman, 2007 ONCA 622.
[12] The mother also correctly submits that the father failed to itemize the time spent for each of these steps in the case. Counsel should, when submitting a bill of costs provide an itemization of how much time was spent for each step in the case. Otherwise, it becomes very difficult for the judge to assess the appropriate amount of costs.
[13] Lastly, the father claimed time spent by counsel's law clerk at the rate of $165 per hour. This seemed very high.
[14] These flaws are mitigated by the fact that the father only claimed costs for 50% of the time set out in the bill of costs.
[15] The father claimed time for correspondence, meetings, reviewing disclosure and preparing pleadings. This is a legitimate submission at the trial stage as this is work that is either not attributable to a discrete step in the case or is attributable to multiple steps in the case. See: Czirjak v. Iskandar, 2010 ONSC 3778 and my comments in Kardaras v. Kardaras, 2008 ONCJ 616.
[16] The father claimed the amount of $26,049.59 for work done after January 5, 2015. This work was all attributable to the trial step. It included a claim for 9.75 hours of work done by the law clerk at a rate the court finds to be high.
[17] In making this decision, the court also considered the factors set out in sub-rule 24(11), which reads as follows:
Factors in Setting Costs
24(11) 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 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.
[18] The case was important for the parties. It involved some complexity due to the multiple allegations that were explored.
[19] The father acted reasonably in the litigation. The mother was unreasonable in failing to accept a very fair offer to settle made by the father or to make an offer to settle of her own.
[20] The rates claimed by father's counsel (except for the law clerk) were reasonable. The failure to itemize the time made in his counsel's bill of costs made it challenging to assess if the time claimed was reasonable.
[21] The court considered the mother's ability to pay costs. See: MacDonald v. Magel. However, a party's limited financial circumstances will not be used as a shield against any liability for costs but will be taken into account regarding the quantum of costs. See: Snih v. Snih.
[22] The mother is of modest means. However, there was credible evidence at trial that she was working during 2014. The mother revealed for the first time at trial that she had received $17,000 of government benefits in the summer of 2014. She still had these monies at the time of the trial. These are monies that can be applied to costs.
[23] The court has also considered both Boucher et al. v. Public Accountants Council for the Province of Ontario and Delellis v. Delellis and Delellis. Both these cases point out that when assessing costs it is "not simply a mechanical exercise." In Delellis, Aston J. wrote at paragraph 9:
However, recent cases under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended have begun to de-emphasize the traditional reliance upon "hours spent times hourly rates" when fixing costs....Costs must be proportional to the amount in issue and the outcome. The overall objective is to fix an 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.
[24] Taking into account all of these considerations, an order shall go that the mother shall pay the father's costs fixed in the amount of $28,000, inclusive of fees, disbursements and H.S.T.
[25] The mother shall pay the father the sum of $14,000 for these costs within 20 days. She may repay the balance of costs at the rate of $300 per month, starting on May 1, 2015, until they are repaid.
Justice S.B. Sherr
Released: March 23, 2015