Court File and Parties

Court File No.: D81224/15 Date: June 6, 2016

Ontario Court of Justice

Re: F.K. and D.M. – Applicants And: T.R. – Respondent

Before: Justice Roselyn Zisman

Counsel:

• Rono A. Baijnath - for the Applicants
• Kristen Whitley - for the Respondent

Heard On: By written submissions

Costs Endorsement

Introduction

[1] The issue of costs arises out of a temporary motion argued before me January 22, 2016.

[2] The Applicants are the child's maternal uncle and aunt and the Respondent is the child's father's nephew and cousin of the child. The child's parents and two of his older siblings were killed while the family was having dinner in Kabul, Afghanistan. It was believed that the child's father was the intended target. The child was seriously wounded and eventually brought to Canada by the Respondent and his wife on April 30, 2014 and since then has resided with them and their children.

[3] The Applicants initially brought an urgent temporary motion on September 23, 2015 for custody of the child, guardianship of the child's property and the appointment of the Office of the Children's Lawyer. The Respondent sought an order dismissing the Applicant's motion on the grounds it did not meet the test of urgency. The Respondent also brought a cross-motion for an order of custody, disclosure of third party records and a sealing order or in the alternative that the child and parties be referred to by initials.

[4] On September 23, 2015, Justice Nevins heard arguments and ruled that the motion was not urgent. He then conducted a case conference. Several procedural orders were made with respect to setting a timetable for filing of further materials and leave was granted to the Applicants to add another party. On a without prejudice basis an order was made sealing the file and the appointment of the Office of the Children's Lawyer was denied at that time only. Neither party was to change the child's existing care arrangements or remove the child from the jurisdiction. Costs were reserved to the judge hearing the motion on its merits.

[5] In my decision released on March 9, 2016, the Respondent was granted custody of the child. I ordered that the Applicants have no access without the prior written consent of the Respondent and his wife or further court order and that the Applicants or any other party, except the Respondent and his wife, were prohibited from removing the child from the jurisdiction. A sealing order was not granted but the parties and the child were to be referred to by initials.

[6] The decision provided that if the issue of costs was not resolved, the parties were given a timetable for filing written costs submissions.

Position of the Parties

[7] Counsel for the Respondent seeks cost on a full recovery basis of $58,795.81 payable by the Applicants forthwith. Costs are sought on the basis that the Applicants' urgent motion was found not to be urgent and on the substantive issues the Respondent was successful. It is submitted that the costs have already been reduced in that the Bill of Costs only includes drafting materials, court preparation, attendance at court and disbursements and does not include letters, emails, meetings between counsel or between counsel and the Respondent. Further, the Respondent served and filed an offer to settle that was better than the decision. It is submitted that the costs are high as the Respondent was forced to respond extensively and in detail to the many unfounded allegations made by the Applicants and to their unreasonable position to change the status quo.

[8] Counsel for the Applicants submits that there should be no order for costs or in the alternative costs limited to $2,000 payable at the rate of $100 monthly. It is submitted that the costs sought by the Respondent are excessive and exorbitant for a three hour motion. It is submitted that all of the parties are refugees and in receipt of social assistance and neither party has the income or resources to afford to retain counsel at the rates claimed by counsel for the Respondent. It is also submitted that the amounts claimed for 3 lawyers that worked on the file are excessive as is the time spent and that the disbursements are unclear and excessive. It is submitted that if costs are ordered that the hourly rates and time permitted should be limited to those permitted by legal aid.

Applicable Legal Principles

[9] Rule 24(1) of the Family Law Rules provides guidance on costs in 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 at para. 8, 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 behavior by litigants.

[12] In Biant v. Sagoo Justice Perkins considered the costs award scheme under the Rules and commented, at para. 20:

[T]he preferable approach in family law cases is to have costs 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. There remains, I believe, a discretion under r. 24(1) to award the amount of costs that appears just in all the circumstances, while giving effect to the rules' preeminent presumption, and subject always to the rules that require full recovery or that require or suggest a reduction or an apportionment

[13] The Ontario Court of Appeal in the recent case of Forrester and Dennis confirmed this approach and the court further reaffirmed its decision in Sordi v. Sordi at para. 21, "In the context of family law disputes, a court need not find special circumstances to make a costs award approaching substantial indemnity."

[14] 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 Council 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.

[15] Subsection (b) of Family Law Rule 24(11) relates to the reasonableness of each party's behavior in a case.

[16] In considering if a party acted reasonably, Family Law Rule 24 (5) directs the court to consider if a party made an offer to settle and the reasonableness of any offer to settle.

[17] 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.

[18] 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, in accordance with Family Law 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 most family law cases it is unreasonable behavior for a party not to make an offer to settle.

[19] 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:

1. If the offer relates to a motion, it is made at least one day before the motion date.

2. 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.

3. The offer does not expire and is not withdrawn before the hearing starts.

4. The offer is not accepted.

5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

Offer to Settle

[20] In this case, shortly after the Application and Notice of Motion for an urgent motion were served Respondent's counsel sent a letter to the Applicants' counsel encouraging them to withdraw their Application without cost consequences and also putting the Applicants on notice that if not, the Respondent would seek costs and also noting that the motion did not meet the test for urgency.

[21] Counsel for the respondent then served a formal offer to settle, dated September 21, 2015, two days before the urgent motion was scheduled to be heard. The Respondent proposed that the status quo continue namely, that the Applicants or anyone else, except the Respondent and his wife, not remove the child from the care of the Respondent without prior Court Order or notarized consent of the Respondent and on a severable basis that the file be sealed. The offer to settle was never withdrawn.

[22] The Respondent was successful with respect to the urgent motion dealt with at the September 23, 2015 court attendance and with respect to the substantive issues on the motion heard on its merits on January 22, 2016. The decision rendered was clearly more favourable than the Respondent's offer to settle.

[23] After the September 23, 2015 court attendance, counsel for the Respondent sent several letters with respect to missed timelines for serving and filing documents by the Applicants' counsel and in a letter dated October 21, 2015 offered to settle the issues of the costs relating to the September 23, 2015 attendance in the amount of $25,000 and advised counsel that if the issue of costs was not settled, costs in the range of $40,000 would be sought. Counsel for the Applicants did not respond to this correspondence.

[24] It is submitted by Applicants' counsel that prior to commencing the Application, the Applicants made several attempts to speak to the Respondent and meet with the family elders but that the Respondent was resistant. Further, it is submitted that the Applicants also sought direction from the Canadian and Afghanistan embassies to try to seek a resolution and being unsuccessful had no choice but to commence their Application. It is also submitted that in correspondance dated January 8, 2016 the Applicants offered to mediate but that this offer was rejected by the Respondent. However, the Applicants never served an offer to settle.

[25] The Respondent's offer to settle meets all of the conditions of Family Law Rule 18 (14) and the Respondent is therefore entitled to costs to the date the offer was served and on a full recover basis from that date subject to the discretion of the court to order another amount.

Application of Legal Principles to the Facts

[26] In determining the amount of costs, I have considered the legal principles and the following factors as set out in Family Law Rule 24 (11) as follows:

a) The importance, complexity or difficulty of the issues:

The issue of what custody and access arrangements are in a child's best interests is one of the most important issues in any family law case. In this case, the issue was also particularly complex as there were two conflicting custody orders from courts in Afghanistan and a complicated and conflicting factual background. There were unfounded allegations made by the Applicants that resulted in the involvement of the children's aid society, the police and extensive medical information due to the injuries suffered by the child and his ongoing treatment needs. The Applicants also raised several jurisdictional issues and alleged that the Respondent had abducted the child and sought for this court to enforce and accept that the Afghanistan court has jurisdiction over the child.

b) The reasonableness or unreasonableness of each party's behavior in the case:

The Respondent acted reasonably and attempted to resolve the issues without proceeding to a contested motion and as previously indicated served an offer to settle.

The Applicants did not act reasonably not only by not making an offer to settle but in view of the positions they took throughout the proceedings. It should have been clear to the Applicants that there was no basis for bringing an urgent motion that then required the Respondent to prepared extensive responding motion materials. The position by the Applicants namely, that they were only seeking temporary custody of the child until the maternal grandmother could obtain the necessary immigration documents to come to Canada and then remove the child to Afghanistan, was unreasonable and untenable. Despite being granted leave to add a party to the Application, that is, the maternal grandmother, they failed to do this. Instead, the Applicants attempted to rely on a letter by the maternal grandmother in which she authorized the Applicants to have temporary custody of the child until she could come to Canada. The Applicants were therefore requesting that this court enforce the maternal grandmother's order despite the fact that she was not even a party to the proceeding.

The Applicants and their counsel had an obligation to continually assess the strength of their case and failed to do so. After being served with the Respondent's affidavit and the affidavit of the child's primary physician it should have been clear to the Applicants that the Respondent and his wife had met and were continuing to meet all of the child's extensive medical needs and that he was a happy and content child in their care. The Applicants, who had no pre-existing relationship with the child, should have appreciated that to upset a status quo that had been in place since April 30, 2014 would have required overwhelming evidence that the child's needs were not being met. Instead the Applicants attempted to rely on a court order obtained by the maternal grandmother granting her custody after the child had been removed from Afghanistan by the Respondent who had obtained a court order granting him custody of the child and the right to remove the child to Canada.

During submissions on the motion, I raised concerns about several deficiencies in the Applicants' materials with respect to the lack of any legal opinions about the validity of the two conflicting Afghanistan court orders, the lack of an explanation of the custody laws in Afghanistan and concerns with respect to the filing of letters attached to affidavits instead of the affiant properly swearing an affidavit. Applicants' counsel then sought an adjournment of the motion to provide better evidence. The adjournment request which was denied.

The Applicants made many unfounded allegations against the Respondent and relied on evidence that I found to be contradictory, not credible or not properly before the court.

The Applicants also breached the terms of the September 23, 2015 order when they took the child on two separate occasions without the Respondent's permission. They needlessly involved the child in investigations by the children's aid society and the police.

In summary, I find that the Applicants acted unreasonably in pursuing this litigation.

c) The lawyer's rates:

There were several lawyers involved in this proceeding. Ms Whitley who was the primary counsel has 11 years of experience and her hourly rate is $400; Ms Ng has 8 years of experience and her hourly rate is $350; and Ms Weineman has 6 years of experience and her hourly rate is $250. A student was also involved at an hourly rate of $125.

Counsel for the Applicants submits that the rates are above the prescribed rates for the years of call. I assume he is referring to the "Information for the Profession" bulletin from the Costs Sub-Committee of the Civil Rules Committee, which is the successor to the prior Cost Grid, and sets out maximum partial indemnity rates for counsel with various levels of experience. In the case of Ganie v. Ganie the court considered the hourly rates set out in the bulletin as a starting point but noted that the rates which were published in 2005 should be increased by inflation. In that case, Justice Price adjusted the rates for inflation and found that the appropriate hourly rates would be $93 for a law clerk, $265 for counsel with less than 10 years of experience, $350 for counsel of between 10 to 20 years of experience and $410 for counsel with over 20 years of experience.

The Family Law Rules do not set any hourly rate but permits the court the discretion to consider if the hourly rate charged is reasonable. Based on my experience sitting in this court I find the rates for counsel as set out in the bulletin, even if adjusted for inflation, to be somewhat low but consider the cost bulletin to be instructive. The rates charged by counsel for the Respondent are no so far out of the suggested rate to be unreasonable. I therefore find that the hourly rate charged by all counsel for the Respondent to be reasonable.

Counsel for the Applicant also submits that the hourly rate charged should be reduced to the legal rate and submits that courts have ordered costs payable at the legal aid rate because a party is of modest means. Counsel relies on several cases for this proposition. In the case of Onuselgou v. Okele, the court held that the legal rate paid was a fair and reasonable amount that reflected the actual amount paid or payable for the work done by counsel for the Applicant. On the facts of the case, counsel for the successful party had submitted a Bill of Costs on a full indemnity basis based on her regular hourly rate and on a partial indemnity rate based on the legal aid rate and the court ordered the costs based on the lower rate and on a partial indemnity basis based on the particular circumstances of the case. In the case of Philp v. Philp, the seven line endorsement simply states that where the retainer is by legal aid costs should be fixed to reflect that tariff. In the case of Perry v. Perry the court held that it did not believe that counsel was entitled to claim an hourly rate in excess of the rate permitted by Legal Aid.

However, none of these cases referred to the cases of Ramcharitar v. Ramcharitar and Holt v. Anderson which held that the fact a litigant is in receipt of legal aid does not restrict counsel to reduce their regular rate.

Further, section 46 of the Legal Aid Services Act provides that:

(1) The costs awarded in any order made in favour of an individual who has received legal aid services are recoverable in the same manner and to the same extent as though awarded to an individual who has not received legal aid services.

I also point out that in this case, the court has no knowledge of the nature of the Respondent's counsel's retainer. A litigant is not required nor should a court inquire into the nature of the financial arrangements between a party and his counsel. The court should not assume that just because the Respondent is of modest means that counsel is retained pursuant to legal aid. I find none of the cases relied upon by Applicants' counsel stand for the general proposition that if a party is of modest means or if a party is in receipt of legal aid that the hourly rate should be reduced to the legal aid tariff.

d) The time properly spent:

The three counsel and the student whose time is included on the Bill of Costs spent a total of 113.70 hours. The time was spent preparing the Answer, 35.1 affidavit, Notice of Motion and extensive affidavits, a factum, and a book of authorities. There were two court attendances with respect to the temporary motion. On the first attendance counsel spent an entire day as a result of the Applicants' urgent motion that the court dismissed but instead held a case conference and then another afternoon to argue the substantive motion. Further, although two counsel attended on the motion, the time for only one counsel is billed.

Counsel for the Respondent submits that the costs for the motion are high as the Respondent was forced to put together detailed and extensive evidence to support the continuation of the care of the child in face of the many allegations made against him. As a result it was necessary to obtain third party records and a detailed affidavit from the child's primary physician to outline the care the Respondent provided to the child and his ongoing medical needs. Respondent's counsel also needed to spend extra time responding to the Applicants' claim for guardianship for the child's property and for the Office of the Children's Lawyer to be appointed. As the Applicants had not properly served the Office of the Children's Lawyer with respect to the guardianship issue pursuant to section 47 of the Children's Law Reform Act, counsel for the Respondent needed to do so. Further as a result of missed filing timelines and a further affidavit served just a day before the motions were heard with fresh allegations, the Respondent's counsel needed to prepare a further reply affidavit on very short notice.

However, in reviewing the time spent I find that it is inevitable when more than one counsel is involved on a file that there is excess time spent and possible duplication of time spent by one counsel reviewing and editing materials prepared by another counsel. Counsel for the Respondent obviously appreciated the serious consequences of this motion to the Respondent and all three counsel spent the time they felt was necessary to properly prepare and I do not question that the time docketed was actually spent. But I find that the Applicants should not be responsible for all of the time and would reduce the time spent by counsel who assisted Ms Whitley and the student by 1/3 to account for duplication of services.

e) The expenses properly paid and payable:

The Respondent claims disbursements inclusive of applicable taxes of $4,855.18. Counsel for the Applicants submits that the claims for process server fees of $952.90 and a professional fee of $1,093.76 are excessive and unclear. The professional fee was paid to the child's physician for the time spent to prepare a report which I find is reasonable. I agree that the process server's account seems high and in future it would be preferable that the account be attached to counsel's Bill of Costs. The other expenses charges are reasonable. There is also a claim for a non-taxable disbursement to the law firm of Hull and Hull for $13,050.91. This expense arises out of the claim by the Applicants for guardianship of the child's property. Counsel for the Applicants raised this issue despite the fact that this court does not have jurisdiction to deal with this property aspect of the case. The issue arose as it was believed that the Agence France Press, who was the child's father's employer, was holding funds on trust for the child. As a result of this claim, Respondent's counsel determined it was necessary to seek professional advice from counsel familiar with estate matters. If there is such a claim this aspect of the case would have to be transferred to the Superior Court of Justice and costs for some of this expenses may be properly claimed in that proceeding. As there is no account attached to the Bill of Costs I am unable to determine what portion of this cost should be attributable to this motion.

f) Any other relevant matter:

It is submitted that as the Applicants are of very modest means that the costs should be substantially reduced. I agree that a party's ability to pay costs is a relevant consideration. However, a party's limited financial circumstances should not be used as a shield against any liability for costs but will be taken into consideration regarding the amount of the costs, particularly when that party has acted unreasonably and is the author of her/his own misfortune.

The family law cost rules are there to encourage settlement and to discourage and sanction inappropriate behaviour. In this case the Applicants' continued pursuit of this litigation was unreasonable. The Applicants should have understood that by ignoring a reasonable offer to settle they would likely have to pay for the legal expenses of the Respondent's counsel. Just because the Applicants incurred no legal expenses as their expenses were funded through legal aid, should not entitle them to expect that they can litigate with impunity. If the court does not discourage such litigation, then every litigant who is not directly funding their own litigation will simply bring and continue to litigate unmeritorious claims to court without any consequences.

Conclusion

[27] If the Applicants were of some financial means, I would have found that they should pay close to full recovery of all of the Respondent's costs, with the reductions I have previously referred to, as the Respondent served a reasonable offer to settle and was much more successful on the motion than the offer. However, I have considered the Applicants' modest means and as a result I find that reducing the costs to a partial recovery basis of $32,916 is fair and reasonable in all of the circumstances. I recognize that this amount will pose a huge burden for the Applicants but litigants cannot expect to aggressively pursue litigation and not face serious cost consequences.

[28] Order as follows:

1. The Applicants shall pay to the Respondent costs fixed at $32,916.00 inclusive of disbursements and applicable taxes. Payable within 60 days or on such other terms as counsel may agree.

Justice Roselyn Zisman

Date: June 6, 2016