Court File and Parties

Court File No.: 61757/13 Date: July 27, 2016

Ontario Court of Justice

Re: Peter Livisianos – Applicant

And: Niki Liadis – Respondent

Before: Justice Roselyn Zisman

Counsel:

• Brian Ludmer - for the Applicant
• Dani Frodis - for the Respondent

Heard On: Written submissions

Costs Endorsement

Introduction

[1] This decision on the issue of costs arises out of a 7 day trial regarding parenting time for the parties' child, Evangelos Liadis born February 5, 2012. There was a highly contentious history of litigation in this case that involved numerous attendances for motions, case conferences and a settlement conference. There were numerous prior cost orders made by the case management judge. At the commencement of the trial, counsel advised that the parties had settled the issues of custody, some incidental parenting issues and child support. Despite the fact that the issue for trial had been narrowed to that of only parenting time it was in the context of a history of high conflict and distrust between the parties.

[2] My decision was released on May 18, 2016. The Applicant ("father") sought an order for equal parenting time. The Respondent ("mother") sought an order for a continuation of the temporary order that provided the father with access on alternate week-ends from Friday to Monday and every Wednesday overnight. Both parties had proposal for the sharing of holidays and the father also sought orders for the right of first refusal, travel, change of name and other incidental parenting orders. The mother was successful on all issues. The decision either outright denied the relief the father requested or no order was made with respect to some of the issues he raised.

[3] Counsel were required to provide brief written submissions as to costs. Both counsel have provided their comprehensive written cost submissions.

Position of the Parties

[4] Counsel for the mother submits that the mother was totally successful and is presumed to be entitled to costs. It is submitted that the mother's total fees and disbursements were $179,209.92 after deducting costs that the father was previously ordered to pay. Counsel seeks full recovery of costs of $144,090.00 representing full recovery of costs from February 5, 2015 to the conclusion of the trial and 1/3 of her costs from October 2013 to January 2015 excluding costs awarded at various stages of the litigation. She served 3 offers to settle in accordance with the Family Law Rules 18 (14). Her behavior was fair and reasonable throughout and if the father had accepted her offer to settle he would have been in a better position than necessitating a trial. It is further submitted that the factors set out in Family Law Rules 24 (11) favour the mother.

[5] Counsel for the father submits that there should be no order for costs. It is submitted that the father settled all of the issues, except the access schedule and made significant compromises in doing so. It is submitted that the father made 16 offers to settle and that the mother acted unreasonably throughout the litigation and in particular that if she had accepted the father's offer to settle regarding access that would have alleviated the necessity of a trial. It is further submitted that the costs claimed are excessive and include legal fees and disbursements that were addressed in previous cost orders, includes time spent on the issues of custody and child support that were settled and time for duplicate counsel that attended at the trial. It is submitted that the father's counsel's legal fees prior to the trial were only $97,546, half of which he submits were to resolve the financial and custody issues and his fees for the trial were only about $34,000 that is a total of $131,546. Although the Bill of Costs he submitted indicate total fees of $110,225.

Applicable Legal Principles

[6] 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.

[7] 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 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, 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] In Serra v. Serra, 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.

[9] Counsel for the father relies on the case of Blank v. Micalallef for the proposition that full recovery of costs should be only awarded in rare cases to punish a party for their conduct in the proceeding and that full recovery of costs is even rarer than substantial indemnity costs and that partial indemnity costs are the norm unless there is a good reason to award a higher level of costs.

[10] However, Justice Perkins in the case of Biant v. Sagoo took a different approach when considered the costs award scheme under the Family Law 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

[11] 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."

[12] I favour and use the approach in the case of Biant v. Sagoo and the Ontario Court of Appeal rather than the case relied upon by counsel for the father.

[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 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 behaviour 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 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. In this case, both counsel made offers to settle.

[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:

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.

Application of Legal Principles to the Facts

[19] In this case both parties made multiple offer to settle. The offers to settle all complied with the procedural requirements of Family Law Rules 18 (14). It is submitted by father's counsel that he served 16 offers to settle whereas mother's counsel only served 3 offers to settle and that the mother was unreasonable in refusing to accept the father's various offers to settle with respect to the parenting time. Just because the father served more offers to settle does not mean that he was being more reasonable or trying harder to settle the case. More does not mean better. If the father had accepted the mother's offer to settle the trial would not have been necessary and both parties would have saved considerable legal fees. I accept the submission that even if the provisions of Rules 18 (14) and 24(1) are met that the court has an overriding discretion to order an amount of costs less than full recovery.

[20] The mother was completely successful at trial and is presumed to be entitled to her costs.

[21] 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

[22] It is submitted by father's counsel that the trial was only about parenting time. But the context of the trial was about the father's insistence on the principle that there should be equal time sharing and his relentless attack on the mother's parenting abilities. The issue was therefore extremely important to both parties. The father made the case more complex by the number of witnesses called and the volumes of case law he relied on.

b) The Reasonableness or Unreasonableness of Each Party's Behavior in the Case

[23] As set out in my trial decision I found that mother's conduct prior to the litigation commencing and thereafter to be reasonable. I do not agree with the submissions made by father's counsel that the mother's behaviour was unreasonable. In the father's cost submissions he makes the same arguments about the mother's behaviour that were rejected in the trial decision. As found in the trial decision, the father's behaviour was unreasonable both prior to and throughout this litigation. He pursued an aggressive and relentless litigation strategy for shared decision making and equal time sharing. His strategy was to wear the mother down both financially and emotionally so she would capitulate to his demands. He brought numerous urgent motions, temporary motion and threatened appeals of the temporary orders. His trial strategy continued this style of litigation and he made it clear that there would be further litigation if he did not obtain the relief he was seeking. There were 7 previous orders of costs payable by the father in the total amounts of about $17,800 and in the settlement of the financial issue the father agreed to pay $4,000 in costs. One would have expected the father to seriously consider his position regarding access before he proceeded with the trial and prolonged the issues into a 7 day trial.

c) The Lawyer's Rates

[24] Dani Frodis counsel for the mother was called to the bar in 1993 and his current hourly rate is $520. Samantha Dineno who assisted and prepared most of the pleadings and affidavits was called to the bar in 2009 and her current hourly rate is $310. Other junior counsel were also minimally involved at hourly rates of $310 and $275. There were no charges for legal assistants or law clerks. Brian Ludmer counsel for the father was called to the bar in 1987 and his hourly rate is $370. He was assisted by a legal assistant and law clerks whose hourly rate were between $125 and $150.

[25] It is submitted by father's counsel that the courts routinely apply the Costs Sub-Committee guidelines. In the case of Ganie v. Ganie Justice Price considered the guidelines as a starting point and readjusted the 2005 rates for inflation. He found that appropriate hourly rates would be $93 for a law clerk, $265 for counsel with less than 10 years of experience, $350 for counsel with 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 leave the court discretion to consider if the hourly rates for counsel are reasonable. Although the cost bulletin rates, as adjusted, are instructive they are not binding. Based on my experience it is not unusual for experienced family lawyers in this jurisdiction to charge hourly rates of $400 to $500 or even more. Family law litigation is expensive and when there is so much at stake litigants seek out the most experienced counsel they can find, despite their high hourly rate. I do not find that the hourly rates charges by mother's counsel in the circumstances of this case to be unreasonable.

d) The Time Properly Spent

[26] It is submitted that the time spent was excessive and "overkill". I adopt the comments by Justice Feldman (as she then was) in the case of Tri-Investments as follows:

I do not view it to be the court's function when fixing costs to second-guess successful counsel on the amount of time that should or could have been spent to achieve the same result, unless the time spent is so grossly excessive as to be obvious overkill.

[27] I do not find that the time spent was excessive or that there was "overkill". A finding of "overkill" would more properly be leveled at father's counsel. With respect to the approach by mother's counsel, much of the work was done by more junior counsel to reduce costs. As the parties were required to prepare affidavits for the parties and all lay witnesses as their direct examination more preparation time was required prior to trial than the usual process of witnesses simply testifying orally. Counsel were also required to spend time reviewing the affidavits filed on behalf of the opposing party.

[28] The problem as properly identified by father's counsel is the Bill of Costs is not specific enough to eliminate duplicate costs or reduce costs that were related to the issues that were settled or already dealt with by prior cost orders. For example, the Bill of Costs deducts the amount of cost ordered for various steps in the proceeding but then still includes costs for that step. If costs were ordered for a motion it is not appropriate to then also include costs incurred for that step which is what has been done by mother's counsel. I agree with father's counsel that the Bill of Costs should therefore be reduced.

[29] I do not accept the father's submission that therefore all costs prior to the trial cannot be claimed as there are costs that are not directly related to a step in the proceeding such as the initial interviews with a party, drafting of pleadings, attendance at a first appearance, ongoing meetings with a party to discuss the overall case, correspondence and drafting offers to settle. The father had several previous counsel before retained Mr. Ludmer for the trial. Mr. Ludmer submitted his Bill of Costs as of March 1, 2016 and he spent 139.40 hours between March 1 to April 27 and his clerks spent a further 136 hours, a total of 275.40. Mr. Ludmer has not included any time spent for a review of the trial decision or time spent preparing his cost submissions.

[30] Counsel for the mother have been involved since the inception of the case as of October 16, 2013. Although the time spent by counsel for the mother cannot be calculated for exactly the same timeframe, I estimate that the hours spent with respect to the trial by both Mr. Frodis and Ms. Dinardo total about 229.4 hours. Accordingly, I find that the time spent for preparation and attendance at the trial by both of mother's counsel is not excessive when compared with the time spent by father's counsel.

e) The Expenses Properly Paid and Payable

[31] The only disbursements claimed are for process server fees and courier fees. No charges are made for photocopying, fax, binding costs, travel or parking. However, most of the process server fees and courier expenses, based on the dates, would relate to previous steps in the proceeding for which costs were already ordered and those costs orders would have included the disbursements. Therefore only a nominal order for the disbursement would be applicable to the initial filing of pleadings and filings related to the trial.

f) Any Other Relevant Matter

[32] Counsel for the father relies on my decision in the case of Sang v. Suteu where I disallowed the time allotted to a clerk for taking notes at a trial. However, in that case the parties were of modest means and there was a significant issue with respect to the mother's ability to pay costs to the father. Further, in that case the father's clerk simply took notes as a convenience for counsel. In this case, Ms Dinardo was the counsel who had a significant role in the case from its inception and was the counsel that prepared the opening statement, trial management conference, trial record, document briefs, all of the affidavits and prepared the witnesses for trial Ms. Dinardo was also the counsel who reviewed the significant volumes of materials and case law filed by the father's counsel. Although she did not examine or cross-examine any witnesses, there were several times in the trial that it was clear that Mr. Frodis sought her input as did the mother. Further given the volume of materials filed by counsel for the father, it was reasonable to have two counsel present at trial. There is no issue as the ability of the father to pay costs in this case. I find that in the circumstances of this case, it was reasonable to have two counsel attend trial although I find that it is reasonable to somewhat discount the total counsel fees.

[33] The further difficulty is determining the time spent prior to trial with respect to the custody and child support issues that were settled on the first day of the trial. It is submitted by father's counsel that the father spent $97,546 in legal fees prior to trial, half of which were to resolve the financial and custody issues and that his actual costs for the trial were only $34,000 plus HST. However, I find that the issues cannot be so clearly separated. Both counsel cross-examined on matters related to the financial issues as it was submitted this was relevant to the credibility of the parties. Both counsel in their materials and in their direct and cross-examinations spent a considerable amount of time on custody related issues as this impacted on their respective positions regarding the parenting time. Although the consent on the custody and financial issues required the father to pay the mother $4,000 with respect to the financial issues there is no mention of costs with respect to the custody issues.

Conclusion

[34] 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, she was the successful party and she was reasonable. However, there should be a significant reduction for costs already ordered as the costs claimed include costs for which previous orders were made and it is not permissible to include all of the costs for prior steps and simply deduct the costs ordered. I have calculated there should be a deduction of $62,408 for prior steps in the proceeding for which costs were already ordered and I have also reduced the time allocated to Ms Dinardo's attendance at the trial. Unfortunately, this calculation is somewhat arbitrary as the preparation of the Bill of Costs lumps the work does in time slots and does not separate the times for various actions which may properly have been permitted if not connected to for example a motion or conference. I have also added a modest amount for disbursements related to the service and filing of the initial filings and service and filings related to the trial.

[35] I have also considered that a cost order should reflect what the losing party might have contemplated he would pay. In this case, as the father incurred costs for the preparation and attendance at trial of about $110,225. He must have understood that the mother would have incurred similar costs. He also was aware that the mother incurred substantial costs since the inception of the case. The father also incurred costs with his prior counsel although those costs are not stated.

[36] I find that a fair and reasonable cost order and one that is proportionate to the issues involved in all of the circumstances is $92,640.00.

Order as Follows

1. The Applicant shall pay to the Respondent her costs fixed at $92,640.00 inclusive of disbursements and applicable taxes. Payable within 30 days.

Justice Roselyn Zisman

Date: July 27, 2016