Court File and Parties

Court File No.: D80744/15 Date: 2016-09-02

Ontario Court of Justice

Between:

Andrey Plotnikov Applicant

Counsel: Eli Karp, for the Applicant

- and -

Evegeniya Borisova Respondent

Counsel: Larry Silverberg, for the Respondent

Heard: August 10, 2016

Justice: S.B. Sherr

Costs Endorsement

Part One - Introduction

[1] On August 10, 2016, the court conducted a focused trial to determine whether the respondent (the mother) would be permitted to travel to Russia with the parties' two-year-old child (the child). The parties had resolved all other issues between them at court on July 5, 2016.

[2] The mother's travel request was granted. Oral reasons for decision were delivered the same day.

[3] The mother made submissions seeking costs of $9,000. The applicant (the father) submitted that if costs were awarded, he should only pay the mother $1,500.

Part Two – Legal Considerations

[4] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395, [2009] O.J. 1905 (Ont. C.A.) 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.

[5] 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, [2000] O.J. No. 330 (SCJ- Family Court). 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, [2008] O.J. No. 1978 (SCJ).

Part Three – No Offers to Settle

[6] Neither party made an offer to settle.

[7] This court has often written that it will usually be unreasonable behaviour to fail to make an offer to settle. The court wrote in paragraphs 4-5 of Klinkhammer v. Dolan and Tulk, 2009 ONCJ 774, [2009] O.J. No. 6370 (OCL):

4 It was surprising that there were no formal offers to settle in this case. It is reflective of the polarity of the parties. It should be a fundamental step in any family law case to serve at least one offer to settle. Parties and their counsel now have a mandate under subrule 2(4) of the rules, to promote the primary objective of the rules; to deal with cases justly (subrule 2(2)). Dealing with a case justly includes taking steps to save time and expense (subrule 2(3)). Offers to settle play an important role in saving time and expense in a case. They are an important vehicle in promoting settlements, focus the parties and often narrow the issues in dispute.

5 There are consequences in the rules for not making or accepting reasonable offers to settle. Subrule 18(14) sets out the costs consequences of not accepting an offer to settle that is as good as or better than the final result. When determining the reasonableness of a party's behaviour in the case, clauses 24(5)(b) and (c) of the rules direct the court to examine the reasonableness of any offer made, withdrawn or not accepted. This does not preclude the court from examining the failure of a party to make an offer to settle.

[8] Although at first blush this appeared to be an "all or nothing" trial issue, offers to settle would have been helpful. At the outset of the hearing, with the assistance of the court, the parties were able to resolve travel terms to locations other than Russia. If the parties had exchanged offers to settle, these issues might have been resolved much earlier. The parties could also have proposed conditions about travel to Russia that might have generated further discussions and possible resolution.

Part Four – Considerations for the Successful Party

[9] The mother was the successful party at the trial.

[10] In making this decision, the court considered the factors set out in subrule 24(11), which reads as follows:

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.

[11] The case was important for the parties. It was not complex or difficult.

Part Five – Evidentiary and Procedural Issues

[12] The mother took steps that unnecessarily increased the costs of the hearing.

[13] On July 5, 2016, the parties agreed that the remaining travel issues would be determined by a focused trial pursuant to subrule 1(7.2).

[14] The parties agreed that direct evidence at the trial would be provided by affidavit. They agreed on time limits for cross-examination and re-examination.

[15] The mother filed affidavits sworn by herself, a family friend (the collateral witness) and an assistant of the mother's lawyer (the assistant).

[16] The father asked for the collateral witness and the assistant to be produced at trial for cross-examination. The mother refused to produce the witnesses.

[17] The mother moved by Form 14B motion to strike these affidavits and requested a telephone conference to address this issue. The telephone conference was held with counsel on August 8, 2016.

[18] The assistant's affidavit set out her conversations with the mother's employer. The entire affidavit consisted of hearsay and was presented for the truth of its contents.

[19] The mother submitted that the evidence was admissible because the assistant verily believed the contents of the employer's information to be true.

[20] When a court orders that direct evidence at a trial be delivered by affidavit evidence, the rules of evidence still apply. The evidentiary standard is the same as when the evidence is given orally.

[21] A focused trial arising out of an application is not a motion. The less restrictive rules of evidence that apply on motions, set out in subrule 14(19) (providing information from someone else, if the person is identified by name and the deponent states that he or she believes the information to be true), do not apply.

[22] The court ruled that the assistant's evidence was inadmissible as none of the hearsay exceptions applied. The affidavit was struck.

[23] The mother also submitted that she did not have an obligation to produce the collateral witness for cross-examination. The court disagreed.

[24] Clause 1(7.2)(h) of the rules gives the court authority to order that a witness give all or part of his or her evidence by affidavit and not require the witness to attend in person.

[25] On July 5, 2016, counsel for the father asked to be able to cross-examine each affiant for up to 30 minutes. Counsel for the mother did not object to this.

[26] The court did not make an order excusing any affiant from attending in person. Unless such an order is obtained (or the parties agree) the expectation is that any affiant should attend at court for cross-examination.

[27] The court considered the mother's request on the telephone conference to not require the collateral witness to attend in person for cross-examination.

[28] Clause 1(7.2)(h) should be read in conjunction with rule 2 which states that the primary objective of the rules is to deal with cases justly.

[29] To deal with a case justly a party should be able to both fairly present their case and answer the case against them.

[30] The court determined that for the father to fairly answer the case against him he should be entitled to cross-examine the collateral witness.

[31] The parties agreed that the cross-examination of the collateral witness could be conducted by teleconference as he would not be in Toronto on the trial date.

[32] The collateral witness was examined. His evidence had no impact on the final decision.

Part Six – Other Considerations

[33] The mother's bill of costs included time spent drafting the affidavits of the assistant and the collateral witness and addressing the evidentiary and procedural issues described above. The mother will not receive costs for this time as the position taken by her was not reasonable. The amount awarded to her will also be reduced by the time that father's counsel had to unnecessarily spend on this issue (he said that this was 2 hours – time the court finds to be reasonable).

[34] The failure of the parties to serve offers was unreasonable behaviour.

[35] The court found at trial that the father had mixed motives for opposing the mother's travel request. He subjectively feared that she would not return from Russia with the child, but also revealed considerable anger at the mother, causing the court to believe that he was trying to reassert a loss of control, by thwarting a travel request that he knew was important to the mother.

[36] The parties acted reasonably by resolving all of the other issues between them and agreeing to resolve the remaining issue in a focused manner.

[37] The rates claimed by the mother's lawyer were reasonable.

[38] The expenses claimed by the mother are reasonable.

[39] The father has the financial ability to pay the costs that will be awarded.

[40] The court considered both Boucher et al. v. Public Accountants Council for the Province of Ontario, [2004] O.J.No. 2634 (Ont. C.A.) and Delellis v. Delellis and Delellis, [2005] O.J. No. 4345. 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.

Part Seven – Order

[41] Taking into account all of the considerations set out above, an order shall go that the father pay the mother's costs fixed in the amount of $4,500, inclusive of fees, disbursements and H.S.T. The costs are due and payable within 45 days.

Released: September 2, 2016

Justice S.B. Sherr