Court File and Parties

Court File No.: D70231/14 Date: August 12, 2016

Ontario Court of Justice

Re: Antoin Theodore Noble, Applicant And: Alexandria Hawkins, Respondent

Before: Justice Melanie Sager

Counsel: James H. Herbert, Counsel for the Applicant Karmel Sinclair, Counsel for the Respondent

Heard On: Addressed in Chambers based on written submissions

Introduction

[1] The Applicant issued an Application in June 2014 in which he requested an order for joint custody and shared parenting of the parties' daughter Brooklyn Florence Noble, born March 17, 2010.

[2] The Respondent opposed the Applicant's claims for joint custody and shared parenting and in her Answer and Claim made requests for sole custody and child support retroactive to January 1, 2014.

[3] All of the issues were addressed in a two day trial held on May 9th and 10th, 2016. An oral decision was given on May 13, 2016 and the parties were invited to make cost submissions in accordance with the timetable set out in my order of May 10, 2016. The following is my decision with respect to the issue of costs of the hearing.

Position of the Respondent

[4] The Respondent submits that she is entitled to a costs order in the amount of $7459.95 on a full indemnity basis for the following reasons:

a) The Respondent was successful on the issue of custody;

b) The Respondent was successful on the issue of access;

c) The Respondent was successful on the issue of child support and obtained an order that was more favourable to her than her Offer to Settle;

d) The father behaved unreasonably and lacked credibility at trial;

e) The order made by the court following trial was less favourable to the Applicant than what was offered in the Respondent's Offer to Settle, rejected by the Applicant; and,

f) The Applicant did not serve an Offer to Settle.

Position of the Applicant

[5] The Applicant submits that there should be no order for costs in the Respondent's favour for the following reasons:

a) The Respondent engaged in behavior directed at the Applicant which he describes as "shocking misconduct" which amounts to unreasonable behavior on the part of the Respondent; and,

b) The Respondent did not achieve an order that was more favourable than her Offer to Settle.

[6] If the court is not persuaded by the Applicant's argument that no costs should be awarded to the Respondent, the Applicant submits that the quantum of costs being sought by the Respondent is not appropriate for the following reasons:

a) The Respondent seeks a costs order based on substantial indemnity which the Applicant argues is not appropriate in this case;

b) The Respondent requests costs based on her lawyer's hourly rate of $220.00 despite the fact that she was in receipt of a Legal Aid certificate which would result in her lawyer being paid an hourly rate no higher than $109.14;

c) The purpose of a costs order is indemnity not to provide a windfall; and,

d) If a costs award is to be made it should be based on partial indemnity and the lawyer's hourly rate as paid by Legal Aid, or $1,931.78.

Applicable Legal Principles

[7] Rule 24(1) of the Family Law Rules (the 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.

[8] Rule 24 (11) provides a list of factors a court should consider when setting the amount of costs. The rule provides as follows:

In setting the amount of costs, the court 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.

[9] In Serra v. Serra 2009 ONCA 395, [2009] O.J. No. 1905 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.

[10] In Biant v. Sagoo (2001), 20 R.F.L. (5th) 284 (Ont. S.C.), the court wrote,

"The 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 appear just in all the circumstances, while giving effect to the rules' preeminent presumption, and subject to the rules that require full recovery or that require or suggest a reduction or an apportionment."

[11] The court of appeal in Berta v. Berta, 2015 ONCA 918, affirmed that a successful party in a family law case is presumptively entitled to full recovery costs. The court of appeal addressed this issue further in the recent decision of Forrester v. Dennis, 2016 ONCA 214, in which it affirmed its decision in Sordi v. Sordi, 2011 ONCA 665, that "In the context of family law disputes, a court need not find special circumstances to make a costs award approaching substantial indemnity."

[12] 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 (Ontario) (2004), 2004 CarswellOnt 2521, [2004] O.J. No. 2634 (Ont. C.A.), 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.

[13] Subsection 24(11)(b) directs the court to consider the reasonableness of each party's behavior in a case. When deciding if a party acted reasonably, Rule 24(5) requires a court to consider the reasonableness of any Offer to Settle the party made and Offer to Settle the party failed to accept.

[14] Rule 18 of the Rules governs Offers to Settle. Subsection 18(14) addresses the costs consequences of a party's failure to accept an Offer to Settle. This subsection provides that a party who makes an Offer to Settle is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date provided that the conditions in the subsection are met. In so far as it relates to this matter, in order for this subsection to be applicable, the Offer to Settle must be made at least 7 days prior to trial; it does not expire and is not withdrawn before the hearing starts; the offer is not accepted; and, the party who made the offer obtains an order that is as favourable as or more favourable than the offer.

[15] An Offer to Settle that does not meet the requirements of subsection 18(14) of the Rules may be considered by the court pursuant to subsection 18(16) of the Rules which reads,

(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. O. Reg. 114/99, r. 18 (16).

[16] The Applicant did not make an Offer to Settle.

[17] The Respondent made an Offer to Settle dated May 2, 2016. According to the date on the cover letter enclosing the Offer to Settle, it was served 7 days in advance of the trial although the fax transmittal sheet provided by counsel for the Respondent shows a transmission date of November 30, 2013.

[18] Paragraph 17 of the Respondent's Offer to Settle reads, "This Order [sic] remains open until 9:00 a.m. on Monday May 9, 2016." As the Offer to Settle expired before the hearing started, subsection 18(14) of the Rules is not applicable but the court will still consider the Offer to Settle pursuant to subsection 18(16).

[19] The Respondent was largely successful at trial and obtained an order that is less favourable to the Applicant then her proposal to settle the issues as contained in her Offer to Settle dated May 2, 2016. The Respondent is entitled to a costs order. The question now is the quantum of the order.

Application of Legal Principles to the Facts

Quantum of Costs Order

[20] In determining the amount of costs, I have considered the following factors as set out in Rule 24 (11):

a) The issues raised in the Application were of extreme importance to the parties as is the case in most trials heard in family court. The issues addressed at trial were not complex;

b) The Applicant failed to provide the Respondent and the court with adequate financial disclosure in light of his self employment income and his position that he should be permitted to calculate his income by deducting his income loss from self employment from his T4 employment income;

c) The Applicant only provided his 2015 Income Tax Return on the second day of trial and did not substantiate his company's sales or expenses;

d) The court found the Applicant's evidence with respect to his true income to be unreliable;

e) The Respondent's Offer to Settle on the issues of custody, access and child support are either as good as or more favourable to the Applicant then the final order made by the court;

f) The Applicant did not make a formal Offer to Settle in accordance with the Family Law Rules;

g) The Applicant's position on the issues of custody and access were unreasonable. More specifically, the Applicant sought an order increasing the time his daughter is in his care when the evidence demonstrated very clearly that he relies on his mother and girlfriend to provide most of the care for his daughter when he has access pursuant to the current court order;

h) The Applicant's position on the issue of child support was not reasonable as he sought to set off a business loss against his T4 employment income before fixing his child support obligation. The lack of reasonableness flows, in part, from the fact that he did not produce disclosure even remotely adequate to justify both his sales and expenses, and, he runs a business that is conducted mostly in cash;

i) Income was imputed to the Applicant in an amount that exceeded what was being requested by the Respondent; and,

j) The amount of time claimed to have been spent on this trial by counsel for the Applicant is entirely reasonable, if not modest, as is her hourly rate of $220.00.[1]

[21] The Respondent was largely if not wholly successfully in obtaining the relief she was seeking.

[22] As noted above, the Applicant's position at trial on all of the issues was not reasonable. I draw on the comments of Justice Robert Spence in Heuss v. Surkos, 2004 ONCJ 141, 2004 Carswell Ont 3317 where he writes at paragraph 20,

"Parties to litigation must understand that court proceedings are expensive, time consuming and stressful for all concerned. They are not designed to give individual litigants a forum for carrying on in whatever manner they may choose, oblivious to the impact of that conduct on the other side and, perhaps most importantly for the purpose of this case, oblivious to the mounting costs of the litigation. Matrimonial litigation is an occasion for sober consideration and thoughtfulness rather than intemperate behavior."

[23] The Applicant's conduct and the position he took at trial together with the level of success achieved by the Respondent is sufficient reason for the court to make an order for costs that is based on full recovery.

[24] Counsel for the Applicant argues that a costs order should not be based on the Respondent's counsel's hourly rate as the Respondent was legally aided.[2] It is well established that courts are not required to fix costs in favour of legally aided litigants based on the Legal Aid rate paid to the lawyer. See Ramcharitar v. Ramcharitar, (2002), 62 O.R. (3d) 107 (Ont. SCJ), and Holt v. Anderson, [2005] O.J. No. 5111 (Div. Ct.). The court is permitted to base a costs order on counsel's actual hourly rate.

[25] 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.

[26] For all of the reasons set herein, the Applicant is entitled to a costs order based on full recovery. In all of the circumstances of this case, a costs award of $7459.95 is fair and reasonable.

Order

1. The Respondent shall pay the Applicant's costs of the hearing of her Application fixed at $7459.95 inclusive of disbursements and HST, payable forthwith.

2. If the costs are not paid by the Applicant to the Respondent as ordered, 50% of the costs award shall be enforceable by the Family Responsibility Office as child support as approximately half the time of trial was spent on the issue of retroactive and prospective child support.

Justice Melanie Sager

Date: August 12, 2016

Footnotes

[1] The Respondent's counsel's Bill of Costs does not include any costs associated with work done prior to trial preparation. The Respondent is entitled to claim the cost of preparing the Answer and Claim, requests made in writing for disclosure, receipt and review of financial disclosure or any other step in the case that is associated with having the Application adjudicated, other than preparing for and attendance at motions and conferences.

[2] The court has no knowledge as to whether or not this information is accurate, nor is it appropriate to enquire into the terms of a client's retainer with their lawyer.