Court File and Parties
Date: 2016-12-28 Court File No.: D90640/16
Ontario Court of Justice
Between:
MESHELL AUCOIN Applicant
- and -
CATHERINE MICHELLE LANGDON Acting in Person Respondent
Counsel: Richard Teicher and Katie Sharp, for the Applicant Respondent Acting in Person
Heard: In Chambers
Justice: S.B. Sherr
Costs Endorsement
[1] On November 22, 2016, the court released its reasons for decision arising out of a trial about the respondent's spousal support obligations to the applicant.
[2] The court gave the parties the opportunity to make written costs submissions. The applicant made submissions. The respondent did not.
[3] The applicant seeks her full recovery costs of $5,442.63 against the respondent, inclusive of fees and disbursements.
[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).
[6] Subrule 18(4) reads as follows:
Offer to be Signed by Party and Lawyer
(4) An offer shall be signed personally by the party making it and also by the party's lawyer, if any.
[7] 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.
Even if subrule 18(14) does not apply, the court may take into account any written offer to settle, the date it was made and its terms when exercising its discretion over costs (subrule 18(16)).
[8] The applicant made two offers to settle. Neither offer attracted the costs consequences set out in subrule 18(14).
[9] The applicant's first offer to settle, dated February 11, 2016 was contained in a letter sent by her counsel to the respondent. This offer was not signed by the applicant, as required by subrule 18(4). This offer proposed that the respondent pay spousal support of $1,150 per month for 5 years. The trial decision provided that the respondent pay the applicant spousal support that averaged out to $700 per month for 5 years.
[10] The applicant's second offer to settle, dated November 10, 2016, proposed that the respondent pay her spousal support of $725 per month for 5 years, with no right of review if there is a material change of circumstances. This amount was very close, but still slightly more than the spousal support ordered. The trial decision also did not restrict the right of either party to change the order if there was a material change in circumstances and set up a review process if it turns out that the respondent's average income in 2017 and 2018 is $10,000 more or $10,000 less than the annual income of $85,000 attributed to her.
[11] The applicant did not serve the respondent with her second offer to settle at least 7 days before the trial, as required by paragraph 2 of subrule 18(14).
[12] The respondent made no offers to settle the case.
[13] At trial, the applicant sought spousal support of $1,224 per month for 6 years. The respondent asked that no support be paid.
[14] The court finds that the applicant was the more successful party, based on the positions taken by the parties at trial, and in particular, based on her position taken in her second offer to settle.
[15] The applicant's second offer to settle was very reasonable. The respondent should have made an effort to settle this case.
[16] The respondent did not rebut the presumption that the applicant is entitled to costs.
[17] In making this decision, the court considered the factors set out in subrule 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 was not difficult or complex.
[19] The applicant acted reasonably. The respondent's refusal to negotiate settlement was not reasonable. She also delayed in providing financial disclosure.
[20] The applicant was represented by a staff lawyer and law students from Downtown Legal Services. This is a Legal Aid clinic. Most of the legal work at the clinic is done by the law students, supervised by the staff lawyer. The applicant submitted that Downtown Legal Services does not docket their time or bill their clients.
[21] The case law is well settled that the receipt of legal aid is not a factor in determining costs. See: Ramcharitar v. Ramcharitar, 62 O.R. (3d) 107 (S.C.J.) at para. 25 and Alvarez v. Smith, [2008] O.J. No. 941 at para. 17-19.
[22] If Downtown Legal Services wishes to maximize costs claims made on behalf of its clients, it is incumbent on it to keep accurate docketing records, including:
a) The service provided for the client.
b) The time spent on the service provided.
c) Who provided the service, and whether the person is a lawyer or a law student.
d) The hourly rate claimed for the person providing the service.
[23] The need for accurate docketing was apparent in this case. The applicant's Bill of Costs did not set out any details about the time spent on the case or the hourly rates claimed for the persons providing the services.
[24] The applicant did set out the services that were provided and who provided them in her Bill of Costs, but it appears that many of the services provided were not attributable to the trial step. For instance, time was claimed for work done preparing for and attending at a case conference. 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, [2005] O.J. No. 5715 (OCJ). 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.
[25] A party is entitled to claim time spent for meetings with the client and reviewing and preparing pleadings and financial statements as this is time not attributable to any one step in the case. See: Czirjak v. Iskandar, 2010 ONSC 3778. Costs accrued from activity not specifically related to the step (not requiring judicial intervention) should be dealt with at the end and not by the motions judge. See: Houston v. Houston, 2012 ONSC 233; Walts v. Walts, 2014 ONSC 98.
[26] The work done by the law students on this case was exemplary.
[27] The expenses claimed by the applicant ($442.63) were reasonable.
[28] 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.
[29] The respondent has the financial ability to pay the costs that will be ordered.
[30] Taking into account all of these considerations, an order shall go as follows:
a) The respondent shall pay the applicant's costs fixed in the amount of $3,600 inclusive of fees and disbursements.
b) The respondent may pay these costs at the rate of $300 per month, starting on February 1, 2017. However, if she is more than 30 days late in making any of these payments, or any ongoing support payment, the entire amount of costs remaining owing, shall immediately become due and payable.
Released: December 28, 2016
Justice S.B. Sherr