Court Information

Court File No.: D71938/14 Date: May 8, 2017 Ontario Court of Justice 47 Sheppard Avenue East Toronto, Ontario M2N 5N1

Between: Martin Kruja (Lazi), Applicant (father) And: Lediola Elezi, Respondent (mother)

Before: Justice Robert J. Spence

Costs Submissions Received in Chambers Reasons Released: May 8, 2017

Counsel:

• Applicant father: In person
• Ms. Lisa Johnson for the respondent mother

Reasons for Judgment

Introduction

[1] On April 6, 2017, I released my judgment following a two-day trial. The mother was substantially successful on all issues. She now seeks her costs of that trial.

Parties' Respective Positions

[2] The mother is requesting costs on a full recovery basis, totaling $55,577 inclusive of disbursements and H.S.T.

[3] The father does not argue that he should pay no costs. Rather, he states that the mother's claim for costs is excessive. However, he does not specify what costs he thinks are reasonable for the court to order.

The Trial Issues

[4] The trial, which lasted for two days and concluded on April 4, 2017, centered on three issues:

1. Custody – the mother sought sole custody; the father sought joint custody.
2. Access – the father sought essentially a 50-50 parenting regime; the mother sought a reduced form of access.
3. Child support – the father sought an order requiring him to pay little or no support, whereas the mother sought an imputation of income to father in the amount of $100,000 per year.

The Outcome at Trial

[5] The mother was the successful party. In the court's reasons for judgment released April 6, 2017, the court ordered:

1. Sole custody to mother;
2. A defined parenting schedule which accorded almost entirely with that sought by mother; and
3. Child support payable by the father to the mother in the amount of $1,172 per month, based on an imputed income to father in the amount of $80,000 per year.

Costs Rules

[6] Costs in family law cases are governed by Rules 18 and 24 of the Family Law Rules.

[7] The relevant portions of Rule 18 provide:

APPLICATION

(2) This rule applies to an offer made at any time, even before the case is started.

WITHDRAWING AN OFFER

(5) A party who made an offer may withdraw it by serving a notice of withdrawal, at any time before the offer is accepted.

TIME-LIMITED OFFER

(6) An offer that is not accepted within the time set out in the offer is considered to have been withdrawn.

COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER

(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.

COSTS CONSEQUENCES — BURDEN OF PROOF

(15) The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14).

COSTS — DISCRETION OF COURT

(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.

[8] The relevant portions of Rule 24 provide:

SUCCESSFUL PARTY PRESUMED ENTITLED TO COSTS

24. (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.

SUCCESSFUL PARTY WHO HAS BEHAVED UNREASONABLY

(4) Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party's own costs or ordered to pay all or part of the unsuccessful party's costs.

DECISION ON REASONABLENESS

(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.

BAD FAITH

(8) If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.

FACTORS IN COSTS

(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.

Application of Costs Rules

[9] The starting point in this decision must take into account two undisputed facts. First, the mother was the successful party. And, accordingly, subrule 24(1) presumptively entitles her to her costs of the trial. See: Sims-Howarth v. Bilcliffe.

[10] Second, the mother served not just one, but four Offers to Settle. Those Offers were served at various times, starting with the first Offer on December 10, 2015 and ending with the final Offer on March 30, 2017.

[11] The final Offer revoked all prior Offers. It was made severable so that it was open to the father to accept any one, or more of the four parts of that Offer which dealt with custody, parenting, incidents of custody/access and child support.

[12] The court must take into account how the order made at trial compares to any settlement offers that were made. See: Lawson v. Lawson.

[13] The mother achieved a better result at trial than all four of the Offers which she served on the father. The father accepted none of the Offers, nor any part of the final severable Offer.

[14] Pursuant to subrule 18(14)(2), the mother is presumptively entitled to full recovery costs, "unless the court orders otherwise" if the final Offer had been served at least seven days prior to the start of trial. It was not.

[15] However, pursuant to subrule 18(16), the court "may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply".

[16] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395 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. See also Fong v. Chan.

Whether Rule 18 Has Been Engaged

[17] As I noted earlier, mother's final Offer to Settle dated March 30, 2017 was served less than seven days prior to trial. Accordingly, it does not comply with subrule 18(14).

[18] However, in the exercise of the court's discretion over costs, the court does take that Offer into account pursuant to subrule 18(16).

[19] The court places weight on that final Offer for a number of reasons:

1. The terms of the Offer were favourable to the father, particularly when compared with the outcome at trial;
2. The Offer was severable, so that it was open for the father to accept one or more of the four parts of the Offer, without accepting the Offer in its entirety;
3. The Offer was the fourth Offer to Settle delivered by the mother to the father, all of which were either rejected or ignored by the father; and
4. While the Offer was not delivered seven days prior to trial, its delivery four days prior to trial nevertheless gave the father sufficient time to consider the merits of the Offer to Settle.

[20] In the court's view, these considerations, in and of themselves, move the costs consequences toward the higher end of the spectrum in favour of the mother.

[21] In his costs submissions, the father states:

The Applicant [father] made efforts to settle the case before trial. He offered sole custody to the mother.

[22] The father attached his Offer to his costs submissions. That Offer is dated March 20, 2017.

[23] While the father did make an offer of sole custody to the mother, he failed to point out that his Offer proposed that he pay child support in an excessively low amount ($100 per month vs. the court order of $1,172 per month); as well, his access proposal was far more liberal than what the court ordered.

[24] And because that Offer was not severable, it was not open for mother to accept the father's proposal for sole custody to the mother without also accepting the unreasonable proposals for child support and access.

Rule 24 - What Costs Are Appropriate Here?

[25] As I noted earlier, the court must look at the factors in subrule 24(11)(a) – (f).

[26] The issues of custody, access and child support were very important to both parties.

[27] Notwithstanding this, the issues were not conceptually complex.

[28] In the circumstances of this case, the court places considerable weight on subrule 24(11)(b), namely, the "reasonableness or unreasonableness of each party's behaviour in the case".

[29] There was nothing in the mother's behaviour which suggested to the court that the mother behaved in anything other than an entirely reasonable manner.

[30] However, the father's conduct left much to be desired. I extract the following from mother's costs submissions, which reference specific paragraphs in the court's reasons for judgment released April 6, 2017:

1. Paragraph 33 – "the evidence also revealed to the court that the father wants his parenting time with the children to be on his terms, and his terms only".

2. Paragraphs 39 and 40 – "he picked them up early [from daycare] notwithstanding more than one temporary court order which stipulates that his access is to begin with pick up from daycare at 4:30. What is his stated justification for disobeying the court orders? He said 'I want to maximize my time with my kids'".

3. Paragraph 43 – "What the foregoing reveals to the court is that regardless of what a court may order, the father will do things the way he wants to do them, particularly if he is able to diminish the mother's role in the lives of the children".

4. Paragraph 47 – "And yet his actions reveal that regardless of the children's needs, regardless of what a court might order him to do, he will act in the way he chooses".

5. Paragraph 79 – "The father's dismissive attitude toward court orders seems to know no bounds. That attitude was more than amply demonstrated when it came to the financial aspects of this litigation".

6. Paragraph 107 – "It is not necessary for the court to list every instance of non-disclosure and active misrepresentation for the court to have an accurate flavour of father's deceit".

[31] Father's unreasonable conduct also ties into subrule 24(8), which mandates the court to order costs on a full recovery basis when the court determines that a party has acted in bad faith.

[32] The extracts referred to above lead the court to conclude that the father in fact acted in bad faith during the course of this litigation.

[33] I turn next to the lawyer's rates and the time spent on this case. Counsel has 23 years of experience and she charges $400 per hour for her time. This falls within the range of acceptable rates, as found by other courts. See, for example, Livisianos v. Liadis, 2016 ONCJ 465, at paragraph 25.

[34] Father argues that the 47 hours of time spent for preparation for this two-day trial was excessive. I disagree. Although the actual court time may only have been two days, the court required the parties to prepare their evidence in chief and file it in advance of the trial. The court made this order to shorten the court time. However, by necessity it required the parties to spend more time in advance of the trial itself.

[35] In Grimba v. Bossi, 2012 ONSC 2290, the court stated at paragraph 14 that, in the absence of "obvious overkill":

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.

[36] Having regard to the kinds of documentation which mother's counsel had to obtain and review, as well as the witnesses which counsel prepared for trial testimony, I do not consider the total counsel time of 109 hours to be "obvious overkill".

[37] That said, the court takes a different approach in the assessment of fees charged by the lawyer for law clerk time spent. Here, counsel seeks an additional $4,190 plus H.S.T. for law clerk time.

[38] However, there is no detail whatsoever, either in the lawyer's Bill of Costs, or in her submissions which elaborate on the law clerk time spent, or why it was necessary to have a law clerk involved in the trial process.

[39] I have discussed in prior cases the importance for counsel to particularize the need for law clerk fees and the work performed by law clerks before a court will impose such costs against the opposite party.

[40] Without repeating those various comments in the present case, I find that it would be inappropriate to allow any recovery for the law clerk fees.

[41] With respect to the expenses listed by the mother's counsel in her Bill of Costs, there is nothing shown there which appears to be out of the ordinary or excessive.

[42] Finally, I turn to subrule 24(11)(f), "any other relevant matter".

[43] While the court is required to consider whether any other relevant matter exists which might impact on the amount of costs, the father has not made submissions on what those relevant considerations might be. Nor is the court aware of any such considerations which might otherwise impact on the scale of costs.

[44] I will comment on father's argument that costs should not be awarded on a full recovery basis. In support of that argument, the father cites the case of Blank v. Micallef. At paragraph 19 of that case, Ricchetti J. stated:

Full recovery costs are only to be awarded on rare cases to punish a party for their conduct in the proceeding. Full recovery costs are even rarer than substantial indemnity costs, which themselves are rare. Partial indemnity costs are the norm unless there is good reason to award a higher level of costs.

[45] However, Justice Perkins took a different approach in the case of Biant v. Sagoo. In considering costs awards under the Family Law Rules, Justice Perkins stated, at paragraph 20:

I agree with Aston J. in Sims-Howarth v. Bilcliffe, citing Mallory v. Mallory, that 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 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.

[46] More recently, in Forrester v. Dennis, 2016 ONCA 1387, the Court of Appeal confirmed this approach by stating at paragraph 22:

As this court affirmed in Berta, at para. 92, citing Biant v. Sagoo, 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." This award "is subject to the factors listed in r. 24(11) [of the Family Law Rules, O. Reg. 114/99], the directions set out under r. 24(4) (unreasonable conduct), r. 24(8) (bad faith) and r. 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party": Berta, at para. 94 (citation omitted). And as articulated in Sordi v. Sordi, 2011 ONCA 665, 283 O.A.C. 287, 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".

[47] This court favours the approach taken in the case of Biant, supra, and the Ontario Court of Appeal in Forrester, supra, rather than the case relied upon by father.

[48] Furthermore, the mother's argument for full indemnification of her costs, is buttressed by my earlier finding in these reasons that the father conducted himself in bad faith in the context of this litigation.

[49] Additionally, the court's earlier comments with respect to the engagement of Rule 18 in the circumstances of this case, would also entitle the mother to full indemnification of her costs.

Conclusion

[50] I conclude:

1. Mother was the successful party;
2. Mother served multiple offers to settle;
3. Mother achieved a more favourable result at trial than her offers to settle; and
4. The father conducted himself in a manner which the court characterizes as bad faith.

[51] Accordingly, and for all of the reasons articulated herein, the court favours an award of substantial indemnity, save and except for the fees in respect of the law clerk.

[52] Accordingly I award costs in favour of the mother as follows:

1. Full recovery of fees, disbursements and H.S.T. in the amount of $55,577, less
2. Law clerk fees of $4,190 and H.S.T. on those fees in the amount of $544, for a total deduction of $4,734, resulting in
3. Total costs owing by father to mother in the amount of $50,843.

[53] These costs will be payable by father to mother forthwith and shall be enforceable by the Family Responsibility Office as an incident of child support.

[54] In the event I have made any errors in my arithmetical calculations, I may be spoken to by Form 14B within 10 days.

Justice Robert J. Spence May 8, 2017