Court File and Parties
Date: August 3, 2017
Court File No.: D90288/16
Ontario Court of Justice
Between:
Salim Matti Acting in Person Applicant
- and -
Zina Odish Respondent
Amal Nayyar, for the Respondent
Paulina Sbrocchi, Agent, for the Assignee, City of Toronto
Heard: In Chambers
Justice: S.B. Sherr
Costs Endorsement
[1] On June 19, 2017, the court released its reasons for decision arising out of a two-day trial about the applicant's (the father's) child and spousal support obligations. See: Matti v. Odish, 2017 ONCJ 410.
[2] The court gave the parties the opportunity to make written costs submissions. The respondent (the mother) seeks her costs of $15,180. The father and the City of Toronto (the assignee) did not make costs submissions.
[3] 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.
[4] 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).
[5] 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The offer does not expire and is not withdrawn before the hearing starts.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.
[6] 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)).
[7] The onus of proving that the offer is as or more favourable than the trial result is on the person making the offer. See: Neilipovitz v. Neilipovitz, [2014] O.J. No. 3842 (SCJ).
[8] The court is not required to examine each term of the offer as compared to the terms of the order and weigh with microscopic precision the equivalence of the terms. What is required is a general assessment of the overall comparability of the offer as contrasted with the order. See: Wilson v. Kovalev, 2016 ONSC 163.
[9] The mother made an offer to settle dated May 25, 2017. The court finds that this offer met the required criteria for the costs consequences set out in subrule 18(14) to apply.
[10] The mother offered that the father's annual income be imputed at $55,000 for support purposes. The court imputed the father's 2016 income at $59,677 and his 2017 income at $56,649. The trial result was more favourable to the mother.
[11] The mother offered that the father pay spousal support at the mid-range of the Spousal Support Advisory Guidelines based on his annual income of $55,000 (about $500 per month). The court ordered spousal support of $650 each month, starting on January 1, 2016. The trial result was more favourable to the mother.
[12] The father did not make a formal offer to settle. At trial, he proposed paying child support based on an imputed annual income of $40,000 – but only on an ongoing basis. The court started child support on January 1, 2016. The father asked that the mother's claim for spousal support be dismissed.
[13] The mother was the successful party.
[14] Subrule 18(14) creates a presumption that entitles the mother to costs up until the date of her offer to settle and to full recovery costs from the date of her offer. The father did not rebut this presumption.
[15] 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.
[16] The case was important for the parties. There was also complexity and difficulty to the case as counsel for the mother had to deal with late, incomplete and disorganized financial disclosure from the father. She also had to spend considerable time going through the father's personal and business bank records and invoices to prove that the father was not properly reporting his income.
[17] The mother's behaviour was reasonable.
[18] The father's behaviour was not reasonable. He was not a credible witness and the court found that he was not disclosing his actual income. He did not produce financial disclosure within the timelines ordered by the court. His financial disclosure was incomplete. He did a massive document dump on the mother of disorganized business invoices and expenses just prior to the trial. He failed to make any support payments until October 19, 2016.
[19] The rates claimed by the mother's counsel are reasonable.
[20] The mother restricted her costs claim to the settlement conference step before Justice Carole Curtis on March 16, 2016 and the trial step. Justice Curtis had reserved costs of the settlement conference and it is appropriate for the court to assess these costs at this stage.
[21] The mother claimed costs at 73% of a full recovery rate for her work prior to her offer to settle – May 25, 2017. This is a reasonable request. She claimed full recovery costs from the date of her offer.
[22] The amount of time claimed by the mother for a two-day trial is reasonable – particularly considering that her counsel had to spend considerable time reviewing, organizing and analyzing incomplete and disorganized disclosure from the father. In reviewing the father's business records she was able to identify costs of sales improperly deducted from gross revenue (as they were actually paid by customers), undisclosed cash income and personal expenses of the father that were deducted from business income. My comments made in paragraph 28 of Jones v. Hugo, 2012 ONCJ 381 also apply here:
[28] The extensive amount of time spent on the case by Mr. Finlayson was primarily caused by the actions of the respondent. The respondent tried to hide his income. Mr. Finlayson did an outstanding job in revealing it. This was not an easy process. The applicant had a dilemma. While the time Mr. Finlayson spent on the case might at first blush appear to be out of proportion to the amount in dispute, his options in this case were to spend the time necessary to establish his imputed income claim or spend less time on the matter and possibly fail to prove the claim. The respondent placed the applicant in this dilemma by acting in bad faith. Such behaviour dictates that the court be generous in reviewing the time claimed by counsel faced with this situation. To do otherwise, only encourages the obstructive party. These "chase" files are time-intensive. Disclosure (what there is of it) usually comes in increments. The case requires constant review to stay on top of outstanding disclosure and undertakings. Continual analysis must be conducted by counsel to put together the financial puzzle pieces and establish the payor's true income. That was the case here. It was the meticulous nature of the applicant's presentation that was essential in establishing the respondent's income.
[23] The expenses claimed by the mother are reasonable.
[24] 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.
[25] The court finds that the father can afford the costs that will be ordered – particularly if he is permitted to pay them over a reasonable time period.
[26] Taking into account these considerations, an order shall go that the father shall pay the mother's costs fixed in the amount of $15,000, inclusive of fees, disbursements and HST.
[27] The father may pay the costs at the rate of $500 each month, starting on September 1, 2017. However, if he is more than 30 days late in making any of these payments, the entire amount of costs then owing shall immediately become due and payable.
Released: August 3, 2017
Justice S.B. Sherr