Court File and Parties

Ontario Court of Justice

Date: 2020-06-17

Court File No.: Toronto DFO-11-10168

Between:

Anna Lerus Applicant

— And —

Alix Vilgrain Respondent

Before: Justice Alex Finlayson

Supplementary Submissions Respecting Section 7 Expenses and Costs heard on: June 17, 2020

Reasons for Judgment released on: June 17, 2020

Counsel:

• Shawn Philbert, counsel for the applicant
• Dana Cohen, counsel for the respondent

ALEX FINLAYSON J.:

PART I: OVERVIEW

[1] On December 16, 2019, I heard multiple motions brought by the Applicant mother for a number of things. I released my Judgment respecting those motions on February 7, 2020 (2020 ONCJ 77). The determination of certain special or extraordinary expenses pursuant to section 7 of the Child Support Guidelines from March 29, 2017 to the present, ought to have been the only issue remaining in this case to be dealt with. That could have been accomplished at a case conference in case management.

[2] While to their credit, when the motions were argued, the parties did agree that the Court should make a final Order regarding those section 7 expenses based on the written material filed, the motions were otherwise not as straightforward as they should have been. The material was voluminous, and many other issues got thrown into the mix.

[3] Commencing in November of 2018, about 19 months after most of the issues in this case settled by way of Final Minutes of Settlement, the mother began launching motions. She brought three in total. The motions raised a number of matters that I found were without merit, or which were not properly before the Court. Many of the issues raised had actually been resolved by way of the Minutes of March 29, 2017 already, and incorporated into a Final Order of this Court that day.

[4] Except for the section 7 expenses, for which, as it turns out in the net result, the mother now owes money to the father, I did not grant any of the relief claimed by the mother.

[5] Unfortunately, when I heard the motions on December 16, 2019, neither counsel had filed DivorceMate calculations to address the actual remaining section 7 issues in the litigation. As such, in the Judgment of February 7, 2020, I directed the parties to re-attend before the Court with calculations, based on the findings in the Judgment.

[6] This Endorsement now quantifies the section 7 expenses that are owing, based on the Court's income determinations and its findings about what constituted section 7 expenses in the February 7, 2020 ruling. While the father owes the mother some money for section 7 expenses she incurred, the father incurred far greater expenses for which the mother owes her share. It is for that reason I have said that in the net result, the mother will owe the father money.

[7] This Endorsement also addresses costs of the motions.

[8] Submissions respecting the quantification of section 7 expenses and costs were heard in writing, and supplemented by oral submissions on June 17, 2020.

PART II: QUANTIFICATION OF THE SECTION 7 EXPENSES

[9] Based the findings I made in the February 7, 2020 Judgment, a review of the DivorceMate calculations filed for this further attendance, and based on discussions with counsel on the record on June 17, 2020, the mother owes the father section 7 expenses of $3,257.00. A Support Deduction Order shall issue.

[10] To be clear, this is the net number of the section 7 expenses that the mother owes to the father, less those that the father owes to the mother. In other words, the mother has received a credit for the father's contribution to the expenses she incurred for the parties' two children. This fully reconciles section 7 expenses up to December 31, 2019. The Judgment of February 7, 2020 provides how section 7 expenses are to be dealt with for 2020 going forward. As such, there are now no further issues in this case, and the litigation is at an end.

PART III: ISSUES AND ANALYSIS RESPECTING COSTS

A. The Parties' Positions

[11] The father claims costs of $10,400.52 inclusive of HST and disbursements. He asks that the costs be enforced through the Family Responsibility Office, or set off against child support.

[12] The father argues that he was clearly successful on all issues in the motions. Except for a small portion of her several claims for section 7 expenses, all of the relief claimed by the mother was dismissed by the Court.

[13] The father submits that the mother "did not beat or even tie a single provision of" any of her three Offers. By contrast, the father made two offers, both of which provided that the mother's motion be dismissed. While the first Offer was withdrawn before the motion began, the second Offer, dated October 28, 2019 was not. Had the mother accepted the father's second Offer, she would have only been required to pay him $1,000 in costs, according to its terms.

[14] The mother says that there should be no costs. Her written submissions include a number of statements about the prior proceedings in this case. She also argues that the father's conduct in the litigation was unreasonable, such that the Court should deprive him of costs. Finally, in her written submissions, the mother submits that the father's Offer was neither severable, nor specific enough such that it was capable of acceptance.

[15] Alternatively, if the Court is inclined to make a costs order, then the mother submits that no more than $4,000 should be awarded.

B. Applicable Legal Principles

[16] Section 131 of the Courts of Justice Act provides that cost orders are in the discretion of the Court. The framework for awarding costs is set out in Rule 24 of the Family Law Rules.

[17] Pursuant to rule 24(10), the Court must deal with the costs of a step in a case, promptly after dealing with that step. The Court must either determine entitlement to costs and fix the amount, or expressly reserve costs to a later stage of the case. In this case, as the litigation is now over, I will deal with costs of the motions now.

[18] Modern costs rules are designed to foster three fundamental purposes: to partially indemnify successful litigants; to encourage settlement; and to discourage and sanction inappropriate behaviour by litigants. Rule 2(2) of the Family Law Rules adds a fourth, to ensure that cases are dealt with justly. See Mattina v. Mattina, 2018 ONCA 867 ¶ 10.

[19] An important factor in the determination of costs is success. Rule 24(1) provides a presumption that the successful party is entitled to costs of a motion. The Court may apportion costs if success is divided pursuant to rule 24(6).

[20] Pursuant to rule 24(4), a successful party who has behaved unreasonably may be deprived of all or part of his or her costs, or even be ordered to pay the other side's costs. Rule 24(5) sets out the factors the Court is to examine in deciding whether a party behaved reasonably or unreasonably.

[21] The quantum of costs is determined with reference to the factors in rule 24(12). It reads:

24(12) In setting the amount of costs, the court shall consider,

(a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues:

(i) each party's behaviour,

(ii) the time spent by each party,

(iii) any written offers to settle, including offers that do not meet the requirements of rule 18,

(iv) any legal fees, including the number of lawyers and their rates,

(v) any expert witness fees, including the number of experts and their rates,

(vi) any other expenses properly paid or payable; and

(b) any other relevant matter.

[22] And finally, because both the father and the mother served Offers to Settle the motions, I also consider Rule 18. As I will explain, the costs provisions of Rule 18(14) are engaged in relation to the father's second Offer. The rule is not engaged in relation to the father's first Offer, nor to any of the mother's Offers.

C. Success

[23] There is no question that the father was successful. Again, with the exception of a very small portion of the section 7 expenses that the mother claimed, I did not grant any of the relief sought in either of the mother's Notices of Motion dated November 8, 2018, October 7, 2019, or November 12, 2019.

[24] Specifically, regarding the section 7 expenses, while I did give the mother a small credit against the section 7 expenses that she owes the father, I did not grant the years of retroactive section 7 expenses as she claimed, nor did I allow many of the expenses that the mother alleged should qualify.

[25] While I found in the February 7, 2020 Judgment that the mother's claim for custody may still have been a live issue in the litigation that the mother could pursue, because of the chaotic and unfocussed way that the litigation had been conducted, I found it necessary to map out a process for her to follow if she wished to pursue that claim. See Lerus v. Vilgrain, 2020 ONCJ 77 ¶ 219-243. As far as I am aware, she did not take any further steps in accordance with those directions. As a result, pursuant to the Judgment, custody is resolved, with the joint custody terms in the Separation Agreement from 10 years ago remaining intact.

[26] In one of her later motions, the mother asked for permission to proceed with all of the various listed claims in her earlier November 8, 2018 Notice of Motion. She now submits at paragraph 31 of her written costs submissions, that because I indicated I would address all issues raised in the motions on December 16, 2019, that is somehow a success, and therefore there is some divided success in this case.

[27] I do not accept this submission. When this matter first came before me, I discovered this case had drifted. Just because the Court issued directions regarding how the multiple motions would proceed, that is not tantamount to the person who brought those motions enjoying success. And I certainly did not rule that the father was prohibited from claiming an equalization payment in the Superior Court were the case to go there, as the written submissions suggest.

[28] The various claims for relief in the mother's motions ought not to have been brought in the first place. Just because I have now dealt with them, I fail to see how that means success was divided. Rule 24(6) has no application to costs in this case.

D. Reasonableness of the Father's Behaviour

[29] The mother relies on rules 24(4) and (5) to argue that the father should be deprived his costs, based on unreasonable conduct in the litigation.

[30] First, the mother alleges that the father delayed the proceedings by not coming to Court. While in my review of the prior proceedings in the February 7, 2020 Judgment, I did find that the father failed to attend Court at times in the past, I also found that the mother did not attend sometimes, too. Both parents played a role in the litigation drifting.

[31] I need not assign any further blame here. Justice Sirivar already sanctioned the father's failure to attend in early 2019, with a costs order. And I note that Justice Jones sanctioned the mother's failure to attend on another occasion, in the summer of 2019. The father has paid the costs Order of Sirivar J. The costs now claimed by the father relate to time spent to defend the motions, not to any delay that has been occasioned for which he is responsible.

[32] Second, the mother accuses the father of misrepresentation. She also accuses him, again, of failing to disclose his true income at the time of the Separation Agreement. Non-disclosure is an allegation that she raised in the motions I heard in December 2019. And to be clear, the non-disclosure allegedly occurred about 10 years ago at the time of the Separation Agreement.

[33] I did not make findings of fact respecting either misrepresentation or non-disclosure. The mother cannot now re-argue this, in an attempt to characterize the father's behaviour as unreasonable, for costs purposes.

[34] Third, and most significantly, the mother blames the father for causing the whole debacle (and delay) associated with the request to transfer this case to the Superior Court. Had he not said he wanted to claim an equalization payment, then this transfer issue would never have arisen. She also says that the substantive issues that she was advancing, would then have been determined much sooner, but for his unreasonable position.

[35] It is true that this transfer issue caused some aggravation in the litigation. In fact, at ¶ 11 of Lerus v. Vilgrain, 2020 ONCJ 77, I found that the transfer motion was ill conceived from the outset. Elsewhere in the Judgment, I explained why it was not possible, on the basis of the history of this case, choices made in the litigation, orders made in this case, and how jurisdiction is divided between this Court and the Superior Court, to transfer this particular case to the Superior Court, even if it the transfer request was initially advanced as a consent. I will not repeat any of that analysis here.

[36] It is important to recall that the transfer motion was initially presented to the Court as a "consent" transfer by way of 14B Motion. Both sides bear some initial responsibility for this. However, the mother fails to take any responsibility for what happened next and blames the father entirely.

[37] When the "consent" 14B Motion first came before me, I was concerned that this case was not an appropriate one for a transfer. The Court did not grant it, and requested additional material and submissions, including an explanation as to on what exact legal basis this Court could or should transfer the case.

[38] Soon thereafter, the father elected not to pursue the transfer further. The mother, however, filed a Form 14 Notice of Motion for the transfer. Ostensibly that was to allow the father to mount a defence to her claim to set aside the Separation Agreement, in a scenario where she would be proceeding in the Superior Court with that set aside claim.

[39] Even if the transfer was still being presented as a consent, I nevertheless required submissions as to the legal basis for the transfer. And then the submissions never came, case law was not supplied, and the transfer motion got abandoned.

[40] This procedural conundrum aside, what the mother says really triggered all this was the father wanting to claim an equalization payment. This statement too, ignores important context.

[41] The mother's costs submissions ignore that at ¶ 359-372 of Lerus v. Vilgrain, 2020 ONCJ 77, I found that it was the mother's "late in the day request to amend her pleading" (to claim spousal support 10 years after the Separation Agreement) that led the father to say that he may want to raise equalization as a defence. It was the mother's request to set aside the Separation Agreement, an Agreement which father says had its property and support terms intertwined, that sent the parties down this road.

[42] Despite the submissions of counsel, I do not fault the father for telling the other side he would raise the issue of equalization as a defence to a possible claim to set aside a Separation Agreement. This is certainly not unreasonable or bad faith behaviour as was submitted orally during costs submissions.

[43] The father is entitled to raise defences. Even though this transfer motion led to confusion and delay, I do not find that he behaved unreasonably in the litigation for the purposes of rules 24(4) and (5).

[44] And in the end, the transfer issue would have been moot, had it not been abandoned, as I did not grant the request respecting amending or setting aside.

[45] I completely reject the mother's submission that the substantive issues would have been resolved much sooner but for the father's desire to raise an equalization payment. Delay to the resolution of the outstanding aspects of this case was significantly caused by the mother filing motions in an attempt to expand the scope of the litigation, and to re-litigate claims that had already been resolved in the Minutes.

[46] Finally, or perhaps related, the mother's written submissions say that the father embarked on a litigation strategy to wear her down. I did not find this, and I do not find this now.

[47] To be clear, many of the mother's statements about the father's conduct in her written costs submissions are not findings of fact of the Court. My Judgment of February 7, 2020 is 373 paragraphs long. It contains many findings, including a detailed description of the prior proceedings. Its length is the direct result of the positions taken, mostly by her, and motions brought exclusively by her, in the later stages of this litigation.

E. Offers to Settle

[48] The mother did not achieve a result as or more favourable than any of her Offers. Rule 18(14) therefore does not apply respecting the mother's Offers.

[49] The father's first Offer does not qualify as a Rule 18(14) Offer, as it was not open for acceptance when the motion started. However, it remains relevant in determining the quantum of costs when I come to rule 24(12)(a).

[50] The father's second Offer of October 28, 2019 does qualify as a Rule 18(14) Offer, however. And, I find that the father achieved a result as favourable as his Offer.

[51] That Offer provides that the mother's motion would be dismissed with costs of $1,000. If the litigation continued, then the father would be able to renew a request for directions, something he elected not to proceed with when the motions were argued.

[52] To repeat it here again, with the exception of a small credit for section 7 expenses but still leaving the mother owing money to the father, I did not grant any of the relief in any of the mother's three Notices of Motion. Arguably, she might have had to pay no section 7 expenses to the father at all, had the Offer been accepted. In dollars and cents, it makes little sense that the mother proceeded as she did, and that is even more so in light of the Offers.

[53] I do not accede to the statements in the mother's written submissions that the father's Offer was unclear. This complaint appears to arise because the father's Offer refers to a motion (singular) of the mother's being dismissed, whereas the mother actually had three motions before the Court. The submission is that the mother did not know which of her motions she would have been agreeing should be dismissed, had she just accepted the father's Offer.

[54] That is something which could have been easily clarified, for example by way of correspondence between counsel. In any event, it is clear to the Court that in making the Offer, the father was trying to avoid incurring the costs of these motions, and ultimately, to avoid having any of the motions proceed.

F. Time Spent and Hourly Rates

[55] Ms. Cohen is a 21-year lawyer. Her hourly rate of $450.00 per hour is reasonable.

[56] The mother's motion of November 8, 2018 first came before Sirivar J. in January 2019. Sirivar J. did not deal with it in full. She only addressed the mother's request to strike the father's pleadings, based on a prior Endorsement that granted leave for that relief only, to be pursued. In short, she addressed costs of the motion to strike, only.

[57] Before me, there is still time claimed in Ms. Cohen's Bill of Costs relating to the preparation of materials, and other work done, prior to that court attendance before Sirivar J. in January 2019. That time was incurred to prepare material to respond to the balance of the November 8, 2018 motion, which eventually came before me, and which I heard in December, 2019.

[58] The costs in relation to that work done, was not dealt with by Sirivar J. The next opportunity to claim costs in relation to it was when the motions returned before me. As it relates to responding to the balance of the November 8, 2018 motion, which I did deal with in the February 7, 2020 Judgment, it properly forms part of the costs claim now before the Court. And I find that time spent to be appropriate.

[59] As is the time Ms. Cohen spent (and the disbursements incurred) as set out on the balance of the Bill.

G. Other Relevant Factors in Rule 24(12)

[60] Pursuant to rule 24(12)(a)(i), the Court is to consider the reasonableness and proportionality of a number of things, including the parties' behaviour, as it relates to the importance and complexity of the issues.

[61] The remaining issues in this case were not complex. It became apparent to the Court that very early on in the litigation (ie. as of March 29, 2017), most of the issues had settled.

[62] Given the simplicity of the actual section 7 expenses left to deal with, their resolution could have been achieved at a further conference before the case management judge at the time. Indeed, that is what Murray J. envisioned, based on my read of some of her prior Endorsements (summarized in the February 7, 2020 Judgment).

[63] Instead almost three years elapsed and the litigation expanded.

[64] Above, I have already addressed the reasonableness of the father's behaviour. I do not find that the father's behaviour was unreasonable for the purposes of rule 24(12)(a) either.

[65] By contrast, it was not reasonable for the mother, during the time period between the Final Minutes and December 2019 when I heard the motions, to have launched an onslaught of litigation.

[66] The mother's Offers to Settle were not reasonable either. They are confusing and they were not capable of acceptance, when considered in light of the actual remaining issues.

[67] In terms of her specific conduct in the litigation, and based on the findings in the Judgment, it was not reasonable for her:

(a) at this stage of the case, to raise a request to set aside the Separation Agreement, 10 years after it was signed, in order to claim spousal support;

(b) to move to set aside the Consent Order of March 29, 2017 on a flimsy evidentiary basis, and without regard for the legal grounds needed to be proven;

(c) to raise various claims, including years of retroactive child support and section 7 expenses, covering the years for which there was already a settlement;

(d) to raise various claims, according to an incorrect procedure; and

(e) to change her position across different motions and over time, in a confusing fashion, leading up to the hearing of the motions.

H. Quantum of Costs

[68] One approach to determining the quantum might have been to award the father some costs up to the date of his Offer of October 28, 2019, and then full recovery after that, in accordance with Rule 18(14). However, Ms. Cohen's Bill of Costs does not really provide much by way of a breakdown of the time spent after the date of the Offer. Orally, she provided some clarification.

[69] Nevertheless, as the Ontario Court of Appeal held in Beaver v. Hill, 2018 ONCA 840 ¶ 12, "… proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs."

[70] The father himself fairly concedes that the costs of the motion were "vastly disproportionate" to the amount of money the parties were arguing about. However, he says that given the mother's "steadfast insistence that the proceeding and the motion proceed", he had no choice but to respond.

[71] While the time Ms. Cohen spent on the case might at first blush appear to be out of proportion to the amount in dispute, her options were either to do her job and to respond properly (which she did), or not to invest much energy in responding, risk the father perhaps losing certain issues, or risk the litigation continuing, or both, all of which would have resulted in the father incurring even more costs.

[72] This places the Court in a dilemma. Costs should be proportional to the issues. But greater proportionality was not possible given the manner in which the litigation unfolded. This suggests that the Court should be generous in reviewing the time claimed by Ms. Cohen, who was faced with this situation.

[73] In the context of this case, the remaining issue which should have only just been about reconciling section 7 expenses for three years, the father was confronted with multiple motions and expanding issues. The father had no choice but to respond.

[74] Having regard to his wholesale success, his Rule 18 Offer, his previous Offer (which although was not technically a Rule 18 Offer, it was also reasonable and ought to have been accepted back when it was still open for acceptance), the time Ms. Cohen spent (but in the context of what happened in the litigation), and the mother's behaviour in the litigation (which I find directly correlates to the father's increased costs), I find it is fair and reasonable to make an award of $7,500 in costs, inclusive of HST and disbursements, payable forthwith.

I. Enforcement

[75] The father is concerned about enforcement.

[76] Until very recently, the mother had not paid Jones J.'s costs Order. That was a mere $250. Both counsel now agree that within the past few days, correspondence was sent to Ms. Cohen advising that the costs is on the way via mail. Nevertheless, Ms. Cohen had not received it as of June 17, 2020 when I heard the oral submissions.

[77] The father asks that these costs that I am now ordering be enforced through the Family Responsibility Office, or that they be set off against child support.

[78] Counsel for the mother submits that since the $250 has now been sent out, the Court cannot or should not make any enforcement order. The submission seemed to suggest that I must find some non-compliance. And counsel for the mother says that I should also consider this issue, in the context of the father not having paid his previous costs order of Sirivar J. in a timely way.

[79] Again, these costs that I am awarding are costs in relation to motions to deal with what should have been just outstanding section 7 expenses. However, in the process of trying to resolve that, the father also had to respond to a myriad of other claims, mostly of a support nature (child and spousal support, and other section 7 expenses). Now it is true that some other issues were not about support (custody and a travel issue), but they still had to be responded to. The context, again, is they had to be responded to in what should have been a motion about the remaining section 7 expenses, only.

[80] Counsel for the mother did not provide me with any authority for the proposition that there must be non-compliance with a past costs order in order now to make an enforcement order via the Family Responsibility Office. I need not deal with this argument any further.

[81] I find that the costs incurred relate to support claims. To the extent that I am wrong and some costs on the Bill relate to custody and travel, that was by no means the main focus of the motion, and in any event I have not ordered the full $10,440 claimed by the father. I am satisfied that the costs that I am ordering, are costs in relation to support claims.

[82] Therefore, at the father's request, the costs Order shall be enforceable as an incident of support through the Family Responsibility Office pursuant to section 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act, 1996.

[83] As such, I need not address the father's alternative argument about set-off any further. Nor do I need to consider whether non-compliance has any role to play in the analysis of that.

PART IV: ORDERS

[84] Based on the above, I make the following orders:

(a) The mother shall pay to the father section 7 expenses in the amount of $3,257.00. This is the net number of the section 7 expenses that the mother owes to the father, less those that the father owes to the mother. This fully reconciles all section 7 expenses claims by both parties up to December 31, 2019;

(b) A Support Deduction Order respecting those section 7 expenses shall issue;

(c) The mother shall pay to the father costs of the motions, in the amount of $7,500, inclusive of HST and disbursements, payable forthwith;

(d) This costs Order shall be enforceable as an incident of support through the Family Responsibility Office pursuant to section 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act, 1996; and

(e) A Support Deduction Order shall issue respecting the costs Order.

Released: June 17, 2020

Signed: Justice Alex Finlayson