ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FS-10-1062
DATE: 2012-03-08

B E T W E E N:

HELEN MAUREEN KERSHAW

Richard Greene, for the Applicant

Applicant

• and -

WILLIAM LESLIE KERSHAW

Bradley A. Smith , for the Respondent

Respondent

HEARD: Via written submissions

Mr. Justice D. C. Shaw

Decision On Costs

Introduction

[ 1 ] This is a decision on the costs of a motion brought by the applicant, Ms. Kershaw, to require the respondent, Mr. Kershaw, to comply with certain terms of a consent divorce order granted by Warkentin J. on July 23, 2010. The parties disagreed on the meaning of the terms and asked for an interpretation. The terms which were in dispute dealt with Mr. Kershaw’s pension benefits. The issue was whether Mr. Kershaw’s pension should be divided on a linked or delinked basis. Mr. Kershaw’s position was that his pension should be divided on a linked basis. Ms. Kershaw’s position was that the order required the pension to be divided on a delinked basis. I found that Ms. Kershaw was entitled to have Mr. Kershaw’s pension divided on a delinked basis, as that term is used by his pension plan, OP Trust.

[ 2 ] In my decision on the motion, I reserved the issue of costs, pending receipt of written submissions from the parties. Submissions on costs were not to exceed five pages, exclusive of the parties’ respective Bills of Costs. Counsel filed submissions in accordance with my order, but counsel for Ms. Kershaw then filed “Reply Cost Submissions” after reviewing the submissions on behalf of Mr. Kershaw. Mr. Kershaw’s counsel objected to the filing of these additional submissions. I agree with counsel for Mr. Kershaw that no leave was granted for “Reply Submissions”, I therefore take into consideration only the initial submissions filed by each party.

[ 3 ] Ms. Kershaw requests costs of the motion in the sum of $18,000.00, inclusive of disbursements of $56.02 and HST. Mr. Kershaw submits that no costs should be awarded. In the alternative, Mr. Kershaw submits that if the court is inclined to award costs, Ms. Kershaw should receive costs fixed in the amount of $2,500.00.

[ 4 ] In Cawdrey v. Cawdrey, 2011 ONSC 416 , 2011 CarswellOnt 808, 92 R.F.L. (6 th ) 99, [2011] W.D.F.L. 2768, [2011] W.D.F.L. 2751 (S.C.J.), I set out certain factors and principles applicable to costs in family law cases:

“[2] The starting point in setting costs in family law matters is Rule 24(1):

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

[3] Rule 24(10) provides that promptly after each step in the case the court should decide who, if anyone, is entitled to costs and set the amount of costs.

[5] Rule 24(11) sets out the factors which must be considered in awarding costs:

(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 signatures of the order;

(e) expenses properly paid or payable; and

(f) any other relevant matter.

[6] An award of costs is a matter in the discretion of the court by virtue of s. 131(1) of the Courts of Justice Act , which provides:

Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in the proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid.

[7] In C.A.M. v. D.M., 2003 18880 (ON CA) , [2003] O.J. No. 3707 (C.A.) at para. 40 , Rosenberg J.A. held that the Family Law Rules have circumscribed the broad discretion granted by s. 131(1) of the Courts of Justice Act , but that they have not, however, completely removed the court’s discretion. I note that Rule 24(11)(f) allows the court, in setting the amount of costs, to take into account “any other relevant matter.” Read in conjunction with s. 131(1) of the Courts of Justice Act , there remains a discretion to award costs that appear just in the circumstances of the case, while giving effect to the Rules.

[8] The Court of Appeal has made it clear that in assessing costs, the overriding principle is one of reasonableness, and that the failure to follow that principle can produce a result that is contrary to the fundamental objective of access to justice ( Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA) , 71 O.R. (3d) 291 (Ont. C.A.), at p. 302.

[9] In Zesta Engineering Ltd. v. Cloutier , 2002 25577 (ON CA) , [2002] O.J. No. 4495 (Ont. C.A.), at para. 4 the Court of Appeal did not make a specific finding with respect to the amount of time spent or the rates charged by counsel, and stated:

In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant.

[10] While Boucher and Zesta Engineering are not family law cases, I accept that the principles enunciated above are applicable to family law matters.”

[11] Ms. Kershaw was successful on the motion. Mr. Kershaw submits that despite the fact that Ms. Kershaw was successful, she should not be awarded costs because her counsel failed to draft an appropriately worded order so that Ms. Kershaw’s intention was manifest and so that the form of the order would carry out her intention. Mr. Kershaw also submits that no costs should be awarded because the issue in dispute was novel.

[12] In my view, Ms. Kershaw, as the successful party, is entitled to costs. In my decision on the motion, I found that based on the ordinary meaning of the words of the paragraph in question the parties intended that Mr. Kershaw’s pension was to be divided into two separate, permanent and independent pensions, payable for life, with the death of either spouse to have no impact on the pension of the other. I found that a linked pension would be inconsistent with the key words of the paragraph. Although the wording of the paragraph in question could have been improved, I found that it adequately expressed the intention of the parties.

[13] The issue was novel only in the sense that Mr. Kershaw attempted to defeat what I found to be his expressed intention to delink his pension by arguing that a delinked pension would contravene both the terms of his pension plan and the provisions of s. 65(3) of the Pension Benefits Act . I did not accept these submissions.

[14] I therefore see no basis to deprive Ms. Kershaw, as the successful party, of her costs.

[15] Three lawyers worked on Ms. Kershaw’s file. Mr. Greene of Toronto, with 29 years experience, claims 15 hours at a full recovery rate of $350.00. His regular hourly rate is said to be $475.00. Mr. Zalev, an associate with Mr. Greene’s firm in Toronto, claims 46.9 hours at a full recovery rate of $210.00. He has 6 years experience. His regular hourly rate is said to be $290.00. Mr. Illingworth, of Thunder Bay, was retained as an agent by Mr. Greene. Mr. Illingworth has 30 years experience. He claims 21.6 hours at an hourly rate of $300.00, on a full recovery basis. All three lawyers practice in the area of family law. On a partial recovery basis (calculated by counsel at 75% of full recovery) their fees are $12,995.14, not including HST.

[16] Mr. Kershaw has filed a Bill of Costs for comparison purposes. His lead counsel, Mr. Smith, has 18 years experience in family law. Mr. Smith’s hourly rate, on a full recovery basis, is $275.00. Mr. Smith shows preparation time, prior to the motion, of 37.7 hours, plus preparation on the day of the motion of 3.8 hours, plus 4.5 hours for his attendance on the motion, for a total of 41 hours. Mr. Babcock, with 29 years experience, who docketed .4 hours, shows a full recovery hourly rate of $290.00. Mr. Smith’s law clerk, with 31 years of experience, spent 12 hours on the file at a full recovery hourly rate of $140.00.

[17] I do not find that the full recovery hourly rates of any of the lawyers involved – Mr. Greene, Mr. Zalev, Mr. Illingworth, Mr. Smith and Mr. Babcock – to be unreasonable. Perhaps the only caveat that could be raised is that notwithstanding that Mr. Greene’s rate is reasonable for Toronto counsel of his experience and expertise, it is arguable that for a motion heard in Thunder Bay, his rate should not exceed the $300.00 hourly rate shown for his Thunder Bay agent of similar experience. Mr. Babcock’s rate of $290.00 per hour is not dissimilar to Mr. Illingworth’s rate of $300.00 per hour. They have equivalent experience. Mr. Smith, who has less experience than Mr. Babcock, Mr. Greene and Mr. Illingworth, has an hourly rate of $275.00. A rate of $300.00 for counsel with 12 additional years experience does not appear, by comparison with Mr. Smith’s rate, to be out of line.

[18] The total fees for Mr. Kershaw’s counsel, on a full recovery basis, are $14,446.00, exclusive of HST. On a partial recovery basis (calculated by Mr. Smith at 60% of full recovery), Mr. Kershaw’s Bill of Costs shows fees of $8,663.50.

[19] Ms. Kershaw submits that the motion was extremely important to her.

[20] Mr. Kershaw submits that the issue in dispute was very narrow and not factually or legally complex or difficult. He submits that the pension issue was no more important, and arguably less important, than the many other issues that arise in family litigation.

[21] In my opinion, the matter was of importance because of the significant financial consequences to Ms. Kershaw that would have resulted if I had found that the pension should be linked and Mr. Kershaw had died. I also view the legal issues raised by Mr. Kershaw to have had a degree of complexity and difficulty.

[22] Both parties allege unreasonable conduct by the other. Ms. Kershaw argues that Mr. Kershaw was unreasonable for not complying with the order. Mr. Kershaw submits that Ms. Kershaw or her counsel were unreasonable for failing to draft the order in a form that would carry out her intention.

[23] I do not regard the behaviour of either side to have been unacceptable. Although I found that Mr. Kershaw had intended to delink his pension, I cannot say that his position, namely, that a delinked pension would contravene the terms of his pension plan and the Pension Benefits Act , was unreasonable. But I also cannot say that the wording of the order was unreasonable. As I have noted, the wording could have been improved but I found that it expressed the intention contended by Ms. Kershaw.

[24] Mr. Kershaw takes issue with the time spent by Ms. Kershaw’s lawyers, “for a short uncomplicated motion”. I would not describe this as a “short” or an “uncomplicated” motion. Mr. Smith, himself, docketed 8.3 hours on the day of the motion, including 4.5 hours in attendance on the motion. I have previously expressed my opinion that the motion had a degree of complexity. However, I accept Mr. Kershaw’s submission that the 83.5 hours claimed by Ms. Kershaw’s three counsel is more than Mr. Kershaw should bear. I have no doubt that the time was expended. I also accept the submissions of Ms. Kershaw’s counsel that in fact the actual legal fees and disbursements that were incurred on this motion were in excess of $35,000.00. Nevertheless, the 83.5 hours that were docketed are beyond what Mr. Kershaw, as the unsuccessful party, could reasonably expect to be responsible for. On the other hand, I cannot find that Mr. Kershaw would have had any reasonable expectation that, if he was unsuccessful, his exposure to costs would be limited to the $2,500.00 which he submits he should pay if I award costs to Ms. Kershaw. His expectations would have reasonably been informed by the costs of his own lawyers, who had a full recovery fee of $14,446.00.

[25] In Zanewycz v. Manryk 2009 CarswellOnt 3842, [2009] W.D.F.L. 4302, at para. 20 , I stated:

“I appreciate that parties incur significant costs in order to properly prosecute or defend family law mattes. There has to be, however, some realistic limit on costs awarded in family law matters. Otherwise, the justice system in family law matters will not be accessible to most people in this Province. I say this not as a criticism of the Bill of Costs presented on behalf of Ms. Manryk, but rather as a corollary to the comment of the Court of Appeal that costs awards should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful party rather than as an exact measure of the actual costs of the successful party.”

[26] I remain of this view. In my opinion, having regard to the factors discussed above, in the context of the particular facts of this case, it would be fair and reasonable to award Ms. Kershaw costs of this motion fixed in the sum of $12,500.00, inclusive of disbursements and H.S.T.

___________ ”original signed by”____

The Hon. Mr. Justice D. C. Shaw

Released: March 8, 2012

COURT FILE NO.: FS-10-1062

DATE: 2012-03-08

ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: HELEN MAUREEN KERSHAW Applicant - and – WILLIAM LESLIE KERSHAW Respondent DECISION ON COSTS Shaw J.

Released: March 8, 2012

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