SUPERIOR COURT OF JUSTICE - ONTARIO

KINGSTON COURT FILE NO.: 09-215
DATE HEARD: Written Submissions

RE: Geertsma and Smith

BETWEEN: Amy Geertsma, Applicant

--and --

Kurt Smith, Respondent

BEFORE: Honourable Mr Justice Martin James

COUNSEL:
Tina M. Fasano for the Applicant
G. Edward Lloyd for the Respondent

COSTS ENDORSEMENT

James J.

[ 1 ] This endorsement disposes of the costs issues arising from an eight day trial in this matter earlier this year.

[ 2 ] The bulk of the trial time was taken up by the respondent’s claim for compensation based on unjust enrichment principles but the applicant also sought retroactive and ongoing child support.

[ 3 ] Prior to trial the applicant served a written offer to settle that was more generous to the respondent than the result at trial. The applicant seeks to invoke the rule regarding the cost consequences of failing to accept an offer where the person to whom the offer was made would have done better to accept the offer than to proceed to trial.

[ 4 ] The offer is dated January 26, 2011. The trial commenced on February 14, 2011.

[ 5 ] The applicant’s bill of costs commences with an attendance at Assignment Court on November 26, 2010. It is clear that there was time spent dealing with the litigation prior to the November Assignment Court but no claim is advanced for this portion of the applicant’s costs. As a result, the actual costs are understated to some extent.

[ 6 ] The applicant’s bill of costs shows her counsel’s full rate of $300 per hour only. No effort has been made to separate and identify partial, substantial or full indemnity compensation.

[ 7 ] The full indemnity fees claimed by the applicant amount to $39,450. I do not propose to include the modest amount claimed for the law clerk ($144) or the articling law student ($66).

[ 8 ] It is common to allow partial indemnity costs at 60% of the full rate. Substantial indemnity is defined as 1.5 times the partial indemnity rate. The total amount of time claimed by counsel for the applicant prior to the date of the offer is $4,770. I calculate the applicant’s pre-offer costs to be about $2900. on a partial indemnity basis and the post offer, substantial indemnity rate equals approximately $31,200.

[ 9 ] The respondent criticizes the derogatory allegations made by the applicant against the respondent in this litigation, her refusal to promptly acknowledge all mortgage payments made by the respondent and the quantity of time spent by the applicant’s counsel. He also notes that the court should consider the means available to the payor to satisfy an order for the payment of costs. I do not think any of these arguments warrant a reduction of the fees.

[ 10 ] I find that the rate of $300 per hour charged by the applicant’s counsel for someone with 18 years experience is reasonable. As well, I note that not all eligible costs have been claimed by the applicant because the bill of costs commences only a few months before the trial actually started.

[ 11 ] The ability of the respondent to pay an order for costs is not an important consideration in this case as he secured a substantial judgment against which the costs can be applied. It appears to me that the ongoing child support obligations of the respondent will not be affected by an award of costs against him because the parties can utilize set-offs.

[ 12 ] In my view, it is significant that the applicant made a written offer prior to trial that was more advantageous to the respondent than the eventual outcome. The Family Law Rules permit full recovery of legal costs in these circumstances but the trial judge must ensure that any costs awarded are reasonable in the circumstances.

[ 13 ] I note that rule 18.14 creates a presumption in favour of a litigant who makes a favourable offer prior to trial. The presumption is that the offerer should be fully compensated for legal costs incurred subsequent to the date of the offer. This presumption is so strong that it is sometimes said to create an almost automatic cost entitlement because the court places great importance on meaningful efforts to settle disputes without the necessity of trial.

[ 14 ] The applicant’s costs are allowed and fixed at $36,000 for fees plus H.S.T. of $4,680 and disbursements of $2,483.21 (H.S.T. included) for a total of $43,163.21.

[ 15 ] The request for enforcement for the payment of costs by the Family Responsibility Office is not granted as this litigation dealt primarily with the respondent’s unjust enrichment claim.

James, J.

DATE: January 23, 2012