COURT FILE NO.: FS-10-4897
DATE: 2012-04-19
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DALLAS SHAE MARKALL,
Stephen R. Lundin, for the Applicant
Applicant
- and -
PENNY MARIE MARKALL,
Robert Stead, for the Respondent
Respondent
HEARD: Pursuant to written submissions
Mr. Justice J.S. Fregeau
Decision On Costs
[1] This is a decision on costs in relation to a family law trial that took place over the course of ten full and five partial days of trial. Costs of the trial were reserved pending receipt of written submissions. Written submissions on costs have now been filed on behalf of both of the parties.
[2] The primary issue to be decided at trial was whether the children should reside primarily with the Applicant or Respondent. This issue required determination because, subsequent to the parties’ separation, the Respondent moved from Dryden to Fort Frances.
[3] The Applicant was successful at trial. I ordered that the domestic contracts the parties had entered into be amended to provide that the children reside primarily with the Applicant in Dryden and that the Respondent have the children with her in Fort Frances for regular, specific periods of time.
The Applicant’s Position
[4] The Applicant submits that he is entitled to costs in accordance with the presumption, found in Family Law Rule 24(1), that a successful party is entitled to costs. The Applicant submits that he is entitled to partial indemnity costs to April 26, 2011 and full recovery costs after that date. This latter submission is based on the fact that the Applicant served an Offer to Settle On April 26, 2011, which he suggests falls within the provisions of Family Law Rule 18(14).
[5] The Applicant also submits that his case was presented efficiently and economically, while that of the Respondent included testimony and witnesses not strictly germane to the issues under consideration. The Applicant suggests that this factor unnecessarily lengthened the trial and increased costs.
[6] The Applicant’s Bill of Costs suggests a billing rate for the Applicant’s counsel of $250.00/hour and a counsel fee for trial days of $2,600.00/day for the full days and $1,360.00 for the partial days. The Applicant’s Bill of Costs indicates total fees charged to the client to be $8,900.00 from the start of the Application to April 26, 2011, the date of the Applicant’s Offer to Settle, based on 35.6 hours at $250.00/hour.
[7] The Applicant submits that his costs from April 26, 2011 to present to be $66,850.00 for fees, $1,911.89 for disbursements and $8,902.64 for HST. These fees were calculated based on 98.2 hours at $250.00/hour, 4.8 hours of travel time at $125.00/hour, 10 full trial days at $2,600.00/day and 5 partial trial days at $1,360.00/day. The Applicant’s Bill of Costs totals $77,664.53.
The Respondent’s Position
[8] The Respondent submits that both the Family Law Rules and the Courts of Justice Act provide courts with discretion to award costs other than in strict accordance with the Rules. The Respondent submits that this is an appropriate case for this court to exercise that discretion and to decline to make a costs award or to award costs in a nominal amount.
[9] The Respondent submits that she has virtually no assets and little or no income. As she resides in Fort Frances and the children reside in Dryden, the Respondent suggests that she will incur costs to travel from one community to the other to attend the children’s school activities, parent/teacher interviews, extracurricular activities, etc. The Respondent suggests that it is necessary for her to incur these costs to maintain her relationship with the children, which is in their best interests. The Respondent suggests that a significant costs award will reduce her ability to spend time with her children.
[10] The Respondent submits that this was not a case where the responding party’s position was without merit and frivolous. The Respondent submits that her claim was meritorious given the facts and background. It is further submitted that this case, like many mobility cases, had to be litigated because settlement was impossible.
[11] The Respondent submits that the trial was unnecessarily lengthened as a result of the Applicant’s tactics, which included a very lengthy cross examination of the Respondent during which her parenting of the children was “put under the microscope”. The Respondent submits that this was shown to have unnecessarily added to trial time and costs because little or no weight was placed on this evidence by the court in reaching a decision on the issues.
[12] The Respondent submits, taking into account all factors and the circumstances of the Respondent, that each party should bear their own costs. In the alternative, the Respondent suggests that a nominal costs award of $5,000.00 to $10,000.00 be made.
Discussion
[13] Family Law Rule 24(1) establishes a presumption that a successful party is entitled to the costs of a case.
[14] Rule 24(11) sets out the factors which must be considered by the court in making a decision on costs:
“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.”
[15] Section 131(1) of the Courts of Justice Act provides the court with a residual discretion on the issue of costs:
“Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.”
[16] Shaw J., in his Decision on Costs in Kershaw v. Kershaw 2012 ONSC 134, in referring to C.A.M. v. D.M., 2003 CanLII 18880 (ON CA), [2003] O.J. No. 3707 (C.A.), found that the Family Law Rules have not completely removed the discretion granted to the Court by s. 131(1) of the Courts of Justice Act. Shaw J. notes that Rule 24(11)(f) allows the court, in setting the amount of costs, to take into account “any other relevant matter.” This provision, read in conjunction with s. 131(1) of the Courts of Justice Act, imparts on the court a discretion to award costs that appear just in the circumstances of a particular case, while giving effect to the Rules.
[17] 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 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.), at p. 302.
[18] In Serra v. Serra (2009), 2009 ONCA 395, 66 R.F.L. (6th) 40 (Ont. C.A.), at p. 42, the Court of Appeal reiterated the fundamental purposes which modern costs rules are designed to foster, as set out in Fong v. Chan (1999), 1999 CanLII 2052 (ON CA), 46 O.R. (3d) 330 (Ont. C.A.), at para. 22:
(1) to partially indemnify successful litigants for the costs of litigation;
(2) to encourage settlement; and
(3) to discourage and sanction inappropriate behaviour.
[19] In Zesta Engineering Ltd. v. Cloutier, (2001) 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.”
[20] The Applicant was the successful party in this litigation. I find that the Order made after trial is as favourable as the Applicant’s Offer to Settle of April 26, 2012. However, in consideration of what I consider to be all the relevant factors and circumstances of this case, I choose to exercise my discretion to depart from the provisions of Rule 18(14).
[21] This was a very difficult and emotionally charged mobility case involving two young children and two competent parents who each love their children very much. As submitted by the Respondent, given the nature of mobility cases, they are tried more often than settled. The outcome of many mobility cases is difficult, if not impossible to predict with any degree of confidence. The positions of both the Applicant and Respondent were reasonable. Based on the evidence heard, each had considerable merit. Any suggestion that the Respondent was unreasonable in taking the matter to trial is without substance. It is for these reasons that I chosen to not apply the provisions of Rule 18(14).
[22] Addressing the provisions of Rule 24(11), the issues were not complex or difficult, but they were of the utmost importance to the parties. In regard to the reasonableness of each party’s behaviour in the conduct of the trial, I find that the importance of the primary issue to the parties impacted the tactical decisions of both. It is understandable that, at trial, each of the Applicant and Defendant chose to “go all in” and call witnesses that were unnecessary and to conduct examinations that were unduly long. I find this to have been done in good faith and in an attempt, on the part of both parties, to leave no stone unturned in their efforts to succeed at trial. It is only with the benefit of hindsight that any blame for an unnecessarily long and costly trial can be attributed to either party. If any blame is to be so attributed, it should be done in equal portions.
[23] I find the financial position and circumstances of the Respondent to be both a relevant and just factor to considered in determining costs. The Respondent is of very modest means. The best interests of the children require that the Respondent exercise regular and liberal access, as ordered. I accept that the Respondent will incur costs to do so. I also accept that the Respondent will want to spend time with the children during occasions and events that necessarily will occur in Dryden. The Respondent will incur travel and accommodation costs in doing so. In considering this factor, I am mindful of the fact that the Applicant has not sought child support from the Respondent.
[24] In all of the circumstances, I order costs in the amount of $15,000.00 to be paid by the Respondent to the Applicant. These costs shall be paid on or before December 31, 2012.
___”original signed by”
The Hon. Mr. Justice J.S. Fregeau
Released: April 19, 2012
COURT FILE NO.: FS-10-4897
DATE: 2012-04-19
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DALLAS SHAE MARKALL,
Applicant
- and –
PENNY MARIE MARKALL,
Respondent
DECISION ON COSTS
Fregeau J.
Released: April 19, 2012
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