SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: FS-09-352141
DATE: 20120906

RE: K.S.W

Applicant

– and –

S.W.

Respondent

BEFORE: JENNINGS J.

COUNSEL:
Avra Rosen and Lorna Yates
for the Applicant

Gerald P. Sadvari and Melanie Battaglia
for the Respondent

ENDORSEMENT as to costs

[ 1 ] At the conclusion of my reasons for judgment released May 16, 2012, I invited the parties to make written submissions as to the disposition of costs. I have now had the advantage of those submissions.

[ 2 ] It is clear that the husband’s written offer to settle dated October 4, 2011, was significantly more favourable to the wife on the issues that were tried than was my judgment. Accordingly the husband is presumptively entitled to costs (Family Law Rules 24(1)). He is further entitled to full recovery costs from the date of the offer provided the five conditions in rule 18(14) are met. There is no evidence that the husband did not meet those conditions.

[ 3 ] The husband claims full recovery costs of $792,447.47. Alternatively he asks for substantial indemnity costs of $574,204.72 or partial indemnity costs of $421,255.97. Each claim includes a claim for disbursements and taxes of about $115,000.

[ 4 ] As a result of the judgment, the wife had assets of about $7,600,000 and the husband about $2 million less. To the credit of the parties, over the years between separation and trial they resolved many of the issues existing between them. Prior to trial, they agreed upon values of most of their assets and the division of some of them, which in large part they carried out. They signed a 13 page parenting plan settling the terms of custody and access to their children.

[ 5 ] The result was that what could have been a lengthy, difficult trial was reduced to three days of evidence and one day of argument. The issues were not unduly complicated. With respect to calculating each party’s NFP it was necessary to arrive at a value of two large parcels of real estate, one owned by each, as well as the value of some less significant assets owned at, and acquired during, marriage. The determination of value required an analysis of competing appraisals submitted by the experts retained by each of the parties.

[ 6 ] The other issue was determining the quantum of spousal and child support, including retroactivity of payments. The wife testified and called one witness to give evidence of real estate values. The husband testified and called two witnesses as to real estate values. Levels of past income were agreed as contained in the reports filed of the wife’s financial expert.

[ 7 ] A significant portion of the first day of trial was taken up by a contested motion brought by the husband for a sealing order, which was resolved in his favour.

[ 8 ] Perhaps the most contentious issue tried was the wife’s request that I impute a level of income to the husband that he had enjoyed in the years prior to the ending of his employment not long before trial. The evidence was that because of a non-compete clause he would be unable to obtain employment in his field until October 2012. Based upon the evidence I heard I declined to impute income to him as the wife had requested.

[ 9 ] The obvious difficulty confronting me is to assess the very large costs claims in light of what was at the end a relatively brief and uncomplicated trial.

[ 10 ] The husband supported his claim by filing 56 pages of dockets stretching back, I presume, to the opening of the file in October 2007. I had two problems with the dockets. First, as I read them, considerable time was claimed for steps taken before judges of this court in March 2010, June 2010, December 2010, May 2011, June 2011 and October 2011, when costs were either fixed against the husband or neither awarded nor reserved. I may not take that time into account at this stage ( Islam v. Rahman 41 R.F.L. (6) 10).

[ 11 ] Second, it is not possible for me to split out time charged to the file that had to do with the issues of custody and access that resulted in the parenting agreement to which I have referred. The agreement did not deal with or reserve costs.

[ 12 ] The husband’s lead counsel billed his time over the course of the file at rates varying between $700 to $800 per hour. I am aware that a counsel fee at that very high level has been allowed on a substantial indemnity basis to senior counsel in complex matters considering significant issues or large sums. In this case counsel’s experience entitles him to seek the hourly rate claimed. Although the sums claimed by the wife were significant it is the complexity of the issues that is concerning.

[ 13 ] Associates’ time is billed as follows:

i) 2,008 Call - $545 per hour
ii) 2,005 Call - $550 per hour
iii) 2,011 Call - $400 per hour
iv) Students - $265 per hour
v) Law clerks - $235-$250 per hour

In my opinion those rates are excessive.

[ 14 ] I am also aware that in some Family Law cases very significant costs awards have been made. See:

Pakka v. Nygard , [2004] O.J. No. 2121

LeVan v. LeVan (2006), R.F.L. (6th) 291

Debora v. Debora (2005), 2005 7671 (ON SC) , 14 R.F.L. ( 6 th ) 245.

The factual situations in those cases which drove the amounts awarded for costs cannot in any way be compared to the case I tried.

[ 15 ] What I have to do is to determine a fair and reasonable amount for the husband to receive for costs on a substantial indemnity scale for his success in a relatively simple and brief family law trial in which it ought to have been readily apparent that guideline child support that was awarded would undoubtedly be reviewed within a year of trial when the husband could return to his field of employment.

[ 16 ] The overriding principle to be applied is that found in Boucher et al. v. Public Accountants Council 2004 14579 (ON CA) , 71 O.R. (3d) 291. The award must be fair and reasonable in the circumstances of the case and in accordance with the reasonable expectation of the parties as to the cost risks to be incurred if the case is to be tried.

[ 17 ] In arriving at an amount I have considered the following cases in addition to those to which I have already referred: Farrar v. Farrar , [2002] O.J. No. 152 ; Zeleny v. Zeleny (2004), 2004 5094 (ON SC) , 69 O.R. (3d) 287; Waywell v. Waywell (2004), 2004 7577 (ON SC) , 11 R.F.L. (6 th ) 167; Hackett v. Leung (2005), 2005 42254 (ON SC) , 22 R.F.L. (6 th ) 314; Delellis v. Delellis , 2005 36447 (ON SC) , [2005] O.J. No. 4345; Patterson v. Patterson (2007), 2007 26288 (ON SC) , 38 R.F.L. (6 th ) 434; C.S. v. M.S. (2007) 2007 20279 (ON SC) , 38 R.F.L. (6 th ) 315; Khan v. Yakub (2008), 2008 55141 (ON SC) , 60 R.F.L. (6th) 219 and Elgner v. Elgner , [2010] O.J. No. 1077 .

[ 18 ] In my view a fair and reasonable award for the four day trial, on a substantial indemnity basis, in the circumstances pertaining in this case would be $265,000 inclusive of disbursements and taxes.

[ 19 ] I understand from the submissions that the wife has listed her home for sale at $6.9 million, $1.5 million more than Mr. Lebow’s date of trial valuation. If she delivers to the husband’s solicitors within 15 days of the release of this endorsement a copy of her irrevocable direction to the solicitors acting for her on the sale of her home, that they are to pay the costs awarded in this endorsement forthwith upon closing, from the sale proceeds, to the husband’s solicitors, costs awarded should be payable upon the closing of the sale or on January 31, 2013, whichever shall first occur. In default of the delivery of such an undertaking the costs are payable forthwith.

JENNINGS J.

RELEASED: September 6, 2012