SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 34242/11
DATE: 20121003

RE: Sherry D. Durrant v. Trent R. Barnes

BEFORE: Fragomeni J.

COUNSEL:
Elliot Birnboim, for the Applicant
Jennifer A. Krob, for the Respondent

HEARD: August 8, 2012

E N D O R S E M E N T re C O S T S

[ 1 ] The Applicant wife seeks full-indemnity costs of the motion in the all-inclusive sum of $15,780.00. Mr. Birnboim sets out his hourly rate at $525.00. He was called to the bar in 1992. The Bill of Costs filed indicates total hours spent on the motion at 26.6 hours.

[ 2 ] The wife sought the following relief at the motion:

1. Exclusive possession of the matrimonial home;

2. That the home be sold and the husband’s consent dispensed with;

3. That the husband’s pleadings be struck.

[ 3 ] The wife was successful on 1 and 2. With respect to 3 the pleadings were not struck but stayed to give the husband an opportunity to cure his default.

[ 4 ] In addition to these orders, the following additional orders were made:

• That the husband pay forthwith the cost order of Justice Murray dated July 15, 2012 in the amount of $1,500;

• That the husband pay forthwith $2,500 costs for the proposed Assessor Jackie Van Betlehem;

• That the husband comply with all remaining disclosure issues.

[ 5 ] The husband submits that there was divided success at the motion and therefore there should be no order as to costs. In the alternative the husband submits that if the Court determines that the parties were not equally successful, then the court should decline to award any costs for the issues on which success was divided and award costs on a partial indemnity basis for the issues a party succeeded on.

[ 6 ] The husband sets out his costs for the motion at $17,324.05.

[ 7 ] The wife was successful on the issues of exclusive possession of the home and dispensing with the husband’s consent for the sale of the home. The husband was successful with respect to the issue relating to the striking of his pleadings. As set out by the husband the wife conceded at the opening of the motion that an appropriate order would be a stay. Not much time was spent on that issue although it was a serious issue for the husband. Most of the time at the motion was spent on the two issues relating to the home.

[ 8 ] I am satisfied therefore, on balance that the wife is entitled to her costs of the motion.

[ 9 ] The order of Justice Gray that the husband was to pay $2,500 toward the assessment was made on April 26, 2012. These funds should have been paid by the husband and that issue should not have been before me on August 8, 2012. As well the matters relating to disclosure should have been resolved. Thankfully and as I indicated in my August 13, 2012 endorsement, since new counsel has been retained, the husband has been fulfilling his disclosure obligations and has complied with most of the requests.

[ 10 ] With respect to the issues relating to the home, at paragraph 17 of my endorsement dated August 13, 2012 I note the following:

At paragraph 39 of his August 3, 2012 Affidavit, the husband acknowledges that his position is and has always been that the matrimonial home should be sold. Although he does not object to the sale of the home he objects to the sale of the home immediately as a result of his dire financial circumstances. As I have already indicated, I do not agree with the husband’s characterization of his financial situation.

[ 11 ] In these circumstances the motion relating to the sale of the home was not necessary. On July 25, 2012 the wife made an offer to resolve the issues as follows:

1. Order to go in accordance with para. 2 and 3 of Applicant’s Notice of Motion, July 17/12. Respondent to vacate immediately.

2. Any proceeds of sale of the matrimonial home shall be paid to Elliot Birnboim (Chitiz Pathak LLP) in trust pending further agreement or court order.

3. As an inducement to accept this offer, the Applicant shall pay the Respondent the sum of $7,500.00 forthwith as a without prejudice payment which shall be a credit against any of the Respondent’s claims. This paragraph shall be confidential and not disclosed to the court except as a credit to any future order in favour of the Respondent. This payment shall otherwise be without prejudice to any of the claims of either party herein.

4. Relief sought in para 1 of Notice of Motion, July 17/12 shall be adjourned to August 8, 2012 peremptory on the Respondent, costs adjourned to that date as well.

[ 12 ] Rule 24(1) of the Family Law Rules states:

24. (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal. O. Reg. 114/99, r. 24 (1) .

[ 13 ] Rule 24(6) states:

(6) If success in a step in a case is divided, the court may apportion costs as appropriate. O. Reg. 114/99, r. 24 (6) .

[ 14 ] Rule 24(11) states:

(11) 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. O. Reg. 114/99, r. 24 (11) .

[ 15 ] Rule 57.01(1)(o.b.) of the Rules of Civil Procedure states:

Factors in Discretion

57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed.

[ 16 ] In Boucher v. Public Accountants Council for the Province of Ontario (June 22, 2004) a decision of Armstrong J.A. released June 22, 2004, Justice Armstrong noted the following at para. 26:

[26] It is important to bear in mind that rule 57.01(3), which established the costs grid, provides:

When the court awards costs, it shall fix them in accordance with subrule (1) and the Tariffs.

Subrule (1) lists a broad range of factors that the court may consider in exercising its discretion to award costs under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C. 43 . The express language of rule 57.01(3) makes it clear that the fixing of costs is not simply a mechanical exercise. In particular, the rule makes clear that the fixing of costs does not begin and end with a calculation of hours times rates. The introduction of a costs grid was not meant to produce that result, but rather to signal that this is one factor in the assessment process, together with the other factors in rule 57.01. Overall, as this court has said, the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.

[ 17 ] In Davies v. Clarington (Municipality) 2009 ONCA 722 , 2009 O.N.C.A. 722 Epstein, J.A. sets out the following at paras. 51 and 52:

In Andersen v. St. Jude Medical Inc. (2006), 2006 85158 (ON SCDC) , 264 D.L.R. (4th) 557 , the Divisional Court set out several principles that must be considered when awarding costs:

1. The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in rule 57.01(1): Boucher , Moon, and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA) , 75 O.R. (3d) 638 (C.A.) .

2. A consideration of experience, rates charged and hours spent is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher . The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier (2002), 119 A.C.W.S. (3d) 341 (Ont. C.A.) , at para. 4 .

3. The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: rule 57.01(1)(0.b).

4. The court should seek to avoid inconsistency with comparable awards in other cases. "Like cases, [if they can be found], should conclude with like substantive results": Murano v. Bank of Montreal (1998), 1998 5633 (ON CA) , 41 O.R. (3d) 222 (C.A.) , at p. 249 .

5. The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher .

As can be seen, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of the costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant. In Boucher, this court emphasized the importance of fixing costs in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding at para. 37, where Armstrong J.A. said "[t]he failure to refer, in assessing costs, to the overriding principle of reasonableness, can produce a result that is contrary to the fundamental objective of access to justice."

[ 18 ] I am satisfied in all of the circumstances of this case guided by the legal principles set out herein that a fair and reasonable cost award in favour of the wife is an all-inclusive sum of $10,000.00. Clearly the wife was more successful at the motion than the husband. The husband’s conduct necessitated the motion being brought by the wife. The husband had failed to abide by the various court orders including orders for disclosure and orders for payment of costs. With respect to the payment of any cost order made relating to this motion the wife sets out the following at paragraph 12 of her costs submissions:

The Respondent would argue that he is unable to pay the full indemnity costs which necessarily flow from this conduct. While a court has jurisdiction to consider the financial circumstances of the parties ( see MacDonald v. Magel , 2003 18880 (ON CA) ), this assertion is fundamentally problematic:

a) The principle may bear consideration where a party has otherwise been unsuccessful and behaves reasonably. In this case, the conduct has been the antipode of reasonableness.

b) The Respondent has failed to make the requisite disclosure to support his true financial picture and there is ample evidence (and indeed, judicial comment) that the Respondent’s unemployment appears deliberate.

c) The Respondent has already misappropriated extensively from the Respondent including stealing her tax refund of $6,400 in May 2012 as well as, at the outset, charging her credit card $5,000 to pay his first lawyer – he is now on his third.

d) The Respondent’s conduct includes breaches of court orders, including costs orders. The costs orders to date, which have been moderate, have been ineffective in achieving the “behaviour modification” intended by Fong, supra . Costs should be used to encourage parties to settle matters and punish those who, unreasonably, do not. Parsons v. Parsons (No. 2), 2002 45521 (ON SC) .

[ 19 ] In Parsons v. Parsons (No. 2) Justice Grant A. Campbell sets out the following at paras. 12, 13 and 14:

A litigant’s limited financial health may not be used as a shield against any liability for costs when that litigant has behaved unreasonably. It may be relevant to the issue of the quantum or scale of costs, but not to another party’s entitlement thereto. See Panny v. Gifford and Gifford 1997 9579 (ON CJ) , (1997), 31 R.F.L. (4th) 440 , 1997 9579, [1997] O.J. No. 2241 , 1997 Carswell­Ont 2028 (Ont. Prov. Div.), per Regional Senior Provincial Judge Louise L. Gauthier.

However, to some degree, the court should take into consideration the indirect impact on the child, of any sizeable costs order, such as is being sought by the applicants.

On the other hand, when the respondents have acted unreasonably, the applicants should not have to financially “pick-up” or absorb the result of those respondents’ impulsive and punitive decisions. While the court recognizes that costs orders may “fan the fires”, I interpret the rules as recognizing that there must be consequences for unreasonableness. There is an element of behaviour modification to a costs order in that it encourages a change in attitude from a “litigate with impunity” mindset.

[ 20 ] Order to issue:

That the husband pay to the wife her costs of the motion fixed in the all-inclusive sum of $10,000.00.

Fragomeni J.

DATE: October 3, 2012

COURT FILE NO.: 34242/11
DATE: 20121003

SUPERIOR COURT OF JUSTICE - ONTARIO RE: Sherry D. Durrant v. Trent R. Barnes BEFORE: Fragomeni J. COUNSEL: Elliot Birnboim, for the Applicant Jennifer A. Krob, for the Respondent ENDORSEMENT re COSTS Fragomeni J.

DATE: October 3, 2012