Slater v. Slater, 2012 ONSC 5860

NEWMARKET COURT FILE NO.: FC-15131-01
DATE: 2012-10-16

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Gregory Kent Slater, Applicant

AND:

Laurie Slater, Respondent

BEFORE: McGee J.

COUNSEL: Both parties, self-represented

HEARD: May 22, 23, 24, 25, and 28, 2012

costs endorsement

Introduction

[ 1 ] On August 14, 2012 I released my decision for this five day trial. Upon finding a material change in circumstances I varied the amount of child support for the period of May 2006 to present after determining the father’s income for support purposes during respective periods. I also made certain findings and orders with respect to competing claims for the proportionate sharing of proposed section 7 expenses per the Federal Child Support Guidelines.

[ 2 ] The father was successful in his variation of support after May 1, 2006. He was not successful in varying his support obligations for prior period of May 2005 to April 2006.

[ 3 ] The mother sought to impute to the father an income of $300,000 with resulting table support, and in the alternative maintain an imputed income of $125,000. The mother was not successful at trial.

[ 4 ] The decision provided for costs submissions as follows:

a. applicant father 20 days to file submissions,
b. respondent mother 20 days thereafter for her response,
c. reply by father within 10 days of response.

Submissions were to be limited to three pages, exclusive of Offers to Settle and Bills of Costs.

[ 5 ] The submission, response and reply were received on a timely basis. Each party subsequently wrote to me with further argument and allegations against the other party which I am obliged to disregard for the purposes of determining costs.

[ 6 ] I have also disregarded the lengthy portions of materials in each of the parties’ respective materials which seek to relitigate the issues determined at trial and/or seek to raise new issues. Finally, I must convey to the parties that it is not the role of this court to recalculate monies received to date by the FRO – that is the role of the enforcement agency.

[ 7 ] The applicant father (AF) seeks a partial recovery of fees in the amount of $45,000 on a totality of costs in the amount of $57,195.82; both amounts being inclusive of H.S.T. Of this latter amount, approximately $26,200 was allocated directly to expert and witness fees.

THE LAW AND ANALAYIS

[ 8 ] It is well settled that self represented litigants may recover costs if they have devoted the time and effort in doing the work ordinarily completed by counsel, and they can establish that they have suffered a lost opportunity cost by foregoing remunerative activities as a result: Fong v. Chan (1999) 1999 2052 (ON CA) , 46 O.R. (3 rd ) 330 OCA . The focus of such inquiries must be on the value of the time spent to the litigant who performed the work, one measure being the income that the litigant could otherwise have earned: Jahn-Cartwright 2010 ONSC 2263 () , 2010 CarswellOnt 5657 (Ont S.C.J.).

[ 9 ] The Ontario Court of Appeal in Serra v. Serra , 2009 ONCA 395 () , 2009 ONCA 395, 66 R.F.L. (6th) 40, [2009] O.J. No. 1905, 2009 Carswell­Ont 2475 (Ont. C.A.), confirms that modern costs rules are designed to foster three fundamental purposes, namely to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and to sanction inappropriate behaviour.

[ 10 ] Subrule 24(1) of the Family Law Rules , O. Reg. 114/99, creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs. See Sims-Howarth v. Bilcliffe , 2000 22584 (ON SC) , 2000 22584, 6 R.F.L. (5th) 430, [2000] O.J. No. 330, 2000 Cars­well­Ont 299 (Ont. Fam. Ct.). To determine whether a party has been successful, the court should take into account how the order compares to any settlement offers that were made. See Lawson v. Lawson , 2008 23496 (ON SC) , 2008 23496, 167 A.C.W.S. (3d) 723, [2008] W.D.F.L. 3600, [2008] O.J. No. 1978, 2008 Cars­well­Ont 2819 (Ont. Fam. Ct.). The position each party took at trial should also be examined.

[ 11 ] The first Offer to Settle by the AF relevant to this trial is dated April 27, 2012. There are earlier offers, but they are intertwined with the parenting issues. The AF’s April 27, 2012 offer provides that no costs are to be paid if the respondent mother (RM) accepts by May 7, 2012 that all arrears are terminated as of April 30, 2012 and thereafter child support would be paid in the amount of $700 being the table amount for one child on income of $77,000.

[ 12 ] The ongoing amount offered is not significantly different that that ordered at trial: $724 per month from January 1, 2012 forward based on annual income of $80,000.

[ 13 ] The AF made a further offer dated May 23, 2012 which sets arrears as of April 30, 2012 at $15,000 with support from May 1, 2012 forward set at $801 per month being the table amount on income of $90,000. The applicant further includes a term for contribution of $2,500 for 2012 summer camp and requires the RM to ensure that Corben’s medications are covered under a Trillium designation.

[ 14 ] The AF has calculated the revised arrears resulting from my August 14, 2012 decision: $13,652 inclusive of amounts paid over the period of June 2010 to April 2012. This amount is disputed by the RM. I have reviewed at some length her rather confusing manner of calculating the revised arrears and am satisfied that her resulting figure, less her $5,000 contribution to the Bar Mitzvah expenses is less than the May 23, 2012 offer of $15,000.

[ 15 ] When reviewing the May 25, 2012 offer for $15,000; ongoing support at $801 ($724 ordered) and $2,500 for summer camp (none ordered) the AF’s offer is clearly more advantageous to the RM than her result at trial.

[ 16 ] The RM made two contemporaneous offers each dated May 25, 2012. The first seeks a lump sum payment of $81,680 inclusive of arrears and future table child support. The lump sum is not severable from terms for life insurance, summer camp, an Orthodox Ghet [1] and post secondary education. The second offer sets arrears at $30,000, section 7 expenses at $15,000 and ongoing support from May 1, 2012 at $1,076 being the table amount on income of $125,000. Again, these terms are non severable with an order for costs of $10,000, an Orthodox Ghet, post secondary expenses and a further section 7 expense.

[ 17 ] The May 25 2012 offers are difficult to assess as they lump sum future periodic payments. [2] At no time during the trial did the RM seek a lump sum of child support for future obligations. When the calculation of the lump sum is assessed, it is clear that the RM’s offers are not more favourable to the AF than his trial result.

[ 18 ] Neither of the May 25, 2012 offers is signed by the RM, but its receipt is acknowledged by the AF. An earlier offer of September 2011 was made by the RM for arrears at $60,000 and ongoing support at $450. It is not clear whether the May 2012 offers revoked the September 2011 offer. In any event, the arrears payment of $60,000 would not have been more advantageous to the AF than the result at trial.

[ 19 ] I find that the AF’s May 23, 2012 offer is more favourable that the result at trial and thus satisfies the language within section 18(14) of the Family Law Rules .

COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER

18 (14) A party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:

1. If the offer relates to a motion, it is made at least one day before the motion date.
2. If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
3. The offer does not expire and is not withdrawn before the hearing starts.
4. The offer is not accepted.
5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer. O. Reg. 114/99, r. 18 (14) .

COSTS CONSEQUENCES — BURDEN OF PROOF

(15) The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14). O. Reg. 114/99, r. 18 (15) .

COSTS — DISCRETION OF COURT

(16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply. O. Reg. 114/99, r. 18 (16) .

[ 20 ] Overall, the AF was the more successful party at trial. He will be entitled to his costs. Were this to be the end of the inquiry, costs would be awarded in the full recovery amount of $57,196.

[ 21 ] However, I must then consider the factors set out in subrule 24(11) of the Rules which reads as follows:

(11) Factors in 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.

[ 22 ] Subrule 24(5) provides criteria for determining the reasonableness of a party’s behaviour in a case (a factor in clause 24(11) ( b ) above). It reads as follows:

(5) Decision on reasonableness.— In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,

( a )
the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;

( b )
the reasonableness of any offer the party made; and

( c )
any offer the party withdrew or failed to accept.

[ 23 ] This case was neither complex nor difficult, although it was made so by the manner of the parties’ conflicted relationship. Its determination was important for the parties.

[ 24 ] The AF’s Bill of Costs derives in large measure from the cost of his expert’s assessment of both his and the RM’s income. Mr. Hame’s evidence was critical at trial, and was necessary given the nature of the parties’ incomes and the litigation positions of the parties. The AF should not be required to bear the costs of those expert’s fees unilaterally.

[ 25 ] The balance of the AF’s Bill of Costs results from purchases of “bundled” services: document preparation and a lawyer’s attendance at the trial scheduling court. Only $7,800 of the total fees is attributed to the AF’s preparation and attendance time. This amount is reasonable given the hours involved and the monies that the AF could otherwise be earning. I give no effect to the amount of $300 for the costs of a transcript which was not used at trial.

[ 26 ] In summary I find none of the claimed expert’s fees, preparation time or the bundled services to be excessive. As requested in the RM’s response to the costs submissions, I have considered the direction in Boucher et al. v. Public Accountants Council for the Province of Ontario , 2004 14579 (ON CA) , and 2004 14579, that the assessment of costs is “not simply a mechanical exercise.”

[ 27 ] In Delellis v Delellis and Delellis , Justice David R. Aston wrote at paragraph [9]:

[9] …However, recent cases under the Rules of Civil Procedure , R.R.O. 1990, Reg. 194, as amended, have begun to de-emphasize the traditional reliance upon “hours spent times hourly rates” when fixing costs. . . . Costs must be proportional to the amount in issue and the outcome. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant. . . .

[ 28 ] The question of proportionality looms large in this Motion to Change. As referenced throughout my trial decision, the entire proceeding was well out of proportion to the issues involved. For example, the AF took an entire day in his direct evidence, only a small aspect of which was relevant to the issue of child support. Much of his testimony, as well as his orientation at trial was an accounting of past grievances with the mother, his personal disappointments and an exploration of his parenting distress.

[ 29 ] RM’s asserts that the AF’s conduct throughout the proceeding was unreasonable, and in bad faith. I will deal first with her claim that the AF has acted in bad faith. Justice Perkins in S.(C.) v. S.(C.) , 2007 20279 (ON SC) , [2007] O.J. No. 2164 (Ont.S.C.J.) at paragraph 17 states:

In order to come within the meaning of bad faith in Rule 24(8), behaviour must be shown to be carried out with intent to inflict financial or emotional harm on the other party or persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court. A misguided but genuine intent to achieve the ostensible goal of the activity, without proof of intent to inflict harm, to conceal relevant information or to deceive, saves the activity from being found to be in bad faith.

[ 30 ] In my view, the AF at no time disguised his intentions or attempted to deceive. Rather he formed a false sense of victimization which in his mind, justified a refusal to financially support his son. Although ill intentioned and wrongheaded, it does not reach the necessary criteria for a finding of bad faith.

[ 31 ] I do find that the AF acted unreasonably as contemplated in Rule 24(11.) From September 2006 to May 2010 the AF failed to pay any child support. This period would have continued but for aggressive enforcement by the Family Responsibility Office, whose measures included the suspension of the AF’s licence. Despite the AF’s ultimate success in moderating his child support obligation to reflect changed circumstances, there was no basis for the AF to refuse to pay any child support during this period.

[ 32 ] I therefore reduce the costs claimed to reflect what would have been proportionally responsible for a variation of child support and special expenses in these circumstances, and to reflect judicial sanction for the AF’s unreasonable conduct in failing to pay any child support for a period of 44 months.

[ 33 ] I balance against these reductions the extreme trial position of the RM in seeking an imputation of income of $300,000. Much trial effort and time was exhausted in this direction, including the calling of a witness to give expert evidence for which no notice or report had been served.

[ 34 ] In consideration of all these factors, I award the AF costs of $25,000 payable forthwith. This amount recognizes the importance of the expert’s fees paid by the AF which were necessary to the determination of both his and the RM’s income; the excessive expenses incurred by both parties in unduly aggressive litigation and the AF’s unreasonable conduct in refusing to pay any child support from September 2006 to May 2010.

Justice H. McGee

Date Released: October 16, 2012

[1] Not claimed in the pleadings.

[2] Future child support is not an obligation that can be easily determined by a lump sum. A lump sum assumes a release for future obligation- which is not available with respect to child support which is a child’s claim, not a parent’s claim. Lump sums can be fashioned as a prepayment, always subject to variation – but this was not the manner in which the offers were expressed.