ONTARIO
SUPERIOR COURT OF JUSTICE
TORONTO
COURT FILE NO.: FS-08-340704-0000
DATE: 2012/12/03
BETWEE N:
Joel Stevens
Lawrence Thacker, Matthew Lerner, Yashoda Ranganathan and Bryan Smith, for the Applicant
Applicant
- and -
Pamela Stevens
Respondent
- and -
Epstein Cole LLP
Roslyn Tsao
Added Respondents
Stephen Grant, and Gillian P. Kerr, for the Respondent
William Pepall, and Shannon M. Puddister, for Added Respondents
HEARD: July 27, 2012
COST ENDORESMENT
HARPER J.
Issues
[1] Like many of the issues in this case, the issue of costs has a few unique features:
a) What costs, if any, should be paid by Joel to Pamela? Joel concedes Pamela’s entitlement to costs. He disputes the amount of costs to which she is entitled.
b) What costs, if any, should be paid by Joel to the Added Respondents? Joel submits that the Added Respondents did not claim costs and is therefore not entitled to any.
c) Should the Added Respondents pay any costs to Pamela in the event that she does not receive full recovery from Joel? Pamela claims that Ms. Tsao’s mistake was the precipitating factor that started this litigation and she should not be out of pocket for any legal fees and disbursements.
Background
[2] Joel brought an application on July 22, 2008. His claims placed before the court had multiple issues that had to be determined:
a) Whether the Marriage contract should be set aside because:
(i) Pamela lacked capacity to enter into and/or:
(ii) the Marriage Contract is unconscionable; and/or
(iii) there is no consensus ad idem /there was a fundamental mistake.
b) If the entire Marriage Contract is not set aside, whether paragraph 12(a)(i) should be set aside under section 56(4) of the Family Law Act R.S.O. 1990, c. F.3 .
c) In the further alternative, whether the fundamental error at paragraph 12(a)(i) should be rectified.
d) If the Marriage Contract is set aside:
(i) The amount owing pursuant to an equalization of net family property, which includes a determination of:
a) the value of the matrimonial home;
b) whether the Cottage is a matrimonial home; and
c) whether the Chalet is a matrimonial home;
(ii) The amount, if any, Joel owes to Pamela in spousal support arrears;
(iii) The amount, if any, Joel owes to Pamela in child support arrears; and
(iv) Whether the amounts owed by Joel to Pamela in arrears of payments, if any, should be set off against the amount Pamela owes to Joel pursuant to an equalization of the net family property.
e) Whether the Court should make a declaration that Joel is obligated to comply with the Promissory Note, such that Pamela is repaid the money she loaned to the Trust.
[3] Pamela was successful on every issue.
[4] Pamela’s original submissions set out a Bill of Costs for fees and disbursements of $1,031,709.36. That Bill of Costs was adjusted and resulted in Pamela claiming for fees and disbursements the sum of $950,624.47.
[5] The Added Respondents claim costs against Joel. Joel asserts that the Added Respondents did not seek costs in their Answer and Claim. They did not set out in their Answer and Claim that they were seeking costs nor was the costs box in the claim even checked.
[6] I find that the Added Respondents conducted themselves in a manner that made it obvious they were seeking costs. They served and filed an offer to settle on Joel on the 10th day of May 2010. This would not have been necessary if costs were not being claimed. Joel did not accept any offers served on him by either Pamela or the Added Respondents. Pamela accepted the offer of the Added Respondents. I find that Joel had sufficient notice that costs were being sought by the Added party and the lack of a particular pleading was mere inadvertence that did not catch Joel by surprise. Under the circumstances the claim for costs of the added party may proceed.
[7] With respect to Pamela’s claim that the Added Respondents should be responsible for what amounts to “complete indemnification of all of her costs that may not be covered in a cost award against Joel.” I find that there is no jurisdiction given in the rules to allow for such a claim. Even if such a claim could proceed, I find that although Ms. Tsao’s original mistake was the spark that lit the flame of this litigation, the conduct of Joel raged this litigation into the massive fire it became. The Added Respondents acted in a reasonable manner at all times within this litigation and cannot be held responsible for Joel’s bad faith, unreasonable conduct and refusal to accept all reasonable offers by both Pamela and the added party.
The Law and Analysis
[8] The starting point in setting costs in family law matters is Rule 24(1) of the Family Law Rules O.Reg 114/99:
[9] “24(1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.”
[10] Rule 24(8) provides that “If a party has acted in bad faith, the court shall decide costs in a full recovery basis and shall order the other party to pay them immediately.”
[11] Rule 18(14) provides that a party who makes an offer is, unless the court order otherwise, entitled to costs to the date the offer was served and full recovery costs from that date, if certain conditions are met. One of the conditions is:
- The party who made the offer obtains an order that is as favorable as or more favorable than the offer.
[12] Rule 24(10) provides that promptly after each step in the case the court should decide who, if anyone, is entitled to costs and set the amount of costs.
[13] Rule 24(11) sets out the factors which must be considered in awarding costs:
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 signatures of the order;
e) expenses properly paid or payable; and
f) any other relevant matter.
[14] An award of costs is a matter in the discretion of the court by virtue of s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C43 which provides:
Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in the proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid.
(continued exactly as in the source…)
Joel shall pay costs to Pamela in the amount of $950,624.47 - $26,566.77 = $924,057.70
Joel shall Pay Pamela prejudgment interest in the amount of $55,189.04
Joel should pay costs to the Added Party, the total sum of $403,693.03
Justice R. John Harper
Released: December 3, 2012
COURT FILE NO.: FS-08-340704-0000
DATE: 2012/12/04
ONTARIO SUPERIOR COURT OF JUSTICE FAMILY COURT
BETWEE N: Joel Stevens - and - Pamela Stevens - and - Epstein Cole LLP Roslyn Tsao
COST ENDORSEMENT
HARPER J.
Released: December 3, 2012