SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 02-FP-274082 0001

DATE: 20130207

RE: LILIANE MISZTAL, Applicant

• and -

JERRY KARPYNCZYK, Respondent

BEFORE: Justice S. M. Stevenson

COUNSEL:
Liliane Misztal, Appearing in Person
Catherine Hibberd, for the Respondent

DATES HEARD: September 11, 12, 13, 14 and 19, 2012

ENDORSEMENT AS TO COSTS

[1] In my Reasons for Decision dated November 20, 2012, I urged the parties to agree on costs but if they were unable to do so, I asked that they provide me with their written submissions.

[2] The applicant requests that her costs be fixed by the Court and she has submitted a Bill of Costs claiming disbursement costs of $6,239.29.

[3] The respondent seeks costs as set out in his Bill of Costs, on a partial indemnity scale from the commencement of the proceedings through to August 30, 2012, in the amount of $23,675.00, plus HST of $3,077.75 and on a substantial indemnity basis thereafter of $43,950.00, plus HST of $5,713.50 for a total of $67,625.00, plus HST of $8,791.25 and disbursements of $10,680.15, inclusive of HST. The respondent also indicates that he incurred additional legal fees from previous counsel in the amount of $10,787.89.

[4] The issue of costs in a family law proceeding is determined by Rules 18 and 24 of the Family Law Rules (O. Reg. 114/99, as. am.).

Success

[5] Under Rule 24(1) of the Family Law Rules, the successful party is presumed to be entitled to recover costs. The applicant submits that she has been substantially successful in that spousal support was increased retroactively to April 1, 2010, spousal support was not time limited, a cost-of-living adjustment was granted, the Court did not find that the parties' son John was a dependent as advanced by the respondent, and none of the requests of the respondent were granted as set out in his Response to Motion to Change, including the request to terminate or reduce support.

[6] In contrast to this, the respondent submits that he has been substantially successful. He submits that there were nine heads of relief sought by the applicant and only three were granted. He acknowledges that spousal support was increased to $1,950 per month effective April 1, 2010, a cost-of-living adjustment was ordered and medical/dental coverage was ordered to be provided by the respondent for the applicant. However, he submits that all of the applicant's requests dealing with a variation of the parties' separation agreement were dismissed, as were her requests for life insurance coverage, reimbursement for her education expenses, and an order that the Ryerson pension plan be bound to fulfill the terms of the separation agreement regarding pension and releases.

[7] The respondent further argues that the Court extinguished the arrears of MacDonald J. that had accumulated pursuant to her order of June 28, 2011 and that he was given credit for any payments he had already made which effectively neutralized MacDonald J.'s order.

[8] I find that there was divided success at trial. The majority of the time and evidence focused on the issue of variation of spousal support, the retroactivity of any order, whether there should be a cost-of-living adjustment, the determination of the parties' incomes, and the issue of the dependency of the parties' son John and how this would affect the payment of spousal support. The applicant was successful in having the spousal support varied and increased and she was partially successful with respect to the issue of retroactivity as the order was made retroactive to April 1, 2010, but it was not made retroactive to October 2008 as sought by the applicant. The applicant was also successful in her defence of the claim that John was still a dependent.

[9] The respondent was successful in that the claims of the applicant for life insurance coverage, a contribution by the respondent to the applicant's education expenses, her claims that the Ryerson pension plan be bound to fulfill the terms of the separation agreement regarding pensions and releases, as well as a variation in the separation agreement with respect to support releases were dismissed.

Offers to Settle

i) The Applicant's Offers

[10] The applicant made a number of offers to settle, one being July 8, 2011 where the offer was for $3,000 per month in spousal support commencing October 1, 2008 with no time limit. The offer included a cost-of-living adjustment and the respondent's estate and all assets would be bound by the spousal support order. The respondent would provide medical/dental coverage and his estate and assets would be bound to continue to pay for the applicant's medical, extended health and dental expenses in the event of the respondent's death. The offer included a life insurance policy of $500,000 and other relief with respect to a life insurance policy. The separation agreement dated March 20, 2003 was to be amended to delete any releases relating to spousal support.

[11] The applicant also made an offer to settle dated September 4, 2012, for spousal support in the amount of $2,850 per month commencing March 1, 2010 on an unlimited basis as well as a cost-of-living adjustment. There were similar provisions with respect to binding the respondent's estate; however, the life insurance policy value sought was $300,000. Medical, dental and extended health coverage was included along with the same provisions with respect to the parties' separation agreement. Further, the respondent was to pay for all credit and CRA interest charges incurred by the applicant during the proceeding.

[12] Another offer to settle was made by the applicant dated September 6, 2012, for $2,700 per month support commencing December 1, 2010. The offer imputed an income to the respondent in the amount of $20,000. In the alternative, the offer was for periodic spousal support in the amount of $2,350 commencing December 1, 2010 in addition to a lump sum payment of $35,000 tax-free to the applicant. The support was to be indefinite and there was to be a cost-of-living adjustment. The offer included medical and dental benefits and life insurance in the amount of $300,000 along with other estate provisions. The offer also included a provision for an order ensuring that the Ryerson University pension plan would fulfill the terms of the order for spousal support and medical and dental benefits in the event of the respondent's death.

ii) The Respondent's Offers

[13] The respondent made two offers, including a first offer dated December 9, 2010. In that offer, the respondent would pay to the applicant the sum of $2,000 per month for spousal support commencing December 1, 2010 and he would maintain the applicant as the named beneficiary on his extended health benefit plan available to him through his employment.

[14] In the respondent's second offer, dated August 30, 2012, the respondent would pay $2,350 per month for spousal support commencing September 1, 2012 and he would maintain the applicant as the named beneficiary on his extended health benefit plan available to him through his employment. Support could be varied in the event of a material change in circumstances, which change was to include the respondent's retirement.

[15] Upon reviewing the offers to settle, I note that the first offer made by the respondent was similar to the order made at trial with respect to the quantum of spousal support in that spousal support at trial was ordered in the amount of $1,950 per month whereas the offer was for $2,000 per month. The commencement date of the offer was December 1, 2010 whereas the order obtained at trial was for spousal support to commence as of April 1, 2010. The respondent was also to maintain extended health coverage for the applicant which he agreed to do at trial. I note that there was no cost-of-living adjustment which is a significant difference from the order.

[16] In the respondent's August 30, 2012 offer, the quantum of support was in excess of what was ordered at trial; however, there was no cost-of-living provision.

[17] The major difference is that the offers did not include a cost-of-living adjustment which would be a very significant omission from the applicant's perspective, as the previous judgment of Wright J. did not include such a provision, and this was an important issue in the Applicant's case at trial.

[18] Rule 18 deals with Offers to Settle, which must be in writing and signed by both the party and the party's lawyer. Rule 18(14) describes the cost consequences of failing to accept an offer as follows:

COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER

(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).

[19] I find that the full recovery provisions under Rule 18(14) are not applicable as neither party's offers fulfilled the criteria set out in Rule 18(14) 5. The respondent's last offer applicable at trial, included a fixed level of support whereas the order included a cost-of-living adjustment. Although one cannot predict the changes in the cost-of-living, even assuming a modest annual percentage increase and taking into consideration that the support order is not time limited but subject to a material change in circumstances, the annual cost-of-living increases ordered over time will likely result in support payments exceeding $2,350 per month. Additionally, the order was made retroactive to April 1, 2010 and the order did not stipulate that a material change would automatically include the respondent's retirement. The applicant's last offer was for $2,700 per month, commencing December 1, 2010 or alternatively, for $2,350 per month in addition to a lump sum payment of $35,000 plus cost-of-living adjustment, life insurance and estate provisions, which is not similar to the order made. However, both parties' offers are still a relevant consideration under Rule 18(16) which states: "When the court exercises its discretion over costs, it may take into account any written offers to settle, the date it was made and its terms, even if subrule (4) does not apply."

[20] I must also consider the factors set out in s. 24(11) in setting the amount of costs as follows:

The Importance, Complexity or Difficulty of the Issues

[21] The most significant issue at trial was the variation of spousal support. Clearly the issue of spousal support was extremely important to both parties and involved other issues such as the determination of the parties' incomes and imputing income to the applicant, as well as a determination as to whether John was a dependent. These issues made the trial somewhat more complex as did the applicant's assertion that her medical difficulties prevented her from working. The issue concerning whether the applicant could use her medical notes and records filed also increased the complexity of the trial and a separate motion had to be brought by the respondent. This is despite the fact that the applicant, as per the endorsement of Penny J., was given specific timelines within which to file her expert reports.

The Reasonableness or Unreasonableness of Each Party's Behaviour in the Case

[22] The applicant submits that the lack of disclosure by the respondent created delay as there were refusals to provide documents validating John's college attendance, a failure to provide proper transcripts for John and proof of who paid the tuition for John's education. It is clear that this documentation should have been provided as the respondent was claiming that John was a dependent and that he had been the sole supporter of John throughout John's dependency. This information should have been provided in a timely fashion; however, I do not have any information as to why the applicant did not bring a proper motion to obtain this information.

[23] The respondent argues that the applicant was seeking other substantial relief which resulted in unnecessary costs being incurred by the respondent. The respondent, as indicated, submits that this other relief was dismissed by the Court. As a result, the respondent submits that the applicant increased the complexity and duration of the matter. The respondent attributes the length of the matter to a combination of the applicant's aggressive litigation strategy as a "myriad of relief" was sought and the applicant's failure to submit proper evidence on the medical issues. The respondent also submits that there were nine court appearances prior to trial and these costs, aside from the motion before MacDonald J. on December 14, 2010, were adjourned to the trial judge.

[24] I do not have enough information before me to conclude that any delay of the proceedings was caused by either party. I do acknowledge the respondent's submissions that the trial was adjourned at the second Trial Management Conference held before Penny J. on February 15, 2012 as the applicant had delivered documents just prior to the Trial Management Conference and advised the Court that her Affidavit evidence-in-chief was incomplete. I also note Mesbur J.'s endorsement that the admissibility and use of numerous documents in the applicant's document brief was raised by the respondent on September 5, 2012.

[25] I do find that some of the relief sought by the applicant, which was dismissed at trial, most likely added additional costs to the litigation as the respondent had to respond to the claims. However, I cannot conclude that the other relief sought by the applicant significantly increased the respondent's costs. I note that these issues did not take up a significant amount of time at trial.

The Lawyer's Rates

[26] I consider the rates of Ms. Hibberd, counsel for the respondent, of $250 per hour on a partial indemnity basis and $375 per hour on a substantial indemnity basis entirely reasonable. She was called to the bar in 1996 and has extensive experience.

The Time Properly Spent on the Case

[27] I do find that the hours attributed to preparation for trial by Ms. Hibberd to be somewhat excessive as 117.2 hours were spent from August 30, 2012 to September 19, 2012 (approximately 21 days) for a trial short in duration. In comparison, the total time spent from November 3, 2010 to August 29, 2012, (approximately 22 months) was 94.7 hours.

Expenses Properly Paid or Payable

[28] I have reviewed the disbursements claimed by the applicant and without detailed explanations as to costs for medical records, couriers, taxis etc. it is difficult to determine whether these costs are reasonable although they do seem somewhat high. The applicant has also claimed mileage and parking that is not detailed.

[29] I have also reviewed the disbursements claimed by the respondent and find them to be somewhat excessive. I query why the respondent would be claiming $1,474.20 for photocopies when the applicant filed voluminous medical records and other materials and has only claimed $662.40. I also find that the legal research costs claimed by the respondent to be excessive given the issues that were to be determined at trial. The research costs being claimed by the respondent are in excess of $4,500.00 which costs seem high given that the issues regarding the law were not overly complex.

Any Other Relevant Matter

[30] Rule 24(11)(f) states that a person setting the amount of costs shall consider any other relevant matter. As noted in Peers v. Poupore (2008), 2008 ONCJ 615, 61 R.F.L. (6th) 453 (Ont. C.J.) this includes the ability to pay which I have considered. I am mindful that this factor cannot override the other factors. As Spence, J. stated:

42 However, in deciding quantum, I must be mindful of clause 24(11)(f), which requires the court to consider, in addition to all the factors in clauses 24(11)(a) to (e), "any other relevant matter", which includes the ability to pay. See, for example Heuss v. Surkos, supra, and Biant v. Sagoo, 2001 28137 (ON S.C.), 2001 28137 (2001), 20 R.F.L. (5th) 284, [2001] O.J. No. 3693, [2001] O.T.C. 695, 2001 CarswellOnt 3315 (Ont. S.C.J.). Having said this, I emphasize that ability to pay alone cannot -- nor should it – override the other factors in subrule 24(11).

Conclusion

[31] Given the divided success of the parties, I do not find that either party is presumed to be entitled to costs under Rule 24(1). Under Rule 24(6), if success is divided, the court may apportion costs as appropriate.

[32] Taking all of the above factors into consideration, I find that although success was divided, the applicant should pay nominal costs to the respondent in the amount of $5,000. I make this determination on the basis that the respondent provided reasonable offers; the first trial date was delayed due to late filing of documents by the applicant; and the applicant failed to comply with the order of Penny J. with respect to the filing of an expert report on a very central issue to the trial. This necessitated the respondent bringing a motion on the first day of trial to exclude certain evidence, thereby increasing costs to the respondent and delaying the trial. Although the applicant was a self-represented litigant, I note that she is a fully licensed paralegal and would have been aware that additional costs were being incurred by the respondent.

Order

[33] I order the following:

i) The applicant, Liliane Misztal shall pay costs to the respondent, Jerry Karpynczyk, in the amount of $5,000, inclusive of HST and disbursements within 90 days.

Stevenson J.

DATE: February 7, 2013