ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FC-10-209-00
DATE: 20130301

BETWEEN:

SUSAN BEATON
Applicant

– and –

DAVID BEATON
Respondent

J. Herbert, for the Applicant
D. Beaton on his own behalf

HEARD: By written submissions

COSTS ENDORSEMENT

QUINLAN J.:

OVERVIEW

[1] This matter proceeded by way of a ten-day trial. The applicant wife was awarded judgment in the amount of $71,389.08. The parties were invited to make submissions as to costs in writing.

ISSUES AT TRIAL

[2] The issues at trial were:

(a) the validity of a “release” signed by the applicant;

(b) the conduct of the business after separation, including the sale of business equipment;

(c) the value of the business;

(d) equalization of net family property; and

(e) payments made by the respondent husband to a third party.

JUDGMENT AT TRIAL

[3] I determined that the “release” signed by the applicant had no validity. Given the position taken by the parties by the end of the trial, much of the evidence relating to the conduct of the business after separation and the sale of the business equipment was irrelevant. I attributed no value to what remained of the business, which was the respondent’s contacts, goodwill and an aggregate licence. After considering the relevant factors in relation to equalization of net family properties, I determined that the respondent owed the applicant $55,574.68 in equalization of net family properties plus $15,814.40 for his one-half share of credit card debts, for a total amount owing of $71,389.08.

[4] In the course of the trial, more information came to light regarding the monies flowing between the respondent and Cindy Fleury. Ms. Fleury acted in various capacities, financial and personal, in relation to the respondent and the business. Although I had serious reservations about the propriety of the transfer of monies from the respondent to Ms. Fleury, I decided that a determination of whether conveyances between the respondent and Ms. Fleury were fraudulent would have to be considered in the course of another action, on a full evidentiary record.

POSITIONS OF THE PARTIES

[5] The applicant seeks costs on a full recovery basis in the amount of $28,937.75, inclusive of disbursements and HST, on the basis that the respondent acted in bad faith, utilized delay tactics and acted unreasonably in not accepting reasonable offers to settle.

[6] The respondent’s position is that the applicant wasted court time by calling witnesses without supporting records and that, had a forensic accountant been utilized by the applicant, the trial could have been substantially shortened. The respondent claims costs on a substantial indemnity basis for the trial and the motion to add Ms. Fleury as a party in the amount of $40,404.85, inclusive of GST.

OFFERS TO SETTLE

[7] The applicant made two reasonable offers to settle in advance of the trial, however, neither offer engaged the costs consequences set out in Rule 18(14) of the Family Law Rules in that both offers expired in advance of the trial.

ANALYSIS

[8] It is well settled that s.131 of the Courts of Justice Act[^1], provides considerable judicial discretion on the issue of fixing costs. Rule 24 of the Family Law Rules provides a measure of guidance in the exercise of that discretion by enumerating certain factors that the court may consider in assessing costs.

[9] In determining costs, the court 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;

e. Expenses properly paid or payable; and

f. Any other relevant matter.

[10] In Serra v. Serra[^2] our Court of Appeal provided these overarching comments with respect to costs rules:

Modern costs rules are designed to foster three fundamental purposes:

(i) To partially indemnify successful litigants for the cost of litigation;

(ii) To encourage settlement; and

(iii) To discourage and sanction inappropriate behaviour by litigants.

[11] The court’s role in assessing costs is not necessarily to reimburse the litigant for every dollar spent on legal fees. There is a component of reasonableness when costs awards are considered.[^3]

[12] As noted in Biant v. Sagoo[^4], “the preferable approach in family law cases is have costs recovery generally approach full recovery, so long as the successful party has behaved reasonably and the costs claimed are proportional to the issues and the result.”

[13] In addition to the presumption that a successful party is entitled to the costs of the case, if a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.[^5]

[14] I find that the applicant was successful and is presumptively entitled to her costs.[^6] The respondent was not successful and is not entitled to his costs. I agree with the applicant’s position that the issues at trial were not complex, but that the conduct of the respondent throughout the proceeding made it difficult for the applicant to argue her case, given the late and incremental disclosure that continued through the course of the trial. The failure of the respondent to acknowledge the role of and monies paid to Ms. Fleury was unreasonable and resulted in the prolonging of the trial. The respondent did not acknowledge payment of $55,000 to Ms. Fleury until proof was provided to him. He did not disclose that he received a T-4 slip for $15,000 from Ms. Fleury or disclose the accounting in relation to a loan she provided to him. The effect of the respondent’s delays and refusal to admit certain matters resulted in the court not being in a position to determine whether the transfer of monies by the respondent to Ms. Fleury was fraudulent.

[15] Although the witnesses called by the applicant were of little assistance to the court for a variety of reasons, including the fact that the issues post-separation were essentially irrelevant by the end of the trial, the additional time occasioned by their attendance was not significant. A forensic accountant would not have ultimately assisted the court much, again given the narrowing of the issues by the end of the trial, and, considering the applicant’s financial situation, would not have been feasible.

[16] I find that the applicant’s course of conduct throughout the proceedings and the trial and the positions that she took to attempt to resolve the matter were reasonable. The respondent’s conduct, on the other hand, was not. Throughout the trial, in written submissions at the conclusion of the trial and in written submissions on the issue of costs, the respondent focused his attentions on the conduct of the applicant’s counsel. I find that throughout, the respondent was unnecessarily critical of the reasonable and professional conduct of the applicant’s counsel.

[17] In C.(K.) v. B.(S.)[^7], the court acknowledged that in family cases, bad faith failure to disclose has cost consequences. In that case, the applicant refused to make proper disclosure and used delay tactics. The successful respondent was awarded costs on a full-recovery basis.

[18] I find that the respondent acted in bad faith. As in C.(K.), the respondent, too, refused to make proper disclosure and used delay tactics. His behaviour increased the costs of the case and is “deserving of sanction for that reason”.[^8]

[19] I find that the respondent’s litigation conduct falls within Rule 24(8) and, accordingly, costs shall be decided on a full recovery basis and the respondent shall be ordered to pay them immediately.

COSTS OUTLINE

[20] The respondent argues that there is no breakdown of hours claimed by the applicant’s counsel, however, the “client’s ledger” is attached to the applicant’s submissions.

[21] Generally, the court ought not to second guess the time spent by counsel. As observed Nordheimer J. in Basedo v. University Health Network[^9], “it is not the role of the court to second guess the time spent by counsel unless it is manifestly unreasonable in the sense that the total time spent is clearly excessive or the matter has been overly lawyered.”

[22] I have reviewed the Costs Outline. I find that the costs claimed are reasonable. Accordingly, the respondent shall pay the applicant her costs of the proceedings in the amount of $28,937.75, being $24,628 for fees, $980.63 for disbursements, and $3,329.12 for HST. Costs shall be paid immediately.

QUINLAN J.

Released: March 1, 2013

[^1]: R.S.O. 1990, c.C.43

[^2]: 2009 ONCA 395, [2009] O.J. No. 1905 at para. 8 (C.A.)

[^3]: Benetau v. Young, 2010 ONSC 33 at para. 13

[^4]: 2001 28137 (ON SC), 2001 CarswellOnt 3315 at para. 20 (S.C.J.)

[^5]: Rules 24(1) and 24(8) of the Family Law Rules

[^6]: Rule 24(1) of the Family Law Rules.

[^7]: (2008), 2008 5109 (ON SC), 49 R.F.L. (6th) 286, 164 A.C.W.S. (3d) 648 (S.C.J.).

[^8]: C.S. v. M.S., 2007 20279 (ON SC), [2007] O.J. No. 2164 at para. 19.

[^9]: [2002] O.J. No. 597 (S.C.J.)