SUPERIOR COURT OF JUSTICE - ONTARIO

Court File No.: FS-12-00376887-0000
Date: 20130912

RE: Joseph Allan Freeman, Applicant

• and -

Susan Freeman, Respondent

BEFORE: Justice S. M. Stevenson

COUNSEL:
Rodica David, Q.C., for the Applicant
Michael Stangarone, for the Respondent

DATE HEARD: July 11, 2013

ENDORSEMENT AS TO COSTS

[1] In my endorsement dated July 24, 2013 I urged the parties to agree on costs, but asked that if they were unable to do so they provide me with their written submissions. I have now had an opportunity to review the costs submissions and lengthy supporting documentation of both parties.

[2] The applicant seeks costs relating to issues of the matrimonial home in the amount of $15,872.06 on a full indemnity basis, or alternatively, $12,078.13 on a partial indemnity basis. In the further alternative, he seeks that no costs be ordered regarding the home issues. The applicant also seeks $11,126.55 in costs on a full indemnity basis for costs unnecessarily incurred due to the respondent’s counsel and that all other costs be deferred to trial.

[3] The respondent seeks costs in the amount of $59,375.00 calculated on the basis of substantial recovery to July 8, 2013 and full recovery from July 8, 2013 to July 11, 2013.

Success

[4] Under Rule 24(1) of the Family Law Rules, O. Reg. 114/99 (the "FLRs"), there is a presumption that a successful party is entitled to costs. The applicant submits that the results on the motion were divided. He contends that the respondent succeeded on the motion that was heard, but that she was unsuccessful on the issues appointing the Office of the Children’s Lawyer and an order for a Functional Abilities Assessment as he contends that these claims were either effectively dismissed or withdrawn.

[5] The respondent submits that she was successful on the motion and that she is entitled to the costs as requested. She disputes that the other issues not involving the matrimonial home as set out in the applicant’s costs submissions, were either dismissed or withdrawn as she contends that these issues were left to be determined at trial.

[6] Both parties filed voluminous materials for these motions, including the applicant filing a factum of over 50 pages and the respondent filing a factum of over 150 pages, far exceeding the length as set out in Practice Directions of the Court. Both parties sought substantial relief and both also brought contempt motions. I advised counsel at the outset that all of the issues would not be heard given the volume of materials and the time that would be required to properly hear the motions. I urged counsel to speak to one another and after much discussion they agreed to narrow the issues for the motion. As such, only the issues of the sale of the matrimonial home and exclusive possession were to be determined.

[7] With respect to the issues argued regarding the matrimonial home, the respondent was entirely successful as the applicant’s motion for the immediate listing and sale of the home was dismissed and the respondent was granted an order for exclusive possession pending the determination at trial. Therefore, the respondent is presumed to be entitled to costs.

Offers to Settle

[8] Rule 18 of the FLRs deals with Offers to Settle. 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).

[9] The respondent contends that she met her Offers to Settle dated July 8, 2013 and July 10, 2013 and therefore she is entitled to costs to the date the Offer was served (July 8, 2013) and full recovery costs forward pursuant to Rule 18(14). The respondent also contends that the applicant’s Offer dated October 12, 2012 did not address “the central focus of the motions” and as such, it was impossible to accept the applicant’s Offer.

[10] It is the applicant’s position that at the outset of the hearing of the motions, the respondent’s counsel for the first time advised the applicant’s counsel and the Court, that the respondent’s position at trial is that she will be seeking exclusive possession until June 2015. The applicant contends that this is contrary to her position in her Answer as she seeks temporary and permanent exclusive possession of the matrimonial home. He further contends that up to the hearing of the motion, the respondent was seeking temporary exclusive possession either pending trial or until June 2015, but the respondent would still seek permanent exclusive possession at trial. The applicant submits that had he known about this change in position by the respondent, the motion could have been adjourned to trial and the hearing avoided. In contrast to this, counsel for the respondent contends that he indicated at the motion that he will be arguing at trial either for permanent exclusive possession of the matrimonial home or alternatively, for exclusive possession of the matrimonial home until June 2015.

[11] I have difficulty with the argument of the applicant as at any point the applicant could have agreed to defer the sale of the home until June 2015 as proposed or he could have agreed to set the matter for trial in January or February 2014 as proposed when the issue would have been fully determined. It appears both of these options were available prior to the hearing. These options were also available at the hearing of the motion, but counsel for the applicant did not request a recess in order to explore the issue further with counsel for the respondent. Both parties were present and a discussion could have taken place. The applicant continued with the arguing of the motion where the applicant sought an immediate listing and sale of the matrimonial home.

[12] The respondent’s Offer dated July 8, 2013, which parts were severable, proposed to adjourn the applicant’s request for the sale of the matrimonial home until trial and allow the respondent to have exclusive possession pending a trial. These parts of the Offer were reasonable considering the best interests of the children and given the fact that a trial could be heard as of January 20, 2014. Taking into consideration the Offers, and the success of the respondent on the matrimonial home issues, the respondent is entitled to costs.

[13] In determining costs, I must also consider the factors as set out in s. 24(11) of the FLRs as follows:

The Importance, Complexity or Difficulty of the Issues

[14] The issues were important to both parties and the children. Much material was filed containing conflicting evidence. The issues of the sale of the matrimonial home and exclusive possession were not overly complex or difficult.

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

[15] Both parties raised allegations of inappropriate conduct by the other party, including delay by counsel. It is clear from a review of the materials filed with the submissions including correspondence between counsel, that the matter is one of high conflict with allegations of contempt being raised by both parties. Neither party seems focused on ending the conflict. It is apparent that both parties have acted somewhat unreasonably. I find no basis for ordering costs against the respondent for any actions taken by her counsel.

The Lawyers' Rates

[16] I consider the rates of counsel (including junior counsel) to be reasonable given their years of experience.

The Time Properly Spent on the Case

[17] It appears that both parties have spent significant amounts of time on these motions. I am not prepared to determine costs on the issues that were not part of the hearing and that I ordered were to be adjourned to a date to be fixed. Costs with respect to those issues should be left to be determined by the motions Judge hearing those remaining issues or by the trial Judge.

[18] With respect to the issues that were argued before me, the total revised amount of costs listed in the respondent’s Bill of Costs filed in her reply submissions are costs of $14,521.50 on a partial indemnity basis, $19,438.00 on a substantial indemnity basis and $24,172.60 on a full indemnity basis. I do have concerns regarding the amount of time spent on these issues by the respondent's counsel. The time spent by counsel and law clerks totals over 100 hours on these two issues that were not overly complex and should not have required such amount of time. There appears to be an inordinate amount of time spent on drafting and reviewing of affidavits, factums and preparation for the hearing. Given these factors, there must be a reduction in the costs amount.

Expenses Properly Paid or Payable

[19] I have reviewed the expenses claimed by the respondent of $3,938.05 which includes process servers, courier charges and photocopying charges. It is difficult to determine how much of these costs are solely related to the two issues at the hearing as it appears that the costs relate to all of the issues. As such, there must also be a reduction in these expenses.

Any Other Relevant Matter

[20] Rule 24(11)(f) of the FLRs states that a person setting the amount of costs shall consider any other relevant matter. The applicant submits that he has no ability to pay costs and that his only significant asset, the matrimonial home, is not available to satisfy any costs ordered. He submits that if he is ordered to pay costs, they should come out of his share of the matrimonial home once that issue has been determined.

[21] The respondent disputes the allegation that the applicant is unable to pay costs and submits that costs should be determined at every stage of the proceedings as per the FLRs. She also contends that the applicant’s income has not been determined for support purposes, he has been able to fund his litigation up to this point and he may be working.

[22] Ability to pay is relevant only with respect to the issue of quantum of costs and not to the other party’s entitlement to costs (see Izyuk v. Bilousov, 2011 ONSC 7476, [2011] O.J. No. 5814 (S.C.J.). I agree that there has been no determination of the applicant’s income and I cannot conclude at this stage that he is unable to pay a costs order. Additionally, I agree with the submissions of the respondent that costs should be awarded at every stage of the proceeding as per Rule 24(10).

Order

[23] As stated in Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), [2004] O.J. No. 2634 (C.A.) at para. 26 with respect to costs: "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".

[24] Taking into consideration this objective, the submissions of the parties, the fact that the respondent has been successful on the issues argued before me, the factors outlined above that I have considered under Rule 24(11) and Rule 18, including the offers served by the parties and proportionality, the applicant shall pay costs to the respondent in the amount of $11,000.00, inclusive of HST and disbursements, payable within 90 days. Costs with respect to the remaining issues on the motions that were previously ordered by me to be adjourned to a date to be fixed, shall be determined by the Judge hearing the motions or the trial Judge.

Stevenson J.

DATE: September 12, 2013