ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 844-2012

DATE: 2013/11/28

BETWEEN:

CINDY WYLIE

Applicant

– and –

ROBERT SHEEHAN

Respondent

Julie Audet , counsel for the Applicant

Christian Pilon, counsel for the Respondent

HEARD: September 27^th, 2013

RULING ON ISSUE OF COSTS

LALIBERTE, J.

Introduction

[1] Having ruled on the merits of the applicant’s Motion to Change under Rule 15 of the Family Law Rules, the Court is now asked to decide the issue of costs. Both parties have filed written submissions coupled with their respective bill of costs.

[2] Counsel for the applicant has provided a bill of costs totalling $11,164.13. Her position is that Ms. Wylie should be awarded her costs on a substantial indemnity basis. She is claiming an amount of $8,800.00.

[3] The respondent has filed a bill of costs which totals $9,322.04. His view is that each party should bear their own costs. In the alternative, he argues that the applicant should be liable for costs on a partial indemnity basis. He is requesting the sum of $4,995.39.

[4] The end result is that these proceedings have collectively generated legal expenses in the amount of $20,486.17. The issues for the Court are:

1. Who is liable for these costs?
2. What is the quantum of liability, if any?

The Law

[5] A proper determination of costs in family law proceedings requires the Court to reflect on a myriad of factors. It is more than a simple mathematical or mechanical exercise. (Boucher et al v. Public Accountants Council for the Province of Ontario 2004 14579 (ON CA), [2004] O.J. No. 2634 (Ontario Court of Appeal). As stated by the Ontario Court of Appeal in Somers v. Fournier 2002 45001 (ON CA), [2002] O.J. No. 2543 at paragraph 17:

“Thus, costs are both a discretionary indemnification device and a mechanism by which abuses of the Court’s processes may be deterred and penalized. Costs are routinely used by Ontario Courts to reward or sanction the conduct of parties prior to and during the litigation process…”

[6] The fundamental purposes of costs rules have been identified as follows:

1. To partially indemnify successful litigants for the cost of litigation;
2. To encourage settlement;
3. To discourage and sanction inappropriate behaviour by litigants.

Serra v. Serra 2009 ONCA 395, [2009] O.J. No. 1905 (Ontario Court of Appeal)

[7] The Court is bound to consider the framework set out in the Family Law Rules. While our Court of Appeal in C.A.M. v. D.M. 2003 18880 (ON CA), [2003] O.J. No. 3707 confirms a degree of discretion, “…It is apparent that the Family Law Rules have circumscribed the broad discretion…” which is granted to Judge’s under section 131(1) of the Courts of Justice Act.

[8] The Family Law Rules which are relevant to this matter are as follows:

Rule 2:

• Court is required to apply rules to promote the primary objective which is to deal with cases justly
• Parties and lawyers are required to help the Court promote this objective

Rule 18:

• The ramification of offers to settle made by a party

Rule 24:

• 24(1): The successful party is presumed entitled to costs.
• 24(2): The presumption of entitlement based on success may be rebutted if successful party acted unreasonably.
• 24(3): In deciding if a party acted unreasonably, Court considers:

➢ Behaviour in relation to issues from the time arose, including whether an offer to settle was made;

➢ Reasonableness of offer made;

➢ Any offer party withdrew or refused.

• 24(6): Costs may be apportioned in accordance with success.
• 24(8): Consequences of a party acting in bad faith.
• 24(11): In setting the amount of costs to be paid by the party who is found to be liable, the Court must consider:

➢ The importance, complexity or difficulty of the issues;

➢ The reasonableness or unreasonableness of party’s behaviour;

➢ The lawyers’ rates;

➢ The time properly spent on the case;

➢ Expenses properly paid or payable;

➢ Any other relevant matter.

Discussion

A) Which party is liable for costs?

[9] The successful party is presumptively entitled to costs under Family Law Rules 24(1). Through their written submissions, both parties claim success.

[10] The applicant’s position is that while not all of her requests were granted, the Court did order payment of $7,212.00 in arrears of child support as well as monthly child support in the amount of $596.00 She also notes that the Court dismissed the respondent’s claim for retroactive overpayment of child support.

[11] In his written submissions, the respondent opines that by reason of the divided success, both parties having been successful on some arguments and unsuccessful on others, each should bear their own costs. In the alternative, he argues that he was more successful since the Court did not disrupt the various agreements between the parties since 2008. More importantly, the Court did not impute corporate income as sought by the applicant.

[12] On a purely mathematical accounting or measurement of what was claimed by the parties and what was ultimately granted by the Court, devoid of any concept of what is just in the circumstances, success can certainly be seen as having been divided amongst the parties. However, the principles are such that success is not limited to a comparison of what is sought in the pleadings and what is ultimately decided by the Court. This is only one part of the equation. Proceedings must be analyzed in a context.

[13] As noted by the Court in the October 10^th, 2013 ruling, the parties had signed a separation agreement on March 20^th, 2008. From 2008 to 2011, they agreed to vary the amount of child support. These changes reflected, in part, the fact that the children were now in a shared custody setting.

[14] In December 2011, the respondent unilaterally stopped paying child support. Attempts by the applicant to resolve this issue directly and through counsel proved futile. The respondent did not pay any child support from December, 2011 to February, 2013. He resumed to pay only once legal proceedings were initiated by the applicant. The children were deprived from his support when in the care of the applicant mother. There is no indication that he did not have the means to pay support. His position was as stated in his e-mail of December, 2011: “I pay for them when they are here and you for them when they are there.”

[15] It is also obvious to the Court that the respondent resisted the request for disclosure. He failed to respond to counsel’s request. It is through litigation that he was compelled to provide disclosure of his personal and corporate financial situation.

[16] The true measure of success in these proceedings is found in the applicant having successfully advocated for child support on behalf of the children. While the Court did not impute corporate income and did not re-visit the $400.00 without prejudice interim order of February, 2013, the Court did order payment of arrears and found ongoing child support obligations. When looked at in the context of the respondent’s position as stated in the above-noted e-mail and his lack of cooperation, the Court’s decision is seen as being substantially more favourable to the applicant.

[17] Both parties failed to convince the Court to re-visit the period during which they were able to agree on how much child support was to be paid. As stated by the Supreme Court of Canada in D.B.S. v. S.R.G. 2006 SCC 37, [2006] S.C.J. No. 37:

“…agreements reached by the parents should be given considerable weight…it is often unwise for Courts to disrupt the equilibrium achieved by the parents.”

[18] Since both parties failed to convince the Court to re-visit how much was historically paid whether as overpayments or underpayments, very little weight is given to this in terms of success for costs purposes.

[19] As indicated in Serra v. Serra op. cit., the Court must consider the appropriateness of the litigants’ behaviour in deciding who is liable for costs. Proper conduct will logically favour entitlement. Inappropriate conduct should be discouraged and sanctioned through costs.

[20] The Court finds that the applicant acted properly in the circumstances. In fact, once she was told by the respondent that he was not paying any child support as of December, 2011, the applicant was duty bound to act as she did in order to protect the children’s right to support. Not to have done so, would have amounted to a failure to fulfil her obligations towards her children. The Supreme Court of Canada in D.B.S. v. S.R.G. op. cit. explained that there is a duty to act on a recipient parent to preserve a child’s right to support from the other parent. At paragraph 103, the Court states the following:

“The second important concern is that recipient parents not be encouraged to delay in seeking the appropriate amount of support for their children. From a child’s perspective, a retroactive award is a poor substitute for past obligations not met…Recipient parents must act promptly and responsibly in monitoring the amount of child support paid…Absent a reasonable excuse, uncorrected deficiencies on the part of the payor parent that are known to the recipient parent represent the failure of both parents to fulfil their obligations to their children.”

[21] The Court also finds that the respondent attempted to resolve the issue of child support. As already noted, there is a relationship between a litigant’s attempt at settlement and costs entitlement. On balance, the Court finds that the applicant attempted to resolve the issue personally and then through counsel. The respondent did not respond to any attempts to avoid litigation.

[22] The Court agrees with the respondent that the offer to settle of March 28^th, 2013 that was served on the respondent does not trigger rule 18(4) in terms of costs consequences. However, the court is taking into account this offer as provided for in rule 18(16). It is an attempt at settlement which favours the applicant.

[23] As already discussed, improper conduct by a litigant attracts costs consequences. The Court finds that the respondent did not act properly in the circumstances. Specifically, this finding is based on the following considerations:

i) His decision to arbitrarily stop paying child support as of December, 2011, and not paying any support until compelled through litigation; as stated by the Ontario Court of Appeal in Tauber v. Tauber 2000 5747 (ON CA), [2000] O.J. No. 2133 at paragraph 55:

“…the first objective of the Child Support Guidelines is to establish “a fair standard of support for children that ensures that they continue to benefit from the financial means of both spouses after separation. Where as here the custodial parent is required to pursue litigation to vindicate that purpose, neither that parent nor the child should be penalized…ordinarily, the custodial parent should not bear the cost of litigation that is for the benefit of the child.”

ii) His lack of openness and cooperation in disclosing financial information;

iii) There are no indications to suggest that the respondent attempted to settle the issue either pre or post litigation.

[24] Therefore, the Court finds that the applicant is entitled to partial indemnification for costs stemming from this litigation to be paid by the respondent.

B) How much should the Respondent pay?

[25] As stated by the Ontario Court of Appeal in Serra v. Serra op. cit, an award for costs should reflect what the Court views is a fair and reasonable amount that should be paid by the unsuccessful party. In deciding on the proper quantum, the Court has considered the following:

• This was an important issue as it involved child support;
• The determination of income under section 15 to 19 of the Child Support Guidelines is relatively complex;
• The finding that the applicant acted reasonably;
• The finding that the respondent did not act reasonably;
• The respective bill of costs filed by both parties which appear reasonable;
• The fact that the respondent did have some measure of success;
• The fact that the respondent must pay $7,212.00 in retroactive child support for 2012 on or before April, 2014;
• There is no evidence to suggest that the respondent is unable to pay costs.

[26] The Court finds that a fair and reasonable amount is $6,500.00.

Conclusion

[27] The Court orders that the respondent pay the applicant costs in the amount of $6,500.00 (all inclusive) and that this is to be paid on or before April 18^th, 2014.

Justice Ronald M. Laliberte Jr.

Released: November 28^th, 2013

COURT FILE NO.: 844-2012

DATE: 2013/11/28

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

CINDY WYLIE

Applicant

– and –

ROBERT SHEEHAN

Respondent

RULING ON ISSUE of COSTS

Justice Ronald M. Laliberte Jr.

Released: November 28^th, 2013