NEWMARKET
COURT FILE NO.: FC-10-34674
DATE: 20131210
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: CHARLES MARC BAILEY, Applicant
AND:
NANCY ANN BAILEY, Respondent
AND:
WHITNEY-BAILEY ASSOCIATES INC., 1564957 ONTARIO INC. and 1474117 ONTARIO INC., Non-Parties
BEFORE: THE HON. MR. JUSTICE G.M. MULLIGAN
COUNSEL:
A. Feldstein, for the Respondent
C. Still, for the Non-Parties
The Applicant, Self-Represented
HEARD: By written submissions
COSTS ENDORSEMENT
[1] The respondent Nancy Ann Bailey brought a motion against three non-parties for disclosure. The applicant Charles Marc Bailey did not participate in the motion, however, he has a minority interest in the non-party corporations. Prior to the motion the respondent sought significant disclosure from the non-parties to enable the respondent’s business valuator to properly determine Mr. Bailey’s income. Prior to the motion the non-parties did provide a certain amount disclosure and agreed to provide some further disclosure, with some items redacted, provided that a confidentiality agreement was entered into.
[2] The respondent was successful upon the motion obtaining an order for disclosure subject to a confidentiality agreement. The parties attempted to negotiate a confidentiality agreement, were unable to resolve the issue and re-attended to have that issue addressed.
[3] Both parties have provided costs outlines.
[4] The respondent seeks costs of $34,822.88 plus HST on a substantial indemnity basis. His costs outline included an estimated lawyer’s fee for attending a costs hearing of $3,800. However the matter was dealt with by written submissions and no cost hearing was conducted. The respondent made an offer to settle indicating that the matter could be settled without costs if all of the disclosure requested was provided and a confidentiality agreement was entered into prior to the hearing.
[5] The non-parties seek their costs in the amount of $31,662.80 all inclusive on a substantial indemnity basis. The non-parties also provided an offer to settle indicating those items they were prepared to produce, those items they were prepared produce as redacted and those items that they were not prepared to produce.
Offers to Settle
[6] Rule 18 of the Family Law Rules provides costs consequences if a party fails to accept an offer. Rule 18(14)(5) indicates that one of the conditions is:
The party who made the offer obtains on order that is as favourable as or more favourable than the offer.
[7] Rule 18(15) indicates that the burden of proving that the offer is as favourable or more favourable than the offer to settle is on the party who claims the benefit of subrule 14. In this case based on the submissions I have reviewed I am not satisfied that either party has met that burden and therefore costs should be dealt with on a partial indemnity basis subject to the guidance provided in Rule 24.
[8] The respondent achieved a substantial success on the motion and is presumptively entitled to costs subject to the factors set out in Rule 24. Rule 24(11) provides a list of factors a court ought to consider in dealing with costs:
A person setting the amount of costs 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, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order;
(e) expenses properly paid or payable; and
(f) any other relevant matter.
[9] In Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905 at para. 8, the Ontario Court of Appeal provided these over-arching comments with respect to costs:
Modern cost rules are designed to foster three fundamental purposes:
to partially indemnify successful litigants for the cost of litigation;
to encourage settlement; and
to discourage and sanction inappropriate behaviour by litigants.
[10] The court’s role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees. There is a component of reasonableness which must be considered when awarding costs. As J.A. Campbell J. stated in Benetau v. Young, [2010] ONSC 33 at para. 13:
As in this case, it has become clear that judges are being called upon more frequently to act as gatekeepers to access and determine what is a reasonable level of costs and what, in hindsight, was a reasonable amount of time that should have been invested in a case. A line of case law has developed that establishes that responsibility, that:
…the cost award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than an exact measure of the actual costs of the successful litigant [citation and emphasis omitted].
[11] It is clear that the respondent was seeking disclosure for over an extended period of time. The motion was adjourned a number of times before it was finally heard. Although some disclosure was provided by the non-party it was insufficient in the view of the respondent to enable its business valuator to properly determine the income of Mr. Bailey. The respondent thus sought and obtained a judicial determination of the issue. Unfortunately the parties could not resolve the issue of the confidentiality agreement without a further attendance in court.
Conclusion
[12] I have considered the submissions of both parties and the importance of the issue to the respondent. With these factors in mind and in consideration of the over-riding principles of fairness and the expectation of the parties, I fix costs against the non-party in the
amount of $20,000 all inclusive, payable to the respondent within 30 days of the release of this endorsement.
MULLIGAN J.
Date: December 10, 2013