COURT FILE AND PARTIES

COURT FILE NO.: 07-FA-15101-01
DATE: 20140403

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MOYA DIANNE BROWN, Applicant

** - and -**

david lloyd, Respondent

BEFORE: S. Stevenson, J.

COUNSEL:
Jaret Moldaver, for the Applicant
Karen C. Bales / Richard Diamond, for the Respondent

HEARD: November 18 to 22, 2013

ENDORSEMENT AS TO COSTS

[1] The parties have been unable to agree on costs. I have now had an opportunity to review the written costs submissions of both parties.

[2] The applicant seeks costs on a full recovery basis in the amount of $84,292.25, inclusive of HST and disbursements. She submits that she was successful at trial and that she achieved as favourable a result with respect to a first Offer to Settle made by her and a better result than her second Offer. She submits that unless the Court orders otherwise, she is entitled to costs from at least December 12, 2011 forward on a full recovery basis.

[3] The respondent submits that the applicant should be entitled to costs in the maximum amount of $35,022.72 plus HST. He submits that only the parties' most recent Offers to Settle were open for acceptance at the commencement of trial. He further contends that the Court found the applicant in breach of an order. Additionally, he contends that he was successful on a number of issues including evidentiary issues and past conduct. In reply submissions, the applicant disputes that the applicant was found in breach of an order or that the applicant argued that the respondent was an unfit parent.

[4] Rule 24 of the Family Law Rules, O. Reg. 114/99 (the "FLRs"), governs the determination of costs and specifically, Rule 24(11) sets out the factors that a court must consider when determining costs.

Success

[5] Under Rule 24(1) there is a presumption that a successful party is entitled to costs. The applicant submits that she was wholly successful in having the respondent's Motion to Change dismissed and that she should be entitled to costs.

[6] I agree that the applicant was wholly successful as the respondent's Motion to Change was dismissed. The applicant is entitled to costs.

Offers to Settle

[7] Rule 18(14) of the FLRs describes the costs consequences of failing to accept an Offer to Settle 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).

[8] Rule 18(16) provides as follows: "When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply."

[9] The applicant served two Offers to Settle, one dated December 11, 2012 and another dated October 16, 2013. I agree with the respondent's submissions that the applicant's October 16, 2013 Offer to Settle replaced her previous Offer. Only the applicant's October 16, 2013 Offer to Settle and the respondent's Offer to Settle of October 8, 2013 were open for acceptance at the commencement of trial. However, pursuant to Rule 18(16), the Court may take into consideration any written offer to settle of the parties when exercising its discretion in determining costs.

[10] The respondent's Offer to Settle dated October 8, 2013 does not satisfy Rule 18(14) 5. The applicant's Offer to Settle dated October 16, 2013 was made at least seven days before trial, it did not expire, it was not withdrawn before trial and the Offer was not accepted. The applicant did obtain an order that was more favourable than the Offer as the Motion to Change was dismissed, whereas the applicant had offered more access time to the respondent in her Offer which the respondent did not receive at trial. As such, the provisions of subrule (14) are applicable and the applicant is entitled to costs to the date of October 16, 2013 and full recovery thereafter unless the court decides otherwise. Despite the applicant's success and Offer, I have determined that there should be a reduction in the amount of costs sought by the applicant for the reasons set out below.

Factors in Costs

[11] The factors that a court must consider in determining costs are set out in s. 24(11) of the FLRs. They have been considered by me as follows:

The Importance, Complexity or Difficulty of the Issues

[12] The issue of time sharing with the parties' son Dax was important to both sides. The issues were not overly complex or difficult.

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

[13] The applicant was reasonable in defending the Motion to Change. Contrary to the respondent's submissions, there was no finding that the applicant had breached a court order. Additionally, it was not unreasonable for the applicant to raise issues regarding the respondent's parenting. If a material change in circumstances had been found, this evidence would be considered in determining whether greater access should be granted to the respondent. I find no basis for costs to be awarded to the respondent or set-off as proposed by him regarding this issue.

[14] With respect to the respondent's behaviour, he admitted that he was not satisfied with previous access orders of the Court and that he has pursued increased access on an ongoing basis. This has led to ongoing costs for both parties. The applicant also made a reasonable Offer to Settle that would have led to an increase in the respondent's time with Dax; however, the respondent chose not to accept this reasonable Offer.

The Lawyers' Rates

[15] I consider the rates of counsel for the applicant ($450 to $500 an hour) to be appropriate for counsel in Toronto with his level of experience.

The Time Properly Spent on the Case

[16] The respondent submits that the total fees and disbursements submitted by the applicant from September 10, 2012 to October 16, 2013 (the date of the Offer to Settle) should be reduced by $6,863.75 for a total of $37,289.45. He submits that these costs should be payable on a partial indemnity basis, which would be $22,373.67. From October 17, 2013 to current he submits that the total fees and disbursements are $29,929.81 and that a deduction of $14,118.50 should be applied resulting in total fees of $15,811.31. The substantial indemnity rate is $12,649.05. The overall costs would then be $35,022.72, plus HST. The reasons for these reductions are set out above, including the respondent’s submissions that the Offer to Settle was made on October 16, 2013, the Court made a finding that the applicant breached a court order, he was successful on an evidentiary issue at trial, and he should not have had to defend past conduct. As set out above, some of these submissions are without merit but some do warrant a reduction in the amount of costs sought by the applicant.

[17] Additionally, the time spent on the case by the applicant's two lawyers and three law clerks totals approximately 208 hours. A significant amount of preparation was completed by law clerks (81.5 hours) and by counsel (35 hours) charging a lower rate. However, despite the applicant's submission that there is no duplication in time, I find that the amount of time spent on a number of tasks in preparing for a trial of this nature is excessive and that a reduction should be applied. I also agree with the respondent that there should be some reduction in fees and disbursements with respect to the determination of an evidentiary issue at trial on which the respondent was successful.

[18] I must also take into consideration the principle of reasonableness in determining costs. 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". Another consideration is what the respondent would have reasonably expected to pay if unsuccessful. As submitted by counsel for the applicant, the respondent according to his sworn Financial Statement dated March 1, 2013, stated that he had paid $35,460.59 from February 28, 2012 to February 28, 2013 in legal fees. The trial was in November 2013.

Expenses Properly Paid or Payable

[19] I have reviewed the expenses claimed by the respondent and find the expenses claimed of $1,698.97 and $579.01 to be reasonable.

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. I have already indicated that I do not agree with the respondent's submissions that the applicant was found to be in breach of a court order and that she forced the respondent to prove that he was a fit parent.

Order

[21] Taking into consideration the reasonableness of the amount claimed by the applicant, the submissions of the parties, the fact that the applicant has been successful and the factors outlined above that I have considered under Rule 24(11) and Rule 18, including the offers served by the applicant and the respondent, the respondent shall pay costs to the applicant in the amount of $58,000, inclusive of HST and disbursements, payable within 30 days. This is a fair and reasonable amount for the respondent to pay and one which he could have reasonably expected to pay if unsuccessful.

Stevenson J.

DATE: April 3, 2014