OTTAWA
COURT FILE NO.: FC-12-1304
DATE: 2014/04/04
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Helen Nasrallah, Applicant
AND
Esper Nasrallah, Respondent
AND
Heirs of the late George Nasrallah namely:
Luccia Nasrallah
Haifa Foessl
Rhonda Ferrie
Esper Nasrallah and
Faye Nasrallah-Mahoney, Added Respondents
BEFORE: Mr. Justice Timothy Minnema
COUNSEL: Anaïs Labelle-Lussier, for the Applicant
Sabrina Herscovitch, for the Respondent Esper Nasrallah
William R. Hunter, for the Added Respondents
HEARD: By written submissions
COSTS ENDORSEMENT
[1] The parties have provided me with their written submissions on costs. As anticipated, the issues are complicated. I dealt with three motions which ended the proceedings. Ms. Helen Nasrallah is seeking costs on the motions against the respondents of $7,250, all inclusive, on what she calls a ‘substantial indemnity’ basis, noting that her full recovery costs would be $8,582.34. Esper Nasrallah is not seeking costs on his own, but submits that no costs should be awarded against him. However, he is one of the Heirs, and collectively they are seeking costs against Helen Nasrallah for the proceeding and motions of $41,916.13, all inclusive.
Background of the Proceedings
[2] The details of these proceedings are set out in my decision at 2014 ONSC 116. As an overview, Helen Nasrallah brought an application against her husband, Esper Nasrallah, claiming various family law remedies, including a resulting trust and possession related to the matrimonial home. Esper Nasrallah refuted these claims and made claims of his own. The legal ownership of the home was still in the name of Esper Nasrallah’s deceased father, who died without a will, and Helen Nasrallah amended her application to add the above named Heirs as necessary respondents. The Heirs, including Esper Nasrallah, filed an answer seeking to have the applicant’s claims relating to the home dismissed with costs. They subsequently obtained legal title to the property, and took an active role in the litigation. The parties exchanged disclosure and some examinations for discovery were conducted.
[3] On March 28, 2013, the litigant spouses Helen and Esper Nasrallah signed Minutes of Settlement purporting to resolve all the issues between them. Esper Nasrallah was to pay Helen Nasrallah $125,000 in full satisfaction of all claims, following which Helen Nasrallah was to vacate the home. That agreement also contained the following paragraph:
COSTS
18 Each party will pay his / her own legal fees and disbursements associated with all negotiations and the litigation arising from their marriage and separation. Helen will immediately instruct her counsel to withdraw the claim against the Estate of George Nasrallah. In the event that the Estate of George Nasrallah seeks indemnification of any costs on account of the action brought against it being withdrawn, Esper will immediately fully reimburse Helen for any costs sought by the Estate, as well as any legal fees and disbursements that she incurs to enforce the terms of this paragraph.
[4] Esper Nasrallah did not pay the $125,000 settlement. Helen Nasrallah did not vacate the home. Esper Nasrallah challenged the legal validity of the Minutes of Settlement. Helen Nasrallah did not withdraw the claim as against the added parties.
[5] On September 24, 2013, Helen Nasrallah brought her motion to enforce the terms of the Minutes of Settlement. Esper Nasrallah brought a cross-motion to have the Minutes of Settlement set aside, in effect to revive the matrimonial litigation. The Heirs brought a motion to dismiss the claim as against them, and also requested occupation rent from Helen Nasrallah. These were the motions dealt with by me.
Law
[6] Pursuant to subsection 131(1) of the Courts of Justice Act, R.S.O., c. C.43, as amended, costs are discretionary. I have assessed the costs below guided by Rule 24 of the Family Court Rules, O. Reg. 114/99, as amended, and in particular sub-rules (1), (4) through (9), and (11).
[7] The overriding principle is that costs are to be fixed in a way that is fair to the parties and reasonable in the circumstances (Murray v. Murray (2005), 2005 46626 (ON CA), 79 O.R. (3d) 147 (C.A.)). This includes considering the reasonable expectations of the losing litigant regarding costs (Serra v. Serra (2009), 2009 ONCA 395, 66 R.F.L. (6th) 40 (Ont. C.A.); Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.)). It also includes a consideration of the impact that the costs award will have on the party ordered to pay (Murray, supra).
Analysis
(a) Costs sought by Helen Nasrallah
[8] As noted in the Costs paragraph of the Minutes of Settlement reproduced above, the spouses agreed to pay their own costs up until the execution of the Minutes of Settlement. Therefore, Helen Nasrallah is only seeking her costs on the motions. While her submissions are directed at the issues between herself and Esper Nasrallah, she asks that I apportion these costs between him and the Heirs, who took an active role in the motions.
[9] Regarding sub-rules 24(1) and (6) of the Family Court Rules, I find that Helen Nasrallah was substantially successful on her motion and is presumed to be entitled to costs. Per sub-rules (4) and (5), she did not behave unreasonably during the case such that this presumption is rebutted.
[10] Neither of sub-rule 24(7) or (9) impact on my decision. All parties were well prepared for the hearing and it was run efficiently by counsel. The need to adjourn the first attendance was for due process, not uniquely the fault of any party, and the time was not wasted.
[11] Regarding sub-rule 24(8), Helen Nasrallah relies on P. (M.L.) v. P. (G.W.), 2004 CarswellOnt 486 (S.C.J.) for the proposition that “the intentional failure to fulfil an agreement in order to achieve an ulterior motive” constitutes bad faith. She says Esper Nasrallah, in changing his mind after signing the Minutes of Settlement and refusing to fulfill his obligations under it, left her with no choice but to bring her motion. She notes that his arguments for setting aside the agreement were unsuccessful and that further litigation and motions would have been avoided had he complied with the agreement. I agree with all these submissions and find that Esper Nasrallah’s behaviour was unreasonable and misguided. I have considered that as a factor in assessing costs. However, I do not find that his behaviour crossed the line of being intended to inflict harm or to deceive, such that an ulterior motive is made out: see S.(C.) v. S.(M.), 2007 20279 (ON SC), [2007] O.J. No. 2164 (S.C.J.) at para. 17, affirmed 2010 ONCA 196, [2010] O.J. No. 1064 (Ont. C.A.). I do not find bad faith on the facts in this case.
[12] This leaves me to consider the factors in sub-rule 24(11). In my view, the first factor (a) is not overly significant in that the main issue on the motion regarding the soundness of the Minutes of Settlement was not particularly complex. Regarding 24(11)(c), (d), and (e), no issue was taken with the hourly rates and hours spent by Helen Nasrallah’s counsel or her Bill of Costs. Regarding 24(11)(b), I have already found above that Esper Nasrallah’s behavior in the case was unreasonable and there was no unreasonableness on the part of Helen Nasrallah.
[13] There were no offers favouring Helen Nasrallah and I have made no other finding to support a full recovery of costs. Given the above, I find that a fair and reasonable amount of costs is the $7,250 requested, all inclusive. As all the respondents participated on the motions, I order that they are jointly and severally liable for these costs.
(b) Costs sought by the Heirs (including Esper Nasrallah) from Helen Nasrallah
[14] I am not inclined to order costs against Helen Nasrallah for three reasons. I do not find that the Heirs, which grouping includes Esper Nasrallah, had clear success in this case. I do not find that costs against Helen Nasrallah are appropriate looking at the other criteria in Rule 24. Lastly, I find that if I did order costs in favour of the Heirs, I would have ordered Esper Nasrallah not Helen Nasrallah to pay those costs directly.
(i) Success
[15] My decision upheld the Minutes of Settlement. The $125,000 payment it contained included consideration for the resulting trust claim. The parties agreed at the conclusion of the hearing of the motions that if I made such a finding, then Helen Nasrallah’s claim for possession of the home would no longer be dependent upon the payment of the settlement funds. With her claim for a resulting trust dealt with, she no longer claimed possession of the home and the parties agreed that she could have 60 days to vacate. The proceedings were at an end. I therefore dismissed the application as it related to the matrimonial home.
[16] The Heirs claim that, as a result, they have been successful. Their position all along was that the claim for a resulting trust against the home should be dismissed and they made an offer to settle reflecting that. They are seeking costs throughout including full recovery costs from the date of the offer.
[17] However, the summary judgment motion by the Heirs was not decided on its merits. There was no success by them in that sense. Their success was contingent on the disposition of Esper Nasrallah’s motion, specifically, on him losing it. Had he been successful in having the Minutes of Settlement set aside, then the family law litigation might have continued, and the resulting trust claim involving the Heirs might still be alive. The resulting trust claim was settled and never adjudicated.
[18] Esper Nasrallah was an Heir, the others Heirs supported him, and I do not find that they were entirely successful. The immediate issue was the validity of the Minutes of Settlement on which Helen Nasrallah was successful. As noted further below, it was only once that issue was determined in her favour that she could relinquish her claim to the home and, therefore, the Heirs could be successful. They were only successful because she was successful.
[19] I also note that another issue was put forward by the Heirs that was actually determined on its merits. It was their claim for occupation rent. On that, I find that they were clearly unsuccessful.
[20] For those reasons and the further reasons set out under the following headings, I am not inclined to award any costs against Helen Nasrallah.
(ii) Other Considerations under Rule 24
[21] Reasonableness in 24(11)(b) requires me to consider offers to settle per 24(5), which are also specifically dealt with in Rule 18(14). There was only one made, by the Heirs, as explained above. It meets all the requirements of Rule 18(14) 2 to 5 and, as such, per Rule 18(14) they are entitled to costs to the date the offer was served and full recovery costs from that date, unless I order otherwise. As noted, I do order otherwise. In doing so, I have considered “any other relevant matter” under Rule 24(11)(f), the overriding costs principles identified above, and the other factors set out under the heading below.
[22] Helen Nasrallah behaved reasonably throughout. As noted below, she had no choice but to add the Heirs to this proceeding. There was no allegation of bad faith against her.
[23] There was never any indication or argument that the Heirs were to be treated or considered individually, only ever as a group that included Esper Nasrallah, and they were all represented by the same counsel. Esper Nasrallah did not behave reasonably, which resulted in the need to have these matters determined by the court in the first place.
[24] Regarding "any other relevant matter", Helen Nasrallah is on disability and earned approximately $26,684 in 2013. She has yet to receive any of the $125,000 settlement from Esper Nasrallah. Little is known about the collective or individual wealth of the Heirs. Requiring her to pay costs sought of $41,916.13, or any part of it, when there was no fault or miss-step on her part, and when some of that recovery would go to satisfy the obligations of Esper Nasrallah, would be unfair and unreasonable in my view.
[25] For those reasons and the ones that follow, I am not inclined to award any costs against Helen Nasrallah.
(iii) “Sanderson Order”
[26] Had I found that the Heirs were successful and entitled to their costs, I would have ordered that Esper Nasrallah, as the unsuccessful respondent, pay them directly. This is commonly referred to in the civil law context as a “Sanderson Order”. Again, I would not have made any costs order against Helen Nasrallah, which is the only order that the Heirs are seeking.
[27] There are a number of factors that I have considered, and findings that I make, in coming to the conclusion that a Sanderson Order would have been appropriate here:
(a) As noted, I find that it was reasonable and proper for Helen Nasrallah to have served the Heirs; indeed, it would have been inappropriate for this case to proceed to trial without formal notice to them given their ownership interests.
(b) Along the same lines, I find that it would not have been reasonable for Helen Nasrallah to release the Heirs before settlement or trial. Although the Heirs point out, correctly, that the Costs paragraph above states that the claim against them would be withdrawn “immediately”, the only Heir who was a party to those Minutes of Settlement was Esper Nasrallah. It was his subsequent failure to pay the settlement funds as agreed, and his decision to attack the validity of the Minutes of Settlement themselves, that precluded Helen Nasrallah from withdrawing that claim. By seeking to set aside the agreement, he left open the possibility that the family litigation would continue. It is disingenuous for Esper Nasrallah, as an Heir, to rely on that particular aspect of the Costs paragraph when it was his actions that kept the property issues alive.
(c) While I accept the accuracy of the Bill of Costs of the Heirs’ counsel, it is not clear to me why the Heirs themselves decided to take such an active role in this proceeding. I am unaware of any argument they made or position they took that was contrary to Esper Nasrallah. He was one of them. I find that their interests were shared.
(d) As to costs up to and including the date of the Minutes of Settlement, Esper Nasrallah agreed in the Costs paragraph to “immediately fully reimburse” Helen Nasrallah for any costs claimed by the Heirs. Making him directly responsible for those costs is in keeping with the spirit of that agreement.
I would add that the Heirs have urged me to follow the Costs paragraph “to the letter” by ordering Helen Nasrallah to pay them their costs directly and ordering Esper Nasrallah to subsequently reimburse her for those very same costs. I have no confidence that Esper Nasrallah would make a timely reimbursement, given he has not paid the settlement amount. I am therefore suspicious of an ulterior motive. To be clear, I would not make any order that would support a possible scenario where Esper Nasrallah, as an Heir, could attempt to enforce costs against Helen Nasrallah while he, at the same time, was actually obligated to reimburse her for those very same costs.
(e) As to the litigation since the Minutes of Settlement, this resulted entirely from Esper Nasrallah’s default under it and he should be responsible to pay all those associated costs.
Decision
[28] For the reasons set out above, I exercise my discretion to make what I find is the only fair and reasonable costs order in the circumstances of this case: the Respondents shall pay Helen Nasrallah costs in the amount of $7,250, all inclusive.
Mr. Justice Timothy Minnema
Date: April 4, 2014
COURT FILE NO.: FC-12-1304
DATE: 2014/04/04
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Helen Nasrallah, Applicant
AND
Esper Nasrallah, Respondent
AND
Heirs of the late George Nasrallah namely:
Luccia Nasrallah
Haifa Foessl
Rhonda Ferrie
Esper Nasrallah and
Faye Nasrallah-Mahoney,
Added Respondents
BEFORE: Mr. Justice Timothy Minnema
COUNSEL: Anaïs Labelle-Lussier for the Applicant
Sabrina Herscovitch for the Respondent Esper Nasrallah
William R. Hunter for the Added Respondents
COSTS ENDORSEMENT
Mr. Justice Timothy Minnema
Released: April 4, 2014