COURT FILE NO.: 3337-04
DATE: 2014-04-08
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
NANCY CHAN
Applicant
- and -
KENNETH TOWN
Respondent
Anita T. Kain, for the Applicant
Peter Callahan, for the Respondent
Price J.
COSTS ENDORSEMENT
Nature of the Proceeding
[1] When Ms. Chan brought a motion to change her financial support based on an increase in Mr. Town’s income, Mr. Town responded with a motion to change the custody and access terms. He also resisted Ms. Chan’s efforts to obtain financial disclosure from him. Mr. Town’s motion was eventually dismissed and after an order was made requiring him to obtain a professional valuation of his income, he accepted an offer to settle from Ms. Chan, on substantially the same terms as one she had made nine months earlier.
[2] The parties were unable to resolve the issue of costs and have made written submissions on this issue. I have reviewed their submissions and address this remaining issue here.
Background Facts
[3] On March 16, 2012, Ms. Chan made a motion to change the consent order of Murray J. dated December 6, 2007, granting her child support. On May 9, 2012, Mr. Town delivered a response, and a cross-motion to change the consent order of Herold J. dated September 3, 2009, granting Ms. Chan custody of the parties’ children and granting Mr. Town access to their children.
[4] Ms. Chan was self-represented from March 16 to July 31, 2012, although she received advice and assistance from a lawyer, Cathryn Paul, who was not on record as her solicitor. On July 5, 2012, she made an interim motion for financial disclosure from Mr. Town. Mr. Town responded with a motion for financial disclosure from Ms. Chan, and for a parenting schedule for the summer months.
[5] On July 5, 2012, Fitzpatrick J. adjourned both parties’ motions for financial disclosure to no fixed date, and made an order for a parenting schedule for the summer. He did not award costs.
[6] On July 31, 2012, Ms. Chan delivered a Notice of Change in Representation, appointing Novalea Jarvis as her lawyer. On September 18, 2012, the parties attended a settlement conference before me in relation to both motions.
[7] Mr. Town’s motion had earlier been scheduled to be heard on October 29, 2012. At the conference, a date was set for the hearing of Ms. Chan’s motion on February 19, 2003. Ms. Chan stated that she had not received adequate financial disclosure from Mr. Town. I set a timetable for such disclosure, and for questioning. I reserved the costs of the conference to the judge hearing the motions.
[8] On September 24, 2012, Ms. Chan delivered an Offer to Settle both motions. Mr. Town did not accept this offer. On October 29, 2012, Gray J. dismissed Mr. Town’s motion to change custody/access. He did not order costs.
[9] On December 17, 2012, Ms. Chan ended her retainer of Ms. Jarvis and delivered a Notice of Change of Representation appointing Kain & Ball as her lawyers. On January 10, 2013, the parties’ lawyers attended a teleconference with me, arranged by Ms. Chan’s lawyer, Ms. Kain, to deal with disclosure issues.
[10] At the conference, I vacated the February 19th hearing date for Ms. Town’s motion and made an order requiring the parties to retain a valuator jointly to provide a certified valuation of Mr. Town’s income for support purposes. The valuator’s fees were to be paid initially by Mr. Town, subject to a later costs order. I reserved the costs of the teleconference to the judge hearing the motion.
[11] On January 28, 2013, Ms. Chan served a new Offer to Settle her motion to change child support. The substantive terms of this offer, insofar as her motion to change child support were concerned, were similar to those contained in her earlier Offer dated September 24, 2013. The new offer required Mr. Town to pay Ms. Chan’s costs of her motion as follows:
a) Costs from March 16, 2012, to January 28, 2013, on a partial indemnity scale; and
b) Costs from January 28, 2013, on a full recovery basis.
[12] On June 17, 2013, at Ms. Kain’s request, the parties attended a further teleconference regarding disclosure. I adjourned the conference to August 20, 2013, to permit Ms. Chan to bring a motion to have Mr. Town found in contempt, and to permit Mr. Town to move, if he wished, to set aside my order dated January 10, 2013.
[13] On July 19, 2013, Mr. Town accepted Ms. Chan’s Offer to settle dated January 28, 2013. On July 25,2013, Ms. Chan sent a Bill of Costs, with a Consent and draft Order directing Mr. Town to pay her costs in the amount of $41,232.19.
[14] Upon reviewing Ms. Chan’s Bill of Costs, Mr. Town’s lawyer, Mr. Callahan, requested particulars and back-up documentation of the costs claimed. On August 9, 2013, Ms. Kain replied, indicating that, as Mr. Town had not accepted Ms. Chan’s position, she would have her costs fixed by the Court. She then moved to have her costs fixed in the amount of $41,1232.19.
[15] At the return of her motion to have her costs assessed by the court on Augusts 20, 2013, the parties were invited to make written submissions. The parties later delivered these submissions.
Positions of the Parties
[16] Ms. Chan seeks costs in the amount of $41,232.19, as follows:
a) Costs from March 16, 2012 to January 28, 2013, on a partial recovery basis, in the amount of $33,743.38;
b) Costs from January 28 to July 19, 2013, on a full recovery bases, in the amount of $7,488.81.
[17] Mr. Town submits that Ms. Chan should be granted her costs in the amount of $14,457.59, calculated as follows:
a) Fees of Novalea Jarvis (partial indemnity)
July 31 to Dec. 16/12): $ 4,925.25.
b) Fees of Kain & Ball (partial indemnity)
(Dec. 17/12 to Jan. 28/13): $ 3,209.82
c) Fees of Kain & Ball (full indemnity)
(Jan. 29/13 to July 19/13): $ 4,454.50
Sub-total: $ 12,589.57
HST on fees: $ 1,636.64
Disbursements (Novalea Jarvis) $ 84.75
Disbursements (Kain & Ball) $ 129.76
HST on disbursements: $ 16.87
Total: $14,457.59
Analysis
[18] This assessment of Ms. Chan’s costs relate solely to her motion to change child support.
[19] A costs order balances two conflicting principles:
a) A blameless litigant who is successful in a proceeding should not be required to bear the costs of prosecuting or defending the proceeding.
b) Citizens should not be made to feel unduly hesitant to assert or defend their rights in court by the prospect that, if unsuccessful, they will be required to bear all the costs of their opponent.
[20] The Supreme Court has held that the ultimate objective in balancing these principles is to ensure that the justice system works fairly and efficiently.[^1]
The Discretion to be Exercised
[21] The entitlement to costs and the amount to be paid are “within the court’s discretion.”[^2] The Courts of Justice Act provides:
131(1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in the proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid. [Emphasis added]
[22] The court must exercise its discretion with due regard to the objectives of costs awards, and to rule 24(11) of the Family Law Rules (“FLR”), which sets out the factors the court considers when determining how the objectives are best attained in the circumstances of a particular case.[^3]
Objectives to be Served
[23] Historically, the court’s paramount consideration when awarding costs was indemnifying the successful party. More recently, the Supreme Court has stated that costs orders serve broader objectives in the administration of justice, including penalizing a party who has refused a reasonable settlement offer, and sanctioning behaviour that increases the duration and expense of litigation, or is otherwise unreasonable or vexatious: “In short, it has become a routine matter for courts to employ the power to order costs as a tool in the furtherance of the efficient and orderly administration of justice.”[^4]
Factors to be Considered
[24] Rule 24(11) of the FLR lists the factors the court should consider when quantifying costs:
- (11) 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.
Importance, Complexity, and Difficulty
[25] The issue of child support was important to both parties. This is reflected in Ms. Chan’s sustained efforts to secure full financial disclosure from Mr. Town, and Mr. Town’s efforts to limit the disclosure he provided.
[26] The issue of child support was not, in itself, complex, but Mr. Town’s failure to make timely and full financial disclosure complicated Ms. Chan’s task of establishing his income for support purposes.
Reasonableness of Each Party’s Behaviour
[27] Rule 24(5) of the FLR provides:
- (5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,
(a) the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle.
[28] Not every instance of unreasonable conduct by a respondent attracts an order granting the applicant her costs on a higher scale. In civil proceedings, orders for substantial indemnity costs, like their predecessor, solicitor and client costs, are exceptional. Mark M. Orkin, in The Law of Costs,[^5] cites the Supreme Court in Young v. Young, in this regard: “Solicitor and client costs are generally awarded only where there has been reprehensible, scandalous, or outrageous conduct on the part of one of the parties.”[^6] Mr. Town’s conduct, while unreasonable, was not scandalous or egregious. It did not reach the threshold where, in a civil action, it would justify an award of costs against him on a substantial indemnity scale, which should be made sparingly.
[29] Ms. Chan asserts, however, that Mr. Town acted in bad faith by resisting her requests for disclosure of the documents needed to determine his income for child support purposes. Bad faith is behaviour “carried out with intent to inflict financial or emotional harm on the other party or other persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court.”[^7] Mr. Town’s conduct falls within this definition.
[30] Harper J. observed in Stevens v. Stephens:
Deliberate non-disclosure is not merely unreasonable conduct, it is an example of bad faith….One of the most significant contributors to lengthy and costly litigation is untimely and inaccurate disclosure. All too often, one party makes every effort to thrust economic havoc on the other when this game of litigation hide and seek forms a part of their litigation strategy. This cannot be permitted by the court.[^8] [Emphasis added]
[31] Mr. Town engaged in such conduct and “drove up the cost of this litigation in reckless disregard to the ultimate consequences.”[^9] The award of costs to Ms. Chan should reflect this.
The Lawyers’ Hourly Rates
[32] Ms. Chan’s principal lawyer, Anita Kain, was admitted to the Bar in 1985 and practiced family law for 23 years before undertaking Ms. Chan’s case. She bills her time at $500 per hour. Ms. Kain was assisted by Lisa Katz, who was admitted to the Bar in 2007. She practiced law for 6 years before working on this file. She bills her at $255 per hour. Ms. Kain was also assisted by an experienced law clerk, Michelle Schiralli, whose time is billed at $200 per hour, and by a Law Student, whose time is billed at $50.00 per hour.
[33] Ms. Chan’s earlier lawyer, Novalea Jarvis, was admitted to the Bar in 1990. She had practiced law for 13 years before undertaking Ms. Chan’s case, and she bills her time at $300 per hour. Cathryn Paul was admitted to the Bar in 1996, and practiced law for 17 years. She bills her time at $275 per hour.
[34] The “Information for the Profession Bulletin”, from the Costs Sub-Committee of the Rules Committee (“the Costs Bulletin”),[^10] suggests maximum hourly rates, on a partial indemnity scale, of $80 for law clerks, $225 for lawyers of less than 10 years’ experience, $300 for lawyers between 10 and 20 years’ experience, and $350 for lawyers with 20 years’ experience or more. These rates were generally intended for the most complex and important of cases.
[35] As noted above, Rule 24 of the FLR[^11] does not use the terms “partial indemnity” or “substantial indemnity. Instead, it refers to "costs of a motion, enforcement, case or appeal". The FLR provide no guidelines to assist the court in determining reasonable amounts of costs payable, or reasonable hourly rates, on a full-recovery basis, or otherwise. It is therefore appropriate to use the Information Bulletin, adjusted for inflation, since the Bulletin, issued in 2005, is dated, and Rule 1 of the Rules of Civil Procedure,[^12] as authorized by Rule 1(7) of the FLR.[^13]
[36] Rule 1 of the Rules of Civil Procedure defines substantial indemnity costs as "costs awarded in an amount that is 1.5 times what would otherwise be allowable in accordance with Part I of Tariff A" - i.e. they are 1.5 times the partial indemnity rate. Costs calculated on a substantial indemnity scale represent something less than full recovery. Courts have estimated substantial indemnity costs to be approximately 90% of costs on a full recovery basis.[^14]
[37] According to the Costs Bulletin, Ms. Kain’s partial indemnity rate is $350, as she has practiced law for more than 20 years. The Bank of Canada inflation calculator converts $350 in 2005 to $410.93 in 2014. Increasing this amount, on a substantial indemnity scale, by 10% produces a rate of $452.03 on a full recovery basis. I am therefore applying an hourly rate of $450 to Ms. Kain’s time.
[38] The partial indemnity hourly rate for Lisa Katz, who has practiced for less than 10 years, is $225. This converts to $264.17 in 2014. The full recovery equivalent is $290.59. I am therefore applying an hourly rate of $290 to her time.
[39] The Bulletin recommends an hourly rate of $80 for Law Clerks, which converts to $93.93 in 2014. The full recovery equivalent is $103.32. I am rounding this rate downward to $100.
[40] Novalea Jarvis, who has practiced law for 13 years, and Cathryn Paul, who has practiced for 17 years, were entitled to a partial indemnity rate of $300 in 2005, which converts to $352.22 in 2014, and a full recovery rate of $387.44. I am allowing their time at $385 per hour.
[41] Mr. Town’s lawyer, Mr. Callahan, was called to the Bar in 1993, and practiced for 20 years before undertaking this case for Mr. Town. He bills Mr. Town $430 per hour. This is proportional to the full recovery rates of $290 to 450 I am applying to Ms. Chan’s lawyers. Mr. Callahan’s hourly rate would reasonably have informed Mr. Town’s expectation as to the costs he might be required to pay if unsuccessful in the motion.
Time Properly Spent on the Case
[42] Determining the time that Ms. Chan’s lawyers have spent on her motion is complicated by the following:
a) Until Ms. Chan retained Ms. Jarvis on July 31, 2012, she was assisted by Cathryn Paul, who was not her solicitor of record.
b) Until October 29, 2012, when Gray J. dismissed Mr. Town’s motion, Ms. Chan’s lawyers were dividing their time between Ms. Chan’s motion and Mr. Town’s motion.
c) Novalea Jarvis, the lawyer who represented Ms. Chan until December 17, 2012, was no longer her solicitor of record when Ms. Chan settled her motion and the parties made their costs submissions.
[43] Ms. Chan argues that she is entitled to recover costs for the fees she paid Ms. Paul since her Offer to Settle provides that she is entitled to her costs from the beginning of the proceeding to the date when she delivered her Offer, albeit on a partial recovery basis. I agree. In Bank of Nova Scotia v. Schussler et al., in 1980, the High Court held that a litigant was entitled to recover costs for the assistance received from a lawyer who had not filed a notice of his appointment as solicitor of record.[^15] Baradaran v. Tarion Corporation, in 2013, was a special case, in which only modest costs were allowed because the lawyer was assisting her own father, who was represented by another lawyer as solicitor of record.[^16] In Jongazma v. Primont Homes (Heritage Hollow) Inc., Siegel J. found no impediment to the recovery of costs for the services of a lawyer who was consulted as an expert without becoming solicitor of record.[^17]
[44] Ms. Chan and Ms. Kain’s law clerk reviewed the invoices that Ms. Chan received from Ms. Jarvis and annotated them to differentiate the entries that pertained only to Ms. Chan’s motion (which Ms. Chan circled), those that pertained to both parties’ motions (which Ms. Chan circumscribed with squares), and those that pertained only to Mr. Town’s motion (which were left un-marked). Neither Ms. Chan nor Ms. Jarvis were examined on these annotations and Mr. Callahan has not seriously disputed Ms. Chan’s allocation of time between the two motions or advanced contrary evidence.
[45] Based on the invoices tendered, I find that Ms. Chan’s lawyers spent the following time on her motion. The lawyers at Kain & Ball spent the following time:
a) Anita Kain: 8.80 hours
b) Lisa Katz: 19.90 hours
c) Law Clerks: 4.00 hours
[46] Novalea Jarvis spent a total of 137.06 hours, as appears from the following invoices which she rendered:
a) Invoice # 197: 54.00 hours
b) Invoice # 202: 66.66 hours
c) Invoice # 210: 16.40 hours
[47] Of the total of 137.06 hours that Ms. Jarvis spent, Ms. Chan states she spent 24.3 hours on Ms. Chan’s motion alone, 62.4 hours on tasks involving both motions, and 50.36 hours on Mr. Town’s motion alone. The details are set out in the Appendix to these reasons. I apportion ½ the time Ms. Jarvis spent on tasks involving both motions. On that basis, I am adding 31.2 hours (1/2 of the total of 62.4 hours she spent on tasks involving both motions) to the time Ms. Jarvis spent on Ms. Chan’s motion alone, to produce a total of 55.5 hours that she spent on that motion altogether.
[48] In addition to the time spent by Kain & Ball, and Novalea Jarvis, Cathryn Paul spent 2.50 hours on Ms. Chan’s motion, as appears from the following invoices which she rendered:
a) Invoice # 2071: 1.50 hours
b) Invoice # 2044: 1.00 hours
[49] Based on the foregoing, Ms. Chan’s lawyers spent a total of 90.7 hours on her motion (32.7 by Kain & Ball, 55.5 by Ms. Jarvis, and 2.5 by Ms. Paul).
[50] Mr. Town’s lawyer, Mr. Callahan, calculates that he spent 43.95 hours on Ms. Chan’s motion, or approximately half the time spent by Ms. Chan’s lawyers. This is not surprising. Ms. Chan’s lawyers were required to prepare significantly more documentation, and do more preparation, in advancing her motion to change, and to obtain the necessary disclosure from Mr. Town, than Mr. Callahan was required to prepare and do in resisting their efforts.
[51] Ms. Chan’s lawyers were required to prepare her Motion to Change, her supporting affidavit, and responding affidavit, her Financial Statement, her motion for disclosure, her Settlement Conference Brief, Requests for Information from Mr. Watzinger, Clear Spider Inc., Ms. Poore, and from Mr. Town himself, attend at the Settlement Conference and the motion for disclosure, and at the follow-up conferences to obtain disclosure, prepare Ms. Chan’s Offers to Settle, and review the Offer received from Mr. Callahan. The time that Ms. Chan’s lawyers spent on these tasks was reasonable and necessary.
Offers to Settle
[52] Rule 18 of the FLR deals with offers to settle. The relevant part, for purposes of the present case, is Rule 18(14):
(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:
If the offer relates to a motion, it is made at least one day before the motion date.
The offer does not expire and is not withdrawn before the hearing starts.
The offer is not accepted.
The party who made the offer obtains an order that is as favourable as or more favourable than the offer.
[53] Rule 18(14) does not entitle Ms. Chan to her costs on a higher scale based on her Offer to Settle, because Mr. Town accepted the Offer. However, the terms of the Offer itself entitle her to her costs from January 28 to July 19, 2013, on a full recovery basis.
[54] Some reduction must be made to the costs Ms. Chan claims to reflect the fact that her Offer provides for costs on a partial recovery basis from March 16, 2012, to the date of her Offer (January 28, 2013). Ms. Chan incurred the following costs during that period:
a) Novalea Jarvis: 55.5 hours (July 27 to Dec 18/12) @ $385 = $21,367.50
b) Cathryn Paul: 2.5 hours (June 4 to July 13/12) @ $385 = $ 962.50
c) Anita Kain: 4.0 hours (Jan 4 to 21/13) @ $450 = $ 1,800.00
d) Lisa Katz: 4.40 hours (Dec 31/12 to Jan 28/13) @ $290 = $ 1,276.00
e) Clerks: .50 hours (Dec 27/12 to Jan 22/13) @ $100.00 = $ 50.00
TOTAL: $ 24,476.00
Scale of Costs
[55] The parties disagree as to what percentage reduction should be made to these costs, calculated on a full recovery basis, to arrive at the costs that Ms. Chan should recover for this period based on her Offer to Settle. The FLR do not address costs on either a partial or substantial indemnity “scale”. Rule 18(14), dealing with the costs consequences of a failure to accept an Offer to Settle, instead differentiates between “costs” and “full recovery of costs”. Rule 24(8) also refers to “costs on a full recovery basis,” where a party acted in bad faith.
[56] In Sims-Howarth v Bilcliffe, Aston J. held that the two traditional scales of costs are no longer an appropriate way to quantify costs under the FLR.[^18] He stated that, having determined that one party is liable to pay costs, the court must fix the amount at some figure between a nominal sum and full recovery, having regard to the factors set out in Rule 24, without any assumptions about categories of costs. This characterization of costs under the FLR was approved by the Ontario Court of Appeal in C.A.M. v D.M.[^19]
[57] It is generally not appropriate to award more than 85 per cent of a successful litigant’s bill, unless the unsuccessful litigant has acted unreasonably or in bad faith, to the extent that censure is appropriate.[^20] Applying this test, Mr. Town’s unreasonable conduct would attract a costs award on a full recovery basis, but for the wording of Ms. Chan’s Offer to Settle. In a family law case, the court need not find “special circumstances” before ordering costs on a full recovery basis.[^21] This still leaves a range of costs from Nominal to just short of full recovery.
[58] While costs are designed primarily to indemnify the successful litigant, and not to punish the unsuccessful one, both the FLR and the jurisprudence recognize the sanctioning of unreasonable behavior as a valid objective of a costs order. Costs must always be proportional to what is at stake in the case, however, and to the unsuccessful party’s reasonable expectation, but unreasonable behavior will, in appropriate circumstances, result in a higher award of costs.
[59] In Perri v. Thind et al.,[^22] Henderson J. granted leave to appeal to the Divisional Court from a costs award that was a marked departure from the normal or routine costs made in motions court. In doing so, he stated that costs orders are not designed mainly to be a punishment. In that case, however, the motion judge had awarded costs four times greater than the successful litigant’s substantial indemnity costs. Henderson J. himself noted that costs, when awarded on a higher scale, can serve to express the court’s disapproval of unreasonable conduct.[^23]
[60] Mr. Town’s failure to make timely disclosure, his continued disputing of facts that he should have admitted, and his failure to accept Ms. Chan’s offers in a timely manner, unnecessarily lengthened Ms. Chan’s preparation for the motion and necessitated repeated conferences to address disclosure issues. The costs that these steps entailed should have been avoided and the award of costs to Ms. Chan should reflect this.
[61] In Stevens v. Stevens, Harper J. stated:
I also found in my decision that Joel was not credible or reliable with respect to what his income was. I agree with the comments of J.W. Quinn J. in Hatcher v. Hatcher, [2009] O.J. No. 148 at paragraph 77:
The husband’s catch-me-if-you-can approach to his income is to be condemned. This conduct alone warrants full-recovery costs. Deliberate non-disclosure is not merely unreasonable conduct, it is an example of bad faith.
One of the most significant contributors to lengthy and costly litigation is untimely and inaccurate disclosure. All too often, one party makes every effort to thrust economic havoc on the other when this game of litigation hide and seek forms a part of their litigation strategy. This cannot be permitted by the court. I find that Joel participated in such conduct and drove up the cost of this litigation in reckless disregard to the ultimate consequences.[^24]
[62] Additionally, I have considered the earlier Offer to Settle that Ms. Chan delivered on September 24, 2012, in exercising my discretion pursuant to Rules 18(16)[^25] and 24(5).
[63] Rule 18(16) permits the court to consider an Offer to Settle that does not meet all the conditions of Rule 18(14). It provides:
18.(16) When the court exercises its discretion over costs, it may take into account any written offers to settle, the date it was made and its terms, even if subrule (14) does not apply.
[64] More particularly, Rule 24(5) permits the court to consider any offer to settle when determining whether a party acted reasonably. It provides:
24.(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,
(a) the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;
(b) the reasonableness of any offer the party made; and
(c) any offer the party withdrew or failed to accept.
[65] Ms. Chan’s Offer to settle dated September 24, 2012, is not materially different than her later Offer, which Mr. Town accepted. Had Mr. Town accepted the earlier offer on September 24, 2012, Ms. Chan’s costs would have been approximately $6,163.08 on a partial recovery basis.
[66] Additionally, had Mr. Town accepted Ms. Chan’s Offer to Settle dated January 28, 2013, when it was made, her costs would have been substantially less than they became. Instead, Mr. Town continued opposing her motion, and resisting her efforts to obtain financial disclosure, thereby escalating her costs.
[67] I have taken Mr. Town’s delay in accepting Ms. Chan’s offers into account in determining at what level she should “partially recover” the costs she incurred in the interval. As his delay in accepting Ms. Chan’s first offer is not accounted for by facts not known to him when that offer was made, Ms. Chan should recover her costs from that date more fully.
[68] Jarvis J. took a more conservative approach in the civil action of H. v. W., but the circumstances distinguish that case from the present one. He stated:
Rule 49 sets out the well-known consequences of failure to accept formal offers. In rule 49.10(10)(1) and (2), the consequences are triggered by the offer and obtaining a judgment. Ms. W.'s position is that, as a respondent offeror, she ought to be entitled to party-and-party costs from the date of the offer to the date of acceptance. The rules do not specifically provide for this situation, but the offer itself contemplates that the cost issue shall be determined upon application to the court.
I have considered all of the above and have decided that it would be in the interest of justice to order that the husband pay some of the costs incurred by the wife as a result of his delay in accepting the offer but not the cost of her solicitor's services. The scheme outlined in Rule 49 was clearly intended to encourage the settlement of disputes before trial. The cost consequences provided for in the rule are clearly intended to apply when a party proceeds to trial in the face of a reasonable formal offer. Here the matter did not proceed to trial; however, there were costs incurred by the wife which would clearly not have been incurred if Mr. H. had accepted the offer at an earlier date.
I am mindful that by not awarding costs to the wife on a solicitor-and-client scale it may appear that I am penalizing her. While solicitor's fees for trial preparation could have been avoided had Mr. H. accepted earlier, it is my view that Ms. W. would have incurred additional fees anyway in completing the settlement. I think the interests of justice are best served by not awarding costs to the wife for her solicitor's fees. The rules are designed to encourage settlement. Mr. H. did settle this matter, albeit at a very late date. I do not wish to discourage settlement and in this case a trial was avoided and consequently so were additional legal expenses. I do, however, wish to discourage settlement on the eve of trial. For these reasons I am awarding the wife the costs she incurred to obtain experts' reports in preparation for trial. [^26] [Emphasis added]
[69] Unlike Ms. W. in H. v. W., Ms. Chan incurred additional costs that she would not otherwise have incurred, as a result of Mr. Town’s delay in accepting her offers at an earlier date. It is appropriate that she be compensated for those costs more fully than otherwise.
[70] Ms. Chan seeks 65% of the costs she incurred from March 16, 2012, to January 28, 2013, as costs “on a partial recovery basis”. In the circumstances, and for the reasons stated above, this is a very reasonable position for her to take. On this basis, I will deduct $8,916.60, being 35% of the fee portion of her costs, as calculated above on a full recovery basis, to arrive at the fee portion of her costs, in the amount of $15,559.40 ($24,476.00 - $8,916.60) for this period on a partial recovery basis.
Expenses Paid
[71] Ms. Chan claims solely for expenses related to the child support issue. These total $3,235.74, and consist of the following:
a) Kain & Ball’s disbursements: $ 129.76
b) Novalea Jarvis’ disbursements:
(i) Invoice # 197: $ 527.60
(ii) Invoice #202: $1,868.88
(iii) Invoice #210: $ 709.50
TOTAL: $ 3,235.74
c) HST (13%) on disbursements: $212.05
(i) Kain & Ball’s HST: $ 16.87
(ii) N. Jarvis Invoice #197: $ 47.58
(iii) N. Jarvis Invoice #202: $ 55.36
(iv) N. Jarvis Invoice #210: $ 92.24
[72] As these costs are not apportioned between the “partial” and “full” recovery periods, they will be allowed in the amounts claimed.
[73] The balance of Ms. Chan’s costs, being the costs she incurred from the date of her Offer to Settle (January 28, 2013) onward, are allowed on a full recovery basis. These consist of the following:
a) Anita Kain: 4.8 hours @$450.00 = $2,160.00
b) Lisa Katz: 25.4 hours @$290.00 = $7,366.00
c) Law Clerks: 3.8 hours $100.00 = $ 380.00
TOTAL: $9,906.00
[74] Based on the foregoing, Ms. Chan’s entitlement, is as follows:
a) Fees March 16/12 to Jan 28/13 (partial recovery): $15,559.40
b) Fees Jan 28/13 onward (full recovery): $ 9,906.00
TOTAL FEES: $ 25,465.40
c) HST on fees (13%): $ 3,310.50
d) Disbursements: $ 3,235.74
e) HST (13%) on disbursements: $ 212.05
TOTAL FEES, DISBURSEMENTS & HST: $ 32,223.69
Other Relevant Matters
[75] I must, at this point, “step back and examine the overall award with a view to determining whether it is ‘fair and reasonable’ for the kind of matter involved.” In determining what is fair and reasonable, I must take into account the reasonable expectation of the parties concerning the amount of costs.[^27]
[76] Awards of costs in motions to change final orders vary greatly, depending on their factual complexity, the extent of the change sought, and the reasonableness of the parties’ conduct. I have considered the following costs awards made in similar cases:
(a) In Winton v. Lofranco, Himel J. awarded costs of $61,000 ($50,000 for fees and $11,000 for disbursements) in a motion to change custody and cross-motion for support involving a three day hearing.[^28]
(b) In Piskor v. Piskor, Blishen J. awarded costs of $18,000 on a full recovery basis in a motion to change support.[^29]
(c) In Blanchard v. Walker, Curtis J. awarded the husband his costs of $30,000, on a full recovery basis, for the wife’s unsuccessful motion to change child support.[^30]
(d) In Boneva v. Bonev (No. 3), Jones J. awarded costs of $83,241.04, on a full recovery basis, for the husband’s unsuccessful motion to change child support.[^31]
(e) In S. (S.) v. S. (M.) and A. (P.), 2007 ONCJ 95, Dunn J. awarded a wife her costs of $40,000 on a full recovery basis in the husband’s unsuccessful motion to change child support.[^32]
(f) In Ross v. Ross, Mesbur J. awarded a wife costs of $26,543.70, some of it on a full recovery basis, for a husband’s unsuccessful motion to change child support.[^33]
[77] Based on these awards, the costs claimed by Ms. Chan are well within the range of what Mr. Town should have expected to pay if unsuccessful.
[78] There is an element of behaviour modification to a costs order serving to encourage a change in attitude from a “litigate with impunity” mindset.[^34] In Mooney, Curtis J. made the following observations, which I adopt:
Parties to litigation must understand that court proceedings are expensive, time-consuming and stressful for all concerned. They are not designed to give individual litigants a forum for carrying on in whatever manner they may choose, oblivious to the impact of that conduct on the other side and, perhaps most importantly for the purposes of this case, oblivious to the mounting costs of the litigation: Heuss v. Sarkos, 2004, Ont. Ct., supra, para. 20.
Matrimonial litigation is an occasion for sober consideration and thoughtfulness rather than intemperate behaviour: Heuss v. Sarkos, 2004, Ont. Ct., supra, para. 20.
One of the purposes of costs is to change behaviour. The justice system is a precious public resource. Access to the justice system by individuals must be balanced with the need to ensure that the resource is available for all those who need it. This is one of the purposes of Rule 2.
Unless courts discourage this behaviour, it will continue and increase. Orders for costs are one way to discourage this behaviour.[^35]
CONCLUSION AND ORDER
[79] For the reasons stated, it is ordered that Mr. Town shall pay Ms. Chan’s costs of her motion in the amount of $ 32,223.69, payable forthwith.
Price J.
Released: April 8, 2014
Appendix “A”
Apportionment of time based on N. Jarvis invoices
a) Invoice # 197
Time spent solely on Ms. Chan’s motion: 15.0 hours
• Page 1: 4.3 hours
• Page 2: 4.1 hours
• Page 3: 4.7 hours
• Page 4: 1.0 hours
• Page 5: .9 hours
Time spent partially on each motion: 38.3 hours
• Page 1: .5 hours
• Page 3: 8.9 hours
• Page 4: 12.3 hours
• Page 5: 16.6 hours
Time spent solely on Mr. Town’s motion to change: .7 hours
• Page 1: .1 hours
• Page 5: .6 hours
Disbursements: $ 527.60
HST on disbursements: $ 47.58
b) Invoice # 202
Time spent solely on Ms. Chan’s motion to change: 1.6 hours
• Page 1: 1.6 hours
Time spent partially on each motion: 24.1 hours
• Page 1: .2 hours
• Page 2: 20.6 hours
• Page 3: 3.3 hours
Time spent solely on Mr. Town’s motion to change: 40.96 hours
• Page 1: .3 hours
• Page 2: 11.96 hours
• Page 3: 18.7 hours
Disbursements: $1,868.88
HST on disbursements: $ 55.36
HST on disbursements: $ 55.36
c) Invoice #210
Time spent solely on Ms. Chan’s motion to change: 7.7 hours
• Page 1: 6.3 hours
• Page 2: 1.4 hours
Time spent solely on Mr. Town’s motion to change: 8.7 hours
• Page 1: .4 hours
• Page 2: 2.3 hours
• Page 3: 6.0 hours
Disbursements: $ 709.50
HST on disbursements: $ 92.24
c) TOTALS :
Time spent solely on Ms. Chan’s motion to change: 24.3 hours
• Invoice #197: 15.0 hours
• Invoice #202: 1.6 hours
• Invoice #210: 7.7 hours
Times spent partially on each of the parties’ motions: 62.4 hours
• Invoice #197: 38.3 hours
• Invoice #202: 24.1 hours
• Invoice #210: Nil hours
Time spent solely on Mr. Town’s motion to change: 50.36 hours
• Invoice #197: .7 hours
• Invoice #202: 40.96 hours
• Invoice #210: 8.70 hours
COURT FILE NO.: 3337-04
DATE: 2014-04-08
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
NANCY CHAN
Applicant
– and –
KENNETH TOWN
Respondent
COSTS ENDORSEMENT
Price J.
Released: April 8, 2014
[^1]: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371, at paras. 25-26 [Okanagan]. [^2]: Courts of Justice Act, R.S.O. 1990, c C.43, s. 131. [^3]: Family Law Rules, O. Reg. 114/99 [^4]: Okanagan, at para. 25. [^5]: M. M. Orkin, The Law of Costs, 2d ed., looseleaf (Aurora, Ont.: Canada Law Book, 1987), at p. 2-46 [Orkin]; Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, at p. 154, re-stated in Perri. [^6]: Orkin, at p. 2-48. [^7]: C.S. v. M.S., 2007 20279 (ON SC), at para. 17, Perkins J., aff’d 2010 ONCA 196, 262 O.A.C. 225. [^8]: Stevens v. Stevens 2012 CarswellOnt 15385 (ON SC), per Harper J., at paras 22 and 23, Aff’d, [2013] O.J. No. 1912 (ON CA) [^9]: Stephens, para. 23 [^10]: The Costs Bulletin was implemented on July 1, 2005, by the Costs Sub-Committee of the Rules Committee to replace the Costs Grid, which it repealed the same year. The Costs Bulletin has advisory status only and not statutory authority, as it was not included in the Regulation that repealed the Costs Grid. [^11]: Family Law Rules, O. Reg. 114/99 [^12]: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 [^13]: See Zeleny v. Zeleny, 2004 5094 (ON SC), para. 22 [^14]: 680195 Ontario Ltd. v. 2169728 Ontario Limited o/a Stoneybrook Auto Service, 2010 ONSC 4064, para. 8, citing Hanis v. The University of Western Ontario et. al., 2006 23155 (ON SC), [2006] O.J. No. 2763 (S.C.J.), Power J., at para. 46. [^15]: Bank of Nova Scotia v. Schussler et al., 1980 1582 (ON SC). [^16]: Baradaran v. Tarion Corporation, 2013 ONSC 6559, McEwen J., para. 5 [^17]: Jongazma v. Primont Homes (Heritage Hollow) Inc., 2006 22131 (ON SC), para. 8 [^18]: Sims-Howarth v Bilcliffe, 2000 22584 (ON SC), [2000] O.J. No. 330 (S.C.J.) [^19]: C.A.M. v D.M., 2003 18880 (ON CA), [2003] O.J. No. 3707 (C.A.), at para. 42. [^20]: Osmar v. Osmar (2000), 2000 20380 (ON SC), 8 R.F.L. (5th) 387 (Ont. S.C.). [^21]: Sordi v. Sordi, 2011 ONCA 665, 283 O.A.C. 287. [^22]: Perri v. Thind et al. (2010), 2009 34977 (ON SC), 98 O.R. (3d) 74 (S.C.). [^23]: Perri, at paras. 24-26, 32-33. [^24]: Stevens v. Stevens, 2012 ONSC 6881, paras. 22 and 23 [^25]: J.T. v. S.R.G. (No. 2), 2005 ONCJ 285, Dingwall v. Wolfe, 2010 ONSC 1044 [^26]: H. v. W., 1993 8500 (ON SC) [^27]: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.); Moon v. Sher (2004), 2004 39005 (ON CA), 246 D.L.R. (4th) 440 (C.A.); Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA), 75 O.R. (3d) 638 (C.A.). [^28]: Winton v. Lofranco (2005), 2005 63819 (ON SC), 21 RFL (6th) 228 (Ont. S.C.). [^29]: Piskor v. Piskor, 2004 5023 (ON SC), [^30]: Blanchard v. Walker, 2012 ONCJ 799 [^31]: Boneva v. Bonev (No. 3), 2005 ONCJ 249 [^32]: S. (S.) v. S. (M.) and A. (P.), 2007 ONCJ 95 [^33]: Ross v. Ross, 2012 ONSC 3205 [^34]: Parsons v. Parsons, 2002 45521 (ON SC), at para. 14, Campbell J. [^35]: Mooney, at paras. 30-34.