COURT FILE AND PARTIES

COURT FILE NO.: FS-89-12

DATE: 2014-04-29

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Larry Daniel Straus, Applicant

AND:

Eva Maria Pocsai, Respondent

BEFORE: The Honourable Mr. Justice C. S. Glithero

COUNSEL:
William R. Clayton, for the Applicant

Tiffany Frederick, for the Respondent

Costs ENDORSEMENT

[1] On February 26, 2014 I released written reasons disposing of the issues in this six day action, other than the issue of costs. In that respect I invited written submissions which have now been received.

[2] In those submissions, each side recognizes that the degree of success achieved is important on the disposition of costs. Unfortunately, both sides claim to be the successful party. Accordingly, the applicant seeks costs in the amount of $75,000 plus taxable disbursements and HST. The respondent claims costs in the amount of $44,909.26 inclusive of fees, disbursements and applicable HST.

[3] While section 131 of the Courts of Justice Act, R.S.O. 1990, c.C.43 provides that costs are a matter for the discretion of the court, two of the Family Law Rules, Ont. Reg. 114/99 have specific application.

[4] Rule 24 (1) provides a presumption that a successful party is entitled to costs. Subsection (4) provides that a party who behaved unreasonably albeit enjoying success in the action, may be deprived of all or part, or even ordered to pay costs, as a result. Subsection (5) provides guidance as to how to determine whether a part has acted unreasonably.

[5] Somewhat importantly, section 24 (6) provides that where success is divided in a step in a case, the court may apportion costs as appropriate. Subsection (11) requires the court to consider the importance, complexity or difficulty of the issues; the reasonable or otherwise of each party’s behaviour, the lawyer’s rates, the time properly spent on a case, expenses paid or payable and any other relevant matter.

[6] As noted in Serra v Serra, 2009 ONCA 395, “modern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants: Fong v Chan (1999), 46 O.R. 3rd (330). There the court also held that costs should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties.” See Boucher v Public Accountants Counsel for the Province of Ontario (2004) 2004 14579 (ON CA), 71 O.R. (3rd) 291.

[7] Of course offers to settle may play an important part on a decision as to costs. Rule 18 (14) provides that where a party makes an offer, unless ordered otherwise, he or she is entitled to costs to the date the offer was served and full recovery of costs after that date if the offer was not accepted and its maker obtained an order as favourable or more favourable than set forth on the offer. The burden of proving that the trial result is as or more favourable is that of the party who made the offer. The rule also continues that the making of an offer may be taken into account even if the trial result obtained was not as good or better than the potion offered.

[8] With these principles in mind, I must consider the results obtained on the various issues raised.

[9] Custody of the parties’ natural child Halen was important to both an each claimed custody.

[10] The result was an award of joint custody with primary residence to the respondent. Neither party claimed the other to be unfit and each gave evidence expressing a wish that the other be involved in Halen’s upbringing. In my opinion on this issue of custody it can’t be said that either party was a clear winner, although I hope Halen to be. In my analysis the respondent might have a slight edge in that Halen’s primary residence is with her. This result was based in part on the fact that Halen’s siblings live with the respondent. Neither party extended an offer to agree to joint custody.

[11] Access for Halen was not an issue as neither side argued that the other should be deprived of access if custody was awarded to the other. The result at trial was essentially the same as that agreed to by the parties in minutes of settlement that formed the basis for the interim order of Justice Sloan.

[12] Custody of the other two children was not realistically an issue in that while the respondent claimed it, the applicant didn’t want it.

[13] Child support for Halen was not in dispute as it was not contested that if either party was awarded custody the other should pay child support in accordance with the guidelines.

[14] The respondent sought an order requiring the applicant to pay child support for two of her other children. She was partially successful, as the trial result was that one half of the difference between the child support for one child and that for three children would be paid but only for two years.

[15] The issue of section 7 expenses involved divided success. While I ordered the applicant to pay in proportion to his income as compared to that of the respondent, I went on to impute a quantum of income to her which had the effect of reducing what the applicant would have otherwise had to pay. The respondent did not recover section 7 expenses in respect of the other two children.

[16] The respondent sought spousal support but it was ordered that she receive no spousal support.

[17] In terms of the Merner Place residence, the applicant sought an order that it be partitioned and sold. That request was denied. However the respondent was given a time period in which to determine whether she wished to purchase the respondent’s five per cent share in that property, and if so, to then pay the applicant off within a stipulated time period, failing which the property was to be sold.

[18] In my assessment this is a case in which success was divided at trial. The applicant succeeded in terms of spousal support and to a degree was successful in respect of child support for the other two children, but was not successful on his claim for sole custody or in his claim to have the property partitioned and sold. The respondent failed in her claim for spousal support, and had only limited success in respect of her claim for support for the other two children, but achieved success in her desire to prevent an order for partition and sale of the home.

[19] The respondent made two offers to settle, one dated November 6, 2013 and hence prior to trial. The other ffer to settle was in respect of costs and was dated March 27, 2014. The first of those offers claimed sole custody, with access to the applicant, spousal support for a period of fourteen months in the amount of $1,000 per month, on which issue the respondent failed. The offer required the applicant to pay child support for all three children whereas at trial the respondent only succeeded on that claim in respect of Halen and to a limited degree in respect of the other two children both as to quantum and as to duration. The claim as advanced at trial for a vesting order, which failed, was not dealt with in the offer to settle. While the respondent claims to have achieved a result as or more favourable that her offer to settle, I do not agree.

[20] That is not to say that she ought not to be commended for making an offer to settle and thereby trying to avoid the expense of a trial, particularly as there was no offer to settle made by the applicant.

[21] In most cases, in my opinion, it is often unreasonable for a party to make no offer to settle in a family law case given the expense of a trial. That will not always be true, particularly in one issue cases, as for example, where custody is the only issue. Family law cases are expensive to try as is evidenced by the claims for costs in this case. In my opinion it is not reasonable to either make no offer to settle, not make any counter offer in response to the offer received from the other side, particularly in respect of money issues.

[22] In my estimation, the issue at trial that involved the greatest number of witnesses and in respect of which the greatest amount of time was spent was the factual contest surrounding the access visit exchanges. As I found in my earlier rReasons, I reject the respondent’s position and find that she deliberately used the car seat safety concern as an excuse, and deliberately and without justification delayed the access visit exchanges. In my opinion that stance on her part clearly hardened the position as between the parties and the applicant’s family such as to make a sensible and amicable resolution difficult if not impossible. That was unfortunate, as in my opinion all the issues in this case could have been resolved, as between the parties, if greater effort had been made.

[23] Section 24 (11) sets out particular items I am to consider. In my estimation, the issues in this case were not particularly complex or difficult. They were of importance to the parties, as custody concerns always are. But this was not a particularly complex issue.

[24] I take no exception to the hourly rates claimed, by either side, as the difference in experience of counsel justifies a significant difference in hourly rates claimed.

[25] I have concerns about the hours claimed, not in the sense that I doubt they were spent, but rather in the sense of whether or not the expenditure of time was warranted in a case that was not particularly complex, or difficult, and given that it was only a six day trial, and that not all of each of those six days was occupied.

[26] On behalf of the applicant, counsel Mr. Clayton spent 149.7 hours. Another lawyer spent 22.8 hours, a law clerk spent 34.9 hours and an articling student spent 18.3 hours. A review of the dockets indicates that two motions were involved in this case, one of which was pursuant to minutes of settlement. There was a case conference and a settlement conference, and a few hours of oral questioning of both parties. To accomplish this, over 220 hours was spent. Using a notional 40 hour week, and suggesting that is likely generous when considering billable time, the net result is over five weeks of preparation for a case that was tried in just over a week.

[27] On behalf of the respondent, the bill of costs indicates that two lawyers spent a total of 156 hours plus another 26.3 hours of a law clerk’s time. Again, using the same consideration, approximately four weeks was spent.

[28] The amount of costs that a party can reasonably expect to recover, or to pay, surely must bear some relation to the complexity and difficulty of the issues, and the amounts realistically at issue in the case of the financial issues as opposed to the custody/access issues. The parties in this case are not affluent. While it’s difficult to put a price on an issue like custody, I also remember that in this case neither side claimed the other to be an unsuitable parent, and each side wanted the other involved in Halen’s upbringing.

[29] The amount of costs claimed on behalf of the applicant, $88,095.00 on a substantial indemnity basis, plus disbursements plus applicable HST, reduced in the final result to a claim of $75,000.00 plus disbursements and HST are amounts that exceed a year’s pay for the applicant, and are all the more exorbitant when it comes to the respondent given her income position.

[30] The respondent’s claim for costs in the amount of $44,999.00 is an amount that is double what the respondent has lived on in many years by her own choice, according to her own evidence, and represents more than half of a year’s income for the applicant.

[31] In short, while the respondent is to be commended for making an offer and hence at least trying to settle the case, although the offer was not exceeded at trial, it must be noted that she did not achieve sole custody as claimed, nor spousal support, nor child support in the amount claimed or for indefinite child support in respect of the other two children. The applicant did not achieve sole custody and was partially unsuccessful in respect of the child support claim for the other two children but he succeeded on the spousal support issue. In terms of conduct, I am of the view that failure to make any offer to settle or to respond to the other side’s offer to settle, is not reasonable in terms of the way in which family law case should be conducted. In terms of the respondent’s conduct, the problems created by her stance in access visit exchanges served to deepen the rift between the parties.

[32] I remind myself that neither Rules 18 nor 24 require that a cost order be made: Murray v Murray, 2005 46626 (ON CA), [2005] O.J. No. 5379 (Ont. CA).

[33] The ultimate objective is to arrive at a result which reflects what is fair and reasonable in all the circumstances. Taking into account the factors that I have mentioned and the divided success in respect of the various issues here it is my conclusion that the most fair and just result is to have each side bear its own costs incurred in litigating this case.

[34] I am not forgetting that the respondent made an offer to settle costs as well. It was not accepted. The disposition on costs is not as favourable as her offer. At least she made one.

[35] There will be no order as to costs.

C. S. Glithero J.

Date: April 29, 2014