ONTARIO
SUPERIOR COURT OF JUSTICE
BELLEVILLE COURT FILE NO.: FS-10-0353-00
DATE: 20140625
BETWEEN:
Marietta Zouganelis-Fobert
Sheri Thompson, for the Applicant
Applicant
- and -
Kevin John Fobert
In Person
Respondent
HEARD: In Writing
Abrams J.
DECISION ON COSTS
BACKGROUND
[1] The trial in this matter occurred over the course of April 12, 13, 14 and 28, 2013 in Belleville. The Court released its decision on December 20, 2013.
[2] The issue of Costs was to be dealt with in a separate decision.
[3] The Applicant’s cost submissions were submitted under cover, dated January 22, 2014.
[4] No cost submissions were received from the Respondent. By Notice of Change, dated February 12, 2014, the Respondent indicated to the Court that he was no longer represented by Trial Counsel, Mr. Lloyd. Rather, the Respondent chose to act on his own behalf.
LAW
[5] The Ontario Court of Appeal in Serra v. Serra 2009 ONCA 395, [2009] O.J. 1905 confirmed that modern cost rules are designed to foster three fundamental purposes, namely to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants bearing in mind that the awards should reflect what the Court views is a fair and reasonable amount that should be paid by the unsuccessful party.
[6] Subrule 24(1) of the Family Law Rules (“the Rules”) creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs.[^1]
[7] To determine whether a party has been successful, the Court should take into account how the Order compares to any settlement offers that were made.[^2] Moreover, the position each party took at trial should also be examined.
[8] Subrule 18(14) of the Rules reads as follows:
COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER
18(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.
- 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.
- The offer does not expire and is not withdrawn before the hearing starts.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.
[9] The Court has a discretion to take into account any written offer to settle, the date it was made and its terms, even if subrule 18(14) does not apply, when exercising its discretion over costs.[^3] Further, in deciding whether a party has acted reasonably or unreasonably in a case, the Court shall examine the reasonableness of any offer the party made.[^4] By contrast, a party’s failure to serve an offer to settle may be viewed as an adverse factor in determining the issue of costs.[^5]
[10] The failure to make an offer to settle much earlier by either party is unreasonable behaviour. Subrule 2(4) imposes a duty on parties and their lawyers to promote the primary objective of the Rules to deal with cases justly.[^6] This includes taking appropriate steps to save time and expense.[^7] Offers to settle play an important role in saving time and expense by promoting settlements, focusing parties and often narrowing issues in dispute.[^8] Further, the failure to serve an offer to settle will be an adverse factor when assessing costs.
[11] In making this decision, I have considered the factors set out in subrule 24(11) of the Rules, which reads as follows:
24(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.
[12] Subrule 24(5) provides criteria for determining the reasonableness of a parties behaviour in a case. It reads as follows:
Decision on Reasonableness
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.
[13] Family Law litigants are responsible for and accountable for the positions they take in the litigation.[^9]
[14] I have also considered both Boucher et al v. Public Accountants Council for the Province of Ontario 2004 14579 (ON CA), [2004] O.J. No. 2634 (Ont C.A.) and Delellis v. Delellis and Delellis 2005 36447 (ON SC), [2005] O.J. 4345. Both these cases point out that when assessing costs it is “not simply a mechanical exercise.” In Delellis, Aston, J. wrote at paragraph 9:
However, recent cases under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended, have begun to de-emphasize the traditional reliance upon “hours spent times hourly rates” when fixing costs…. Costs must be proportional to the amount in issue and the outcome. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant.
[15] I have also considered the Respondent’s ability to pay the costs Order.[^10] However, the means of the Respondent may not be used to shield his liability, particularly when he has acted unreasonably.[^11]
ANALYSIS
[16] The Applicant was the successful party in this litigation.
[17] Rule 24(1) presumes that a successful party is entitled to his or her costs.
[18] At the commencement of the trial, the Applicant provided the Court with a written statement detailing the Order that she was seeking to have made at the end of the trial.
[19] The Court’s decision of December 20, 2013, provided the Applicant an almost word for word Order as what she had requested, with the exception that income was imputed to the Respondent in an amount greater than what the Applicant was requesting, which resulted in the Applicant receiving a greater amount of monthly child support and having child support arrears fixed in an amount greater than she had requested.
[20] The Applicant’s Bill of Costs indicates her costs for commencing the action, conducting the trial and all steps after the trial, inclusive of disbursements and HST, is $38,567.50, broken down as follows:
• $9211.72 being the costs prior to trial preparation in earnest; and
• $29,355.78 being the costs incurred for trial preparation and trial.
[21] The Applicant has not requested costs for any intermediate steps in the action, such as costs related to conferences. However, the Applicant is making a claim for costs in relation to the Respondent’s motion to adjourn the trial, which was adjourned to the trial judge.
[22] The Court finds as a fact that the custody and access issues in this case were complex because of the history of violence between the parties and the Respondent’s denial of the history of violence.
[23] The Court finds as a fact that the equalization of property issue was complex as a result of the Respondent’s assertion that this father was the actual owner of the matrimonial home, at the date of separation. The Applicant argued successfully that the value of the matrimonial home should be included in the Respondent’s Net Family Property as the transfer of the home by the Respondent to his father on the day prior to the marriage was a sham.
[24] The Court finds as a fact that each of the issues in the case were made more difficult by the Respondent’s unmerited positions, which he maintained throughout the trial despite the fact that the positions were not supported by the evidence.
[25] The Court finds as a fact that the Respondent’s behaviour throughout the trial was unreasonable. Firstly, the Respondent commenced the trial without having provided proper financial disclosure. Secondly, the Respondent commenced the trial not having made proper financial disclosure contrary to an early Order obligating him to do so. Thirdly, the Respondent persisted in ignoring the financial disclosure requirements throughout the trial to the point that a mid-trial adjournment was granted for the Respondent’s accountants to provide financial disclosure directly to the Court. Even after that, the Respondent was ordered to leave trial and go home to retrieve further financial disclosure.
[26] The Court finds as a fact that the trial could have been completed in less time had the Respondent engaged in reasonable behaviour related to financial disclosure.
[27] The Court finds as a fact that the Applicant served a Request to Admit seeking to have the Respondent admit the authenticity of 81 documents, which were mostly made up of the Applicant’s income tax returns, receipts for the children’s activities and the documents to support the values used by the Applicant in her Net Family Property Statement. The Court finds as a fact that the documents were not contentious. Rather, they were ordinary disclosure in the course of a Family Law action. The Court finds as a fact that the Respondent acted unreasonably by denying the authenticity of the 81 documents listed in the Applicant’s Request to Admit. As a result, the trial time was unnecessarily lengthened by the Applicant having to prove every receipt for the children’s activities, every tax return, etcetera.
[28] Thus, the Court finds that the total costs figure of $38,567.50 is reasonable given all of the factors set out above. The Bill of Costs served and filed by the Applicant is uncontested. The Respondent failed to accept the Applicant’s offer to settle. Moreover, the Respondent made no offer to settle that the Court is aware of.
[29] Subrule 24(8) of the Rules states that if a party has acted in bad faith, the Court shall decide costs on a full recovery basis and shall order the party to pay them immediately.
[30] Persistent refusal by a party to make accurate financial disclosure and reveal their true income may rise to the level of bad faith.[^12] As the Court found, the Respondent was guilty of both in all the circumstances of the case.
[31] Moreover, the Respondent testified that he would in all likelihood make an assignment in bankruptcy. Thus, the entire amount of the costs may be enforced as an incident of support by the Family Responsibility Office.
[32] Alternatively, the Applicant has requested that any cost award be made a charge on the property at 16 Oriole Park Avenue, Belleville, Ontario and that if the cost award, and any amounts outstanding from the decision of December 20, 2013, are not forthwith paid in full, then the Applicant shall be entitled to possession of the property and entitled to list and sell the property without authorization or cooperation of either Respondent.
[33] Accordingly, the Respondent shall pay to the Applicant the sum of $38,567.50, inclusive of disbursements and HST, marked forthwith and in any event within 7 days from the date of this Order. The entire amount of costs may be enforced as an incident of support by the Family Responsibility Office. Further, the award of cost is hereby made a charge on the property at 16 Oriole Park Avenue, Belleville, Ontario and if the cost award, and any amounts outstanding from the decision of December 20, 2013, are not fully paid within 7 days from the date of this Order, then the Applicant shall be entitled to possession of the property and entitled to list and sell the property without authorization or cooperation of either Respondent.
Justice Brian W. Abrams
Released: 25 June , 2014
BELLEVILLE COURT FILE NO.: FS-10-0353-00
DATE: 201406
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Marietta Zouganelis-Fobert
Applicant
- and -
Kevin John Fobert
Respondent
DECISION ON COSTS
Abrams J.
Released: June 25, 2014
[^1]: Sims-Howarth v. Bilcliffe 2000 22584 (ON SC), [2000] O.J. No. 330 (SCJ – Family Court).
[^2]: Lawson v. Lawson 2008 23496 (ON SC), [2008] O.J. No. 1978 (SCJ).
[^3]: See subrule 18(16).
[^4]: See subrule 24(5)(b).
[^5]: M(J.V.) v. P(F.D.), 2011 CarswellOnt 13501 (ONT. C.J.).
[^6]: See Rule 2(2).
[^7]: See Rule 2(3).
[^8]: Laing v. Mahmoud, 2011 ONSC 6737.
[^9]: Heuss v. Surkos, 2004 CarswellOnt 3317, 2004 ONCJ 141.
[^10]: MacDonald v. Magel (2003) 2003 18880 (ON CA), 67 O.R. (3rd) 181 (Ont C.A.).
[^11]: Parsons v. Parsons (No. 2), 2002 45521 (ONSC).
[^12]: DePace v. Michienzi (2000) 2000 22460 (ON SC), 12 RFL (5th) 341 (Ont. SCJ)