COURT FILE NO.: FC-13-953
DATE: 2014/08/26
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ALYSSA NOVICK
Applicant
– and –
MAXIME FAILLE
Respondent
Michael Rankin, for the Applicant
Maxime Faille, Self-represented
HEARD: By written submissions
AMENDED REASONS as to costs on
the motion heard february 25, 2014
The text of the original reasons as to costs was corrected on September 4, 2015, and the description of the correction is appended.
KERSHMAN J.
Introduction
[1] Written submissions were requested in relation to the issue of costs arising from the Motion heard February 25, 2014. Costs outlines and submissions were provided by both parties.
Mother’s Position
[2] The Applicant (“Mother”) argues that she was substantially successful on the motion and therefore, pursuant to rule 24(1) of the Family Law Rules, O. Reg. 114/99, she is entitled to costs. She argues that she was awarded substantial child and spousal support, partial retroactive child support, orders regarding medical and dental benefits, security for support through irrevocable insurance designations and an order for exclusive possession of the matrimonial home, as well as orders compelling Mr. Faille to answer outstanding undertakings and two or three refusals.
[3] The Mother argues that, pursuant to rule 24(5), the Court can examine the reasonableness of a party’s behaviour including any offer to settle. She argues that the Respondent’s (“Father”) position on the motion was wholly unreasonable. His position was that the matter should be dismissed without any of the relief being granted.
[4] The Mother argues that the Father took the unreasonable position that his pre-separation income should be considered for spousal support purposes, which was rejected by the Court.
[5] The Mother argues that the Father increased the complexity and difficulty of the issues, which led to a more extensive evidentiary record and complex legal arguments in relation to the issues.
[6] The Mother argues that the Father opposed the granting of any relief, including any retroactive support or the use of his post-separation income increases for the purposes of calculation of spousal support.
[7] As to the lawyer’s rates the time properly spent under rule 24.11(c) and (d), the Mother argues that the factual and legal records were complex. There was a comprehensive factum and no fewer than 42 authorities were filed on the motion. The partial indemnity bill in this case is broken down as follows:
Offers to Settle
[8] The Mother argues that the Father’s offer to settle was totally unreasonable.
[9] The Mother acknowledges that while she did not achieve the amount requested under her own offer to settle, the Court’s decision is largely consistent with the terms she offered, including the blended child support, a substantial spousal support payment, dental benefits, insurance coverage and exclusive possession of the matrimonial home.
[10] Therefore, the Mother argues that costs awards should reflect what the Court views as a fair and reasonable amount that should be paid by the unsuccessful party (Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, at para. 12).
Father’s Position
[11] The Father argues that success on the motion was divided and, pursuant to rule 24(6), costs should be apportioned as appropriate.
[12] The Father argues that the Mother was unsuccessful in her motion for increased child support and partially successful in relation to spousal support.
[13] The Father then submits arguments on a number of issues: (1) the transferring of monies from a joint checking account to the Mother’s account alone during the initial post-separation period; (2) the refusal by the Mother to attend a financial mediation in December, 2010; (3) the failure by the Mother to answer undertakings; and (4) the Mother’s refusal to cooperate in relation to access to the children. None of these matters were part of the motion argued before the Court on February 25, 2014 and therefore are not pertinent to the issue of costs.
[14] The Father argues that the Court endorsed in its entirety his position with respect to child support. He does acknowledge that spousal support was based on his year of separation income but argues that it was not unreasonable considering he is shouldering the entire servicing of the substantial joint debts, that the Mother will owe him a substantial equalization payment, that she has exclusive possession of the matrimonial home and essentially all of its contents.
[15] The Father also argues that the Mother’s disclosure was not complete while his disclosure was.
[16] The Father argues that the issues were not complex and that his income was a straightforward professional income.
[17] As to the offers to settle, the Father argues that neither party beat the offers to settle and success on the motion was divided. He then goes on to discuss an offer to settle made in July, 2012, which was well before the date of this motion.
[18] The Father argues that costs should be paid by the Mother to him and be set at $16,672.00 inclusive of HST and disbursements. In the alternative, he argues that there should be no order as to costs.
[19] He argues in the further alternative that costs claimed at 75 percent of rates are excessive and that $50,000.00 for costs was disproportionate to the time argued on the motion. He cites the case of Farrar v. Farrar, [2002] O.J. No. 152, in which, after a five-day trial the Court ordered the payment of $25,000.00 inclusive of all pre-trial attendances plus, GST (at that time) plus disbursements of over $8,000.00.
[20] Lastly, the Father submitted that any costs award should take into consideration and be reduced by the amount of tax savings arising from the tax deduction available for the costs enforcement. The Respondent relies on the case of Boehm v. Peters, 2012 ONCJ 173, 22 R.F.L. (7th) 362.
The Law
[21] The issue of cost in the family context is dealt with under subsection 131(1) of the Courts of Justice Act, R.S.O. 1990 c. C.43, as well as Rules 18 and 24 of the Family Law Rules.
Analysis
[22] Various matters were settled on consent at the beginning of the motion, including that the children would remain on the Father’s medical/dental plan, that the Mother would not be on the Father’s dental plan, that on an interim basis the Father would reimburse the Mother for a loss of double coverage under the Father’s medical/dental plan and that of the Mother, and that the Mother would continue to have temporary exclusive possession of the matrimonial home.
[23] The issues that were argued related to the following:
outstanding undertakings and refusals;
child support including s. 7 expenses;
spousal support;
retroactive child and spousal support; and
a temporary order that the Father maintain his current Manulife basic life insurance policy, RBC life insurance policy, and disability policy with the Mother named as irrevocable beneficiary.
[24] As to the outstanding undertakings and refusals, the Father was ordered to comply with the outstanding undertakings and was required to answer two of the three refusals.
[25] As to the issues of child and spousal support, the Father was making undifferentiated child and spousal support payments to the Mother. This resulted a great deal of confusion as to how much was being paid for child support and how much was being paid for spousal support.
[26] The Court found that the Father’s current income of $420,000.00 should be used when calculating child support and ordered the appropriate child support based on one child living at home full time and one child attending university out of town.
[27] The child support for two children, based on an income of $420,000.00 was $5,090.00 per month. The Court ordered full child support for 4.5 months, and child support for Noah alone (at a rate of $3,261.00 per month) for the remaining 7.5 months of the years. This resulted in an average monthly child support of $3,946.00. At the time of this motion, the Father was paying $4,800.00 per month for undifferentiated child support and spousal support.
[28] As to the issue of s. 7 expenses, the Mother was successful on that issue.
[29] As to the issue of spousal support, the Father argued that the Mother had a reasonable entitlement to non-compensatory spousal support and argued that the amount currently being paid as undifferentiated child and spousal support was appropriate and should continue. The Court did not find that to be the case and ordered spousal support of $7,000.00 per month.
[30] As to the argument for retroactive child and spousal support, the Court held that the issue of retroactive spousal support and a certain portion of retroactive child support would be left to the trial judge. The Court notes that the Mother was successful in obtaining retroactive child support from January 2013.
[31] As to the issue of the Manulife and RBC insurance policies, the Mother was successful in that she was named as irrevocable beneficiary for two of the insurance policies for the children until such time as child support is no longer payable, but the Court ordered that the Mother not be the irrevocable beneficiary for all of the amount but for some of the amount. The Mother was successful to a large extent in relation to the insurance policy issue.
[32] On the whole, the Court finds that the Mother was more successful than the Father. As such, she is entitled to costs.
[33] In relation to sub‑rules 24(4) to (6), in the Court’s view, the Respondent acted unreasonably to a certain extent as relates to which level of income should be used for the purpose of calculation of spousal support. That led to a longer and more protracted motion.
[34] Sub-rule 24(11) deals with the factors in setting costs.
[35] As to rule 24(11)(a), the issues on the motion were moderate in terms of complexity.
[36] As in rule 24(11)(b), as to the reasonableness of each party’s behaviour, from the Court’s perspective, the Father’s position as to his income level for the purpose of calculation of spousal support was definitely a stumbling block in terms of the determination of the amount. Therefore the Court finds that his position on this issue on the motion was, to a certain extent, unreasonable.
[37] With respect to rule 24(11)(4), in relation to the lawyers’ rate, the Court notes that the Mother’s counsel has 27 years of experience at the bar, and there was a five‑year associate.
[38] Howard J. in OGT Holdings Ltd. v. Startek Canada Services Ltd., 2010 ONSC 1090 (“OGT Holdings”), stated at para. 7:
7 In June of 2005 the Costs Subcommittee of the Civil Rules Committee issued the following INFORMATION FOR THE PROFESSION:
In preparing its report to the Rules Committee that led to the changes in fixing costs to be implemented on July 1, 2005, the Costs Subcommittee gathered substantial information and consulted widely. Based on this, the following may provide some guidance to the profession as these changes are implemented.
It is anticipated that in considering rates, as one of the various relevant factors, courts will normally treat the rates set out below as maximum rates when fixing partial indemnity costs. These rates are the maximums that were available under the costs grid. It is further anticipated that the maximum rates would apply only to the more complicated matters and to the more experienced counsel within each category. The rates used in costs submissions will normally come within the range established by these maximums as appropriate to the particular matter after giving consideration to the factors set out in r. 57.01(1) which now include the amount an unsuccessful party could reasonable expect to pay and the principle of indemnity. Finally, it is the intention that these guidelines will be reviewed periodically so that their currency can be maintained, in light of accumulated experience.
In addition to the hearing itself, these guidelines encompass mediation under r. 24.1, discovery of documents, drawing and settling issues on a special case, setting down for trial, pre-motion conferences, examinations, pre-trial conferences, settlement conferences, notices or offers, preparation for hearing, attendance at assignment court, orders issuing or renewing a writ of execution or notice of garnishment, seizure under writ of execution, seizure and sale under writ of execution, notices or garnishment or any other procedure authorized by the Rules of Civil Procedure.
Law Clerks
Maximum of $80.00 per hour
Student-at-law
Maximum of $60.00 per hour
Lawyer (less than 10 years)
Maximum of $225.00 per hour
Lawyer (10 or more years but less than 20 years
Maximum of $300.00 per hour
Lawyer (20 years and over)
Maximum of $350.00 per hour
[39] The Court is not aware that the Civil Rules Committee has issued any follow-up information. The Court is aware that this is a family law case; notwithstanding that fact, the Court has the ability to rely on the OGT Holdings case in this matter.
[40] The billing rate charged by Mr. Rankin is $500 per hour. Based on the OGT Holdings case, the maximum that Mr. Rankin could charge is $350 per hour. He is claiming partial indemnity costs at the rate of $375 per hour. The billing rate charged by the associate is $250 per hour. Based on the OGT Holdings case, a lawyer with less than 10 years of experience can only charge a maximum of $225. In this case, the lawyer had only five‑year experience.
[41] The total time spent by Mr. Rankin is 68.7 hours. The total time spent by Ms. White is 38.9 hours.
[42] The Ontario Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 37 stated that:
In assessing costs, the overriding principle is one of reasonableness and that the failure to follow that principle could lead to a result that is contrary to the fundamental objective of access to justice. The costs award should reflect more what the Court views as a fair and reasonable amount that should be paid by an unsuccessful party, rather than an exact measure of the actual costs to the successful litigant.
[43] In this case, strictly on a time spent basis, the following would be the result:
• Rankin: 68.7 hours x $350 per hour = $24,045
• White: 38.9 hours x $175 per hour = $6,867.50
• Total: 107.6 hours, $30,912.50 + HST
[44] The Court finds that even on the aforesaid basis, these costs would be excessive for the motion. The Court does not accept that this amount is what an unsuccessful litigant would reasonably expect to pay on this motion.
[45] Having weighed the various factors and the overriding principle that the goal is to fix costs in a way that is fair and reasonable to the party, in the circumstances, the costs award to the Mother for fees and HST, is fixed at the sum of $13,000.00.
[46] The claim for disbursement is $3,373.10. The breakdown of the disbursements includes photocopies of $1,980.00; the amount is excessive. The total disbursements are fixed at $1,250.00 inclusive of HST.
[47] The total fees, disbursements and HST are fixed at $14,250.00 ($13,000.00 + $1,250.00).
[48] The Court finds that none of the Offers to Settle made in relation to the motion exceeded the relief granted on the motion.
[49] These costs are to be paid at the rate of $3,500.00 per month, on the first day of each and every month, commencing September 1, 2014, until paid.
[50] Order accordingly.
Justice Stanley Kershman
Released: August 26, 2014
APPENDIX
The following sentence is removed from paragraph [26]:
The Father argued that child support should be based on his pre-separation income, which was somewhere in the range of $287,000.00.
Paragraph [27] is deleted:
The child support for two children, based on an income of $420,000.00 was $5,090.00 per month. This is far higher than the amount that the Father was paying for undifferentiated child support and spousal support.
The following paragraph is inserted in the place of paragraph [27]:
The child support for two children, based on an income of $420,000.00 was $5,090.00 per month. The Court ordered full child support for 4.5 months, and child support for Noah alone (at a rate of $3,261.00 per month) for the remaining 7.5 months of the years. This resulted in an average monthly child support of $3,946.00. At the time of this motion, the Father was paying $4,800.00 per month for undifferentiated child support and spousal support.
The following words are removed from the first sentence of paragraph [33]: child support and
The following words are removed from the first sentence of paragraph [36]: child support and
COURT FILE NO.: FC-13-953
DATE: 2014/08/26
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ALYSSA NOVICK
Applicant
– and –
MAXIME FAILLE
Respondent
Amended reasons as to costs on
the motion heard february 25, 2014
Kershman J.
Released: August 26, 2014