ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: FS-12-5169
DATE: 2014-09-30
B E T W E E N:
Kirsten Mouland,
Cheryl Siran, for the Applicant
Applicant
- and -
Stefan Mouland,
Unrepresented
Respondent
HEARD: September 25, 2014,
Via Teleconference
Mr. Justice D.C. Shaw
Decision On Costs
[1] This is a decision on the costs of a case that went to trial on custody, child support and spousal support.
Background
[2] I ordered that the parties were to have joint custody of the children, with their primary residence with Ms. Mouland. Mr. Mouland was required to pay child support of $1,346 per month, based on his 2013 employment income of $94,314 and the Child Support Guidelines. The parties were ordered to share s. 7 Guidelines expenses in proportion to their respective incomes. Mr. Mouland was required to pay spousal support of $400 per month for a fixed period up to June 1, 2019. Mr. Mouland was required to name the children and Ms. Mouland as the beneficiaries of his life insurance policy available through his employment and to maintain coverage for the children under his extended health care plan.
[3] Ms. Mouland seeks her costs of the case. She served three offers to settle on March 28, 2014, any one of which was open for acceptance. Offer (No. 2) provided for joint custody, time sharing and support of the children in accordance with my order of August 26, 2014. It offered to settle spousal support at $279 per month, indexed to the cost of living. It also provided that Mr. Mouland would name the children and Ms. Mouland as beneficiaries of his life insurance policy for so long as he had a support obligation. It required Mr. Mouland to maintain coverage for the children and Ms. Mouland under his extended health care plan.
[4] Mr. Mouland did not accept any of the three offers to settle.
[5] The costs which Ms. Mouland seeks are fees of $14,705, based on her lawyer’s actual hourly rate of $225 for 61.4 hours of docketed time and her lawyer’s law clerk’s actual hourly rate of $100 per hour for 8.9 hours, plus disbursements of $584.40 and HST, for a total of $17,218.91.
The Law
[6] In Serra v. Serra (2009), 2009 ONCA 395, 66 R.F.L. (6th) 40 (Ont. C.A.), at p. 42, the Court of Appeal reiterated the fundamental purposes which modern costs rules are designed to foster, as set out in Fong v. Chan (1999), 1999 2052 (ON CA), 46 O.R. (3d) 330 (Ont. C.A.), at para. 22:
(1) to partially indemnify successful litigants for the costs of litigation;
(2) to encourage settlement; and
(3) to discourage and sanction inappropriate behaviour.
[7] The starting point in setting costs in family law matters is Rule 24(1):
“24(1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.”
[8] Rule 24(10) provides that promptly after each step in the case the court should decide who, if anyone, is entitled to costs and set the amount of costs.
[9] Rule 24(11) sets out the factors which must be considered in awarding costs:
(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 signatures of the order;
(e) expenses properly paid or payable; and
(f) any other relevant matter.
[10] Rule 18(14) deals with the costs consequences of a failure to accept an offer to settle:
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.
[11] An award of costs is a matter in the discretion of the court by virtue of s. 131(1) of the Courts of Justice Act, which provides:
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.
[12] In C.A.M. v. D.M., 2003 18880 (ON CA), [2003] O.J. No. 3707 (C.A.) at para. 40, Rosenberg J. held that the Family Law Rules have circumscribed the broad discretion granted by s. 131(1) of the Courts of Justice Act, but that they have not, however, completely removed the court’s discretion. I note that Rule 24(11)(f) allows the court, in setting the amount of costs, to take into account “any other relevant matter.” Read in conjunction with s. 131(1) of the Courts of Justice Act, there remains a discretion to award costs that appear just in the circumstances of the case, while giving effect to the Rules.
[13] The Court of Appeal has made it clear that in assessing costs, the overriding principle is one of reasonableness, and that the failure to follow that principle can produce a result that is contrary to the fundamental objective of access to justice (Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.), at p. 302.
[14] In Zesta Engineering Ltd. v. Cloutier, 2002 25577 (ON CA), [2002] O.J. No. 4495 (Ont. C.A.), at para. 4 the Court of Appeal did not make a specific finding with respect to the amount of time spent or the rates charged by counsel, and stated:
In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant.
Discussion
[15] Ms. Mouland obtained a judgment that, in its totality, on the major issues in dispute was as favourable or more favourable than her offer to settle (No. 2), of March 28, 2014. Her offer on joint custody, primary residence and timesharing was the same as the judgment. Child support was awarded in the amount set out in the offer, based on Mr. Mouland’s 2013 employment income. Ms. Mouland received a larger award of monthly spousal support - $400 – than the amount in her offer - $279, indexed. She received an award for s. 7 Guidelines expenses, as set out in her offer to settle. The difference between the offer and the judgment were basically three items:
• Firstly, spousal support in the judgment was time limited to June 1, 2019. In the offer, duration was indefinite;
• Secondly, the offer required Mr. Mouland to maintain coverage for Ms. Mouland and the children under Mr. Mouland’s extended health care plans. Ms. Mouland is not entitled to coverage under the plans. The judgment required coverage for the children only.
• Thirdly, Ms. Mouland’s offer required Mr. Mouland to designate Ms. Mouland and the children as beneficiaries on all his polices of life insurance for as long as he had a support obligation. The judgment requires Mr. Mouland to designate the children as beneficiaries of 50% of the face amount of the policy of insurance available through his employment on his life and to designate Ms. Mouland as a beneficiary in a percentage of the face amount of the policy equal to not less than $20,000.
[16] I do not regard the small differences between the offer and the judgment as significant. The trial focused on custody and timesharing, on whether Mr. Mouland’s child support obligations should be based on his 2013 income and on Ms. Mouland’s entitlement to spousal support. At trial Ms. Mouland acknowledged that her spousal support should be time limited. Whether or not Ms. Mouland was included on Mr. Mouland’s health care plan would not affect the premium that Mr. Mouland would have to pay to include coverage for the children. At trial, Ms. Mouland acknowledged that the plans did not allow her to be covered. Mr. Mouland disputed coverage for Ms. Mouland under his life insurance policy. Although the judgment did not required her to be an equal beneficiary with the children, coverage was required to the extent of $20,000 to secure Mr. Mouland’s spousal support obligation.
[17] I regard the actual hourly rates shown for Ms. Mouland’s solicitor, Ms. Siran, and for Ms. Siran’s law clerk, to be reasonable. Ms. Siran has eight years of experience. Ms. Siran’s law clerk has 34 years of experience. None of the law clerk time was secretarial in nature.
[18] Of the 61.4 hours docketed by Ms. Siran, 22.3 hours pre-date the March 28, 2014 offer to settle and 39.1 hours post-date the offer. Of the 11.2 hours of law clerk time, 7 hours pre-date the offer and 4.2 hours are after the offer.
[19] On a strict mathematical basis, using docketed time and hourly rates, Ms. Siran’s time for preparation after March 28, 2014, and attendance at four days of trial comes to $8,797.50. Ms. Siran’s post-March 28, 2014 time comes to $200. A total of approximately $9,000 is very reasonable for a four day trial and related preparation, even on a scale that is less than full recovery.
[20] I have concerns about the claim for the time prior to March 28, 2014. Part of that time includes attendances at a case conference, a settlement conference and a trial management conference, plus preparation for those conferences. There is no indication that any order was made with respect to costs of any of these three conferences. This is significant in light of the provisions of Rule 24(10) that requires the judge who heard each step to summarily deal with the issue of costs. If costs of a step are not ordered, and the record is silent on the issue, the presumption is that the step was concluded without costs. Steps in a case include motions and conferences. In Islam v. Rahman 2007 ONCA 622, at para. 2 the Court of Appeal held that in the absence of a specific order for costs of a step by the judge who deals with that step, the trial judge should disallow costs claimed in relation to such steps.
[21] It is unclear from Ms. Mouland’s Bill of Costs how much time was spent in relation to each of the conferences and how much was spent on pleadings, client meetings, communication with Mr. Mouland’s former counsel, drafting offers to settle and preparation for trial.
[22] Because rule 18(14) distinguishes between (a) “costs to the date the offer was served” and (b) “full recovery of costs from that date” where an offer meets the conditions of rule 18(14), it follows that the time pre-dating the offer to settle, apart from time spent in relation to the conferences, should be compensated at less than a full recovery rate.
[23] Mr. Mouland submits that it was reasonable for him to take this matter to trial because it was important that he has equal input into the decisions affecting his children. He was concerned that this input would be impaired if the primary residence of the children was with Ms. Mouland. Joint custody, as contained in the offer, and as ordered, entitles each party to equal input into the major decisions affecting the children’s health, education and welfare. The fact that the children reside for a greater portion of time with Ms. Mouland does not affect that fact.
[24] The time that the children spend with Mr. Mouland, as per the offer and the judgment, is substantial. The offer remained open for acceptance up to trial. Mr. Mouland took the risk that Ms. Mouland would be successful at trial in at least meeting her offer.
[25] During a portion of the case, Mr. Mouland was represented by counsel. He would have been aware of the costs of litigation from the accounts of his own counsel. He could reasonably have expected to pay significant costs if he was the unsuccessful party in a four day trial.
[26] In my opinion, having regard to the factors discussed above, in the context of the particular facts of this case, it would be fair and reasonable to award Ms. Mouland costs of this case in the sum of $10,500 for fees, plus HST of $1,365, and $584.40 for disbursements, plus HST of $17.80, for a total of $12,467.26
[27] This was a multi-issue matrimonial matter, which included issues of both child support and spousal support. On the authority of Wildman v. Wildman, 2006 33540 (ON CA), [2006] O.J. No. 3966 (C.A.) at paras. 53 – 59, and Clark v. Clark 2014 ONCA 175, at para. 81, this costs award shall be enforceable as support by the Family Responsibility Office.
The Hon. Mr. Justice D.C. Shaw
Released: September 30, 2014
COURT FILE NO.: FS-12-5169
DATE: 2014-09-30
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Kirsten Mouland,
Applicant
- and -
Stefan Mouland,
Respondent
DECISION ON COSTS
Shaw, J
Released: September 30, 2014
/mls