ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: FS 4832/12
DATE: 20141209
BETWEEN:
D.C.
Ms Glenna McClelland, for the Applicant
Applicant
- and -
H.C.
In Person
Respondent
HEARD: October 27, 28, 29, 30, 31 and November 3, 4, 10, 12 and 13 2014
REASONS FOR DECISION ON COSTS
Conlan J.
I. INTRODUCTION
[1] After a lengthy trial, in Reasons for Judgment reported at 2014 ONSC 6696, I resolved the issues of custody and access, child support and spousal support. The parties had previously settled the property issues.
[2] On the major issue at trial, custody and access, the Applicant father was successful. The Respondent mother had sought a continuation of the status quo – custody and primary residency with her and access between the two girls and their father. Instead, I ordered what was sought by the father – joint custody and a shared parenting regime on a week-about rotation schedule.
[3] The parties have been unable to resolve the issue of costs. I have received and reviewed their written submissions.
II. THE POSITIONS OF THE PARTIES
The Father
[4] The father claims costs in the total amount of $47,000.00. The supporting documentation shows the following: $40,755.00 for fees and $9850.75 for disbursements, taxes excluded. Although the Costs Outline indicates that the total costs on a substantial indemnity basis are $58,327.15, the Bill of Costs indicates that the $40,755.00 for fees is based on full indemnity - $300.00 per hour for the father’s lawyer who has over thirty years of experience and practices primarily in the area of family law. The figure for disbursements includes $8380.00 in costs associated with the assessment completed by the London Custody & Access Project - $5880.00 (70% of the assessment invoice) plus $2500.00 (50% of the assessor’s trial retainer).
[5] The father submits that he made three Rule 18 Offers to Settle (February 4, 2014, July 29, 2014 and October 16, 2014), that the result after trial was as favourable as or more favourable than each of those three Offers in all respects but two (the father’s request for a parenting coordinator which was denied and the father’s position on child support arrears), and that, consequently, he is presumptively entitled to full recovery of costs from the dates of the Offers.
[6] The father submits that the mother was unreasonable both before and during the trial and unnecessarily prolonged the hearing.
[7] The father submits that the mother has the ability to pay costs and should be ordered to do so.
[8] The father requests that costs awarded in his favour be set-off against arrears of child support and/or the equalization payment owing by him.
[9] The father offered to settle the issue of costs for $35,000.00 to be paid by the mother. The mother did not respond to that offer.
The Mother
[10] It is unclear from the mother's written submissions on costs whether she is suggesting no costs or costs in favour of the father but in an amount less than what has been requested.
[11] The mother argues that she cannot afford to pay costs. Her motor vehicle is not roadworthy; her home is at risk; she already spent more than $40,000.00 in her own legal fees prior to trial; she is in debt; and she has no savings and no credit available.
[12] The mother opposes the father's request to have any costs that are awarded to him offset with child support arrears and/or the equalization payment owing by him.
[13] The mother also contends that the disbursements sought by the father dealing with the professional assessment ought to be disallowed.
[14] I assure the mother that I have considered carefully her submissions on costs. But for those submissions, and her financial circumstances in particular, there would have been a decent chance that I would have given the father what he asked for.
[15] In the end, I cannot in good conscience go below what I have decided. Ironically, my decision means that the father will be awarded significantly less than what the mother asserts she paid herself in legal fees before the trial even started. And it must not be forgotten that the mother has a relatively stable, well-paying job which, coupled with the property settlement, takes her out of the class of litigants who are truly impecunious.
III. ANALYSIS and CONCLUSION
[16] Costs awards are designed to encourage settlement, to indemnify successful litigants and to sanction inappropriate conduct. I have tried to fashion my decision in a way that best satisfies the first two objectives. The third consideration is not relevant in this case.
[17] I have considered subrules 18(14), (15) and (16) of the Family Law Rules (“Rules”). Those provisions are as follows.
[18] Costs Consequences of Failure to Accept Offer
(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. O. Reg. 114/99, r. 18 (14).
Costs Consequences – Burden of Proof
(15) The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14). O. Reg. 114/99, r. 18 (15).
Costs – Discretion of Court
(16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply. O. Reg. 114/99, r. 18 (16).
[19] I have considered subrules 24(1), (5) and (11) of the Rules. Those provisions are as follows.
Rule 24: Costs
Successful Party Presumed Entitled to Costs
- (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal. O. Reg. 114/99, r. 24 (1).
Decision on Reasonableness
(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. O. Reg. 114/99, r. 24 (5).
Factors in 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. O. Reg. 114/99, r. 24 (11).
[20] Generally, the other items in Rule 24 are not applicable here. For example, this is not a case of divided success. This is not a case where the successful party, the father, behaved unreasonably. This is not a case where a party acted in bad faith or where costs were caused by the fault of one of the parties or counsel.
[21] A relevant consideration in deciding whether to not strictly apply subrule 18(14) is the financial condition of the parties. M.(A.C.) v. M.(D.), 2003 18880 (ON CA), [2003] O.J. No. 3707 (C.A.).
[22] No argument could reasonably be made that the father is not entitled to some costs. He was successful on the most important and time-consuming issue at trial - custody and access. There is no good reason to displace the normal presumption that the father, as the successful party after trial, is entitled to costs.
[23] No complaint could reasonably be made about the quantum of costs being requested by the father. Anything less than $50,000.00 is a bargain for a trial of this length.
[24] No complaint could reasonably be made about the hourly rate or time dockets of the father's counsel. The issues were very important to the parties and to their children, particularly custody. The case was fairly and very competently presented by Ms. McClelland. With her expertise and level of experience, $300.00 per hour is on the low side, even for Grey and Bruce Counties. The hours that Ms. McClelland spent on the file were reasonable. The disbursements charged were reasonable, and those now being claimed against the mother are properly recoverable.
[25] The amount of costs sought by the father is not beyond what the mother should reasonably have expected to pay after such a lengthy trial.
[26] Having said all of the above, I have decided to exercise my discretion and reduce by about one-third the total amount of costs requested by the father.
[27] I do that for these reasons.
[28] First, although I agree that the father, in most respects, met or exceeded after trial what he offered to settle for, it would likely crush this mother, financially and psychologically, to slavishly adhere to the presumed costs consequences of that.
[29] The financial conditions of the parties would make it unreasonable to strictly apply subrule 18(14).
[30] It must be remembered that the mother earns far less money than the father and has no current partner to help share the financial burden.
[31] Second, at a time when the parties are embarking on a shared parenting regime, I hesitate to do anything which will only drive a wedge between the parties right from the outset.
[32] Third, although the mother was not successful on the custody issue, I found that she conducted herself quite well at trial. Without a lawyer, she remained polite and was fairly well prepared.
[33] Further, the mother cannot really be faulted for failing to settle the matter of custody in advance of trial. The assessment process took a long time, and then the report from the London Custody & Access Project was largely in favour of what was then the status quo (the mother's position).
[34] Fourth and finally, I simply do not think that the mother could possibly be in a position to ever afford to pay anything more than what I have decided to award. And I am not in the habit of issuing Orders just for the sake of seeing them in print.
[35] For all of the foregoing reasons, I order that the mother shall pay to the father costs in the total all-inclusive amount of $30,000.00.
[36] That figure represents partial indemnity recovery. All of the disbursements sought by the father are allowed. The balance of the award is for fees.
[37] Quantum of costs is largely discretionary. The overriding objective is to make an award that is fair, just and reasonable in all of the circumstances.
[38] The sum of $30,000.00, in my view, meets that objective.
[39] I decline to permit the costs to be set-off against child support arrears owing by the father. I acknowledge that such authority exists, however, I am loathe, generally, to trade anything that is for the benefit of children for something that is for the benefit of a parent.
[40] As for the equalization payment, the costs shall be set-off against whatever the father owes in that regard. So ordered.
[41] I wish the parties and their two daughters the best going forward. These parents, working together in a shared parenting regime, will undoubtedly provide their children with a solid foundation on which to build their future lives.
Conlan J.
Released: December 9, 2014
COURT FILE NO.: FS 4832/12
DATE: 20141209
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
D.C.
Applicant
- and -
H.C.
Respondent
REASONS FOR DECISION ON COSTS
Conlan J.
Released: December 9, 2014