SUPERIOR COURT OF JUSTICE – ONTARIO

FAMILY COURT

COURT FILE NO.: FD251/13

DATE: December 17, 2014

RE: Ronald Scott Furtney, the estate trustee of the late Philip Leroy Furtney, the applicant

AND:

Mary Diane Furtney, respondent

BEFORE: MITROW J.

COUNSEL:
Terry Hainsworth for the applicant
Stephen McCotter for the respondent

HEARD: written submissions filed

ENDORSEMENT ON COSTS

[1] On June 26, 2014, I released my decision in relation to the applicant’s motion to set aside $100,000 from the estate to be applied towards the applicant’s legal fees and disbursements. The applicant is the estate trustee of the estate of the late Philip Leroy Furtney.

[2] I have considered the written submissions of the applicant dated September 24, 2014; the respondent’s submissions dated October 20, 2014; and the applicant’s reply submissions via letter dated November 3, 2014 that included some additional authorities.

[3] Also, via letter dated September 30, 2014, the applicant seeks $558.22 in relation to an appearance on September 17, 2014 before me to make submissions regarding the interpretation of a portion of my order dated June 26, 2014 dealing with the meaning of “anticipated legal expenses.” The applicant submits that the endorsement for the September 17, 2014 appearance did not deal with costs and the applicant enclosed his bill of costs should the court see fit to award costs. No submissions on this specific costs issue were received from the respondent. The applicant submits that the interpretation favoured his position. It is not clear why the respondent did not address this minor costs issue. In the circumstances, I order that the costs in relation to the September 17, 2014 appearance are left to the trial judge.

DISCUSSION

[4] The applicant was successful on his motion to have the sum of $100,000 set aside out of the estate for fees and disbursements, as asked; as such, the applicant is presumptively entitled to costs.

[5] The applicant seeks $10,647.09 inclusive of fees, H.S.T. and disbursements. The fees portion sought is $8,249.20.

[6] The main objection raised by the respondent is that the fees are excessive. She takes issue with the disbursements also. However, the respondent’s submission to the effect that she had no choice but to oppose the motion is a factor that merits little or no weight.

[7] Regarding the factors in r. 24(11), the most contentious factors are (d) and (e). Both parties concede the importance of the motion. There was some moderate complexity as to the legal issues involved on the motion. In relation to (b), neither party served an offer. This court has repeatedly encouraged parties in family law matters to serve offers and, if necessary, to serve them often. Given that both parties are equally at fault in not serving any offer, I am not prepared to reduce the costs that would otherwise be payable to the applicant.

[8] No issue was taken with Mr. Hainsworth’s hourly rate of $475. The bulk of the fees portion of the bill of costs is the 18.7 hours spent by Mr. Hainsworth. The amount sought by the applicant for fees is 80% of the time actually spent.

[9] The respondent submits that if costs are ordered, then the amount allowed should be one-third of the total fees docketed and 50% of the disbursements. There is no dispute between the parties that the guiding principle in awarding costs is reasonableness and not a mathematical computation of hours times hourly rate.

[10] I find that the sum of $5,000 for fees is a reasonable amount for the respondent to pay.

[11] Regarding disbursements, the sum of $1,173 is claimed; of this amount, the sum of $947.40 is shown as “Westlaw.” I disallow this disbursement entirely. There is no evidence as to how it is arrived at. Did Westlaw forward an account of $947.40 plus H.S.T. for conducting research? Is this a real cash disbursement? In some situations, law firms may pay a flat monthly rate to a research facility such as Westlaw for the right to use its electronic research service. If it is the latter, then the appropriateness of such a disbursement becomes questionable. If a law firm has a flat rate charge, then charging clients for individual research time, which in totality may exceed the monthly flat rate charge, could actually generate a profit. In the present case, there are no invoices or other evidence or information filed that would allow the court to determine whether this is a reasonable or proper disbursement, as opposed to being part of the firm’s overhead as reflected in the hourly rates.

[12] The respondent shall pay to the applicant the sum of $5,800 inclusive of fees, disbursements and H.S.T. The remaining disbursements have been rounded down slightly to arrive at this amount. The timing of the payment of the costs is dealt with below.

[13] I do wish to address the applicant’s reply submissions that were directed solely to the issue of the time properly spent by the applicant. The applicant makes the following written submission: “To the extent that a solicitor argues that his or her opponent has spent too much time on the case, the objecting solicitor will be required to furnish his or her own dockets.”

[14] In support of this submission, the applicant relies on two cases: Wimalaratnam v. Wimalaratnam (2011), 2011 CarswellOnt 2211 (S.C.J.); and Livingston v. Livingston, 2014 ONSC 3987 (S.C.J.).

[15] I disagree with the applicant’s submission that there was an obligation on the respondent to file her bill of costs. Further, the cases relied on by the applicant must be read subject to a case, on point, decided by the Court of Appeal for Ontario and which was not referred to in the applicant’s submissions: Smith Estate v. Rotstein, 2011 ONCA 491 (C.A.). In Smith Estate, the motion judge had allowed over $700,000 in costs to the successful party. The quantum of costs claimed by the winning party was hotly contested before the motion judge. In arriving at the costs decision, the motion judge placed significant emphasis on the failure of the losing party to file her bill of costs and, as a consequence, the motion judge placed “little weight” on the losing party’s detailed critique of the bill of costs.

[16] The Court of Appeal for Ontario found that the motion judge, in effect, rejected an argument based on the analysis of the evidence and billing rates because the appellant (the losing party) had failed to file her own bill of costs, which she is not required to do (para. 52). The motion judge’s approach was found to constitute reversible error (para. 56).

[17] In Smith Estate, the court discussed the effect of a losing party not filing a bill of costs as follows at para. 50:

50 In my view, there is no requirement for the losing party, who is not seeking costs, to file a bill of costs although it is preferable that he or she does so. However, if the losing party chooses not to file a bill of costs, this is a factor that the judge, who is assessing costs, may take into account when considering the reasonable expectations of the losing party.

[18] In the present case, the facts and issues were not overly complex. The absence of a bill of costs from the respondent is, I find, of little significance, as the costs analysis was capable of being undertaken based on the applicant’s bill of costs and the submissions that were made. Also, although the respondent did not file a bill of costs, her written submissions did provide a summary of the hours spent by her counsel on the motion.

[19] The final point to consider is when the costs should be paid.

[20] I take into account that the applicant’s costs of this motion will be paid out of the $100,000 set aside pursuant to the order. Given that the applicant and his brother are residuary beneficiaries of the estate, it is possible that ultimately, a portion of the $100,000 can be regarded as part of the applicant’s personal money – but that would only be the case if there is any residue left in the estate after the payment of all claims, including the equalization payment owing to the respondent.

[21] The order made on the applicant’s motion included a provision that the order was without prejudice to the respondent’s right, at trial, to request that all or part of the $100,000 set aside for legal costs be repaid by the applicant to the estate.

[22] In the circumstances, I order that the sum of $5,800 ordered to be paid by the respondent to the applicant is not due and payable until this proceeding has been dealt with on a final basis.

[23] An order shall issue accordingly.

“Justice Victor Mitrow”

Justice Victor Mitrow

Date: December 17, 2014