COURT FILE NO.: FC-04-1541
DATE: 2014/01/06
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Gavin Fletcher, Applicant
AND
Andrea Thomas, Respondent
BEFORE: Mr. Justice Timothy Minnema
COUNSEL: Michele Blais, for the Applicant
Respondent representing herself
HEARD: In Chambers (Written Submissions)
ENDORSEMENT ON COSTS
[1] Pursuant to my judgment dated August 27, 2013, the parties have now provided me with their written cost submissions and I note, because there was some confusion, that they include those of Ms. Thomas dated September 30, 2013. Mr. Fletcher is seeking costs of $79,622.84 inclusive of disbursements and HST. Ms. Thomas asks that there be no order of costs against her, but adds that if costs are ordered they be $7,500 all inclusive paid in monthly installments of $250, or, in the alternative, $10,000 all inclusive paid in monthly installments of $75.
Background of the Proceeding
[2] The application was commenced in March of 2011. At the time Mr. Fletcher had different counsel acting for him who initiated the proceedings and attended on the interim motions and initial conferences. He is not seeking costs regarding that work. His current counsel was retained in late 2012 for the purpose of taking the matter to trial. The trial took place over eight days. Ms. Thomas represented herself. The main issues to be decided were custody and access. Ms. Thomas was seeking an order of sole custody to her with access to Mr. Fletcher every other weekend. Mr. Fletcher was seeking joint custody and equal shared time with the children. My judgment supported Mr. Fletcher’s position.
Law
[3] Pursuant to subsection 131(1) of the Courts of Justice Act, R.S.O., c. C.43 as amended, costs are discretionary. I have assessed the costs below guided by Rule 24 of the Family Court Rules, O. Reg. 114/99 as amended, and in particular sub-rules (1), (4) through (9), and (11).
[4] The overriding principle is that costs are to be fixed in a way that is fair to the parties and reasonable in the circumstances (Murray v. Murray (2005), 2005 46626 (ON CA), 79 O.R. (3d) 147 (Ont. C.A.)). This includes considering the reasonable expectations of the losing litigant regarding costs (Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40; Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.)). It also includes a consideration of the impact that the costs award will have on the party ordered to pay (Murray, supra), and where applicable a consideration of its effect on the care, maintenance or interests of children (M.(A.C.) v. M.(D.) (2003), 2003 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.), Quinn v. Nicholson, 2013 ONSC 1125.
Analysis
[5] Regarding sub-rules 24(1) and (6), Mr. Fletcher was successful at the hearing and is presumed to be entitled to costs. Per sub-rule (4), he did not behave unreasonably during the case such that this presumption is rebutted.
[6] Neither sub-rule 24(7) nor (9) impact on my decision. Both sides were well prepared for trial and it was run efficiently by Mr. Fletcher’s counsel. Although Mr. Fletcher was critical regarding the voluminous materials Ms. Thomas submitted and the length of her cross-examination of him and her own testimony in-chief, in my view Ms. Thomas was well organized and did an admirable job in getting across the points she thought were necessary. Her advocacy was well above the level one would expect from the average self-represented litigant. I will touch on reasonableness again below, but I agree with Ms. Thomas that she conducted herself in an appropriate and calm manner during the trial, and treated both counsel and the court with respect. Ms. Thomas in her costs submissions leveled criticism at Mr. Fletcher’s counsel, yet I find that she was also very appropriate and conducted herself as expected from experienced counsel.
[7] Both parties allege bad faith by the other under 24(8). Neither provided relevant case law. The case supplied by Ms. Thomas, Rondelet v. Neff, 2011 ONCJ 407, dealt with full recovery costs under sub-rule 24(11), not bad faith. The case of S.(C.) v. S.(M.), 2007 20279 (ON SC), [2007] O.J. No. 2164 (Ont. S.C.), affirmed 2010 ONCA 196, addresses the test. I do not find any intent to deceive or to inflict harm here by either party, or any clear examples of the other intentional behaviors that meet the test in that case. Bad faith is not established.
[8] This leaves me to consider the factors in sub-rule 24(11). In my view none of (a), (c), (d), or (e) are of significant consequence. The issues were not particularly complex, although they were important as they involved children. No issue was taken with the Bill of Costs in the sense of challenging the rates claimed or times spent. On my own review I find these to be proper.
[9] With respect to reasonableness in 24(11)(b) (and the criteria in 24(5)), I comment on offers to settle below. Other than that, I do not find that either party’s behaviour (as opposed to their position) in the case was unduly unreasonable. I have not forgotten that Ms. Thomas delivered the Parenting Agreement to the school resulting in embarrassment to Mr. Fletcher, that she unilaterally attempted to hire a psychologist, and that she unnecessarily exacerbated the conflict around Austin’s hockey. While all these were inappropriate, for the most part I view them as her genuine but misguided attempts to achieve what she thought were the best results for the children. I do not find that they attract severe costs consequences.
[10] Reasonableness in 24(11)(b) requires me to consider offers to settle per 24(5), which are also specifically dealt with in Rule 18(14). I turn to them now.
[11] Ms. Thomas maintains that a letter from her lawyer dated June 9, 2010 to Mr. Fletcher’s lawyer asking her to “confirm the following interim agreement” was an offer in her favour. The letter was clearly not a formal offer attracting costs consequences under Rule 18(14): it was not signed by Ms. Thomas; it was not styled as an offer; and it was sent nine months prior to this application (see the definition of “offer” in Rule 18(1) and the definition of “case” in Rule 2(1)). Further, this supposed proposal/agreement only reiterated the existing access status quo at the time, did not deal with the critical issue of custody, and was only to be temporary. Afterwards and before the litigation started Ms. Thomas took the clear position that the very same status quo was no longer acceptable. I cannot see how this letter is an offer or otherwise relevant.
[12] As to formal offers within the proceeding, four were identified. Ms. Thomas made three. The first was in her Settlement Conference Brief of March 29, 2012, the others were dated December 5, 2012 and January 24, 2013. My decision was not as favourable to her as any of these offers. Without addressing details, they all indicated that she would have sole custody while I ordered joint custody, and they all proposed that Mr. Fletcher would have less time with the children than what he obtained.
[13] Mr. Fletcher’s offer is dated January 13, 2013. My judgment is as favourable or more favourable to him than this offer, and this is acknowledged by Ms. Thomas. She argued that the offer had expired, but it is clear on its face that it did not. Mr. Fletcher’s offer meets all the requirements of Rule 18(14) 2 to 5 and as such, per Rule 18(14), he is entitled to costs to the date the offer was served and full recovery costs from that date, unless I order otherwise.
[14] Whether I should order otherwise is related both to my consideration under Rule 24(11)(f) of “any other relevant matter” and my consideration of the overriding costs principles identified above. It is well established that under 24(11)(f), the last catch-all category, “a consideration of particular relevance may be the financial position of the parties, especially of an unsuccessful custodial parent”: M.(A.C.) v. M.(D.), supra, at para. 42.
[15] Ms. Thomas has argued financial hardship. She indicates that she is “a woman of modest means with little ability to pay costs.” In 2012 her gross income was $53,408. She owns a townhouse. She indicates that she has met with the bank recently but does not qualify for a loan to pay costs. She says she has significant debt and is currently living on credit which is close to being maxed out. She indicates that her bank account is $1,500 into its overdraft. She claims to have accumulated legal fees of $42,000 since 2010, although she does not indicate if there is current debt related to that. She says that if she is forced to sell her home to pay costs, the moving will impact the children. She provided an affidavit indicating that her financial circumstances have worsened in the past six months.
[16] While the financial issues took a backseat at the trial, Ms. Thomas’ sworn financial statement in the Trial Record indicated that her total assets were $212,194 and her total debts were $226,129. The biggest debt was her mortgage.
[17] While Mr. Fletcher is in a better situation regarding his income in that he earned $90,206.39 in 2012, it is hard to assess whether he is in a better financial position overall. He has the same child care costs as Ms. Thomas. He pays higher section 7 expenses and also pays her $503/month in set-off child support. He says he borrowed 100 percent of the money needed to finance the trial from his family and friends. Unlike Ms. Thomas, he does not own his own home. His assets in his sworn financial statement in the Trial Record totaled $1,900, and his debts were listed as $68,890. The biggest debt was his car loan. He had $15,000 on a line of credit and a loan of $5,000 from his girlfriend Kristin Moir, both of which he said were for legal fees.
[18] Ms. Thomas specifically relies on the Court of Appeal decision in Murray v. Murray, supra, to argue that as it would be devastating on her to pay costs, they should not be ordered. In looking at the decision appealed from there (Murray v. Murray, 2003 64299 (ON SC), [2003] O.J. 3350 (S.C.J.)), I note that Mrs. Murray was a candidate for social assistance and had yet to achieve financial self-sufficiency, while Mr. Murray’s projected income was more than double what Mr. Fletcher earns. While I apply the principles from the Court of Appeal decision, I do not find that on the facts they stand for the proposition that Ms. Thomas should not have to pay any costs.
[19] While I consider the impact of the costs award on Ms. Thomas, I also consider Mr. Fletcher’s financial situation in assessing what is fair and reasonable. These are equal custodial and residential parents, and neither has the ability to absorb these substantial legal costs. The fundamental purposes of modern costs rules cannot be overlooked. As restated in Serra v. Serra, supra, they are “(1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behavior by litigants.” As noted in that case, legal fees can create a tremendous burden on litigants and neither party should simply sit back and roll the dice when those fees continue to mount.
[20] Ms. Thomas indicates in her submissions that “[b]oth parties were well aware of the cost consequences of this matter going to trial” yet she says that it was Mr. Fletcher “who unilaterally chose this path.” I cannot follow this argument. Mr. Fletcher wanted the status quo of joint custody and shared parenting to continue. He pled it. He offered it. He obtained it. It was Ms. Thomas who was seeking to reduce his access and remove his custodial rights. In doing so she pushed this matter to a trial. It was her position that caused Mr. Fletcher to incur what I calculate to be about $57,000 worth of legal fees (before HST) after he made his offer, and $12,950 in legal fees (plus HST) prior to that date. For me to now in effect order him to assume all those costs, or even the bulk of them, would not be fair or reasonable in my view.
[21] Having regard to all the relevant factors and considerations outlined above, I find that the appropriate order for costs payable by Ms. Thomas to Mr. Fletcher is $48,000 inclusive of HST and disbursements.
[22] As noted, Ms. Thomas has proposed that she satisfy the costs order by way of periodic payments. Mr. Fletcher had a similar proposal, although for different amounts. I do not see it as my role to decide financing arrangements, as there could be potential unforeseen legal consequences. I leave it to the parties to deal with enforcement or to agree on a payment plan.
Mr. Justice Timothy Minnema
Date: January 6, 2014
COURT FILE NO.: FC-04-1541
DATE: 2014/01/06
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Gavin Fletcher, Applicant
AND
Andrea Thomas, Respondent
BEFORE: Mr. Justice Timothy Minnema
COUNSEL: Michele Blais, for the Applicant
Respondent representing herself
ENDORSEMENT
Mr. Justice Timothy Minnema
Released: January 6, 2014