Bentien v. Bentien, 2015 ONSC 1252

COURT FILE NO.: 700/12

DATE: 20150225

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Dallas Ryan Bentien, Applicant

AND

Kristy Lynn Bentien, Respondent

BEFORE: Mr. Justice Timothy Minnema

COUNSEL: Stephen L. Zap, for the Applicant

Matthew A. Giesinger, for the Respondent

HEARD: In Chambers (Written Submissions)

COSTS ENDORSEMENT

[1] Following a five day trial, I delivered my Reasons for Judgment found at 2014 ONSC 7238. I have now received written submissions on costs.

Positions

[2] Although the applicant appeared to be seeking partial recovery costs up until the delivery of an Offer to Settle on July 10, 2014 and then full recovery costs afterwards, his final submission was that “the total cost award for the five day Trial be fixed at $54,185.09”. That is full recovery throughout, inclusive of HST and disbursements. The respondent also sought costs, between “full indemnity” of $16,945.39, calculated as 80 percent of the total fees and disbursements, and $10,590.87.

Law

[3] Pursuant to subsection 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 as amended, costs are discretionary. I am to assess the costs guided by Rule 24 of the Family Court Rules, O. Reg. 114/99 as amended. There is a presumption that the successful party is entitled to costs (subrule 24(1)). If success is divided, the court may apportion costs (subrule 24(6)). Factors such as generous offers to settle, reasonableness (including a consideration of all offers to settle), preparedness, and bad faith may also effect entitlement: subrules 24(4), (7), (8), and 18(14).

[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 ONCA 46626 (ON CA), 79 O.R. (3d) 147 (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 ONCA 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.)). It also includes a consideration of the impact that the cost award will have on the party ordered to pay (see Murray above), and where applicable a consideration of its effect on the care, maintenance or interests of children (M.(A.C.) v. M.(D.), 2003 ONCA 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.), Quinn v. Nicholson, 2013 ONSC 1125.

[5] As costs are to be decided promptly after each step in the case (sub-rule 24(10)), they are not awarded for preliminary steps (conferences and motions) that have been addressed by another judicial officer where the costs have not been reserved: see Islam v. Rahman, 2007 ONCA 622, 41 R.F.L. (6th) 10. This does not mean, however, that the costs order should only relate to matters concerning the hearing. As clarified in Houston v. Houston, 2012 ONSC 233, 12 R.F.L. (7th) 115 (Div. Ct.), steps not requiring any form of judicial intervention, such as the preparation of pleadings, are not covered by this rule.

Analysis

[6] The applicant was substantially successful at trial. He is presumptively entitled to costs.

[7] I have reviewed the Offers to Settle submitted. None were severable. The respondent offered sole custody and primary residence of the child to her. She had no success, and the applicant’s offer on those central issues mirrored my findings. However, the applicant’s offer also included a higher amount for the equalization than ordered, and sought to have more income imputed to the respondent than was found. Neither party therefore did as well or better than all the terms of any offer. As such, the full recovery cost provisions of Rule 18(14) are not triggered: Paranavitana v. Nanayakkara, 2010 ONSC 2257, [2010] O.J. No. 1566 (S.C.J.) at para. 14. I have still considered the relative reasonableness of the offers in these deliberations, pursuant to Rules 18(16) and 24(5).

[8] I do not accept the respondent’s accusation that applicant was the one who made the trial necessary and that he was “litigious”, “unwielding”, and unwilling to settle. To the contrary, it was the respondent who behaved unreasonably at the outset by leaving the jurisdiction with the child giving the applicant no choice but to take the matter to court. Further, she never wavered on her sole custody position.

[9] While the respondent’s poor behavior is relevant to cost considerations generally, particularly in assessing reasonableness, the applicant has not based his claim on bad faith.

[10] The issues in this case were not particularly complex. They were important, involving the best interests of a child. They were made more difficult than needed by wife’s actions on separation.

[11] I have considered the applicant’s lawyer’s rates, time properly spent on the case, and the expenses incurred, and find them all to be quite reasonable. They were not disputed by the respondent. Indeed, from the period January 2014 forward, the applicant’s counsel spent about 37 hours less time on the file than the respondent’s, although he billed at a higher level given his considerable experience.

[12] The applicant has sought fees for motions and conferences in his Amended Bill of Costs. I am not considering those, in keeping with Islam above. When removed, they reduce the total claimed for fees plus taxes to roughly $25,000 on a full recovery basis and $15,000 at 60 percent.

[13] An often difficult consideration in family law cases is Rule 24(11)(f) “any other relevant matter”. As noted above, the financial situation of the parties can be taken into account under this last catch-all category. Indeed, the biggest issue between the parties in their costs submissions was how I should treat the respondent’s “precarious financial position”. To recap briefly, she was on social assistance but seeking work in Trenton at the time of trial, and had limited personal assets. She indicated in her submissions that she will be relocating to Kingston, given the Judgment. She has the child in her care half time.

[14] In Murray v. Murray above, the question before the Court of Appeal was whether the impecuniosity of Mrs. Murray justified an order that each side be responsible for his or her own costs. It addressed that question taking into account (1) the financial situation of both parties, and (2) the result of the proceedings.

[15] Looking at the financial situation of both parties here, the respondent’s situation is similar to that of Mrs. Murray, and I note this factor weighed very heavily in the Court of Appeal’s decision. Mrs. Murray, against whom costs were sought, was a candidate for social assistance and had yet to achieve financial self-sufficiency. The court found that a costs award would have a devastating effect on her, and likely destroy whatever chance she may have to achieve financial self-sufficiency. It was noted in particular that Mrs. Murray, similar to Ms. Bentien, had a “complete lack of financial resources”. On the other hand, Mr. Murray in that case was considerably more affluent than Mr. Bentien. Mr. Murray was found at trial to have a projected annual income of $208,000, and significant corporate holdings: see 2003 ONCA 64299 (ON SC), [2003] O.J. 3350 (S.C.J.) at paragraphs 58 and 111. Mr. Bentien earns an annual salary of $67,182 per year, cares for another child as well as Damien, and while he owns his home it is heavily encumbered with little equity. At trial he was found to have a negative net family property. Indeed, he was still saddled with significant family debt in excess of $50,000.

[16] Regarding the result of the proceeding, in Murray the trial decision was in the wife’s favour but overturned on appeal because of a flawed legal analysis. The Court of Appeal noted that her claim was not dismissed, and that she might still succeed in a second trial. In those circumstances it found it to be somewhat unfair to ask her to bear the burden of the costs of the trial. Further, there was no mention in Murray about Mrs. Murray behaving unreasonably. As in Katz v. Nimelman, [2008] O.J. No. 1288, at para. 32, the distinguishing feature in this case is that I have found that the applicant is entitled to costs. The applicant (1) was successful at trial; (2) made more sincere attempts at settlement; and (3) acted reasonably when the respondent behaved inappropriately. The fundamental purposes of modern costs rules cannot be overlooked, and they line-up with those facts. As restated in Serra v. Serra, 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.” A “no costs” award on these facts runs the risk of encouraging unmeritorious litigation by parties who expect to be “costs proof” because of their limited means.

[17] I find it worthy of note that Ms. Bentien has been able to avoid any costs thus far in this action as a result of her financial circumstances. On the motion heard on September 20, 2013, the court in deciding costs ruled:

“Success is essentially divided on this motion. In circumstances as described earlier regarding the removal of the child from the jurisdiction, the court would be inclined to order costs in favour of the Applicant. However, given the Respondent’s current financial circumstances a costs order may be a road block, if left unpaid, to proceed in this matter. In all the circumstances the parties shall bear their own costs.”

Upon a review of the record I am also convinced that her financial situation factored into the no-cost orders on other court appearances before trial. In other words, the respondent has played the financial circumstances card before. As noted in Serra, 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. In my view the respondent here, with a long shot at winning on the main issues but with a sense that she might have nothing to lose, decided to roll the dice. There was very little compromise in her position. Indeed she was seeking to have the applicant’s contact with the child reduced from the status quo, while my decision increased his time.

[18] Having regard to all the relevant factors and considerations outlined above, I find that it is appropriate that the respondent pay the applicant’s costs of $4,000 inclusive of HST and disbursements. Both her behaviour and her financial circumstances were among the factors weighted in coming to this decision. I am also mindful of the fact that she sought costs herself of a much higher amount.

[19] There is one final issue. The applicant has asked that the costs award be set-off against his ongoing child support. He relied on the case of Berry v. Berry, 2014 ONSC 4146, which in turn relied on the case of Peers v. Poupore, 2008 ONCJ 615. In Peers the court found that there were two divergent lines of authority, one holding that a costs order may not be set-off against an order for child support, another holding that a set-off is permissible. A case mentioned in that latter group was the Ontario Court of Appeal decision in Burisch v. Gosal, 2007 ONCA 569, although the set-off there was not against ongoing child support but rather against child support arrears. The court in Peers noted that the previously decided cases provided limited analysis, but it found that a set-off would be fair and just given the following factors: both of the parties were legally represented; the child would not suffer by the order; and without the order the costs were unlikely to be paid. The court in Berry allowed a set-off relying on the second of those factors, finding that the children would not suffer given the income of the party receiving child support.

[20] I have several concerns with this request. First, given the divergent line of cases identified in Peers, I have reviewed the enabling legislative authorities and can find nothing in section 131 of the Courts of Justice Act, Rule 24, or Rule 26 (Enforcement of Orders) that allows the remedy sought. Indeed it is seems somewhat premature to address enforcement now, given that the order is just being made and, at least in this case, there is no history of default. The applicant anticipates a lack of payment given the respondent’s circumstances, but in Peers family members had assisted the respondent with a previous cost order. The second reservation I have is that child support orders are intended to contribute to child care expenses. The court must be careful and rely on clear evidence before it considers diverting money so intended and permitting less than full Child Support Guideline payments to flow. Child support is the right of the child, and there can be no assumption that an amount less than the Guidelines will be adequate. My third concern relates to the applicant’s argument that not only would the child not suffer, but the order would actually enhance the child’s well-being as it would allow the applicant to address his debt load while having no appreciable effect on the Ontario Works Benefits the respondent receives. In other words, it is only the government’s subrogated entitlement to the support payments that would be affected. I cannot see how I can make such an order when the government agency that will be impacted has not been given notice. One might expect an argument that the respondent’s proposal is contrary to public policy, as ordering a government agency to in effect indirectly pay the costs on the respondent’s behalf is not the intent or purpose of the costs award. In any event, I am not satisfied that the child in this case will not suffer. The respondent at trial was actively looking for employment and was confident she would be successful. When she finds a job her Ontario Works benefits can be expected to end, at which point an ongoing order diverting child support would directly impact the child.

[21] In the circumstances, I am not inclined to set-off costs against the respondent’s child support order. I leave it to the parties to deal with enforcement or to agree on a payment plan.

Decision

[22] In summary then, I order that the respondent pay the applicant’s costs of $4,000 inclusive of HST and disbursements.

Mr. Justice Timothy Minnema

Date: February 25, 2015