Introduction

1This is a costs endorsement flowing from a five day trial that was held before me in January of 2015. The Applicant, Mr. Gamal Osman (“Mr. Osman”) was self-represented at the trial, but had the assistance of counsel prior to the trial. He seeks costs in the sum of $42,547.00.

2The Respondent, Ms. Manal ElKadi was represented at trial by Mr. Hamza Talpur, who is a lawyer who was called to the bar in 2014, and was a first year lawyer. Ms. ElKadi is seeking full indemnity costs in the sum of $38,551.38 or, in the alternative, partial indemnity costs in the sum of $23,130.83.

The Positions of the Parties

3Ms. ElKadi proceeded first with her costs submissions. She claims entitlement to costs because, inter alia, the successful party should be entitled to costs of the action, Ms. ElKadi offered to settle the matter on terms that were more favourable to Mr. Osman than my judgment, and Mr. Osman behaved unreasonably in this case. Full indemnity costs are sought.

4Mr. Osman opposes Ms. ElKadi’s request on the basis that her counsel’s submissions are made in bad faith, and on the basis that the success in this case was divided. He seeks costs in the sum of $42,547.00.

Relevant Factors in Fixing Costs

5The relevant factors in fixing costs are set out in Rule 24 of the Family Law Rules. Subsections 24(1) and (11) state:

(1) There is a presumption that a successful party is entitled to the costs of the motion, enforcement, case or appeal.

(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.

6In this case, the factors that the Court should consider in fixing costs are also expanded on in Serra v. Serra ((2009) ONCA 395), where the Court of Appeal stated (at paragraph 8):

8Modern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants: Fong v. Chan (1999), 2052 (ON CA), 1999 2052 (ON CA), 46 O.R. (3d) 330, at para. 22.

7In fixing costs in this case, I have considered all of these factors. However, based on the submissions of the parties, the most relevant factors are:

a) The settlement offer made by Ms. ElKadi in December of 2014.

b) The conduct of the parties in proceeding to trial.

c) The outcome of the litigation.

d) The time properly spent on the case.

8I will address each of these issues in turn. I start from the premise, however, that the successful party should have its costs. Ms. ElKadi was, broadly speaking, very successful in this litigation. Accordingly, she should be entitled to recover costs. The amount of those costs is the issue to be determined.

The Settlement Offer

9I start with the question of whether this is a settlement within the meaning of Rule 18(14), which states:

(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.

10In particular the third point states that Offers to Settle will only fit within this provision of the Rules if they are not withdrawn before the hearing commences. In this case, the Offer stated that it was “open for acceptance until the 5th of January, 2015 or at least one day before the start of the trial.” The trial did not start until January 14th, 2015. As a result, the offer expired one day before the start of the trial. It was withdrawn before the hearing commenced. As a result, Rule 18(14) does not apply to this case.

11However, as noted in Rule 24, a settlement offer is a factor that the Court should consider in fixing costs. Similarly, Rule 18(16) states that the Court may consider any offer to settle, even if Rule 18(14) does not apply. In this case, the fact that the Applicant could have resolved this case a day before the trial started is a significant consideration, especially when the terms of the Offer are compared to my Judgment.

12I would note the following in comparing the offer to my judgment:

a) On holiday access for Sarah, Ms. ElKadi offered no change, and I ordered no change.

b) On child support, Ms. ElKadi offered to release Mr. Osman from arrears and accept child support in the sum of $1,759.00 per month from February 2nd, 2015. I ordered the payment of child support of $1,753.00 per month from February 2015 forward. However, I ordered significant arrears payable by Mr. Osman.

c) On spousal support, Ms. ElKadi offered to release Mr. Osman from arrears, and accept spousal support in the sum of $400.00 per month from February 15th, 2014 forward. I ordered $350.00 per month in spousal support but again ordered significant arrears payable by Mr. Osman.

d) On Net Family Property (“NFP”), Ms. ElKadi offered to split the proceeds of the matrimonial home equally and forgo any other NFP payment. On my Order, Ms. ElKadi received the entire proceeds from the matrimonial home in partial satisfaction of the arrears and also received a small NFP payment.

e) Ms. ElKadi, in her offer, sought “substantial” indemnity costs, which were not quantified.

13In assessing this Offer, Mr. Osman did worse at trial on virtually all of the issues than he would have done by accepting this Offer. The only question is whether he would have had to pay less in costs than was suggested by the offer. This factor does not assist Mr. Osman for two reasons. First, the costs he would have had to pay when he accepted the Offer are substantially less than I am ordering him to pay. Second, in any event, Ms. ElKadi’s success at trial significantly exceeds her offer. Indeed, Ms. ElKadi probably ended up with an amount approximately $50,000.00 more through my judgment than she would have received under her Offer.

14In the circumstances, Ms. ElKadi’s offer is a significant factor that supports an award of full indemnity costs.

The Conduct of the Parties

15Mr. Osman had the opportunity to settle this matter on more favourable terms than the judgment he received. Ultimately, however, parties are entitled to a final determination of their dispute, and the Court must be mindful of that. This factor provides very limited support to an order of full indemnity costs.

16Both parties have argued that the other acted in bad faith. Ms. ElKadi argues that, by proceeding to trial, Mr. Osman acted in bad faith, as set out in C.S. v. M.S. 2007 20279 (ON SC), [2007] O.J. 2164. Mr. Osman argues that Ms. ElKadi’s counsel acted in bad faith by overstating the value of the home that he owns a one per cent interest in with his current partner.

17Neither party has proven their bad faith, either at trial or in their costs submissions. I would point out to both parties, again, that the financial disclosure on both sides was, to put it mildly, incomplete. In light of that conclusion, I am not prepared to find bad faith on either party.

The Outcome of the Litigation

18As noted above, Ms. ElKadi was very successful in this litigation. Mr. Osman states that “there is no clear winner in this case.” I disagree. Mr. Osman was seeking to have significantly reduced spousal support, no child support for Salma, Ms. ElKadi’s Egypt property counted in NFP and additional access to Sarah. He lost on all of these issues.

19I fail to see how success was divided in this case. Ms. ElKadi was entirely successful in this litigation. She should be entitled to her costs. Given her Offer to Settle when compared to the outcome of the case, she should be entitled to something approaching full indemnity costs.

The Time Properly Spent on the Case

20Generally, the time spent on this case by the Applicant’s counsel appears to be reasonable. There are two exceptions to this conclusion.

21Mr. Zigelstein attended at trial on the first two days. However, he was not gowned and took no active part in the trial. Indeed, on the first day, I had to caution Mr. Zigelstein that he could not sit at the counsel table on the second day if he was not gowned. On the second day, Mr. Ziglestein was again not gowned, and had to be directed not to sit at the counsel table.

22In short, Mr. Zigelstein did not take any active part in the presentation of the trial. As a result, I am not prepared to make any award for costs on account of his counsel fee.

23Further, given that Mr. Talpur was a first year lawyer, there was undoubtedly some duplication of time between his efforts and Mr. Zigelstein’s efforts. While the teaching of young associates by senior lawyers is valuable, it is not something that the losing party should pay for. As a result, I would also discount the time spent by Mr. Zigelstein in January of 2015.

Final Disposition

24As noted above, Ms. ElKadi is entitled to something approaching full indemnity costs in this case, less the deductions for Mr. Zigelstein’s trial preparation and attendance time in January of 2015. I calculate those deductions at $6,100.00 plus HST.

25Accordingly, Ms. ElKadi is entitled to recover costs in the amount of $30,000.00, inclusive of disbursements and HST.

26Approximately seventy (70) per cent of the time was spent on support issues. These costs were expended in part in the pursuit of support payments. As a result, $21,000.00 of the costs may be collected through the Family Responsibility Office. A Support Deduction Order to issue.

LeMay J.

Date: April 10, 2015

Osman v. Elkadi, 2015 ONSC 2327

Case Summary

Introduction

The Positions of the Parties