CITATION: Dumonski v. Dumonski, 2015 ONSC 2517
COURT FILE NO.: FS-12-0065-02
DATE: 2015-04-17
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Tammy Dumonski,
Roy F. Karlstedt, for the Applicant
Applicant
- and -
Mitchell Shawn Dumonski,
Samantha A. Filipovic, for the Respondent
Respondent
HEARD: Via written submissions
Regional Senior Justice D. C. Shaw
Decision On Costs
[1] This is a decision on costs of a case that settled shortly after the trial was called on February 17, 2015.
[2] Ms. Filipovic, counsel for the respondent, Mitchell Shawn Dumonski, presents a Bill of costs seeking fees of $11,012.50 plus disbursements of $57.00 and HST on fees and disbursements. The fees claimed are based on 39 hours of time docketed by Ms. Filipovic, at an hourly rate of $250.00 and 5.5 hours of law clerk time, at an hourly rate of $125.00.
[3] Ms. Filipovic has 20 years’ experience. Her two law clerks have one and two years’ experience, respectively.
[4] Mr. Karlstedt, counsel for Ms. Dumonski, does not take issue with the hourly rate of $250.00 for Ms. Filipovic. He does take issue with the hourly rates of Ms. Filipovic’s law clerks and submits that because of their relatively limited experience, an hourly rate of $50.00 to $75.00 would be more appropriate.
[5] Mr. Karlstedt submits that Mr. Dumonski’s costs should be assessed at $3,000.00 inclusive of disbursements and HST. This extrapolates to a fee of approximately $2,600.00, made up roughly of 10 hours of time for Ms. Filipovic and approximately $100.00 for the services performed by her law clerks.
The Law
[6] The starting point in setting costs in family law matters is Rule 24(1):
24(1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.
[7] Rule 24(11) sets out the factors which must be considered in awarding costs:
(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 signatures of the order;
(e) expenses properly paid or payable; and
(f) any other relevant matter.
[8] An award of costs is a matter in the discretion of the court by virtue of s. 131(1) of the Courts of Justice Act, which provides:
131(1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in the proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid.
[9] In C.A.M. v. D.M., 2003 18880 (ON CA), [2003] O.J. No. 3707 (C.A.) at para. 40, Rosenberg J. held that the Family Law Rules have circumscribed the broad discretion granted by s. 131(1) of the Courts of Justice Act, but that they have not, however, completely removed the court’s discretion. I note that Rule 24(11)(f) allows the court, in setting the amount of costs, to take into account “any other relevant matter.” Read in conjunction with s. 131(1) of the Courts of Justice Act, there remains a discretion to award costs that appear just in the circumstances of the case, while giving effect to the Rules.
[10] The Court of Appeal has made it clear that in assessing costs, the overriding principle is one of reasonableness, and that the failure to follow that principle can produce a result that is contrary to the fundamental objective of access to justice (Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.), at p. 302.
[11] In Zesta Engineering Ltd. v. Cloutier, 2002 25577 (ON CA), [2002] O.J. No. 4495 (Ont. C.A.), at para. 4 the Court of Appeal did not make a specific finding with respect to the amount of time spent or the rates charged by counsel, and stated:
In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant.
[12] While Boucher and Zesta Engineering are not family law cases, I accept that the principles enunciated above are applicable to family law matters.
[13] Mr. Dumonski claims costs on a “substantial” indemnity basis. However, the Family Law Rules, unlike the Rules of Civil Procedure, do not address costs on a “substantial” or “partial” indemnity basis. Rule 18(14) of the Family Law Rules, dealing with the cost consequences of a failure to accept an offer to settle does differentiate between “costs” and “full recovery of costs.” Rule 24(8) also refers to “costs on a full recovery basis” where a party has acted in bad faith. In Sims-Howarth v. Bilcliffe, 2000 22584 (ON SC), [2000] O.J. No. 330 (S.C.J.), Aston J. held that the concept of the two traditional scales of costs is no longer the appropriate way to quantify costs under the Family Law Rules. He stated that having determined that one party is liable to pay costs, the court must fix the amount at some figure between a nominal sum and full recovery, having regard to the factors set out in Rule 24(11), without any assumption about categories of costs. This characterization of costs under the Family Law Rules was approved by the Ontario Court of Appeal in C.A.M. v. D.M., 2003 18880 (ON CA), [2003] O.J. No. 3707 (C.A.), at para. 42.
Submissions
(a) Mr. Dumonski
[14] Mr. Dumonski’s position is that he was put to significant legal expense because Ms. Dumonski would not provide financial disclosure, she would not agree to pay support for the parties’ children who were residing with Mr. Dumonski and she insisted, until the opening of trial, on receiving spousal support when her income was less than that of Mr. Dumonski.
[15] Mr. Dumonski served two Offers to Settle.
[16] The first offer, dated September 15, 2014, provided for substantially the same terms as those to which the parties agreed at trial, apart from a provision in the offer that each of the parties would assume 50% of the joint Scotiabank loan and would not take any steps to declare bankruptcy until that 50% share was assumed. It also provided that if the offer was accepted by September 22, 2014, each party would bear his or her own legal costs. After that date, costs would be payable. The September 22, 2014 date was extended by one week at the request of counsel for Ms. Dumonski, but was never accepted. It remained open for acceptance until the commencement of trial.
[17] The second offer was sent on February 13, 2015, four days prior to trial. It was similar to the first offer. It provided that both parties would bear their own costs.
[18] Ms. Dumonski was ordered to provide a sworn financial statement by January 23, 2015. She did not comply. Ms. Filipovic shows .9 hours of time to summons Ms. Dumonski’s employer for trial in order to obtain proof of Ms. Dumonski’s income.
[19] Ms. Filipovic notes that the costs claimed by Mr. Dumonski run from the date of the trial management conference on January 6, 2015 and not from the commencement of the case. Ms. Filipovic submits that because no time is taken into account for services prior to January 6, 2015, the Bill of Costs is substantially discounted from what could have been claimed.
[20] Ms. Filipovic submits that because Ms. Dumonski has threatened bankruptcy, any costs awarded should be characterized as having been incurred for the purposes of child support and that the costs of $750.00 which I awarded after Ms. Dumonski did not attend the trial management conference of January 6, 2015 should, retroactively, also be characterized as having been incurred for the purposes of child support.
(b) Ms. Dumonski
[21] Mr. Karlstedt submits that the scheduled trial would have been essentially a two witness, two day trial. He submits that the time shown for trial preparation by Ms. Filipovic, of 28 hours, is excessive for the two main issues of spousal support and child support.
[22] Mr. Karlstedt submits that it was clear on the evidence that because the parties’ incomes were roughly equal historically, and that because Mr. Dumonski had been laid off at the date of trial and was receiving employment insurance benefits, Ms. Dumonski’s claim for spousal support would have been dismissed at trial. Therefore, Mr. Karlstedt submits, little preparation time was required on that issue. Similarly with respect to child support, he submits that the only difficulty was obtaining income information for Ms. Dumonski and that once Ms. Filipovic had that information from Ms. Dumonski’s employer, it became a simple exercise to calculate child support under the Child Support Guidelines and that substantial preparation was not required for that issue.
[23] With respect to the Offers to Settle, Mr. Karlstedt submits that Mr. Dumonski’s insistence that the parties each assume one-half of the joint debt with Scotiabank was not something that the court could, or did, order. He submits that this was an unreasonable demand by Mr. Dumonski and contributed to the difficulties in settling the case.
[24] Mr. Karlstedt submits that Ms. Filipovic should be allowed 10 hours of time, including the five hours spent on the day of the trial because not only were the issues simple, but also the time at trial was spent settling the case rather than litigating it.
Discussion
[25] Mr. Dumonski is entitled to costs. He was successful in obtaining an order which required Ms. Dumonski to pay child support and which did not require him to pay spousal support. He had offered to settle these two issues well before trial. Although, unlike the offers, the order did not require each party to assume one-half of the Scotiabank debt, so as to protect Mr. Dumonski from a possible assignment in bankruptcy by Ms. Dumonski, nevertheless, in exercising my discretion on costs, these offers and Ms. Dumonski’s failure to respond, will be taken into account, pursuant to rule 18(16).
[26] I do not accept Mr. Karlstedt’s submission that because it was obvious that Mr. Dumonski would be successful at trial on the issues of child and spousal support, Mr. Dumonski should receive little in the way of compensation for preparation for trial on those issues. Ms. Dumonski had given no indication before trial that she was conceding on those issues. It would have been folly for Ms. Filipovic not to have prepared on behalf of her client. Mr. Dumonski was entitled to expect his lawyer to be ready to meet the case that he was facing. To limit the preparation time for trial to five hours would not be fair or reasonable.
[27] I also take into consideration that Ms. Dumonski did not provide the financial information that she was obliged to give. Full and frank financial disclosure is the hallmark of family law litigation. Failure to comply with the duty to make disclosure should be visited with costs consequences.
[28] With respect to the factors set out in rule 24(11), the issues were not complex, but they were of importance to these parties of limited financial means. Mr. Dumonski’s offers were reasonable efforts to resolve the issues. Ms. Dumonski’s failure to respond and to make financial disclosure can be categorized as unreasonable behaviour within the meaning of rule 24(11)(b). As noted above, Mr. Karlstedt does not take issue with Ms. Filipovic’s hourly rate. I agree with Mr. Karlstedt’s submission, however, than an hourly rate of $125.00 for law clerks of one and two years’ experience is high for this matter.
[29] In my opinion, having regard to the factors discussed above, in the context of the particular facts of this case, it would be fair and reasonable to award Mr. Dumonski costs of this case in the sum of $7,500.00 for fees plus $57.00 for disbursements, together with applicable HST on the fees and disbursements. These costs will be regarded as an incident of support because they were primarily expended to secure an order for child support.
[30] The order for costs of $750.00 made at the trial management conference of January 5, 2015, has been issued and entered. I am without jurisdiction to vary that order to characterize it as having been made for the purposes of support.
___”original signed by”
The Hon. Mr. Justice D. C. Shaw
Released: April 17, 2015
CITATION: Dumonski v. Dumonski, 2015 ONSC 2517
COURT FILE NO.: FS-12-0065-02
DATE: 2015-04-17
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Tammy Dumonski,
Applicant
- and -
Mitchell Shawn Dumonski,
Respondent
DECISION ON COSTS
Shaw R.S.J.
Released: April 17, 2015
/mls