Babience v. Russell, 2015 ONSC 3578

COURT FILE NO.: FC-14-044938-00

DATE: 20150602

SUPERIOR COURT OF JUSTICE – ONTARIO – FAMILY COURT

RE: Evelyn Babience, Applicant

and

Roy Russell, Respondent

BEFORE: The Honourable Mr. Justice R.P. Kaufman

COUNSEL: Jason K. Allan, for the Applicant

Charles Baker, for the Respondent

HEARD: April 13, 2015

COSTS ENDORSEMENT

[1] This matter resolved at the trial management conference (“TMC”), resulting in a final order based on minutes of settlement entered into between the parties. After oral argument, the issue of costs was reserved.

[2] A brief review of the file indicates that the application was issued on January 7, 2014. On the same date, a case conference was scheduled for March 21, 2014. The answer was filed on February 12, 2014. The case conference was held on March 21 and interim minutes of settlement were signed that day which provided, in part, for disclosure by both parties. The Office of the Children’s Lawyer (“OCL”) was requested to become involved to assist the children, aged 15 and 13. On May 2, 2014, the OCL accepted the file and appointed counsel for the children.

[3] The settlement conference took place on January 8, 2015. On consent, the claim for divorce was split off from the other issues. The endorsement for that event states “that the parties may be close to resolution (or not).” The respondent was directed to provide draft minutes of settlement to the applicant by electronic transmission and the applicant was to revise as she deemed appropriate and provide the respondent with a signed copy of the revised minutes, together with a copy with the revisions in bold print. If the revised minutes were signed by the respondent, he was to file same together with an approved draft order and support deduction order by form 14B to my attention. If not resolved, the TMC was scheduled for April 13, 2015 and the parties were to file the respective briefs, net family property worksheets (if applicable) and they were to exchange offers to settle. The trial record was to be filed by April 1, 2015 with expected trial duration of one to two days. The costs of the event were reserved.

[4] Of note, the court remembers reminding counsel that they, themselves, were not parties to the action, this comment being a reflection of the dynamics observed by the court in the interaction of counsel.

[5] What could be ascertained from a review of the respective TMC briefs is that it took some time to achieve a resolution that the court thought was available at the earlier settlement conference. When the minutes prepared pursuant to my earlier direction were not returned to the respondent by March 31, 2015, a date which he imposed out of apparent frustration in the delay of the matter being resolved, he served an offer to settle which contained a term that the minutes were to be signed by the applicant by April 12 and the respondent would thereafter sign within twenty-four hours of proof that the minutes have been signed by the applicant. The offer also provided for costs of the application fixed at $2,500 and the offer would remain open for acceptance, but the respondent was to be entitled to additional partial indemnity costs from April 12, 2015.

[6] What could also be further ascertained was that the applicant, due to an apparent work commitment, was unable to sign the minutes, received by her counsel on March 27, until April 1 where after the signed document was sent to the respondent’s counsel, Charles Baker, by email the same date. The applicant’s counsel, Jason Allan, requested receipt of a signed copy of the minutes and his covering letter confirmed that the matters were now resolved and no further court attendances required. Mr. Baker’s response was to serve a TMC brief (apparently prepared that day), in which he seeks a cost award because, as Mr. Allan suggests, he was unhappy with the negotiation process. In turn, Mr. Baker comments that the trial record, which was due on April 1, 2015, was not filed, the applicant had not served a brief and neither had she delivered an offer, as ordered.

[7] Both parties allege noncompliance with the disclosure order. By virtue of the parties having signed the minutes, the court can only surmise that the alleged noncompliance was not of a sufficient nature to preclude the matter from being resolved.

[8] On behalf of the respondent, Mr. Baker comments, with frustration, about the delay in the process, alleged procrastination by the applicant and that the respondent was prepared to sign the minutes in advance of the applicant, provided that Mr. Allan would confirm, in writing, that his client would sign the document in its current form to enable it to be enforceable, but Mr. Allan declined to do so.

[9] On behalf of the applicant, Mr. Allan argues, with similar frustration, that throughout the litigation his client had encountered a bullying mentality from the respondent, an example of which is that the parties find themselves in court at a TMC to deal with costs on a case which has apparently settled. He notes that the respondent expected the applicant to pass the trial record on the very day she had an appointment to sign the final minutes. He argues that the minutes contain a provision by which each party will bear his or her own costs for the negotiation and preparation of the agreement. He maintains that a TMC is not the proper forum to address the costs of a case. In that regard, he refers to rule 17(6) of the Family Law Rules, O Reg 114/99, which delineates the purposes of a TMC and which is silent in having a stated purpose of a party, feeling aggrieved with the negotiation process, seeking costs. He notes that rule 17(18) provides that costs may be assessed for conferences that are adjourned and that, as the TMC had not been adjourned, there is no authority for the court to make a costs award. He concludes that the respondent’s actions, and arguably more so that of his counsel, are contrary to the primary objectives of the Rules which is to save time and expense and give resources to a case that is deserving. He concludes by suggesting that costs should be assessed against the respondent because the court’s valuable time had been unnecessarily taken to deal with his baseless requests for costs and that in the circumstances, this might be one of the rare cases where it is appropriate to assess costs against Mr. Baker in his personal capacity.

[10] The respondent has filed a bill of costs seeking partial recovery in the sum of $2,490.64 or full recovery in the sum of $3,735.78 and, in both cases, disbursements of $14.50. He has claimed 9.6 hours for attendance on the settlement conference, continued negotiations and preparation of the TMC brief and 2.0 hours is claimed for attendance on the TMC.

[11] In further argument on behalf of the applicant, Mr. Allan maintains that his client settled custody and access promptly upon hearing the recommendations of the OCL and she reached a settlement on the property issues without pursuing an “un-equalization payment” which the court interprets as being an award pursuant to section 5(6) of the Family Law Act of an amount that is more or less than half the difference between the net family properties, if the court is of the opinion that equalizing the net family properties would be unconscionable. He concludes by stating that in terms of “justice”, one must consider that the applicant basically lost half the value of her house (the matrimonial home in existence at the date of separation after seventeen years of cohabitation had been inherited during the marriage), lost her children and now has to pay support and had to pay for this litigation and it would be unfair to penalize her with costs when her actions have been reasonable.

[12] The tenor of the demeanour of counsel towards one another borders on lack of civility. It is evident that the observations by this court at the conclusion of the settlement conference were ignored. Perhaps it is the old adage that a town that does not have sufficient business for one lawyer has more than enough for two. Warring counsel only exacerbate the dispute before the court. It is expected that counsel citing the primary objectives of the Rules will do more than pay lip service to those objectives. Counsel should also appreciate that if costs are being requested against a lawyer in his personal capacity recourse is pursuant to rule 24(9) and that recourse is sought on motion.

[13] Under rule 24(1) of the Family Law Rules, there is a presumption that a successful party is entitled to the costs of a case. Despite that sub-rule, rule 24(4) states that a successful party who has behaved unreasonably during the case may be deprived of all or part of the party’s own costs, or ordered to pay all or part of the unsuccessful party’s costs. Under rule 24(5), in deciding whether a party has behaved reasonably or unreasonably, the court shall examine:

(a) the party’s behaviour in relation to the issues from the time they arose, including whether a party made an offer to settle;

(b) the reasonableness of any offer the party made; and

(c) any offer the party withdrew or failed to accept.

[14] Rule 24(11) of the Family Law Rules sets out the factors to be considered by a court in setting the amount of costs which include the importance, complexity or difficulty of the issues, the reasonableness or unreasonableness of each party’s behaviour in the case, the lawyer’s rates, the time properly spent on the case (including negotiations) expenses properly paid or payable and any other relevant matter.

[15] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395, [2009] O.J. 1905, confirmed that modern costs rules are designed to foster three fundamental purposes, namely to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants bearing in mind that the awards should reflect what the court views is a fair and reasonable amount that should be paid by the unsuccessful party.

[16] Under rule 18(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 offer is made at least seven days before the hearing date, the offer does not expire in is not withdrawn before the hearing starts, is not accepted and the party who made the offer obtains an order that is as favourable as or more favourable than the offer. The court has a discretion to take into account any written offer to settle, the date it was made and its terms, even if subrule 18(14) does not apply, when exercising its discretion over costs. (Subrule 18(16)). Further, in deciding whether a party has acted reasonably or unreasonably in a case, the court shall examine the reasonableness of any offer the party made. (Rule 24(5)(b)). By contrast, a party’s failure to serve an offer to settle may be viewed as an adverse factor in determining the issue of costs. (See: M. (J.V.) v. P. (F.D.), 2011 CarswellOnt 13510 (Ont. C.J.)).

[17] The failure to make an offer to settle much earlier by either party is unreasonable behaviour. Subrule 2(4) imposes a duty on parties and their lawyers to promote the primary objective of the rules to deal with cases justly (Rule 2(2)). This includes taking appropriate steps to save time and expense (Rule 2(3)). Offers to settle play an important role in saving time and expense by promoting settlements, focusing parties and often narrowing issues in dispute.(See: Laing v. Mahmoud, 2011 ONSC 6737). The failure to serve an offer to settle will be an adverse factor when assessing costs.

[18] The case law encourages me to view a costs decision in a summary, flexible and balanced manner, recognizing the wide discretion afforded by Rule 24 of the Rules (See: Ostapchuk v. Ostapchuk, 2003 ONCA 57399, 2003 CarswellOnt 1661, [2003] O.J. No. 1733 (C. A.)). The costs decision must, as well, reflect some form of proportionality to the actual issues argued, rather than an unquestioned reliance on billable hours and documents created. (See: Pagnotta v. Brown, 2002 CarswellOnt 2666 (Sup. Ct.) and Gale v. Gale, (2006) CarswellOnt 632)).

[19] Paragraph 15.13 of the minutes state that each party would pay her and his own costs for the negotiation and preparation of the agreement. It does not preclude an award of costs for matters other than the negotiation and preparation of the agreement. Even if the court exercised its discretion in not awarding costs for the attendance at the TMC, it had previously reserved the costs of the settlement conference. In addition, it is unfortunate that applicant’s counsel makes reference to all that the applicant had lost. The children were at an age where their views and preferences were made known to the OCL and the applicant showed respect for those views and preferences, however disappointing a result to her. Her child support obligation flows from the relevant legislation. The resolution of the equalization of net family property flows from the legislation and the court did opine that she would have unlikely been successful in pursuing relief pursuant to section 5(6) of the Family Law Act.

[20] This court wishes to compliment the parties for resolving the matter without the necessity of a trial. The case was certainly capable of being resolved at the settlement conference or soon thereafter. The respondent was unhappy with the pace of negotiations and imposed a deadline which lapsed. He served an offer to settle and the applicant did not. The applicant was in receipt of the minutes prior to the expiry of the deadline and could have instructed her counsel to indicate her acceptance of the minutes before she attended to sign the document. The respondent is entitled to costs, which I fix in the sum of $1,200, inclusive of HST and disbursements.

Justice Kaufman

Released: June 2, 2015