COSTS ENDORSEMENT

Douglas J.

[1] This is my ruling on costs following trial in this matter which concluded with my Reasons for Decision presented orally on June 2, 2015.

[2] This was the Respondent’s application under the Hague Convention seeking an order that the parties’ son be returned to the State of Indiana. The Applicant defended on the basis that such an order would expose the child to grave risk of harm within the meaning of Article 13(b) of the Convention.

[3] I ordered that the child be returned to the State of Indiana by no later than July 2, 2015 upon the Respondent undertaking in writing that until a court of competent jurisdiction in the State of Indiana adjudicates otherwise, the Applicant shall have exclusive possession of the parties’ matrimonial home and contents and the child shall be in the Applicant’s care upon return to the State of Indiana subject to access by the Respondent on alternating weekends plus a non-overnight visit per week.

[4] Costs in this matter are governed by Rule 24 of the Family Law Rules. According to Rule 24 there is a presumption that a successful party is entitled to costs.

[5] In setting costs Rule 24(11) requires that I consider the following:

(a) The importance, complexity or difficulty of the issues;

(b) The reasonableness or unreasonableness of each parties behavior in the case;

(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;

(f) And any other relevant matter.

[6] The Respondent submits that his costs of both the motion before Justice Rogers (reserved to the trial judge) and of trial should be awarded in the amount of $87,394.46 inclusive of disbursements and HST.

[7] The Applicant submits that the costs sought by the Respondent are excessive and, given the Applicant’s impecuniosity any costs award would have a negative impact on the Applicant’s ability to provide for the parties’ child given that the child remains in her primary de facto care.

[8] In his submissions the Respondent relies upon two Offers to Settle; however, no cost consequences are triggered by these Offers to Settle because they were not served seven days prior to the trial or hearing date as required by Rule 18(14) and in any event the Offer contemplated the parties having “joint custody” of the child, something that was not within my jurisdiction to grant in the context of this proceeding.

[9] Regarding the Applicant’s submission of excessive costs she submits the total of $23,425 should be deducted from the Respondent’s Bill of Costs in relation to the following items:

(a) 5.9 hours pertaining to the preparation and attendance at the Trial Management Conference before Justice Rogers on May 4, 2015 where costs were not reserved ($1970);

(b) 7.7 hours ($2155) pertaining to arranging supervised access and obtaining supervised access notes that were excluded from evidence on the Applicant’s successful mid-trial motion;

(d) 3.8 hours ($940) preparing witnesses who are not called at trial and did not prepare affidavits;

(e) 2.5 hours ($1675) researching issue of stay of proceedings following trial;

(f) 7.8 hours ($2110) for duplicative services, scanning documents, two hours to prepare a continuing record, attempting to reach counsel, excessive research, preparing Bill of Costs post-trial;

(g) 2.5 hours ($1050) for “intensive collaboration and assistance” between two lawyers in order draft emails to the Applicant’s counsel;

(h) 21.4 hours ($10,700) for duplicative services at high rate of $500 for “discussions” with trial counsel, preparing 14B motion materials that were never served, scanning letters, speaking with a criminal defence lawyer, revising materials already prepared, and discussing “state of trial”.

[10] This matter proceeded before me for seven days of trial time. The issue of costs before the motion before Justice Rogers is also before me.

[11] In my view this matter was of low to moderate complexity, being restricted as it was to two very discrete issues.

[12] The issues were of significant importance to the parties.

[13] Although in my reasons I have identified some basis for concern as to the credibility of both parties, I do not conclude for the purposes of this ruling on costs that either was necessarily more or less reasonable than the other in their conduct in this case. Ultimately it is clear that both parties were motivated by love of their son and the desire to have their son residing in their chosen place of residence.

[14] I have reviewed the lawyers’ rates and while they are not of themselves cause for concern given the experience of the various lawyers involved for the parties, I do find that the time devoted to this matter and summarized in the Bill of Costs of the Respondent to be somewhat excessive.

[15] There is merit to the above referenced concerns expressed by the Applicant regarding some of the inclusions in the Respondent’s Bill of Costs and to reflect this the Respondent’s Bill of Costs should be reduced by $18,000, bringing the total of the Respondent’s full indemnity claim for costs to $69,394.46.

[16] As I see no basis for an award of full indemnity costs, the question then becomes whether the Respondent should be entitled to substantial indemnity costs at approximately 80% or partial indemnity costs at approximately 50% being $55,515.57 and $34,697.23 respectively.

[17] As noted in my Reasons for Decision, I expressed concerns regarding the quality of the evidence of both parties and both parties’ credibility. But for the issue of impecuniosity raised by the Applicant I would be inclined to award partial indemnity costs to the Respondent of $35,000.

[18] Turning now to the issue of impecuniosity, the Applicant argues that she has no source of income and any significant costs award against her would impose a disproportionate hardship. It is argued that she has already exhausted whatever funds she had and adding to her existing debt would cripple her financially and such would be contrary to the child’s best interests.

[19] In M.(C.A.)v. M.(D.), 2003 18880 (ON CA), 2003 CarswellOnt 3606 (C.A.) the Ontario Court of Appeal observed that “in fixing costs the courts cannot ignore the best interests of the child and thus cannot ignore the impact of a costs award against a custodial parent that would seriously affect the interests of the child”.

[20] In Dimick v, Dimick, 2009 NSSC 172 (Nova Scotia Superior Court) it appears the successful party was seeking costs of $100,000 following trial of approximately six days. The court observed that a relevant consideration is the reality that the parties must continue to interact for the benefit of their children. The court was of the view that the quantum of costs claimed by the petitioner would so impoverish the respondent that she would, for the foreseeable future, clearly be unable to meet her financial obligations. It was therefore considered necessary to balance the entitlement of the successful party to costs with ensuring the financial viability of the respondent to maintain her financial and other obligations to the children. In those circumstances claimed costs of $100,000 were reduced to $15,000 plus disbursements of $8,600.

[21] Rule 24(11)(f) allows me to consider “any other relevant matter” in setting the amount of costs. In my view a party’s financial circumstances are clearly relevant.

[22] I also consider however that in most circumstances competent adults ought to be held responsible for the decisions they make. In this case the Applicant was represented by very able counsel and it is safe to assume that she was fully aware of her potential exposure to an expensive costs award in the event her position proved unsuccessful on this application.

[23] While a party’s precarious financial circumstances are certainly relevant to assessment of quantum of costs, such should not necessarily amount to complete inoculation against such an award except in the rarest of circumstances. Impecunious litigants should not be encouraged through such an approach to take unreasonable or unmeritorious positions on issues in dispute.

[24] In short, while the Respondent is clearly entitled to costs, same must be tempered to a reasonable extent by the Applicant’s financial circumstances but not erased altogether.

[25] Addressing the concerns and objections outlined above, it is my view that a costs award in the amount of $12,500 is fair and reasonable, to be paid at the rate of at least $250 per month commencing August 1, 2015. So ordered.

Douglas, J.

Released: July 10, 2015

Prusinski v. Prusinski, 2015 ONSC 4495

Case Summary

COSTS ENDORSEMENT

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues