ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: FS-10-0011-03
DATE: 2015-07-14
B E T W E E N:
Janice Karam,
William G. Shanks, for the Applicant
Applicant
- and -
David Johnson,
Michael Cupello, for the Respondent
Respondent
HEARD: June 5, 2015,
at Thunder Bay, Ontario
Regional Senior Justice D. C. Shaw
Decision On Costs
[1] The applicant, Janice Karam, brought a motion to change the final order of July 28, 2011, of Wright J. The motion was settled at the beginning of trial on June 5, 2015. Ms. Karam seeks her costs of the motion to change. The respondent, David Johnson, takes the position that no costs should be paid by either party.
[2] The order of Wright J. required Mr. Johnson to pay child support of $1,541 per month for the two children of the parties’ relationship, based on Mr. Johnson’s 2010 income of $112,922.00.
[3] In her motion to change, Ms. Karam proposed that Mr. Johnson pay child support of $1,828 per month, commencing June 1, 2013, based on Mr. Johnson’s 2012 income of $134,073.
[4] In his response to the motion to change, Mr. Johnson stated that his income had been reduced significantly in 2014 because of unemployment and a change of jobs. He said that he had paid support of $1,874 per month for the first five months of 2014, and that he would continue to pay $1,874 per month if Ms. Karam withdrew her motion.
[5] The motion to change proceeded through a case conference and a settlement conference and was then set down for trial.
[6] Ms. Karam was represented throughout by Mr. William Shanks. Mr. Johnson was unrepresented until shortly before trial when Mr. Michael Cupello came on the case as counsel.
[7] By letter dated September 3, 2014, Ms. Karam proposed settlement of the case on the basis that Mr. Johnson pay a one-time lump sum of $3,000, which was to be deemed to be child support up to May 31, 2014, plus periodic support of $1,105 per month, commencing June 1, 2014, reflecting an estimated income for 2014 for $75,000, subject to revision based on Mr. Johnson’s actual 2014 income as disclosed by his last year-to-date pay stubs in December 2014. The sum of $7,500 that Fitzpatrick J. ordered to be paid by Mr. Johnson as costs, on October 6, 2011, would be enforceable by the Family Responsibility Office as child support.
[8] On May 29, 2015, Mr. Cupello sent an Offer to Settle on behalf of Mr. Johnson that proposed that Mr. Johnson pay child support based on the Guidelines amounts and Mr. Johnson’s income as follows:
June 1, 2012 – May 1, 2013: $1,525 per month based on income of $108,905 for 2011;
June 1, 2013 – May 1, 2014: $1,828 per month based on income of $134,073 for 2012;
June 1, 2014 – May 1, 2015: $1,562 per month based on income of $112,031 for 2013;
June 1, 2015 and following: $1,075 per month based on income of $72,809 for 2014.
[9] At the opening of trial I granted Ms. Karam leave to amend her motion to change, to claim that the $7,500 for costs ordered by Fitzpatrick J. be enforced as child support. I also permitted Mr. Johnson to amend his response, to claim that he pay support based on his income in 2011 – 2014, inclusive.
[10] At trial, the parties agreed that Mr. Johnson owed child support arrears of $3,506.52, based on Mr. Johnson’s income in 2011, 2012, 2103 and 2014, as shown above. They agreed that commencing June 1, 2015, Mr. Johnson would pay support of $1,075.22 per month, based on his income of $72,809. They agreed that the costs of $7,500 ordered by Fitzpatrick J. would be enforced as child support by the Family Responsibility Office. The parties did not agree on the costs of Ms. Karam’s application. I reserved my decision on costs after hearing oral submissions from counsel.
[11] Mr. Shanks seeks costs of $9,147.18, on a full indemnity basis, made up of fees of $7,553.50, plus disbursements of $611.73, plus HST on fees, of $987.95. In the alternative, he seeks partial indemnity costs of $5,748.71, comprised of fees of $4,546.00, plus disbursements of $611.23, plus HST on fees, of $590.98.
[12] Mr. Shanks submits that the consent order made at trial incorporates for the period commencing June 1, 2013, the support claimed in Ms. Karam’s motion to change, of $1,828 per month, based on Mr. Johnson’s 2012 income of $134,073. He also submits that the offer of September 3, 2014, called for support of $1,105 per month, commencing June 1, 2014, based on estimated income of $75,000 for 2014, subject to adjustment for Mr. Johnson’s actual income determined at the year’s end. This compares to the amount of $1,075 agreed to at trial, based on Mr. Johnson’s actual 2014 income of $72,809.
[13] The September 3, 2014 offer also provided that costs of $7,500 ordered by Fitzpatrick J. would be enforced as support, as was ordered at trial on June 5, 2015.
[14] Mr. Shanks notes that Mr. Johnson was ordered on February 17, 2015 to serve and file his complete income tax returns for the years 2011 to 2014.
[15] Mr. Shanks submits that Mr. Johnson has a history of failing to voluntarily adjust his support payments and failing to make financial disclosure.
[16] Mr. Cupello submits that until the morning of trial, the only relief claimed by Ms. Karam on her motion to change was that Mr. Johnson pay $1,828 per month. In fact, as the result of the consent order at trial, that amount was payable only for the year following June 1, 2013, and was reduced to $1,562 per month for June 1, 2014 to May 1, 2015, and was further reduced to $1,075 per month after June 1, 2015.
[17] Mr. Cupello submits that after he became involved, Mr. Johnson offered to settle for what was ordered on consent at trial, other than requiring the $7,500 cost order of Fitzpatrick J. to be enforced as support. As to this latter issue, Mr. Cupello points out that the enforcement of the $7,500 cost order was not part of Ms. Karam’s pleadings.
[18] Mr. Cupello notes that the $3,000 lump sum payment set out in the September 3, 2014, offer was not characterized as payment of arrears and arrears were not addressed.
[19] Mr. Cupello submits that after he became involved, Mr. Johnson made full disclosure.
[20] Mr. Cupello also submits that if costs are awarded, no costs should be given with respect to the case conference and the settlement conference because, under rule 24(1), costs are to be decided in a summary manner after each step.
Discussion
In my view, it was necessary for Ms. Karam to bring her motion to change the order of Wright J. of July 28, 2011, so that Mr. Johnson would pay support commensurate with his income for the preceding year. Although the order of June 5, 2015, was made on consent and was substantially in accordance with Mr. Johnson’s offer which he made after he retained Mr. Cupello, I am satisfied that there would have been no agreement if Ms. Karam’s motion to change had not been brought.
[21] It is apparent from the endorsement of Pierce J. of February 18, 2015, that an order was required to compel Mr. Johnson to produce his complete tax returns for the years 2011 to and including 2014. Although the motion to change only claimed variation based on Mr. Johnson’s income for 2012, the preamble of the order of Pierce J. references the fact that what was at issue was the collection of costs (as ordered by Fitzpatrick J.), arrears of child support and ongoing child support.
[22] I agree with Mr. Cupello’s submission that costs of the case conference and of the settlement conference should not form part of this cost order because the costs of those conferences are properly dealt with at the completion of the conferences in accordance with rule 24(1).
[23] The Family Law Rules do not address costs on a “substantial” or “partial” indemnity basis. Rule 18(14), 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.
[24] The Costs Outline filed by Ms. Karam on a “full indemnity basis” includes over $4,000 for the case conference, the settlement conference and for five hours of trial. The trial settled shortly after it commenced. The “partial indemnity” fees of $4,546 include over $2,500 for those events.
[25] I take into consideration that Ms. Karan’s motion to change had to be amended at trial to include the relief that was granted on the June 5, 2015 consent order. However, Mr. Johnson’s response also had to be amended at trial.
[26] I take into consideration the offers made by each party, which were similar in principle to the consent order, but not completely identical.
[27] I also take into consideration that Mr. Johnson only completed his disclosure after he was ordered to do so and only after Mr. Cupello became involved.
[28] In all the circumstances, it would be fair and reasonable to award Ms. Karam costs of the case in the amount of $3,500 for fees plus $611.23 for disbursements, plus HST on the fees of $3,500 enforceable by the Family Responsibility Office as child support.
___”original signed by”
The Hon. Mr. Justice D. C. Shaw
Released: July 14, 2015
COURT FILE NO.: FS-10-0011-03
DATE: 2015-07-14
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Janice Karam,
Applicant
- and -
David Johnson,
Respondent
DECISION ON COSTS
Shaw R.S.J.
Released: July 14, 2015
/mls