Loncar v. Pendlebury, 2015 ONSC 4673

SUPERIOR COURT OF JUSTICE – ONTARIO

FAMILY COURT

COURT FILE NO.: 345/13 (St. Catharines)
DATE: 2015/07/21

RE: Zoran Loncar (Applicant) v. Alicia Pendlebury (Respondent)

BEFORE: The Honourable Mr. Justice R.A. Lococo

COUNSEL: The Applicant was not represented by counsel

Marlene J. VanderSpek, for the Respondent

HEARD: By written submissions dated May 28 and June 12, 2015

E N D O R S E M E N T – C O S T S

I. Introduction

1Following the breakdown of Zoran Loncar’s common law relationship with Alicia Pendlebury, Mr. Loncar brought an application seeking joint custody of their daughter, Alessandria. He also sought expanded access to Alessandria, including overnight access. At a two day hearing of the application, the court also considered Ms. Pendlebury’s request for leave to move with the child to Alberta and her claim for child support, including a proportionate share of special and extraordinary expenses. In these proceedings, Mr. Loncar acted on his own behalf without counsel. Ms. Pendlebury was represented by counsel on a Legal Aid certificate.

2In Reasons for Judgment dated May 12, 2015,¹ Ms. Pendlebury was granted sole custody of Alessandria, leave to move with Alessandria to Alberta and child support. Mr. Loncar was granted liberal and generous access when he is in Alberta, when the child is in Ontario and by electronic communications. As well, the parties were ordered to share special and extraordinary expenses equally. The issue of costs was left to be determined based on written submissions.

3In written submissions received from Ms. Pendlebury’s counsel, Ms. Pendlebury argued that the court should make a costs award in her favour as the successful party on the application. She seeks costs in the amount of $17,290.50, including fees of $14,562.15 (plus HST) and disbursements of $835.27 (including HST).² She calculated the fee amount on a partial indemnity basis until January 7, 2015, the date of an offer to settle was served on Mr. Loncar, and on a substantial indemnity basis thereafter. In Ms. Pendlebury’s submission, it was appropriate to calculate costs in that way on the basis that the court’s final order was as favourable as or more favourable than the offer to settle.

4In his written submissions, Mr. Loncar argued that there should be no order as to costs in the circumstances of this case. In the alternative, he submitted that the amount claimed is excessive, and in any case should be limited to costs incurred for trial. The issues raised by Mr. Loncar’s submissions are considered below under the following headings:

(a) Entitlement to costs;

(b) Impact of the offer to settle; and

(c) Amount of costs.

II. Entitlement to costs

5Under subrule 24(1) of the Family Law Rules,³ there is a presumption that a successful party is entitled to costs. As explained below, I consider Ms. Pendlebury to be the successful party in this case. Therefore, she has the benefit of that presumption. In all the circumstances, I find that a costs award in her favour is the appropriate result in this case.

6As noted in my Reasons for Judgment, the most hotly-contested issues at trial related to custody and mobility. By the time of trial, the areas of dispute relating to child support were relatively minor, and the resolution of access issues depended in large measure on the determination of the mobility issue.

7Ms. Pendlebury was substantially successful on the issues relating to custody and mobility. Ms. Pendlebury was granted sole custody of Alessandria and given leave to move to Alberta, in the latter case effective 30 days after the decision. As requested by Ms. Pendlebury, Mr. Loncar was granted liberal and generous access to Alessandria in the terms requested by Ms. Pendlebury, consistent with my ruling on the mobility issue. I also provided directions relating to interim access pending Ms. Pendlebury’s departure for Alberta with Alessandria, as discussed further in the next section of this endorsement.

8Mr. Loncar argued that he should not suffer a costs penalty for opposing Ms. Pendlebury’s request for sole custody and leave to move to Alberta given the significant impact her success on these issues would have on his ability to maintain a relationship with Alessandria. He also argued that I should take into account the fact that Ms. Pendlebury did not raise the mobility issue until late in the proceedings, completely changing the focus of the litigation. While I agree with Mr. Loncar that these are matters that I would be entitled to take into account when considering costs, I am not persuaded that they are sufficient to rebut the presumption that Ms. Pendlebury should be awarded costs in this case.

9With respect to the mobility issue in particular, Ms. Pendlebury filed an amended Answer raising that issue some seven months before trial. Mr. Loncar can hardly claim to have been taken by surprise on this issue. As well, there was no indication that Ms. Pendlebury failed to raise the issue in a timely way once she formed the intention to move to Alberta, if permitted to do so.

III. Impact of offer to settle

10Under subrule 18(14) of the Family Law Rules, unless the court orders otherwise, a party who makes an offer to settle is entitled to costs to the date of the offer and full recovery costs after that date if the offering party obtains an order that is as favourable as or more favourable than the offer to settle and the other requirements of the subrule are met. Under subrule 18(15), the burden of proving that the order is as favourable as or more favourable than the offer to settle is on the offering party.

11Having reviewed the terms of Ms. Pendlebury’s offer to settle dated January 6, 2015, I am not satisfied that Ms. Pendlebury has discharged her burden of proving that the order is as favourable as or more favourable than the offer to settle, in particular in relation to mobility and access. Accordingly, costs will be awarded on a partial indemnity basis.

12With respect to mobility and access, the principal difference between the offer to settle and the final order relates to the delay of 30 days in the effective date of the mobility order and the directions relating to Mr. Loncar’s access in the period pending Ms. Pendelbury’s departure for Alberta. In those respects, I consider the final order to be less favourable to Ms. Pendlebury than the offer to settle. I included those terms in the final order based on the level of prior conflict between the parties, particularly with respect to access. I was concerned that in the absence of interim access directions, there would be conflict between the parties on this subject in the period prior to Ms. Pendlebury’s departure. As well, without a delay in the effective date of the mobility order, Ms. Pendlebury and Alessandria could arguably have been on a plane the next day to join Ms. Pendlebury’s father in Alberta without breaching the strict terms of the order.

13In her costs submissions, Ms. Pendlebury’s counsel noted that those terms of the final order were not the subject of submissions at trial by either party. She argued that in those circumstances I should not take them into account when considering whether Ms. Pendlebury had the benefit of subrule 18(14), particularly given that that Ms. Pendlebury was substantially successful on the issues of mobility and access. I was not persuaded by that argument. The concerns I addressed by including those terms in the final order arose from the evidence at trial of conflict between the parties, based on contributing conduct by both parties. As well, while I agree that Ms. Pendlebury was substantially successful on the issues of mobility and access, that fact is consistent with a costs award in Ms. Pendlebury’s favour but, in my view, does not justify the enhanced level of costs contemplated by Rule 18.

14In his costs submissions, Mr. Loncar raised a number of other distinctions between the offer to settle and the final order that, in his submission, made it impossible to determine whether the final order or the offer to settle was more favourable to Ms. Pendlebury. Notably, the offer to settle did not include a specific amount for on-going support. As well, the final order directed the parties to share special and extraordinary expenses equally, while under the offer to settle, the parties would pay their proportionate share based on their respective incomes. However, I did not consider the other points raised by Mr. Loncar, taken each on its own, to be sufficient to deny Ms. Pendlebury the benefit of subrule 18(14) had it otherwise been available. In particular, I agree with Ms. Pendlebury’s submission that she was inhibited in her ability to make a specific offer relating to on-going child support because of Mr. Loncar’s failure to provide updated income information to Ms. Pendlebury’s counsel until the start of the trial. As well, the order relating to special and extraordinary expenses was anticipatory in nature, since no such expenses had been incurred prior to trial. An order for the equal sharing of those expenses was made as a matter of convenience at the suggestion of Ms. Pendlebury’s counsel, without dispute by Mr. Loncar, given the uncertainty about the future level of income for both parties.

IV. Amount of costs

15Given my finding that Ms. Pendlebury is entitled to costs on a partial indemnity basis, Ms. Pendlebury’s claim for costs, based on the information contained in the costs outline, would total $13,808.80, consisting of fees of $11,481.00 (plus HST on that amount of $1,492.53) and $835.27 in disbursements (including HST).

16The fee amount claimed was based on 60 per cent of counsel’s actual regular hourly rate of $190.00. Ms. Pendlebury’s counsel argued that it was appropriate for her to use that hourly rate in making this calculation, even though the hourly rate actually charged under the Legal Aid tariff was just over half of that amount. I agree that it was appropriate to use that method of calculation in light of section 46 of the Legal Aid Services Act,⁴ consistent with the decision of Justice Scott of this court in Alvarez v. Smith.⁵ However, I also note that when exercising my discretion to fix the amount of costs, I am not bound by the calculation of hours and time rates, as indicated by the Ontario Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario.⁶

17In his costs submissions, Mr. Loncar argued that the costs amount claimed by Ms. Pendlebury was excessive to the extent that it included fees and disbursements that did not relate to the trial. Even though I did not find the aggregate amount claimed by Ms. Pendlebury to be excessive in absolute terms, I agree that Ms. Pendlebury was not entitled to claim costs for certain of the steps in the proceedings prior to trial.

18This issue was addressed by Justice Scott in the Alvarez decision, who relied on subrule 24(10) of the Family Law Rules, as interpreted by the Ontario Court of Appeal in Islam v. Rahman.⁷ Under subrule 24(10), the court is required to decide who if anyone is entitled to costs, and set the amount of costs, promptly after each step in the proceeding. In the Islam case, relying on subrule 24(10), the court held that the trial judge should have disallowed costs claimed by the successful party that related to steps taken in the proceeding (such as conferences and motions) where there was no specific costs order in that party’s favour.⁸ Applying that principle in setting the costs amount in the Alvarez decision, Justice Scott considered “only the steps related to trial, which shall include as well preparation of the initial pleadings and initial attendances with the applicant in order to do that….” and “the preparation of the current costs submissions….”⁹

19Charges relating to the case conference and settlement conference were included in the chart of time charges attached to Ms. Pendlebury’s costs outline. The issue of costs was not addressed in the endorsements for those conferences. As well, the chart included charges relating to a motion heard in July 2014. The endorsement for that motion specifically stated that there would be no order as to costs.

20In these circumstances, a downward adjustment of the amount claimed for fees and disbursement is in order to eliminate amounts relating to these prior steps, which is consistent with subrule 24(10) and the Islam decision. Although it is difficult to be precise, the application of those principles in this case would require a significant reduction from the amount claimed by Ms. Pendlebury.

21In all the circumstances, there will be a costs order in Ms. Pendlebury’s favour, fixing her costs at $5,000, including disbursements and tax. Given Mr. Loncar’s employment and financial situation based on the evidence at trial, it would be appropriate to extend the time for payment beyond the usual 30 days. Accordingly, that amount is payable by Mr. Loncar within 180 days.

The Honourable Mr. Justice R.A. Lococo

Footnotes

1. 1Loncar v. Pendlebury, 2015 ONSC 3026.
2. 2The total amount of $17,290.50 corrects a calculation error in Ms. Pendlebury’s submissions, in which the total amount was calculated as $17,399.08. To arrive at the latter amount, HST was calculated by applying the HST rate to the aggregate of $14,562.15 for fees and $835.27 for disbursements, even though the disbursements amount already included HST.
3. 3O. Reg. 114/99.
4. 4S.O. 1998, c. 26.
5. 52008 10047 (ON SC), [2008] O.J. No. 941 (S.C.).
6. 6(2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) at para 26.
7. 72007 ONCA 622, [2007] O.J. No. 3416.
8. 8Ibid. at para.2.
9. 9Alvarez, note 5 supra at para. 13.