Court File and Parties

COURT FILE NO.: 102-2011D

DATE: 2015/10/19

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Randall C. Witherspoon (Applicant)

And:

Mary E. Witherspoon (Respondent)

BEFORE: Justice I. F. Leach

COUNSEL: R. Ian Robertson, for the plaintiff

Elli M. Cohen, in defendant

HEARD: By way of written cost submissions

ENDORSEMENT – COSTS

Background

[1] The parties to this matrimonial dispute were married in 1983, and together had four children, born between 1983 and 1993.

[2] The applicant came from a farming family, apparently focused on the raising and sale of livestock, and the parties and their children seem to have remained involved in such farming throughout the marriage, with the parties nevertheless engaging in other employment to some extent.

[3] In particular:

• The applicant seems to have remained actively engaged in livestock and/or cash crop farming, (for his parents, and on successive farm properties rented or owned by the parties), although he also took on and maintained other employment, including work for a Goderich company that mines and distributes salt.
• The respondent was a factory worker at the time of marriage, but took and takes the position that, throughout the marriage, she was primarily a "stay at home" mother, and assumed the role of "a traditional farm wife". However, she acknowledges that, between maternity leaves and thereafter, she engaged in a series of jobs outside the home, (including full or part time roles as a factory worker, babysitter, cleaner, retail sales clerk, respite care worker, and power company employee – although her work life also was affected by health and disability complications, offset by Worker's Compensation benefits).
• It seems clear that, for the balance of the marriage, the parties and their children lived on farm properties involved in the farming operations worked, at least primarily, by the applicant.

[4] The parties separated after 23 years of marriage in or around 2009, (albeit with both staying on in the matrimonial home, a farm property, until the applicant physically departed approximately two years later).

[5] The date of separation, the work and financial contributions of the parties and their children, the extent to which the farming operations were or could have been successful and/or generated more sale proceeds on farm asset disposition, and the respondent's entitlement to spousal support, were but some of the very many contentious issues that permeated this highly acrimonious litigation.

[6] In that regard, the material filed by the parties describes a vast array of disputed matters, some major but some relatively minor and petty, which were addressed by a series of expensive and time-consuming motions and cross-motions.

[7] Details of many of those motions and cross-motions, their scheduling and return history, and the parties' very disparate views as to whose alleged unreasonable positions necessitated the bringing of the motions, and which party ultimately was more successful in achieving what each wanted in bringing or resisting the motions, were set out at considerable length in the material filed by counsel in relation to the cost exercise placed before me now.

[8] I will not attempt to replicate those details here.

[9] For present purposes, the various motions and cross motions addressed such disparate issues as:

• disputes about the sale of farm assets other than real estate, (including preservation, maintenance and/or sale of livestock, and sometimes minute details relating to whether, how, when and where such livestock would be sold, and the proper approach to associated costs and sale proceeds);
• disputes about alleged non-disclosure and failure to provide proper accounts in relation to farming and financial matters;
• disputes relating to possession of the matrimonial home and restraining orders;
• disputes relating to sale of the farm property constituting the matrimonial home, (including disputes as to desired rights of first refusal, responsibility for sale arrangements, conduct of listing and sale arrangements, alleged efforts to thwart or frustrate sale arrangements, and proposals to accept alternative offers);
• disputes as to interim spousal and child support;
• disputes relating to the processing of claims made by the respondent for reimbursement of certain expenditures through the applicant's benefits plan; and
• disputes about alleged counsel misconduct and conflicts of interest.

[10] The latter issues reflect the unfortunate reality, (echoed in some of the correspondence exchanged between counsel, and some aspects of the written submissions made in the filings provided to me), that acrimony between the parties seems to have infected, to some degree, relations between counsel.

[11] Some of the parties' motions and cross-motions ended, often after contested adjournments, in grudging and belated resolution by the parties, (in whole or in part), shortly before or after the parties and their counsel arrived at the courthouse for formal argument of the motions.

[12] Other aspects of the motions and cross-motions ended in formal argument and court resolution.

[13] Still other aspects of the motions and cross-motions effectively were abandoned, as the parties did not seek to pursue or bring them on for final determination and resolution by the court before turning their attention instead towards trial.

[14] In the meantime, of course, the litigation was punctuated by the case, settlement and trial management conferences mandated by the Family Law Rules, and a good deal of corresponding attempts at judicial mediation.

Settlement and written cost submissions

[15] Trial of this matter was scheduled to commence in Goderich on May 11, 2015, (following an adjournment the month before, in circumstances that were also contentious and disputed).

[16] However, when the matter was called for trial on May 11, 2015, counsel appeared and indicated that the matter had resolved, (in accordance with Minutes of Settlement that had been signed and filed), apart from residual cost issues.

[17] In that regard, the parties had agreed to preserve those residual cost issues for resolution by the court.

[18] In the result, and as requested by the parties, I set a timetable for the tendering of written cost submissions intended to address and resolve all remaining cost issues, apart from those already expressly reserved to Mr Justice King by virtue of an earlier endorsement. In particular, pursuant to a consent endorsement, if the parties were unable to settle the remaining cost issues as well:

• both parties were to deliver their primary cost submissions on or before June 16, 2015, (with submissions to be a maximum of 15 pages, not including Bills of Costs or other necessary attachments);
• both parties were to deliver any responding cost submissions on or before July 16, 2015, (with submissions to be a maximum of 7 pages, not including any necessary attachments); and
• no further cost submissions were contemplated or permitted.

[19] In early June of 2015, the dates set forth in the above timetable were extended by one month, at the request of counsel and with the consent of both parties.

[20] Both parties filed then delivered their primary cost submissions on July 16, 2015.

[21] This was followed by the Applicant's delivery of responding cost submissions on August 13, 2015, and the Respondent's delivery of responding cost submissions on August 17, 2015. Although both are labelled "Reply" cost submissions, both filings respond to the primary submissions made by the other side, and there effectively was no contravention of the final provision of the original cost timetable, set forth above.[^1]

[22] The parties' respective filings were accompanied by a good deal of additional material, including docket entries, copies of various orders, endorsements and offers to settle, and copies of other documentation reproducing, in whole or in part, material such as correspondence exchanged between counsel, financial statements, tax returns, pension statements, and details of property sale related matters.

Party positions

[23] At the risk of over-simplification, the respondent now apparently seeks full reimbursement of all costs and disbursements incurred by her in relation to the parties' extended litigation, up to and including the settlement reached on May 11, 2015, and in some respects thereafter. (Docket entries offered in support of the respondent's claim include work done on May 14 and 28, 2015, but apparently not work done to prepare the primary or responding written cost submissions delivered by the respondent.)

[24] In particular, the respondent apparently claims full reimbursement fees, disbursements and associated taxes totalling $99,360.40.

[25] Supported by a myriad of particulars, the respondent says that such reimbursement is justified by the unreasonable conduct of the applicant throughout the litigation, and by her having achieved, in her view, greater success than the applicant.

[26] For his part, (and again at the risk of over-simplification), the applicant's primary position is that each of the parties should bear his or her own respective costs in relation to this litigation, without the making of any further cost award at this point.

[27] That primary position is not supported by any attempt by the applicant to question the propriety of the cost exercise agreed to by the parties; e.g., in terms of mentioning or relying upon any proffered authority or other legal principle questioning whether the court has or should exercise a jurisdiction to entertain and resolve such cost claims at this stage.

[28] Rather, the applicant essentially argues that, in the particular circumstances of this case, it clearly was the respondent who adopted more unreasonable positions and litigation strategies, and that it was the applicant who achieved a greater degree of success.

[29] Notwithstanding those suggested conclusions, the applicant emphasizes that he would be content in the circumstances with a formal disposition requiring each party to bear his or her own costs, with the exception of costs associated with this current exercise, as the applicant feels that the exercise has been entirely inappropriate and unnecessary; i.e., given his willingness to walk away from a further cost claim at this point.

[30] In that regard, the applicant seeks, in any event, costs of $13,319.88 for reimbursement of the costs, disbursements and applicable tax associated with his preparation of his primary and responding written cost submissions.

[31] However, as something of a "fall back" position, the applicant argues that, if there are to be any costs awarded at all at this stage, (beyond costs of this exercise), those costs should be awarded in the applicant's favour, directed towards the $132,228.40 in legal fees, disbursements and applicable taxes incurred by the applicant.

[32] In support of that fall-back position, the material filed by the applicant makes similarly detailed submissions as to why the respondent has acted unreasonably, and explaining why the applicant should be viewed as having achieved a greater detail of comparative success; success which is said to have exceeded the various settlement offers relied upon by the respondent.

[33] Moreover, the applicant has tendered material and information to support his alternate claims to substantial costs, particularly in relation to certain motions and cross-motions, and his preparation for trial.

Analysis

[34] Again, in addressing the question of what if any costs should be awarded at this "post-settlement" stage of the proceeding, both parties focus largely on their very disparate perspectives on relative success, (both during the litigation and upon settlement), and broad questions of who may or may not have behaved unreasonably and in bad faith throughout the litigation.

[35] These obviously are factors in formal cost award determination emphasized by Rules 24(1), (4), (5) and (8) of the Family Law Rules.

[36] In this case, however, it seems to me that those broad factors effectively are being seized upon by the parties as a means of now revisiting and rearguing, at length, the acrimonious details of disputed issues and matters which the parties supposedly have left behind, and moved beyond, through their formal settlement.

[37] In particular, the filings are punctuated by emphatic if not inflammatory allegations and denials, back and forth, about whether parties were telling the truth about certain matters, whether parties engaged in collateral and improper efforts to conceal matters or undermine contemplated arrangements, and whether positions and submissions had merit.

[38] Moreover, in an effort to underscore the perceived unreasonable attitude and approach of the opposing party and his or her counsel, each side has included reference to additional matters showing that the parties' acrimony and squabbles have continued after their formal settlement. These include:

• disputes about alleged delays in the processing of a formal divorce;
• disputes about alleged delays in terminating FRO garnishments and corresponding overpayment of support, which in turn have a bearing on whether or not the applicant is or is not effectively in breach of certain cost payment orders;
• disputes about whether or not whether claims made by the respondent pursuant to the applicant's benefit plan, (including a claim in relation to certain eye-glasses), were ever submitted by the applicant, or submitted by the applicant and simply denied by the benefits provider; and
• disputes about whether or not full disclosure was made in advance of the parties' settlement.

[39] In devoting considerable time to reviewing, working through and reflecting upon such competing cost submissions, I have come to the firm view that the cost determination exercise the parties agreed to undertake is fundamentally flawed and inappropriate.

[40] My view in that regard is based on two principal considerations.

[41] First, the history of this matter and supporting docket material makes it quite clear that the lion's share of the significant legal expense now in dispute was generated by the extensive motions and cross-motions outlined above, and by the various conferences and associated judicial mediation that took place throughout the course of the litigation. In that regard:

• The cost submissions and related material filed by the respondent makes no effort whatsoever to segregate the particular costs associated with those steps in the proceeding, and/or to isolate costs relating to those steps in the proceeding from any remaining residual costs of the action. Given the broad nature of some of the docket entries offered in support of the respondent's cost claims, one wonders whether such segregation and isolation would even be possible, at this point. In any event, the respondent simply asks that she now receive reimbursement in relation to all of the legal expense she has incurred over the course of this dispute, from her retention of counsel until a number of weeks after the parties' formal settlement.
• The cost submissions and related material filed by the applicant makes an effort to segregate and identify the costs associated with some of the various motions, but groups even those particular motions together to some extent; (i.e., combining the suggested total of costs relating to the motion and cross-motion initially returnable on April 3, 2013, and combining the suggested total of costs for the respondent's motion initially returnable on May 13, 2013, and the application's motion initially returnable on June 26, 2013). There is also an effort made to segregate the applicant's cost of fees, disbursements and taxes associated with trial preparation, said to total $14,480.95, and indirectly indicting that the bulk of the $132,228.40 of total legal expense incurred by the applicant must have been directed towards other steps in the litigation. However, no effort is made to segregate or separately indicate the costs directed to such other steps.
• There was no evidence before me to indicate or suggest that the costs of any pre-trial motion or conference were formally reserved to the trial judge, (as opposed to a judge who would be hearing and deciding a particular motion adjourned on the basis of interim agreements and terms). Moreover, such an endorsement would have been quite unusual and at odds with the legislated direction, in Rule 24(10 of the Family Law Rules, that entitlement to costs and their quantification, (if any), are to be decided promptly at each step in the proceeding by the judge or other person who dealt with that step.[^2]
• In the context of "ordinary" civil litigation, (i.e., as opposed to litigation of issues relating to family law), parties normally are not permitted to have the trial judge revisit cost issues associated with pre-trial motions. In particular, where motions have resulted in an order awarding and quantifying associated costs, or indicating that no costs would be awarded, no further costs for steps taken in relation to such motions may be awarded or assessed, and a trial judge has no jurisdiction to award costs for a prior contested event for which costs were decided.[^3] Moreover, where motions have resulted in an order making no express provision for costs or relating to costs, the law is clear that no costs shall be awarded or assessed for steps taken in relation to such motions.[^4]
• Our courts have emphasized that these principles have been reinforced in the context of family law litigation, and extended beyond motions so as to apply to all pre-trial steps in such litigation, by the provisions of Rule 24(10). In particular, it is incumbent on a party who desires the costs of any particular pre-trial step in such a family law proceeding, (including the costs of any conference or motion), to promptly raise that issue with the judge who has dealt with that step, who accordingly will be in the best position, at that point, to assess all of the cost factors set forth in the rules, and determine entitlement and quantum of costs. In family law proceedings, the trial judge accordingly should not deal with costs primarily associated with preliminary steps such as motions and conferences. The trial judge has no jurisdiction to award such costs.[^5]
• In my view, as the "trial judge", (although that is something of a misnomer in the true circumstances underlying how the present cost dispute comes before me for consideration), I therefore should not and cannot entertain, at this point, belated claims by either party for the costs associated with conferences, the costs associated with motions that were previously determined, (with specified cost rulings or with no order being made in relation to costs), or the costs associated with motions that effectively were not pursued to conclusion and effectively abandoned before trial.[^6]
• In the result, this cost exercise effectively is rendered moot in relation to the vast majority of the costs being sought and addressed by the parties' written cost submissions.

[42] Second, in my view, whether one is focused on pre-trial steps in the litigation or the other residual costs of the litigation, the attempt to argue cost entitlement and quantification through application of the normally applicable cost recovery rules, after the parties have reached a formal settlement of the substantive issues between them, without trial, is fundamentally misconceived and inappropriate. In that regard:

• As noted above, the cost regime created for family law litigation in this province, through enactment of Rule 24 of the Family Law Rules, focuses in large measure on the criteria of "success", (which creates a presumption of entitlement), and "reasonable" or "unreasonable" behaviour.
• However, in my view, those criteria, and the degree of relative "success" in particular, presuppose the existence of objective benchmarks from which the court in turn can draw appropriate and reliable conclusions; e.g., by comparison of party positions and with objectively determined outcomes that reveal the true relative merits of each party's position. Such objective benchmarks are lacking where the outcome against which parties attempt to argue their degree of "success" is not the product of judicial fact-finding and objective determination, but an agreed settlement.
• For example, both parties in the case before me are now trying to argue that the agreed settlement has generated an outcome more in line with their pre-settlement desires, and more or less favourable than the outcome suggested by prior settlement offers. However, such arguments presuppose that the outcome achieved by settlement is a proper benchmark by which to assess relative success, and thereby the reasonableness of either party's behaviour, insofar as the negotiated outcome should be presumed to coincide with the objective determination and outcome at which a court would have arrived, had the matter been the subject of judicial fact-finding and determination.
• In my view, those underlying assumptions are self-evidently fallacious. As our courts have recognized, "there are doubtless many motivating factors why parties enter into settlements and why a particular party may resile from claims or defences to claims either made or responded to", and "the reasonableness or unreasonableness of any party's position in either asserting a claim, abandoning a claim or abandoning a defence or answer to a claim can depend on a myriad of factors".[^7]
• In that regard, experience has shown that parties to matrimonial litigation frequently decide to compromise and accept a settlement, effectively abandoning certain pre-settlement claims and defences without pressing them to trial, not because the party concedes in any way that positions previously held in the litigation have no objective merit, but because the party is simply tired of the ongoing acrimony, and/or feels unable to incur the expense of litigating the matter through to a final conclusion after trial. Given such realities, it seems to me that permitting post-settlement claims for costs, in which negotiated settlements are used after the fact as supposed benchmarks by which the objective reasonableness of pre-settlement positions should be measured, runs counter to public policy. Endorsing such an approach would actively discourage parties from making any compromises in order to achieve settlement.
• Moreover, attempts to address such cost issues in a post-settlement context are unlikely to promote judicial economy. Again, application of the cost rules presupposes that the court is in a position to rely on factual or other objective findings that either support or detract from the parties' respective submissions. However, that self-evidently will not be the case where the parties rely on matters and considerations that have never been the subject of any judicial fact finding, or corresponding judicial determination on issues or reasonableness, unreasonableness, or alleged misconduct.[^8] The parties in the case before me seem to have come to such a realization either consciously or instinctively, given their respective efforts to now revisit contentious issues and evidence, and belatedly have such matters resolved in their favour in order to justify their cost positions. However, an exercise that effectively encourages and requires the parties and the court to revisit and essentially litigate such issues, which supposedly have been resolved by a substantive settlement, seems entirely and inappropriately retrograde in nature.
• For such reasons, our courts have held that, "where parties make a settlement as between themselves, the court … should be very slow to make an award of costs against one of the parties", and "unless there are compelling reasons to do so, costs in the circumstances of a settlement between parties ought not to be awarded by the court".[^9]
• I agree with that approach, and am not persuaded that there are any compelling reasons to depart from it in the circumstances of this case.

[43] For the above reasons, no costs will be ordered at this stage, in favour of either party, as far as the costs incurred by the parties prior to this exercise are concerned. The parties each shall bear responsibility for their own costs in that regard.

Costs of this exercise

[44] I am mindful of the reality that the outcome of this cost determination exercise is therefore exactly what the applicant said it should be, at least in his primary submission; i.e., that each side should receive no costs, (apart from whatever costs might be awarded in relation to this exercise).

[45] In one sense, that might be characterized as "success" by the applicant in relation to this step of the proceeding, in turn giving rise to a presumption, pursuant to Rule 24(1) of the Family Law Rules, that the applicant should be awarded costs in relation to this exercise. (As noted above, the applicant has formally requested costs of $13,319.88 in that regard.)

[46] However, the outcome does not coincide with any principled position taken by the applicant with respect to the propriety of this exercise. In particular, it does not result from any challenge by the applicant to the court's ability to award costs at this stage, either in relation to previous steps in the proceeding in respect of which no costs were requested or ordered, or in the wake of the substantive settlement negotiated by the parties.

[47] To the contrary, the applicant implicitly if not expressly accepted that such costs were a possibility.

[48] In particular, as noted above, the applicant took the substantive position that the normal cost considerations of success and reasonableness were to be applied in resolving the question of whether costs should be awarded, and if so, what the amount of costs should be. However, the applicant felt such considerations supported either a conclusion that no costs should be awarded, (a result he was prepared to accept at the outset), or that a measure of costs should be awarded in his favour.

[49] In short, both parties committed, by mutual agreement, to this inappropriate and abortive cost exercise.

[50] By doing so, in my view, both parties behaved unreasonably, within the meaning of Rules 24(4) and 24(5) of the Family Law Rules.

[51] In the circumstances, I chose to award neither party any costs in relation to this exercise.

Justice I F. Leach

Date: October 19, 2015

[^1]: In my view, there nevertheless was an effective contravention by the Respondent of the page limit set on written submissions, at least insofar as the Respondent's primary written submissions are concerned. In particular, in addition to 12 pages of written argument set forth in the Respondent's "Submission on Costs", the Respondent filed not only docket entries, numerical data and calculations, (along with attachments such as court orders and endorsements, and offers to settle), but a further seven page "Cost Outline" containing at least 4-5 more physical pages of further written argument. (I say "physical" pages because, in terms of content, the number of additional pages of written argument would have expanded considerably beyond 4 to 5 pages, had the text not been single spaced and reduced to a constant font size normally reserved for footnotes.) The Applicant, while noting the contravention, commendably chose not to respond in kind. However, when page limits are set on written submissions, those limits should be respected in both letter and spirit. That unfortunately was not the case here, at least insofar as the Respondent is concerned.

[^2]: Rule 24(10) of the Family Law Rules reads as follows: "Promptly after each step in the case, the judge or other person who dealt with that step shall decide in a summary manner who, if anyone, is entitled to costs, and set the amount of costs."

[^3]: See, for example: Orkin, The Law of Costs, (2nd ed.), at paragraph 402; Kordic v. Bernachi (2007), 161 A.C.W.S. (3d) 692 (Ont.S.C.J.), at paragraph 5; and Hollinger Inc. v. Ravelston Corp. (2008), 54 C.P.C. (6th) 211 (Ont.C.A.).

[^4]: For example, see: Orkin, The Law of Costs, (2nd ed.), at paragraph 402; Delrina Corp. v. Triolet Systems Inc. (2002), 2002 45083 (ON CA), 165 O.A.C. 160 (C.A.); and Radvar v. Canada (Attorney General) (2006), 145 A.C.W.S. (3d) 208 (Ont.S.C.J.).

[^5]: See, for example: Davis v. Davis, [2004] O.J. No. 2256 (S.C.J.); Raaymakers v. Green, [2005] O.J. No. 6218 (S.C.J.), varied 2006 719 (ON CA), [2006] O.J. No. 124 (C.A.); Islam v. Rahman, 2007 ONCA 622, [2007] O.J. No. 3416 (C.A.); and Blank v. Micallef, 2009 60668 (ON SC), [2009] O.J. No. 4636 (S.C.J.).

[^6]: I am mindful of the fact that I was one of the judges who dealt with certain interim aspects of one of the motions; i.e., the Respondent's motion initially returnable before me on October 3, 2012, (more than three years ago). The relief requested in that motion was wide-ranging, and addressed a panoply of issues including requests for exclusive possession of the matrimonial home, orders relating to the sale of the farm property and the sale of farm assets, interim spousal support and child support, (including a contribution towards "section 7" expenses), and an order compelling the refiling of certain tax returns. However, when the matter came before me, in the context of a contested adjournment request, the motion was adjourned on certain terms, including the agreed sale of certain cattle. Most of those adjournment terms were agreed by the parties, with the exception of a minor ruling I was required to make concerning the payment of certain costs associated with transporting the cattle to the point of sale. All concerned were agreed that the costs of the adjournment hearing should be reserved to the judge hearing and deciding the motion on its merits, and I made an endorsement accordingly. I thereafter was not the judge who dealt substantively with the motion. Nor do I think my having dealt with limited aspects of the motion briefly, more than three years ago, in any way alters the conclusion that I should not be entertaining belated claims for the cost of that motion now. In particular, even if I was the judge who "dealt with" the substantive issues raised by that motion, (which I was not), Rule 24(10) requires that a claim for the costs of a step in the proceeding be raised "promptly" after each step. This underscores the reality that the person best positioned to deal with the costs of a matter is not simply the judge or other person who dealt with it, but the judge or other person who has recently dealt with it. That I may have reviewed motion material and heard oral submissions more than three years ago, in relation to that particular motion, gives me little if any advantage over a trial or other judge who has never dealt with the motion before.

[^7]: Dhillon v. Dhillon Estate, 2009 58607 (ON SC), [2009] O.J. No. 4459 (S.C.J.), at paragraph 20.

[^8]: Ibid., at paragraphs 9-11.

[^9]: See, for example: Anishinaabe Child and Family Services Inc. v. CBC, 1997 22764 (MB QB), [1997] M.J. No. 181 (Q.B.); Dhillon v. Dhillon Estate, supra; and Blank v. Micallef, supra.