ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 238/12
DATE: 20151022
BETWEEN:
Ryan Thomas Tyner
John Mastorakos, for the Applicant
Applicant
- and -
Jessica Marie Tyner, Robert Pollard and
Judy Pollard
Lucienne MacLauchlan, for the Respondents
Respondents
Heard November 24, 25, 27, 28, December 2, 3, 2014
Trousdale J.
ENDORSEMENT ON COSTS
[1] This was a 5 and a half day trial. The Applicant, Mr. Tyner claimed a divorce from Ms. Tyner in his Application. In addition, Mr. Tyner named Ms. Tyner’s maternal grandparents, Mr. and Mrs. Pollard as Respondents to Mr. Tyner’s Application as Mr. Tyner claimed an interest in property or damages from them for unjust enrichment for work and money Mr. Tyner claimed he contributed to the improvement of Mr. and Mrs. Pollard’s farm property in Selby, Ontario. Mr. and Ms. Tyner resided on the farm property and Ms. Tyner carried on her riding business there.
[2] In her Answer, Ms. Tyner made claims against Mr. Tyner for equalization of net family property, spousal support, and civil damages.
[3] Mr. Tyner seeks costs from Ms. Tyner and Mr. and Mrs. Pollard for total legal fees of $53,692.00 plus HST, and disbursements of $7,644.26 inclusive of HST, for a total of $69,446.22. This is based on 10 /11 of Mr. Tyner’s legal fees after his offer of November 4, 2013, which allocation Mr. Tyner submits takes into account Ms. Tyner’s success on the equalization of net family property, and 50% as partial indemnity costs of his legal fees incurred prior to his offer of November 4, 2013. Mr. Tyner’s total fees and disbursements were $89,347.44.
[4] Ms. Tyner and Mr. and Mrs. Pollard seek their costs on a full recovery basis from Mr. Tyner in the sum of $53,389.13 for fees, disbursements and HST.
Offers to Settle – Rule 18
[5] On May 31, 2013, Mr. Tyner made a written offer to settle all issues in the proceedings. This offer proposed that Mr. Tyner and Ms. Tyner not make any equalization payment to each other, each of them would keep the chattels he and she had in his and her possession (which would mean Mr. Tyner would keep the jointly owned tractor), there would be a mutual release of spousal support, and Mr. and Mrs. Pollard and Ms. Tyner or any of them would pay to Mr. Tyner the sum of $30,000.00 in full and final satisfaction of Mr. Tyner’s claim for an interest in the Selby farm property owned by Mr. and Mrs. Pollard. This offer to settle was not withdrawn prior to trial.
[6] On November 4, 2013, Mr. Tyner made a written offer to settle to Mr. and Mrs. Pollard alone that they should pay to Mr. Tyner the sum of $35,000.00 in full satisfaction of his claim in the Selby farm property plus costs of $7,500.00 if the offer were accepted on or before November 28, 2013. If the offer were accepted after November 28, 2013, Mr. and Mrs. Pollard were to pay to Mr. Tyner his costs relating to Mr. Tyner’s claim against them on a partial indemnity basis as agreed by the parties or fixed by the Court. This offer to settle was signed by Mr. Tyner and his lawyer and was not withdrawn prior to trial.
[7] On November 4, 2013, Mr. Tyner made an offer to settle to Ms. Tyner alone that he would return the tractor to her, and that he would pay to her the sum of $5,000.00 in full and final satisfaction of all of her claims including spousal support and equalization. Ms. Tyner was also to have Mr. Tyner’s name removed from the obligation for the horse trailer financing or alternatively pay it off or refinance it to eliminate Mr. Tyner’s obligation for that financing (a value of approximately $10,000.00 to Mr. Tyner). If the offer were accepted by November 28, 2013 each party would pay their own costs. If the offer to settle were accepted after November 28, 2013, Ms. Tyner would pay to Mr. Tyner his costs relating to Ms. Tyner’s claims against him on a partial indemnity basis as agreed by the parties or fixed by the Court. This offer to settle was signed by Mr. Tyner and his lawyer and was not withdrawn prior to trial.
[8] On November 20, 2014 (4 days prior to trial) Mr. Tyner’s counsel in an email offered to settle the claim against Mr. and Mrs. Pollard for the sum of $48,464.90 plus prejudgment interest of $1,574.25 and costs as agreed or else determined after trial. This offer to settle was not signed by Mr. Tyner nor his lawyer. This offer to settle was not withdrawn prior to trial.
[9] Ms. Tyner and Mr. and Mrs. Pollard put forward a document entitled “Proposed Separation Agreement” which they allege was given to Mr. Tyner prior to litigation being commenced by Mr. Tyner. The document proposes a separation agreement which would settle all matters between Mr. Tyner and Ms. Tyner by way of Mr. Tyner turning over the tractor to Ms. Tyner, by Mr. Tyner paying the sum of $32,479.77 as compensation for expenses incurred by Ms. Tyner for the matrimonial home, and by Mr. Tyner paying the legal costs relating to the agreement. This document does not comply with the requirements of a written offer to settle pursuant to Subrule 18(4) of the Family Law Rules as it is not signed by Mr. and Mrs. Pollard and Ms. Tyner, nor by their lawyer, if any at that time.
[10] On October 2, 2014, Ms. Tyner and Mr. and Mrs. Pollard made a formal written offer to settle that Mr. Tyner pay to Ms. Tyner an equalization payment of $160,000.00, and that Mr. Pollard would pay to Mr. Tyner the sum of $25,000.00 provided that Mr. Tyner provided all original receipts for payments totalling $25,000.00. Ms. Tyner would be solely liable for the joint loan for the horse trailer and would pay it off (a value of approximately $10,000.00 to Mr. Tyner). All other claims against the other would be withdrawn and there would be no costs. This offer to settle was signed by Ms. Tyner and by Mr. and Mrs. Pollard and it was not withdrawn prior to trial.
[11] After trial, Mr. Tyner was successful in obtaining judgment against Mr. and Mrs. Pollard in the sum of $50,000.00 for unjust enrichment plus prejudgment interest. After trial, Ms. Tyner was successful in obtaining judgment that Mr. Tyner should pay her an equalization payment of $36,118.09 plus $5,386.20 for her half of the tractor for a total payment of $41,504.29 plus prejudgment interest. Each party remained liable for one half of the joint trailer loan. Ms. Tyner’s claim for damages and her claim for spousal support were dismissed.
[12] Mr. Tyner claims that as against Mr. and Mrs. Pollard, he is entitled to the costs consequences of Rule 18(4) and Rule 24(1). He argues that he was totally successful on his claim as against Mr. and Mrs. Pollard, and should be entitled to partial indemnity costs against Mr. and Mrs. Pollard up to the date of his offer made on November 4, 2013 and full recovery costs thereafter.
[13] Mr. Tyner further argues that Ms. Tyner was entirely unsuccessful in her claims against Mr. Tyner other than obtaining a substantially lower equalization payment than she claimed.
[14] Ms. Tyner and Mr. and Mrs. Pollard argue that success was divided almost equally as Mr. Tyner received $50,000.00 while Ms. Tyner received $41,504.29 plus possible reimbursement of some additional payments made by Ms. Tyner.
[15] This case is somewhat more complicated as Mr. Tyner had a claim against Mr. and Mrs. Pollard, while Ms. Tyner had a counterclaim against Mr. Tyner. Ms. Tyner and Mr. and Mrs. Pollard were all represented by the same lawyer and presented themselves as one unit. Their lawyer’s submission at the end of trial was that there should be a set-off of any amount owing by Mr. Tyner to Ms. Tyner against any amount found owing by Mr. and Mrs. Pollard to Mr. Tyner. I did order that the set-off could take place if Ms. Tyner, and Mr. and Mrs. Pollard all consented in writing to the set-off.
[16] I find that in the net result, Mr. Tyner did not obtain an order that was at least as favourable or more favourable than his offer to settle made May 13, 2013 as although he received a greater amount than he offered to settle for his claim for unjust enrichment, his offer involved no equalization payment to Ms. Tyner. Accordingly, I find that Mr. Tyner’s offer to settle made on May 13, 2013 does not qualify for the costs consequences of Subrule 18(4) of the Family Law Rules. Nevertheless, pursuant to Subrule 18(16) this offer to settle may be taken into account in exercising my discretion regarding costs in this matter.
[17] I find that Mr. Tyner did better at trial as against Mr. and Mrs. Pollard than his offer to settle made November 4, 2013 on his claims against Mr. and Mrs. Pollard. Accordingly, on the legal fees incurred on that claim, I find that Mr. Tyner should be entitled to the costs consequences of Subrule 18(14).
[18] I find that Mr. Tyner’s offer to settle made on November 4, 2013 to Ms. Tyner regarding Ms. Tyner’s claims was substantially lower than the order obtained by Ms. Tyner after trial. I find that this offer to settle does not qualify for the costs consequences of Subrule 18(14) as Mr. Tyner did not obtain an order that was at least as favourable or more favourable than that offer to settle. However, that offer to settle may be taken into account in exercising my discretion regarding costs in this matter.
[19] I find that the proposed separation agreement prior to litigation starting was an attempt to try to settle the matter without litigation. On that basis, I find that it was reasonable that this proposal was not shown to the court until the costs phase of the trial. However, the document did not comply with the requirements for offers to settle in Subrule 18(4) as it was not signed by Mr. and Mrs. Pollard and by Ms. Tyner, and by their lawyer if they had one at that time. I also find that the proposed separation agreement in the net result was much less favourable than the order made at trial.
[20] I find that the offer to settle made by Mr. and Mrs. Pollard and Ms. Tyner on October 2, 2014 complied with the formal requirements of Rule 18, but that it does not qualify for the costs consequences set out in Subrule 18(14) as the order obtained by them at the trial was much less favourable than the offer to settle made by them, both in relation to the issues of unjust enrichment and in relation to equalization of net family property. However, this offer to settle may be taken into account by me in exercising my discretion regarding costs in this matter pursuant to Subrule 18(16).
Rule 24 of the Family Law Rules
[21] In considering the issue of costs, I have also considered the provisions of Rule 24 of the Family Law Rules.
[22] Rule 24(1) provides that there is a presumption that a successful party is entitled to costs. However, Rule 24(4) provides that a successful party who has behaved unreasonably during a 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. Rule 24(5) sets out the factors a court should consider in determining whether a party has behaved reasonably or unreasonably including whether the party made an offer to settle and the reasonableness of any offer the party made. Rule 24 (11) sets out some of the factors to be considered in determining costs.
[23] I find that Mr. Tyner was successful in his claim against Mr. and Mrs. Pollard and that he made a reasonable offer to settle that claim.
[24] I find that Mr. Tyner greatly undervalued the claim of Ms. Tyner for equalization of net family property in making his offers to settle and he was not successful in defeating that claim against him. I find that Mr. Tyner did not make a reasonable offer to settle with respect to the equalization payment owing by him to Ms. Tyner. Mr. Tyner was however successful in having Ms. Tyner’s claims against him for spousal support and for civil damages dismissed.
[25] I find that Mr. and Mrs. Pollard and Ms. Tyner greatly undervalued Mr. Tyner’s claim for unjust enrichment against Mr. and Mrs. Pollard and that they were not successful in defeating that claim. I find that Mr. and Mrs. Pollard and Ms. Tyner did not make a reasonable offer to settle the claim for unjust enrichment.
[26] Ms. Tyner was successful in obtaining a substantially greater equalization payment than offered to her by Mr. Tyner. However, I find that Ms. Tyner and Mr. and Mrs. Pollard greatly overvalued Ms. Tyner’s claim for equalization of net family property in their offer to settle. I find that in all the circumstances, Mr. and Mrs. Pollard and Ms. Tyner did not make a reasonable offer to settle the equalization of net family property when they requested an equalization payment payable to Ms. Tyner in the sum of $160,000.00. Ms. Tyner was unsuccessful in her claims for spousal support and for civil damages.
[27] The issues were of importance to all of the parties involved. Most of the trial time was spent on the issues of unjust enrichment and equalization of net family property.
[28] Mr. and Mrs. Pollard and Ms. Tyner submit that the lawyer’s rates for Mr. Tyner’s counsel are excessive when comparing the respective years of experience of the two counsel. I note that the lawyer’s rates for Mr. Tyner’s counsel were on the higher side, while the rates for counsel for the Respondents were on the lower side, given their experience. The number of hours actually spent by each counsel personally on the file was very similar. However, Mr. Tyner’s legal fees also included additional hours and fees for work done by an assistant and an articling student.
[29] Mr. Tyner is critical of Mr. and Mrs. Pollard and Ms. Tyner using one counsel as that complicated the issues. He also submits that it was really two trials.
[30] However, the legal costs at issue would potentially have been substantially more if a separate counsel were involved on behalf of Mr. and Mrs. Pollard. Further, it is Mr. Tyner who chose to name Mr. and Mrs. Pollard as Respondents to his Application for Divorce from Ms. Tyner, rather than bringing a separate action against Mr. and Mrs. Pollard.
[31] Where either counsel has claimed costs for any conferences, I have not included those costs. Subrule 24(10) provides that costs are to be decided promptly after each step in the case. If costs were not determined at the end of any of the conferences nor reserved by the judicial officer presiding, they would not be awarded at this stage. In that regard, I rely on the case of Islam v. Rahman, 2007 ONCA 622, 41 R.F.L. (6th) 10.
[32] I find that Mr. Tyner was overall more successful at trial than Ms. Tyner and Mr. and Mrs. Pollard were. However, this success must be looked at in the context of the whole trial and be tempered by Ms. Tyner’s success on the equalization payment and by Mr. Tyner having never made a reasonable offer to settle regarding the equalization payment owing by him to Ms. Tyner.
[33] The Ontario Court of Appeal in Sera v. Sera, 2009 ONCA 395, 66 R.F.L. (6th) 40 stated that modern costs rules are designed to foster three fundamental purposes. Those are:
(1) to partially indemnify successful litigants for the cost of litigation;
(2) to encourage settlement; and
(3) to discourage and sanction inappropriate behaviour by litigants.
[34] The Ontario Court of Appeal in Sera went on to state in paragraph 12:
As this Court has observed, costs awards, at the end of the day should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties”: see Boucher v. Public Accountants Council (Ontario), (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.) at para 24.
[35] It is very unfortunate that Mr. Tyner incurred legal fees of $89,347.44, and Ms. Tyner and Mr. and Mrs. Pollard incurred legal fees of $53,389.13 in Mr. Tyner obtaining judgment against Mr. and Mrs. Pollard for the sum of $50,000.00, and Ms. Tyner obtaining judgment against Mr. Tyner for $41,504.29 plus some possible reimbursement for other items.
[36] I have also considered that costs must be proportional to the amount in issue and the outcome.
Order
[37] Having considered the written submissions of the parties regarding costs, the offers to settle, the relative success of the parties, the aforesaid findings, the provisions of Rules 18 and 24, and in the exercise of my discretion, I find that the Respondents, Mr. and Mrs. Pollard and Ms. Tyner shall pay costs to Mr. Tyner fixed in the sum of $25,000.00 inclusive of fees, disbursements and HST.
[38] Order to go accordingly.
Justice A.C. Trousdale
Released: October 22, 2015
COURT FILE NO.: 238/12
DATE: 20151022
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Ryan Thomas Tyner
Applicant
- and -
Jessica Marie Tyner, Robert Pollard
and Judy Pollard
Respondents
ENDORSEMENT ON COSTS
Trousdale J.
Released: October 22, 2015