COURT FILE AND PARTIES

COURT FILE NO.: FS-09-354462-0001

DATE: 20151029

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Teresa Anne charron, applicant

AND:

Martin Charron, respondent

BEFORE: C. HORKINS J.

COUNSEL: Stephen Grant and Meghan Lawson, for Ms. Charron

Jacqueline Mills, for Dr. Charron

HEARD at Toronto: In Writing

COSTS ENDORSEMENT

[1] The respondent, Dr. Charron brought a motion to change a final order. In reasons released on August 28, 2015 (2015 ONSC 5370), I ordered a variation. In summary, spousal support was terminated and child support was varied to reflect Dr. Charron’s reduced income.

[2] Dr. Charron also brought a motion seeking to hold Ms. Charron in contempt for failure to follow the final order. I found that Ms. Charron’s conduct was careless and inconsiderate, but it did not rise to the level of deliberate and wilful conduct. As a result, this motion was dismissed.

[3] The parties have not been able to agree on costs. Dr. Charron seeks costs on a full indemnity basis in the amount of $147,862.76 inclusive of fees disbursements and GST. Ms. Charron says that no costs should be ordered. Alternatively, if costs are ordered, she submits that a modest amount be ordered ($20,000).

legal framework

[4] Rule 24 of Family Law Rules, O. Reg. 114/99 deals with costs. Rule 24(1) states that the successful party is presumed entitled to costs.

[5] Rule 24(11) of Family Law Rules states that in setting the amount of costs the court shall consider the following factors:

(11) A person setting the amount of costs shall consider;

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

(b) the reasonableness or unreasonableness of each party's behaviour in the case;

(c) the lawyer's rates;

(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; and

(f) any other relevant matter.

[6] Rule 18 deals with offers to settle. In this case both parties served offers to settle. The relevant part of the rule states as follows:

18 (14) A party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:

1. If the offer relates to a motion, it is made at least one day before the motion date.

2. If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.

3. The offer does not expire and is not withdrawn before the hearing starts.

4. The offer is not accepted.

5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

[7] The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14).

[8] When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.

[9] In addition to considering the factors set out in Rule 24.(11), the court must take into account the principles articulated in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.). The overall objective of fixing costs is to fix an amount that is fair and reasonable for an unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant. In deciding what is fair and reasonable, “the expectation of the parties concerning the quantum of a costs award is a relevant factor.” (at para. 38)

[10] Finally, as the court stated in Serra v. Serra, 2009 ONCA 395 at para. 8 "[m]odern costs rules are designed to foster three fundamental purposes: (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: Fong v. Chan (1999), 1999 2052 (ON CA), 46 O.R. (3d) 330, at para. 22."

analysis

[11] This motion to change involved affidavit evidence and oral testimony from the parties. Extensive documentation was filed. The hearing of the motion lasted three days and was followed by final written submissions and a day of final oral submissions.

[12] Dr. Charron’s bill of costs provides a detailed breakdown of the work completed by one senior lawyer and a law clerk. Ms. Mills was called to the bar in 1986 and is a certified specialist in Family law. She docketed 210.70 hours on the file at an hourly rate of $450. The law clerk has over 20 years of experience and she docketed 179 hours at an hourly rate of $150. Their rates are reasonable given their expertise. Ms. Charron has not challenged the rates or the number of hours spent on this motion.

[13] Ms. Charron was represented by two counsel. Her costs submissions do not reveal the fees and hours that her counsel incurred. When revealed, this can show the expectation of the responding party and can serve as a useful benchmark to assess the reasonableness of the costs requested.

[14] The motion was very important to the parties and of moderate complexity. Dr. Charron had experienced a significant drop in his income and Ms. Charron had remarried. Dr. Charron was using a significant portion of his income to pay the child and spousal support in the final order. On the motion to change, Dr. Charron was seeking to terminate spousal support and adjust child support to his lower income.

[15] The motion to change was issued on September 24, 2014. Seven case conferences were required before the motion was heard. Costs of some of these conferences were reserved to the motion to change. The details are as follows:

• March 30, 2014 – The first case conference was adjourned at Ms. Charron’s request because she was retaining new counsel. Ms. Charron was ordered to serve and file responding materials by April 17, 2014 (this deadline was not complied with). No costs were ordered.

• July 10, 2014 – The parties attended before Justice Harvison Young to sign the final order.

• October 22, 2014 – The parties attended before a DRO and Justice Paisley. An order for disclosure was made (Ms. Charron did not comply with the order).

• January 12, 2015 – A case conference was held before Justice Kruzick. Ms. Charron was self-represented. Costs were reserved to the final disposition.

• March 25, 2015 – A settlement conference was held before Justice Stewart. A trial date was set for the week of June 15, 2015. Costs were reserved to the trial judge.

• May 25, 2015 – A trial management conference was held before Justice Kiteley. Ms. Charron had a lawyer on a limited retainer. Counsel’s oral motion to adjourn the trial was denied. Costs were reserved to the trial judge.

• June 9, 2015 – Ms. Charron brought another motion to adjourn the trial. On consent the trial was adjourned for a week. Costs of $3,000 were reserved to the trial judge.

[16] Dr. Charron says that he should receive full indemnity costs for the following reasons:

(1) He was “entirely successful on all financial issues”.

(2) The result was close to the terms of his offer to settle.

(3) Ms. Charron acted unreasonably and in bad faith.

(4) Ms. Charron was frequently unprepared for various steps in the motion to change.

(5) Although Dr. Charron did not succeed on the contempt motion, there was compelling evidence to show that Ms. Charron was not “doing her utmost to encourage a relationship” between him and the children.

[17] The first two points deal with the degree of Dr. Charron’s success on the motion. I accept that Dr. Charron enjoyed considerable success on this motion. He served an offer to settle on January 12, 2015. While the offer meets the conditions of rule 18(14) 1-4, Dr. Charron did not obtain “an order that is as favourable as or more favourable than the offer”. For example, the spousal support was terminated as of October 1, 2015 and the offer set June 1, 2014 as the termination date. The offer that he served was not divisible.

[18] Points three, four and five deal with Ms. Charron’s conduct. The test for bad faith in the family law context is set out in Scalia v. Scalia, 2015 ONCA 492 at para. 68:

The legal test for bad faith in the family law context, as set out in S. (C.) v. S. (M.) (2007), 2007 20279 (ON SC), 38 R.F.L. (6th) 315 (S.C.J.), at para. 17, aff'd 2010 ONCA 196, 262 O.A.C. 225, is that the impugned behaviour must be shown to be carried out with "intent to inflict financial or emotional harm on the other party or persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court." In short, the essential components are intention to inflict harm or deceive.

[19] While Ms. Charron’s conduct was unreasonable, it does not equate to bad faith. There is one small exception. Ms. Charron admitted that she lied about the Daneswood property because Ian did not want to be involved in her dispute with Dr. Charron. This was bad faith because she lied with the intention of deceiving Dr. Charron.

[20] Much of Ms. Charron’s conduct deals with her failure to make full and reliable financial disclosure. This is referred to in the reasons for judgment. Dr. Charron states that this conduct necessitated further scrutiny since he could not accept what Ms. Charron provided at face value. Full disclosure is a fundamental requirement. Ms. Charron’s failure to make full and reliable disclosure was unreasonable conduct. I accept that such conduct added to Dr. Charron’s legal expenses.

[21] The various conferences reveal that Ms. Charron was not always ready to proceed. Ms. Charron attended the case conference on January 12, 2015 without filing any Case Conference brief or an updated financial statement. She failed to respond to a Request for Information served on her. She had already failed to comply with court ordered disclosure. She attended a Settlement Conference on March 25, 2015, without having filing a Settlement Conference brief or updated financial statement. She attended the Trial Management Conference on May 25, 2015 unprepared, without filing a Trial Management Conference brief or updated financial statement. On that occasion, she attended with counsel with a limited retainer to request an adjournment of the trial only. That request was denied by Justice Kiteley. Ms. Charron’s lack of preparation prevented meaningful settlement discussions at these conferences.

[22] Dr. Charron’s contempt motion was not successful because Ms. Charron’s conduct did not reach the level of deliberate and willful conduct necessary to prove contempt. However, her conduct was found to be “careless and inconsiderate” as described in para. 220 of the reasons:

[220] Paragraph 10 of the 2011 order is clear and unequivocal. However, the evidence does not show that Ms. Charron disobeyed the order deliberately and willfully. She found it too much of a burden to comply and she fell into a less formal and infrequent method of communicating. She had time to manage the renovation of her homes and take numerous vacations. She should have found time to comply with this order. This was careless and inconsiderate on her part and her conduct cannot be overlooked. That said, her conduct does not reach the level of deliberate and willful conduct and for this reason the request to hold her in contempt fails.

[23] Ms. Charron’s unreasonable behaviour is a significant factor in assessing what costs should be awarded. While there was one area of bad faith, this conduct relates to the contempt motion and cannot be used to justify full indemnity costs for the motion to change.

What is Fair and Reasonable?

[24] Ms. Charron argues that success was divided and that no costs should be ordered because it will be a hardship for her and the children.

[25] Dr. Charron was successful on most of the issues at trial. Based on the facts found at trial, I do not accept that Ms. Charron and the children will suffer hardship if a reasonable and fair costs order is made.

[26] Dr. Charron is entitled to costs given his success. It would be unfair to order no costs or even $20,000 of costs given Dr. Charron’s degree of success and Ms. Charron’s unreasonable conduct. Further, costs of $20,000 would be insufficient given the length of the trial, the amount of preparation work and the costs from earlier attendances that were reserved to the trial judge. At the other end, I find Dr. Charron’s request of $147,862.76 to be excessive.

[27] Dr. Charron is entitled to costs for the four case conferences/ motions where costs were adjourned to the trial judge. I fix these costs at $6000 for the four events inclusive of fees disbursements and HST. For the motion to change, I order Ms. Charron to pay Dr. Charron’s costs of $65,000. This is inclusive of fees, disbursements and HST. I find that this is a fair and reasonable costs award.

[28] In summary Ms. Charron shall pay Dr. Charron costs of $71,000.

miscellaneous issues

[29] In Dr. Charron’s costs submissions he refers to Ms. Charron’s failure to respond to his calculation of overpaid child support in 2014 and 2015 (total $13,384.16). Dr. Charron requests a court order or if required a further attendance to settle this issue. Ms. Charron did not respond to this issue in her costs submission.

[30] This is a simple matter of math and is capable of being resolved without delay. Ms. Charron must respond immediately. If the parties require the court to resolve the issue they shall do so in writing. Brief submissions shall be exchanged and filed with the court by November 12, 2015.

C. Horkins J.

Date: October 29, 2015