NEWMARKET
COURT FILE NO.:
FC-14-045894-00
DATE:
20151216
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Leslie Jane Patterson, Applicant
AND:
Daniel Sarafian, Respondent
BEFORE: J.S. McLeod, J.
COUNSEL:
Salvatore Mannella, Counsel, for the Applicant
Christopher M. Murphy, Counsel, for the Respondent
HEARD: November 19, 20, 2015
COSTS ENDORSEMENT
Background
1Following my endorsement concerning this long motion dated November 19th and November 20th, 2015, I invited counsel to provide written submissions as it pertains to costs.
2This was a motion for temporary support. On the 10th of November 2014, Justice McGee ordered that the issues of temporary spousal support, and retroactive spousal support proceed to a long motion.
3The central issue in this matter was one of imputing income to both the applicant wife and the respondent husband (herein after referred as “A.W.” and “R.H.”).
4The order of November 10th, 2014, also referenced the need to engage expert reports in assisting in determining the imputed incomes of both parties.
5The parties entered into a subsequent order, on consent, dated July 22nd, 2015. That order mandated that the parties were to provide an income analysis report to be prepared by a certified income valuator.
6The valuator for A.W. delivered an analysis as to A.W.’s imputed income and also prepared a report as it pertained to R.H.’s imputed income.
7R.H.’s valuator prepared a report as it pertained to R.H.’s imputed income. R.H.’s valuator was unable to provide an opinion as it pertained to A.W.’s imputed income. It was submitted that the inability to do so was because further disclosure was required.
8Both parties, through counsel, acknowledged the need for further disclosure and a joint meeting of the experts. That order was made on the 19th of November, 2015.
9This Court refused to make an order as it pertained to the issue of retroactive spousal support and ordered that this matter be resolved by the trial judge.
10For purposes of the temporary support order, this court relied partially upon the evidence of both experts and ordered that R.H. pay monthly spousal support in the sum of $9,062.00. In that regard, A.W. was successful in so much as an order was made for temporary spousal support. Pursuant to Rule 24(1) of the FLR’s a successful party is entitled to their costs.
11Subrule (11) speaks to the factors in awarding the “amount” of costs. It does not have an impact upon whether a party should be awarded costs:
(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.
Offers to Settle
12Rule 18 deals with offers to settle. Subrule (14) deals with the costs consequences after an offer.
(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:
If the offer relates to a motion, it is made at least one day before the motion date.
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.
The offer does not expire and is not withdrawn before the hearing starts.
The offer is not accepted.
The party who made the offer obtains an order that is as favourable as or more favourable than the offer.
13In his submissions for costs on behalf of A.W. counsel seeks legal fees (on a partial indemnity basis) in the sum of $32,232.00.
14In addition, he seeks $19,099.95 in disbursements. With respect to the request for disbursements, approximately $17,600.00 is sought for the fees charged by A.W.’s expert. A series of other claimed disbursements deal with amounts expended to conduct abstract searches, P.P.S.A. searches, and sub-searches. These, of course, are not relevant to the issue of temporary spousal support.
15The parties have submitted for this court’s consideration, 2 offers that were exchanged in this matter. A.W. served an offer dated October 14th, 2015. That offer requested:
a payment of $360,000.00 for retroactive spousal support;
interim spousal support in the sum of $10,860.00;
costs in the sum of $25,000.00.
The offer also requested other ongoing financial disclosure. Of particular note, A.W.’s offer to settle was “open for acceptance until October 21st, 2015, until one minute prior to the commencement of the motion.”
16R.H.’s offer to settle is dated October 9th, 2015. The relevant portion of that offer proposed that R.H. pay spousal support in the sum of $5,214.00 monthly up to September 22nd, 2015. This offer clearly is not consistent with my order in this matter.
17The motion was originally returnable on the 21st of October 2015. It appears that the parties prepared themselves to argue the motion on that date. Unfortunately given the time restrictions the matter was adjourned and ultimately found itself before me on the 19th of November 2015.
18It is clear that the A.W.’s offer expired as of October 21st, 2015. It was not reissued or renewed. In this case Rule 18, sub 14(3), is applicable.
19Subrule 18(16) deals with the discretion of the court in matters of costs. It provides:
(16) 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.
What is abundantly clear is that this court has discretion as to whether or not a party is
entitled to full recovery of costs or a lesser amount.
Legal Principles
20Cost rules have been designed to foster three fundamental purposes.
(1) to indemnity 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 C.A.); Feng v. Phillips, 2006 13769 (ON SC), [2006] O.J. No. 1708, 2006 CarswellOnt 2608 at para. 21 (S.C.J.))
Analysis
21Rule 24(11) of the Family Law Rules provides that, in exercising its discretion to award costs on a full recovery basis, the court must consider the following factors:
(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.
Importance, Complexity or Difficulty of the Issues
22(a) The importance, complexity or difficulty of the issues
The issues arising in this motion are extremely important to A.W. as she was receiving extremely limited financial assistance from R.H. Although the issue of temporary spousal support in and of itself is not ordinarily complex, there was a significant difficulty in this matter in determining what the imputed incomes of both parties should be for spousal support purposes. Hence the necessity of retaining experts.
Reasonableness of Behaviour
23(b) Reasonableness of each party’s behaviour in the case
Despite the assertions made by both parties I do not find that any of the “behaviours” were unreasonable. The issue, frankly, is the significant divergence in the opinions expressed by the experts, the inability of one of the experts to properly critique the others report, and the necessity for the experts to meet in order to narrow the issues as it pertains to their expressed opinions.
The Lawyer’s Rates
24(c) The Lawyer’s Rates
The lawyer’s rate is based on counsels’ years of call and his experience. The hourly rates are reasonable.
Time Properly Spent and Expenses
25(d) Time properly spent on the case
In reviewing the accounts submitted on behalf of the applicant wife almost 140 hours docketed and billed for counsel, his associate, and his law clerk. The accounts for the associate solicitor and law clerk themselves amount to almost $16,000.00.
(e) Expenses properly paid
At this juncture and given the fact that there are still outstanding orders for directions as they pertain to both experts, this court is unable to determine whether or not the expert expense claimed by the applicant wife is indeed reasonable. I am of the view that this claim ought to be resolved at trial. It is not possible to determine who should be paid for the costs of their expert. This is a costs claim which will require a consideration of which report is most helpful to the court and of course that cannot be determined given the ongoing involvement of the experts.
Other Relevant Matters
26(f) an other relevant matter
In this regard the law is settled. This court may take into account parties financial situations. The ability or inability to pay costs goes to the amount of costs and not to the liability of costs. (M.(A.C.) v. M.(D.) (2003), 2003 18880 (ON CA), 67 O.R.(3d) 181 (C.A.), Andrews v. Andrews, 1980 1913 (ON CA), 32 O.R. (2d) 29, 1980 CarswellOnt 323 (C.A.); Kearney v. Kearney, 2001 26486 (ON CJ), [2001] O.J. No. 3290, 2001 CarswellOnt 2791 at para. 15 (Ont.Ct.J.); VandenElsen v. Markley, 2003 1994 (ON SC), [2003] O.J. No. 4843, 2003 CarswellOnt 4987 at para. 6 (S.C.J.))
27I am also of the view, under this matter that the Court must consider the cost benefit to the successful applicant.
28Counsel for A.W. submits in his claim for costs that this court ought to take into consideration the behaviour of the respondent husband following the delivery of the temporary order. Those matters are not relevant to this court’s determination albeit they may be significant in subsequent steps.
Conclusion
29Neither parties offer mirrors or come close to the determination made by this Court. In this case the Court is not prepared to execute its discretion in awarding costs as claimed by the applicant wife. In particular what this court views as considerable hours expended by counsel, his associate and his law clerk to matters that are germane to the overall resolution of this matter and not specifically focused on this time required for preparation of the long motion. In the A.W.’s costs submission the summary of hours spent specifies “fee items” that relate to the issues of disclosure, communication with the expert and communications between office staff. This Court cannot however, ignore the level of preparation and thoroughness that both parties demonstrated in arguing this lengthy motion. Much of that a result of the focusing of counsel on issues germane to the motion. Accordingly, A.W. is entitled to costs fixed in the sum of $15,000.00 plus H.S.T., disbursements in the sum of $800.00 plus G.S.T.
30The issue as to whether or not the disbursement for the Expert Report ($17,592.50) is to be considered by the trial judge in this matter once a clearer picture as to the accuracy of the reports has been established. This of course can only happen after the experts meet as required and deliver their reports.
J.S. McLeod, J.
Date: 16 December 2015