SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: FS-15-19905
DATE: 20151230
RE: alana jung, Applicant
- and -
amir johnson, Respondent
BEFORE: Justice S. M. Stevenson
COUNSEL: Harold Niman/Richard Niman, for the Applicant
Grant Gold, for the Respondent
ENDORSEMENT AS TO COSTS
[1] Both parties seek costs with respect to the long motion that was heard before me on October 13, 2015. As the parties have been unable to resolve the issue of costs, both have filed written submissions along with reply submissions which I have now considered. The applicant seeks costs on what she submits is a less than partial indemnity basis in the amount of $20,000 inclusive of disbursements. The Respondent seeks costs in the amount of $52,205.39.
Success and Offers to Settle
[2] The issue of costs in a family law proceeding is determined by Rules 18 and 24 of the Family Law Rules, O. Reg. 114/99 (the “FLRs”). Under Rule 24(1) there is a presumption that a successful party is entitled to costs.
[3] As stated by Aston J. in Sims-Howarth v. Bilcliffe, 2000 22584 (ON SC), 6 R.F.L. (5th) 430, [2000] O.J. No. 330 at para. 13: "Offers to settle not only become a yardstick by which to measure success, but also become a prime consideration in determining the quantification of costs."
[4] Rule 18(14) of the FLRs describes the costs consequences of failing to accept an Offer to Settle 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:
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The offer does not expire and is not withdrawn before the hearing starts.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. O. Reg. 114/99, r. 18(14).
[5] Both parties claim that they were successful and that they are entitled to costs. The applicant submits that she has been successful for two reasons. Firstly, the applicant submits that: “the case law is consistent that a party seeking proper child support in a high income case should have his or her costs payable for the child support issues in the proceeding.” She also submits that the respondent's offers did not include any retroactive support payments or included minimal retroactive support payments. She contends that the Court ordered retroactive child support to October 2014 and as such, she was successful on the motion.
[6] In contrast, the respondent acknowledges that the applicant was successful in obtaining a retroactive child support order, however, he contends that overall the applicant was unsuccessful. The respondent contends that he was predominantly successful on more of the issues and he is entitled to costs.
[7] The applicant submits that since the Case Conference in March of 2015, she made numerous Offers to Settle. Counsel for the applicant has included with his submissions an appendix containing a chart outlining the numerous offers made by both parties in an effort to resolve the matter. Counsel for the applicant contends that nearly all of the applicant’s offers were less than what she received as a result of the motion and that many of the respondent’s offers were also less than what the applicant received on the motion. Further, the applicant submits that almost none of the respondent’s offers regarding child support were made retroactive and if retroactivity was included, it was only for a few months. The applicant further contends that despite the respondent's most recent offer made pursuant to the motion being in excess of the child support ordered by the Court, she contends that the offer of child support was not retroactive and was only received on the eve of the motion. The applicant further contends that neither party bettered their offer with respect to the motion. However, she requests that all of the offers be taken into account by this Court in determining costs.
[8] The respondent included with his written costs submissions two Offers to Settle, one by the respondent and one by the applicant. In the respondent’s Offer to Settle dated October 8, 2015, he offered to pay interim child support in the amount of $36,000 per month commencing November 1, 2015 until the date of the trial, subject to a retroactive adjustment either upwards or downwards to November 1, 2015 to reflect the amount of child support awarded at trial. The offer also included a provision that the issue of spousal support be adjourned to the trial and that neither party pay costs of the motion. The offer was to remain open for acceptance until one minute after the commencement of the hearing of the motion returnable October 13, 2015.
[9] Counsel for the respondent also included the Offer to Settle dated October 9, 2015 of the applicant. The provisions of the applicant's offer included that the respondent, on a without prejudice basis, pay interim child support in the amount of $40,000 per month retroactive to October 2014 until the date of trial (with credit given to the respondent for payments already made for child support in the amount of $325,000 resulting in the respondent owing the applicant $195,000 in retroactive support) and the issue of spousal support was to be adjourned to the trial on a without prejudice basis. The Offer to Settle was open for acceptance until one minute after the commencement of the motion. If the Offer to Settle was accepted before 4:30 p.m. on October 9, 2015, there was to be no order as to costs. If the Offer to Settle was accepted thereafter, the respondent was to pay the applicant's costs of the motion on a substantial indemnity basis.
[10] The applicant sought an order for interim child support in the amount of $50,000 per month retroactive to October 2014. Counsel for the applicant agreed at the hearing of the motion that despite the fact that the applicant was seeking child support retroactive to September 18, 2013, the issue of retroactive child support from September 18, 2013 to October 2014 would be addressed at trial. The applicant also sought interim spousal support in the amount of $50,000 per month retroactive to October 2014 and interim costs and disbursements in the amount of $75,000.
[11] After the hearing of the motion, an order was made that the respondent pay interim child support to the applicant in the amount of $28,000 per month pending trial and until further order of the Court. This was to commence as of October 1, 2014. The order was made without prejudice to either party arguing for a different amount at trial and without prejudice to the applicant arguing at trial that the payments be made retroactive to the child Amelia’s birth, being September 18, 2013. The applicant's claim for interim spousal support was dismissed without prejudice to her proceeding with her claim for spousal support at trial including any retroactive claim. Further, the applicant's claim for interim costs and disbursements was dismissed without prejudice to her advancing this claim in the future.
[12] I note that there were numerous attempts made by both parties to resolve the issues in their entirety. Counsel for the applicant did not provide copies of the Offers to Settle made by the parties but as contained within his chart, it is apparent that numerous attempts were made by both sides. In many of these offers, the applicant is seeking to have the respondent purchase a home for her and Amelia or to purchase a home to be held in trust for Amelia along with child support payments. There are also fixed non-variable amounts set for child support. It is acknowledged that some of these offers do not include retroactive child support, however, these other provisions are contained within the offers as indicated with respect to the purchase of a home and the fixed amount of child support. Although these offers are relevant to the determination of the overall reasonableness of the parties, the more pertinent Offers to Settle pertaining to the motion before me are the October 8, 2015 and October 9, 2015 offers. It is also important to note that at the actual hearing of the motion, the position taken by the respondent that day was that he was prepared to pay $28,000 per month in child support and was also agreeable that any adjustments could be made at trial.
[13] In his Offer to Settle dated October 8, 2015, the respondent offered to pay interim child support in the amount of $36,000 per month commencing November 1, 2015 subject to a retroactive adjustment either upwards or downwards to November 1, 2015 to reflect the amount of child support awarded at trial. As indicated, he also offered that the issue of spousal support be adjourned to the trial and that neither party pay costs of this motion. The issue of interim costs and disbursements was not addressed in the Offer to Settle. The respondent's offer for child support exceeded the amount of child support ordered. With respect to the issue of spousal support, this issue was to be adjourned to trial. The order provided that the claim for interim spousal support was dismissed without prejudice to the applicant proceeding with her claim for spousal support at trial including any retroactive claim.
[14] In her Offer to Settle dated October 9, 2015, the applicant offered child support in the amount of $40,000 per month retroactive to October 2014 allowing the respondent credit for payments already made. The issue of spousal support was to be adjourned to trial on a without prejudice basis. Similarly, the applicant's Offer does not include any provision with respect to interim costs and disbursements.
[15] Taking into consideration the relief sought by the applicant on her motion, the relief sought by her on the day of the hearing of the motion, the offers made by the parties, and the order made, overall the respondent was more successful. It is acknowledged that the applicant was successful in obtaining a retroactive child support order, however, the child support ordered was in the amount sought to be ordered by the respondent at the hearing of the motion (i.e. $28,000), and the amount ordered was less than the respondent’s offer of $36,000 per month. Further, the applicant’s claim for spousal support was dismissed without prejudice to the applicant seeking this relief at trial including on a retroactive basis. The applicant sought $50,000 at the hearing of the motion and to have the issue addressed at trial in her Offer. The respondent offered to have the spousal support issue determined at trial as he did at the hearing of the motion. This is similar to what was ordered. The claim for interim costs and disbursements sought by the applicant was dismissed without prejudice to her advancing her claim in the future. The respondent had argued that there was no evidence before the Court to order this relief. This was accepted by the Court and the claim was dismissed as indicated. The respondent’s Offer did not address the issue of interim costs and disbursements. As the respondent has been more successful, there is a presumption that the respondent is entitled to some costs.
[16] I find that the full recovery provisions under Rule 18(14) of the FLRs are not applicable as neither party's offer fulfilled the criteria set out in Rule 18(14)5. I do not find that overall either party obtained an order that was as favourable as or more favourable than the offers on all of the issues.
[17] Despite this, both parties' offers are still a relevant consideration under Rule 18(16) which states: "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."
[18] To determine costs, I must also consider the factors set out in s. 24(11) of the FLRs in setting the amount of costs as follows:
The Importance, Complexity or Difficulty of the Issues
[19] The issues were not overly complex or difficult. However, it is acknowledged that given the respondent earns a significant income, this did add some complexity to the motion. The issues were important to both parties.
The Reasonableness or Unreasonableness of Each Party's Behaviour in the Case
[20] Pursuant to Rule 24(5) of the FLRs, when determining whether a party has behaved reasonably or unreasonably, the Court must consider the parties’ behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle, the reasonableness of any offer the party made and any offer the party withdrew or failed to accept. The respondent made a reasonable offer with respect to the motion. The amount of monthly child support offered was $8,000 more per month than what was ordered and was subject to adjustment at trial back to November 1, 2015. I agree that the applicant could have had the benefit of increased payments prior to trial had she accepted the offer of $36,000 per month. However, it is acknowledged that this Offer did not commence the child support payments as of October 2014 as ordered. Overall I did not find either party’s behaviour unreasonable. Both attempted to resolve the issues through many Offers to Settle throughout the proceeding.
The Lawyer's Rates
[21] I consider the hourly rate of counsel for the applicant of $820 to be reasonable for senior counsel in Toronto with his experience. I also consider the respondent’s counsel rate of $650 per hour to be reasonable for senior counsel in Toronto with his experience. Both senior counsel had counsel with less experience complete some work on the file. Their respective rates are also reasonable.
The Time Properly Spent on the Case
[22] I find the total time spent on the file, as submitted by counsel for the applicant, of 102.1 hours including questioning to be excessive for this motion as do I find the total time of 81.6 hours as submitted by the respondent. Proportionality must be considered. There is also duplication in work by counsel for the applicant and time charged for both counsel to attend on the motion. It is difficult to determine whether there is any duplication of work performed by each counsel for the respondent as no itemized details are provided regarding the work performed by each individual lawyer, only the total time by each lawyer. I do note that only Mr. Gold appeared as counsel for the respondent at the hearing of the motion before me. His fee for that attendance is reasonable.
Expenses Properly Paid or Payable
[23] I have reviewed the expenses claimed by the applicant. They total $892.65 and are not unreasonable. The respondent’s expenses claimed total $2,257.09 which is also not unreasonable as $1,544.55 includes the costs of transcripts and special examiner fee.
Any Other Relevant Matter
[24] Rule 24(11)(f) of the FLRs states that a person setting the amount of costs shall consider any other relevant matter. As noted by Justice Rosenberg in C.A.M. v. D.M. (2003), 2003 18880 (ON CA), 176 O.A.C. 201, 67 OR (3d) 181; 231 DLR (4th) 479; 43 RFL (5th) 149; at para. 42, in setting the amount of costs, the financial positions of the parties and the impact on the best interests of the children may be taken into consideration.
[25] Counsel for the applicant relies on the Ontario Court of Appeal decision of Tauber v. Tauber, 2000 5747 (ON CA), [2000] O.J. No. 2133 (C.A.) in support of the applicant’s position that in cases involving high income earners as stated by Rosenberg J.A., at para. 51: “absent unusual conduct, the payer spouse in such cases being in the best position to fund the litigation should be required to pay the costs attributable to the child support issues.” Counsel for the applicant sets out in his written submissions that in Tauber at paras. 55-57, Rosenberg J.A. further indicated that custodial parents should not bear the costs of litigation for the benefit of the child where the non-custodial parent is challenging the table amount and if the non-custodial parent does want to challenge the presumptive table amount, he or she should ordinarily be required to pay for that exercise.
[26] The applicant asserts that the applicant was not seeking the table amount on the motion and in fact, she did not even seek half of the table amount. She contends that the motion was for the benefit of Amelia, and that the applicant negotiated for months but was forced to bring the motion. She further submits that it was in the respondent’s interest to litigate and he should be required to pay costs. She argues that the motion could have been resolved had the respondent agreed to make any of his offers retroactive.
[27] In contrast, the respondent submits that the respondent was reasonable in litigating the interim support issues. He contends that the applicant was seeking a significant amount of child and spousal support and interim disbursements of $75,000. Counsel for the respondent submits that Tauber was related to a decision at trial, not a motion. He contends that in any event, the applicant does have the means to bear her own costs and that of the motion as she has received to date $364,000 from the respondent. The respondent contends that in addition he was voluntarily paying for all of the applicant's costs of accommodation including her rent and all utilities, he had purchased a vehicle for her and was paying the insurance on the vehicle as well as providing the applicant with $5,000 per month prior to the motion.
[28] Counsel for the respondent further contends that a costs award will not negatively affect Amelia’s best interests as she will be well provided for despite any costs order against the applicant. The respondent relies upon the decisions of Cole v. Freiwald, 2011 CarswellOnt 10517 and Scipione v. Del Sordo (Scipione), 2015 ONSC 5982 in support of his position that: “While a party’s limited financial circumstances is a factor for the court to consider, it should not be used as a shield against any liability for costs.”
Conclusion
[29] As indicated, overall the respondent was more successful. The respondent earns a significant income (approximately $15,700,000 CAD) while the applicant is a full-time student. I agree with the submissions of the applicant that following Tauber, the respondent should be required to pay the costs attributable to the child support issue. He is in a significantly better financial position to challenge the amount of child support which support is for the benefit of Amelia. However, the applicant’s submissions fail to take into account her lack of success on the issues of spousal support and interim costs and disbursements. The respondent was successful on these two issues. I have taken all of these factors into consideration in exercising my discretion with respect to the order of costs.
[30] I must also take into consideration the principle of reasonableness in determining costs. As stated in Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), [2004] O.J. No. 2634 (C.A.) at para. 26 with respect to costs: "the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant".
[31] Taking into consideration the reasonableness of the amount sought by the respondent and proportionality, the submissions of the parties, Rule 24(1), the factors outlined above that I have considered under Rule 24(11) and Rule 18 including the Offers served by the parties, the applicant shall pay to the respondent costs in the amount of $7,500. The timing of the payment of this costs order shall be determined by the trial Judge.
Stevenson J.
DATE: December 30, 2015