Superior Court of Justice – Family Court
Newmarket Court File No.: FC-13-42937-00 Date: 2016-03-02
Between:
Peter Panagiotis Nick Christakos, Applicant
– and –
Gina Santos De Caires, Respondent
Counsel:
M. Tweyman, for the Applicant
R. Heft, for the Respondent
Heard: June 1-5 and November 16, 18, 19, 20, 2015
Cost Endorsement
NICHOLSON J.:
[1] This is my Cost Endorsement for the trial held in this matter June 1-5 and November 16, 18, 19, 20, 2015 for which I delivered Judgment on January 29, 2016.
[2] The Court of Appeal for Ontario in Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, confirmed that modern costs rules are designed to foster three fundamental purposes, namely to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants bearing in mind that the awards should reflect what the court views is a fair and reasonable amount that should be paid by the unsuccessful party (at para. 8).
[3] Rule 24(1) of the Family Law Rules, O. Reg. 114/99, creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs (Sims-Howarth v. Bilcliffe, 2000 CanLII 22584 (ON SC), 6 R.F.L. (5th) 430, at para. 1). To determine whether a party has been successful, the court should take into account how the order compares to any settlement offers that were made (Lawson v. Lawson, 2008 CanLII 23496 (ON SC), [2008] O.J. No. 1978, at para. 7). The position each party took at trial should also be examined.
[4] Rule 18(14) of the Family Law Rules reads as follows:
COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER
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The offer does not expire and is not withdrawn before the hearing starts.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.
[5] The court has discretion to take into account any written offer to settle, the date it was made and its terms, even if r. 18(14) does not apply, when exercising its discretion over costs (r. 18(16)). Further, in deciding whether a party has acted reasonably or unreasonably in a case, the court shall examine the reasonableness of any offer the party made (r. 24(5)(b)). By contrast, a party’s failure to serve an offer to settle may be viewed as an adverse factor in determining the issue of costs (J.V.M. v. F.D.P., 2011 ONCJ 616, [2011] O.J. No. 5441, at para. 5).
[6] The Applicant Husband made one offer to settle on March 13, 2015 and two further separate offers to settle (one relating to lump sum spousal support and the other regarding equalization) on April 29, 2015, one month prior to the start of the trial. Each of these offers is relevant to the issue of costs.
[7] In the March 13, 2015 offer to settle, the Applicant Husband offered to settle the case by each party receiving half of the proceeds held in trust. Globally this offer was approximately $8,000 lower than what was ultimately ordered. Therefore, even though this offer was not better than the ultimate judgment, it was very reasonable and if accepted would have made the expensive nine day trial unnecessary.
[8] The April 29, 2015 offers were more significant. If the Respondent Wife had accepted these offers she would have received a significantly higher settlement than she received in the final judgment. The Wife was unreasonable in not accepting these offers.
[9] In the Husband’s April 29, 2015 offer he proposed to settle spousal support by way of a lump sum payment of $115,000. The judgment awarded the Wife with a lump sum spousal support payment of $61,579.
[10] On the issue of equalization, the Husband offered to accept $35,000 from the Respondent Wife. The Respondent Wife argued that she owed no equalization and claimed unequal division of family property. The judgment granted an equalization payment owing from the Wife to the Husband of $30,424.68 and denied the Wife’s claim for unequal division.
[11] The global result of the Applicant Husband’s offers from April 29, 2015 was that the Applicant Husband would pay to the Respondent Wife a total of $50,000. The Wife’s offers resulted in a payment to her of $125,000. The judgment resulted in a payment to the Wife of $16,789.32. The Husband’s offers therefore exceeded the final judgment.
[12] I have considered the factors set out in r. 24(11) of the Family Law Rules, which read as follows:
24 (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.
[13] Rule 24(5) provides criteria for determining the reasonableness of a party’s behaviour, a relevant factor in determining costs, per r. 24(11)(b), above. It reads as follows:
DECISION ON REASONABLENESS
(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,
(a) the party's behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;
(b) the reasonableness of any offer the party made; and
(c) any offer the party withdrew or failed to accept.
Family law litigants are responsible and accountable for the positions they take in litigation: Heuss v. Surkos, 2004 ONCJ 141, 2004 CarswellOnt 3317.
[14] When I consider the conduct of the parties I find that the Wife acted unreasonably in not accepting the Husband’s offers to settle. However, the Wife did submit several offers to settle throughout these proceedings and submits that a review of the offers reveals some mixed results in the areas of determination of income and the resulting offsetting child support, as well as some of the individual finings I made leading to the equalization calculation.
[15] Furthermore, the reasonableness of the Husband has been brought into question. The Respondent Wife argues that the Applicant Husband refused to disclose significant date of marriage debts as well as significant amounts of income. The Wife did not convince me that the Husband unreasonably withheld evidence regarding his income, however I find he did originally fail to include in his equalization calculation date of marriage debt totaling $158,410. Although the Applicant Husband may have actually disclosed some of this debt in the volumes of disclosure he produced, he failed to include it in his Financial and Net Family Property Statements. The debt was fully and clearly accounted for only a few months prior to trial, in part as a result of questioning conducted by the Respondent Wife. I do not find that the Husband acted in bad faith, rather he was poorly organized and inadvertently failed to account for these significant date of marriage debts. Ultimately he included these debts in his calculation of net family income, which made a significant impact on the final equalization. I find this conduct caused delay and will be taken into consideration under r. 24(4).
[16] I find the hourly rates of counsel in line with their levels of experience and areas of practice. However, counsel for the Wife spent considerably more time in trial preparation and charged her client for 10 hours each day of trial. While the importance and complexity of the matters at trial did require a substantial time commitment, I find counsel for the Applicant Husband was more reasonable in the costs associated with the trial.
[17] I am also guided by the overriding principle of fairness and reasonableness. One of the considerations in an assessment of costs is to fix costs in an amount that is “fair and reasonable” for the unsuccessful party to pay in a particular proceeding (Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291, at para. 24).
[18] Although they are not specified in r. 24(11) as factors in determining costs, the financial means of the parties, their ability to pay a costs order and the effect of any costs ruling on the parties and the children of the family are also relevant considerations in reaching a determination on the issue of costs (Fyfe v. Jouppien, 2012 ONSC 97, 10 R.F.L. (7th) 371, at para. 11).
[19] The Husband seeks costs of $79,000. The Wife seeks an order that no costs be paid for the trial and that the Husband pay her the costs associated with questioning in the amount of $4,600.
[20] In light of all these factors I make the following findings:
the Applicant Husband was more successful than the Respondent Wife;
the Husband acted unreasonably in the course of the proceedings by causing delay and expense in failing to properly account for date of marriage debts;
the Respondent Wife also acted unreasonably in not accepting the Husband’s offers; and
the Wife’s financial circumstances are less favorable than that of the Husband’s, which limit her ability to pay a significant costs award after paying her own lawyers very substantial legal fees.
[21] As such, the Wife will pay costs to the Husband in the amount of $45,000 all inclusive. Said amount will be paid from the Respondent Wife’s share of the moneys held in trust.
Justice P. Nicholson
Released: March 2, 2016