Trenholm v. Jaszczyszak
Ontario Reports
Ontario Superior Court of Justice,
Fregeau J.
March 31, 2016
129 O.R. (3d) 786 | 2016 ONSC 2226
Case Summary
Family law — Practice — Costs — Applicant's application struck as result of her ongoing failure to comply with undertakings and to satisfy costs orders — Respondent awarded costs on partial indemnity basis — Applicant having had significant difficulty managing litigation as self-represented litigant — Respondent making offer to settle when applicant was without counsel — Neither applicant's conduct nor offer to settle entitling respondent to costs on full recovery basis.
The applicant's family law application was struck as a result of her ongoing failure to comply with undertakings and to satisfy court orders. The respondent sought his costs on a full recovery basis, arguing that he faced substantial financial jeopardy as a result of the applicant's property and spousal support claims, that he had no choice but to retain experienced counsel, that he had served an offer to settle that remained open for acceptance at the time the application was struck and that was more favourable to the applicant than the ultimate result, and that the applicant took unreasonable steps throughout the litigation.
Held, the respondent should be awarded costs on a partial indemnity basis.
The applicant had significant difficulty managing the litigation as a self-represented litigant. While that did not relieve her of her obligations and responsibilities as a litigant, it was a factor to take into account in determining costs. The offer to settle was made after the applicant's previous counsel was removed [page787] from the record, so the applicant was unable to discuss the offer with experienced counsel. Neither the applicant's conduct nor the terms of the offer to settle entitled the respondent to costs on a full recovery basis.
Cases referred to
Andersen v. St. Jude Medical, Inc., 2006 85158 (ON SCDC), [2006] O.J. No. 508, 264 D.L.R. (4th) 557, 208 O.A.C. 10, 145 A.C.W.S. (3d) 786 (Div. Ct.); Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634, 188 O.A.C. 201, 48 C.P.C. (5th) 56, 132 A.C.W.S. (3d) 15 (C.A.); Fong v. Chan (1999), 1999 2052 (ON CA), 46 O.R. (3d) 330, [1999] O.J. No. 4600, 181 D.L.R. (4th) 614, 128 O.A.C. 2, 93 A.C.W.S. (3d) 222 (C.A.); Serra v. Serra, [2009] O.J. No. 1905, 2009 ONCA 395, 66 R.F.L. (6th) 40; Zesta Engineering Ltd. v. Cloutier, 2002 25577 (ON CA), [2002] O.J. No. 4495, 21 C.C.E.L. (3d) 161, 118 A.C.W.S. (3d) 341 (C.A.)
Statutes referred to
Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131(1)
Rules and regulations referred to
Family Law Rules, O. Reg. 114/99 [as am.], rules 12(1), (3), 18(14), (16), 24(1), (11)
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 57.01(1)
RULING on costs.
R. Karlstedt, for applicant.
S. Lundin, for respondent.
FREGEAU J.: —
Background
[1] On March 2, 2016, the applicant's application was struck as a result of the applicant's ongoing failure to comply with undertakings given approximately 20 months previously, her failure to comply with a financial disclosure order and her failure to satisfy two costs orders. One of the costs orders was made at a January 26, 2016 trial management conference as a result of the applicant not filing a trial management conference brief.
[2] My order of March 2, 2016 indicated that the respondent was entitled to his costs. The respondent was directed to file written submissions as to costs within 15 days of March 2, 2016. The respondent's costs submissions have been filed. They were served on the applicant's counsel on March 11, 2016.
[3] The applicant was directed to file her submissions as to costs within seven days after the deadline for the respondent's costs submissions -- by March 24, 2016. The applicant has chosen not to file any submissions as to costs. [page788]
The Respondent's Submissions
[4] The respondent has filed a bill of costs indicating that counsel for the respondent docketed 87.8 hours on this file at the rate of $280/hour. Clerk time is set out as 7.3 hours at the rate of $100/hour. This results in total fees of $25,314, plus disbursements of $263.47 and HST of $3,325.07, for a total of $28,902.54.
[5] The respondent submits that he should be awarded costs on a full recovery basis less costs already ordered to be paid by the applicant: $500 from the January 26, 2016 trial management conference and $2,500 from a February 10, 2016 motion.
[6] The respondent submits that he faced substantial financial jeopardy as a result of the applicant's property and spousal support claims. He had no choice but to retain experienced family law counsel and vigorously defend all claims. The respondent further submits that the applicant's trust claim in relation to property was complex and required significant time to analyze and defend.
[7] The respondent submits that he served an offer to settle that remained open for acceptance at the time the application was struck. The respondent submits that the terms of the offer were more favourable to the applicant than the ultimate result.
[8] Finally, the respondent submits that the applicant took unreasonable positions throughout the litigation that were ultimately doomed to fail based on the facts. This is suggested to amount to unreasonable behaviour on the part of the applicant which unduly lengthened the litigation.
[9] The respondent submits that a cost award should consider all of the foregoing facts. In all of these circumstances, it is submitted that full recovery costs should be ordered against the applicant.
Discussion
[10] An award of costs is a matter in the discretion of the judge by virtue of s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, which reads as follows:
131(1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid.
[11] Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides:
57.01(1) Factors in discretion -- In exercising its discretion under s. 131 of the Courts of Justice Act to award costs, the court may consider, in addition [page789] to the result in the proceeding and any offer to settle or to contribute made in writing,
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was,
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(g) a party's denial of or refusal to admit anything that should have been admitted;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs.
[12] In Anderson v. St. Jude Medical, Inc., 2006 85158 (ON SCDC), [2006] O.J. No. 508, 264 D.L.R. (4th) 557 (Div. Ct.), at para. 22, the Divisional Court set out the principles to be applied by the court in exercising its discretion:
The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in Rule 57.01(1).
A consideration of experience, rates charged and hours spent is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant.
The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: Rule 57.01(1)(0.b). [page790]
The court should seek to avoid inconsistency with comparable awards in other cases. "Like cases (if they can be found), should conclude with like substantive results."
The court should seek to balance the indemnity principle with the fundamental objective of access to justice.
A discretionary decision of a case-management judge in a class proceeding is entitled to a very high level of deference.
(Citations omitted)
[13] The Court of Appeal has made it clear that in assessing costs, the overriding principle is one of reasonableness, and that the failure to follow that principle can produce a result that is contrary to the fundamental objective of access to justice (Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634 (C.A.), at p. 302 O.R.
[14] In Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905, 66 R.F.L. (6th) 40 (C.A.), at p. 42 R.F.L., the Court of Appeal reiterated the fundamental purposes which modern costs rules are designed to foster, as set out in Fong v. Chan (1999), 1999 2052 (ON CA), 46 O.R. (3d) 330, [1999] O.J. No. 4600 (C.A.), at para. 22:
(1) to partially indemnify successful litigants for the costs of litigation;
(2) to encourage settlement; and
(3) to discourage and sanction inappropriate behaviour.
[15] In Zesta Engineering Ltd. v. Cloutier, 2002 25577 (ON CA), [2002] O.J. No. 4495, 21 C.C.E.L. (3d) 161 (C.A.), at para. 4, the Court of Appeal did not make a specific finding with respect to the amount of time spent or the rates charged by counsel, and stated:
In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant.
[16] The Family Law Rules (O. Reg. 114/99, as amended) provide significant assistance and direction on the issue of costs in family law proceedings in Ontario. The rules that are relevant to this particular application are as follows:
12(1) Withdrawing Application, Answer or Reply -- A party who does not want to continue with all or part of a case may withdraw all or part of the application, answer or reply by serving notice of withdrawal (Form 12) on every other party filing it.
. . . . . [page791]
(3) Costs Payable on Withdrawal -- A party who withdraws all or part of an application, answer or reply shall pay the costs of every other party in relation to the withdrawn application, answer, reply or part, up to the date of withdrawal, unless the court orders or the parties agree otherwise.
18(14) Costs Consequences of Failure to Accept Offer -- 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.
(16) Costs -- Discretion of the Court -- 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.
24(1) Successful Party Presumed Entitled to Costs -- There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.
(11) Factors in Costs -- 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.
[17] In my opinion, the hourly rate set out in the respondent's bill of costs is reasonable for family law counsel with 26 years' [page792] experience. Approximately 90 hours of time docketed on the file is also reasonable given that the matter began in 2013 and was scheduled to proceed to trial in April 2016.
[18] However, neither the applicant's conduct nor the terms of the offer to settle entitle the respondent to costs on a full recovery basis. The applicant's previous counsel was released as counsel of record for the applicant on October 6, 2015. The applicant was unable to retain new counsel until late February 2016. I note that the respondent's offer to settle is dated January 19, 2016. Obviously the applicant was not able to discuss this offer with experienced legal counsel.
[19] It is obvious that the applicant was having significant difficulty managing this litigation as a self-represented litigant. While this does not relieve the applicant of her obligations and responsibilities as a litigant, it is a factor that I take into account in determining costs and in declining to award costs on either a full or substantial recovery basis.
[20] I further decline to include previous costs awards in this costs order. Those costs orders remain as stand-alone orders. I see no reason to vacate those previous costs orders and then include the quantum of those orders into this order.
[21] The respondent has been successful in this litigation and should be partially indemnified for his costs. He is entitled to a reasonable amount as partial compensation, taking into account his total costs and all other factors.
[22] The applicant is ordered to pay to the respondent costs of $17,000, inclusive of disbursements and HST. This represents approximately 2/3 of full recovery costs, taking into account the two costs orders already made. These costs shall be paid within 30 days.
Order accordingly.
End of Document