Court File and Parties
OTTAWA COURT FILE NO.: FC-13-2062 DATE: 20160510 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Michele Remillard, Applicant, self-represented AND Hau Trung Le, Respondent, self-represented
BEFORE: Madam Justice Cheryl Robertson
HEARD: In Chambers: Written Submissions on Costs for trial heard January 19-22, 2016.
COSTS Ruling
ROBERTSON J.
Background
[1] The issue for determination is the liability and quantum of costs payable in a family law action. The trial centered on financial issues. Many matters including valuation date settled before trial. Custody, access, most child support and ancillary issues resolved by partial Minutes of Settlement in September 2015. Several issues settled the first day of the trial by consensus and are incorporated into the final order.
[2] Both parties retained competent lawyers in the early stages of this long, high conflict case. Later, the mother, via unbundled legal services, hired legal guidance. Both parties were self-represented at trial because they ran out of money. They have big legal bills. They want the other to reimburse them. These are hard working folks of limited means. Both parties prepared for court as they saw the “job” of self-advocates. They found the process difficult. They had great trouble speaking directly with each other. Communication is usually key to resolution. Their conflict got the better of them.
[3] The parties filed written costs submissions. They generally agree on the legal principles but disagree on the application to their circumstances. Both claim success, reasonableness and that their offers exceeded the results. Both contend bad faith of the other.
[4] Most of their lawyers’ bills related to the children’s issues, disclosure, or discussions flowing from emails. The accounts covered advice, preparation of pleadings or briefs, negotiations, litigation steps such as conferences, motions, affidavits, the custody/access assessment and procedural attendances. There is nothing unreasonable about their lawyers’ bills.
[5] Later, the parties appeared pro se at motions and a combined conference/trial management meeting. At trial, they resolved an issue about payment of a prior costs order. $6,000 was offset. The trial decision required the father to pay $600 for the assessment report. Some earlier reserved costs issues have been factored this into this ruling.
Applicant’s Position
[6] The Applicant seeks costs in the sum of $55,230.56 which includes her costs on a full indemnity basis. Her calculations show a combination of legal fees, disbursements, and some lost wages. She wants her costs offset against the equalization payment she owes to the Respondent.
Respondent’s position
[7] The Respondent also claims full recovery of his costs. He is seeking “attorney fees” of $41,591 and personal fees of $33,408. He claims costs of 530.28 hours of his own time at a rate of $63.00 per hour. He concludes he was successful at trial, argues that the Applicant conducted herself with bad faith, so he should therefore receive costs. He submits that the Applicant’s failure to provide disclosure was contrary to Rule 19 of the Family Law Rules and extended the length of the trial. He attached a long list of documents claiming that she ambushed him with at trial, many of which had been improperly taken from him in the first place and hoarded by her until trial. He argues that he could not be fully prepared without the documents she only filed during the course of the trial. He also argues that the Applicant’s “belligerent” and “theatrical” behaviour delayed the proceedings significantly.
Trial/litigation Result
[8] The parties separated in 2006. They co-parented their two children for many years without a formal agreement or litigation. They had a workable nesting arrangement until about 2008 but even after they separated residences, their co-operation resembled a “nesting style” until about 2012/2013. They had some counseling. An old issue renewed. The co-parenting terminated. The mother’s application seemed motivated by her belief that the children were at risk of harm by the father. He resisted. The assessment concluded his issue was not fatal to his parenting. The action did not settle.
[9] Both parties agree that the children’s issues dominated the early years of litigation. The children’s issues eventually resolved to no one’s satisfaction. Some financial issues were tried.
[10] Ms. Remillard’s application claimed sole custody and access in accordance with a psychologist’s recommendation [Page 9, paragraph 7]. On a temporary basis, she stated Mr. Le could have daytime access whenever he wished. Mr. Le sought joint custody with shared residency. Both asked for an order to equalize net family property and each claimed a divorce. There was no dispute about child support or incomes. Paragraph 30 of Ms. Remillard’s reply acknowledged Mr. Le’s proposal for sharing of S. 7 expenses. He asked for advance agreement on S. 7 expenses. That did not occur. Ms. Remillard claimed spousal support. Mr. Le defended it. Both sought costs. There were few financial legal issues raised in the pleadings even though the trial was about money.
[11] The family underwent a full and thorough custody/access assessment by the psychologist advanced by Ms. Remillard in her application. He addressed the safety/alienation/realistic estrangement allegations. The assessor concluded that both parents had good, basic parental capacities and he recommended joint custody.
[12] The assessment raised and addressed clinical issues: Ms. Remillard’s “intense rage towards the father could be at the source of overt or covert alienating influences”. The doctor described her as free from overt signs of psychopathology but wrote “her structure very probably situates her in the register of the histrionic personality in that she is very demonstrative, assertive, and attention seeking. Her assertions can be felt by others to have aggressive and dominating undertones.” The psychologist assessed the daughter’s estrangement from Mr. Le and wrote the father “overlooked her difficulties and required help to read her sensitivities.” He recommended the father introduce his new spouse in a “homeopathic” way and to be aware of the child’s difficulties in “adapting to his new situation without regard to her personal particularities”. His eventual recommendation at page 64 of the assessment was for both parties to continue to assume joint custody and parental authority of the children along with other practical recommendations. He noted it was essential for each parent to reassume a minimum degree of trust in the custodial capabilities of the other in order for the various recommendations to become fully operational.
[13] Sadly for these children and this family, the parents did not successfully implement the recommendations in a positive and healthy way for the children. Their mutual distrust increased and dominated them. Litigation is no substitute for tough social work. The current result is the father has no contact with either child. The son wants contact with the father but the father resists. Their daughter repelled contact with the father. He believes this is orchestrated by the mother’s interference. She does not see it that way.
[14] After the assessment, the mother had some counseling but it did not take. She should try again. In short, she is still angry and overbearing. Her unchallenged evidence is that she is on disability due to litigation stress, sole parenting and lack of support payments. Her behavior at trial clearly confirmed some problems. She focuses negative energy on the father’s new spouse and blames her for alienating the children.
[15] The father is still oblivious to various recommendations. The children have no relationship with their new sibling. Though softer spoken with a kinder tone, his message is no more reflective of implementing the assessment results. For example, he unsuccessfully brought a motion to allow his new spouse, Ms. Ong, to represent him. She is not a lawyer. She is very capable, indeed, having assisted him to prepare some of his documents. The point is he was unable to see how it would impact the children if he incited Ms. Remillard further by including Ms. Ong in the process. Was Ms. Ong to negotiate with Ms. Remillard? Ms. Ong was already dragged into the parties’ huge conflicts embroiling the children with invasion of privacy and missing cash. The large sum of missing money from a shoe in Ms. Ong’s closet seems to be blamed on the son. The privacy breach involved the daughter taking photographs apparently for Ms. Remillard and sitting in the driveway to look at them. The dynamics in this family system are broken. The custody/access result is a tragedy for the children.
[16] I find it was necessary for Ms. Remillard to proceed to trial on the issue of spousal support, quantum of S. 7 expenses and the equalization of net family property. I adopt her submission that while those issues were not legally complex to the court, they were complex for the parties as self-represented litigants, especially when seen through their own historical filters. There was an intense disagreement between the parties about various uncomplicated issues. Without lawyers to manage them, the conflict overwhelmed them and the litigation spiraled.
[17] The net equalization payment owing by the Applicant, Ms. Remillard, to the Respondent, Mr. Le is $33,368.17 after some adjustments including an offset for previous costs orders. The proceeds of the home were divided before the trial. Ms. Remillard was awarded spousal support of $250.00 per month on an indefinite basis with a material change/review provision in 2019. Mr. Le was successful on an RRSP issue. The S. 7 expenses contribution by Mr. Le were capped at $300.00 per month. The pleadings voiced consensus on the S. 7 payment theory. A subsequent consent order particularized the types of expenses. Many of Ms. Remillard’s actual S. 7 claims were excessive and unrealistic given the financial reality of the parties and lack of advance agreement. On the other hand, Mr. Le’s S. 7 actual payment offer was low, especially given the fact he does not see the children or incur access expenses for them. He did not seem eager to agree to the expenses in advance given his own finances.
[18] The cross claimed divorce was uncontested. They were separated for years. Mr. Le tried hard to sever and finalize the divorce. His new partner was pregnant. She needed his benefit coverage. Ms. Remillard had her own benefits yet resisted the divorce until trial. She sought various items as leverage. This added to the animosity between the parties. I find such further parental discord was unnecessary and adverse to the children’s interests. Increasing acrimony over a divorce was wrong and certainly contrary to the recommendations of the assessment. Like it or not, Mr. Le’s new baby is a sibling to these children. A sibling relationship is a right of the children not to be lightly ignored. The two subsidiaries of this family are now downright disconnected.
[19] Mr. Le also concedes that the legal issues were not overly complex. He agrees the trial issues were the equalization of the net family property, spousal support, S. 7 expenses and divorce. The pleadings set the menu for the trial. Mr. Le’s claims at trial increased from his initial application. For example, he wanted years of post-separation accounting resulting from the pooling their incomes. He sought a restraining order at trial but had not claimed one by application. Such claims were disposed of on the first morning of the trial. No matter how appetizing it might be, you can’t morph your claims into some other cause of action because things have gone badly or you regret being too reasonable years ago.
[20] He filed his legal accounts. There is no challenge to his lawyer’s credentials. Ms. Remillard points to Ms. Ong’s involvement in the file as noted on the dockets. She submits Ms. Ong’s participation alienated Mr. Le from his children, causing her to incur significant expense and subsequent debt as a direct result of her bad faith and involvement.
Offers
[21] I have compared offers with the result at trial and also with the final order based on partial minutes of settlement. I also reviewed the pleadings. The litigation started August, 2013.
[22] Ms. Remillard detailed the comparison of her offers to the result in her written submissions. I find her offers were properly made under the rules and were open for acceptance until trial. Her offer for spousal support dated January, 2016 was for $400 per month until December, 2017. The result was $250 indefinite, subject to material change in circumstances including the year 2019.
[23] Mr. Le’s comprehensive Offer through his lawyer, dated April 14, 2014 meets the criteria set out in Family Law Rule 18 (14). That offer was reasonable regarding the children. It incorporated the results of the assessment. It did not include large claims without pleadings for various compensation post separation as asked at trial. That offer was quite favorable on issues of S. 7 expenses, child support and insurance. He proposed temporary spousal support of $200/ month in his offer. That was not unreasonable. Nothing on the face of his offers suggested the terms were not severable or had an expiry date.
[24] He submits that he had made 13 offers of settlement and proposals over two and a half years of litigation in efforts to resolve the issues. He said he produced all of the documents he intended for use during the trial with no surprises. He gave concrete examples during the proceedings when the Applicant withheld a document such as her 2013 CRA Notice of Assessment, and intimates she misled the court.
[25] Mr. Le claims success; that his first offer of settlement in 2014 was substantially more favorable to the Applicant than the final order. Eventually he offered sole custody to the Applicant as she had claimed and notes that she did not even accept that for six months. He argued that she made a number of unsubstantiated and sometimes outrageous assertions and claims unsupported on a factual basis. He gave examples where other judges and a Master had made comments. His custody offer exceeded Ms. Remillard’s pleadings.
Analysis
[26] Custody outcomes are always considered from the vantage of children’s best interests. The outcome is contrary to these children’s interest.
[27] Neither parent requested the result in their pleadings. The father views his decision to quit litigating as one of prevention and financial necessity. In short, he was bullied and withdrew to avoid perpetual conflict and havoc for the children. The mother concludes the father abandoned the children. For the most part, rather than forming a conclusion of divided success, I find the result is one of divided failure.
[28] The consequences of bad family dynamics or mismatched personality structures are not enumerated factors to determine costs. The Family Law Rules and case law do not use costs as a reward or punishment for personality quirks. There is no doubt the Ms. Remillard behaved badly at times during the trial. It was tough to wrangle control of the courtroom sometimes; however, there is no doubt that every morning when she came to the trial she intended to behave professionally and properly. At one point she acknowledged she was unable to control herself and I accept this. Neither of these parties in my view should receive costs as a form of monetized damages as they seem to claim for their lost work time due to their self-representation. Both parties were articulate, well-spoken and tried to be well-prepared. They lacked the experience and judgment for effective representation or conflict management. No article, booklet, primer or coaching advice from even experienced counsel can substitute for judgment and skills of a good legal advocate especially in a high conflict matter.
There is no challenge to the rates or experience of either lawyer. Two experienced lawyers conducted the matter reasonably efficiently. I find the bills of costs submitted to them by counsel are reasonable both in time spent and lawyer’s rates. Both parties made some efforts to settle. They both resisted reasonable elements of the other’s proposals. The assessment was a significant expense and investment in the children. That cost was shared.
LAW
[29] The parties agree substantially with the law on costs. The quantum of a cost award is discretionary. The court must step back and examine the overall results with a view to determining whether it is fair and reasonable and whether the costs order is in line with the principle of proportionality. The family resources were modest.
[30] As set out in Berta v. Berta, 2009 ONCA 918, a successful party in a family law case is presumptively entitled to costs. An award of costs, however, is subject to the factors listed in Rule 24(11), the directions set out under Rule 24(4) (unreasonable conduct), Rule 24(8) (bad faith) and Rule 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party.
[31] The law of costs was neatly packaged by Justice Pazaratz in Jackson v. Mayerle, 2016 ONSC 1556:
COSTS ANALYSIS:
In Serra v. Serra, 2009 ONCA 395 the Ontario Court of Appeal confirmed that costs rules are designed to foster three important principles: a. To partially indemnify successful litigants for the cost of litigation. b. To encourage settlement; and c. To discourage and sanction inappropriate behaviour by litigants.
The assessment of costs is not a mechanical exercise. It’s not just a question of adding up lawyer’s dockets. Boucher et al. v. Public Accountants Council for the Province of Ontario; Dingwall v. Wolfe, 2010 ONSC 1044 (SCJ).
The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant. Selznick v. Selznick, 2013 ONCA 35 (Ont. C.A.); Delellis v. Delellis (SCJ); Serra (supra); Murray v. Murray (Ont. C.A.); Guertin v. Guertin, 2015 ONSC 5498 (SCJ).
Rules 18 and 24 of the Family Law Rules govern the determination of both liability for costs and the amount of costs. While these rules have not completely eliminated judicial discretion, the rules nonetheless circumscribe the broad discretion previously granted to the courts in determining costs. C.A.M. v. D.M. (Ont. C.A.); Andrews v. Andrews, [1980] O.J. No. 1503 (Ont. C.A.); Wilson v. Kovalev, 2016 ONSC 163 (SCJ).
Rules 18 and 24, and most of the case law focus on two words: “Success” and “Reasonableness”. The latter entails two components: a. Reasonableness of behaviour by each party. b. Reasonableness of the amount of costs to be awarded.
The starting point in any costs analysis is the presumption that a successful party is entitled to costs. Rule 24(1). Sims-Howarth v. Bilcliffe (SCJ).
RULE 18 OFFERS
To determine whether a party has been successful, the court should take into account how the order or eventual result compares to any settlement offers that were made. Lawson v. Lawson (SCJ).
Rule 18 deals with the formalities and consequences of offers. Rule 18(14) provides that a party who makes a written offer at least seven days before the trial, and obtains an order as favorable as or more favorable than the offer, is entitled, unless the Court orders otherwise, to costs to the date that the offer was served and full recovery costs from that date.
Both parties have referred to their respective offers to settle in support of their positions on costs. a. The Applicant claims that on the main issues his offers entitle him to full recovery of costs. He says on remaining issues his offers demonstrate that he made reasonable settlement proposals so he should still receive significant reimbursement for costs. b. The Respondent disputes that any of the Applicant’s offers trigger an entitlement to full recovery pursuant to Rule 18(14). She says to the contrary, their respective offers demonstrate that she was making more reasonable efforts to settle the case.
[32] In determining costs, I considered the factors set out in FLR 24(11). I also considered FLR 24(5) which provides criteria for determining the reasonableness of a party’s behaviour in a case (a factor in clause 24(11)(b) above) and Rule 18(15), (burden of proving favorable order), Rule 18 (10) (offer remaining open despite rejection or counter-offer). I have also considered Rule 2: the primary objective of the rules is to enable the court to deal with cases justly. That includes dealing with cases in ways appropriate to its importance and complexity, saving expense and ensuring the procedure is fair to all parties.
Any other relevant matter
[33] Family law litigants are responsible for and accountable for the positions they take in the litigation: Heuss v. Surkos, 2004 ONCJ 141. The law provides for consideration of the financial consequences of a costs award as a relevant factor but it is not a shield. Ability to pay costs is not an enumerated factor. Neither parent in the present case has the financial ability to pay for expensive litigation. Either parent paying their legal expenses impact the children. Between them, they spent more than $125,000 in professional fees plus their lost time. That would have funded years of S. 7 expenses and paid a large portion of anticipated post-secondary education costs. I am mindful of my findings with respect to the reasonableness of the parties’ positions at trial, the disclosure complaints and behaviour issues. Costs are a business risk of litigation but not an income stream to be relied on.
[34] I find the mother was more successful on the issues of spousal support, and property issues. Mr. Le’s claim for a restraining order was not properly before the court. It took up virtually no court time. I also found his post separation accounting claim should not have been put forward at the trial. His large claim was ill-conceived within this court action, especially in light of their joint business arrangement to pool funds for years after separation.
[35] Mr. Le was very reasonable in the resolution of the jewelry issue. Ms. Remillard took the jewelry years after separation as some form of tactical insurance. This was wrong. Somehow, a valuable pendant is missing. Several consents to valuation issues were elicited the first to day of trial. Mr. Le was correct that Ms. Remillard would have been in a better position overall had she accepted the first or the second offer than she is as a result of my decision.
[36] Success was divided on S. 7 issue. The expenses had been agreed and the expenditure was capped.
[37] Family Rule 24(8) provides that if a party has acted in bad faith the court shall decide costs on a full recovery basis and order those costs to be paid immediately. I do not find either party acted in bad faith although I do find they sometimes acted badly. The mother’s presentation style was difficult, as predicted by the assessor. Mr. Le complained this style was her pattern.
[38] In exercising my discretion to award costs, I am mindful of the proportionality, Mrs. Remillard’s lack of offer on the custody/ access and Mr. Le’s early reasonable offer.
[39] The issues were not complicated at law. The issues were important to the parties. Divorce was claimed by both and as stated, it was particularly important to Mr. Le. Ms. Remillard’s resistance to the divorce was unreasonable.
The reasonableness or unreasonableness of each party’s behaviour in the case
[40] Ms. Remillard submits that the Respondent acted in bad faith throughout the proceedings and that his bad conduct should be a factor for consideration under Family Law Rule 24(8). Her submissions outline 11 areas where she believes his bad faith conduct is demonstrated.
[41] Mr. Le argues that Ms. Remillard’s blameworthy conduct and unreasonable behaviour extended the trial and relies on Lawson v. Lawson, [2004] O.J. 3206 stating it supports his conclusion that unreasonable behaviour and conduct during the trial and predating the trial should disentitle the Applicant to all claimed costs. I find Ms. Remillard behaved unreasonably, at times, as I outlined in my judgment. Mr. Le’s summary of occasions when her behavior at trial was reprimanded is accurate.
[42] I find that both parties failure to communicate contributed to the length of the trial and to the conflict. They had quality legal help for a long time but were unable to instruct their lawyers to settle. Each blames the other.
The lawyer’s rates
[43] I find the lawyers’ rates to be reasonable.
The time properly spent on the case / Expenses properly paid or payable
[44] I find the time spent on the case, outlined in the lawyers’ accounts to be reasonable. It was not the lawyers who extended the conflict.
[45] The credentials of Ms. Remillard’s lawyers were beyond reproach. Her first lawyer had 30 years of experience in family law. I find his rate of $400/per hour to be fair and reasonable given his level of experience. When he was appointed to the bench she consulted someone else. She subsequently retained the unbundled services of a family law lawyer with 25 years of experience who charged an hourly rate of $300.00. I find the rates reasonable and upon reviewing the accounts, I find the work undertaken to be appropriate given the issues for determination. This was a very high conflict file and quality legal representation was a good idea.
[46] Ms. Remillard chose to expedite a transcript of the oral decision. I disallow the $300 claimed. It is not a proper disbursement. She could have obtained a CD at a fraction of the cost if she chose. She had requested one for a previous appearance.
Conclusion
[47] Neither party succeeded on the custody/access issues. Mr. Le’s offers about custody/access were reasonable. There should be no costs on this issue. This finding tempers the result.
[48] Each succeeded on some issues at trial. Ms. Remillard should pay costs for the divorce. Mr. Le was very reasonable to resolve the jewelry issue. He was successful in the double counting issue. While he offered to pay support, he didn’t. This made his offer somewhat hollow and only increased Ms. Remillard’s distrust. Although her reply agreed to Mr. Le’s S. 7 pleadings, she failed to secure a commitment to pay in advance. Her expenditures exceeded of his ability to pay. On the other hand, his offer for cash contribution at trial was low. She was more successful than Mr. Le in securing a cap on S. 7 which she could translate into real dollars. Both alleged disclosure issues. Ms. Remillard’s packaging of disclosure at trial was avoidable by at least delivering the index in advance. The spousal support issue was somewhat of a draw, having regard to the early offer of Mr. Le. His reasonable, comprehensive offer would have served him better but for his augmented claims.
[49] In all of the circumstances and the costs factors pursuant to the rules, and costs already ordered, I order only very modest costs as fair and reasonable. Taking into consideration the written submissions of the parties, the offers to settle, divided success on the main issues at trial, provisions of Rules 18 and 24 of the Family Law Rules as outlined above, the case law, the financial reality of the parties, the outcome and proportionality, and in the exercise of my discretion, I fix costs to Ms. Remillard fixed in the sum of $1,000.00, inclusive, fees, disbursements, and HST.
Order
[50] Order to go that Mr. Le shall pay costs to Ms. Remillard fixed in the sum of $1,000.00 inclusive of HST and disbursements.
Madam Justice Cheryl Robertson
Date: May 10, 2016
OTTAWA COURT FILE NO.: FC-13-2062 DATE: 20160510 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: Michele Remillard Applicant - and - Hau Trung Le Respondent
COSTS RULING Robertson, J.
Released: May 10, 2016