Court File and Parties

Court File No.: F475/15 Date: June 9, 2016 Superior Court of Justice – Ontario Family Court

Re: Michael Anthony Reati, applicant (appellant in appeal) And: Jennifer Michele Racz, respondent (respondent in appeal)

Before: MITROW J.

Counsel: Iain D.D. Sneddon for the applicant Malcolm Bennett for the respondent

Heard: written submissions filed

Endorsement on Costs

[1] I have reviewed the parties’ written costs submissions (first from the respondent-in-appeal, then response by appellant and then reply by respondent-in-appeal) and the authorities submitted by the parties.

[2] The costs submissions were filed pursuant to my order dated March 24, 2016 dismissing the appellant’s appeal of a final arbitration award that permitted the respondent-in-appeal (hereinafter referred to as the respondent) to relocate with the child to Minnesota, so that the respondent could commence her employment at the Mayo Clinic.

[3] The respondent seeks costs on a “full indemnity” basis totalling $40,090.86 inclusive of disbursements and HST. The fees portion totals $34,050.72. The appellant submits that each party should bear his or her own costs or, in the alternative, that the respondent should be entitled to costs fixed at $7,500, to be set-off against any remaining equalization payment owing by the respondent to the appellant.

[4] A successful party’s presumptive entitlement to costs is set out in r. 24(1) of the Family Law Rules, O. Reg. 114/99, which applies to a “… motion, enforcement, case or appeal” (my emphasis). This presumption is applicable to the case at bar, being an appeal from an arbitrator’s award.

[5] I consider the factors in r. 24(11). Clearly this case was of utmost importance to each party, with some moderate level of complexity as posed by the immigration issues. In relation to the appeal, I find that each party behaved reasonably. I reject the respondent’s submission that the appellant acted unreasonably in pursuing the appeal. Litigants can pursue an appeal, and lose, without being branded as unreasonable. I find this to be the case in this appeal.

[6] The appellant’s costs of the appeal were just under $24,300 all inclusive. The fees portion was $20,460.50.

[7] I do agree with the appellant that he ought not to bear the costs of both Mr. Bennett and junior counsel, Ms. Fisher, who both attended on the appeal. While the respondent of course can agree to have two counsel present, that cost is not something that the appellant should share in on the facts of this case. That being said, Ms. Fisher’s main role was to do legal work delegated to her as it relates to responding to and preparing for the appeal, and that work cannot be characterized as duplication. Accordingly, the only duplication would be Ms. Fisher’s attendance at the appeal hearing (fees totalling $1,650). No issue was taken by the appellant as to the respondent’s disbursements, which I find to be reasonable.

[8] The appellant submits that courts have displayed a reluctance to award significant costs in mobility cases, and that the courts have found that the presumption in r. 24(1) should not apply in a mobility case. The appellant cites: Bridgeman v. Balfour, 2009 CarswellOnt 7214 (S.C.J.) and Reid v. Mulder, 2006 CarswellOnt 1901 (S.C.J.). In both cases, the court exercised its discretion not to award costs relating to custody, access and mobility issues to the parent who succeeded on those issues.

[9] While I do agree that a court, in appropriate circumstances, can exercise its discretion to decline an award of costs to a successful party, such a result will be dependent largely on the specific facts.

[10] The respondent in turn points to Bjornson v. Creighton, 2002 CarswellOnt 3866 (Ont. C.A.), where mobility was the main issue and where appeal costs of $23,000 were awarded to the mother, who successfully appealed a trial decision preventing her from moving and taking the child with her.

[11] This is not a proper case to deny costs to the respondent, who is the successful party.

[12] In Furtney v. Furtney, 2014 ONSC 2439, in dealing with costs, I stated the following:

[14] In Sims-Howarth v. Bilcliffe, 2000 Carswell Ont. 299 (S.C.J.), at paragraph 4, Aston J. makes clear that the court is to quantify costs under r. 24 according to the factors in r. 24(11). The two traditional scales of costs are no longer appropriate. The Family Law Rules, in relation to costs, differ significantly from the Rules of Civil Procedure. If a party is liable to pay costs, the court must fix the amount at “some figure between a nominal sum and full recovery”.

[15] This discussion by Aston J. in Sims-Howarth was approved by the Court of Appeal for Ontario stating that the Family Law Rules demand flexibility in examining the list of factors in sub-rule 24(11) without any assumptions about categories of costs: C.A.M. v. D.M., 176 O.A.C. 201 (Ont. C.A.) at paragraph 42.

[13] It was the respondent’s submission that an offer to settle was not made because “there was no room for negotiation on the polarizing issue of mobility.” In family law cases, offers should be made, and if necessary, made often. Despite widely divergent positions, it is always open to a litigant to make an offer to settle, especially if that litigant intends to seek “full indemnity,” and/or intends to rely on the presumption of entitlement to costs on a full recovery basis as provided for in r. 18(14). In the context of the respondent seeking “full indemnity” costs, I take into account the failure of the respondent to make any offer. The absence of an offer to settle means that r. 18(14) is not engaged. Although full recovery costs can be awarded without resorting to r. 18(14), the present case does not merit such an award.

[14] In awarding costs, the overriding principle is reasonableness, and the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party, rather than any exact measure of the actual costs of the successful party: Davies v. Clarington (Municipality), 2009 ONCA 722, 2009 CarswellOnt 6185 (Ont. C.A.) at para. 52: see also Boucher v. Public Accountants Council (Ontario), 2004 CarswellOnt 2521 (Ont. C.A.) at para. 24.

[15] Further, costs recovery on a “full indemnity” or “full recovery” basis must still pass the reasonableness test, and such costs are not merely whatever the successful party’s lawyer charged the successful party.

[16] While the respondent was clearly successful and is presumptively entitled to costs, I do not agree with the costs figure in the range suggested by the respondent. I find that $17,500 all inclusive is a reasonable amount of costs for the appellant to pay. While the respondent was successful, I find that the time spent by her lawyers was excessive in the context of what the appellant reasonably could be expected to pay. Certainly the respondent is at liberty in expecting and paying her lawyers to spend the time that they did in defending the appeal; if so, then that is a matter between the respondent and her lawyers and not something for which the appellant is responsible.

[17] Both parties agree that any costs order payable by the appellant should be set-off against any equalization payment owing by the respondent to the appellant. I am prepared to make that order. The respondent is also content to set-off any costs order against any future spousal support obligation that the respondent may have to the appellant. Given that there is no information as to if, or when, the respondent may be required to pay spousal support, the order below leaves that matter to be dealt with by the parties on a voluntary basis.

Order

[18] I make the following order:

1. Within 30 days, the appellant shall pay to the respondent her costs of the appeal fixed in the amount of $17,500 inclusive of HST and assessable disbursements.
2. The costs order shall be set-off against any remaining equalization payment owing by the respondent to the appellant.
3. If the respondent should in the future have an obligation to pay spousal support to the appellant, then the parties are at liberty to make arrangements on mutual agreement to allow for any portion of the aforesaid costs award to be set-off against any spousal support that may be payable by the respondent to the appellant.

“Justice Victor Mitrow” Justice Victor Mitrow Date: June 9, 2016