Court File and Parties

COURT FILE NO.: 3791/10 DATE: 2016 06 29 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Elena Maria Albergaria Applicant – and – Daniel Paulo Albergaria Respondent

Counsel: Chukwuma Chuks Oriuwa for the Applicant Adam Black, for the Respondent

HEARD: In Chambers

Costs Endorsement

Trimble J.

[1] In my Reasons for Judgment dated March 9, 2016, I dismissed Elena Albergaria’s Motion to Change the Judgment of Coats J. of November 16, 2012. On April 14, 2016, I issued Supplementary Reasons dealing with child and spousal support, and section 7 expenses, and second supplementary reasons dealing with specific questions posed by counsel.

[2] In this case, the Motion to Change occupied two days of hearing. In addition, there were several conference calls. The Order is now settled. I now address the costs of the Motion to Change.

The Parties’ Approach

[3] Before I turn to costs, I wish to address the parties’ approach to their continued relationship. The pair has two children. Consequently, they will be bound to each other for the rest of their lives. They must amend their conduct. I recommend that they read Jackson v. Jackson with which this couple’s dispute has many similarities. Murray, J. said:

The practical reality is that they have no apparent interest in curbing conflict to minimize the potential of harm to their children. They appear oblivious to the collateral damage that high conflict between them might have on their children.

[4] The parties have a remarkable ability to disagree on everything. Only their desire to engage in warfare exceeds their ability to disagree. In para. 4 of my reasons dismissing the Motion to Change, I reviewed the thoughts of others before whom the Albergarias have appeared:

[4] The dissolution of the Albergaria marriage was and continues to be contentious. Every bit of ground was bitterly fought over. Settlements were reached then broken, orders made then violated, ignored, and challenged. It has been the gift that keeps on giving. As Herold J. observed:

“The parties are either unwillingly, or quite possibly even constitutionally incapable of agreeing about anything; one or both, it is not clear to me at this stage who, is far more interested in scoring points, and being “right”, than in looking at the big picture and trying, at long last, to put the best interests of [the children] in the forefront. The only way, unfortunately, is to let the litigation play out, and let the chips fall where they must.”

Round 1

[5] Elena brought her Application for Divorce in early 2010. Between then and Coats J.’s Order of November 16, 2012, there were eleven attendances at Court. The matter was placed on the trial list in March, 2011 then put over to the November, 2011 list, the week of January 20, and the week of November 15, 2012. Resolution came only on the eve of trial. The parties reached an agreement on custody and access of the two children on March 28, 2011. Coats J. incorporated the custody and access agreement into a final order.

[6] The custody and access agreement and Coats J.’s Order of March 28, 2011 did not hold. The parties continued to wrangle. After a long negotiation on the eve of trial, in which both parties had competent, experienced family counsel, they suspended their differences log enough to reach a settlement of all issues. Their Agreement was incorporated into Coats J.’s Order of November 16, 2012.

Round 2

[7] Round two began in the fall of 2013. Daniel brought a Motion to Change Coats J.’s Final Order re joint custody. In 2014, Elena brought her Motion to Change the child and spousal support provisions of Coats J.’s Order.

[8] The parties’ approach to the termination of their union did not change. Between May, 2014 and February 11, 2016 when I heard Elena’s motion to change, there were ten attendances in Court between the two motions. Elena’s motion was on the trial list twice.

[9] Daniel’s motion was determined by LeMay J. on June 3, 2015. He dismissed it, but clarified ambiguities in the parenting agreement and dispute resolution mechanism incorporated into Coats J.’s Order. Daniel said that Elena had repudiated the agreement by failing to abide by the dispute resolution mechanism in the Agreement, and failed to follow counselling recommendations. Therefore, he wanted sole custody of the children.

[10] Because of ambiguities in the Agreement’s dispute resolution mechanism, LeMay J. did not find that Elena had repudiated the Agreement. However, he did find that Elena, by refusing to pay for her share of the mediation/arbitration process, was attempting to renegotiate the Agreement. He was critical of Elena, saying: “To be clear, any further attempts by Elena to renegotiate the payment provisions of the agreement in her favour will be considered resiling from the agreement if she uses a renegotiation of the payment provisions as a reason to delay mediation or arbitration” [Para. 29].

[11] LeMay J. pointed out that while Daniel wishes to move matters along, Elena wants to consider everything, in every aspect, which frustrates decisions being made and actions taken. For example, he faulted Elena for cancelled counselling for the children at ROCK in 2013. He said at paragraph 45: "As I noted above, I do not have sufficient information to determine who caused the cancellation of the counselling services in 2013. Two points should be made, however. First, the evidence I do have suggests that, if blame is to accrue for this issue, it rests with Elena and not Daniel as it was her (sic) who cancelled the sessions because she had a belief that Daniel had met with staff without her presence. Second, Elena’s constant references to this issue are exactly the sort of conduct that Herold J described in his May 1, 2014 endorsement as “scoring points, and being right” instead of looking at the best interests of the children.”

[12] Elena persisted in her uncooperative behaviour throughout 2014, such that the children’s counselling did not recommence until early 2015. She continued to blame Daniel and his conduct in 2013 for the delay. As LeMay J. said at para 49, “It leads almost inescapably to the conclusion that Elena is deliberately delaying counselling. It also raises questions about the genuineness of Elena’s suggesting that counselling take place in May of 2014, and the genuineness of the other issues that she raised about why counselling could not proceed promptly.”

[13] LeMay J. did not reserve his criticism for Elena alone. He criticized both parents for discussing litigation with the children.

[14] Notwithstanding that Daniel’s Motion to Change was dismissed, LeMay J. awarded him costs in part because he had modest success on some aspects of his motion, and because of the way Elena had conducted herself.

[5] Others who have dealt with the pair’s disputes expressed their views about the Albergaria’s approach to the dissolution of their marriage but were hesitant to express a firm opinion as to who was responsible for the high conflict. I am not. With the benefit of those judges’ views and my own experience, it is clear to me that Ms. Albergaria is the main protagonist in the couple’s war of attrition. Ms. Albergaria continually engages Mr. Albergaria in disputes. Many of her issues are over small or picayune matters. Most of these are with respect to matters already settled, based on her interpretation of agreed on matters which benefits herself. She will not compromise or negotiate off her position. Her desire to engage Mr. Albergaria is relentless. It is an overwhelming itch that she must scratch.

[6] One of Newton’s laws of physics is that for every action there is an equal and opposite reaction. So too it is with this couple. Mr. Albergaria always reacts by ignoring Ms. Albergaria, initially. He has no desire to engage with his ex-wife. When she persists, he tells her to ‘go away’. Ms. Albergaria does not; she pushes harder. Mr. Albergaria, in the face of his ex-wife’s intransigent position, becomes equally intransigent. An appearance at court is inevitable.

[7] The lead up to the Motion to Change is an example of this. Coats, J.’s order (a consent order incorporating the parties’ agreement) had a two year stand-still provision for review of support. This was designed to allow these to disengage and avoid a dispute for two years. Ms. Albergaria could not do so. She began to press for disclosure and discussion about changing support in May, 2014, four months before Coats, J.’s order permitted a review. Mr. Albergaria did not want to engage with her on support until after September 1, 2014, as provided in the Order.

The Law on Costs

[8] The most recent state of the law on costs comes from the Ontario Court of Appeal case of Berta v. Berta, 2015 ONCA 918, in which the Court said:

[88] A trial judge’s costs award attracts considerable deference from a reviewing court. Absent an error in principle, or unless a costs award is plainly wrong, appellate intervention with a trial judge’s discretionary costs ruling is precluded: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27. In this case, I agree with the Wife that the trial judge erred in principle in fashioning his costs award.

[89] In family law cases, a trial judge’s discretion to award costs is subject to the provisions of the Rules. Rule 24(1) creates a presumption that a “successful party is entitled to the costs of…a case”. But it does not require that a successful party is always entitled to costs: M.(A.C.) v. M.(D.) (2003), 67 O.R. (3d) 181 (C.A.), at para. 40. Rule 24(4) states that a successful party who has behaved “unreasonably” may be deprived of all or part of his or her costs or ordered to pay all or part of the unsuccessful party’s costs. Further, in cases where a party has acted in bad faith, r. 24(8) directs that the court “shall decide costs on a full recovery basis and shall order the party to pay them immediately”.

[90] Rule 24(11) outlines the factors to be considered in awarding costs. These include the importance, complexity or difficulty of the issues (r. 24(11)(a)), the reasonableness or unreasonableness of each party’s behaviour in the case (r. 24(11)(b)), the lawyer’s rates (r. 24(11)(c)), and the time properly spent on the case (r. 24(11)(d)).

[91] Moreover, as in other civil cases, offers to settle in family law cases carry costs consequences. Rule 18(14) stipulates that if a party makes an offer and obtains an order that is “as favourable as or more favourable than the offer”, that party is entitled to “full recovery of costs from that date”. However, the court retains a discretion not to make an award of full recovery of costs even where a party has met the conditions in r. 18(14): M.(A.C.), at para. 43.

[92] In Biant v. Sagoo (2001), 20 R.F.L. (5th) 284 (Ont. S.C.), the court considered the costs award scheme under the Rules and commented, at para. 20:

[T]he preferable approach in family law cases is to have costs recovery generally approach full recovery, so long as the successful party has behaved reasonably and the costs claimed are proportional to the issues and the result. There remains, I believe, a discretion under r. 24(1) to award the amount of costs that appears just in all the circumstances, while giving effect to the rules’ preeminent presumption, and subject always to the rules that require full recovery or that require or suggest a reduction or an apportionment.

[93] This court has repeatedly endorsed the Biant court’s approach to the determination of costs in family law disputes: see for example, Ruffudeen-Coutts v. Coutts, 2012 ONCA 263, 15 R.F.L. (7th) 35, at para. 4; Sordi v. Sordi, 2011 ONCA 665, 13 R.F.L. (7th) 197, at para. 21; M.(A.C.), at para. 40.

[94] Thus, 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 r. 24(11), the directions set out under r. 24(4) (unreasonable conduct), r. 24(8) (bad faith) and r. 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party: M.(A.C.), at paras. 40–43.

[9] In assessing costs, I must also consider the cases that have outlined broad principles with respect to costs under s. 131 of the Courts of Justice Act. Costs awards have a number of purposes, four of which are to indemnify (partly) successful litigants, encourage settlement, correct behaviour of the parties and discourage frivolous or ill-founded litigation (see 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, at para. 10). Generally costs should follow the event (see Bell v. Olympia & York (1994), 17 O.R. (3d) 135 (C.A.)) and be proportional to the issues in the action and the outcome, and be reasonable for the losing part to pay, all circumstances considered (see Boucher v. Public Accountants, (2004), 71 O.R. (3d) 291 (C.A.) and Moon v. Sher et al., [2004] OJ No 4651 (C.A.). Conduct of the parties is also relevant, where it deserves sanction (see Davies v. Clarington (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.).

[10] Finally, I note that any award for costs is not a judgment on the adequacy of fees charged to the client or amount worked by the lawyer. Those are issues between the solicitor and client. Rather, an award for costs reflects that amount that it is reasonable that the losing party should pay to the winning party.

The Parties’ Positions:

a) Mr. Albergaria:

[11] Mr. Albergaria says that he should be entitled to substantial indemnity costs fixed at $60,000, to indemnify him, and sanction Ms. Albergaria’s conduct. She made resolution impossible. He points also to offers which he made which were, overall successful.

b) Ms. Albergaria:

[12] Ms. Albergaria says that the parties should bear their own costs. She points to Mr. Albergaria’s failure to disclose his retroactive pay adjustments following the resolution of a protracted labour dispute between the City of Toronto and its fire-fighters. She used this adjustment as one of the material changes in circumstances in her Motion to Change. She says that in failing to provide the details of that change in income, she was misled into thinking that there had been a material change. She says that he intentionally delayed and frustrated the court process and settlement possibilities by his failures to disclose.

Analysis:

[13] Mr. Albergaria is entitled to costs from Ms. Albergaria. His conduct, while not perfect, is not sufficient to deny him costs. Ms. Albergaria shall pay Mr. Albergaria costs on a partial indemnity basis, fixed at $37,240.45, comprising $30,000, plus disbursements of $2,956.15 (before HST), and HST of $4,284.30.

[14] In addressing costs, I wish to deal with some specific issues.

[15] Rule 18 - Offers to Settle: Mr. Albergaria says that since the “total cost to Daniel” of his the offers to settle are “virtually identical to, or greater than the Final Order” he should have his costs on a substantial indemnity basis.

[16] In Jackson v. Mayerle, 2016 ONSC 1556, the Court stated the following, at para. 47:

To trigger full recovery costs a party must do as well or better than all the terms of any offer (or a severable section of an offer). Paranavitana v. Nanayakkara, 2010 ONSC 2257, [2010] O.J. No. 1566 (Ont. S.C.J.); Rebiere v. Rebiere, 2015 ONSC 2129 (Ont. S.C.J.); Scipione v. Del Sordo, 2015 ONSC 5982 (Ont. S.C.J.). The court is not required to examine each term of the offer as compared to the terms of the order and weigh with microscopic precision the equivalence of the terms. What is required is a general assessment of the overall comparability of the offer as contrasted with the order (Sepiashvili v. Sepiashvili, 2001 CarswellOnt 3459 (Ont. S.C.J.), additional reasons to 2001 CarswellOnt 3316 (Ont. S.C.J.); Wilson v. Kovalev, 2016 ONSC 163 (Ont. S.C.J.). [Emphasis in original.]

[17] Mr. Albergaria had two offers. Both offers contained costs amounts fixed in sum specific to a certain date, and thereafter on a substantial indemnity basis. The date demarking the differing costs consequences and the fixed amount payable until that date is different in each offer. As the costs submissions Mr. Albergaria made are not broken down on based on the time periods contained in the offers, I am unable to determine if, as a whole, the offers were more or less favourable than the final order. Mr. Albergaria is not entitled to costs on a substantial indemnity basis because of offers he made.

[18] Rule 24(4) & (5) - Unreasonable Behaviour: I have commented above on the behaviour of both parties. While Ms. Albergaria’s behaviour is objectionable and unreasonable, Mr. Albergaria’s conduct is also often unreasonable. For example, with respect to my arithmetical error, Ms. Albergaria offered to simply agree to the change in the order. Mr. Albergaria insisted that the order should be in strict conformity with the reasons. Ms. Albergaria proposed making a side agreement that the amount recoverable would be the corrected number, while the order contained my arithmetically incorrect number. Technically Mr. Albergaria is correct. However, his technical, unbending approach meant that there was a conference call to settle the matter. Mr. Albergaria is not entitled to enhanced costs because of Ms. Albergaria’s conduct. I have taken her conduct into account, however, when dealing with the complexity of the steps taken.

[19] Rule 24(8)- Divided Success: Success was divided, although Mr. Albergaria was by far more successful than Ms. Albergaria.

[20] Rule 24(11) - Bad Faith: Mr. Albergaria says that Ms. Albergaria’s conduct does not amount to bad faith. It is close enough to bad faith, he says, and that it justifies costs at $60,000.00. On bad faith, I adopt the carnival barker’s standard of perfection – “close but no cigar”.

[21] Rule 24(11) - Other Factors: Rule 24(11) requires an analysis of such things as the complexity of the issues, the behaviour of the parties, lawyers’ rates, time properly spent on the matter, and any other relevant issue.

[22] I have commented on the conduct of the parties, already.

[23] The issues in this case are not complex. Ms. Albergaria’s approach to matters and Mr. Albergaria’s response have created a file in which time is spent needlessly. Mr. Albergaria’s reaction, however, requires Ms. Albergaria’s stimulus. Without the latter, the former would not come about.

[24] There are matters raised in Mr. Albergaria’s lawyer’s dockets that are not chargeable. For example, time is claimed for attendance before Donohue, J. on December 29, 2015, which she dealt with. There is time claimed for preparing a DRO brief. There are other items. Rather than do a line item review, however, I am satisfied that there is a reduction required for unnecessary work on the file.

[25] The substantial indemnity hourly rates for Mr. Albergaria’s lawyer are reasonable. However, he is only allowed partial indemnity rates, which I have considered at $250 per hour.

[26] Disbursements for photocopies appear to be high. Such things as coloured tabs, tabs, card stock and acetates, and cerlox bindings are not recoverable. They are overhead. The amounts claimed for photocopies are not substantiated by a number of copies or price per copy. The number of copies is large, as the volume of the file shows. In light of the foregoing, I have reduced disbursements by $1,000.

[27] Mrs. Albergaria’s Ability to Pay: Ms. Albergaria says that she cannot pay any costs award made against her. She claims a debt load of $325,544, which includes $220,000 for her mortgage, $30,000 loans from family and the $60,000 claimed in costs. Undue hardship is something to be considered in making an award of costs. The onus of establishing hardship is on the person claiming it, and it must be established on evidence (see: LeVan v. LeVan, [2006] O.J. No. 4599, per Backhouse, J. at para. 39, and Critch v. Critch, [2005] O.J. No. 2002, per Eberhard, J., at para. 6). In this case, Ms. Albergaria has not proved undue hardship.

[28] The Best Interests of the Children: Ms. Albergaria also claims that the best interests of the children will be affected if a cost order is made as she will be required to sell the house to pay any costs award.

[29] In the context of this family, the best interests of the children are that litigation between the parents the financial drain caused by that litigation cease. Unless the parents stop their current dispute resolution approach, money will continue to drain. The question, therefore is that unless things change, the question is “when” Ms. Albergaria has to sell her house, not “if”.

[30] Teaching Lessons: Ms. Albergaria, as the protagonist in most of the litigation since Coats, J.’s order. She has caused the litigation costs to mount. In every hearing since Coats, J.’s order she has been unsuccessful. In the case of the motion before LeMay, J., Ms. Albergaria was given a “pass”.

[31] Proportionality: A cost award is not a matter of arithmetic. Rather, it is made on a broad principled basis. The foremost of these principles is what amount is reasonable and proportional to the issues and amounts involved in the case? I have considered proportionality in all aspects of my decision.

[32] As indicated above, Mr. Albergaria is entitled to his costs, on a partial indemnity basis. Based on his hours claimed, at a partial indemnity rate of $250/hour, the fess would be $40,000, approximately. A reasonable, fair and proportionate amount for Ms. Albergaria to pay to Mr. Albergaria, based on all of the circumstances of the case, and my analysis and comments, above, on a partial indemnity basis, is $37,240.45, comprising $30,000 for fees, disbursements of $2,956.15 (before HST), and HST of $4,284.30.

Trimble J. Released: June 29, 2016

COURT FILE NO.: 3791/10 DATE: 2016 06 29 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Elena Maria Albergaria Applicant – and – Daniel Paulo Albergaria Respondent COSTS ENDORSEMENT Trimble J.

Released: June 29, 2016