Editor’s note: Addendum released on September 07, 2016 and appended to the original decision. The corrections were not integrated in the original reasons.
CITATION: McCabe v. Tissot, 2016 ONSC 4443
COURT FILE NO.: FS-08-340484
DATE: 20160711
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: lisa mcCabe, Applicant
- and -
bertrand samuel tissot, Respondent
BEFORE: Justice S. M. Stevenson
COUNSEL: Harold Niman/Katharine Rajczak. for the Applicant
Mr. Tissot, self-represented
ENDORSEMENT AS TO COSTS
[1] I have now had an opportunity to review the costs submissions of both parties with respect to the trial. As indicated in my Reasons for Decision dated April 4, 2016 (the “Reasons”), this matter originally went to trial before Frank J. in November of 2014. After three days of the applicant’s testimony, the parties settled the matter and signed Minutes of Settlement (the “Minutes”).
[2] Subsequent to the signing of the Minutes, on December 4, 2014 the applicant informed her counsel that a provision was missing from the Minutes. The parties could not agree and as a result, a rectification motion was heard before Stewart J. which resulted in her order of April 24, 2015 that Mr. Tissot could either rectify or rescind the Minutes. Mr. Tissot chose to rescind the Minutes. The matter was eventually re-scheduled for a 15 to 17-day trial. It was agreed by the parties that the evidence given by the applicant before Frank J. in November of 2014 would form the applicant's evidence-in-chief for this trial along with any update from her since November of 2014. This was all subject to cross-examination which had just commenced prior to the parties settling. As such, three volumes of transcripts from the trial in November 2014 also formed part of the evidence for this trial. In total, including the three days of evidence in 2014, the trial was 17 days in duration.
[3] The applicant seeks costs on a full recovery or substantial indemnity basis as she submits that she has been entirely successful on all significant issues. It is the applicant’s position that overall she did much better in the final order than in her Offers to Settle. She also seeks that costs be enforced through the Family Responsibility Office as a support order otherwise she contends that she will be denied the ability to enforce the costs order as she asserts that the respondent has made himself judgment proof.
[4] The applicant outlines that her total costs of the case (after significant discounts from her current counsel) on a full recovery basis, including work completed by her previous counsel and preparation of costs submissions, are $948,367.84. She further submits that costs between substantial indemnity of at least 80% and partial indemnity of 66% would range from $625,000 to $900,000. (However, I note that taking the applicant’s total of $948,367.84, the actual range is $625,922 to $758,694 using those percentages).
[5] In contrast, the respondent contends that he is the successful party and that the applicant’s costs are excessive. He contends that the applicant was unreasonable and that she gained very little by going to trial and, in fact, was unsuccessful on many issues. It is his position that the applicant has chosen to endlessly litigate and has now greatly compromised both parties’ financial stability and that of their son Liam. Further, the respondent contends that the parties pursuant to the Minutes agreed that each party would bear his or her own costs. He submits that the only relevant amount that the applicant could seek in costs would be the $350,000 that the applicant spent since May of 2015. Additionally, he submits that he is financially ruined and any costs order against him will detrimentally affect his ability to provide for his son Liam. In any event, the respondent asserts that the applicant is not entitled to any costs given his success and her unreasonableness in proceeding to trial. He submits that both parties should be responsible for their own costs of this proceeding.
Success and Offers to Settle
[6] The issue of costs in a family law proceeding is determined by Rules 18 and 24 of the Family Law Rules, O. Reg. 114/99 (the “FLRs”). Under Rule 24(1) there is a presumption that a successful party is entitled to costs.
[7] As stated by Aston J. in Sims-Howarth v. Bilcliffe, 2000 22584 (ON SC), 6 R.F.L. (5th) 430, [2000] O.J. No. 330 at para. 13: "Offers to settle not only become a yardstick by which to measure success, but also become a prime consideration in determining the quantification of costs." Further, as outlined by McGee J. in Slater v. Slater, 2012 ONSC 5860: "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. See Lawson v. Lawson, 2008 23496 (ON SC), 2008 23496, 167 A.C.W.S. (3d) 723, [2008] W.D.F.L. 3600, [2008] O.J. No. 1978, 2008 CarswellOnt 2819 (Ont. Fam. Ct.). The position that each party took at trial should also be examined."
[8] Rule 18(14) of the FLRs describes the costs consequences of failing to accept an Offer to Settle as follows:
(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. O. Reg. 114/99, r. 18(14).
[9] The applicant submits that she served twelve Offers to Settle from June 20, 2014 to December 4, 2015. She concedes that the first five Offers were withdrawn and that the December 4, 2015 Offer was made mid-trial. It appears from the applicant’s costs submissions that the respondent served five Offers to Settle from June 24, 2014 to November 11, 2015. The June 24, 2014 Offer was withdrawn. Both parties also ask that the court consider the Minutes that were rescinded and the impact that this had on subsequent costs.
[10] As set out in Rule 24(4), a successful party may not receive costs if his or her behaviour has been unreasonable. Rule 24(5) sets out some examples of factors to be considered when determining whether a party has acted reasonably. These factors include the party’s behaviour in relation to the issues from the time they arose, the reasonableness of any Offer the party made and any Offer the party withdrew or failed to accept.
Order Made at Trial
[11] After trial, the applicant was granted sole custody and primary residence of the parties’ son, Liam. Certain provisions were made such that the applicant is required to consult with the respondent with respect to major medical decisions and educational decision-making. Liam is to continue to attend a private school until the completion of grade 8 and the parties are to share in this expense in proportion to their incomes. Additionally, Liam is to have counselling with Dr. Fidler or some other recommended therapist.
[12] With respect to Liam's residential schedule, he is to spend alternate weekends from Friday after school until Monday morning return to school and every Wednesday from 3:30 p.m. until 8:00 p.m. with the respondent. Additionally, Liam is to spend alternating Monday evenings following the weekend that he resides with the applicant, from 3:30 p.m. until 8:00 p.m. with the respondent. Liam is to otherwise reside with the applicant. During the Christmas school holiday, Liam will share time with both parents equally as well as during Family Day, Easter and Thanksgiving weekends. Liam is also to share time equally with his parents during March Break each year and the summer school vacation period is to be shared equally with neither parent spending more than two consecutive weeks of summer vacation with Liam at a time.
[13] The final order also contains provisions pertaining to the respondent's travel with Liam, including the requirement that the respondent obtain a mirror order in France prior to the respondent travelling with Liam to France as was sought by the applicant.
[14] Pursuant to the final order, the respondent is to pay to the applicant child support for Liam in the amount of $1,076 per month commencing January 1, 2016 based on an imputed income of $125,000 gross per year. The parties are to share in proportion to their incomes the section 7 expenses of Liam based on the applicant's income of $175,000 gross per year and the respondent’s income imputed at $125,000 gross per year. The applicant is to contribute 58% and the respondent is to contribute 42% to these expenses.
[15] Further, the respondent is to pay to the applicant table child support owing in the amount of $35,640 for the period August 1, 2008 through to and including December 31, 2015. The respondent is also to pay to the applicant his contribution to section 7 expenses for the same time period in the amount of $37,166.23. Both parties must maintain a policy of life insurance in the amount of $250,000 naming the other parent as irrevocable beneficiary in trust for Liam for so long as Liam is entitled to child support.
Offers Made in 2014
[16] As indicated, there were numerous Offers to Settle served by the parties. The applicant made Offers commencing in June of 2014 and continued to make Offers prior to and during the trial before Frank J. The first five Offers were withdrawn; however, the Offers dated November 7, 2014 and November 8, 2014 were not withdrawn.
[17] In the November 2014 Offers, the main provisions included custody to the applicant with consultation with the respondent on issues pertaining to major medical decisions and education. Liam's attendance at private school was guaranteed until grade 6. With respect to the time-sharing provisions, Liam was to spend alternate weekends from Friday after school to Monday morning with the respondent and every Wednesday overnight and alternating Mondays from after school until 6:30 p.m. with the Mondays to be extended to a Tuesday if the Monday was a holiday or professional development day (“PD day”). The Christmas vacation period was to be shared equally as was March Break and Easter. During the summer each party was to spend two uninterrupted consecutive weeks of vacation with Liam. The regular schedule resumed after the vacation times.
[18] With respect to child support, the respondent was to pay table support in the amount of $1,263 per month based on an imputed income of $150,000 which was to be fixed and non-variable for a period of five years. The respondent was to pay 50% of Liam’s section 7 expenses and was to pay the sum of $100,000 with respect to child support obligations prior to October 1, 2014. The respondent was also to maintain a policy of life insurance in the amount of $500,000. The major difference between the two Offers made in November 2014 was that in the November 8, 2014 Offer, the respondent was to pay the sum of $75,000 on account of any and all child support obligations owing. There were other minor changes.
[19] The respondent made an Offer to Settle dated June 24, 2014 which was withdrawn. He subsequently made another Offer during the November 2014 trial dated November 7, 2014. The respondent's Offer provided for sole custody to the applicant and that the respondent share time with Liam on alternating weekends from Friday after school to Monday morning, every Wednesday overnight and alternating Mondays following the weekend that Liam resides with the applicant from after school to 7:30 p.m. Mondays were to be extended to Tuesdays if there was a holiday or PD day. The Christmas vacation period was to be shared equally as was the March Break. The parties were to have three weeks each during the summer with Liam and Easter weekend was to be shared equally. There was also time sharing on Father’s Day and Liam’s birthday set out.
[20] The respondent also agreed to the applicant obtaining a mirror order at her cost. He accepted that Ontario had jurisdiction with respect to issues regarding Liam and that France did not. There was to be co-operation once the mirror order was filed for Liam to secure French citizenship. There were also provisions made with respect to the respondent being provided with written notice of any and all significant decisions affecting Liam's health, education and welfare and no significant decision was to be made without reasonable prior written notice of at least 30 days to the respondent.
[21] With respect to child support, the respondent was to pay $1,076 per month based on an imputed income of $125,000 gross per year. The respondent also agreed to share equally some of Liam's section 7 expenses but did not agree to be responsible for Liam's costs for attendance at private school.
[22] Ultimately the Minutes were signed by the parties and the matter was settled. As indicated, the Minutes were rescinded after the respondent was given the choice by Stewart J. to rescind or rectify the Minutes. As such, almost exactly one year later another trial commenced before me. This led to additional Offers being made by both parties.
Offers in 2015
i) The Applicant’s Offers
[23] Offers to Settle were made by the applicant from June 4, 2015 to December 4, 2015. In her Offer dated June 4, 2015, the provisions with respect to custody and consultation with the respondent were essentially the same as previous Offers. However, the respondent's time-sharing with Liam was reduced. The respondent was to spend time with Liam on alternate weekends from Friday after school until Sunday evening, every Wednesday after school until 7:00 p.m. and alternating Mondays, following the weekend when Liam resides with the applicant, from after school until 6:30 p.m.. Monday was extended to Tuesday if the Monday was a holiday or PD day.
[24] As set out in the applicant's previous Offers, the provisions were essentially the same with respect to the sharing of Christmas holidays, March Break, Easter and summer vacation. Thanksgiving was now added.
[25] With respect to child support, the respondent was to pay $1,076 per month based on an imputed income of $125,000 gross which was to be fixed and non-variable until December 31, 2018. The respondent was to pay 50% of Liam’s section 7 expenses and $50,000 with respect to any child support amount owing. Life insurance was to be in place in the amount of $350,000. French protection provisions were still included.
[26] In the applicant’s Offer dated September 14, 2015, custody remained with the applicant as did the provisions with respect to consultation with the respondent. There was a change with respect to the respondent's time sharing with Liam in that he was to spend alternate weekends from Friday after school until Sunday evening with Liam; every Thursday from after school until Friday morning return to school with Liam remaining with the respondent if Friday was a PD day; and alternating Monday evenings following the weekend when Liam resides with the applicant from after school until 6:30 p.m. This schedule for fixed and non-variable until December 21, 2018. Holidays were still shared and each party was to spend two uninterrupted consecutive weeks of summer vacation with Liam with the regular schedule to resume after the vacation days. There were still provisions with respect to Liam's habitual residence and French protections.
[27] With respect to child support, the respondent was to pay to the applicant table child support in the amount of $800 per month based on an imputed income of $85,000 gross which was to be fixed and non-variable until December 31, 2018. The respondent was to pay 35% of Liam’s section 7 expenses. It was recognized that the respondent paid $50,000 toward retroactive child support and special expenses up to and including November 30, 2014 and that he had paid additional periodic child support in the amount of $5,380. The Offer provided that the respondent would pay an additional $15,000 with respect to any child support owing including section 7 expenses up to and including September 2015. Each party was to maintain a policy of life insurance in the amount of $350,000.
[28] Another Offer was served by the applicant dated October 30, 2015. The provisions with respect to custody and consultation remained as did the French protections. The provisions with respect to time-sharing were the same as the previous Offer of September 14, 2015 as were most of the terms pertaining to the sharing of holidays. Child support was payable in the amount of $639 per month based on an imputed income of $70,000 which was to be fixed and non-variable until December 31, 2018. The respondent was to pay 35% of Liam's extraordinary section 7 expenses. The applicant was to pay for Liam’s attendance at private school. It was acknowledged that the respondent had paid a total of $70,786 in child support from the date of separation up to and including April 30, 2015. In full satisfaction of all table support and section 7 expenses owing up to October 31, 2015, the respondent was to pay to the applicant the sum of $70,000. Further, each party was to maintain a policy of life insurance in the amount of $350,000.
[29] In her Offer dated November 3, 2015, the custody and consultation provisions remained essentially the same as did the time-sharing provisions with the exception that the alternating Monday evenings were to be from after school until 7:00 p.m. With respect to holiday time, the applicant provided in her Offer that she would always have the first half of the break during Christmas plus Christmas Eve and Christmas Day and the respondent was to have the second half of the break including New Year's Eve and New Year's Day. During the summer vacation period, Liam was to spend two uninterrupted consecutive weeks of summer vacation with each parent and one non-consecutive week in Canada. Provided the French protections were in place, the respondent was to have two uninterrupted weeks in France with Liam and the respondent was also entitled to take Liam to France during the March Break provided the French protections were in place.
[30] Child support was payable by the respondent to the applicant in the amount of $639 per month based on an imputed income of $70,000 gross which was to be fixed and non-variable until June 2019. The respondent was to pay 35% of Liam's section 7 expenses but the applicant was to be solely responsible for the cost of custom orthotics for Liam and Liam’s private school. With respect to any child support owing, the respondent was to pay to the applicant the sum of $60,000. Both parties were to maintain life insurance in the amount of $250,000 and name the other parent as irrevocable beneficiary in trust for Liam.
[31] One final Offer was made by the applicant during the trial and was dated December 4, 2015. The provisions with respect to custody and consultation remained as did the French protections. Time-sharing with Liam by the respondent was changed to include alternate weekends from Friday after school until Monday morning and alternating Monday overnights on the weekend when Liam resides with the applicant from after school until Tuesday morning. This schedule was fixed and non-variable until December 31, 2018. Provisions with respect to holidays remained the same as the previous Offer as did the table amount of child support of $639 per month based on an imputed income of $70,000. The respondent was to pay to the applicant the sum of $60,000 for any child support amount owing from the date of separation up to and including October 31, 2015. Both parties were still to maintain life insurance in the amount of $250,000. It is noted that similar to the applicant's previous Offers, no costs were to be payable by the respondent to the applicant if the Offer was accepted within a certain time period.
ii) The Respondent’s Offers
[32] Prior to the trial before me, the respondent made three Offers that were not withdrawn. In his Offer dated June 4, 2015, the applicant was to have sole custody of Liam, however, both parents were to make major medical decisions after considering medical advice including but not limited to therapy or other psycho-educational support. With respect to educational decisions, the applicant was to solicit the input and opinions of the respondent other than psycho-educational support. If the parties were unable to agree despite input from relevant professionals, the applicant was to have responsibility for making a decision in Liam's best interests provided notice in writing was given of at least 90 days. If the decision required financial input from the respondent, the decision had to be jointly made. With respect to Liam attending private school until the completion of grade 6, this was solely at the applicant’s cost unless the respondent agreed in writing.
[33] With respect to time-sharing, the respondent was to spend alternate weekends from Friday after school, or Thursday if Friday was a holiday, until Monday morning to be extended to Tuesday morning if Monday was a holiday or PD day with Liam. Liam was also to spend every Wednesday from after school to Thursday morning and alternating Mondays following the weekend when Liam resides with the applicant from after school until Tuesday morning with the respondent. There was to be an equal sharing of time with Liam during the Christmas vacation. Each party was to spend two uninterrupted consecutive weeks of vacation with Liam each summer increasing to three weeks in 2018.
[34] With respect to child support, the respondent was to pay the sum of $762 per month based on an imputed income of $85,000 gross which was to be fixed and non-variable for a period of three years until November 30, 2017. Commencing July 1, 2015 the respondent was to pay 50% of Liam's hockey, dental and uninsured medical expenses. The respondent was also to pay the sum of $50,000 on account of any other child support obligations and section 7 expenses owing to date. Each party was to maintain a policy of life insurance in the amount of $250,000.
[35] In the respondent's Offer dated October 22, 2015, the applicant was to have custody of Liam. The respondent agreed that Ontario would have jurisdiction to deal with all issues involving Liam including custody, access, travel and mobility and Liam's place of habitual residence was to remain in Toronto, Ontario. The respondent also agreed that Canada would have exclusive and continuous jurisdiction over Liam but sought that Liam be registered as a French citizen. With respect to medical decisions, the respondent’s Offer stated that the applicant would make major medical decisions after considering medical advice and after consultation with the respondent 90 days before a decision is made. The applicant was to solicit the input and opinions of the respondent in relation to educational decision-making but would have responsibility for making a decision in Liam's best interests provided notice in writing was given to the respondent of at least 60 days.
[36] With respect to time-sharing, the respondent sought a regular schedule that would allow for 6 out of 14 days for Liam to be with the respondent. He sought every other weekend from Friday after school until Monday morning. If Friday was a holiday or PD day, pickup would be on Thursday and return on Monday morning. If Monday was a holiday or PD day, pickup would be on Friday after school and return Tuesday morning to school. Liam would also spend every Wednesday overnight with the respondent and every other Monday overnight following the applicant's weekend with Liam. If Monday was a holiday or PD day, the access would take place on Tuesday after school to Wednesday morning return to school. All holidays were to be shared equally and during the summer each parent was to have Liam for up to three consecutive weeks being 21 full days including travel. The balance of the summer was to be divided equally on a week on week off basis.
[37] In the respondent’s Offer, the respondent was to pay table child support for Liam based on his income as shown on his tax return. He was agreeable to paying 50% of Liam's hockey and skiing expenses and 50% of Liam's medication, orthotics of one pair per year, and regular dental expenses. He indicated that orthodontic work was offered free of charge by one of his friends who is an orthodontist. Life insurance was to be maintained in the amount of $250,000 by each parent with both parties naming a trustee as irrevocable beneficiary of the policy for the benefit of Liam. The respondent indicated that the sum of $35,000 owed from the respondent to the applicant (presumably with respect to the rescission of the Minutes) was to be used for child support owing in the amount of $12,000, section 7 expenses for 2015 and 2016 in the amount of $8,000. The applicant was to retain a further $5,000 and the respondent was to keep $10,000.
[38] The respondent's final Offer to Settle was dated November 11, 2015. In this Offer the respondent agreed to the French protections but sought a provision that Liam could apply for French citizenship subject to the French protections. The applicant was to have sole custody of Liam with consultation with the respondent. The respondent reverted back to the applicant providing him with 30 days advance notice where practicable with respect to major medical decisions. He agreed that if the parties were unable to come to a decision in relation to an education issue, the applicant would have responsibility for making a decision in Liam's best interests provided notice was given to the respondent of at least 30 days. The respondent agreed to Liam attending private school for as long as the applicant determined it was in Liam's best interest, the cost of which had to be paid by the applicant.
[39] With respect to time-sharing with Liam, Liam would spend alternate weekends from Friday after school to Monday return to school with the respondent. If Monday was a holiday or PD day, Liam would remain with the respondent until Tuesday morning return to school. Liam would also spend every Wednesday from after school until Thursday morning with the respondent and alternating Monday evenings following the weekend that Liam resides with the applicant from after school until 7:00 p.m. With respect to holidays, time with Liam was to be shared equally and the respondent offered that during the Christmas vacation period Liam would be with the applicant the first half of the break in even years and the second half in odd years. Liam would be with respondent the first half of the break in odd years and the second half in even years.
[40] During the summer, the regular schedule would apply subject to each parent's vacation. Liam would spend two uninterrupted consecutive weeks of summer vacation with each parent and one non-consecutive week to be spent in Canada. With respect to child support, the respondent was to pay to the applicant child support based on an imputed income of $50,000 or calculated from the previous 12 months’ worth of expenses, whichever was greater. If the parties were unable to agree on what constituted expenses, the issue was to be summarily arbitrated by an arbitrator as mutually agreed upon. Should the respondent obtain full-time employment, child support was to be based on his actual income.
[41] The respondent further agreed to pay a lump sum of $3,500 to cover child support payments for the period May 1, 2015 to November 30, 2015. With respect to section 7 expenses, the respondent was agreeable to paying 35% of stipulated expenses with the applicant to be solely responsible for the cost of custom orthotics for Liam. He further agreed to pay to the applicant the sum of $20,000 payable in two installments to cover section 7 expenses owing from November 1, 2014 to November 30, 2015. Both parties were also to maintain a life insurance policy in the amount of $250,000 and name the other parent as irrevocable beneficiary in trust for Liam.
Position of the Parties at Trial
[42] At trial the applicant sought sole custody of Liam. She was prepared to consult with the respondent with respect to medical and educational decisions as reflected in her draft order provided. With respect to time-sharing, the applicant sought an order that the respondent share time with Liam on an alternating weekend basis from Friday after school to Sunday evening. She wished for the respondent's time during the week with Liam to remain as it currently was with the respondent sharing time with Liam from after school on Wednesdays and on alternate Mondays. As an alternative, the applicant was prepared to agree to an order that the respondent share time with Liam on alternating Thursdays after school until Sunday evening and if this was ordered, there would no longer be Wednesday visits. The applicant was opposed to the respondent sharing time with Liam on Sunday overnight.
[43] The applicant was prepared to have the respondent share time with Liam on a relatively equal basis for most holidays but was not prepared to have both parties share equal time with Liam during the summer school vacation period. Given Liam's ongoing needs, the applicant also sought that Liam have psychotherapy/counselling with Dr. Barbara Fidler or some other recommended therapist. The applicant also sought that the French protections be put in place which would ultimately allow the respondent to travel to France with Liam.
[44] With respect to ongoing table child support, the applicant sought an order imputing income to the respondent in the amount of $125,000 which resulted in a table amount of support of $1,076. She further sought that income be imputed to the respondent in significantly higher amounts for most of the years from 2008 to 2015. In some of those years, in particular the years 2010 and 2011, she sought to impute incomes of $428,324 and $506,030 gross respectively to the respondent. The applicant sought significant arrears of table support given the imputation of income. She also sought that the respondent pay 50% of the total costs of section 7 expenses, 50% being $86,232.12.
[45] The respondent's position at trial was that the parties make decisions jointly with respect to Liam. He also sought that Liam spend 6 out of every 14 nights with him but ultimately he was flexible as to which 6 nights were chosen. Mr. Tissot wanted to revert back to the extended overnights that he had enjoyed in the past with Liam. He also sought that the parties share all holidays equally. The respondent did not feel the need for any French protections to be put in place given his assertion that he had never threatened to abduct Liam and that, in any event, there were protections available as both Canada and France are signatories to the Hague Convention on child abduction.
[46] With respect to child support and section 7 expenses, the respondent's position was that he had paid a significant amount of child support and had made appropriate contributions to section 7 expenses. He further argued that he also had incurred section 7 expenses that needed to be accounted for in the final calculations. Additionally, he asserted that for a period from 2009 to 2013, the parties were getting along well and he was hoping for reconciliation. His position was that he contributed much financially to the family during this period of time that needed to be taken into consideration. The respondent also testified that he may have in fact overpaid child support. He asked that the court determine his income based on his expenses for the prior years which he asserted showed an income significantly less than that advanced by the applicant. With respect to ongoing child support, the respondent’s position was that the court continue to base his income on his stated expenses, given his unemployment, until such time as he secured employment.
Determination of Success
[47] Taking into consideration the positions taken by the parties at trial, the Offers made by the parties and the order made, I find that overall the applicant was more successful and she is entitled to some costs. The applicant was granted custody and she was successful in that Wednesday and alternate Monday time-sharing with the respondent was not expanded to include overnights during the school year; French protections were ordered; Liam was allowed to continue at private school with both parties contributing towards the expense; counselling was ordered for Liam; child support for Liam was ordered in the amount of $1,076 per month based on an imputed income of $125,000 gross to the respondent; $35,640 was ordered to be paid with respect to outstanding table child support; $37,166 was ordered to be paid with respect to outstanding section 7 expenses and ongoing section 7 expenses were to be shared in proportion to the parties’ incomes.
[48] It is acknowledged that the applicant was not entirely successful at trial as the respondent's time-sharing with Liam on alternate weekends was expanded to include Sundays overnight and time-sharing on Wednesdays and alternate Mondays was extended until 8:00 p.m. Additionally, the parties were ordered to share the summer school vacation period equally with Liam with neither parent spending more than two consecutive weeks of summer vacation with Liam at a time. Other holidays were to be shared equally.
[49] Further, although there were table child support and section 7 arrears ordered to be paid by the respondent to the applicant in the total amount of $72,806.23, this amount was far less than the significant amount of table support and section 7 arrears sought by the applicant at trial. As indicated, the applicant sought to impute significant income to the respondent from 2008 to 2015. An income of $150,000 was imputed to the respondent for the years 2008 to 2015 resulting in substantially less arrears of table support and section 7 expenses owed by the respondent than sought by the applicant. Additionally, the applicant was denied many section 7 expenses claimed as they were deemed not to be proper section 7 expenses. She was also denied equal sharing as requested on some of the section 7 expenses. All were to be shared in proportion to the parties’ incomes.
[50] However, in determining success the Offers must also be taken into consideration. I find that overall the Offers made by the applicant, in particular those dated September 14, 2015, October 30, 2015, November 3, 2015 and December 4, 2015 (which Offer was made during the trial), were reasonable Offers. Most of these Offers provided for additional overnights to the respondent and significantly less child support and arrears of child support. In the latter Offers commencing with the October 30, 2015 Offer, the applicant agreed to pay for Liam’s private school which was a major issue between the parties.
[51] In all of those Offers, custody remained with the applicant as did the provisions with respect to consultation with the respondent on medical and educational decisions. There was also provision for alternate weekends and mid-week overnight time-sharing with the respondent along with alternating Mondays. The request for French protections was consistent, but the Offers with respect to child support were significantly different than those pursued by the applicant at trial. In the Offer dated September 14, 2015, child support was to be paid in the amount of $800 per month based on an imputed income of $85,000 gross, which amount was to be fixed and non-variable for a period of three years. The respondent was to pay 35% of Liam's section 7 expenses and the arrears were set at $15,000.
[52] In the Offer dated October 30, 2015, the amount of table child support was reduced further based on an imputed income to the respondent of $70,000. The child support amount was $639 per month which was to be fixed and non-variable for a period of three years. Once again the respondent was to pay 35% of Liam's section 7 expenses. It is noted that the arrears increased to $70,000 which was close to the order made.
[53] In the subsequent Offer of November 3, 2015, there was a minor variation with respect to the extension of time on Monday evenings and the division of Christmas holidays. Child support remained based on an imputed income of $70,000 gross per year but was to be fixed and non-variable until June of 2019. The respondent was still to pay 35% of Liam’s section 7 expenses; however, the applicant was to be solely responsible for the cost of custom orthotics for Liam. The child support arrears were reduced to $60,000 and life insurance was reduced to $250,000.
[54] The same cannot be said of the respondent’s Offers. While there were issues that the respondent agreed to settle and some on which he was successful at trial, I find that overall his Offers were not entirely reasonable and capable of acceptance by the applicant. In the last Offer made by the respondent before trial dated November 11, 2015, the respondent did agree to custody with consultation with the respondent. He also agreed to French protections but sought that Liam obtain French citizenship. His time-sharing provisions were not the same as ordered at trial with the exception of alternate Sunday nights overnight which was ordered at trial. He did offer equal sharing of holidays and summer which was ordered at trial, however, his proposal for imputation of his income at $50,000 or calculated on his expenses was not reasonable. Further, he offered to pay a total of $23,500 for section 7 and table support arrears which was not a reasonable amount given he should have been and was capable of working since 2010. He was also opposed to paying for Liam’s private school costs which he was ordered to do at trial.
[55] The respondent submits that he could not accept the applicant’s last Offer before trial as he could not afford to pay a lump sum of $60,000 for arrears and also pay for private school. However, the applicant agreed to pay for Liam’s private school costs as set out above in her last two Offers before trial. The respondent also had agreed a year earlier to pay $50,000 in child support arrears when he signed the Minutes. In my view, a settlement could have easily been worked out on many of these issues and many further costs avoided. Unfortunately, the Offers were not made severable by either party which would have undoubtedly led to a much shorter trial.
Application of Rule 18(14)
[56] The applicant seeks significant costs. Upon reviewing the Offers made by the applicant that were not withdrawn and not made mid-trial (i.e. the December 4, 2015 Offer), I do not agree with the applicant’s submission that she has been successful on all major issues and that she is entitled to full recovery of costs pursuant to Rule 18(14) of the FLRs. It is acknowledged that the provisions set out in the applicant's Offers with respect to the issues of child support and imputation of income were more advantageous to the respondent than those ordered at trial. Additionally, the provisions with respect to custody and consultation with the respondent in the order were similar to those set out by the applicant in her Offers.
[57] However, the time-sharing provisions set out in the applicant's Offers were not the same as the order. I acknowledge that the applicant allowed for an additional overnight on Thursday evenings on a weekly basis, however, the order made allowed for alternate Sundays overnight to be spent by the respondent with Liam which was a major point of contention in the trial and also important for Liam to have with his father as set out in the Reasons. Additionally, the order provided for an expansion of time on Wednesdays and alternate Mondays.
[58] The applicant at trial was greatly opposed to the respondent spending overnights with Liam on alternate Sundays. It is noted that in her Offer dated December 4, 2015, which was made mid-trial, time-sharing with Liam by the respondent was increased to include alternate weekends from Friday after school until Monday morning and alternating Monday overnights on the weekend when Liam resides with the applicant. However, as the Offer was not made at least seven days before the trial, that Offer is not a consideration under Rule 18(14).
[59] Further, the order provided that each party share time in the summer with Liam equally with neither party spending more than two consecutive weeks of summer vacation with Liam at a time. This was not the proposal set forward by the applicant in her Offers. Additionally, in the applicant's Offer dated November 3, 2015, the applicant was always to have the first half of the Christmas break which included Christmas Eve and Christmas Day with the respondent always having the second half of the break including New Year's Eve and New Year's Day. In the order, the time was to be split equally and is to alternate on a yearly basis. The same is true for the other holidays.
[60] As such, I find that the full recovery provisions under Rule 18(14) of the FLRs are not applicable as the applicant’s Offers did not fulfill the criteria set out in Rule 18(14)5. I do not find that overall the applicant obtained an order that was as favourable as or more favourable than the Offers on all of the issues.
[61] I must also consider the factors set out in s. 24(11) of the FLRs in setting the amount of costs as follows:
The Importance, Complexity or Difficulty of the Issues
[62] The issues of custody and time sharing were extremely important issues that took up a significant amount of time at trial. However, the financial issues were also extremely important and greatly impact Liam. The respondent’s income was not straightforward given that his income had to be determined and imputed since the respondent had chosen not to work since 2010. Overall the issues were not overly complex but made more difficult by the respondent’s failure to prove his income.
The Reasonableness or Unreasonableness of Each Party's Behaviour in the Case
[63] In my Reasons dated April 4, 2016, I detailed at length the behaviour of both parties that contributed to the conflict and to the difficulties that Liam was and is experiencing. Neither party is without fault. Both parties’ behaviour in relation to the issues from the time they arose was at times concerning. What is most troubling is that this matter was settled in November 2014 during the first trial before Frank J. Even when the issue arose with respect to the rectification motion, the parties should have settled the issues. By not doing so, the conflict was increased between them which undoubtedly led to more stress for Liam. Both parties should be faulted for what occurred after the rescission of the Minutes as problems only escalated. Both had the ability to compromise and to reach a resolution.
[64] The respondent did not take a reasonable position with respect to his income and the payment of appropriate child support and section 7 expenses. He had an obligation to work and chose not to since 2010. As also set out at length in my Reasons, the respondent had the onus of establishing his income and to provide support for Liam. To leave it to the applicant and to the court to determine his income based on his expenses is not a reasonable position.
[65] The applicant at trial also did not take a reasonable position on many of the section 7 expenses. In particular, she claimed child care expenses for the nanny after already claiming these expenses as a business expense. Little evidence was given by her of her attempts to rectify this with the Canada Revenue Agency as claimed.
The Lawyer's Rates
[66] The applicant originally had other legal counsel. I was not provided with a breakdown of the fees for previous counsel, Martha McCarthy and Company. I was provided with a client ledger showing the fees, disbursements and taxes billed to the applicant and the applicant’s retainers provided and fees paid. The total in fees, disbursements and HST paid to the applicant’s previous counsel is $431,273.53. There is no indication of hourly rates of counsel or staff or any explanation of the work completed.
[67] Mr. Niman and Ms. Rajczak had carriage of the file at trial for the applicant. Mr. Niman’s hourly rate is set out as $755, increased to $785 in July 2014 and $820 in July 2015. His year of call is 1976. Ms. Rajczak’s hourly rate is stated as $475 which increased to $490 in July 2015. Her year of call is 1996. Their rates are consistent with senior counsel in Toronto. There are 8 other lawyers listed with hourly rates ranging from $275 to $540. There is also a law student at $200 per hour; an articling student at $250 per hour and two law clerks at $275 per hour (increased to $295 in July 2015) and $170 per hour. It is indicated in the Bill of Costs that most of the fees of the assisting lawyers, law clerks and students have been discounted to zero.
[68] The respondent did not provide a Bill of Costs and is seeking that each party be responsible for his or her own costs. He did provide a Statement for Account from his previous counsel, Ms. Seaton which shows a balance due as of July 15, 2015 of $27,588.05.
The Time Properly Spent on the Case
[69] As indicated, with respect to fees from the applicant’s previous counsel, there is no indication of hourly rates of counsel or staff or any explanation of the work completed. As such it is difficult to determine whether time has been properly spent on the case. However, given the parties were not in litigation from approximately 2009 to the spring of 2013, total fees of $431,273.53 appear excessive especially when previous counsel did not represent the applicant at trial either before me or before Frank J. Proportionality must be considered.
[70] With respect to current counsel, there is a breakdown of the time spent by Mr. Niman and Ms. Rajczak along with other lawyers, students and law clerks provided, however, there is no total of hours spent on the file. Upon reviewing the 19 pages of dockets provided, there is a tremendous amount of time spent on the file and at times duplication in time. I find that the time spent on the file and total fees billed is excessive with respect to the issues before the court and again, proportionality must be considered. I also question whether both senior counsel needed to be present daily for a trial of this nature. The respondent should not be expected to subsidize this expense and the use of two counsel by the applicant.
[71] As set out by Pazaratz J. in Scipione v. Scipione, 2015 ONSC 5982 at para. 113, costs must be reasonable, fair and proportionate:
…even where the “full recovery” provisions of the Rules are triggered – either by an offer which meets Rule 18(14) requirements, or by a finding of bad faith – quantification of costs still requires an overall sense of reasonableness and fairness. Goryn v. Neisner 2015 ONCJ 318, 2015 ONCJ 318 (OCJ). The Rules do not require the court to allow the successful party to demand a blank cheque for their costs. Slongo v Slongo 2015 ONSC 3327, 2015 ONSC 3327 (SCJ). The court retains a residual discretion to make costs awards which are proportional, fair and reasonable in all the circumstances. M.(C.A.) v. M.(D.) (2003) 2003 18880 (ON CA), 67 O.R. (3d) 181 (ONT. C.A.)).
[72] As stated in Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), [2004] O.J. No. 2634 (C.A.) at para. 26 with respect to costs: "the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.”
[73] The amount of legal fees spent by the parties on this litigation is astronomical and completely unreasonable. The applicant has mortgaged her home and has very little equity left as was her evidence at trial and as set out in her sworn Financial Statements. The respondent also spent an exorbitant amount on legal fees borrowing funds from his parents to finance the first trial. The applicant alone has spent close to $1 million on legal fees and disbursements. The respondent borrowed over $393,000 from his parents. The fees spent by the parties are completely disproportionate to the issues before the court.
[74] These issues were not overly complex. I acknowledge that the trial involved many witnesses, a number of whom were experts, but most of these issues could have been resolved and should have been resolved. The parties lost sight of what is reasonable and what is proportionate. The financial devastation suffered by this family will last a lifetime. Most importantly it will once again negatively impact their son Liam. I echo the concerns raised by Pazaratz J. in Jackson v. Mayerele, 2016 ONSC 1556 at paras. 10-12 when he states:
No matter what costs order I make, the financial ruin cannot be undone. They’ll never recover. Their eight year old daughter’s future has been squandered.
How did this happen? How does this keep happening?
What will it take to convince angry parents that nasty and aggressive litigation never turns out well?
[75] As indicated in my Reasons, the parties got along reasonably well and avoided court from 2009 to the spring of 2013. However, from the spring of 2013 onward conflict ensued and they attended court numerous times, obtaining approximately 41 court orders. Not only did this financially devastate the parties and affect Liam detrimentally as set out in my Reasons, but it also resulted in the use of an inordinate amount of judicial resources. My only hope is that the parties have now come to the realization that the destruction both financially and emotionally was not worth it and they will not become embroiled in further litigation in the future. Only time will tell.
Expenses Properly Paid or Payable
[76] I have reviewed the expenses claimed by the applicant. They total $12,657.18 plus HST of $1,645.43. I do not find these expenses to be unreasonable considering the volume of documentation and the costs for the number of experts and professionals testifying at trial.
Any Other Relevant Matter
[77] Rule 24(11)(f) of the FLRs states that a person setting the amount of costs shall consider any other relevant matter. As noted by Justice Rosenberg in C.A.M. v. D.M. (2003), 2003 18880 (ON CA), 176 O.A.C. 201, 67 OR (3d) 181; 231 DLR (4th) 479; 43 RFL (5th) 149 at para. 42, in setting the amount of costs, the financial positions of the parties and the impact on the best interests of a child (or children) may be taken into consideration which I have also considered in reaching my decision.
Conclusion
[78] In summary, there are many factors that contribute to an award of costs to the applicant:
i) the applicant was overall more successful;
ii) the importance of the issues to both parties;
iii) the burden on the respondent to earn an income and pay appropriate child support and section 7 expenses and the burden on the respondent to provide proof of his income and his unreasonable failure to do both significantly increased costs; and
iv) the reasonableness of the applicant in making progressive Offers to Settle and in particular her December 4, 2015 Offer.
Although not in strict compliance of Rule 18(14) as the December 4, 2015 Offer was made during the trial, the applicant’s Offer is still a relevant consideration under Rule 18(16) which states: "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." This Offer provided for custody to the applicant with consultation with the respondent on medical and education decisions. The respondent was to spend Friday after school until Monday morning with Liam and alternating Monday overnights on the weekend when Liam resides with the applicant from after school until Tuesday morning. The provisions remained the same with respect to holidays as in the applicant’s previous Offers, as did imputed income of $70,000 gross and the amount of monthly table child support. The amount of arrears was $60,000 and life insurance was in the amount of $250,000.
A major point of contention throughout the litigation was Liam’s attendance at private school and responsibility for payment of the school’s fees. In her Offer, the applicant agreed to assume the costs of private school as she had in her Offers of October 30, 2015 and November 3, 2015. This was an Offer that if accepted by the respondent would have ended the litigation and avoided three more days of trial. Additionally, there would have been no costs payable by the respondent if the Offer was accepted by December 11, 2015.
[79] There are also factors that reduce the amount of costs payable to the applicant:
i) the full recovery provisions under Rule 18(14) are not applicable;
ii) both parties were unreasonable in their inability to extricate themselves from the consequences of the rectification decision and both acted unreasonably in increasing the conflict in custody and access issues;
iii) the applicant spent far more on costs since the rectification decision than was the cause of the motion for rectification (i.e. the costs of private school);
iv) the time spent and the fees incurred are completely disproportionate to the issues in dispute; and
v) consideration of what a case of this nature might have cost taking into account proportionality and reasonableness.
[80] I conclude that costs in the amount of $125,000 payable by the respondent to the applicant takes into account all of these factors. This is also a reasonable amount that the respondent should have expected to pay if unsuccessful. As at least 40% of these costs are attributable to the determination of the respondent’s income for support purposes since separation, the ongoing amount of child support, and the determination of both table support and section 7 arrears from 2008 to 2015, $50,000 of these costs shall be enforced by the Family Responsibility Office as an incident of support.
Order
[81] This Court orders that the respondent shall pay to the applicant costs in the amount of $125,000, of which $50,000 shall be enforced by the Family Responsibility Office as an incident of support.
Stevenson J.
DATE: July 11, 2016
CITATION: McCabe v. Tissot, 2016 ONSC 4443
COURT FILE NO.: FS-08-340484
DATE: 20160907
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: lisa mcCabe, Applicant
- and -
bertrand samuel tissot, Respondent
BEFORE: Justice S. M. Stevenson
COUNSEL: Harold Niman/Katharine Rajczak. for the Applicant
Mr. Tissot, self-represented
addendum
ENDORSEMENT AS TO COSTS
[82] Further to my Endorsement as to Costs, dated July 11, 2016, the order at paragraph 81 with respect to costs shall be amended as follows:
This Court orders that the respondent shall pay to the applicant costs in the amount of $125,000, of which $50,000 shall be enforced by the Family Responsibility Office as an incident of support. These costs shall be payable by August 10, 2016.
Stevenson J.
DATE: September 7, 2016