ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FS-14-80414 DATE: 2016 08 05

B E T W E E N:

Gregory John Franklin In Person Applicant

• and -

Sonja Joy ten Berge In Person Respondent

HEARD: In Writing

COSTS ENDORSEMENT

Justice M.G. Emery

[1] I have now received written submissions from each party seeking costs. I invited written submissions on costs in paragraph [109] of the Reasons for Judgment released on June 21, 2016, even though the parties were encouraged to settle any costs either may claim. Neither submission indicates whether that effort was made.

[2] Ms. ten Berge filed her submissions on June 30, 2016. Although Ms. ten Berge represented herself at trial, she claims costs for the fees and disbursements she paid to her lawyer, Cynthia K. Waite, while retained as counsel from the initial consultation up to and including the settlement conference. She seeks costs on a full recovery basis in the amount of $13,926.25 for fees, $769.65 for disbursements and $1,883.57 for a total of $16,579.47. Ms. ten Berge bases her claim for costs on the result obtained at trial in relation to an offer to settle made on October 17, 2014, and various positions Ms. ten Berge took throughout the proceeding.

[3] Mr. Franklin seeks costs on a full recovery basis in the amount of $22,790.12. In a similar fashion, he seeks costs to recover fees and disbursements he paid to Susan Powell, counsel he retained for a time. Those costs are apportioned between $17,864.40 for property issues, and $3,998.92 for custody and access issues paid to Ms. Powell, from the initial consultation to the time when settlement negotiations broke down after the settlement conference.

[4] Mr. Franklin also claims lost wages in the amount of $926.80 for appearing at the settlement conference and throughout the trial process. Mr. Franklin bases his entitlement to costs on the result achieved at trial, submissions that Ms. ten Berge has acted unreasonably and in bad faith, and on his offer to settle dated October 21, 2014 that remained open at trial.

[5] Like many cases, by the time Ms. ten Berge and Mr. Franklin reached trial they had run out of money and therefore they were each self-represented litigants at the trial itself. The two main issues throughout the history of this proceeding have always been the custody of, access to and parenting for Sophie, and the equalization between their net family properties having regard to the assets of, and distribution of debts, between the parties. Those were the issues at trial, except that all but one of the parenting issues that had been resolved by the time the trial commenced.

Governing Principles

[6] Every costs order involves a consideration of entitlement, scale and quantum. Entitlement requires the court to determine the proper party to award costs, leaving the other party to pay them. Scale refers to the level of costs to be paid, in order to reimburse the party awarded costs for legal fees and out-of-pocket expenses on a partial indemnity, substantial indemnity or full recovery basis. The quantum of those costs calls upon the court to set an actual amount for the costs one party is to pay the other.

[7] In a family law case, the court relies upon Family Law Rule 18 where an offer to settle that meets the requirements of the rule has been served, and Family Law Rule 24 with respect to all other aspects of making a costs award. Family Law Rule 24(1) provides a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal. In order to determine which party was the successful party, it is often important to determine if a party achieved a result on an issue that meets or exceeds one or more terms of an offer to settle served in accordance with Family Law Rule 18 even if the offer to settle in its fullness does not meet the requirements of Family Law Rule 18 to benefit from its effect.

[8] I speak of two other relevant matters here that are relevant to making a costs award.

[9] First, Fong v. Chan, 46 O.R. (3d) 330 (Ont C.A.) sets out the three fundamental objectives that the modern costs rules are designed to serve:

1. To partially indemnify successful litigants for the cost of litigation;
2. To encourage settlement; and
3. To discourage and sanction inappropriate behaviour by litigants.

[10] The same three objectives for the modern costs rules have been recognized as applicable to family law proceedings in Serra v. Serra, 2009 ONCA 395.

[11] Second, it is a fundamental principle in the law of costs that the court should only grant what is a fair and reasonable amount for costs. A measure of what is fair and reasonable is generally considered to be what the unsuccessful party could reasonably expect to pay for those costs: Boucher v. Public Accountants Council for the Province of Ontario, [2004] 71 O.R. (3rd) 291.

[12] When setting costs, a judge is exercising his or her discretion given under Section 131 of the Courts of Justice Act to award the costs of, and incidental to, a proceeding or a step in that proceeding.

[13] The discretion the court is given under Section 131 of the Courts of Justice Act is subject to the provisions of a statute or rules of court. As the Family Law Rules are rules of court applicable to family law proceedings, my discretion to award an amount for costs is modified by Family Law Rule 24(11) that mandates that I consider the following factors:

24 (11) A person setting the amount of costs shall consider,

(a) the importance, complexity or difficulty of the issues; (b) the reasonableness or unreasonableness of each party’s behaviour in the case; (c) the lawyer’s rates; (d) the time properly spent on the case, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order; (e) expenses properly paid or payable; and (f) any other relevant matter. O. Reg. 114/99, r. 24 (11).

[14] Costs are not intended to be punitive in nature. Rather, the purpose of a costs award is to compensate the successful party in a case or a step in a case for the expense to which he or she has been put through the litigation process. This is illustrated by the concept of full recovery of costs in Family Law Rule 24, and the other levels of indemnity for costs generally available for the court to grant.

Application to This Case

[15] The parties were able to reach consensus on an order that they have joint custody of Sophie, arrangements about decision-making for Sophie, and access and other parenting issues prior to trial. The only contentious issue with respect to parenting Sophie concerned the proposed term “number 15” in the report of the Office of the Children’s Lawyer. This term recommended that on Tuesday evening every other week when Mr. Franklin dropped Sophie off at the home of Ms. ten Berge, he would watch from his car until Sophie entered the home. Mr. Franklin was not to enter the home of Ms. ten Berge at that time.

[16] Mr. Franklin asked the court for an order that he be permitted to walk Sophie to the door of the home owned by Ms. ten Berge when returning Sophie on those evenings. He asked for an order permitting him to keep Sophie overnight if Ms. ten Berge had been consuming alcohol to excess, or was exhibiting intoxicated behaviour. For the reasons given in the judgment, the recommendation under term “number 15” made by the Office of the Children’s Lawyer preferred by Ms. ten Berge was ordered over the request made by Mr. Franklin. On this issue, Ms. ten Berge was the successful party.

[17] I ordered an equalization payment for Ms. ten Berge to pay Mr. Franklin in the amount of $111,635, with adjustments at trial for a net payment of 58,108 ordered by the court. The offer made by Ms. ten Berge on October 17, 2014 was to pay Mr. Franklin $56,139, and the offer made on April 30, 2015 to pay $30,000 were both withdrawn. Thereafter, the only offer to settle open at trial for Ms. ten Berge was her offer to settle dated January 5, 2016 to pay $20,000, and to remove Mr. Franklin from the mortgage, joint line of credit and Sophie’s trust account. Ms. ten Berge had served offers which, even if open when the trial commenced, proposed payment for amounts less than the result achieved.

[18] In contrast, Mr. Franklin’s offer to settle dated October 21, 2014 offered to accept $58,139 based on an equalization payment of $90,000 before adjustments. This offer to settle remained open at the start of the trial. While the amount Mr. Franklin offered to accept for an equalization payment, in overall terms, was less than the amount found by the court, the net amount payable to him was a mere $31 less than the net amount he had offered to take. Even though the offer fell short on a net basis, by comparing Mr. Franklin’s offer on this issue to the result achieved at trial, he was clearly the successful party on the equalization issue.

[19] I conclude that the parties were each successful on one of the two issues at trial. Since success was divided, I am exercising my discretion under Family Law Rule 24(6) and apportioning costs as follows:

a) On the access issue of whether to implement term “number 15”, Ms. ten Berge is awarded costs on a partial indemnity basis in the amount of $5,500, being one half of 66% of the fees and disbursements she paid to her lawyer; b) On the equalization issue, Mr. Franklin is awarded costs on a partial indemnity basis in the amount of $7,750, being one half of 66% of the fees and disbursements he paid to his lawyer; c) Neither party is awarded costs for their own time in the absence of objective evidence she or he has incurred an opportunity cost for their own time and effort: Fong v. Chan.

[20] Ms. ten Berge is therefore ordered to pay costs to Mr. Franklin in the net amount of $2,250 after set-off. This amount is payable within 30 days, in addition to the equalization payment Ms. ten Berge has been ordered to pay.

Justice M.G. Emery Released: August 5, 2016