CITATION: Louca v. Louca, 2016 ONSC 4960
COURT FILE NO.: 34696/02
DATE: 2016-08-08
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mandy Louca
Applicant
– and –
Stelios Ioannou Louca
Respondent
Tania Harper, Counsel for the Applicant
Maciej (Matt) K. Milczarczyk, Counsel for the Respondent
SUPPLEMENTARY ENDORSEMENT RE: COSTS
THE HONOURABLE MR. JUSTICE D.J. GORDON
[1] In my reasons for decision, released June 17, 2016, I invited written submissions from counsel on the issue of costs.
Issues at Trial
[2] The sole issue at trial requiring determination was child support, retrospective and prospective, guideline and extraordinary expenses. To do so, findings as to income were required, particularly for Mr. Louca, having regard for his rental business.
[3] Those matters were relatively straightforward but were made complex by the passage of time and an incomplete evidentiary record.
Trial Was Not Necessary
[4] This case should have been resolved years ago. In their opening remarks, counsel identified the nature of the parties’ dispute. In the circumstances, I invited them to engage in further discussions given the obvious financial concern of a then estimated three day trial.
[5] The parties were unsuccessful. The trial proceeded but required four days. A cost benefit analysis now reveals the trial was of no benefit given the positions of the parties, offers to settle and the expense of trial. My decision had to have been within the range of possibilities counsel would have considered in their resolution discussions.
Trial Result
[6] In my reasons for decision, findings were made as to the income to be imputed to Mr. Louca from 2002 to 2016. I addressed childcare expenses from 2002 to 2012 and other extraordinary expenses from 2002 to 2015. Potential post-secondary expense was considered but not decided, such being premature. A final order was then granted in the following terms:
(a) Mr. Louca to pay prospective guideline child support of $339 monthly;
(b) Mr. Louca to pay 37 per cent of future extraordinary expenses;
(c) Mr. Louca to pay retrospective guideline child support and extraordinary expenses in the amount of $20,000.
[7] Ms. Harper requests that a specified date be provided for payment of the retrospective award so that it can be enforced by the Family Responsibility Office. Accordingly, I direct the $20,000 to be paid by Mr. Louca by September 30, 2016. The aforementioned order shall be amended in this regard.
Delay
[8] This case started in 2002. Temporary orders were granted early in the proceeding, many on consent. In 2005, the issues of custody, access and child support were directed to be placed on the trial list. That did not happen. Property claims were resolved in 2005. While negotiations continued from time to time, the court file was dormant until 2012.
[9] The parties were able to address matters involving the parenting of their son. They were content to follow the temporary order as to child support. Indeed, for some unknown reason, Ms. Louca thought this was a final order.
[10] In 2012, Mr. Louca presented a motion to change, a procedural irregularity. He had been dismissed from his employment in 2011 and was having health problems. Surgery and other treatment followed a diagnosis for cancer.
[11] This motion resulted in a further temporary order regarding child support. The usual conferences were scheduled. The case proceeded to trial in 2016.
[12] Fourteen years is an unacceptable time period for any case. Both parties are responsible for the delay. They were represented by a number of lawyers during most of this period. But little was accomplished.
[13] The passage of time impacted on the quality of evidence at trial and made the decision-making process difficult. Quantifying retrospective child support, in particular, was unnecessarily complex as documents were missing and memories fade.
[14] Delay impacted the result on the substantive issues and must now be considered on the cost claim. Neither party should benefit from the delay. It is virtually impossible to address costs pertaining to prior events.
Non-Disclosure
[15] As stated above, documents were missing by the time of trial. However, documents should have been available or compiled in some manner with respect to the rental business of Mr. Louca. He may be an unsophisticated businessman who does not keep complete financial records. But he had a lawyer and an accountant.
[16] The onus was on Mr. Louca to establish his income at trial. There can be no excuse for his failure to provide full and frank disclosure. His neglect made the determination of his income more difficult than necessary.
Offers to Settle
[17] Numerous offers to settle were served by the parties, commencing in 2005. They were close to a resolution in 2007. But no effort was made to complete the negotiations. The files went dormant.
[18] Nothing happened until 2012. Mr. Louca then served a motion to change. After a temporary order was granted, offers were exchanged at the case conference in 2013 and the settlement conference in 2015. Formal offers to settle were served in 2015 and 2016.
[19] Neither party met their offer. No doubt, complicating resolution discussions was the increasing litigation expense. Costs even became part of the offers.
Cost Claim
[20] Success at trial was divided, having regard to the positions of the parties. In a formal sense, Ms. Louca was successful in obtaining a final order quantifying child support.
[21] On behalf of Mr. Louca, Ms. Harper seeks a cost award as follows:
(a) $58,050, inclusive of disbursements and HST, on a substantial indemnity basis;
(b) alternatively, $40,635, on a partial indemnity basis; or
(c) alternatively, $28,933.74, on a substantial indemnity basis.
[22] The claim in (a) and (b) is said to reflect counsel’s time and expense since 2012, plus the 2005 motion and 2007 trial preparation. The claim in (c) represents time and expense since August 2015.
[23] Mr. Milczarczyk, counsel for Mr. Louca, does not challenge the time recorded, hourly rate or disbursements. However, he says there should be no cost award given the delay, the offers to settle and what he describes as the unreasonable position taken by Ms. Louca.
Analysis
[24] A successful party is presumptively entitled to a cost award, subject to the provisions of Rule 24 and the reasonableness of the claim for costs: see Berta v. Berta, 2015 ONCA 918.
[25] In my view, substantial indemnity costs are not appropriate. The offers to settle were not met, success was divided and neither party acted reasonably, as defined by Rule 24. Delay is an outrageous component in this case, inexcusable and worthy of sanction. A straightforward case was made difficult as neither party saw fit to address the dispute until there was a change in circumstances.
[26] But even then, the issues should have been resolved. While I am confident Ms. Harper and Mr. Milczarczyk made significant attempts to negotiate a resolution, this was clearly a case to request a secondary settlement conference or to proceed with mediation. It was not a case for trial.
[27] Neither party acted in bad faith, but the positions taken were not reasonable. I am not persuaded a sincere cost benefit analysis was undertaken. Proportionality must be considered.
[28] Ms. Louca cannot escape delay in considering costs. Likewise for Mr. Louca and, as well, his failure to make full and frank disclosure.
[29] In all of the circumstances, a fair and reasonable cost award is $12,000, inclusive of disbursements and HST, on a partial indemnity basis. Such amount is awarded to Ms. Louca, payable by Mr. Louca by September 30, 2016 and, as it relates to child support, enforceable by the Family Responsibility Office.
D.J. Gordon J.
Released: August 8, 2016
CITATION: Louca v. Louca, 2016 ONSC 4960
COURT FILE NO.: 34696/02
DATE: 2016-08-08
BETWEEN:
Mandy Louca
Applicant
– and –
Stelios Ioannou Louca
Respondent
SUPPLEMENTARY ENDORSEMENT re: COSTS
D.J. Gordon J.
Released: August 8, 2016
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