COURT FILE NO.: FC-15-170 DATE: 2016/08/23 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Nadia Abu-Zahra, Applicant AND Ashraf Hendy, Respondent
BEFORE: Madam Justice L. Sheard
COUNSEL: Emily Comor, for the Applicant Gonen Snir, for the Respondent
HEARD: By Written Submissions
COSTS ENDORSEMENT
Overview
[1] This costs decision follows my decision on two motions heard on July 14, 2016. The motions were brought by spouses, both dealing with the sale of the matrimonial home. The parties had separated and the Applicant remained in the matrimonial home with the couple’s two young children, aged almost five and three.
[2] This was designated a high conflict case and was case-managed by Justice Warkentin. On December 3, 2015 Justice Warkentin ordered a timetable by which each the parties were entitled to offer to buy out the other’s interest in the home. On March 29, 2016 the Respondent’s offer to buy out the Applicant was accepted. His purchase was to close on May 19, 2016.
[3] On the strength of the Respondent’s purchase, the Applicant made arrangements to buy a new home with her parents. The Respondent failed to complete the purchase on May 19, 2016, leaving the Applicant with the carrying costs of the matrimonial home and an obligation to contribute to the costs of the new home.
[4] With assurances from the Respondent, communicated in part through his lawyer, the Applicant extended the closing date a number of times. One extension was to June 2, 2016, on which date there was a hearing before Justice Warkentin via conference call. As a result of that hearing, the Respondent was allowed until June 17, 2016 to complete the closing. He did not meet that deadline.
[5] On July 14, 2016 the Applicant brought a motion for an order authorizing her to list and sell the matrimonial home without the participation or consent of the Respondent. The Respondent brought a cross-motion seeking, in part, an order striking the Applicant’s notice of motion and postponing the listing of the home until the settlement conference scheduled for August 30, 2016 or the trial scheduled for September 2016.
[6] By written decision released on July 15, 2016, I dismissed the Respondent’s cross-motion but allowed him until July 28, 2016 to buy out the Applicant’s interest in the Home, failing which the Applicant was free to list the home for sale. The Respondent was to complete his purchase on the same terms and conditions as set out in the agreement of March 29, 2016. In the meantime, the Applicant was free to begin the repairs to the home as recommended by her real estate agent. In that way, she was not prejudiced by the order allowing the Respondent until July 28, 2016: the Applicant could immediately begin to prepare the house to be listed and sold, should the Respondent again fail to complete the purchase.
[7] My Order sets out what the Applicant is entitled to receive from the net proceeds of the sale, which included any additional costs or expenses she incurred by reason of the Respondent’s failures to complete the purchase of the home as per the March 29, 2016 agreement. The amounts to be paid to the Applicant were to have been determined either by agreement or by the Court and to either be paid from the net sale proceeds of the Home, held in trust, or taken into consideration when determining an equalization payment between the parties.
[8] Finally, my Order awarded the Applicant her costs of the motion in an amount agreed upon between the parties or, failing agreement to be determined by the Court. In that event, the parties were to provide me with written submissions, not to exceed three pages plus a Bill of Costs, within 14 days of the date of this order.
Positions of the Parties
[9] Written costs submissions were received from the Applicant’s lawyer on July 21, 2016 and from the Respondent’s lawyer on July 28, 2016. On August 2, 2016 the Applicant’s lawyer delivered reply submissions.
[10] The Applicant seeks indemnification of her costs on the motion and for the costs she incurred leading up to the motion. She references Rule 24(1) of the Family Law Rules, O. Reg. 114/99 (the “Family Law Rules”) which provide that a successful party is presumptively entitled to the costs of a motion. She seeks her costs on a full indemnity basis which include 21.4 hours at $310 an hour together with a counsel fee of $1,500 for the motion, which amounts total $9,191.42, including disbursements and taxes. The Applicant does not provide a breakdown of her disbursements but states that the foregoing amount includes: photocopies, faxes, document tabs process server for court filings, etc.
[11] In his submissions the Respondent asks that each party should bear his or her costs of the motion especially due to “the unreasonable behaviour of the Applicant in trying to prevent the Respondent from being able to purchase the matrimonial home before and after the motion, and since de facto the Applicant was only partially successful in her motion while the court de facto provided the Respondent with the relief he requested in his motion which made him finalize the purchasing of the matrimonial home.” (emphasis added)
[12] The Respondent’s submissions purport to provide evidence of events that occurred after the motion. For example, the submissions state that the Applicant tried to prevent the Respondent from buying a home by “bringing more demands for additional money at the last minute.” The Court cannot consider submissions as if they were evidence.
[13] The Respondent’s submissions disclose that the Respondent did complete the purchase of the home on July 28, 2016, which is confirmed in the Applicant’s Reply submissions. As there is no dispute over that fact, I am prepared to accept it notwithstanding the absence of any sworn evidence on the issue. There is no agreement about the circumstances surrounding of the closing. Moreover, the parties’ costs submissions contain differing accounts as to what happened after the motion and prior to the closing. Again, I have no evidence, but only submissions. In any event, what may or may not have happened after the motion, does not appear to be a proper consideration with respect to my determination of the costs of the motion.
[14] In support of the Respondent’s submissions that the party should bear their own costs at page 2 of the submissions he states: “Therefore, the Respondent is actually the one who was successful in the motion, in that the house was listed immediately and he had the opportunity to buy the home.”
[15] It appears to me that the Respondent is confusing his ability to obtain mortgage financing and to complete the purchase of the home by July 28, 2016, as permitted by my Order, with success on his motion. Further, in his submissions under the heading “Reasonableness and bad faith” the Respondent criticizes the Applicant for her alleged behaviour prior to the motion and after the motion, including her request for reimbursement of money spent in readying the house for sale; a term of my Order.
[16] Under his heading “Importance” the Respondent asserts that the Applicant could have waited for the settlement conference scheduled for August 30, 2016 but chose to put herself in what “she called great stress” and was in contempt of a court order by moving to Rockcliffe, when meant enrolling the children in school in a new school district.
[17] In her reply submissions, the Applicant points out (which evidence was also before me on the motion) that the Respondent refuse the Applicant’s offer to buy out his interest in the home, which meant that either the Respondent bought out the Applicant or that the house would be sold to a third-party. In either case, the Applicant would have to find another place to live.
[18] In the Respondent’s submissions under the heading “Others” the Respondent asserts that the court in its endorsement “has actually added costs on the Respondent that were supposed to be shared between the parties, the preparation of the house for sale. In doing so the court already fined the Respondent – para 30(4) to the endorsement and justified it by the Respondent’s conduct.”
[19] Paragraph 30(4) of my decision does require the Respondent to reimburse the Applicant for money she had spent readying the house for sale, in the event the Respondent completed the purchase. What the Respondent’s submissions appear to overlook is that the Respondent, as the buyer of the house, received the benefit of those improvements. Absent paragraph 30(4), the Applicant would have had no way to recover the monies she had spent to ready the house for sale and, as the sale price had been agreed to by the parties in March 2016, the Respondent would have purchased the house, with the improvements, without having had to pay for them.
Factors
[20] The factors to be considered when fixing costs are set out in Rule 24 of the Family Law Rules and include that the successful party is presumed to be entitled to costs, the reasonableness of the behaviour of each party and any offer to settle, any acts of bad faith by any party, the importance, complexity or difficulty of the matter, the scale of costs, hourly rates and time spent, and the reasonable expectations of the losing party.
Success
[21] Notwithstanding the Respondent’s submissions, paragraph 30(10) of my endorsement makes it clear that the Applicant (Wife) is entitled to her costs of the motion. The only issue is the amount.
Complexity and Importance of the Issues
[22] The parties agree that the issues were not overly complex or difficult. The Applicant asserts that the issues were important to her and to the children. The Respondent’s submissions on the importance of this motion are referenced above.
[23] I accept that the issues raised in the motion were important. The Applicant was suffering financial harm, as referenced in my endorsement, and she and the children were living in a house that was partially stripped of its furnishings, in anticipation of the move to a new home. The importance of this issue appears also to have been recognized by Justice Warkentin who authorized the Applicant to bring an urgent motion in her order of June 2, 2016.
Unreasonable Behaviour or Bad Faith
[24] The Applicant argues that the Respondent has acted unreasonably. Among other things she asserts that the Respondent: failed to take sufficient steps to complete the purchase of the home, which he had agreed to purchase on March 29, 2016; failed to cooperate and sign a low-rate mortgage renewal on the home, which resulted in a higher rate being paid for the mortgage; and brought a cross motion, contrary to the order of Justice Warkentin. That last assertion is accurate and was referenced at paragraph 21 of my Endorsement. Further, the Respondent’s motion itself sought relief based on Applicant’s non-payment of costs in the face of an agreement between counsel that those costs would not have to be paid by the Applicant until the sale of the home. That issue is addressed at paragraph 22 of my Endorsement.
[25] In his submissions, the Respondent asserts that it is the Applicant that acted in bad faith and was trying to prevent the Respondent from buying the house both before and after the motion. The paragraphs under that heading refer to evidence that was before me on the motion, and that was taken into consideration in my decision, and to information set out in the submissions. I have already concluded that I cannot treat the submissions as evidence.
[26] Overall, I find that it is the Respondent who is acted unreasonably and in bad faith.
Scale of Costs and Offers to Settle
[27] The Applicant seeks full indemnity costs. She attaches an Offer to Settle dated June 2, 2016 by which, among other things, she offers to extend the closing by the Respondent of the home to June 17, 2016. The Respondent asserts that he did not receive this Offer to Settle. The Applicant does not include an affidavit of service of the Offer to Settle but does include an email addressed to counsel for the Respondent dated June 9, 2016 in which she makes reference to “our Offer to Settle a motion.”
[28] The terms of the Applicant’s Offer to Settle are not better than the terms that were reached at the motion and, accordingly, I do not rely on the Offer to Settle in reaching my decision with respect to costs.
Hourly rates, Time Spent and Proportionality
[29] The hourly rate charged by the Applicant’s lawyer is $310. She was called to the bar in 1994. That hourly rate appears to be appropriate and the Respondent appears to takes no issue with the hourly rate charged.
[30] The Respondent does object to the amount claimed. The objection is that the Applicant has failed to provide a detailed invoice or record of time spent and includes a claim for 4.2 hours spent in “communication with client” and 3.4 hours spent on “communication with opposing lawyer”. The balance of the time appears to be directly related to the motion.
[31] The Respondent objects also to a counsel fee of $1,500. He asserts that the motion lasted 45 minutes with little waiting time and that, based on the claimed hourly rate, the time charged for attendance at the motion should have been $232.50 ($310 x 75%).
[32] This cost decision is intended to deal only with the motions before me. In the absence of a detailed breakdown of time spent, I cannot discern whether the time spent on communication with client or communication with opposing lawyer related to this motion or to other events that predated this motion. I did not note any endorsement of Justice Warkentin on June 2 that spoke to costs. However, nothing in this endorsement is intended to prejudice the right of either party to seek costs for matters unrelated to the motion before me.
Amount the unsuccessful party would reasonably expect to pay
[33] In his submissions, the Respondent has provided a computer printout of the fees recorded from July 3, 2016 to July 14, 2016. He has recorded a total of 15.42 billable hours. Charged at the rate of $225 for a total of $3,532.50 pre-HST. No time is shown for preparation of the cost submissions. I do note that counsel for the Respondent charged his client one hour for the motion.
[34] Excluding the time spent in communication with client and opposing lawyer, the time spent by the Applicant’s lawyer’s 13.8 hours prior to attendance at the motion. If I were to allow an additional one hour for the motion in one hour for the preparation of the cost submissions, the total time would be 15.8 hours, very comparable to that spent by the Respondent’s counsel. I conclude that the time spent is within the contemplation of the Respondent and that the hourly rate is also reasonably anticipated given the year of call of counsel for the Applicant.
[35] I conclude that when he brought a motion that he knew had not been authorized by Justice Warkentin, the case management judge, and when he included assertions in his affidavit that were inaccurate (reference to the nonpayment of costs when an agreement existed for payment of the costs) that the Applicant would reasonably expect to pay costs in the range of $5,000.00
Disposition
[36] Having considered the above, I order the Respondent to pay to the Applicant the costs of the Respondent’s motion, that was dismissed, and of the Applicant’s motion on which she was successful, fixed in the amount of $4,898.00 plus HST, inclusive of disbursements.
Justice L. Sheard
Date: August 23, 2016