Citation and Court Information
CITATION: Haslip v Haslip, 2016 ONSC 7085
OTTAWA COURT FILE NO.: FC-09-1655
DATE: November 15, 2016
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: John Haslip, Applicant
AND
Teresa Haslip, Respondent
BEFORE: The Honourable Mr. Justice Martin James
COUNSEL: Gary Blaney, Counsel for the Applicant
A. Sean Jones, Counsel for the Respondent
HEARD: Written Submissions
COSTS ENDORSEMENT
[1] This is a costs endorsement following a motion for summary judgment and subsequent trial of issues. The motion was for an order enforcing a settlement purportedly made on the eve of trial. As a result of the motion, I ordered that there should be a trial of the issues relating to the circumstances surrounding the purported settlement. The trial of the issues took nearly four days to complete.
[2] The applicant husband says the respondent spouse reneged on the settlement in bad faith in an effort to obtain more favourable terms. The applicant also says that the respondent should not be permitted to advance “a myriad of allegations” then not be held accountable when the issues are resolved against her.
[3] The respondent says there was nothing unreasonable or improper in the way she responded after learning that a binding settlement had been concluded. Also, the respondent submits that the applicant was not substantially successful on the motion and the respondent’s costs on the motion should be set off against the applicant’s costs for the trial.
[4] The trial was determined in favour of the applicant and the settlement was found to be binding and enforceable. The applicant’s bill of costs has two basic components; firstly, the time spent on the initial motion and secondly, the time spent in relation to the trial of issues.
[5] The applicant claims his costs on a full indemnity basis. The monetary values are $28,200.00 for the motion and $74,600.00 for the trial respectively, for a total of $95,345.00 plus disbursements. These amounts are similar to the costs incurred by the respondent except that the respondent was unrepresented for a portion of the time leading up to the hearing of the motion.
[6] The applicant says that the respondent has significant assets including a share in the matrimonial home and a waterfront lot, an RRSP of $80,000.00, an equalization payment of $20,000.00 and a $29,000.00 payment for the transfer of corporate shares to the applicant and is therefore able to absorb a substantial costs order. On the evidentiary record before me, the values for the home and waterfront lot were not clearly established.
[7] The respondent says that a fair costs award would recognize her modest financial resources and the fact that she made an offer to settle but the applicant did not. While the applicant was not required to make an offer, the question is whether the applicant ought to have tried to settle by making an offer to adjust the settlement terms rather than incurring expenses of about $100,000 resisting the application completely. I think the respondent makes a valid point. At the same time, the respondent’s offer came late in the day and didn’t offer much in the way of compromise. Suffice it to say that neither party made an offer to settle that engaged the costs consequences of Rule 49.
[8] In my view, the respondent should be liable to pay costs for both the motion and the trial on a partial indemnity basis. At the end of the day the applicant was substantially successful, thereby triggering an entitlement to some compensation for his legal costs. I am not inclined to award costs to the applicant on a higher scale, either full or substantial indemnity, for several reasons. Firstly, full or substantial indemnity costs awards are not the norm. Unless there are unusual circumstances, costs are typically awarded on a partial indemnity basis. While the respondent’s decision to contest the validity of the settlement agreement turned out to be a serious misjudgment, her conduct did not approach the level that requires an increased costs award in favour of the other side. Secondly, it is not clear to me that the respondent has the financial resources to absorb the financial blow that would result from a costs award to the applicant on a substantial indemnity basis. Thirdly, the terms of settlement, while reasonable, are on the low side of the appropriate range and as such are favourable to the applicant without introducing a punishing costs order into the mix. Fourthly, the determination of the appropriate scale of costs and the actual quantification of costs both involve the exercise of judicial discretion. There are few hard and fast rules. Each case turns on its own particular facts. Here the applicant was successful and is entitled to recover a portion of his costs but not to full indemnity for his legal expenses.
[9] The amount payable by the losing side is not automatically tied to the amount paid by the successful party to his or her own lawyer. The assessment of costs is not simply an arithmetical tally of time spent multiplied by an hourly rate. Proportionality considerations are engaged as well. The quantum of a costs order usually relates in part to the amount at stake or the value of the prize won. Making that assessment on the facts here is more difficult because of the nature of the proceeding.
[10] In addition, the applicant claims a counsel fee of $6,000.00 for four days of trial. He says “the daily counsel fee of $5,000.00 was partially covered by the hours docketed each day, with a $1,500.00 surplus for each day being charged, to come to a total of $5,000.00 per day of counsel fee”. Counsel for the applicant does not provide any authority for the proposition that on a party and party assessment, the actual time spent should be supplemented with an additional amount awarded as a “counsel fee” and I am not prepared to do so on the facts here.
[11] Costs awards on motions for summary judgment can vary greatly but commonly range between $10,000 to $15,000 on a partial indemnity basis in fairly complicated proceedings. In this case Mr. Blaney spent 13.4 hours preparing for questioning and 6 hours on the day of questioning plus 4 hours preparing for questioning in relation to Mr. Sinclair and 3 hours attending and something like 25 hours preparing for the motion. I am not saying this is excessive, but I am saying that it is often unrealistic to expect to be able to collect for all this time on a party and party assessment.
[12] Turning to the trial, again, the applicant advances a large monetary claim for a four day trial. The respondent raised numerous issues in her bill of particulars that had to be addressed, but it could be argued that the various issues were simply different aspects of the same basic question, namely, what transpired in the days leading up to, and on the day the settlement was finalized. I do not doubt that counsel spent the time indicated in the dockets and the amount of preparation a lawyer commits to a case is always a judgment call, but it doesn’t automatically follow that the full amount of these costs are recoverable from the losing party.
[13] The modern approach to the determination of costs is captured in this statement from Zesta Engineering Ltd. v. Cloutier (2002), 2002 CanLII 25577 (ON CA), 21 C.C.E.L. (3d) 161 (Ont.C.A.) where the Court of Appeal wrote:
We have considered the bills of costs submitted by the appellant. However, we make no specific finding with respect to the time spent or the rates charged by counsel. In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.
[14] In the result, the respondent is ordered to pay costs to the applicant for both the motion and the trial in the global amount of $35,000 for fees plus HST of $4,550 and disbursements of $594.00 plus HST of $77.22 for a total of $40,221.22.
[15] This sum shall be payable over a period of 3 years at the rate of $1,117.25 per month commencing January 1, 2017 and on the first day of each month thereafter. The financial disparity between the parties following the breakdown of the marriage warrants an accommodative approach to the terms of payment. The applicant continues to benefit from a substantial income whereas there is potential hardship for the respondent if the costs are payable in full immediately.
[16] If the respondent should default in making any payment when due, and such default is not cured within 15 days then, at the option of the applicant, the entire amount remaining unpaid shall accelerate and become due and payable in full immediately upon demand for payment. So long as the monthly payments are made and the debt has not accelerated and become due in full, no interest shall be payable. In the event of a default in payment that is not corrected within the specified time and the applicant elects to accelerate the payment, interest shall begin to accrue from the date of the demand for payment at the rate of 3% per year.
The Honourable Mr. Justice James
Date: November 15, 2016
CITATION: Haslip v Haslip, 2016 ONSC 7085
OTTAWA COURT FILE NO.: FC-09-1655
DATE: November 15, 2016
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: John Haslip, Applicant
AND
Teresa Haslip, Respondent
BEFORE: Honourable Mr. Justice Martin James
COUNSEL: Gary Blaney, Counsel for the Applicant
A. Sean Jones, Counsel, for the Respondent
COSTS ENDORSEMENT
James, J.
Released: November 15, 2016