Court File and Parties

CITATION: Fry v. Fry, 2016 ONSC 8126

COURT FILE NO.: FS-14-19304

DATE: 20161223

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Marlo Lynn Fry, by her Litigation Guardian the Public Guardian and Trustee, Applicant

AND:

Donald Lawrence Allan Fry, Respondent

BEFORE: Kiteley J.

COUNSEL: Robert Shawyer, for the Public Guardian and Trustee

Alla Koren, for the Respondent

Charlena Claxton, former counsel for Applicant and for Public Guardian and Trustee

HEARD: in writing

ENDORSEMENT AS TO COSTS

Procedural history

[1] On March 20, 2014, Ms. Fry started this Application filed by her then counsel. Mr. Fry’s Answer was filed May 1, 2014.

[2] At the case conference held on June 11, 2014 Charlena Claxton attended on behalf of the Applicant, who was “stuck in traffic” and Alla Koren acted for the Respondent. Stevenson J. noted in her endorsement that the Applicant was in the process of retaining new counsel and that, while Ms. Claxton appeared, she had not yet been retained and she asked for an adjournment to obtain instructions from the Applicant and to be formally retained. The case conference was adjourned to July 9, 2014. Justice Stevenson reserved costs to the next case conference.

[3] On July 9, 2014 Justice Stevenson’s endorsement was as follows:

This matter was before me on June 11, 2014. We were unable to proceed with the Case conference given the Applicant was in the process of retaining counsel. Ms. Claxton appeared today but is not formally retained yet as Legal Aid has not determined whether they will grant a certificate. Ms. Claxton also raises an issue with respect to having the involvement of the Public Guardian and Trustee for the Applicant. This issue has also been raised by the Respondent in his Case Conference Brief and Supplementary Case Conference Brief filed.

There is an ongoing issue with respect to the sale of the matrimonial home. The Respondent wants to sell the home as he has purchased another home for he and the child S. He is currently paying for both homes. Ms. Fry, the Applicant, opposes the sale.

At this stage, the parties need to get a resolution to some of these issues. The Respondent also seeks to sever the divorce which is opposed by the Applicant.

Either party may bring any motions, if necessary, to address the issues.

The Respondent seeks costs of today and of the last Case Conference. The issue of costs is adjourned to the motions Judge who it is anticipated will be hearing a motion regarding the sale of the home and the severance of the divorce.

On consent, the Respondent shall be entitled to serve any documents for this proceeding on Ms. Claxton who will receive the documents on behalf of the Applicant, unless Ms. Claxton notifies counsel for the Respondent otherwise.

Settlement Conference scheduled for October 22, 2014 at 12:00 p.m.

[4] The motion on behalf of the Respondent came before me on August 21, 2014 at which time I made the following endorsement:

Ms. Claxton has been retained. She has taken steps to have a motion heard on Sept. 18/14 to appoint the Public Guardian and Trustee. She has not served Ms. Koren with that motion. Ms. Koren concedes that the motion must be decided before this matter progresses. She asks for 2 orders as a condition of the adjournment: an order enabling her client to renegotiate the mortgage and an order severing divorce. Ms. Claxton has no instructions but advises her client does not want the divorce severed.

When there is an issue as to the capacity of a litigant, the Court has limited jurisdiction to make orders. In this case, the delay caused by the adjournment will cause Mr. Fry considerable financial distress. He is entitled to be relieved of that distress, particularly when it will not negatively impact the wife.

He also wishes to sever the divorce. Given that on any version of the evidence, the parties have been separated many years, and given that I see no prejudice by such an order, I consider the request reasonable.

Order to go as Follows:

1. This motion is adjourned to October 9, 2014 on my list if I am available.

2. Mr. Fry has the authority to renegotiate the terms of payment of the mortgage held by R.B.C. The consent of Ms. Fry to such renegotiation is dispensed with.

3. The divorce is severed from the corollary relief. Mr. Fry may apply for a divorce on notice to the wife.

4. Costs of today reserved to the judge hearing the motion.

[5] On September 18, 2014 Justice Perkins heard the motion to appoint the Public Guardian and Trustee. Anthea Cheung attended on behalf of the Ministry of the Attorney General. Justice Perkins made the following endorsement:

Motion by Applicant Mother, on consent of PGT, for appointment of PGT to represent her in the case, as she is a special party. Order as asked. Order signed.

On oral motion, order that the contents of court file FS-14-19613 be transferred to and incorporated into existing court file FS-14-19304; that file 14-19613 be closed; that the affidavit of Charlena Claxton sworn Aug. 14, 2014 and exhibits in support of this motion be sealed and not be part of the public record and be available only to Applicant Mother and the court staff and judiciary.

[6] On October 9, 2014, I made the following endorsement:

Motion by respondent was originally returnable Aug. 21/14 and adjourned to today in expectation that an order would be made Sept. 18/14 appointing PG &T. That did happen.

Although today’s date was picked on August 21, Ms. Claxton is not in a position to take instructions from the PGT. She asks that the matter be adjourned until after the S/C on October 22/14. If I am to deal with it, that would mean an adjournment to Nov. 4.

I will adjourn once more but the next date will be peremptory to the Applicant.

There were 2 case conferences in June and July. The Applicant failed to file a case conference brief but the Respondent did. Since there have now been 4 attendances at which little has been accomplished, the Respondent need not attend the S/C unless the applicant has become fully prepared as indicated below.

Order to go as follows:

1. Motion adjourned to Nov. 4/14 at 10 before me. Peremptory to applicant.

2. Costs of today reserved to the next date.

3. Counsel for the Applicant shall serve and file by October 17/14 a case conference brief and an offer to settle.

4. If the Applicant does not comply with para 3 the S/C will not proceed.

5. If S/C proceeds, counsel for Respondent may file case conf. brief and fresh materials not required.

[7] On October 22, 2014, Justice Paisley’s endorsement indicates that the settlement conference was held.

[8] On November 4, 2014 I made the following endorsement:

Ms. Koren reports that Ms. Fry is in hospital again and that Ms. Claxton (acting for the PG & T) is ill. This matter has been the subject of a C/C, S/C or motion on June 11/14; July 9/14; Aug. 21/14, Oct. 9/14; and Oct. 22/14. On the last attendance for the motion, this date was made peremptory against the applicant. Even though neither she nor her counsel are here, it is fair to the respondent to deal with his request to sell the home. The home is vacant and is a significant financial burden to the respondent. Any claims the applicant might have can be addressed through the proceeds of sale.

I am not prepared to order $15,000 costs in the absence of counsel for Ms. Fry. That can be dealt with in the context of the likely motion to divide the proceeds of sale.

Order to go:

1. For sale of the matrimonial home as in para 1,2,3 of the draft order.

2. The respondent is entitled to costs of his motion. The amount shall be fixed by me once the net proceeds of sale have been calculated.

[9] On motion brought on behalf of the Respondent in December 2014, the divorce was granted and took effect January 14, 2015.

[10] On June 4, 2015, Justice Jarvis made a referral to the Office of Children’s Lawyer.

[11] There were no steps in the proceeding until Mr. Shawyer (acting for the PGT) asked for a case conference. On August 25, 2016, I made the following endorsement:

This was a conference call with current counsel (Robert Shawyer and Alla Koren) and Charlena Claxton who acted for the applicant at the time I made an order on Nov. 4/14 that costs would be fixed after closing of the sale of the former matrimonial home. The objective of the call was to establish the procedure for fixing the costs.

The closing of the sale was in August 2015 and approximately $415,000 has been held in trust by the real estate lawyer. Ms. Koren and Mr. Shawyer agree that the costs to be fixed are with respect to Aug. 21/14, Oct. 9/14 and Nov. 4/14. They don’t agree whether I am to fix costs also of case conferences held June 11/14 and July 9/14. I will receive submissions from counsel on that issue.

I encouraged Ms. Koren and Mr. Shawyer to explore how they might agree to release funds except an amount that would cover any order as to costs I might make.

Ms. Claxton was involved in the call because of a claim against her with respect to the costs in issue.

Order to go as follows:

1. Costs submissions in writing filed on 10^th^ floor to my attention as follows:

Ms. Koren Sept. 12/16

Mr. Shawyer Sept. 30/16

Ms. Claxton Oct. 28/16

2. Counsel for the parties may arrange a case conference or settlement conference before me or Justice Stevenson if available.

[12] On November 24, 2016 I made the following endorsement:

On Aug. 25/16 I had a telephone conference call with counsel including Ms. Claxton. I made an order for counsel to make written submissions as to costs on this timetable:

Ms. Koren Sept. 12/16

Mr. Shawyer Sept. 30/16

Ms. Claxton Oct. 28/16

Mr. Shawyer’s written submissions were sent to my attention in duplicate, one dated Sept. 20 and the other dated Sept. 23/16. Other than slight pagination differences, they appear to be the same.

I received no other submissions.

Last week I ordered the file for my review. It contained the following:

Ms. Koren’s submissions served Sept. 8/16 on Ms. Claxton and Mr. Shawyer.

Ms. Koren’s reply submissions served Oct. 3/16 on Ms. Claxton and Mr. Shawyer although I had not included reply submissions in the Aug. 25/16 endorsement.

The file does not contain any written submissions from Ms. Claxton although, as expected, Mr. Shawyer is asserting a claim against her personally.

The procedure reflected in the August 25/16 endorsement was intended as an expeditious way to resolve this long outstanding issue. That has not happened and as a result the parties have not been able to finalize the distribution of trust funds.

As the timetable above indicates, Ms. Claxton was given 30 days to file her submissions. If she did so, they were not brought to my attention as I had directed. If she did not do so, her opportunity to make submissions will shortly close.

Order to go as follows:

By Wednesday Nov. 30/16 at 4:00 p.m. Ms. Claxton shall serve her written submissions and file them on the 10^th^ floor of 393 University ensuring that they are immediately brought to my attention.

[13] As I instructed, my Registrar faxed a copy of that endorsement to Mr. Shawyer, Ms. Koren and Ms. Claxton and she followed up with a telephone call to Ms. Claxton’s office to ensure the endorsement had been received.

[14] As the endorsement dated August 25/16 indicated, Ms. Claxton was included in that conference call because Mr. Shawyer had put her on notice of the claim against her personally. Ms. Claxton was originally given almost 30 days after counsel for the parties served their submissions to file hers. As the endorsement dated November 24, 2016 indicates, she was given an unsolicited extension. I am satisfied that she has been given an extensive opportunity to respond to the claim for costs against her personally.

[15] As of this date, Ms. Claxton has not filed written submissions.

Positions taken

[16] On behalf of the Respondent, Ms. Koren has asked for full indemnity costs for the conferences and motion attendances. She has provided a bill of costs that adds up to $16,165.64 including fees, disbursements and HST. Ms. Koren takes the position that the Applicant should be ordered to pay costs of $15,000 plus $1,000 for the written submissions. Mr. Shawyer pointed out a calculation error and in her reply submissions Ms. Koren conceded that the July 30, 2014 docketed time of 0.7 hours was wrongly included at $1,290 and should have been only $245, a difference of about $1,000.

[17] On behalf of the Public Guardian and Trustee, Mr. Shawyer has taken the position that the Respondent is not entitled to costs of the motion dated August 5, 2014 and November 4, 2014 and in the alternative that he should be entitled to only a portion of his costs as a result of Ms. Fry’s financial situation and the Respondent’s unreasonable conduct and that such costs should be borne by her former counsel of record, Ms. Claxton, personally pursuant to rule 57.07(1) of the Rules of Civil Procedure and the Family Law Rules as well as principles established by the Supreme Court and the Ontario Court of Appeal.

Analysis and Conclusions

A. Costs of Case Conferences

[18] Based on the endorsements of Justice Stevenson dated June 11, 2014 and July 9, 2014, the costs of those conferences were reserved to the motions judge. I am satisfied that those costs are outstanding and are before me. I am mindful that it was Ms. Fry who initiated the proceedings and then failed to participate in either conference. Ms. Fry must be held responsible for failing to comply with the Family Law Rules by not preparing for and attending the case conferences which were therefore not productive. I accept Mr. Shawyer’s submissions that she has been and is in financially challenging circumstances. I will reduce the amount that I would otherwise order on that account.

B. Costs of motion for sale of matrimonial home

[19] The costs of the Respondent’s motion originally returnable August 21, and adjourned to October 9 and November 4 are before me. The issues are as follows: whether Mr. Fry is entitled to costs; if so, how much; and should Ms. Fry or Ms. Claxton be liable for such costs.

[20] Mr. Fry brought a motion for sale of the former matrimonial home. There were three attendances: August 21 was adjourned to October 9 because the motion to appoint the PGT was scheduled for September 18, 2014; October 9 was adjourned because Ms. Claxton advised that she was not in a position to take instructions from the PGT; it proceeded November 4 as it had been made peremptory against Ms. Fry and no materials were filed and Ms. Claxton did not attend.

[21] This issue of the sale of the matrimonial home was raised on behalf of Mr. Fry at the case conferences. It appears that the motion for sale returnable August 21, 2014 was served on August 5 and filed on August 13, 2014. As the endorsement dated August 21, 2014 indicated, Mr. Fry was experiencing considerable financial distress and as a result, I made an order giving him authority to renegotiate the mortgage. At the time the order for sale was made on November 4, 2014, the home was vacant. The motion for sale pursuant to the Partition and Sale Act ought not to have been necessary and once brought, ought not to have been opposed. Mr. Fry was successful in that motion and, pursuant to rule 24(1) he is entitled to costs of the motion as I indicated in the endorsement dated November 4, 2014.

[22] In his written submissions Mr. Shawyer raised issues at paragraphs 41 to 51 that Mr. Fry should be deprived of all or some of his costs pursuant to rule 24(5) of the Family Law Rules because he acted unreasonably. I disagree with those submissions. While Ms. Fry may have been under a disability, she nonetheless managed to have an Application issued on her behalf. Mr. Fry delivered an Answer and Financial Statement promptly. It appears that his counsel arranged the first case conference and served notice. His counsel properly filed a brief and he and his counsel acquiesced in an adjournment of the first case conference. His counsel did not serve the motion for sale until August 5, 2014 which was four months after service of the Application. He did not act precipitously in seeking an order for sale, particularly when, as the evidence before me on the motion indicated, he was under considerable financial distress. I do not agree that he was repeatedly attempting to deal with substantive issues before a litigation guardian was appointed. Indeed, based on the timing of the motion to appoint the PGT in September 2014, I infer that that step was a response to his motion for sale. In other words, it was his request for an order that finally precipitated the motion for the appointment of the PGT. Mr. Fry was aware that his wife was experiencing mental health challenges. But I do not agree that it was incumbent on him to bring a motion to seek the appointment of a litigation guardian in the circumstances of this case where his wife appeared to have retained a lawyer and that lawyer was aware of the potential disability. Mr. Fry had served an offer to settle before the application was issued and he served a reasonable offer to settle at the time of the service of the Notice of Motion in August. There is no basis to deny Mr. Fry the costs to which he is presumptively entitled and which I ordered on November 4, 2014.

[23] I turn to the amount of costs.

[24] Ms. Koren had given ample notice at the case conferences that her client needed a resolution on the issue of the house and Justice Stevenson indicated in her July 9, 2014 endorsement that a motion for sale was likely. After two unproductive conferences that Ms. Fry did not attend, it was reasonable for Mr. Fry to bring the motion on appropriate notice. It is also reasonable that he recover costs of the bringing of the motion.

[25] The attendance on August 21 was reasonable and appropriate from Mr. Fry’s perspective but the motion had to be adjourned because of the delay in bringing on the motion for the appointment of the PGT. By August 21 the issue of Ms. Fry’s capacity was before the court which had two consequences. The first was that the motion for sale had to be adjourned. The second is that the court must be cautious before making a costs order against a person whose capacity to participate was questionable. I am not persuaded that Ms. Fry should be ordered to pay costs of the attendance on August 21, 2014.

[26] While Ms. Claxton ought to have acted more promptly after July 9 in bringing on the motion earlier than September 18, 2014, that does not constitute conduct that would attract an order that the lawyer pay the costs either under the Rules of Civil Procedure or the Family Law Rules. I am not prepared to order that Ms. Claxton pay costs of the attendance on August 21, 2014.

[27] In making his submissions, Mr. Shawyer has referred extensively to the communications between Ms. Cheung (in house counsel for the PGT) and Ms. Claxton. After the appointment of the PGT on September 18, 2014, Ms. Cheung had communications as to the PGT retaining Ms. Claxton to continue to act, as to the pending motion brought on behalf of Mr. Fry for sale, and as to Ms. Claxton’s lack of response to Ms. Cheung’s many requests. On February 10, 2015, Ms. Cheung terminated Ms. Claxton’s retainer.

[28] I agree with counsel for the PGT that rule 57.07 of the Rules of Civil Procedure and rule 24(9) of the Family Law Rules are applicable. As described fully in Mr. Shawyer’s written submissions and summarized at paragraph 57, Ms. Claxton caused costs to be incurred by undue delay, by her failure to assess and report to the PGT counsel as to the prospects of success of the motion, and by her lack of responsiveness to her instructing PGT counsel. Having been found to be a special party on September 18 and having been retained by the PGT, Ms. Claxton had a responsibility to ensure that the special party was not exposed to costs of a motion that was unnecessary and inevitably successful. I agree that Ms. Claxton should pay the costs that Ms. Fry would otherwise be required to pay.

[29] Ms. Koren provided a bill of costs that totaled approximately $14,500 after adjusting for the calculation error and HST on that error. Mr. Shawyer challenged the bill of costs for various reasons. At paragraph 51 of his written submissions, Mr. Shawyer took the position that after the adjustments he advocated, the most that Mr. Fry should recover from Ms. Fry was $3,928.70.

[30] I approach it somewhat differently. I do not agree that Ms. Fry should be required to pay full indemnity costs. She failed to comply with the Family Law Rules at the outset and for those conferences I will order a payment.

[31] I have not allowed costs for the attendance on the first return date of the motion for sale on August 21. Mr. Fry should recover costs from Ms. Fry in connection with the preparation of the motion materials which should be modest given Ms. Fry’s financial position.

[32] And Mr. Fry should recover costs from Ms. Claxton for the attendances on October 9 and November 4, 2014.

[33] As required by rule 24(11) of the Family Law Rules, the amount of those costs ought to reflect that this was a straightforward motion for sale that was neither complex nor difficult while the consequences were important. The costs must be proportionate to the issues, the complexity and the means of both parties.

ORDER TO GO AS FOLLOWS:

[34] Ms. Fry shall pay: (a) costs of the conferences held on June 11, 2014 and July 9, 2014 in the amount of $500 each for a total of $1,000 inclusive of tax; (b) costs of the preparation of the motion for sale (together with service and filing fees and disbursements) fixed in the amount of $3,000 inclusive of tax; for a total of $4,000 which shall be paid from her share of the proceeds of sale of the former matrimonial home.

[35] Charlena Claxton shall pay costs of the attendances on October 9, 2014 and November 4, 2014 fixed in the amount of $1,500 inclusive of tax.

[36] Ms. Koren may take out this order without approval from Ms. Claxton.

Kiteley J.

Date: December 23, 2016