Court File and Parties
CITATION: Turk v. Turk, 2016 ONSC 816
COURT FILE NO.: FS-14-19285
DATE: 20160202
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jennifer Sandra Turk, Applicant
AND:
Stuart Bernard Turk, Respondent
BEFORE: Kiteley J.
COUNSEL: Harold Niman and Katharine Rajczak, for the Applicant
Heather Hansen, for the Respondent
HEARD: in writing
ENDORSEMENT AS TO COSTS ARISING FROM SUMMARY JUDGMENT MOTION
[1] In reasons for decision released September 30, 2015 [2015 ONSC 5845] I dismissed the motion brought on behalf of the Respondent to dismiss paragraphs 1-3 and 11-13 of the Application and to order bifurcation of the issue of the enforceability and binding nature of the parties’ separation agreement. On October 30, 2015 I received the Applicant submissions as to costs and in mid-November I received the Respondent’s submissions.
[2] The Applicant has asked for fees in the amount of $166,467.50 (plus HST of $21,640.78) and disbursements in the amount of $15,370.36 (plus HST of $1,978.91) for a total of $205,355.55 (inclusive of HST) plus an additional $1,661.11 inclusive of HST for preparation of the submissions. Counsel for the Respondent takes the position that the costs should be $31,000 plus HST, without prejudice to argument by either party on final disposition about any further payment of costs for fees incurred prior to the date of the summary judgment motion.
[3] Pursuant to Family Law rule 24(1) the successful part is entitled to costs of the motion. Pursuant to rule 24(10), the court is required to decide “in a summary manner” after each step in the case, who is entitled to costs and to set the amount of costs.
[4] Pursuant to rule 24(11), in setting the amount of costs, the court is required to consider the following:
(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.
[5] Pursuant to rule 24(5), in deciding whether a party has behaved reasonably or unreasonably, the court shall examine:
(a) the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;
(b) the reasonableness of any offer the party made; and
(c) any offer the party withdrew or failed to accept.
[6] Pursuant to rule 24(12), the court may make an order for all of the expenses of carrying on the case.
Entitlement
[7] As counsel for the Respondent conceded, the Applicant is entitled to recover her costs.
Factors in assessing the amount of costs
[8] The Respondent takes the position that the Applicant’s delay and obstruction of the summary judgment motion was excessive and unreasonable in that she refused to respond to or outright refused countless available dates for the motion; she insisted that voluminous disclosure and multiple days of questioning occurred before the motion; and she ignored timelines and skipped multiple attendances at the questioning she had insisted on. Further that the Applicant’s conduct unnecessarily and directly increased the cost of the motion for both parties and that that fact should be considered “at the core of the Court’s analysis of how much costs should be awarded in favour of the Applicant”.
[9] While not taking the position that the conduct of the Respondent was so unreasonable as to increase the costs that should be awarded, counsel for the Applicant repeated the submission at the hearing of the motion that it was the Respondent who delayed providing disclosure, routinely missed deadlines and unnecessarily increased costs of the Applicant.
[10] I am not satisfied that the conduct of either party should be considered “unreasonable” within the meaning of rule 24. There was a great deal at stake in the motion for summary judgment and the responding party (i.e. the Applicant) was required to provide an evidentiary record to support the position her counsel took. I do not accept that the Applicant’s forcefully requiring the Respondent to provide disclosure falls into the category of unreasonable conduct that would negatively impact the recovery of costs.
[11] The Respondent made an offer to settle dated April 22, 2015 which consisted of two options: an adjournment of the long motion to August to enable the parties to mediate the underlying issues; or a proposal to settle all of the outstanding issues as to child support and spousal support. The Respondent made a second offer dated July 28, 2015 in which he proposed that the Applicant withdraw the claims set out in paragraph 1-3 and 11-13 of her Application, with the following cost consequences:
If the Applicant accepts this Offer to Settle on or before July 31, 2015 at 2:00pm, the Respondent will pay the Applicant $30,000 on account of her costs of this motion. If the Applicant accepts this Offer between July 31, 2015 at 2:01pm and August 13, 2015 at 2:00pm the Respondent will pay $15,000 to the Applicant on account of her costs of this motion. If the Applicant accepts this Offer between August 13, 2015 at 2:01 pm and September 3, 2015 at 10:00am each party will bear their own costs in relation to the Summary Judgment Motion and the Applicant’s withdrawal of the claims specified in paragraph 1.
[12] The Applicant made two offers, one dated June 19, 2014 in which she proposed an expedited trial with costs paid to the date of the offer; and dated October 24, 2014 in relation to the motion for undertakings.
[13] This was an all or nothing motion. It would have been well nigh impossible to settle without capitulation by one party or the other. Pursuant to rule 18(16) the court may take into account any written offer even if subrule (14) does not apply. I find that the offer dated July 28, 2015 constituted an effort to focus on the child and spousal support issues in the Application and was a genuine effort to achieve resolution. However, to the extent that it precluded the Applicant from pursuing her claim that the issue of equalization of net family property should be determined de novo and unaffected by the separation agreement, it was a result less favourable than the decision on the motion. I consider that that offer is a neutral factor in determining costs of the summary judgment motion.
[14] As is apparent from reviewing the earlier endorsement, the issues in this motion were important, complex and difficult. The Applicant was exposed to considerable risk if the motion to dismiss paragraphs 1-3 and 11-13 was granted and exposed to risk although less poignant, if the issues had been bifurcated. The Respondent was exposed to less risk as to the impact of the outcome of the motion. Both counsel were justified in the effort that each made to pursue the position taken by their clients.
[15] Counsel for the Applicant docketed a total of 331.15 hours over the period of 18 months preparing for and arguing the summary judgment motion which included requests for disclosure, questioning and preparation of extensive court materials. The hourly rate for Mr. Niman was $755 although his rate had increased in 2014 to $785 and in 2015 to $820. Ms. Rajczak’s hourly rate was $475 although hers had increased in 2015 to $490. The hourly rates for Ms. McCarthy was $675 in 2014 and $725 in 2015; for Ms. Hansen it was $400 in 2014 and $425 in 2015. Neither counsel raised an issue about the rates.
[16] Counsel for the Respondent made extensive submissions that the work performed by counsel for the Applicant went far beyond the services that were relevant to the motion for summary judgment. At paragraphs 32 to 38 of her submissions, counsel noted the following:
(a) approximately $45,000 of lawyers’ fees were in relation to preparation for, or attendance at questioning;
(b) approximately $5,500 were in relation to work on financial statements, disclosure and communication with their expert;
(c) approximately $2,500 were in relation to the first case conference in the summer of 2014, the costs of which were not reserved;
(d) approximately $6,500 were in relation to the undertakings motion which it was asserted was brought unnecessarily, less than a month after the Respondent’s questioning;
(e) approximately $6,000 were in relation to preparation for, and attendance at the case management conference in June 2015 which conference would not have been necessary if the motion had proceeded in November 2014 as originally anticipated;
(f) approximately $22,000 were in relation to services rendered in a period prior to service of the summary judgment motion;
(g) the bill of costs inappropriately included some costs such as $3000 related to costs of the May 2015 motion;
(h) the bill of costs contains services that are too vaguely labeled to be characterized as related to the motion;
(i) carving out those services to be removed, counsel’s best effort to assess what services were appropriate approximated $62,000 (plus HST);
(j) the $15,000 of disbursements included over $7,000 for printing and copying and almost $4,500 for “report/transcripts” and nearly $600 for taxis.
[17] Counsel for the Respondent proposed that it was fair and proportionate and therefore reasonable that her client pay 50% of $62,000 or $31,000 plus HST given the submissions about the behaviour of the Applicant.
[18] The Respondent’s bill of costs reflects services rendered by lawyers and staff at the firm of Martha McCarthy and Company and totals $87,685 for fees (plus HST of $11,399.05) and disbursements and HST reflected in accounts rendered by Grant and Sadvari in the amount of $15,838 as well as disbursements in the amount of $800, the most significant of which was process server. Mr. Grant’s invoices are attached and include services rendered beginning July 27, 2015 and ending October 20, 2015.
[19] Counsel for the Respondent argues that services rendered for the moving party should be expected to be higher than services rendered on behalf of the responding party. I do not agree with that submission. Generally speaking the responding party is at greater risk in a motion for summary judgment. I do not agree that the bill of costs for the moving party sets a maximum amount of costs.
[20] I am mindful that:
(a) rule 24(10) requires the court to decide costs “in a summary manner” and that does not include a detailed analysis of a bill of costs that, between fees and disbursements, totals over $200,000;
(b) as indicated at paragraph 117 of the earlier endorsement, I noted that the last minute inclusion of the limitations issue in the factum provoked hasty but necessary response by counsel for the Applicant and for which I find the Applicant should be fully indemnified;
(c) in the case of two of the motions, costs were reserved to the motions judge. Since I have dismissed the motion for summary judgment, costs ought to be paid by the Respondent of those two motions;
(d) the court must be conscious of multiple time keepers dealing with the same event;
(e) in analyzing the bill of costs as is reflected in paragraph 16 above, counsel for the Respondent has, not surprisingly, likely erred on the side of exclusion;
(f) in deciding the amount of costs, the benefit of the doubt should go to the party most at risk, which will likely be the responding party to the motion;
(g) in the context of recent amendments to the Family Law Rules with respect to summary judgment motions, the court ought to be cautious about establishing rigid principles as to consequential costs orders too soon;
(h) in a motion for summary judgment that is dismissed and therefore the case will continue, it is difficult, if not impossible, to decide at this stage, the extent to which services rendered ostensibly in relation to the motion will also be relevant to the balance of the proceeding. Furthermore, assuming the matter does not settle and is resolved after a judgment at trial, the trial judge will be met with the challenge of deciding which of the costs contained in the bill of costs were ordered compensable at the stage of the motion for summary judgment and which were not and which might be compensable depending on the outcome of the trial. The burden of proving to the satisfaction of the trial judge which services and disbursements have already been paid and which were not should fall on the party who received compensation following the motion for summary judgment. To facilitate that later process, the motions judge should clarify, in a summary manner, what is compensable;
(i) this motion for summary judgment started before the Family Law Rules were amended and, as motions are pursued after the amendment, counsel will be attuned to providing a bill of costs that distinguishes between those services rendered solely as a result of the motion (such as responding affidavits and factum) and those rendered in the context of the motion but which, should the motion be dismissed, will also be relevant to the continuation of the proceeding.
[21] Rule 24(1) speaks of a successful party being entitled to “the costs of a motion”. There are two references to “full recovery costs” namely in rule 24(8) if the court finds that a party has acted in bad faith and in rule 18(14) in relation to offers. Bad faith is not an issue in this motion and I consider that the offers do not impact the amount of costs. However, the specific references to full recovery costs causes me to infer that rule 24(1) does not anticipate full recovery but partial recovery. That is the appropriate approach in this case.
[22] Bearing all of that in mind, I find that it is fair and reasonable that the Respondent pay costs to the Applicant calculated as follows:
Total fees claimed: $166,467
Minus: in relation to services rendered prior to service of the summary judgment motion: $ 22,000 in relation to the first case conference: $ 2,500
Balance: $141,967
At 75% recovery: $106,475
Plus HST at 13%: $ 13,841
TOTAL FEES AND HST: $120,316
[23] Of the disbursements, I do not allow courier, faxes, filing Application, Law Society levy, or taxis because they relate to the commencement of the proceeding or are not reimbursable. Of the allocation of $7,245 to “photocopies/prints/scans”, I cannot determine what is attributed to the motion so I allocate $2,000. I accept 100% of the allocation of $1,425 to “searches-corporate and real estate” because those were relevant and necessary for the motion. Accordingly the disbursements are as follows:
Photocopies/prints/scans: $2,000
Searches – corporate and real estate: $1,425
Total: $3,425
Plus HST at 13%: $ 445
TOTAL DISBURSEMENTS PLUS HST: $3,870
ORDER TO GO AS FOLLOWS:
[24] The Respondent shall pay to the Applicant costs of the summary judgment motion fixed in the amount of $120,316 inclusive of HST for fees and $3,870 inclusive of HST for disbursements payable as follows:
(a) by March 3, 2016 $50,000
(b) by April 4, 2016 $50,000
(c) by May 3, 2016 $24,186.
Kiteley J.
Date: February 2, 2016