Court File and Parties

Newmarket Court File No.: FC-14-46826-00 Date: 2017-07-04 Superior Court of Justice – Ontario – Family Court

Re: Leandro Alvaro, Applicant And: Eleanor Anthea Nano Alvaro, Respondent

Before: The Honourable Mr. Justice Kaufman

Counsel: James Jagtoo, Counsel for the Applicant Rono A. Baijnath, Counsel for the Respondent

Heard: In Chambers

Costs Endorsement

[1] This court heard an urgent Motion on December 8, 2015 filed at Volume 1, Tab 9 of the Continuing Record. In paragraph 13 of my Endorsement I reserved the issue of costs to the next event and provided for Bills of Costs and Offers to Settle to be made available.

[2] The next event proceeded on February 12, 2016 when a consent Order was filed. The costs of the preceding event continued to be reserved pending delivery of the respondent’s Bill of Costs.

[3] The Settlement Conference was scheduled for August 16, 2016. It was deemed to be premature as the court could not determine if disclosure was complete, almost complete or insufficient. The costs submissions of the original event remained outstanding. Costs of the scheduled Settlement Conference were reserved to the judicial officer best able to determine if disclosure, to that date, was deficient or not.

[4] On December 19, 2016 my Judicial Assistant received a letter from the respondent’s counsel enclosing his Bill of Costs. Subsequently I received the applicant’s costs submissions, which were served upon the respondent’s counsel on December 22, 2016. I then requested the respondent’s costs submissions. They were promptly delivered to the court. Through administrative inadvertence the file was delivered to Justice Jarvis who was also awaiting costs submissions on a parallel matter involving the parties. This is my Ruling on the submissions received which is released together with the court’s apologies for the ensuing delay.

[5] The applicant submits that the respondent is not entitled to costs. His reasons are as follows:

a. The fact that the respondent filed her submissions ten months after the court Order suggests that the respondent abandoned any claim for such costs;

b. In the alternative the respondent filed her submissions late and without even a cursory explanation and it is therefore within the discretion of the court to deny costs;

c. In the further alternative, the respondent has filed two Bills of Costs. The applicant submits various deficiencies in the submissions including the following:

i. The person alleged to have worked on the files is not identified;

ii. There is reference to 2.2 hours relating to an attendance before Justice Gilmore on a date where such attendance did not occur. Aside from that error, the attendance before Justice Gilmore that did occur is not relevant to the current submissions as that court did not reserve costs of that event;

iii. The materials filed before this court in relation to the December 8, 2015 attendance were brief. It is noted that the Motion consisted of one-half page and yet time allegedly expended is claimed at 2.3 hours. The time claimed for a rather brief supporting Affidavit is 3.2 hours. Added claims for case and file research total 1.8 hours although no Factum or Book of Authorities was presented. Counsel for the respondent filed two disparate Bills of Costs and this “research” item was not included in the second submission;

iv. Claims are made for work performed after the Motion date which are not relevant for consideration at this time;

v. Although the respondent’s submissions claims for work expended on the supporting Affidavit referenced in this event, a total of nine hours is claimed from March 26 to November 25, 2015 without evidence as to how the earlier work is relevant to the Motion at bar;

vi. There is a further claim of four hours in total docketed on February 26, 2016 which is not relevant to the Motion at bar;

vii. The Motion preparation of 2.3 hours should be reduced to half an hour given the lack of complexity and sheer brevity of the documents relied upon without a reference to any of the Rules; and

viii. If 10 hours is allotted for the Motion including preparation and attendance, this yields $3,250 relying upon an hourly rate of $325. On a partial indemnity rate of 60%, which is $1,950 at best.

[6] The applicant submits, relying upon Rule 24(4) of the Family Law Rules that even if a party is successful the court can deprive the successful party of costs and, in addition, can order the successful party to pay part or all of the unsuccessful party’s costs if the court finds unreasonable conduct.

[7] In reliance of this argument, the applicant submits that, notwithstanding the applicant’s non-attendance on December 8, 2015, this fact does not relieve the respondent from her obligation to being truthful, candid and forthright with the court. In fact, in the absence of the applicant, the respondent had a higher duty to make full and fair disclosure of all material facts and that failure to do so is in itself grounds for setting aside any Order obtained on that Motion. In further reliance of this argument, the applicant refers to a Motion argued before Justice Jarvis on November 14, 2016, cross-examination of the respondent on Affidavit material and a Factum filed with Justice Jarvis with reference to the appearance before him.

[8] In summary, the applicant relies upon the late delivery of the respondent’s costs submissions, misleading the court by failing to make full disclosure and exaggerating the hours unrelated to the Motion constitute, cumulatively, grounds on which this court could properly refuse to grant her any costs. Alternatively, the applicant claims that any costs to which the respondent might be entitled be discounted by $1,400 plus HST representing the applicant’s legal fees in reviewing, sorting out and responding to the respondent’s submissions which were presented in a haphazard and confusing manner.

[9] The respondent’s submissions focus on the subject matter placed before this court on December 8, 2015 which requested a division of the sale proceeds of the matrimonial home, holding the applicant’s share in trust, spousal and child support. In this regard, the respondent claims that she was the successful party on a Motion in which the applicant refused to participate and which, prior to, he failed to communicate in achieving an agreement that would either eliminate or reduce the issues in dispute. His lack of cooperation resulted in his own counsel obtaining an Order removing himself as counsel of record on the very same day the substantive Motion was argued.

[10] The respondent’s claim of success is predicated upon the court awarding half of the net proceeds of sale to the respondent while retaining the applicant’s share in trust and ordering the applicant to pay child support of $2,130 per month for two children and mid-range spousal support of $3,467 per month all premised on the applicant’s income of $160,000 per annum. The respondent maintains that the court Order exceeded the amounts she had originally requested. Accordingly she requests costs on a substantial recovery basis.

[11] The respondent did not serve a formal Offer to Settle. She has produced correspondence reflecting pre-Motion attempts to resolve the Motion at bar in support of her costs submissions to Justice Jarvis but none to this court. They cannot be considered.

[12] She claims to be entitled to full recovery of costs as there is no indication of improper behaviour on her behalf. In this regard she relies upon Biant v Sagoo, 2001 CarswellOnt 3315 at paragraph 20. (SCO).

[13] The respondent also argues that her Motion was necessary and the issues of significant importance and urgency given the pending sale of the matrimonial home. She maintains that the issues became more complicated due to the applicant being non-responsive to her requests for resolution. She maintains that the issue of the preservation Order was complex and required greater legal analysis and research. She maintains that the applicant was unreasonable due to his inaction, refusal to respond to queries and failure to attend court on the return date of the Motion all of which increased her legal fees. She notes that the applicant was aware of her requests for support for herself and the children as these issues were canvassed at the Case Conference before Justice Gilmore on March 9, 2015 and that costs of that Conference were reserved. She also states that her counsel communicated with opposing counsel from June 2015 until November 2015 to seek a resolution of the support issues to no avail.

[14] The respondent also alleges both unreasonable behaviour and bad faith on the part of the applicant in agreeing and then refusing to pay support prior to the Motion as he was very much aware of her dire financial situation, being an unemployed stay-at-home mother. Further, for two and a half months, following the signing of the Agreement of Purchase and Sale for the matrimonial home, the applicant refused to negotiate a partial or full distribution of the proceeds of sale with full knowledge that the respondent and children would have nowhere to live upon the completion of the agreement. In furtherance of this argument, the respondent notes that the applicant’s counsel removed himself as counsel of record on the return date of the Motion relying upon a failure to communicate as grounds. In this regard the court notes that former (and current) counsel made an oral argument to be removed as counsel in the presence of the respondent’s counsel.

[15] In summary the respondent submits that additional time was required due to the urgency created by the inactivity of the applicant, settlement efforts were both unresponsive and wasted and that a Factum and Book of Authorities was prepared. Again the court notes that the Factum was prepared for the argument before Justice Jarvis and not this court. The Bill of Costs, filed, requests full recovery of costs, inclusive of HST in the amount of $9,962.08

Analysis

[16] The ONCA in Serra v. Serra, 2009 ONCA 395, [2009] O.J. 1905 confirmed that modern costs rules are designed to foster three fundamental purposes, namely to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants bearing in mind that the awards should reflect what the court views is a fair and reasonable amount that should be paid by the unsuccessful party.

[17] Subrule 24(1) of the Rules creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs. Sims-Howarth v. Bilcliffe, [2000] O.J. No. 330 (SCJ- Family Court). To determine whether a party has been successful, the court should take into account how the Order compares to any settlement offers that were made. Lawson v. Lawson, [2008] O.J. No. 1978 (SCJ). In Scipione v Del Sordo, 2015 CarswellOnt14971 (paras. 1-7), Justice Pasaratz dealt with the issue of success, in commenting that “the starting point shouldn’t be so muddy; who got what they asked for? That question should not be so complicated”.

[18] Rule 18(14) is the governing Rule with respect to an Offer to Settle and its impact on costs. It is inapplicable in this case as neither party delivered an Offer. The court has a discretion to take into account any written Offer to Settle, the date it was made and its terms, even if subrule 18(14) does not apply, when exercising its discretion over costs. (Subrule 18(16)). Further, in deciding whether a party has acted reasonably or unreasonably in a case, the court shall examine the reasonableness of any Offer the party made. (Clause 24(5)(b) of the Rules). By contrast, a party’s failure to serve an Offer to Settle may be viewed as an adverse factor in determining the issue of costs. There is some indication that the respondent’s counsel had explored the potential of resolving the issue of support through correspondence with the applicant’s counsel and that a subsequent agreement had been rescinded by the applicant. However those negotiations occurred at a time that the respondent and children were still living in the matrimonial home and the applicant was attending to the costs of the home. The court has not been provided with additional proof of negotiations either prior to or after service of the Motion at bar pertaining to the issues before this court.

[19] The failure to make an Offer to Settle much earlier by either party is unreasonable behaviour. Subrule 2(4) imposes a duty on parties and their lawyers to promote the primary objective of the Rules to deal with cases justly (Rule 2(2)). This includes taking appropriate steps to save time and expense (Rule 2(3)). Offers to Settle play an important role in saving time and expense by promoting settlements, focusing parties and often narrowing issues in dispute. See: Laing v Mahmoud, 2011 ONSC 6737. The failure to serve an Offer to Settle will be an adverse factor when assessing costs. M. (J.V.) v. P. (F.D.), 2011 CarswellOnt 13510 (Ont. C.J.).

[20] Based on the relief requested in the subject Motion and the relief granted by this court it is clear that the respondent was the successful party and therefore entitled to costs. There were four main issues before the court. The applicant, aware of the Motion, chose not to instruct counsel. The court notes that at the first Case Conference the applicant wished to withdraw his application and pursue reconciliation. Although the respondent, at that time, did not rule out that possibility, nevertheless she stated that she did not wish to withdraw her claims. Perhaps that explains the applicant’s apparent failure to instruct counsel but he did so at his own peril.

[21] In assessing those costs the court is required to take into consideration the factors enumerated in Rule 24(11). None of the issues were difficult but with the pending sale of the matrimonial home they were certainly of importance as the respondent was without funds and about to lose the roof over her head. Contrary to that alleged by the respondent in her submissions, the Motion would still have proceeded even if the applicant had not either rescinded or resiled from the Agreement to pay support since the amount in question would have been insufficient once the home was sold. In terms of the applicant’s alleged refusal to discuss a division of proceeds there is nothing before the court that it can rely upon to consider that submission. As noted, neither party submitted an Offer to Settle the issues placed before the court for determination and that reflects poorly on both parties in allowing the court to assess their behaviour. The hourly rate of the respondent’s counsel, being $325 per hour with a call to the Bar in 2007 is not, in itself, unreasonable. There are, however, some concerns in the respondent’s Bill of Costs. The time to be considered by the court flows from the preparation of the Motion materials to the conclusion of the Motion including preparation and entry of the Order. The costs reserved by Justice Gilmore were not specifically reserved to the Motion; they remain available for consideration by the court subsequently determining the outstanding issues, likely at trial. This court also finds that all time docketed prior to October 2015 is inapplicable for consideration at this time but similarly remains subject to future determination of costs. Better particularity in the dockets would have been of benefit to this court in assessing costs.

[22] With respect to the respondent’s arguments, this court reserved the costs argument from December 8, 2015 to the next event. At the next event, costs were further reserved pending delivery of the respondent’s Bill of Costs. Perhaps the court should have imposed a timeframe for delivery but it did not. If the respondent is correct that this court has discretion to deny costs, then this court chooses not to exercise such discretion. Further, it is improper for the respondent to direct the court’s attention to arguments presented to Justice Jarvis at a subsequent Motion including references to the applicant’s Factum which is based on information discovered after the December 8, 2015 Motion. Although this court’s Order had support commence as of December 1, 2015 the Order provided for an adjustment in the event it was proven that the applicant had attended to certain payments prior to the Order. This court does not accept that the respondent misled the court as to the fact the applicant had been carrying the costs of the home. The focus of the respondent’s arguments pertained to her financial concerns upon the home being sold.

[23] I am also unable to accept the applicant’s assertion that the respondent has exhibited bad faith behaviour or acted unreasonably to such an extent as to deny her a costs award. There is a difference between bad faith and unreasonable behaviour. The essence of bad faith is when a person suggests their actions are aimed for one purpose when they are aimed for another purpose. It is done knowingly and intentionally. S. (C.) v. S. (M.), 38 RFL (6th) 315 (Ont. SC).

[24] The court notes the applicant’s submission that, at best, the respondent might be entitled to costs of $3,250 subject to a further discount for partial recovery. The court would be remiss in ignoring the fact that following his removal as counsel of record, Mr. Jagtoo requested payment of $5,000 to be applied towards his fees incurred prior to the Motion date on behalf of the applicant, payable from the funds remaining in trust. The court also recalls that the respondent’s counsel did not object to this request.

[25] One of the considerations in an assessment of costs is to fix costs in an amount that is “fair and reasonable” for the unsuccessful party to pay in a particular proceeding: Farjad-Tehrani v. Karimpour, 2009 CarswellOnt 2186 (S.C.J.) at para. 32, aff’d 2010 ONCA 326, 2010 O.N.C.A. 326 at para. 4. Costs need to be proportional to the issues and amounts in question and the outcome of the case. Amounts actually incurred by the successful litigant may therefore not be determinative. Hackett v. Leung, [2005] O.J. no. 4888 (Ont. S.C.J.).

“The overriding principle of reasonableness must govern, rather than any exact calculation of what cost should be allowed. A line by line assessment of the fees is not required” (1175777 v. Magna International (2007) 61 RPR (4th) 68, aff’d (2008) 66 RPR (4th) 186 (Ont.C.A.).

[26] I am prepared to recognize the expenditure of 16.1 hours by the respondent’s counsel, disallowing, at this stage of the proceeding, dockets that occurred prior to October 1, 2015 and dockets following the drafting of the Order. I must also disallow the claim for the law clerk absent any evidence in support of such claim. Other than that I accept, implicitly, that all claimed time was rendered by Mr. Baijnath. In consideration of all of the above, this court awards the respondent costs of $5,232.50. This court was prepared to discount this amount for failure to present an Offer to Settle but chooses not to in the absence of any responding material being filed by the applicant. The respondent shall also be entitled to HST payable on this amount together with disbursements of $143.50 plus HST thereon for a total award of $6,074.88 to be paid to the respondent from the funds remaining in trust from the sale proceeds of the former matrimonial home.

Justice R. P. Kaufman Released: July 4, 2017