Court File and Parties

COURT FILE NO.: FC-15-258 DATE: 2017/07/20 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Alex Wachira Nderitu Applicant – and – Wathira Kamoji Respondent

Richard R. Marks, counsel for the Applicant J. Alison Campbell, counsel for the Respondent

HEARD: In Writing

COST ENDORSEMENT

SHELSTON, J.

[1] After a ten day trial, I released my decision dealing with custody, access, child support, arrears of child support, life insurance and equalization. I encouraged the parties to settle the issue of costs but if they could not, they were to submit a Bill of Costs not to exceed three pages plus any offers to settle.

[2] The applicant submits that he was the successful party and seeks partial indemnity costs of $151,597.70 and full indemnity costs of $199,167.02.

[3] The respondent’s position is that this was a case of divided success and that the total fees incurred by the respondent throughout the course of this process were $101,870.21. She provides a Bill of Costs in the amount of $85,175.31 in fees. She seeks costs in the amount of $40,000 inclusive of HST and disbursements which is partial indemnification as a result of her offer made on September 26, 2016 and a further $11,566.51 for the costs associated with the applicant’s amendment of his pleading that resulted in a case conference in February 2017 and the final day of trial on March 20, 2017.

The Family Law Rules

[4] Under Rule 24 (1) of the Family Law Rules, O. Reg. 114/99 (the “Family Law Rules”), there is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.

[5] Rule 24 (5) states that in deciding whether a party has behaved reasonably or unreasonably, the Court shall examine:

(a) 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] If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately. (Rule 24(8) of the Family Law Rules)

[7] The factors to be considered in assessing costs are set out in Rule 24 (11) of the Family Law Rules, which include:

(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 witness, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of order;

(e) Expenses properly paid or payable; and

(f) Any other relevant matter.

[8] The costs rules are designed to foster three important principles:

(a) To partially indemnify successful litigants for the cost of litigation;

(b) To encourage settlement; and

(c) To discourage and sanction inappropriate behaviour by litigants. (See Serra v. Serra, 2009 ONCA 395)

Analysis

Successful party

[9] To be able to determine who was a successful party and presumptively entitled to costs, I am required to look at the issues before me and the offers submitted in the positions taken at trial.

[10] The issues were as follows:

(a) The applicant claimed joint custody. The respondent claimed to have the final say in the event of a dispute on a major decision regarding the child until her offer dated September 26, 2016 where she made an offer that included an alternate dispute resolution process. In my decision, I ordered that the parties would have joint custody on all of the child’s decisions. The applicant was successful on this issue;

(b) On the parenting schedule, the parties agreed to a two week schedule. The parties were in agreement regarding the first week. The dispute concerned the respondent’s request to have the child one extra night during the second week. I refused the respondent’s request and ordered that the second week be shared equally. The applicant was successful on this issue;

(c) On the issue of table child support, the respondent’s offers to settle on the payment of table child support by the applicant ranged from $300, $600 and $782 per month. The respondent made no formal offer to settle. I ordered no table child support payable except for one year. The applicant was successful on this issue;

(d) On the issue of arrears of table child support, the respondent sought varying amounts of arrears from $7,040-$15,000. The applicant offered to pay $1,864 in June 2016 and proposed to pay $2,986 at the trial. I ordered $4,600 to be paid. The father was more successful on this issue;

(e) On the issue of life insurance, the respondent’s position was that the amount was $225,000 for the applicant and $150,000 for her. The applicant’s position was $225,000 in a draft agreement sent in June 2016 for both parties. I ordered the amount of $180,000 for both parties. The applicant was partially successful on this issue;

(f) On the issues of equalization, the parties were able to resolve the issue again indicative of reasonable conduct; and,

(g) Both parties offered to maintain the child on the extended health benefits and this relief was ordered.

[11] In reviewing the issues outstanding, the positions taken at trial and the trial decision, I find that the applicant was the more successful party and is presumptively entitled to costs.

The importance, complexity or difficulty of the issues

[12] I find that the custody issues were extremely important to both parties. The financial issues including child support and equalization were important. I did not find that the issues were complex but that they were difficult because of the nature of the claims being made regarding the custody of this young child.

The reasonableness or unreasonableness of each party’s behaviour

[13] In determining whether a party acted reasonably or unreasonably, I am to examine a party’s behaviour in relation to the issues from the time they arose, determine if an offer to settle was made, determine the reasonableness of any offer and consider any offer that was withdrawn earlier and was not accepted.

[14] Offers to settle are the yardstick with which to measure success and are significant both in considering liability and quantum as set out in Osmar v. Osmar (2000), 8 R.F.L. (5th) 387 (Ont. S.C.).

[15] The applicant made no formal offers in accordance with the Family Law Rules. His brief of “Offers” contain draft separation agreements attached to correspondence, letters dealing with only one issue such as custody and on one occasion resending one of the respondent’s formal offers to settle with handwritten amendments. None of these letters meet the requirement of a formal offer to settle under the Family Law Rules. None are signed by the applicant. Some of these offers were not received by the counsel for the respondent.

[16] As the trial was approaching, the respondent made four formal offers dated June 10, September 15, September 22 and September 26, 2016. In the first three offers to settle, the respondent proposed joint custody but in the event that the parties were unable to arrive at an agreement regarding a major decision affecting the child, the respondent reserved the right to make the decision. In the fourth offer to settle dated September 26, 2016, the respondent proposed that if the parties were unable come up to an agreement, the parties would go to binding arbitration. The applicant had proposed binding arbitration if the parties reached an impasse on major decisions for the child. In my decision, I found that it was the best interest of the child that both parties have an equal say in such major decisions.

[17] Another problem with the respondent’s various offers to settle was her insistence that her home be designated as the child’s primary residence. I did not grant this relief to the respondent in my trial decision.

[18] It is clear that the parties tried to settle this matter without success. The applicant never made a formal offer. While his efforts to settle do not qualify as formal offers to settle under the Family Law Rules, the father made many attempts to resolve the issue.

[19] I find that both parties acted reasonably in this matter. The parties had a fundamental difference of opinion as to which parent should make the major decisions regarding their child’s life. The parties were very close to an agreement on the residential arrangements which is indicative reasonable behaviour.

The lawyer’s rates and disbursements

[20] I find that Mr. Marks’ hourly rate of $300 to be reasonable as were the hourly rates charged by Ms. Campbell and Ms. Williams.

The time properly spent on the case

[21] My role in assessing costs is not necessarily to reimburse the litigant for every dollar spent on legal fees but the award of costs must be fixed in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings (see Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.))

[22] In determining costs, I must consider what is fair and reasonable for the respondent to pay as I have found that the applicant has been the most successful party.

[23] Counsel for the applicant provided a Bill of Costs where he indicates that from July 7, 2015 up to and including June 12, 2017, he has spent 440 hours of time preparing for and attending at various parts of the litigation process. I note in reviewing the Bill of Costs that there are entries which indicate preparation for an attendance at settlement conference, a motion and a trial management conference. Counsel for the respondent has provided me with a chart of the various court proceedings where costs were awarded or not refered to. It appears that after Mr. Marks was retained, there were two settlement conferences, three motions, three attendances at assignment Court, a trial management\settlement conference and a case conference subsequent to the trial. I do not have any evidence that costs were reserved to the trial judge for any of those appearances. While I did not specifically reserve costs of the case conference in February 2017, I consider that step to be part of the trial process and have considered the time for that step as part of my cost decision.

[24] Rule 24(10) mandates the court to determine costs after each step. Where there is no order as to costs at a certain step, the court is not to consider costs related to that step. Islam v Rahman, 2007 ONCA 622. I am aware that on April 28, 2016 costs were awarded to the applicant of $750 and costs of $500 were awarded to the respondent on October 6, 2016. Unfortunately, the Bill of Costs prepared by counsel for the applicant does not carve out the costs for those steps where there was a cost award or costs are not addressed in the endorsement. When I compare the chart to the Bill of Costs prepared by counsel for the respondent, it is clear that the applicant is seeking costs for proceedings where costs were dealt with or costs were not reserved.

[25] I will consider attendance at assignment court because invariably there is no endorsement made by the judge at assignment court. In my view, attendance at assignment Court is part of the litigation process and there is no requirement for a specific endorsement to be made for costs to be reserved to the trial judge.

[26] Another issue is with respect to the time spent by counsel for the applicant in preparing for and conducting this litigation. Counsel for the respondent indicates that the time claimed being 440 hours is excessive. I agree. The total time spent by counsel for the respondent indicates that she and a junior lawyer spent over 312 hours on this matter with the total amount spent by lawyers and paralegals coming to 344 hours commencing in October 2014 to March 2017. Further, counsel for the respondent was retained in October 2014 while counsel for the applicant became involved in July 2015.

[27] Regarding the respondent’s costs of $11,566.51 for the costs associated with the applicant’s amendment of his pleading that resulted in a case conference in February 2017 and the final day of trial on March 20, 2017, the amendment was required to allow the applicant to claim parallel parenting as alternative relief. I found that the amendment was required because counsel for the respondent, in her closing submissions, withdrew a proposal for alternative dispute resolution in the event the parties were unable to come to an agreement on decisions regarding the child. As I found that the applicant had been taken by surprise, I granted the request of the applicant to amend his pleadings to seek an order for parallel parenting and set a future date to deal with the evidence on parallel parenting. In the end, I rejected that option and ordered a joint custodial arrangement where both parties had an equal say in all major decisions affecting the child’s life.

[28] Regarding the respondent’s claim for $40,000 of costs, the respondent’s offer dated September 26, 2016 stated that she was prepared to agree to binding arbitration with two specific arbitrators as part of an alternative dispute resolution process in the event of a dispute over making a decision regarding the child. Her offer contained a provision that she would have the child 8 nights out of 14 and that her home would be declared as the child’s primary residence. Further, she sought a payment by the applicant of table child support of $300 per month, a payment of arrears of child support of $7,040, a designation of a life insurance policy in the amount of $225,000 as security for child support and an equalization payment of $25,000. However, none of this relief was granted at the trial.

Disposition

[29] I have considered the fact that the applicant has been the successful party and that the successful party is not to be compensated for every dollar spent on legal fees. I have considered the factors set out in the Family Law Rules, the various offers to resolve this dispute, the positions taken by the parties at trial, the trial result and the costs incurred by these litigants.

[30] I find it is fair and reasonable that the respondent pay to the applicant costs fixed in the amount of $50,000 inclusive of HST and disbursements.

Shelston J.

Released: July 20, 2017

COURT FILE NO.: FC-15-258 DATE: 2017/07/20 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Alex Wachira Nderitu Applicant – and – Wathira Kamoji Respondent reasons for judgment Shelston J. Released: July 20, 2017