CITATION: J. Y. v.L.F.-T., 2017 ONSC 6039
NEWMARKET COURT FILE NO.: FC-14-45047-00
DATE: 20171011
ONTARIO
SUPERIOR COURT OF JUSTICE
FAMILY COURT
BETWEEN:
J. Y.
Applicant
– and –
L. F.-T.
Respondent
C. Marchetti, for the Applicant
R. T. Pecus, for the Respondent
HEARD: February 21, 27, 28, 2017; March 1, 2, 3, 2017 and May 15, 16, 17, 18, 19, 20, 23, 29, 2017
COSTS ENDORSMENT
MCGEE J.
[1] The father seeks a full recovery of his trial costs: $163,244 inclusive of disbursements and HST. For the reasons that follow he is awarded $118,000 in costs, inclusive of disbursements and HST, payable in 60 days.
Analysis:
Offers to Settle
[2] As the successful party, the father is presumptively entitled to his costs, but not necessarily a full recovery. A full recovery requires additional circumstances – such as a Rule 18(14)[^1] Offer to Settle.
[3] In the month preceding the February 21, 2017 start of trial, the father served three Offers and the mother served two Offers. No prior Offers have been submitted. The father served a fourth offer while the trial was on hiatus from March 3rd to May 15th.
- The father’s Offer of January 30, 2017 had severable terms for custody and access that were more favourable to the mother than the result at trial. The terms for child support were not. The January 30, 2017 Offer was not signed by counsel because the father had no counsel of record as of January 30, 2017.
I find that the custody and access sections of the January 30, 2017 Offer attract a full recovery of costs per Rule 18(14).
The mother’s Offer of February 13, 2017 had no severable terms and no terms as favourable to the father as the result at trial. In fact, the terms as a whole were dramatically unfavourable but for the forgiveness of any arrears of table child support and proportionate sharing of section 7 expenses accrued prior to March 1, 2017. The mother sought sole custody (joint was ordered) supervised access (normalized access was ordered) and support based on imputation of $150,000 annual income commencing March 1, 2017 ($70,000 was ordered).
The father’s Offer of February 14, 2017 maintained the January 30, 2017 terms for custody and access, and proposed an alternative settlement of table child support based on imputation of income to the father of $60,000[^2] per annum. There was no provision for arrears of either table support or section 7 expenses. The Offer was signed by counsel, and served seven days prior to trial.
The mother’s Offer of February 15, 2017 mirrored her February 13, 2017 Offer but for the issue of a name change, which counsels reported as settled on the first day of trial. Because that term was not severable, it cannot stand alone as a costs consideration.
The father’s Offer of February 20, 2017 again maintained the January 30, 2017 terms for custody and access, and proposed a further increase in table child support based on imputation of $80,000 in annual income to the father. Although there was no provision for arrears of either table support or section 7 expenses, over time the increased table support might well have narrowed the gap between a settlement result and the trial result. The Offer was signed by counsel, but was served less than seven days before trial. The timing of service disqualifies it as a Rule 18(14) Offer.
The father’s mid-trial Offer of March 31, 2017 incorporated all the January 30, 2017 custody and access terms, and table support based on $80,000 per annum; then closed the gap by offering a retrospective increase in table child support from 2011 calculated as a lump sum of $8,724. And the parenting terms remained severable from the support terms. Acceptance of this Offer would have placed the mother in a more favourable position than the result at trial.
[4] There is a fixed window of opportunity to seek a full recovery of costs under Rule 18(14). The mother is quite correct that the technical requirements of subrule (4) within Rule 18 must be met to attract the costs consequences of its subrule (14). But Rule 18(14) is not the only rule in which Offers to Settle loom large.
Application of Rule 24(5)
[5] In deciding whether a party has behaved reasonably or unreasonably, Rule 24(5) requires the court to examine a party’s overall behaviour in relation to the issues from the time they arose, including whether the party made an Offer to Settle, whether it was reasonable, and whether there was any offer a party withdrew or failed to accept.
[6] It bears emphasizing that a court’s view of reasonable litigation conduct is gauged over the totality of a proceeding. Mid-trial efforts to find compromise and resolution - whether in whole or in part - give effect to the objectives of Rule 2, draw the same analysis as set out in the often cited Serra v. Serra [^3]and are statutorily relevant to an award of costs through the operation of Rule 24(5).
[7] Appertain to this analysis are the father’s third and fourth Offers to Settle. In each, the father’s proposal for ongoing table child support was more favourable than the orders sought by the mother. His final Offer proposed a retroactive payment approaching that made at trial,[^4] and throughout, the financial provisions remained severable from the parenting orders based on the structure of the first Offer.
[8] The fourth Offer is particularly compelling. The father’s evidence on income had concluded well prior to the March 31, 2017 Offer. By then, it ought to have been evident that the mother’s claim of $150,000 in imputed income was unachievable. To fail to accept the fourth Offer, in whole or in part, or to at least make a counteroffer was in my view, unreasonable litigation conduct.
Divided Success
[9] Rule 24(6) permits the court to apportion costs as it sees appropriate in cases of divided success.
[10] The mother insists within her August 30, 2017 costs submissions that she was the successful party on the financial issues, resulting in divided success per Rule 25(6). As such, she asks that there be no order for costs, or alternatively, that she be awarded her costs of $84,717, being one half of a full recovery amount ($164,816) ‘as she was successful on the child support and related issues plus $220.63 which was the fee for the YRCAS file.’
[11] Divided success requires a comparative analysis. Almost all family cases have multiple issues. Not all issues are equally important, time-consuming or expensive to determine. A useful set of tests can be found in Jackson v. Mayerle [^5] which drew forward the comprehensive survey of divided success within Scipione v. Del Sordo[^6].
a) How many issues were there?
b) How did the issues compare in terms of importance, complexity and time expended?
c) Was either party predominantly successful on more of the issues?
d) Was either party more responsible for unnecessary legal costs?
[12] "Divided success" does not necessarily mean "equal success". And "some success" may not be enough to impact on costs.[^7]
[13] Such are the circumstances of this proceeding. The trial was almost wholly devoted to the mother’s allegations of sexual or unspecified child abuse. All of the father’s six witnesses: including two police officers, the SCAN nurse and the paediatrician; and the mother’s 11 witnesses, two of whom were added to her list while the trial was on hiatus spoke to those allegations. Only the parties themselves gave evidence on support.
[14] The trial time spent on financial issues was not over 15% of the trial, and likely less. The mother’s success was modest. The final Order imputed income to the father $10,000 per annum in excess of his second Offer to Settle, $10,000 less than his next two Offers, and $80,000 less than the mother’s Offers. She obtained an award of arrears, inclusive of the father’s share of section 7 expenses in excess of three of his four Offers, with the fourth Offer being close.
[15] I do not find that this is a case of divided success that would result in no award of costs to the father.[^8] Neither do I find that the mother’s modest success on minor issues significantly impacts on the costs sought by the father.
Costs to be Determined at Each Step of the Proceeding
[16] I accept the mother’s submissions that the account of the father’s previous solicitor in the amount of $37,550 be disallowed. Without a fulsome Bill of Costs, I cannot discern the steps in the proceeding to which they relate, or whether any steps are outside my jurisdiction as the trial judge to assess, per Rule 24(10).
Quantum of Costs
[17] Once liability for costs has been established, the court must determine the appropriate quantum. It is well settled that assessing costs is not a mechanical exercise[^9] and that costs should ultimately reflect a fair and reasonable amount for the unsuccessful party to pay to the successful party.
[18] Costs need to be proportionate to the issues and amounts in question, and the outcome of the case. Amounts actually incurred by a successful litigant are not necessarilydeterminative. A successful party cannot just demand a blank cheque for their costs.[^10] The court retains a residual discretion to make costs awards which are proportional, fair and reasonable in all the circumstances.[^11]
[19] At the same time, the principle of proportionality ought not necessarily reduce costs when the unsuccessful party has forced a long and expensive trial.[^12] As observed by Justice Gray, “[i]t is cold comfort to the successful party, who has been forced to expend many thousands of dollars and many days and hours fighting a claim that is ultimately defeated, only to be told that it should obtain a reduced amount of costs based on some notional concept of proportionality.”[^13]
[20] This was an exceedingly difficult and painful trial. There is no greater injustice than a false claim of sexual abuse of a child.
[21] As set out in my July 19, 2017 reasons, as the matter progressed, the mother and her allies’ allegations escalated. Attempts at resolution were often followed by new allegations. The father made some errors in judgment, but overall, any poor conduct was contextual rather than directed towards an improper motive.
[22] By the start of trial the father had little option but to borrow funds to retain specialized counsel. His risked losing any prospect of a normalized relationship with his daughter.
[23] Such a view is reinforced by a post-trial review of the Offers to Settle. A concession of sole custody to the mother was not enough. The mother set exact terms for sole custody with no obligation to consult, supervised access for times to be determined by an agency, and imputation of his income at $150,000 per annum. None of the terms were severable. In her closing submissions the mother continued to press for these orders, even if the court found no evidence of sexual abuse.
[24] None of the terms were realized.
[25] The mother’s campaign to remove the father from her daughter’s life over this course of litigation has been multifaceted, not unsophisticated and entirely unwarranted. It must be discouraged. Family law litigants are responsible and accountable for the positions they take during litigation.[^14]
[26] Father’s counsel submits a number of other actions by the mother that complicated the conduct of the trial and incurred additional costs. I list those which are not already referenced in this endorsement or my reasons, being unknown, or unclear to me during the trial.
(a) The mother declined an invitation from the father at the start of trial to re-involve the OCL and attempt a further settlement meeting. In my view, this compounds the mother’s breach of the Order of October 12, 2016 requesting the assistance of the OCL. The lack of updated OCL assistance meant that the court was without G.’s views and preferences, and more importantly, an independent witness who could incorporate the evidence of collateral witnesses, saving time and expense.
I do not accept the submissions of the mother that the OCL would not have provided assistance in any case – even if she had completed Intake Forms - as the prior report was less than a year old. The prior report contemplated follow-up once the father spoke to the CAS.
(b) There was a query between counsels as to whether the mother gave the father an incomplete set of CAS notes, the full record only being delivered after the father had closed his case, thus prejudicing his case. The mother submits that the father had equal access to the entire file, but because he refused to pay the copying fee to the CAS, it never came into his possession, and it is not her responsibility to build his case.
It is not before me to decide this matter, but I will observe that much time and expense was spent by both sides on the CAS records.
(c) Father’s counsel takes issue with opposing counsel making short notice changes to her witness list and calling a witness out of order. She also submits that mother’s counsel was late in producing will-say statements and contact information for witnesses.
I do not give effect to this complaint, as trial counsel was not counsel at the Trial Scheduling Conference, and certain scheduling accommodations are endemic to the vagaries of trial, particularly one that had to be adjourned after the first day, had a number of professionals testifying and went on hiatus between sittings. Both counsels were exemplary in their efforts to make the trial as efficient as possible.
(d) Father’s counsel does raise the issue of the mother raising mid-trial the question of calling her other two children as witnesses. This issue was not previously conferenced. A mid-trial motion was contemplated and the father’s counsel prepared for that motion, (as did the Court) prior to the mother withdrawing her request. Father’s counsel seeks costs thrown away in this regard. Mother’s counsel disputes any additional costs, finding none in the Bill of Costs.
(e) Finally, father’s counsel asserts that the witnesses added mid-trial to address new allegations of abuse were announced as expert witnesses, but then tendered as fact witnesses, resulting in costs thrown away. To this I give some small measure of consideration, as the additional witnesses were heralded as having great importance to the mother’s case, only to be found to be additional allies lacking any objective basis for their evidence.
[27] Rule 24(11) sets out a list of factor to be considered when assessing the quantum of costs:
FACTORS IN COSTS
24 (11) A person setting the amount of costs shall consider,
(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.
[28] The mother focuses her submissions on the factors around two themes: the reasonableness of having taken a vigorous approach to her case, given her belief that the father posed a risk of harm to their daughter, and the unfairness of the father engaging a litigation team.
[29] I will address the first with an observation that a strong subjective view does not give licence to litigate. Trials are determined on evidence. Evidence must be carefully considered at all stages of the process, as does one’s position in the litigation. The independent evidence in this case did not support the mother’s beliefs. The mother’s evidence was neither consistent nor reliable.
[30] With respect to the second theme, I agree with the mother’s submission that fees for a second counsel are usually not recoverable. [^15] I also agree that certain items within the father’s Bill of Costs ought not be given full effect: research fees for a polygraph test that was not tendered at trial, dockets for administrative work that should have been done at a lower hourly rate.
[31] At the same time, the father’s reply submissions highlight an interesting irony: his overall trial cost is almost $40,000 less than that of the mother’s stated full recovery fee[^16] – despite her counsel’s lower hourly rate. His counsel explains that the availability of law clerks and associates operated to push much work down to lower hourly rates.
[32] One of the measures of what is fair and reasonable for an unsuccessful party to pay in costs is often discerned by looking at what the other party has paid for her own legal fees.[^17]
[33] A court must consider whether the overall hours spent can be reasonably justified[^18]; and I find that they can. I have reviewed the mother’s Bill of Costs for duplication and unnecessary fees. A second counsel was billed for only 2.5 days – which father’s counsel stresses was of great assistance. Counsel also acknowledges an error in the Bill resulting in a further reduction of $1,446. I have no concerns that the father’s Bill of Costs does not otherwise reflect time spent on necessary work. I agree that the father is entitled to a measure of costs for the preparation of his cost reply submissions.
[34] Ultimately, I return to my observation that this was an exceedingly difficult and painful trial. The father marshalled almost all of the independent professional evidence within the trial. His counsel had to cross examine 11 of the mother’s witnesses, most of whom felt varying degrees of loyalty to the mother, making their cross-examination challenging. The mother made no efforts to adjust her settlement position, or the orders sought to reflect the realities of the evidence as it unfolded. Rather, she escalated her claims – resulting in more than the usual preparatory work by counsel over the course of the trial.
[35] I calculate the father’s costs as a full recovery of costs from January 20, 2017 on the issues of custody and access per Rule 18(14), and a partial recovery on certain of the financial issues, particularly a determination of the father’s income per Rule 24(5). I then consider the resulting amount in light of the Rule 24(11) factors, within an overall view of what would be just and reasonable for an unsuccessful litigant to pay in these circumstances.
Mother’s Ability to Pay the Costs Award
[36] I give no effect to the mother’s submission that she lacks the ability to pay an award of costs. I also decline to make an order allowing the mother to pay the costs through a set off against child support. The father is entitled to recover the whole of his costs in 60 days, the 30 day extension recognizing the possibility that the mother may need time to refinance.
[37] First, I am not persuaded that the mother is a person of modest means. She owns a home with significant equity. I found her income for support purposes to be in excess of that declared for tax purposes. She receives child support from the father of her older two children sufficient to their needs, and child support from this father for her third child.
[38] The mother has not conducted her case as would a person of modest means. For example, in the fall of 2016 she circumvented the re-appointment of the OCL, and on the eve of trial, rejected a proposal that the trial be adjourned pending a renewed request for their assistance which would have been followed by settlement discussions. She gave the father no realistic settlement option to avoid the cost of a trial.
[39] Perhaps it was overconfidence, but as the trial progressed and the evidence crystallized, and the trial went into a lengthy hiatus, the mother took no steps to bring the proceeding to a close, even on a partial basis, as might a person of modest means. Instead, she doubled down with additional allegations.
[40] Even were the mother a person of modest means, it is counter intuitive to suggest that the objectives of a costs award: to indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants[^19] are less applicable to such litigants. To the contrary, those who can least afford litigation should be the most motivated to pursue resolution.[^20]
[41] Second, I have found that the mother engaged in unreasonable litigation conduct. An award of costs is one of the very few protections that people have from those who would use the court system inappropriately. In M. (A.C.) v. M. (D.), 2003 18880 (ON CA), [2003] 67 O.R. (3d) 181 (C.A.) Justice Marc Rosenberg confirmed that the court should consider a parent’s ability to pay, but that the inability to costs should not be used as a shield against any liability, especially when the parent has acted unreasonably.
Justice H. McGee
Date: October 11, 2017
[^1]: Family Law Rules
[^2]: This was the trial finding of income for 2014 and 2015; with 2016 and 2017 income set at $70,000 per annum.
[^3]: 2009 ONCA 395
[^4]: I thank counsel for recalculating the amount of child support arrears, and amend paragraph 191 of my July 19, 2017 Reasons for Decision accordingly. The correct amount of table arrears is therefore $9,136 rather than $14,731 – which compares to the $8,724 offered within the father’s March 31, 2017 Offer (exclusive of section 7 expenses).
[^5]: 2016 ONSC 1556
[^6]: 2015 CarswellOnt 14971
[^7]: Justice Pazaratz in Scipione supra
[^8]: As proposed by the mother, citing Murphy v. Murphy 2014 ONSC 2624
[^9]: Delellis v. Delellis, 2005 36447 (ON SC), [2005] O.J. No 4345
[^10]: Slongo v. Slongo, 2015 ONSC 3327 (Ont. S.C.J.)
[^11]: M. (C.A.) v. M. (D.), (2003) 2003 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.)
[^12]: Murphy v Murphy 2010 ONSC 6204, 2010 CarswellOnt 8616, Philippe v Bertrand 2015 CarswellOnt 7509
[^13]: Cimmaster v. Piccione, 2010 846 (ONSC) Gray J.
[^14]: Hackett v. Leung, (2005) 2005 42254 (ON SC), 22 R.F.L. (6th) 314 (Ont. S.C.J.); Katarzynski v. Katarzynski, 2012 ONCJ 393 (Ont. C.J.); Toscano v. Toscano, 2015 ONSC 5499 (Ont. S.C.J.)
[^15]: Sepiashvili v. Sepiashhviili, 2001 25708 (ON SC), 2001 CarswellOnt 3459 (SCJ)
[^16]: $37,550 of the father’s account was incurred by a prior counsel, so the amount incurred by father’s trial counsel: $125,694 can be compared to the mother’s stated full recovery of $164,816
[^17]: Goryn v. Neisner, 2015 CarswellOnt 8562 (Ont. C.J.)
[^18]: Murphy v. Murphy, 2010 ONSC 7204 (S.C.J.)
[^19]: Serra v. Serra, 2009 ONCA 395
[^20]: Balaban v. Balaban, 2007 7990 (ON SC), 2007 CarswellOnt 1518