BACKGROUND

[1] I heard the Added Respondent’s motion for summary judgment for an Order declaring that a $400,000 mortgage registered against the Applicant and Respondent’s house in favour of the Added Parties was valid and enforceable. For the reasons given August 25, 2017, I granted summary judgment in favour of the Respondent. Although the Mortgage was valid, I found that there had been no advances under the mortgage. See 2017 ONSC 5001.

[2] The Respondent seeks costs of the motion in the amount of $46,188. The Added Respondents submit that each party should bear their own costs of the motion.

[3] Having considered the parties’ submissions, I order that the Added Respondent shall pay costs of this motion to the Respondent in the amount of $18,000.00 within 60 days.

ANALYSIS

[4] In family law proceedings, the award of costs is governed by primarily by section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended (“CJA”), as well as by Rules 18 and 24 of the Family Law Rules, Ontario Regulation 114/99, as amended.

[5] Rule 24 of the Family Law Rules outlines the relevant considerations in awarding costs and ordering security for costs in family law proceedings. For purposes of this motion, the following provisions of Rule 24 are relevant:

(1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.

(2) The presumption does not apply in a child protection case or to a party that is a government agency.

(3) The court has discretion to award costs to or against a party that is a government agency, whether it is successful or unsuccessful.

(4) Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party’s own costs or ordered to pay all or part of the unsuccessful party’s costs.

(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

(6) If success in a step in a case is divided, the court may apportion costs as appropriate.

(7) If a party does not appear at a step in the case, or appears but is not properly prepared to deal with the issues at that step or otherwise contributes to that step being unproductive, the court shall award costs against the party unless the court orders otherwise in the interests of justice.

(8) 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.

(9) If a party’s lawyer or agent has run up costs without reasonable cause or has wasted costs, the court may, on motion or on its own initiative, after giving the lawyer or agent an opportunity to be heard,

(a) order that the lawyer or agent shall not charge the client fees or disbursements for work specified in the order, and order the lawyer or agent to repay money that the client has already paid toward costs;

(b) order the lawyer or agent to repay the client any costs that the client has been ordered to pay another party;

(d) order that a copy of an order under this subrule be given to the client.

(10) Promptly after dealing with a step in the case, the court shall,

(a) make a decision on costs in relation to that step; or

(b) reserve the decision on costs for determination at a later stage in the case.

(10.1) In making a decision on costs in relation to a step in a case, the court shall decide in a summary manner whether anyone is entitled to costs and, if so, determine who is entitled and set the amount of the costs.

(11) In setting the amount of costs, the court shall consider,

(a) the importance, complexity or difficulty of the issues;

(b) the reasonableness or unreasonableness of each party’s behaviour in the case;

(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.

(12) The court may make an order that a party pay an amount of money to another party to cover part or all of the expenses of carrying on the case, including a lawyer’s fees.

[6] These costs rules are designed to foster four fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; (3) to discourage and sanction inappropriate behavior by litigants; (4) to ensure that cases are dealt with justly: Bridge v. Laurence, 2017 ONSC 1655, paras. 9-10 (Ontario Divisional Court).

[7] Although the broad discretion under section 131 of the CJA to award costs is circumscribed by the Family Law Rules, it is not completely removed. There may be circumstances, aside from a successful litigant’s unreasonableness under subrule 24(4), that may rebut the presumption that a successful party is entitled to costs under subrule 24(1): M.(C.A.) v. M.(D.), 2003 CanLII 18880 (ON CA), [2003] O.J. No. 3707, paras. 40, 41.

[8] The requirement under subrule 24(11) for the court to consider “any other relevant matter” in setting the amount of costs permits the court to take into account the financial situation of the parties: M.(C.A.) v. M.(D.), para. 42.

[9] A self-represented litigant (“SRL”) may be awarded costs for disbursements as well as the economic loss caused by having to prepare and appear to argue the case: Fong v. Chan (1999), 1999 CanLII 2052 (ON CA), 46 O.R. (3d) 330 (Ont. C.A.); G.B. v. S.A., 2013 ONSC 2147, para. 49. A SRL must be able to demonstrate that he or she: (1) devoted time and effort to do work ordinarily done by a lawyer retained to conduct the litigation; and, (2) incurred an opportunity cost by forgoing remunerative activity. A SRL should only “receive a ‘moderate’ or ‘reasonable’ allowance for the loss of time devoted to preparing and presenting a case”. The ordinary loss of time of a party involved in or attending a legal dispute should not be compensated: Fong, para. 26.

[10] Unlike the Rules of Civil Procedure, the Family Law Rules does not provide for “partial indemnity costs” or “substantial indemnity costs”. A court must fix the amount of costs at some figure between a nominal sum and full indemnity: Costa v. Perkins, 2012 ONSC 3165, para. 50 (Ontario Divisional Court).

[11] Subrules 18(14)-18(16) of the Family Law Rules address the costs consequence of the failure to accept an offer to settle:

(14) A party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:

If the offer relates to a motion, it is made at least one day before the motion date.
If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
The offer does not expire and is not withdrawn before the hearing starts.
The offer is not accepted.
The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

(15) The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14).

(16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.

[12] A party’s apparent entitlement under subrule 18(14) to costs on a full recovery if the requisite conditions are satisfied, may be denied in light of the financial condition of the parties or the reasonableness of the amount of costs claimed: M.(C.A.), para. 43.

[13] While an award of “no costs” might be perceived to encourage unmeritorious and expensive litigation, it may be appropriate to do so if a costs award would have a devastating effect on the unsuccessful party’s ability to achieve financial self-sufficiency: Murray v. Murray, 2005 CanLII 46626 (ON CA), [2005] O.J. No. 5379, paras. 9-10.

[14] The overarching principle is that an award of costs “… should reflect what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties”: Serra v. Serra, 2009 ONCA 395, para. 12.

[15] The application of the above costs considerations to the circumstances on this motion are addressed below.

Result in the Proceeding

[16] The Added Respondents submit that success on the motion was split because although the mortgage was found to be unenforceable given that any monies provided by the Added Parties were gifts rather than advances under the mortgage, the Added Respondents were successful in upholding the validity of the mortgage which the Respondent had challenged on the basis of duress, undue influence and a failure to obtain independent legal advice.

[17] However, the result in the proceeding, which found there had been no advances under the mortgage, favoured the Respondent.

Offers to Settle

[18] The Added Respondents made no offers to settle this motion.

[19] On the other hand, the Respondents made numerous offers to settle. The two latest offers were dated May 1, 2017. They both replaced all previous offers. It is unclear which offer was made last. One offer states that the motion shall be dismissed with costs and the other offer states that the mortgage shall be discharged from the lands registry office immediately and that no interest shall be due on discharge.

[20] The Respondent has not demonstrated which offer was the last offer to settle and thus he has not demonstrated that an offer to settle was made that was as favourable as the result of the motion.

Reasonableness of the Parties’ Behaviour

[21] The Added Parties’ failure to make an offer to settle and failure to accept any one of the many offers to settle which essentially sought the dismissal of the motion for summary judgment suggests that the Added Parties’ could have acted more reasonably given the outcome of the motion.

[22] The Respondent submits that the Added Respondents acted in bad faith. In particular, he states that the Mr. Milionis misled the court in his Answer signed on May 15, 2015 when he implied that $400,000 had been advanced in 2005 only to admit later that he was seeking to recover previous advances that went back as far as 2000. The Added Respondents deny acting in bad faith in this proceeding however they do not address any of the allegations made by the Respondent.

Importance, Complexity or Difficulty of the Issues

[23] The Respondent states that he “faced a very difficult case with a misleading opposing party litigating in bad faith at every step”. He also states that his case was highly complex given that the events occurred many years ago, involved several parties, homes, mortgages and documents. The Added Parties made no submission on this issue.

The Self-Represented Rates Claimed

[24] The Respondent claims $300 per hour on a substantial indemnity scale and $200 per hour on a partial indemnity scale. He submits that from May 2017 to September 2017 his self-employed consulting rates were $1,200 US per diem. He states that his rates are two-third of the rates charged by counsel for the Added Respondents. Mr. Mendicino charged $400 per hour.

[25] In my view the rates claimed by the Respondent are excessive rather than modest. His materials while detailed in relation to the evidence, were woefully lacking in cogent legal analysis that might be expected from someone claiming $200-$300 per hour. Further, there is no evidence that he suffered economic loss that was caused by having to prepare and appear to argue the case.

[26] I find that $100 per hour represents an appropriate for the Respondent.

The Time Spent on the Case

[27] The Respondent claims about 94 hours spent in relation to the motion for summary judgment.

[28] I note that Mr. Mendicino’s account only shows 24 hours billed and the rest of the time was undisclosed as a “block fee”. His total account was $18,355.15.

Expenses Properly Paid or Payable

[29] The Respondent was represented by counsel for a period of time which included representing the Respondent at questioning on the parties’ affidavits. He paid $14,407.08 inclusive of taxes for these services. He also paid $1,914, inclusive of taxes, for the cost of examinations and transcripts.

Conclusions

[30] I find that it is fair and reasonable for the Added Respondent to pay costs of $18,000.00, inclusive of taxes and disbursements, to the Respondent within 60 days.

M. D. FAIETA, J.

Released: November 17, 2017

Milionis v. Rivas, 2017 ONSC 6778

Case Summary

BACKGROUND

Result in the Proceeding

Conclusions

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues

Statutory Provisions 3

Legal Tests 1

Legislation 3