PREVOST v. PREVOST, 2017 ONSC 6810

CITATION: PREVOST v. PREVOST, 2017 ONSC 6810

COURT FILE NO.: 12-1003

DATE: November 14, 2017

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

NICOLE PREVOST

– and –

GUY PREVOST

Edward C. Castle, counsel for the Applicant (Responding party)

Warren A. Leroy, counsel for the Respondent (Moving party)

HEARD: by written submissions

RULING ON COSTS

Desormeau, J.

ISSUES

[1] The issue I must determine is that of costs, following a Motion to Change a Final Order, heard July August 14, 2017.

[2] Mr. Guy Prevost is requesting costs, on a partial indemnity scale, in the amount of $14,188.62, inclusive of H.S.T. and disbursements.

[3] Ms. Nicole Prevost disputes the amount of costs requested by Mr. Prevost, and suggests that if the Court does award costs to the Respondent, they should be fixed at $4,000.00.

POSITION OF THE PARTIES

[4] Mr. Prevost’s request for costs is based on the following:

a. He was almost entirely successful at the motion, and therefore he is presumptively entitled to his costs;

b. He acted reasonably throughout the litigations, including having provided comprehensive disclosure, and having continued to pay child support despite it causing significant financial hardship to him;

c. Ms. Prevost’s conduct was unreasonable in that she failed to act in the children’s best interests by involving them in the litigation, and her refusing to concede any issues; and

d. While both parties made Offers to Settle, neither party beat their offer.

[5] Briefly summarized, Ms. Prevost’s request to fix costs at a lower amount is based on the following:

a. Mr. Prevost was unsuccessful in two aspects of the judgement;

b. Neither parties’ Offer to Settle was more favourable than the judgement;

c. While Mr. Prevost achieved success, very little time was devoted to the issue of ongoing child support;

d. Mr. Prevost behaved unreasonably by: changing counsel three times, permitting the matter to be dismissed, taking nine months to obtain the TRAC report, and due to the nature of the offers to settle made by him; and

e. Ms. Prevost’s family’s economic viability was significantly diminished by the Judgement, and any award of costs in favour of Mr. Prevost will further economically disadvantage her and the children.

[6] Prior to going any further, I must first address that Ms. Prevost makes reference to comments made at conferences by another judge. Rule 17 (23) of the Family Law Rules (“FLR”) stipulates that no statement made at a settlement conference shall be disclosed to any other judge. As such, I have given these references no weight.

[7] It is suggested by Ms. Prevost that the Rules of Civil Procedure (“RCP”) apply in this case to permit the costs to be fixed pursuant to rule 57 RCP. Rule 1(7) FLR states that if the FLR do not cover a matter adequately, the court may, where it is appropriate, make reference the RCP. I have reviewed Rule 57 RCP. Unfortunately, counsel did not see fit to attach what he referred to as the “proposal” for Rule 57 RCP. I have nonetheless found what I presume counsel is referring to in stating “the proposal appended to Rule 57”. This proposal appears to be a Costs Grid Consultation Paper. This proposal is not binding. More importantly, I find that Rule 24 FLR adequately address the issue of costs, and I will therefore not make any further references to the RCP.

[8] Ms. Prevost sets out that Mr. Prevost acted unreasonably in allowing the Motion to Change to be dismissed. I note that Rule 39 FLR provides that both parties receive notice of an impending administrative dismissal. The Notice of Approaching Dismissal in the endorsement record clearly states that both parties were served a copy of same. The Dismissal Order was set aside on consent of both parties. As such, I do not find that Mr. Prevost’s behaviour was unreasonable.

THE LAW

[9] Rule 24 of the Family Law Rules (FLR) addresses the issue of costs. Rule 24(1) FLR states that there is a presumption that a successful party is entitled to the costs of a motion.

[10] Rule 24(11) outlines the factors to be considered in quantifying costs:

(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.

[11] Modern costs rules are designed to foster three fundamental purposes:

1. to partially indemnify successful litigants for the cost of litigation;

2. to encourage settlement; and

3. to discourage and sanction inappropriate behaviour by litigants:

Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905 (Ont. C.A.), at para. 8; Sickinger v. Sickinger, 2017 ONSC 2612, at para. 11.

[12] Rule 2(2) of the FLR adds a fourth fundamental purpose for costs: to ensure that the primary objective of the rules is met - that cases are dealt with justly. This provision needs to be read in conjunction with Rule 24 of the rules: Sambasivam v. Pulendrarajah, 2012 ONCJ 711, [2012] O.J. No. 5404 (Ont. C.J.); Lawrence v. Lawrence, 2017 ONCJ 431, at para. 28.

[13] The justice system is a precious public resource. Access to the justice system by individuals must be balanced with the need to ensure that the resource is available for all those who need it. This is one of the purposes of Rule 2: Lawrence v. Lawrence, supra, at para. 52.

[14] Parties to litigation must understand that court proceedings are expensive, time-consuming and stressful for all concerned. They are not designed to give individual litigants a forum for carrying on in whatever manner they may choose, oblivious to the impact of that conduct on the other side and, perhaps most importantly for the purposes of this case, oblivious to the mounting costs of the litigation: Lawrence v. Lawrence, supra, at para. 54.

[15] Modern costs rules accomplish various purposes in addition to the traditional objective of indemnification. An order as to costs may be designed to penalize a party who has refused a reasonable settlement offer. Costs can also be used to sanction behaviour that increases the duration and expense of litigation, or is otherwise unreasonable or vexatious. In short, it has become a routine matter for courts to employ the power to order costs as a tool in the furtherance of the efficient and orderly administration of justice: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371 (S.C.C.), para. 25; Lawrence v. Lawrence, supra, at para. 31.

[16] In Boucher v. Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.), the Ontario Court of Appeal indicated that a costs award should be a "fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs of the successful litigant". A "fair and reasonable amount" is that amount which the unsuccessful party could reasonably have expected to pay in the event of lack of success in the litigation: Lupien v. Carmichael, 2017 ONSC 2929, at para. 9.

[17] Determining the amount of costs is not simply a mechanical exercise. Costs must be proportional to the amount in issue and the outcome: Boucher v. Public Accountants Council (Ontario), supra.; Lawrence v. Lawrence, supra, at para. 64.

[18] When awarded on a full recovery scale, costs can serve to express the court's disapproval of unreasonable conduct during the litigation: Prinzo v. Baycrest Centre for Geriatric Care, 2002 45005 (ON CA), 2002 CarswellOnt 2263, 2002 C.L.L.C. 210-027, 17 C.C.E.L. (3d) 207, 161 O.A.C. 302, 60 O.R. (3d) 474, 215 D.L.R. (4th) 31(Ont. C.A.), para 76; Lawrence v. Lawrence, supra, at para. 32.

[19] In determining costs, the court must also consider, pursuant to Rule 24(5) FLR, reasonableness of the parties. 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.

[20] Success is given presumptive pre-eminence in Rule 24. While Rule 24(11)(f) does permit the consideration of ability to pay (under the umbrella of "any other relevant matter"), it is given significantly less prominence than the presumption that costs will follow success: Biant v. Sagoo, 2001 28137 (ON SC), 2001 CarswellOnt 3315, [2001] O.T.C. 695, 20 R.F.L. (5th) 284 (Ont. S.C.J.): Lawrence v. Lawrence, supra, at para. 33.

[21] Ability to pay alone cannot, nor should it, over-ride the other factors in Rule 24(11): Peers v. Poupore, 2008 ONCJ 615 (Ont. C.J.), para. 42; Lawrence v. Lawrence, supra, at para. 35.

[22] The (financial) means of the unsuccessful party may not be used to shield her from liability for costs, particularly when she has acted unreasonably: Gobin v. Gobin (2009), 2009 ONCJ 278, 71 R.F.L. (6th) 209 (Ont. C.J.), para. 24; Lawrence v. Lawrence, supra, at para. 36.

[23] Moreover, as stated by Justice Blishen: “…although financial ability to pay is a factor in fixing costs, it cannot be a complete “defence” to an award of costs. If it was, a party could litigate financial immunity. This result would be inconsistent with the policy of the Family Law Rules that litigants should be responsible for the positions they take in litigations”: Hackett v. Leung, 2005 43354 (ON SC), at para. 15.

[24] 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 23496 (ON SC), 2008 CarswellOnt 2819, [2008] W.D.F.L. 3600, 167 A.C.W.S. (3d) 723, [2008] O.J. No. 1978 (Ont. S.C.J.). The position each party took in the case should also be examined: Lawrence v. Lawrence, supra, at para. 41.

[25] Rule 18(14) sets out the costs consequences regarding Offers to Settle:

COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER

(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:

1. If the offer relates to a motion, it is made at least one day before the motion date.

2. 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.

3. The offer does not expire and is not withdrawn before the hearing starts.

4. The offer is not accepted.

5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer. O. Reg. 114/99, r. 18 (14).

[26] A finding of bad faith is not a condition precedent to full recovery of costs by the other side under the Family Law Rules: Osmar v. Osmar, 2000 20380 (ON SC), 2000 CarswellOnt 2343, 8 R.F.L. (5th) 387, [2000] W.D.F.L. 660, [2000] O.J. No. 2504, [2000] O.T.C. 979 (Ont. S.C.J.), para. 11; Lawrence v. Lawrence, supra, at para. 57.

ANALYSIS

[27] I find that Mr. Prevost is the substantially successful party. He is therefore presumptively entitled to costs.

[28] In determining the quantum of costs, I have taken into account the factors set out in Rule 24(11):

(a) the importance, complexity or difficulty of the issues: The issues themselves were relatively complex and diverse. The outcome was very important to both parties’ and their financial circumstances.

(b) the reasonableness or unreasonableness of each party’s behaviour in the case: Despite suggestions by Ms. Prevost, I find that Mr. Prevost behaved reasonably. I am unable to find that Mr. Prevost changing counsel makes him unreasonable. Further, adjournments consented to by both parties, and failure of either party to take immediate steps to avoid a dismissal order, are not indicative unreasonable behaviour by one party alone. For reasons set out below, I do not however find that Ms. Prevost acted reasonably.

(c) the lawyer’s rates: Both Mr. Leroy’s and Mr. Castle’s hourly rates are reasonable, as it that of Mr. Leroy’s clerk. Based on Mr. Leroy having been called to the bar in 2014, I have no difficulty accepting his mentor’s 3.3 hours on the file as being reasonable in the circumstances.

(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: I find that both counsel’s time spent on the file was reasonable. I do not agree with the submission of counsel for Ms. Prevost that very little time was devoted by Mr. Prevost in relation to his successful outcome. Counsel for Mr. Prevost provided me comprehensive and compelling factums and books of authority which addressed all issues and allowed for succinct verbal argument on his client’s behalf at the motion.

(e) expenses properly paid or payable: The disbursements claimed totalling $1,842.09, inclusive of H.S.T., are reasonable.

(f) any other relevant matter: I have considered that Ms. Prevost raises the issue of ability to pay costs.

[29] The issue of proportionality or overall reasonableness of a claim for costs must be measured against the sums at stake as well as the results: Bemrose v. Fetter, 2006 8201 (ONSC). At the Final Motion, Mr. Prevost confirmed that he had continued to pay full child support, as set out in the Final Order, despite what I found to be material changes in circumstances as to his income. Mr. Prevost provided ongoing fulsome financial disclosure. While the relief he sought was an order that child support arrears overpaid by him be fixed at $34,178.00, at the motion, he suggested that should I deem it more appropriate to fix the arrears as of the date of issuing the Motion to Change, those arrears would be $14,330.51, inclusive of section 7 expenses. The award made, in his favour, was for $18,332.00 of arrears.

[30] I find that Ms. Prevost has not behaved reasonably for the following reasons:

a. Ms. Prevost was served the Motion to Change materials in June, 2015. Attached thereto was medical evidence which supported Mr. Prevost’s change in circumstances. Disclosure continued throughout the proceedings;

b. Despite fulsome evidence of material changes in circumstances, Ms. Prevost made no significant concessions. She unsuccessfully argued that income be imputed to Mr. Prevost at $70,000.00. She submitted that all of Mr. Prevost’s claims for reimbursement be dismissed, and advanced that he owed her $9,230.00 in retroactive child support;

c. She involved the children in the litigation by admittedly having them take pictures of gift cards in Mr. Prevost’s home; and

d. Despite continuing to receive child support from Mr. Prevost in the amount of $640.00 per month, there is no evidence that any of these monies were set aside in case Ms. Prevost was unsuccessful in her arguments.

[31] I have reviewed Mr. Prevost’s Offer to Settle, dated June 30, 2017. I have also reviewed Ms. Castle’s correspondence dated July 14, 2017, which is referred to as a settlement offer despite it not complying with Rule 18 FLR. Pursuant to subrule 18(14), in order to be entitled to full recovery of costs from the date of the offer, the party making the offer must obtain an order that is as favourable as or more favourable than the offer. This is not the case.

[32] While I have considered that Ms. Prevost does not currently have an ability to pay a costs order, this is but one consideration.

[33] I am mindful that the Court’s role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees: Aprile v. Aprile, 2016 ONCJ 678, at para. 13.

[34] I have considered that Ms. Prevost could reasonably have expected to pay costs in the event of lack of success in the litigation, particularly as Mr. Prevost’s motion materials set out his request for costs based on a substantial indemnity basis.

[35] After considering the relevant factors, I find that Mr. Prevost’s request for costs on a partial indemnity scale exemplifies his reasonable behaviour, and is exceptionally practical in the circumstances.

DISPOSITION

[36] The following Order is made:

Ms. Prevost shall pay to Mr. Prevost costs fixed at $14,188.62, inclusive of H.S.T. and disbursements. The costs award shall bear post judgment interest at the rate prescribed by the Courts of Justice Act, until satisfied.

Justice Hélène C. Desormeau

Released: November 14, 2017

PREVOST v. PREVOST, 2017 ONSC 6810

COURT FILE NO.: 12-1003

DATE: November 14, 2017

ONTARIO

SUPERIOR COURT OF JUSTICE

NICOLE PREVOST

– and –

GUY PREVOST

Ruling on COSTS

Justice Hélène C. Desormeau

Released: November 14, 2017