Superior Court of Justice - Ontario
CITATION: Beausoleil v. Rowe, 2017 ONSC 7203
BARRIE COURT FILE NO.: FC-16-861
DATE: 20171201
RE: Brian Beausoleil, Applicant
AND: Janet Lynn Rowe, Respondent
BEFORE: THE HON. MADAM JUSTICE R.A. WILDMAN
COUNSEL: M. Kowalsky, Counsel for the Applicant M.J. Prost, Counsel for the Respondent
HEARD: November 29, 2017
ENDORSEMENT
[1] This matter settled yesterday, on the second day of trial. Mr. Beausoleil accepted an offer that had been made by Ms. Rowe on April 7, 2017. The terms of the accepted offer were:
(1) Ms. Rowe will transfer her interest in 85 Balm Beach Rd. E to Mr. Beausoleil upon payment to her of $150,000.
(2) Ms. Rowe releases any claim for spousal support.
(3) Mr. Beausoleil will permit Ms. Rowe to obtain items on a list of personal property attached (“Schedule A”) and she will deliver to him two dressers and a single bed.
[2] Ms. Rowe’s original offer had provided that there would be no costs paid by either party “if this offer is accepted within 30 days of the date of this offer” (emphasis added).
[3] As the offer was not accepted within 30 days, the parties are asking me to determine the issue of costs. They also asked me to determine whether Mr. Beausoleil should be responsible for reimbursing Ms. Rowe for issues related to the chattels.
The issues regarding the chattels
[4] Subsequent to the April 7, 2017 offer being made, but prior to it being accepted, the parties made arrangements for Ms. Rowe to have movers pick up the items on “Schedule A”. This means that, at the time of acceptance of the offer yesterday, Ms. Rowe already had most of the items on the list.
[5] However, when the parties presented their settlement to the court, I was advised that there were some “minor” issues regarding chattels that the parties needed to work through last night. Ms. Rowe said she had not received everything on Schedule A and Mr. Beausoleil said he was not sure if he had the items she was now requesting. He agreed to go back to his home and check and, if he had them, Ms. Rowe could receive them as part of the settlement.
[6] Ms. Rowe provided an additional list of items that she said she had either not received or now wanted. Mr. Kowalsky and Mr. Beausoleil went back to Mr. Beausoleil’s home and searched for them. Not all could be located but the parties reached an agreement that Mr. Beausoleil would allow Ms. Rowe to pick up the following items to complete the exchange of chattels:
(1) Crystal glasses and vases
(2) The antique dresser/desk
(3) The washer and dryer
(4) The metal detector
(5) Two metal decorative art pieces, and one bowl with rocks and candles
(6) Box of Bell satellite receivers
(7) Austin’s bike helmet
[7] When the trial resumed today, Mr. Prost advised that Ms. Rowe wanted $1,000 compensation for issues related to the original list. The claims related to:
(1) The following items had been received but were damaged:
A table leaf for a three-year-old table was scratched
A framed picture of a farm scene, which Ms. Rowe had purchased for $120 at some point, was also scratched
A deep fryer, which had been purchased for $80, had sand and dirt in it and could no longer be used
Jewellery – Some of Ms. Rowe’s necklaces were broken and four pairs of earrings were missing the mate. Ms. Rowe estimated the cost of each pair of earrings at $60 but, despite the passage of several months since she had received them, she had not gone to a jeweller to get anything in writing about the cost of repairing the necklaces or replacing the earrings.
A hanging pouch had a broken “dowel” holder. Ms. Rowe estimated the cost of repair at $5
(2) Ms. Rowe’s daughter’s Wii game and accessories were missing. She estimated that the original cost of the game was $100, along with 10 to12 figurines that were originally purchased for $20 to 25 each.
(3) $60 for garbage disposal because Mr. Beausoleil included in the load picked up by Ms. Rowe’s movers various items of no use to Ms. Rowe (such as mattresses, beer bottles, expired food and a pail of dog feces), which she had to take to the dump.
(4) $300 for the cost of her movers
[8] I can understand Ms. Rowe being upset. Mr. Beausoleil had stored her belonging in an outside shed and knew that animals were coming into the shed. This was confirmed by his Facebook post, containing a picture of the old shed and the message:
I have shed/outbuilding on my property that I shoved a pile of the ex’s abandoned crap. (sic) Every time I check this window it’s open. The dirt smear is on the inside. Lol. At least something is using her things. Lmfao.
[9] However, the trial is complete. Family law does not generally award damages for petty conduct during a separation. Mr. Beausoleil did not have the opportunity to respond to Ms. Rowe’s complaints, as I decided it was not necessary, but I have no doubt he would have had some complaints about Ms. Rowe that he would want me to hear about. All of that is unproductive and unnecessary, as a final settlement has been reached to avoid continuing the trial.
[10] At the time of the settlement yesterday, Ms. Rowe knew about the damaged items, the cost of the garbage disposal she had incurred and the cost of her movers. She did not make it clear when the settlement was signed and filed with the court that she would be pursuing an additional claim for damages for the items she had already received. No term was included in the settlement (and resulting court order) that preserved her right to make such a claim.
[11] I find that she is not entitled to try to litigate these complaints after the settlement was filed with the court. There will be no damages or monetary award relating to those items.
[12] However, the “Wii” game is different. As part of the settlement yesterday, Mr. Beausoleil agreed to return the items in Schedule A, which included “Kids Wii and games”. If the Wii game was not already returned, and Mr. Beausoleil cannot find it, he needs to pay Ms. Rowe’s daughter some compensation, as he cannot honour that term of the court order.
[13] Mr. Kowalsky produced a printout from Amazon.ca that shows two versions of this game are available on that site for approximately $50 each, including shipping. The figurines were first mentioned today, and are not on the original list, so Mr. Kowalsky did not have the opportunity to file similar evidence about their like replacement cost. I am, therefore, going to allow $100 for the figurines, on the assumption that the replacement cost for used figurines would be approximately half of Ms. Rowe’s lowest estimate for the original purchase price, as it was for the game.
[14] Order to go:
(1) Mr. Beausoleil is to allow Ms. Rowe to pick up the items listed in paragraph 6, at her own expense, within 30 days.
(2) Mr. Beausoleil is to pay Ms. Rowe’s daughter, Chelsea, $150 to compensate her for the Wii game and figurines.
(3) Upon the completion of these two terms, each party will retain all property currently in his or her possession and all further property claims are hereby dismissed.
Costs
[15] Mr. Beausoleil suggests that each party should bear his or her own costs. Ms. Rowe is seeking her costs of $20,817.81.
[16] A successful party is presumed entitled to costs.[^1] Ms. Rowe is the successful party, as she has received an award of $150,000, which she would not have received without this litigation. She is presumed entitled to costs.
[17] A successful party who has behaved unreasonably may be deprived of her costs or ordered to pay the other party’s costs.[^2]
[18] The only evidence I have about unreasonable behaviour on Ms. Rowe’s part that would have an impact on costs was her insistence that the court determine her request for $1,000 “damages” related to her chattels. The value of the used chattels that were supposedly “damaged” was so low that it did not make sense to be paying lawyers, collectively, $655 an hour to argue about them. She had no evidence to support the monetary value of her claims. She did not make it clear, when the settlement was reached yesterday, that she wanted an additional $1,000 relating to these trivial matters. It was ridiculous to be litigating those claims today and Ms. Rowe should not receive any costs relating to this issue. She should also pay Mr. Beausoleil full recovery costs for the time spent on dealing with the outstanding personal items. I will be deducting $1,000 from her costs, which is approximately 1.5 hours of time for Mr. Prost and Mr. Kowalsky’s time spent preparing for and arguing this issue today.
[19] The Family Law Rules provide some guidance in examining reasonableness[^3] and factors to consider in determining costs[^4]. I find that the time spent by Ms. Rowe’s counsel on this case (approximately 60 hours) is reasonable, considering the importance and complexity of the issues (which included trust claims, a substantial interest in land, and spousal support). I find the expenses claimed are also reasonable. I also find Mr. Prost’s hourly rate of $275 per hour reasonable.
Rule 18
[20] Rule 24(5) directs the court to consider offers to settle in assessing reasonableness. Rule 18 also provides more guidance about the impact of offers to settle.
[21] Rule 18 is a powerful tool in family litigation. It is designed to promote realistic settlement offers by imposing a significant cost sanction for unsuccessful litigation in the face of a reasonable offer by the other side. Unless the court orders otherwise, a party who makes a Rule 18 offer is entitled to costs to the date the offer was served, and full recovery costs from that date, if the offer is not accepted and the party who made the offer obtains an order that is as favourable as or more favourable than the offer.[^5] Even if Rule 18(14) does not apply, the court may take into account any offer to settle in determining costs[^6].
[22] The provisions of Rule 18(14) apply to this case. By failing to accept Ms. Rowe’s offer when it was presented on April 7, 2017, Mr. Beausoleil risked being ordered to pay costs to Ms. Rowe if she did “as well or better” at trial. That is exactly what happened, as he accepted that offer, but not until the second day of trial.
[23] Mr. Kowalsky argues, on Mr. Beausoleil’s behalf, that Rule 18(14) does not apply because it relates to a party failing to accept an offer. As Mr. Beausoleil ultimately accepted Ms. Rowe’s offer, he says she cannot rely on the cost consequences of the Rule. He says his acceptance of her offer saved both of the parties the cost of the rest of the trial, so there should be no order of costs.
[24] With respect, that makes no sense. The cost consequences of Rule 18(14) relate to the period of time during which Mr. Beausoleil failed to accept Ms. Rowe’s offer. Mr. Beausoleil’s acceptance of the offer relieves him of a claim for further costs after the date of acceptance but not before he did so.
[25] The whole point of Rule 18(14), and pretrial offers to settle, is to provide some cost incentive to the other side to settle without a trial. Once the offer is made, the other side is risking an award of full recovery costs for every day that the offer remains outstanding and unaccepted. This requires parties to realistically evaluate their litigation risk and consider settlement, unless they are confident that they are going to achieve a result at trial that is more favourable than the terms that have already been offered.
[26] To hold that, even during a trial, a party can accept any previous offers that have been made by the other party, and be excused from any requirement to pay for all the other side’s costs incurred between the date of the offer and the date it is accepted, would defeat the purpose of offers to settle and Rule 18. There must be cost consequences for failing to accept the offer when it was first made.
[27] Those consequences are clear and are set out in Rule 18(14). Partial recovery costs must be paid up to the date of the offer and (reasonable) full recovery costs from the date of the offer up to the date the “as or more favourable” order is obtained.
[28] Mr. Kowalsky also suggests that Rule 18(14) only applies when a person obtains an order as a result of a judicial determination on the merits of the case after a full hearing. Again, with respect, there is no validity to that argument.
[29] Rule 18(14) contains no such wording. It is irrelevant whether the order is obtained after a full trial or as a result of a settlement. It would make no sense to require a full hearing on the merits, after a settlement, in order to preserve a litigant’s entitlement to costs.
[30] Rule 18(14) is very clear and applies to the matter before me. Mr. Beausoleil could have “got exactly the same deal” on April 7, 2017. He waited until months later, after substantial additional costs had been incurred on both sides, to accept Ms. Rowe’s offer. Mr. Beausoleil must pay the costs that have been incurred as a result of his failure to accept Ms. Rowe’s proposal before the second day of trial.
Other offers
[31] I have some discretion is deciding what portion of costs to order up to the date of the offer. Both parties agree that no costs for conferences should be included in the costs award, as none were reserved to the trial judge.[^7]
[32] In deciding how to exercise my discretion, I have considered all of the offers made by both sides, as I am required to do in assessing his or her “reasonableness”.
[33] Mr. Beausoleil’s offers were not reasonable. On January 31, 2015; June 9, 2016 and sometime in October 2016, he made “offers” to Ms. Rowe. They all provided that she should sign the house over to him and she would receive nothing other than her personal effects.
[34] I have no idea why these offers were even made – they certainly provided no incentive to settle or any proposal that could form the basis of productive negotiation. It was very unreasonable of Mr. Beausoleil not to make some sort of settlement offer, particularly considering the fact that the disputed property was registered in both Mr. Beausoleil’s and Ms. Rowe’s names, and there was nothing in writing to support his claims that his mother was entitled to a share in the property or reimbursement for her contribution to the downpayment.
[35] In his settlement brief[^8], Mr. Beausoleil increased his settlement offer to $10,000 as the “nuisance value of her claim”. This was no a reasonable offer. The rhetoric was demeaning and unhelpful rhetoric, and a $10,000 offer on a case that ultimately settled for $150,000 is obviously not within the range of reasonable proposals.
[36] On the day of the April 7, 2017 settlement conference, April 7, 2017, the parties received input from the presiding judge. As a result, Mr. Beausoleil made an offer of $74,255 to be paid by September 1, 2017 (or when the property was remortgaged). His offer contained a clause that there would be no costs, but only if the offer was accepted that day.
[37] Why would anyone do that? Although the amount offered was less insulting than his prior offers, the term about the timing for acceptance was unreasonable. What is to be gained by litigation tactics that try to pressure someone into an immediate deal?
[38] In any event, given the $150,000 order at trial, the amount of Mr. Beausoleil’s offer was not so reasonable that it would warrant a reduction of the costs that he should be paying.
[39] Shortly thereafter, on June 19, 2017, Mr. Beausoleil made another offer but he reduced his proposed payment to $60,000. Once again, he tried to put time pressures on for acceptance, as he only gave Ms. Rowe until July 7, 2017 to accept it. Given the final result, this offer was unreasonable, as was the short time limit for acceptance.
[40] As an aside, I will note that, in order to obtain the significant cost incentive under Rule 18(14), an offer needs to remain open until the hearing begins. Mr. Prost’s practice of leaving the offer open for acceptance until trial, but including a term that costs would be waived only if the offer was accepted within 30 days, is far more clever than is serving time-limited offer, leaving no settlement proposal “on the table” thereafter.
[41] Turning to the reasonableness of Ms. Rowe’s pretrial settlement position, I have only been referred to one offer, other than the April 7, 2017 one that was ultimately accepted.
[42] On January 23, 2017, Ms. Rowe offered to settle for $275,000 plus her personal property OR one-half of the proceeds of sale of the home plus $15,000 in spousal support[^9] and her personal property.
[43] Given the result at trial, I find that Ms. Rowe was asking for too much at that point. Her January 23 offer was unreasonably high and unlikely to promote settlement.
[44] As a result, I find that neither party was behaving particularly reasonably in their settlement positions prior to Ms. Rowe’s April 7, 2017 offer. Rule 18(14) does provide that a person should receive some costs up to the date of her offer unless the court orders otherwise.
[45] I recognize that Ms. Rowe is only requesting partial recovery costs of $1,242.50 plus HST up to the date of her offer. However, taking into account the unreasonable settlement positions prior to April 7, 2017, I have decided that neither party should receive costs up to April 7.
[46] However, Ms. Rowe should receive full recovery costs for the work done after April 7, 2017. She was behaving reasonably in leaving a $150,000 open for acceptance at any time, and Mr. Beausoleil must suffer the cost sanctions of Rule 18(14) for failing to accept it.
DECISION
[47] As mentioned, I am also going to reduce Ms. Beausoleil’s costs by approximately $1,000 plus HST for the time spent today dealing with chattels. I am also going to reduce the time spent on the first day of trial by two hours plus HST, as the time up to the luncheon recess has already been dealt with in another costs decision.
[48] Bearing in mind that I am fixing costs, rather than doing a detailed assessment of them, I order that Mr. Beausoleil pay Ms. Rowe her costs of these proceedings, including fees, HST and disbursements, fixed at $17,500.
WILDMAN J.
Date: November 29, 2017
(Released December 1, 2017)
[^1]: Family Law Rules, O. Reg. 114/99, Rule 24(1) [^2]: Rule 24(4) [^3]: Rule 24(5) [^4]: Rule 24(11) [^5]: Rule 18(14) [^6]: Rule 18(16) [^7]: Rule 24(10.1) [^8]: It is unclear whether this was for the February 3, 2017 or April 7, 2017 settlement conference, as I have only received an excerpt from the brief, which is undated. [^9]: Although I did not hear all of the evidence related to spousal support, I do note that this appears to have been a relatively weak claim, as Mr. Beausoleil says the parties maintained separate residences until they moved into their jointly owned property together for two years. Both entitlement and quantum would have been issue but, should any spousal support have been ordered, the duration would have been minimal.