Browne v. Cerasa, 2018 ONSC 2242

NEWMARKET COURT FILE NO.: FC-11-039695-01

DATE: 20180406

ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY COURT

BETWEEN:

MARIA BROWNE

Applicant

– and –

GIOVANNI CERASA

Respondent

Self-Represented

J. De Vries, for the Respondent

FINAL COSTS SUBMISSIONS RECEIVED: November 4, 2017

DECISION - COSTS

FRYER J.:

I. Introduction

1I heard this matter’s trial over 17 days between November 14, 2016, and February 15, 2017. The primary issue for the trial was whether the Applicant (Mother) should be permitted to move with the child Vincenzo to Brooklyn, New York.

2I heard lengthy evidence from the parties and their family members. I also received evidence from the clinician with the Office of the Children’s Lawyer (“OCL”), and two therapists involved with Vincenzo. I granted the relief that the Applicant (Mother) sought and permitted the move.

3The Applicant (Mother) was self-represented throughout the trial. Counsel, Ms. De Vries, represented the Respondent (Father).

4The Applicant (Mother) seeks costs of $160,872. The Respondent (Father) submits that each party should bear their own costs.

II. General Principles re Costs

5In Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905, the Court of Appeal confirmed that modern costs rules are designed to foster three fundamental purposes (para. 8):

(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 [citation omitted].

6Ultimately, costs should reflect what the court views as a fair and reasonable amount for the unsuccessful party to pay. As explained in Berta v. Berta, 2015 ONCA 918, [2015] O.J. No. 6844 (revised on January 18, 2016) at para. 94:

a successful party in a family law case is presumptively entitled to costs. An award of costs, however, is subject to the factors listed in r. 24(11), the directions set out under r. 24(4) (unreasonable conduct), r. 24(8) (bad faith) and r. 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party” [citation omitted].

7A costs assessment is not just a mechanical exercise. Costs must be proportional to the amount in issue and the outcome. The overall objective is to fix a fair and reasonable amount for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant: Boucher et al. v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634 (Ont. C.A.); Selznick v. Selznick, 2013 ONCA 35, [2013] W.D.F.L. 1013; Murray v. Murray, 2005 CanLII 46626 (ON CA), [2005] O.J. No. 5379 (Ont. C.A.); and Delellis v. Delellis, 2005 CanLII 36447 (ON SC), [2005] O.J. No. 4345 (Ont. S.C.).

III. Analysis

1. Determination of Success

8Costs hinge on an assessment of relative success: Rule 24(1) of the Family Law Rules, O. Reg 114/99 (“FLR”); Sims-Howarth v. Bilcliffe, 2000 CanLII 22584 (ON SC), [2000] O.J. No. 330 (Ont. S.C.).

9The FLR’s r. 24(6) requires that the court consider if success was divided. Divided success does not mean equal success. Rather, r. 24(6) requires a contextual analysis, as not all issues are equally important, time-consuming, or expensive to determine: Jackson v. Mayerle, 2016 ONSC 1556, 130 O.R. (3d) 683 at paras. 66-7.

10The Respondent asserts that the Applicant’s claim for supervised access necessitated a trial and, that her failure to succeed on that issue translates to a finding of divided success. I found the following in my trial decision (para. 207):

[d]espite [the Applicant (Mother)’s] position set out in her draft order, she did not actively pursue [supervised access] at trial and her focus was on the proposal set out above wherein [the Respondent (Father)] would have regular, unsupervised access.

The supervised access issue occupied little to no trial time. Applying a contextual analysis, success was not divided.

11When comparing the relief sought against the ultimate result, the Applicant (Mother) was clearly the successful party.

2. Offers to Settle

12The FLR’s rr. 18 and 24(5)(c) highlight the important role that offers to settle play in litigation. They save time and expense by promoting settlements, focusing parties, and often narrowing disputed issues: Laing v. Mahmoud, 2011 ONSC 6737, [2011] O.J. No. 5134. As a result, at the end of litigation, relative success is also evaluated with regard to the offers to settle delivered by each party: J.S. v. M.M., 2016 ONSC 3072, 80 R.F.L. (7th) 399 at para. 12, and Sims-Howarth at para. 13.

13The Respondent (Father) submits that offers to settle do not always carry the same weight in a mobility case where the issue—the move—is a binary one that leaves little room for compromise: See e.g. Bridgeman v. Balfour, [2009] O.J. No. 4985 (Ont. S.C.) and Rassel v. Rassel, 2008 CanLII 56939 (ON SC), [2008] O.J. No. 4410 (Ont. S.C.). In Rassel, however, Justice Mossip commented on the very fact-specific nature of costs jurisprudence. In the case at bar, as I address in further detail below, the offers to settle indeed form part of the overall costs assessment.

14The Applicant (Mother) emailed a final offer to settle on July 26, 2016. The Respondent (Father) submits that this offer cannot be considered under r. 18(4) because it was not signed or witnessed and this provision should be strictly followed: Riss v. Greenough, 2003 CanLII 2224 (ON SC), [2003] O.J. No. 1574 (Ont. S.C.). In Gogas v. Gogas, 2011 ONSC 5368, [2011] O.J. No. 4085, however, Justice Healey held that a technical omission, in that case a lawyer’s failure to sign an offer to settle did not render the offer null and—contrary to Riss—held the following (para. 20):

there is still a wide discretion over costs provided by subrule 18(16), which allows the court to take into account any written offer to settle, the date it was made, and its terms, even if subrule 18(14) does not apply.

I prefer this reasoning as more consistent with the FLR’s overall objective, set out in its r. 2(2).

15The offer to settle that the Respondent (Father) filed with his submissions was also unsigned and unwitnessed. For other reasons, even if they were signed and witnessed, neither party’s offer met the criteria for full indemnity costs pursuant to the FLR’s r. 18(14). However, as neither party disputed that they received the other party’s offer, I am prepared to consider them pursuant to r. 18(16), as well as in the analysis of the relative reasonableness of each party’s behaviour.

16The Applicant (Mother)’s offer to settle was more favourable to the Respondent (Father) than my ultimate decision in a number of significant respects. The Applicant (Mother) offered additional access time during the first few years after the move. Her offer based child support on a $40,000 income whereas I imputed a higher income of $87,200 to the Respondent (Father). She also offered to waive child support for the months that the Respondent (Father) exercised access in New York. The Applicant (Mother)’s offer was less favourable to the Respondent (Father) in the allocation of holiday time with Vincenzo.

17The Respondent (Father) delivered an offer to settle dated November 5, 2017; it expired November 11, 2017, before the trial’s commencement on November 14, 2017. In the offer, he consented to the move, provided that Vincenzo “has had his open heart surgery in Canada and no further open heart surgeries are medically necessary” Vincenzo’s doctors advised some time ago that it was unclear if Vincenzo would ever need open heart surgery. They hoped that a less invasive procedure would correct the defect; at least one doctor suggested that Vincenzo would benefit from delaying even the less invasive procedure. While it is possible that the Respondent (Father) intended the reference to “open heart surgery” to include the less invasive procedure, the history of communications between the parties is such that it is equally likely that he deliberately used that term knowing that if the offer was accepted the move could be delayed indefinitely. The Respondent (Father)’s offer also included that he would pay no child support to compensate for the “high cost of exercising access”.

18The Applicant (Mother)’s offer to settle weighs in her favour in terms of the assessment of overall success. The Respondent (Father)’s offer to settle does not assist his position in terms of relative success.

3. Reasonableness of the Parties’ Behaviour

19The FLR’s r. 24(4) states that a court can sanction unreasonable conduct through a costs award.

20Subrule 24(5) provides criteria for determining the reasonableness of a party’s behaviour, and reads as follows:

DECISION ON REASONABLENESS

(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

(c) any offer the party withdrew or failed to accept.

21Each party complained about the other’s unreasonable conduct both leading to the trial and during the trial itself. Neither party provided details about time they expended outside trial preparation and attendance, and neither party asserted that costs of a prior event were reserved to me. The trial judge should not deal with costs requests that were or should have been addressed at these prior steps in the case: Islam v. Rahman, 2007 ONCA 622, [2007] O.J. No. 3416.

22Regarding the trial, the Applicant (Mother) presented her case before me in a generally organized and responsible fashion. The Respondent (Father) acted reasonably by retaining counsel to help with trying these difficult and emotional issues. By my observations, Ms. De Vries was respectful and helpful to both the Applicant (Mother) and the court.

23I appreciate that the Respondent (Father) who is clearly devoted to Vincenzo found it difficult to propose a settlement of the mobility issue. However, in this case there was significant evidence including the report from the Office of the Children’s Lawyer that suggested that the move, particularly the anticipated reduction in Vincenzo’s exposure to conflict would be in Vincenzo’s best interests. The offers to settle exchanged by the parties in this case have a bearing on my assessment of costs.

24In her offer to settle, the Applicant (Mother) attempted to ensure that the Respondent (Father)’s parenting time with Vincenzo would remain largely the same after the move. She also made financial compromises by offering to pay for her and Vincenzo’s travel back to Canada and by offering to waive child support when the Respondent (Father) travelled to New York. The Applicant (Mother)’s offer to settle was carefully considered and portrayed reasonable behaviour. The Respondent (Father)’s failure to consider this offer, again, and in light of all of the other independent information available to him at the time, was less reasonable.

25The Respondent (Father) states in his costs submissions that “the Applicant mother could have promoted an early settlement of the issues if she had simply provided the necessary disclosure” regarding her financial resources to fund Vincenzo’s travel and details of where he would live and attend school. This position is disingenuous: the evidence at trial showed that the Applicant (Mother) provided extensive detail in a largely timely fashion regarding all the above. Furthermore, the evidence suggested that the Respondent (Father) was unwilling to even consider the possibility of Vincenzo moving without the matter being determined at trial.

26I find that the Respondent (Father) was particularly unreasonable in his financial disclosure and the position he took on his income. Although I make no finding, I note that a persistent refusal by a party to make accurate financial disclosure and reveal their true income may constitute bad faith for costs purposes: DePace v. Michienzi, 2000 CanLII 22460 (ON SC), [2000] O.J. No. 4436 (Ont. S.C.); and Kardaras v. Kardaras, 2008 ONCJ 616, [2008] O.J. No. 5721. The Respondent (Father)’s offer to settle made no reference to his income and simply stated that he would be absolved of his obligation to pay child support. The Applicant (Mother)’s offer to settle the financial issues was very reasonable and superior to my ultimate decision.

27Overall, even allowing for the difficult nature of the issue at stake, the Applicant (Mother)’s conduct and behaviour was more reasonable than that of the Respondent (Father).

4. Factors in Setting the Amount of Costs

28Rule 24(11) of the FLR sets out a number of factors to consider in determining the costs quantum.

29One of the considerations in an assessment of costs is to fix costs in an amount that is “fair and reasonable” for the unsuccessful party to pay in a particular proceeding: Farjad-Tehrani v. Karimpour, [2009] O.J. No. 1665 (Ont. S.C.) at para. 32, aff’d 2010 ONCA 326 at para. 4.

30The law on costs claimed by a self-represented litigant is set out in detail in Izyuk v. Bilousov, 2011 ONSC 7476, [2011] O.J. No. 5814. In it, Justice Pazaratz followed Price J.’s decisions in Jahn-Cartwright v. Cartwright, 2010 ONSC 2263, [2010] O.J. No. 3307, and Cassidy v. Cassidy, 2011 ONSC 791, [2011] O.J. No. 1053.

31The following principles are taken from these aforementioned cases:

• The Court of Appeal [in Fong v. Chan, 1999 CanLII 2052 (ON CA), 1999 O.J. 4600 (Ont. C.A.)] confirmed a self-represented litigant's entitlement to costs.
• Self-represented litigants are not entitled to costs calculated on the same basis as litigants who retain counsel.
• The self-represented litigant should not recover costs for the time and effort that any litigant would have to devote to the case.
• Costs should only be awarded to those lay litigants who can demonstrate they devoted time and effort to do the work ordinarily done by a lawyer retained to conduct the litigation.
• A party with counsel, opposite an unrepresented litigant, should not perceive that they are immune from a costs award merely because such opposite party is unrepresented. They should be discouraged from presuming they will face only nominal costs.
• The right of a self-represented litigant to recover costs is not automatic. Quantification of those costs may be difficult. But without the option of awarding meaningful costs to self-represented litigants, the court's ability to encourage settlements and discourage inappropriate behaviour will be greatly diminished.
• Determination of costs for self-represented litigants should take into account all of the objectives which costs orders should promote. Rules 18 and 24 of the [FLR] apply. Otherwise the resulting amount can render the entitlement to costs illusory; undermine access to justice by self-represented litigants; and frustrate the administration of justice.
• If a self-represented litigant, in performing the tasks that would normally have been performed by a lawyer, lost the opportunity to earn income elsewhere, this may be a relevant factor. But costs for self-represented parties are not the same as damages for lost income. Remunerative loss is not a “condition precedent” to an award of costs.
• To require proof of lost income would disqualify litigants who are homemakers, retirees, students, unemployed, unemployable, and disabled; and deprive courts of a tool required re administration of justice.
• Lost income may be one measure. But even if no income was lost, the self-represented party's allocation of time spent working on the case may still represent value. The fact that a self-represented litigant is not a lawyer who charges a standard and commonly accepted hourly rate makes it more difficult—but not impossible—to assess their costs. However, the difficulty in valuing the time and effort of the lay litigant is not a good reason to decline to value it.
• An “applicable hourly rate” should be taken into account when quantifying even a self-represented lay litigant's costs. But the appropriate hourly rate, once determined, is only one of several factors to be considered.
• In considering the appropriate hourly rate, the court should consider what the lay litigant's reasonable expectations were as to the costs he or she would pay if unsuccessful.
• Where one party is represented by a lawyer and the other is not, the hourly rate that the represented litigant's lawyer is entitled to claim on an assessment of costs should inform the reasonable expectations of both parties as to the costs that they will likely be required to pay if unsuccessful. Otherwise, litigants represented by lawyers would be less circumspect with regard to their conduct and their response to the opposing party's efforts to settle because that party is a self-represented litigant.
• The hourly rate of the lawyer representing the unsuccessful party is only one of several factors to be considered. It does not necessarily entitle the successful self-represented party to claim the same rate for time spent.
• As with counsel, the appropriate hourly rate may be affected by the level of indemnification or recovery deemed to be appropriate, given all of the [FLR’s] Rule 18 and 24 considerations.
• There are no automatic calculations. We should not simply use the hourly rate for the opposing lawyer, or the hourly rate the self-represented litigant earns outside of court.
• The quality of the self-represented litigant's work and documentation must be considered, and its impact on hearing time and trial results. The emphasis must be on the value of the work done. This encompasses both the value of the work to the Court and the value of the time spent to the litigant who performed the work, or who hired a lawyer to perform it.
• Calculating the amount of time the self-represented litigant should be compensated for can be a complex endeavour. All litigants suffer a loss of time through their involvement in the legal process. A self-represented litigant should not recover costs for the time and effort any litigant would have to devote to the case, including attendances in court where the party would ordinarily attend.
• But if the self-represented litigant demonstrates he/she did the work ordinarily done by a lawyer, then they will have justified receiving an award of costs—including time spent on communications, drafting documents and correspondence, preparation and compensation for time spent arguing their case.
• Self-represented litigants may be held to the standards of civility expected of lawyers and a proper reprimand for failure to do so is an award of costs on a substantial indemnity basis. Where either a litigant or his/her lawyer acts unreasonably, by incivility or otherwise, it is a factor that may result in discounting the costs that should otherwise be awarded. This discounting is a necessary part of quantifying costs and is consistent with the overall purpose of costs awards in improving the efficiency of the administration of justice.

(a) Importance and Complexity of Issues

32The issues in this case were very important to both parties and Vincenzo. Each party is a caring and loving parent and wants Vincenzo in his or her care for as much time as possible. The move to New York by necessity creates a significant change for Vincenzo.

33The issues in this trial were also complex. The parties have a high conflict relationship and very poor communication. Vincenzo has a heart defect that will require medical intervention in either Canada or the U.S. Vincenzo also has some behavioural issues that will need to be addressed. All these issues were interwoven with the mobility issue, making its determination more complicated.

(b) Reasonableness or Unreasonableness of Each Party’s Behaviour

34The FLR’s r. 24(5)(a) requires that the court consider the reasonableness of a party's behaviour in relation to the issues from the time they arose. My findings on this issue are set out above.

(c) Lawyers’ Rates—Rule 24(11)(c)

35The Applicant (Mother) was self-represented, albeit she retained counsel for some specific work. Her claim for costs is not based on a lawyer’s rate or number of hours worked, but rather on various costs she incurred before and during the trial, including travel and accommodation expenses. She also claims costs related to the income lost from the job offer she had to decline because the move issue was yet undetermined.

36To set an appropriate and reasonable hourly rate to apply to the Applicant (Mother)’s work preparing for and attending the trial, I considered the following:

• The Applicant (Mother) represented herself diligently, reasonably and appropriately for much of the trial. She was for the most part well-organized in a manner expected of lawyers.
• Allowing for the fact that the Applicant (Mother) is not a lawyer, her trial preparation and presentation was generally of a high calibre.
• The Applicant (Mother) appeared to work cooperatively and respectfully with counsel for the Respondent (Father); the same was true for Ms. De Vries.
• The Applicant (Mother)’s conduct of the hearing including her examinations and cross-examination were appropriate and did not unreasonably lengthen the proceedings.

37The Applicant (Mother) seeks costs of $99,000 in relation to the loss of a job opportunity. She was terminated from her employment with Scotiabank in February 2015, and did not work thereafter. She was offered a lucrative job in New York City and attempted to bring a motion permitting her to move immediately. That motion was dismissed and costs awarded against her by McGee J.; accordingly, the Applicant (Mother) had to turn that job down.

38As noted above, if a self-represented litigant, in performing tasks normally performed by a lawyer, lost the opportunity to earn income elsewhere, this may be a relevant factor. This was not the case here, however. The Applicant (Mother) lost potential income from declining the job because she was unsuccessful in the interim motion. She did not work during this period and there are therefore no lost wages to consider in the assessment of costs.

39The Applicant (Mother) also sought costs associated with living expenses such as the mortgage and property taxes on her husband’s home in Toronto where she lived with Vincenzo up until the trial and her travel expenses back and forth to New York. She argues that she would not have incurred any of these expenses had the Respondent (Father) consented earlier to the move. Again, the objective here is not to fully indemnify the successful party for all of the financial implications associated with the legal dispute. The objective is to fix an hourly rate that reasonably and appropriately reflects the work that the Applicant (Mother) performed as a self-represented party in conducting the legal proceedings. These claims by the Applicant (Mother) do not reasonably form part of the costs analysis.

40Ms. De Vries was called to the bar in 2014. Her billing rate is $225/hour.

41Having considered all of the foregoing factors, an hourly rate of $100/hour for the Applicant (Mother)’s work on trial preparation and attendance is reasonable.

42The Applicant (Mother) also retained two different lawyers to assist her. She paid fees totalling $4,348.21 that shall be included in the consideration of costs.

(d) Time and Effort Expended

43The Respondent (Father)’s counsel spent approximately 186 hours to prepare for and conduct the trial.

44The Applicant (Mother) states that she spent 960 hours preparing for and conducting the trial however she did not provide a detailed breakdown as to how these hours were spent.

45While the Applicant (Mother) may very well have expended 960 hours in preparing for and attending at the trial, in terms of an assessment of costs, the time spent is excessive. The amount of time expended by the Respondent (Father)’s lawyer is a more reasonable measure for the purposes of this costs analysis.

(e) Disbursements

46The Applicant (Mother) also advances a claim for various disbursements, some of which are appropriate and others that are not.

47The following are appropriate disbursements:

• Printing $1,461.70
• Scanning $328.38
• Summons to Witness $143.20
• Ashworth Report $1,608.75
• Ashworth Attendance Fee $330.00
• Total Disbursements $3,872.03

(f) Parties’ Financial Positions – Rule 24(11)(f) – Any Other Relevant Matter

48The Respondent (Father) asks the court to consider his financial circumstances in reducing or eliminating any obligation for him to pay costs.

49Izyuk states the following (para. 50):

Ability to pay costs can also be considered as “any other relevant matter” under subrule 24(11). The financial means of the unsuccessful party is a factor that may rebut the presumption that the successful party is entitled to full recovery for costs: See M. (A.C.) v. M. (D.) (2003) 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.); Harrington v. Harrington (2009) 2009 ONCA 190, 63 R.F.L. (6th) 274 (Ont. C.A.).

50In my trial decision, I commented on the Respondent (Father)’s failure to make full and timely financial disclosure. This failure required that I impute an income to him. I am not prepared to now consider his alleged impecuniosity—which the evidence contradicts in any event—as a factor in my costs assessment.

IV. Summary and Conclusion

51The Applicant (Mother) was the successful party and she is presumptively entitled to costs.

52The Applicant (Mother) made a reasonable offer to settle that contained no time restriction; her offer was superior to the trial result in most respects. The Respondent (Father) made an offer to settle the parenting issues, but its terms were such that I give it little weight in the overall assessment.

53The Respondent (Father)’s position in the litigation was understandable from an emotional perspective, but considering the OCL clinician’s recommendations and those of the other experts involved with Vincenzo, his position was less reasonable.

54Although these were secondary issues in the trial, the Respondent (Father)’s approach to the disclosure, income determination, and child support was unreasonable. Accordingly, the costs award shall include a sanction for such behaviour.

55Considering all the above factors, the Respondent (Father) shall forthwith pay the Applicant (Mother) the sum of $22,000 inclusive of disbursements and HST. Of this sum, $10,000 shall be enforced by the Family Responsibility Office as an incident of child support.