Court File and Parties

COURT FILE NO.: FC-15-170 DATE: 2018/06/25 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: N. A.- Z. AND A. H.

BEFORE: Madam Justice Tracy Engelking

COUNSEL: Emily Comor, Counsel for the Applicant Gilbert Ngieme Wansome, Counsel for the Respondent

HEARD: In writing

Endorsement on Costs

[1] A trial was held in the within matter from May 15 to 19, May 23 to 26 and July 24 to 27, 2017. The court’s Reasons for Decision were released on January 29, 2018. In the Reasons, the parties were permitted to provide submissions on costs at 10 day intervals after February 15, 2018, in the event that they were unable to reach any agreement regarding same. However, there was some delay in ensuring that Mr. H. received the court’s decision as his trial counsel had ceased to remain on the record. On February 21, 2018, the court received confirmation that Mr. H. had retained new counsel, Mr. Gilbert Ngieme Wansome, and a copy of the Reasons for Decision were provided to him.

[2] On February 26, 2018, the court received a copy of the Applicant’s Cost Submissions. On March 15, 2018, the following message was sent on my behalf by my judicial assistant to Mr. Wansome:

In my Reasons for Decision released on January 29, 2018, I stated the following in relation to the issue of costs: “Failing agreement by counsel by February 15, 2018 as to the liability for costs of this matter, counsel will make written submissions to me at intervals of 10 days from February 15, 2018 and I will make an order.” On February 26, 2018, I received Submissions on costs from Ms. [A. – Z.], which were also served on Mr. [H.] (via his counsel) on that date, service by courier being effective on the following date. Mr. [H.]’s Submissions on Costs were, therefore, due on March 8, 2018. I have not received them to date, nor have I received any request for an extension of the timeline. I recognized that there may have been a brief delay in Mr. [H.] receiving a copy of my reasons for Decision based on his change of counsel. I am, therefore, prepared to extend the timeline for receipt of Mr. [H.]’s submissions on Costs to March 31, 2018, after which date, I will render my decision, with or without them.

[3] No submissions on costs have been received from or on behalf of Mr. H., and I am therefore now providing my decision with respect to same.

Positions of the Parties

[4] In her submissions on costs, Ms. A.-Z. is seeking full recovery of her costs of $291,698.77 inclusive of disbursements and HST. She asserts that not only was she completely successful at trial and that the outcome was less favourable to Mr. H. than any of the several offers she made, but that Mr. H.’s behaviour was unreasonable throughout the proceedings, and therefore she is entitled to full recovery.

[5] As was indicated above, Mr. H. provided no submissions on costs and his position is unknown.

Applicable Law on Costs

[6] Rule 24(11) of the Family Law Rules outlines that the Court shall take into consideration the following factors in setting an amount for costs: the importance, complexity or difficulty of the issues; the reasonableness or not of each party’s behaviour; the lawyer’s rates; the time properly spent on the case; and, any other relevant matter.

[7] In determining the reasonableness or unreasonableness of a party, pursuant to Rule 24(5) the Court is to examine the party’s behaviour in relation to the issues from the time they arose; the reasonableness of any offer to settle; and, any offer the party withdrew or failed to accept.

[8] Rule 18(14) dictates that a party is entitled to costs from the date of an offer on a full recovery basis if the criteria contained therein are met.

[9] The Court still has discretion to ensure that costs are fixed in an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances of any case as per Boucher et al v. Public Accountants Council for the Province of Ontario at para 26.

[10] As noted by Cronk J.A. in Berta v. Berta, 2015 ONCA 918 at paragraph 94, “a successful party is 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(140 (offers to settle), and the reasonableness of the costs sought by the successful party : M.(A.C.) , at paras. 40-43.”

Analysis

[11] The Applicant made the following Offers to Settle over the course of this file:

• May 27, 2014 – this was not an Offer to Settle signed by the client pursuant to Rule 18, however, it was a letter from her counsel to Mr. H. suggesting terms of a Separation Agreement (the parties had separated a few weeks earlier). In it, Ms. A.-Z proposed sole custody and primary residence of the children with her with access to him as agreed between them, Federal Child Support Guideline support to be paid by him, proportional sharing of s. 7 expenses, exclusive possession of the matrimonial home to her, and an equalization of the NFP;
• August 24, 2016 – two separate Offers to Settle were sent separating the financial and parenting issues, however, they were attachments to Ms. A.-Z.’s Settlement Conference Brief, and were not separately served on Mr. H.;
• September 11, 2016 – new Offer to Settle on the financial issues served on Mr. H.’s then counsel, Gonen Snir, providing that Mr. H. pay table child support on an income of $99,369, 40% of the children’s extraordinary expenses, $80,000 in full and final settlement of all outstanding child support and section 7 arrears as well as equalization payment, and that Mr. H. receive one-half of the Family Law Value of Ms. A.-Z.’s pension ($43,370);
• November 24, 2016 – new Offers to Settle were served on Mr. H., who was then self-represented, by email. Ms. A.-Z. offered to sever the parenting issues from the financial ones and to submit to a parenting assessment by Dr. Abe Worenklien with supervised access by Mr. H. (which had just been ordered on a temporary basis by De Sousa J.) pending the results of the assessment. On the financial issues, Ms. A.-Z. offered that Mr. H. pay table child support on an income of $125,000 and an equal share of the children’s extraordinary expenses, that Mr. H. pay $40,000 as his share of the children’s daycare expenses to November 2016, that there would be no arrears of child support owing, that there would be no equalization payment owing by Mr. H. but that Ms. A.-Z. would retain her pension, that Mr. H. hold life insurance of $250,000 and that he pay to Ms. A.-Z. $35,000 in costs or for costs to be determined by written submissions;
• December 13, 2016 – Final Offer to Settle on the parenting issues which provided for sole custody and primary residence of the children with Ms. A.-Z. and once weekly supervised and once weekly skype access to Mr. H., unsupervised every second weekend access on the condition that Mr. H. surrender all of his passports prior to each visit and that he post a bond of $50,000, among other terms, and no costs if accepted by December 21, 2016.

[12] Mr. H. made no Offers to Settle except one dated August 26, 2016 which was attached to his Settlement Conference Brief and not served separately on Ms. A.-Z. On November 21, 2016, Mr. H.’s then lawyer, Julie Gravelle, sent an email to Ms. A.-Z.’s counsel proposing a partial settlement of the financial issues by arrears of child support, contributions to s. 7 expenses and equalization being resolved by neither party making any payment to the other.

[13] I am not prepared to consider the parties’ respective August 24, 2016 and August 26, 2016 offers to settle, neither having served them on the other outside of the Settlement Conference process. I do not consider them to be Rule 18(14) offers, having only formed part of the parties’ briefs for discussion at the conference.

[14] Having said that, I am of the view that Ms. A.-Z. would be entitled to full recovery costs on the financial issues from the date of her September 11, 2016 Offer to Settle, which was not withdrawn by her November 24, 2016 Offer to Settle, to the extent that the outcome of the trial was less favourable to Mr. H. than if he had accepted the offer. On the issue of child support and section 7/extraordinary expense arrears, I found at trial that Mr. H. owed to Ms. A.-Z. $12,789 in child support arrears for 2014, $34,188 in child support arrears from January 1, 2015 to December 31, 2017, and $40,295.78 in arrears of s.7/extraordinary expenses from June 1, 2014 to December 31, 2017. I also found that he owed Ms. A.-Z. an equalization payment of $10,751.20. However, the trial decision included arrears up to December 31, 2017, some 15 months more of arrears than at the date of the offer.

[15] The amount that Mr. H. owed Ms. A.-Z. as a result of the trial decision for the period of June 2014 to September of 2016 (the date of her offer) is as follows:

• $12,789 in retroactive child support from June to December of 2014;
• $18,225 in child support for 2015 ($2,525 per month less amount paid of $1,355 per month as of April 1, 2015);
• $15,039 in child support from January to September of 2016 ($3,026 per month less amount paid of $1,355 per month);
• $7,951.50 in section 7/extraordinary expense arrears for 2014;
• $12,698.84 in section 7/extraordinary expense arrears for 2015;
• $8,613 in section 7/extraordinary expense arrears for January to October of 2016.

[16] The total of the above-noted amounts is $75,316.34. When the ordered equalization payment of $10,751.2 is added to that, for a total of $86,067.54, Ms. A.-Z.’s offer that Mr. H. pay $80,000 for all arrears and the equalization is $6,067.54 less than he was ordered to pay at trial. In addition, Ms. A.-Z. offered that Mr. H. receive one-half of the Family Law Value of her pension of $43,370, and that his child support be payable on $99,369. The offer was thus substantially more favourable to Mr. H. than was the outcome of the trial.

[17] Similarly, Ms. A.-Z.’s Offer to Settle of November 24, 2016 was also far more favourable to Mr. H. than was the outcome of trial, particularly in relation to quantum of income on which child support was based, the requirement for Mr. H. to maintain life insurance and the equalization payment.

[18] With respect to the parenting issues, Ms. A.-Z. made a very reasonable Final Offer to Settle on December 13, 2016. Ms. A.-Z. was concerned at that juncture about the theft of the children’s passports from her office. Notwithstanding her concern, Ms. A.-Z.’s offer of December 2016 included unsupervised weekend access on certain conditions, and Mr. H. fared much worse at trial in this regard. Mr. H., of course, would have been much better off accepting the proposal made by Ms. A.-Z. shortly after the parties separation in May of 2014, avoiding litigation and supervised access altogether. The only access he was ultimately granted at trial was supervised access at the discretion of Ms. A.-Z.

[19] In addition to the offers which were made by Ms. A.-Z., and which I have considered, I find that Mr. H. behaved unreasonably throughout the proceedings. In the trial decision, I found Mr. H. to be entirely lacking in credibility, so much so that it was at times difficult to discern fact from fiction. Additionally, I found that he acted seemingly in a way as to want only to cause pain and expense to Ms. A.-Z. in relation to the issues of N.’s school and the sale of the Goulbourn house. He also acted without regard for N. on the issue of her counselling. Mr. H., moreover, failed to provide adequate disclosure to Ms. A.-Z., to the extent that I struck his pleadings on the financial issues on motion at the commencement of trial. He hid employment and/or income, he acted contrary to existing court orders relating to access, and he made the job of Ms. Comor exceeding difficult in terms of tracing his activity, whereabouts and money.

[20] For all of the above reasons, I find that Ms. A.-Z. would be entitled to full recovery costs on the financial issues from September 11, 2016, and on the parenting issues as of December 13, 2016. However, given that Ms. Comor’s bill of costs does not break down the costs according to the issues, and that they are minimal between September 11 and the end of December 2016, Ms. A.-Z. will be entitled to her costs on a full recovery basis from January 1, 2017.

[21] The issues were exceedingly important to the parties, and the flight risk and financial issues were complex; the former because of the surreptitiousness with which Mr. H. took steps to arrange matters and the latter because of a lack of disclosure and forthrightness from Mr. H. in terms of his employment/financial affairs.

[22] Ms. Comor was called to the Bar in 1994, and I find her rate of $325 per hour to be reasonable. Ms. Catherine Deutsch-Turgeon was a student-at-law in 2015 and a new lawyer in 2016. I find her rate of $180 per hour to be high given her level of experience when she started working on the file in 2016. I would reduce her rate to $100 per hour. I additionally find that Ms. Comor’s rate of $3,000 per day for trial and Ms. Deutsch-Turgeon’s of $750 per day reasonable.

[23] I find as well the time spent on the preparation of the submissions for costs of 26.2 hours for Ms. Comor and 8.4 hours for Ms. Deutsch-Turgeon to be excessive. I would limit it to a total of 10 hours for Ms. Comor and two hours for Ms. Deutsch-Turgeon.

[24] Ms. A.-Z.’s costs to the end of September 2016 at a full recovery rate, with Ms. Deutsch-Turgeon’s rate being $100 per hour is $64,312.50. Her costs at a full recovery rate between September 11, 2016 and December 13, 2016 are an additional $1,657. Partial recovery of her costs to December 30, 2016 will be $44,000.00

[25] From January of 2017 onwards, Ms. A.-Z’s costs at a full recovery rate with the adjustments referred to in paragraphs 21 and 22 above are $176,255. Ms. A.-Z.’s bill of costs includes additionally HST on her counsels’ fees and disbursements inclusive of HST at $17,156.40. I would reduce the disbursements by one-half of the fee paid to Chantal Bourgeois to $2,899 for the custody and access assessment, as each party was to contribute equally to same. Disbursements inclusive of HST would therefore become $13,880.53.

[26] The end result is that Mr. H. will have to pay Ms. A.-Z. a total of $220,255 in fees, $28,633.15 in HST on the fees and $13,880.53 in disbursements inclusive of HST, for a total of $262,768.68.

Order

[27] There shall be an order as follows:

1. The Respondent, Mr. H. shall pay to the Applicant, Ms. A.-Z. the sum of $262,768.68 costs in the cause, which are inclusive of disbursements and HST.

Madam Justice Tracy Engelking Date: June 25, 2018