ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: NATHAN NIFCO (Applicant) AND : DANIELA NIFCO (Respondent)
BEFORE: M. D. FAIETA, J.
COUNSEL: Stephen Benmor, for the Applicant Sharon R. Shore, for the Respondent
HEARD: Submissions in Writing
COSTS ENDORSEMENT
BACKGROUND
[1] The background related to this costs motion is described in my decision dated April 19, 2018. See Nifco v. Nifco, 2018 ONSC 2603. I granted the Respondent’s motion for interim child support, interim spousal support and disclosure of outstanding financial information. I dismissed the Applicant’s motion to lift a preservation order so that $25,000 could be taken to pay his own legal expenses.
[2] The Respondent submits that she should be awarded full indemnity costs of $14,142.25. The Applicant submits costs be fixed in the amount of $3,534.38 for two reasons: (1) the Respondent was not successful on all items of relief sought; (2) the time docketed by counsel for the Respondent is excessive. The Applicant also submits that the Applicant has limited ability to pay a costs order and that such amount should only be payable upon the conclusion of this proceeding or the sale of the matrimonial home.
[3] For reasons described below, I order that the Applicant pay costs of $13,000, inclusive of disbursements and taxes, to the Respondent within 30 days.
ANALYSIS
[4] In family law proceedings, the award of costs is governed primarily by section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, as well as by Rules 18 and 24 of the Family Law Rules, Ontario Regulation 114/99, as amended.
[8] The purposes of an award of costs under the Family Law Rules are to: (1) indemnify successful litigants for the cost of litigation; (2) encourage settlement; (3) discourage and sanction inappropriate behavior by litigants; (4) ensure that cases are dealt with justly: Bridge v. Laurence, 2017 ONSC 1655, paras. 9-10 (Ontario Divisional Court).
[5] 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.
[6] Unlike the Rules of Civil Procedure, the Family Law Rules does not provide for “partial indemnity costs” or “substantial indemnity costs”. The Family Law Rules eliminates “… the two traditional scales of costs. Instead, the court must fix the amount of costs at some figure between a nominal sum and full indemnity. The subrule demands flexibility in examining the enumerated list of factors without any assumption about categories of costs”: Costa v. Perkins, 2012 ONSC 3165, para. 50 (Ontario Divisional Court).
[7] Rule 24 of the Family Law Rules provides that:
(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
(c) any offer the party withdrew or failed to accept.
(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;
(c) order the lawyer or agent personally to pay the costs of any party; and
(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;
(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.
(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.
[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 party that makes an offer to settle and later obtains a more favourable order is generally entitled to full indemnity costs from the time that the offer to settle was made. Subrules 18(14) - 18(16) of the Family Law Rules provide:
(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.
[10] 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.) v. M.(D.), [2003] O.J. No. 3707, paras. 40-43.
[11] The application of the above costs considerations to the circumstances on this motion are addressed below.
Result in the Proceeding
[12] The Respondent succeeded in obtaining the main items of relief that she sought on this motion – namely child support, spousal support and disclosure. The Respondent’s motion for an order requiring the Applicant to bring the property taxes on the matrimonial home into good standing was not granted.
Offers to Settle
[13] The Respondent served an Offer to Settle on December 6, 2017, more than one month before the hearing of the motion. The Applicant did not accept the Offer to Settle. The Respondent‘s Offer to Settle was more favourable than the Order that I made:
| Issue | Respondent’s Offer | Order |
|---|---|---|
| Applicant’s Income for Support Purposes | $120,000 | $174,000 |
| Child Support | $2,235 per month | $3,084 per month |
| Spousal Support | $1,682 per month | $2,003 per month |
[14] I find that the Offer to Settle made by the Respondent satisfies the requirements of Rule 18(14) of the Family Law Rules and, accordingly, the Respondent is entitled to her costs on a full indemnity basis from the date that the Offer to Settle was served.
Reasonableness of the Parties’ Behaviour
[15] The Applicant did not pay the Respondent any spousal support since the date of separation. One week before the motion, he offered to pay her $200 per month in child support. The Applicant has also underpaid child support since separation. I imputed income to him that is far in excess of the $50,000 that he claims. His failure to accept the Respondent’s position (that his annual income should be imputed to be $120,000) was unreasonable given the available evidence and my finding that income of $174,000 per year should be imputed to him.
Importance, Complexity or Difficulty of the Issues
[16] The Respondent’s motion was straightforward and simple. However, it was made unnecessarily difficult by the Applicant’s inadequate financial disclosure.
The Hourly Rates Claimed
[17] The Applicant does not challenge the hourly rates claimed by Ms. Shore ($575 per hour) and an articling student ($150). I find that the hourly rates claimed are reasonable.
The Time Spent on the Case
[18] The Bill of Costs submitted on behalf of the Applicant shows that:
- Ms. Shore billed 13.9 hours, including 12.6 hours after the date that the Offer to Settle was served; and
- An articling student billed 26.8 hours, including 15.4 hours after the date that the Offer to Settle was served.
[19] The motion materials, including the factum, was drafted by the articling student and reviewed by Ms. Shore.
[20] The Applicant submits that the time billed by counsel for the Respondent is excessive. He states that both Ms. Shore and her articling student should have billed for five hours each. Both parties filed extensive materials in support of their positions on this motion. However, the Applicant did not support this assertion by providing evidence of the time billed by his counsel for this motion. I am not satisfied that the time billed by counsel for the Respondent is unreasonable.
Other Considerations
[21] The Applicant submits that he has very limited access to liquid assets to pay costs at this time. He states that he cannot access his RRSP assets to pay a costs order given the terms of a preservation order granted by Justice Stewart on June 6, 2017. Accordingly, I lift the preservation order solely in relation to the Applicant’s RRSP assets and solely for the purpose of satisfying this costs order. Within 75 days, the Applicant shall provide the Respondent with: (1) the amount(s) withdrawn from his RRSP asset(s) to pay this costs order; and (2) a copy of the statement of accounts for July, 2018 and August, 2018 for the RRSP asset(s) used to pay this costs order.
Conclusions
[22] I find that it is fair and reasonable for the Applicant to pay costs of $13,000.00, inclusive of taxes and disbursements, to the Respondent within 30 days.
M. D. FAIETA, J.
Released: July 26, 2018