Lewis v. Schuck, 2018 ONSC 4603

Court File and Parties

Date: 2018-07-30 Superior Court of Justice – Ontario

Re: Candice Laurie Dianne Lewis, Applicant And: Andrew John Schuck, Respondent

Before: M. D. Faieta, J.

Counsel: Melanie Larock, for the Applicant Kevin B. Peires, for the Respondent

Heard: Submissions in Writing

Costs Endorsement

Background

1The background related to this costs motion is described in my decision dated June 21, 2018. See Lewis v. Schuck, 2018 ONSC 3887. I granted the Applicant’s motion requiring the Respondent to produce his medical records related to his alcohol dependency from January 1, 2015 to date. The Respondent brought a cross-motion for an order requiring the Applicant to disclose her monthly bank statements from January, 2014 and for other financial documents. The Applicant had provided the Respondent with her bank statements for 2016 but not 2015. I ordered that the Applicant provide her bank statements for 2015.

2The Applicant submits that she should be awarded costs of $10,000. The Respondent submits that he should be awarded costs of $5,000.00.

3For reasons described below, each party shall bear their own costs of these motions.

Analysis

4In a family law proceeding, the award of costs is governed by section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended (“CJA”), as well as by the Family Law Rules, Ontario Regulation 114/99, as amended.

5Section 131 of the CJA provides that, subject to the rules of court, costs of a proceeding are in the discretion of the court.

6Under the Family Law Rules, the award of costs is governed primarily by Rules 18 and 24.

7Rule 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.

8A 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:

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.

(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.

9The 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).

10In a family law proceeding a successful party is presumptively entitled to an award of costs generally approaching full recovery:

(1) provided that the successful party has behaved reasonably and the costs claimed are proportionate to the issue and the result;

(2) subject to the factors listed in Rule 24(11), the directions set out under Rule 24(4) (unreasonable conduct), Rule 24(8) (bad faith) and Rule 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party.

See Forrester v. Dennis, 2016 ONCA 214, para. 22; Berta v. Berta, 2015 ONCA 918, paras. 92, 93.

11Unlike the Rules of Civil Procedure, the Family Law Rules does not provide for partial indemnity, substantial indemnity or full indemnity costs. Accordingly, a court need not find special circumstances in a family law proceeding in order to make an award of costs on a substantial indemnity basis: Sordi v. Sordi, 2011 ONCA 665, para. 21. In contrast, under the Rules of Civil Procedure costs are awarded on a partial indemnity basis unless justice can only be done by awarding costs on a substantial or full indemnity scale: Laczko v. Alexander, 2012 ONCA 872, para. 2. In a civil proceeding costs may only be awarded on a substantial indemnity and full indemnity basis in exceptional circumstances. Costs may only be awarded on a substantial indemnity basis where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties or where, under Rule 49.10, a plaintiff has obtained a judgment more favourable than his offer to settle: Toronto Star Newspapers Ltd. v. Fraleigh, 2011 ONCA 555, para. 34. Costs on a full indemnity scale may be awarded in a civil proceeding only where a party’s conduct is “especially egregious”: Net Connect Installation Inc. v. Mobile Zone Inc., 2017 ONCA 766, para. 8.

12Nevertheless, despite these differences, an award of costs under both the Family Law Rules and the Rules of Civil Procedure “… 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.

13The application of the above costs considerations to the circumstances on this motion are addressed below.

Result in the Proceeding

14Both parties had partial success on their motion.

15The Applicant sought and was granted an order requiring that copies of the Respondent’s medical records, including records from his family physician, psychiatrist (Dr. Kalam Sutandar), and any other medical, psychiatric or health professional and any hospital and addiction treatment facility in relation to the Respondent’s mental health and alcohol dependency issues from January 1, 2015 to date. However, her request for an Order that the Respondent provide his decoded OHIP summary for the period from January 1, 2015 to date was dismissed.

16The Respondent sought an order that required the Applicant to provide: (a) copies of the Applicant’s monthly statements for her TD bank accounts, ending in 935 and 639; (b) copies of the Applicant’s monthly statements for her TD credit card, ending in 999, from January 1, 2014 to date; (c) a letter from TD Bank setting out all accounts held by the Applicant since January 1, 2014; (d) a letter from the Applicant’s employer setting out her work schedule. Prior to the hearing of the motion the Applicant delivered bank statements for 2015 but not 2016. I ordered that such records be also provided for 2015. I dismissed the other relief sought by the Respondent.

Importance, Complexity or Difficulty of the Issues

17None of the issues on this motion were complex or difficult. The issue of the production of medical records was of greater importance as it informs the question of whether the Respondent is fit to care for their 2 ½ year old daughter.

Reasonableness of the Parties’ Behaviour

18The Respondent should not have refused to release his medical records to the Applicant especially given that: (1) he had authorized their release to the Office of the Children’s Lawyer for purposes of their investigation into his daughter’s best interests; (2) he relied on certain records made by Dr. Sutandar at the hearing of the motion.

19The Applicant delivered her bank statements (for 2016 to 2018, but not 2015) after being served with the Respondent’s motion record. Given that the Applicant has not prepared financial statements for 2015 and 2016 relating to the Applicant’s personal training business because she states that she earned no income during that period (which is denied by the Respondent), and given that most of the Applicant’s revenues were received in cash, it was reasonable for the Respondent to request her banking records for the 2015-2016 period.

The Reasonableness of the Costs Sought

The Hourly Rates, Time Spent and Expenses Claimed

20Both parties filed Bill of Costs.

21The Respondent’s Bill of Costs provides:

Hourly Rate	Hours	Fees
Kevin B. Peires – 2007 Call	$300	20.8
Gary M. Peires 2011 Call	$275	2.5
Total Fees Inclusive of HST
Disbursements – photocopies, process server, mobile notary
Total Fees, Disbursements & HST

22The Applicant’s Bill of Costs provides:

Hourly Rate	Hours	Fees
Melanie A. Larock – 2011 Call	$400	21.3
Rebecca D. Organ – 2017 Call	$275	21
Rebecca Morgan, Junior Law Clerk	$175	4.4
Total Fees Inclusive of HST
Disbursements – filing documents, photocopies case law research – inclusive of HST
Total Fees, Disbursements & HST

23In my view the time docketed by counsel for the Applicant exceeds what might reasonably have been expected and required given the dockets of counsel for the Respondent.

Proportionality of the Costs Sought to the Issue and Result

24The costs incurred in relation to the two hour motion that was held in respect of both motions appears disproportionate to the issues and result – particularly as the Family Law Rules contain many rules related to disclosure designed to avoid the time and expense of the types of motions brought in this case.

Offer to Settle

25The motions were to be heard on February 22, 2018 but they were adjourned to March 13, 2018.

26The Applicant served two offers to settle. The Respondent made no offers to settle.

27The Applicant’s offers to settle were as follows:

1. Offer dated February 20, 2018: The Respondent shall produce the requested medical records and a decoded OHIP summary from January 1, 2015. The offer remains open until one minute after the commencement of the hearing of the motion. If the Offer is accepted by the Respondent on or before Noon on February 21, 2018, each party shall bear their own costs. If the Offer is accepted afterwards, the Respondent shall pay the Applicant’s costs.

2. Offer dated March 6, 2018: The Respondent’s motion shall be dismissed. The offer remains open until one minute after the commencement of the hearing of the motion. If the Offer is accepted by the Respondent on or before 5:00 pm on March 7, 2018, each party shall bear their own costs. If the Offer is accepted afterwards, the Respondent shall pay the Applicant’s costs.

28The Applicant did not obtain an order that was as favourable as, or more favourable than, either offer. Accordingly the offers made by the Applicant do not satisfy the requirements of Rule 18(14) of the Family Law Rules. In any event, given that the offers did not contain an element of compromise and were served shortly before the scheduled hearing of the motion, these offers defeated the spirit of this rule: Murphy v. Murphy, 2010 ONSC 6204, paras. 27, 28. For that reason I would not have exercised my discretion under Rule 18(14) to award full recovery costs had, on its face, the requirements of Rule 18(14) been satisfied.

Conclusions

29Success on these motions was divided. Each party’s unreasonable actions led to the unnecessary hearing of both motions. Each party shall bear their own costs of these motions.