Court File and Parties

Newmarket Court File No.: FC-07-27672-00 Date: 20180821 Ontario Superior Court of Justice

Between: Jordon Lazare, Applicant And: Renee Heitner, Respondent

Counsel: J. Wilson, Counsel for the Applicant K. Nathens, Counsel for the Respondent

Heard: May 31, 2018

Costs Endorsement

McGee J.

Introduction

[1] Dr. Lazare seeks a partial recovery of costs in the amount of $48,450 for this spousal support review heard May 31, 2018. He acknowledges that he was not wholly successful, and reflects that appreciation by reducing his claim from a full recovery of $57,160.

[2] This is not a decision in which it is necessary for me to explore the reasonableness of legal fees or time spent per [Rule 24(12) of the Family Law Rules] [1]. Counsels have each submitted Bills of Costs that reflect diligent, proportionate, market appropriate fees and disbursements. Some issue might be taken with individual billings – such as the applicant’s law clerk rates, or possible duplications from legal team work by both counsels’ offices; but those are easily overshadowed by the significant, overall savings of an expedited trial.

[3] In other words, if the measure of what an unsuccessful party should expect to pay in costs is that parties’ own costs incurred; then Dr. Lazare and Ms. Heitner are on the same footing and can take no real issue with the other’s account.

[4] To be decided are the effect of two of the four themes around which Ms. Heitner asks for an Order that no costs be paid.

1. the weighting of “divided success,” and whether it favours a view that duration of spousal support was a more important issue at trial than quantum;
2. whether her April 3, 2018 Offer to Settle was similar to the result at trial so that the failure of Dr. Lazare to accept that Offer protects her from an award of costs.
3. whether costs should only be assessed for the period from the service of her April 3, 2018 Offer to Settle to trial; and
4. if her means justify a reduction in costs.

[5] I can briefly dispose of the latter two themes. Justice Jarvis expressly reserved the issue of costs accumulated to the date of the January 16, 2018 Settlement Conference. Moreover, there is no basis in law to limit the applicant’s costs exposure to a period of time after which she served her first Offer to Settle. To do so would undercut the purposes of a costs award and the statutory incentives to serve early, meaningful Offers to Settle.

[6] Dr. Lazare opposes any view that Ms. Heitner is of modest means, and I agree. She has the means to pay a costs award through financing on her home, in the same manner as she chose to fund this litigation. She litigated expansively, and made no Offer to Settle until six weeks before trial.

[7] A finding of modest means in a costs award is not limited to income. It requires a broader view of overall litigation conduct. One cannot incur significant legal fees, knowing that one’s opponent is incurring costs in the same or greater range; and then claim a reduced exposure for costs due to modest means. As is often stated, true parties of modest means are the most careful of litigators.

The Weighting of “Divided Success”

[8] Ms. Heitner makes interesting submissions on the issue of divided success. She proposes that her success in avoiding an immediate termination of spousal support ought to be given greater weight in this costs determination than Dr. Lazare’s success on the determination of her income, the quantum of child and spousal support and the denial of her claim for indefinite spousal support.

[9] If success in a step in a case is divided, the court may apportion costs as appropriate. [2] Divided success is not equal success. It requires a comparative analysis. Most family cases have multiple issues and not all are equally as important, time-consuming or expensive to determine. [3] When there are a number of issues before the court, only the dominant issue may be the one that attracts an award of costs. When deciding what that issue was, the court must also consider the parties’ respective Offers to Settle. [4]

[10] In these reasons, I propose that the issues before the court are the primary consideration in assessing divided success, and the parties’ respective Offers to Settle are the secondary consideration.

[11] I will start with Ms. Heitner’s submissions, which included very helpful comparison of Dr. Lazare’s three Offers to Settle: August 2, 2017, March 20, 2018 and May 1, 2018; and Ms. Heitner’s April 3, 2018 Offer to Settle, and the result at trial. Counsel also calculated the lump sum value of the final spousal support Order.

[12] A review of the Offers to Settle supports Ms. Heitner’s submission that spousal support termination was the dominant issue between the parties. In negotiations, she was agreeable to setting off table support, imputing income, the resulting proportionate sharing of section 7 expenses; and, she was prepared to terminate spousal support December 31, 2021.

[13] But at trial, it was the other issues that dominated: Ms. Heitner pursued a large increase in spousal support based on a compensatory analysis, while maintaining full table child support in the face of agreed shared parenting. She opposed any imputation of income. Indefinite spousal support was an included issue (as a finding of compensatory entitlement could open the gate) but it was certainly not a dominant issue.

[14] Therein lies the dilemma of litigating off a different menu than one negotiates.

[15] Dr. Lazare’s counsel also created a chart. His compared the results at trial to each of the applicant and respondent’s positions at trial, rather than to the Offers. The chart shows Dr. Lazare to have been wholly successful on four issues: determination of Ms. Heitner’s income for support purposes, child support, section 7 expenses, and her request to increase spousal support. On the fifth: termination date for spousal support, he was successful – though not on his date - because Ms. Heitner had sought indefinite spousal support.

[16] A comparison of what was sought in the litigation, rather than within the Offers must be the primary [Rule 24(6) of the Family Law Rules] (divided success) analysis if I am to give effect to the purposes of costs award: to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants. [5] To do otherwise is to encourage all in, or all out litigation; or in other words, the all too familiar “accept my terms or I’ll fight you on everything.”

[17] As recognized in the Supreme Court of Canada in [Hryniak v. Mauldin] [6] a sea change is necessary if access to justice is to be preserved. A litigant ought not be rewarded for unduly complicating his or her case as a negotiation strategy.

[18] It was not unreasonable for Dr. Lazare to seek a termination of spousal support on a second review of spousal support, and he was successful in doing so, though not on his preferred date. It was unreasonable for Ms. Heitner to ask for $4,000 a month in indefinite spousal support and full table child support.

[19] Inappropriate litigation conduct is corroborated by a secondary consideration of the Offers to Settle. Dr. Lazare served a severable Offer in which Ms. Heitner could have obtained a consent Order for child support more favourable than that ordered at trial, and removed that issue from the litigation. Ms. Heitner’s only Offer: April 3, 2018 was not severable.

[20] Divided success is largely a discretionary exercise. In considering the whole of the litigation conduct by both parties, some reduction should be given relative to the termination date issue, but none sufficient to deprive Dr. Lazare of his costs.

Comparison of Offers to Settle and Reasonable Litigation Conduct

[21] Alternatively, Ms. Heitner proposes that her April 3, 2018 Offer to Settle was similar to the result at trial and that the failure of Dr. Lazare to accept that Offer protects her from an award of costs.

[22] I disagree. Her termination date was tied to child support that was less favourable to Dr. Lazare than the result at trial. Had she accepted the severable term for child support in Dr. Lazare’s May 1, 2018 Offer – which was higher than the result at trial – the difference over time could have significantly offset the net benefit to her of continuing spousal support. [7]

[23] As set out above, the fact that her Offer was not severable removed much of its potential to be protective – as did her subsequent litigation conduct.

[24] [Rule 24(5) of the Family Law Rules] provides, when 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.

[25] Dr. Lazare makes compelling submissions that Ms. Heitner was unreasonable in her litigation conduct. Specifically, he points to his series of three Offers from August 2, 2017 to May 1, 2018, the last of which mirrored child support provisions from her April 3, 2018 Offer for the specific purpose of removing it from the conflict.

[26] I agree that Ms. Heitner’s failure to accept, in effect, the terms of her own Offer for child support was unreasonable litigation conduct. In doing so, I give effect to a full recovery of costs per [Rule 18(14) of the Family Law Rules] on the issue of child support from May 1, 2018 forward.

[27] The failure to serve an Offer to Settle is an adverse factor when assessing costs. Offers to Settle play an important role in saving time and expense by promoting settlements, focusing parties and narrowing issues in dispute. [8] Although Ms. Heitner did make a comprehensive Offer, she only made one, and it came six weeks before trial. The effect is to leave her no protection for litigation costs preceding April 3, 2018.

[28] Certain of those costs were expressly reserved and must be given effect. I find that the costs of the adjourned Settlement Conference and the abandoned motion are recoverable on a full indemnity basis.

[29] Finally, Dr. Lazare also seeks costs for the valuation of his income and extensive disclosure of documents evidencing his income. In his view, the issue of his income was resolved much later than it ought to have been. I find no basis for an additional recovery of costs in this regard. Once the parties agreed on income, I can take no view of whether the prior requests for disclosure were overzealous. To do so in these circumstances could inadvertently disincentivize settling such an important issue.

Conclusion

[30] Assessing costs is “not simply a mechanical exercise,” [9] and it is well understood that courts do not necessarily reimburse a litigant for every dollar spent on legal fees. Ultimately, the court’s responsibility is to make a costs award which is proportional, fair and reasonable in all the circumstances. [10]

[31] Having reviewed the excellent submissions of both counsels, considered the arguments advanced and having reviewed the respective Bills of Costs and case law submitted, I grant the applicant costs in the rounded amount of $35,000 in fees and disbursements plus HST.

[32] This amount does not fit entirely within the three stages of analysis proposed by the applicant. It reflects the lack of success on termination of spousal support, does not include the costs of producing disclosure and discounts the expert’s fees to determine income which in my view were his obligation to incur. The amount does reflect a full recovery of certain of the costs incurred after May 1, 2018, the prior reserved event, and a partial recovery for the balance.

[33] Costs of $35,000 plus HST are payable in 30 days.

Justice H. McGee DATE: August 21, 2018

[1] Formerly Rule 24(11) of the Family Law Rules, O. Reg. 114/99 [2] Section 24(6) Family Law Rules, O. Reg. 114/99 [3] Jackson v. Mayerle, 2016 ONSC 1556 [4] Firth v. Allerton, 2013 ONSC 4900; Mondino v. Mondino, 2014 ONSC 1102 [5] Serra v. Serra, 2009 ONCA 395 [6] Hryniak v. Mauldin, [2014] 1 S.C.R. 87 [7] Depending how long child support was in pay. [8] Laing v. Mahmoud, 2011 ONSC 6737 [9] Delellis v. Delellis [10] M. (C.A.) v. M. (D.)