Court File and Parties

Peterborough Court File No.: FC-15-112 Date: 2018-10-16

Ontario Superior Court of Justice Family Court

Between: RMW, Applicant – and – JKW, Respondent

Counsel: K. Cunningham, for the Applicant C. Pineiro, for the Respondent

Heard: In Writing

Costs Endorsement for Cross-Motions

Scott M.A.C., J.

[1] In my endorsement granting the respondent’s motion for summary judgment dismissing the applicant’s claim to set aside the final order of Ingram J., dated December 14, 2015, I held that the respondent had been more successful on the cross-motions, heard by me on June 1, 2018, and ought to be entitled to consideration of her costs.

[2] Respondent’s counsel seeks on her behalf “substantial indemnity” costs, relying on her success on the majority of the issues, including a dismissal of various heads of relief in the applicant’s cross-motion and the restricted scope of disclosure permitted to him and on the contents of her formal offer to settle which was exceeded by the motions’ outcome. Counsel presented a bill of costs in the amount of $14,449.45, inclusive of disbursements and HST.

[3] Applicant’s counsel urged that success was divided in that the applicant was persuasive that there had been a material change of circumstance since the final order and was given permission to proceed with a Motion to Change child support. In those circumstances, the applicant was of the view that no costs to either party would be most appropriate.

[4] This position discounts this court’s finding that the dominant issue on these cross-motions was whether there were grounds to set aside the final order of Ingram J., dated December 14, 2015. As indicated in my reasons, despite a review of a number of circumstances proffered by the applicant, the respondent was successful in demonstrating that on the particular facts of this case, the final order must be upheld. As a result, it would be an inappropriate application of subrule 24(1) of the Family Law Rules (FLR), O Reg 114/99, for each party to bear their own costs.

[5] In the alternative, as his motion was not frivolous, there were no grounds to warrant substantial indemnity costs. The applicant had served two formal offers to settle. If the court was inclined to grant the respondent costs in this matter, these should be limited to $2,500 in total, payable at $100 per month due to the applicant’s straightened financial circumstances.

[6] Apart from her submissions on costs, applicant’s counsel expressed concern regarding this court’s jurisdiction to have permitted the respondent seeking from January 1, 2016, special and/or extraordinary expenses for the children pursuant to s. 7 of the Child Support Guidelines (CSG), O Reg 391/97, when this relief, according to counsel, was not pled nor specified in her notice of motion. In Reply submissions, respondent’s counsel was able to demonstrate that the “s.7” relief was sought in the Response to Motion to Change and referred to in the respondent’s affidavit and in her counsel’s submissions on the motion.

[7] In my view, a Motion to Change child support must encompass a court’s review of all the financial needs, being both table amount and s.7 expenses, for each child determined to remain dependent on the parties pursuant to the provisions of the CSG. The cross-motions sought determination by a court as to the appropriate issues to be litigated. As both parties claimed the court’s consideration of concurrent aspects of child support in their pleadings, my determination of the permitted parameters of the issues that remained properly before the court was within the scope of the relief sought in the respective notice of motions. That I restricted retroactivity of the respondent’s s. 7 claim to the same timeframe allowed for the applicant’s Motion to Change the table amount of child support was to his advantage.

[8] It has long been established that a court’s discretion to award costs ought to be structured to achieve the following purposes: to indemnify the successful litigant for the costs of the litigation, to encourage settlement and to discourage and sanction inappropriate behaviour in the conduct of the litigation, Fong v. Chang, 128 O.A.C. 2.

[9] Applicant’s counsel made little mention in her submissions of the respondent’s formal offer to settle and the operation of Rule 18(14) of the FLR, which entitles, unless a court orders otherwise, a party to “full recovery costs from that date”. I agree with the respondent’s counsel’s characterization that the offer’s acceptance would have been more advantageous to the applicant than was the motion’s outcome. This confirms her success on the main issues on the motion. The date of the offer at March 22, 2018 - two and a third months prior to the hearing of the motion - allows full recovery costs for only that timeframe forward.

[10] The provisions of the applicant’s two offers to settle would not have been sufficiently advantageous to the respondent to assist the applicant to better demonstrate his partial success or reduce his obligation to compensate the respondent for her litigation expenses within the structure of Rule 24 of the FLR. Their delivery might have encouraged settlement and, at least, demonstrates some reasonableness on behalf of the applicant but beyond that are of no assistance to the costs’ quantification.

[11] I do agree with applicant’s counsel that prior to the delivery of the respondent’s offer, there are no grounds to award her substantial indemnity costs. I find that partial recovery to the respondent on successful issues is the appropriate range to calculate her entitlement to costs on motion preparation from September 6, 2017 until March 20, 2018.

[12] Subrule 24(11) of the FLR requires the court to consider, beyond the complexity of the issues raised, the reasonableness or unreasonableness of each parties’ behaviour in the case, the lawyer’s rates, the time properly spent on the case (certain steps specified), expenses and any other relevant matter.

[13] This matter did have some complexity as to the appropriate legal test to apply in order to determine whether to set aside a final order that encapsulated the entire agreement between the parties. The applicant was successful as to which test to apply, but the respondent was successful on the application of that test to the facts of this case. On balance, the respondent had greater success in the outcome and is still entitled to partial recovery costs to the date of her offer and full recovery costs thereafter.

[14] The respondent acted reasonably throughout and her substantial offer to settle reinforces this. I have already noted above the effect of the applicant’s offer to settle. There has been no other conduct identified by either party that would counter this balance of reasonableness, more to the betterment of the respondent’s account.

[15] A review of the respondent counsel’s cost outline revealed an hourly rate which was reasonable. I do agree however, with applicant’s counsel that certain tasks undertaken by the legal assistant do not fall within the scope of subrule 24(11)(d). I am also of the view that photocopies/fax charges are not disbursements, but part of office overhead which must be subsumed in counsel’s hourly rate.

[16] Beyond that, a review of the respondent’s costs outline, contrasted with applicant’s counsel’s critique (which suffered from the admission that the applicant’s legal costs on the motions were $10,000 more than what the respondent claimed) leaves me with a few events and times for preparation that seemed inapplicable to these motions or disproportionate to the volume of material reviewed and produced. Consequently, I have discounted one duplication of review by two counsel, some of the “procedural tasks”, for example, filing, travel time and some of the hours docketed for the attendance on April 26, 2018.

[17] I have further discounted the respondent’s entitlement to costs for the applicant’s success in being permitted to proceed with his Motion to Change table amount child support. However, my view is that the restricted nature of his entitlement to further disclosure ought to be counted as a success to the respondent.

[18] It has long been established that beyond this threshold vetting, a strict mathematical recalculation of the respondent’s cost outline will not achieve the goals as set out in paragraph 7 above but a synthesis or balancing of all the factors delineated in subrule 24(11) of the FLR is required as best described by Aston J in Delellis v. Delellis at para 24:

However, recent cases under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended, have begun to de-emphasize the traditional reliance upon “hours spent times hourly rates” when fixing costs…Costs must be proportional to the amount in issue and the outcome. The overall objective is to fix an amount that is fair and reasonable 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.

[19] A litigant’s ability to pay costs is another “relevant matter” for the purposes of subrule 24(11) of the FLR and considering a party’s circumstances is an appropriate exercise of a court’s discretion, which is clearly preserved by statute i.e., s. 131 of the Courts of Justice Act, R.S.O. 1990, c C. 43 and by the FLR, for example, subrule 18(14) and case precedent, see Boucher et al v. Public Accountants Council for the Province of Ontario, [2004] O. J. No. 2634.

[20] I took into account the applicant’s current circumstances, and those that are demonstrably connected to the outcome of the motions i.e. the necessity to instruct counsel further on the continuation of the Motion to Change – but the respondent is in even more restricted financial circumstances of current unemployment and remains a residential parent. Ultimately, the applicant must bear the majority of the responsibility for unsuccessfully attempting to set aside a final order he consented to himself.

[21] For all of the above reasons, the applicant shall pay the respondent her costs of these cross-motions fixed at $9,000, inclusive of disbursements and HST, payable at $300 per month, commencing October 31, 2018 and in each month thereafter, until fully paid.

Date Released: October 16, 2018