KINGSTON COURT FILE NO.: 43/17 DATE: 20181102 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Michael Wayne Goodberry, Applicant AND Annette Howes, Respondent
BEFORE: Mr. Justice Timothy Minnema
COUNSEL: Danielle Russell, for the Applicant Lindall S. McDonald, for the Respondent
HEARD: In Chambers
COSTS ENDORSEMENT
MINNEMA, J.
[1] Following a six day family law trial concerning an unjust enrichment claim, I gave the parties an opportunity to make submissions on costs. The respondent is seeking all inclusive full recovery costs of between $54,794.42 and $38,652.45 depending on which of her Offers to Settle attracts costs consequences. The applicant is asking that there be no order as to costs.
Law
[2] Beaver v. Hill, 2018 ONCA 840 and Mattina v. Mattina, 2018 ONCA 867 are two recent decisions of the Ontario Court of Appeal summarizing the law relating to costs in a family law proceeding following the recent amendments to Rule 24 of the Family Law Rules in July of 2018. The excerpt below is from paragraphs 9, 10, and 12 to 15 from Mattina (citations and excerpts from the Family Law Rules omitted):
Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides that cost orders are in the discretion of the court. Rule 24 of the Family Law Rules sets out a framework for awarding costs for family law cases in the Family Court of the Superior Court of Justice …
This court has held that modern family cost rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement, and; (3) to discourage and sanction inappropriate behaviour by litigants: … Rule 2(2) adds a fourth fundamental purpose: to ensure that cases are dealt with justly: … And Rule 24(12) [1], which sets out factors relevant to setting the amount of costs, specifically emphasizes “reasonableness and proportionality” in any costs award.
Rule 24(1) creates a presumption of costs in favour of the successful party …
Consideration of success is the starting point in determining costs. This presumption does not, however, require that the successful party always be entitled to costs. An award of costs is subject to: the factors listed in r. 24(12), r. 24(4) pertaining to unreasonable conduct of a successful party, r. 24(8) pertaining to bad faith, r. 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party.
Rule 24(12) sets out a list of factors the court shall consider in determining an appropriate amount of costs.
The Family Law Rules only expressly contemplate full recovery costs in specific circumstances, e.g. where a party has behaved unreasonably, in bad faith or has beat an offer to settle under r. 18(14).
Rule 24(4) addresses the situation in which a successful party has behaved unreasonably.
Rule 24(5) provides guidance on how to evaluate reasonableness.
Rule 24(8) discusses the cost consequences for a party who has acted in bad faith.
[3] In assessing what is just, reasonable, and proportional, considerations may include the impact that the cost award will have on the party ordered to pay (Murray v. Murray (2005), 79 O.R. (3d) 147 (C.A.)) and its effect on the care, maintenance or interests of children (C.A.M. v. D.M. (2003), 67 O.R. (3d) 181 (Ont. C.A.)). The latter is not a consideration in this case.
Analysis
Success
[4] The applicant’s claim for unjust enrichment was dismissed. The respondent as the successful party is therefore presumed to be entitled to costs. I do not accept the applicant’s argument that, as the respondent made an unsuccessful alternative argument regarding the limitation period, success is divided. It had no impact on the outcome.
Offers
[5] As noted, the requirements for an Offer to Settle that has direct cost consequences are set out in Rule 18. The party seeking full recovery costs must meet the burden of proving he or she has done as well or better than all the terms of any offer. The offer must be signed by the party and the party’s lawyer (if any), and delivered at least 7 days before trial. Unless withdrawn, offers falling under Rule 18 generally remain open for acceptance even if previously rejected or the other party has made a counter-offer.
[6] The applicant made three offers involving payments to him in full satisfaction of all claims. As his application was dismissed at trial, he did not do as well as any of those offers.
[7] The respondent also made three Offers to Settle. The last one was dated June 15, 2018, and it revoked all previous offers. In it she offered to pay the applicant $10,000 for the dismissal of all claims without costs. Her offer met all the formal requirements of Rule 18, and remained open for acceptance at the start of trial. In my view the respondent has met the burden of proving that the judgment is as favorable as or more favorable to her than her last offer.
Bad Faith
[8] There is no allegation of bad faith as a consideration in assessing costs.
Setting Costs Amounts: Subrule 24(12)
[9] As noted in subsection 24(12)(a), in setting the amount of costs the court is to consider the reasonableness and proportionality of each of the factors under the following general headings as they relate to the importance and complexity of the issues.
[10] I would observe that this case was important to the parties in the sense that it involved what to them were significant sums of money. It was also complex. By their very nature unjust enrichment and constructive trust claims are not simple, and this one required detailed and substantial evidence.
Behaviour
[11] Both parties argue that the other failed to comply with procedural requirements in the litigation process in a timely way. It is not apparent to me who is correct. I am not convinced that either party behaved unreasonably to the extent that it would impact these costs deliberations. Through their counsel they were respectful, conciliatory and reasonable, and indeed helpful with a view to assisting the court and to completing the trial in a fair but relatively efficient manner. Their counsel utilized Requests to Admit and a Statement of Agreed Facts. By agreement the evidence in-chief of some witnesses was tendered by way of affidavits. Further agreements on the evidence were made during the course of the trial. All in all, I am thankful to the parties and in particular to both counsel for their approach to completing this complex case, and appreciative of their civility.
Written Offers to Settle
[12] I have considered the offers above in assessing reasonableness, and note the mutual attempts at settlement.
Time Spent by Each Party, Legal Fees and Rates, Expenses Incurred (Subrules 24(12)(a) (ii), (iv) to (vi))
[13] Both parties filed Bills of Costs. There is no dispute about the lawyers’ rates, the time spent, or about disbursements. The applicant only took specific issue with the respondent’s Bill of Costs related to the fees claimed for conferences. However, the respondent indicated that she was only seeking her costs from the date of whichever Offer to Settle attracted Rule 18 cost consequences. All the conferences in this case pre-dated the June 15, 2018 offer.
Any Other Relevant Matter
[14] The applicant, in support of his position that there should be no order as to costs, argued that “[t]he Respondent left the parties relationship in a much greater financial position than that of the Applicant.” He added that at age 62 he is “in significant and on-going pain but without any foreseeable ability to retire.”
[15] This was a relatively short (six year) spousal relationship. The applicant came in with essentially nothing and he appears to have left with nothing. The respondent came in with a sizeable contingent matrimonial settlement, and she left with a house in its stead worth considerably less. Both parties worked at low paying jobs during the course of their relationship. Both received inheritances, which they chose to deal with in very different ways.
[16] Awarding costs is not equalizing net family properties. It is not spousal support. It is a discretionary exercise based on what is fair and reasonable in view of the case, the parties, and the disposition. The applicant was essentially trying to obtain from the respondent monies to which he was not entitled. The fairness of the respondent eating her costs because of the applicant’s age or health or lack of retirement savings escapes me. While I have considerable sympathy for his circumstances, the applicant’s difficulties for the most part pre-dated the relationship and are not the respondent’s fault or responsibility. I am not persuaded that there is a strong connection here between the relative financial positions of the parties and the costs of this failed application.
Analysis/Summary
[17] Referring to the fundamental purposes of the costs Rules noted above, in my view encouraging settlement and in particular the application of Rule 18 requires a costs award.
[18] Rule 18(14) indicates that, as the respondent did better than her June 15, 2018 offer, she is entitled to “costs to the date the offer was served and full recovery of costs from that date” unless the court orders otherwise. As noted she is prepared to forgo her costs claim for the period prior to June 15, 2018. That is a significant concession. I have roughly calculated her fees including disbursements and HST for the work after June 15, 2018, and they appear to match the $38,652.45 requested.
[19] Looking at proportionality and reasonableness, overall the costs the respondent is seeking are modest for a complex case ending in a six day trial. Her request is well within the range of what the applicant should have reasonably expected given his own legal costs. Indeed, he had little sense of proportionality himself; by the end of trial he was seeking a recovery that was close to par with his own legal fees. This case was not about support or equalization, rather it had the flavour of a civil action. In that respect, I agree with Justice Gray in Cimmaster Inc. v. Piccione, 2010 ONSC 846 at paragraph 19, that the proportionality principle should not normally result in reduced costs when the successful party “has been forced to expend many thousands of dollars and many days and hours fighting a claim that is ultimately defeated.” That is particularly so where the applicant could have accepted the $10,000 offer, avoided the bulk of his own substantial legal fees, and eliminated his exposure to a costs award.
Decision
[20] While the assessment of costs is not simply a mechanical exercise (Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (Ont. C.A.) at para. 26), I can see no reason to depart from the application of Rule 18(14) other than to limit the respondent to the costs she has requested. Having regard to the factors and considerations outlined above, I find that what is just and reasonable in the circumstances is to order the applicant to pay the respondent’s costs of $38,652.45 inclusive of HST and disbursements.
Mr. Justice Timothy Minnema Date: November 2, 2018