NEWMARKET COURT FILE NO.: FC-13-043942-00 DATE: 20181105 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
SAWSAN HEBO Applicant – and – PETER JACOB PUTROS Respondent
Counsel: Kim Larsen, for the Applicant William H. Abbott, for the Respondent
HEARD: By written submissions
COSTS DECISION
F. GRAHAM J.
Issue
[1] Ms. Hebo seeks costs in the amount of $203,059.19, inclusive of tax and disbursements, in relation to this matter which culminated in a ten day family law trial.
[2] Mr. Putros concedes that Ms. Hebo was the successful party at trial but submits that Ms. Hebo should be awarded costs in the amount of $50,841.61, inclusive of tax and disbursements.
Brief Background
[3] The trial decision in this matter is located at 2017 ONSC 7043.
[4] The parties separated on May 14, 2013.
[5] Ms. Hebo seeks costs commencing with her initial consultation with counsel on June 10, 2013.
[6] On January 19, 2016, the parties settled, on a final basis, their non-financial child-related issues and restrictions on contact between the parties.
[7] The trial, which commenced on May 15, 2017, related exclusively to financial issues.
Case History
[8] On June 10, 2013, Ms. Hebo first consulted with counsel.
[9] On July 29, 2013, she signed an Application, Form 35.1, and Financial Statement.
[10] On September 11, 2013, at a four-way meeting, the parties, with the assistance of counsel, came to an agreement on various issues, including a temporary parenting schedule and that Mr. Putros would pay $1,171 per month in base child support on a temporary basis. They also agreed that Ms. Hebo would vacate the matrimonial home on November 29, 2013 and Mr. Putros would pay her $12,000 by that date, to be characterized by him later as child support, an advance on periodic spousal support, an advance on equalization, or a combination of the three.
[11] On October 21, 2013, the parties attended a case conference. Costs were not ordered or reserved.
[12] In September, 2014, Ms. Hebo sought Mr. Putros’ consent to travel with the children during the March school break in 2015. He did not consent and, as a result, a motion was heard by Bird J. on January 14, 2015. Ms. Hebo was successful and Mr. Putros was ordered to pay costs.
[13] On January 8, 2016, Ms. Hebo served Mr. Putros with a severable written offer to settle, on a final basis, the non-financial child-related issues, restrictions on contact between the parties, special and extraordinary child expenses going forward, medical and dental benefits, and life insurance to secure support.
[14] On January 19, 2016, the parties attended a settlement conference before Jarvis J.
[15] On the same date, the parties signed a Partial Separation Agreement (PSA) which, on a final basis, settled the non-financial child-related issues and restrictions on contact between the parties. Paragraph 10.13 of the PSA stipulated, “The parties will pay their own costs for the negotiation and preparation of this Agreement.”
[16] On the same date, on consent, Jarvis J. made a final order with respect to the non-financial child-related issues and restrictions on contact between the parties which was identical to those terms in the PSA.
[17] Jarvis J.’s order also set a trial management conference for April 18, 2016, and concluded with the statement, “Costs reserved.”
[18] On April 18, 2016, the trial management conference was adjourned from the 2016 spring trial sittings at the request of Mr. Putros. A new trial management conference was ordered to be set through the trial co-ordinator peremptory on Mr. Putros. Costs for April 18, 2016 were reserved.
[19] On October 25, 2016, a trial management conference was held. Ms. Hebo was permitted to file an amended Application claiming unjust enrichment and an equitable share in the matrimonial home. Costs for the conference were reserved.
[20] On December 2, 2016, the trial was adjourned to 2017.
Law in Relation to Costs
Rule 17(18) – Conferences
[21] Rule 17(18) of the Family Law Rules, O. Reg. 114/99, as amended, as it read prior to July 1, 2018, provided that if a conference is adjourned because a party is not prepared, has not served the required brief, has not made the required disclosure, has otherwise contributed to the conference being unproductive or has otherwise not followed these rules, the judge shall,
(a) order the party to pay the costs of the conference immediately;
(b) decide the amount of the costs; and
(c) give any directions that are needed.
[22] Rule 17(18), as it reads since July 1, 2018, stipulates that costs shall not be awarded at a conference unless a party was not prepared, did not serve a required brief, did not make any required disclosure, otherwise contributed to the conference being unproductive, or otherwise did not follow the rules, in which case the judge shall, despite subrule 24(10),
(a) order the party to pay the costs of the conference immediately;
(b) decide the amount of costs; and
(c) give any directions that are needed.
Rule 18 – Offers to Settle
[23] Rule 18 sets out various rules with respect to written offers to settle that have been signed by the party making the offer and by that party’s lawyer, if any, and served on another party.
[24] Rule 18(5) provides that a party who serves such an offer may withdraw the offer by serving a notice of withdrawal at any time before the offer is accepted.
[25] Rule 18(6) stipulates that an offer that is not accepted within the time set out in the offer is considered to have been withdrawn.
[26] Rule 18(9) stipulates that the only valid way to accept such an offer is by serving an acceptance on the party who made the offer, before the offer is withdrawn and before the court begins to give a decision that disposes of the claim dealt with in the offer.
[27] Rule 18(14) sets out a special rule that if a party serves an appropriately signed written offer to settle at least seven days before the commencement of a trial, and the offer is does not expire and is not withdrawn before the trial starts, and the offer is not accepted, and the party making the offer obtains an order at trial that is as favourable or more favourable than the offer, then the party who made the offer is entitled to costs to the date the offer was served and full recovery of costs from that date onward, unless the court orders otherwise.
[28] Rule 18(15) stipulates that the burden of proving that an order is as favourable as or more favourable than an offer to settle is on the party who claims the benefit of rule 18(14).
[29] Rule 18(11) provides that if an accepted offer does not deal with costs, either party is entitled to ask the court for costs.
[30] Rule 18(16) provides that the court may take into account any written offer to settle when exercising its discretion over costs, even if rule 18(14) does not apply.
Rule 24 – Costs Generally
[31] In the absence of offers to settle that meet the criteria of rule 18(14), rule 18(6) and rule 24 govern the determination of costs, subject to rule 17(18) with respect to conferences which is set out below.
[32] Rule 24(1) and (4) provide that there is a presumption that a successful party is entitled to costs of a case, although a successful party who has behaved unreasonably during the 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.
[33] Rule 24(5) stipulates that in determining whether a party has behaved reasonably or unreasonably, the court must examine: the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle, the reasonableness of any offer the party made, and any offer the party withdrew or failed to accept.
[34] Rule 24(6) states that if success in a step in a case is divided, the court may apportion costs as appropriate.
[35] Rule 24(7) requires that if a party is not properly prepared to deal with the issues at that step in a case 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.
[36] Rule 24(8) stipulates that 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.
[37] Rule 24(10), as it read prior to July 1, 2018, required the court to make a decision on costs promptly after dealing with a step in a case or reserve the decision on costs for determination at a later stage in the case.
[38] Rule 24(10.1), as it read prior to July 1, 2018, required a court making a decision on costs in relation to a step in a case, to decide in a summary manner whether anyone was entitled to costs and, if so, determine who is entitled and set the amount of costs.
[39] Rule 24(10), as it reads since July 1, 2018, requires the court, promptly after a step in a case, to summarily determine who, if anyone, is entitled to costs in relation to that step and set the amount of costs, or, expressly reserve the decision on costs for determination at a later stage in the case.
[40] Rule 24(11), as it reads since July 1, 2018, stipulates that if the court fails to act under subrule (10) in relation to a step in a case does not prevent the court from awarding costs in relation to the step at a later stage.
[41] Rule 24(11), as it read prior to being amended on July 1, 2018, provided that 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,
(e) expenses properly paid or payable, and
(f) any other relevant matter.
[42] Rule 24(12), as it reads since July 1, 2018, provides that in setting the amount of costs, the court shall consider,
(a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues:
(i) each party’s behaviour,
(ii) the time spent by each party,
(iii) any written offers to settle, including offers that do not meet the requirements of rule 18,
(iv) any legal fees, including the number of lawyers and their rates,
(v) any expert witness fees, including the number of experts and their rates,
(vi) any other expenses properly paid or payable; and
(b) any other relevant matter.
[43] The Ontario Court of Appeal stated in Serra v. Serra, 2009 ONCA 395, 66 R.F.L. 6th 40, at para. 8, that the costs rules are intended to promote three fundamental goals: to partially indemnify successful litigants for the cost of the litigation, to encourage settlement, and to discourage and sanction inappropriate behaviour by litigants.
[44] These three goals, along with rules 17(18), 18, 24, and subrules 2(2), 2(3) and 2(4) which stipulate that the primary objective of the rules is to enable the court to deal with cases justly, guide this court in determining a proportional, fair, and reasonable amount that should be paid for costs in this case.
Rule 18 Offers
Offers and Results
[45] On January 8, 2016, Ms. Hebo made a rule 18(4) offer comprised of various severable parts.
[46] Paragraph 2 of the offer stipulated that Mr. Putros could directly contact the children’s service providers for information. This issue was settled by way of a consent order on January 19, 2016. The settlement was as favourable to Ms. Hebo as her offer on this issue. This issue, however, was resolved in a manner beneficial to Mr. Putros. Paragraph 2 also addressed extended health benefits but this aspect of the offer was rescinded by a subsequent offer made on October 18, 2016.
[47] Paragraph 3 stipulated various terms about exchanges of the children. These terms were settled on January 19, 2016. The terms ordered were not as favourable to Ms. Hebo as her offer.
[48] Paragraphs 4 and 5 stipulated that Ms. Hebo would have final decision-making authority for, and primary residence of, the children. These issues were settled on January 19, 2016. The terms ordered were as favourable to Ms. Hebo as her offer.
[49] Paragraph 6 stipulated terms of access and was expressly stated to be non-severable from paragraph 3. These terms were settled on January 19, 2016. The terms ordered were not as favourable to Ms. Hebo as her offer.
[50] Paragraph 7 stipulated terms for travel with the children. These terms were settled on January 19, 2016. The terms ordered were not as favourable to Ms. Hebo as her offer.
[51] Paragraph 8 stipulated terms for the children’s passports. These terms were settled on January 19, 2016. The terms ordered were not as favourable to Ms. Hebo as her offer.
[52] Paragraphs 9 and 10 were a restriction on the children’s residence and domicile location. These terms were settled on January 19, 2016. The terms ordered were as favourable to Ms. Hebo as her offer.
[53] Paragraphs 11 and 12 were rescinded by a subsequent offer made on October 18, 2016.
[54] Paragraph 14 reserved the issue of costs. This term was included in the consent order.
[55] On October 18, 2016, Ms. Hebo made a rule 18(4) offer comprised of various severable parts.
[56] Paragraph 2 was identical to paragraph 2 of the January 8, 2016. The benefits issue was not settled and was decided at trial. The result was as favourable to Ms. Hebo as her offer. Mr. Putros did not oppose the order at trial. This issue was not a significant focus at the trial.
[57] Paragraph 3 required Mr. Putros to pay child support in the amount of $1,172 per month commencing November 1, 2016. This issue was decided at trial. Mr. Putros was ordered to pay $1,173 per month commencing in 2014. Although monthly amount ordered was slightly higher than Ms. Hebo’s offer, the issue of base child support was not a significant focus at the trial.
[58] Paragraphs 4 to 9 were rescinded by a subsequent offer made on November 14, 2016.
[59] Mr. Putros made a rule 18(4) offer on November 3, 2016 comprised of various severable parts.
[60] Part A stipulated that Mr. Putros would pay spousal support in the amount of $1,043 per month for three years commencing November 1, 2016 which could not be varied; or $232 per month with a review under certain circumstances prior to October 1, 2019 and, regardless of circumstances, a possible review on or after October 1, 2019; or $2,800 per month for twelve months only. Spousal support was decided at trial. The order made was less favourable to Mr. Putros than his offer.
[61] Part B stipulated that Mr. Putros would pay $17,500 for arrears of; child support, special and extraordinary expenses, and spousal support, to October 31, 2016, less the $12,000 already paid to Ms. Hebo on an uncharacterized basis. This issue was decided at trial. The order made was less favourable to Mr. Putros than his offer.
[62] Part C stipulated that Mr. Putros would maintain his work life insurance with a review of the quantum every two years. This issue was decided at trial. The quantum of Mr. Putros’ life insurance at work was not part of the evidence, although his Net Family Property Statement dated November 9, 2016 (Exhibit 108) stated that he had $100,000 in life insurance from State Farm on that date. It is unknown to the court whether Mr. Putros obtained as favourable or a more favourable result than this offer.
[63] Part D stipulated that Mr. Putros would pay Ms. Hebo $75,000 in equalization. This issue was decided at trial. The result was less favourable to Mr. Putros than his offer.
[64] On November 14, 2016, Ms. Hebo made a rule 18(4) offer comprised of various severable parts which were all rescinded by a subsequent offer made on May 10, 2017.
[65] On May 10, 2017, Ms. Hebo made a rule 18(4) offer comprised of various severable parts.
[66] Paragraph 2 required Mr. Putros to pay spousal support in the amount of $1,000 per month commencing May 1, 2017, reviewable in three years or when Ms. Hebo obtained full-time employment. This issue was decided at trial. The result was more favourable to Ms. Hebo than her offer. Spousal support was a significant focus at the trial.
[67] Paragraphs 3 and 7 required Mr. Putros to pay the equivalent of $47,000 for arrears of child support, special and extraordinary expenses, and spousal support. This issue was decided at trial. The result was more favourable to Ms. Hebo than her offer. This was a significant focus at trial.
[68] Paragraph 4 concerned special and extraordinary expenses. This issue was decided at trial. The result was more favourable to Ms. Hebo than her offer. The proportionate division of responsibility for these expenses depends on Ms. Hebo’s income. Mr. Putros failed to prove that income should be imputed to Ms. Hebo. Her income was a significant focus at trial.
[69] Paragraph 5 stipulated that Mr. Putros would insure his life for $200,000 to secure support. This issue was decided at trial. The order was as favourable to Ms. Hebo as her offer. This was not a significant focus at trial.
[70] Paragraph 6 stipulated that Mr. Putros would pay Ms. Hebo $140,000 for equalization. This issue was decided at trial. The amount ordered was $132,426.94 plus prejudgment interest of $7,000. Thus, the total was $139,426.94. It is irrelevant that, during the trial, Mr. Putros elected to designate the $12,000 he had already paid to Ms. Hebo as an advance on equalization. Simply because part of the award was prepaid does not reduce the total amount of the award for costs purposes. Nevertheless, the result was slightly less favourable to Ms. Hebo than her offer.
[71] Paragraph 8 stipulated, in the alternative to paragraphs 2, 3 and 6 (spousal support, arrears of; spousal support, child support, and special and extraordinary expenses; and equalization), a global settlement of $200,000, including costs, structured in a tax effective manner between spousal support and equalization with partial payment in 2016 and the balance paid during the first half of 2017. If selected, this paragraph was non-severable with paragraphs 4 and 5 (special and extraordinary expenses and life insurance). All of these issues were decided at trial. The total of equalization ordered, and the total, to April 30, 2017 of; spousal support arrears, pre-judgment interest on equalization and spousal support arrears, child support arrears, and special and extraordinary expense arrears, was approximately $195,000. The present value, on that date, of spousal support continuing at the rate of $1,200 per month (or $14,400 per annum), as ordered at trial, clearly exceeded $5,000. The result at trial was more favourable to Ms. Hebo than her alternative offer. These were all significant issues at trial.
Summary of Successful Rule 18 Offers
[72] In summary, Ms. Hebo made a rule 18(4) offer on January 8, 2016 with respect to final decision-making authority and primary residence for the parties’ children. These significant issues were settled on January 16, 2016 upon terms as favourable to her as her offer.
[73] Ms. Hebo also made a rule 18(4) offer on October 18, 2016 with respect to extended health benefits. The result at trial was as favourable to her as her offer. Benefits were not a significant focus at trial.
[74] Ms. Hebo also made a rule 18(4) offer on May 10, 2017 with respect to on-going spousal support. The result at trial was more favourable to her than her offer. Spousal support was a significant focus at trial.
[75] Ms. Hebo also made a rule 18(4) offer on May 10, 2017 with respect to the combined arrears of spousal support, child support, special and extraordinary expenses. The result was more favourable to her than her offer. This was a significant focus at trial.
[76] Ms. Hebo also made a rule 18(4) offer on May 10, 2017 with respect to the sharing of on-going special and extraordinary expenses. The result at trial was more favourable to her than her offer. This issue was a significant focus at trial.
[77] Ms. Hebo also made an alternative rule 18(4) offer on May 10, 2017 with respect a global settlement of $200,000 for on-going spousal support, arrears of; spousal support, child support, and special and extraordinary expenses; and equalization, and for on-going special and extraordinary expenses, and life insurance to secure support. The life insurance result was as favourable to her as her offer but was not a significant focus at trial. The global result on the other issues was more favourable to her than her offer. These issues were significant foci at trial.
Summary of Unsuccessful Rule 18 Offers
[78] The consent terms in the January 19, 2016 order with respect to exchanges of the children, access, travel with the children, and the children’s passports, were similar to Ms. Hebo’s offers but included terms that likely were influenced by Mr. Hebo’s views.
[79] Paragraph 6 of the offer of May 10, 2017 stipulated that Mr. Putros would pay Ms. Hebo $140,000 for equalization. This issue was decided at trial. The result was slightly less favourable to Ms. Hebo than her offer. Nevertheless, the result in relation to her global offer, which included equalization, was more favourable to her than her offer.
No Offers to Settle
[80] Ms. Hebo sought a finding that Mr. Putros had been unjustly enriched and that she had an equitable interest in the matrimonial home. She did not succeed. There were no offers to settle this issue. This was a significant focus at trial.
[81] Ms. Hebo sought an unequal division of net family property. She did not succeed. The offer to settle equalization, however, was, in effect, an offer to settle this issue. But, as noted above, the equalization result at trial was less favourable to Ms. Hebo than her offer. Nevertheless, as also noted above, her alternative global offer to settle a number of issues, including equalization, for $200,000 was surpassed by the result at trial.
Importance and Complexity
[82] The trial involved issues of great importance to the parties. Ms. Hebo was impecunious and dependent upon public assistance after she and the children moved out of the matrimonial home into a basement apartment to allow Mr. Putros to move back into the matrimonial home. Mr. Putros acknowledged Ms. Hebo was in dire financial straits when he testified that he voluntarily paid her tenant’s insurance because he knew that she did not have much money. At the same time, he was not paying her any spousal support. The arrears of support, on-going spousal support and sharing of special and extraordinary expenses were very important to Ms. Hebo given her significant financial need. Similarly, the division of net family property was very important to her because she needed funds to find a better place to live with the children. The issues were also quite important to Mr. Putros who testified that Ms. Hebo was trying to “drain” him of all of the financial resources he had earned over many years of hard work.
[83] The trial was moderately complex family law trial because a number of considerations affected equalization. One was the validity of a significant promissory note which involved a careful assessment of credibility and reliability of various witnesses. There was also a claim for an unequal division of net family property and a claim based in unjust enrichment seeking an equitable share in the matrimonial home. There was also the imputation of income issue.
Costs for June 10, 2013 to January 19, 2016
Positions of the Parties
[84] Ms. Hebo seeks substantial indemnity costs for this entire period. She submits that, as the successful party at trial, she is entitled to costs from the beginning of the case.
[85] She suggests that much of her January 8, 2016 offer to settle was reflected in the PSA and the consequent order of Jarvis J., which, she submits supports her claim for costs for this period.
[86] She also underlines that Mr. Putros paid no spousal support during this period.
[87] She estimates that about forty percent of the legal work done prior to January 20, 2016 involved non-financial child-related matters and sixty percent involved financial matters. She seeks recovery by way of costs for eighty percent for both types of legal work, which she calculates as $8,871.24 and $21,786.87, respectively.
[88] Mr. Putros argues that there should be no costs for the non-financial child-related issues. He underlines the wording of para. 10.13 of the PSA (set out above). In his written submissions dated May 22, 2018, at Tab B, he highlights the entries on Ms. Hebo’s counsel’s dockets that he concedes were properly before the court for consideration in relation to costs. In doing so, he explicitly does not concede that these amounts should be ordered for costs as he maintains that Ms. Hebo was unsuccessful in relation to some of the docketed issues, the issue was settled, or too much time was docketed.
[89] Ms. Hebo responds that the negotiation and preparation of the PSA likely involved costs of about $3,000, inclusive of tax and disbursements, and concedes, therefore, that eighty percent of that amount ($2,400) should be deducted from her claim for costs. With that exception, she maintains that the effect of Jarvis J.’s order was to reserve costs for the non-financial child-related issues up to that point.
Analysis
[90] Nothing outside the ordinary progression of a case occurred during the period of June 10, 2013 to January 29, 2016, except a motion for authorization to travel for which costs were ordered by the motions judge.
[91] The pleadings were served and a case conference was set in the usual manner. Prior to the case conference the parties had the four-way meeting and resolved a number of issues. Mr. Putros’ counsel states that the four-way meeting was held at his initiative. There is no indication that either party was unprepared for, or obstructed, the case conference. With the exception of the travel motion, the matter proceeded in the usual fashion to the settlement conference where the non-financial child-related issues were resolved on a final basis. Again, there is no indication that either party was unprepared for, or obstructed, the settlement conference. To the contrary, significant progress was made prior to the case conference and at the settlement conference.
[92] While Mr. Putros did not pay spousal support during this period, he did pay the $12,000 that was uncharacterized. Further, Ms. Hebo was at liberty to bring a motion for temporary spousal support.
[93] Although the PSA does reflect many aspects of Ms. Hebo’s January 8, 2016 offer to settle, it also contains numerous differences, which leads the court to infer that the PSA was the culmination of negotiations, rather than simply one party’s work product, except with respect to final decision-making and primary residence for the children.
[94] The meaning of “Costs reserved” in Jarvis J.’s order is not clear. The court is not persuaded that it meant costs were reserved with respect to all time spent on the non-financial child-related issues until that point. It is more likely that it simply meant that costs for the settlement conference were reserved.
[95] The court finds that costs should not be awarded for the non-financial child-related issues that were settled on January 20, 2016. Neither should costs be awarded for preparation and attendance at the case conference and settlement conference.
[96] Having examined Ms. Hebo’s counsel’s time dockets in detail, the court accepts that the docket entries between December 31, 2014 and January 19, 2016 identified by Mr. Putros are the entries during that period that are properly before the court for consideration of costs. The court finds that the amount of time docketed for those entries was reasonable.
[97] Those dockets total 18.4 hours for a junior counsel, 9 hours for a law clerk, and 0.6 hours for a senior law clerk. Their hourly rates of $175, $80 and $100, respectively, were reasonable.
[98] At those rates, the amount docketed without HST was $3,220 for junior counsel, $720 for the law clerk and $60 for the senior law clerk.
[99] The court also reviewed the dockets from June 10, 2013 to December 31, 2014, provided by Ms. Hebo at Tab A of her written submission dated May 31, 2018. Taking a similar approach as Mr. Putros with respect to these dockets, the court identified entries that are properly before the court for consideration of costs. The court found that the amount of time docketed for those entries was reasonable.
[100] Those dockets total 14.6 hours for junior counsel and 10.1 hours for a law clerk.
[101] At hourly rates of $150 and $70 respectively, as indicated in Ms. Hebo’s materials, the amount docketed without HST was $2,190 and $707.
[102] Disbursements incurred during this period were $1,294 including HST. The court finds that amount to be reasonable.
[103] The court accepts Ms. Hebo’s suggestion that an order for a significant percentage of those costs is appropriate given her success at trial in relation to the issues that were live during that period. Having considered the reasonableness and proportionality of each parties’ behaviour, time spent, written offers to settle, legal fees, persons involved, and rates, as they relate to the importance and complexity of the issues, the court finds that Mr. Putros shall forthwith pay Ms. Hebo costs of $6,200 inclusive of disbursements and HST for the period of June 10, 2013 to January 20, 2016.
Costs for January 20 to October 18, 2016
Positions of the Parties
[104] Ms. Hebo seeks substantial indemnity costs of $15,960.34 based on eighty percent recovery for this period.
[105] Mr. Putros again highlighted the entries on Ms. Hebo’s counsel’s dockets that he conceded were properly before the court for consideration in relation to costs, subject to the same caveats.
Analysis
[106] Nothing outside the ordinary progression of a case occurred during this period, except that a trial management conference (TMC), originally scheduled for April 18, 2016, was adjourned to October 25, 2018, at Mr. Putros’ request. Costs were reserved and the next TMC date was peremptory upon him.
[107] The court accepts as appropriate Mr. Putros’ docket selections, which include Mr. Larsen’s time at the adjourned TMC on April 18, 2016, but the court adds five additional entries: January 20 (law clerk 0.7 hours), February 4 (junior counsel 0.7 hours), February 10 (junior counsel 0.1 hours and law clerk 0.1 hours), and October 13 (law clerk 1.0 hours).
[108] The court finds that the times docketed were reasonable.
[109] Those dockets total 18 hours for senior counsel, 8.5 hours for junior counsel, 0.3 hours for a senior law clerk, and 14.1 hours for a law clerk. Their hourly rates of $325, $175, $100 and $80, respectively, were reasonable.
[110] At those rates, the amount docketed without HST was $5,850 for senior counsel, $1,487.50 for junior counsel, $30 for the senior law clerk and $1,128 for the law clerk.
[111] The court accepts Ms. Hebo’s suggestion that a significant recovery of costs is appropriate given her success at trial on issues that were live during that period. Having considered the reasonableness and proportionality of each parties’ behaviour, time spent, written offers to settle, legal fees, persons involved, and rates, as they relate to the importance and complexity of the issues, the court finds that Mr. Putros shall pay Ms. Hebo $6,000 in costs inclusive of HST for the period of January 20 to October 18, 2016.
[112] Disbursements for this period will be discussed below.
Costs for October 19, 2016 to May 10, 2017
Positions of the Parties
[113] Ms. Hebo seeks full recovery of costs for this period based on comparing the results of the trial to the terms of Ms. Hebo’s October 18, 2016 offer.
[114] Mr. Putros again highlighted the entries on Ms. Hebo’s counsel’s dockets that he conceded were properly before the court for consideration in relation to costs, subject to the same caveats.
Analysis
[115] Ms. Hebo’s October 18, 2016 offer was explicitly rescinded by her November 14, 2016 offer, which, in turn, was explicitly rescinded by her May 10, 2017 offer. As a result, Ms. Hebo is not in a position to seek full costs based on rule 18(4) for the period of October 19, 2016 to May 10, 2017.
[116] The case proceeded in the normal course during this period. The TMC proceeded as scheduled on October 25, 2018. There is no indication that either party was unprepared, or obstructed, the TMC on October 25, 2016. Accordingly, there will be no costs awarded for the TMC.
[117] At the TMC, Jarvis J. permitted Ms. Hebo to amend her Application by adding the claim for unjust enrichment and an equitable interest in the matrimonial home.
[118] The court accepts as appropriate Mr. Putros’ selections, but the court adds 16 additional entries which may be summarized as: October 19 (law clerk 2.0 hours), October 26 (law clerk 0.7 hours), October 27 (law clerk 0.1 hours), November 1 (senior law clerk 0.3 hours), November 14 (senior law clerk 0.3 hours), November 15 (senior law clerk 0.2 hours), November 16 (senior law clerk 0.2 hours and junior lawyer 1.5 hours), December 1 (law clerk 0.2 hours), December 5 (law clerk 0.1 hours), February 28 (senior law clerk 0.4 hours), May 3 (law clerk 0.1 hours), and May 9 (law clerk 0.7 hours).
[119] The court finds that the times docketed were reasonable. The time docketed included preparation for a trial that was not reached during the regional fall trial sittings.
[120] These dockets total 64.6 hours for senior counsel, 4.8 hours for junior counsel, 12.4 hours for a senior law clerk, and 32.4 hours for a law clerk. Their hourly rates of $350, $225, $125 and $80, respectively, were reasonable. At those rates, the amount docketed without HST was $22,610 for senior counsel, $1,080 for junior counsel, $1,550 for the senior law clerk and $2,592 for the law clerk.
[121] These costs total $27,832 without HST. The percentage of this work that related to Ms. Hebo’s unsuccessful claim for unjust enrichment and an equitable interest in the matrimonial home is unknown to the court. Based on the limited time spent on these issues prior to closing submissions, the court finds that a reduction of costs by $3,832 to $24,000 without HST is an appropriate reflection of her lack of success on these issues.
[122] The court accepts Ms. Hebo’s suggestion that a significant recovery of costs is appropriate in relation to the other trial issues that were live during that period. Having considered the reasonableness and proportionality of each parties’ behaviour, time spent, written offers to settle, legal fees, persons involved, and rates, as they relate to the importance and complexity of the issues, the court finds that Mr. Putros shall pay Ms. Hebo costs of $18,000 inclusive of HST for the period of October 19, 2016 to May 9, 2017.
[123] Disbursements for this period will be discussed below.
Costs for May 11, 2017 to December 1, 2017
Positions of the Parties
[124] Ms. Hebo seeks full recovery of costs for this period based on a comparison of the results of the trial to the terms of Ms. Hebo’s May 10, 2017 offer.
[125] Mr. Putros again highlighted the entries on Ms. Hebo’s counsel’s dockets that he conceded were properly before the court for consideration in relation to costs, subject to the same caveats with respect to success and time.
Analysis
[126] The case proceeded in the normal course during this period.
[127] Ms. Hebo is entitled to full recovery of her costs during this period with respect to the issues identified above in her May 10, 2017 offer where the result at trial was at least as favourable to her as her offer. Although she did not match her offer for equalization alone, she obtained a result that was more favourable than her alternative global offer which included equalization. She is not entitled to costs with respect to her unsuccessful claim for unjust enrichment and an equitable interest in the matrimonial home.
[128] The court accepts as appropriate Mr. Putros’ docket selections, but adds 12 additional entries which may be summarized as: May 15 (law clerk 2.0 hours), May 16 (senior law clerk 0.9 hours), May 18 (law clerk 0.2 hours), May 29 (senior law clerk 0.3 hours), June 1 (law clerk 0.9 hours), June 15 (law clerk 1.3 hours, senior law clerk 2.6 hours), June 16 (law clerk 0.4 hours), and June 22 (law clerk 0.1 hours).
[129] The selected dockets total 259 hours for senior counsel, 5 hours for junior counsel, 13 hours for a senior law clerk, and 12.5 hours for a law clerk. Their hourly rates of $350, $225, $125 and $80, respectively, were reasonable.
[130] At those rates, the amount docketed without HST was $90,650 for senior counsel, $1,125 for junior counsel, $1,950 for the senior law clerk and $1,000 for the law clerk. These amounts total $94,725 without HST.
[131] The court finds that the times docketed for junior counsel and the law clerks were reasonable. The court is unable to reach the same conclusion with respect to the time docketed by senior counsel even though the time docketed includes attendance and preparation before and during a ten day trial.
[132] The court finds that senior counsel’s time should be reduced by 59 hours to 200 hours. That reduces his fees without HST to $70,000 and reduces the total fees without HST to $74,075.
[133] The percentage of the legal work prior to July 27, 2017 that related to Ms. Hebo’s unsuccessful claim for unjust enrichment and an equitable interest in the matrimonial home is unknown to the court. Based again on the limited time spent on these issues prior to closing submissions on these issues, and deducting all 16.2 hours of her counsel’s time billed between July 28 and August 1, 2017, which was likely devoted to preparing a supplemental written argument on these issues alone, the court finds that a reduction of costs by $14,075 to $60,000 is appropriate to account for Ms. Hebo’s lack of success on these issues.
[134] Having considered the reasonableness and proportionality of each parties’ behaviour, time spent, written offers to settle, legal fees, persons involved, and rates, as they relate to the importance and complexity of the issues, the court finds that there should be full recovery of the $60,000 plus HST of $7,800.
[135] Accordingly, Mr. Putros shall pay Ms. Hebo $67,800 in costs inclusive of HST for the period of May 11 December 1, 2017.
[136] Disbursements will be discussed below.
Disbursements
[137] The court is unable to understand Ms. Hebo’s claim for disbursements. Her Bill of Costs at Tab 3A of her submissions dated January 15, 2018 indicates total disbursements of $22,501. Of that amount, only the first $1,294 is itemized in the Bill of Costs. At the last page of Tab 3C there is a table itemizing disbursements that is incomprehensible to the court and, as far as the court can tell, bears little resemblance to the Bill of Costs.
[138] Counsel for Mr. Putros suggested that a total of $5,000 for disbursements would be reasonable.
[139] In the absence of cogent submissions to the contrary, the court will fix $5,000 inclusive of HST for disbursements from January 20, 2016 to December 1, 2017.
Totality of Costs
[140] The court finds that Mr. Putros should be able to pay the total amount of $103,000 in costs, in addition to the amounts he was ordered to pay in the trial judgment, as a result of his long-term employment in a supervisory role with a good income. He also has other skills that may permit him to make additional income. He is responsible for his decision to proceed to trial rather than accept Ms. Hebo’s May 10, 2017 offer to settle. He must have realized that he could be liable for considerable costs if he did not succeed at trial. His behaviour with respect to non-payment of spousal support and presenting incredible and unreliable evidence at trial was unreasonable and demonstrative of bad faith.
Conclusion
[141] Mr. Putros shall forthwith pay Ms. Hebo costs in the amount of $103,000 inclusive of disbursements and HST.
[142] Of that amount, the court attributes $40,000 to support issues which shall be enforceable as support. A support deduction order shall issue for that amount.
[143] The court attributes the balance of $63,000 to equalization. For the reasons cited at paragraph 226 of the trial judgment, this amount shall be an additional charge upon the matrimonial home as security for payment. This charge shall not be discharged until the full amount of this charge is paid.
[144] The Applicant may have orders issued accordingly without approval as to form or content.
Costs
[145] Ms. Hebo’s submissions include a sealed offer to settle the issue of costs in relation to today’s decision. The envelope remains sealed. If Ms. Hebo wishes, she may serve and file a brief supplemental submission on or before November 12, 2018. Regardless whether Ms. Hebo files a supplemental submission, Mr. Putros may serve and file a brief response on or before November 19, 2018. Ms. Hebo may serve and file a very brief reply on or before November 26, 2018.
F. GRAHAM J. Released: November 5, 2018