Court File and Parties

COURT FILE NO.: FS-16-86157-00 DATE: 2018-11-07

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

VIDOLL AUGUSTINE REGISFORD Applicant

- and -

LORAINE MARCIA REGISFORD Respondent

COUNSEL: Lance Carey Talbot, for the Applicant Adam N. Black, for the Respondent

HEARD: November 30, 2017, at Brampton, Ontario

Price J.

COSTS ENDORSEMENT

NATURE OF MOTION

[1] On the date scheduled for the hearing of Mr. Regisford’s motion to have the parties’ two properties which they jointly owned listed for sale, the parties settled the issues with the help of their counsel. They consented to an Order on that date incorporating the terms they had negotiated and providing that if they were unable to agree on costs, the issue would be determined by the Court on written submissions. The parties were unable to agree on the costs, and the Court has reviewed their written submissions. These reasons will address that remaining issue.

BACKGROUND FACTS

[2] Mr. Regisford brought a motion to have two jointly owned properties, including the matrimonial home, listed for sale. The motion was served on November 9, 2017, for a hearing on November 30th.

[3] Ms. Regisford opposed the motion on the ground that the sale of the properties would prejudice her claims to equalization of net family property, post-separation adjustments, and retroactive support. She argued that she should either have a right of first refusal when the matrimonial home was listed and $122,500.00 from Mr. Regisford’s share of the proceeds should be held back on account of her claims, or the sale of the properties should be deferred until the family law issues were tried. Ms. Regisford served her Affidavit and Statement of Position and the Law on the afternoon of November 28, 2017, two days before the hearing.

[4] At court on November 30, 2017, the parties signed a consent to an Order for the listing of the properties for sale. The Consent Order did not provide a right of first refusal to Ms. Regisford, but did include a hold-back of $60,000.00 from Mr. Regisford’s share of the proceeds of sale.

[5] The Order further provided that if the parties were unable to agree on costs, the Court would determine that issue based on written submissions from the parties. The parties were unable to agree on the costs, and made their Cost Submissions.

ISSUES

[6] The Court must determine whether either party is entitled to costs from the other and, if so, the amount of those costs.

PARTIES’ POSITIONS

[7] Mr. Regisford submits that he was successful in the motion and is presumptively entitled to his costs. He submits that it was unreasonable for Ms. Regisford to oppose the motion, and additionally, that she was unreasonable to delay selling the jointly owned properties. He claims costs in the amount of $28,457.92.

[8] Ms. Regisford submits that there should be no costs payable by either party to the other following the settlement. She notes that the issues were settled, not adjudicated, and in such circumstances, success cannot be determined. The focus of the determination of costs, she submits, must be on reasonableness. In this regard, she asserts that the issue should not be determined based on submissions, without at least affidavit evidence, but that, in any event, it was Mr. Regisford’s conduct that was unreasonable, both before the motion and afterward, and that she made a reasonable Offer to Settle which he should have accepted. She submits that if the Court orders costs, they should be paid by Mr. Regisford in the amount of $5,000.00.

ANALYSIS AND EVIDENCE

a) General principles

[9] Costs Orders are designed to achieve three principal purposes, (a) to indemnify successful litigants; (b) to sanction unreasonable conduct of the litigation; and (c) to encourage settlement.

[10] A successful party is presumed to be entitled to his or her costs, pursuant to Rule 24(1) of the Family Law Rules. The preferable approach in family law cases is to allow costs on a full recovery basis, provided the successful party acted reasonably and the costs claimed are proportional to the issues and results and were within the range that the opposing party should have expected if unsuccessful in the motions.

[11] A litigant whose conduct was reasonable and who is successful in a proceeding should not be required to bear the costs of having his rights tested. However, an unsuccessful litigant should not be so heavily burdened with costs as to discourage other litigants from submitting issues to the court where the outcome is not a foregone conclusion that the parties should have anticipated.

b) Can the Court determine the issue of costs when the parties settled all issues outstanding between them in the motion?

[12] In Gibeau v Parker and Rivard, 2017 ONSC 545, Shelston J. reviewed the jurisprudence on this issue and concluded:

[34] The Family Law Rules were designed to encourage settlement at all stages of the litigation process. Part of that process is the determination of costs. If parties settle a matter and ask the Court to address costs, it is incumbent on litigants to provide the Court with the necessary information on the claims made, the party’s positions including the offers exchanged and the final terms of settlement to allow a Court to determine the issue of which party was successful.

[35] In my view, where parties settle a family law proceeding, the court should determine costs if the court has a sufficient evidentiary record to conduct the required analysis. This was done in Benoit v. Kerr (supra), A.C. v. G.K (supra), Ohanessian v. Kalisz (supra) and McNaught v McNaught (supra) Johanns v. Fulford, 2011 ONSC 5268. Herr v. Rebelo, 2016 ONSC 4829

[Emphasis added]

[13] Justice McGee, in Benoit v. Kerr, (2014), set out the reason why such a pre-determination is required. He stated:

Consideration of success is the starting point in determining costs. However, any attempt to determine a “winner” or “loser” in a settlement is, in most cases, complex if not impossible….. Unless there are compelling reasons to do so, costs in the circumstances of the settlement between parties ought not to be awarded by the court.”

[Emphasis added]

[14] In Witherspoon v Witherspoon, (2015), counsel attended on the first day of trial with signed Minutes of Settlement resolving all issues except costs. After reviewing extensive cost submissions, Justice Leach found that the attempt by the parties to argue cost entitlement and quantification was misconceived and inappropriate after the parties had reached an agreement without a trial. Amongst her considerations was the inability of a judge to determine success in the absence of judicial fact finding resulting in conclusions to be compared to the parties positions, and that it runs counter to public policy to permit post settlement claims for costs when settlement agreements are used to compare to the objective reasonableness of pre-settlement positions. It was her view that unless there are compelling reasons to do so, costs ought not to be awarded in a case where settlement was reached. Justice Leach was not persuaded that there were compelling reasons to depart from that principle in the circumstances of the case before her.

[15] An analysis of the material, where it is sufficient, may enable a judge to award costs to one of the parties, or deny costs to both. Justice Kitely, in Ohanessian v. Kalisz (2016), granted costs of $27,454 where a motion and cross-motion were both settled. In doing so, she questioned the purpose of counsel leaving the determination of costs to the judge after settling the substantive issues. She was concerned at the absence of submissions on the substantial issues without an opportunity to analyse the evidence for contradictions and challenges. She noted that it was difficult, in the absence of such submissions, to arrive at a conclusion as to success based solely on competing affidavits. Justice Kitely stated at paragraph 21:

I am mindful that it is essential that parties make best efforts to resolve pending motions because it creates an opportunity for them to experience collaboration that does not require judicial adjudication. I also realize that if every motion were contested, the courts would grind to a halt. I accept that sometimes counsel and the parties arrive at a consensus as to the underlying substantial issues but cannot agree as to the cost consequences. I understand that there is a role to play in making orders as to costs in such circumstances. However, when acting in negotiations which leave cost to a judge who did not adjudicate, I encourage counsel to reflect client’s expectations as to the extent to which each might be vindicated by a costs award.

[16] In Ball v. Ball, (2014), Minnema J. found that he had jurisdiction to make a costs award in the face of a settlement where there was an extensive record with supporting documentation. After considering the pleadings, the offers and the settlement, he ordered that both parties were to pay their own costs as he found that success was divided and there was no compelling reason to make a cost order or to re-apportion costs.

[17] In other cases, the judge may decide that he/she is unable to determine costs where, on the evidence before the Court, a factual finding cannot be made as to reasonableness. In Talbot v Talbot (2016), Templeton J., faced with a determination of costs where the parties had signed Minutes of Settlement on the eve of trial, found that, on the evidence before him, he could not decide which party was successful or make factual findings as to reasonableness or lack of reasonableness in the conduct of the parties. He therefore ordered both parties to pay their own costs where one party sought costs of $52,128.70.

[18] In Herr v. Rebelo, (2016) Vogelosang J. stated:

In my view, the reluctance to award costs of a settled case depends entirely on the circumstances, the claims made (and the context of the claims) and the general nature of the settlement achieved: Johanns v. Fulford, 2011 ONSC 5268, 2011 ONSC 5268 (Sup. Ct.), Kearly v. Renfro, 2012 ONSC 5391, 2012 ONSC 5391 (Sup. Ct.), C.(A.) v. K.(G.), 2015 ONCJ 398, 2015 ONCJ 398 (Ont. Ct.).

[19] In Johanns, (2011), Aston J. refused leave to appeal a costs award where parties had settled all of the issues except costs, rejecting the argument that resolution by minutes of settlement rendered a reasonable determination of “success” impossible. In his view, the award was properly made on “a very extensive record with supporting documentation on the positions taken by the parties, their claims in the litigation and the ultimate result, as well as the terms of Offers to Settle and the dates such offers were made.”

[20] In the present case, the parties have provided written submissions and extensive briefs containing the correspondence between them preceding the motion, their Offers to Settle, and a chart comparing Mr. Regisford’s Offers to Settle, and counsel’s dockets, that permits the Court to place the Consent Order in sufficient context to determine whether either party was substantially successful and whether they were reasonable in bringing, and initially opposing, the motion.

[21] A comparison of Mr. Regisford’s Offers to Settle dated September 18 and October 22, 2017, with the consent Order discloses the following similarities and differences:

(a) Similarities:

1. Both Offers and the Consent Order provide for the listing of the two properties for sale. The Offer of September 18, 2017, provides for listing within 7 days of the Offer or within 15 days of the motion being heard. The Offer dated October 22 provided for listing within 7 days of the Offer.
2. The listing agent is the same, as is the parties’ obligation to follow the agent’s advice regarding listing price, and the permission to the parties to attend at the property with the agent.
3. Both Offers and the consent Order are identical as to the costs to be paid from the proceeds of sale.

(b) Differences:

1. The Offer of September 18, 2017, provides for a minimum sale price of $870,000 for 20 Fernbrook and a minimum sale price of $765,000 for 56 John Street, and a closing date not less than 30 days from the accepted Offer to Purchase. The Offer of October 22, 2017, reduces the minimum sale price of 20 Fernbrook Street to $785,000 and the minimum sale price for 56 John Street to $685,000, and a closing date not less than 30 days from the date of accepted Offer to Settle. The consent Order provides for acceptance of the highest Offer, subject, in the case of 56 John Street, to a minimum closing period of 60 days.
2. The Offer of September 18, 2017, provides for a hold back of $75,000.00 from Mr. Regisford’s share. The Offer of October 22, 2017, provides for equal distribution of net proceeds, “subject to the payment of the equalization payment being paid to Ms. Regisford from Mr. Regisford’s share of the sale proceeds.” The consent Order provides for a $60,000.00 holdback.
3. The Offers provide for no costs if the Offer is accepted within one day (amended the following day to 7 days), in the case of the Offer of September 18, 2017, and within two days, in the case of the Offer dated October 22, 2017. If the deadline is past, both Offers provide for costs on a partial recovery basis to the date of service of the Offer, and full indemnity costs after. The consent Order provides for the Court to determine costs.

[22] I find that neither Offer is equal to or more favourable than the consent Order. Both Offers provide for minimum prices whereas the consent Order does not. More important, the Offer of September 18, 2017, provided for a minimum price of $870,000 for Fernbrook, whereas Ms. Regisford ultimately purchased that property for $785,000.00. While the Offer of October 22, 2017, provided reduced the minimum price for Fernbrook to $785,000, the Offer failed to provide for a holdback, whereas the consent Order provided for a $60,000.00 holdback. While the conduct of the parties after the motion was settled is not a factor that enters directly into the determination of facts, the price at which Ms. Regisford later purchased the Fernbrook property gives an indication of why she may have regarded Mr. Regisford’s Offer as less favourable than the outcome she ultimately achieved. Based on the foregoing, I find that success in the motion was divided.

[23] Although the material filed in support of the costs submissions is sufficient to enable the court to determine that success was divided, it is not sufficient to permit a determination as to fault in the back and forth of negotiation that preceded the bringing of the motion, and that occurred leading up to the hearing.

[24] Each party alleges that the other vacillated in his/her willingness to have the properties sold. The evidence is not sufficiently clear to shed light on the reasons for the vacillation, or the extent to which one party’s failure to meet the other’s underlying objectives of acquiring one of the properties at what he/she considered a fair price, or recovering or resisting a fair equalization payment, accounted for the vacillation.

[25] I am not persuaded that the conduct of either party is so unreasonable as to entitle the other to his/her costs.

CONCLUSION AND ORDER

[26] For the foregoing reasons, it is ordered that neither party shall pay the other costs of the motion.

Price J. Released: November 7, 2018