Court File and Parties

Court File No.: FS-15-82431-00 Date: 2018-11-08 Ontario Superior Court of Justice

Between:

YVONNE CHRABALOWSKI, Applicant (Alla Koren, for the Applicant)

- and -

RADEK CHRABALOWSKI, Respondent (Self-represented)

Heard: March 15, 2016, at Brampton, Ontario

Before: Price J.

Costs Endorsement

NATURE OF MOTION

[1] The parties have been unable to resolve the issue of what costs, if any, each party should pay to the other arising from the Applicant/wife, Yvonne Chrabalowski’s unsuccessful motion to strike the Respondent/husband, Radek Chrabalowski’s Answer based on his failure to pay $6,000.00 costs which Tzimas J. had ordered him to pay for in relation to an earlier motion for sale of the parties’ jointly owned home.

BACKGROUND FACTS

[2] Ms. Chrabalowski obtained an Order from Tzimas J. dated December 11, 2015, directing the sale of the parties’ jointly owned home. Paragraph 6 of the Order required Mr. Chrabalowski to pay Ms. Chrabalowski’s costs of the motion in the amount of $6,000.00 within 30 days.

[3] Ms. Chrabalowski brought a motion on February 22, 2016, to strike Mr. Chrabalowski’s Answer and for leave to proceed to an uncontested trial on the ground that Mr. Chrabalowski had failed to pay the $6,000.00 costs. The parties attended court on March 3, 2016, and at Mr. Chrabalowski’s request, the motion was adjourned to March 15, 2016, to give him additional time to deliver responding material. He was ordered to pay Ms. Chrabalowski’s costs of the adjournment in the amount of $1,000.00, which he did.

[4] Mr. Chrabalowski delivered his responding material, as well as a cross-motion to stay the sale of the home and to strike Ms. Chrabalowski’s Application on the ground of her breach of an earlier Order of Woollcombe J. dated June 26, 2015, requiring her to contribute to household expenses, after 5 p.m. on March 9, 2016. The Rules required service of his motion by 4 p.m. that day. Additionally, Mr. Chrabalowski requested additional time to pay the costs ordered by Tzimas J. until the matrimonial home was sold and he could realize his share of the proceeds.

[5] At the hearing of the motions on March 15, 2016, Ms. Chrabalowski noted that Mr. Chrabalowski’s material did not address his failure to pay the $6,000.00 costs ordered by Tzimas J. and submitted that having regard to his failure to comply with that Order, the Court should not entertain his cross-motion. Additionally, she argued that much of Mr. Chrabalowski’s affidavit amounted to an attempt to re-litigate her earlier motion for an order directing sale of the home, which had resulted in the Order of Tzimas J. dated December 11, 2015.

[6] Mr. Chrabalowski’s affidavit in support of his cross-motion made serious allegations against both Ms. Chrabalowski and the realtor who had assisted in the sale of the home. Because Mr. Chrabalowski had not been able to file his motion material, the Court had not yet had an opportunity to review it before the hearing on March 15th. The Court therefore adjourned the motion to the morning of March 17, 2016.

[7] After hearing further argument from 9:15 a.m. to 10:36 a.m. on March 17, 2016, and having regard to the undisputed evidence that Mr. Chrabalowski had sufficient equity in the home to pay the costs ordered by Tzimas J. from his share of the proceeds of sale, even after Ms. Chrabalowski’s potential claims were allowed and paid from his share, and the fact that an order striking pleadings was a drastic remedy of last resort, this Court concluded that Ms. Chrabalowski’s motion was premature and should be dismissed.

[8] Because Ms. Chrabalowski, in her material, had not addressed the substance of Mr. Chrabalowski’s cross-motion to stay the sale of the home, and requested an opportunity to do so if his motion was permitted to proceed, and because the Court concluded that Tzimas J. was in the best position to determine whether her own Order should be stayed, this Court adjourned Mr. Chrabalowski’s motion to April 6, 2016, before Tzimas J., and granted Ms. Chrabalowski leave to file further responding material in the intervening three weeks. The Court directed that if the parties were unable to agree on the costs of Ms. Chrabalowski’s unsuccessful motion to strike Mr. Chrabalowski’s pleading, they could submit written arguments by April 8, 2016, after Tzimas J. had heard Mr. Chrabalowski’s motion to stay the sale of the home.

[9] On April 6, 2016, Tzimas J. heard Mr. Chrabalowski’s motion to stay the sale of the home. After hearing argument, Justice Tzimas dismissed the motion, but varied her Order of December 11, 2016, to permit Mr. Chrabalowski to pay the costs of the December motion from his share of the net proceeds of sale of the home.

[10] Justice Tzimas granted the parties leave to file written submissions on costs and after receiving their submissions, released an endorsement dated May 31, 2016, ordering Mr. Chrabalowski to pay Ms. Chrabalowski’s costs of his motion in the amount of $10,500.00.

[11] The parties delivered written arguments to this Court regarding the costs of Ms. Chrabalowski’s motion to strike Mr. Chrabalowski’s pleadings. In the meantime, Ms. Chrabalowski’s Application proceeded to a trial Management Conference on March 24, 2017, at which time an Order was made in accordance with minutes of settlement disposing of the parenting issues, with no costs payable. The remaining issues proceeded to a trial before Bielby J. at the civil blitz sitting that began May 8, 2017, estimated to require 11 days. On May 9th, the parties signed final minutes of settlement regarding all remaining issues.

ISSUES

[12] The Court must determine whether either of the parties should be ordered to pay the other’s costs of Ms. Chrabalowski’s unsuccessful motion to strike Mr. Chrabalowski’s pleadings and, if so, in what amount.

PARTIES’ POSITIONS

[13] Mr. Chrabalowski, who was self-represented, requested his costs of the motion in the amount of $7,625.00 based on 61 hours at a Law Clerk’s rate of $125.00 per hour, plus disbursements of $187.00. The disbursements consisted of service of his affidavit ($63.60), 407 ETR toll charges ($13.22), photocopies ($98.88 at .25 per page), and faxes (11.30 at $2.50 per page).

[14] Ms. Chrabalowski, although unsuccessful in the motion, requested her costs in the amount of $7,000.00, inclusive of disbursements and HST, on the basis of Mr. Chrabalowski’s unreasonable conduct in failing to pay the costs ordered by Tzimas J. and thereby precipitating the motion.

ANALYSIS AND EVIDENCE

General principles

[15] 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: Sims-Howarth v. Bilcliffe, 2000 ONSC 22584, para. 11; Biant v. Sagoo, 2001 ONSC 28137, para. 1.

[16] 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: Paranavitana v. Nanayakkara, 2010 ONSC 2257.

[17] 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: Serra v Serra, 2009 ONCA 395. However, an unsuccessful litigant should not be required to pay the costs of a motion that the successful litigant precipitated by his unreasonable conduct, or 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 should have been anticipated.

[18] Historically, the successful party in a motion made necessary by the responding party’s breach of a court order was entitled to costs on a substantial indemnity scale: Cassidy v. Cassidy, 2011 ONSC 791, para. 14; Astley v. Verdun, 2013 ONSC 6734, at paras 52 to 58. This was because a finding of contempt is a finding of unreasonable conduct. Substantial indemnity costs did not follow automatically or invariably from a finding of contempt, but such a finding gave rise to a rebuttable presumption that the successful party was entitled to costs on a substantial indemnity scale. In Astley v. Verdun, (2013), Goldstein J. described the jurisprudence governing the imposition of substantial indemnity costs as it pertains to contempt, He stated:

I characterize the test this way: there is a rebuttable presumption that substantial indemnity costs are appropriate in a contempt of court case. The presumption may be rebutted where the contemnor is suitably contrite, has attempted to purge his or her contempt, has taken steps to minimize costs incurred by the other party, and the contempt itself is towards the lower end of the "flagrant and wilful" scale. Astley v. Verdun, para. 57

[Emphasis added]

[19] In the present day, the Family Law Rules do not explicitly provide for costs on either a partial or substantial indemnity scale. Rule 18(14), dealing with the costs consequences of a failure to accept an Offer to Settle, instead differentiates between “costs” and “full recovery of costs”. Rule 24(8) also refers to “costs on a full recovery basis,” where a party has acted in bad faith. In a family law case, the court need not find “special circumstances” before ordering costs on a full recovery basis: Sordi v. Sordi, 2011 ONCA 665, 283 O.A.C. 287. It has a range of costs awards open to it, from nominal to just short of full recovery.

[20] In Sims-Howarth v Bilcliffe, (2000), Aston J. held that the two traditional scales of costs are no longer an appropriate way to quantify costs under the Family Law Rules. He stated that, having determined that one party is liable to pay costs, the court must fix the amount at some figure between a nominal sum and full recovery, having regard to the factors set out in Rule 24, without any assumptions about categories of costs. This characterization of costs under the Family Law Rules was approved by the Ontario Court of Appeal in C.A.M. v D.M..

[21] In Berta v. Berta, (2015), the Court of Appeal stated:

In Biant v. Sagoo (2001), 2001 ONSC 28137, 20 R.F.L. (5th) 284 (Ont. S.C.), the court considered the costs award scheme under the rules and commented, at para. 20:

[T]he preferable approach in family law cases is to have costs recovery generally approach full recovery, so long as the successful party has behaved reasonably and the costs claimed are proportional to the issues and the result. There remains, I believe a discretion under Rule 24(1) to award the amount of costs that appears just in all the circumstances, while giving effect to the rules’ preeminent presumption, and subject always to the rules that require full recovery or that require or suggest a reduction or an apportionment.

This court has repeatedly endorsed the Biant court’s approach to the determination of costs in family law disputes: see for example, Ruffudeen-Coutts v. Coutts, 2012 ONCA 263, 15 R.F.L. (7th) 35, at para. 4; Sordi v Sordi, 2011 ONCA 665, 134 R.F.L. (7th) 197, at para. 21; M. (A.C.) v. M. (D.), (2003), 2003 ONCA 18880, 67 O.R. (3d) 181 (C.A.), at para. 40.

[22] Costs must always be proportional to what is at stake in the case, and to the unsuccessful party’s reasonable expectation as to what costs he may face if he is unsuccessful. In appropriate circumstances, unreasonable behavior will result in a higher award of costs. In Perri v. Thind et al., (2010), Henderson J. granted leave to appeal to the Divisional Court from a costs award that was a marked departure from the normal or routine costs made in motions court. In doing so, he stated that costs orders are not designed mainly to be a punishment, but acknowledged that costs, when awarded on a higher scale, can serve to express the court’s disapproval of unreasonable conduct: Perri, at paras. 24-26, 32-33.

[23] A litigant who has achieved a successful outcome may also be deprived of costs in certain circumstances, including where he has behaved unreasonably. Rule 24(4) of The Family Law Rules provides, in this regard:

24(1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.

(4) Despite subrule (1), a successful party who has behaved unreasonably during a 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.

(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,

(a) the party’s behavior in relation to the issues from the time they arose, including whether the party made an offer to settle …;

[Emphasis added]

Applying the principles to the facts of the present case

[24] If Mr. Chrabalowski was unable to pay the costs ordered by Tzimas J., he could and should have moved to vary her Order by permitting him to pay the costs by installments, or from his share of the net proceeds of sale of the home. At the very least, he could have made an Offer to Ms. Chrabalowski along those lines. By failing to take such steps, he acted unreasonably and thereby precipitated Ms. Chrabalowski’s motion.

[25] Ms. Chrabalowski also could have proposed payment of the costs from the proceeds of sale of the home. Having regard to Mr. Chrabalowski’s financial circumstances, and the fact that he was self-represented, she or her lawyer should have done so. Once having made the motion, she could and should have served an Offer to Settle along those lines, especially after Mr. Chrabalowski requested that relief in his cross-motion. In failing to take such steps, she also acted unreasonably.

[26] Ms. Chrabalowski sought her costs of the motion in the amount of $7,000.00, an amount $500.00 greater than the costs order that she was seeking to enforce. She stated that she incurred $9,000.00 in preparation of the motion. At her counsel’s stated hourly rate of $350.00, that translates to 25.71 hours. That amount of time was greatly excessive for a motion like this one. The supporting affidavit of Ms. Chrabalowski’s lawyer’s law clerk consisted of 4 ½ pages of text, double spaced, mostly setting out the background of the Order for sale of the home, which was irrelevant to the motion to strike pleadings. The Factum consisted of four pages of standard principles governing the striking of pleadings, and one page repeating the relief sought in the Notice of Motion. At most, 4 hours, or $1,400.00 would have been recoverable, based on the material filed.

[27] Mr. Chrabalowski supports his request for costs with a Bill of Costs listing hours spent but unsupported by an affidavit substantiating the time claimed or the hourly rate he asks to be applied to that time: Abela v. Gibbens, 2018 ONSC 2544, paras. 46-62. The hours claimed include 6 hours spent reviewing Ms. Chrabalowski’s motion material, 6 hours travelling to the court house and to Ms. Koren’s office, and consulting duty counsel, 4 hours swearing an affidavit and filing it in court, and 8 hours waiting and attending at the motion hearing. The hours claimed for reviewing the affidavit and Factum which, as noted, consist of 8 pages of text, is clearly excessive, the material does not distinguish between time spent in travel, which is not recoverable fully, and time spent consulting duty counsel, which may not be recoverable at all Cindy Jahn-Cartwright v. John Cartwright, 2010 ONSC 2263, para. 11, and the time spent attending court and waiting to be heard, which is not recoverable by a self-represented litigant unless evidence is provided as to the deduction to be made for time the litigant would normally have spent in court if not arguing his case, as litigants who are represented by a lawyer are not compensated for such time: Cartwright, supra, para. 13 to 15.

[28] I find that the unreasonable conduct by both parties disentitles them to the modest costs they might otherwise have been entitled to for a motion of this kind, and having regard to the material filed.

CONCLUSION AND ORDER

[29] For the foregoing reasons, it is ordered that there shall be no costs payable for this motion.

Price J. Released: November 8, 2018