Court File and Parties
COURT FILE NO.: FC-04-2829-01 DATE: 2018/11/13 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Diane J. Miller, Applicant -and- Russell W. Miller, Respondent
BEFORE: Madam Justice D. Summers
COUNSEL: Judy Overgaard, for the Applicant Wade Smith, for the Respondent
HEARD: In Writing
Costs Endorsement
Introduction
[1] This was the Respondent’s (“Mr. Miller”) motion to change. He sought to terminate spousal support, impute income and obtain child support. When Mr. Miller commenced the proceeding, one of the parties’ two children had been living with him for several years. Notwithstanding this change to split custody, child support was not varied. Mr. Miller continued paying for two children. The Applicant, Ms. Miller (“Ms. Hanna”) did not pay child support to him. By the time the case was heard, both children were living with Mr. Miller. Ms. Hanna opposed his request to end spousal support. Instead, she sought a significant increase in support based on the increase in Mr. Miller’s income. She resisted payment of child support for the eldest child and argued that support for the youngest be based on her actual income. Ms. Hanna also sought retroactive child support for one child to correspond to the increase in Mr. Miller’s income over the years.
Positions of the Parties
[2] Mr. Miller argues that overall, he was the successful party. He seeks his costs. If granted on a partial indemnity basis between the date the proceeding was commenced and the date of his offer in September, 2017 and on a substantial indemnity scale after that, he asks for $31,163. In the alternative, he asks for $24,427 on a partial indemnity basis throughout. Both amounts are inclusive of disbursements and HST.
[3] Ms. Hanna argues that success was divided and no costs should be payable.
Success
[4] Rule 24(1) of the Family Law Rule (FLR’s) creates a presumption of costs in favour of the successful party.[^1] Consideration of success is the starting point in determining costs.[^2] The court should look at the positions taken by the parties and how the order made compares to offers to settle.[^3]
[5] Rule 24(6) allows the court to apportion costs as appropriate if success was divided.[^4]
[6] Ms. Hanna argued it was never expected that she would be self-sufficient or that support would end. Considering the circumstances of the marriage and marriage breakdown including that it was an 8 year relationship, it ended when she was 34 years old, she successfully completed two retraining programs after marriage breakdown, and the specific terms of the order to be varied, Ms. Hanna’s position was not reasonable.
[7] Ms. Hanna also argued that she was unable to work full-time and earn an income commensurate with her post separation training. The rationale for her position in the litigation changed over time. In the beginning, she said that full time work was not available. When that assertion was challenged, she said it was her health that prevented her from working full time. She continued to collect child support from Mr. Miller after December, 2016 even though both children were then living with him. She did not pay child support. This was not a reasonable position to have adopted on the issue of child support.
[8] My order directed a reduction in spousal support from $4,200 to $2,000 per month effective January 1, 2019 and terminated entitlement effective April 30, 2019. I imputed income to Ms. Hanna of $50,000 and ordered her to pay ongoing child support to Mr. Miller. I further ordered that she reimburse him for the amount of child support received after she no longer had a child living with her. Both parties were ordered to make retroactive child support payments to the other. The amount owing by Mr. Miller was significantly greater than the amount owing by Ms. Hanna.
[9] Success was not divided as Ms. Hanna submits. When the outcome here is measured in relation to the positions taken in the litigation and the offer made by Mr. Miller, he is the successful party and entitled to costs.
Offers to Settle
[10] Mr. Miller made a formal Offer to Settle on September 6, 2017. He proposed: (1) spousal support would terminate at the end of September, 2017; (2) he would forego child support for both children until they started post-secondary school; and (3) he would make a lump sum payment of $40,000.
[11] Ms. Hanna did not make an Offer to Settle.
[12] When the terms of Mr. Miller’s Offer are measured against the financial effect of my order as a whole, the outcome is not as favourable to him. As a result, his offer does not trigger the costs consequences of rule 18(14)[^5]. However, I have considered his effort to settle under rule 18(16). [^6] This rule gives the court discretion to take into account any written offer to settle, the date it was made and its terms. I find Mr. Miller’s offer was reasonable. It was deserving of serious consideration.
[13] Ms. Hanna’s failure to make a settlement offer was not reasonable. Rule 2 of the FLR’s imposes a duty on the parties and their lawyers to promote the primary objective of the rules to deal with cases justly. This duty includes taking appropriate steps to save time and expense. Offers to Settle play an important role in saving time and expense by promoting settlements, focusing the parties and often narrowing the issues in dispute. The failure to serve an Offer to Settle is an adverse factor when assessing costs.[^7]
Quantum
[14] To determine the amount to be paid by Ms. Hanna, I have considered the factors listed in R. 24(11) of the FLR’s.[^8] Child support and spousal support are issues that by their nature are important to the parties. The complexity of the issues between the parties grew over the three year period that it took for this matter to be heard. In the end, there were two expert reports to be considered.
[15] As stated, the positions taken by Ms. Hanna in the litigation were unreasonable as was her failure to make an offer. Mr. Miller did make an offer. It was reasonable. Assessing the strengths and weaknesses of one’s case is an ongoing responsibility. Litigants should remain open to compromise and make settlement offers accordingly. The failure to do so is a consideration in the assessment of costs.
[16] Only Mr. Miller’s counsel provided a Bill of Costs. The hourly rate charged for senior counsel was reasonable. The matter took just over three years to be heard on the merits. There were several court appearances and the material filed grew with each event.
[17] Mr. Miller also seeks to recover the cost of his expert report. Initially, he attempted to demonstrate the availability of full-time employment to Ms. Hanna without recourse to an expert. When those efforts failed, Mr. Miller hired an expert. I find this was a reasonable and necessary expense under the circumstances.
[18] Ms. Hanna asks the Court to consider her ability to pay. It is well settled that the court should consider a party’s limited financial resources when determining the size of a costs award.[^9] Meagre resources, however, do not completely insulate a party against a costs award.[^10] In this regard, I have considered Ms. Hanna’s actual earnings, her savings and the equity she has in her home.
[19] Modern costs rules are designed to foster three fundamental purposes: to partially indemnify successful litigants for the cost of litigation; to encourage settlement; and to discourage and sanction inappropriate behaviour by litigants. The court must also be mindful that costs awards should reflect a fair and reasonable amount to be paid by the unsuccessful party.[^11]
[20] Ms. Hanna did not provide any evidence of her costs for this motion to change. As a result, I have no objective measure to assess the proportionality of Mr. Miller’s costs against what Ms. Hanna’s might reasonably expect to pay as the unsuccessful party.
[21] For the above reasons and considerations, I find it fair and reasonable that Ms. Hanna pay costs to Mr. Miller in the amount of $15,000.00 inclusive of disbursements and HST. Payment shall be made within 30 days.
Madam Justice D. Summers
Date: 2018/11/13
COURT FILE NO.: FC-04-2829-01 DATE: 2018/11/13
ONTARIO SUPERIOR COURT OF JUSTICE
RE: Diane J. Miller, Applicant -and- Russell W. Miller, Respondent
BEFORE: Madam Justice D. Summers
COUNSEL: Judy Overgaard, for the Applicant Wade Smith, for the Respondent
COSTS ENDORSEMENT
Madam Justice D. Summers
Released: 2018/11/13
[^1]: O. Reg. 114/99 [^2]: Sims-Howarth v. Bilcliffe 2000 22584 (ON SC), [2000] O.J. No. 330 (S.C.J.) [^3]: Lawson v. Lawson 2008 23496 (ON SC), [2008] O.J. No. 1978 (S.C.J.) [^4]: Supra see note 1 [^5]: Supra, see note 1 [^6]: Ibid [^7]: Laing v. Mahmoud, 2011 ONSC 6737 [^8]: Supra, see note 1 [^9]: MacDonald v. Magel, 2003 18880 (Ont.C.A.) [^10]: Snih v. Snih, 2007 20774 (Ont. S.C.J.) [^11]: Serra v. Serra, 2009 ONCA 395```