Court File and Parties
COURT FILE NO.: FC-17-2483 DATE: 2018/11/16 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Susan Davidson, Applicant AND James Davidson, Respondent
BEFORE: Blishen J.
COUNSEL: Peter Mirsky, for the Applicant Wade Smith, for the Respondent
HEARD: In Writing
COSTS ENDORSEMENT
Introduction
[1] Ms. Davidson filed a motion seeking a number of temporary orders relating to: exclusive possession and sale of the matrimonial home and other properties; child support for two adult children, (Brooke and Shelby) based on income imputed to the respondent and an order striking the respondent’s answer and cross-application for failure to comply with terms of a disclosure order.
[2] Mr. Davidson’s cross motion requested: exclusive possession of the matrimonial home and a delay in its sale; permission to amend his pleadings to claim a constructive trust in one property; sale of another property; and child support for a third child (Chloe) residing with him. Ms. Davidson consented to orders for child support for Chloe and sale of one property.
[3] Ms. Davidson argues she was the more successful party on the motion and is therefore entitled to costs. She further argues she acted reasonably whereas the respondent was in breach of an order for disclosure and acted unreasonably and in bad faith. She requests full recovery costs fixed at $15,464.70.
[4] Mr. Davidson argues he was successful in obtaining temporary orders to amend his pleadings; for sale of a property and child support for Chloe. He submits there is a great deal of controversy with respect to argued bad faith and behaviour of both parties which will be canvased at Questioning and ultimately at trial. Therefore, he submits costs be assessed but paid in the cause. His Bill of Costs claims a total of $8,522.18 for the motion and cross-motion.
Success
[5] Pursuant to subrule 24 (1) of the Family Law Rules, O.Reg. 114/99 as am, there is an presumption that a successful party is entitled to costs.
[6] Overall, Ms. Davidson was the more successful party on the motion. She obtained orders for exclusive possession of the matrimonial home and an order for sale of the home. She agreed child support was payable by her for Chloe and was successful in obtaining an order for child support for Brooke based on an imputed income of $82,000, significantly higher than the $52,533 argued by Mr. Davidson. She was not successful in obtaining an order for child support for 20 year old Shelby as the evidence surrounding Shelby’s living arrangements was unclear. Ms. Davidson was not successful in obtaining an order to strike Mr. Davidson’s pleadings.
[7] Mr. Davidson was successful in obtaining an order to amend his pleadings. The sale of one property and child support for Chloe were agreed upon. He was unsuccessful in obtaining an order for exclusive possession of the matrimonial home and to further delay its sale.
Reasonableness and Bad Faith
[8] Both parties argue the other has acted unreasonably and in bad faith.
[9] A successful party who has behaved unreasonably may be deprived of costs or ordered to pay the unsuccesfull party’s costs (subrule 24 (4)).
[10] Mr. Davidson submits there is a great deal of controversy and competing evidence with respect to the issues of reasonableness and bath faith which will be canvassed at Questioning and perhaps ultimately at trial.
[11] Ms. Davidson argues Mr. Davidson behaved unreasonably and in bad faith as he:
- was in breach of an order for disclosure;
- “secreted away” considerable property,(presumably referring to business equipment);
- mischaracterized and minimized his income; and
- sought to control the matrimonial home by preventing its sale.
[12] Pursuant to subrule 24 (5) in deciding whether a party has behaved reasonably or unreasonably, the court must examine the following factors:
(a) the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle; (b) the reasonableness of any offer the party made; and (c) any offer the party withdrew or failed to accept. O. Reg. 114/99, r. 24 (5) .
[13] Neither party provided an Offer to Settle the motion or cross-motion.
[14] If the court finds that a party has acted in bad faith, costs must be decided on a full recovery basis and paid immediately. (subrule 24 (8)).
[15] There are allegations and contradictory evidence regarding the behaviour of both parties. I did find that Mr. Davidson did not fully comply with the disclosure order made by Master Fortier. However, I note counsel for Ms. Davidson in his Costs Submissions acknowledged Shelby was no longer residing with her mother. He stated Shelby’s residence changed after the motion was filed but not before the motion was argued. The motion was argued on the basis that Shelby was still residing with her mother.
[16] Based on the evidence before me and on the motions, I find both parties behaved somewhat unreasonably; Mr. Davidson to a greater extent. I agree with counsel for Mr. Davidson that Questioning and a possible trial will further canvass the issues of reasonableness and bad faith with more comprehensive and detailed evidence.
Quantum
[17] Subrule 24 (12) indicates in setting the quantum of costs the court shall consider the following:
(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. O. Reg. 298/18, s. 14.
[18] I have already noted there were no Offers to Settle and there is evidence of some unreasonable conduct on the part of both parties.
[19] The applicant’s costs submissions indicate approximately 34 hours were spent preparing for the motion. Counsel for the respondent spent approximately 19 hours. The legal fees and rates of counsel are reasonable given their experience, as are their disbursements. The total amount requested by the applicant on a full recovery basis is $15,464.70. The respondent’s Bill of Costs reflects a total claim of $8,522.18.
[20] Reasonableness and proportionality must be considered as they relate to the importance and complexity of the issues. A number of the issues were resolved on consent. Exclusive possession of the home; sale of the home; child and spousal support; and striking and amending pleadings were certainly important issues, although not overly complex. Determining Mr. Davidson’s income for support purposes was complicated given lack of full disclosure and anomalies in his reported income which I found unreliable.
Conclusion
[21] Scales of costs are no longer an appropriate way to quantify costs under the Family Law Rules. The rules require flexibility and an examination of the factors listed under rule 24 (12) without any assumptions regarding categories of costs.
[22] Modern costs rules are designed to foster three fundamental purposes:
- To partial indemnify successful litigants;
- To encourage settlement; and
- To discourage and sanction inappropriate behaviour by litigants.
[23] Costs awards should reflect what the court views as a fair and reasonable amount to be paid by the unsuccessful litigant. See: Serra v. Serra, 2009 ONCA 395, Sims-Howarth v. Bilcliffe, Costa v. Perkins, 2012 ONSC 3200, Mattina v. Mattina, 2018 ONCA 867.
[24] In conclusion, I order Mr. Davidson to pay Ms. Davidson costs fixed in the amount of $8000 inclusive of disbursements and HST as a fair, reasonable and proportional amount under all the circumstances. Mr. Davidson has the ability to pay these costs and they are to be paid in full by December 21, 2018.
Date: November 16, 2018 Blishen J.
COURT FILE NO.: FC-17-2483 DATE: 2018/11/16 ONTARIO SUPERIOR COURT OF JUSTICE
RE: Susan Davidson, Applicant AND James Davidson, Respondent
BEFORE: Blishen J.
COUNSEL: Peter Mirsky, for the Applicant Wade Smith, for the Respondent
COSTS ENDORSEMENT Blishen J.