NEWMARKET COURT FILE NO.: FC-11-39491-02 DATE: 20181121 ONTARIO SUPERIOR COURT OF JUSTICE FAMILY COURT
BETWEEN:
COLLEEN HEATHER BARTHAU Applicant – and – KENNETH J. JOHANSEN Respondent
D. Barbieri/C. Still, for the Applicant Self-Represented
FINAL WRITTEN SUBMISSIONS DELIVERED – July 26, 2018
DECISION - COSTS
FRYER, J.
I. Introduction
[1] I heard a trial of this matter between December 7 – 8, 2017. The issues for trial were the Respondent (Father)’s income for support and the Applicant (Mother)’s claim for retroactive and prospective child support for both children. Following the release of my decision, the parties delivered written submissions with respect to costs — the last of which was filed July 26, 2018.
[2] The Applicant (Mother) seeks full recovery costs of $24,882.29. She asserts that, although she did not have complete success, the Respondent (Father)’s behaviour amounts to bad faith that entitles to her to the higher costs award.
[3] Despite my order that limited each party’s costs submissions to 4 pages, the Respondent (Father) delivered 40 pages of submissions in which, for the most part, he attempted to re-litigate the issues at trial. His position with respect to costs appears to be that each party shall bear their own.
II. Principles with Respect to Costs
[4] In Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, at para. 8, the Court of Appeal confirmed that modern costs rules are designed to foster three fundamental purposes: (i) partial indemnification of the cost of litigation for successful litigants, (ii) encouragement of settlement between parties, and (iii) deterrence and sanctioning of inappropriate behaviour by litigants. Ultimately, costs should reflect what the court views as a fair and reasonable amount that should be paid by the unsuccessful party.
[5] In Berta v. Berta, 2015 ONCA 918, 128 O.R. (3d) 730, at para. 94, as revised on January 18, 2016, the court stated the following:
[A] successful party in a family law case is presumptively entitled to costs. An award of costs, however, is subject to the factors listed in r. 24(11), the directions set out under r. 24(4) (unreasonable conduct), r. 24(8) (bad faith) and r. 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party.
[6] In the recent decision of Beaver v. Hill, 2018 ONCA 840, the Court of Appeal emphasized, at para. 10, that “[t]his caveat is an important one since, as this court pointed out in Frick v. Frick, 2016 ONCA 799, 132 O.R. (3d) 321, the Family Law Rules “embody a philosophy peculiar to a lawsuit that involves a family” (at para. 11).”
[7] In Mattina v. Mattina, 2018 ONCA 867, it was held that “Rule 2(2) adds a fourth fundamental purpose: to ensure that cases are dealt with justly: Family Law Rules, r. 2(2); E.H. v. O.K., 2018 ONCJ 578, at para. 8; Sambasivam v. Pulendrarajah, 2012 ONCJ 711, at para. 37.”: at para. 10.
[8] The assessment of costs is not just a mechanical exercise. Costs must be proportional to the amount in issue and the outcome: Beaver, at para. 12.
[9] The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case rather than an amount fixed by the actual costs incurred by the successful litigant: Boucher et al. v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.); Selznick v. Selznick, 2013 ONCA 35, [2013] W.D.F.L. 1013; Murray v. Murray (2005), 79 O.R. (3d) 147 (C.A.); Delellis v. Delellis and Delellis.
III. Analysis
[10] With some exceptions including r. 24(4), these general principles with respect to costs hinge on an assessment of relative success: see r. 24(1) of the Family Law Rules, O. Reg. 114/99; Sims-Howarth v. Bilcliffe (2000), 6 R.F.L. (5th) 430 (Ont. S.C.); Mattina, at para. 13.
(a) Determination of Success
(i) Retroactive Child Support
[11] The Applicant (Mother) sought child support retroactive to November 16, 2011 totalling $42,640.
[12] The Applicant (Mother) delivered two offers to settle. Her first offer to settle was dated May 19, 2017 (“First Offer”) and her second offer to settle dated July 27, 2017 supplemented the First Offer (“Second Offer”). Neither offer contained severable terms.
[13] In her First Offer, the Applicant (Mother) offered to accept $10,000 in retroactive child support up to March 31, 2017 if paid forthwith or $11,000 in retroactive child support for the same period paid in twelve monthly instalments. In her Second Offer dated July 27, 2017, the Applicant (Mother) renewed her offer with respect to the retroactive child support calculated to March 31, 2017.
[14] The Respondent (Father) did not make an offer to settle. He states in his submissions that he did not know he needed to do that. I find that difficult to accept after he attended several conferences and after he received the Applicant (Mother)’s two offers to settle.
[15] I ultimately ordered that the Respondent (Father) pay retroactive Table child support totaling $69 up to March 21, 2017. I also ordered that the Respondent (Father) pay $2,103 in retroactive contribution to special and extraordinary expenses for the children for a total of $2,172.
[16] Although the Respondent (Father) was ordered to pay some retroactive child support, the Applicant (Mother) cannot be said to have had significant success on this issue either relative to her position at trial or relative to her offers to settle.
[17] The Applicant (Mother) delivered a Request to Admit on or about November 9, 2017 and, as the Respondent (Father) failed to respond to it, he was deemed to admit the allegations. For reasons set out in my decision, I exercised my discretion and fixed a quantum of retroactive support different than that calculated by the Applicant (Mother). However, I commend the Applicant (Mother) for attempting to narrow the trial issues and to the extent it may have been relied upon by the Applicant (Mother) in terms of her position at trial, I am prepared to accord it some weight in the overall costs analysis.
(ii) Prospective Child Support
[18] The Applicant (Mother) sought a continuation of Douglas J.’s temporary child support order made March 21, 2017 in which the Respondent (Father) would pay Table child support based on the mid-point between Table support for one child and Table support for two children. Based on the Respondent (Father)’s income of $67,474, this would equate to Table child support of $810 per month.
[19] The Applicant (Mother)’s offer to settle proposed the same thing.
[20] The Respondent (Father) did not dispute that he had an obligation to pay child support for Mikalah but he objected to paying support for Ethan who is living at Enterphase.
[21] For reasons set out in my decision, I declined to order any Table child support for the child Ethan. I fixed Table child support at $629 per month for the child Mikalah. However, I also ordered that the Respondent (Father) pay $76 per month being his proportionate share of Ethan’s special and extraordinary expenses. I did not make an adjustment to the Table support paid by the Respondent (Father) between March 21, 2017 and the date of my decision.
[22] The Applicant (Mother) sought a sharing of special and extraordinary expenses based on her paying 10 percent and the Respondent (Father) paying 90 percent. However, in both of her offers she proposed that she pay 25 percent of these expenses.
[23] I ordered that the parties share the special and extraordinary expenses for the children with the Applicant (Mother) paying 24 percent and the Respondent (Father) paying 76 percent.
[24] The Applicant (Mother) did not have significant success with respect to the issue of prospective child support again in terms of the relief sought at trial or her offer to settle.
(b) Reasonableness
[25] Rule 24(4) of the Family Law Rules states that a court can sanction unreasonable conduct through an award of costs and that a successful party can be ordered to pay costs where his or her behaviour is demonstrated to be unreasonable.
[26] Rule 24(5) provides criteria for determining the reasonableness of a party’s behaviour in a case as follows:
In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,
(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.
[27] For the most part, the Applicant (Mother)’s behaviour was reasonable. Although she did not have significant success, she did attempt to settle the issues based on information that was available to her at the time. She prepared a Request to Admit in order to narrow the trial issues. Her counsel was well prepared and conducted an efficient trial on her behalf.
[28] Although I do not find that the Respondent (Father)’s behaviour reaches the threshold for bad faith as set out in in Jackson v. Mayerle, 2016 ONSC 1556, 130 O.R. (3d) 683, at paras. 56 – 63, his unreasonable behaviour is a significant aspect of this costs analysis.
[29] As I noted in my decision, the Respondent (Father) refused to cooperate with basic disclosure obligations. At the time of the trial, he was in breach of a number of disclosure orders. He did not produce his 2016 Income Tax Return or Notice of Assessment nor did he file an up-to-date Financial Statement. The Applicant (Father) also took unreasonable positions with respect to the determination of his historical income. As I already noted in my decision, he was flip and cavalier in the delivery of his evidence.
[30] In my view, the Respondent (Father)’s obfuscation with respect to his income throughout this litigation led the Applicant (Mother) to believe that he was earning significantly more than I ultimately found he was. This in turn informed her settlement and trial positions. For example, the Respondent (Father) insisted at trial that he had nothing to do with “All In Hot Tubs” despite the clear evidence led by the Applicant (Mother) to the contrary. In his Financial Statement sworn November 25, 2016, the Respondent (Father) stated that his current income was $15,530 when his paystub showed year-to-date earnings of $67,474. When the Applicant (Mother) learned that the Respondent (Father)’s declared income had increased to almost $70,000 from the $24,000 he had represented to the Applicant (Mother) in mediation in 2011, it is understandable that she would query whether she was entitled to a significant retroactive award. Had the Respondent (Father) been forthright with his disclosure early on, both parties might have avoided this costly trial.
[31] The Respondent (Father) did not respond to the Request to Admit that was served on him.
[32] The Respondent (Father) did not deliver an offer to settle although there were a number of areas in which he could have proposed a compromise. In this case, his failure to deliver an offer weighs against him in the overall costs analysis.
(c) Factors in Setting Costs
[33] Rule 24(12) of the Family Law Rules sets out a number of factors to be considered in determining the quantum of costs as follows:
(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.
[34] The issues in this case were for the most part simple. The Respondent (Father) bears the lion’s share of any complexity that arose in the determination of his income.
[35] The issue of the child support payable for Ethan who is living at Enterphase was not clear although neither party assisted the court with case law on this subject.
[36] The Applicant (Mother) delivered two offers to settle well prior to trial in an attempt to resolve the issues. Although she did not beat the offers, I have considered them as they were based on information available to her at the time.
[37] The Applicant (Mother)’s Bill of Costs sets out fees of $23,450.22 inclusive of HST. The billing rates charged by all counsel involved are appropriate for the year of call.
[38] The disbursements sought of $1,431.96 are also appropriate.
(d) Summary
[39] The Applicant (Mother) had marginal success when comparing her position at trial and her offers to settle to the ultimate result.
[40] However, I would award some costs in her favour pursuant to r. 24(4) of the Family Law Rules. The Respondent (Father)’s failure to provide disclosure as required by the Family Law Rules and per various court orders and his deliberate obfuscation with respect to his historical income was unreasonable and puts the Applicant (Mother)’s position in a different light.
[41] The quantum of costs sought by the Applicant (Mother) is not reasonable given the limited degree of success. Furthermore, the costs award must be proportionate to the amount in issue and the outcome.
[42] Having regard to the foregoing, I find that an appropriate award of costs of $10,000 inclusive of HST and disbursements to be paid by the Respondent (Father) to the Applicant (Mother) at the rate of $400 per month commencing December 1, 2018. As the issues in this case centered around child support, this whole amount shall be enforceable by the Family Responsibility Office as an incident of child support.
JUSTICE L.E. FRYER