Rothschild v. Rothschild, 2019 ONSC 1378

Case Summary

The court issued a costs endorsement following interim motions on parenting and financial issues. Both parties sought costs from the other. The Applicant argued for partial costs based on success in financial matters, while the Respondent sought substantial indemnity costs, citing full success on parenting issues and the Applicant's misrepresentation of income. The court found success to be largely divided, with the Respondent succeeding on the primary parenting issue and the Applicant on several other important financial matters. Neither party's settlement offer was significantly more favourable, and no unreasonable or bad faith conduct was found. Consequently, the court declined to award costs, ordering each party to bear their own. interesting_citations_summary: > The endorsement reiterates the three purposes of modern family cost rules: indemnification, settlement encouragement, and sanctioning inappropriate behavior. It emphasizes that while success is the starting point for costs, it is not determinative, and a "contextual analysis" is required for divided success, considering the importance of issues and resources expended, rather than a simple tally. The court exercised its discretion under Rule 24(6) of the Family Law Rules to decline a costs award where success was largely divided and no misconduct was present. final_judgement: The court declined to make a costs order, ordering each party to bear their own costs. winning_degree_applicant: 3 winning_degree_respondent: 3 judge_bias_applicant: 0 judge_bias_respondent: 0 year: 2019 decision_number: 1378 file_number: "FS-18-2429" source: "https://www.canlii.org/en/on/onsc/doc/2019/2019onsc1378/2019onsc1378.html" cited_cases: legislation: - title: "Family Law Rules, O. Reg. 114/99" url: "https://www.ontario.ca/laws/regulation/990114" case_law: - title: "Serra v. Serra, 2009 ONCA 395" url: "https://www.canlii.org/en/on/onca/doc/2009/2009onca395/2009onca395.html" - title: "Berta v. Berta, 2015 ONCA 918" url: "https://www.canlii.org/en/on/onca/doc/2015/2015onca918/2015onca918.html" - title: "Thompson v. Drummond, 2018 ONSC 4762" url: "https://www.canlii.org/en/on/onsc/doc/2018/2018onsc4762/2018onsc4762.html" keywords: - Costs - Family Law Rules - Divided success - Interim motions - Parenting issues - Financial issues - Offers to settle - Unreasonable conduct - Bad faith areas_of_law: - Family Law - Civil Procedure --- # Court File and Parties **Court File No.:** FS-18-2429 **Date:** 20190227 **Superior Court of Justice - Ontario** **Re:** Adam Rothschild, Applicant **And:** Amanda Rothschild, Respondent **Before:** P. J. Monahan J. **Counsel:** Harold Niman and Richard Niman, for the Applicant Jaret Moldaver and Jesse Rosenberg for the Respondent **Heard:** In Writing --- # Costs Endorsement [1] On January 28, 2018, I issued an Endorsement resolving a number of parenting issues involving the parties’ two children, on an interim without prejudice basis. I also addressed a variety of financial issues, including interim child and spousal support, providing for a line of credit to be secured against the matrimonial home in order to fund costs associated with the litigation, and an order for exclusive possession of the matrimonial home. [2] The parties were unable to settle the issue of costs incurred in connection with their respective motions, and have made written submissions. Each seeks an order for recovery of some or all of their costs from the other. [3] The Applicant concedes that he was unsuccessful on the parenting issues but maintains that he was more successful on numerous other financial issues. On this basis he argues that he is entitled to a portion of his costs pursuant to [Rule 24(6) of the Family Law Rules](https://www.ontario.ca/laws/regulation/990114). He seeks costs fixed in the amount of $20,000, which is less than half of his total costs incurred of $56,701.93. [4] The Respondent argues that she was entirely successful on the parenting issues which, as noted in my Endorsement, was a significant focus of the argument on these motions. The Respondent also submits that, although success was divided on financial issues, she was forced to bring her motion for interim child and spousal support in light of what she characterizes as the Applicant’s falsely sworn representations, post separation, with respect to his income. She therefore argues that she should be entitled to her costs on a substantial indemnity basis in the amount of $45,160.24, which is approximately 80% of her total costs of $55,526.86. [5] For the reasons that follow I decline to make a costs order in respect of these motions. # Applicable Legal Principles [6] It is well established that modern family cost rules are designed to foster three fundamental purposes: (i) to partially indemnify successful litigants; (ii) to encourage settlement; and (iii) to discourage and sanction inappropriate behaviour by litigants. [1] [7] [Rule 24(1)](https://www.ontario.ca/laws/regulation/990114) creates a presumption of costs in favour of the successful party. [2] While consideration of success is the starting point in determining costs, this presumption does not automatically require that the successful party be awarded his or her costs. Entitlement to costs is subject to a variety of factors, including whether the successful party has behaved unreasonably, [3] whether there has been bad faith conduct, [4] and the nature of any offers to settle made by either party. [5] [8] Where success in a step in a case is divided, [Rule 24(6)](https://www.ontario.ca/laws/regulation/990114) provides that the court may apportion costs as appropriate. The determination of whether success was truly “divided” does not simply involve adding up the number of issues and running a mathematical tally of which party won more of them. Rather, as Chappel J. noted recently in [Thompson v. Drummond, 2018 ONSC 4762](https://www.canlii.org/en/on/onsc/doc/2018/2018onsc4762/2018onsc4762.html) at paragraph 13, it requires a “contextual analysis that takes into consideration the importance of the issues that were litigated and the amount of time and expense that were devoted to the issues which required adjudication.” [9] Where the court concludes that success was in fact divided, [Rule 24(6)](https://www.ontario.ca/laws/regulation/990114) provides the court with considerable discretion. In such a case, the court may decline to make an award of costs. Conversely, the court may make an assessment as to which party was more successful on an overall global basis or on the primary issue, and to make an award of costs accordingly. # Analysis [10] As is evident from the fact that each party spent approximately $55,000 on this one-day motion, there were numerous issues in dispute. However the most significant area of dispute revolved around the Applicant’s access to the parties’ two children and, on this issue, the Respondent was entirely successful. In fact, I adopted her proposed access schedule in its entirety. [11] Success on the issue of child and spousal support was divided. I determined the Applicant’s income to be $300,000, which fell between the income levels advanced by the parties. In the result, the child and spousal support ordered fell between the amounts put forward by the parties. [12] The Applicant was successful on most of the other issue, a number of which were important. I accepted the Applicant’s submission that a section 30 assessment was not appropriate at this time, and dismissed this aspect of the Respondent’s motion. I accepted the Applicant’s argument that an income of $25,000 should be imputed to the Respondent, as well as his proposal to establish a line of credit secured against the matrimonial home, with the result that I dismissed the Respondent’s claim for an interim disbursement to fund her litigation costs. I also dismissed the Respondent’s claim for an order of retroactive support, adjourning this aspect of her motion to trial. [13] Each party served an Offer to Settle. Both Offers were reasonable. However neither party achieved a result which was as favourable as their respective Offers. I do not regard these Offers as materially affecting entitlement to costs on these motions. [14] Although the litigation was contentious and hotly disputed, I do not find that either party behaved unreasonably or in bad faith. In my view, success on these motions was largely divided. In the circumstances the most appropriate result is that each party should bear their own costs, and I so order. --- P. J. Monahan J. **Date:** February 27, 2019 --- [1] [Serra v. Serra, 2009 ONCA 395](https://www.canlii.org/en/on/onca/doc/2009/2009onca395/2009onca395.html) at paragraph 8. [2] [Berta v. Berta, 2015 ONCA 918](https://www.canlii.org/en/on/onca/doc/2015/2015onca918/2015onca918.html) at paragraph 94. [3] [Rule 24(4)](https://www.ontario.ca/laws/regulation/990114). [4] [Rule 24(8)](https://www.ontario.ca/laws/regulation/990114). [5] [Rule 18(14) & (16)](https://www.ontario.ca/laws/regulation/990114). [6] [2018 ONSC 4762](https://www.canlii.org/en/on/onsc/doc/2018/2018onsc4762/2018onsc4762.html) at paragraph 13.

citation: "Rothschild v. Rothschild, 2019 ONSC 1378" parties: "Adam Rothschild v. Amanda Rothschild" party_moving: "Adam Rothschild" party_responding: "Amanda Rothschild" court: "Superior Court of Justice" court_abbreviation: "ONSC" jurisdiction: "Ontario" case_type: "costs" date_judgement: "2019-02-27" date_heard: "2019-02-27" applicant:

"Adam Rothschild" applicant_counsel:
"Harold Niman"
"Richard Niman" respondent:
"Amanda Rothschild" respondent_counsel:
"Jaret Moldaver"
"Jesse Rosenberg" judge:
"P. J. Monahan" summary: > The court issued a costs endorsement following interim motions on parenting and financial issues. Both parties sought costs from the other. The Applicant argued for partial costs based on success in financial matters, while the Respondent sought substantial indemnity costs, citing full success on parenting issues and the Applicant's misrepresentation of income. The court found success to be largely divided, with the Respondent succeeding on the primary parenting issue and the Applicant on several other important financial matters. Neither party's settlement offer was significantly more favourable, and no unreasonable or bad faith conduct was found. Consequently, the court declined to award costs, ordering each party to bear their own. interesting_citations_summary: > The endorsement reiterates the three purposes of modern family cost rules: indemnification, settlement encouragement, and sanctioning inappropriate behavior. It emphasizes that while success is the starting point for costs, it is not determinative, and a "contextual analysis" is required for divided success, considering the importance of issues and resources expended, rather than a simple tally. The court exercised its discretion under Rule 24(6) of the Family Law Rules to decline a costs award where success was largely divided and no misconduct was present. final_judgement: The court declined to make a costs order, ordering each party to bear their own costs. winning_degree_applicant: 3 winning_degree_respondent: 3 judge_bias_applicant: 0 judge_bias_respondent: 0 year: 2019 decision_number: 1378 file_number: "FS-18-2429" source: "https://www.canlii.org/en/on/onsc/doc/2019/2019onsc1378/2019onsc1378.html" cited_cases: legislation:
- title: "Family Law Rules, O. Reg. 114/99" url: "https://www.ontario.ca/laws/regulation/990114" case_law:
- title: "Serra v. Serra, 2009 ONCA 395" url: "https://www.canlii.org/en/on/onca/doc/2009/2009onca395/2009onca395.html"
- title: "Berta v. Berta, 2015 ONCA 918" url: "https://www.canlii.org/en/on/onca/doc/2015/2015onca918/2015onca918.html"
- title: "Thompson v. Drummond, 2018 ONSC 4762" url: "https://www.canlii.org/en/on/onsc/doc/2018/2018onsc4762/2018onsc4762.html" keywords:
Costs
Family Law Rules
Divided success
Interim motions
Parenting issues
Financial issues
Offers to settle
Unreasonable conduct
Bad faith areas_of_law:
Family Law
Civil Procedure

Court File and Parties

Court File No.: FS-18-2429 Date: 20190227 Superior Court of Justice - Ontario

Re: Adam Rothschild, Applicant And: Amanda Rothschild, Respondent

Before: P. J. Monahan J.

Counsel: Harold Niman and Richard Niman, for the Applicant Jaret Moldaver and Jesse Rosenberg for the Respondent

Heard: In Writing

Costs Endorsement

[1] On January 28, 2018, I issued an Endorsement resolving a number of parenting issues involving the parties’ two children, on an interim without prejudice basis. I also addressed a variety of financial issues, including interim child and spousal support, providing for a line of credit to be secured against the matrimonial home in order to fund costs associated with the litigation, and an order for exclusive possession of the matrimonial home.

[2] The parties were unable to settle the issue of costs incurred in connection with their respective motions, and have made written submissions. Each seeks an order for recovery of some or all of their costs from the other.

[3] The Applicant concedes that he was unsuccessful on the parenting issues but maintains that he was more successful on numerous other financial issues. On this basis he argues that he is entitled to a portion of his costs pursuant to Rule 24(6) of the Family Law Rules. He seeks costs fixed in the amount of $20,000, which is less than half of his total costs incurred of $56,701.93.

[4] The Respondent argues that she was entirely successful on the parenting issues which, as noted in my Endorsement, was a significant focus of the argument on these motions. The Respondent also submits that, although success was divided on financial issues, she was forced to bring her motion for interim child and spousal support in light of what she characterizes as the Applicant’s falsely sworn representations, post separation, with respect to his income. She therefore argues that she should be entitled to her costs on a substantial indemnity basis in the amount of $45,160.24, which is approximately 80% of her total costs of $55,526.86.

[5] For the reasons that follow I decline to make a costs order in respect of these motions.

Applicable Legal Principles

[6] It is well established that modern family cost rules are designed to foster three fundamental purposes: (i) to partially indemnify successful litigants; (ii) to encourage settlement; and (iii) to discourage and sanction inappropriate behaviour by litigants. [1]

[7] Rule 24(1) creates a presumption of costs in favour of the successful party. [2] While consideration of success is the starting point in determining costs, this presumption does not automatically require that the successful party be awarded his or her costs. Entitlement to costs is subject to a variety of factors, including whether the successful party has behaved unreasonably, [3] whether there has been bad faith conduct, [4] and the nature of any offers to settle made by either party. [5]

[8] Where success in a step in a case is divided, Rule 24(6) provides that the court may apportion costs as appropriate. The determination of whether success was truly “divided” does not simply involve adding up the number of issues and running a mathematical tally of which party won more of them. Rather, as Chappel J. noted recently in Thompson v. Drummond, 2018 ONSC 4762 at paragraph 13, it requires a “contextual analysis that takes into consideration the importance of the issues that were litigated and the amount of time and expense that were devoted to the issues which required adjudication.”

[9] Where the court concludes that success was in fact divided, Rule 24(6) provides the court with considerable discretion. In such a case, the court may decline to make an award of costs. Conversely, the court may make an assessment as to which party was more successful on an overall global basis or on the primary issue, and to make an award of costs accordingly.

Analysis

[10] As is evident from the fact that each party spent approximately $55,000 on this one-day motion, there were numerous issues in dispute. However the most significant area of dispute revolved around the Applicant’s access to the parties’ two children and, on this issue, the Respondent was entirely successful. In fact, I adopted her proposed access schedule in its entirety.

[11] Success on the issue of child and spousal support was divided. I determined the Applicant’s income to be $300,000, which fell between the income levels advanced by the parties. In the result, the child and spousal support ordered fell between the amounts put forward by the parties.

[12] The Applicant was successful on most of the other issue, a number of which were important. I accepted the Applicant’s submission that a section 30 assessment was not appropriate at this time, and dismissed this aspect of the Respondent’s motion. I accepted the Applicant’s argument that an income of $25,000 should be imputed to the Respondent, as well as his proposal to establish a line of credit secured against the matrimonial home, with the result that I dismissed the Respondent’s claim for an interim disbursement to fund her litigation costs. I also dismissed the Respondent’s claim for an order of retroactive support, adjourning this aspect of her motion to trial.

[13] Each party served an Offer to Settle. Both Offers were reasonable. However neither party achieved a result which was as favourable as their respective Offers. I do not regard these Offers as materially affecting entitlement to costs on these motions.

[14] Although the litigation was contentious and hotly disputed, I do not find that either party behaved unreasonably or in bad faith. In my view, success on these motions was largely divided. In the circumstances the most appropriate result is that each party should bear their own costs, and I so order.

P. J. Monahan J.

Date: February 27, 2019

[1] Serra v. Serra, 2009 ONCA 395 at paragraph 8. [2] Berta v. Berta, 2015 ONCA 918 at paragraph 94. [3] Rule 24(4). [4] Rule 24(8). [5] Rule 18(14) & (16). [6] 2018 ONSC 4762 at paragraph 13.