COURT FILE NO.: FS-15-84763-00 DATE: 2019-01-09 ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
ROZINA SAMNANI Self-represented Applicant
- and -
AKBAR GALMANI Self-represented Respondent
HEARD: January 11, 12, and 15, 2018, at Brampton, Ontario Price J. Costs Endorsement
OVERVIEW
[1] Following a three day trial at which Ms. Samnani and Mr. Galmani represented themselves, the court released its judgment and reasons on December 10, 2018. The issues at trial were whether Mr. Galmani had received funds from Ms. Samnani that he was required to repay, what equalization payment, if any, he was required to make to Ms. Samnani to equalize the parties’ net family property, and what spousal support, if any, Mr. Galmani was required to pay to Ms. Samnani.
[2] For reasons released on December 10, 2018, this Court found that Ms. Samnani sent $23,512.28 to Mr. Galmani in response to his demands, and that he had returned $4,227.06 to her. The Court ordered Mr. Galmani to repay to Ms. Samnani the balance of $19,285.22.
[3] After disallowing claims by Mr. Galmani that were unsupported by evidence, this Court found that on the date of separation, his net family property was $32,866.60 and that Ms. Samnani had no net family property. The Court found that Mr. Galmani had withheld property and funds from Ms. Samnani following their separation and ordered him to pay restitution of $3,000.00 for those items that he had failed to return. Additionally, it ordered him to make an equalization payment of $23,152.97 to Ms. Samnani, being half the difference between the parties’ net family properties.
[4] The Court found that Ms. Samnani was entitled to spousal support from Mr. Galmani on both a compensatory and non-compensatory basis. She suffered a loss of advantage as a result of the marriage and its breakdown and was in need of financial support which Mr. Galmani was capable of providing. The Court imputed an income of $24,500 to Ms. Samnani and $37,500 to Mr. Galmani, and ordered Mr. Galmani to pay spousal support to Ms. Samnani in the mid-range SSAG amount of $619.79 per month for three years.
[5] In the reasons it issued on December 10, 2018, this Court noted that until March 2017, Ms. Samnani was represented by a lawyer on a Legal Aid Certificate, for which Legal Aid Ontario required her to repay $8,000, inclusive of fees, HST, and disbursements. After March 2017, Ms. Samnani was able to retain a lawyer privately, for which her costs were $4,000, inclusive of HST and disbursements. While her Legal Aid lawyer charged her more than $8,000, Ms. Samnani claimed only the amount that Legal Aid Ontario required her to pay.
[6] Based on the foregoing, Ms. Samnani estimated her costs in the amount of $12,000 ($8,000 + $4,000). Mr. Galmani’s stated that he incurred costs of $16,500, inclusive of fees, HST, and disbursements. On this basis, the Court found that Ms. Samnani’s costs were proportionate to those that Mr. Galmani had incurred to oppose her claims, but directed that if the parties were unable to agree on costs, they could submit written arguments on that issue. They submitted written arguments which the Court has reviewed. This endorsement will address that remaining issue.
POSITIONS OF THE PARTIES
[7] Ms. Samnani claims costs on a full recovery basis in the amount of $12,750.00. She relies on her presumptive entitlement to costs based on her success at trial, and on Mr. Galmani’s unreasonable conduct in disputing the return of her funds and personal belongings to her and his failure to accept Offers to Settle she made whereby she had offered to accept a payment of $10,000, significantly less than the amounts she was awarded at trial.
[8] Mr. Galmani submits that the parties had agreed that the only issues to be tried were repayment of funds to Ms. Samnani and spousal support, and that he had omitted documents from his Exhibit Book that related to equalization of net family property. He acknowledges having received an Offer from Ms. Samnani to accept $10,000 and initially counter-offered $9,000 and later offered $10,000 but with delayed payment. He asks that he not be ordered to pay any costs as such costs would impose a financial hardship on him.
ANALYSIS AND LAW
1. Purposes of a costs order
[9] 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. [1]
(i) To Indemnify successful litigants
[10] The starting point in any costs analysis is the presumption that a successful party is entitled to costs. [2] A successful party is presumed to be entitled to his or her costs, pursuant to Rule 24(1) of the Family Law Rules.
[11] In awarding costs, the court must balance two conflicting purposes, namely, to indemnify the successful litigant for the cost of asserting her right to financial disclosure, and to preserve access to justice by not making the unsuccessful litigant, and other potential litigants, feel unduly hesitant to assert their rights by requiring them to bear all the costs of the successful party as well as their own. [3] The ultimate objective in balancing these principles is to ensure that the justice system works fairly and efficiently. [4]
(ii) Sanctioning unreasonable conduct
[12] 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. [5] An unsuccessful litigant should not 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 the parties should anticipate.
[13] A litigant who has achieved a successful outcome may be deprived of costs where he or she 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 …; [6]
[Emphasis added]
[14] Additionally, unreasonable behavior by the unsuccessful party can result in a higher award of costs to the successful party. 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. [7] 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. [8]
(iii) Encouraging settlement
[15] The court encourages settlement by rewarding reasonable Offers to Settle and by treating a failure to accept a reasonable Offer to Settle as unreasonable conduct that can attract an order for costs on a higher scale.
2. Factors to be considered
[16] Rule 24(11) of the Family Law Rules lists the factors which the court should consider in quantifying costs:
- (11) A person setting the amount of costs shall consider, (a) the importance, complexity or difficulty of the issues; (b) the reasonableness or unreasonableness of each party’s behaviour in the case; (c) the lawyer’s rates; (d) the time properly spent on the case, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order; (e) expenses properly paid or payable; and (f) any other relevant matter.
[17] 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. [9]
[18] 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.
[19] In Andersen v. St. Jude Medical Inc., (2006), the Ontario Divisional Court set out the approach to be taken when awarding costs:
- The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in rule 57.01(1): Boucher, Moon, and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC 2005 ONCA 1042, (2005), 75 O.R. (3d) 638 (C.A.).
- A consideration of experience, rates charged, and hours spent is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier (2002), 119 A.C.W.S. (3d) 341 (Ont. C.A.), at para. 4.
- The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: Rule 57.01(1)(0.b).
- The court should seek to avoid inconsistency with comparable awards in other cases. "Like cases, [if they can be found], should conclude with like substantive results": Murano v. Bank of Montreal 1998 ONCA 5633, (1998), 41 O.R. (3d) 222 (C.A.), at p. 249.
- The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher. [10]
[20] In Davies v. Clarington (Municipality) et al. (2009), the Court of Appeal stated:
As can be seen, the overriding principle is reasonableness. If the judge fails to consider the reasonableness of the costs award, then the result can be contrary to the fundamental objective of access to justice. Rather than engage in a purely mathematical exercise, the judge awarding costs should reflect on what the court views as a reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant. In Boucher, this court emphasized the importance of fixing costs in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding at para. 37, where Armstrong J.A. said “[t]he failure to refer, in assessing costs, to the overriding principle of reasonableness, can produce a result that is contrary to the fundamental objective of access to justice.” [11]
[Emphasis added].
3. Applying the legal principles to the facts of this case
(i) Indemnification of the successful party
[21] Ms. Samnani was substantially successful in the determination of all three of the issues tried. Mr. Galmani, in his Costs Submissions, argues, in effect, that the equalization issue should not have been tried because at the Pre-Trial Conference before Van Melle J. on October 23, 2017, Ms. Samnani intended to proceed only with the issue of repayment and spousal support. In its reasons dated December 10, 2018, this Court noted that at the Pre-Trial Conference on March 9, 2017, Van Melle J. listed the issues for trial as spousal support, repayment of loaned monies, and equalization of net family property and that while Justice Van Melle omitted to mention the equalization issue in her Endorsement on October 23, 2017, that issue also had not yet been resolved.
[22] In any event, Ms. Samnani was successful on all three issues. Success was not divided. In Scipione v. Scipione, (2015). Pazaratz J. stated:
- “Divided success” does not necessarily mean “equal success”. And “some success” may not be enough to impact on costs. a. Rule 24(6) requires a contextual analysis. b. Most family court cases involve multiple issues. c. Not all issues are equally important, equally time-consuming or equally expensive to determine. d. Comparative success can be assessed in relation to specific issues: i. Did a mid-point number prevail on a financial issue? ii. Did a compromise result on a parenting issue? e. Comparative success can also be assessed globally in relation to the whole of the case: i. How many issues were there? ii. How did the issues compare in terms of importance, complexity and time expended? iii. Was either party predominantly successful on more of the issues? iv. Was either party more responsible for unnecessary legal costs being incurred? [12]
[23] Mr. Galmani was ordered to repay the amount Ms. Samnani proved she had transferred to him in response to his demands, less the amount she acknowledged he had repaid to her. The Court rejected Mr. Galmani’s argument that he had returned most of the amounts he had received to her. Mr. Galmani was also ordered to pay restitution for the jewellery and clothing he had failed to return to Ms. Samnani.
[24] The Court attributed a higher net family property to Mr. Galmani than he acknowledged. This resulted in his being ordered to make a substantial equalization payment to Ms. Samnani.
[25] The Court rejected Mr. Galmani’s argument that the parties’ separation had rendered him incapable of earning income, and imputed a higher income to him than the amount he acknowledged being capable of earning. The Court rejected his argument that Ms. Samnani was capable of earning a higher income than he was and that she did not require a payment of spousal support from him.
(ii) Importance, Complexity and Difficulty
[26] The issues at trial were moderately complex as a result of Mr. Galmani’s initial failure to provide full financial disclosure and as a result of his continued understating of his assets and income earning capacity and his overstatement of the amounts he had returned to Ms. Samnani.
(iii) Reasonableness of Each Party’s Behaviour
[27] In the normal course, costs are awarded to a successful litigant on a partial indemnity scale, representing approximately 60% of the successful litigant’s total legal fees and disbursements; however, the court has the discretion to order costs to be paid on a substantial (partial indemnity costs x 1.5 = 90%) [13] or full recovery scale in exceptional cases. [14]
[28] Mr. Galmani’s conduct in failing to make full financial disclosure entitles Ms. Samnani to her costs on a full recovery scale. Rule 24(11)(b) explicitly recognizes that costs may be used to express the court’s disapproval of a litigant’s unreasonable conduct. It provides that a successful party who has behaved unreasonably during a case may be ordered to pay all or part of the unsuccessful party’s costs. So also, if an unsuccessful party, who would ordinarily be ordered to pay partial indemnity costs, has behaved unreasonably, he or she may be ordered to pay a higher proportion, or all, of the successful party’s costs.
[29] Additionally, Rule 24(8) of the Family Law Rules provides for full recovery costs if a party has acted in bad faith. As noted above, persistent refusal to make financial disclosure has been held to be “bad faith” within the meaning of subrule 24(8). [15] If not “bad faith”, failure to disclose and to comply with court orders is “unreasonableness” within the meaning of Rule 24(11)(b) and can attract the sanction of costs on a full recovery basis. [16]
[30] In any event, Perkins J. in Biant v. Sagoo, (2001), held that, “the preferable approach in family law cases is to have cost 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.” [17]
(iv) The Lawyer’s Rates and hours reasonably spent
[31] Ms. Samnani is entitled to claim her costs at the hourly rate which her lawyer was entitled to claim based on his or her experience. The Legal Aid Services Act provides:
46(1) The costs awarded in any other order made in favour of an individual who has received legal aid services is recoverable in the same manner and to the same extent as though awarded to an individual who has not received legal aid services. [18]
[32] In Nairn v. Lukowski, in 2002, the applicant received services on a Legal Aid Certificate, and the Family Court stated, “the fact that she was on Legal Aid does not limit costs recoverable to the amount payable to counsel pursuant to the Legal Aid rates…” In that case, the court awarded costs at an hourly rate of $200, an amount in excess of the Legal Aid rate. Justice Wein reviewed the jurisprudence and came to a similar conclusion in Ramcharitar v. Ramcharitar, in 2002. Justice Wein stated:
[T]here is no punitive aspect in such an award of costs; the party paying the costs simply pays the same amount as they would if the client were not legally aided. In fact, to hold otherwise would grant an inadvertent windfall to the party fortunate enough to only have to pay costs to an opposing party on Legal Aid, since the rate would be accordingly reduced. [19]
[33] Nevertheless, Ms. Samnani is claiming, for the services provided to her up to March 2017, only the amount, $8,000, that Legal Aid Ontario is requiring her to reimburse to it for the services her lawyer provided.
[36] Ms. Samnani claims an additional $4,750 for the fees she paid to a lawyer she retained privately and who provided services from March 2017 to and including the preparation of documents for the trial and her costs submissions. She submitted a Bill of Costs but it does not provide a breakdown of the time spent or the hourly rate applied. The Family Law Rules do not provide explicitly for Costs Outlines in family cases and the form of Costs Outline prescribed by the Rules of Civil Procedure is not designed for self-represented litigants.
[37] Ms. Samnani submitted a Bill of Costs in lieu of a Costs Outline. The court commonly accepts Bills of Costs from lawyers in family law cases. For example, Justice Van Melle accepted a Bill of Costs in Folkes v. Folkes, (2016). [20] Justice Chappel similarly accepted one in Donna Reid Spettigue and Charles Spettigue v. David G. Varcoe, (2012). [21] On this basis, I accept the Bill of Costs that Ms. Samnani filed.
[38] Mr. Galmani did not fully disclose the time his lawyers spent or the amounts they charged him. He does not submit a Costs Outline or a Bill of Costs. In his Costs Submissions, he states:
I still have private debts to pay, advance on credit card, owe payment to my previous lawyers (Ravinder Mann who represented me was on Pre-Trial held on October 23, 2017). Invoices from some of the lawyers are attached on Tab ‘A’ and Tab ‘B’.
[Emphasis added]
[39] The invoices that Mr. Galmani tendered cover only the periods from December 21, 2015, to August 27, 2016, and from September 26 to October 2, 2017. It is not possible, based on his incomplete information, to compare the time spent by Ms. Samnani’s lawyers with the time spent by Mr. Galmani’s.
(v) What is fair and reasonable
[40] I must, at this point, step back and examine the overall award with a view to determining whether it is "fair and reasonable" for the kind of matter involved. In making this determination, I take into account the reasonable expectation of the parties concerning the amount of costs. [22]
[1] As noted previously, the costs that Ms. Samnani claims for the period March 2017 to the conclusion of the trial, and for the costs submissions, is proportionate to the amount Mr. Galmani states that his lawyers charged him and within the range of what Mr. Galmani should have expected to pay if unsuccessful at the trial. Based on my own observations of the material Ms. Samnani filed at the trial and the presentation she made during the three day trial, and in the absence of more complete information from Mr. Galmani, I find the amount claimed by Ms. Samnani to be reasonable.
[2] Mr. Galmani submits that he should not be ordered to pay any costs to Ms. Samnani as such an Order would impose a financial hardship on him. He has not submitted sufficient evidence to support a claim of financial hardship and rejects his argument based on the income it imputed to him at trial, including his employment income and his rental income from the U.K.
CONCLUSION AND ORDER
[3] For the foregoing reasons, it is ordered and adjudged that:
- Mr. Galmani shall forthwith pay to Ms. Samnani her costs fixed in the amount of $12,750.00.
Price J. Released: January 9, 2019
COURT FILE NO.: FS-15-84763-00 DATE: 2018-01-19 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: ROZINA SAMNANI Applicant
- and - AKBAR GALMANI Respondent COSTS ENDORSEMENT Price J. Released: January 9, 2019
[1] Serra v. Serra 2009 ONCA 395; Docherty v. Catherwood, 2016 ONSC 2140; Chan Fong et al v. Chan et al, 1999 ONCA 205246 [2] Rule 24(1). Sims-Howarth v. Bilcliffe 2000 ONSC 22584, [2000] O.J. No. 330 (SCJ) [3] Friday v. Friday, 2013 ONSC 6179 at para. 5; Mark Orkin, The Law of Costs (2nd edition) (2001), p. 23 [4] British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371 at paras. 25 and 26 [5] Serra v. Serra 2009 ONCA 395 [6] O.Reg. 114/99 as am. [7] Perri v. Thind et al. (2010), 2009 ONSC 34977, 98 O.R. (3d) 74 (S.C.). [8] Perri, at paras. 24-26, 32-33. [9] Family Law Rules, O Reg. 114/99, Rule 224(1); Sims-Howarth v. Bilcliffe, Sims-Howarth v. Bilcliffe, 2000 ONSC 22584, para. 11; Biant v. Sagoo 2001 ONSC 28137, para. 1 [10] Andersen v. St. Jude Medical Inc., (2006) 2006 ONSC 85158, 264 D.L.R. (4th) 557 (Ont. Div. Ct.). [11] Davies v. Clarington (Municipality) et al., 2009 ONCA 722 at para. 52 [12] Scipione v. Scipione, 2015 ONSC 5982 [13] Rules of Civil Procedure, RRO 1990, Reg 194, Rule 1, as authorized by Family Law Rules, Rule 1(7) [14] Feinstein v. Freedman, 2014 ONCA 446 at para. 21; 131843 Canada Inc. v. Double “R” Toronto Ltd. (1992) 7 C.P.C. (3d) 15 (Ont. Gen. Div., per Blair J., as he then was) at p. 17, approved in Murano v. Bank of Montreal, 1998 ONCA 5633, (1998) 41 O.R. (3d) 222 (C.A.) at p. 244 [15] DePace v. Michienzi (2000), 2000 ONSC 22460, [2000] O.J. No. 4436 (Ont. Fam. Ct.), at paragraph [22]; Riha v. Riha (2001), 107 A.C.W.S. (3d) 251, [2001] O.J. No. 3211, 2001 CarswellOnt 2770 (Ont. Fam. Ct.). Domb v. Domb, 2002 ONSC 45568, para. 4; Reisman v. Reisman, [2007] O.J. No. 5538 (S.C.J.) at paras. 2-3, aff’d [2008] O.J. No. 1843. [16] DePace v. Michienzi, supra, at para. 24. [17] Biant v. Sagoo, 2001 ONSC 28137, [2001] O.J. No. 3693 (S.C.) at para. 20 [18] Legal Aid Services Act, 1998, SO 1998, c 26 [19] Ramcharitar v. Ramcharitar, 2002 ONSC 53246, at para. 25 [20] Folkes v. Folkes, 2016 ONSC 4347, para. 17. [21] Donna Reid Spettigue and Charles Spettigue v. David G. Varcoe, 2012 ONSC 925, at paras. 37-38. [22] Referring to: Boucher v. Public Accountants Council for the Province of Ontario, 2004 ONCA 14579, [2004] O.J. No. 2634 (C.A.) (released June 22, 2004); Moon v. Sher, [2002] O.J. No. 4651 (C.A.) (released November 16, 2004); and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 2005 ONCA 1042, [2005] O.J. No. 160 (C.A.) (released January 24, 2005)