NEWMARKET COURT FILE NO.: FC-16-50370-00 DATE: 20190412 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Darlann Theresa Passfield Applicant – and – Bryon Allan Passfield Respondent
Jason K. Allan, for the Applicant Self-Represented
HEARD: In Writing
REASONS FOR DECISION ON COSTS McDermot J.
INTRODUCTION
[1] During the November 2018 sittings, I heard a trial concerning the Applicant’s claim for spousal support. At the same time the parties were giving evidence at the trial, the sale of the matrimonial home was in the process of closing. It was a difficult closing because of the condition of the home and complaints made by the purchasers as to damage to the property. By the fourth and last day of trial, the amount of the net proceeds of the home remained unknown.
[2] This was a trial for spousal support. However, Ms. Passfield acknowledged that, because of Mr. Passfield’s self-employed status, there was little income that could be attached to pay periodic spousal support. She therefore asked for lump-sum spousal support in the amount of Mr. Passfield’s one-half share of the net proceeds from the sale of the matrimonial home. She may have been entitled to substantially more but elected to only pursue assets and income that she knew would be actually available to pay support.
[3] Ms. Passfield was entirely successful at obtaining that relief. I ordered that the Respondent’s share of the net proceeds of the matrimonial home be paid to her as lump sum spousal support. Ms. Passfield is therefore presumptively entitled to costs of the trial under r. 24(1) of the Family Law Rules [1]. Mr. Passfield also acknowledges Ms. Passfield’s entitlement to costs. The only issue is the amount of costs payable.
[4] Ms. Passfield also asked for the costs of two motions and a settlement conference, the costs of which were referred to the trial judge. Those issues are separate from the costs of trial and presumably are addressed by reference to the results at those motions and the conference.
TRIAL COSTS
[5] As set out above, the applicant is presumptively entitled to her costs of trial. The issue is the amount of costs that she is entitled to.
[6] In costs submissions made on behalf his client, Mr. Allan does not rely upon unreasonable or bad faith behaviour. Rather, he relies upon offers to settle made in this proceeding and his unqualified success at trial.
Offers to Settle
[7] In his submissions, Mr. Allan says that he made seven offers to settle. They are attached to his costs submissions.
[8] Three of the offers to settle, those dated November 4, 2016, December 2, 2016 and December 11, 2017 are offers to settle motions brought in the proceedings. They are irrelevant to the results at trial and do not assist in assessing the costs of trial.
[9] The first two offers, dated May 3 and 9, 2016, offered the respondent a significantly better result than that achieved by him at trial. In effect, the offers state that the matrimonial home would be sold and each party would walk away with their one-half share of the net proceeds. Any claims for equalization of property and spousal support would be withdrawn.
[10] The applicant’s third offer to settle, dated September 7, 2016, significantly muddies the waters. That is because it was not really an offer to settle; it was simply an offer that an order go to sell the home, after which the funds would be held in trust “pending agreement between the parties or court order.” This is really not a final offer, but an offer to have the property sold. However, it did permit the respondent to purchase the applicant’s one-half interest in the home.
[11] The final offer, dated October 16, 2018, made in the month prior to trial, largely matches the result at trial.
[12] The October 16, 2018 offer provides that all of the net proceeds of the sale of the home would be paid to the applicant full satisfaction of the claims made by her in this litigation. The offer contained a release of spousal support. That offer is in accordance with the result achieved by Ms. Passfield at trial.
[13] Mr. Passfield also made an offer. He offered Ms. Passfield one half of his net proceeds in satisfaction of her claim for spousal support. Although he did not achieve this result at trial, it does show that he attempted to negotiate a settlement of the matter and that this offer was made in the spirit of compromise: See: Beaver v. Hill, 2018 ONCA 840.
[14] Offers to settle are crucial to the quantification of costs. Rule 18(14) states that where the result at trial is as favourable or more favourable than the offer, and the offer otherwise meets the formal requirements of r. 18, that allows for the party to making the offer to receive full recovery costs from the date of the offer and partial recovery costs prior to the date the offer was made.
[15] It would appear that the first two offers made in May 2016 were significantly better for the Respondent than the result at trial as they both provided that Mr. Passfield would receive his one half share of the net proceeds of the home and no spousal support or equalization was otherwise payable. However, those two offers were made prior to these proceedings being commenced. Once the proceedings began, Ms. Passfield made a third offer in September 2016, which effectively superseded the first two offers. That offer was not intended to settle the application in its entirety; all that offer stated was that the matrimonial home would be listed and sold and that the funds held in trust pending agreement between the parties or court order. The offer does not speak to a final result or as to what the agreement or court order might be. Because of this, all that the respondent would have gained by accepting the offer was a sale of the home along with funds being held in trust.
[16] Although the offer did contain an alternative to the home being sold, being a purchase by the respondent of the applicant’s one-half interest in the home, this again did not speak to a final result on the issues of equalization of property or spousal support raised in the application.
[17] Therefore, the first meaningful offer in this proceeding which can be related to the result at trial is the applicant’s offer of October 16, 2018, which, as noted above, was entirely in line with the result at trial. I find that this offer was “as favourable” as the result at trial within the meaning of r. 18(14). Therefore the applicant is entitled to her full recovery costs subsequent to the making of that offer.
[18] The respondent suggests that the offer is not in accordance with the result at trial as “occupation rent” mentioned in paragraph 1 of that offer was not ordered at trial. In fact, the occupation rent had already been ordered by Justice McPherson and was paid subsequent to trial from the respondent’s share of the net proceeds of the home. As set out in my trial endorsement, the payment of occupation rent and costs already ordered left approximately $95,000 available to pay the applicant’s claim for lump sum spousal support.
[19] Based upon the work done by Gordon Allan prior to his retirement and the pretrial work done by Jason Allan, counsel at trial for the applicant, the applicant claims costs of $15,000 for pretrial work and $35,424 for the costs of trial. Disbursements for the trial as claimed are $1,000 to $1,300 plus HST; it appears that this is included in the costs of trial claimed in the applicant’s costs submissions.
[20] I have not seen any bill of costs or account statement for Gordon Allan’s work. I cannot take this work into account without a bill of costs being submitted.
[21] In the bill of costs attached to the costs submissions, there are costs claimed there for various motions and a settlement conference. Although the court can consider costs prior to trial, even where costs are not reserved [2], there has to be some good reason to award costs for previous steps in the proceeding when those steps are unrelated to trial. As best as possible, the court is to order costs at each step of the proceedings and in awarding the costs of a proceeding, there must be some basis for costs being awarded for those events apart from success at trial.
[22] As part of the trial costs, I am willing to award costs of the trial scheduling conference and costs of the questioning, which took place prior to trial in October 2018. The trial scheduling conference is obviously related to the trial itself; the transcripts from the questioning were referred to and used at trial and were referred to in my endorsement as well. Those costs are included in the costs of trial.
[23] I am therefore willing to award costs from September 4, 2018 on, when it is apparent from the bill of costs that counsel began preparing for the trial scheduling conference; after this, the questioning took place.
[24] It is relevant to the costs award as to whether the costs were incurred prior to or after the offer to settle made October 16, 2018. After that date, based upon the offer to settle, costs are to be awarded on a full recovery basis.
[25] Prior to the offer to settle, $8,500 of lawyers’ time was expended on the trial scheduling conference and the questioning.
[26] Therefore, based upon the principle that partial recovery costs are 60% of the actual costs, I am awarding $4,860 for the costs of the trial scheduling conference and questioning.
[27] After the date of the offer, the lawyers’ time and disbursements on preparation for trial and the trial itself, totals $31,120. The total of the costs incurred after the offer was made are more than the net claimed for lawyers’ time in the costs submissions. This may be because there were several questionable entries in the bill of costs. For example, the entry for November 21, 2018, also includes time entries for November 18 and 19, 2018. On November 21, there was an insertion of time for a meeting to prepare and review for examination and cross-examination on November 19, 2018 of 8 hours. There was already an entry on November 19 of 3.5 hours for preparation for cross-examinations and this would mean that Mr. Allan worked an 11.5 hour day that day. That is a bit of a stretch when he claims 8 hours per day of trial, including preparation time for the next day. There appears to be some doubling up of time, howsoever inadvertent that may have been. The total of time for preparation of trial of $31,120 may therefore be excessive. I therefore will return to the figures requested in the costs submission and award a total of $35,424, inclusive of HST and disbursements for preparation for and attendance at trial. Taking into account HST, the total of pretrial costs are $5,491.80, rounded up to $5,500.
[28] Therefore, I award a total of $40,924 [3] for the costs of the trial scheduling conference, questioning and for the costs of the trial, taking into account the offer to settle made on October 16, 2018.
[29] Mr. Passfield says that this is not proportionate, considering the amount that was in issue. I understand that proportionality is an extremely important part of the awarding of costs and this has been confirmed by the Court of Appeal. See Beaver v. Hill, supra and r. 2(2) and 24(12).
[30] It is correct that Ms. Passfield only recovered approximately $95,000 at trial. However, this was all that was available and Ms. Passfield’s recovery was made difficult because Mr. Passfield refused to even acknowledge an entitlement for spousal support at trial. The position he took at trial was “no holds barred” and this was made more difficult by his failure to make proper disclosure or to address defects in the disclosure that he provided. Ms. Passfield had little choice but to expend the effort at trial to prove both entitlement and quantum of support. Most of the time at trial was spent on entitlement issues.
[31] As well, the parties’ efforts were proportionate to the recovery and little could have been done to shorten the trial. There were only two witnesses, who were the parties themselves. There were no other witnesses or expert evidence which might have been disproportionate under the circumstances. Ms. Passfield made her case in the most economical way possible under the circumstances and proportionality is therefore not a factor in this costs award.
[32] There will therefore be an award of costs of $40,924, inclusive of HST and disbursements, for the costs of trial. Those costs are collectable by the applicant as against the respondent by way of support, as support was in issue at trial.
COSTS OF EVENTS WHERE COSTS RESERVED
[33] The Applicant claims costs for three events prior to trial where costs were reserved, being a Settlement Conference and two motions.
Settlement Conference – April 3, 2018
[34] The minutes of settlement signed by the parties on April 3, 2018 at this Settlement Conference states that costs are to be determined “in the cause.” This means that, as the Applicant was successful in the cause (she obtained the support that she requested according to her offer to settle), the Applicant is entitled to her costs of the settlement conference.
[35] The only entry on the bill of costs in respect of the attendance at the settlement conference is the 6 hours spent on the date of the settlement conference for which the Applicant will be charged $2,400. As well there was a solicitor’s meeting on April 2, the day prior to the conference, with Darlann Passfield; I assume this is in respect of the settlement conference. That would be a further $800 for a total $3,200 in costs. There does not appear to be any time entries for preparation of the brief or documentation for the settlement conference.
[36] The Applicant claims $3,500 in costs and this not warranted by the bill of costs even on a full recovery basis. There is no basis for costs to be paid on a full recovery basis. Therefore the Applicant shall have her costs of the settlement conference of $1,920 (60% of $3,200) and taking into account of HST the total costs payable for the settlement conference on a partial recovery basis are $2,150. So ordered.
Motion of December 7, 2016
[37] This was a motion for the sale of the matrimonial home.
[38] The Applicant appears to have been successful in the motion in so far as the matrimonial home was, on consent, listed for sale. As well some disclosure was agreed to. The Applicant’s offer to settle dated December 2, 2016 also called for a sale of the home according to the same terms as the order as well as, in part, to the disclosure agreed to.
[39] It took 17 months after this order was made to obtain a sale of the home in mid to late 2018.
[40] The Applicant claims $3,500 in costs in respect of this motion. There are, however, no time entries in respect of the December 7, 2016 motion; the time entries in the bill of costs attached to the Applicant’s costs submissions only commence in September, 2017. Nothing in the narrative speaks to how these costs should be determined. Although the Applicant may very well be entitled to her costs of this motion, I have no idea or means of determining whether the amount claimed for costs is accurate or reasonable. I am therefore not willing to award any costs for the December 7, 2016 motion.
January 17, 2018 Motion
[41] This motion was for temporary spousal support and was adjourned by McGee J. to a long motion date. It was never heard because trial overtook the claim for temporary support. Although Mr. Allan still appeared to disagree with this decision during trial, it appears that McGee J. determined that the motion brought by Mr. Allan on behalf of his client for temporary spousal support was a long motion, largely because of the amount of material filed on the motion. Justice Douglas’ order of April 3, 2018 states that the motion would be “vacated” and the costs of the motion would be determined by “Justice McGee or as the court directs.”
[42] There has been no direction by the court pursuant to Douglas J.’s order as to how these costs are to be determined. In any event, it appears that a long motion was brought by the Applicant which was scheduled for a regular motions day. Any motion brought on a regular motions day should have been capable of being argued and determined within one hour and McGee J. determined that the Applicant’s motion for temporary support could not. I am not going to, and neither can I, second guess McGee J. as to the correctness of her decision to adjourn this motion to a long motion date. Temporary spousal support was never determined in these proceedings. The placement of the motion on the regular motions list is not the fault of Mr. Passfield or his counsel and it would appear that the costs of that motion should have been awarded to Mr. Passfield, rather than the other way around. There will therefore be no order as to the costs of the motion returnable January 17, 2018.
DISPOSITION
[43] There shall therefore be an award of costs in favour of the Applicant of $43,074, being the total of the costs of trial and the costs of the settlement conference. Those costs are collectible as support as the only major substantive issue before the court at trial and in this litigation was spousal support.
J.P.L. McDermot J.
Released: April 12, 2019
[1] Family Law Rules, O. Reg. 114/99.
[2] See r. 24(11) of the Family Law Rules.
[3] $35,424 + $5,500