Court File and Parties
COURT FILE NO.: 545/16 (Guelph)
DATE: 2019-04-29
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jana Lee Sullivan, Applicant
AND:
Randolph William Mahoney, Respondent
BEFORE: Barnes J.
COUNSEL: Elliot Vine, for the Applicant
Harvey A. Swartz, for the Respondent
HEARD: In Writing
COSTS ENDORSEMENT
INTRODUCTION
[1] Ms. Sullivan seeks her costs after a short family law trial. The parties resolved custody and access issues shortly before trial. At trial, Ms. Sullivan was successful in imputing income to Mr. Mahoney; she received an order for child support; ongoing and retroactive section 7 expenses. Mr. Mahoney was successful receiving a cap on the section 7 expenses for dance. All other section 7 expenses are to be calculated on a proportionate basis as determined by their income: Sullivan v. Mahoney, 2018 ONSC 7211.
DISCUSSION/ANALYSIS
[2] Rule 24(1) of the Ontario Family Law Rules creates a presumption that the successful party is entitled to his or her costs. This presumption can be rebutted where the successful party has behaved unreasonably: Rule 24(4) and (5).
[3] Ms. Sullivan submits that she was the most successful party and is entitled to full recovery costs of $43,927.37
[4] A party who makes an offer to settle which is rejected by the other party and receives a result more favourable or as favourable as the offer may, at the court’s discretion, receive an award for full recovery of costs from the date the offer is made: Rule 18(14), Family Law Rules.
[5] The purpose of a cost award is to:
indemnity the successful party for their costs;
encourage settlement and to discourage inappropriate behaviour by a litigant: Serra v. Serra, 2009 ONCA 395 (Ont. C.A.)
[6] Rule 24(12) enumerates the factors to consider in awarding costs as follows: each party’s behaviour; time spent by a party; offers to settle; reasonableness of legal fees including the number of lawyers and rates charged; reasonableness of expert’s fees, including number of experts and rate charged and any other proper and payable related expense. Paranavitana v. Nanayakkara, 2010 ONSC 2257, [2010] O.J. No. 1566 (Ont. S.C.J.) summarises the analytical framework for assessing costs in family law case.
[7] A determination of the quantum of costs payable is not a simple mathematical computation. Rather it is based on a determination of what is reasonable and proportional in each case: Rule 24(12). Case law has described this circumstance as what is fair and reasonable in all of the circumstances: Serra v. Serra, 2009 ONCA 395 (Ont. C.A.); Sims-Howarth v. Bilcliffe, 2000 CanLII 22584 (ON SC), [2000] 6 R.F.L. (5th) 430 (Ont. S.C.J.); Costa v. Perkins, 2012 ONSC 3165 (Ont. Div.).
[8] Ms. Sullivan describes Mr. Mahoney’s conduct as unreasonable because he took an aggressive stance on child support; he did not accept an Ontario Office of the Children’s Lawyer (OCL) recommendation that he pay guideline child support and that the child continue to dance and reside with Ms. Sullivan. His acceptance of her offer to settle, on custody and access issues, just weeks before the trial was unreasonable. As a result, she was forced to incur unnecessary additional costs in this litigation.
[9] Ms. Sullivan attributes bad faith to Mr. Mahoney because of my findings that he sought to conceal his income in his corporation. She also alleges that Mr. Mahoney reneged on an agreement to share decision making on medical issues by withdrawing his consent for child therapy for their only child.
[10] Mr. Mahoney submits that he does not have the financial means to pay costs in the amount of $43,000. He submits that he has incurred $50,000 in legal bills. He says a costs order will cause him financial hardship. He seeks an order permitting him to pay retroactive child support on a monthly basis until it is paid off.
[11] Mr. Mahoney submits that he was successful in obtaining an annual cap in the amount spent on section 7 expenses for dance. He said his agreement on custody and access saved Ms. Sullivan costs associated with proceeding to trial on those issues.
[12] According to Mr. Mahoney, Ms. Sullivan behaved unreasonably by contravening the agreement to grant him access to the child; by refusing to attend mediation to resolve issues relating to the cost of dance and other issues raised at trial; refusing to participate in reunification therapy and by refusing to increase his access to the child as per the OCL’s recommendation.
[13] Ms. Sullivan was the most successful party. Success was divided. Mr. Mahoney’s success on the issue of an annual cap on the section 7 expenses is a relevant issue to consider: Rule 24(6).
[14] Mr. Mahoney accepted Ms. Sullivan’s offer to settle on custody and access issues two weeks before the trial was scheduled to commence. Ms. Sullivan incurred some expense in preparing for trial based on those issues, however, the trial was significantly shortened because those issues were resolved and Ms. Sullivan saved some legal costs as a result.
[15] As noted, Ms. Sullivan was the most successful party, however, the issue of retroactive and ongoing section 7 expenses with respect to dance for the child was a significant issue in the litigation and counts towards Mr. Mahoney’s favour in calculation of the quantum of costs.
[16] I have considered the competing allegations of bad faith and unreasonable behaviour, many of which on the basis of the evidentiary record have not been substantiated. However, Mr. Mahoney’s conduct in concealing his income was unreasonable and resulted in Ms. Sullivan expending additional financial resources in the litigation. Another consequence of my finding of concealment of income is that the veracity of Mr. Mahoney’s claim of financial hardship is suspect.
[17] On balance, there is no basis, on this record, for me to find any unreasonable behaviour on behalf of Ms. Sullivan.
[18] The issues were of significant importance to the parties. There were financial consequences for each party with impacts on the only child of their union. The items billed and rates charged by Ms. Sullivan are reasonable given the issues raised and the experience of counsel and law clerks.
[19] Costs in the amount of $38,000.00 is proportional, fair and reasonable in all of the circumstances. Due to Mr. Mahoney’s unreasonable behavior costs is awarded on a full indemnity scale.
[20] Despite my adverse finding on the issue of financial hardship alleged by Mr. Mahoney, I am satisfied that based on an annual income of $73,000, he would need some time to pay. Mr. Mahoney shall pay the costs ordered within 3 months. Post-judgment interest is set at a rate of 3% per annum. This amount shall be enforceable as support by the Director of the Family Responsibility Office.
[21] Given the potential financial impact of the cumulative financial orders I have made in this case, I will accede to Mr. Mahoney’s request and order that effective immediately, the retroactive child support payments as ordered in Sullivan v. Mahoney, 2018 ONSC 721, if not already paid in full, shall be divided into 12 equal payments and each monthly amount shall be added to the monthly child support payable by Mr. Mahoney as specified in Sullivan v. Mahoney, 2018 ONSC 7211. This payment plan shall be in effect until the retroactive child support is paid in full.
Barnes J.
Date: April 29, 2019
COURT FILE NO.: 545/16 (Guelph)
DATE: 2019-04-29
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jana Lee Sullivan, Applicant
AND:
Randolph William Mahoney, Respondent
BEFORE: BARNES J.
COUNSEL: Elliot Vine, for the Applicant
Harvey A. Swartz, for the Respondent
COSTS ENDORSEMENT
Barnes J.
Date: April 29, 2019