Naegels v. Robillard, 2019 ONSC 5151
CITATION: Naegels v. Robillard, 2019 ONSC 5151
COURT FILE NO.: FC-15-1667
DATE: 2019/09/04
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Karen Naegels, Applicant
AND
Dwayne Robillard, Respondent
BEFORE: D. Summers J.
COUNSEL: Stacy Coulterman, for the Applicant
Stephen Greenberg, for the Respondent
HEARD: In Writing
COSTS ENDORSEMENT
Overview
[1] This costs endorsement follows a 5-day trial where the primary issues were unjust enrichment based on a joint family venture and spousal support.
[2] Ms. Naegels submits that she was successful in relation to her position at trial and her Offers to Settle. She seeks full recovery costs of $59,083.06. This amount is the total of three separate Bills of Costs submitted, each relating to a specific period of time.
[3] Mr. Robillard acknowledges her entitlement to costs. Quantum is the only issue. He argues that costs should be calculated on a partial recovery basis and subject to a number of reductions or offsets. He does not make any submissions with respect to an amount that could ultimately be considered reasonable and proportionate.
[4] For the reasons that follow, I find that Ms. Naegel’s is entitled to partial recovery costs in the amount of $18,750.
Factors That Must be Considered When Determining the Amount of Costs
[5] Under rule 24(12) of the Family Law Rules, O.Reg. 114/99, the court must consider the reasonableness and proportionality of each factor set out below as it relates to the importance and complexity of the issues.
(i) Each Party’s Behaviour
The Parties’ Positions at Trial
[6] Although both parties took positions that were perhaps less than wise, I do not consider that either party conducted themselves unreasonably in the litigation.
[7] Ms. Naegels enjoyed overall success at trial, but her position on property significantly exceeded her recovery. She sought $52,988 as one-half of the increase in the value of two properties plus reimbursement of $14,971 for credit card charges and Mr. Robillard’s use of other monies. I found her entitlement was 35% of $75,955 being the total increase in wealth during the relationship for a final award of $26,580.
[8] On the issue of spousal support, Ms. Naegels’ trial position on quantum was reasonable but her stance on duration exceeded my finding. She sought $1,936 per month payable until December 31, 2028 based on a 13-year relationship. I awarded $1,900 per month until June 15, 2026 based on my finding that their relationship lasted 11 years. My support order was subject to annual cost of living adjustments and possible variation in the event of a material change in circumstance. Ms. Naegels also asked to be maintained as the beneficiary of Mr. Robillard’s extended health care plan for the duration of spousal support whereas I ordered Mr. Robillard to provide coverage for so long as support was payable if the terms of his plan allowed him to do so.
[9] The respondent, Mr. Robillard, disputed the property claim and denied that he had been unjustly enriched in any way. With respect to spousal support, he acknowledged Ms. Naegels’ entitlement but argued that his obligation had largely been met by payments already made. He said ongoing support, if any, should be at the low end of the range for both quantum and duration. My order was at the high end of the range on both. Considering the length of the relationship, the extensive nature of their family life together and Ms. Naegels’ poor health, Mr. Robillard’s position was ill-advised but not unreasonable.
[10] Ms. Naegels submits that Mr. Robillard took unreasonable positions at trial regarding the date of separation, whether they were ever engaged to be married, and her role with his children. She further states as a fact that his positions were found to be unreasonable at trial. That is not so. I did not make that finding then nor do I make it now.
[11] With respect to the date of cohabitation and the date of separation, the parties did not agree on either issue. My finding on the date of cohabitation aligned with Mr. Robillard’s position whereas Ms. Naegels’ was successful on the date of separation.
[12] Ms. Naegels’ prevailed in her positions regarding their engagement and her role with his children. While Mr. Robillard’s positions were not accepted neither did I accept Ms. Naegels’ position on the date of cohabitation.
The Civil Application
[13] Ms. Naegels argues that she is entitled to the costs she incurred to defend the civil application commenced by Mr. Robillard for possession of his home. Ms. Naegels contends that it was unreasonable of Mr. Robillard to bring a proceeding outside of family court that caused her to incur unnecessary costs.
[14] I agree that it was an unreasonable step to have taken in the context of a relationship breakdown, however, I accept Mr. Robillard’s assertion that the costs issue in that application was decided by Justice Doyle in 2015. I will explain.
[15] By the time the civil matter came to court on August 18, 2015, Ms. Naegels had commenced proceedings in family court. Warkentin J. ordered that the civil file be kept with the family court file but remain a separate proceeding pending further agreement by the parties or court order. The application was adjourned to November 12, 2015 in family court with the expectation that it would be heard at the same time as the motion for support. Justice Warkentin further held, “… costs of the Application to date are reserved to the judge ultimately disposing of this matter.”
[16] On November 12, 2015, Justice Doyle heard Ms. Naegels’ support motion. Her order of that date provided support to Ms. Naegels and stated “Since the writ of possession will not issue until January 8, 2016, the applicant will be entitled to remain at 80 Robarts Cres. until January 8, 2016.” On the issue of costs, Justice Doyle held that success was mixed. She reviewed offers to settle and ordered no costs. Ms. Naegels contends that Doyle J.’s order was temporary and, therefore, did not ultimately dispose of the matter.
[17] Justice Doyle’s order allowing Ms. Naegels to stay in the home until January 8, 2016 when the writ would issue leaves open no conclusion other than the application for possession had been decided on a final basis. [Emphasis added]. Considering Justice Warkentin’s order that the files be kept together with the expectation that they would be heard together in Family Court leads me to conclude that both matters were dealt with that day by Doyle J. Accordingly, I find that Justice Doyle’s costs order applied to both matters and costs for the civil application are no longer at issue. Neither party provided me with any evidence to establish that the civil application was still pending. Accordingly, I deduct $13,178.63 from the total costs sought by Ms. Naegels.
(ii) The Time Spent, Legal Fees, Number of Lawyers and Their Rates
[18] Mr. Robillard challenges the number of lawyers that worked on Ms. Naegels’ file and the fact that a new lawyer took over midstream. He says both factors contributed to a duplication in time and fees charged that warrant a reduction. He does not question the rates charged.
[19] The two remaining Bills of Costs cover the periods from December 5, 2017 to April 19, 2018 and April 19, 2018 to July 19, 2018. The amounts for each period are roughly equal. I surmise that the first Bill of Costs includes some time for trial preparation since the trial was not adjourned until the trial management/settlement conference on January 2, 2018. Costs of that conference were reserved to the trial judge as were the costs of another settlement conference on January 22, 2018 that was held on a single issue. There was also a motion in March 2018. The order there makes no mention of costs. It was during this period between December and April that another lawyer within the same firm took over the file. The Bill of Costs that corresponds to this period for $21,311.81 does not provide me with sufficient detail to determine the time spent in relation to each individual event.
[20] There does appear to be some duplication of time with 4 counsel involved in various ways, but I am mindful of the economies brought to bear by the use of senior and junior counsel and their corresponding hourly rates. I am also mindful that the first conference in January was required in any event, but Mr. Robillard should not bear any costs for the change in counsel or the other two court appearances that were solely the result of changes in Ms. Naegels’ health. I find it fair and reasonable to reduce the amount sought by one half.
[21] The third Bill of Costs extends to July 2018. Why this is so was not explained, however, the charges appear to end with the conclusion of the trial in May. Here, Mr. Robillard contests the time spent and the fees charged for trial preparation. He says overall it was excessive and questions the charges incurred while Ms. Naegels was representing herself. I accept Ms. Naegels’ explanation that her lawyer was on a limited scope retainer and much work was done behind the scenes to assist with trial preparation. Indeed, Ms. Naegels did not have a lawyer on the first day of trial. On the second day, her lawyer re-joined the case. I am satisfied that it was counsel’s prior involvement that allowed her to step in, as and when she did. I also accept the explanation that the time referred to by Mr. Robillard as excessive includes counsel’s attendance at trial. Although the charges were not broken down between trial preparation and attendance, I find that approximately one third was for actual court time.
[22] Mr. Robillard says the issues at trial were not complex. I do not agree. Unjust enrichment claims, by their very nature, are factually and legally complex. Here, the issue was further complicated by the parties’ inability to agree on their dates of cohabitation and separation.
[23] Mr. Robillard did not provide any evidence of the time spent or the costs he incurred for the trial in May 2018. His choice not to do so leaves me without any way to assess the reasonableness or proportionality of Ms. Naegels’ Bill of Costs in relation to what Mr. Robillard might reasonably have expected. However, considering his Bill of Costs in relation to the amount he seeks to recover as costs thrown away for the adjournment in January 2018 as discussed below, I find the time and costs incurred by Ms. Naegels for trial to be reasonable and proportionate.
(iii) Offers to Settle Including Those Not Meeting the Requirements of Rule 18
[24] Ms. Naegels made three Offers to Settle: December 6, 2017; April 19, 2018 and April 27, 2018. All remained open for acceptance until the trial started. None of the offers trigger the full recovery cost consequences of r. 18 (14) as Ms. Naegels did not succeed in obtaining an order at trial that was as favourable, or more favourable, than her offers.
[25] Her first offer in December 2017 proposed settlement of her property claim for $75,000 and spousal support for $2,200 per month payable for a fixed non-variable 5-year term ending in 2022. Her next offer of April 19, 2018 was for $30,000 to settle property and $1,700 for spousal support over a fixed non-variable 5 ½ year term ending on December 31, 2023. Her third offer dated April 27, 2018, proposed $30,000 for property and monthly spousal support of $1,745 for a fixed non-variable 5.5-year term ending December 31, 2023 or, in the alternative, a lump sum support of $72,265. The monthly support proposal was based on the mid-point of the Spousal Support Guidelines (SSAG) range for a 13-year relationship whereas the lump sum amount was roughly equivalent to 6 years of support based on the high end of the SSAG range for an 11-year relationship. The April 27th offer was not signed by Ms. Naegels and was not a valid rule 18 offer under the Family Law Rules. Sub-rule 18 (4) states that an offer shall be signed personally by the party making it and also by the party’s lawyer, if any.
[26] All of Ms. Naegel’s offers included provisions requiring Mr. Robillard to maintain her as a beneficiary of his extended health care plan, of life insurance coverage sufficient to secure his spousal support obligation, and to return some chattels.
[27] In each instance, Ms. Naegels’ offer to settle the property issues was greater than the amount she received at trial. The amount and duration of spousal support that Ms. Naegels offered in April 2018 was less than she received at trial but her offers all provided for a non-variable fixed term of support whereas the support ordered at trial is subject to variation in the event of a material change in circumstance. In addition, I ordered that Mr. Robillard maintain her as the beneficiary of life insurance and his health care plan, but only if the plan permitted him to do so. On the issue of chattels, I was not given sufficient evidence to make a determination.
[28] I find both offers made by Ms. Naegels in April 2018 were reasonable and worthy of serious consideration by Mr. Robillard. Unless there is a material change in circumstance leading to a support variation that favours Mr. Robillard, it appears that he will pay more in after tax dollars over the years than he would otherwise have had he accepted either of the offers made in April 2018.
[29] This is not a case for full recovery costs. Success was partial and none of the rules providing for full recovery apply. See for example r. 18(14) and r. 24(8) of the Family Law Rules. The Ontario Court of Appeal in Mattina v. Mattina, 2018 ONCA 867 indicates that partial recovery costs are in the range of 60% to 70% of the total bill of costs.
[30] Mr. Robillard did not make a formal offer. He sent one letter on May 2, 2017 proposing spousal support of $1,000 per month for 19 months and a dismissal of Ms. Naegels’ property claims. It was not a reasonable proposal.
(v) Expert Witness Fees and Other Expenses Properly Paid or Payable
[31] With the exception of parking costs totalling $118 inclusive of HST, I find the remaining disbursements to be reasonable. See Beaver v. Hill, 2018 ONCA 840 at para 14 where the court found that time and expenses associated with travelling to court to be problematic when considering costs to be paid by the other party.
(vii) Any Other Relevant Matter
Costs Thrown Away
[32] Mr. Robillard seeks costs thrown away in two instances: for the adjournment in January 2018 and for the time he claims was wasted during the first two days of trial in May 2018. He relies on Caldwell v Caldwell, 2015 ONSC 7715 to say that costs thrown away should be determined on a full recovery basis. Ms. Naegels opposes any award of costs to Mr. Robillard. She says he has not provided anything to substantiate that the work done prior to the adjournment had to be re-done. I am not persuaded by that argument. While I accept that not all work had to be done again (ie. preparing questions for the witnesses), I consider it inevitable that there would be much work to be repeated after a delay of 4 months.
[33] In Caldwell, at paras 8 through 12, Justice Quinlan reviews the law on cost thrown away:
8 The phrase “costs thrown away” refers to a party’s costs for trial preparation which have been wasted and will have to be re-done as a result of the adjournment of the trial: Pittiglio v. Pittiglio, 2015 ONSC 3603 (Ont. S.C.J.) at para. 7; Middleton v. Jaggee Transport Ltd., 2014 ONSC 3041 (Ont. S.C.J.), at para. 5.
9 There are three general categories of cases in “costs thrown away” decisions:
(i) the first category deals with fault where, for example, one of the parties or their counsel neglect to call a witness or a last-minute amendment is required. The court will grant the adjournment on conditions, including the payment of costs thrown away;
(ii) the second category is where the trial is adjourned because of the court’s scheduling problems. No costs are awarded in this circumstance as no party bears responsibility for the adjournment; and
(iii) the third category deals with adjournments sought by one of the parties as a result of no fault on their part. Costs thrown away are still awarded against the party applying for the adjournment, notwithstanding lack of fault: Goddard v. Day, 2000 ABQB 799 (Alta. Q.B. [In Chambers]).
10 The court noted in Goddard, at para. 20:
The third category... is really one of responsibility for the adjournment as opposed to fault or lack of fault... situations where someone is responsible for an adjournment but cannot be faulted for that responsibility... [B]eing responsible for an adjournment...carries with it a costs consequence.
11 Costs thrown away are generally payable on a full recovery basis: Pittiglio, at para. 5; Milone v. Delorme, 2010 ONSC 4162, 2010 CarswellOnt 5535 (Ont. S.C.J.), at para. 12; Straume v. Battarbee Estate, 2001 CarswellOnt 6225 (Ont. S.C.J.), at paras. 2-3; Middleton, at para. 5. This is because the purpose of such an award of costs is to “indemnify a party for the wasted time for trial preparation arising from the adjournment”: Pittiglio, at para. 6; Legacy Leather International Inc. v. Ward [2007 CarswellOnt 527 (Ont. S.C.J. [Commercial List])], 2007 CanLII 2357, at para. 9. Such an award is not to punish the party seeking the adjournment, but to indemnify the other party for the wasted time for trial preparation arising from the adjournment: Incandescent Revolution Manufacturing Co. v. Gerling Global General Insurance Co. [1989 CarswellAlta 405 (Alta. Q.B.)], 1989 CanLII 3385, at para. 12; Pittiglio, at para. 6, citing Kalkanis v. Kalkanis, 2014 ONSC 205 (Ont. S.C.J.), at para. 3.
11 The court must determine what costs have actually been wasted. This is not an easy task: some witnesses will require little further preparation while some will require much: Straume, at para. 4. It has been described as an “intuitive”, rather than a scientific, process: Pittiglio, at para. 17.
January Adjournment
[34] The costs thrown away here fall into the third category as described above. Ms. Naegels sought the adjournment. She is responsible for the delay but not to be faulted for it. The circumstances that gave rise to the request were beyond her control. Nevertheless, costs consequences should follow.
[35] According to Mr. Robillard, the adjournment request was last minute and based on counsel’s unavailability for personal reasons. There were, however, other reasons stated in counsel’s letter dated December 20, 2017. First, it was apparent that counsel’s need to be out of the country after January 5, 2018 was a last-minute development that Justice Shelston accepted as valid. The second reason for seeking an adjournment related to medical concerns impacting Ms. Naegels’ ability to participate in the trial. Enclosed with counsel’s letter was a very recent letter from Ms. Naegels’ family doctor and a note from the Ottawa Hospital. Justice Shelston considered the medical information vague and was cognizant of Mr. Robillard’s concern for costs thrown away. The third point raised in relation to the adjournment request was the fact that Mr. Robillard’s employment was ending December 31, 2017 – a change that impacted the issue of spousal support.
[36] Justice Shelston ordered the parties to proceed to the trial management/settlement conference on January 2, 2018 and said if the matter did not settle, he would review the request to adjourn the trial. Justice Doyle presided over the conference. She found that Ms. Naegels was unable to instruct counsel and ordered that the trial be adjourned to the May 2018 sittings. Costs were reserved to the trial judge.
[37] Mr. Robillard submits a Bill of Costs for the period between November 7, 2017 and December 19, 2017 totaling $14,619.37 inclusive of HST. It provides only a broad, three-line description of the work done and no detail beyond counsel’s hourly rate and the number of hours spent. No submissions were made to assist the court in determining the costs actually thrown away. As stated in Pittiglio, I’m left to be more “intuitive” than “scientific” in determining the work that had to be re-done. While I am satisfied that not all of the work needed to be done again, I have no doubt that Mr. Robillard incurred significant costs thrown away. I find $7000 is a reasonable amount to allow for the adjournment.
The Trial in May
[38] Mr. Robillard also seeks costs thrown away for the first two days of trial in May 2018. Although he did not specify the amount sought or provide a Bill of Costs, he did make submissions at the end of trial for $4,500. I agree that he is entitled to some costs but for one day of trial, not two, and not as costs thrown away. It is clear in Caldwell that the phrase “costs thrown away” refers to a party’s costs for trial preparation which have been wasted and will have to be re-done. Here, the morning of the first day was lost before the trial was adjourned to the next morning. The morning of the second day was spent in a voir dire made necessary by a last-minute issue that Ms. Naegels raised on the first day. The additional costs flow from the extra time required for trial. There was no trial preparation to be re-done that would give rise to costs thrown away. To account for this, I reduce Ms. Naegels costs entitlement by $1,500 – an amount that represents 5 hours at partial recovery rates for Mr. Robillard’s counsel.
My Award
[39] Modern costs rules have as their purposes four fundamental goals: to partially indemnify successful litigants; to encourage settlement; to discourage and sanction inappropriate behaviour; and to ensure that cases are dealt with justly. See Mattina v. Mattina and r. 2(2) of the Family Law Rules. I also consider that a cost award is to be reasonable and proportionate. After the reductions and offsets above, I apply a range of 60% to 70% as indicated in Mattina and award costs to Ms. Naegels of $18,750 payable within 30 days.
[40] Spousal support was one of the two primary issues in this case. Costs in the amount of $7,250 shall be enforceable by the Family Responsibility Office.
Justice D. Summers
Date: September 4, 2019
COURT FILE NO.: FC-15-1667
DATE: 2019/09/04
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Karen Naegels, Applicant
AND
Dwayne Robillard, Respondent
BEFORE: D. Summers J.
COUNSEL: Stacy Coulterman, for the Applicant,
Stephen Greenberg, for the Respondent
COSTS ENDORSEMENT
D. Summers J.
Released: September 4, 2019