Court File and Parties
Court File No.: FC-08-167-2 Date: 2019/12/02 Superior Court of Justice - Ontario
Re: Angela Menses Delulio, Applicant -and- Cliff Persi, Respondent
Before: Justice P. MacEachern
Counsel: Deanne Fowler for the Applicant Gonen Snir for the Respondent
Heard: In Writing
Costs Endorsement
[1] This endorsement determines costs following the decisions released on July 16, 2019, in Delulio v. Persi, 2019 ONSC 4303.
Late Filing
[2] Mr. Persi served his cost submissions after the deadline set out in my endorsement of July 16, 2019. The deadline for his cost submissions was September 6, 2019. Mr. Persi served his costs submissions on September 10, 2019, along with a motion seeking an order to permit late filing. Mr. Persi’s counsel states he missed the deadline through inadvertence. Ms. Delulio refused to consent to late filing, on the basis that Mr. Persi’s counsel should have been aware of the deadline, which she had communicated to him several times through correspondence.
[3] Although I appreciate counsel for Ms. Delulio’s frustration, I do not find any prejudice to Ms. Delulio arising from Mr. Persi serving his costs submissions on Tuesday, September 10, 2019, rather than on Friday, September 6, 2019. I grant an order permitting Mr. Persi to file his costs submissions. I have reviewed Mr. Persi’s costs submissions in determining the issue of costs below.
Costs
[4] Ms. Delulio seeks costs on a full recovery basis of $12,509.67. Her position is that she is entitled to full recovery of her costs as the successful party on the motion and due to her offer to settle dated March 15, 2019. These costs reflect 31.25 hours, based on her lawyer’s hourly rate of $350 (17 years’ experience), plus $150.29 in disbursements and tax.
[5] Mr. Persi seeks full recovery of his costs, fixed at $14,128.25. His position is that he was more successful on the motion than Ms. Delulio was because he achieved an order requiring Ms. Delulio to pay child support and contribute to s.7 expenses, and argues that Ms. Delulio’s conduct was unreasonable due to her position on her income. Mr. Persi’s costs reflect 38.8 hours, based on his lawyer’s hourly rate of $250 per hour (more than ten years’ experience), for fees (inclusive of tax) totalling $7,642, plus disbursements of $6,486.25 to hire a private investigator.
[6] Modern costs rules are designed to foster four fundamental purposes (1) to partially indemnify successful litigants; (2) to encourage settlement; (3) to discourage and sanction inappropriate behaviour by litigants; and (4) to ensure that cases are dealt with justly (subrule 2(2) of the Family Law Rules, O.Reg. 114/99); see also Mattina v. Mattina, 2018 ONCA 867.
[7] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. An award of costs is subject to: the factors listed in subrule 24(12), subrule 24(4) pertaining to unreasonable conduct of a successful party, subrule 24(8) pertaining to bad faith, subrule 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party (Berta v. Berta, 2015 ONCA 918 at para. 94).
[8] Subrule 24(1) creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs (Sims-Howarth v. Bilcliffe). To determine whether a party has been successful, the court may take into account how the order compares to any settlement offers (Lawson v. Lawson).
[9] Subrule 18(14) provides that a party is, unless the court orders otherwise, entitled to costs on a full recovery basis from the date an offer was served if the following conditions are met:
- If the offer relates to a motion, it is made at least one day before the motion date.
- If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
- The offer does not expire and is not withdrawn before the hearing starts.
- The offer is not accepted.
- The party who made the offer obtains an order that is as favourable as or more favourable than the offer.
[10] Even if a party’s offer does not satisfy the criteria under subrule 18(14), the offer is still a factor to consider under subrule 24(12)(a).
[11] Ms. Delulio was the successful party on the motion. This conclusion is supported by Ms. Delulio’s offer to settle dated March 15, 2019.
[12] The result of the motion was that Ms. Delulio was ordered to pay child support of $624/m as of August 1, 2019, based on her income being $42,000, plus 29% of s.7 expenses. Mr. Persi’s child support arrears due to his past underpayments of child support were fixed at $21,055. These arrears were set-off against Ms. Delulio’s child support payments.
[13] Ms. Delulio offered to settle based on her paying child support of $459/m as of April 1, 2019, based on her income being $30,000, plus 25% of s.7 expenses. Significantly, Ms. Delulio offered to resolve the issue of Mr. Persi’s underpayment of past child support by reducing her child support payments by $100 per month.
[14] At the time of Ms. Delulio’s offer, the children were 12 and 15 years of age. Ms. Delulio offered to settle the arrears and ongoing child support by paying a net amount of $359 per month ($459 - $100 = $359). $359 per month is $265/m less than the ongoing child support ordered on the motion ($624 - $359 = $265). On the motion, Mr. Persi was also ordered to pay arrears of $21,055.
[15] When compared to the result on the motion, if Ms. Delulio paid $265 less per month until the youngest child turns 18 years of age, her offer to settle child support arrears is roughly equivalent to $19,080 (6 years X 12 months X $265). This rough estimate is increased by the 4% difference between Ms. Delulio’s contribution to s.7 expenses in her offer (25%), compared to the outcome of the motion (29%). Neither party made submissions on how this difference should be quantified. However, as an example, if we assume s.7 expenses totalling $100,000, which is very generous to Mr. Persi, this 4% difference only amounts to $4,000.
[16] Ms. Delulio did not submit a precise value for her offer to settle child support arrears. I cannot calculate the value of her offer to settle child support arrears because the value varies depending on the duration of child support and the amount of s.7 expenses. The onus of proving that the offer is as favourable, or more favourable, than the motion result and that she has met the requirements of subrule 18(14), is on the person making the offer (Neilipovitz v. Neilipovitz, [2014] O.J. No. 3842 (SCJ)). I do not find that Ms. Delulio has met this onus. I do find, however, that Ms. Delulio’s offer dated March 15, 2019 demonstrates that she was the successful party on the motion and that she acted reasonably. Ms. Delulio is presumptively entitled to her costs of the motion.
[17] My review of Mr. Persi’s offers supports the above conclusion. Mr. Persi made two offers. In the first, he sought an income of $80,000 per year be imputed to Ms. Delulio. In the second, he sought an income of $60,000 be imputed to her. Most significantly, however, neither offer provided for him to pay any amounts for past underpayments of child support. In contrast, in both of Mr. Persi’s offers, Ms. Delulio would have owed him significant amounts (approximately $14,000 to $16,000) for past child support.
[18] I find that Ms. Delulio’s legal fees, inclusive of tax and disbursements, of $12,509.67 are reasonable and proportional in the circumstances, and are within Mr. Persi’s reasonable expectations, particularly given the fees he incurred.
[19] I do not find that Ms. Delulio is entitled to full recovery of her costs. The Family Law Rules only expressly contemplate full recovery of costs in specific circumstances, for example where a party has behaved unreasonably, in bad faith or has beat an offer to settle under subrule 18(14).
[20] I do not find that either party’s conduct was unreasonable as to attract additional cost consequences.
[21] Taking into consideration that Ms. Delulio was the successful party at trial, I find that an award of costs fixed at $8,000 is fair and just.
[22] I order Mr. Persi pay costs to Ms. Delulio fixed at $8,000.
[23] I further order that all of these costs were incurred in relation to the issue of child support, and shall, therefore, be enforceable by the Family Responsibility Office as child support.
[24] This order shall bear post-judgment interest in accordance with the Courts of Justice Act, R.S.O. 1990, C. C.43 (“CJA”).