Court File and Parties
Court File No.: 01-FL-1054-9 Date: 2019/12/11 Superior Court of Justice - Ontario
Re: Julie Cayen, Applicant And: Mark Skotnicki, Respondent
Before: Madam Justice H.J. Williams
Counsel: Susan Galarneau, Counsel for the Applicant Any Mayer, for the Respondent
Heard: In writing
Costs Endorsement
[1] The respondent mother seeks full indemnity costs after being substantially successful on a motion to change.
Background
[2] The father brought a motion to change an order for child support when the couple’s son, who had been living with the mother in Ottawa, moved to go to school in the British Columbia community where the father lived.
[3] The decision in favour of the mother turned on the wording of the December 15, 2017 consent order the father wanted to change. The order stated that its support terms “will not be subject to any variation for any reason whatsoever.” The mother’s evidence was that in December 2017, after years of litigation and multiple motions to change, she had waived support arrears and agreed to a lower amount of on-going support than she could have demanded in exchange for an order that would truly be “final”.
[4] I held that the choice of the phrase “for any reason whatsoever” was evidence of the parties’ intentions and that, before consenting to the order, the parties considered or should have considered all of the reasons that might justify a future variation request by either of them. The parties had agreed that there would be no such reasons—not “any reason whatsoever”--that would justify a variation.
[5] I found that in the circumstances, despite the son’s move from Ottawa to B.C., the father failed to establish that there were any material changes that would justify a variation of the December 15, 2017 order.
[6] The December 15, 2017 order provided that the father would pay $900.00/month to support the son until March 2020. The son moved to B.C. in July 2018.
The Parties’ Positions
The Mother
[7] The mother argues that she is entitled to full indemnity costs because she was the successful party and she made two early offers to settle, both of which were more favourable to the father than was my decision.
The Father
[8] The father argues that costs are typically awarded on a partial indemnity scale and should be in this case.
[9] The father argues that he acted reasonably throughout the proceedings.
[10] The father argues that when he consented to the December 15, 2017 order, he could not have contemplated that his son would move to B.C.
[11] He argues that the fact that the parties exchanged offers to settle prior to the hearing indicates that they both accepted that their support obligations had changed after the son’s move, “contradicting the notion that the parties contemplated the possibility of Joseph moving to the west coast when they consented to the terms of the December 2017 order.”
[12] The father argues that the mother was not entirely successful on the motion.
[13] The father also argues that the mother was not using the child support payments he was making to benefit the son and that it was only after he served his motion materials that the mother began to give the son money directly.
[14] The father also argues that a significant costs order will affect his ability to provide financial assistance to the son and that the mother doesn’t need costs because she is receiving $900.00/month in child support from him even though the son no longer lives with her.
Analysis
[15] Costs awards are intended to serve 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 under subrule 2(2) of the Family Law Rules. (Mattina v. Mattina, 2018 ONCA 867.)
[16] Subrule 24(1) of the Family Law Rules creates a presumption of costs in favour of the successful party.
[17] In exercising its discretion to order costs, the court is required to consider the factors set out in subrule 24(12) which are the following:
(a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues:
(i) each party’s behaviour,
(ii) the time spent by each party,
(iii) any written offers to settle including offers that do not meet the requirements of rule 18,
(iv) any legal fees, including the number of lawyers and their rates,
(v) any expert witness fees, including the number of experts and their rates,
(vi) any other expenses properly paid or payable; and
(b) any other relevant matter.
Each Party’s Behaviour
[18] Neither party acted in bad faith.
[19] I consider the father’s position on the motion to have been untenable in the face of the provision in the December 15, 2017 order, to which he had consented, which said that its support terms “will not be subject to variation for any reason whatsoever.”[^1] I have no doubt that the father genuinely considers the son’s move to B.C. to be a change in circumstances that should affect the amount of child support he is obliged to pay; although the argument was unsuccessful on the motion, he continued to advance it in his costs submissions.
[20] Although I found the father’s position to have been without foundation, I am not prepared to find that he acted unreasonably in advancing it.
[21] However, I accept that mother’s argument that it was unreasonable for the father to have asked the mother to sign minutes of settlement in late 2018 which contained terms other than the terms to which the parties had agreed. It did not help the father’s cause that he then stated in his costs submissions that the mother had refused to sign the minutes of settlement but did not mention that the minutes did not mirror the parties’ agreement.
[22] I found the mother’s refusal to pay her portion of the son’s tuition at the beginning of each semester to be unreasonable. I now see that in her first offer to settle shortly after receiving the father’s motion materials, the mother had agreed that she would make the tuition payments “up front.” However, the mother did not formally concede the issue; she responded to it in her motion materials and then, at the hearing of the motion, argued that it had not been specifically pleaded. In his motion form, the father had requested an order enforcing the mother’s obligation to pay tuition but not one requiring her to do so at the beginning of the semester. Because both parties referred to the issue in their written materials, I allowed the father’s oral request for an amendment to his pleading to include it[^2]. This was a minor issue. That said, a more reasonable position for the mother to have taken in her materials and at the hearing would have been simply to agree to pay tuition at the beginning of the semester, as she had in her first offer to settle.
The Time Spent by Each Party
[23] The mother’s lawyer docketed 35.7 hours, including costs submissions.[^3] The timekeepers who worked for the father, who included four lawyers, a student and a “researcher” who appears to have performed primarily administrative tasks, docketed 75.3 hours.
Written Offers to Settle
[24] The mother made her first offer to settle via email on November 26, 2018.
[25] The father responded with a settlement proposal the next day.
[26] The mother accepted the father’s offer but, as I noted above, later refused to sign minutes of settlement which did not reflect the terms of the offer she had accepted.
[27] The mother made a formal offer to settle on January 16, 2019. She withdrew her November 26, 2018 offer the following day.
[28] The father then made offers to settle on March 12, 2019 and July 29, 2019.
[29] The father’s offers all would have required the mother to reimburse the father for support paid on behalf of the son after the son’s move to B.C. in July 2018.
[30] As I have already noted, the mother’s offers to settle were more favourable to the father than was my decision on the motion.
[31] Subrule 8(14) of the Family Law Rules provides as follows:
COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER
18(14) A party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, 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.
[32] I find that, in respect of her January 16, 2019 offer, the mother has met the conditions of subrule 18(14).
[33] The November 26, 2018 offer does not comply with subrule 18(14), because it was withdrawn on January 17, 2019 and therefore before the start of the July 30, 2019 hearing. I remain entitled to take it into account under subrule 18(16).
Legal Fees, Number of Lawyers and Rates
[34] The mother’s lawyer is in her 29th year of practice. She charged the mother $395.00/hour.
[35] The lawyer who argued the motion on behalf of the father is in her 14th year of practice and charged the father $260.00/hour early in the retainer and then $275.00/hour. A lawyer in her 2nd year of practice charged the father $170.00 and then $180.00/hour. Lawyers charging $295.00 and 250.00/hour respectively docketed small amounts of time as well as a student at $120.00/hour and a “researcher” at $100.00/hour.
[36] I do not consider any of the rates charged by the timekeepers for either party to be unreasonable.
Conclusion
[37] The mother was substantially successful on the motion. She was successful on the dominant issue which was whether the support order for the son should be varied. The timing of the tuition payment issue, in respect of which the mother was unsuccessful, and the two issues in respect of which the father was successful, were minor and took up little space in the motion materials and in court.
[38] The mother’s January 16, 2019 offer to settle complied with the requirements of subrule 18(4). The mother beat this offer in the sense that its terms were more favourable to the father than the terms of my decision. If the father had accepted either this offer or the mother’s earlier offer of November 26, 2018, he would be better off and each party would have saved thousands of dollars in legal fees.
[39] Although I recognize that even if the conditions of subrule 18(14) are met, the court maintains discretion not to order full recovery costs (C.A.M v. D.M. [2003] (Ont. C.A.)), in this case, I see no reason why the mother should not have her costs to January 16, 2019 and full recovery costs after that date.
[40] The mother seeks full recovery costs of $18,722.99, inclusive of disbursements and HST. This total includes the fees associated with the mother’s costs submissions.
[41] The father argues that the mother’s costs are exaggerated, that the mother’s lawyer performed unnecessary work and that the mother’s lawyer sent aggressive emails regarding what turned out to be a non-issue and which increased the costs for both parties. The father also argues that the mother’s lawyer should have delegated work to a more junior lawyer with a lower hourly rate.
[42] The parties’ bills of costs show that although the father’s legal team docketed 75.3 hours and the mother’s lawyer about 35.7 hours, the associated fees, before disbursements and HST, were comparable and somewhat but not significantly higher for the mother.[^4]. In principle, the father’s argument that the mother’s lawyer should have delegated work to a more junior professional has some appeal. However, in this case, although the hourly rates of the father’s team were considerably lower than the rate of the mother’s lawyer, the mother’s lawyer spent roughly half the amount of time. The comparable fee totals suggest a correlation between experience and efficiency.
[43] The mother’s lawyer spent 3.7 hours (translating into fees of $1,461.50) up to and including January 16, 2019, the date of her offer. The balance of her time, 32 hours ($12,640.00 in fees), was docketed after that date.
[44] I do not consider the hourly rate or the hours spent by the mother’s lawyer to be unreasonable.
[45] As fixing of costs is not simply a matter of multiplying an hourly rate by the number of hours, in addition to the observations I have already made, I have also taken the following into consideration:
• The issues on this motion were important to the parties. The child support issue was important to the father because he believed he was overpaying and to the mother because of the concessions she had made in conjunction with the December 15, 2017 order in the expectation that there would be no further litigation.
• The issues were of moderate complexity.
• Both parties acted unreasonably in one respect; I consider the respective unreasonable conduct of each party to cancel out that of the other.
• The father asked that any costs award be reduced by the mother’s marginal tax rate to reflect the fact that her legal fees are tax deductible. The father relies on a 2013 case of this court. However, in Scipione v Scipione, 2015 ONSC 5982 at para. 74, Pazaratz J. held that tax deductibility was no longer a factor to be considered in quantifying costs.
[46] After applying subrule 18(4) and considering the factors in subrule 24(1), I conclude that fees of $13,000.00 would represent a reasonable and proportionate amount for the father to pay the mother in this case. The father shall pay the mother $13,000.00 in fees plus HST. The mother shall also have her disbursements, as reflected in her bill of costs and paragraph 15 of her reply submissions, plus HST.
[47] The mother has asked that the costs be deemed to be additional support and that the costs award be enforceable through the Family Responsibility Office. The father did not object to this request and I consider it to be reasonable. The costs award shall be deemed to be support.
[48] The father requested time to pay the costs award. I consider this to be a reasonable request and will grant such an order. If the parties are unable to agree on a payment schedule, they may make brief written submissions in accordance with the following timetable:
• The father may deliver written submissions of no more than two pages in length within 28 days of the date of this endorsement;
• The mother may deliver written submissions in response of no more than two pages in length within 14 days of the date of receipt of the father’s submissions; and
• The father may deliver any reply submissions of no more than one page in length within seven days of the date of receipt of mother’s submissions.
[49] These submissions may be filed by sending them to me, care of the family law trial coordinator. If because of the upcoming holiday season or for any other reason the parties wish to amend the timetable, they may do so on consent, with notice to me, care of the family law trial coordinator.
Madam Justice H.J. Williams
Date: December 11, 2019
Court File No.: 01-FL-1054-9 Date: 2019/12/11
Ontario Superior Court of Justice
Re: Julie Cayen, Applicant And: Mark Skotnicki, Respondent
Before: Madam Justice H.J. Williams Counsel: Susan Galarneau, Counsel for the Applicant Any Mayer, for the Respondent
Heard: In writing
Reasons for decision: costs
Madam Justice H.J. Williams
Released: December 11, 2019
[^1]: That said, such a provision does not bar variation altogether; it can only bar variation subject to the court’s power to vary under s. 17 of the Divorce Act. [^2]: In her costs submissions, the mother said that father had not requested leave to amend the pleading. In fact, his counsel did so orally. [^3]: The 35.7 hours do not include time related to a case conference which the mother’s lawyer omitted from her bill of costs because costs of the case conference had already been fixed. [^4]: The parties’ bills of costs reflect costs of approximately $14,000.00 for each party. However, as the mother had extracted from her bill of costs time relating to a case conference for which costs were fixed at $2,000.00, the mother’s total fees were correspondingly higher. The father’s brief includes time associated with the case conference.