SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO: FS-17-91042-00
DATE: 2019 12 18
RE: YULY ANDREA GUTIERREZ PARRA v. PREMKUMAR BALASUBRAMANIAN
BEFORE: LEMAY J
COUNSEL: E. Mazinani, Counsel for the Applicant
P. Buttigieg, Counsel for the Respondent
ENDORSEMENT
[1] This was a motion for interim disbursements brought by the Applicant on November 29th, 2019. I dismissed the application from the bench for oral reasons given that day. In essence, there were three reasons why the motion for interim disbursements was dismissed. First, there is an arguable case that the Applicant will not owe the Respondent any payments at the end of trial. Second, the trial is scheduled for the January, 2020 blitz, which was six week after the motion was brought, and the Applicant had no good reason for why this motion was not brought months ago. Third, the interim disbursements that were sought were limited to legal fees, and I was concerned that the Applicant was seeking to have the Respondent fund her litigation.
[2] It is now time to fix the costs for this motion.
Positions of the Parties
[3] I note at the outset that I fixed the length of costs submissions to two (2) single spaced pages. Counsel for the Respondent provided submissions that were five pages, not single spaced, and counsel for the Applicant provided submissions that were three pages, also not single spaced. I am disappointed that counsel, particularly Respondent’s counsel, did not follow my directions. It is clear that Mr. Buttigeg’s submissions are longer than they are supposed to be. I have determined that I will consider the costs submissions regardless of the failure to follow my directions.
[4] The Respondent argues that he should be entitled to full indemnity costs on the basis that the Applicant’s claims for interim disbursements were advanced in bad faith. In particular, the Respondent argues that the claims advanced by the Applicant for the costs of the interpreter and for the expert report were not justifiable and were advanced to conceal the Applicant’s primary motivation of having her legal fees paid by the Respondent.
[5] In addition, the Respondent points to Rule 24(5) of the Family Law Rules, and argues that I should conclude that the Applicant behaved unreasonably in bringing this motion. On the other hand, the Respondent argues that he behaved reasonably by offering to settle the motion for the payment of $10,000.00 in interim disbursements. Based on all of these points, the Respondent seeks costs in the sum of $6,214.46 inclusive of HST and disbursements.
[6] The Applicant argues that the Respondent, although the successful party, should be denied costs for the following reasons:
a) There was no valid offer to settle, as the Respondent withdrew the Offer to Settle prior to the commencement of the motion.
b) The Respondent made baseless allegations of fraud against the Applicant and her counsel, which he was not able to prove.
c) The Responding Affidavit relied on by the Respondent is, by and large, the same Affidavit he prepared for trial, and there was little additional work required to prepare for the motion.
The Issues to be Addressed
[7] Based on the foregoing summation, I must address the following issues:
a) Was there a valid Offer to Settle?
b) Did either party behave in bad faith?
c) How should the factors under Rule 24(11) be applied to this case?
The Offer to Settle
[8] Rule 18 of the Family Law Rules sets out the requirement for a valid offer. There is no dispute that the Applicant’s offer is a valid offer within the meaning of the family law rules. The dispute is over whether it triggers the cost consequences in Rule 18(14), which states:
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
[9] In this case, all of the criteria under Rule 18(14) are clearly met except for point 3. Some brief background facts are required to explain the issue.
[10] This motion was originally before Fragomeni J., who had a very heavy motions load on November 29th, 2019. Therefore, the matter was transferred to my courtroom. The offer to settle was withdrawn by the husband’s counsel after Fragomeni J. had purged his motions list but before the matter was transferred to my courtroom. The question is whether this is a withdrawal of the offer “before the hearing starts”.
[11] I am of the view that the offer was withdrawn before the hearing started for three reasons. First, the fact that the parties are present in Court while the Court is attending to other matters does not mean that the hearing has started. Indeed, the Rule 14 Notice of Motion form states that the parties will make a motion at 10:00 “or as soon as possible after that time”. The notice of motion itself envisions that the motion isn’t being made until the parties are called upon by the judge to argue it.
[12] Second, this interpretation accords with the specific words used in the Rule. The phrase “the hearing starts” is different from when court starts. The hearing in question is the specific hearing over the issue that the offer is attempting to resolve and it only starts when the matter is called by the Court.
[13] Finally, it is possible that the parties will turn up in Court to have their motion heard, but that the Court will not deal with it for any number of reasons. Those reasons could include the Court does not have sufficient time, the Court is not persuaded that the motion is a short motion and adjourns it, the judge scheduled to hear the motion may have a conflict, or the materials filed are deficient. In those circumstances, one would not necessarily conclude that the hearing has started.
[14] As a result, the offer is not an offer within the meaning of Rule 18(14). However, I am still of the view that it is a factor that should be considered, and one that favours an award of costs to the Respondent. Given the outcome of the motion, the Respondent’s offer to settle was entirely reasonable and should have been accepted. The Applicant’s counter-offer of $40,000.00 in interim disbursements is not a reasonable offer and is not a factor that enters into my consideration in assessing costs.
The Allegations of Bad Faith
[15] The Respondent alleges that the Applicant behaved in bad faith by bringing a claim for her legal fees disguised as a claim for expenses such as an expert report and an interpreter. The Applicant alleges that the Respondent behaved in bad faith by alleging that the Applicant’s bill of costs was inflated without reasonable cause. I reject both arguments.
[16] I start by noting the decision of Pazaratz J. in J.S. v. M.M. (2016 ONSC 3072). In that decision, he set out the requirements for a finding of bad faith. Those requirements include, inter alia, a requirement that there was malice or intent to harm on the part of one party. The facts of J.S. are instructive, in that the Applicant included nude photographs of the Respondent and approximately 90 pages of sexting between the Respondent and another man as part of a custody and access motion. Pazaratz J. held that to be bad faith conduct. The allegations that I have in this case are substantially different. I see no evidence that either party acted maliciously or intended to harm the other party.
[17] The Respondent’s claim of bad faith suffers from two flaws, as follows:
a) The Applicant always asserted that part of the reason for her motion for interim disbursements was so that she could pay for her legal fees. On the motion materials I have, it is very difficult to see how the Applicant was concealing her primary motivation when it was clear from the motion record.
b) In any event, the costs of an interpreter and the costs of an expert report are part of the Applicant’s legal bill. The argument that the Applicant is hiding her desire to claim one type of legal expense by seeking payment for a different type of legal expense is unsustainable.
[18] This brings me to the Applicant’s claim of bad faith. The Applicant alleges that the Respondent engaged in an unfounded claim of fraud against the Applicant’s counsel. At the hearing of the motion, and in his materials, the Respondent alleged that the Applicant’s counsel had inflated her bills of cost in order to obtain a larger amount of interim disbursements. The Applicant argues that the decision of Mele v. Thorne, Ernst and Whinney (1997 12124 (ON SC), [1997] O.J. No. 443 (Gen. Div.)) supports her position.
[19] In Mele, the Court was faced with a situation where significant allegations of the Defendant lawyers were receiving a secret commission. Dambrot J. held that allegations of fraud or improper conduct that are made against a professional (such as counsel) and are not proven can result in a departure from the usual rules of cost.
[20] In this case, the claim that the Applicant’s costs bill was inflated was not made in bad faith. I reach that conclusion for two reasons. First, arguments about counsel’s excessive costs are a regular feature of litigation. This is not something that should come as a surprise to counsel, or be viewed as an attack on the integrity of counsel. Questioning the other side’s costs is often a legitimate point to raise. Second, having reviewed the claimed amount of cost and the amount of work that has been done to date in the litigation, I can see the basis for the Respondent’s argument that the Applicant’s costs were too high at this stage of the litigation although I am making no determination of that issue, as that will be a matter for the trial judge to determine. For both of these reasons, it was a legitimate question to raise with the Court.
[21] However, the manner in which the issue was raised was in my view overly aggressive. It is arguable that counsel for the Respondent was suggesting that there might have been a plan to inflate the bill of costs. That type of allegation could be seen as an attack on the other counsel’s integrity. As a result, although the Applicant has not established bad faith, the strong language used by the Respondent is a factor that supports a modest reduction in the costs payable.
The Factors Under Rule 24(11)
[22] Rule 24(11) of the Family Law Rules requires me to consider a series of factors in assessing costs. I have already dealt with the reasonableness or unreasonableness of each party’s behaviour in the sections above, both on the offers to settle and on the allegations of bad faith. I start by noting that nothing in the behaviour of either party persuades me to depart from the standard rule that the successful party should be entitled to recover his costs.
[23] This brings me to the importance, complexity and difficulty of the issues. These issues were quite simple in nature, and the test for interim disbursements is well known. As a result, this was not a particularly complex issue, and would not have resulted in a significant amount of time being expended.
[24] Counsel for the Respondent points out that the Applicant filed a factum, making the matter more complicated. I disagree for two reasons. First, factums often assist the Court in understanding the issues, and make the matter simpler to hear and decide. Second, factums (or at least statements of law) are generally required for family law motions in the Central West Region. It is certainly part of the standard endorsement that is made at the first case conference.
[25] This brings me to the time properly spent on the case. The motion was heard, argued and decided before noon on the date that it was scheduled to be heard. As a result, the counsel fee should only be three hours or so, which is what counsel for the Respondent quite properly claimed. In addition, I accept the Applicant’s assertion that the underlying facts for this motion would be essentially the same as the facts for the trial that the parties are preparing for. As a result, the time expended in preparing for this motion outside of Court will be reduced.
[26] When all of these factors are considered, I am of the view that the $6,212.46 that is claimed by counsel for the Respondent appears to be at the top end of the reasonable range for the actual costs incurred. However, I am not persuaded that full indemnity costs are appropriate in this case. I am of the view that partial indemnity costs are appropriate for this motion, and I fix those costs at $3,000.00 inclusive of HST and disbursements. Given that the trial is almost upon the parties, those costs are to be payable at the conclusion of the action.
Conclusion
[27] For the foregoing reasons, the Applicant is to pay the Respondent’s costs in the sum of $3,000.00 inclusive of HST and disbursements at the conclusion of the action.
LEMAY J
DATE: December 18, 2019
COURT FILE NO: FS-17-91042-00
DATE: 2019 12 18
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: YULY ANDREA GUTIERREZ PARRA v. PREMKUMAR BALASUBRAMANIAN
BEFORE: LeMay J.
COUNSEL: E. Mazinani, Counsel for the Applicant
P. Buttigieg, Counsel for the Respondent
ENDORSEMENT
LeMay J.
DATE: December 18, 2019