COURT FILE NO.: FS-17-0026-00
DATE: 2019-01-30
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Virgil James Hyatt
S. Prescott, for the Applicant
Applicant
- and -
Kimberly Mei-Yin MacDonell
R. Angell, for the Respondent
Respondent
HEARD: Via Written Submissions
Mr. Justice T.A. Platana
Decision On Costs
[1] The Applicant sought an order for joint custody on certain terms. The issue focused on was that the child’s primary residence be with him and that the child not be taken out of the District of Rainy River when in the custody of the Respondent. The Respondent’s answer included a claim for custody, child support and for compensation for property she claims she purchased and was installed in a home the Applicant was building for she and the Respondent on property owned by the Respondent’s mother.
[2] The Respondent was awarded sole custody, child support, and permission to relocate with the child to Thunder Bay, with specified access provisions for the Applicant. In addition, the Applicant was ordered to pay to the Respondent the sum of $18,561.94 on the basis of an unjust enrichment for monies put into the Respondent’s mother’s property.
[3] Child support was ordered in the amount of $223.00 per month based on the Applicant’s then current income, with a provision to provide updated financial information on a yearly basis, and/or within 30 days of obtaining employment.
[4] Counsel made submissions on costs in writing.
[5] The Respondent submits that as the successful party she is presumptively entitled to her costs. In addressing the factors set out in Rule 24(1), she submits that the issue was of the utmost importance to the parties who were unable to co-parent because of a lack of communication between the parties.
[6] She relies on an informal offer (not a Rule 18 offer) to settle on January 5, 2018, in a draft separation agreement which the Respondent submits offered more favourable terms to the Applicant, including joint custody, with a 7 day on/off schedule, and weekend and extended access to the Respondent. Terms were to be altered if the Respondent relocated outside of Fort Frances. A further Offer was submitted on April 27, 2018 which counsel argues was substantially similar to the final order made. Until the child reached kindergarten age, it provided for a 7/7 schedule with the child residing in Thunder Bay when with the mother, and in Fort Frances when with the father. Both parties could remove the child from the District of Thunder Bay or Rainy River for holiday travel purposes. When the child started full time school the mother would have custody, and the child’s primary residence would be in Thunder Bay. Access periods were offered including common access provisions for holiday periods. There was an offer for mutual release of spousal support claims.
[7] Counsel submits that the Applicant took unreasonable positions, particularly relying on the Applicant’s refusal the Respondent’s proposal to change access to allow her to move 30 kilometres from Fort Frances which would have meant less travel times for her employment, and correspondingly more time with the child.
[8] Counsel also submits that the Applicant’s failure to comply with the Rules to provide a financial statement and trial record, including arguing the issue of an adjournment after a hearing date had been set, was a substantial and unnecessary waste of court time and resources and required additional time and cost for the Respondent.
[9] The Respondent’s bill of costs request costs on a full indemnity basis in the amount of $32,708.98 for fees, including HST, and disbursements of $1,752.89 plus HST of $227.87 for a total amount of $34,689.74. Ms. Angell relies on s. 1(1)(g) of the Family Responsibility and Support Enforcement Act (“FRSEA”) to request that costs be enforceable as child support.
[10] The Applicant acknowledges that the Respondent was largely the successful party. However, given that the focal issue was mobility, submits that there should be no costs awarded, or if any, the amount should be minimal.
[11] Ms. Prescott replies that the amount the Respondent seeks is neither fair nor reasonable in the circumstances of this case. She submits that the Applicant acted reasonably, and further, he has an inability to pay any significant costs.
[12] She further argues that the Respondent’s request to have any costs amount which may be awarded enforced as child support is unreasonable, and that if I consider otherwise, any amount awarded should only be subject to a support deduction order to the extent that the costs awarded relate to the issue of child support.
[13] Counsel for Mr. Hyatt, Ms. Prescott, cites Russel v. Russel at para. 9:
There is no other area of family law litigation in which the idea of “winner” and “loser” is less applicable than that of mobility cases. It is also true, that even with the very best parents, it is the area where “win-win” solutions can rarely, if ever, be fashioned. Parents involved in a mobility dispute often have to resort to the courts, because even with the best of intentions, and with both parties doing their best to put their child’s interest before their own, they cannot find a solution to the desire of one parent to move with the child, and the other parent vehemently resisting that move.
[14] Counsel submits that the issue was of the utmost importance to the Applicant father as the child had lived in Fort Frances since October 2016, approximately one and a half years prior to this hearing. Counsel submits that the Applicant’s position was reasonable, before and throughout the hearing of the application. She relies on the same factors relied on at the hearing, which I rejected as being in the child’s best interest. She further relies on that it was reasonable for the Applicant to take the position he took at the hearing based on a letter from the Applicant’s previous legal counsel.
[15] Further she notes that when the Applicant became self-represented due to lack of resources, he did propose several changes to the informal offer to settle. She relies on a comment with respect to the Respondent’s position in a letter from the Applicant’s previous counsel. I note that the Respondent totally rejected that such an offer was ever made.
[16] In summary, Ms. Prescott submits that the Applicant did make counter-proposals to resolve the issues, and that his conduct should not be considered to be unreasonable because he did not agree with the proposals for settlement made by the Respondent. She argues that the Applicant’s position throughout was based on his determination of what was in the child’s best interest.
[17] With respect to the offer to settle, Ms. Prescott submits that the court in Russel indicated that analyzing attempts to settle in mobility cases are “not that helpful in determining who was more or less reasonable” and that a trial is usually the only way to resolve the issue of mobility with any finding.
[18] Ms. Prescott further submits that ability to pay costs can be considered as “any other relevant matter” under Rule 24(11). She submits that Mr. Hyatt is impecunious and has no ability to pay any costs award made against him. He has been unemployed since December 2018. He expects to earn approximately $27,792.00 in 2018. He has personal debt of over $176,000.00. He was ordered to pay $18,561.94.00 as reimbursement to the Respondent for materials she paid for towards building a home on land owned by his mother. She relies on Weare v. Noumann 2015 ONSC 5872, where Fregeau, J. found it unreasonable to award costs which exceeded the payor’s expected annual income.
[19] The Applicant’s position is that I decline to make an order that any costs awarded should be subject to a support deduction order. She argues that the issue of child support was peripheral to the focal issue of mobility and less time was spent with respect to support at the hearing. She notes that, neither the case management judge (who refused an adjournment one week prior) nor the application judge had been advised by counsel that there was any other issue other than mobility to be tried until the morning of the hearing. Counsel submits that the applicant should not be held responsible by way of costs for additional time spent by counsel the morning of the hearing spent in last minute attempts to settle (as requested by the judge) and to prepare a financial statement.
Discussion
[20] A number of principles relating to awarding costs in Family Law matters were stated in Beaver v. Hill 2015 ONCA 840.
[21] Under the Family Law Rules, O. Reg. 114/99, judges are not constrained to the normal scales of costs found in the Rules of Civil Procedure, RRO 1990, Reg. 194, since no scales of costs are mentioned in the Family Law Rules. Also, the Family Law Rules expressly provide that, depending on the conduct of the parties and the presence or absence of offers to settle, a judge may increase or decrease what would otherwise be the appropriate quantum of costs awarded.
[22] A successful party in a family law case is presumptively entitled to costs subject to the factors set out in Rule 24.
[23] The Family Law Rules “embody a philosophy peculiar to a lawsuit that involves a family” (at para. 11). Rule 24(12) sets out the appropriate consideration in fixing the quantum of costs. It reads:
(12) In setting the amount of costs, the court shall consider:
(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.
[24] Proportionality and reasonableness are the touchstone consideration to be applied in fixing the amount of costs.
[25] I begin the analysis of costs to be awarded by noting that the Respondent must be considered to be the successful party and is therefore, presumptively entitled to costs.
[26] In considering the principles in awarding costs, and the factors noted in R. 24(11), I find that while the issues were important to the parties, they were not novel issues which were complex and difficult to present. There were few witnesses, their evidence was not complicated and the legal arguments were not complex.
[27] The position taken by each party was not unreasonable as they were basically focused on where the child should live. I found the actions of the Applicant unreasonable in two circumstances. The refusal to agree to an amendment of a previous order which would have permitted the Respondent to move approximately 30 kilometres to decrease her work travel time, which would have increased her time with the child, to me was an unreasonable position. Further, his action in placing her personal belongings in garbage bags and leaving them outside for her to pick up was inconsiderate at least, and unreasonable.
[28] I have reviewed the Bill of Costs and the Respondent’s request for a total of $34,689.74 on a full recovery basis. I make the following observations. I accept that the hourly rates charged for counsel are reasonable. One hundred hours, however, is excessive in the circumstances of this case. The time billed totals in excess of 150 hours for the various types of work done, including approximately 120 for counsel which includes time spent for discussions between senior and junior counsel. Much time is billed for a law clerk where the work performed is what should be considered as administrative tasks such as preparation of correspondence to and from the client and opposing counsel and phone calls on items which are of a purely administrative nature. To charge $100.00 for a law clerk an hour for tasks such as these is unreasonable. The time spent by a law clerk totaling approximately 35 hours primarily for preparation and/or review of correspondence is excessive. There is an amount of $100.00 per hour billed for “Law Clerk”. One clerk has 24 years experience, and one has 2. The work billed for them seems to be largely review and/or preparation of correspondence. A 2 year law clerk cannot be billed at the same rate as a 24 years law clerk.
[29] The time spent was further lengthened by the Applicant’s failure to provide timely financial information prior to trial.
[30] I have also noted that travel time and costs between Fort Frances and Thunder Bay were submitted. I have not allowed the full costs claimed as it was not established that local counsel could not have been retained.
[31] The presence of offers to settle is a factor to be taken into account. In circumstances of cases where mobility is the focal issue, I would not expect offers to be made which could realistically be expected to resolve that issues.
[32] In Boucher v. Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.), the Ontario Court of Appeal indicated that a costs award should be a “fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs of the successful litigant”. A “fair and reasonable amount” is that amount which the unsuccessful party could reasonably have expected to pay in the event of lack of success in the litigation: Lupien v. Carmichael, 2017 ONSC 2929, at para. 9.
[33] Determining the amount of costs is not simply a mechanical exercise. Costs must be proportional to the amount in issue and the outcome: Boucher v. Public Accountants Council (Ontario), supra; Lawrence v. Lawrence, supra, at para. 64.
[34] Ability to pay alone cannot, nor should it, over-ride the other factors in Rule 24(11): Peers v. Poupore, 2008 ONCJ 615, 2008 ONCJ 615 (Ont. C.J.), para. 42; Lawrence v. Lawrence, supra, at para. 35.
[35] The (financial) means of the unsuccessful party may not be used to shield her from liability for costs, particularly when she has acted unreasonably: Gobin v. Gobin (2009), 2009 ONCJ 278, 71 R.F.L. (6th) 209 (Ont. C.J.), para. 24; Lawrence v. Lawrence, supra, at para. 36.
[36] As noted in Boucher, costs should be “a fair and reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs of the successful litigant.” The amount should be fair and reasonable. Proportionability and reasonable expectations of costs of the unsuccessful party must be considered.
[37] Notwithstanding the financial means of the payor is a factor that may rebut the presumption that the successful party is entitled to full recovery of costs, but is not relevant to entitlement. The Applicant’s financial statement (filed on the day of trial) shows annual income projected to be approximately $28,000. He has debt of $176,000. He has been ordered to pay the Respondent $18,561.94. He will incur access costs travelling between Fort Frances and Thunder Bay.
[38] Ms. Angell has requested that I exercise my discretion so that any costs award be enforceable as child support, as permitted under the Family Responsibility and Support Act, and Clark v. Clark, 2014 ONCA 175. In considering this request I refer back to my reasons in the application. The focal issue in this matter was mobility. Even after a trial management conference shortly before the commencement of the application, little focus was placed on the support issue. The report to the trial judge indicated that only mobility was in issue. The issue of support was raised at the opening of trial. That indicates to me that the parties had not meaningfully made support an issue, and that the child’s residence was what led to the application being heard. Financial support was not made a significant issue at the hearing. The Applicant only provided a financial statement on the opening day, after being directed to do so.
[39] I have accepted that the Applicant is of limited ability to pay, however there is no indication that he will not pay the costs order.
[40] For those reasons, I decline to make this order enforceable as support under the FRSEA.
[41] Costs are an exercise in the court’s discretion. In considering the above principles and Rules, I find reasonable costs to be awarded to Ms. MacDonnell in the amount of $18,500.00 plus HST, plus disbursements of $1,980.76, including HST.
“original signed by” The Hon. Mr. Justice T. A. Platana
Released: January 30, 2019
COURT FILE NO.: FS-17-0026-00
DATE: 2019-01-30
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Virgil James Hyatt
Applicant
- and -
Kimberly Mei-Yin MacDonell
Respondent
DECISION ON COSTS
Platana J.
Released: January 30, 2019
/sab