Court File and Parties

COURT FILE NO.: FS-19-95085 DATE: 2020 08 11 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ROGER STEVEN PARDY, Applicants AND: ESTER MARY KELLY, Respondent

BEFORE: TRIMBLE J.

COUNSEL: N. Hussain, for the Applicant J. Grossman, for the Respondent

HEARD: July 20, 2020

Endorsement

The Motion:

[1] The applicant/husband brings this motion for summary judgment with respect to the date of separation.

[2] The husband argues that the date of separation was 1 February 2011; the wife, 10 July 2013. The effect of the husband’s date of separation is that the property equalization claims by the wife would be statute barred.

The Issue:

[3] The parties resolved the issue of the date of separation on 20 March 2020. I am asked to decide the question of costs of the summary judgment motion, as requested in paragraph three of the orders requested in the husband’s Notice of Motion.

Positions of the Parties:

[4] Husband argues that he “won” the motion since the wife agreed with his sole issue, in its entirety; namely, she accepted his date of separation. Further, she maintained her position with respect to her preferred date of separation without any evidence. She refused to discuss the date of separation issue without disclosure from the husband, notwithstanding that her claim would have been statute barred if husband’s date of separation was found to be correct. This is evidence of bad faith.

[5] The wife argues that because the matter settled it is inappropriate to award and fix costs. Fixing and awarding costs requires the Court to declare that one side “won”. This is impossible to do when a matter settled. Settlements are driven by a myriad of reasons that may not speak to a winner or a loser.

The Law:

[6] In deciding costs, the first question is “Who won?” Settlements involve legal, economic, tactical, familial, emotional or other considerations, making it difficult or impossible to determine who won and who lost (see: Talbot v. Talbot, 2016 ONSC 1351, Para’s 55 to 60).

[7] In Witherspoon v. Witherspoon, 2015 ONSC 6378, Leach, J. said that because settlement (including abandoning an issue pleaded) may be driven by a number of reasons, permitting post settlement claims for costs, in which the settlement is used after the fact as a benchmark by which the objective reasonableness of pre-settlement positions should be measured, runs counter to public policy, and endorsing such an approach would discourage settlement. Unless there are compelling reasons to do so, costs in the circumstances of a settlement between parties ought not to be awarded by the court.

[8] In order to determine the winner in a case that settled, a court may look to the offers, and how they compare to the result (see Lawson v. Lawson, [2008] O.J. No. 1978), as well as the positions each party took (see: Carmichael v. Carmichael, 2019 ONSC 7224, at para. 34). However, costs are payable usually to the “declared winner”, following full consideration of evidence and argument. In settlements it is rare to have a declared winner. In cases which settle, the best approach is to consider success to have been divided and apply FLR 24(6) rather than 41(1) (see: Talbot, para. 55).

[9] Talbot also provides that costs may be awarded where there was “clear capitulation” by one side or the other (at para. 55).

[10] Turning to expectation and scale of costs, in Berta v. Berta (2015), the Court of Appeal stated:

In Biant v. Sagoo (2001), 20 R.F.L. (5th) 284 (Ont. S.C.), the court considered the costs award scheme under the rules and commented, at para. 20:

[T]he preferable approach in family law cases is to have costs recovery generally approach full recovery, so long as the successful party has behaved reasonably and the costs claimed are proportional to the issues and the result. There remains, I believe a discretion under Rule 24(1) to award the amount of costs that appears just in all the circumstances, while giving effect to the rules’ preeminent presumption, and subject always to the rules that require full recovery or that require or suggest a reduction or an apportionment.

This court has repeatedly endorsed the Biant court’s approach to the determination of costs in family law disputes: see for example, Ruffudeen-Coutts v. Coutts, 2012 ONCA 263, 15 R.F.L. (7th) 35, at para. 4; Sordi v Sordi, 2011 ONCA 665, 134 R.F.L. (7th) 197, at para. 21; M. (A.C.) v. M. (D.), 67 O.R. (3d) 181 (C.A.), at para. 40.

[11] In this case, the husband relies on Berta for his claim for substantial indemnity costs. He ignores the more recent Court of Appeal decision that addressed costs in Family Law cases (Mattina v. Mattina, 2018 ONCA 867), in which the Court at para. 15 appears to have restricted the application of Berta in terms of limiting full indemnity to situations of specific sorts of conduct like bad faith In Mattina, the Court of Appeal said:

[10] This court has held that modern family cost rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement, and; (3) to discourage and sanction inappropriate behaviour by litigants. Rule 2(2) adds a fourth fundamental purpose: to ensure that cases are dealt with justly, and Rule 24(12), which sets out factors relevant to setting the amount of costs, specifically emphasizes “reasonableness and proportionality” in any costs award.

[12] Rule 24(1) creates a presumption of costs in favour of the successful party of a motion, case, or appeal and the presumption that a successful party is entitled to costs applies equally to custody and access cases.

[13] Consideration of success is the starting point in determining costs. This presumption does not, however, require that the successful party always be entitled to costs. An award of costs is subject to: the factors listed in r. 24(12), r. 24(4) pertaining to unreasonable conduct of a successful party, r. 24(8) pertaining to bad faith, r. 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party.

[14] Rule 24(12) sets out a list of factors the court shall consider in determining an appropriate amount of costs:

(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.

[15] The Family Law Rules only expressly contemplate full recovery costs in specific circumstances, e.g. where a party has behaved unreasonably, in bad faith or has beat an offer to settle under r. 18(14). (Emphasis added)

[16] Rule 24(4) addresses the situation in which a successful party has behaved unreasonably:

Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party’s own costs or ordered to pay all or part of the unsuccessful party’s costs.

[17] Rule 24(5) provides guidance on how to evaluate reasonableness:

In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,

(a) the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle; (b) the reasonableness of any offer the party made; and (c) any offer the party withdrew or failed to accept.

[18] Rule 24(8) discusses the cost consequences for a party who has acted in bad faith:

If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately. [Citations removed]

[12] Even where the case calls for full indemnity does not mean that the successful party is entitled to whatever costs were incurred. The court assessing costs is still required to consider all of the factors in such an award (see: United Soils Management Ltd. v. Mohammed, 2019 ONCA 128).

[13] Costs, at the end of the day, should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties” (see: Boucher v. Public Accountants Council for the Province of Ontario, 71 O.R. (3d) 291, at para. 24).

Analysis:

[14] Following Witherspoon and its progeny, normally I would not order costs payable where the parties had resolved their issues. Ordering costs in these circumstances can create a disincentive both to the parties in this litigation, and to other litigants, to resolve their issues. Who would settle the case only to be hit with an award of costs? Further, there are the issues raised by the cases such as Talbot, to consider.

[15] In my view, one possible reading of this case is that the wife capitulated as contemplated by Talbot. The result achieved in the settlement was exactly what he had hoped to achieve at the motion, which is exactly what he hoped to achieve in the Application.

[16] In para. 14 of her Affidavit, however, the wife says that she will not elaborate on the reasons why she chose the July 2013 separation date and not the husband’s February 2011 date. She says that she agreed to the 2011 date because she did not want to spend thousands on a motion which will not affect the outcome of the case. The wife argued that she will be entitled to relief from the limitation in the circumstances of this case.

[17] In this case, the action continues. The wife claims that she is entitled to an extension of the limitation. I was not asked to decide this question.

[18] In light of the fact that the litigation continues, the most fair and just disposition is to make the costs for this motion payable in the cause.

[19] What is the quantum of costs, regardless of who pays them?

[20] I use the husband’s claim for costs for this analysis.

[21] The husband seeks full recovery costs of $19,514.54, or, in the alternative, partial indemnity costs of $13,244.84 (representing 75%). He says at para. 29 of his Affidavit that the wife “lied”, and knowingly advanced the false separation date in order to avoid the expired limitation.

[22] I do not accept the husband’s assertion.

[23] In order for the husband to saddle the wife with full indemnity costs for bad faith, husband mush show that the wife acted with intent to inflict financial or emotional harm on the husband in order to conceal information relevant to the issues, or to deceive the other party or the court. If the wife’s conduct is merely misguided but genuine, then there is no bad faith. Bad faith requires proof that a significant portion of the wife’s intent was to inflict harm, to conceal relevant information, to deceive, or to achieve some other nefarious purpose (see: Negin v. Fryers, 2018 ONSC 6713, at para. 17; S(C) v. S(M), 2007Ont 48811 (S.C.)).

[24] The husband has failed to prove the requisite intent on the wife’s part.

[25] I turn now to the husband’s misplaced reliance on Berta instead of the Court of Appeal’s more recent case of Mattina. In this respect, the husband’s lawyer must have been aware of Mattina, and is failure to put Mattina before the Court is a dereliction of his obligation to the Court.

[26] Berta created a cottage industry in full indemnity claims be winners of family law motions. Family counsel seem to be of the view that any conduct by the opposing party which they find disagreeable is bad faith, and therefore, they should be able to claim from the unsuccessful litigant every nickel charged to the client for every second of work on the file. Therefore, claims for costs since Berta have been unnecessarily high and not reflective of that amount which is reasonable for the losing party to pay, reasonable for the winning party to receive, proportionate to the issues in the litigation, and a reasonable reflection of the appropriate level of indemnity.

[27] The husband’s claim for costs in this case are of that nature.

[28] The successful husband claims $19,514.54 for full indemnity recovery or $13,244.84 for partial indemnity recover for this summary judgment motion.

[29] I award costs fixed at $2,500, all-inclusive. In doing so, I have considered all the cost principles reviewed above. This includes the offers to settle, on which I will touch shortly.

[30] I fixed costs at this rate for among the following reasons:

A. The Bill of Costs claims for all time expended on the file except for preparing for and attending on the wife’s production motion before court Coroza, J. on 9 January 2020. The balance of the time in the Bill of Costs appears to be for every other event in the file, regardless of its relation to the summary judgment motion. For example, the Bill of Costs begins with an entry on 10 May 2019 for reviewing the certificate of marriage and preparing a draft Application for Divorce. The first mention in the Bill of Costs to a summary judgment motion, however, was in a docket entry of 6 November 2019. I reduced the amount claimed by 50% for this reason, alone. B. The summary judgment material was never filed. The matter was settled before material could be filed. C. The husband seeks 50% of his costs for his costs of the Case Conference before Mossip J. This inappropriate. He did not ask for these costs. They are costs of a case conference, which are not usually granted as they include settlement discussions. Mossip, J., herself, was silent as to costs. She did not reserve costs of the Case Conference to the motion’s judge. There is no basis before me to make any apportionment of those costs. D. The Bill of Costs includes claims for amorphous things such as “email to client re-strategy”, and numerous emails to and from opposing counsel and the client, without describing their relationship to the summary judgment motion. E. Setting aside reductions from the Bill of Costs for events before 6 November 2019, the balance of the Bill of Costs contains a large number of entries that are not clearly related, on their face, to the summary judgment motion. F. The Bill of Costs includes claims for duplicated work, intra-office meetings, and review by a senior lawyer of work done by a clerk or junior lawyer, which are not recoverable on a party and party assessment. G. The work was excessive. Looking at the costs submissions as an example, the husband submitted a 12-page factum, an eight-page affidavit from the husband, and a nine-page Bill of Costs which appears to be an edited print out from the firm’s docket records. The total time claimed for the creation of the documents submitted on this costs motion alone was $1,690.

[31] In reviewing the Bill of Costs, I could find only about $3,000.00 of time that was clearly and unambiguously related to the summary judgment motion. Allowing for the fact that some of the time in the activities criticized above may have applied to the summary judgment motion, I estimate that the actual time related to the motion is perhaps $5,000.00 to $6,000.00.

[32] I turn now to the offers to settle.

[33] The husband served an offer to settle on 4 March 2020 which contained several parts, which were severable. One part of that offer indicated that if the wife accepted the separation date of 1 February 2011 before 9 March 2020, the wife would pay husband’s costs fixed at $5000 in relation to the date of separation motion. If the wife accepted the 1 February 2011 separation date after March 9, 2020, then husband could seek his costs of determining the date of separation.

[34] The wife served an offer on 6 March 2020 which contained a number of terms, which were not severable. The terms included the 1 February 2011 separation date and that neither party shall pay costs with respect to the date of separation. Specifically, there would be no cost payable by other party for today’s motion if the offer was accepted by 13 March 2020. If the offer was accepted after 13 March 2020, the wife was at liberty to seek her costs from the husband in relation to the date of separation.

[35] The wife did not accept any of the parts of the husband’s offer. He is entitled to enhance costs from 9 March 2022 20 March 2020, when the wife accepted husband’s separation date. This is a period of 11 days.

[36] In fixing the costs, as I have, I have considered the effect of the offers.

Order

[37] The costs of this summary judgment motion shall be payable in the cause of the Application, fixed at $2,500, all-inclusive.

TRIMBLE J.

Date: 11 August 2020

COURT FILE NO.: FS-19-95085 DATE: 2020 08 11

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: ROGER STEVEN PARDY, Applicants

AND ESTER MARY KELLY, Respondent

ENDORSEMENT

Trimble J. Released: 11 August 2020