COURT FILE NO.: FC-12-2338-1
DATE: 2020/01/28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Line Fournier
Applicant
– and –
Marc Labranche
Respondent
Carol Craig, Counsel for the Applicant
Michelle Blais, Counsel for the Respondent
HEARD: In writing
Decision on Costs
Justice Engelking
[1] A trial was heard on the Motion to Change from January 28 to February 6, 2019. My Reasons for Judgment were released on August 7, 2019, with slightly Amended Reasons for Judgment having been released on August 29, 2019. In my Reasons, the parties were invited to make written submissions with respect to the issue of costs if they were unable to agree on liability for same. This my decision on costs.
[2] The Applicant, Ms. Fournier, is seeking an order of costs of $193,421.22 plus HST and disbursements. The Respondent, Mr. Labranche submits that the hours and hourly rate claimed by Ms. Fournier’s counsel are excessive, that he tried to reduce costs by proposing that the parties’ respective experts meet, and that the sum requested by Ms. Fournier is not proportional or reasonable.
[3] For the reasons that follow, Mr. Labranche shall pay Ms. Fournier costs in the amount of $130,000, inclusive of HST and disbursements, such costs to be enforceable by the Family Responsibility Office (“FRO”).
Relevant Facts
[4] Ms. Fournier brought a Motion to Change the Final Order of Justice MacLean dated December 20, 2013, in which she sought a reduction in her child support payable effective January 1, 2016. Mr. Labranche filed a Response to the Motion to Change in which he sought retroactive adjustments increasing support from July 1, 2014, however, he later amended his Response to include a claim for retroactive adjustments to 2013.
[5] The issues to be decided included whether the court’s discretion to retroactively vary support should be exercised and what Ms. Fournier’s income was for the years in question. In my decision, I declined to exercise the court’s discretion to retroactively vary child support for the years 2013 to 2015 inclusive, and I reduced the support payable effective January 1, 2016, based on Ms. Fournier’s reduced income. The effect of my decision resulted in Ms. Fournier having overpaid child support by approximately $113,000 between January 1, 2016 and the date of my Reasons. But for the small question of the tax rate to be applied to Ms. Fournier’s disability income commencing in 2016, Ms. Fournier was the successful party on the motion. As such, pursuant to Rule 24(1) of the Family Law Rules, she is presumptively entitled to an order of costs.
The Law
[6] The Ontario Court of Appeal has held that the Family Law Rules on costs 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.”[^1]
[7] Rule 24(12) of the Rules sets out a list of factors the court shall consider in determining an appropriate amount of costs, including that there be reasonableness and proportionality in any costs award.[^2] Factors to be considered include each parties’ behaviour, their time spent, any offers to settle, legal fees, expert witness fees and any other properly paid expenses.[^3] Rule 18(14) provides that there are cost consequences to not accepting an offer if the criteria in that rule are met.[^4]
[8] Both parties provided Offers to Settle to the other. Ms. Fournier’s offers are dated April 6, 2018, April 25, 2018 and December 13, 2018. Ms. Fournier submits that partial indemnity costs should be awarded to her prior to April 25, 2018 and full indemnity costs should be awarded subsequent to her April 25, 2018 offer, as it activated the cost consequences outlined in Rule 18(14) of the Family Law Rules, in that it was more favourable to Mr. Labranche than was the outcome of the trial.
[9] Ms. Fournier’s offer of April 25, 2018, provided that all claims for retroactive adjustments to December 31, 2017 would be withdrawn, and that commencing January 1, 2018, she would pay set-off child support on $300,000, to be adjusted on each calendar year based on “her actual income (with any disability income grossed up to reflect that it is not taxable to her, and her professional income to be calculated as per her accountant valuator report) up to a maximum of $625,000 per year, subject only to a material change in the child’s circumstances.”
[10] Ms. Fournier’s offer of December 13, 2018 was in two parts, which were severable one from the other. In the first part, she offered to deposit $40,000 into an account in Tye’s name to be used for her post-secondary education or divided between the parties if she elected to not go to post-secondary school, and to pay $20,000 directly to Mr. Labranche to attend to any and all retroactive adjustments to December 31, 2017. The second part offered for Ms. Fournier to pay on-going support commencing January 1, 2018 again based on her annual income, including “(…her professional income to be calculated as per her accountant valuator report) up to a maximum of $625,000 per year.”
[11] Mr. Labranche submits that he could not accept Ms. Fournier’s offer of April 25, 2018 or the second part of her offer of December 13, 2018 because she capped her income at $625,000 per year, which he argues is not in keeping with the Federal Child Support Guidelines, (though it is consistent with their agreement and consent order in 2013) and because it was only her accountant valuator who could determine it. He does not indicate why he did not accept part one of the December offer. Regardless, I find both offers were more favourable to him than was the outcome of the trial, and they do trigger the cost consequences of Rule 18(14). Of the total amount sought by Ms. Fournier, $159,724.50 is being requested on a full recovery basis post-April 25, 2018.
[12] The offers provided by Mr. Labranche dated November 8, 2018 and January 13, 2019, were admittedly less favourable to him than was the outcome at trial.
[13] Both of the issues of when and if the court should exercise its discretion to vary retroactive support and of what Ms. Fournier’s income was were complex. In particular, the issue of whether a non-recurring capital gain Ms. Fournier received in 2015 formed part of her income was a very complex one, on which the parties’ experts disagreed.
[14] I do not find that either parties’ behavior in the litigation was inappropriate. While I found in the trial that Ms. Fournier’s behaviour was not “blameworthy”, I also found that she was hampered by her disability in being able to promptly and completely respond to requests, and even sometimes orders, for disclosure. It is very likely that her inability contributed to delay in the case and consequently increased Mr. Labranche’s costs.
[15] Mr. Labranche submits that it is not reasonable for Ms. Fournier’s counsel to charge $360 per hour as a 2007 Call to the Bar when his own counsel’s rate was $360 per hour as a 1992 Call to the Bar. He further argues that the number of hours charged by Ms. Fournier’s team of lawyers of 684.05 was excessive in contrast to his counsel’s total of 464.4 hours. While I accept that some additional hours would have been required by Ms. Fournier’s counsel to organize the file and financial disclosure after changes to her counsel, Mr. Labranche cannot be held responsible for that. I, thus, agree on both accounts; I would reduce Ms. Fournier’s counsel’s hourly rate to $300 per hour for Ms. Craig to somewhat reflect the difference in years called to the Bar, and I would also reduce the hours billed to 500 to be somewhat consistent with that of Mr. Labranche’s counsel, which would have the combined effect of reducing the bill by about $50,000.
[16] Even with the aforementioned adjustments, Mr. Labranche submits that in order for the costs award to be reasonable and proportional, the court must consider his ability to pay. He relies on the Ontario Court of Appeal having found in paragraph 18 of Beaver v. Hill, 2018 ONCA 840 that “…it may be appropriate, in the exercise of a judge’s overriding discretion, to reduce the quantum of costs that a party will have to pay because of their financial condition…” He relies also on Delellis v. Delellis and Delellis, 2005 36447 (ONSC), where at paragraph 9, Justice Harper states:
Costs must be proportional to the amount in issue and the outcome. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant. In that vein, the reasonable expectation of the losing party concerning the quantum of costs is a relevant factor to consider. In this case, there was a genuine triable issue on the liability to pay anything and this respondent’s obligation to pay costs should not ignore that.
[17] Ultimately, the bill of costs submitted by Mr. Labranche’s counsel totaled $177,593.68 on a substantial indemnity basis, and $130,555.40 on a partial indemnity basis. Mr. Labranche would have, therefore, had a reasonable expectation that his quantum of costs would be upwards of $100,000.
[18] In this case, as in Delellis, there was a genuine triable issue on the liability of Ms. Fournier to pay increased child support, particularly in 2015. I cannot ignore it in assessing Mr. Labranche’s obligation to pay costs. There was not the same genuine issue, however, with respect to decreasing Ms. Fournier’s support obligation as of January 1, 2016. Mr. Labranche did not, nevertheless, resolve that issue prior to trial in accordance with either of Ms. Fournier’s offers, which I find to have been reasonable.
[19] In the circumstances of this case, I find that Mr. Labranche shall pay costs to Ms. Fournier of $130,000, inclusive of HST and disbursements.
[20] Ms. Fournier has requested that order of costs be enforced as child support. The entirety of the case is attributable to the issue of child support. The only question is whether the order falls within or outside of the scope of s. 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act[^5]. In Clark v. Clark, 2014 ONCA 175, the Ontario Court of Appeal noted at paragraph 63:
[63] Thus, under both official language versions of the section, by reason of the inclusion in the s. 1(1)(g) definition of “support order” of “the payment of legal fees or other expenses arising in relation to” or flowing from support or maintenance, costs awards concerning support or maintenance form part of a “support order” that is “enforceable in Ontario for the payment of money as support or maintenance”. In Ontario, the FRO is the body responsible for the enforcement of such orders.
[21] Further, in Clark at paragraph 77, the court found that the Appellant in that case “pointed to no authority for the contention that where a child support claim is dismissed, costs incurred in respect of that claim cannot form part of a support order enforceable by the FRO”.
[22] There is a controversy in the caselaw as to whether a costs order relating to support can be enforceable by FRO when it is in favour of the support payor.[^6] I do not have to answer that question, as in this case, both parents are support recipients. I am of the view that costs incurred by Ms. Fournier to vary the support order and defend the claim for a retroactive variation can be enforceable by the FRO.
Order
[23] For the all the reasons given above, I order as follows:
(1) The Respondent, Mr. Labranche, shall pay to the Applicant, Ms. Fournier, costs for the Motion to Change fixed in the amount of $130,000 inclusive of HST and disbursements; and,
(2) This order constitutes a “support order” within the meaning of the Family Responsibility and Support Arrears Enforcement Act, 1996 and is enforceable by the Director.
Justice Engelking
Released: January 28, 2020
COURT FILE NO.: FC-12-2338-1
DATE: 2020/01/28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Line Fournier
Applicant
– and –
Marc Labranche
Respondent
decision on costs
Engelking J.
Released: January 28, 2020
[^1]: Mattina v. Mattina, 2018 ONCA 867, paragraph 10 [^2]: Rule 24(12), Family Law Rules, O.Reg. 114/99, as am. [^3]: Ibid. [^4]: A party is entitled to costs on a full recovery basis if the offer was made at least one day before the motion, did not expire or was not withdrawn, is not accepted and the order made is as or more favorable than the offer. [^5]: S.O. 1996, c.31 [^6]: See M.B. v. S.B.B., 2019 ONSC 3960 and Fielding v. Fielding, 2019 ONSC 833 where Justice McPhee and Monahan respectively both find that it cannot and Shelley v. Shelley, 2019 ONSC when Justice Mitrow says that it can.```