Superior Court of Justice - Ontario
COURT FILE NO.: FC-18-2106
DATE: 2020/09/29
RE: FIRAS SHOUMALI, Applicant
- and -
MICHELA TELATIN, Respondent
BEFORE: D. Summers J.
COUNSEL: Mary Cybulski and Katherine Cooligan, for the Applicant
Lisa Sharp, for the Respondent
HEARD: In Writing
COSTS ENDORSEMENT
Overview
[1] This endorsement addresses the costs of a seven-day trial where the central issues were custody and whether the child’s primary residence would be in Serbia with the respondent mother, or in Ottawa, where the applicant father lives. The proceeding was a custody application of first instance argued in the context of relocation. There were issues of retroactive and ongoing child support. The applicant’s entitlement to spousal support was disputed, as was quantum. Each party sought to impute income to the other. My full reasons can be found at 2020 ONSC 563.
[2] The applicant, Mr. Shoumali, submits that success was divided, and each party should bear their own costs. He acknowledges that the respondent, Ms. Telatin, was successful in obtaining an order for sole custody and primary residence in Serbia, but says he was successful on spousal support and the issue of her income. He made two formal offers. Both were severable. He argues his offers demonstrate a greater willingness to compromise than revealed by Ms. Telatin’s offers. He also asks the court to give due consideration to the difficulty of the all or nothing nature of mobility cases when the result is being separated from your child by thousands of miles. Finally, he asks the court to consider his financial circumstances.
[3] Ms. Telatin submits she was the successful party and is entitled to costs under Rule 24(1) of the Family Law Rules.[^1] She also argues that her offers were almost identical to, or better than, the outcome at trial. She seeks substantial recovery costs in the amount of $80,351.00 inclusive of disbursements and HST based on a solicitor-client account of $100,439.99.
[4] For the reasons that follow, I find Mr. Shoumali should pay costs to Ms. Telatin of $37,500 to be set-off by the retroactive spousal support she owes to him.
Success
[5] On the central issue of custody, each party argued at trial that they were the primary parent. Mr. Shoumali sought joint custody, primary residence in Ottawa, with access to Ms. Telatin on school holidays if she remained in Serbia. In the event she returned to Ottawa as she said she would do if the child was ordered back, Mr. Shoumali sought joint custody and equal time sharing. Ms. Telatin sought sole custody whether living in Ottawa or Serbia but asked for an order that the child be permitted to remain in Serbia with her. It is where they had moved as a family for her job and separated a few months later. I found that both parties had been actively involved parents. There were times during the relationship when they parented jointly and times where one or the other had been the primary parent. However, overall, Ms. Telatin was the parent who assumed the lions’ share of responsibility for all aspects of the care and services needed by the child. I found she was the CEO for the family. After considering all of the circumstances including each party’s plan of care and their inability to communicate with one another, I found it was in the child’s best interests to award sole custody to Ms. Telatin. She was the successful party.
[6] Ms. Telatin was also successful in obtaining an order allowing the child to remain in Serbia. I found that it was in the child’s best interest to remain there, subject to parenting time with her father in Ottawa, or elsewhere as agreed by the parties, at least four times a year for a minimum of 10 days each time plus three weeks in the summer to increase to four weeks when the child reaches 7 years of age. The parenting time awarded to Mr. Shoumali was slightly more generous than Ms. Telatin’s position at trial. She sought to share travel costs in proportion to income. I ordered that she pay all costs until October 2020. Thereafter, each party would pay the cost of two trips per year.
[7] The parties each enjoyed some success on their respective claims to impute income. Mr. Shoumali sought to impute income to Ms. Telatin of $273,644 CDN after adjusting for the USD exchange rate and applying a tax gross up to account for the non-taxable status of her income. Ms. Telatin argued her income was the equivalent of $234,313. I found it to be $270,000.
[8] Ms. Telatin asked the court to find that Mr. Shoumali was underemployed and to impute income to him of $204,905. It was Mr. Shoumali’s position that his income should be limited to his current employment earnings in Ottawa plus interest earnings for a total of $49,993 annually. He argued that he was not underemployed and should not be required to return to his career in international aid. I found that he was underemployed and imputed annual income of $150,000 commencing November 1, 2020 to allow him a reasonable period to obtain employment commensurate with his skills and experience. The amount of income imputed was based on Mr. Shoumali’s prior tax-exempt earnings over the years and his admission at the interim motion before Shelston J. in November 2019, regarding the rate of pay provided by international aid organizations to professionals in his field of work.
[9] Based largely on her success imputing income to Mr. Shoumali, Ms. Telatin also prevailed on the issue of ongoing child support but was not successful in her retroactive claim. It was not until early May 2019 that Mr. Shoumali had employment in Canada. I ordered Mr. Shoumali to pay child support of $461 per month commencing June 1, 2019 until November 1, 2020 when it increased to $1,299 based on the income imputed to him. On the issue of s. 7 expenses, I ordered the parties to share those costs in proportion to income excluding the child’s private school costs in Serbia. On this issue, the outcome favoured Mr. Shoumali.
[10] Ms. Telatin disputed Mr. Shoumali’s claim for spousal support. I found both compensatory and needs-based entitlement and ordered support of $2,000 per month between November 1, 2018 until May 31, 2019. Effective June 1, 2019 the amount payable decreased to $1,600 per month. A further decrease to $700 per month was ordered effective November 1, 2020. Spousal support in this amount continues until October 31, 2021 when it ends. Mr. Shoumali was largely successful on this issue but did not experience the outright success that he claims. The parties cohabited for five years. Mr. Shoumali sought indefinite support at trial. My order was for time-limited support.
[11] Each party made two offers. Each was severable. Ms. Telatin argues that her offers were almost identical to or better than my order. One has only to look at spousal support to find that is not the case. Neither offer provided for anything other than a full release of spousal support. Moreover, there were other areas where her offers differed from my order.
[12] In my view, Mr. Shoumali’s offers demonstrated a greater willingness to compromise. One example was the provision in his second offer that allowed Ms. Telatin and the child to remain in Serbia until December 2020 when her most recent contract would end. In contrast, Ms. Telatin’s offer was to remain in Serbia with the child for as long as her employer extended her current contract. After that she would have the ability to move with the child wherever her next contract took her, upon sixty days’ notice to Mr. Shoumali.
[13] All parts of Mr. Shoumali’s first offer were severable and capable of acceptance independent of other parts. His second offer was only partially severable. Parts E and H addressing retroactive child support and her claim for a restraining order should have been accepted by Ms. Telatin. They equalled the outcome at trial. Part F addressing spousal support was better for Ms. Telatin than my order, but it was not eligible for acceptance on its own.
[14] Ms. Telatin’s two offers were very similar to one another. The only substantive difference between the first and second offer on the parenting issues was to add a fourth week to Mr. Shoumali’s summer access when the child turned 7 years of age. This particular change was consistent with my order but other aspects of her offer on access were not as favourable to Mr. Shoumali as my order. Ms. Telatin’s position on child support did not change from offer to offer but both showed willingness to impute income at amounts lower than I found.
[15] Ms. Telatin met both offers for sole custody and the child remaining in Serbia.
[16] Considering the outcome at trial in relation to the positions argued and the offers to settle as a yardstick for success,[^2] I find that success was divided between the parties. However, that does not mean success was equal, nor does it automatically lead to an order for no costs.[^3] A comparative analysis indicates that Ms. Telatin was more successful, overall, and her success included the dominate issues of custody and mobility. I find Ms. Telatin is entitled to a cost award that factors in her success, Mr. Shoumali’s general success on spousal support, and their divided success elsewhere.[^4]
The Amount to Be Paid
[17] When determining the amount of costs, rule 24(12) of the Family Law Rules,[^5] require that the court consider 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
(vii) the court can also consider any other relevant matter.
Each Party’s Behaviour
[18] The very nature of a custody dispute is important to the parties and the child. Adding the element of relocation, amplifies the weight and magnitude of the dispute, especially where large distances are involved. In this case, there was a measure of factual complexity around the somewhat variable nature of the parties’ parenting relationship that often depended on where they were living, which one of them was working, the location of their employment, the international nature of their careers, the number of times they moved between cities, countries and continents, the reasons for those moves, and allegations of psychological abuse.
[19] Each party alleges that the other behaved unreasonably. According to Mr. Shoumali, Ms. Telatin behaved unreasonably in relation to an issue involving significant money transfers from her to him, particularly after they moved from the United Kingdom to Canada in 2015. He challenges the time she spent on this issue at trial when her pleadings did not include a claim for reimbursement, and her testimony that she intended to wait and see the outcome of the trial before deciding whether to bring a separate action. In the context of this litigation, I do not consider that Ms. Telatin’s behaviour was unreasonable in this regard. The issue of these funds was raised first by Mr. Shoumali. He testified that the money transfers were gifts from her to him. The total exceeded $800,000 CDN. Mr. Shoumali’s evidence left Ms. Telatin little alternative but to provide the court with her evidence to refute his allegation of gift. She acknowledged that Mr. Shoumali had returned a large portion of the monies before they separated but contended that he still had a significant sum in his possession. She asked the court to determine that amount and consider it in relation to any spousal support that may be ordered. Although Ms. Telatin did not provide sufficient evidence to allow the court to consider the funds in the manner she sought, I do not consider the time spent on this issue or her behaviour in relation to it, to have been unreasonable. Any decision that she may make in the future to pursue a claim for the return of funds will come with its own consequences.
[20] Ms. Telatin alleges that Mr. Shoumali’s behaviour was not only unreasonable but rose to the level of bad faith. She urges the court to draw this conclusion for reasons that are not readily distinguishable from the mere fact that Mr. Shoumali decided to pursue his case at all. She also relies on my credibility findings that did not favour Mr. Shoumali. I do not agree with Ms. Telatin that Mr. Shoumali behaved unreasonably or that he acted for one purpose when his intent was really another. I am satisfied that Mr. Shoumali pursued his case out of love for his child and not with a significant intent to harm Ms. Telatin.[^6]
The Time Spent by Each Party
[21] Mr. Shoumali challenges aspects of the time spent by Ms. Telatin. Her Bill of Costs reflects 388.45 hours – an amount more that double the 169.7 hours spent by his counsel. Her full recovery solicitor-client account was $100,439.99 whereas his was $69,569.86. Ms. Telatin employed the services of one lawyer and one articling student. Mr. Shoumali had three counsel and one clerk working on his file, however, all charged different hourly rates. Based on my review of his Bill of Costs, the tasks undertaken by each professional and the corresponding fees were commensurate with their respective years of experience. I find the disparity in time spent is excessive and adjust for it in my award. Moreover, Ms. Telatin did not provide any explanation that would account for the significant difference in time spent and fees incurred.
Written Offers to Settle Including Those That Do Not Meet the Requirements of Rule 18
[22] Ms. Telatin made one informal attempt to settle the issue of spousal support by offering that Mr. Shoumali retain a portion of the funds that she alleged he owed her and then return the rest. I do not attach any weight to this proposal. Ms. Telatin did not plead this relief. A settlement proposal on spousal support that was tied to a claim not made should not, in my view, factor into a cost award. Moreover, the amount proposed as lump sum support is less than the likely net benefit of the amount ordered.
Any Other Relevant Matter
[23] I consider Mr. Shoumali’s submission that he does not have the ability to pay a costs award. He does not own any real property, he says his savings have been depleted and his income remains unchanged from trial except that he no longer earns any interest income. He points out that Ms. Telatin’s financial position is far superior to his.
[24] It is well settled law that the court can consider the financial situation of the parties in setting the amount of costs in a family law case.[^7] However, a party’s limited financial circumstances cannot be used as a shield against any liability for costs but will be taken into account regarding the quantum of costs.[^8] Here, I find that Mr. Shoumali’s financial statement filed at trial does indicate an ability to pay some amount in costs. It showed a net worth of approximately $91,000 with over $76,000 in his bank accounts. No debt was disclosed.
[25] I also consider the difficult “all or nothing” nature of a relocation case that results in the child living far from the unsuccessful parent with access only a few times a year. These cases are difficult to settle, among the most difficult for a court to decide and the outcome among the most difficult for the unsuccessful parent to accept. Circumstances such as those presented in this case can leave a parent feeling little option but to compete for the ability to maintain their relationship with their child.
[26] Finally, I take account of the following general principles that apply to cost orders,
Costs awards are discretionary. Reasonableness and proportionality are two important principles that guide the court’s discretion.[^9]
The court must have regard to what is a fair and reasonable amount to be paid by the unsuccessful party considering the circumstances in a particular proceeding, rather than any exact measure of the actual costs to the successful litigant.[^10]
In deciding what is fair and reasonable, the expectation of the parties concerning the quantum of a costs award is a relevant factor. [^11]
Modern costs rules are designed to foster 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.[^12]
[27] In all of the circumstances here, including divided success, outright success on some issues, the nature of the issues in dispute, Mr. Shoumali’s limited means, Ms. Telatin’s superior financial position, Mr. Shoumali’s obligation to pay child support and share access travel costs, the primary purposes of a costs award, and the amount he might reasonably expect to pay in costs measured in relation to his own legal expenses, I find it fair and reasonable that Mr. Shoumali pay costs of $37,500.
[28] Ms. Telatin asks that costs be set-off against the spousal support she owes. Section 111 of the Courts of Justice Act[^13] give the court jurisdiction to set-off debts between the parties. In these circumstances, I find it fair and reasonable to set-off the amount Mr. Shoumali owes in costs by the sum of $14,000 which is the amount owed by Ms. Telatin in retroactive spousal support. I decline to set-off costs against the periodic spousal support ordered. The balance of $23,500 shall be paid in thirty-six equal instalments plus post-judgment interest.
D. Summers J.
Date: September 29, 2020
COURT FILE NO.: FC-18-2106
DATE: 2020/09/29
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: FIRAS SHOUMALI, Applicant
- and -
MICHELA TELATIN, Respondent
BEFORE: D. Summers J.
COUNSEL: Mary Cybulski and Katherine Cooligan, for the Applicant
Lisa Sharp, for the Respondent
COSTS ENDORSEMENT
D. Summers J.
Released: September 29, 2020
[^1]: O. Reg 114/99. [^2]: Osmar v. Osmar (2000) 2000 20380 (ON SC), 8 R.F.L. (5th) 387 (Ont. SCJ). [^3]: Jackson v. Mayerle, 2016 ONSC 1556. [^4]: Firth v. Allerton, 2013 ONSC 5434. [^5]: Supra, note 1. [^6]: S.(C.) v. S.(M.) 2007 20279 (ON SC), [2007] O.J. No. 2164; Stewart v. McKeown, 2012 ONCJ 644 (OCJ); F.D.M. v. K.O.W. 2015 ONCJ 94 (OCJ; Harrison v. Harrison , 2015 ONSC 2002. [^7]: M. (C.A.) v. M. (D.), 2003 18880 (ON CA), [2003] O.J. No. 3707 (Ont. C.A.). [^8]: Snih v. Snih, 2007 20774 (Ont. SCJ). [^9]: Beaver v. Hill, 2018 ONCA 840. [^10]: Boucher v. Public Accountants Council for the Province of Ontario 2004 14579 (ON C.A.), 71. O.R. (3d) 291. Cited with approval in Serra v. Serra, 2009 ONCA 395. [^11]: Ibid. [^12]: Mattina v. Mattina, 2018 ONCA 867. [^13]: R.S.O. 1990, c. C.43.```