Superior Court of Justice
BARRIE COURT FILE NO.: FC-12-064-01
DATE: 20200821
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Connie McMaster-Pereira Applicant
– and –
Michael Pereira Respondent
Counsel: Paul Daffern and Marta Ross, Counsel for the Applicant Natasha Razack, Counsel for the Respondent
HEARD: November 18, 19, 20, 21, 22, 25, 26, 27, 28, 29 and December 2, 2019 and by written submissions
RULING ON COSTS
DOUGLAS J.
[1] This is my ruling on costs arising from my Reasons for Judgment dated June 12, 2020.
[2] Applicant mother seeks costs of $250,000 in fees, disbursements of $23,430.87, reimbursement of $4,765 for a direct expenditure by Applicant mother to an accounting service, and HST as applicable. She relies upon 4 possible offers to settle in support of her claim for costs.
[3] Respondent father submits costs claimed by Applicant mother are excessive, the supporting bill of costs lacks sufficient detail, Applicant mother’s offers do not qualify as ‘’offers’’ within the meaning of the Family Law Rules and the claim ought to be reduced to remove costs not associated with child support. He says Applicant mothers’s claim should be reduced to $100,000. The court is urged to consider the financial impact of a further significant monetary burden upon Respondent father.
[4] The first step is to determine the successful party. Doing so requires consideration of the parties’ respective offers to settle and comparison to the result.
[5] Applicant mother relies upon offers contained in her settlement conference briefs for the events of July 18/18 and October 9/19. For the reasons set out in the decision of Pazaratz J. in Entwistle v. MacArthur, 2007 CanLII 17375 (ONSC) I conclude that such offers are not ‘’offers’’ within the meaning of Rule 18 and that they cannot be considered as provided in Rule 17(23). Therefore, these ‘’offers’’ have no influence on determination of costs.
[6] Applicant mother’s ‘’offer’’ dated May 9/19 is not signed by Applicant mother. It does not conform to the formal requirements of Rule 18. It is not an ‘’offer’’ and so I will not accord it any influence over this issue.
[7] Applicant mother’s offer dated November 28/19 conforms with the formal requirements of Rule 18. It is an ‘’offer’’ within the meaning of the Rules; however, its terms are such that they do not trigger costs consequences under Rule 18.
[8] Respondent father served an offer dated December 1/19. It conforms with the formal requirements of Rule 18. It is an ‘’offer’’ within the meaning of the Rules; however, its terms are also such that they do not trigger costs consequences under Rule 18.
[9] To assess relative success I am therefore left with the issues, the parties’ respective positions, and the result.
[10] The issue regarding parenting for Cruz was given relatively little time in court. It was resolved on the basis that Cruz continued to reside with the parties on a week-about basis. There was little if any dispute between the parties at trial. I treat this issue as neutral in determination of relative success.
[11] The primary issues in dispute were child support (ongoing and retroactive) and Respondent father’s income. The vast majority of effort expended throughout the course of these proceedings focused on these issues.
[12] Considering the parties’ respective positions on these issues, and the result, there can be no doubting Applicant mother was the successful party. She is presumed entitled to costs.
[13] I have examined Applicant mother’s bill of costs. It includes charges for court events for which costs do not appear to have been reserved. As best I can determine (given some absence of detail in Applicant mother’s bill of costs), those events consumed at least 9.8 hours of Mr. Daffern’s time and 65.3 hours of Ms. Ross’ time. The Rules require that the court decide costs at each step of a proceeding. If costs have not been reserved, I presume it was not the intention of the court to preserve a subsequent claim. I note as well that Applicant mother’s bill of costs inadvertently includes 2 charges of 6.3 hours of Ms. Ross’ time in relation to the July/18 appearance at settlement conference. To ensure such events are not included in consideration of costs, I would reduce Mr. Daffern’s time by 15 hours, and Ms. Ross’ by 70 hours.
[14] Having examined Applicant mother’s bill of costs, there appears to be some merit to Respondent father’s submission that the time expended is excessive. For example, if my reading of the bill is correct, over 26 hours of lawyers’ time was logged in relation to preparation for and attendance upon the settlement conference in July/18. This particular example has been addressed as above by removing the expended time from consideration of costs, but there appears overall to have been a greater expenditure of time than one might normally associate with the various steps in this proceeding.
[15] Having said that, I remain mindful that Respondent father’s conduct in relation to disclosure, largely documented in my Reasons, has contributed significantly to the time expended by Applicant mother’s counsel in furtherance of advocacy on her behalf.
[16] Respondent father’s criticism of Application mother’s bill of costs as lacking detail also has some merit. I encountered some difficulty in determining what services related to which court events, as noted above. Overall, however, I found Applicant mothers’s bill of costs to have sufficient detail to allow a proper assessment of this issue.
[17] As to Respondent father’s submission that Applicant mother’s claim should be reduced to remove costs associated with issues unrelated to child support, as noted above, very little time was expended in court on this issue. I cannot determine how much of Applicant mother’s bill of costs relates to this issue; however, in reply submissions Applicant mother says her costs associated with this issue are approximately $10,000. Respondent father has not indicated how much of his bill of costs relates to this issue, a piece of information that might have offered some guidance. I will estimate the associated costs to be approximately 10%, to be deducted from Applicant mother’s potential claim.
[18] As to bad faith on the part of Respondent father, while his conduct as outlined in my Reasons certainly rises to the level of ‘’unreasonable’’ within the meaning of Rule 24, I find that it does not meet the high threshold for a finding of ‘’bad faith’’. I do consider Respondent father’s unreasonable conduct a direct contributor to Applicant mother’s increased fees and disbursements.
[19] Respondent father’s unreasonableness can also be considered in relation to his offer. Upon review of Respondent father’s offer, it is well off the mark in comparison to my findings at trial. His position, as defined in his offer, appears distant from reality. I find it represents another component of Respondent father’s unreasonable conduct in this proceeding.
[20] The primary issue being child support, a right of the children, the issues in dispute were very important.
[21] Ultimately, costs are designed to partially indemnify successful litigants, encourage settlement and discourage unreasonable conduct.
[22] In the circumstances described above, I find the appropriate approach is to allow partial indemnity costs, but in a greater amount than might otherwise be proportionate on a Motion to Change, to reflect the additional expense to which Applicant mother was put in pursuit of the truth about Respondent father’s income.
[23] Applicant mother calculates total fees for counsel and law clerk in the amount of $192,216.50 on a partial indemnity basis, before HST. As indicated above, from this I would deduct 15 hours of Mr. Daffern’s time and 70 hours of Ms. Ross’ time, totalling (at their respective partial indemnity hourly rates) $21,000. I would further deduct 10% for the non-support issues, in the amount of $19,221. Applying these deductions brings Applicant mother’s claim for fees to $151,995.
[24] The sum of $151,995 is higher than would normally be associated with this type of proceeding. I remind the parties that this Motion to Change consumed 11 days of trial time, focused almost entirely upon Respondent father’s income, including necessarily imperfect testimony from third parties who were tasked with trying to make some sense out of the incomplete disclosure and inconsistent evidence provided by Respondent father. I find that this unusually high amount of costs is justified in the circumstances, including Respondent father’s unreasonable conduct.
[25] The disbursements as well are appropriate and again related to Respondent father’s unreasonable conduct.
[26] I would summarize the costs as follows:
- Fees $151,995.00
- HST on fees $ 19,759.35
- Non-taxable disbursements $ 1,917.58
- Taxable disbursements $ 23,430.87
- HST on taxable disbursements $ 3,046.01
- Debits and Credits disb. (incl. HST) $ 4,765.00 Total $204,913.81
[27] This award of costs will undoubtedly represent a further significant financial burden to Respondent father. I have made findings regarding his income that suggest a much greater ability to afford this burden than that which he urges upon me in his submissions. Relieving him of even some of this burden would be incompatible with the objectives of costs as set out in Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905 (Ont.C.A.), a failure to recognize the impact of Respondent father’s unreasonable conduct upon Applicant mother and an opportunity missed to discourage litigants from engaging in conduct that drives litigation inexorably forward without apparent regard to the consequences.
[28] For all of these reasons,
ORDER TO GO:
Respondent father shall pay to Applicant mother the sum of $204,913.81 for costs arising from the Reasons for Judgment dated June 12, 2020.
This order is operative and enforceable upon release of this endorsement under my electronic signature without any need for a signed or entered formal typed order. Approval is dispensed with. The parties shall submit a formal order for signing and entry upon resumption of regular court operations.
DOUGLAS J.
Released: August 21, 2020