NEWMARKET COURT FILE NO.: FC-12-40780-00
DATE: 20200207
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mark Meitine
Applicant
– and –
Marina Grigoryan
Respondent
Alexandra Abramian, for the Applicant
Unrepresented
HEARD: By written submissions
McDermot J.
INTRODUCTION
[1] This is the final step in the Respondent Mother’s Motion to Change. She brought this proceeding to change a consent order dated May 19, 2015 which provided Mr. Meitine, the Applicant Father, sole custody of the parties’ two children. Although that order provided that the children were to reside with the Applicant Father, by the time this matter came to trial, care of the children was being equally shared pursuant to the recommendations of the social work investigator appointed by the Office of the Children’s Lawyer.
[2] Ms. Grigoryan asked for both sole custody and primary residence of the children. After hearing an 11-day trial, I dismissed her Motion to Change in its entirety. Although a portion of the trial was taken up by financial issues, including extensive cross examination of Mr. Grigoryan on her financial situation, the parties eventually settled the financial issues prior to the conclusion of the trial. There is little doubt that the primary issue at trial and the issue that consumed most of the efforts of the parties was the Respondent’s request to change custody and residence of the children.
ANALYSIS
[3] Ms. Abramian on behalf of the Applicant Father now requests costs of the trial and prior proceedings. She requests costs of $128,917.14 inclusive of disbursements and HST. Her claim is for full recovery costs partially as a result of her client’s success at trial and partially because of his Offer to Settle, which was made on November 17, 2018 and which essentially offered the result at trial: a dismissal of the Respondent’s Motion to Change and continuation of the shared custody regime earlier agreed to between the parties.
[4] Ms. Grigoryan represented herself in these proceedings. She has filed costs submissions which acknowledge the Applicant’s success in the proceedings. However, she offers only $40,000 in costs payable at the rate of $250 per month because of the following:
a. The offer to settle was not severable and included a financial offer which was bettered, as far as she is concerned, by the actual financial settlement between the parties arrived at prior to the completion of the evidence at trial;
b. The costs requested and set out in the Bill of Costs filed by the Applicant are excessive; and
c. She is of modest means and income and cannot afford to pay the costs of trial.
[5] Neither party raised any issues of bad faith or misconduct.[^1]
[6] As entitlement to costs by the Applicant and his success at trial is acknowledged, the Respondent’s submissions define the issues between the parties concerning the amount of costs payable by the Respondent.
Offer to Settle
[7] Where a litigant has made an offer to settle and the result is better at trial than as set out in an offer to settle served by that litigant, that party is entitled to full recovery costs from the date of the offer. Rule 18(14) of the Family Law Rules[^2] reads as follows:
(14) A party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:
If the offer relates to a motion, it is made at least one day before the motion date.
If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
The offer does not expire and is not withdrawn before the hearing starts.
The offer is not accepted.
The party who made the offer obtains an order that is as favourable as or more favourable than the offer.
[8] In the present case, the Applicant is correct when he says that his offer was spot on the result concerning custody and access. Paragraphs 1 and 2 of the offer provided that he would continue to have sole custody of the children and that the shared arrangement that the parties had earlier agreed to would continue.
[9] Were custody and access the only issues addressed by the offer, the Applicant would be entitled to full recovery costs from November 17, 2018 on as the offer otherwise complied with the provisions of Rule 18(14). However, the offer also contained financial provisions, including a provision that the Applicant would pay differential support based on the shared arrangement and that Ms. Grigoryan would pay a proportionate share of the Applicant’s s. 7 expenses including the tuition for Kayla’s Children Centre. That was not the result at trial as the parties settled their financial issues differently, with neither party paying child support to the other, and with each party bearing their own s. 7 expenses. The Applicant’s s. 7 expenses are particularly onerous, as he pays for private schooling for these children who are on the autism spectrum.
[10] An offer has to be wholly equal to or better than the result achieved at trial: see Gurley v. Gurley, 2013 ONCJ 482 where Sherr J. stated at para. 9:
The offer included incidents of custody that were not included in the final order, including a term that the father could apply for the children's identification, including passports, without the mother's consent, and a term that the mother not expose the children to smoke or marijuana use. Close does not count when applying subrule 18 (14). Its presumptive costs consequences were not triggered by this offer.
[11] Even though the financial issues were settled in the present case rather than being adjudicated on, the same principle applies. If the result at trial, through settlement or decision, is not the same as or better than all of the terms of the offer, the court cannot presumptively award the costs of a proceeding under Rule 18(14). Nothing in that rule permits a court to presumptively award costs because the party making the offer bettered part of the offer. Without the offer being severable, the Applicant is only entitled to partial recovery costs based upon his success in the proceedings, something the Respondent already acknowledges.
[12] That might have been remedied had the offer stated that its terms were severable, which would have allowed me to award costs based only upon the major issue at trial, which was the mother’s claim for a change in custody. Without a severability clause, the offer cannot be used to presumptively award full recovery costs because the financial provisions in that offer differed from the end result. Wildman J. spoke to the issue of the severability of an offer in Paranavitana v. Nanayakkara, 2010 ONSC 2257, [2010] O.J. No. 1566 (S.C.J.) in a statement that is particularly applicable to the present case at para. 13 and 14:
13 Unfortunately, this offer was not severable. There would have been no disadvantage to the wife in making the custody offer, in particular, severable from the financial and property terms. Severable offers are an underused tool that can confer considerable settlement and cost advantages. Because of the full recovery provisions of Rule 18(14), they can provide much more flexibility to the court to award full recovery for at least a portion of the overall costs, if the party is successful on only some of the issues. Had the custody terms of the wife's offer been severable from the other terms, I would have been prepared to consider ordering full recovery costs on the custody issue from the date of the offer forward. As this was the majority of the trial time, that would have been a significant cost advantage to the wife.
14 However, as the offer was not severable, the wife would have to do as well or better than all the terms of the offer, in order to take advantage of the full recovery cost provisions of Rule 18(14). Since the husband got an additional week of access, as well as an order that spousal support would reduce from $1000 in three years, Ms. Nanayakkara did not do as well as or better than her offer in its totality.
[13] Wildman J. goes on to state that this does not prevent the court from taking the offer into account when awarding costs under Rule 18(16).
[14] However, the Applicant points out that he bettered his offer on all points, considering the settlement. On the financial issues, he had offered to pay the Respondent $15,663 for arrears of support, as well as net set-off child support of $523.80 per month. He ended up paying no arrears and no set-off child support after the settlement.
[15] The offer may have provided for a more beneficial financial settlement to the Respondent, but the problem that I have is that the Respondent could not accept the financial terms of the settlement without also agreeing to a dismissal of her Motion to Change. Perhaps she should have done this, but it was not an option to her to settle only the financial issues through the offer to settle as it was not severable. Again, to parse out parts of the offer, using settlement as part of the result and the trial result for the remainder, strikes me as unfair where the offer is not severable, and the losing party does not have the option of accepting part of the offer.
[16] I intend, however, to take the offer into account when quantifying costs as permitted under Rule 18(16).
Reasonableness of Costs
[17] Under Rule 24(11)d, the court court is required to address “the time properly spent” on the file. This involves reviewing the Bill of Costs provided by the Applicant as part of his costs submissions.
[18] The Respondent says that the Bill of Costs filed by the Applicant is unreasonable because of the following:
a. The Applicant claims costs for matters, such as motions and conferences for which costs have already been awarded; and
b. The Respondent says that the Applicant’s lawyer has overbilled her time on a number of instances.
Double Billing Issue
[19] In her submissions, the Respondent says that the Applicant has included in her Bill of Costs time spent on matters previously addressed in these proceedings. She has filed endorsements respecting a number of events for which costs were addressed. She says that the Applicant is not entitled to any costs prior to August 15, 2018 as a result.
[20] Ms. Abramian has responded by addressing each of those events in the Applicant’s costs reply.
[21] The events in issue are as follows:
June 24, 2015 Motion brought by Applicant re Advance on Equalization Payment and Financing of Matrimonial Home
[22] Kaufman J. heard this motion and granted the Applicant the relief requested. He noted that the Respondent did not file material but gave oral submissions concerning the motion. Kaufman J. ordered the Respondent to pay $1,500 in costs for the motion from her share of the net proceeds of the home.
[23] The Bill of Costs filed by the Applicant has no entries prior to June 29, 2015 and the motion was heard prior to that date. There are no costs claimed by the Applicant concerning the June 24, 2015 motion.
August 5, 2015 Consent Order Appointing Dr. Holloway to Provide Reunification Therapy
[24] This was a consent order obtained on motion which appointed Dr. Holloway for reunification therapy.
[25] The appointment of Dr. Holloway was, unfortunately, stillborn as he could not assist the parties after hours or on weekends when Mr. Meitine was available. Evidence was led during trial of the difficulties with this, and the delay in obtaining an alternative therapist to assist in reunification therapy. In my reasons, I found Ms. Grigoryan to be unreasonable concerning the reconciliation therapy and responsible for the delay in obtaining a replacement therapist.
[26] There are no entries in the Bill of Costs for this court appearance. Although there was time spent by Ms. Abramian in attempting to obtain a reunification therapist, including correspondence with Ms. Grigoryan, there were no time entries for attendance at this motion or preparation of motion materials. Most of the time entries concerning Dr. Holloway, noted as being between August 17 to 20, 2015, took place after the motion was heard and addressed in court. Moreover, the costs of dealing with this issue by the Applicant’s lawyer were properly chargeable to the Respondent considering my findings as to the responsibility for the delay in appointing the reunification therapist and the necessity of negotiating that point considering the Respondent’s position that only Dr. Holloway would do. I note as well that the reconciliation therapy resulted from Ms. Grigoryan’s decision to have no contact with the children for a two-year period from 2013 to 2015.
[27] In any event, even if the time spent leading up to August 5, 2015 was related to the motion, this does not prevent the court from awarding those costs after the fact as costs were not addressed in the consent. See Rule 24(11), recently passed, which permits a court to address costs of a step in the proceeding even where costs are not reserved.
February 9, 2016 Consent Order Appointing Joanna Seidel to Provide Reunification Therapy
[28] This order was obtained from McGee J. at a teleconference and was on consent. Costs of this “appearance” were not reserved or addressed.
[29] There are no time entries for the teleconference with McGee J. on February 9, 2016, or, for that matter, for the case conference (converted from a motion) earlier conducted by McGee J.
[30] Although there are time entries in respect of Joanna Seidel prior to the teleconference, I note again that Rule 24(11) permits the court to order costs of an event even where the costs were not reserved. In para. 69 to 72 of my trial endorsement issued in this matter I outlined the difficulties that the Applicant had in obtaining the appointment of a reunification therapist, largely at the hands of the Respondent. Even if the Applicant’s counsel had to spend time respecting the appointment of Joanna Seidel and the court process necessary to do so, I again would have found that the Respondent was responsible for the incurring of those costs because she unreasonably insisted upon Dr. Holloway providing that service even after he had recused himself on September 3, 2015.
December 14, 2016 Access Motion
[31] DiTomaso J. heard this motion. He dismissed the Respondent’s motion for access and awarded $1,500 in costs against Ms. Grigoryan.
[32] Although there was some time spent by Ms. Abramian concerning telephone calls and correspondence regarding access prior to this motion being heard, there were no time entries in the Bill of Costs for pleadings or affidavits prepared for the motion or for Ms. Abramian’s attendance at the motion.
April 10, 2018 Consent Order re Schooling, the Applicant’s Address and Status Quo
[33] This was an order of Kaufman J. made on consent. Ms. Abramian’s associate, Brigitta Tseitlin, attended on the motion.
[34] There were no time entries in the Bill of Costs for the attendance on this motion or for preparation of motion documentation.
[35] In any event, as the costs of this motion were reserved on consent, the Applicant was at liberty to claim the costs of this motion in any event.
June 20, 2018 Attendance on Motion re Schooling and Summer Activities
[36] This was the first appearance for the motion regarding the children’s change in schools eventually heard on August 15, 2018 as well as the motion regarding summer activities resolved on consent on June 22, 2018.
[37] I suspect that this appearance was included in the costs award made by Kaufman J. on August 15, 2018 after hearing the schooling motion.
[38] In any event, there is no entry for preparation of documentation, preparation for this attendance or for the attendance itself in the Bill of Costs. There is no duplication concerning this particular issue.
June 22, 2018 Attendance to Obtain Consent Order re Summer Activities
[39] There is no entry in the Bill of Costs for this court appearance.
[40] On the day before the motion, June 21, 2018, there is an entry for the preparation of the consent which was filed the next day. Although this is connected with the June 22 court appearance, Rule 24(11) permits me to rule on the costs of this particular consent order (re 2018 summer activities) even though costs were not reserved. I therefore find that I should include this costs entry into the overall costs award of this proceeding as the parties’ disagreement regarding summer activities is directly related to the abilities of the parties to co-parent these children which was an important issue at trial.
August 16, 2018 Motion re Schooling of Children
[41] On August 16, 2018, the parties argued a motion brought by the Respondent to stop the children from being removed from their public schools and enrolled at Kayla’s Children Centre.
[42] The Applicant was wholly successful, and the Respondent’s motion was dismissed with costs of $5,742.40.
[43] There is no double recovery of costs for the August 16 motion as there were no entries for the preparation for or attendance at this motion in the Bill of Costs filed.
Result
[44] The Respondent has claimed that the Applicant should not recover any costs prior to August 16, 2018 as the various attendances in court since the commencement of this Motion to Change carried their own cost consequences as matters progressed. However, the Bill of Costs does not reflect any of the costs of those court attendances, and the remaining costs are properly chargeable to the Respondent in this costs award.
Overbilling of Time
[45] One of the major issues in considering costs is whether the costs are reasonable and proportionate considering the matters in issue: see Beaver v. Hill, 2018 ONCA 840. The Respondent says that the costs claimed are not and suggests that the the Applicant’s lawyer entered excessive time not reflecting the time actually spent. She gives two examples, the first being the 8 hours to prepare the costs submissions, which she says was excessive and the 7 hours billed for the July 17, 2019 trial appearance, which was actually about 1.5 hours.[^3]
[46] Two examples are not enough for the court to assume that Applicant’s counsel “padded” her time. An analysis of the entire Bill of Costs would be necessary for the court to make that finding. Moreover, the July court appearance would entail preparation time and travel time (the attendance was in Barrie court), which might add 3 hours onto the amount of time spent by counsel. If the Bill of Costs was edited to remove the time spent on motions and court attendances prior to August 16, 2018, then it may very well have taken the time stated in the Bill of Costs.
[47] Moreover, considering that this was an 11-day trial involving a claimed variation in custody of these two special needs children, with expert evidence being led through the Office of the Children’s Lawyer, I find that the costs claimed by the Applicant are reasonable and proportionate to the issues before the court in this proceeding. The Applicant might have claimed substantially more.
[48] I decline to make a finding that counsel has entered excess time into the Bill of Costs. I do find that the costs claimed are reasonable and proportionate under the circumstances.
Respondent’s Financial Circumstances
[49] The Respondent notes that she is of limited income and financial means. She says that a substantial award of costs would work a hardship on her and urges the court to limit her costs liability and order repayment of costs at the rate of $250 per month.
[50] I agree that the Respondent is of limited means. Evidence was led at trial as to her financial circumstances. Her income was in the range of $25,000 per year and she works teaching music. Her income is substantially less than that of the Applicant.
[51] In M. (C.A.) v. M. (D.), 2003 CanLII 18880 (ON CA), [2003] O.J. No. 3707 (C.A.), Rosenburg J.A. confirmed that the words “any other relevant matter” in Rule 24(11)(f) allows the court to consider, in quantifying costs, the financial circumstances of a party, especially where it affects his or her financial ability to care for a child. At para. 42 he stated, “In fixing costs the courts cannot ignore the best interests of the child and thus cannot ignore the impact of a costs award against a custodial parent that would seriously affect the interests of the child.” At para. 43, he stated, “a relevant consideration would be the financial condition of the parties, especially an unsuccessful custodial parent. See Church v. Church, 2003 CanLII 2084 (ON SC), [2003] O.J. No. 2811 (Ont. S.C.J.) at paras. 14 - 18.” See also Harrington v. Harrington, [2009] O.J. No. 827 (C.A.) at paragraph 8.
[52] In the present case, the Respondent agreed that the Applicant need not pay any differential child support although he agreed to pay for the children’s schooling at Kayla’s Children Centre. Considering the relative incomes of the parties, that may, in itself, work a hardship. I note that the parties share custody on an equal basis, and that the ability of the Respondent to care for the children during her time with them has already been affected by the agreement that no child support is payable, and this would be exacerbated by an overly onerous costs award.
[53] I therefore take into account the Respondent’s financial circumstances in setting the costs amount and the terms of repayment of costs in this proceeding.
COSTS AWARD
[54] As set out above, the Applicant has requested full recovery costs of these proceedings in the amount of $128,917.14 inclusive of disbursements and HST. The Respondent agrees that costs are payable, but only offers to pay $40,000 in costs, payable at $250 per month.
[55] The Applicant served an Offer to Settle under Rule 18 which has been discussed above. Because the Applicant’s Offer to Settle was not severable, I decline to order full recovery costs based upon Rule 18(14) even though the financial issues were, perhaps, settled on a basis more favourable to the Applicant than the offer.
[56] The Respondent has suggested that costs are not payable prior to August 15, 2018 as there were motions for which costs were addressed prior to that date. I have rejected that contention as there were no time limits for those motions. I have also determined that the Respondent has not proven that the Applicant’s lawyer charged excess time than that actually spent on the file.
[57] Finally, I have confirmed that I will take the Respondent’s financial circumstances into account in setting costs, as she has shared care of the children and she is of modest means. I am not willing to allow this costs award to impair her ability to care for the children, when, as pointed out by the Applicant’s lawyer, the agreement made regarding support does not provide for any differential support even when the Applicant’s income is well in excess of the Respondent’s.
[58] I am therefore ordering costs to be paid on a partial recovery basis. In civil matters, partial recovery costs are generally in the range of two thirds to three quarters of substantial indemnity rates (which are not full recovery): Bardouniotis v. Trypis, 2010 ONSC 6586. This would mean that costs should be awarded in the amount of $85,000, more or less. However, I note that under the Family Law Rules, judges are not constrained to the normal scales of costs mentioned in the Rules of Civil Procedure,[^4] since no scales of costs are mentioned in the Family Law Rules: see Beaver v. Hill, supra.
[59] All of this being said, I find that the Respondent’s offer of $40,000 in costs is too low. That is not even within the range of partial recovery costs as set out above. In fact, it is less than one half of the amount that would normally be ordered.
[60] Therefore, taking into account the financial circumstances of the Respondent, I am awarding costs to the Applicant in the amount of $65,000 inclusive of disbursements and HST. Again, in light of the Respondent’s financial circumstances, these costs shall be repayable by payments of $650 per month commencing March 1, 2020. This repayment schedule will take years but not decades to satisfy the costs amount.
[61] In the event of a default in repayment, the Applicant may issue a judgment for this costs award and to take all means legally available to collect the costs then owing to him.
McDERMOT J.
Released: February 7, 2020
[^1]: Although the Respondent’s failure to serve an offer to settle may be seen as unreasonable conduct within the meaning of Rule 24: see Klinkhammer v. Dolan and Tulk, 2009 ONCJ 774. [^2]: O. Reg. 114/99 [^3]: Court house time logs confirm that the July 17, 2019 appearance took all of 111 minutes. [^4]: R.R.O. 1990, Reg. 194