Court File and Parties
COURT FILE NO.: FS-19-41383 DATE: 20210226 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: SHAZIA UMBRIN KAMBOH Applicant/Respondent – and – QAISAR MAJEED Respondent/Applicant
Counsel: Howard J. Feldman, for the Applicant/ Respondent Harvey S. Goldstein, for the Respondent/ Applicant
Heard: In Writing
Costs Endorsement
P.J. Monahan J.
[1] On February 4, 2021, I released my Endorsement dealing with pretrial motions that had been filed by both parties in this litigation. In accordance with that Endorsement, the parties have now made written submissions with respect to costs.
[2] As I explained in my Endorsement, the parties sought approximately two dozen separate heads of relief, far in excess of what could reasonably be dealt with on a one-day motion. The written material filed was voluminous, repetitive and disorganized. Both parties ignored the restrictions on written material set out in the Rules as well as the relevant practice direction.
[3] The manner in which the parties approached these motions is reflected in their respective Bills of Costs. Counsel for the Respondent spent approximately 145 hours and billed his client approximately $64,000 plus HST, while counsel for the Applicant spent approximately 83 hours (plus approximately 18 hours of a law clerk’s time) and billed his client approximately $44,000 plus HST. Of course, having together spent well in excess of $100,000 on this one-day motion, these parties can look forward to a trial later this year which will undoubtedly consume a significant multiple of that amount.
[4] While both parties bear some responsibility for the excessive and disproportionate manner in which this motion was conducted, that responsibility is not shared equally. As I will explain in these reasons, the Applicant consistently took unreasonable positions and refused to accept reasonable compromise proposals put forward by the Respondent. Faced with this pattern of intransigence, the Respondent has little choice but to invest significant resources in order to achieve a fair and reasonable result. In short, I find the Applicant to be primarily responsible for the excessive and disproportionate time and resources spent on this motion, and that finding informs the costs award set out below.
Legal Framework Governing Costs Awards in Family Law Proceedings
[5] It is well established that modern family cost rules are designed to foster three fundamental purposes: (i) to partially indemnify successful litigants; (ii) to encourage settlement; and (iii) to discourage and sanction inappropriate behaviour by litigants. Serra v. Serra, 2009 ONCA 395 at paragraph 8. Moreover, as the Court of Appeal emphasized in Mattina v. Mattina, 2018 ONCA 867 ("Mattina") at paragraph 10, a fourth fundamental purpose of costs awards in family law proceedings is to ensure that cases are dealt with justly, in accordance with Rule 2(2) of the Family Law Rules.
[6] Rule 24 (1) of the Family Law Rules creates a presumption of costs in favour of the successful party. Berta v. Berta, 2015 ONCA 918 at paragraph 94. While consideration of success is the starting point in determining costs, this presumption does not automatically require that the successful party be awarded his or her costs. Mattina at paragraph 13. Entitlement to costs is subject to a variety of factors, including whether one or both parties have behaved unreasonably, Rule 24 (4), whether there has been bad faith conduct, Rule 24 (8), and the nature of any offers to settle made by either party. Rule 18 (14) & (16).
[7] In determining the appropriate quantum of costs, Rule 24 (12) of the Family Law Rules sets out the relevant considerations. It provides as follows:
(12) SETTING COSTS AMOUNTS – In setting the amount of costs, the court shall consider,
(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.
[8] While Rule 24 (12) sets out the relevant considerations, the key principles governing awards of costs in family law proceedings are proportionality and reasonableness. As Nordheimer J.A. stated in Beaver v. Hill, 2018 ONCA 840 at paragraphs 12 and 19, “[p]roportionality is a core principle that not only governs the conduct of proceedings generally, but is specifically applicable to fixing costs in family law matters.” This conclusion flows directly from the fundamental Boucher principle, applied by Ontario courts on innumerable occasions, that costs awards should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties.”
[9] There is no presumption that a successful party in a family law matter should receive costs that “generally approach full recovery”. Beaver v. Hill, at paragraph 13. However, the Rules do provide for an entitlement to full recovery of costs in specific circumstances, such as bad faith under Rule 24 (8), or besting an offer to settle under Rule 18 (14). That said, “full recovery” of costs does not necessarily equate to the amount legal counsel has billed the successful client, since the quantum of costs must always meet the test of proportionality and reasonableness in light of the importance and complexity of the issues at stake in the litigation.
Relevant Factors in Determining Costs in this Case
The Respondent was the Successful Party
[10] As Chappel J. noted recently in Arthur v. Arthur, 2019 ONSC 938 at para 14, the identification of the successful party in a proceeding does not involve merely adding up the number of issues in dispute and “running a mathematical tally of which party won more of them”. Rather, it requires a “contextual analysis that takes into consideration the importance of the issues that were litigated and the amount of time and expense that were devoted to the issues which required adjudication.”
[11] Viewed through this holistic lens, there is little doubt that the Respondent was the successful party on these motions. Although there were numerous issues raised by both parties, three issues were of particular importance, and the Respondent was entirely or more successful on all three.
[12] The first of these issues, which was by far the most significant on these motions, was whether the matrimonial home should be sold, as well as the manner in which the proceeds of any sale should be dealt with. This was key focus of oral argument as well as the analysis in my Endorsement. The Respondent was successful on this issue, in that I granted the precise terms he requested in his notice of motion.
[13] The second key issue was whether the Respondent should be required to provide further disclosure to the Applicant. Here, again, the Respondent was successful in that I dismissed the Applicant’s motion for further disclosure.
[14] The third key issue was whether a joint expert should be appointed to in order to analyse and report on various issues. Both parties had proposed the appointment of a joint expert, but I dismissed this request. Nevertheless, the reason why a joint expert was not appointed was because the mandate proposed by the Applicant was open-ended and unworkable. Far from reducing costs or saving time, I found that the appointment of a joint expert on terms proposed by the Applicant would have inevitably produced further confusion, conflict and cost, and would have distracted the parties and the court from the key issues at stake in the litigation. In contrast, the mandate for the joint expert proposed by the Respondent was focused and reasonable. In short, it was only because of the unreasonable position taken by the Applicant that this head of relief was denied.
[15] Most of remaining grounds for relief proposed by the parties were referred to the trial judge. However, these matters were of lesser significance, as reflected by the fact that they received little attention in oral argument or in my Endorsement. Moreover, the ultimate outcome on most of these matters has yet to be determined.
[16] In short, the Respondent was clearly the successful party on these motions.
The Respondent Bettered his Offers to Settle Key Issues
[17] Both parties made numerous Offers to Settle, none of which was accepted. However, the Respondent made Offers dealing with certain of the key issues on the motion and obtained a result that was as favourable or more favourable than those Offers.
[18] For example, on June 25, 2020, the Respondent proposed that the matrimonial home be listed for sale, that each of the parties receive $200,000 out of the net proceeds, with the remaining proceeds held in trust until final settlement. This Offer was identical to the result obtained. Had that offer been accepted, it would have provided the Respondent with sufficient funds to undertake the litigation to conclusion and might even have avoided the necessity of bringing this motion in the first place.
[19] With respect to disclosure, on January 22, 2021 the Respondent offered to provide further documents requested by the Applicant. This exceeded the result obtained in my Endorsement, since the Applicant’s request for further disclosure was dismissed.
The Applicant’s Position on the Key Issues was Unreasonable
[20] Not only was the Applicant unsuccessful on the three key issues identified above, but her position on those issues was unreasonable.
[21] For example, there was no reasonable justification offered for the Applicant’s refusal to allow the matrimonial home to be sold. The Applicant herself had brought a motion in 2017 seeking to have the matrimonial home sold and, in 2018, had entered into a written agreement to sell the home. Neither party has lived full-time in the matrimonial home since 2018.
[22] The Applicant’s position on the motion was that the home should be rented out rather than sold since the real estate market at the present time is uncertain. Yet as I pointed out in my Endorsement, it is speculative to assume that the real estate market will necessarily improve by the fall of 2021. I also note that in her cost submissions, the Applicant now argues that the Respondent benefited from her refusal to allow the home to be sold because the real estate market has improved over the past few months; she argues that the Respondent should not receive his costs because he benefitted from the delay she caused.
[23] The Applicant’s suggestion that the real estate market has improved over the past few months contradicts the position she took at the motion itself. I would further observe that any improvement in the real estate market that may have occurred is not attributable in any way to the conduct of the Applicant, and thus cannot provide a basis for avoiding the normal cost consequences of unreasonable behavior.
[24] Also relevant is the fact that on January 27, 2021, the day after the argument of the motion but before release of my Endorsement, the Applicant made a fresh Offer to Settle the issue of the sale of the matrimonial home. In this January 2021 offer, the Applicant appeared to compromise her position in that she agreed that the matrimonial home be listed for sale. However, the January 2021 Offer contained a number of significant conditions and limitations which made the offer of little real value, and may actually have disadvantaged the Respondent had the Offer been accepted.
[25] Consider the following terms of the Applicant’s January 2021 Offer
a. the home was to be listed for sale at a price of $1.9 million, which was over $225,000 in excess of the recent appraised value;
b. the listing would expire after 60 days unless an offer of at least $1.85 million was made within that timeframe;
c. even if an offer in excess of $1.85 million was made and accepted within the 60 days, if that purchaser requested a home inspection and, as a result of that inspection, proposed a price reduction of more than $5000, no such price reduction would be permitted. In other words, if a prospective purchaser offered to purchase the home for the full list price of $1.9 million (or even at a price in excess of $1.9 million), but then sought a $5,001 reduction in the purchase price on account of a home inspection, such a request would cause the offer to be rejected;
d. even if the home were sold, the entire proceeds would be paid into court and no motions seeking a distribution of any of the net proceeds could be brought prior to trial. This would have defeated the Respondent’s purpose in seeking the sale, since he required some distribution of funds in order to continue to pursue the litigation;
e. acceptance of the offer was on condition that there would be no costs in relation to the motions for the sale of the matrimonial home.
[26] In other words, had the Respondent accepted this January 2021 Offer, he would have obtained nothing of any practical value, while sacrificing his entitlement to costs. Not surprisingly, the Respondent did not accept such a one-sided Offer.
[27] In my Endorsement, I also explained why the Applicant’s position on issues relating to disclosure and the appointment of a joint expert were unreasonable, (See paragraphs 48 to 54 on the issue of the joint expert, and paragraphs 55 to 57 on the issue of disclosure.), and that analysis will not be repeated here.
Determining a Fair and Reasonable Cost Award in This Case
[28] I have already found that the Respondent was the more successful party on these motions and is therefore presumptively entitled to his costs pursuant to Rule 24 (1) of the Family Law Rules.
[29] With respect to quantum, the Respondent argues that he is entitled to “full recovery” of certain of his costs in that he bettered his Offers on two of the key issues on the motions, namely, the sale of the matrimonial home and disclosure. The Offer with respect to the sale of the matrimonial home is particularly significant. This Offer was made in June 2020, at a time when the Respondent has expended very limited resources. Had it been accepted it might well have avoided the necessity for the matters in dispute to proceed to contested motions.
[30] I agree that, since the Respondent bettered these offers, his entitlement to “full recovery costs” under Rule 18 (14) of the Family Law Rules is engaged. Nevertheless, as noted above, “full recovery” costs do not necessarily equate to the fees a lawyer bills to the successful client. Considerations of reasonableness and proportionality remain relevant, so that the costs award must still reflect “the total reasonable and proportional amount the court determines the party should have spent in dealing with the case.” Arthur, at para. 40.
[31] In this case, Respondent’s counsel spent 145 hours and billed costs of approximately $64,000 plus HST on a one-day motion. While there were numerous issues raised by the Applicant that required a response, the Respondent similarly chose to raise an inordinate number of issues in his own motion. I would also point out that the issues raised were generally not legally complex, and in my view did not warrant the amount of time expended.
[32] The Applicant has provided her own Bill of Costs. Although the Applicant is not seeking “full recovery” of her costs, she indicates that recovery of her costs at a “full rate” would equate to $42,500 plus HST, while recovery at a “substantial rate” (i.e. 80% of full recovery”) would equate to $34,200 plus HST.
[33] I have found that the Applicant took unreasonable positions on the key issues that significantly increased the costs of this motion, and that the Respondent should recover his costs on a scale that equates to or approaches full recovery. Taking into account all the relevant factors discussed above, including the fact that the Respondent also bears some responsibility for the costs incurred, in my view a fair and reasonable amount for the Applicant to pay is $35,000 plus HST.
[34] I therefore order to Applicant to pay the Respondent $35,000 on account of fees and disbursements, plus HST of $4550, for a total amount payable of $39,550, to be paid within 60 days.
P. J. Monahan J. Released: February 26, 2021