Court File and Parties

Court File No.: FS-18-001901 Date: 2021-03-01 Superior Court of Justice - Ontario

Re: Sara-Jane White, Applicant And: Wayne Kozun, Respondent

Before: M. Kraft, J.

Counsel: Paul Riley, for the Applicant Dana Cohen, for the Respondent

Heard: In writing

Costs Endorsement

[1] This is the costs endorsement in respect of a ten-day trial I heard between November 16th and 27th, 2020. The trial gave rise to three issues namely: 1) the decision-making regime that would be in the best interests of the children, I.K., age 18, and G.K., age 13, given the difficulty in the parties’ communication, the high-conflict nature of the parties’ relationship and the events that had transpired since separation; 2) the parenting schedule that is appropriate and in the best interests of the children, given I.K.’s special needs?; and 3) whether the Kozun Family Trust should be wound up at this time?

[2] I ordered that I.K. have her primary residence with the respondent and G.K. reside with the parties, pursuant to an equal time-sharing schedule. In terms of decision-making responsibility, I ordered that the respondent have final decision-making for all significant decisions that affect both I.K. and G.K. I dismissed the respondent’s request for orders relating to the Kozun Family Trust, “without prejudice” to either party’s right to proceed by way of an application with respect to these claims. The issue of support was settled mid-trial and was not determined by me.

[3] The respondent seeks costs on a full recovery basis in the amount of $105,024, inclusive, on the grounds that he achieved substantial success on the issues at trial; he behaved reasonably throughout; the applicant behaved unreasonably; and the respondent’s Offers to Settle were reasonable. The respondent’s position is that his rate of success was 100% on the issues of final decision-making responsibility for the children; obtaining a fixed holiday schedule for the children; and obtaining an order that I.K.’s primary residence be with him and a shared parenting schedule for G.K., which schedule he claims is only slightly different than what he had proposed in his Draft trial order.

[4] The applicant also seeks costs on a full recovery basis in the amount of $118,980.50, on the grounds that she achieved divided success at trial with respect to parenting and support, in that an Order was made requiring the respondent to pay child and spousal support based on his annual income and she obtained a shared parenting schedule for G.K.

Legislative Framework

[5] Subject to the provisions of an Act or the rules of court, costs are in the discretion of the court, pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. By r. 24(10)(a) of the Family Law Rules, O. Reg. 114/99 (FLRs), the court is directed to make a decision on the costs of a step in the case promptly after dealing with the step, in a summary manner.

[6] 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 Rule 2 (2) of the Family Law Rules: Mattina v. Mattina, 2018 ONCA 867.

[7] The touchstone considerations of costs awards are proportionality and reasonableness: Beaver v. Hill, 2018 ONCA 840, at para. 12. In Boucher v. Public Accountants Council (Ontario), at paras. 28-29, 37, the court held that costs must be fair and reasonable, and consistent with the reasonable expectations of the parties.

[8] Rule 24(1) of the Family Law Rules creates a presumption of costs in favour of the successful party, subject to the factors set out in r. 24: Beaver, at para. 10.

[9] There is no general approach in family law of “close to full recovery costs”: Beaver, at para. 11. Rather, full recovery is only warranted in certain circumstances, such as bad faith under r. 24(8), or beating an offer to settle under r. 18(14): Beaver, para. 13.

[10] The factors to consider in setting the amount of costs are listed in r. 24(12). The court must consider the reasonableness and proportionality of a number of factors as they relate to the importance and complexity of the issues. These factors include each party’s behaviour, the time spent by each party, any written offers to settle, including those that do not meet the requirements of r. 18, any legal fees and any other expenses, and any other relevant matter. In particular, an award of costs is subject to: the factors listed in Rule 24(12), Rule 24(4) (unreasonable conduct of a successful party), Rule 24(8) (bad faith), Rule 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party: Berta v. Berta, 2015 ONCA 918 at para. 94.

[11] Rule 24(6) of the Family Law Rules sets out that If success in a step in a case is divided, the court may apportion costs as appropriate.

[12] I have considered the factors set out in Rule 24 (12) of the Family Law Rules, which provides as follows:

24(12) 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

[13] Rule 24(5) provides criteria for determining the reasonableness of a party's behaviour in a case (a factor in clause 24(12)(a)(i) above). It provides as follows:

DECISION ON REASONABLENESS

(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,

(a) the party's behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle; (b) the reasonableness of any offer the party made; and (c) any offer the party withdrew or failed to accept.

Who was Successful at Trial?

[14] The respondent had proposed that G.K. reside with him 8 nights out of 14, such that during Week One, G.K. was with him overnights on Monday, Tuesday, Thursday, Friday, Saturday and Sunday, and during Week Two, G.K. was with him overnights on Monday and Thursday. At trial, I ordered that G.K. would reside with the respondent 7 nights out of 14, but pursuant to a slightly different schedule, such that in Week One, G.K. was overnight with the respondent on Monday, Tuesday and Thursday, and in Week Two, G.K. was overnight with the respondent on Wednesday, Friday, Saturday, and Sunday. However, with respect to G.K.’s schedule, I ordered that she have equal parenting-time with both parents, giving the respondent one less overnight and changing the days he proposed.

[15] Again, I ordered that the respondent have sole decision-making responsibility for all decisions impacting I.K. and G.K. The respondent was successful on both obtaining sole decision-making responsibility for the children and in obtaining a residency schedule where I.K. is in his primary residence, along with a fixed holiday schedule. The shared-parenting schedule the respondent had proposed for G.K. provided him with one more overnight than what I ordered. However, the respondent was still largely successful at trial.

[16] Given that the parties settled the issue of support and I was not provided with the details of the support agreement, this is a neutral issue that does not impact any costs ordered. However, given the parenting schedule I ordered for G.K., success was divided between the parties on this issue since the applicant sought a week on/week off schedule and the respondent sought a schedule where G.K. would reside with him 8 nights out of 14, and I ordered an equal time sharing schedule for G.K. which is different than what either party proposed. The only issue on which the respondent did not achieve success was the wind-up of the Kozun Family Trust. While I dismissed this request of the respondent, I did so, “without prejudice” to either party’s right to proceed by way of an application with respect to these claims.

Factors to be Considered

[17] Again, rule 24(12) of the FLRs lists the factors the court must consider when quantifying costs.

Importance, Complexity, and Difficulty

[18] The trial was of significant importance to both parties. In particular, both parents wanted the court to order that he/she had sole decision-making responsibility in relation to all decisions that impact the children. It was clear that the applicant refused to communicate with the respondent and co-parenting was not an option. Further, it was of particular importance to the respondent that I.K. have her primary residence with him so her school routine, behaviour management and treatment plan would be consistently followed to ensure expectations of I.K. remain constant. The trial was quite complex as it involved several psychiatric and mental-health experts dealing with allegations of addiction, mental health concerns, as well as expert evidence related to I.K.’s special needs, prognosis and future plans. This was not a straight-forward parenting trial given the level of conflict between the parties; the allegations of mental health concerns against each parent; and I.K.’s special needs.

[19] While it is true that the respondent was not successful on the winding up of the Kozun Family Trust and that the parties settled the issues of support, the two issues of most importance to the parties were decision-making authority over and the residential schedule for the parties’ children. In fact, approximately 10 of the 12 days of the trial were devoted to these two issues. Further, all of the expert evidence led were about both these issues.

[20] In determining reasonableness, Rule 24(5) of the FLRs sets out what ought to be considered and is referred to above in paragraph [13].

[21] The respondent claims that the applicant’s conduct was unreasonable, in that she:

a. Failed to make any offers to settle on either the parenting or support issues; b. Demanded support amounts that had no connection to the reality of the respondent’s income but instead were based on severance income from a job from which he was let go in 2016, a year prior to the parties’ separation; c. Failed to provide any evidence as to her income, to allow the respondent to properly address the support issues prior to trial; d. Pursued her claim for joint custody when she refused and/or failed to communicate about any child-related issues and/or refused and/or failed to participate in any medical or therapeutic appointments or educational matters for over a year prior to trial; e. Refused to accept that the respondent did not have an alcohol issue, causing the respondent to incur the significant costs of an additional expert report and in having Dr. McMaster testify at trial; f. Refused to consider or accept the respondent’s various reasonable offers made to settle the parenting and support issues; and g. Breached the interim court order in the months leading up to the trial with respect to the parenting schedule and decision-making in relation to I.K.

[22] While I agree that the applicant’s conduct was unreasonable, especially in terms of her inability and refusal to communicate or cooperate with the respondent on parenting matters and educational matters, particularly those related to I.K., the structure of the applicant’s personality likely made cooperative communication impossible. The respondent was aware of the applicant’s difficult personality having been married to her for years. In that sense, the applicant’s unreasonable conduct must be considered, but does not amount to bad faith, in my view.

Written Offers to Settle

[23] On March 10, 2020, the respondent made a Rule 18 Offer to Settle with respect to parenting and support. The offer is approximately the same in terms of parenting as what was ordered at trial. The parties reached an agreement as to support, which the respondent claims was less than what he offered the applicant. In his costs submissions, the respondent submits that, in his offer to settle, he forewent child support, offered to pay 100% of the s.7 expenses and offered to pay spousal support in the sum of $3,500 a month. The respondent’s offer was never withdrawn and remained open for acceptance until the delivery of the trial decision. It is impossible for me to assess whether the agreement the parties reached in terms of support was better or worse than the support offered in the respondent’s March 10th, offer as I am not aware of the details of the support agreement reached by the parties mid-trial.

[24] In terms of parenting, from January 2019 forward, once Howard Hurwitz delivered his custody and access assessment report, the respondent offered to settle the parenting issues in accordance with Mr. Hurwitz’s recommendations, namely, giving the respondent final decision-making authority over the decisions that impact the children and an equal time-sharing parenting schedule, where the children would reside with the parties on a week on/week off basis. This proposal was made by the respondent on February 13, 2019 and on July 3, 2019. The applicant did not accept either offer and insisted on joint decision-making authority or sole decision-making authority in her favour. The respondent’s offer in this regard exceeded what I ordered at trial, since I did not order an equal-time sharing schedule for I.K.

Time Spent by Each Party and Any Legal Fees, Including the Number of Lawyers and Their Rates, etc.

Lawyer’s Rates

[25] The respondent’s lawyer, Dana Cohen is a 1999 call. Her hourly rate is $450.00. The applicant’s lawyer, Paul Riley, is a 1995 call. His hourly rate is $500.

Time Properly Spent on the Case

[26] Mr. Riley spent 156.75 hours on this matter, along with his law clerk who spent 89.35 hours on this matter, at a rate of $300 an hour.

[27] Ms. Cohen spent 178.90 hours on this matter. She had two law clerks assisting her, a senior clerk with an hourly rate of $265 and a junior clerk, at an hourly rate of $125. In total, the two law clerks spent 21.4 hours on this matter.

[28] Thus, the time spent on the case by each party was relatively the same overall. Further, their counsel were both relatively close in terms of seniority.

[29] Given the issues involved at trial and the involvement of various experts, including Howard Hurwitz, Dr. Pearce, Dr. McMaster, Dr. Hundert and Dr. Steinman, along with the educational professionals involved with I.K., I find that the time spent by the respondent’s lawyer to have been reasonable and proportionate to the issues dealt with at trial. The costs that the respondent incurred were reasonable in the circumstances of this case. They were also proportional to what was at stake and to the applicant’s reasonable expectation as to what costs she might face, if she was unsuccessful. I accept the record of time set out in the respondent’s Bill of Costs.

Disbursements

[30] The respondent claims $5,091.66 for disbursements, inclusive of H.S.T. and taxes relating to courier charges, process servers, Westlaw Research and the psychiatric assessment of Dr. McMaster. I find the disbursements to be reasonable.

Amount of Costs

[31] The FLRs do not explicitly provide for costs on either a partial or substantial indemnity scale. Rule 24(8) refers to “costs on a full recovery basis,” where a party has acted in bad faith. In a family law case, the court need not find “special circumstances” before ordering costs on a full recovery basis, see Sordi v. Sordi, 2011 ONCA 665, 283 O.A.C. 287. It has a range of costs awards open to it, from nominal to just short of full recovery.

[32] In Sims-Howarth v. Bilcliffe, [2000] O.J. No. 330 (S.C.J.), Aston J. held that the two traditional scales of costs are no longer an appropriate way to quantify costs under the FLRs. He stated that, having determined that one party is liable to pay costs, the court must fix the amount at some figure between a nominal sum and full recovery, having regard to the factors set out in Rule 24, without any assumptions about categories of costs. This characterization of costs under the FLRs was approved by the Ontario Court of Appeal in C.A.M. v. D.M., [2003] O.J. No. 3707 (C.A.), at para. 42.

[33] Costs must always be proportional to what is at stake in the case, and to the unsuccessful party’s reasonable expectation as to what costs he may face if he is unsuccessful. In appropriate circumstances, unreasonable behavior will result in a higher award of costs.

Conclusion and Order

[34] In light of the extent of the respondent’s success at trial; the reasonableness and proportionality of the work performed by the respondent’s counsel; the fact that the applicant should have expected to pay costs, if the respondent succeeded in obtaining sole decision-making responsibility for the children and primary residence of I.K.; and the unreasonable conduct on the part of the applicant in not making an Offer to Settle, an order that the applicant pay 75% of the applicant’s actual costs incurred in relation to the trial represents a reasonable and fair contribution to the costs he incurred at the trial in the sum of $78,768.00, inclusive of fees, disbursements and HST.

[35] Accordingly, this Court orders that Sara-Jane White shall pay costs of the trial to Wayne Kozun in the amount of $78,768.00, inclusive of fees, disbursements and HST.

M. Kraft, J. Date Released: March 1, 2021.