ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FC-19-FS000042-0000

DATE: 2021-08-09

BETWEEN:

ANTHONY CRAIG OLIVER

Applicant

– and –

ANNETTE HELEN JEAN CODERRE

Respondent

Lisa Reeve, Counsel for the Applicant

Walter Drescher, Counsel for the Respondent

The honourable mdm. Justice d. piccoli

Costs endorsment

[1] This endorsement follows the release of my decision in this matter on June 17, 2021 and regards the issue of costs.

[2] The court heard a trial that took place from March 15-18, 2021. The trial was about whether the cohabitation agreement, dated June 8, 2009, (the agreement) should be set aside in its entirety and/or whether the spousal support provisions of the agreement should be set aside. At the end of the trial, I decided that the agreement should not be set aside in whole or in part.

[3] Ms. Coderre seeks 100% of her costs as she states she was 100% successful. She seeks $29,724.65; namely, $24,980 in legal fees in relation to Mr. Drescher, HST of $3,247.40 and $1,497.25 for her account with her previous counsel.

[4] Ms. Coderre asserts that Mr. Oliver should not have commenced the action. She further states that the issues before the court were important, complex and/or difficult, and that Mr. Oliver made the case more complex in that he pled everything possible in his claim to set the agreement aside. She states Mr. Oliver was unreasonable because (i) he did not provide any expert or medical evidence until January 2021, even though he commenced this action in 2019, (ii) his assertion that he did not remember the cohabitation agreement did not have the “ring of truth”, (iii) he did not call as a witness the lawyer who provided him with independent legal advice, and (iv) he insisted that the agreement was unconscionable.

[5] Ms. Coderre states that her lawyer’s hourly rate is $400 and is reasonable, and that the time spent was reasonable. The trial took three days with a half a day of submissions.

[6] Ms. Coderre states she made “numerous offers to settle all issues”. In fact, she made two – one on June 12, 2019, and a second offer was included as part of the settlement conference signed October 28, 2019.

[7] Mr. Oliver agrees that Ms. Coderre was successful. His position is that he should pay $12,000 in costs at a rate of $100 per month. He states this is a reasonable amount of costs given the following circumstances:

The costs claimed by Ms. Coderre are unreasonable for three reasons:

1. Her bill of costs includes an amount for costs which have already been addressed by the court, as well as amounts that are inflated or mis-recorded as at counsel rate when they likely belong at staff rates;

2. His claim had merit and Ms. Coderre acted unreasonably causing more work for the applicant’s counsel; and

3. He is in a dire financial situation and would not be able to pay such an amount of costs and would face insolvency if required to do so.

[8] Mr. Oliver also argues that Ms. Coderre’s previous lawyer’s fees were incurred before the litigation commenced, that the offers of settlement could not be accepted given Ms. Coderre’s requirement that Mr. Oliver pay back a loan she advanced him prior to cohabitation and that despite my directive, Ms. Coderre made no offer to settle the issue of costs.

[9] Ms. Coderre did not reply to Mr. Oliver’s cost submissions.

[10] For the reasons that follow, I order that Mr. Oliver pay to Ms. Coderre the sum of $15,000 in costs.

The Law

[11] The award of costs is within the discretion of the court: see Courts of Justice Act, R.S.O. 1990, c. C.43, at s. 131(1). The modern costs rules are designed to foster four fundamental purposes:

i. to partially indemnify successful litigants for the costs of litigation;

ii. to encourage settlement;

iii. to discourage and sanction inappropriate behaviour by litigants; and

iv. to ensure that cases are dealt with justly pursuant to subrule 2(2) of the Family Law Rules, O. Reg. 114/99.

See Mattina v. Mattina, 2018 ONCA 867; Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40.

[12] The Court of Appeal for Ontario has stated that proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs: see Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at para. 12.

[13] Rule 24(1) of the Family Law Rules states that a successful party is presumptively entitled to their costs.

[14] Rule 24(12) outlines the factors to be considered by a court in setting the amount of costs:

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 behavior;

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 the experts and their rates,

vi. any other expenses properly paid or payable; and

b) any other relevant matter.

[15] Rules 24(4) and 24(5) direct the court to evaluate whether a party has behaved reasonably or unreasonably.

[16] If offers to settle that meet the requirements of Rule 18 are made, I am required to have regard to Rule 18(14), which sets out the costs consequences of failing to accept an offer. Rule 18(14) applies where the party made a written offer at least seven days before trial and obtained an order as favourable as or more favourable than the offer.

[17] Rule 18(15) provides that the burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party that claims the benefit of the rule.

[18] Rule 18(16) states that costs are at the discretion of the court and the court may consider any written offer to settle, the date it was made, and its terms, even if Rule 18(14) does not apply.

[19] In Chomos v. Hamilton, 2016 ONSC 6232, 82 R.F.L. (7th) 395, at para. 19, Pazaratz J. stated that the court is not required to examine each term of the offer, as compared to the terms of the order, and weigh, with microscopic precision, the equivalence of the terms. What is required is a general assessment of the overall comparability of the offer as contrasted with the order.

Offers to Settle

[20] I was not referred to any offer of settlement made by Mr. Oliver in reference to the trial. His offer of settlement, dated July 7, 2021, is in relation to the cost issue.

[21] Ms. Coderre’s formal offer of settlement, dated June 12, 2019, states at paragraph 1 “The Application of the Applicant and the Answer/Claim by the Respondent are hereby dismissed without costs, including the personal loan between the Applicant and Respondent in the original amount of $8,286.64.” Mr. Oliver interpreted this offer to mean that he was required to pay $8,286.64 towards a personal loan (which was not pled by Ms. Coderre) in order to accept the offer. As Ms. Coderre did not reply to this submission, I accept that is what Mr. Oliver understood. As a result, this offer does not meet the fifth condition of Rule 18(14) of the Family Law Rules as I did not order the repayment of a personal loan.

[22] With respect to Ms. Coderre’s offer in her settlement conference brief dated October 28, 2019, although it does not meet the technical requirements of Rule 18(14), it is a written offer I can consider under Rule 18(16). That offer is exactly what I ordered at trial. Accordingly, I find that Ms. Coderre is entitled to her costs from the date of that offer.

Did Either Party Act Unreasonably

[23] With respect to unreasonable behaviour, Rules 24(4) and 24(5) read as follows:

SUCCESSFUL PARTY WHO HAS BEHAVED UNREASONABLY

(4) Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party’s own costs or ordered to pay all or part of the unsuccessful party’s costs.

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.

[24] I am guided by the specific wording with respect to “reasonableness” as contained within Rule 24(4), “a successful party who has behaved unreasonably during a case” and Rule 24(5)(a), “the party’s behaviour in relation to the issues from the time they arose”.

[25] In Kisten v. Kosewski, 2020 ONSC 3380, at para. 41, Bale J. stated that “a practical application of this language requires some measure of causal connection between the offensive behaviour, and the conduct of the litigation. That is, except in extreme circumstances, the behaviour will have resulted in unnecessary steps or increased costs. To suggest otherwise, in this court’s opinion, would lead to unintended and sometimes absurd results.”

[26] I find that Mr. Oliver did act unreasonably. He failed to call as a witness the lawyer who provided independent legal advice. He called Mr. Purdy who offered nothing to the trial. His evidence took up 90% of the trial. His evidence that he had no memory of signing the agreement was not credible. His insistence on arguing a plethora of reasons for setting aside the agreement with no factual basis clearly created unnecessary steps and increased costs.

[27] With respect to Ms. Coderre, although I find her behaviour reasonable, I also find that her failure to produce a proper net family property statement, despite the order of Justice Sheard of November 26, 2020, did nothing to promote settlement. She should have produced the information in respect of her date of marriage deductions.

Quantum of Costs for the Trial

[28] Once liability for costs has been established, the court must determine the appropriate quantum of costs. Rule 24(12) prescribes some of the factors which the court must consider in deciding the appropriate quantum.

[29] As noted above, proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs: see Beaver v. Hill, at para. 12.

[30] The assessment of costs is not a mechanical exercise. It is not just a question of adding up a lawyer’s dockets. The overall purpose is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances of the case: see Jackson v. Mayerle, 2016 ONSC 1556, 130 O.R. (3d) 683, at paras. 16-21.

[31] In Serra v. Serra, Boucher v. Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA), 75 O.R. (3d) 638 (C.A.), the Court of Appeal for Ontario set out the following additional general principles relating to quantum:

(i) Ultimately, costs decisions should reflect what the court considers to be a fair and reasonable amount that the unsuccessful party should pay.

(ii) Costs need to be proportional to the issues and amounts in question and the outcome of the case.

(iii) Amounts actually incurred by the successful litigant are not determinative.

(iv) In assessing what is fair and reasonable, the expectation of the parties concerning the amount of a costs award is a relevant consideration.

See also Selznick v. Selznick, 2013 ONCA 35.

[32] I agree with Mr. Oliver that the costs ordered by Justice Sheard on November 26, 2020 already take into account part of the bill of costs submitted. As Ms. Coderre did not file a reply, I will accept Mr. Oliver’s submissions that the entries on the dates from November 16, 2020 to November 26, 2020 had been dealt with by Justice Sheard’s order. By my calculation, that is a total of 4.1 hours at $400 per hour, which is $1,640, plus HST of $213.20, for a total of $1,853.20.

[33] I also agree with Mr. Oliver that certain tasks such as preparing a notice of change of representation, preparation of draft orders, receiving and reviewing consents, setting dates, reviewing correspondence from the trial coordinator, and reviewing notices of change in representation could have been done by a law clerk or junior lawyer. There is also other work that is not properly detailed.

[34] Rule 24(12) sets out specific factors the court should consider. I will address these factors in turn:

a. Each party’s behaviour, r. 24(12)(a)(i): In this respect, I have found that the Applicant acted unreasonably. I find that the Respondent’s behaviour was reasonable.

b. The time spent by each party, r. 24(12)(a)(ii): From October 28, 2019, and not including the time spent on the motion heard by Justice Sheard, the Applicant’s counsel spent approximately 50 hours on the matter including over 3 days of trial. The time itself is reasonable. As I have stated some of the work could have been done by a law clerk or junior lawyer.

c. Written offers to settle, r. 24(12)(a)(iii): I have already commented on the written offers exchanged in this case.

d. The legal fees, including the number of lawyers and their rates, r. 24(1)(a)(iv): In this respect, Mr. Drescher’s hourly rate of $400 is reasonable given his years of experience. Law clerks or junior lawyers could have been utilized for tasks mentioned above.

e. Any other expenses, r. 24(12)(a)(vi): There are no disbursements claimed by Ms. Coderre.

Ability to Pay

[35] Mr. Oliver states he has limited ability to pay and that he seeks to pay $12,000 at a rate of $100 per month over the next 10 years. He states he is funded by legal aid, he is receiving employment insurance and has not yet returned to work, although he plans to return to work when called, and that he has filed a consumer proposal in a desperate effort to settle his current debts for living expenses post separation.

[36] In Witt v. Witt, 2019 ONSC 3732, at para. 22, the court noted the following:

(a) in the appropriate case a relevant consideration would include the financial position of the other party;

(b) unless a party can meet the threshold of undue hardship, that party would not have relief from costs on the basis of affordability where a reasonable offer has been served: see LeVan v. LeVan (2006), 2006 31020 (ON SC), 82 O.R. (3d) 1, at para. 39.

[37] I note that cost consequences typically have a negative impact on the losing party. These consequences serve to encourage settlement.

[38] It is counter-intuitive to suggest that the objectives of a cost award are less applicable to a person of modest means: see J.Y. v. L.F., 2017 ONSC 6039. This is not a case where a cost award will negatively impact obligations to a child as these parties have no children. In this case Ms. Coderre was successful and made two offers of settlement early on, the second of which was as favourable as the result achieved at trial. She is entitled to costs which are reasonable and proportionate.

Order

[39] I order that Mr. Oliver pay $15,000 in costs to Ms. Coderre within 90 days.

D. Piccoli J.

Released: August 9, 2021