Court File and Parties

COURT FILE NO.: 634/18 (St. Catharines) DATE: 20210820

SUPERIOR COURT OF JUSTICE – FAMILY COURT – ONTARIO

RE: frank carm di felice, Applicant AND: lindsay Ann di felice, Respondent

BEFORE: The Honourable Mr. Justice R. A. Lococo

COUNSEL: Luigi De Lisio, for the Applicant Maria G. Lucarelli, for the Respondent

HEARD: By written submissions dated June 28 to July 20, 2021

ENDORSEMENT – COsts

I. Introduction

[1] Frank Di Felice and Lindsay Di Felice are parties to a family law application that Frank commenced in February 2018, following the parties’ separation earlier that year. This endorsement addresses the costs consequences arising from the 16-day application trial by video conference earlier this year.

[2] At trial, the principal issues related to Frank's request for joint decision-making responsibility and equal parenting time for the parties’ two young sons. Lisa sought sole decision-making responsibility and shared parenting time, providing Frank with significant but not equal time with the children, structured around his work schedule. Related issues regarding child support and special or extraordinary expenses were resolved between the parties during the course of the trial. The parties had previously resolved issues regarding property and spousal support following a settlement conference.

[3] As set out in Reasons of Decision dated June 7, 2021 (reported at 2021 ONSC 3918), I made a final order that grants decision-making responsibility to Lindsay, requiring her to consult with Frank with respect to significant decisions about the children’s well-being but providing Lindsay with responsibility for making the decision if they are unable to agree. The final order also imposes a shared parenting time schedule similar in structure to the interim access schedule previously in effect, with modest additional parenting time for Frank. The final order also requires the parties to pursue mediation in good faith to resolve conflicts before resorting to the courts by way of a variation motion. Costs were left to be determined following written submissions.

[4] As directed in the Reasons for Judgment, the parties have provided written costs submissions. Those submissions indicate that in January 2020 (prior to the originally-scheduled trial date), both parties made offers to settle, referred to further below.

II. The parties’ positions

[5] In her costs submissions, Lindsay submits that as the successful party, she should be awarded costs in the total amount of $176,000[^1] for legal fees, disbursements and HST, payable by Frank within 60 days. Lindsay calculated that amount on a partial indemnity basis until the date of her January 2020 offer to settle and on a substantial indemnity basis thereafter. Calculated on a partial indemnity basis throughout, the total costs amount would be $129,000. Calculated on a full indemnity basis, the total costs amount would be $209,000.

[6] In his costs submission, Frank submits that success was divided, with the result that no costs should be awarded. If the court determines a costs award should be made to Lindsay, Frank submits in the alternative that costs should be awarded on a partial indemnity basis in the amount of $44,835, based on properly-incurred full indemnity costs of $74,725. With his costs submissions (as directed in my Reasons for Judgment), Frank also provides a bill of costs from his own counsel, which indicates Frank’s full indemnity costs as $51,209.

III. Successful party

[7] The determination of costs is in the court’s discretion: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131. For family law proceedings, there is a presumption that a successful party is entitled to costs: Family Law Rules, O. Reg. 114/99, r. 24(1). However, 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: rr. 24(4) and 24(5). If success is divided, the court may apportion costs as appropriate: r. 24(6).

[8] Consistent with r. 24(1), consideration of success is the starting point in determining costs: Sims-Howarth v. Bilcliffe (2000), 2000 ONSC 22584, 6 R.F.L. (5th) 430 (Ont. S.C.), at para. 1. To determine whether a party has been successful, it is appropriate for the court to consider the position each party took at trial. The court should also take into account how the trial outcome compares to any settlement offers that were made: Lawson v. Lawson, 2008 ONSC 23496 (Ont. S.C.), at para. 7.

[9] Frank disputes Lindsay’s position that she was the successful party to the application. Frank says that success was divided, arguing as follows:

a. Lindsay was not successful in obtaining unfettered decision-making responsibility, given the final order’s mandatory requirement to consult with Frank with respect to significant decisions affecting the children’s well-being and the requirement to pursue mediation in good faith to resolve conflicts before resorting to the courts.

b. The final order granted Frank additional parenting time beyond the level Lindsay proposed in her draft final order at trial or her January 2020 offer to settle. The parenting time order was only “one overnight shy” of one of the options proposed in Frank’s January 2020 offer, according to Frank.

[10] I disagree with Frank’s position.

[11] By any measure, Lindsay was substantially successful in obtaining the order she sought. To the extent her success was less than complete, the appropriate approach in my view would be a downward adjustment in the amount of costs awarded, rather than to deny her any costs despite her substantial success.

[12] Under Lindsay’s draft order at trial, she would have sole decision-making responsibility with respect to the children. Consistent with the law as it stood at that time, Lindsay’s January 2020 offer to settle would provide for “joint custody” of the children but Lindsay would have the final say should the parties not agree on any decision. Both Lindsay’s draft order at trial and her offer to settle would have required the parties to consult each other about important issues.

[13] The final order provides Lindsay with substantially what she sought with respect to decision-making responsibility. If the parties do not agree with respect to a significant decision, Lindsay has the final say. The obligation in the final order to consult Frank is more specific and robust, but it builds on the consultation requirement in the draft trial order and the offer to settle. While the final order requires good faith attendance at mediation before a court-ordered variation can be sought, it does not constrain Lindsay from making the final decision on a significant matter within the scope of the order absent Frank’s agreement.

[14] As well, the final order’s parenting time provisions substantially track Lindsay’s position (including the children’s continued involvement in daycare contrary to Frank’s wishes), with modest additional parenting time for Frank. As in the interim parenting schedule, Frank has significant parenting time with the children built around his work schedule, but it is nowhere near the equal parenting time regime that Frank sought at trial and in his January 2020 offer to settle.

[15] Based on the foregoing, I find that for the purpose of fixing costs, Lindsay should be considered the successful party, and is therefore presumptively entitled to costs. I also see no justification for denying Lindsay costs altogether based on unreasonable or reprehensible behaviour on her part.

IV. Quantum of Costs

[16] Having concluded that Lindsay as the successful party is entitled to her costs, the next issue to consider is the quantum of costs that should be awarded.

[17] As a general rule, “proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs” in family law proceedings: see Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at para. 12, leave to appeal refused, [2019] S.C.C.A No. 82. That principle is reflected in r. 24(12)(a), which directs the court to consider the “reasonableness and proportionality” of a number of listed factors as they relate to “the importance and complexity of the issues”. Those factors include (a) each party’s behaviour, (b) time spent by each party, (c) any written offers to settle, (d) legal fees, including the number of lawyers and their rates, and (e) other proper expenses.

[18] In fixing costs, r. 18(14) provides additional direction that applies where a party who makes a written offer to settle obtains an order that meets the requirements set out in that rule. One of those requirements is that the offering party obtains an order that is “as favourable as or more favourable than the offer.” If the requirements are met, the offering party is “entitled to costs to the date the offer was served and full recovery costs from that date”. When fixing costs, the court may take into account any written offer to settle, whether or not r. 18(14) applies: see r. 18(16).

[19] Lindsay submits that she should be awarded costs in the total amount of $176,000. That amount is calculated on a partial indemnity basis until the date of her January 2020 offer to settle and on a substantial indemnity basis thereafter. In support of her calculation method, Lindsay argues that given her success at trial when compared to her offer to settle, she has met the requirements of r. 18(14).

[20] I disagree. Given the terms of the final order, Lindsay’s substantial success at trial does not translate into meeting the requirement that the final order is “as favourable or more favourable than the offer.”

[21] What Lindsay sought in her draft order in trial was essentially unfettered sole decision-making responsibility with respect to the children. While there was no issue about her devotion to the children’s best interests, in the final order, I intentionally avoided using the word “sole” and attempted to put in place a more robust consultation requirement as a modest counterweight against Lindsay’s unfortunate past tendency toward a “my-way-or-the-highway” approach to decision-making. For both parties, I remain concerned that their difficulty in getting past the unfortunate circumstances of their acrimonious breakup for the children’s sake does not bode well for the future. As well, while the parenting schedule in the final order followed the structure that Lindsay proposed, it provided modestly greater parenting time for Frank than Lindsay proposed in her draft order at trial.

[22] Even though I have found that Lindsay’s offer did not meet the requirements of r. 18(14), I still have the discretion under r. 18(16) to take non-compliant offers into account when fixing costs. However, previous case law indicates judicial reluctance to assess costs on an elevated scale (which would include full or substantial indemnity costs) except in a “rare and exceptional case” based on “egregious or reprehensible conduct that warrants sanction”: see McBride Metal Fabricating Corp. v. H & W Sales Co. (2002), 2002 ONCA 41899, 59 O.R. (3d) 97 (C.A.), at paras. 37-38 (in which the the Court of Appeal considered the effect of r. 49.13 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which corresponds to r. 18(16) of the Family Law Rules). In this case, I see no sufficient basis for assessing costs payable by Frank on an elevated scale.

[23] Using the calculation method for partial indemnity costs set out in Lindsay’s bill of costs, the total costs award would be $129,000 (based on total indemnity costs of $209,000). On Frank’s analysis of Lindsay’s bill of costs, Frank’s position is that Lindsay’s partial indemnity costs would be $44,835 (based on supportable total indemnity costs of $74,725).

[24] Frank argues that the amounts charged for fees and disbursements in Lindsay’s bill of costs were excessive on a number of grounds, including (i) time and disbursements relating to potential witnesses and matters that were not addressed (or were excluded from evidence) at trial, (ii) duplicative internal consultations, and (iii) the attendance of two counsel throughout the trial (compared to one counsel for Frank). While there is some limited merit to certain of the points raised, they would not in the aggregate have justified such a significant reduction in the amount of costs awarded.

[25] My principal concern with the amount of costs Lindsay seeks is one of proportionality. Frank’s application and Lindsay’s response to it, as originally framed, raised a number of issues for determination. To the parties’ credit, they settled most of those issues prior to trial or, in certain instances, while the trial was ongoing. While the matters left to be determined were contentious, I do not consider 16 trial days to be a justifiable use of scarce judicial resources to resolve those limited matters, especially given the other unfulfilled demands on the legal system during that time. The documentary evidence provided at trial was needlessly voluminous. While not causing significant delay individually, peripheral matters caused needless distraction and contention. Those matters included (i) Lindsay’s ill-considered request that the court micro-manage the children’s religious upbringing by ordering a baptism and designating the Godparents, and (ii) her attempt to admit into evidence FaceTime recordings of virtual access visits to discredit Frank, notwithstanding ample evidence in Frank’s other communications already before the court that adequately served the same purpose.

[26] In all the circumstances, I do not consider the amount of costs sought to be consistent with the “touchstone considerations” of reasonableness and proportionality referred to in Beaver, at para. 12, and r. 24(12)(a). As well, to the extent that the counsel’s time and charges are relevant considerations, I note the Court of Appeal’s comments in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 ONCA 14579, 71 O.R. (3d) 291 (C.A.), at para. 26, where the court states that the calculation of hours and time rates is only one factor to be taken into account when fixing costs. The overall objective is “to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.” In doing so, the reasonable expectations of the unsuccessful party would be a relevant factor, consistent with Boucher, at paras. 37-38, and r. 57.01(1)(0.b) of the Rules of Civil Procedure. While Boucher is a non-family civil case, the court’s “overall objective” in Boucher is consistent with the principles set out in the Family Law Rules, as interpreted by the Court of Appeal in Beaver.

[27] When considering what amount of costs Frank as the unsuccessful party may reasonably expect to pay, I have the benefit of seeing the bill of costs from his counsel, which indicates full indemnity costs of $51,209. Lindsay challenges the reliability of Frank’s bill of costs, given that the description of services does not address matters that you would typically expect during the course of litigation. When the party providing a bill of costs is not themselves seeking costs, I accept that its probative value is less compelling than it otherwise would be. However, it provides at least some indication of an unsuccessful party’s reasonable expectations relating to the awarding of costs.

[28] In fixing costs, as previously indicated, I am also taking into account Lindsay’s degree of success in the proceedings, which I found to be substantial but not complete.

[29] Taking the foregoing considerations into account, I fix Lindsay’s costs at $75,000, including disbursements and HST, payable by Frank within 60 days.

R. A. Lococo J.

Released: August 20, 2021

[^1]: That amount includes disbursements of $8,601.38 (including HST on taxable disbursements).