COURT FILE NO.: FS-17-00017392-0000
DATE: 20210831
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Cathryn Casier, Applicant
AND:
Mark Casier, Respondent
BEFORE: Howard J.
COUNSEL: Luigi DiPierdomenico, for the Applicant
Larry M. Belowus, for the Respondent
HEARD: Written submissions
costs ENDORSEMENT
Overview
[1] In my endorsement released May 7, 2021,[^1] I allowed the respondent husband’s motion for an interim variation and reduction of the spousal support awarded under the order of the Honourable Mr. Justice Scott K. Campbell dated August 15, 2017 (the “Campbell Order”).
[2] In para. 140 of my endorsement, I indicated that my presumptive view was that respondent husband was successful on the motion and is presumptively entitled to his costs, subject, however, to the provisions of s. 24(4) of the Family Law Rules.[^2]
[3] In para. 141 of my endorsement, I fixed a schedule for delivery of the parties’ costs submissions in the event that they were unable to agree on the question of costs, as follows:
a. The respondent shall deliver his submissions within thirty (30) days following the release of these reasons;
b. The applicant shall deliver her submissions within twenty (20) days following service of the respondent’s submissions;
c. The respondent shall deliver his reply submissions, if any, which shall be limited to no more than three (3) double-spaced pages, within five (5) days following service of the applicant’s submissions; and
d. If either party fails to deliver their submissions in accordance with this schedule, they shall be deemed to have waived their rights with respect to the issue of costs, and the court may proceed to make its determination in the absence of their input or give such directions as the court considers necessary or advisable.
[4] The parties have been unable to agree on the costs of the special appointment motion.
[5] In accordance with the prescribed schedule, the respondent husband delivered his costs submissions on May 31, 2021 (effective June 1, 2021), the applicant wife delivered her submissions on June 18, 2021, and the respondent husband delivered his reply submissions on June 25, 2021.
[6] I have read and considered the submissions received from both parties and their supporting material.
[7] The costs submissions of the respondent husband take the position that he should be paid his costs of the motion on a partial indemnity scale in the total amount of $17,542.12, consisting of legal fees of $15,211, together with applicable HST of $1,977.43, plus disbursements of $353.69 (inclusive of HST).
[8] The position of the applicant wife is that costs of the motion should be awarded to her or, in the alternative, the court should make no costs award in favour of any party.
[9] For the reasons that follow, I uphold my presumptive view and find that the respondent husband was the successful party on the motion and is entitled to his costs of the motion, which I fix in a partial indemnity amount but subject to the reduction explained below.
Governing Legal Principles
[10] Costs awards in family law matters are governed by section 131 of the Courts of Justice Act[^3] and Rules 24 and 18 of the Family Law Rules.
[11] Subsection 131(1) of the Courts of Justice Act confers upon the court a general discretion to determine costs. Rule 24 of the Family Law Rules governs the determination of costs in family law proceedings and provides guidance in the exercise of the court’s discretion by enumerating circumstances and factors that the court may consider when determining costs.
[12] Making an award of costs is inherently an exercise of judicial discretion. Indeed, our Court of Appeal has said that “costs awards are ‘quintessentially discretionary.’”[^4] While the provisions of Rule 24 of the Family Law Rules have circumscribed the broad discretion granted to the court by s. 131(1) by the Courts of Justice Act, they have not completely removed the court’s discretion.[^5]
[13] The indemnification of the successful party is a paramount objective, but not the only one, to be served by a costs order.[^6] Our Court of Appeal has recognized that: “[m]odern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants.”[^7]
[14] Consideration of success is the starting point in determining costs.[^8] Costs generally follow the event. In other words, a successful party is generally entitled to compensation for her or his legal costs. That principle is expressly reflected in the presumption codified in subrule 24(1) of the Family Law Rules, which provides that: “[t]here is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.”
[15] However, that presumption may be rebutted where it is shown that the successful party has behaved unreasonably. In that regard, subrule 24(4) provides that:
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.
[16] In setting the amount of costs to be awarded, subrule 24(12) of the Family Law Rules enumerates several factors that must be taken into account, as follows:
(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.
[17] However, while subrule 24(12) mandates the court to consider the enumerated factors, our Court of Appeal has held that the “Family Law Rules demand flexibility in examining the list of factors” in subrule 24(12).[^9]
[18] In fixing the amount of costs to be awarded, the court’s objective is not to reimburse a litigant for every dollar spent on legal fees. Rather, the overriding principles that the court must apply are fairness and reasonableness. As the Ontario Court of Appeal observed in its leading decision in Boucher v. Public Accountants Council (Ontario): “[o]verall, as this court has said, the 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.”[^10]
[19] The interest in promoting settlement, which, again, is one of the fundamental purposes of costs awards, finds expression in subrules 18(14) to (16) of the Family Law Rules, which address the cost consequences of failing to accept offers to settle, in the following terms:
(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.
(15) The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14).
(16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.
[20] Subrule 18(4) of the Family Law Rules provides for the following formal requirements of an offer to settle:
An offer shall be signed personally by the party making it and also by the party’s lawyer ….
[21] I am guided by these governing principles here.
Analysis
The Successful Party
[22] Although the submissions of the applicant wife spent some time reviewing the question of who the successful party on the motion was, I reiterate the finding that I made in para. 140 of my endorsement that the respondent husband was the successful party on the motion.
[23] The applicant wife’s submissions emphasize the point that the primary position taken by the respondent husband on the motion was that spousal support ought to be terminated. It is argued that, given that spousal support was not terminated altogether, success here was divided.
[24] That is not my view of the matter, and I reject that argument.
[25] It is true that the initial claim in the prayer for relief in the respondent’s notice of motion sought termination of spousal support; however, as reflected at the very outset of my endorsement in para. 1, in the very next breath, the respondent sought, in the alternative, a variation and reduction in spousal support.
[26] I regard the respondent’s initial claim to be something that I might term “a position taken for the purposes of the litigation” (which, I suspect, was informed, in part, by the fact that the applicant wife herself maintained her correspondingly opposite position that there should be no variation at all). However, during argument of the contested motion, it was quite clear that it was the alternative claim that the respondent husband was really pursuing and, hence, to that end, a central feature of the argument of the respondent husband was that the most appropriate determination of his income for spousal support purposes was $67,935, which submission was ultimately upheld by this court.
[27] I compare that to the position of the applicant wife before me, who, throughout the argument of the motion, steadfastly maintained her position that there should be no interim variation at all. There was no real alternative or compromise position offered by the applicant wife.
[28] In the result, as the respondent husband had sought, the spousal support was reduced. The Campbell Order was varied to reduce the support payable from $11,000 per month based on an annual income of $300,000 to just $2,400 per month based on an annual income of $67,935. Thus, the respondent husband was the successful party on the motion before me.
[29] As such, this is not a case of divided success that would justify apportioning the costs or making no award of costs to either party. In my view, the cases relied upon by the applicant wife in para. 10 of her submissions are all distinguishable, which is not surprising, given that, because “costs awards are ‘quintessentially discretionary,’” such cases turn on their individual facts.
[30] In particular, the applicant wife asked me to compare the case at bar with the facts in Gainer v. Gainer.[^11] In my view, respectfully, the circumstances in Gainer bear very little resemblance to the instant case. There, the respondent husband opposed the claim by the applicant wife for interim spousal support; however, the motion judge ordered that the respondent pay $3,250 per month to the applicant. There, the applicant wife claimed that she was precluded from returning to the workforce by a debilitating medical condition; however, the motion judge ordered that the applicant “shall take steps to prepare to return to the workforce and to earn at least part-time teaching or other income” by the subsequent school year. There, the applicant wife made claim to an order for exclusive possession for the matrimonial home; however, the motion judge ordered the partition and sale of the matrimonial home, as the respondent husband had requested.
[31] To my mind, it was obvious why Quigley J. found that success was divided and made no order as to costs in Gainer, and that likely explains why the court apparently felt no need to deliver full reasons on the issue of costs, beyond the mere three sentences provided.
[32] Simply put, Gainer is of no assistance to the applicant wife here.
[33] I have considered all of the factors enumerated in subrule 24(12) of the Family Law Rules, not all of which are equally relevant in the instant circumstances (or at all).
The Importance and Complexity of the Issues
[34] Clause 24(12)(a) of the Family Law Rules requires the court to have regard for, inter alia, the importance and complexity of the issues in the proceeding.
[35] The central issue on the motion was the appropriate quantum of spousal support. That issue is critically important to the applicant wife because she has no real other independent income apart from what the respondent husband pays her in spousal support. It was just as important to the respondent husband because, as I found in para. 100 of my endorsement, as of January 2020, the respondent husband “no longer earns an annual salary from Comber Tool. Following his retirement in January 2020, which I have found was reasonable, he no longer earns any employment income.” As a result, he had no ability to fund a monthly spousal support obligation of $11,000 pursuant to the Campbell Order.
[36] In my view, the issues involved on the motion were complex. I adopt as my own reasons the explanation set out in para. 4 of the respondent husband’s submissions dated May 31, 2021, as to the many sub-issues in play. There were four attendances, all held by Zoom video-conference hearing, to deal with the matter, including contested argument on a special appointment motion that spanned two days before me, i.e., on November 20, 2020, for a full day, and again on December 16, 2020, for a half-day.
The Time Spent by Each Party
[37] Subclause 24(12)(a)(ii) of the Family Law Rules requires the court to consider the time spent by each party.
[38] I have reviewed the time entries set out in the bill of costs dated May 31, 2021, submitted on behalf of the respondent husband. The total hours claimed is 57.4 hours.[^12]
[39] In my view, the claim for indemnification of 57.4 hours is neither unreasonable nor disproportionate for a contested motion requiring a special appointment that spanned over two days and actually required four separate court attendances, requiring, in effect, two full days in court.
[40] Moreover, I note that there was nothing in the submissions of the applicant wife that took issue with the amount of time spent as claimed in the respondent’s bill of costs. The bill of costs appended to the applicant’s material indicated that a total of 40.0 hours was expended by her counsel. In all the circumstances, I do not consider the difference of 17.4 hours to be material, especially given that counsel for the applicant was not required to expend additional time preparing reply materials, as did counsel for the respondent.
Any Written Offers to Settle
[41] Pursuant to subclause 24(12)(a)(iii), the court is required to consider any written offers to settle, including offers that do not meet the requirements of Rule 18.
[42] There were no offers to settle the motion made by either party.
[43] I return to this point when I consider, below, the claims of the applicant wife concerning the alleged unreasonable behaviour of the respondent husband.
The Legal Fees
[44] Subclause 24(12)(a)(iv) directs the court to consider any legal fees, including the number of lawyers and their rates.
[45] The bill of costs submitted on behalf of the respondent husband clearly sets out that the full indemnity rate of counsel for the respondent husband is $395 per hour and the partial indemnity rate claimed is $265 per hour. To be clear, the respondent husband claims only partial indemnity costs. I note that the $265 partial indemnity rate is about two-thirds of counsel’s full indemnity rate of $395 per hour.
[46] In my view, a partial indemnity rate of $265 per hour for someone of Mr. Belowus’s considerable experience, having practised at the bar for 40 years in Family Law, is certainly reasonable.
[47] Moreover, again, I note that there was nothing in the submissions of the applicant wife that took issue with the hourly rate claimed in the respondent’s bill of costs. Indeed, the bill of costs filed by the applicant indicates that counsel for the applicant claims the very same hourly rates.
[48] In the circumstances here, the respondent husband is entitled to reimbursement of his legal fees on a partial indemnity scale. There is no basis to award costs on a full indemnity or any other elevated scale, and no such claim is made.
[49] At the partial indemnity rate of $265 per hour, the bill of costs claims total legal fees of $15,211 based on 57.4 hours incurred in connection with the motion. Together with HST of $1,977.43, the total amount of partial indemnity fees claimed is $17,188.43. I return to the precise amount to be allowed below.
Any Expert Witness Fees
[50] Subclause 24(12)(a)(v) requires the court to consider any expert witness fees, including the number of experts and their rates.
[51] There were no expert witnesses called at the hearing.
Any Other Expenses Properly Paid or Payable
[52] Subclause 24(12)(a)(vi) directs the court to consider any other expenses paid or payable.
[53] I have reviewed the claimed disbursements as set out in the bill of costs submitted on behalf of the respondent husband.
[54] The total of all disbursements claimed is $353.69, inclusive of applicable HST. I find the disbursements to have been properly incurred and expensed, and the amounts claimed are certainly reasonable in the circumstances.
[55] Again, I note that there was no claim to the contrary in the submissions of the applicant wife. Indeed, the $603 amount claimed in the applicant’s bill of costs for disbursements is significantly more than that claimed by the respondent.
The Behaviour of Each Party
[56] In settling the amount of costs payable by a party, subclause 24(12)(a)(i) requires the court to consider each party’s behaviour.
[57] Reviewing all the submissions collectively, it appears that both parties accuse the other of unreasonable behaviour. Generally speaking, with the one exception I address below, I am not persuaded that either party engaged in the type or level of unreasonable behaviour contemplated by Rule 24.
[58] There is, for example, a suggestion in paras. 4, 5, 11, and 25 of the submissions of the applicant wife, relying, inter alia, on the provisions of clause 24(5)(a), that because the respondent husband did not present an offer to settle, he did not act reasonably.
[59] I would not give effect to this submission. The fact is that neither party presented an offer to settle. The submissions of the applicant wife obliquely argue that failure to deliver a Rule 18 offer to settle constitutes unreasonable behaviour for the purposes of Rule 24. If that argument is sound – and I am not convinced it is in all circumstances – then both parties here are each guilty of such allegedly unreasonable behaviour. As such, the argument does not advance the applicant wife’s position.
[60] While I am satisfied that, generally speaking, neither party engaged in “bad faith” or unreasonable behaviour of the type contemplated by Rule 24, the one exception I would make, and the one concern that I do have, was flagged in para. 132 of my endorsement, where I said:
To the extent that the respondent husband arguably engaged in some measure of “self help” and discontinued payment while his motion was outstanding before the court and before it had been determined by the court, and whether such conduct falls within the scope of rule 24(4) of the Family Law Rules, is something that can be addressed on the issue of costs.
[61] I found that upon the cessation of his business and the discontinuance of his annual salary in January 2020, the respondent husband no longer had the cash-flow to continue making the spousal support payments of $11,000 per month required under the Campbell Order. The respondent husband then brought his motion seeking to vary the Campbell Order, which was served on March 3, 2020, and returnable on March 13, 2020. Unfortunately, the hearing of that motion was delayed by a series of events, most of which[^13] reflect the sequelae of the impact of the COVID-19 pandemic on the operations of the court. As I said in my endorsement, the delay in the hearing of the motion caused by the global pandemic is not for the account of the respondent husband.
[62] However, I am concerned by the decision of the respondent husband to terminate all support payments to the applicant wife while his motion was still pending before the court but not yet determined. It is common ground that, as I found in para. 50 of my endorsement, “[f]ollowing the termination of his salary in January 2020, the respondent husband stopped making any spousal support payments to the applicant wife.”
[63] It is one thing for the respondent husband to say that he can no longer afford to pay $11,000 per month in spousal support under the Campbell Order. But it is quite another thing for him to say that he ought not to pay anything at all.
[64] And yet it would seem that the respondent husband does not take that position. In para. 3 of his costs submissions delivered May 31, 2021, the respondent husband states that, “[t]here has never been an issue of entitlement to spousal support.” To the same effect is para. 3 of this reply submissions: “[e]ntitlement to spousal support was not an issue.”
[65] Respectfully, the respondent husband cannot have it both ways. If the applicant wife’s entitlement to spousal support was never in issue (and I agree with that observation), and if the respondent husband therefore recognized and accepts her entitlement to support, then there can be no justification for his unilateral decision to discontinue all support as of January 2020. The respondent’s concession that the applicant is entitled to spousal support cannot be reconciled with his decision to stop paying support altogether. At the very least, he ought to have continued to pay at least some level of support based on his bona fide assessment of what his income would be. Instead, he paid nothing.
[66] Further, it is quite another thing altogether for the respondent husband to unilaterally decide that it should be he who exercises the effective decision-making authority on the point. That is, by delivery of his motion to vary, the respondent husband implicitly acknowledged that, in the absence of agreement of the parties, it is for the court to decide the quantum of support payable. But even before his motion was served on the applicant, the respondent husband took it upon himself to discontinue all support payment even though he had already determined to submit the issue to the court for determination.
[67] That is self-help. And that cannot be countenanced by the court.
[68] Again, subrule 24(4) of the Family Law Rules provides that “a successful party who has behaved unreasonably during a case may be deprived of all or part of the party’s own costs” [emphasis added]. By engaging in his self-help behaviour, the respondent husband, though ultimately the successful party on the motion, behaved unreasonably. Consequently, I find it appropriate to exercise my discretion under subrule 24(4) and deprive the respondent husband of a portion of his costs.
[69] The bill of costs presented on behalf of the respondent husband reflects legal fees on a partial indemnity basis of $15,211 and on a full indemnity basis of $22,673 (all amounts exclusive of HST). I have already found that the respondent husband is entitled to partial reimbursement of his legal fees on a partial indemnity scale. In all the circumstances of the instant case, I would fix his legal fees in the amount of $10,000, exclusive of HST.
Any Other Relevant Matter
[70] The court is directed by clause 24(12)(b) to consider any other relevant matter in settling the question of costs. In my view, there is no other relevant factor here.
[71] In these circumstances, having reviewed the parties’ submissions, including the bill of costs submitted by the respondent husband, and having considered the principles that should guide the court’s exercise of its discretion under s. 131 of the Courts of Justice Act to award costs, the factors enumerated in rule 24(12) of the Family Law Rules, and all other relevant considerations, I find that a fair, reasonable, and proportionate costs award in the circumstances of the instant case would indemnify the respondent husband, on a partial indemnity basis, in the amount of $10,000 on account of fees, together with HST of $1,300, plus $353.69 in disbursements (inclusive of tax), for a total amount of $11,653.69.
[72] Accordingly, I fix the respondent’s costs of the motion, on a partial indemnity basis, in the total amount of $11,653.69 (inclusive of fees, disbursements, and HST).
Conclusion
[73] For all of these reasons, an order shall go for the payment by the applicant wife to the respondent husband of his costs of the special appointment motion, on a partial indemnity basis, fixed in the total amount of $11,653.69 (inclusive of fees, disbursements, and HST).
[74] This costs award owing to the respondent husband may be satisfied by way of an “offsetting credit” against the arrears of support owed to the applicant wife under my endorsement of May 7, 2021, which imposed support obligations on the respondent husband as of February 1, 2020.
J. Paul R. Howard
Justice
Date: August 31, 2021
[^1]: Casier v. Casier, 2021 ONSC 3407 (S.C.J.).
[^2]: Family Law Rules, O. Reg. 114/99.
[^3]: Courts of Justice Act, R.S.O. 1990, c. C.43.
[^4]: Fielding v. Fielding, 2015 ONCA 901, 129 O.R. (3d) 65, at para. 67, quoting Kerry (Canada) Inc. v. Ontario (Superintendent of Financial Services), 2009 SCC 39, [2009] 2 S.C.R. 678, at para. 126.
[^5]: M. (C.A.) v. M. (D.) (2003), 2003 18880 (ON CA), 67 O.R. (3d) 181, 43 R.F.L. (5th) 149 (C.A.), at para. 40.
[^6]: Watterson v. Canadian EMU, 2018 ONSC 301 (Div. Ct.), at para. 8.
[^7]: Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, at para. 8, citing Fong v. Chan (1999), 1999 19943 (ON CA), 46 O.R. (3d) 330 (C.A.), at para. 22. See also 1465778 Ontario Inc. v. 1122077 Ontario Ltd. (2006), 2006 35819 (ON CA), 82 O.R. (3d) 757 (C.A.), at para. 26.
[^8]: Davis v. Fell, 2016 ONCJ 84, at para. 28, cited with approval in Talbot v. Talbot, 2016 ONSC 1351, 76 R.F.L. (7th) 370 (S.C.J.), at para. 7, per Templeton J., and Stephens v. Stephens, 2016 ONSC 1393 (S.C.J.), at para. 5, per Raikes J.
[^9]: M. (C.A.) v. M. (D.), at para. 42, quoting with approval Sims-Howarth v. Bilcliffe, 2000 22584 (ON SC), [2000] O.J. No. 330, 6 R.F.L. (5th) 430 (S.C.J.), at para. 4, per Aston J.
[^10]: Boucher v. Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, [2004] O.J. No. 2634 (C.A.), at para. 26.
[^11]: Gainer v. Gainer, 2006 12969 (ON SC), [2006] O.J. No. 1631, 24 R.F.L. (6th) 18 (S.C.J.).
[^12]: On my calculation of the total hours claimed for each time entry, I calculate that the total time expended was 66.4 hours. However, I evaluate the claim based on the 57.4 figure set out in the bill of costs, as I defer to counsel’s calculations and assume there is a rationale for the number presented in the bill of costs.
[^13]: “Most” but perhaps not all. At the return-to-operations scheduling court on July 16, 2020, the motion was scheduled for hearing on Monday, October 5, 2020. At that point, the applicant wife had yet to deliver her responding materials. Those responding materials were served, effectively, as of Tuesday, September 29, 2020 – that is, some four business days before the October 5th hearing. Thus, the October 5th date had to be adjourned – over the objection of the applicant wife – to allow the respondent husband an effective opportunity to deliver reply materials. The matter then came on for hearing before me on November 20, 2020. I would not be surprised to learn that the applicant’s almost-seven-month delay in responding to the motion was, at least in part, caused or impacted by the COVID-19 pandemic. However, it is not clear to me that that is the entire explanation for the delay.