COURT FILE NO.: FC-19-1751
DATE: 2021/10/28
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Henry Oppong-Nketiah, Applicant
AND:
Eunice Oppong Nketiah, Respondent
BEFORE: Somji J.
COUNSEL: Sarah Kennedy, for the Applicant
Karla Policelli, for the Respondent
HEARD: In Writing
COSTS ENDORSEMENT
[1] This decision addresses the respondent mother’s costs application following a motion brought by the applicant father for an interim order compelling the sale of the matrimonial home, sale of an investment property, and disclosure of the mother’s pension valuation. I rendered my decision on the motion on July 7, 2021, and indicated that the mother was the successful party: Oppong Nketiah v. Oppong Nketiah, 2021 ONSC 4807
[2] The mother seeks costs on a substantial indemnity basis of approximately $7,200 on the grounds that she was the successful party and that the father’s conduct was unreasonable.
[3] The father argues that success was mixed and consequently, the parties should bear their own costs. The father argues that: one, the mother acted unreasonably by refusing to sell the investment properly until March 24, 2021, which necessitated the motion and increased costs; two, the mother adduced privileged settlement discussions and misled the court about the parties’ positions on the investment property; and three, the fees for the mother’s counsel are excessive in relation to the work performed.
[4] The issues to be decided are:
Is the mother the successful party and is she entitled to a costs award?
If the mother is entitled to a costs, what constitutes a reasonable award?
[5] All references to rules are the Family Law Rules, O. Reg. 114/99 unless otherwise stated.
Issue 1: Is the mother the successful party and is she entitled to a costs award?
[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, as per r. 2(2) that cases are dealt with justly: Mattina, at para. 10.
[7] The court has the discretion to determine to whom costs should be awarded and in what amount: Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43.
[8] Rule 24 sets out the legal framework for cost orders in family cases: Mattina v. Mattina, 2018 ONCA 867, at para 9.
[9] The starting point is that the successful party is presumptively entitled to costs: r. 24(1). However, in awarding costs judges must also consider the following:
➢ written offers to settle: rr. 18(14) and 24(12)(a)(iii);
➢ any unreasonable conduct on the part of a successful party: r. 24(4); and
➢ if a party has acted in bad faith: r. 24(8).
Success
[10] I disagree with the father that there was mixed success in this case. The mother was successful on the principal issue of whether there should be an interim order compelling the sale of the Greely home under the Partition Act. With respect to the investment property, the mother consented to the sale prior to the start of the motion. Despite her agreement, the father proceeded to argue this issue. The fact that the court ordered the sale of the property on consent of the parties does not render the father successful on this issue.
[11] Similarly, the mother provided her pension valuation prior to the motion based on a separation date of May 11, 2018. The father was not satisfied and argued the pension valuation should be based on a separation date of September 2018. I found that the mother was entitled to rely on the May valuation date, but for the purposes of finalizing disclosure, I ordered the mom to provide another pension valuation based on the later date. This order, intended to facilitate disclosure and assist the parties in advancing their matter, does not render the father successful on this issue. As indicated in my motion decision, the date of separation remains in dispute and will be determined at trial unless the parties come to an agreement.
[12] I find the mother was the successful party and is presumptively entitled to costs: r. 24(1). Furthermore, I do not find that the mother engaged in any unreasonable conduct that would disentitle her to a costs award: r. 24(4)
[13] The father argues that the mother acted unreasonably by one, providing her pension valuation for the first time just before the motion was heard; two, refusing to sell the investment properly for two years which necessitated the father bringing a motion at a cost to him; and three, unilaterally adducing privileged settlement discussions and misleading the court about the parties’ positions on the investment property.
[14] The mother provided her pension valuation in November 2019 from the Government of Canada Pension Centre which she understood would be sufficient. The parties continued to discuss the matter. The father only requested an actuarial opinion of her federal pension in September 2020. This would result in an additional cost to the mother, a concern her counsel raised at the time. Nonetheless, the mother provided a formal pension valuation report to the father on March 24, 2021, six days before the motion was heard. I do not have any evidence to suggest that the amount of time taken to obtain the actuarial report was excessive or that the mother’s intent was to delay the family law matters. Furthermore, even after the report was provided, the father requested a new report be prepared valued as of September 2018 when he had been aware since May 2019 that the mother would be relying on a separation date of May 11, 2018 for pension valuation. I do not find the mother’s conduct unreasonable.
[15] Counsel for the father argues that the mother’s unwillingness to sell the rental property earlier and without the need to bring a motion was unreasonable and should disentitle her to costs. I disagree. The fact that parties have historically taken different positions on how to resolve this property issue is not determinative factor in the awarding of costs on this motion. While the father might argue it was unreasonable for the mother to have refused the sale of the investment property earlier, the mother could equally argue it was unreasonable for the father not to accept her offer of November 2020 to buy out his share of the investment property which would have provided him with immediate funds. Moreover, counsel for the mother explains that it was premature for the mother to agree to sell the investment property until the parties had exchanged financial disclosure, including a request for the information on the father’s overseas assets. The mother was also using the rental income from the investment property to supplement child support and expenses for four children.
[16] The parties could not resolve their differences over the investment property, and the father chose to bring a motion which he was entitled to do. However, the mother accepted his offer to settle this matter six days before the motion was heard and an order was made on consent to sell the investment property. Given the issue was resolved on consent, and the Court did not adjudicate the merits of this particular issue, it is difficult to assess whether the parties’ positions were unreasonable. It is for this reason that costs are generally not appropriate on consent orders: Ball v Ball, 2014 ONSC 5754 at para 12. Nonetheless, based on the submissions made, I find the mother’s conduct on this issue was reasonable and does not disentitle her to a costs award on the motion which dealt principally with the interim sale of the Greely home.
[17] Finally, I disagree that the mother misled the court. The court was well aware that the mother did not originally agree to the sale of the investment property and consented just prior to the motion hearing. The court was also well aware of the financial, residential, and personal circumstances of the father and the reasons for which he sought sale of both the investment property as well as the Greely home.
[18] The mother was the successful party on the motion and did not engage in unreasonable conduct. She is entitled to a costs award.
Issue 2: If the mother is entitled to a costs, what constitutes a reasonable award?
[19] In determining the amount to be awarded, r. 24(12) requires a judge to 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.
[20] Rule 18(14) provides for full recovery costs if certain conditions are met. It states:
(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. O. Reg. 114/99, r. 18 (14).
[21] In this case, the relevant factors for consideration in quantum as identified by both parties includes: the conduct of the parties, offers to settle, time spent on various issues, fees and rates, and the reasonableness of the costs requested by the mother.
Conduct of the parties and offer to settle
[22] The mother seeks costs on a substantial indemnity basis on the grounds that the father was unreasonable because one, he did not accept her offer to purchase his interest in the Greely home based on the appraised value and two, that he engaged in spiteful conduct by insisting on its sale with little regard to the potential impact it would have on the children.
[23] I find the father’s refusal to accept the mother’s offer does not warrant an elevated costs award. As indicated in my decision, the court cannot order one party to be given a right of first refusal with respect to the sale of a jointly owned property. The father was not and is not legally obliged to accept the mother’s offer to purchase his share. He is entitled to seek the highest price for his interest in the property in the market. Indeed, that may be the situation after trial.
[24] The motion was an attempt by the father to obtain an order to force the sale of the Greely home under the Partition Act pending trial on the remaining family law matters. The father was not successful in obtaining an interim order compelling the sale of the Greely home, and consequently, there will be a costs award against him. However, the father’s refusal to accept the mother’s offer to purchase his share when he was not legally obliged to do so does not warrant an elevated costs award for the mother.
Offer to settle:
[25] Both parties made offers to settle in this case, a factor to be considered in assessing the quantum of costs to be awarded.
[26] The mother argues that had the father accepted her offer to purchase his share of the Greely home, he would have been in immediate receipt of his share of the equity in the home, a situation that would have been more favourable to him than the outcome of his motion.
[27] It is difficult to discern in these circumstances whether the mother’s offer to purchase the father’s share in the home at the appraised value was in fact more favorable for the father given that one cannot know what the price could have been on an open market bid. Furthermore, to the extent that the mother’s offer could be deemed as being more favorable because it would have given him immediate access to some funds, the mother would only be entitled to full recovery costs as of the date of the offer which was March 24, 2021: r. 18(14). I agree with counsel for the father that the mother’s counsel on the motion, Sarah Kennedy, has not provided a bill of costs particularizing when she did her work and what portion should be fully recovered. In addition, I am unable to discern from her bill of costs what work she did on the principal issue and what she did on the matter that ultimately settled. I find the mother has not established grounds for costs on a substantial indemnity basis.
Time spent on various issues and billings
[28] I agree that the motion was complex given that the Partition Act was not originally pled, the parties had divorced during the proceedings thereby extinguishing rights to exclusive possession of the matrimonial home, and there were numerous factors to consider in the exercise of the court’s discretion on whether to compel a sale of the Greely home on an interim motion. The issue was also of importance to the mother because of its potential impact on the four children and maternal grandmother who resided with her in the home.
Legal fees and rates
[29] The father argues the fees charged by counsel on the motion was excessive.
[30] I find the fee of $300/hour charged by Ms. Kennedy was reasonable and commensurate with her years of experience. Ms. Kennedy charged for 25 hours of work whereas counsel for the father charged for only 15.3 hours. This is a 10 hour discrepancy valued at $3000.
[31] Ms. Kenney did not specify when the 25.8 hours was completed and whether it was on all issues or just the one that was principally litigated. Without a clear breakdown of her billings, it is difficult to determine whether all 25 hours were reasonably necessary: Benzeroual v Issa, 2017 ONSC 6225 at paras 54 to 56.
[32] Given the nature and complexity of the principle issue on the motion, I find that 20 hours is a reasonable amount of time to have billed in this matter:
Reasonableness of costs requested
[33] In determining quantum, I must consider whether the costs sought by the successful party is reasonable: Mattina, at para 13; Berta v. Berta, 2015 ONCA 918 at para 94.
[34] I must also consider the financial means of the parties, their ability to pay, and the effect of any costs ruling on the parties and the children: Fyfe at para 11; M.(A.C.) v. M (D.), 2003 CanLII 18880 (ON CA), 231 D.L.R. (4th) 479, at para 45
[35] The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para 26; Fearon at para 44.
[36] The mother’s actual costs on the motion were $8,746.20. Having considered that the mother was the successful party, the conduct of the parties, offers to settle, the complexity of the principal issue, and the hours, rates, and fees as presented on the bill of costs, I find that a costs award to the mother in the fixed amount of $3,600 is fair and reasonable in this case.
Order
[37] The father will pay the mother costs in the amount of $3,600 within 30 days.
Somji J.
Date: October 28, 2021
COURT FILE NO.: FC-19-1751
DATE: 2021/10/28
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Henry Oppong-Nketiah, Applicant
AND:
Eunice Oppong Nketiah, Respondent
BEFORE: Somji J.
COUNSEL: Sarah Kennedy, for the Applicant
Karla Policelli, for the Respondent
costs endorsement
Somji J.
Released: October 28, 2021