Court File and Parties

Court File No.: FS-20-243 Date: 2021-11-09 Superior Court of Justice - Ontario

Re: Patricia Pilgrim, Applicant And: Jeffrey Lee Vanderstelt, Respondent

Before: Justice D.A. Broad

Counsel: Scott DeGroot, for the Applicant Robert W. Sager, for the Respondent

Costs Endorsement

[1] The parties have been unable to settle the question of costs in respect of the applicant’s motion for enforcement of an earlier disclosure order and for interim spousal support and have now each delivered written submission on costs.

Position of the Applicant

[2] The applicant seeks an award of costs on a substantial indemnity basis in the total sum of $6557.01 comprised of $5563.20 in respect of fees, HST on fees in the sum of $723.22 and disbursements, inclusive of HST in the sum of $270.59.

[3] In the alternative, the applicant seeks costs on a substantial indemnity basis in the sum of $1967.10 with respect to the issue of spousal support, and on a partial indemnity basis for all remaining issues in the sum of $3817.89 for total costs payable of $5784.99, inclusive of HST and disbursements.

[4] The applicant points to the letter from her counsel dated March 23, 2021 seeking the respondent’s consent to pay spousal support in the sum of $1800 monthly, on a without prejudice basis. The letter stated that it should be considered an Offer to Settle within the meaning of rule 18 of the Family Law Rules. The applicant estimated that 30% of the time devoted to the motion related to the issue of spousal support and that since the amount ordered for interim spousal support exceeded the amount referred to in the offer, substantial indemnity costs should be ordered in respect of the spousal support component of the motion.

[5] The applicant also submitted that the respondent’s conduct in not complying with the order of Justice Sheard dated March 18, 2021 requiring financial disclosure should be taken into account in determining the question of costs such that the respondent should be ordered to pay costs on a substantial indemnity basis on the entire motion.

Respondent’s Position

[6] The respondent submits that the applicant’s letter of March 23, 2021 proposed that spousal support payment commence immediately, whereas the court ordered that interim spousal support commence June 1, 2021, later than what was proposed. He also points out that the letter was signed only by the applicant’s lawyer and therefore does not comply with rule 18(4) of the Family Law Rules.

[7] The respondent also submits that he agreed to provide the disclosure in the valuations requested by the applicant and the argument was restricted to the issue of spousal support.

[8] The respondent argues that the applicant’s counsel spent an excessive amount of time on the matter, comprising 24.4 hours. He also takes issue with the applicant’s claim for disbursements for photocopying and research (Westlaw) charges.

[9] The respondent concludes that a reasonable amount for costs, inclusive of taxes and disbursements should be $2086.20. Due to the amount of arrears of spousal support which he has been ordered to pay, the respondent requested that any award of costs be payable within six months.

Guiding Principles

[10] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that "subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid."

[11] Pursuant to rule 24(1) of the Family Law Rules, the successful party is presumed to be entitled to recover costs. Rule 24(11) requires the court, in setting the amount of costs, to consider a number of factors including the importance, complexity and difficulty of the issues, the reasonableness or unreasonableness of each party's behavior in the case, the lawyer's rates, the time properly spent on the case, expenses properly paid or payable, and any other relevant matter. These factors are to be applied flexibly (see M. (C.A.) v. M. (D.) (2003), 67 O.R. (3d) 181 (Ont. C.A.) at para 42).

[12] Rule 18(14) of the Family Law Rules provides that a party who makes an Offer to Settle at least one day prior to a motion or seven days prior to a trial, which did not expire, was not withdrawn and was not accepted, and obtains an order that is as favourable as or more favourable than the offer is entitled to costs to the date of service of the offer and full recovery of costs from that date, unless the court orders otherwise.

[13] Consideration of the relative success of the parties on the issues in the case is the starting point in determining costs (see Butty v. Butty, [2009] O.J. No. 1887 (Ont. S.C.J.) at para. 4, citing Sims-Howarth v. Bilcliffe, [2000] O.J. No. 330 (Ont. S.C.J.)). In the case of Johanns v. Fulford, 2010 ONCJ 756 (Ont. C.J.) at para. 13, it was held that, for the purpose of rule 24(1), "success" is assessed by comparing the terms of an order against the relief originally requested in the pleadings and against the terms of any offers to settle.

[14] In M. (C.A.) v. M (D.) the Court of Appeal confirmed, at paras. 40-42, that:

(a) although the Family Law Rules have circumscribed the broad discretion granted by s. 131(1) of the Courts of Justice Act, they have not completely removed the trial judge's discretion;

(b) although the general provision, rule 24(1), enacts a "presumption" that the successful party is entitled to costs of the case it does not require that the successful party is always entitled to costs;

(c) a successful party may not obtain a costs award in his or her favour even in circumstances not falling within rule 24(4);

(d) there may be circumstances aside from the unreasonableness of the successful party's conduct that rebut the presumption; and

(e) the financial situation of the parties can be taken into account in setting the amount of the costs award either under rule 24 or rule 18 pursuant to the direction in sub rule 24(11) that the court take into account "any other relevant matter".

[15] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan, [1999] O.J. No. 3707 (Ont. C.A.) at para. 24).

[16] Importantly, the case law directs that a costs award must represent a fair and reasonable amount that should be paid, rather than an exact measure of the actual costs, must be consistent with what the unsuccessful party might reasonably have expected to have to pay, and must reflect some form of proportionality to the actual issues argued, rather than an unquestioned reliance on billable hours and documents created (see Mason v. Smissen, [2013] O.J. No. 4229 (Ont. S.C.J.) at paras. 5 and 6 and the cases therein referred to).

[17] As recently emphasized by the Court of Appeal in Beaver v Hill, 2018 ONCA 840 at paras. 12-13, proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs in family proceedings and a "close to full recovery" approach is inconsistent with the fact that the Family Law Rules expressly contemplate full recovery in specific circumstances, e.g. bad faith under r. 24(8), or besting an offer to settle under r. 18(14).

Discussion

[18] The respondent does not dispute that the applicant was the successful party on the motion and did not submit that the presumption in rule 24(1) has been displaced. The applicant is therefore entitled to an award of costs in respect of the motion.

[19] I am unable to accept the respondent’s submission that the court should not have regard to the offer set forth in the letter from the applicant’s counsel, proposing spousal support in the sum of $1800 per month, on the basis that interim spousal support was not ordered to commence until June 1, 2021.

[20] The applicant made her proposal and waited two weeks before incurring any costs on the motion. The motion was brought June 1, 2021 and the applicant quite correctly sought interim spousal support from that date.

[21] Although the letter did not satisfy the requirement of subrule 18(4) requiring that it be signed personally by both the applicant and her lawyer, subrule 18(16) provides that 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.

[22] The case of Blackstock v. Comeau, 2018 ONSC 1098 (S.C.J.) stands for the proposition that subrule 18(16) permits the court to take into account any written offer to settle, including an offer provided by counsel alone, without the signature of the offering party.

[23] The March 23, 2021 letter demonstrated that the applicant was settlement focused and sought to resolve the issues without the cost and delay associated with a motion. I am not satisfied that the respondent has been shown to be similarly settlement focused.

[24] The motion to require compliance with Justice Sheard’s earlier order should not have been necessary, but for the respondent’s dilatory approach to compliance with it. Indeed, as pointed out by the applicant in her submissions, financial disclosure by the respondent should have been automatic without the need for any motion.

[25] In the circumstances, it is appropriate that the respondent pay the costs of the motion on a substantial indemnity basis.

[26] As indicated above, the respondent argues that the amount of time spent by the applicant’s counsel was excessive, however, the court is hampered in assessing this submission by the respondent’s failure to file his own Costs Outline or Bill of Costs in order to gauge his reasonable expectations with respect to costs.

[27] As was held by the Court of Appeal in Beaver v. Hill reasonableness and proportionality are the predominant considerations in fixing costs in family proceedings.

[28] In all of the circumstances, I find that an award of costs on a substantial indemnity basis, fixed in the sum of $5,500, inclusive of fees, disbursements and HST is reasonable and reflects the fundamental purposes of costs in the context of this case.

Disposition

[29] It is ordered that the respondent pay costs to the applicant in the sum of $5,500 within 90 days hereof.

D.A. Broad, J.

Date: November 9, 2021