Felix Salazar Holguin v. Thiruchelvam Mohan, 2021 ONSC 7696

COURT FILE NO.: FS-20-19588

DATE: 2021-11-23

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: FELIX SALAZAR HOLGUIN, Applicant

AND:

THIRUCHELVAM MOHAN, Respondent

BEFORE: Kimmel J.

COUNSEL: Applicant, Self-Represented felixsalazarmt@gmail.com

Kenneth Younie, for the Respondent kenneth@vanderschootfamilylaw.com

HEARD: October 5, 2021 (Supplementary written cost submissions dated October 22, 2021, November 1, 2021 and November 5, 2021)

Costs ENDORSEMENT

[1] I granted the respondent’s summary judgment motion for the dismissal of this application in my endorsement dated October 14, 2021 (Holguin v. Mohan, 2021 ONSC 6820). I found there was no genuine issue requiring a trial because the application was statute barred, having been commenced more than two (and even more than ten) years after the pleaded causes of action arose. I found that the parties’ relationship ended in January 2009. Holguin’s application was commenced in October of 2020 and it was therefore out of time under both the Limitations Act and the Real Property Limitations Act.

[2] The parties agreed to exchange their respective Bills of Costs by October 8, 2021 (before knowing the outcome of the summary judgment motion) outlining the amount of costs that they would be seeking from each other if they were the successful party on this motion, and they did so. I encouraged the parties to try to settle the costs of the application after receiving my November 3, 2021 endorsement, but allowed them to make brief written submissions on costs if they were unable to settle, which written submissions I have now been provided with and read.

Positions of the Parties on Costs

[3] The successful respondent claims to be presumptively entitled to costs under s. 24 of the Family Law Rules, and seeks full indemnity costs based on a November 9, 2020 offer to settle that was served early on in the proceeding, before he delivered his Answer, in which he offered a without costs dismissal (which offer was open for acceptance until trial with incremental cost consequences if accepted more than three days after the offer was served). Conversely, the applicant never served an offer to settle and never indicated that he would accept anything less than a 50% interest (or value equivalent) in the respondent’s property.

[4] The respondent seeks costs of $16,548.29 inclusive of all fees, disbursements and applicable taxes. This represents 39.1 lawyer hours, 6.6 clerk/assistant hours. An additional amount of $1,500 is sought for the preparation of the bill of costs and cost submissions.

[5] In his October 8, 2021 bill of costs, the applicant sought an award of costs in his favour of $14,400.00, based on an estimated total of 96 hours that he says he spent working on the motion, at a reduced hourly rate of $14/hour (from what he charges as a professional registered massage therapist, of $75/hour).

[6] The applicant raises various arguments seemingly going to the merits of the application (which has already been dismissed). He is ultimately suggesting that there should be no costs awarded against him, and that he should be awarded $15,000 in costs to be paid to him by the respondent, because (according to his allegations):

a. He is self-represented, although he tried to retain counsel;

b. English is not his first language and he has had to ask for assistance from friends and family to review his written submissions to the court[^1];

c. There was a problem with the uploading/retention of his materials for the motion in CaseLines which resulted in the court not having before it all of his material when the motion was (in his view) wrongly decided;

d. The respondent may have acted in bad faith and be implicated in whatever the problem was with the retention of the applicant’s materials on CaseLines, with the result that the court was misled by not having all of the material for the motion; and

e. The respondent’s offer was not reasonable because it did not recognize the compromise that the applicant was making by seeking only a 50%, rather than the higher 70% interest in the respondent’s property that the applicant believes he is entitled to.

[7] Most of these points raised by the applicant are not relevant to the determination of the issue of costs but I will address those that I consider might possibly be relevant in the analysis that follows.

Costs Analysis

Entitlement to Costs

[8] Under Rule 24 of the Family Law Rules, O. Reg. 114/99, there is a presumption that a successful party is entitled to the costs of a motion.

[9] Rule 24 of the Family Law Rules sets out factors that the court can consider when determining both the entitlement to and quantum of costs. Among other things, an award of costs is subject to: r. 24(4) (unreasonable conduct of a successful party), r. 24(8) (bad faith), r. 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party: see Berta v. Berta, 2015 ONCA 918, [2015] O.J. No. 6844, at para. 94.

[10] Modern family law cost rules are based on broad objectives. These objectives are: (1) to partially indemnify successful litigants; (2) to encourage settlement; (3) to discourage improper behaviour by litigants; and (4) to ensure cases are dealt with justly under r. 2(2) of the Family Law Rules: see Mattina v. Mattina, 2018 ONCA 867, [2018] O.J. No. 5625, at para. 10.

[11] The only point raised by the applicant in his cost submissions that could possibly be tied to the question of the respondent’s entitlement to costs is the assertion that the respondent acted in bad faith. The alleged bad faith is tied into the applicant’s erroneous assumption that the court did not have access to his materials filed on the motion before, during or after it was argued. This is simply not the case. There was an issue with accessing the applicant’s materials on CaseLines that was raised at the outset of the motion. However, it was established through a review of the material that I had access to in the electronic court file (that I was able to access outside of CaseLines both before, during and after the motion) that the only thing that was missing of the applicant’s material was his factum, which was sent to me by the respondent’s counsel and I reviewed it during a break in the oral submissions, before the applicant began. All of the applicant’s motion material was subsequently filed and uploaded onto CaseLines and accessible for review while the motion was under reserve.

[12] All of the applicant’s material for the motion, being his affidavit sworn September 2, 2021 with attached exhibits and his factum, were reviewed and considered by the court. Furthermore, there is nothing before the court to suggest that the respondent was in any way responsible for the applicant’s materials not being available on CaseLines on the day of the hearing (nor did that have any impact on the outcome of the motion in any event). I do not consider the respondent to have acted in bad faith, or to have behaved unreasonably, in relation to any aspect of the issues relevant to the determination of the motion or costs.

[13] I find the successful respondent to be entitled to costs of the application, which has been dismissed.

Scale of Costs

[14] Rule 18(14) of the Family Law Rules provides that: 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:

1. If the offer relates to a motion, it is made at least one day before the motion date.

2. 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.

3. The offer does not expire and is not withdrawn before the hearing starts.

4. The offer is not accepted.

5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

[15] The respondent’s November 9, 2020 offer to settle meets all of these criteria. The only one that is even open for discussion is whether the offer was as favourable or more favourable than the ultimate outcome. Under r. 18(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). I find that the respondent has met that burden in that his offer was for a without costs dismissal of the application, whereas the outcome of the application is that it was dismissed with costs.

[16] I am aware of the line of cases that suggest that an offer that only compromises on costs and does not compromise on the substance of the issues is not a “real” offer for settlement purposes. However, I am also cognizant that, in a situation where the respondent considers his position to be strong, he should not be required to offer a settlement payment, beyond foregoing costs, in order to be entitled to the benefit of r. 18(14). There are cases in which offering to forego costs is a real offer of compromise where there is a decisive threshold issue that strongly favours one party, and this is one of those cases.

[17] Under r. 18(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. I find the respondent’s settlement offer to be a relevant consideration that leads me to conclude that he is entitled to almost his full indemnity costs, subject to some considerations about inclusions that I will discuss in the next section in the exercise of my discretion in determining the quantum of costs.

Quantum of Costs

[18] Rule 24(12) prescribes the factors that the court is to consider 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 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, [which includes, amongst other things, presumptive cost consequences when a party achieves a more successful outcome than certain extended settlement offers not accepted by another party],

iv. any legal fees, including the number of lawyers and their rates; …

v. any other expenses properly paid or payable; and

b. any other relevant matter.

[19] One of the yardsticks against which to measure the reasonableness and proportionality of the costs claimed by the respondent is to compare them to what the applicant is seeking. The applicant seeks costs in the amount of $15,000. This is not too far outside of the range of what the respondent seeks ($16,548.29 + $1,500 = $18,048.29). The total number of lawyer and clerk/assistant hours are not unreasonable, having regard to the nature and importance of the issues and when considered in light of the total hours spent by the applicant (which are understandably much higher due to his lack of legal training). There are no fees claimed for lawyer or clerk/assistant time prior to the date of the settlement offer. There are no disbursements claimed.

[20] I have already found there to be no merit to the suggestion that the respondent acted unreasonably or in bad faith in the connection with the conduct of the application or the summary judgment motion.

[21] Conversely, there is the concern raised by the respondent that the applicant behaved unreasonably by entrenching himself in his position and not making an offer to settle that reflected a compromise from his pleaded claim to a 50% interest in the respondent’s property: see Potter v. Da Silva, 2014 ONCJ 443, para. 22. Having regard to one of the primary objectives of the Family Law Rules mentioned earlier, which is to encourage settlements, parties who do not engage in meaningful settlement negotiations (for example, by not making an offer of compromise against their pleaded claim) may not be considered to be acting reasonably.

[22] One factor in the costs analysis that might detract from the full amount the respondent has claimed is that he has included costs of a case conference held on July 16, 2021. Costs of case conferences are not necessarily awarded to successful parties as a matter of course. The respondent argues, however, that he can ask for them now, since no order was made at the conference and the case conference was directly connected to the summary judgment motion, pursuant to r. 17(18.1) and 24(11): See I.S. v. T.C., 2020 ONSC 5411, at paras. 18-23. I agree that the fees for the case conference in this case are appropriately included as the respondent was persistent throughout that the application was statute barred and that was ultimately the basis on which he succeeded and would no doubt have been an important point of discussion at the case conference.

[23] A further factor that could detract from the total costs claimed by the respondent is that there is time included in the respondent’s Bill of Costs for someone who is variously described as both a legal assistant and a clerk. It is not clear which role this person was working in, but the court does not generally award costs for legal assistants. In the absence of further and better information, and in the exercise of my discretion, I am going to exclude the fees and associated taxes for this work, which total $1,305.15. That leaves $16,743.14 in full indemnity costs still claimed.

[24] Taking into account all of the above considerations, and in the exercise of my discretion, having regard to what is fair, proportional and reasonable in the circumstances, I am fixing the respondent’s costs of the summary judgment motion and the application in the amount of $15,000 (inclusive of all fees and applicable taxes). The applicant is ordered to pay this amount of costs to the respondent forthwith, within 30 days of this endorsement.

[25] I consider that this costs award achieves the objectives for costs awards in family law cases. (1) It mostly, but not entirely, indemnifies the respondent, who was the successful litigant and who made an offer to settle early on; (2) it encourages settlement by holding the applicant accountable for costs after he was presented with, and declined, an offer that, if accepted could have saved both parties the time and expense of the motion that led them to the same, inevitable, outcome, having regard to the limitations bar; (3) it takes into account the reasonableness of the parties’ positions and conduct of the litigation; and (4) I consider it to be a just, fair and reasonable way to balance the competing interests in the circumstances of this case, in part because it is the amount that the unsuccessful applicant was seeking in costs.

Kimmel J.

Date: November 23, 2021

[^1]: The applicant acknowledges that he agreed to start the motion even though his interpreter was not present, based on his ability to comprehend English. His interpreter was present and did interpret for him during his responding oral submissions on the motion.