Court File and Parties

COURT FILE NO.: FC-20-003 (Perth) DATE: 2022-07-11 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: DAVID LENNOX, Applicant AND: SUDAN KAYE, Respondent

BEFORE: Mr. Justice Graeme Mew

COUNSEL: Tamara Scarowsky, for the Applicant Steven Lahti, for the Respondent

HEARD: In Writing

ENDORSEMENT on costs

[1] The trial between the parties took place over three days and determined the issues of how the proceeds of the sale of a property that the parties had owned should be allocated, whether the respondent was entitled to spousal support and, if so, in what amount and duration.

[2] In reasons for decision released on 30 March 2022 (reported at 2022 ONSC 1983) I found that the applicant should pay the respondent spousal support in the amount of $700 per month for 36 months, commencing 1 April 2022, and that the proceeds of sale of their jointly owned property should be divided between the parties equally.

[3] The parties have been unable to reach agreement on the issue of costs. In such eventuality, the parties were requested to provide written costs submissions not to exceed four pages in length, a bill of costs and any offers to settle relied upon.

[4] The applicant’s substantive costs submissions were limited to four pages. Instead of submitting a proper bill of costs, the applicant provided 29 separate statements of account that had been rendered by the applicant’s solicitors. Copies of seven offers to settle were also provided by the applicant.

[5] The respondent provided a bill of costs, a four-page costs submission and two offers to settle.

[6] There were two offers to settle made by the applicant which remained capable of acceptance at the commencement of trial. The most recent of these offers, made on 15 November 2021 is described as his “Rule 18 offer”. He asserts that he was the successful party because each of his offers were more favourable to the respondent than the result at trial, and the respondent did not obtain a better result at trial than the terms of her own offers.

[7] While, as I will explain, the applicant did better than his “Rule 18 offer”, it was only made the day before trial and, as such, is not a qualifying offer under rule 18(14) of the Family Law Rules, O. Reg. 114/99.

[8] The essential elements of the applicant’s “Rule 18 offer” were an equal division of the proceeds of sale of their jointly owned property and a lump sum spousal support payment of $52,000, to be taken out of the proceeds of sale of the property.

[9] The “Rule 18 offer” expressly left open for acceptance an earlier offer of 13 April 2021, which also provided for equal division of the proceeds of sale of the property and for either a lump sum settlement of spousal support of $30,000 or for payment of $7,000 for arrears of spousal support plus $500 per month until 1 February 2027 (i.e. 70 months if the offer had been promptly accepted).

[10] To obtain the benefit of the rule on costs consequences of a party’s failure to accept an offer to settle, 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 the rule: Family Law Rules, r. 18 (15).

[11] The applicant’s claim that the result at trial was less favourable than his offer is based on a calculation that the spousal support of $700 per month for 36 months awarded to the respondent by the court is the equivalent to a lump sum of $19,736, using the mid-point of the applicable tax cost/benefit produced by the DivorceMate program.

[12] The respondent disputes that the applicant has done better than his offer. She argues that the only way that his offer was better than that received in the judgment is the temporal element of the judgment is ignored and the spousal support awarded is “artificially” converted into a lump sum. To do that, she says, ignores the importance of stability in preference of convenience.

[13] The respondent’s argument might have more force if she had not, in her own offers, proposed a lump sum settlement of spousal support.

[14] I am satisfied that the applicant has done better than his offer. Even calculating the lump sum equivalent of spousal support on a straight-line basis ($700 x 36 = $25,200), the offer of $30,000 for that element provided for in the April 2021 offer exceeds what was awarded.

[15] Pursuant to rule 18(14) the applicant is therefore presumptively entitled to his reasonable costs prior to the date of the offer, and full recovery of costs from the date of the offer onwards. The applicant seeks a costs award of $40,000.

[16] However, in the absence of a bill of costs, the only way to assess the appropriateness of the applicant’s claim for costs is to review and aggregate the 29 separate statements of account that have been submitted. As my task is to fix costs rather than assess them, I decline to do so.

[17] The respondent points to various examples of unreasonable behaviour by the applicant throughout the conduct of the litigation which, she argues, should, pursuant to rule 24(4) deprive the applicant of all or part of the costs he would otherwise be entitled to.

[18] The history of the litigation and the positions taken by them at various times do not reflect particularly well on either of the parties. However, in reviewing their respective complaints, lack of reasonableness in their conduct has been evident at times on both sides. It is therefore a neutral factor in my evaluation of costs.

[19] Had I agreed with the respondent that success had been divided between the parties, her costs demand was for $21,742.64 on a partial indemnity scale. The total fees and disbursements incurred by her were $36,237.73.

[20] While the costs fixed by the court should properly reflect the respondent’s failure to take an offer which was more favourable than the result she achieved at trial, in the absence of a proper bill of costs there is no method, short of a forensic analysis of 29 solicitor-client accounts, to fix his costs with any exactitude.

[21] In the circumstances, and using the respondent’s costs as a guide, I therefore fix costs, payable by the respondent to the applicant, in the all-inclusive amount of $30,000.

Mew J.

Date: 11 July 2022