COURT FILE NO.: FS-17-00420942-0000
DATE: 20221013
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JORDAN DUPUIS
Applicant
- and -
SUSHMA KANHAI-DUPUIS
Respondent
Poroshad Mahdi, Counsel for the Applicant
Roslyn Tsao and Danielle Dekeyser, Counsel for the Respondent
HEARD: in writing
Davies J.
reasons for Decision on costs
A. Overview
[1] Jordan Dupuis and Sushma Kanhai-Dupuis had a six-day trial before me in April and May 2022. Ms. Kanhai-Dupuis now seeks $129,037.52 in costs and $5,429.03 in disbursements. Ms. Kanhai-Dupuis argues that she was entirely successful at trial. She argues that she is entitled to full recovery costs after February 22, 2022 when she delivered her offer to settle because my trial decision was as favourable to her as her offer.
[2] Mr. Dupuis argues that I should not make any costs order. He argues that Ms. Kanhai-Dupuis acted unreasonably and caused the trial to be longer and more costly than necessary. Mr. Dupuis also argues that he cannot afford to pay a costs order and that a costs order would be detrimental to the children.
[3] Costs awards are intended to partially indemnify successful litigants, encourage settlement and discourage inappropriate behaviour: Serra v. Serra, 2009 ONCA 395, Mattina v. Mattina, 2018 ONCA 867. Any costs order must be fair, reasonable and proportionate having regard to all the circumstances, including the complexity of the issues, the conduct of the parties, the time spent by counsel and any offers to settle: Family Law Rules, Rule 24(12). The focus must be on what Mr. Dupuis, as the unsuccessful party, would reasonably expect to pay, not on Ms. Kanhai-Dupuis’ actual costs: A.P. v. L.K., 2021 ONSC 1054 at para. 9. At the same time, costs awards must not be so burdensome that they create an impediment or a deterrent to pursuing justice, particularly in family proceedings: Thompson v. Drummond, 2018 ONSC 4762 at para. 9.
[4] I find that it is fair and reasonable to expect Mr. Dupuis, as the unsuccessful party at trial, to pay Ms. Kanhai-Dupuis $60,000 in costs inclusive of HST and disbursements. To ensure the costs award does not have a devastating effect on their family, Mr. Dupuis shall be given 24 months to pay.
B. Success at Trial
[5] Ms. Kanhai-Dupuis was the successful party at trial.
[6] Prior to trial, Ms. Kanhai-Dupuis’ parenting time was supervised and was limited to five hours each weekend (with a few additional daytime visits during the summer and over Christmas). At trial, Ms. Kanhai-Dupuis sought equal parenting time with the children and joint decision-making responsibility.
[7] Mr. Dupuis sought sole decision-making responsibility. In terms of parenting time, Mr. Dupuis agreed that Ms. Kanhai-Dupuis’ parenting time should be increased but he argued any increase should be gradual. He also argues that Ms. Kanhai-Dupuis should only have overnight parenting time with the children on the weekends and only if she moves into an apartment with two bedrooms for the children.
[8] Mr. Dupuis and Ms. Kanhai-Dupuis have three young children (aged 10, 7 and 5). The focus of the trial was on Ms. Kanhai-Dupuis’ alcohol addiction and its impact on her ability to parent their children. Ms. Kanhai-Dupuis’ use of alcohol was problematic before she and Mr. Dupuis separated in 2017. On more than one occasion, Ms. Kanhai-Dupuis put the children in danger and/or was unable to properly care for them because she was drinking.
[9] Despite Ms. Kanhai-Dupuis’ history of abusing alcohol and her admitted addiction, I found it was in the best interests of the children for Mr. Dupuis and Ms. Kanhai-Dupuis to have equal parenting time. Ms. Kanhai-Dupuis had taken significant steps to address and manage her addiction. I found the risk she would relapse was not significant. Nonetheless, to ensure the children’s safety, I ordered that Ms. Kanhai-Dupuis could not consume alcohol during her parenting time or 24-hours before the start of her parenting time. I also ordered her to continue taking alcohol tests before and during her parenting time until December 31, 2022.
[10] As the successful party, Ms. Kanhai-Dupuis is presumptively entitled to costs.
C. Offers to Settle
[11] While the Court retains discretion in terms of awarding costs, there is presumption in favour of enhanced costs if the unsuccessful party failed to accept a reasonable offer to settle: Family Law Rules, Rule 18(14). Ms. Kanhai-Dupuis would be presumptively entitled to full recovery costs from the date of her offer if three conditions are met. First, the offer was made at least seven days before trial. Second, the offer did not expire and was not withdrawn before trial. And third, the result at trial was as favourable or more favourable to Ms. Kanhai-Dupuis than her offer.
[12] Ms. Kanhai-Dupuis made two offers to settle. One related to parenting issues (delivered February 22, 2022) and one related to child support (delivered March 20, 2022). Each element of both offers was severable. Both offers were made at least seven days before trial. Neither offer expired before trial. Neither offer was withdrawn before trial. Therefore, the real issue is whether my trial decision was as favourable or more favourable to Ms. Kanhai-Dupuis than her offers. When considering whether the result at trial was as favourable or more favourable than the offer, I am not required to compare each term of the offer to the terms of the order. Rather, I must assess the offer or offers as a whole and decide how it compares to the final order at trial: Thompson v. Drummond, 2018 ONSC 4762 at para. 19.
[13] Ms. Kanhai-Dupuis’ first offer dealing with parenting included a gradual increase in her parenting time over a two-month period. She proposed that equal parenting time would start in May 2022. Ms. Kanhai-Dupuis proposed an end to the supervised parenting. Ms. Kanhai-Dupuis also proposed that she would continue with daily alcohol testing until May 30, 2022. Except for the termination of the alcohol testing – which I ordered would continue until December 31, 2022 – my order was as favourable to Ms. Kanhai-Dupuis as her offer to settle the parenting issues. I ordered that Ms. Kanhai-Dupuis’ parenting time should not be supervised. I ordered a brief transition period for the children to adjust to increased parenting time with Ms. Kanhai-Dupuis. I ordered that starting August 1, 2022, Ms. Kanhai-Dupuis would have equal parenting time.
[14] However, my order is less favourable to Ms. Kanhai-Dupuis than her offer to settle the support issues. She proposed that once she and Mr. Dupuis had equal parenting time, their respective child support obligations would be offset and Mr. Dupuis would pay her the difference. I found that it would not be appropriate for Mr. Dupuis to pay Ms. Kanhai-Dupuis child support once their parenting time was equal because Mr. Dupuis’ housing costs were much higher and they had agreed it was in the children’s best interests for Mr. Dupuis to spend more on housing to stay in the catchment area for the children’s school.
[15] In my view, Ms. Kanhai-Dupuis’ offers must be considered in their totality to determine whether the outcome at trial was as favourable to her as her offers. Most of the trial time was consumed with parenting issues. Very little time was devoted to support issues. Had Mr. Dupuis accepted Ms. Kanhai-Dupuis’ parenting offer, the trial would have been much shorter and much less expensive. I find that Ms. Kanhai-Dupuis is entitled to enhanced costs because my order was as favourable to her on the main issue at trial. However, I am not satisfied that she is entitled to full recovery because parts of my order were not as favourable as her offer.
D. Ability of Mr. Dupuis to Pay Costs
[16] Mr. Dupuis argues that neither he nor Ms. Kanhai-Dupuis can afford to pay a significant costs award. He argues that a massive costs award will have a detrimental impact on the children.
[17] Mr. Dupuis and Ms. Kanhai-Dupuis are of relatively modest means for parents raising three children in Toronto in two separate homes. Mr. Dupuis earned just over $80,000 in 2021. Ms. Kanhai-Dupuis earned less than $60,000.
[18] Although not enumerated in Family Law Rules, the parties’ financial circumstances and ability to pay are relevant to what quantum of costs, if any, should be awarded: Murray v. Murray, 2005 CanLII 46626 (ON CA), [2005] O.J. No. 5379 (C.A.); Tauber v. Tauber, 2000 CanLII 5747 (ON CA), [2000] O.J. No. 2133 at para. 54. The financial circumstances of the parties are particularly relevant when the unsuccessful party at trial is a custodial parent. The Court cannot ignore the best interests of the children when fixing costs, including the impact of a costs award on the children: C.A.M. v. D.M., 2003 CanLII 18880 (ON CA), [2003] O.J. No. 3707 at para. 42. At the same time, parties with limited financial means cannot be permitted to litigate with impunity. A party with limited financial means is expected to act diligently and reasonably to minimize the costs of litigation. A party who argues the costs award should be reduced (or no costs award should be made) because of their financial circumstances should expect the Court to consider their overall conduct in the litigation: Thompson v. Drummond, 2018 ONSC 4762 at para. 22.
[19] Mr. Dupuis’ and Ms. Kanhai-Dupuis’ financial circumstances are relevant to my decision on what costs are fair and reasonable in this case. A costs order of $135,000, as sought by Ms. Kanhai-Dupuis, would devastate this family and is, therefore, unreasonable.
[20] I also find Ms. Kanhai-Dupuis’ legal fees are unreasonable given her financial circumstances. Ms. Kanhai-Dupuis’ bill of costs includes fees for two lawyers to attend the trial each day. It is, of course, for counsel to decide how to staff a file and how to allocate work among the lawyers working on the case. Senior counsel are also encouraged to give more junior counsel an opportunity to attend court and participate in trials. However, Ms. Kanhai-Dupuis and Mr. Dupuis are of modest means. It is not reasonable in those circumstances to expect Mr. Dupuis to cover the cost of both Ms. Kanhai-Dupuis’ lawyers attending the trial. Ms. Kanhai-Dupuis could not afford to pay two counsel to attend trial. Her counsel have been working pro bono for some time, which is admirable. Nonetheless, it is not reasonable for Ms. Kanhai-Dupuis to include in her bill of costs fees that are well beyond her means and expect to pass those costs on to Mr. Dupuis, who is also of modest means. I have, therefore, deducted the fees for Ms. Kanhai-Dupuis’ second counsel at trial – $11,137.50 – from her total costs.
E. Conduct of the Parties
[21] Mr. Dupuis argues that no costs should be awarded, in part, because Ms. Kanhai-Dupuis acted unreasonably and increased the cost of the trial by failing to make reasonable admissions before trial. I disagree.
[22] The parties agreed to adduce their evidence-in-chief by affidavit. Both Mr. Dupuis and Ms. Kanhai-Dupuis filed detailed affidavits. Mr. Dupuis argues that Ms. Kanhai-Dupuis made several admissions at trial that were not in her affidavit. Mr. Dupuis also argues that Ms. Kanhai-Dupuis revealed important information at trial. For example, Mr. Dupuis argues that Ms. Kanhai-Dupuis admitted for the first time at trial that she was in denial and was not honest with Mr. Dupuis about her relapse in 2019. Mr. Dupuis also argues that Ms. Kanhai-Dupuis shared details of her post-rehabilitation plan for the first time at trial, including her commitment to making a “living amends”.
[23] I am not convinced the trial would have been any shorter if Ms. Kanhai-Dupuis had disclosed details of her treatment plan or agreed to certain facts before trial. There are many facts Mr. Dupuis and Ms. Kanhai-Dupuis will never agree on. By way of one example only, Mr. Dupuis is convinced that Ms. Kanhai-Dupuis was intoxicated one day when she went to pick up the children at school in July 2019. Mr. Dupuis called another parent who saw Ms. Kanhai-Dupuis at the school on the day in question to describe how Ms. Kanhai-Dupuis was acting. Ms. Kanhai-Dupuis adamantly denies she had been drinking that day. The evidence at trial focused largely on the facts Mr. Dupuis and Ms. Kanhai-Dupuis do not agree on. In the end, I did not feel it necessary to resolve all the factual disputes between them. Nonetheless, I do not think an agreed statement of facts on the issues Ms. Kanhai-Dupuis admitted at trial would have meaningfully shortened the trial given the persistent disagreements between Mr. Dupuis and Ms. Kanhai-Dupuis.
[24] I am not satisfied that Ms. Kanhai-Dupuis’ conduct warrants a reduction in costs.
F. Costs for Other Steps in the Proceedings
[25] Ms. Kanhai-Dupuis is only claiming costs from June 18, 2021 to the end of trial. Nonetheless, Ms. Kanhai-Dupuis is seeking costs for several steps in the proceedings that should, in my view, be excluded.
[26] Ms. Kanhai-Dupuis included $5,125 in her bill of costs for a settlement conference on July 16, 2021 and a trial management conference on August 30, 2021. Rule 17(18) of the Family Law Rules says that no costs shall be awarded at a conference unless one party caused the conference to be unproductive or failed to follow the rules. If either party thought this was an appropriate case for costs to be ordered at a conference, those arguments should have been made at the conference. Having not done so, I am not prepared to award costs of the conferences now. If the endorsements from the conferences are silent on the issue of costs, I take that to mean there was no reason to depart from the presumption that no costs are awarded for conferences and I have deducted $5,125 from Ms. Kanhai-Dupuis’ total costs.
[27] Ms. Kanhai-Dupuis has also included in her bill of costs $13,187.50 for Mr. Dupuis’ motion to reopen the trial. After I released my reasons but before I signed the final order, Mr. Dupuis brought a motion to reopen the trial to call evidence about events that occurred after my decision was released. In a separate decision (Dupuis v. Kanhai-Dupuis, 2022 ONSC 5523), I dismissed Mr. Dupuis’ motion to reopen the trial without prejudice to his ability to bring a motion to change my final trial order. I expressly reserved the cost of Mr. Dupuis’ motion to reopen to the hearing of his motion to change. I have, therefore, removed $13,187.50 from Ms. Kanhai-Dupuis’ total costs.
G. Reasonable Costs
[28] Ms. Kanhai-Dupuis’ total costs from July 18, 2021 to the end of trial are $73,1560 once the costs for the conferences in July and August 2021, for second counsel at trial and for Mr. Dupuis’ motion to reopen the trial are removed.[^1] Those costs are reasonable for a six-day trial.
[29] I can consider Mr. Dupuis’ costs as a point of comparison when deciding what he would reasonably expect to pay in costs as the unsuccessful party. Ms. Kanhai-Dupuis argues that Mr. Dupuis’ costs are unreasonably low. I agree.
[30] Counsel for Mr. Dupuis estimated that his costs for the period between June 18, 2021 and the end of trial were only $33,412.72. Counsel for Mr. Dupuis noted that her fees to prepare for and attend trial is “estimated” to be $25,000. In my view, $25,000 is an underestimate. Mr. Dupuis’ counsel was charging him $400 per hour, which is a reasonable hourly rate given her years of experience. At $400 per hour, $25,000 reflects only 62.5 hours. Counsel for Ms. Kanhai-Dupuis claimed 40.5 hours just for attending the trial (or 6.75 hours per day). It is not reasonable to think that Mr. Dupuis’ counsel spent only 22 hours preparing for a six-day trial. Ms. Kanhai-Dupuis’ lawyers spent 140 hours preparing for trial. Mr. Dupuis’ estimate is particularly unreasonable because his counsel had to prepare a detailed affidavit for him, she had to prepare several other witnesses to testify, she had to review Ms. Kanhai-Dupuis’ affidavit, she had to review the CAS and supervision records, and she had to prepare a cross-examination of Ms. Kanhai-Dupuis. In my view, the necessary pre-trial preparation must have taken Mr. Dupuis’ counsel much more than 22 hours.
[31] I find that it is reasonable for Mr. Dupuis, as the unsuccessful party at trial, to pay $60,000 in costs inclusive of HST and disbursements, which represents close to 70% of Ms. Kanhai-Dupuis’ costs from July 18, 2021 to the end of trial plus a portion of the disbursements she claimed.[^2]
[32] To ensure this order does not have a devastating impact on Mr. Dupuis and the children, he will be given 24 months to pay. Mr. Dupuis shall make 8 equal payments of $7,500 on January 1, 2023, April 1, 2023, July 1, 2023, October 1, 2023, January 1, 2024, April 1, 2024, July 1, 2024 and October 1, 2024.
Justice Breese Davies
Date: October 13, 2022
COURT FILE NO.: FS-17-00420942-000
DATE: 20221013
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JORDAN DUPUIS
Applicant
- and –
SUSHMA KANHAI-DUPUIS
Respondent
REASONS FOR DECISION ON COSTS
Davies J.
Released: October 13, 2022
[^1]: Paragraph 29(a) of Ms. Kanhai-Dupuis’ cost submissions says her costs between June 18, 2021 and February 21, 2022 were $39,665, which must be a mistake. The entries on the bill of costs submitted by Ms. Dupuis for that period total $8,250, not $39,665.
[^2]: Ms. Kanhai-Dupuis incurred significant costs for daily alcohol testing ($3,875) and parenting supervision ($16,249.50). Ms. Kanhai-Dupuis is not seeking reimbursement of these disbursements from Mr. Dupuis.