Capar v. Vujnovic, 2022 ONSC 5920
COURT FILE NO.: FS-19-42424
DATE: 2022 10 18
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: IVAN CAPAR
Applicant
- and -
ANNA VUJNOVIC
Respondent
BEFORE: EMERY J.
COUNSEL: Robert Lepore, for the Applicant
Shawn Philbert, for the Respondent
HEARD: In writing
ENDORSEMENT on costs
[1] In Decision #1, the court found that the Marriage Contract dated November 30, 2016 between the parties was valid and enforceable. Ms. Vujnovic’s motion for summary judgment to dismiss the claims pleaded in Mr. Capar’s Answer to set it aside was therefore granted.
[2] In Decision #2, Mr. Capar’s motion for summary judgment was granted on equalization having regard to the Marriage Contract. His claims for an unequal division between net family properties and for unjust enrichment were dismissed. In the final analysis, Mr. Capar was ordered to pay $14,603.70 for equalization, subject to a set-off in the amount of $12,532 that Ms. Vujnovic was ordered to pay to him for post separation adjustments. As a result, the court ordered him to make a net payment to her of $2,071.70.
[3] I have received the submissions on costs of Ms. Vujnovic dated September 9, 2022 which in large part relies on her offers to settle dated August 10, 2020 and November 8, 2021. Ms. Vujnovic seeks $64,918 after service of the first offer on August 10, 2020 on a full indemnity scale, $6,224 on a substantial indemnity level on a substantial indemnity basis prior to this offer to settle and $1,705 for disbursements for the first motion resulting in Decision #1.
[4] Ms. Vujnovic also claims costs for the second motion decided in Decision #2. Ms. Vujnovic claims full indemnity costs in the amount of $9,718 up to service of the second offer on November 8, 2021, in the amount of $28,920 for substantial indemnity costs prior to the date the offer was served, and disbursements of $1,093.
[5] In addition, she requests $3,000 to prepare these costs submissions.
[6] I have also received the submissions of costs from Mr. Capar. He submits that the amount claimed by Ms. Vujnovic totalling approximately $115,000 is grossly excessive. He submits that he would have expected to pay costs in the range of $10,000 to $15,000 if unsuccessful. This represents a considerable difference in expectations. Mr. Capar also submits that the amount claimed by Ms. Vujnovic is wholly disproportionate to the issues and amounts in dispute, and therefore unreasonable.
General principles
[7] The Court of Appeal in Mattina v. Mattina, 2018 ONCA 867 confirmed that the modern rules for costs that apply in family law cases are designed to reinforce three fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants. To those purposes the Court in Mattina added a fourth principle to reflect the primary objective under FLR 2(2): to deal with cases justly. I must ensure that these objectives are met by the amount I set for the costs Mr. Capar should pay.
[8] The amount for fees must be fair and reasonable. Setting the fee portion of a costs award requires balancing the various principles that apply when deciding what is fair and reasonable. The court must keep in mind the nature of the issues, the difficulty with proving facts on the balance of probabilities, and the proportionality of the amounts claimed for fees relative to the amounts at stake. See Beaver v. Hill, 2018 ONCA 840.
Costs under Decision #1
[9] A successful party is presumed to be entitled to costs under FLR 24(1). The determination of which party was successful in a family law case is the starting point to any analysis: Sims-Howarth v. Bilcliffe, 2000 CanLII 22584 (SCJ), 2000 ONSC 22584. Whether a party has been successful may be determined by measuring the positions taken on a particular motion against the results achieved in the court process. This includes a comparison of the result achieved on the motion to the terms of an applicable offer to settle.
[10] In this case, Ms. Vujnovic is presumptively entitled to costs as the successful party on this motion. This presumption is not challenged by Mr. Capar. Ms. Vujnovic is therefore entitled to the costs of the motion. However, the real issues for determination concern scale of costs to award, and the amount of those costs.
[11] The determination of what costs are appropriate to award necessarily involves a consideration of the scale on which to award those costs. The court may then set the quantum of those costs according to that scale on a principled basis.
[12] I have considered Ms. Vujnovic’s offer to settle dated August 10, 2020 in relation to Ms. Vujnovic’s motion resulting in Decision #1, and her offer dated November 8, 2021 with respect to Mr. Capar’s motion for summary judgment.
[13] The first offer to settle concerned the validity of the Marriage Contract. Costs are intended to indemnify a successful party and Ms. Vujnovic claims a significant amount to indemnify her for the legal time and service provided by Mr. Philbert and his team. The offer to settle was served to maximize the rate of recovery of those costs.
[14] In the recent decision of Stewart and Bernard v. Fuhgeh, 2020 ONSC 4850, Justice Shelston of this court made the following statement: “Family law litigants are responsible and accountable for the positions they take in the litigation.”
[15] I agree. Subject to the rare exception, a party to a family law case must be held responsible for the costs of the decisions and position they take in that litigation. Responsibility for the positions taken are one thing, however. The time and resources the other party expends for which costs are claimed are another.
[16] In Moon v. Sher, 2004 CanLII 39005 (Ont. C.A.), Borins J.A. wrote that where a lawyer expends four times the work to achieve a result than what might be seen as reasonable, that is between the lawyer and the client. However, it would not be reasonable to expect the unsuccessful party to pay those costs, nor would it be reasonable for that party to expect to pay (at para. 33).
[17] Mr. Capar submits that the amount the court awards for costs must be fair and reasonable: Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (Ont. C.A.). This is a correct summary of a general principle in the law of costs. The courts of held over the years that costs should be measured with reference to what amount the other party could reasonably expect to pay in costs if unsuccessful. When these broad statements of principle are applied in the family law context, considerations of fairness, reasonableness and proportionality must be kept at the forefront of any determination.
[18] Mr. Capar does not contest that Ms. Vujnovic’s offer to settle dated August 10, 2020 is applicable to her claim for costs. Under Family Law Rule 18(14), she is therefore entitled to the full recovery of her costs. The question then becomes what a reasonable amount to award Ms. Vujnovic for that full recovery would be.
[19] This court has considered the factors set out in FLR 24(12) when deciding the amount to award for costs. These factors are the guideposts for the court when exercising the discretion to award costs that are fair and reasonable.
[20] A large component of Ms. Vujnovic’s claim for costs involves an assessment of whether the amount of time invested by Mr. Philbert and his office in preparing for the first motion was fair and reasonable. The time dockets filed with the bill of costs that accompanied Ms. Vujnovic’s submissions show that Mr. Philbert spent 110.4 hours between August 10, 2020 and April 21, 2021 to prepare correspondence and material in relation to the first motion. The docket shows that Mr. Philbert spent a fair amount of time preparing litigation documents including affidavits and the factum to put Ms. Vujnovic’s case before the court. A substantial portion of time was also taken up with correspondence with Ms. Vujnovic and with opposing counsel. A considerable amount of time was also spent on file review and dealing with undertakings from questioning. On April 20 and 21, 2021, Mr. Philbert recorded 18.4 hours to prepare for and attend court on the motion.
[21] A member of the firm working on the file identified by the initials “EB” also docketed 45.8 hours over the same time period. Neither the name or the credentials for “EB” are given to provide the court with the necessary information to determine if this individual is a lawyer, articling student, law clerk or assistant. From the description of the tasks performed by “EB” on the docket, I conclude from the nature of those tasks that “EB” was Mr. Philbert’s law clerk or assistant.
[22] Without knowing whether “EB” is a lawyer, I am not awarding any costs for that person’s time, however valuable that person’s services were to Mr. Philbert. I am of the view that when a lawyer recovers costs on a full recovery scale, that lawyer’s overhead is included in those costs.
[23] In my view, neither party should reasonably expect that all of Mr. Philbert’s time is claimable in costs. I am not allowing the significant time docketed for the correspondence which may or may not relate exclusively to the motions, to file review or for other internal office work even though that work may have been necessary for Mr. Philbert to effectively represent Ms. Vujnovic.
[24] For the purpose of awarding costs, I am limiting the time for the preparation of materials, time at examinations and office work prior to April 20, 2021 to 20 hours. This is in addition to allowing the approximately 20 hours shown to prepare for and attend before the court to argue the motion on April 20 and 21, 2021.
[25] I find that Mr. Philbert’s effective rate of $400 is reasonable having regard to his experience. I have multiplied the 40 hours allowed on the first motion by that hourly rate, and I find that Ms. Vujnovic is entitled to indemnification for legal fees in the amount of $16,000 on a full recovery basis. This allowance for fees is fair from a costs perspective, as it is proportionate to the overall result. I also find it reasonable as it resembles the amount Mr. Lepore referred to in his submissions, which I take to be a reflection of the costs Mr. Capar might have expected to pay.
[26] After adding disbursements and HST, I award Ms. Vujnovic $20,000 (rounded) for costs on her motion for summary judgment in Decision#1.
Costs under Decision #2
[27] Mr. Capar served an offer to settle dated November 4, 2022 that provided Ms. Vujnovic would be paid $375,000 from the sale of 8 Barber Drive, and that they would split the balance equally. As seen above, Mr. Capar was not as successful as that offer to settle.
[28] Ms. Vujnovic’s offer to settle dated November 8, 2021 was served one day before Mr. Capar’s motion for summary judgment would be heard. The result achieved on that motion were mixed, with the final amount Mr. Capar was ordered to pay to Ms. Vujnovic being less than the amount she had offered to accept.
[29] This offer to settle was not applicable to Ms. Vujnovic’s claim for costs. However, she achieved a result that was better than the terms of Mr. Capar’s offer to settle. Mr. Capar was also unsuccessful on his claims for an unequal division between net family properties under the Family Law Act, and for unjust enrichment.
[30] Ms. Vujnovic was the more successful party on this motion. She is therefore entitled to her costs under FLR 24(1) on a partial indemnity level. However, given the amounts in dispute and the result achieved, it would not be proportionate to the $2,071.70 that Mr. Capar has been ordered to pay to award the $19,571 plus HST that Ms. Vujnovic has claimed on this scale. Nor would it be fair.
[31] In my view, it would be fair, reasonable, and proportionate to award costs to Ms. Vujnovic for half the amount she was awarded for fees on her own motion for summary judgment, plus HST. I am therefore awarding her $8,750 (rounded) for that motion in relation to Decision #2.
Costs awarded
[32] Ms. Vujnovic is therefore awarded costs for her motion in the amount of $20,000 on the first motion, and $8,750 on the second motion. I also award Ms. Vujnovic $1,250 for the time it took her counsel to prepare the submissions on costs. She is therefore awarded costs fixed in the amount of $30,000 inclusive of disbursements and HST for both motions.
[33] These costs are payable by Mr. Capar within 30 days.
Emery J.
Released: October 18, 2022
Capar v. Vujnovic, 2022 ONSC 5920
COURT FILE NO.: FS-19-42424
DATE: 2022 10 18
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
RE: IVAN CAPAR
Applicant
- and –
ANNA VUJNOVIC
Respondent
ENDORSEMENT ON COSTS
EMERY J.
Released: October 18, 2022