COURT FILE NO.: FC1345/18
DATE: January 31, 2022
SUPERIOR COURT OF JUSTICE – ONTARIO
FAMILY COURT
RE: M.N.B., applicant
AND:
J.M.B., respondent
BEFORE: TOBIN J.
COUNSEL: Laura Camarra for the applicant
Monique Rae Bennett for the respondent
HEARD: written submissions filed
ENDORSEMENT on PRE-JUDGMENT INTEREST, POST-JUDGMENT INTEREST AND costs
[1] Following an eight-day trial, the court released reasons for judgment on January 4, 2022. The respondent (mother) was granted decision-making responsibility for the parties’ children. The children were ordered to reside primarily in the care of the mother and have defined parenting time with the applicant (father). The judgment also addressed the issues of child support, spousal support, life insurance and the equalization of net family property.
[2] The parties were encouraged to settle the issues of pre-judgment interest and costs. They were successful with respect to the former but not the latter.
Pre-judgment Interest
[3] On consent, pre-judgment interest shall accrue at the rate of 1.8 percent per year. The pre-judgment interest on the equalization payment of $211,000 from October 18, 2018 to January 4, 2022 is $12,216.03.
Post-judgment Interest
[4] The father asked for the court to address when the equalization payment and lump sum spousal support payment are to be paid. This issue was not raised by counsel in their final submissions or at all during the trial.
[5] The matter was raised by the father as the mother has requested an order that post-judgment interest accrue at the rate of 2 percent per annum from January 4, 2022. The father does not take issue with this interest rate.
[6] Post-judgment interest shall accrue at the rate of 2 percent per annum as requested.
[7] The father shall have until February 18, 2022 to pay to the mother the equalization payment and lump sum spousal support. Post-judgment interest shall accrue on these amounts at the rate of 2 percent per annum from that date.
Costs
[8] The mother asks for costs of $188,936.37. The father submits that costs to the mother should be fixed in the amount of $30,000.
Legal Considerations
[9] Modern family cost rules are designed to foster four fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement; (3) to discourage and sanction inappropriate behaviour by litigants; and (4) to ensure that cases are dealt with justly under r. 2(2) of the Family Law Rules, O. Reg. 114/99: Mattina v. Mattina, 2018 ONCA 867, at para. 10.
[10] Rule 24(1) creates a presumption of costs in favour of a successful party. In determining success, the court may consider the relief claimed by a party in their pleadings or the relief claimed at trial if different from the pleadings: Johnstone v. Locke, 2012 ONSC 1717. Success can also be considered in relation to how the order or eventual result compares to offers to settle that were made: Jackson v. Mayerle, 2016 ONSC 1556.
[11] Rule 24 sets out the framework for awarding costs in family law cases decided in this court. Rule 24(12) sets out factors that are relevant to setting the amount of costs. This subrule is formulated as follows:
(12) In setting the amount of costs, the court shall consider,
(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,
(iv) any legal fees, including the number of lawyers and their rates,
(v) any expert witness fees, including the number of experts and their rates,
(vi) any other expenses properly paid or payable; and
(b) any other relevant matter.
[12] In Beaver v. Hill, 2018 ONCA 840, at para. 12, the court stated with respect to r. 24(12) that:
- … proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs.
[13] In Chomos v. Hamilton, 2016 ONSC 6232, the court held that an offer to settle substantive terms, which also includes a pre-determination of costs, perverts the r. 18(14) analysis because the party ends up trying to claim credit for accurately predicting a costs determination a judge has not yet made. Rule 18(14) contemplates full indemnity for costs where all the terms of an offer have been obtained in the trial judgment. An offer which includes costs obligations not yet determined by the court cannot satisfy the strict requirements of this section.
[14] In MacIntyre-McAlear v. McAlear, 2018 ONSC 2815, at para. 27, the court held that:
… if an offer is non-severable, the party basically must be able to establish they were successful in obtaining everything that they set out in their offer: Scozzaro v. Scozzaro, 2015 ONSC 3703 (Ont. S.C.J.) at para. 15; Hall v. Sabri, 2011 ONSC 6342, [2011] O.J. No. 4850 (Ont. S.C.J.); P. (M.) v. P. (W.), 2014 ONSC 6393 (Ont. S.C.J.) …
Analysis
Success
[15] The mother was the more successful party in this case. She was granted decision-making responsibility with defined parenting time to the father. The father had sought shared decision-making responsibility and parenting time. The mother’s position with respect to the calculation of net family property was accepted by the court. On the issue of spousal support, neither party achieved what they requested.
[16] The father acknowledges that the mother is entitled to support on the basis that she was the more successful party. The dispute between the parties is the amount of costs to be paid.
[17] The mother asks for “elevated costs” or full indemnity on the basis that the father engaged in unreasonable behaviour and that she had served offers to settle.
[18] The father submits that the amount of costs sought by the mother is “grossly excessive, disproportionate and unreasonable given the complexity of the matter and experience of counsel.”
[19] In deciding if a party acted unreasonably, r. 24(5) requires the court to examine a “party’s behaviour in relation to the issues from the time they arose …”
[20] The father was unreasonable in overholding the children on a number of occasions contrary to the order of Carey J. of January 31, 2019. It took a further court order by Mitrow J. on June 9, 2021 to address this issue of interpretation. Thereafter, the father no longer overheld the children. The father was also unreasonable in not being forthcoming about what his employment status was from January 2021 and for withholding a document that he relied upon at trial until 11 days before the trial started.
[21] The mother acted unreasonably in letting the father and the court know of her intention to call two witnesses when the trial began.
[22] Both parties acted reasonably in serving offers to settle. The mother served three and the father two offers.
[23] The mother’s final offer did not contain terms that were severable from the other. Also, her final offer contained a provision that called for costs to be paid.
[24] Neither party made an offer that was “as favourable as or more favourable than” their respective final offers. The increased costs provisions of R. 18 are not engaged in this case.
[25] The issues raised in this case were of considerable importance to the parties, especially those that related to parenting of their children.
[26] The issues presented were not legally or factually complex.
[27] The docket provided by mother’s counsel documents that she spent 251.5 hours on this matter. Her hourly rate was $500.
[28] Father’s counsel did not provide a bill of costs or provide details of the hours spent. However, a comparison of fees charged was provided. The mother’s total bill was $188,936.37 (including $163,330.95 from trial counsel and $25,605.22 from prior counsel). The father’s account from his counsel was $58,263.88. These amounts inform the reasonable expectation of the parties as to their respective exposure to an adverse cost award: Murphy v. Murphy, 2014 ONSC 2624, at para. 23.
[29] The determination of costs is not simply a mechanical exercise. Costs must be proportional to the amount in issue and the outcome. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.).
Conclusion
[30] Based on all these considerations, the court finds that a fair, reasonable, and proportionate amount of costs to be paid by the father to the mother following this eight-day trial is $55,000 inclusive of disbursements and applicable taxes.
[31] As the father is required to pay to the mother an equalization payment, lump sum spousal support and pre-judgment interest by February 18, 2022, the costs award shall become due and be paid by the father to the mother no later than June 30, 2022.
“Justice B. Tobin”
Justice B. Tobin
Date: January 31, 2022