Court File and Parties
Court File No.: FC-17-00055146 Date: 20230224 Ontario Superior Court of Justice
Between: Philip George Karatzoglou, Applicant – and – Rosetta Commisso and Evangelia Karatzoglou, Respondents
Counsel: Jerrod K. Grossman, for the Applicant Elliot Birnboim and Hailey E. Corrigan, for the Respondent, Rosetta Commisso Jared Teitel, for the Respondent, Evangelia Karatzoglou
Heard: In writing
Costs Decision
J. Di Luca J.:
[1] On January 3, 2023, I issued Reasons for Decision granting summary judgment to the second respondent, Evangelia Karatzoglou (“Lisa”). In doing so, I dismissed the claims made against her by the first respondent, Rosetta Commisso (“Rosa”). The claims between Rosa and Lisa related to a residence owned by Lisa which was occupied by Rosa and Philip Karatzoglou (“Phil”) during their marriage, and a business premise owned by Lisa and out of which Phil continues to operate his auto repair business.
[2] The parties have since filed written submissions on costs which I have considered. In what follows, I set out my decision on costs and the reasons for my decision.
[3] Lisa seeks $40,432.52 in costs. The amount is comprised of substantial recovery costs of $13,353.89 up to the date of her offer to settle, plus full recovery costs of $25,318.78 from the date of the offer to settle. The amount also includes disbursements of $1,859.85.
[4] Lisa made two Rule 18 offers to settle, both of which were turned down. The offers to settle proposed a dismissal of Rosa’s claims against Lisa on a no costs basis.
[5] Phil also seeks costs and submits that full recovery costs of $18,039.88 are appropriate. His request includes costs reserved by Douglas J. in relation to a contested motion allowing Rosa to amend her pleadings to include Lisa as a second respondent. That said, Phil’s request for costs is restricted to costs incurred in dealing with Rosa’s claim against Lisa. He has incurred separate costs in relation to the main action which has not been finally determined. While Phil did not provide an offer to settle, he submits that he should receive the benefit of the offer to settle made by Lisa.
[6] Rosa submits that there should be no costs ordered in this case. She submits that she is impecunious with her main source of support coming from the Ontario Disability Support Program (“ODSP”). She has a history of personal struggles that have rendered her unable to work. She relies on the support of her family members to survive. Rosa also submits that the costs requests by Lisa and Phil are unreasonably high given the nature of the issues determined on the motion, though she did not provide a costs outline showing what her comparative costs were on the motion. Lastly, Rosa argues that costs should be restricted to the summary judgment motion only and not costs relating to the entire period of Rosa’s claim against Lisa.
Legal Framework
[7] The modern approach to costs in family law matters seeks to foster, inter alia, the following purposes: (i) to partially indemnify successful litigants for the cost of litigation, (ii) to encourage settlement, (iii) to discourage and sanction inappropriate behaviour by litigants and (iv) to ensure that cases are dealt with justly, see Mattina v. Mattina, 2018 ONCA 867 at para. 10 and Serra v. Serra, 2009 ONCA 395 at para. 8.
[8] Rule 24(1) of the Family Law Rules (“the Rules”) creates a presumption of costs in favour of the successful party. Reasonableness and proportionality are the touchstone considerations in fixing the quantum of costs, see Beaver v. Hill, 2018 ONCA 840.
[9] While success is the starting point for the analysis, the determination of quantum of costs is subject to the factors listed in Rule 24(12) and Rule 18(14) which relates to offers to settle.
[10] Rule 24(12) of the Rules sets out the following considerations which serve to guide the court’s exercise of discretion in fixing the quantum of costs:
SETTING COSTS AMOUNTS (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.
[11] In terms of offers to settle, I note that Rule 18(14) of the Rules provides as follows:
COSTS CONSEQUENCES OF A FAILURE TO ACCEPT OFFER (14) 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:
- If the offer relates to a motion, it is made at least one day before the motion date.
- 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.
- The offer does not expire and is not withdrawn before the hearing starts.
- The offer is not accepted.
- The party who made the offer obtains an order that is as favourable as or more favourable than the offer.
Analysis and Findings
[12] As a starting point, I note that Lisa was entirely successful on the motion for summary judgment. The claim against her has been determined finally and in her favour. This presumptively entitles her to costs. There is no unreasonable or bad faith conduct on her part that would undermine this presumptive entitlement. As well, she is entitled to her costs on the claim and not just on the summary judgment motion as suggested by Rosa’s counsel.
[13] I also note that Lisa served Rule 18 offers to settle which were rejected. She did better than the offers to settle which proposed a no costs dismissal of the claims against her. I also note that Rosa made no counteroffer to settle. The effect of the Rule 18 offers is that Lisa is presumptively entitled to full recovery costs for the time period following the date of the offer. That said, this presumptive entitlement is always subject to the court’s discretion in determining the reasonableness of costs.
[14] In terms of Lisa’s cost outline, I note that consistent with the firm’s practice to provide a teaching environment for younger lawyers, the firm did not bill for overlapping services provided by counsel within the firm. That said, the costs outline does not tabulate the hours dedicated to matter. It simply lists the docket entries. While the role of the court is not to conduct a line by line examination of the docket entries, a quick review suggests that the costs claimed are high, though perhaps not unreasonably so.
[15] In terms of Phil, I note that his participation in the summary judgment motion was neither required nor particularly substantive. His submissions both on the motion itself and on costs essentially adopted the submission made by Lisa. While Phil clearly had an interest in the outcome of the motion, his interest overlapped entirely with Lisa’s. I find the hours his counsel dedicated to the matter excessive in the circumstances. That said, I agree with his submission that the costs reserved by Douglas J. stemming from Rosa’s motion to amend her pleadings to include the claim against Lisa, should be dealt with at this stage of the proceedings.
[16] Turning to Rosa, I note that she is impecunious and has significant personal issues that likely render her difficult financial position fixed. In determining the quantum of costs, I am permitted to consider her financial predicament, see C.A.M. v. D.M. at para. 42. That said, this is not an instance where Rosa is a custodial parent or where her ability to provide for children of the marriage is at issue.
[17] As well, while impecuniosity is a factor to consider, it must not be converted into a licence for free-range litigation. Regardless of financial status, litigation should always be undertaken with an understanding of the potential costs consequences. In this case, Rosa advanced what can be objectively described as “thin” trust and unjust enrichment claims. Her claims may not have been unreasonable to advance but doing so clearly engaged the risk of adverse costs consequences.
[18] When I balance all of the relevant factors, including the offers to settle and Rosa’s financial predicament, and consider the guiding legal principles including reasonableness, I find that costs of $20,000 should be ordered in favour of Lisa and costs of $2,500 should be ordered in favour of Phil.
J. Di Luca J. Released: February 24, 2023