COURT FILE NO.: FC-22-00057447-0000 DATE: 2024-06-03

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

William Russell Birmingham, Applicant – and – Marianne C. Tomkins, Respondent

Counsel: Geoffrey J. Carpenter, Counsel for the Applicant Richard Noll, Counsel for the Respondent

HEARD: In writing, and in person on May 22 and 23, 2024

THE HONOURABLE JUSTICE PICCOLI

COSTS ENDORSEMENT

[1] This court heard a 3-day trial commencing from February 13 to 15, 2024. Prior to, during and following the trial, the parties resolved a number of issues. The decision on the remaining issue, the manner in which the Applicant’s pension would be divided, was released on March 5, 2024.

[2] The court encouraged the parties to attempt to resolve the issues of costs, and if they were unable to do so, invited submissions on costs. The court has received the parties’ submissions on costs. Additionally, the court required the parties to return to court briefly on May 22 and 23 2024, to explain the Applicant’s offers to settle. This is the court decision on costs.

[3] The Applicant seeks his full recovery costs in the amount of $70,420.58. In the alternative, he is seeking costs in the amount of $53,106.61 pursuant to Family Law Rule 18(14) and based on his offer to settle, dated January 10, 2024. He asserts that he acted reasonably, and the Respondent acted unreasonably such that he should receive full indemnity costs from the very outset of these proceedings. He further asserts that that his offer of January 10, 2024, was just as favourable to him as the ultimate resolution and the court’s order, and as such, he should receive full recovery costs from January 10, 2024 onwards.

[4] The Respondent asks that the court order no costs. In the alternative, she requests that costs be significantly reduced to reflect what she states is the Applicant’s unreasonable behaviour. She also asserts that the bill of costs lacks detail and sufficient particularity. In addition, she asserts that it is high and as such, should be significantly reduced. She claims that she would suffer undue hardship if the costs being sought by the Applicant were ordered. She maintains that matters that are settled rarely attract cost consequences. The Respondent’s bill of costs from the time she retained her lawyer, which includes time before this court action was started, is $63,428.04. Her bill of costs from January 5, 2024, to the end of the trial is $34,310.76.

[5] For the reasons that follow, this court orders that the Respondent pay to the Applicant the sum of $40,000 in costs, payable within 120 days.

The Law on Costs

[6] It is trite law that costs provisions set out in the Family Law Rules, O. Reg. 114/99, are intended to foster four important principles: (1) to partially indemnify successful litigants for the cost of litigation, (2) to encourage settlement, (3) to discourage and sanction inappropriate behaviour by litigants, and (4) to ensure that cases are dealt with justly under subrule 2(2) of the Family Law Rules: see Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, at para. 8; Mattina v. Mattina, 2018 ONCA 867, at para. 10.

[7] Under r. 24 of the Family Law Rules, the starting point is that the successful party is entitled to costs: r. 24(1), Family Law Rules; Sims-Howarth v. Bilcliffe, at paras. 1-2.

[8] A successful party who has behaved unreasonably during a case may be deprived of costs: r. 24(4), Family Law Rules. In deciding whether a party has behaved reasonably or unreasonably, the court shall examine the party’s behaviour in relation to the issues from the time they arose; the reasonableness of any offer the party made; and any offer the party withdrew or failed to accept: r. 24(5), Family Law Rules.

[9] If success is divided, the court may apportion costs as appropriate: r. 24(6), Family Law Rules.

[10] Rule 18 governs offers to settle and costs consequences flowing therefrom.

[11] Rule 18(14) provides as follows:

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:

1. If the offer relates to a motion, it is made at least one day before the motion date.
2. 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.
3. The offer does not expire and is not withdrawn before the hearing starts.
4. The offer is not accepted.
5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

[12] For each independent section of a severable offer the Rule 18(14) test remains the same. The party seeking elevated costs must establish that all of the contents of the severable section set out terms which are as favourable or more favourable than the eventual result on the topic(s) addressed in that section. (See Axford v. Axford 2024 Carswell Ont 7442 at para. 14(b)).

[13] Rule 18(15) provides that the party who seeks the benefit of Rule 18(14) has the onus of proving the court’s order is as favourable as, or more favourable than, his or her offer to settle.

[14] Rule 18(16) provides that even if an offer to settle does not meet the formal requirements of Rule 18(14), the court may take account of such offers in determining costs.

[15] As set out by Justice Pazaratz in Laidman v. Pasalic and Laidman, 2020 ONSC 2068, 56 R.F.L. (8th) 481:

a. Rule 24(10) establishes the general principle that the court shall promptly after dealing with a step in the case determine in a summary manner who, if anyone, is entitled to costs in relation to that step and set the amount of any costs, or alternatively shall expressly reserve the decision on costs for determination at a later stage in the case. Bortnikov v. Rakitova, 2016 ONCA 427 (Ont. C.A.); Islam v. Rahman, 2007 ONCA 622 (Ont. C.A.); Weber v. Weber, 2020 ONSC 6855 (Ont. S.C.J.)

b. Rule 24(11) provides that the court's failure to act pursuant to Rule 24(10) in relation to a step in the case does not prevent a judge from awarding costs in relation to the step at a later stage in the case.

c. Nonetheless, the presumption remains that costs should be determined at each stage, and there are good reasons for this. Parties should have an ongoing awareness of the cost consequences of litigation decisions they make. Reserving costs may impede final resolution by needlessly inflating and complicating the list of future issues still to be dealt with. A judge who has just completed a step in a case will usually be in the best position to evaluate all of the relevant Rule 18 and 24 considerations. Reserving costs to a future event — often to a different judge — can result in later confusion and controversy about what really happened at the earlier step.

[16] Under Rule 24(12) a court must consider the following factors:

(a) The reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues:

1. each party’s behaviour,
2. the time spent by each party,
3. any written offers to settle, including offers that do not meet the requirements of rule 18,
4. any legal fees, including the number of lawyers and their rates,
5. any expert witness fees, including the number of experts and their rates,
6. any expenses properly paid or payable; and

(b) any other relevant matter.

[17] As set out by Justice Pazaratz in Churchill v. Elliott and Ward, 2024 ONSC 2757, at paragraphs 25 to 27:

[25] Rule 24(12.1) requires that any claim for costs must be supported by documentation satisfactory to the court. This generally requires a bill of costs setting out services and corresponding legal fees with sufficient particularity to allow the court to make a determination of reasonableness and proportionality.

[26] There is no form for a bill of costs or a costs outline under the Family Law Rules. Tintinalli v. Tutolo, 2022 ONSC 6276 (SCJ). Whatever format is used, it is essential that the party seeking costs provide a detailed breakdown or what services were rendered and which issues the services relate to. As this court stated in Benzeroual v. Issa and Farag, 2017 ONSC 6225:

6 There is no absolute requirement that a bill of costs must follow an “itemized by date and task” format. But particularly where large amounts of money are being claimed, the party seeking costs has an obligation to provide sufficient information:

a. To particularize what work had to be performed and why. b. To address varying levels of indemnification which may apply to different issues. c. To reassure the court that costs are not currently being claimed for previous steps or events where costs have already been dealt with (or should already have been dealt with). This requires more than a generic statement that unrecoverable costs are not being claimed.

[27] Under Rule 24(12)(a)(ii) and (iv), the court must review the lawyer's rates and the "time spent by each party" on the case.

[18] The Family Law Rules emphasize the importance of reasonableness and proportionality in the court’s approach to setting of costs: Mattina, at para. 10; Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at para. 4.

[19] The overall objective in a costs assessment is to determine an amount of costs that is fair and reasonable for the unsuccessful party to pay to the successful party in all the circumstances: Delellis v. Delellis, at para. 9.

[20] Determining the fair and reasonable amount is not a mechanical exercise; it is more than adding up the lawyers’ dockets: Jackson v. Mayerle, 2016 ONSC 1556, 130 O.R. (3d) 683, at para. 17.

[21] A court must consider ability to pay when awarding costs. However, while difficult financial circumstances are a factor, they will not automatically deprive a successful litigant of costs or reduce the amount of costs: Beaulieu v. Diotte, 2020 ONSC 6787, at para. 9. Financial means of a party are relevant but are not a shield against liability: M.B. v. S.B.B., 2019 ONSC 3960, 28 R.F.L. (8th) 81, at para. 45.

[22] Those who are the least able to afford to litigate should be more motivated to seriously pursue settlement and to avoid unnecessary proceedings: Balsmeier v. Balsmeier, 2016 ONSC 3485, 80 R.F.L. (7th) 274, at para. 47, adopting with approval the comments of McGee J. from Mohr v. Sweeney, 2016 ONSC 3238, at para. 17, citing Balaban v. Balaban, at para. 7.

Costs of Cases that Settle

[23] Determining costs in respect of settled matters is notoriously difficult. Courts are divided on whether it is appropriate.

[24] The law regarding costs of settled cases was summarized in Beaudoin v. Stevens, 2023 ONSC 5265, at para. 19, citing Beardsley v. Horvath, 2022 ONSC 3430, in the following way (citations omitted):

In the decision of Beardsley v. Horvath, Summers J. set out a comprehensive analysis of the law regarding costs of settled cases. She notes the following in paras. 10-12:

(i) The caselaw has developed since the decision in Blank v. Micallef, where the court held that costs of a settled case should not be awarded absent compelling circumstances.

(ii) Citing the cases of Scipione v. Del Sordo, Ball v. Ball, and A.C. v. G.K., Justice Summers identifies some general principles that have emerged:

i. It is not uncommon for the court to receive last minute settlements which resolve all issues other than costs.

ii. Parties are always encouraged to settle; even at the last moments of a motion or trial – if signing minutes of settlement will jeopardize a litigant’s ability to seek costs, it will create a disincentive for settlement.

iii. There is a presumption that a successful party is entitled to costs (Rule 24(10)); a party’s behaviour may be a relevant factor. If a court can assess success and reasonableness, costs may be awarded even when there has been a settlement. This is often the case where there is an extensive record with supporting documentation.

iv. If a party brings a motion asking to change almost everything, and, at the last minute, signs a consent which changes almost nothing, it may not be difficult for a judge to determine success.

v. “Success" is assessed by comparing the terms of the order made against the relief requested in the pleadings and, where applicable, against the terms of an offer to settle.

vi. When a case is determined by a settlement rather than a judicial decision, a court often does not have the information and evidence required to assess who was "successful" or the degree of that success. Sometimes the issues are so numerous and the results so different from either party's offer that "success" cannot be measured. For example, in Page v. Desabrais, at para. 42, a multi-issue case, the court compared the offers of the parties throughout the proceeding and found it "simply impossible...to declare one party more successful than the other."

vii. Sometimes, however, a court is able to assess what represents "success" after a settlement is reached. In Kearley v. Renfro, cited above, the only issue before the court on a motion was the residency of three children; the mother agreed on the day scheduled for the motion and settlement conference that the children would go into their father's care immediately. The court found that the father was substantially successful and awarded him costs.

Analysis of Entitlement

[25] The parties exchanged offers to settle, and in large part, were able to resolve the outstanding issues. Resolution took place before, during and following the trial.

[26] Both parties were prepared for trial and provided the court with a statement of agreed facts and a joint net family property statement.

[27] The Applicant made an offer to settled dated January 10, 2024. He provided the Respondent with three options. The court required the parties to return before the court to address the Applicant’s submission that he was successful as it relates to that offer.

[28] Each of the three options required the Respondent to accept that there be no post-separation adjustments for arrears of support or section 7 expenses. The parties actually agreed that there would be a payment of $10,000 on account of those expenses.

[29] Further, it cannot be said that the Applicant was successful in regard to option one. In addition to the offer indicating there would be no post-separation adjustments, he was not successful as it relates to paragraph 1 of option 1. It is not correct for him to say that because he was successful as it relates to paragraph 8, he was successful overall. Paragraph 8 is not severable from paragraphs 1 or 2.

[30] As it relates to option 2, again, it cannot be said that the Applicant was as successful. He offered an equalization payment of $17,335.25 from his share of the proceeds of sale and the division of RRSP by tax free roll over, which was not ordered. Option 2 allowed each paragraph to be accepted separately. At the end of the trial, the court ordered that $109,943.69 be transferred from the Applicant’s pension plan to the Respondent and that he pay an equalization payment in excess of $24,000.

[31] He was not successful as it relates to Option 3 as that option included a term that there be no post-separation adjustment for support.

[32] Further, the court accepts that the Respondent could not properly assess the offers because no calculations were provided to understand how the Applicant arrived at the numbers and she had not been provided with the Applicant’s full income tax returns.

[33] The parties continued to negotiate.

[34] On January 26, 2024, the Applicant offered to pay $10,000 on account of retroactive child support, spousal support and occupation rent. This is exactly what the parties agreed to. His offer was that the only issues that needed to proceed to trial would be prospective child support and the division of the Applicant’s pension. This offer was open for acceptance until January 29, 2024.

[35] It is undisputed that the Applicant was successful as it relates to his offer of January 26, 2024. He was also successful as it relates to the one issue remaining for me to decide. As such, he should as a starting point receive full recovery costs from that date. The lack of detail in the Applicant’s bill of costs requires the court to estimate the amount.

[36] The Respondent made an offer to settle on January 7, 2024. That offer was not severable. When reviewed as a whole, the Respondent was not successful as it relates to that offer. She withdrew that offer and made another Offer to Settle on January 15, 2024. In this new Offer to Settle, the Applicant could choose option 1 or option 2 as it relates to property. In accepting either option, the Applicant was required to accept the portion of the offer dealing with children’s issues. The final resolution of matters involving the children are similar to those set out in the Respondent’s Offer to settle. An agreement of the parenting issues was signed January 25, 2024.

[37] The Respondent made a further offer to settle dated January 31, 2024. The January 31 offer relates to property, support (retroactive and ongoing) and occupation rent. When the January 31 offer is compared to the result at trial and the settlements reached just prior to and following the trial, she was not successful. She sought more than was eventually agreed to for post-separation adjustments and retroactive support. As it relates to property, she included the value of the Respondent’s pension and did not agree that 50% of his pension should be immediately transferred from his pension plan to her.

[38] On February 13, 2024, the parties reached a resolution as it relates to ongoing child support based on the set off using the agreed income of $136,569 for the Applicant and $73,750 for the Respondent, creating a monthly child support obligation of $800. The Applicant was unaware that the Respondent continued to work for cash and did not discover that until the trial, which resulted in that settlement being in question by the end of the trial. Following the trial, the parties reached a resolution as it relates to ongoing support. The Applicant was to pay the Respondent the sum of $600.00 per month. The Applicant was successful on this issue.

[39] The Respondent’s position as it relates to her income and the Applicant’s income were inconsistent. She wanted to include the Respondent’s highest year as income for child support purposes, but not the year that she earned a high income as a result of leasing out her horse. That was not a reasonable position to take.

[40] As it relates to parenting, the parties’ settlement reflects the Applicant’s pleadings, namely equal parenting time with joint decision-making except as it relates to horse riding, the Respondent was granted final say. The Respondent sought primary residence and sole decision-making. The parenting time she proposed was in accordance with the children’s wishes and at minimum each Wednesday from 4-8 p.m. and alternate weekends from Saturday at 1:00 p.m. to Sunday at 1:00 p.m. Clearly, the Applicant was successful on this settled issue. Child support was ordered in the set off amount. The Applicant was successful on these settled issues.

[41] Despite the Applicant’s success on these settled issues, it is clear that from the inception of the litigation changes were taking place as it relates to the parties’ incomes, the intervening criminal proceedings and the children’s activities.

[42] The court does not find as asserted by the Applicant that the Respondent weaponized the criminal justice system. The court does not find that the Respondent’s behaviour was so unreasonable that she should pay full indemnity costs from the outset of the proceedings. The court has noted the one issue that the Respondent was not reasonable about – her income.

Analysis of Quantum

[43] Rule 24(12.1) provides that any claim for costs respecting fees or expenses shall be supported by documentation satisfactory to the court. The Applicant has not submitted satisfactory document to support his request for costs and as such, I am left having to estimate reasonable and proportionate time spent: see Van Eck v. Pham, 2019 ONSC 2030; Saroli v. Saroli, 2021 ONSC 7491, at para. 79.

[44] The Applicant’s bill of costs is not sufficiently detailed. It lacks information including dates, time allocation and a breakdown of work allocation. The court is unable to ascertain the specifics as it relates to the bill of costs. For example, the Applicant requests $8,775 for “attendance at Conferences, TBST, Court and OCL Disclosure Meeting which is reduced to $4,387.50 if those fees relate to time following the January 10, 2024, offer to settle.”

[45] The court is not prepared to order costs for conferences, TBST and other court appearances when it has not been provided with any information in the costs submissions about the issues dealt with at those stages, orders made, and why costs should be awarded for those stages or whether costs were already dealt with at those stages: see Saroli v. Saroli, 2021 ONSC 7491, at para. 77. It is not this court’s role to find previous orders to make that determination.

[46] I also decline to order costs as it relates to the OCL Disclosure Meeting. Presumably that meeting, which was held on June 13, 2023, resulted in Minutes of Settlement dated August 31, 2023. The endorsement for that day in part reads “…the parties requested time to attempt to resolve issues. To the credit of the parties and counsel, they were able to come to a final resolution on parenting issues.”

[47] The Applicant sets costs of “preparation of pleadings, conference briefs, NFPS, Financial Statements, Orders, Minutes of Settlement, support calculations, Confirmation, Affidavits of Service and Offers to settle at $13,105 and reduced to $6,552.50 if those fees relate to time following her January 10, 2024, offer to settle.” This is set out as a block amount and again, it is impossible for the court to determine whether those fees are appropriate, whether costs of conferences were reserved or decided, and the amount of that work which would have been completed regardless of the litigation.

[48] The Applicant seeks costs for “correspondent/telephone calls/meeting with client and / or opposing counsel/Court/ OCL and Criminal Counsel in the amount of $8,695.00 reduced to $$,347.00 if considered after her January 10, 2024.” Again, there is no specificity and as such, it is impossible to determine the appropriateness of those fees. Further, this court is not prepared to order costs for the Applicant’s counsel’s communication with criminal counsel.

[49] The Applicant seeks costs for “correspondence, amending pleadings – time listed after Jan 10.24 Offer served”. Again, there is no specificity. How does correspondence in this block differ from the first block? Why should the Respondent pay for the Applicant to amend his pleading to seek occupation rent?

[50] The Applicant’s counsel is a certified specialist in family law. His hourly rate of $450.00 with 14-15 years of experience is reasonable. The court is unable to ascertain whether the time spent is reasonable given that the Applicant’s bill of costs lacks sufficient detail. The Respondent’s counsel has 35 years of experience and his hourly rate of $425.00 is reasonable.

[51] The court agrees with the Applicant that an indicator of reasonableness is the bill of costs of the Respondent’s lawyer, but that is only one indicator.

[52] The court accepts the time spent in preparation for the trial and attendance at the trial of $24,977.50 (or 52 hours) as it is less time than what the Respondent’s lawyer spent preparing for the trial. The time the Respondent’s lawyer spent was set out in the dockets commencing January 16, 2024, which is the first entry relating to trial preparation.

[53] The disbursements are appropriate and amount to $742.41.

[54] As it relates to the Respondent’s assertion that she cannot afford to pay costs, the court does not agree. She has a net family property of $322,267.59 and is receiving a further $10,000 from the Applicant.

[55] I have reviewed and attempted to balance all of these considerations with a focus on reasonableness and proportionality. In doing so, I find that it is fair, reasonable and proportionate that the Respondent pay to the Applicant the sum of $40,000 within 120 days.

D. Piccoli J. Released: June 3, 2024