Marsh v. Gibson, 2011 ONCJ 276

Toronto (North York) Registry No. D51424/10 DATE: 2011·V·30 CITATION: Marsh v. Gibson , 2011 ONCJ 276 ONTARIO COURT OF JUSTICE BETWEEN: ANDREA MARSH, Applicant, — AND — MARK GIBSON, Respondent. Before Justice Robert J.

Spence Heard on 26 April 2011 Reasons for Judgment released on 30 May 2011 CIVIL PROCEDURE — Costs — Assessment of quantum — Inclusions — Lawyer’s fees — Time properly spent on case — With objective of saving time and expense and bringing case to quick resolution in accordance with rule 2 of Family Law Rules and on consent of all parties, court conducted focused hearing that lasted 1 hour and that successfully disposed of case — Mother’s bill of costs included her lawyer’s preparation for and attendance at that hearing — At motion for costs, motion judge admitted that correlation between lawyer’s preparatory time and trial time is not always clear but, in this case, judge found that 60 hours of lawyer’s preparatory time was excessive for what turned out to be 1-hour hearing over what was quite narrow issue, especially when father had not thrown up substantial roadblocks or behaved in unreasonable manner — Judge’s review of dockets revealed that considerable time had been spent on non-litigious aspects of case, such as strategizing, discussions, and reviews with client and colleagues — From original bill of $19,867, judge fixed father’s liability at $10,000.

CIVIL PROCEDURE — Costs — Assessment of quantum — Inclusions — Lawyer’s fees — Time properly spent on case — With objective of saving time and expense and bringing case to quick resolution in accordance with rule 2 of Family Law Rules and on consent of all parties, court conducted focused hearing that lasted 1 hour and that successfully disposed of case except for costs — At motion for costs, mother’s bill of costs included sum of $4,034.10 (about 10-12 hours of lawyer’s time) for her lawyer’s preparation for costs argument — Motion judge noted that subrule 24(10) of Family Law Rules requires that costs be decided in “summary manner” — Judge concluded that, for

summary determination of costs, $4,034.10 was excessive and trimmed it down to $1,500. CIVIL PROCEDURE — Costs — Assessment of quantum — Inclusions — Pre-litigation work — Whether work required lawyer’s input — In what ultimately became dispute on narrow issue of non-custodial father’s share of cost of child’s nanny under

section 7 of Child Support Guidelines , it took mother and her lawyer more than year before start of case to express that issue in focussed manner and to create proposal that could be presented to father for his consideration — Motion judge at costs motion entirely eliminate all pre- litigation costs that mother had incurred — Judge concluded that mother’s time and efforts to sort out her child-care expense options, interview nannies, prepare charts and compare different options was essentially “homework” issue on which she could have worked on her own time and then presented to her lawyer for minor tinkering — She did not need lawyer’s constant and ongoing input to address and to refine these matters — This was not aspect of case for which father ought to be responsible in costs, particularly time during which mother and lawyer were still groping to achieve focus on what would become single issue in case.

STATUTES AND REGULATIONS CITED Child Support Guidelines , O. Reg. 391/97 [as amended], subsection 7(2) . Family Law Rules , O. Reg. 114/99 [as amended], rule 2, subrule 2(2), clause 2(3)( b ), rule 18, subrule 18(14), rule 24, subrule 24(1) , subrule 24(10) and subrule 24(11) . CASES CITED

Husein v. Chatoor , 2005 ONCJ 487 , 24 R.F.L. (6th) 274, [2005] O.J. No. 5715, 2005 Cars​well​Ont 7809 (Ont. C.J.). Susan E. Harris ............................................................................. counsel for the applicant mother Barbara J. Puckering ................................................................... counsel for the respondent father For previous proceedings, see Marsh v. Gibson , 2011 ONCJ 275 , [2011] O.J. No. 2452 (Ont. C.J.), per Justice Robert J. Spence. [ 1 ] JUSTICE R.J.

SPENCE: On 1 April 2011, I released my decision on the substantive issue, namely, the quantification of childcare costs and the father’s liability for contributing to same. The parties subsequently appeared before me to argue costs. This is my decision and reasons. 1: BACKGROUND [ 2 ] Following the birth of the parties’ child, [1] the father and mother attempted to negotiate how much should be attributable to childcare costs and the portion of those costs that t would be attributable to the father.

The quantification of these costs was somewhat out of the ordinary as the mother is a hospital emergency room nurse who works difficult, inconsistent and sometimes lengthy shifts. Accordingly, she needed childcare that could best accommodate those particular exigencies. [ 3 ] I presided over the first case conference, which was held on 1 November 2010. It quickly became apparent that some further disclosure would be required in order to permit the parties to engage in more meaningful discussions and negotiations.

I suggested to the parties that, if they were prepared to consent, the court would conduct a focused hearing in order to save time and expense and bring the case to a speedy resolution — all in furtherance of rule 2 of the Family Law Rules , O.

Reg. 114/99, as amended. [2] The parties agreed to proceed in that manner and we set a date for 21 March 2011, by which time the parties were to have exchanged disclosure, filed affidavits and then appear before me to argue for a final order. [ 4 ] The parties subsequently agreed to adjourn that date to 29 March 2011, at which time they did appear before me and argued the childcare expense issue — essentially, the sole issue in this case. That court attendance lasted approximately one hour. In total, therefore, there were two court attendances by the parties.

I reserved on the issue of childcare expenses, and released my decision on 1 April 2011. [ 5 ] At the hearing, the mother argued that the child-care costs necessary to meet her job

schedule would amount to approximately $41,500 per year. The father’s estimate was in the range of $20,000 to $25,000 per year. In the particular and unique circumstances of the case, I concluded that a reasonable amount for childcare costs, for apportionment purposes between the parents, was $35,984 per year. I found the mother’s annual income to be $94,306 and the father’s annual income to be $97,519. On the basis of all those amounts, I apportioned the father’s liability for childcare on a straight pro rata basis, pursuant to subsection 7(2) of the Child Support Guidelines , O.

Reg. 391/97, as amended. 2: COSTS SOUGHT BY THE MOTHER [ 6 ] At the outset of this costs hearing, the mother presented a bill of costs prepared on a full-recovery basis in the amount of $38,265.69, inclusive of disbursements and G.S.T.-H.S.T. The mother sought payment by the father of these costs in full. [ 7 ] The father argued that these costs were excessive or, at least, that his obligation to pay costs to the mother should be far less. 3: THE LAW [ 8 ] Rule 24 of the Family Law Rules is the general costs rule. For the purposes of this decision, I set out only the relevant portions of that rule: 24.

Successful party presumed entitled to costs.—

(1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal. . . .

(4) Successful party who has behaved unreasonably.— Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party’s own costs or ordered to pay all or part of the unsuccessful party’s costs.

(5) Decision on reasonableness.— In deciding whether a party has behaved reasonably or unreasonably, the court shall examine, (

a) the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle; (

b) the reasonableness of any offer the party made; and (

c) any offer the party withdrew or failed to accept.

(6) Divided success.— If success in a step in a case is divided, the court may apportion costs as appropriate. . . .

(10) Costs to be decided at each step.— Promptly after each step in the case, the judge or other person who dealt with that step shall decide in a

summary manner who, if anyone, is entitled to costs, and set the amount of costs.

(11) Factors in costs.— A person setting the amount of costs shall consider, (

a) the importance, complexity or difficulty of the issues; (

b) the reasonableness or unreasonableness of each party’s behaviour in the case; (

c) the lawyer’s rates; (

d) the time properly spent on the case, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order; (

e) expenses properly paid or payable; and (

f) any other relevant matter. . . . [ 9 ] Rule 18 deals with offers to settle. The relevant portions of that rule are: 18. Definition.—

(1) In this rule, “offer” means an offer to settle one or more claims in a case, motion, appeal or enforcement, and includes a counter-offer.

(2) Application.— This rule applies to an offer made at any time, even before the case is started.

(3) Making an offer.— A party may serve an offer on any other party.

(4) Offer to be signed by party and lawyer.— An offer shall be signed personally by the party making it and also by the party’s lawyer, if any.

(5) Withdrawing an offer.— A party who made an offer may withdraw it by serving a notice of withdrawal, at any time before the offer is accepted.

(6) Time-limited offer.— An offer that is not accepted within the time set out in the offer is considered to have been withdrawn.

(7) Offer expires when court begins to give decision.— An offer may not be accepted after the court begins to give a decision that disposes of a claim dealt with in the offer.

(8) Confidentiality of offer.— The terms of an offer, (

a) shall not be mentioned in any document filed in the continuing record; and (

b) shall not be mentioned to the judge hearing the claim dealt with in the offer, until the judge has dealt with all the issues in dispute except costs.

(9) Accepting an offer.— The only valid way of accepting an offer is by serving an acceptance on the party who made the offer, at any time before, (

a) the offer is withdrawn; or (

b) the court begins to give a decision that disposes of a claim dealt with in the offer.

(10) Offer remains open despite rejection or counter-offer.— A party may accept an offer in accordance with subrule (9) even if the party has previously rejected the offer or made a counter-offer.

(11) Costs not dealt with in offer.— If an accepted offer does not deal with costs, either party is entitled to ask the court for costs. . . .

(14) Costs consequences of failure to accept offer.— 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. . . .

(16) Costs — Discretion of court.— When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply. 4: DISCUSSION [ 10 ] The bill of costs for the mother consisted of six components, as follows: [3] (1) $7,024.50 for the period from 1 January 2010 to 22 June 2010 (just prior to the commencement of the litigation); (2) $6,109.80 from the commencement of the litigation on 23 June 2010, to the first case conference on 1 November 2010; (3) $10,848.00 for the period from 2 November 2010 to 12 January 2011 (the day before the mother submitted her affidavit evidence for the focused hearing); (4) $9,017.00 for the period 13 January 2011 to the 29 March 2011 (the focused hearing date); (5) $4,034.10 from the date after the focused hearing to 14 April 2011; and (6) $1,231.89 for disbursements. [ 11 ] The argument on behalf of the mother was that she was substantially successful and therefore should be awarded her full costs.

However, the presumptive award of full recovery of costs flows from having served an offer to settle pursuant to subrule 18(14).

In this case, the mother failed to serve such an offer to settle. Accordingly, the starting point for assessing costs should be partial recovery, rather than full recovery. [ 12 ] While the mother was not entirely successful, [4] I conclude nevertheless that she was the “successful party” [5] and, as such, there is a presumption that she is entitled to the costs of her “case”. In my view, there is no reason to depart from the presumption in subrule 24(1) that she is entitled to her costs. The question to be decided, then, is what those costs should be, having regard to the factors set out in clauses 24(11)(

a) to ( f ); those factors are: (

a) the importance, complexity or difficulty of the issue The issue was certainly important to both parties as the amount to be paid by the father — and received by the mother — for child-care expenses are not insignificant. In my view, any complexity or difficulty arose from the mother’s challenging work

schedule and the manner in which the parties thought that

schedule could be addressed by differing child-care options, including various live-in and live-out nanny options. I would characterize this aspect of the case as moderately, but not significantly, difficult. (

b) reasonableness or unreasonableness of each party’s behaviour From the documents submitted by the father’s counsel, it is apparent that he was anxious at all times to reach a resolution of the case. His counsel sent a number of letters to the mother’s counsel repeatedly requesting disclosure so that he could understand the nature of her claim and consider his own options for possible settlement proposals. I did not see in the documentation the same urgency on the part of the mother to settle the case, to be forthcoming with disclosure and to reach a prompt settlement.

I do not conclude from this that the mother acted unreasonably but, rather, that she lacked the same sense of urgency as the father. Notwithstanding the father’s lack of success in the final result, he appeared to have a bona fide interest in reaching an early resolution, thereby attempting to avoid unnecessary litigation expense. It is clear to me that he was not interested in “playing hardball”, or in engaging in litigation for its own sake. (

c) the lawyer’s rates The mother’s counsel charged her time at $300 per hour. She is a lawyer of eight years’ experience. A junior associate in her firm charged her time at $200 per hour. The father’s counsel did not suggest these rates were unreasonable and I accept them as reasonable rates in the circumstances. (

d) the time properly spent The mother seeks reimbursement for 114 hours spent on the case. The mother’s counsel docketed 105 hours. The junior associate docketed 9 hours. The mother’s counsel submitted her 10 pages of dockets to substantiate the time spent. I have no reason to doubt that the mother’s counsel and the junior associate spent the 114 hours that appear on the dockets. My concern, however, is why so much time had to be spent for an issue that was as narrow as this, particularly in circumstances where the father was not throwing up substantial roadblocks or himself acting in an unreasonable manner.

As I review the dockets, it appears that much of the time spent was on the non-litigious aspects of the case, for example, strategizing, discussions, and reviewing with the client and colleagues. The whole point of my suggesting to the parties that the case be finalized by a rule 2 focused hearing was to avoid this mammoth expenditure of time and money, specifically, by limiting the case to only two court appearances, totalling no more than two or three hours. Clearly, the court’s expectations in that regard were misplaced. (

e) expenses properly paid or payable The disbursements in the amount of $1,231.89 clearly include expenses incurred by the mother prior to the commencement of the litigation and, certainly, prior to the work that was performed immediately proximate to the focused hearing itself. (

f) any other relevant matter On the facts of this case, the parties have agreed that the father will not have a relationship with the child. There is a no- access order on consent. I take into account the fact that the mother will be responsible for 100% of the costs of caring for and raising the child. This differs from the normal situation where the non-custodial parent has the child with him or her for a percentage of the child’s time. For example, a typical access regime will often have the child with the non-custodial parent on alternate weekends and a night or two during the week.

In addition, the non-custodial parent will often spend a portion of school vacation and summer vacation time with a child. These access periods result in lower child-related expenses being incurred by the custodial parent, especially for meals and entertainment, as well as other miscellaneous expenditures. While the father’s decision to extricate himself from the child’s life is not necessarily intended as a criticism of the father, this aspect of the case comes down to money, plain and simple.

And because of that, I have concluded that this is a relevant matter that should be taken into account in determining costs. 5: DETERMINATION OF COSTS PAYABLE BY THE FATHER [ 13 ] I start by eliminating entirely all pre-litigation costs that the mother incurred.

This is not because I believe those costs to have been a waste of time in so far as the mother’s case is concerned but, rather, because it is not an aspect of the case for which the father ought to be responsible, particularly where, on the facts of this case, the mother and her counsel were unable to quickly focus in on the issue and arrive at a proposal that could be promptly submitted to the father for his consideration. [ 14 ] For whatever reason, it took more than a full year [6] from the time the mother began to incur legal fees, to the time that she made full disclosure to the father such that the father was reasonably able to assess where he stood on this issue.

To the extent that the mother did require time to sort out her child-care expense options, interview nannies, prepare charts and compare different approaches, I consider this to have been more of a “homework” issue on which the mother could have worked and simply have presented to her counsel, with perhaps only minor tinkering by the mother’s counsel. I am bolstered in this view by the fact that the mother is not an unsophisticated or unintelligent person, as is obvious by the highly responsible position she holds at the hospital.

And, if the mother did require constant and ongoing input from her lawyer in order to address and refine these tasks, the costs incurred for that involvement

should not, in my opinion, be borne by the father. [ 15 ] The last portion of the second component of the bill of costs covers the case conference held on 1 November 2010. I decline to award any costs for the time leading up to and including that first case conference. I do so because of subrule 24(10), which mandates [7] the court to decide costs “after each step in the case”. See also Husein v. Chatoor , 2005 ONCJ 487 , 24 R.F.L. (6th) 274, [2005] O.J. No. 5715, 2005 Cars​well​Ont 7809 (Ont. C.J.).

No costs were requested by the mother at the case conference and it is now too late to seek costs for that “step” in the case. [ 16 ] The foregoing analysis eliminates the totality of the first two components of the mother’s bill of costs, in the amount of $13,134.30. [ 17 ] Components (3) and (4) of the bill of costs, totalling $19,867.00 covers that part of the mother’s case when her counsel was more proximately involved in the preparation for the focused hearing and attended on the focused hearing itself.

However, in reviewing the mother’s dockets, I fail to understand why approximately 60 hours of lawyer time had to be spent preparing for what turned out to be a one-hour hearing on what was a very narrow issue. I am well aware, and readily accept, that hearing or trial time is often the tip of the iceberg for necessary counsel work, and that much of the important legal work goes on in the days and weeks leading up to the hearing itself.

However, I consider the time spent on this aspect of the case to be excessive — perhaps not for the mother herself, but certainly for what the father ought reasonably to be expected to pay. But for the fact that the mother will be incurring 100% of the expenses for rearing her child, I would have reduced the father’s liability for this portion of the legal bill by 75%, [8] particularly as there was offer to settle under rule 18 from the mother.

However, in the particular circumstances of the case, I fix the father’s liability for this aspect of the case in the amount of $10,000. [ 18 ] The fifth component in the bill of costs, in the amount of $4,034.10, covers the period from after the hearing, until 14 April 2011. Save and except for the determination of costs, the case ended on 29 March 2011. Everything that followed was in preparation for the costs argument. Subrule 24(10) mandates the court to decide costs in a “summary manner”. In my view, $4,034.10 is excessive for a

summary determination of costs. In this particular case, that amount represents approximately 10-12 hours of lawyer time. Instead, I would allow $1,500 for this aspect of the case. [ 19 ] The sixth and final component of the bill of costs is the disbursements, which total $1,231.89. As I noted earlier, it is clear that a portion of these disbursements relates to the period prior to the commencement of the litigation and, as well, during that period of the litigation that was not immediately proximate to the focused hearing itself.

I am not prepared to attempt a fine-tooth-comb review of the dockets to parse out these disbursements. Instead, I allow a ballpark estimate for disbursements, inclusive of taxes, in the amount of $750. 6: CONCLUSION [ 20 ] During the course of argument on the issue of costs, counsel for the father advised the court that her own client had incurred costs in roughly the same amount as the mother. That means that these two parties incurred more than $75,000 in costs to determine the issue of child-care expenses which was argued in a one-hour hearing. Frankly, I find this to be a startling amount of money.

I am prepared to acknowledge that my troubled response to these expenditures may be unwarranted; for it may well be that these enormous costs represent a reality that has taken hold in the legal profession in the last number of years. If that is in fact the case, it would explain why approximately 70% of the litigants who appear in the Ontario Court of Justice at 47 Sheppard Avenue East in Toronto cannot afford legal representation.

In the particular circumstances of this case, where both litigants earn close to $100,000 [9] annually, I would have thought that incurring legal fees to obtain a judicial determination of such a narrow issue would not be a financial hardship.

However, now that I am aware of what they actually had to pay to their lawyers, I fully expect that, for each of them, this has been a very painful financial experience. [ 21 ] In the result, the father is to pay costs to the mother, as follows: • for legal fees incurred up to and including the focused hearing: $10,000, • for legal fees incurred for the determination of costs: $1,500, and • for disbursements: $750. • Total (inclusive of all taxes): $12,250.

(10) Costs to be decided at each step.— Promptly after each step in the case, the judge or other person who dealt with that step shall decide in a

summary manner who, if anyone, is entitled to costs, and set the amount of costs.