Yarmo v. Friend, 2011 ONCJ 277

Milton registry No. 274/05 DATE: 2011·III·17 CITATION: Yarmo v. Friend, 2011 ONCJ 277 ONTARIO COURT OF JUSTICE BETWEEN: ROBERT YARMO, Applicant, — AND — APRIL FRIEND, Respondent. Before Justice Roselyn Zisman Endorsement inscribed on 17 March 2011 STATUTES AND REGULATIONS CITED Family Law Rules, O. Reg. 114/99 [as amended], subrule 17(23), subrule 18(14), rule 24, subrule 24(1), and subrule 24(11). CASES CITED Bordynuik v. Bordynuik, , 55 R.F.L. (6th) 126, [2008] O.J. No. 3049, 2008 Cars​well​Ont 4617 (Ont. Fam. Ct.). Boucher et al. v.

Public Accountants Council for the Province of Ontario, , 71 O.R. (3d) 291, 188 O.A.C. 201, 48C.P.C. (5th) 56, [2004] O.J. No. 2634, 2004 Cars​well​Ont 2521 (Ont. C.A.). Entwistle v. MacAurthur, , 157 A.C.W.S. (3d) 773, [2007] W.D.F.L. 4904, [2007] O.J. No. 1958, 2007 Cars​well​Ont3149 (Ont. Fam. Ct.). Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, [2009] O.J. No. 1905, 2009 Cars​well​Ont 2475 (Ont. C.A.). Karen L.

Ballantyne ........................................................................ counsel for the applicant father Respondent mother, April Friend ......................................................................... on her own behalf For previous proceedings, see Yarmo v. Friend, 2011 ONCJ 37, [2011] O.J. No. 2382 (Ont. C.J.), per Justice Roselyn Zisman. JUSTICE R.

ZISMAN (endorsement):— 1: BACKGROUND [1] The applicant commenced a motion to change the order of 7 August 2007 to terminate his obligation to pay spousalsupport and to reduce his obligation to pay child support for the respondent’s two children from a prior relationship, Melanie andMatthew. After a four-day trial, my reasons for judgment were released on 25 January 2011. The parties were invited to submit writtencost submissions.

This is my ruling on the issue of costs. [2] The applicant submits that he has been fully successful on the primary issues namely, that he spousal support beterminated as of 1 January 2009, that monthly child support for the two children be reduced to monthly support for only Mathew from 1January 2009 to 1 September 2009, that his obligation to contribute to each child’s post-secondary education be limited to $8,000.00 per

annum. He was also successful on the issue of terminating the sharing of travel and hotel reward points. He was partially successfulwith respect monthly child support being terminated for Melanie as of 1 September 2010 as she was not living at home while obtainingher post-secondary education. He was not successful with his claim made at the commencement of the trial to terminate child supportfor Matthew based on Matthew’s not being in school and being over 18 years of age. It was only during the trial that the respondentprovided proof that Matthew was still attending school.

Based on that evidence, in closing submissions the respondent’s counselsubmitted that the applicant was willing to pay ongoing child support as long as proof was provided that Matthew was continuing in full-time school attendance. The applicant was also partially successful on the minor issue of reducing his life insurance from $500,000.00.

He has requested a reduction to only $25,000.00 but a reduction to $50,000.00 was ordered. [3] It was the respondent’s position at trial that income be imputed to the applicant, that he continue to pay spousal support,that he pay monthly child support for both children, that he pay his proportionate share of Melanie’s post-secondary expenses of$35,000.00 for the school year 2009-2010, that his life insurance not be reduced and that he should continue to share his reward points— although it appeared during the trial that she may have conceded this last issue.

The respondent was almost totally unsuccessful. [4] In my judgement, I made findings of fact that the respondent had significantly delayed the proceedings as a result of hernon-disclosure or late disclosure. There were eight court attendances prior to trial; costs were fixed on two occasions against therespondent in the amounts of $500.00 and $1,200.00 that were ordered to be paid at a later date. She also unduly prolonged the trial byirrelevant cross-examination, producing documents that were ordered to have been produced prior to trial and included in her documentbrief and not being prepared.

Although it is understandable that, as the respondent was representing herself, the trial would take longerthan with counsel, nevertheless this increased the legal costs to the applicant. [5] The applicant’s total costs for this action were $62,021.00 inclusive of disbursements and taxes.

The applicant seeks anorder that the respondent pay costs of $1,700.00 that were previously ordered within 30 days, and that she be required to pay a further$40,000.00 in costs, of which $10,000.00 should be offset against future support payable by the applicant and that the remainder of$30,000.00 be payable within 90 days. [6] In the respondent’s response to the applicant’s cost submissions, she essentially attempted to re-litigate her case andattempted to explain the basis upon which she sought relief at trial.

The respondent submits that, after she began to represent herself, shediligently attempted to obtain the disclosure requested. The respondent submits that, although the respondent was successful, she madean offer to settle that was reasonable and that there should be no order as to costs. 2: OFFERS TO SETTLE [7] Both the applicant and respondent refer to the offers to settle in their settlement conference briefs. However, as set outin subrule 17(23) the Family Law Rules, O.

Reg. 114/99, as amended, no brief or evidence prepared for a settlement conference and nostatement made at a settlement conference shall be disclosed to any other judge except in an agreement reached at a settlementconference or an order. There is no exception for offers to settle that form part of the settlement conference brief to be disclosed insubmissions for costs. I will therefore not refer to or place any weight on such offers. See Entwistle v. MacAurthur, ,157 A.C.W.S. (3d) 773, [2007] W.D.F.L. 4904, [2007] O.J. No. 1958, 2007 Cars​well​Ont 3149 (Ont. Fam.

Ct.);and Bordynuik v.Bordynuik, , 55 R.F.L. (6th) 126, [2008] O.J. No. 3049, 2008 Cars​well​Ont 4617 (Ont. Fam. Ct.). [8] The applicant made an offer to settle dated 26 February 2010 that was made a full 10 months prior to the trial. Theoffer met the formal requirements of subrule 18(14) of the Family Law Rules. That offer provided as follows: (

a) According to the offer, support arrears would be fixed at $0 as of 1 March 2010. According to the terms of the trialjudgment, the applicant would have owed support of approximately $314 as at that date, not including the $10,000overpayment for post-secondary expenses. (

b) Spousal support would terminate as of 1 March 2010. According to the terms of the trial judgment, those payments wouldterminate as of 1 January 2009. (

c) The applicant would pay child support of $1,254 for Matthew, effective 1 March 2010, to be reviewed in September 2010(Matthew’s plans were unknown until trial). The trial judgment ordered this amount to be paid. (

d) The applicant would pay $18,000 for Melanie’s 2009-2010 school year and $8,000 for each post-secondary yearthereafter. The trial judgment ordered payments of $8,000 per annum, retroactive to the 2009-2010 school year. (

e) Life insurance would be reduced to $50,000. This is what was ordered at trial. (

f) If the offer was accepted before 10 March 2010, each party would pay their own costs. [9] In accordance with subrule 18(14) of the Family Law Rules, as this offer is as good as or better than the order made attrial, the applicant is entitled to full recovery of his costs after 26 February 2010 unless the court orders otherwise.

Legal costs incurredprior to 26 February 2010 were $20,882.00 and costs incurred after 26 February 2010 were $32,320.00 not including disbursement andtaxes. [10] The respondent sent the applicant’s counsel an e-mail on 7 April 2010 offering to settle the motion on the followingterms: mel’s expenses for next 3 years 15,000 x 3 = 45,000 – 25% = 33,750 matthew’s university 4 years 5,000 x 4 = 20,000 – 25% = 15,000 arrears for mel’s child support 700. x 16 = 11,200 mel’s expenses for this year still owes 5,500 spousal support x 4 years 20,000 total 85,450.00 [11] The respondent then sent another e-mail on April 7, 2010 clarifying that the prior offer did not include future childsupport which would be paid until the children were 22 years old as follows:

$1,900.00 per month for 24 months for Mathew and Melanie — $45,600.00 and $1,254.00 per month for 24 months for Mathew — $30,096.00. [12] The e-mail indicated that, if the offer were not accepted by the next day at 10:00 a.m., it expired. [13] The respondent sent another offer to settle by e-mail on 2 November 2010 that offered to settle the entire action if theapplicant would provide her with a lump sum of $85,000.00. She offered to sign a release and have the children also sign a release thatthey would not apply for any further financial support.

Leaving aside the issue of whether or not the respondent could waive thechildren’s entitlement to ongoing child support, based on the evidence it is not clear that Matthew would have the required credits orgrades to be accepted into a four year post-secondary program. Based on the judgement even if both children attend four year post-secondary programs, the maximum payable by the applicant pursuant to the judgement would only be $46,092.00 once adjusted foroverpayments that the applicant has made to date. 3: GENERAL PRINCIPLES [14] It is undisputed that the applicant was the successful party.

As such, he is presumed to be entitled to costs on a partialrecovery basis and to a full recovery of costs after the offer to settle was served. [15] Rule 24 of the Family Law Rules provides guidance on costs in a family law context. Subrule 24(1) sets out the basicassumption that a successful party is entitled to costs. Subrule 24(11) provides a further list of factors a court should consider in dealingwith 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 orwitnesses, 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. [16] In Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, [2009] O.J. No. 1905, 2009 Cars​well​Ont 2475, at paragraph [8],the Ontario Court of Appeal confirmed that costs rules are designed to foster three important principles: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants. [17] The court’s role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees. As waspointed out in Boucher et al. v.

Public Accountants Council for the Province of Ontario, , 71 O.R. (3d) 291, 188O.A.C. 201, 48 C.P.C. (5th) 56, [2004] O.J. No. 2634, 2004 Cars​well​Ont 2521 (Ont. C.A.), the award of costs must be fixed in anamount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings rather than an exact measure of actualcosts to the successful litigant. 4: ANALYSIS [18] I have applied these principles in considering the amount of costs that should be awarded to the applicant. I consider thefollowing factors to be relevant: 1. The applicant was the successful party.

The issues upon which he was only partially successful were minor issues that didnot require a great deal of court time. 2. The applicant served an offer to settle on 26 February 2010 that was as good or better that the result at trial. The offer wasserved 10 months before the trial and, if accepted by the respondent, would have saved considerable legal fees and therespondent would not have had to pay any costs. 3.

There were numerous issues with which to deal at trial, including imputing income to both parties, whether or not therespondent was entitled to ongoing spousal support and the extent of the applicant’s responsibility to pay support andcontribute to the special expenses of the two adult step-children. Therefore, this trial was quite complex and raised difficultissues. 4. The applicant acted reasonably. His settlement position as set out in his offer to settle was reasonable.

He provided fullfinancial disclosure before it was even requested by the respondent’s counsel who briefly represented her at the outset ofthese proceedings. He accepted financial responsibility for his stepchildren and was prepared to continue to provide acontribution to their post-secondary education in the same terms contemplated in the parties’ initial separation agreement. Once he was provided proof that Matthew was still attending high school, he agreed that he was required to pay childsupport.

During the period that he was self-employed, he was prepared to base his income on his gross income rather thanspend considerable court time in delving into each and every deduction to determine whether it was a legitimate businessexpense.

5. On the other hand, the respondent did not act reasonably. Her failure to make full and timely financial disclosure grossly increased the applicant’s legal fees and caused numerous delays in the proceedings. She produced several documents for the first time after the trial began despite the fact that most of these documents were requested prior to trial. Most pertinently, she failed to produce documentation to establish that Matthew was still enrolled in school and provide information regarding his grades and courses taken. These documents could have easily been obtained by her prior to trial. 6.

The respondent made numerous, repeated requests for unnecessary financial disclosure from the applicant. The detailed bill of costs submitted by the applicant shows the overwhelming number of e-mails sent by the respondent to the applicant’s counsel. On some weeks, there were over a dozen e-mails. 7. Costs are to be decided at each step of the proceeding. Applicant’s counsel submits that there were eight court attendances prior to the trial, the cost of which to prepare for and attend was approximately $9,678.00.

The respondent was only ordered to pay costs for two of these court attendances in the total amount of $1,700.00. This leaves costs of $52,343.00 of the total costs requested. Some of the legal expenses do not relate to any steps in the proceeding and are properly requested as part of the overall bill of costs. The cost of receiving and responding to the respondent’s e-mails is a good example. In this case, significant costs were also incurred by the applicant as his counsel prepared several document briefs not only for the applicant but also for the respondent.

If she had not done so, the trial would have been even further prolonged. 8. Counsel for the applicant’s hourly rate is $275.00 per hour. Ms. Ballantyne was called to the bar in 2003 and practises family law exclusively. Her hourly rate is reasonable. The rates for the law clerks from $120.00 to $195.00 per hour are also reasonable. As is set out in the bill of costs, the law clerks assisted counsel in order to reduce costs especially with respect to compiling and organizing the large document briefs that were filed at trial. 9.

The time spent on this matter was reasonable in view of the fact that the case had been commenced two years before it proceeded to trial. There were numerous financial issues and it was necessary to spend significant time to review both parties’ financial documents back to 2007, including tax returns, bank statements, investment statements, credit card and credit line statements, documents relating to the children’s special expenses, letters from employers and employment searches, etc . Counsel needed to prepare several charts to assist the court and to prepare support calculations.

There were hundreds of letters and e-mails exchanged. The total time spend of 215 hours for the entire case was reasonable. 10. The total expenses were $3,817.00. Of this amount, over $1,000.00 was sent on photocopies including tabs and binding costs and most of the remainder was spent for serving and filing documents. All of these expenses are reasonable. Some of the expenses were incurred for photocopying and binding the respondent’s materials as a courtesy to the court. 11.

Although the respondent is liable to pay costs, I am required to consider her financial circumstances in determining the amount she should pay. The respondent is no longer in receipt of spousal support but she does continue to receive child support. Although at the time of the trial the respondent had lost her job, she should, on the basis of her qualifications and work experience and with this trial behind her, be able to find employment. In the trial judgement, income was imputed to the respondent of in the range of $30,000 to $33,000 and she was also found to have access to at least another $20,000 per year.

The respondent also has assets as a result of the property settlement with the applicant. A significant costs order will be difficult for the respondent but she must bear some responsibility for delaying these proceedings and unnecessarily prolonging the trial. She also increased the applicant’s legal fees as a result of sending hundreds of e-mails and making numerous and repeated unnecessary disclosure requests. [ 19 ] The applicant’s total costs were $62,021.00, of which $9,678.00 relate to the court attendances prior to the trial. This leaves $52,343.00 to be apportioned.

The applicant requests costs of $40,000.00, not including the previous cost orders of $1,700.00. The applicant also seeks the respondent pay $10,000.00 to be offset against future support payments payable by the applicant and that the remainder be paid within 90 days. [ 20 ] Although the respondent has the ability to pay costs of $40,000.00 over time, she does not have the present resources to do so. She will need some time to re-adjust her lifestyle and to live within her means.

I would not offset any portion of the costs order against future child support payments as, on the basis of the evidence at trial, I am concerned that this may jeopardize the current needs of the children. [ 21 ] For the reasons outlined herein, I make the following order: 1. The respondent shall pay to the applicant costs of $1,700.00, being $500.00 ordered on 8 September 2009 and $1,200.00 ordered on 10 March 2010. These costs to be paid within 30 days. 2. The respondent shall pay $40,000.00 in costs inclusive.

Such amount to be paid in instalments of no less than $2,000.00 per month commencing on 1 July 2011 and each month thereafter. The Family Responsibility Office shall enforce this cost order as an incident of support.