Boddy v. Boddy, 2010 ONCJ 716

Guelph Registry No. D-171-08 DATE: 2010·XII·08 CITATION: Boddy v. Boddy , 2010 ONCJ 716 ONTARIO COURT OF JUSTICE BETWEEN: WAYNE BODDY, Applicant, — AND — FIONA BODDY, Respondent. Before Justice Jane E.

Caspers Heard by way of written submissions Endorsement inscribed on 8 December 2010 CIVIL PROCEDURE — Costs — Discretion of court — Balance between full recovery and fairness — Assessment of quantum — Mother was successful party in custody and child support dispute — She had also acted reasonably whereas father was intransigent on several issues — For 2 years, he persisted in pressing his unreasonable demands on custody issue until morning of trial when, in minutes of settlement, father conceded that mother’s home was to be children’s primary residence, that she would have sole custody and father to have reasonable access on reasonable notice — On matter of support, father had deceived mother in believing that he earned less than he did and, once case began, he resisted making full and frank financial disclosure for some time — Once he did disclose, mother was able to make 2 offers to settle, both of which proved to be more generous to father than court’s final order, but he accepted neither and did not present any offers of his own — Bearing in mind purposes of cost order, court looked at father’s choice to pursue litigation for almost 2 years and concluded that, as result of being unsuccessful, he had to bear financial costs of that choice — Thus, costs award in mother’s favour was appropriate in this case — Mother had run up bill of $17,818.10 legal fees, disbursements and applicable taxes — But objective of court’s assessment of costs is not necessarily to reimburse litigant for every dollar spent on case — Case of Boucher et al. v.

Public Accountants Council for the Province of Ontario , 2004 CanLII 14579 (Ont. C.A.), pointed out that quantum of costs award must be fair and reasonable for losing party to pay in any given case — After review of factors in subrule 24(11) of Family Law Rules , court fixed mother’s costs at $10,289.03, including disbursements and taxes. STATUTES AND REGULATIONS CITED Child Support Guidelines , O. Reg. 391/97 [as amended],

section 7 . Family Law Rules , O. Reg. 114/99 [as amended], rule 15 , rule 18 , subrule 18(14) , subrule 18(16) , subrule 24(1) , subrule 24(4) , subrule 24(5) , subrule 24(6) , subrule 24(8) , subrule 24(10) and subrule 24(11) . CASES CITED Boucher et al. v. Public Accountants Council for the Province of Ontario , 2004 CanLII 14579 , 71 O.R. (3d) 291, 188 O.A.C. 201, 48 C.P.C. (5th) 56, [2004] O.J. No. 2634, 2004 Cars​well​Ont 2521 (Ont. C.A.). 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.). W.

Gerald Punnett .......................................................................... counsel for the applicant father Jonathan P. Krashinsky ............................................................. counsel for the respondent mother For previous proceedings, see Boddy v. Boddy , 2010 ONCJ 715 , [2010] O.J. No. 5925, 2010 Cars​well​Ont 10546 (Ont. C.J.), per Justice

Jane E. Caspers. [ 1 ] JUSTICE J.E. CASPERS ( endorsement ):— On 12 November 2010, I released my reasons for judgment in this family law matter in which the outstanding issues were custody of and access to the parties’ two children and child support, including matters pertaining to expenses under

section 7 of the Child Support Guidelines , O. Reg. 391/97, as amended, and retroactivity. The parties were represented at trial on 25 and 26 October 2010. [ 2 ] The history of this litigation is fully set out in my reasons for judgment. I will not repeat that here. All issues of custody and access were resolved by minutes of settlement filed at the outset of trial with costs to be fixed by the court. The trial focussed on issues of ongoing child support, the defining and allocation of

section 7 expenses and retroactive child support. [ 3 ] As a term of my order, I invited the parties to make written submissions with respect to costs of no more than three pages in length with fixed dates for filing. Ms. Boddy’s submissions were served and filed on 19 November 2010. The cost submissions of Mr. Boddy were served and filed on 23 November 2010. 1: POSITION OF Ms. BODDY [ 4 ] Ms.

Boddy is seeking costs on a substantial indemnity basis pursuant to a bill of costs filed with her cost submissions, based on her success at trial and the fact that she served offers to settle that were as good as or better than the result of the trial. The court has been presented with evidence that she is indebted to Mr. Krashinsky in the amount total of $17,818.10 comprised of legal fees, disbursements, GST and HST. [ 5 ] She submits that Mr. Boddy’s conduct in these proceedings was unreasonable and that unreasonable delay was engendered as a result of his conduct and this led to an escalation of legal fees. A

summary of the concerns and procedural irregularities raised by Ms. Boddy in her submissions on this point is as follows: • the withholding of the children in February 2009, which necessitated an emergency motion that resulted in the return of the children to Ms. Boddy; • failing to attend at the trial management conference, in contravention of the Family Law Rules , O.

Reg. 114/99, as amended (the “rules”); • failing to serve and file his trial record 30 days prior to the commencement of trial and not until 4 days prior to trial in contravention of the rules; • serving a motion two days in advance of the trial seeking to have the trial judge recuse herself notwithstanding that the issue was not raised at the trial management conference; • serving on the morning of the commencement of trial a motion pursuant to rule 15, to address issues that were the subject matter of the trial; • allowing the proceeding to span two years of litigation when the custody and access issues were resolved on the morning of trial and the terms were “fundamentally identical” in accordance with an offer to settle forwarded on 20 October 2010; • failing to produce full disclosure at a settlement conference on 14 October 2009, which necessitated an adjournment to properly ascertain his support obligation.

Once disclosure was received, an offer to settle was made at the settlement conference held on 5 May 2010 dealing with support, both retroactive and ongoing, in accordance with Mr. Boddy’s income and the Child Support Guidelines but which was not accepted; and • failing to resolve the issues of custody and access in advance of the trial in the face of overwhelming evidence. 2: POSITION OF Mr. BODDY [ 6 ] It is the position of Mr. Boddy that no costs should be awarded.

In the alternative, if costs are to be awarded, they should be ordered in an amount equal to 4 hours of preparation time at $150.00 per hour and $1,500.00 “for the days at trial”. Whether the sum of $1,500.00 represents costs per day or is the total amount of costs suggested for two days of trial is unclear. [ 7 ] He submits that, with respect to the particular issues of custody and access, at all times he acted reasonably and in the best interest of the children. Despite the fact that Ms.

Boddy was successful at trial, he relies on the fact that the issues of custody and access were resolved by minutes of settlement prior to evidence being called and, as a result, a judicial determination on those specific issues was not required. [ 8 ] Mr. Boddy maintains that he was always co-operative. Specifically, he advances that he voluntarily increased the amount of child support payable in 2007 and, by virtue of his consistent payments, was ultimately paying more than the guideline amount in 2009. He concedes that the financial issues were not complex and would have been resolved had Ms.

Boddy “reviewed her own banking statements” and had Mr. Krashinsky confined his cross-examination to the salient points and not engaged in an examination that was “excessively long” and designed “to smear the applicant’s reputation.” [ 9 ] No information has been disclosed by Mr. Boddy regarding legal costs incurred as a result of this proceeding. 3: BAD FAITH [ 10 ] I must first consider the issue whether there was “bad faith” on the part of either party, as such a finding will render any presumptive rule ineffective (subrule 24(8)). I find no “bad faith” on the part of either Mr. Boddy or Ms. Boddy.

[ 11 ] The rules applicable to costs are rules 24 and 18 of the Family Law Rules . They are somewhat intertwined, especially since in this case, offers to settle were served on 5 May 2010 and 20 October 2010. 4: APPLICATION OF RULE 24 [ 12 ] Rule 24 of the Family Law Rules provides guidance on costs in a family law context. There is a presumption that a successful party is entitled to costs of a case (subrule 24(1)).

Despite this general proposition, 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 (subrule 24(4)). In deciding whether a party has behaved reasonably or not, the court should examine the party’s behaviour in relation to the issues from the time that they arose, whether offers to settle were made, the reasonableness of such offers made and any offer that the party withdrew or failed to accept (subrule 24(5)).

If success is divided, the court may apportion costs as appropriate (subrule 24(6)). [ 13 ] There is no question that Ms. Boddy was the successful party. [ 14 ] Both parents sought sole custody of the children. Ms Boddy was successful on the issues of custody and access by agreement of the parties. On the financial issues, Mr. Boddy challenged the payment of any retroactive arrears of support and alleged an overpayment of child support in the amount of $828.23. Ms. Boddy argued that significant arrears were owed as a result of Mr.

Boddy’s failure to make full, frank disclosure of his financial circumstances and to pay child support in accordance with his income as confirmed by Revenue Canada. In the end, the arrears of child support with were fixed at $10,232.87 with a repayment schedule. [ 15 ] Throughout, I find that Ms. Boddy acted reasonably. Mr. Boddy, on the other hand, was unwilling to compromise. His position on several issues, including custody was, I find, intransigent.

As the case management judge, I had the opportunity and advantage of assessing the attitude and approach of the parties at each step of the proceedings in advance of trial. It was Mr. Boddy’s withholding of the children at the outset of these proceedings that precipitated this litigation. Not only did he seek sole custody of the children, but he also sought, unreasonably in my view, supervised access by Ms. Boddy. I do not fault him for his initial concern upon receiving the disclosure from the children regarding the hot tub incident.

But it was clear from the correspondence dated 2 February 2009 from Andy Philips and Moira Middleton, social workers with Family and Children’s Services of Guelph and Wellington County, that there were no child protection concerns arising from the incident of 29 January 2009 involving Mr. Herron. Yet, on 5 February 2009, Mr. Boddy insisted that the matter be heard on an urgent basis requiring Ms. Boddy to respond quickly.

This understandably led to an escalation of legal fees. [ 16 ] In removing the children from Guelph to Woodstock and refusing to return the children to their mother, the children missed some school. Of equal or perhaps greater importance was the fact that this conduct and the relief that he was seeking in this proceeding and in the Woodstock proceeding that he commenced contemporaneously represented a systematic and aggressive interference with Ms. Boddy’s relationship with the children. The motion to change in Woodstock was subsequently withdrawn.

At the trial management conference held on 26 August 2010, Mr Boddy persisted in his unreasonable demands on the issue of custody. Not until the morning of trial was a negotiated settlement reached. [ 17 ] On the morning of trial, Mr. Boddy brought two new motions, both of which were immediately withdrawn: the first requested that I recuse myself from hearing the matter and the second, brought pursuant to rule 15, sought to commence a new proceeding in this court to address the very issues that were the subject matter of the trial about to begin.

No prior notice of any intent to bring either motion was given. [ 18 ] Although I agree with Mr. Punnett that, despite Ms. Boddy’s success at trial, there is discretion not to award costs, I do not agree that there are any circumstances that would compel me to deny Ms. Boddy her costs as the successful party. 5: APPLICATION OF RULE 18 [ 19 ] Offers to settle are an important consideration in assessing costs.

Rule 18 provides that offers to settle must be taken into consideration and, if offers to settle meet the requirements of that rule, then the party, unless the court orders otherwise, is entitled to costs to the date the offer was served and full recovery of costs thereafter (subrule 18(14)). 5.1: Ms. Boddy’s Offer to Settle Dated 5 May 2010 [ 20 ] In this case, Ms. Boddy served a formal offer to settle at the settlement conference held on 5 May 2010 via the settlement conference brief. That offer to settle proposed that Ms. Boddy should have sole custody of the children and that Mr.

Boddy should have alternate weekend access from Friday at 3:30 p.m. until Sunday at 6:00 p.m. as well as other access as could be arranged by the parties.

The offer to settle also addressed both prospective and retroactive support and extraordinary expenses and it did so “in accordance with the applicant’s income and the guidelines, retroactive to a date three years prior to the commencement of the litigation and thereafter in accordance with the guidelines on a go-forward basis.” As the constanting documents were dated 2 February 2009, the offer to settle presumably contemplated arrears fixed as at 2 February 2006. This offer was not accepted. The final court order fixed arrears from 1 January 2006.

Subrule 18(16) stipulates that, 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 18(14) does not apply. In exercising my discretion over costs, I have afforded strong consideration to the fact that this early offer to settle was made and rejected. 5.2: Ms. Boddy’s Offer to Settle Dated 20 October 2010 [ 21 ] In Ms. Boddy’s subsequent offer to settle dated 20 October 2010, she offered once again to settle on the basis of a sole

custody award in her favour with a term that would allow Mr. Boddy reasonable access to the children on reasonable notice and shared holiday time. With a few minor amendments, these were the terms ultimately agreed to and incorporated into the minutes of settlement filed prior to trial. On the issue of ongoing and retroactive support, it was proposed that the child support arrears owing by Mr. Boddy be fixed at $8,831.98 as at that date. This was a decidedly more favourable resolution than the order made at trial where arrears were fixed in the amount of $10, 232.87 as at 28 February 2010. Accordingly, Mr.

Boddy would have been much better off, had he accepted the offer to settle as he would have been required to pay less child support and there would have been no cost consequences. [ 22 ] In the parties’ written submissions regarding costs, the court was not advised of any written offers to settle submitted by Mr. Boddy that would produce cost consequences under subrule 18(4). [ 23 ] I agree with Mr. Boddy’s counsel that the court has discretion not to award full recovery of costs from the date of the service of a rule 18 offer. I decline to adopt that position in this case. Mr.

Boddy must assume a significant degree of responsibility for the lengthy litigation in this case. 6: COSTS CLAIMED AND REQUIREMENT FOR DETERMINATION AT EACH STEP OF LITIGATION [ 24 ] Subrule 24(10) directs that, after each step in the case, costs are to be determined. I have considered that this proceeding was commenced as an urgent motion brought by Mr. Boddy and that I granted Ms. Boddy custody of the children with specified access to Mr. Boddy. Costs on the motion were sought and were awarded to Ms. Boddy on 5 February 2010 in the amount of $500.00. Those costs were paid. [ 25 ] It is argued that, as Ms.

Boddy did not seek costs at the case conference and settlement conferences held, she should not now be permitted to raise the issue. 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: • to partially indemnify successful litigants for the cost of litigation; • to encourage settlement; and • to discourage and sanction inappropriate behaviour by litigants. [ 26 ] Case conferences, settlement conferences and trial management conferences do not as a general rule attract costs unless there has been improper conduct by a litigant. The record indicates that briefs were filed appropriately for the case conference held before me on 21 July 2009.

At that time, an order was made for disclosure by both parties. The endorsement is silent with respect to costs. Briefs were filed on the settlement conference held before Justice Margaret A. McSorley on 14 October 2009. Further disclosure by Mr. Boddy was ordered by the presiding judge. It is clear that, on that occasion, the issue of costs was considered as the endorsement states “no costs”. At the second settlement conference held on 13 January 2010, both parties were ordered by Justice John T. Lynch to file further financial disclosure, in particular bank records.

The endorsement of the settlement conference judge is silent on the issue of costs. A third settlement conference was held on 5 May 2010 before Justice Lynda J. Rogers. The endorsement is again silent on the issue of costs. However, what did flow from that settlement conference was an offer to settle. I have addressed the impact of that important process elsewhere. At the trial management conference held on 27 August 2010, although briefs were filed, Mr. Boddy did not attend and, as a consequence, costs were awarded against him in the amount of $75.00. That costs order was paid.

It would appear that financial disclosure was an ongoing issue for both parties. Whether the various presiding judges felt that costs orders were inappropriate pursuant to subrule 24(10) or whether the court simply decided to withhold its intervention on the issue cannot be determined. 7: FACTORS TO BE CONSIDERED [ 27 ] Subrule 24(11) provides a further list of factors that a court should consider in dealing with 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. [ 28 ] The court’s role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees. As was pointed out in Boucher et al. v. Public Accountants Council for the Province of Ontario , 2004 CanLII 14579 , 71 O.R. (3d) 291, 188 O.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 an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings rather than an exact measure of actual costs to the successful litigant. [ 29 ] Applying these principles to the facts of this case, I make the following findings. 7.1: Importance, Complexity or Difficulty of the Issues

[ 30 ] This was not a complex matter. The custody and access issues were resolved on consent. Once the financial disclosure was received from both parties in the spring of 2010, it should have been simply a matter of calculating the arrears outstanding for the period 2006 to 2009 based on the fluctuations in annual earnings. Only the issue of Mr. Boddy’s 2010 income constituted the subject of some debate. On that issue, Mr. Krashinsky asked that I attribute to Mr. Boddy income in the amount of $35,000.00 for 2010 based on a rather speculative analysis of his earnings to date.

In the alternative, he invited the court to rely on the line 150 income for Mr. Boddy as referenced in his 2009 tax return

summary. In the interest of fairness, that was the decision ultimately made. There ought to have been a consensus on that issue as between the parties. It was a reasonable resolution going forward. [ 31 ] Success was split on the issue of the six missing cheques. Mr Boddy sought credit for all payments; Ms. Boddy argued that credit should only be given if such payments could be confirmed by the production of duplicate cheques. Of the six cheques that were missing, I afforded credit to Mr.

Boddy for two of the cheques notwithstanding that they were not produced, based on the proximity in time of the recorded deposits to Ms. Boddy’s account and the corresponding withdrawals from Mr. Boddy’s account. The rest of the payments were disallowed. [ 32 ] With respect to the

section 7 expenses, these ought to have been easily calculated given that the comparative income of the parties was known, the expectations were clear as defined in the agreement and the expenses were catalogued in a detailed and methodical fashion. [ 33 ] Mr. Boddy asked that he continue to have the benefit of the poorly drafted provision in the separation agreement that dealt with child tax credits.

I declined to do that for reasons set out in my reasons for judgment. 7.2: Behaviour of the Parties [ 34 ] I do not fault either parent for presenting as much evidence as possible in view of the potential for significant monetary consequences following trial. As I indicated in my reasons for judgment, Mr. Punnett undertook a methodical review of the banking documents of his client and those of Ms. Boddy. Mr. Krashinsky’s cross-examination, notwithstanding Mr. Boddy’s unnecessarily strident submissions, I found to be measured, courteous and focussed. [ 35 ] Mr.

Boddy had a positive obligation under the terms of the prevailing separation agreement to make full disclosure and it was Mr. Boddy who was delinquent in his obligation. He misled Ms. Boddy into believing that the child support obligations were being met when they were not. A letter was sent to him by Mr. Krashinsky on 22 December 2008 addressing his historic underpayment of child support and seeking production of income tax returns and notices of assessment for 2005, 2006 and 2007 as well as a year-to-date statement of earnings from 2008.

Still, he refused to provide the requisite information electing instead to litigate. Failure to make full, frank and prompt disclosure during the course of litigation with respect to family issues is a very important factor in the context of costs. [ 36 ] Ms. Boddy submits that Mr. Boddy acted in prolonging this proceeding in not consenting to the children’s remaining in her care in view of the overwhelming evidence in favour of that position.

In deciding to litigate the issues of custody and access up to the first day of trial, he is assumed to have considered the consequences of losing and of being required to pay costs 7.3: Lawyer’s Rates [ 37 ] Ms. Boddy’s counsel billed his services at an hourly rate of $225.00, which is reasonable. His law clerks’ time was billed at an hourly rate of $80.00. This seems high. I have no information regarding their level of experience or expertise and much of the work completed appears to be secretarial-clerical in nature. I have therefore allowed those services at $50.00 per hour. 7.4: Time Spent [ 38 ] Ms.

Boddy’s counsel has presented a detailed and comprehensive bill of costs in which he has apportioned and allocated his time and that of his law clerks. He has also referenced his disbursements and applied all relevant taxes. Mr. Boddy filed voluminous materials at trial and this required Ms. Boddy’s counsel to spend a great deal of time preparing significant responding materials. 7.5: Other Considerations [ 39 ] I have considered that Mr. Boddy made no offers to settle and did not accept the reasonable offers to settle presented by Ms. Boddy first as early as 5 May 2010 and later on 20 October 2010.

Subrule 18(16) allows the court to consider “any written offer to settle.” I have done so with respect to the offer of 5 May 2010. [ 40 ] Mindful of the purposes of a cost order, the court is entitled to consider Mr. Boddy’s choice to pursue the litigation for nearly two years and, as a result of being unsuccessful, he must bear the financial costs of that choice. For the reasons set out herein, a costs award is appropriate. [ 41 ] I have carefully reviewed the bill of costs and have allowed Ms. Boddy costs for the period from 24 September to 25 November 2008 as it was then that Mr. Krashinsky approached Mr.

Boddy seeking financial disclosure. He declined to engage. I have also awarded costs to Ms. Boddy for the period from 3 May 2010 to 17 November 2010 representing the period after the initial offer to settle was served, up to and including the filing of cost submissions. I have not allowed costs for the motion argued on 2 February 2009 as costs were awarded in favour of Ms. Boddy in the amount of $500.00 and those costs have been paid in full. [ 42 ] In my calculations I have awarded costs: • from 24 September 2008 to 25 November 2008 in the amount of $501.35 (legal fees of $477.50 and GST @ 5% $23.85),

• from 3 May 2010 to 25 June 2010 in the amount of $1,078.88 (legal fees $1,027.50 and GST @ 5% $51.38), and • from 1 July 2010 to 17 November 2010 in the amount of $7,585.69 (legal fees $6713.00 and HST @ 13% $872.69). I have prepared my calculations taking into account the transition from GST to HST after 1 July 2010. I have also cautiously allowed disbursements in the amount of $1,123.11. Although substantial and not supported by any specifics, they were never challenged by Mr. Boddy in his submissions. [ 43 ] Taking into consideration all of the factors and circumstances outlined above, I find that Ms.

Boddy is entitled to costs of this proceeding fixed at $10,289.03 including disbursements, GST and HST where applicable. From this amount, I have deducted the $75.00 costs ordered at the trial management conference on 26 August 2010. As this award is significant, I have taken into account Mr. Boddy’s financial circumstances and have established what I consider to be a reasonable payment

schedule in addition to the ongoing child support and payment on arrears as set out in my reasons for judgment. [ 44 ] The court orders as follows: The applicant, Wayne Boddy, shall pay to the respondent, Fiona Boddy, her costs fixed at $10,214.03. The costs are to be paid at the rate of $750.00 per month commencing on 1 January 2011. In the event of any default, the balance owing on the costs award shall immediately fall due and shall be enforced by the Director, Family Responsibility Office, as directly relating to the issue of child support.