Johanns v. Fulford, 2012 ONCJ 103

COURT FILE No.: Toronto DFO 0611158 B2 DATE: 2012-02-29 Citation: Johanns v. Fulford , 2012 ONCJ 103 ONTARIO COURT OF JUSTICE BETWEEN: DAVID JOHANNS Applicant — AND — SUSAN FULFORD Respondent Before Justice P. J. Jones Costs Decision released February 29, 2012 Mr. David Johanns ............................................................................................ on his own behalf Ms. Anita Volikis ............................................................................................. for the respondent JONES; P. J. J.: [ 1 ] On December 23, 2011, I released my ruling dismissing with costs the Applicant's motion to change relating to

section 7 expenses as set out in the consent order of Madam Justice Murray dated December 14, 2009. [ 2 ] I dismissed the motion to change with costs under Rules 1(8) and 14(23) of the Family Law Rules at an early stage because of the Applicant's failure to abide by three orders of the court. At the point I dismissed his motion to vary, he was approximately $10,000.00 in arrears of child support and had failed to pay $69,000.00 in costs he owed to the Respondent mother [ 3 ] I have reviewed the submissions of the parties.

I note that the submissions filed by the Applicant were not particularly helpful as his submissions attempted to reargue the case and the motion. He sought an order of no costs as he argued that he had no ability to pay and was "bankrupt and completely insolvent," a claim disputed by the Respondent. [ 4 ] I have also reviewed submissions filed and the bill of costs prepared by the Respondent who was successful on this motion.

I note that on a partial recovery basis she is seeking costs, including disbursements and H.S.T. of $6,728.22 and on a full recovery basis, costs, of $10351.08. [ 5 ] In determining the amount of costs to be awarded in this matter, I have considered the provisions of rule 24 (11), which reads as follows: 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 . [ 6 ] I note that the following material was filed by the Respondent on the motion, namely: pleadings in response to the motion to change, a factum and book of authorities were filed on the motion, and a bill of costs and book of authorities on the costs issue.

[7] As well, I note that this matter was before me on only two occasions. On the first appearance I was advised that theRespondent wished to bring the motion to dismiss the motion to change and on the second appearance the motion to dismiss was arguedand a dismissal was granted. COSTS AWARD [8] I have fixed costs payable by the Applicant in the amount of $4,000.00 inclusive of H.S.T. and disbursements, all ofsuch costs to be collectible by the Family Responsibility Office as Child Support.

In fixing the costs in this matter, I have not simplytaken the lawyers bill of costs and determined what percentage of those costs to award, although I have reviewed the bill of costs inconsidering the amount of time and effort involved. In fixing costs, I have adopted the reasoning laid out in the Court of Appeal decisionof Boucher v. Public Accountants Council (Ontario), (2004) (ON CA), 71 O.R. (3d) 291. [9] The costs I have awarded herein I feel are fair and reasonable for the Applicant to pay in the particular circumstances ofthis case.

Although the Applicant indicates he has limited or no ability to pay costs and he asks me to consider this factor in mydeliberations and fix costs at zero, I note that he has continued to litigate non-stop, all the while acting as if there are no consequences tosuch litigation even when he is unsuccessful. [10] In my ruling dismissing his motion to change, I expressed concern about the cost/ benefit of bringing such a motion in thecircumstances of this case. [11] I noted in my ruling in paragraph 25 as follows: “It seems evident to me that his motion to change, even if he were successful, would produce only a negligible change to the substantialsums of money he currently owes to Ms Fulford.

Given the history of this proceeding, and the behaviour of Mr.

Johanns in starting anaction that has no apparent merit, (and would, even if successful, result in an almost inappreciable difference to the monies owed to MsFulton) I have decided not to exercise my discretion under rule 1(8) and 14(23) to allow him to seek an order reducing retroactively hissection 7 expenses obligation.” [12] On this motion, I dismissed the Applicant's motion to change with costs as a consequence for the Applicant's failure tocomply with court orders under rule 1(8) and 14(23). [13] Parties who come to court are subject to the rules of the court.

They must be prepared to abide by court orders or face theconsequences.

As well, unless a court determines otherwise in appropriate circumstances, they must be prepared to pay ordered costs andabide by orders made by the court, or they may find themselves, as in this case, refused audience by the court. [14] In all the circumstances of this case an award of $4000.00 is fair and reasonable to the Applicant given the inherent timerequirements and the complexity of the matter as well as the unreasonable behaviour of the Applicant in bringing this matter at a time hewas in default of three court orders and owed $79,000.00 to the Respondent, the majority of which represented unsatisfied costs awards. [15] In arriving at this cost award, I have considered the claim by the Applicant that he has a limited ability to pay costs.

Hisability to pay costs is a factor, but not the only factor in fixing "fair and reasonable costs". As enumerated by A. Pazaratz J. in lzyuk v.Bilousov, 2011 CarswellOnt 14392, 2011 ONSC 7476 in paragraphs 54 and 55, there are three primary objectives of costs orders,namely, “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 It is counter intuitive to suggest that these objectives are less applicable to litigants of modest (or no) means.

To the contrary, those whocan least afford to litigate should be most motivated to seriously pursue settlement, and avoid unnecessary proceedings. As Glithers J.noted in Balaban v. Balaban, (ON SC), 2007 CarswellOnt 1518, at paragraph 7:"...when a person's financial positionis such that they cannot really afford the cost of litigation, then there is all the more reason to attempt compromise of a meaningfulnature.” [16] I note that both parties exchanged offers to settle. I have reviewed the Applicant's offer to settle wherein he sought toreduce not only his

section 7 expense portion of the order but also to substantially reduce the Guideline portion of the order even thougha change in the Guideline portion of the order had not been claimed in his motion to change. In my view, to include in an offer to settle areduction to the guideline portion of an order not claimed for in the motion to change is not an attempt at a "compromise of a meaningfulnature." It is not surprising to me and should not have been surprising to him that his offer to settle was not accepted. [17] I have also reviewed the offer to settle made by the Respondent. I note that her offer would reduce the

section 7 expensesas of September 2011 to 50% of the actual day care expenses. I was concerned that no DivorceMate calculation was included relating tothe after tax cost of the daycare as the consent order before Justice Murray indicated that as of September 2011, “the parties shall eachpay 50% of the after tax daycare costs until the June 1, 2015 review” Even if the words, “after tax daycare costs” had not been includedin the order, it is clear that the court must take into account the tax consequences associated with the expense. See Schmidt v. Smith,[19990 0.J.No. 3062 (S.C.J.).

I encourage the parties to at least resolve by “meaningful compromise” the day care expense variationcontemplated by the order of Murray, J. ORDER [18] Costs fixed at $4,000 inclusive of disbursement and H.S.T. to be collected as child support.

Released: February 29, 2012 ________________________________ Justice P. J. Jones