Collins v. Garmoe, 2012 ONCJ 643

COURT FILE No.: Halton 334/07 DATE: 2012·10·02 Citation: Collins v. Garmoe , 2012 ONCJ 643 ONTARIO COURT OF JUSTICE BETWEEN: JENNIFER ANNE COLLINS Applicant — AND — TIMOTHY LYLE GARMOE Respondent Before Justice S.

O’Connell COSTS ENDORSEMENT Darrel Hotz ........................................................................................................... for the Applicant Lydia Moritz ...................................................................................................... for the Respondent O’CONNELL J.: INTRODUCTION : [ 1 ] On April 12, 2012, following one and one-half days of trial, I made a final order that the retroactive child support owed by respondent, Timothy Garmoe, to the applicant, Jennifer Collins, should be fixed at $5,000.00, to be paid in a lump sum no later than 30 days from the date of this order, or alternatively in monthly payments of $250.00 each month, commencing June 1, 2012. [ 2 ] The issue of retroactive child support was the only issue for trial.

The parties settled the issues of paternity, custody, access, and restraining relief on November 30, 2009, two years prior to this trial, and the issue of ongoing child support was settled on October 1, 2010, one year prior to trial. The trial of the issue of retroactive child support was delayed for a number of reasons which I will address later in these reasons. [ 3 ] I requested written submissions regarding costs. Ms Moritz, counsel for Mr. Garmoe filed written submissions on costs on May 11, 2012. Ms Collins did not provide a response to Mr.

Garmoe’s costs submissions until September 12, 2012, five months later. I had initially granted a request for an extension and a further adjournment request was sought by Ms Collins’ lawyer as a result of some personal reasons. Although the court was reluctant to grant this adjournment given the very lengthy delay in filing costs submissions, a deadline was set for September 12, 2012 and the submissions were received at that time. [ 4 ] The Respondent, Mr.

Garmoe is seeking his costs on a full recovery basis in the amount of $21,752.73, calculated as follows: a. on a partial indemnity basis (60%), from October 2, 2010 to November 23, 2011 when the first Offer to settle was served, in the amount of $5,223.00 plus $678.99 hst; b. on a full indemnity basis, from November 24, 2011 onward, in the amount of $13,098.00 plus $1,702.74 hst; and c. disbursements of $929.20 plus $120.80 hst. [ 5 ] Ms. Collins submits that no costs should be payable.

BACKGROUND: [ 6 ] As indicated above, as of October, 2010, the only issue outstanding between the parties was retroactive child support. On October 1, 2010, Justice Theo Wolder ordered that Ms Collins provide Mr. Garmoe with a

summary of her claim for retroactive child support setting out the amount claimed and the amount received. This was necessary because the amount that Ms Collins was seeking in retroactive child support was unclear to Mr. Garmoe and the court. [ 7 ] Despite several court appearances and directions from the court, Ms Collins did not provide her

summary until April 20,

2011, approximately seven months later. Some reasons for the delay were beyond Ms Collins control. However, the delay in providing the

summary of her claim for arrears and retroactive support gave rise to several additional court attendances before the matter could proceed to trial. [ 8 ] Based on this

summary, it was Ms Collin’s position that Mr. Garmoe owed her child support arrears in the amount of $20,029.93. Despite several more court appearances, the parties were unable to resolve the matter. [ 9 ] On December 12, 2011, at the commencement of trial, Ms Collins relied upon her

summary and chart of child support arrears. However, during the trial, it became apparent that Ms Collins’ chart contained a number of errors. In his closing submissions, counsel for Ms Collins advised that Ms Collins accepted Mr. Garmoe’s calculations of $16, 419.53 as the total amount of child support owed, prior to other deductions and claims being made. At the conclusion of trial, Ms Collins also conceded that Mr. Garmoe was entitled to a reduction of those arrears to take into account the funds that he gave to Ms Collins to purchase her vehicle and a number of other items, during the time period in question.

This reduced her claim by $6,000.00. Thus, by the end of the trial, Ms Collins had reduced her claim from $20, 029.93 to $10,419.53. THE LAW AND GENERAL PRINCIPLES: [ 10 ] Rule 24 of the Family Law Rules, O. Reg. 114/99, governs the determination of costs in family law proceedings and the sections relevant to the circumstances of this case are as follows: “ 24.

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

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

(7) If a party does not appear at a step in the case, or appears but is not properly prepared to deal with the issues at that step, the court shall award costs against the party unless the court orders otherwise in the interests of justice.

(8) If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.

(10) 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 ] Rule 24 (11) provides a further list of factors that a court must consider when setting the amount of costs: “(

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.” O. Reg. 114/99, r. 24 (11) . [ 12 ] Rule 18(14) and 18 (16) of the Family Law Rules , which address the cost consequences of offers to settle, provide the following: “18(14) 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) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made andits terms, even if subrule (14) does not apply.” O. Reg. 114/99, r. 18 (14) and (16). [13] In Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, [2009] O.J.

No. 1905, 2009 CarswellOnt 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. [14] Rule 24 created a new framework for determining costs in family law proceedings.

The presumptive nature of Rule 24 hassignificantly curtailed the court’s discretion regarding costs in family law proceedings and absent compelling circumstances or theexceptions set out in the rule itself, costs are generally awarded to the successful party. The Ontario Court of Appeal in C.A.M. v. D.M.(2003) (ON CA), 67 O.R. (3d) 181 held that while the Rules have not completely removed a judge’s discretion, theRules nonetheless circumscribed the broad discretion previously granted to the courts in determining costs.

Courts must not only decideliability for costs, but also the amount of those costs. [15] 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 CarswellOnt 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. [16] In Delellis v Delellis and Delellis, [2005] O.J. No. 4345, , 143 A.C.W.S. (3d) 235, 2005 CarswellOnt4956 at paragraph 9, Justice David R.

Aston states the following at paragraph 9: “… recent cases under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended, have begun to de-emphasize the traditionalreliance upon "hours spent times hourly rates" when fixing costs...Costs must be proportional to the amount in issue and the outcome. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances ofthe case, rather than an amount fixed by the actual costs incurred by the successful litigant...” ANALYSIS: Offers to Settle [17] Mr.

Garmoe served two offers to settle, both of which were attached to his cost submissions. In his first Offer to Settle,dated November 23, 2011, Mr. Garmoe offered to pay Ms Collins the sum of $5,000.00 in retroactive child support within 30 days of theacceptance of his offer and that each party would bear their own legal costs. In his second Offer to Settle, served seven days before trial,Mr. Garmoe again offered $5,000.00 in retroactive child support and that each party would bear their own legal costs if the offer wasaccepted by December 9, 2011 at 12 noon (two days before trial).

If the offer was accepted after that time, then Ms Collins would payMr. Garmoe the sum of $1,500.00 in legal costs. [18] The change in the cost provisions for the second offer was to address Mr. Garmoe’s travel expenses. Mr. Garmoe lives inNew Mexico, United States and would need to travel to Canada to meet with his lawyer and prepare for trial over the weekend if theoffer was not accepted by Friday at 12 noon. The actual costs of travel, hotel, and meals for Mr.

Garmoe to attend the trial in Ontario wassignificantly more that the $1,500.00 proposed in the offer if it was not accepted by 12 noon on Friday. [19] Ms. Collins served one offer to settle, dated December 5, 2011, seven days before trial. She proposed that Mr. Garmoepay her the sum of $15,000.00 in retroactive child support on such dates and terms as may reasonably be agreed to by the parties and thateach party bear their own legal costs. In addition, her offer to settle contained terms regarding issues not before the court, namely thevariation of the final custody and access order which addressed Mr.

Garmoe’s parenting time and a proposal regarding

section 7expenses which had previously been settled. The provisions of her offer to settle were not made severable. [20] Mr. Garmoe was clearly the successful party and there is no doubt that his offers to settle, made in accordance with Rule18 of the Family Law Rules were as favourable as the result obtained at trial. Ms Collins offer to settle was not reasonable. It containedterms to change issues that had previously been settled and were not before the court. Further, these issues were not severable from theissue of retroactive child support and arrears.

Finally, the amount that Ms Collins sought was more than the amount she claimed at theconclusion at trial, once she acknowledged some accounting errors and conceded that some payments had been made to her during thetrial. [21] Ms. Collins offer to settle illustrates the casual and somewhat careless manner in which she approached this trial. In Serrav.

Serra, supra, referred to above, the Ontario Court of Appeal stated the following at paragraph 7 of its decision: “Parties have anobligation to begin to assess respective cases at the outset of the litigation – even before the litigation commences and to make allreasonable efforts to settle.

Legal fees can create enormous financial burdens for litigants and it behoves, neither party simply to sit backand to roll the dice while those fees continue to mount.” [22] It is clear from the way that the trial unfolded that Ms Collins did not take her obligation to assess her claim seriously andrealistically from the outset.

After two days of trial, Ms Collins changed her claim significantly, and reduced it by almost fifty percent.The cost of preparing and proceeding to trial may very well have been avoided if Ms Collins had taken a good hard look at her case asearly as October of 2010 when Justice Wolder first ordered her to prepare a chart and

summary of her claim for retroactive child supportand arrears.

Bill of Costs: [23] Ms. Moritz is a family law practitioner who was called to the bar in 1994 and has approximately 18 years of family lawexperience. In the bill of costs submitted, her hourly rate is set at $350.00 per hour on a full indemnity scale. This is a reasonable ratefor someone of Ms Moritz’s skill and experience. [24] Ms.

Mortiz’s Bill of Costs only includes the time spent after October 1, 2010 when all other issues were settled exceptretroactive child support and arrears.[1] The bill of costs includes 5.9 hours for attendances at five trial management conferences and oneattendance for the trial ready list, 19.6 hours for trial preparation, 4.6 hours for preparation of court documents, 12 hours for attendingcourt for the trial, 2 hours to prepare costs submissions and 9.6 hours in travel time to and from the Milton Court house (the travel timebeing at the reduced hourly rate of $175.00).

She has also claimed 10.8 hours for her law clerk at a rate of $110.00 per hour. [25] There is no question that the majority of the attendances for the trial management conferences were not necessary butcaused through no fault of Mr. Garmoe, but rather the failure of Ms Collins to be prepared for trial. I recognize that on at least two ofthose attendances, the hearings had to be adjourned due to the passing of Ms Collin’s father and the tragic death of Ms Collins’ brother ina car accident.

However, there were at least three other attendances in which Ms Collins was simply not prepared for trial and wasseeking an adjournment. Having said that, Ms Moritz only sought costs for two attendances. She received costs in the amount of $250.00for one attendance, and costs for the other attendance were reserved to trial. Whether Full Indemnity should be Granted: [26] Although I have found that Mr.

Garmoe’s Offers to Settle complied with Rule 18 of the Family Law Rules, and were asfavorable as the result obtained at trial, thus triggering full recovery of costs, I am not prepared to grant costs on a full indemnity basisfor the following reasons. The Ontario Court of Appeal held at paragraph 43 in C.A.M. v. D.M. (ON CA), 67 O.R.(3d) 181; [2003] O.J. No. 3707 that the court has the discretion not to make an award for full recovery even when a party has met theconditions in Rule 18(14).

The rule makes it clear that a party is entitled to full recovery “unless the court orders otherwise.” Relevantconsiderations would be the financial condition of both parties, especially an unsuccessful custodial parent, and whether the costs soughtby the successful party are reasonable. [27] In this case, having regard to clause 24 (11) (

a) of the Rules, the sole issue for trial was not complex or difficult. The trialpreparation costs claimed by Ms Moritz are excessive given the total sum in dispute between the parties and the outcome achieved attrial. The issue of proportionality and the overall reasonableness of a claim for costs must be measured against the sums at stake. SeeBemrose v. Fetter, ; [2006] O.J. No. 1048. As Justice Aston stated at paragraph 9 in Delellis v Delellis and Delellis,supra, costs must be proportional to the amount in issue and the outcome. The overall objective is to fix an amount that is fair andreasonable.

Ability to Pay: [28] Further, in deciding the amount of costs to be paid, I must also consider clause 24 (11) (

f) which requires the court to consider any other relevant matter, including the ability to pay costs. See Biant v. Sagoo, , 20 R.F.L. (5th) 284,[2001] O.J. No. 3693. In C.A.M v. D.P., Justice Rosenberg for the Ontario Court of Appeal states the following: “I am also of the view that the financial situation of the parties can be taken into account in setting the amount of the costs award eitherunder Rule 24 or Rule 18. Thus, while subrule 24(11) enumerates a number of factors that must be taken into account, the person settingthe amount of the costs is directed to take into account "any other relevant matter".

I agree with Aston J. in Sims-Howarth at para. 4, thatthe "Family Law Rules demand flexibility in examining the list of factors in subrule 24(11) without any assumptions about categories ofcosts". In my view, a consideration of particular relevance may be the financial position of the parties, especially of an unsuccessfulcustodial parent. See Biant at para. 17 and Brennan v. Brennan, [2002] O.J. No. 4743 (S.C.J.) at para. 11.

In fixing costs the courtscannot ignore the best interests of the child and thus cannot ignore the impact of a costs award against a custodial parent that wouldseriously affect the interests of the child. That, however, was not a consideration in this case. The mother is not the custodial parent.”[par. 42] [29] In this case, Ms Collins is the custodial parent and she has no other source of income but child support. Having said that,it clear from the case law that ability to pay should not override other factors in Rule 18 and Rule 24. As Justice Spence stated in Peersv. Purpore 2008 ONCJ 615 , [2008] O.J.

No. 4791, “in family law litigation, and particularly for parties of modest means, itbehoves those parties to act reasonably and to avoid trial if at all possible.” [30] Ms. Collins did not behave reasonably in failing to properly assess and consider her claim and make reasonable offers tosettle, as I have stated previously.

Given the background and the history between these parties and the circumstances leading to theirseparation, it is understandable that Ms Collins judgment may have been clouded, but that does not mean that she could pursue the issueof child support arrears all the way to trial in such a cavalier fashion, given the enormous cost to both parties. In Heuss v. Sarkos, JusticeSpence also states the following at paragraph 20 of that decision: “Parties to litigation must understand that court proceedings are expensive, time-consuming and stressful for all concerned.

They are notdesigned to give individual litigants a forum for carrying on in whatever manner they may choose, oblivious to the impact of thatconduct on the other side and, perhaps most importantly for the purposes of this case, oblivious to the mounting costs of the litigation.Matrimonial litigation is an occasion for sober consideration and thoughtfulness rather than intemperate behaviour.” [31] In my view, in the circumstances of this case, a cost award is appropriate. But for the mother’s financial circumstances, Iwould have been inclined to make a cost award in the range of $10,000.00 to $12,000.00.

However, the obvious concern is theenforcement of any cost award and how it should be paid. Set-off:

[32] Ms. Moritz is seeking that the costs ordered be set off against the arrears of child support owed and that the balance bepayable within 30 days, or set off against his ongoing child support obligation at a rate of $250.00 per month. Currently, Mr. Garmoe’sbasic child support obligation is $1,405.00 per month, in addition to his contribution to

section 7 expenses. [33] Mr. Hotz opposes this approach and submits that if the costs are set off against the child support, then the children will bepenalized and deprived of child support for several months, if not years. He submits that it is unfair to penalize the children, the verypersons whom the child support order is intended to benefit. [34] The case law regarding whether a costs order may be the set off against an order for child support is divided. Some courtsconsider that costs should never be set off against child support payments. In Peers v.

Poupere 2008 ONCJ 615 , [2008] O.J.No. 4791, Justice Spence conducts a thorough and comprehensive review of the case law on this issue, including the Court of Appeal’sdecision in Burisch v. Gosal, 2007 ONCA 569, [2007] O.J. NO. 3120. In that decision, although no rationale was provided, the Court ofAppeal awarded costs to the support payor in the amount of $2,500.00 and further ordered that the costs should be set off against anychild support arrears outstanding. [35] In Peers v.

Poupere, supra, Justice Spence ordered a set off and states the following at paragraphs 60 to 62 of thedecision: “... the notion of treating child support payments as a segregated fund does not mesh with the reality of how parents normally run theirlives. Accordingly, whether a court is prepared to make a set-off order should depend less on an unyielding rule and, rather, upon thefacts of each case. In my view, the inquiry should be directed to ascertaining what is reasonable, fair and just in all the circumstances of aparticular case.

To impose a blanket prohibition against set-off orders would, in some cases, give a support recipient licence to litigate and to act asunreasonably as he or she saw fit, possibly with complete impunity. That kind of conduct has the potential to drive a support payor ofmodest means into financial ruin. It must not be forgotten that an order for costs is only as good as the ability to enforce that order.

One of the primary goals of rules and, in particular, the costs provisions, is to discourage litigation, to encourage parties to actreasonably, and to ensure that parties are potentially held liable for unreasonable choices that they decide to make.” [36] Justice Spence found that the children would not suffer hardship from a set-off order in the case before him. The motherin that case had re-married and her new husband was gainfully employed and supporting the child.

In fact, the mother’s new husband hadagreed to pay previous cost awards. [37] In this case, according to the evidence at trial, Ms Collins and the children have been living in her mother’s family homesince 2007. Ms Collins’s mother source of income is primarily a pension.

The only source of income for the children’s food, shelter,clothing, and other expenses is the child support received from their father. [38] It is unclear why Ms Collins has not returned to full-time employment given that the children have been in full-time day-care since 2009 and she was employed full-time with the same employer prior to their birth.

It is also unclear why the children areeligible for full-time subsidized daycare if Ms Collins is not working. [39] Having said that, unlike the case before Justice Spence, I am concerned that the children will suffer hardship if I set-offany costs owed from the ongoing child support, as this is the mother’s only source of income to pay for the children’s expenses.However, I do not believe that they will suffer hardship if I set off the costs award against the child support arrears owed by the father asthis will not affect the ongoing support payments.

ORDER: [40] In my view, in considering all of the above factors, Ms Collins shall pay Mr. Garmoe’s costs fixed at $5,000.00, inclusiveof fees, disbursements and taxes. These costs are set off against the $5,000.00 owed in child support arrears by Mr. Garmoe. Released: October 1, 2012 Signed: “Justice Sheilagh O’Connell”