2010 ONSC 7007, 2010 ONSC 7007

CITATION : Ward v. Ward, 2010 ONSC 7007 KITCHENER COURT FILE NO.: 40252/07 DATE: 2010/12/20 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: ) ) Wilma Ward ) ) ) Julie Hannaford and Golnaz Eman, for the Applicant ) Applicant ) ) - and - ) ) ) Kenneth Ward ) ) ) Anthony T. Keller, for the Respondent ) Respondent ) ) ) The Honourable Mr. Justice B. H. Matheson COSTS ENDORSMENT [ 1 ] The Respondent brought a motion for

summary judgment dated November 26, 2007. [ 2 ] On consent it was set over for trial of an issue by order of Justice Flynn dated March 29, 2009. [ 3 ] The Applicant asked that Mr. Justice Flynn recuse himself – which he did without an order of the court. [ 4 ] Justice Gordon adjourned the trial of an issue on March 19, 2009 to have an out of town judge hear the matter. [ 5 ] It was heard before me, Justice Matheson, on August 4 and 5, 2010 in Kitchener. Total time was no more than six hours of court time. [ 6 ] There was a meeting of counsel before me to deal with costs on September 1, 2010.

At that time both counsel offered to have written submissions rather than oral arguments. [ 7 ] The Applicant was successful and now claims costs of $218,549.09. There was a typographical error in the Applicant’s costs submissions of September 15, 2010. This was corrected by letter dated November 18, 2010. [ 8 ] The court received an affidavit of J. K. Hannaford sworn July 15, 2010. It contained over 200 pages of time dockets for herself,

lawyers, students, law clerks, articling students and law students for work done on the file. [ 9 ] I have received from counsel the following written submissions on costs:

(1) Affidavit of J. K. Hannaford, sworn July 15, 2010;

(2) Affidavit of Julie K. Hannaford, sworn August 31, 2010;

(3) Applicant’s costs submissions dated September 15, 2010;

(4) Affidavit of Dr. Kenneth Ward, sworn August 11, 2010;

(5) Costs submissions of the Respondent dated September 29, 2010;

(6) Wilma Ward’s costs submissions dated October 6, 2010; and

(7) Letter of correction dated November 18, 2010. [ 10 ] The affidavit of Julie K. Hannaford of August 31, 2010 corrected some mathematical and typographical errors in her affidavit of July 15, 2010. As indicated, a further correction was made by letter of November 18, 2010. [ 11 ] At the hearing of the trial of an issue, Julie Hannaford on August 4 and 5, 2010 spent on those two days some 26 hours. This included travel time from Toronto, preparation and attendance in court. [ 12 ] The Applicant also had in attendance a second lawyer, Golnaz Simaei (formerly Golnaz Eman).

She had some 24.5 hours, which also included travel, preparation and attendance in court. [ 13 ] The billing rate of Hannaford is some $650.00 an hour, she having been called to the bar in 1985. Simaei has a billing rate of some $300.00 an hour. She was called in 2008. [ 14 ] There were four other lawyers involved with this file. There were five law clerks, articling students, law students and legal assistant also working on this file. They charged between $100.00 to $250.00 an hour. [ 15 ] There were travel expenses incurred by the Applicant’s lawyers. They travelled from Toronto to Kitchener.

Also long distance phone calls. [ 16 ] It is difficult to determine the hours of travel. Some are disbursements; others are included in lawyers’ hours. As indicated, the costs sought by the Applicant are some $218,549.09 inclusive of disbursements and HST. [ 17 ] The Applicant made three offers to settle, which were withdrawn. She made a fourth offer to settle on May 12, 2009. That offer was open for acceptance until five minutes after the commencements of evidence at the trial of an issue. [ 18 ] The offer to settle dealt with the following issues: 1. Dr.

Ward’s motion to enforce Memorandum of Agreement would be withdrawn. Matter would proceed to trial. 2. Costs of trial of an issue to be determined. 3. Transcripts used for trial of an issue to be used at trial. 4. Parties complete questioning. 5. Full disclosure. [ 19 ] Dr. Ward did not accept any of the offers, nor did he make any offers of his own. [ 20 ] The offer of May 12, 2009 met the requirements of rule 18. [ 21 ] Ms. Ward was successful in that the Memorandum of Agreement was ruled invalid.

She would be entitled to costs on a substantial costs basis from May 12, 2009. [ 22 ] The costs consequences of not accepting an offer to settle, which is found to be acceptable to the court, is dealt with by rule 49(10)(1): 49.10

(1) Where an offer to settle, (

a) is made by a plaintiff at least seven days before the commencement of the hearing; (

b) is not withdrawn and does not expire before the commencement of the hearing; and (

c) is not accepted by the defendant, and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer to settle was served and substantial indemnity costs from that date, unless the court orders otherwise.

[ 23 ] It is agreed by Ms. Ward’s counsel that the issue was not complex. Notwithstanding that concession, the issue was exceedingly important to her. If the judgment had been otherwise Ms. Ward’s entitlement to child and spousal support, equalization and use of the matrimonial home would be in serious doubt. [ 24 ] The factors in dealing with costs are found at rule 24(11) of the Family Law Rules, which state:

(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. [ 25 ] Parties to a legal process have a right to select a lawyer of their choice. They should not be punished for selecting a lawyer from out of town. In this case, the local administrative judge ordered that an out of town judge be called because of the possible involvement of local lawyers in the preparation of the Memorandum of Agreement. [ 26 ] In the costs submissions of Dr. Ward, reference is made that I ought not to have stated that “the Applicant is entitled to costs”.

I draw counsel’s attention to rule 24(1) of the Family Law Rules which states: “There is a presumption that a successful party is entitled to costs of a motion, enforcement, case or appeal.” [ 27 ] Dr. Ward states that Ms. Ward was acting in bad faith. The issue before the court was whether or not the Memorandum of Agreement was valid – that was the sole issue – other issues will be left for trial. [ 28 ] Dr. Ward says that on an offer to settle there must be an element of compromise - that is true. That did not prevent Dr. Ward from making an offer of his own. [ 29 ] Counsel for Dr.

Ward states that the costs asked for are excessive, stating that there were nine different legal persons involved. He quotes Justice Henderson in Hawkins v. Ontario (Attorney General) , [2010] O.J. No. 1193 , para. 6 : “… [E]ven if this motion had been the most important and most complex motion imaginable, a request of this magnitude is completely out of line for a motion that took two days of court time to argue.” [ 30 ] This case, states counsel for Dr.

Ward, was a single issue dealing with the validity of the Memorandum of Agreement. [ 31 ] Rule 24(10) of the Family Law Rules states: “Promptly after each step in the case, the judge or 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.” [ 32 ] No costs were awarded by either Justice Flynn or Gordon. None will be awarded by this order. I am dealing with the costs of the trial of an issue only. [ 33 ] Costs are governed by rule 57.01 of the Rules of Civil Procedure. That rule provides factors that a judge should consider in exercising his or her discretion. It reads as follows: 57.01(1) In exercising its discretion under

section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing, (0.

a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to costs as well as the rates charged and the hours spent by that lawyer; (0.

b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed; (

a) the amount claimed and the amount recovered in the proceeding; (

b) the apportionment of liability; (

c) the complexity of the proceeding; (

d) the importance of the issues; (

e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; (

f) whether any step in the proceeding was,

(

i) improper, vexatious or unnecessary, or (ii) taken through negligence, mistake or excessive caution; (

g) a party’s denial of or refusal to admit anything that should have been admitted; (

h) whether it is appropriate to award any costs or more than one set of costs where a party, (

i) commenced separate proceedings for claims that should have been made in one proceeding, or (ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and (

i) any other matter relevant to the question of costs. BOUCHER V. PUBLIC ACCOUNTANTS, (ON CA), [2004] O.J. No. 2634 [34] This is a Court of Appeal decision dealing with, in part, the determination of costs. Its overriding theme is that while applyingall the factors set out in rule 57, reasonableness is the dominant factor as indicated in the following paragraphs: 24 The appellants submit that the motions judge accepted the bills of costs that were presented to her without any deductions. The bills were prepared in accordance with the calculation of hours times dollar rates provided by the costs grid.

While it is appropriateto do the costs grid calculation, it is also necessary to step back and consider the result produced and question whether, in all thecircumstances, the result is fair and reasonable. This approach was sanctioned by this court in Zesta Engineering Ltd. v. Cloutier (2002), (ON CA), 21 C.C.E.L. (3d) 161 (Ont. C.A.) at para. 4 where it said: In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by theunsuccessful parties rather than any exact measure of the actual costs to the successful litigant.

See also Stellarbridge Management Inc. v. Magna International (Canada) Inc., (ON CA), [2004] O.J. No. 2102(C.A.) para. 97. … 26 It is important to bear in mind that rule 57.01(3), which established the costs grid, provides: When the court awards costs, it shall fix them in accordance with subrule (1) and the Tariffs. Subrule (1) lists a broad range of factors that the court may consider in exercising its discretion to award costs under s. 131 of the Courtsof Justice Act, R.S.O. 1990, c. C. 43. The express language of rule 57.01(3) makes it clear that the fixing of costs is not simply amechanical exercise.

In particular, the rule makes clear that the fixing of costs does not begin and end with a calculation of hours timesrates. The introduction of a costs grid was not meant to produce that result, but rather to signal that this is one factor in the assessmentprocess, together with the other factors in rule 57.01.

Overall, as this court has said, the objective is to fix an amount that is fair andreasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by thesuccessful litigant. … 29 While I accept that the bills of costs accurately reflect the time spent by all of the lawyers in this matter, it is inconceivable to methat the total amounts claimed are justifiable. In this regard, I accept the submission of the appellants that: (

a) the record in this application was the same record filed in the earlier proceedings; (

b) the respondents filed no evidence; (

c) the respondents conducted no cross-examination of any witness; (

d) the notices of motion to stay filed by the respondents were substantially the same; and (

e) the arguments to be advanced on the return of the motions to quash were substantially the same. … 37 The failure to refer, in assessing costs, to the overriding principle of reasonableness, can produce a result that is contrary to thefundamental objective of access to justice. The costs system is incorporated into the Rules of Civil Procedure, which exist to facilitateaccess to justice. There are obviously cases where the prospect of an award of costs against the losing party will operate as a realitycheck for the litigant and assist in discouraging frivolous or unnecessary litigation.

However, in my view, the chilling effect of a costsaward of the magnitude of the award in this case generally exceeds any fair and reasonable expectation of the parties. 38 In deciding what is fair and reasonable, as suggested above, the expectation of the parties concerning the quantum of a costsaward is a relevant factor. See City of Toronto v. First Ontario Realty Corporation (2002), (ON SC), 59 O.R. (3d)568 at 574 (S.C.). I refrain from attempting to articulate a more detailed or formulaic approach. The notions of fairness andreasonableness are embedded in the common law.

Judges have been applying these notions for centuries to the factual matrix ofparticular cases.

[35] The Court of Appeal in Davies v. Clarington (Municipality), 2009 ONCA 722 , [2009] O.J. No. 4236 at para. 51 statedthe factors that must be considered in the awarding of costs: 51 In Andersen v. St. Jude Medical Inc. (2006), (ON SCDC), 264 D.L.R. (4th) 557, the DivisionalCourt set out several principles that must be considered when awarding costs: 1. The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set outin rule 57.01(1): Boucher, Moon, and Coldmatic Refrigeration of Canada Ltd. v.

Leveltek Processing LLC (2005), (ON CA), 75 O.R. (3d) 638 (C.A.). 2. A consideration of experience, rates charged and hours spent is appropriate, but is subject to the overriding principle of reasonablenessas applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount the court considers to be fair andreasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier (2002), 119A.C.W.S. (3d) 341 (Ont. C.A.), at para. 4. 3.

The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair andreasonable: rule 57.01(1)(0.b). 4. The court should seek to avoid inconsistency with comparable awards in other cases. "Like cases, [if they can be found], shouldconclude with like substantive results": Murano v. Bank of Montreal (1998), (ON CA), 41 O.R. (3d) 222 (C.A.), at p.249. 5. The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher. [36] Counsel for Ms.

Ward has cited a number of cases where courts have awarded large costs awards after court attendances of ashort period of time. I have read them, but find that they are distinguishable from the case at bar. [37] A judge setting costs is not an assessment officer – he or she must look at all the relevant factors and the Rules of CivilProcedure. [38] I find as follows:

(1) This trial of an issue was not complex, but was very important to the Applicant for reasons previously stated.

(2) It was not difficult to argue the various factors.

(3) The Applicant made four offers to settle, three of which were withdrawn. There was one offer still outstanding at the start of thetrial. The Respondent did not respond to any of the offers. Dr. Ward took the position that those offers were an ultimatum and did notcontain any areas of compromise. Yet, he did not make any offers to settle.

(4) The rates charged by Ms. Hannaford of $650.00 are, in today’s legal world, not out of line. She is a very experienced family lawlawyer. Ms. Simaei’s (formerly Eman) rate of $300.00 may be a little high. She was called in 2008.

(5) There is no doubt that the Applicant’s lawyers and support staff spent a considerable amount of time in preparing for the trial. Tohave 11 people work on this file I find to be excessive.

(6) The expenses have been incurred, including travel to and from Toronto. More control over those expenses was, in my opinion, tobe exercised. [39] The Court of Appeal, as stated, has held that one main factor that prevails in all cases is that of reasonableness. [40] The costs grid was abolished because of the excess amount of time that was used in preparing for trial and the courts lost sightof reasonableness. [41] The Applicant is asking for costs in the amount of $218,549.09 all inclusive.

I find that is excessive. [42] I am awarding costs in the amount of $65,000.00 inclusive of disbursements and HST. ___________________________ Matheson, J. Released: December 20, 2010 COURT FILE NO.: 40252/07

DATE: 2010/12/20 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: Wilma Ward Applicant - and – Kenneth Ward Respondent COSTS ENDORSEMENT Matheson, J. Released: December 20, 2010