Lengthy Trial Leads To Costs Issues
The costs associated with going through a divorce can be stressful for all involved, and it’s one of the reasons why we offer mediation services as an alternative to litigation. Successful mediation requires both parties to be motivated to reach an agreement in a respectful and amicable matter. As we can see in a recent decision from the Ontario Superior Court of Justice, the nature of litigation can be such that it takes on a life of its own, driving up costs along the way.
Claims for costs
The couple was before the court to resolve issues around the sharing of property following the breakup of their marriage. The trial took nine days to conclude. In a separate decision about costs, the court noted that the trial took on a “life of its own,” calling the trial “unnecessarily complicated, stressful and expensive for the parties.” The court also noted that this was a case where resolving it before trial would have been beneficial for everyone.
The wife had originally sought $450,000 from the property dispute. She was eventually awarded $83,851.40 (18% of the claim). Her previous offer to settle was $300,000, making her eventual award 28% of that offer.
The husband, meanwhile, offered a settlement of $9,000 prior to trial. The court noted that neither offer before the trial was reasonable in light of where things eventually settled.
The court noted that while the wife was successful in her claim regarding an unequal division of the net family property, she was unsuccessful in a number of other claims, including unjust enrichment, constructive trust, proprietary estoppel, loss of future income and compensation for emotional and physical damages related to her role in pursuing IVF treatments. The court noted it was the wife’s decision to pursue the number of claims she ultimately chose.
How to determine costs
The court was left with the responsibility of determining costs in light of everything that unfolded, including the claims, the amount claimed, and the reasonableness of offers to settle. The court turned to Section 131 of the Courts of Justice Act to explain the factors of discretion it has, listing them as follows:
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the 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;
. . . .
(i) any other matter relevant to the question of costs.
Applying the factors to the case
In applying the factors to this case, the court concluded that the offers by each party were not reasonable in order to avoid a trial. The court wrote that it found the apportionment of liability to directly related to the number of claims filed, both successful and unsuccessful. The court found the wife’s conduct to have unnecessarily lengthened the trial, causing it to last for nine days rather than one or one-and-a-half. The husband, it was noted, was left incurring expenses to defend the claims that were not successful.
As a result, the court decided it would award the wife costs I proportion with how long the successful portion of the case took in relation to the unsuccessful claims, arriving at 16%. This meant that the wife was awarded 16% of her total claim ($13,560) while the husband was awarded 84% of his claim ($2,588.93).
To speak with an experienced Windsor lawyer about the mediation process and how it might benefit your case, call 519.973.1500 or contact us online. Many of our clients are referred to us by former and current clients, as well as by lawyers, accountants and other professionals.