Court File and Parties

Court File No.: D56106/12 Date: March 21, 2016 Amended: April 6, 2016

Ontario Court of Justice

Re: Genevieve Sang (Webster) – Applicant And: Claudiu Suteu – Respondent

Before: Justice Roselyn Zisman

Counsel:

• Stephen Gillies - for the Applicant
• Alex Finlayson – for the Respondent

Heard On: By written submissions and February 26, 2016 attendance

Costs Endorsement

Introduction

[1] The issue of costs arises out of a 15 day motion to change trial heard before me between April 21st and August 25th, 2015. The trial resulted in a joint custody order with primary residence with the mother and a very detailed order with respect to incidents of custody and access. I also reserved costs on the Respondent's pre-trial motion for questioning of various professional witnesses and a post-trial motion relating to the child's school.

[2] My decision was released on September 29, 2015. Any party seeking costs was requested to file brief written submissions within 30 days and response to be submitted within 30 days thereafter.

[3] Counsel for the respondent ("father") served and filed his costs submissions. The father sought an order that any order for costs payable by the mother be set-off against the father's ongoing child support obligation as there would be no other manner in which he would be able to receive any indemnification as the mother is in receipt of Ontario Works and is judgment proof.

[4] In the applicant's ("mother's) response, she opposed such an order on the basis that it would be inequitable to set-off child support against costs given that child support was not an issue between the parties. Further, as Toronto Social Services would be affected by any order for a set-off that agency should have been given notice of this request.

[5] As the issue of service on Toronto Social Services was only raised in the mother's response, the father was given permission to file reply submissions and for a brief oral hearing which was granted on notice to counsel for Toronto Social Services. A timetable was set for the filing of further written submissions. However, as a result of intervening litigation, the date of February 26, 2016 was set for any further oral submissions.

[6] Subsequent to the release of the trial decision on September 29, 2015, the father sought leave to bring a contempt motion and a motion to change the order so that the child would be placed in his sole custody with supervised access to the mother.

[7] The motions were heard on January 12, 2016. My decision was released on January 20, 2016. In the result, on a temporary basis, the custody of the child was changed to the father with supervised access to the mother and the mother was also found in contempt of the order of September 29, 2015.

[8] Due to this change of custody, the father was no longer required to pay child support and the issue of a set-off was moot. A form 14B was submitted and on consent of counsel for the mother and the City of Toronto, it was agreed that any cost order made would be without prejudice to the father's ability in the future to reinstate his request that any cost order against the mother be set-off against his obligation to pay child support.

[9] All counsel attended before me on February 26, 2016. Counsel for the father requested a specific order preserving his right to claim a set-off as he was concerned that in any future litigation, a court may deem the issue of a set-off to be res judicata. Although I do not feel that such an order is strictly necessary, as it would be open to the father should circumstances change to argue the issue of a set-off, I will not interfere with the consent of all counsel on this issue.

[10] Counsel for the mother chose not to make any further submissions on the issue of the mother's liability for costs for the trial and relied on his written submissions.

Position of the Parties

[11] The father seeks full recovery of his total costs of $78,812.17 inclusive of disbursements and applicable taxes on the basis that:

a) he was successful on the trial and outstanding motions;

b) the issues in the case were important, complex and difficult;

c) he behaved reasonably throughout;

d) the mother behaved unreasonably and acted in bad faith;

e) he is entitled to full recovery, even if the mother is found not to have acted in bad faith or to have behaved unreasonably; and

f) the hourly rate for counsel has already been deeply discounted.

[12] Counsel for the mother concedes that the father was the successful party and is presumptively entitled to costs but submits that any cost order should consider the following factors:

a) the mother acted reasonably and made two offers to settle and was willing to attend for mediation which was refused by the father;

b) the time spent by the father's counsel were excessive;

c) the disbursement claimed of a law clerk to take notes during the trial was discretionary and should be disallowed;

d) the mother incurred legal fees of $34,940.11 for her counsel Poroshad Mahdi and the mother incurred no fees for Stephen Gillies who was counsel at the trial; and

e) the mother is in receipt of Ontario Works and as a result she does not have the financial means to pay costs.

Applicable Legal Principles

[13] Rule 24(1) of the Family Law Rules ("Rules") provides guidance on costs in a family law context. Rule 24 (1) sets out the basic assumption that a successful party is entitled to costs. This provision still permits a court broad discretion in determining if costs should be paid, by whom and in what amount.

[14] Rule 24 (11) provides a further list of factors a court should consider in dealing with 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 behavior in the case;

c. the lawyer's rates

d. the time properly spent on the case, including conversations between the lawyer and the party, 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.

[15] In Serra v. Serra, the Ontario Court of Appeal at para. 8, 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 behavior by litigants.

[16] In Biant v. Sagoo Justice Perkins considered the costs award scheme under the Rules and commented, at para. 20:

[T]he preferable approach in family law cases is to have costs recovery generally approach full recovery, so long as the successful party has behaved reasonably and the costs claimed are proportional to the issues and the result. There remains, I believe, a discretion under r. 24(1) to award the amount of costs that appears just in all the circumstances, while giving effect to the rules' preeminent presumption, and subject always to the rules that require full recovery or that require or suggest a reduction or an apportionment.

[17] The Ontario Court of Appeal in the recent case of Berta v. Berta has again endorsed the Biant court's approach to the determination of costs in family law disputes.

[18] As the court concluded in the case of Berta v. Berta, supra at para. 94, a successful party in a family law case is presumptively entitled to recovery costs. An award of costs, however, is subject to the factors listed in Rule 24(11), the directions set out under Rule 24 (4) (unreasonable conduct), Rule 24(8) (bad faith) and Rule 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party.

[19] Subsection (b) of Rule 24(11) relates to the reasonableness of each party's behavior in a case.

[20] In considering if a party acted reasonably, Rule 24 (5) directs the court to consider if a party served made an offer to settle and the reasonableness of any offer to settle.

[21] Rule 24 (5) provides that:

(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.

[22] Offers to settle are an essential part of family litigation. The parties and counsel have a positive obligation to conduct their cases to ensure that the primary objective of Rule 2 (2) is met that is, to deal with cases justly. This includes taking appropriate steps to save time and expenses, per Rule 2 (3). Offers to settle play an integral role in saving time and expenses by promoting settlements, focusing parties and often narrowing the issues in dispute. Offers to settle are therefore important in any consideration of the issue of costs. In my view it is unreasonable behavior for a party not to make an offer to settle.

Application of Legal Principles to the Facts

[23] In this case, the father made an offer to settle dated August 18, 2014 conceding sole custody to the mother, an order for access to him continuing day access once a week to be gradually expanded to overnight access by the time the child turned three and a half years old. The offer to settle including various incidents of custody including that the mother reveal her address and that the father be permitted to participate in the child's medical and other appointments.

[24] The father withdrew this offer on April 15, 2015 that is, five days before the trial was to commence and he made no further offers. The father withdrew his offer to settle due to concerns as the trial approached and the evidence was revealed.

[25] The mother made her first offer to settle on April 20, 2015 that is the day scheduled for the first day of trial. She made a subsequent offer to settle dated April 27, 2015 that is, after the first week of the trial. In the mother's offer to settle she would continue to have sole custody and the father would continue to have day access to be somewhat expanded with various conditions including attended a parenting program. The mother proposed that overnight access would be expanded "when the child was emotionally and developmentally capable of changing residences and has the developmental capacity to accommodate the increase in access" set out in the mother's proposal. If there was a dispute as to when the child was ready to accommodate an increase in access then the parties would initially attend for mediation before returning to court. The offer also required the father to not only to continue to pay child support in accordance with the child support guidelines, which was never disputed by the father, but an additional $500.00 per month for the child's uninsured cost of therapy.

[26] The father submits that in December of 2014, he was prepared to have his motion to change heard by means of reliance on affidavit materials by the case management judge and that proposal was rejected by the mother. At that time his offer to settle was still open for acceptance and of course, if the mother had agreed to proceed on the affidavits filed the entire trial could have been avoided.

[27] As the father withdrew his offer to settle it cannot be considered an offer pursuant to Rule 18. The mother's offer to settle can be considered pursuant to Rule 18 but in the context of the issues in this case and the ultimate result, the mother's offers to settle were totally unreasonable and unrealistic.

[28] The father was successful on the motion to change and is presumptively entitled to costs.

[29] In determining the amount of costs, I have considered the legal principles and the following factors as set out in Rule 24 (11) as follows:

a. The importance, complexity or difficulty of the issues:

The issue of what parenting arrangements are in a child's best interests is the most important issue in any family law case. This is of particular importance and increases the complexity where the child, as in this case, has many special needs. This case was complex due to the many factual and legal issues that arose. There were many professional witnesses involved and extensive records due to the child's medical issues and the involvement of the children's aid society. It was made more difficult due to the mother's interference with the father's ability to obtain access to information about the child for many years preceding the trial and even during the trial process.

b. The reasonableness or unreasonableness of each party's behavior in the case:

It is submitted by mother's counsel that she acted reasonably as she made many concerted and repeated attempts to resolve the dispute by agreeing to mediation in advance of the trial as offered by the children's aid society which was refused by the father. It is submitted that she acted reasonably as she agreed along with the father to attend before another judge mid-trial to resolve the issues and although unsuccessful the mother was prepared to return to again attempt to settle during another break in the trial process. It is submitted that the father refused unless the mother made significant concessions. It is submitted that the father acted unreasonably in refusing to mediate before the trial and refusing to return to the settlement process during the trial. No details were provided by either counsel with respect to the contents of the mid-trial settlement discussions. I am not in a position to therefore ascertain which party was being unreasonable. It is also submitted that the mother acted reasonably as she made two offers to settle.

However, the mother's offers to settle were unreasonable both with respect to the parenting proposal and the extent of the father's financial contributions. It is understandable that the father would not agree to attend mediation as the mother's attempts to diminish the father's role in the child's life were long standing as was her rigidity and lack of compromise.

The mother was unreasonable in not accepting the father's offer to settle which would have avoided the entire trial process. The father was only seeking what I consider to be reasonable access and the ability to be advised and participate in the child's medical and therapeutic appointments. Further, even if she was not prepared to accept the offer to settle she could have agreed to proceed by way of a motion based on written materials without the necessity of a lengthy trial.

Although I would not find the mother acted in bad faith, as that concept has been defined in the case law that is, behavior carried out with intent to inflict financial or emotional harm on the other party, conceal information or to deceive that party or the court, the mother's conduct was certainly egregious. As I found in the trial decision the mother marginalized the father, breached court orders, refused to communicate or permit the father to participate in a meaningful way in the child's life and withheld important information. Although the mother may have acted out of love for the child and on the genuine belief of the rightness of her actions she acted totally unreasonably throughout this litigation and her actions significantly increased the father's costs.

c. The lawyer's rates:

Counsel for the father who was called to the bar in 2002, his usual hourly rate is $350 but he charged his client a reduced rate of only $125. Counsel for the mother agrees that this reduced rate in reasonable. I would add that the usual rate would also have been reasonable.

d. The time properly spent:

Counsel for the father submits that all of the work done was necessary to put the facts and law before the court. Father's counsel prepared and organized almost all of the materials for the trial and mother's counsel relied on the disclosure briefs he prepared. Father's counsel arranged for all of the professional witnesses to be summonsed to court, except the one witness called on behalf of the mother.

It was necessary for the father to bring a pre-trial motion for questioning of several witnesses as those witnesses refused to voluntarily participate. Counsel for the father faced several challenging disclosure issues due in large part to the lengths the mother had gone to in order to obstruct his access to information.

Mother's counsel submits that the time spent was excessive. However, I find that the amount of time spent was increased because of the actions of the mother. Without the thoroughness of the preparation and able presentation of this case by counsel for the father, much of the evidence regarding the child's best interests and the mother's obstruction of the father's involvement in the child's life would not have been available to the court.

e. The expenses properly paid and payable:

Disbursement expenses of $11,684.92 are claimed. The expenses were understandably high in this case due to the cost of the pre-trial questioning, payments for obtaining records from various institutions, photocopying and assembly of many exhibit records, document and case law briefs, witness fees and process server fees.

I agree with counsel for the mother that the expense of $2,260 for father's counsel's law clerk to take notes during the trial should be deducted as this is discretionary expense.

f. Any other relevant matter:

Counsel for the mother submits that the mother is of limited financial means as her only income is the receipt of Ontario Works and she is now in receipt of a reduced amount of income from Ontario Works as the child is not presently in her care.

A party's ability to pay costs is a relevant consideration. However, a party's limited financial circumstances should not be used as a shield against any liability for costs especially when that party has acted unreasonably. Parties of limited means do not engage in litigation without risk. As stated by Justice Robert Spence in Peres v. Poupore, "in family law litigation, and in particular for parties of modest means, it behooves those parties to act reasonably and avoid trial if at all possible."

The mother was represented by experienced counsel at trial and therefore she must have known that there would be an onerous financial consequence to proceeding to trial. But as mother's counsel submitted that the mother did not pay him for the trial, there was no financial consequence to the mother to proceed to trial and it appears that she could therefore litigate with impunity.

The only financial consequences in this case are to the father. The father is of limited means, he earns about $50,000. The father withdrew $25,649.49 from his RRSP's, drew on his lines of credit in the amount of about $33,800, borrowed $11,854 on his credit card and borrowed a further $5,700 from friends to finance the trial.

No submissions were made on behalf of the mother as to what amount she was prepared to pay or how she was proposing a cost order be paid. It appears that the mother is content to simply permit the court to make a cost order in the knowledge that the father would for all practical purposes be unable to enforce the order as she has no assets and is in receipt of Ontario Works.

If the court simply made a cost order with no payment terms then the purpose of a cost order that is, to indemnify successful litigants, to encourage settlement and discourage and sanction inappropriate behavior by litigants, would be defeated. In considering the financial means of parties, the court should also consider the financial means of the successful party and the cost of litigation to him. The father has had to sacrifice his future financial security and he has incurred substantial debt due to the mother's unreasonable behavior in not settling this case. After all when he commenced this litigation all the father was seeking was reasonable access and to have a meaningful role in his son's life.

[30] In considering all of these factors, I find that the father is entitled to full recovery of his costs although I have deducted from the bill of costs the expenses for the law clerk at trial. I am also mindful that the bill of costs is already heavily reduced due to the modest hourly rate charged by father's counsel. The mother's counsel did not present any information about the mother's prospects to earn income now that she does not have the child in her care. The mother is young, educated and an intelligent woman and no reason was given for her inability to now earn a reasonable income. I find that there is no reason she should not be able to pay a minimum of $500.00 per month to the father on account of costs and while I appreciate this amount is somewhat arbitrary, the mother did not to make any proposals to the court with respect to payment of a cost order.

Order

1. The Applicant Genevieve Sang Webster shall pay to the Respondent Claudiu Suteu costs fixed at $68,552.00 inclusive of disbursements and applicable taxes.

2. The Applicant shall repay the amount of costs at a minimum of no less than $500.00 per month as of April 1, 2016.

3. This order is without prejudice to the ability of the Respondent to seek to set-off of this cost order from any future obligation he may have to pay the Applicant child support. If the Applicant is in receipt of Ontario Works, any such request shall be on notice to counsel for the City of Toronto.

4. The Respondent is not precluded from seeking any other enforcement measures against the Applicant.

5. The Applicant shall advise the Respondent within 30 days of obtaining any employment and provide him with a copy of her employment contact, if any and provide him with a copy of a current pay stub.

6. The Applicant shall provide to the Respondent a copy of her Notice of Assessment annually as of June 30, 2016 as long as the cost order remains unpaid.

Justice Roselyn Zisman

Date: March 21, 2016