Court File and Parties

Ontario Court of Justice

Date: March 23, 2016

Court File No.: MILTON 128/15

Between:

ROBIN ANTHONY Applicant

— AND —

MARIA ZAJACZKOWSKA Respondent

Before: Justice S. O'Connell

Costs Endorsement

Counsel:

• Robin Anthony — on his own behalf
• Nick Slinko — counsel for the respondent

Introduction

[1] The respondent mother ("the mother") is seeking $15,000 in costs for the previous five case conferences in this matter.

[2] The mother's counsel has submitted two bills of costs.

[3] The applicant father ("the father") opposes the mother's request for costs. He submits that he is already paid $62,000[1] in legal fees and that he is unable to pay any costs.

Background

[4] In 2015, this matter was transferred from the Ontario Court of Justice in Toronto to the Halton Ontario Court of Justice as the mother and the two children currently reside in Halton.

[5] The first case conference in Halton took place on April 10, 2015. The outstanding issues are custody, access and child support.

[6] At the first case conference in this matter, the father produced in court on that day a CD-ROM containing financial disclosure that he had been ordered to produce on December 3, 2014 at a case conference before Justice Robert Spence in Toronto. As the disclosure had just been produced and was in a CD-ROM format, the case conference had to be adjourned so that the mother and her counsel had an opportunity to review the disclosure. The case conference was therefore adjourned to May 5, 2015.

[7] Counsel for the mother sought to reserve the issue of costs of that case conference, given that the father had not produced this disclosure prior to the case conference and the parties were not able to proceed on that day. It was a wasted appearance.

[8] At the return of the case conference on May 5, 2015, the father advised the court and counsel for the mother that he was still waiting for the financial disclosure that was outstanding from his previous lawyer. He advised that he expected to receive the disclosure in approximately two weeks. The court did not understand the delay in receiving or producing the disclosure that had been ordered on consent five months earlier. Nevertheless, that issue was adjourned while the parties addressed outstanding issues of access.

[9] At that case conference, counsel for the mother again requested and the court directed in its endorsement that if the father did not provide the financial disclosure ordered prior to the next case conference, then costs would be awarded. The matter was then adjourned to August 5, 2015 to monitor the access that had been agreed to by the parties. The parties did negotiate and resolve some issues of access at that appearance.

[10] At the return of the continuing case conference on August 5, 2015, after significant resolution discussions with the court and the parties, the parties reached a consent order on "a temporary without prejudice" basis regarding the issue of access, including a graduated access schedule moving towards unsupervised access between the father and the children. Further incidents of custody and access were also resolved, including the exchange of information between the parties regarding the children's health education and welfare.

[11] The issue of child support could not be reached on that day given the focus on the custody and access issues and the resolution that was reached with respect to those issues pursuant to the temporary consent filed. The matter was adjourned to November 6, 2015 for a continuing case conference to monitor the issues of access and to address the issue of child support. At the August 5, 2015 case conference, neither party sought to reserve the issue of costs.

[12] At the return of the case conference on November 6, 2015, several changes in circumstances had occurred. By that point, the father was exercising unsupervised access with the children, but serious allegations were raised by the mother regarding the father's unsupervised access, including allegations that the father was hitting the children. The Halton children's aid society and the police became involved with the family.

[13] As well, on October 26, 2015 approximately two weeks before this case conference, the father was charged with two counts of assault against the mother regarding historical incidents. His undertaking upon release after his arrest prohibited any direct or indirect contact with the mother and children. The Halton children's aid society recommended that the father's access to the children be supervised at that time.

[14] Given these developments, the court requested a full report of its involvement from the Halton children's aid society and requested that a representative from the children's aid society attend at the next case conference. The court also made a referral to the Office of the Children's Lawyer (OCL) for a social work investigation and report of the children's best interests.

[15] The court of further directed the father to consider varying the contact provisions in his undertaking to include a provision that would permit a variance in accordance with a family court order to determine whether and how supervised access could occur pending the results of the children's aid society's investigation. The father was granted leave to bring a motion for supervised access on December 9, 2015.

[16] On December 9, 2015, all parties were present. Counsel for the Halton children's aid society and the child protection worker assigned to the family also attended as interested parties. It was the society's position that based on the interviews with the children and the observed injuries on one child, physical harm by the father towards at least one of the children had been verified. The society was recommending supervised access at this time. The society had not yet met with the father and was in the process of setting up interviews with him.

[17] The father also advised the court that he had obtained a variation of his undertaking to allow communication with the mother to arrange access indirectly through a third-party, subject to the approval of the children's aid society.

[18] Pending the society's complete investigation and the appointment of the OCL clinical investigator, the parties agreed on a without prejudice basis to reinstate the previous order for supervised access, to be conducted every Saturday or Sunday at the Burlington supervised access center. Mother's counsel agreed to be the third party to communicate and facilitate access between the parties.

[19] The parties also reached an agreement regarding passports and travel arrangements as requested by the mother. Once again, given the significant time and attention to the access issues, the issues of support and financial disclosure were not fully addressed. However, it also appeared that the parties were not likely to resolve these issues and a focused hearing on the issue of child support was discussed.

[20] The matter was then adjourned to February 8, 2016 to monitor the following: 1) supervised access between the father and the children; 2) the children's aid society's investigation; and 3) the appointment and investigation by the OCL clinical investigator.

[21] At the December 9, 2015 case conference, the mother submitted her two bills of costs in the amount of $15,000 for the previous five case conferences and sought costs on a full recovery basis.

The Law and Governing Principles

[22] An award of costs is governed by s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 and Rule 24 of the Family Law Rules, O. Reg. 114/99.

[23] Cost awards are exercises of judicial discretion.[2] The general source of judicial discretion to award costs is found under s. 131 of the Courts of Justice Act. However, that discretion must be exercised within the framework established by Rule 24 of the Family Law Rules.

[24] Rule 24 of the Family Law Rules, O. Reg. 114/99, governs the determination of costs in family law proceedings. 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.

[25] 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.

[26] 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.

18(16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.

[27] Rule 24 created a new framework for determining costs in family law proceedings. The presumptive nature of Rule 24 significantly curtailed the court's discretion regarding costs in family law proceedings and absent compelling circumstances or the exceptions set out in the rule itself, costs are generally awarded to the successful party.

[28] The Ontario Court of Appeal in C.A.M. v. D.M., 67 O.R. (3d) 181 held that while the Rules have not completely removed a judge's discretion, the rules nonetheless circumscribed the broad discretion previously granted to the courts in determining costs. Courts must not only decide liability for costs, but also the amount of those costs.

[29] In Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, 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.

[30] The court's role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees. As was pointed out in Boucher et al. v. Public Accountants Council for the Province of Ontario, 71 O.R. (3d) 291, the award of costs must be fixed in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings rather than an exact measure of actual costs to the successful litigant.

[31] Consideration of success is the starting point in determining costs. However, any attempt to determine a "winner" or "loser" in a settlement or in the case management process is, in most cases, complex if not impossible. Cases are resolved in whole or in part for many reasons. See Sims-Howarth v. Bilcliffe, 2000 CarswellOnt 299 (S.C.J.), para. 1. Thus, for good reason, judges are reluctant to make an order as to costs when the parties settle the merits to their dispute.

[32] Further, if a successful party has behaved unreasonably "in relation to the issues from the time they arose (Rule 24(5))," then pursuant to Rule 24(4), they may be "deprived of all or part of the [their] costs or ordered to pay all or part of the unsuccessful party's costs." Behaviour under Rule 24(5) is not restricted to behaviour associated with offers to settle. See Family Law Rules, Rule 24(4), (5) and 11(b); Lawson v. Lawson, 2004 CarswellOnt 3154 (S.C.J.), para. 44.

[33] It is well established that in order to obtain costs for prior steps, there must be an order reserving those costs to the trial judge, or to the motions judge. A trial judge or motions judge is not entitled to make an award for costs covering prior steps such as case conferences and settlement conferences. Those prior steps are not within the judge's discretion particularly where there was no order as to costs or the issue of costs was not address. See Family Law Rules, Rules 24(10); Islam v. Rahman, 2007 ONCA 622, 2007 CarswellOnt 5718 (Ont. C.A.) at paragraph 2; Jepson v. Cresnjovec, 2007 CarswellOnt 7255 (O.C.J.) at para. 8; MacIntosh v. MacIntosh, 2008 CarswellOnt 655 (S.C.J.) at paras. 22-23 and Debora v. Debora, 2005 CarswellOnt 676 (S.C.J.), para 20.

[34] Finally, 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. In C.A.M v. D.P. supra, 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 either under Rule 24 or Rule 18. Thus, while subrule 24(11) enumerates a number of factors that must be taken into account, the person setting the 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, that the "Family Law Rules demand flexibility in examining the list of factors in subrule 24(11) without any assumptions about categories of costs". [par. 42]

Application of the Governing Law and Legal Principles to This Case

[35] I do not agree that the mother was completely successful on all of the court appearances in this matter. All five appearances were case conferences. No offers to settle were served for those proceedings. Further, costs were only sought and reserved at the first two case conferences regarding the father's failure to provide full financial disclosure and to comply with the order for disclosure made by Justice Spence in December 2014.

[36] I do agree that the first two case conferences were wasted appearances regarding the issues of financial disclosure and child support, in accordance with Rule 24(7) of the Family Law Rules. The court could not meaningfully address these issues as the father failed to produce the financial disclosure ordered in a timely manner (arriving at court with a CD-ROM allegedly containing all of the financial disclosure previously ordered on the first appearance and with none of the outstanding disclosure ordered on the second appearance).

[37] The first conference had to be adjourned so that the mother and her counsel could review the disclosure finally produced. Counsel clearly sought and reserved costs of appearance. The second conference could not proceed and counsel again clearly sought and reserved the costs of that appearance.

[38] The mother's case conference briefs setting out in detail the financial disclosure still outstanding were detailed and comprehensive and no doubt caused her considerable legal fees for both of these conferences.

[39] Second, more importantly, for reasons unknown to the court, the mother did not serve an offer to settle prior to the hearing of this motion, in accordance with Rule 18 of the Family Law Rules.

[40] In my view, the mother should be awarded some costs regarding the first two case conferences for the father's failure to provide financial disclosure during these proceedings.

[41] The remaining three conferences were largely focused on the ongoing custody and access issues, including negotiating a graduated access schedule that was later suspended and then changed as a result of subsequent criminal and children's aid Society investigations.

[42] There was no "winner" or "loser" in these three conferences as the issues were still unresolved and ongoing. The issues of financial disclosure and child support were placed on the "back burner" during the last three conferences and were not addressed.

[43] The mother is not entitled to claim full recovery of costs in accordance with Rule 18(14) of the Rules. The failure to serve an offer to settle prior generally deprives a party of full recovery of their legal costs from the date that the offer was served.

[44] The bills of costs provided filed were reasonable. Having carefully considered all of the circumstances in this matter and in reviewing the bills of costs, I would award the mother partial recovery of her costs in the amount of $5,000, inclusive of GST and disbursements, to be payable no later than 30 days from the date of this Order, or at a rate of $300 per month, commencing May 1st, 2016.

Released: March 23, 2016

Signed: "Justice S. O'Connell"

[1] The father is also involved in another court proceeding with his former wife of another relationship. The court was not clear if he was referring to his total legal fees in both matters.

[2] See Fielding v. Fielding, 2015 ONCA 901, [2015] O.J. No. 6472 (C.A.) at paragraph 67.