Court File and Parties
Date: 2018-03-01
Court File No.: Toronto D10344/17
Ontario Court of Justice
Between:
Catalina Navarro Applicant
— And —
Christopher Steven Luongo Respondent
Before: Justice Curtis
Written submissions regarding Costs
Endorsement released on: 01 March 2018
For Applicant: Sheru Abdulhusein (on a limited scope retainer)
For Respondent: Gagan Sekhon, and then Robert Fernandes
Decision
CURTIS, J.
Index
- Over-view
- The Parties' Positions re Costs
- Background
- Litigation History
- The Costs Analysis
- a. The Law of Costs
- i. Entitlement
- ii. The Evolution of Costs as an Instrument of Social Policy
- b. Success
- c. Behaviour of the Parties
- d. Costs and Ability to Pay
- e. Offers to Settle
- f. The Hourly Rate Issue
- g. Quantum of Costs
- a. The Law of Costs
- Order
Over-view
- This is the decision about costs of the father's motion for custody and access, and the mother's cross-motion.
The Parties' Positions re Costs
The mother claimed costs as the successful party on the motions and asked for full recovery costs of $13,079.75.
The father claimed that the amount sought by the mother was excessive and that he had no ability to pay such an amount. He did not, however, suggest an amount of costs that might be appropriate.
Background
- The applicant is the mother, Catalina Navarro, 43 years old (born 3 October 1974). The respondent is the father, Christopher Luongo, 32 years old (born 3 June 1985). The parties were not married to each other. They lived together from 2008 to 2016. The relationship ended in July 2016 but they continued to live in the same home until October 2016. There is one child of the relationship, Isabella, 4 years old (born 18 June 2013).
Litigation History
This was a high conflict case, which the court noted in several endorsements. Both parents described the relationship this way. There was a history of violence in the relationship, and the involvement of the police and the Children's Aid Society. There were many case conferences, and motions which were hotly contested.
The mother brought an Application on 27 February 2017 claiming (among other things) custody, access, and passport and travel orders. On 18 August 2017, the mother amended her Application to claim child support.
The father filed an Answer on 11 April 2017 claiming, among other things, custody, access, passport and travel orders, child support, and spousal support.
The father brought a motion, on 2 June 2017, before a case conference was held in this case, claiming (among other things) sole custody, and a non-removal order, and the mother responded. The parents agreed that the motion should not proceed and a case conference was scheduled.
The mother brought a motion for passport and travel orders, and to have the child's name removed from the Citizenship and Immigration Canada Passport System Lockout (on which the father had registered the child). The motion was contested and on 18 September 2017, the court made these orders:
a) the mother could apply for the child's passports and other government documents without the father's consent;
b) she could travel outside Canada with the child, without the father's consent;
c) the father shall remove the child's name from the registration with the Citizenship and Immigration Canada Passport System Lockout; and,
d) the father shall pay costs of $600.
The father appealed this order.
The court also noted that the father intended to bring a motion for custody, access and travel and that the mother intended to bring a motion for custody and access.
Those motions were brought and were heard on 28 November 2017. The father claimed joint custody, equal time-sharing and travel orders. The mother claimed sole custody, access and a non-removal order. This claim for costs relates to those contested motions.
For these motions, the parents filed large amounts of material, and particularly the father filed a very large amount of material. The amount of material filed on these motions was inappropriate and not helpful. The volume of material was especially surprising given that both parents were represented by lawyers. There were six volumes of Continuing Records up to the time of the motions (the litigation was nine months old at that time). The Continuing Records contained thousands of pages of material. The volume of material on these motions was quite extraordinary, and not in a positive way, particularly given the fact that there had recently been a motion (for travel and passports, on 18 September 2017) that had covered some of the same evidence.
As well, when the motions were heard on 28 November 2017, there was an unpaid costs order against the father of $600, outstanding from 18 September 2017. The father had not paid the costs. Notwithstanding this, the court allowed him to argue his motion and put forward his claims.
These are some of the findings made by the court in the decision on the motions heard on 28 November 2017:
a) The level of conflict between the parents was very high, and indeed, was shocking;
b) The relationship between the parents was deeply concerning to the court;
c) Children's Aid needed to be involved due to the conflict between the parents, and the risk of harm to the child, which may have been a protection issue;
d) The mother conceded that the father had a good relationship with the child and was a good parent, and repeatedly stated that this was not the issue on the motion;
e) The father had filed far too much material on the motions, with too many exhibits and attachments, at a level that was not appropriate and not helpful to the court;
f) The father's material focused on his rights, entitlements and expectations, and not on the child's needs;
g) The father was confrontational with the mother at every opportunity (and there were many examples: the purchase of the school uniform, Hallowe'en, the first day of school, the registration for school, the father writing to the school board, changing the child's clothes, taking the child to the doctor);
h) These parents were not joint custody parents, and were far from being joint custody parents; and,
i) The tone and content of the father's material was confrontational, controlling, angry, expressed a sense of entitlement and was all about him, and not the child.
- The court made the following temporary orders:
a) Sole custody to the mother;
b) access to the father: - i. Week 1: Monday pick-up after school to Wednesday drop off at school; - ii. Week 2: Sunday pick-up at 1.30 p.m. to Wednesday drop-off at school;
c) The child shall be with the mother from 24 December 2017 to 26 December 2017 at 6.30 p.m.;
d) The father shall not attend at the child's school for lunch with her or for any other reason, unless invited by school authorities or for activities (school play, concert, sporting events, etc.); and,
e) The court is concerned about the level of conflict between the parents and the possible impact on the child. Court staff shall send a transcript of these Reasons for Decision and this endorsement to CCAS Intake for their investigation.
The court also set a schedule for the exchange of written submissions re costs.
The father appealed this order.
The Costs Analysis
The Law of Costs
Entitlement
- The courts have a broad discretion to award costs. The general discretion of the courts regarding costs is contained in the Courts of Justice Act, R.S.O. 1990, c. C. 43, as amended, s. 131(1), which sets out three specific principles:
a) the costs of a case are in the discretion of the court;
b) the court may determine by whom costs shall be paid; and,
c) the court may determine to what extent the costs shall be paid.
- Modern costs rules are designed to foster three fundamental purposes:
(a) to indemnify successful litigants for the cost of litigation;
(b) to encourage settlement; and
(c) to discourage and sanction inappropriate behaviour by litigants.
- Rule 2(2) of the Family Law Rules adds a fourth fundamental purpose for costs: to ensure that the primary objective of the rules is met – that cases are dealt with justly. This provision needs to be read in conjunction with Rule 24 of the rules.
The Evolution of Costs as an Instrument of Social Policy
The traditional purpose of an award of costs was to indemnify the successful party in respect of the expenses sustained. For some time, however, courts have recognized that indemnity to the successful party is not the sole purpose, and in some cases not even the primary purpose, of a costs award. The principle of indemnification, while paramount, is not the only consideration when the court is called on to make an order of costs; indeed, the principle has been called "outdated" since other functions may be served by a costs order, for example to encourage settlement, to prevent frivolous or vexatious litigation, and to discourage unnecessary steps. This change in the common law was an incremental one when viewed in the larger context of the trend towards awarding costs to encourage or deter certain types of conduct, and not merely to indemnify the successful litigant.
The traditional approach to costs can also be viewed as being animated by the broad concern to ensure that the justice system works fairly and efficiently. Because costs awards transfer some of the winner's litigation expenses to the loser, rather than leaving each party's expenses where they fall, they act as a disincentive to those who might be tempted to harass others with meritless claims. In addition, because they offset to some extent the outlays incurred by the winner, they make the legal system more accessible to litigants who seek to vindicate a legally sound position. These effects of the traditional rules can be connected to the court's concern with overseeing its own process and ensuring that litigation is conducted in an efficient and just manner. In this sense it is a natural evolution in the law to recognize the related policy objectives that are served by the modern approach to costs.
Modern costs rules accomplish various purposes in addition to the traditional objective of indemnification. An order as to costs may be designed to penalize a party who has refused a reasonable settlement offer. Costs can also be used to sanction behaviour that increases the duration and expense of litigation, or is otherwise unreasonable or vexatious. In short, it has become a routine matter for courts to employ the power to order costs as a tool in the furtherance of the efficient and orderly administration of justice.
Success
Under Rule 24(1) there is a presumption that the successful party is entitled to costs.
Success must be measured not only against the parties' offers to settle, but also against the claims made by each.
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.
The mother was the successful party on these motions, and she is entitled to costs.
Behaviour of the Parties
One of the purposes of costs is to change behaviour.
The justice system is a precious public resource. Access to the justice system by individuals must be balanced with the need to ensure that the resource is available for all those who need it. This is one of the purposes of Rule 2.
Family law litigants are responsible for and accountable for the positions they take in the litigation.
Parties to litigation must understand that court proceedings are expensive, time-consuming and stressful for all concerned. They are not designed to give individual litigants a forum for carrying on in whatever manner they may choose, oblivious to the impact of that conduct 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.
Rule 24 (5) provides criteria for determining the reasonableness of a party's behaviour in a case (a factor in Rule 24 (11)(b)). It reads as follows:
DECISION ON REASONABLENESS
(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.
A finding of bad faith is not a condition precedent to full recovery of costs by the other side under the Family Law Rules.
When awarded on a full recovery scale, costs can serve to express the court's disapproval of unreasonable conduct during the litigation.
The unreasonable conduct of a litigant is a factor in both the awarding of costs and in fixing the amount of costs.
The dynamics on this case are all too common, and cry out for judicial response. In a troubled economy there are more unrepresented parties in family court, and certainly more people with limited finances. Inevitably, these ingredients create greater strains on the administration of justice. Combined with limited judicial resources, the need to encourage settlement and discourage inappropriate behaviour by litigants has never been more pressing.
It must be made clear to family law litigants that there is no right to a day in court, or at least, that the right to a day in court is tempered with the requirement that the parties take a clear-headed look at their case before insisting on their day in court. The court must sanction this behaviour clearly, or it will invite more of this behaviour.
The father's behaviour in the litigation was unreasonable. Here are some examples:
a) The father's material on the motions was far too long and far too voluminous. His affidavits contained far too many exhibits, and too many pages of exhibits. He attached many texts, e-mails and photos to his affidavit. There were hundreds of pages attached as exhibits. This much material was overwhelming and was not helpful to the court. While it may have been suitable to include some texts, some e-mails and some photos, the amount included was inappropriate;
b) The father's material was not organized and was not focused, despite the involvement of a lawyer in preparing the material. The material presented was not proportionate to either the claims made or the issues in dispute. It was not reasonable for the father to file such material in support of a motion. It actually hurt his case, rather than advance it;
c) he brought a motion before a case conference was held in this case, claiming (among other things) sole custody, and a non-removal order, and the mother responded to the motion. Eventually, the parents agreed that the motion should not proceed and a case conference was scheduled;
d) The mother was required to respond to the father's large amount of material; and,
e) The offer to settle made by the father was not similar to or close to the outcome ordered by the court.
- The conduct of the father directly contributed to the time, effort required and the length of the case. The father was unreasonable in the conduct of the motions. The mother is entitled to costs.
Costs and Ability to Pay
Success is given presumptive pre-eminence in Rule 24. While Rule 24(11)(f) does permit the consideration of ability to pay (under the umbrella of "any other relevant matter"), it is given significantly less prominence than the presumption that costs will follow success.
Ability to pay may be relevant to the issue of the quantum or scale of costs, but not to another party's entitlement to costs.
Ability to pay alone cannot, nor should it, over-ride the other factors in Rule 24(11).
The (financial) means of the unsuccessful party may not be used to shield him from liability for costs, particularly when he has acted unreasonably.
The father argued that he had no ability to pay costs. That issue may be relevant to quantum, but is not relevant to determining entitlement to costs.
Offers to Settle
Offers to settle are a significant part of the landscape in family law in Ontario. They are important to the possible resolution of cases. In addition, they are important to determining costs.
Parties and their lawyers have a positive obligation to behave in ways which enable the court to move cases forward to resolution (Rule 2). Rule 2(4) imposes a duty on parties and their lawyers to promote the primary objective of the rules to deal with cases justly (Rule 2(2)). This includes taking appropriate steps to save time and expense (Rule 2(3)). Offers to settle play an important role in saving time and expense by promoting settlements, focusing parties and often narrowing issues in dispute.
Offers to settle are important and can be the yardstick by which to measure success. They are significant in determining both liability for costs and quantum.
In deciding whether a party has acted reasonably or unreasonably in a case, the court shall examine the reasonableness of any offer the party made (Rule 24(5)(b)).
To determine whether a party has been successful, the court should take into account how the order compares to any settlement offers that were made. The position each party took in the case should also be examined.
The costs consequences of offers to settle are set out in Rule 18 (14) as follows:
COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER
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:
If the offer relates to a motion, it is made at least one day before the motion date.
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.
The offer does not expire and is not withdrawn before the hearing starts.
The offer is not accepted.
The party who made the offer obtains an order that is as favourable as or more favourable than the offer.
The court has a discretion to take into account any written offer to settle, the date it was made and its terms, even if Rule 18(14) does not apply to the offer to settle, when exercising its discretion over costs (Rule 18(16)).
COSTS — DISCRETION OF COURT
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.
Rule 18 (16) invites consideration of any and all offers to settle.
The mother made an offer to settle on 27 November 2018. The terms of her offer to settle came very close to the terms of the order made. The order obtained was as favourable as, or more favourable to the mother than her offer to settle.
The father made an offer to settle later that same day, 27 November 2018. His offer to settle was not close to the terms of the order made.
The Hourly Rate Issue
The mother's lawyer (on a limited scope retainer) is an employee of the Barbra Schlifer Commemorative Clinic. The father argued that she should not be permitted to claim costs based on an hourly rate other than that charged on reduced fee retainers, such as the legal aid rates.
The mother is entitled to claim costs based on the usual hourly rate her lawyer would charge. In cases where the party claiming costs was assisted by a lawyer being paid by the Ontario Legal Aid Plan, the court is not restricted to ordering costs at the lower, reduced rate. To hold otherwise would grant an inadvertent windfall to the party fortunate enough to only have to pay costs to an opposing party based on the reduced fees charged by that party's lawyer.
Quantum of Costs
The 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.
The over-riding principle is reasonableness. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case.
In the context of family law disputes, a court need not find special circumstances to make a costs award approaching substantial recovery.
Determining the amount of costs is not simply a mechanical exercise. Costs must be proportional to the amount in issue and the outcome.
Costs awards should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties, rather than any exact measure of the actual costs to the successful litigant. It is not appropriate to simply take the number of hours spent by counsel on a particular matter and multiply those hours by a determined hourly or per diem rate.
The factors to consider in determining the amount of costs in family law matters are (Rule 24(11)):
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.
- In determining the amount of costs in this matter, the court took into account these factors set out in R. 24 (11), as follows:
a) The importance, complexity or difficulty of the issues: The case was important to the mother and the father. However, it was neither legally complex nor difficult. The case was high conflict;
b) The reasonableness or unreasonableness of each party's behaviour in the case: A finding of unreasonableness is not necessary to the making of a costs order. The mother's behaviour on the motions was reasonable. The father's material filed was not proportionate to the issues involved and was not reasonable;
c) The lawyer's rates: The rates claimed by the mother's lawyer (for her work, and for the work of an articling student) were reasonable;
d) The time properly spent on the case: The time spent by the mother's lawyer was substantial, but was reasonable, under these circumstances, given the issues at stake, the claims made by the father, and the large material filed; and,
e) Expenses properly paid or payable: The disbursements claimed by the mother (total $322.55) were reasonable.
- The court must determine an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of this case. This determination is not merely an arithmetical exercise of calculating time spent by a suitable hourly rate. The costs award in this case should take into account and reflect the amount of work necessary for the mother to respond to the father's claims.
Order
- The court makes the following findings regarding these motions:
a) The mother's offer to settle was very close to the order made on the motions;
b) The conduct of the father on the motions was unreasonable; and,
c) The mother was successful on the motions.
The father shall pay the mother's costs of the motions.
- A fair and reasonable costs order, and one that is proportionate to the issues involved, in all of these circumstances, is an order for costs based on substantial recovery. The father shall pay her costs of $10,000, all included (fees + HST, disbursements + HST).
Released: 01 March 2018
Justice Carole Curtis