Court File and Parties

Ontario Court of Justice

Date: 2018-02-08

Court File No.: Brampton 216/14

Between:

Sheryl Walsh Applicant

— And —

Amber Walsh Stephen Steele Respondents

Before: Justice A. W.J. Sullivan

Heard in Chambers

Cost Decision

Counsel:

• M. DeGroot, for the applicant
• A. Bakaity, for the respondents

Decision

SULLIVAN J.:

Introduction

[1] This is the decision on costs submissions from the above parties after the conclusion of a six-day trial on a motion to change dealing with the issues of custody and access.

[2] It is agreed in the submissions by both the applicant and respondents that at the conclusion of the trial the applicant was primarily successful on the issues in dispute and obtained results favourable or more favourable than her Offer to Settle.

[3] On September 8, 2017 the applicant, Ms. Sheryl Walsh served on the respondents, Ms. Amber Walsh and Mr. Stephen Steele a severable Offer to Settle. The offer consisted of two parts: (1) custody, and (2) access. The Offer to Settle provided for no costs if the offer were to be accepted in whole or for those parts accepted. The Offer to Settle was never withdrawn. The respondents did not accept the applicant's Offer to Settle.

[4] In her submissions for costs the applicant underlines the fact that she was wholly successful at trial. The applicant seeks costs on a substantial indemnity basis of $65,632.21 or, in the alternative, on a partial indemnity basis of $47,399.60. A bill of costs summary as well as bill of costs from the applicant's former counsel and current counsel who handled the trial are submitted. It should be noted that the bill of costs date back to the date when the application was issued February of 2014.

[5] Mr. DeGroot, counsel for the applicant grandmother at trial submits that the applicant throughout these proceedings acted reasonably and in good faith. The final order of custody was granted to the applicant on March 24, 2015.

[6] A unique feature of this trial was the fact that in part the application dealing with final access and support overlap with a motion to change brought by the respondent biological mother and father requesting a change to the custody order of Justice Dunn from of March 24, 2015.

[7] An interesting feature that was raised in this trial and again in submissions by the applicant was that on August 19, 2016, prior to the motion to change being issued the parties at a motion worked on final minutes of settlement which could not be finally signed off at as the respondent father, Mr. Steele was not in attendance but represented by the same counsel as the respondent mother who had agreed to the terms of the minutes. Although negotiated by the same counsel these minutes were not turned into a final order on that they are subsequently through letters confirming the same between the respective lawyers' offices. The minutes were comprehensive on all issues regarding custody, access, table child support and section 7 expenses.

[8] After the motion to change was issued an additional two and a half years of litigation ensued concluding with this trial.

[9] It is not apparent from the respondent submission on costs that they addressed any part of the applicant's Offer to Settle. They also did not serve an Offer to Settle pursuant to the Rules.

[10] As noted above the respondents do not take issue that the applicant was mostly successful but argues the following:

a) The scale of the costs that should be awarded not that there should be an award for costs or not.

b) That the applicant's solicitor has noted in the bill of costs hours of work dating back to the initial issuance of the application in February of 2014 contrary to Rule 24(10) which states that costs should be requested and dealt with summarily at each step of the proceedings.

c) The only period of time regarding costs that this court should consider is from the trial management conference through to the conclusion of the trial.

d) That the success at trial was somewhat divided in that the final order added additional provisions that were not in the applicant's offer.

e) That the issue of child support was dealt with on consent and accordance to the severability of the offer presented by the applicant.

[11] The respondents further submit that the court should look at the case as a whole and how a cost award on the high-end would affect the already difficult relationship between the parties.

[12] The respondent's counsel notes the court in its ruling made the following finding:

"the emotional gulf created by Amber (respondent mother) towards her mother (applicant grandmother) is not as easily overcome and directly affects Amber's ability to act as a parent and develop healthy relations that are meaningful to Ryder."

[13] An Order for costs on a full indemnity basis would impact the financial burden on the respondents and risk affecting the gains the respondent parents have made thus far to rebuild their lives. It is noted the respondents are of modest means.

[14] Further, it is argued on behalf of the respondents that they did not bring their motion to change out of spite but rather felt that they had made gains from the initial period of time when the application had started years earlier.

[15] Mr. DeGroot for the applicant argues that there is a presumption that a successful party is entitled to cost.

[16] The applicant points out the considerations a court must apply to this issue of costs as set out in Rule 24(11).

[17] In addition it is noted that a party who makes an offer is, unless the court orders otherwise, entitled to costs to the date of the offer was served and on a full recovery of costs from that date, if the offer was made at least seven days before trial and the offer does not expire or was not withdrawn and the offer was not accepted.

[18] Further Mr. DeGroot indicates that it is an error to refuse to award costs to a successful party where that party has not behaved unreasonably or success was not divided. Offers to settle it is noted are crucial and become the yardstick by which to measure success; they are significant in determining both liability for costs in quantum. The authority for this is Wylie v. LeClair at paragraph 24 (ONCA), and Osmar v. Osmar at paragraph 7 (ONSC).

Legal Framework

Costs – General Principles

[19] Modern cost rules are designed to foster three fundamental purposes. In Quercia v. Francioni, [2011] O.J. No. 5208 Ontario Superior Court of Justice, at paragraphs 43 and 44, H.A. McGee J. cited the court of appeal's holding in Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905 (C.A.) paragraph 8, that modern costs rules are designed to:

a) To indemnify successful litigants for the cost of litigation

b) To promote and encourage settlement; and

c) To control behaviour by discouraging frivolous suits of defences that lack merit.

Fong v. Chan, [1999] O.J. No. 4600 (OCA).

[20] Rule 2 – Sub Rule 2(2) of the Family Law Rules (the 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.

[21] Sub Rule 2(4) of the rules states that a counsel has a positive obligation to help the court to promote the primary objective under the family law rules. Clauses 2(3)(a) and (b) of the rules set out that dealing with a case justly includes ensuring that the procedure is fair to all parties and saving time and expense. Sambasivam v. Pulendrarajah, 2012 ONCJ 711 (Can LII).

Rule 18 Offers to Settle

[22] Rule 18(14) of the Family Law Rules reads as follows:

Consequences of failure to accept offer 18(14). A party who makes an offer is, unless the court orders otherwise, entitled to cost to the date the offer was served and full recovery of costs from the 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 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.

[23] It is elementary that the onus of proving that an offer is one that is more favourable than the outcome of the trial results is on the person making the offer. Neilipovitz v. Neilipovitz, [2014] O.J. 3842. In assessing whether an offer is more favourable or not it is settled law that close is not good enough to attract the cost consequences of rule 18 (14). The offer must be as good as or more favourable than the trial results. Gurley v. Gurley, 2013 ONCJ 482 Can LII.

[24] The court also must step back and exercise a judgment, having regard to all the circumstances as to what is a fair and reasonable amount to be paid by the unsuccessful party to the successful litigant rather than use an exact measure of the actual cost incurred by the successful litigant. Boucher v. Public Accounts Counsel for the Province of Ontario.

[25] In Quercia v. Francioni, [2011] O.J. No. 5208, Ontario Superior Court of Justice, at paragraphs 43 and 44, H.A. McGee J. cited the Court Of Appeal's decision in Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905 (C.A.) paragraph 8, that modern costs rules are designed to amongst other things partially indemnifies successful litigants for costs of litigation.

[26] Justice McGee stated that "the court's role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees. There is a component of reasonableness which must be considered when awarding costs. A cost award should reflect what the court views as a fair and reasonable amount."

[27] I have considered the above and Rule 24(11) which asked the court to consider the following:

a) the importance, complexity or difficulty of the issues;

b) The reasonableness or under reasonableness 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.

[28] The ability of a person to pay costs should not however override other factors as noted in rule 24(11) Peers v. Poupore, 2008 ONCJ 615.

[29] Generally the court is to consider the parties limited financial circumstances not as a shield against any liability for costs but rather this to be taken into account regarding the quantum of costs, particularly when their actions might not be considered entirely reasonable, Smith v. Smith. In the case of Takis v. Takis, [2003] O.J. No. 4059 (SCJ), the court found that the respondent's lack of income and assets, although a relevant consideration, could not be used as a shield in unnecessary litigation.

Quantum of Costs

[30] Determining the amount of costs is not a direct mathematical or mechanical exercise. Costs must be proportional to the amount in issue and the outcome: Boucher et al. v. Public Accounts Counsel for the Province of Ontario, [2004] O.J. No. 2634 (Ont. C.A.).

[31] The overriding 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 Boucher et al. v. Public Accounts Counsel for the Province of Ontario, [2004] O.J. No. 2634 (Ont. C.A.).

[31] The court has broad discretion to award costs (Courts of Justice Act, s. 131 (1)). One's ability to pay is relevant to the issue of costs, particularly quantum of costs Izyuk v. Bilousov, 2011 ONSC 7476.

[33] I have also considered the dictum in Boucher et al. v. Public Accounts Council of the Province of Ontario, [2004] O.J. No. 2634 (Ont. C.A.):

"… The fixing of costs is not simply a mechanical exercise. In particular, the rule makes clear that the fixing of costs does not begin and end with the calculation of hours, times and rates … Overall, as this court has said, the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant."

Comments and Analysis

[34] In this matter I note the reasonable position of the respondents that costs are to be granted. I also agree that many factors are to be considered when granting costs. The principle considerations I have noted above.

[35] Although, I sympathize with the submissions by counsel for the respondents that costs could create further divisions between the applicant grandmother and her daughter the respondent mother this in itself is not a mitigating factor at this stage for the court. The issues raised in trial and this court's comments regarding the respondent mother Ms. Amber Walsh's differences with her mother have roots that are deeper than this case. I am not here to assist in therapy or analysis at this stage.

[36] I also believe that some of the positions taken by the respondents at trial were not reasonable. This in particular was in regards to placing limits on the contact between Ryder when in the care of the respondents and the maternal grandfather which the respondent mother argued against with a degree of conviction at trial. On this issue as well as not changing final custody the applicant was wholly successful.

[37] I agree that the issue of child support was dealt with on consent and in effect accepted by the respondents and formed part of the applicant's Offer to Settle. This of course was not the main issue at trial nor did it consume much preparation and time.

[38] I further agree that in reviewing the bill of costs submitted by Mr. DeGroot it does date back to the initial application which is contrary to the rules as noted above and that parties must request costs on each appearance if warranted and cost submissions dealt with on a summary basis. If this was not done it is impossible for me to go back and evaluate the events in question in relation to the work conducted and behaviour of the parties at that point in time at this stage many years later.

[39] I will however consider the work from the date of the Offer to Settle being September 8, 2017. A review of the dockets from that date reveal that there was 116.9 hours of work which is essentially preparing for trial which was the motion to change commenced by the respondents. Within the motion to change the applicant raised the issue of restricting access to the maternal grandfather to Ryder and of course the residual issue of finalizing the terms of access and support.

[40] The disbursement costs of $1,400.00 are also being sought which are not unusual or extraordinary given the paper required to properly conduct this trial.

[41] Mr. DeGroot's hourly rate is quite reasonable at $200.00 per hour. I note this is less than the initial lawyer assisting the applicant.

[42] Considering the above hours this would translate into costs of $23,380.00 plus HST of $3,039.40. This combined with the disbursements is a total of $27,831.51.

[43] Considering the law on costs, I recognize that not all costs incurred successful litigants are necessarily recovered.

[44] The applicant did submit an Offer to Settle, which was not on the main issues accepted. I have factored in the consent on the issue of child support as noted above.

[45] I do not believe that the respondent mother in particular acted reasonably in relation to defending a position at trial regarding the insistence on developing a relationship between Ryder and her father the maternal grandfather given the evidence that was submitted in terms of his history with the applicant and the respondent.

[46] I also believe that it is the duty of litigants to early on in the proceedings evaluate and weigh their respective positions. I recognize, as I did in the decision that the respondent parents made out a change in circumstances that permitted me to evaluate their plan for Ryder rather than dismiss outright their motion to change. I concluded, however, that their plan did not meet Ryder's best interest at this time in his life. Further not all changes, such as those made by the respondent parents, can necessarily make up for past circumstances such that custody should be altered. Sometimes events that occur, in particular when it comes to children can never be undone.

[47] I have considered the direction that the setting of costs is not simply a mechanical exercise. I do recognize the modest financial means of the respondents and for that matter the applicant. The evidence at trial was that parents were employed full-time. Amber Walsh with a moving company that provided her with contacts for continued employment in New Brunswick as it was her plan to eventually move and be reunited with her husband Stephen Steele. Stephen is employed with the Canadian Armed Forces.

[48] There is no doubt that a cost award has both an emotional and economic impact on their situation. In making such an award, I do so not to be punitive but rather to recognize and balance the factors that this court has an obligation to do when making these orders.

[49] The issues that went to trial were important to both parties. There was a unique and complicating feature dealing with the extent to which the young respondent parents had made changes in their lives that were material and sustainable, which included in part their emotional well-being that needed to be evaluated. The child Ryder's welfare and stability was the main focus in the trial.

[50] I have further considered Mr. Bakaity's submission on the quantum of costs given the respondents incomes and the outcome at trial. I do believe that there should be an adjustment period in order for the respondents to arrange their financial affairs considering this order. I've also considered the amount to be paid per month. I believe this should be in the form of child support payable through The Family Responsibility Office. This will give all the parties a clear record of payments.

[51] I cannot, and will not, direct the maternal grandmother in terms of how the money will be employed in her ongoing responsibility to care for and raise Ryder. I am confident however, from my assessment of both the applicant grandmother and the respondent parents, that they both wish to assure that Ryder has the ability to go on in the future with education, and opportunities, and will make the necessary arrangements for him to do so.

[52] It is my belief that the family will find creative ways, in assuring that resources that they have available, both financial and emotional, will be put to the best use to heal and move forward in Ryder's best interests.

Final Order

1. The Respondents, Amber Walsh and Stephen Steele shall pay to the applicant, Sheryl Walsh, costs on a partial indemnity basis in the amount of $20,000.00 commencing May 1, 2018 in the amount of $300.00 per month and on the first of each month thereafter until paid down in full as a form of child support payable through The Family Responsibility Office (FRO).

2. A support deduction order shall issue.

Released: February 8, 2018

Signed: Justice A. W.J. Sullivan