COURT FILE NO. D71688/14
ONTARIO COURT OF JUSTICE
B E T W E E N:
NAVDEEP GREWAL
CYNTHIA PON, for the APPLICANT
APPLICANT
- and -
KULWINDER SINGH GREWAL
ACTING IN PERSON
RESPONDENT
TIM HETHERMAN, for the City of Toronto, support assignee
HEARD: MAY 14, 2021
JUSTICE S.B. SHERR
COSTS ENDORSEMENT
Part One – Introduction
1On May 14, 2021, the court heard a focused trial of the parties’ motions to change the order of this court dated December 12, 2014 (the existing order). At the completion of the hearing, the court gave oral reasons for decision. The court changed the existing order by granting the applicant (the mother) sole decision-making responsibility for the parties’ 10-year old child and by increasing the child support payable by the respondent (the father) retroactive to January 1, 2017.
2The mother seeks her costs of $3,000 for the focused hearing. She asks that costs be treated as support and enforced by the Director of the Family Responsibility Office (the Director). She is content that costs be paid in monthly instalments in an amount to be determined by the court.
3The mother assigned her interest in support to the City of Toronto for the time that she was in receipt of public assistance. The City of Toronto participated at the trial to protect its interests. It did not seek an order for costs.
4The father asks that no costs be ordered.
Part Two – Legal considerations
5The Ontario Court of Appeal in Mattina v. Mattina, 2018 ONCA 867 set out that modern costs rules are designed to foster four fundamental purposes:
(1) to partially indemnify successful litigants;
(2) to encourage settlement;
(3) to discourage and sanction inappropriate behaviour by litigants and;
(4) to ensure that cases are dealt with justly under subrule 2 (2) of the Family Law Rules (all references to the rules in this decision are to the Family Law Rules).
6Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.
7An award of costs is subject to the factors listed in subrule 24 (12), subrule 24 (4) pertaining to unreasonable conduct of a successful party, subrule 24 (8) pertaining to bad faith, subrule 18 (14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party. See: Berta v. Berta, 2015 ONCA 918, at paragraph 94.
8Subrule 24(1) creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs. See: Sims-Howarth v. Bilcliffe, 2000 22584 (ON SC), [2000] O.J. No. 330 (SCJ-Family Court).
9To determine whether a party has been successful, the court should examine who was the successful party, based on the positions taken in the litigation. See: Lazare v. Heitner, 2018 ONSC 4861. The court may also take into account how the order compares to any settlement offers that were made. See: Lawson v. Lawson, 2008 23496 (ON SC), [2008] O.J. No. 1978 (SCJ); Todor v. Todor, 2021 ONSC 3463.
10Subrule 18 (14) sets out the consequences of a party’s failure to accept an offer to settle that is as good as or better than the trial result of the person making the offer. It reads 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.
11The onus of proving that the offer is as or more favourable than the trial result is on the person making the offer. See: Neilipovitz v. Neilipovitz, [2014] O.J. No. 3842 (SCJ).
12The court is not required to examine each term of the offer as compared to the terms of the order and weigh with microscopic precision the equivalence of the terms. What is required is a general assessment of the overall comparability of the offer as contrasted with the order. See: Wilson v Kovalev, 2016 ONSC 163.
13Subrule 24 (12) reads as follows:
24 (12) In setting the amount of costs, the court shall consider,
a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues:
(i) each party’s behaviour,
(ii) the time spent by each party,
(iii) any written offers to settle including offers that do not meet the requirements of rule 18,
iv) any legal fees, including the number of lawyers and their rates,
v) any expert witness fees, including the number of experts and their rates,
vi) any other expenses properly paid or payable; and
(b) any other relevant matter.
14In determining the appropriate quantum, the court should consider the amount that the unsuccessful party could reasonably have expected to pay in the event of lack of success in the litigation. See: Arthur v. Arthur, 2019 ONSC 938.
15The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel (2003), 2003 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.). However, a party’s limited financial circumstances will not be used as a shield against any liability for costs but will be taken into account regarding the quantum of costs. See: Snih v. Snih, 2007 20774 (Ont. SCJ pars. 7-13).
Part Three – Subrule 18 (14)
16The mother made an offer to settle dated April 20, 2021 that was more favourable than the final result for the father on all issues. The mother offered to adjust child support retroactive to February 1, 2017, based on an imputed annual income to the father of $44,000 and to permit him to pay the arrears created by the order at $150 each month. The court ordered support retroactive to January 1, 2017, based on an imputed annual income to the father of $44,000 and permitted him to pay the arrears at $345 each month.
17The mother was also prepared to continue the existing order for joint decision-making responsibility, provided that she could make the final decision if the parties disagreed. The court granted her sole decision-making responsibility for the child.
18The mother even made the offer severable to make it more attractive to the father.
19This offer would ordinarily have attracted the costs consequences set out in subrule 18 (14).
20However, the offer to settle contained a term that it expired on May 7, 2021 – 7 days before the trial.
21The technical requirements of subrules 18 (4) and 18 (14) must be met to attract the costs consequences set out in subrule 18 (14). See: Sader v. Kekki, 2014 ONCJ 41; Jakubowski v. Kopacz-Jakubowski, [2008] O.J. No. 1442 (SCJ); Weber v. Weber, 2020 ONSC 6855. Paragraph 3 of subrule 18 (14) explicitly sets out the requirement that the offer cannot have expired or have been withdrawn before the hearing started.
22In Clancy v. Hansman, 2013 ONCJ 702, when the offer expired 5 minutes before the hearing, this court found that an offer to settle did not attract the costs consequences set out in subrule 18 (14). This court reached a similar conclusion in Ajiboye v. Ajiboye, 2019 ONCJ 894, where the offer to settle expired at 9 a.m. on the day of the hearing- before the hearing started.
23As in both Clancy and in Ajiboye, the court finds that it can consider the mother’s offer to settle under subrule 18 (16) and also now under paragraph (iii) of subrule 24 (12) (a).
Part Four – Success
24The court finds that the mother was the successful party at trial.
25The mother sought sole decision-making responsibility for the child and orders that she be able to travel with the child outside of Canada and to obtain government documentation for the child without the father’s consent. Those orders were made over the father’s opposition.
26The mother sought to impute the father’s annual income at $44,000. The father wanted his annual income assessed at about $22,000. The court assessed his annual income at the $44,000 sought by the mother.
27The mother sought a retroactive adjustment of support back to January 1, 2015. The father asked that no retroactive support be ordered. Retroactive support was ordered to start on January 1, 2017.
28The father did not rebut the presumption that the mother, as the successful party, is entitled to costs.
Part Four – Amount of costs
29The issues were important to the parties. They were not complex. The case was made more difficult by the father’s non-compliance with financial disclosure orders.
30The mother acted reasonably in this case. She made a very reasonable offer to settle that the father should have accepted.
31The father did not act reasonably. He failed to comply with multiple disclosure orders. An adverse inference was drawn against him at trial because of this. The court also found that he acted unreasonably by paying paltry child support ($170) each month while spending substantial amounts on his vehicles and on his hobby of restoring and racing vehicles.
32The father acted unreasonably by failing to make an offer to settle despite the court endorsing on February 10, 2021 that each party should make a formal offer to settle the case – ideally severable, as soon as possible. The court also endorsed that it had explained to the parties what severability meant and the costs consequences of making offers to settle.
33The court finds that the time and rates claimed by the mother are very reasonable and proportionate. Her bill of costs was for $3,542.05. The parenting time issue for the father was resolved at an earlier case conference. The mother did not seek costs for that step in the case.
34The costs claimed by the mother are a reasonable amount that the father should have expected to pay if he was unsuccessful.
35The court considered the father’s financial means. Any hardship to him can be adequately addressed by permitting him to pay the costs order over time.
36Taking into account all of these factors, the father shall pay the mother’s costs in the amount of $3,00, inclusive of fees, disbursements and HST.
37The father may pay the costs at $150 each month, starting on June 1, 2021.
Part Five – Costs as an incident of support
38The mother seeks an order that these costs be payable as support and enforced as an incident of support by the Director pursuant to clause 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act.
39The court has discretion to allocate what portion of the costs are attributable to support, particularly when there are multiple issues being litigated. See: Sordi v. Sordi 2011 ONCA 665.
40A flexible approach has been endorsed when the court is determining what proportion of costs should be allocated to the support issues. See: Shelley v. Shelley, 2019 ONSC 2830.
41Very little attention was paid to the remaining parenting issues at the trial. The focus was on the support issues. The court finds that 90% of the time was spent on the support issues. This means that $2,700 of the costs ordered are enforceable as support by the Director.
Part Six – Order
42A final order shall go on the following terms:
a) The father shall pay the mother’s costs fixed at $3,000, inclusive of fees, disbursements and HST.
b) The father may pay the costs at $150 each month, starting on June 1, 2021. However, if he is more than 30 days late in making any ongoing or arrears support payments, or any of these costs payments, the entire amount of costs then owing, shall immediately become due and payable.
c) The amount of $2,700 of this costs order is a support order within the meaning of section 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act, 1996, and as such, is enforceable by the Director of the Family Responsibility Office.
Released: May 17, 2021
Justice S.B. Sherr
