Woods v. Holder, 2021 ONCJ 728
ONTARIO COURT OF JUSTICE
BETWEEN:
ALICIA LISTRA WOODS Applicant (Moving Party)
— AND —
DAVID HOLDER Respondent (Responding Party)
Before Justice Curtis
Written submissions regarding Costs
Reasons for Decision released on 8 July 2021
Bolanle Akinnusi . . . . . . . . . . . . . . . . . . for the Applicant Mother (the Moving Party)
the Respondent Father (the Responding Party) was unrepresented
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) Quantum of Costs
- Order
Over-view
- This is the decision about costs of a motion to change brought by the mother regarding the consent order made 31 August 2012 for child support. The motion to change was heard on 2 March 2021 with oral reasons given.
The Parties’ Positions re Costs
The mother claimed costs of the motion to change on a substantial recovery basis of $8,880, or on a full recovery basis of $11,101.
The father filed no material in response to the mother’s claim for costs. The costs claim is unopposed.
Background
- The mother (the moving party in this motion to change) is 37 years old (born 24 October 1983). The father (the responding party) is 37 years old (born 19 August 1973). The parties were not married and lived together from June 2008 to June 2011. They are the parents of two children:
Atticka, born 11 August 2001 (19 years old), and, Deanna Delicia, born 27 August 2010 (10 years old).
Litigation History
The original application was started on 12 February 2012. The case was completed on 23 November 2012 (final support order was made 31 August 2012, and final access orders were made 23 November 2012, all on consent).
The final consent order re support made 31 August 2012 provided the following (among other clauses):
- Support of $373 per month for two children on income of $25,000 from 1 September 2012;
- Arrears were set at 0 as of 31 August 2012; and,
- Annual financial disclosure (to start 1 June 2013).
The mother brought a motion to change on 19 August 2015 and a final consent order was made on 26 November 2015 regarding access and travel (among other things).
This motion to change was brought on 13 June 2019. The mother sought the following (among other things):
- To increase table child support to be consistent with the father’s current income levels from 1 June 2013;
- s. 7 expenses from 1 June 2019 onward; and,
- for the father to maintain the children as beneficiaries on his medical and health plans.
- The father’s income had increased significantly since the original order in 2012, and may even have been understated in that order. For example, in the year following the consent order (2013), his income was two times that relied on for the order of 31 August 2012. This is the income information produced by the father on the motion to change, and for the year 2020, the income amount imputed by the court:
| Year | Income |
|---|---|
| 2013 | $50,998 |
| 2014 | $44,582 |
| 2015 | $42,414 |
| 2016 | $42,727 |
| 2017 | $47,418 |
| 2018 | $44,581 |
| 2019 | $41,679 |
| 2020 | $80,000 imputed |
- The following orders (among others) were made on the motion to change (for oral reasons given):
a) Child support was adjusted for each year from 2013 onwards to be the table amount for the income amounts of the father (as set out above);
b) Annual financial disclosure;
c) Father to provide medical and dental coverage for the children through his work (on consent);
d) Father shall pay s. 7 expenses for the children in proportion to his income based on the current imputed income of $80,000; and,
e) Mother shall provide proof of enrollment in post-secondary education for each term/semester for which this s. 7 expense is claimed.
- The mother claims costs of the motion to change.
The Costs Analysis
The Law of Costs
Entitlement
Under the Family Law Rules1, rule 2(2), the court is required to deal with cases justly. This is the primary objective of the Family Law Rules. Parties and their lawyers are required to deal with their cases in ways which promote the primary objective of the Rules (Rule 2(4)). Costs are an important component in any decisions made by parties about continuing with a court case.
The courts have a broad discretion to award costs.2 The general discretion of the courts regarding costs is contained in the Courts of Justice Act3, 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 four fundamental purposes:4
(a) to indemnify successful litigants for the cost of litigation;
(b) to encourage settlement;
(c) to discourage and sanction inappropriate behaviour by litigants; and,
(d) to ensure that cases are dealt with justly.
In addressing the issue of costs, the court must ultimately be guided by the primary objective of the Family Law Rules as set out in Rule 2(2), which is to enable the court to deal with cases justly.5
Rule 2(2) needs to be read in conjunction with Rule 24. Rule 2(4) of the rules states that counsel have a positive obligation to help the court to promote the primary objective under the Family Law Rules. Rules 2(3)(a) and (b) set out that dealing with a case justly includes ensuring that the procedure is fair to all parties and saving time and expense.6
Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality.7
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.8
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.9
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.10
Success
The starting point in any costs analysis is the presumption that a successful party is entitled to costs, in Rule 24(1). 11
Success must be measured not only against the parties’ offers to settle, but also against the claims made by each.12
An award of costs, however, is subject to the factors listed in rule 24(11)13, 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.14
The mother was the successful party on the motion to change, and she is presumptively 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.15
The decision respecting liability is ultimately a discretionary one that must be informed by the overall conduct of the parties and all of the circumstances and dynamics of the case. One of the most important functions of costs is to ensure that litigants conduct themselves in a manner that upholds the integrity of our justice system as a whole. A careful consideration of the conduct of the parties is therefore a key component to the costs analysis. The court has an obligation to ensure that litigation is not utilized as a tool to harass parties, and that the resources of the justice system are not unduly drained by unmeritorious claims.16
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.17
Matrimonial litigation is an occasion for sober consideration and thoughtfulness rather than intemperate behaviour. 18
Rule 24 (5) provides criteria for determining the reasonableness of a party’s behaviour in a case (a factor in determining quantum, Rule 24 (12)). 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.19 The court need not find that bad faith or other special circumstances exist to make a costs award approaching substantial or full recovery.20
When awarded on a full recovery scale, costs can serve to express the court’s disapproval of unreasonable conduct during the litigation.21
The unreasonable conduct of a litigant is a factor in both the awarding of costs and in fixing the amount of costs.
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.
Costs and Ability to Pay
Success is given presumptive pre-eminence in Rule 24. While Rule 24(11)(f)22 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 success23.
Ability to pay may be relevant to the issue of the quantum or scale of costs, but not to another party’s entitlement to costs24.
Ability to pay alone cannot, nor should it, over-ride the other factors in Rule 24(11).25 26
The (financial) means of the unsuccessful party may not be used to shield him from liability for costs, particularly when he has acted unreasonably27.
A party’s limited financial means will also be accorded less weight in quantifying costs if the court finds that the party acted unreasonably.28
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.29
The mother made an Offer to Settle on 25 February 2021 which was very reasonable. It included terms that were more favourable to the father than the results of the motion to change. The mother’s proposal essentially waived any arrears owing for the years 2013, 2014 and 2015 (an amount over $24,000). It waived costs of the court appearance on 20 August 2020 (which costs were reserved) and offered no costs of the motion to change. The father should have accepted this offer.
The father did not make an offer to settle the motion to change.
To attract the automatic costs consequences of rule 18(14), an Offer to Settle a motion must be served at least one days before the motion (rule 18(14)(1)) and it must not expire before the hearing starts (rule 18(14)(3)). An Offer that does not meet the criteria of rule 18(14) can still be considered under rule 18(16).
The Offer to Settle expired before the start of motion to change on 2 March 2021, so it cannot attract the automatic costs consequences of rule 18(14), but it can be considered under rule 18(16).
Quantum of Costs
- Once liability for costs has been established, the court must determine the appropriate quantum of costs. These are general principles relating to the quantum issue:
a) ultimately, costs decisions should reflect what the court considers to be a fair and reasonable amount that the unsuccessful party should pay;
b) costs need to be proportional to the issues and amounts in question and the outcome of the case;
c) amounts actually incurred by the successful litigant are not determinative; and,
d) in assessing what is fair and reasonable, the expectation of the parties concerning the amount of a costs award is a relevant consideration.30
The court’s decision on the appropriate quantum of costs must also be informed by the principle of proportionality. Timeliness, affordability and proportionality are essential components of a legal system that ensures true access to justice. In the context of the costs analysis, these factors require the court to ensure that expenses claimed make sense having regard for the importance and complexity of the issues that were litigated.31
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.32
In the context of family law disputes, a court need not find special circumstances to make a costs award approaching substantial recovery.33
In considering the quantum of costs, the court should also consider Rule 1(8), which provides that the court may respond to a failure to follow the Rules or abide by an order by making an order for costs, and Rule 2(2), which provides that one of the primary objectives of the Rules is to ensure that cases are dealt with justly.34
Determining the amount of costs is not simply a mechanical exercise. Costs must be proportional to the amount in issue and the outcome. 35
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.36
Rule 24(12), which sets out factors relevant to setting the amount of costs, specifically emphasizes "reasonableness and proportionality" in any costs award.37 These are the factors in Rule 24(12) to consider in determining the amount of costs in family law matters:
Setting Costs Amounts
(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. O. Reg. 298/18, s. 14.
- In determining the amount of costs in this matter, the court took into account these factors set out in R. 24 (12):
(a) the reasonableness and proportionality of each party’s behaviour, as it relates to the importance and complexity of the issues: While the issues were important to the parents involved, the case was not complex. The father did not make annual financial disclosure as required in the court order 31 August 2012. In this period, his income had increased significantly. He did not make the full and frank disclosure required in the motion to change support. He was not candid about his 2019, 2020 and 2021 income. He made no Offer to Settle the motion to change. While a finding of unreasonableness is not necessary to the making of a costs order, this is unreasonable behaviour;
(b) the reasonableness and proportionality of the time spent by each party, as it relates to the importance and complexity of the issues: The time spent by the mother’s lawyer was reasonable, given the issues at stake and their importance to the parents. The father made no objection on that basis;
(c) the reasonableness and proportionality of any written offers to settle, including offers that do not meet the requirements of rule 18, as it relates to the importance and complexity of the issues: The mother’s offer qualified for consideration under Rule 18(16). The terms of the mother’s offer were more favourable to the father than the results of the motion to change. The father made no Offer to Settle. The father should have accepted her Offer to Settle made 25 February 2021;
(d) the reasonableness and proportionality of any legal fees, including the number of lawyers and their rates, as it relates to the importance and complexity of the issues: The rate claimed by the mother’s lawyer was reasonable. The father made no objection on that basis; and,
(e) the reasonableness and proportionality of any other expenses properly paid or payable, as it relates to the importance and complexity of the issues: The disbursements claimed by the mother were reasonable under the circumstances ($479.47). The father made no objection on that basis.
- 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.
Order
The father shall pay the mother’s costs of the motion to change.38 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 fixed at $11,000 all in (fees plus HST and disbursements plus HST).
The motion to change dealt with support only. The costs are to be enforced by the Family Responsibility Office.
The father shall not bring a motion to change without leave obtained in advance, with a Form 14B, maximum two pages in support, not to be served on the other side unless the court orders. The court shall take into account the payment of costs in determining leave.
Released: 8 July 2021 Justice Carole Curtis
Lawrence v. Lawrence, 2017 ONCJ 431 (Ont. Ct.), para 27; Kukyz v. Simeoni, 2017 ONSC 6732, 2017 ONSC 6732 (Ont. Sup. Ct.), para. 21.
Jackson v Mayerle, 2016 ONSC 1556 (Ont. Sup. Ct.), para. 21.
Berta v. Berta, 2015 CarswellOnt 19550, 2015 ONCA 918, [2015] O.J. No. 6844, [2016] W.D.F.L. 3655, [2016] W.D.F.L. 3696, [2016] W.D.F.L. 3736, 128 O.R. (3d) 730, 262 A.C.W.S. (3d) 699, 343 O.A.C. 237, 75 R.F.L. (7th) 299, (Ont. C.A.), para. 94.
Peers v. Poupore, 2008 ONCJ 615, 2008 O.N.C.J. 615 (Ont. Ct.), para. 62.
Beaver v. Hill, supra, 2018, (Ont. Sup. Ct.), para 41.
Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 2005 1042 (ON CA), 2005 CarswellOnt 189 (Ont. C.A.); Beaver v. Hill, supra, 2018, (Ont. Sup. Ct.), para 39.
Jackson v Mayerle, supra, 2016, (Ont. Sup. Ct.); Beaver v. Hill, supra, 2018, (Ont. Sup. Ct.), para 45.
Farjad-Tehrani v. Karimpour, 2009 CarswellOnt 2186 (Ont. Sup. Ct.), para. 32, aff’d 2010 ONCA 326, 2010 ONCA. 326 (Ont. C.A.), para. 4.
Forrester v. Dennis, supra, 2016, (Ont. C.A.), para. 22.
Beaver v. Hill, supra, 2018, (Ont. Sup. Ct.), para 43.
Footnotes
- Family Law Rules, O. Reg. 114/99, as amended (“the Rules” or “the rules”).
- Mattina v. Mattina, 2018 CarswellOnt 17838, 2018 ONCA 867, [2018] O.J. No. 5625, 299 A.C.W.S. (3d) 770 (Ont. C.A.), para. 9.
- Courts of Justice Act, R.S.O. 1990, c. C. 43, as amended.
- Mattina v. Mattina, supra, 2018, (Ont. C.A), para. 10.
- Darling v. Booth, 2017 ONSC 6261, 2017 ONSC 6261 (Ont. Sup. Ct.);
- Sambasivam v. Pulendrarajah, 2012 ONCJ 711 (Ont. Ct.).
- Beaver v. Hill, 2018 ONCA 840 (Ont. C.A.).
- British Columbia (Minister of Forests) v. Okanagan Indian Band, [2003] 3 S.C.R. 371, 2003 SCC 71, 2003 CSC 71, 2003 CarswellBC 3040, 2003 CarswellBC 3041, 2003 SCC 71, 2003 CSC 71, , [2003] S.C.J. No. 76, [2004] 1 C.N.L.R. 7, [2004] 2 W.W.R. 252, 114 C.R.R. (2d) 108, 127 A.C.W.S. (3d) 214, 189 B.C.A.C. 161, 21 B.C.L.R. (4th) 209, 233 D.L.R. (4th) 577, 309 W.A.C. 161, 313 N.R. 84, 43 C.P.C. (5th) 1 (S.C.C.), paras. 21-24.
- British Columbia (Minister of Forests) v. Okanagan Indian Band, supra, 2003 (S.C.C.), para. 26.
- British Columbia (Minister of Forests) v. Okanagan Indian Band, supra, 2003, (S.C.C.), para. 25.
- Sims-Howarth v. Bilcliffe, 2000 22584 (ON SC), 2000 22584 (Ont. Sup. Ct.);
- Biant v. Sagoo, 2001 28137 (ON SC), 2001 CarswellOnt 3315, [2001] O.J. No. 3693, [2001] O.T.C. 695, 108 A.C.W.S. (3d) 106, 20 R.F.L. (5th) 284 (Ont. Sup. Ct.), para 28.
- The factors are now contained in Rule 24(12).
- M. (C.A.) v. M. (D.)(2003), 2003 18880 (ON CA), 2003 CarswellOnt 3606, 43 R.F.L. (5th) 149, 231 D.L.R. (4th) 479, 67 O.R. (3d) 181, 176 O.A.C. 201 (Ont. C.A.), paras. 40-43;
- Heuss v. Sarkos, 2004 CarswellOnt 3317, 2004 ONCJ 141, 132 A.C.W.S. (3d) 1112 (Ont. Ct.);
- Beaver v. Hill, 2018 ONSC 3352 (Ont. Sup. Ct.), para 38.
- Heuss v. Sarkos, supra, 2004, (Ont. Ct.), para. 20.
- Heuss v. Sarkos, supra, 2004, (Ont. Ct.), para. 20.
- Osmar v. Osmar, 2000 20380 (ON SC), 2000 CarswellOnt 2343, 2000 CarswellOnt 2343, [2000] W.D.F.L. 660, [2000] O.J. No. 2504, [2000] O.T.C. 979, 8 R.F.L. (5th) 387, 98 A.C.W.S. (3d) 137 (Ont. Sup. Ct.), para. 11.
- Sordi v. Sordi, 2011 ONCA 665, 2011 ONCA 665 (Ont. C.A.), para. 21;
- Prinzo v. Baycrest Centre for Geriatric Care, 2002 45005 (ON CA), 2002 CarswellOnt 2263, 2002 C.L.L.C. 210-027, 17 C.C.E.L. (3d) 207, 161 O.A.C. 302, 60 O.R. (3d) 474, 215 D.L.R. (4th) 31 (Ont. C.A.), para 76.
- Now Rule 24(12)((b).
- Biant v. Sagoo, supra, 2001, (Ont. Sup. Ct.), para. 16.
- Izyuk v. Bilousov, supra, 2011, (Ont. Sup. Ct.), para. 51.
- Now Rule 24(12).
- Peers v. Poupore, supra, 2008, (Ont. Ct.), para. 42.
- Gobin v. Gobin, 2009 ONCJ 278, 71 R.F.L. (6th) 209 (Ont. Ct), para. 24.
- Beaver v. Hill, supra, 2018, (Ont. Sup. Ct.), para 55.
- Laing v. Mahmoud, 2011 ONSC 6737, [2011] O.J. No. 5134, 2011 CarswellOnt 12972 (Ont. Sup. Ct.), para. 7.
- Serra, Boucher v. Public Accountants Council (Ontario), 2004 14579, [2004] O.J. No. 2634 (Ont. C.A.);
- Hryniak v. Mauldin, [2014] 1 S.C.R. 87, 2014 SCC 7 (S.C.C.);
- Boucher et al. v. Public Accountants Council for the Province of Ontario, supra, 2004, (Ont. C.A.);
- Sordi v. Sordi, supra, 2011, (Ont. C.A.), para. 21.
- Mooney v. Fast, 2013 CarswellOnt 15659 (Ont. Ct.);
- Boucher et al. v. Public Accountants Council for the Province of Ontario, supra, 2004, (Ont. C.A.).
- Zesta Engineering Ltd. v. Cloutier (2002), 2002 25577 (ON CA), 21 C.C.E.L. (3D) 161 (Ont. C.A.).
- Mattina, supra, 2018, (Ont. C.A.), para. 10.
- The mother claimed costs to be paid to Legal Aid Ontario. There is no jurisdiction to order costs payable to a non-party. The mother can prepare and serve the father, and the Family Responsibility Office with an Assignment of Judgment for Costs assigning the costs judgment to Legal Aid Ontario.