Court File and Parties
DATE: July 14, 2022 COURT FILE NO.: D11039/17
ONTARIO COURT OF JUSTICE
B E T W E E N:
NOORZIA ABRAHIUMKHILL, APPLICANT MEAGHAN PATRICK, for the APPLICANT
- and -
KHALED KHALED, RESPONDENT ACTING IN PERSON
HEARD: IN CHAMBERS
JUSTICE S.B. SHERR
COSTS ENDORSEMENT
Part One – Introduction
[1] On June 15, 2022, the court heard the trial of the respondent’s motion to change this court’s support order dated February 21, 2018. The court provided oral reasons that day and dismissed the respondent’s motion to change.
[2] The court found that the applicant was entitled to her costs and gave her the opportunity to make written costs submissions. It also gave the respondent the opportunity to make a written response.
[3] The applicant served and filed her written submissions which included her bill of costs. She seeks her full recovery costs of $5,593.50. The respondent did not respond to these submissions.
Part Two – Legal considerations
[4] The 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).
[5] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.
[6] An 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.
[7] Subrule 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.
[8] Even if subrule 18 (14) does not apply, the court may take into account any written offer to settle, the date it was made and its terms when exercising its discretion over costs (subrule 18 (16)) or, in assessing the reasonableness of a party under sub-clause (iii) of subrule 24 (12) (a).
[9] The 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).
[10] The 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.
[11] Close is not good enough to attract the costs consequences of 18 (14). The offer must be as good as or more favourable than the trial result. See: Gurley v. Gurley, 2013 ONCJ 482.
[12] Subrule 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.
[13] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel (2003), 67 O.R. (3d) 181 (Ont. C.A.). Difficult financial circumstances are a factor but not always a reason to deprive a successful party of costs or to reduce the amount of costs. See: Beaulieu v. Diotte, 2020 ONSC 6787.
[14] Those who can least afford to litigate should be most motivated to seriously pursue settlement and avoid unnecessary proceedings. See: Mohr v. Sweeney, 2016 ONSC 3338; Balsmeier v Balsmeier, 2016 ONSC 3485.
[15] In 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.
Part Three – The applicant’s offer to settle and subrule 18 (14).
[16] The applicant made an offer to settle dated June 8, 2022. She proposed that if the respondent withdrew his motion to change by June 10, 2022, there would be no order as to costs. After June 10, 2022, the respondent would be required to pay her costs at $275 per hour, plus HST, up until the time he accepted the offer.
[17] The offer to settle was served after 4 p.m. on June 8, 2022, so the offer was actually served on June 9, 2022, as provided in the rules. See: clause 6 (11) (b). This gave the respondent just one day to accept it before costs would start to accrue on the offer until it was accepted.
[18] Even if an offer to settle meets all the pre-conditions for the costs consequences set out in subrule 18 (14) to apply, the court still has the discretion not to apply them – to order otherwise.
[19] Parties require a reasonable period of time to process and make an informed decision about whether to accept an offer. See: Oduwole v. Moses, 2016 ONCJ 653. What constitutes a reasonable period of time will depend on the complexity of the case.
[20] In determining what constitutes a reasonable period of time, counsel should also expect that courts will require offers upon self-represented litigants to be served earlier than the minimum times set out in subrule 18 (14). Rule 2 provides that courts have an obligation to ensure that self-represented litigants are dealt with justly. [1] Counsel are also required to help the court promote this objective. See: subrule 2 (4). Dealing with a case justly includes ensuring that the procedure is fair to all parties. See: clause 2 (3) (a).
[21] Making an offer to settle to a self-represented litigant that permits only one day for acceptance before costs activate may have some value as a litigation tactic, but it has little probative value for this court when determining whether to apply subrule 18 (14). The respondent was not given sufficient time to consider the offer or to obtain advice. The offer did not meet the primary objective to deal with cases justly set out in rule 2.
[22] Further, an offer to settle which also includes a predetermination of costs, as was done here, perverts the subrule 18(14) analysis, because the party ends up trying to claim credit for accurately predicting a costs determination a judge has not yet made. An offer which includes costs obligations not yet determined by the court, cannot satisfy the strict requirements of this subsection. See: Chomos v. Hamilton, 2016 ONSC 6232; Hall v. Hall, 2029 ONSC 4198.
[23] The court will not apply the costs consequences set out in subrule 18 (14). [2]
Part Four – Analysis of the amount of costs
[24] This matter was important to the parties. It was not complex or difficult.
[25] The applicant acted reasonably on this motion to change.
[26] The respondent has acted unreasonably by failing to work and support his children. He failed to provide annual financial disclosure to the applicant and failed to provide ordered disclosure in this case. He also did not make an offer to settle in this case.
[27] The legal rates claimed by the applicant’s counsel ($275 per hour for a 2017 call to the bar) are reasonable.
[28] The time claimed by the applicant’s counsel was reasonable and proportionate.
[29] The respondent should have reasonably expected to pay the costs that will be ordered if he was unsuccessful.
[30] The court considered that the respondent is of modest means and will address this factor by permitting him to pay the costs that will be ordered over a reasonable period of time. The court also considered that the applicant is also of modest means and was protecting the children’s right to a fair amount of support.
[31] Balancing all of these factors an order shall go as follows:
a) The respondent shall pay the applicant’s costs fixed at $4,000, inclusive of fees, disbursements and HST.
b) The respondent may pay these costs at the rate of $200 each month, starting on August 1, 2022. However, if he is more than 30 days late in making any costs payment, the entire amount then owing shall immediately become due and payable.
Released: July 14, 2022
Justice Stanley Sherr
Footnotes:
[1] Also see: Pintea v. Johns, 2017 SCC 23.
[2] The court wishes to emphasize that counsel for the applicant acted in a respectful and professional manner to the respondent during the court appearances. The criticism is limited to the offer to settle.