ONTARIO COURT OF JUSTICE

CITATION: Oretsky v. Viktyuk, 2024 ONCJ 163

DATE: March 27, 2024

COURT FILE No.: FO-13-00010592-0003

BETWEEN:

Aaron Yuval Oretsky

Applicant

— AND —

Ulyana Viktyuk

Respondent

HEARD IN CHAMBERS

COSTS ENDORSEMENT

Theodore Nemetz................................................................................... counsel for the applicant

Ulyana Viktyuk................................................................................................ on her own behalf

JUSTICE W. KAPURURA:

Part One – Introduction

[1] On February 9, 2024, the court released its reasons for decision regarding an uncontested trial of the applicant (the father)’s motion to change. He sought to vary the final order of Justice B. Weagant dated October 7, 2016, with respect to parenting arrangements for the parties’ 11-year-old child (the child).

[2] Justice Weagant’s order granted parenting time to each parent on alternate weeks, with the father having sole custody.

[3] The respondent (the mother)’s response to the motion to change was struck on August 8, 2023. The matter proceeded to an uncontested hearing. At the conclusion of the hearing, the court varied the parenting arrangements.

[4] The father was given an opportunity to serve and file his costs submissions by March 1, 2024.

[5] The father seeks his costs of $31,867.15. A review of the father’s costs submissions shows that he is seeking costs with respect to the entire proceeding on the motion to change. He also seeks a total of $317.55 in disbursements.

[6] The mother was allowed to file her response to the father’s costs submissions by March 15, 2024. She did not file a response.

Part Two – General costs principles

[7] 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).

[8] Costs can 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. See: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, 2003 S.C.C. 71, paragraph 25.

[9] Costs awards are discretionary. Two important principles in exercising this discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.

[10] 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.

Part Three – Success

[11] Subrule 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 CanLII 22584 (ON SC), [2000] O.J. No. 330 (SCJ-Family Court).

[12] At the uncontested trial, the father sought to change the parents’ week-about parenting schedule to allow the child to reside primarily with him, with the mother having parenting time on alternate weekends, with pick-up after school on Friday and drop-off on Sunday at 5:00 p.m. In the alternative, he proposed the schedule above, and added an alternate overnight Wednesday visit for the mother. He also sought additional terms concerning winter break, therapy for the child, and non-removal of the child.

[13] The father partially succeeded in his claims. The court made an order that the child reside primarily with him when school is in session, with the mother having parenting time on alternate weekends from Friday until Monday. The mother was also granted alternate Wednesday overnights with pick-up and drop-off at school.

[14] However, the court ordered that the parents’ week about parenting schedule should continue when school is not in session. This means the child shall maintain a shared parenting schedule during the winter break, spring break, and summer break.

[15] The court granted the father’s request that neither parent remove the child from school for vacation purposes without the prior written consent of the other parent or court order.

[16] The court dismissed the father’s request to call the child daily when he is in the mother’s home. Given the high conflict between the parents, the court found that the order was not in the child’s best interests as it would invite conflict.

[17] The court also dismissed additional claims for incidents of parenting claimed by the father which had not been sought in his motion to change. The claims related to a mediation clause, the right of first refusal when traveling, and a travel clause. The court found that the mother did not have proper notice of these claims and the father had not amended his pleadings to add these additional claims. He was legally represented throughout the proceeding.

[18] The main issue in this case was related to parenting time. Even though the court maintained the week about parenting schedule when school is not in session, the father largely succeeded since the evidence proved that the mother was failing to meet the child’s educational needs and was not taking the child’s special needs seriously.

[19] The child has special needs. He was diagnosed with a Learning Disability.

[20] The court made the following findings of fact after the hearing:

i. The mother has, on several occasions, disagreed with the child’s diagnosis. In her affidavit dated June 13, 2023, she stated in paragraphs 32 to 33 that:

32. The father persistently labels (the child) as disabled or a special needs child, causing significant harm to (his) self-esteem. His intention behind this labeling is to manipulate the system and seek financial support from the government by presenting (the child) as someone with disabilities.”

33. It is important to note that there are no reports supporting his claims.

ii. The mother does not seem to fully appreciate the significance of the child’s disability. This was confirmed by Dr. Handley-Derry’s evidence. The doctor also testified that she does not fully appreciate the need for an intensive daily remedial program.

iii. The lack of consistency in meeting the child’s needs in the two homes is impacting the child’s needs, albeit some positive gains were reported by Dr. Handley-Derry.

iv. The parenting relationship between the two parents is toxic. Conflict between the parents continues, and the conflict is impacting their ability to meet the child’s needs.

v. The father is the parent who has been attentive to the child’s therapy and treatment, including engaging in daily remedial programs for the child as recommended by professionals.

vi. The mother has not fully supported the child in therapy. He was brought to therapy sessions by the father 27 times. The mother only brought him twice. The recommendation was for him to attend on a weekly basis. However, the therapist noted that the child was only attending therapy every other week when he was in his father’s care. In her report, the therapist described the child as “a young boy caught in the middle of high conflict between his parents.”

vii. The child has been consistently late at school while he is in the mother’s home. The child has also been absent from school while in her care.

[21] The court found that the father had met the threshold for material change in circumstances requiring a variation of Justice Weagant’s order.

[22] The father is presumptively entitled to his costs on the parenting issues for the uncontested hearing. The mother did not rebut this presumption.

Part Four – Subrule 18 (14)

[23] 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:

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 the 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.

[24] The parties in this case did not exchange offers to settle. Therefore, the court will not conduct an analysis with respect to subrule 18(14).

Part Five – Factors in determining the amount of costs

[25] 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.

[26] Both parents acted unreasonably by engaging in conflict.

[27] The case was complicated by the mother’s failure to comply with several court orders, leading to the striking of her response to the motion to change. She failed to comply with the following court orders:

i. On October 31, 2017, the Superior Court of Justice dismissed her appeal of Justice Weagant’s order and ordered her to pay the father’s costs of the appeal in the amount of $15,000.00, payable within 60 days. She has not paid these costs.

ii. On March 13, 2019, Justice Weagant ordered her to pay the father his costs in the amount of $1,000.00, payable ‘forthwith’. She has not paid these costs.

iii. On June 13, 2023, this court ordered her to pay the father’s costs in the amount of $1,000.00. She has not paid these costs.

[28] The mother acted unreasonably by failing to:

i. Comply with court orders for costs.

ii. Comply with court orders that allowed her to move to reinstate her response to the motion to change after it was struck by the court on August 8, 2023. She was allowed to move to reinstate it by paying the outstanding costs. She did not pay the costs.

iii. Take the child to therapy consistently.

iv. Appreciate the significance of the child’s Learning Disability.

v. Take the child to school every day and on time.

vi. Follow directions and reminders from the court during the uncontested trial by being disruptive and making outbursts. Her inability to regulate her emotions during the proceeding was very concerning.

[29] The father acted reasonably by remaining child-focused throughout the proceeding.

[30] The father acted unreasonably by:

i. Seeking orders at the uncontested trial stage that he had not sought in his pleadings.

ii. Filing voluminous materials, most of which were repetitive.

iii. Seeking an order for supervised parenting time for the mother. He did not plead this request and did not provide a sufficient basis for the request in his evidence. The request first came out during closing submissions.

iv. Exceeding page limits for costs submissions. The parties were ordered to file 3 pages of narrative for their submissions, excluding bills of costs and offers to settle. The father filed 4 pages of narrative. The 4^th page is titled “Bill of Costs”, but it is further costs submissions.

[31] In determining the appropriate quantum of costs, the court has an obligation to review the specifics of the costs claim to assess the reasonableness of the amounts requested and whether items claimed are properly the subject of a costs award. See Donnelly v. Donnelly, 2004 CarswellOnt 2076 (S.C.J.).

[32] The court must also consider whether the hours spent can be reasonably justified. See: Pagnotta v. Brown, [2002] O.J. No. 3033 (S.C.J.); Murphy v. Murphy, 2010 ONSC 7204 (S.C.J.); However, this analysis should be undertaken in a global fashion. The court is not required to embark upon a painstaking, line-by-line analysis of bills of costs and second guess every hour and item claimed, unless there are clear concerns about excessive claims and overreaching. See: Docherty v. Catherwood, 2016 ONSC 2140 (S.C.J.), at para. 50.

[33] The father’s two counsels did not state their years of call. Mr. Nemetz’s hourly rate is $400.00. Ms. Speers’ hourly rate is $300.00. The court finds their hourly rates to be reasonable.

[34] Mr. Nemetz’s bill shows 24.8 hours of work. Ms. Speers’ bill shows 60 hours of work. The total amount sought in costs is $31,867.00.

[35] The father’s costs submissions also seek costs with respect to prior events. The court must determine whether costs should be paid for the prior events.

Part Six – Costs for prior steps in the case

[36] Subrule 24 (11) came into force on July 1, 2018. It provides that the failure of the court to order costs in relation to a step in a case does not prevent it from awarding costs in relation to the step at a later stage in the case.

[37] However, courts continue to be cautious about awarding costs at the trial stage where costs were not awarded at earlier steps in a case. See: Baezner v. Brunnenmeir, 2018 ONCJ 956; Nabwangu v. Williams, 2019 ONCJ 171.

[38] In Cameron v. Cameron, 2018 ONSC 6823, Justice Marvin Kurz interpreted the changes to the costs rules regarding prior steps in a case as creating a rebuttable presumption against ordering costs for these steps if they were not addressed or reserved by the judge hearing the step. He wrote at paragraphs 83 to 88:

[83] In sum, a trial judge has the jurisdiction under R. 24(11) to determine the costs of earlier steps in the proceeding. However, in light of the continued application of R. 24(10), it should be presumed that a judge who does not determine or reserve the costs of a step before her or him does not find that the conduct of the parties during the course of that step merits an award of costs.

[84] That presumed finding should be entitled to deference by subsequent judges. It should be accorded even greater deference when, as here, the previous step was conducted before R. 24(11) was formally amended on April 23, 2018.

[85] If the judge of a step prior to trial does not wish the presumption to apply, I suggest that he or she should say so. The judge can then expressly reserve the costs of the step to a later date, such as the trial. If that occurs, brief reasons would be helpful. I know that many judges are reluctant to award costs of a conference or even reserve them for fear that such a decision may adversely affect the potential for settlement. However, with the increasingly onerous costs of family litigation, it is always salutary for the parties to be reminded at every stage of the proceeding of the potential costs consequences of their litigation.

[86] In light of the presumption, a judge hearing a trial should only grant the costs of a previous step in one of the following circumstances:

a. when they have been reserved to the trial judge; or

b. when, in light of subsequent events, the trial judge is better situated to determine the costs of the prior step than the judge presiding over that step. In that case, the process of determining costs will involve a broad consideration of the prior step within the context of the case as a whole; or

c. in exceptional circumstances.

[87] If a party seeks the previously undetermined and unreserved costs of a previous step, the onus rests on him or her to set out why those costs should now be awarded in their favour. To meet that onus, the party should offer a detailed summary of each prior step for which he or she is seeking costs. The party should add an explanation of why he or she should now be granted the costs of that step. That summary should include:

a. the positions that each party took at that step;

b. the manner in which the party’s participation in that step advanced the case or contributed towards the ultimate result;

c. an explanation of why the later judge is in a better position than the judge who actually dealt with the particular step to assess the significance or reasonableness of the conduct of the parties during that step;

d. a comparison of any relevant offers to settle, particularly as they may impact on the prior step; and

e. any other consideration that the party relies upon to claim the costs of that step.

[88] The principles set out above also apply, with any necessary adjustments (considering their more summary nature), to motions and any other proceedings in which a judge is asked to award the undetermined costs of prior steps. Those principles can apply, for example when a motions judge is asked to determine the costs of a previous case conference or when the balance of a partially completed conference is adjourned to another date, without costs being reserved.

[39] In Laidman v. Pasalic and Laidman, 2020 ONSC 7068, the court set out that the presumption remains that costs should be determined at each stage, and there are good reasons for this. Parties should have an ongoing awareness of the cost consequences of litigation decisions they make. Reserving costs may impede final resolution by needlessly inflating and complicating the list of future issues still to be dealt with. A judge who has just completed a step in a case will usually be in the best position to evaluate all of the relevant Rule 18 and 24 considerations. Reserving costs to a future event – often to a different judge – can result in later confusion and controversy about what really happened at the earlier step.

[40] In Berge v. Soerensen, 2020 ONCJ 265 Justice Roselyn Zisman set out the following circumstances where costs of a prior step should be awarded by a trial judge:

a) Costs have been reserved to the trial judge.

b) When, considering subsequent events, the trial judge is better situated to determine the costs of the prior step than the judge presiding over the step or,

c) In exceptional circumstances.

Part Seven – Should the court order costs for prior steps in this case?

[41] The court must review the steps taken before the uncontested trial in this case given that the father is seeking costs for the entire proceeding.

[42] The father’s motion to change was filed on September 26, 2022, with a first appearance court date of November 3, 2022.

[43] The following chart shows the previous court appearances and related court endorsements on costs:

Date

Determination of costs

January 12, 2023

The endorsement does not show whether costs were requested, addressed, or reserved.

April 19, 2023

The court made the following order:

“No costs are ordered for today’s appearance. Each party to bear their own costs for today’s appearance (oral reasons were provided)”

June 13, 2023

The court made the following order:

The mother shall pay the father’s costs in the amount of $1,000.00 for today’s appearance.

August 8, 2023

The court decided not to order costs (each party was to bear their own costs).

[44] The costs submissions made by the father’s counsel do not address the relevant factual and legal considerations as to the reasons this court should award him costs for prior steps. The court has noted the following:

a. The submissions do not specify the prior steps that the father is seeking costs on.

b. There is no summary of each prior step for which costs are being sought.

c. There is no mention of any specific prior events where costs were addressed, sought, or reserved.

d. It is not clear why the father should be awarded costs for those prior steps.

e. The submissions mainly focus on the mother’s unreasonableness. However, this consideration should have been tied to a specific prior event for which costs are being sought.

f. The submissions do not address if any special circumstances would support an award of costs for the prior steps.

[45] The bill of costs filed by the father’s counsel, Mr. Nemetz, shows the following concerning entries with respect to prior events:

a. The bill of costs shows 1 hour being sought for April 18, 2023, court attendance. Court attendance was on April 19, 2023. The error may be inadvertent. However, on April 19, 2023, the court specifically ordered each party to bear their costs for the appearance, and oral reasons were provided.

b. The submissions appear to seek costs for events where costs were specifically ordered by the court. On June 13, 2023, the father was awarded costs in his favour in the amount of $1,000.00 at a motion. His bill of costs submitted shows that he is still seeking the following:

i. June 12, 2023 – 1.5 hours – Court preparation (for a motion)

ii. June 13, 2023 – 1.3 hours – attendance at a motion

c. On August 8, 2023, the court decided not to order costs in favour of either party. The father’s bill of costs shows the following entries for costs being sought:

i. August 2, 2023 – 0.7 hours – preparation for the upcoming motion

ii. August 8, 2023 – 1.5 hours- court attendance

d. The bill of costs includes entries from May 20, 2021, about 16 months before the father’s motion to change was filed. The explanation for these entries is not clear. The father states that following the parties’ several motions between 2019 and 2020 (before the filing of the motion to change), the mother was told that he would bring a motion after the pandemic was over. The explanation itself remains obscure concerning eligibility for costs consideration. The court does not accept the vague explanation as a basis for justifying payment of costs for events that occurred 16 months before the commencement of the motion to change.

[46] The court finds that this is not an appropriate case for the court to award costs for prior events. Further, the court has serious concerns with respect to some of the entries provided by the father in the bills of costs submitted by his counsels.

Part Eight – Assessing a bill of costs where more than one lawyer is involved

[47] Mr. Nemetz is the father’s main counsel. He had a second lawyer, Ms. Speers, assisting him on the file. The bill of costs attached to the father’s costs submissions contains entries from both lawyers. The following entries appear to show entries by both lawyers for the same event:

i. November 29, 2023: Mr. Nemetz seeks 2 hours for court attendance, Ms. Speers seeks 1.5 hours for court attendance.

ii. January 17, 2024: Mr. Nemetz seeks 4 hours for court attendance. Ms. Speers seeks 2.5 hours for court attendance.

iii. February 5, 2024: Mr. Nemetz seeks 2.5 hours for court attendance. Ms. Speers seeks 1.5 hours for court attendance.

[48] There are cases where the courts have held that there is inherent duplication of services that occurs whenever more than one lawyer works on a file. These cases suggest that there should be some reduction on the claimed costs. See Hyperbaric Oxygen Institute of Canada Inc. v College of Physicians, et al., 2015 ONSC 6914 (para. 7, Hague v. Liberty Mutual Insurance Co., 2005 CanLII 13782 (ON SC), [2005] O.J. No. 1660 at para 17.

[49] In other cases, the courts have taken a contextual approach.

[50] In Atkinson v. Atkinson, 2014 ONCJ 474, Justice R. Zisman wrote at subparagraph 28(d), that:

It is quite a common practice for a legal clerk and junior counsel (to) interview and prepare draft materials and then have those materials reviewed by senior counsel and this practice generally results in costs savings. However, in reviewing the Bill of Costs it is difficult to determine exactly what work was done by each counsel and the legal clerk as the same generic outline is referred to and there are no time dockets. I assume therefore that there was some duplication of services and that the Bill of Costs should be reduced. Further, both counsel attended court and the father should not have to absorb the cost for both counsel.

[51] In Fearon v. Fearon, 2021 ONSC 2305, Justice Trimble wrote as follows:

[56] A client is entitled to have as many lawyers work on a file as that client wishes to pay for. Whether the opposing party shall be forced to pay for the cost of more than one lawyer on a party and party assessment is a different question. An award of costs in this context is no reflection on the economic relationship between lawyers and their counsel. Rather, the determination is whether it is fair and reasonable that the paying party should pay for more than one counsel in all the circumstances.

[59] I also note that there is some duplication between senior and junior counsel, for which adjustment must be made.

[52] Generally, costs for two lawyers are not recoverable at trial. See: Sepiashvili v. Sepiashhviili, 2001 CanLII 25708 (ON SC), 2001 CarswellOnt 3459 (SCJ); Y. (J.) v. F. (L.), [2017] O.J. No. 5228 (S.C.J.). In M.P.M. v. A.L.M., 2020 ONSC 3491, some allowance on account of the more junior lawyer was found warranted. The applicant’s lawyers conducted the trial in an exceedingly efficient and commendable manner. They were well prepared. It was clear from the dockets provided that junior counsel played a meaningful role in the preparation for and conduct of the trial. He was much more than a spectator. Further, a significant concession was made by applicant’s counsel to ensure that any duplication of time was eliminated.

[53] In Diamond v. Berman, 2020 ONSC 4301, McGee J. stated the following:

67. As a general principle, I am of the view that the costs of multiple counsel cannot be recovered in costs. The recovery of fees for multiple counsel does not create an exception to the ordering of costs in an amount that would have been reasonably expected to have been paid by the unsuccessful party. One cannot shift to the other party the financial consequences of engaging multiple counsels any more than the consequences of engaging counsel with a higher hourly rate than is reasonable in the circumstances. To allow otherwise would be to permit litigants to financially intimidate their opponent and to potentially discourage meritorious claims.

[54] The complexity of the matter also would dictate where co-counsel would be permitted at trial. If a matter is sufficiently complex or the efficient presentation of evidence requires two counsel, an exception might very well be made. However, the message has to be given that, where co-counsel is employed at trial, the client risks those costs being disallowed unless the particular matter warrants it. The matter must be extremely complicated for the court to find that there is a need for second counsel, and this is particularly so in family law matters where the affordability of trials and the cost of representation for matrimonial clients is increasingly in issue and the affordability of family law counsel has resulted in some 70% of matters involving unrepresented parties. See: Iacobelli v. Iacobelli, 2020 ONSC 6128 (at paragraph 47).

[55] It appears that the governing principles of reasonableness and proportionality stated in Beaver v. Hill (supra) still apply. In exercising its discretion, the court must take a contextual approach. Generally, where a party fails to justify that an additional lawyer (or lawyers) was reasonably necessary, a cost reduction may be warranted.

[56] This case proceeded by way of an uncontested trial. The court heard evidence from the father and child’s doctor. Mr. Nemetz, the father’s counsel, is experienced counsel. The evidentiary issues were not complicated. The brief explanation on the father’s costs submissions is that the second counsel was required to address ‘the multitude of parenting issues which required constant reporting and addressing’. The court does not accept this explanation given that the matter proceeded on an uncontested basis. Further, the explanation does not specifically address the necessity of two lawyers attending the same court appearance.

[57] The court finds that the entries on the two bills of costs relating to court attendance by both lawyers at the same time amount to duplication of services and a reduction is warranted.

Part Nine – Should the court award the amount of costs sought by the father?

[58] The father seeks his costs of $31,867.00.

[59] The court will not award the amount of costs sought by the father for the following reasons:

i. He increased the costs by his unreasonable conduct as stated above.

ii. The court has disallowed costs that precede the uncontested trial. Most of the entries constituting his request for costs cover the period before the uncontested hearing.

iii. Some of his costs cover amounts paid to the two lawyers for the same events and time (duplication).

iv. He has engaged in egregious conduct by:

a. Seeking costs for events that the court previously awarded costs on.

b. Seeking costs for events that the court previously refused costs on.

[60] The court will award the father his costs in the amount of $7,000.00, including HST. The court finds that this award is reasonable and proportionate in the circumstances.

[61] The court finds that the disbursements sought by the father in the amount of $317.55 for process service and printing are reasonable and will be ordered.

[62] The mother did not file costs submissions. The court will not grant her a payment plan since she has ignored several orders for costs. The award for costs shall be payable forthwith.

[63] Given the mother’s long history of non-compliance with costs orders, the court will add an additional clause requiring her to provide proof of compliance with this costs order before bringing a motion to change.

Part Ten – Orders

[64] Balancing all the above considerations, an order shall go on the following terms:

i. The mother shall, forthwith, pay the father his costs fixed at $7,317.55, inclusive of fees, disbursements, and HST.

ii. The mother shall provide proof of compliance with this costs order before bringing a motion to change parenting orders.

Released: March 27, 2024

Signed: Justice Wiri Kapurura