Court File and Parties
Court File No.: D55753/12 Date: 2012-09-17
Ontario Court of Justice
Toronto North Family Court
Between:
Charles Ascento Acting in Person Applicant
- and -
Summer Davies Respondent
Counsel: Roger Rowe, counsel for the Respondent
Heard: In Chambers
Justice: S.B. Sherr
Costs Endorsement
Part One - Introduction
[1] On July 24, 2012 I released my decision for this one day trial. I awarded the respondent (the mother) custody of the parties' child, granted the applicant (the father) day access, imputed income to the father and ordered him to pay child support retroactive to July 1, 2011. I gave the mother the opportunity to make written costs submissions and gave the father the opportunity to make written reply.
[2] The mother served and filed written costs submissions. She seeks full indemnity costs of $3,508.11. The father did not make any submissions.
Part Two – Finding of Bad Faith
[3] The mother seeks a finding that the father acted in bad faith. Sub-rule 24(8) of the Family Law Rules (the rules) states that if a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately. Persistent refusal by a party to make accurate financial disclosure and reveal their true income may rise to the level of bad faith. DePace v. Michienzi, 12 R.F.L. (5th) 341 (Ont. SCJ); Kardaras v. Kardaras, 2008 ONCJ 616.
[4] In my reasons for decision I made the following findings of fact that support making a finding of bad faith under sub-rule 24(8):
a) The father did not comply with the financial disclosure orders made by this court dated February 24, 2012, April 20, 2012 and July 4, 2012.
b) The father did not provide a sworn financial statement despite court orders to do so.
c) The father provided limited financial disclosure at trial.
d) The father had been inconsistent in his compliance with court orders. He observed them when it suited him.
e) The father significantly understated his cash income.
f) The father engaged in blameworthy conduct. He stopped paying child support when he had the ability to make such payments.
[5] The mother will be awarded her full indemnity costs for the support issues.
[6] The finding of bad faith will be restricted to the support issues. The evidence did not support a finding that the father acted in bad faith with respect to the parenting issues. A bad faith finding on specific issues does not necessarily have a spill-over effect to other issues. Hunt v. Hunt, [2001] O.J. No. 5111 (SCJ).
Part Three – Analysis
[7] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395, [2009] O.J. 1905 (Ont. C.A.) stated that modern costs rules are designed to foster three fundamental purposes, namely to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants bearing in mind that the awards should reflect what the court views is a fair and reasonable amount that should be paid by the unsuccessful party.
[8] Subrule 24(1) of the rules creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs. Sims-Howarth v. Bilcliffe, [2000] O.J. No. 330 (SCJ- Family Court). To determine whether a party has been successful, the court should take into account how the order compares to any settlement offers that were made. Lawson v. Lawson, [2008] O.J. No. 1978 (SCJ). The position each party took at trial should also be examined. Neither party made an offer to settle.
[9] The mother was the successful party at trial on the parenting issues. She was successful in obtaining a sole custody order. She was successful on the access issues, with some minor modifications to her proposed plan.
[10] In making this decision, I considered the factors set out in sub-rule 24(11) of the rules, which reads as follows:
24(11) A person setting the amount of costs shall consider:
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness or unreasonableness 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.
[11] The case was important for the parties. It was not complex or difficult.
[12] Sub-rule 24(5) of the rules provides criteria for determining the reasonableness of a party's behaviour in a case (a factor in clause 24(11)(b) above). 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.
[13] The mother cannot be faulted for her failure to make an offer to settle on the financial issues. Without accurate financial disclosure, she could not have been expected to properly assess what a reasonable offer would be. However, she should have made an offer to settle on the parenting issues. Offers to settle play an important role in saving time and expense by promoting settlements, focusing parties and often narrowing issues in dispute. The failure to serve an offer to settle will be an adverse factor when assessing costs. See: Laing v. Mahmoud, 2011 ONSC 6737. It will be the rare case where full indemnity costs will be ordered when the court finds that an offer to settle should have been made.
[14] The mother will be awarded costs on the parenting issues on a partial indemnity basis.
[15] I have reviewed the rates submitted by counsel for the mother. They are very reasonable. The father is fortunate that most of the time spent on the case was attributed to Ms. Williams, a student-at-law (who performed excellently at trial).
[16] Subrule 24(10) sets out that costs are to be determined in a summary manner after each step in the case by the presiding judge. A "step" in the case is one of the discrete stages recognized by the rules such as a case conference, settlement conference and the like. Husein v. Chatoor, 2005 ONCJ 487, [2005] O.J. No. 5715 (OCJ). The trial judge should not deal with requests for costs that were addressed or should have been addressed at these prior steps in the case. Islam v. Rahman, 2007 ONCA 622.
[17] A review of the dockets submitted by counsel for the mother showed that the mother is seeking compensation for legal work performed for prior steps in the case where costs were not sought or reserved. This time will not be allowed. However, there are a number of steps for which costs cannot be recovered until the final adjudication or settlement of the case, as they do not require any form of judicial intervention, such as preparation of pleadings and financial statements, property evaluations, document production, attendance at questioning, review of transcripts, compliance with undertakings, and preparation for trial, to name but a few. See: Houston v. Houston, 2012 ONSC 233. The mother is entitled to recover these costs.
[18] I find that the father has the ability to pay this costs award.
[19] I have also considered both Boucher et al. v. Public Accountants Council for the Province of Ontario, [2004] O.J.No. 2634 (Ont. C.A.) and Delellis v. Delellis and Delellis, [2005] O.J. No. 4345. Both these cases point out that when assessing costs it is "not simply a mechanical exercise." In Delellis, Aston J. wrote at paragraph 9:
However, recent cases under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended have begun to de-emphasize the traditional reliance upon "hours spent times hourly rates" when fixing costs....Costs must be proportional to the amount in issue and the outcome. 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, rather than an amount fixed by the actual costs incurred by the successful litigant.
[20] Counsel for the mother has asked that costs be payable to his firm in trust. I am not prepared to make such an order. The mother can always execute a direction to that effect.
[21] Taking into account all of the circumstances set out above, I order that the father shall pay the mother her costs fixed at $2,500 inclusive of fees, disbursements and HST. This shall be payable forthwith.
[22] The mother has asked that the father be precluded from initiating any further proceedings in this case until this costs order has been paid. I have found that the father has little regard for court orders and has acted in bad faith on the financial issues. I have found that he has the ability to pay this costs order. It is unlikely that he will comply with the costs order willingly. The mother's request is reasonable.
[23] An order will go that the father cannot initiate any further proceedings, without prior leave of the court, without first providing proof to the court that this costs order has been paid.
Justice S.B. Sherr
Released: September 17, 2012
