Court File and Parties

Date: August 2, 2018

Court File No.: D11026/17

Ontario Court of Justice

Between:

T.M.B.-P.

Glenda Perry, for the Applicant

Applicant

- and -

B.P.G.

Dilani Gunarajah, for the Respondent

Respondent

Heard: In Chambers

Justice: S.B. Sherr

Costs Endorsement

Background

[1] On July 3, 2018, the court released its reasons for decision arising out of a three-day trial about the parenting and child support arrangements for the parties' three children, ages 8, 7 and 5 (the children). See: T.M.B.-P. v. B.P.G., 2018 ONCJ 435.

[2] In paragraph 223 of its reasons the court gave the parties until July 17, 2018 to make written submissions if they were seeking costs.

[3] The applicant (the mother) filed her costs submissions within the timeline. She seeks costs of $34,843. The respondent (the father) did not seek costs within the required timeline.

[4] The father had until July 31, 2018 to respond to the mother's costs request. He filed submissions, but did not limit himself to responding to them. Instead, he sought his own costs of $14,398.01.

[5] It was inappropriate for the father to seek his own costs in his response to the mother's costs submissions. The time to do that was by July 17, 2018. His remedy, if he wanted to claim costs after that date, was to seek an extension order from the court pursuant to subrule 3(5) of the Family Law Rules. If granted, the court could then have provided the mother with an opportunity to respond to his costs claim – just as he had the opportunity to respond to her claim.

[6] However, upon a review of the father's costs submissions it is apparent that his costs claim has no merit. Accordingly, the court will not require the parties to go through this process.

Costs Principles

[7] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395, 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 2(2) of the Family Law Rules adds a fourth fundamental purpose for costs: to ensure that the primary objective of the rules is met – that cases are dealt with justly. This provision needs to be read in conjunction with rule 24. See: Sambasivam v. Pulendrarajah, 2012 ONCJ 711.

[9] Modern costs rules accomplish various purposes in addition to the traditional objective of indemnification. 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, paragraph 25.

[10] 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. 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. See: Lawson v. Lawson.

Offers to Settle

[11] Subrule 18(14) 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.

[12] The technical requirements of subrule 18(14) must be met to attract its costs consequences. See: Clancy v. Hansman, 2013 ONCJ 702; Reid v. Thomas, 2017 ONCJ 122.

[13] Here, the mother's offer to settle was dated and served on June 12, 2018 – 6 days before the start of the trial on June 18, 2018. Paragraph 2 of subrule 18(14) sets out a condition that the offer must be made at least 7 days before the trial for its costs consequences to apply.

[14] Justice Robert Spence faced a similar fact situation in Reid v. Thomas, supra. He wrote the following at paragraphs 41 and 42:

[41] However, the Offer was served six days prior to trial, not seven days. In Clancy v. Hansman, 2013 ONCJ 702, Justice Stanley Sherr had the following to say, at paragraph 11:

The seven-day requirement in paragraph 2 of subrule 18(14) is an important one. It emphasizes the importance of making timely offers to avoid the significant legal costs that are incurred in the week before a trial. It also reflects the reality that emotions often run high prior to the start of a trial and it might be more difficult for a party to accept an offer when they are in full trial preparation mode.

[42] Nevertheless, despite this one-day shortfall, the court retains a discretion under subrule 18(16) to take into account any written Offer to Settle, the date it was made, and its terms, even if subrule (14) does not apply.

[15] Accordingly, the mother's June 12, 2018 offer to settle does not attract the costs consequences set out in subrule 18(14). It will be considered though under subrule 18(16).

[16] The mother attached a second offer to settle in her submissions. This had been contained in her settlement conference brief dated March 18, 2018.

[17] The issue of whether the court should consider an offer to settle contained in a settlement conference brief was discussed in Entwistle v. MacArthur. Justice Alex Pazaratz found that the wording of subrule 17(23) precluded the court from considering such offers to settle. He wrote at paragraph 22:

[22] Accordingly, I cannot accept the respondent's submission that the offer in paragraph 16 of the settlement conference brief constitutes an offer under rule 18 of the Family Law Rules. They are different types of offers. In relation to rule 18, litigants always have a choice. They may elect to file an offer, at any stage in the proceeding (before or after the settlement conference). Rule 18 includes many detailed provisions that are not even referred to in paragraph 16 of the settlement conference brief. And if litigants elect to file a formal offer, clause 18(8)(b) very clearly identifies that the terms of the offer "shall not be mentioned to the judge hearing the claim dealt with in the offer, until the judge has dealt with all the issues in dispute except costs."

[18] Justice Pazaratz concluded at paragraph 44 of his decision:

[44] I must conclude that subrule 17(23) precludes me from considering the respondent's offer to settle contained in his settlement conference brief of 24 April 2002, in relation to the current issue of costs. Had the respondent intended, at that time, to present an offer with cost consequences relating to rules 18 and 24, he could (and should) have filed a separate, formal offer as a stand-alone document.

[19] In Farooq v. Majeed, 2011 ONCJ 827, Justice Roselyn Zisman followed Entwistle and did not consider an offer to settle attached to a settlement conference brief when determining costs.

[20] This court will take the same approach and will only consider the mother's offer to settle dated June 12, 2018.

[21] The mother, in her costs submissions, also referred to comments that had been made by judges at settlement conferences previously held in this case. Judicial comments at settlement conferences should not be included in costs submissions (see this court's comments in paragraphs 31 and 32 of LeBlanc v. LeBlanc, 2018 ONCJ 499). The court disregarded this portion of the mother's costs submissions.

Success at Trial

[22] When success on an issue is divided, pursuant to subrule 24(6), the court may apportion costs as it considers appropriate.

[23] The mother's offer to settle was very similar to her trial positions.

[24] The father's offer to settle had some differences from his trial positions. In his offer to settle he proposed leaving the issue of custody silent. At trial, he sought joint custody or parallel parenting of the children. In his offer, he proposed that his weekend access end on Sundays at 5 p.m. At trial, he asked that it end on Monday mornings.

[25] This case involved many issues concerning parenting and child support.

[26] The main issue in the case was about the father's request for joint custody of the children. The mother sought sole custody of the children. Many of the factual disputes arose over this issue.

[27] The mother was completely successful on this issue. The court awarded her sole custody of the children. It also made several adverse findings of fact against the father. It found that:

• He lacked credibility;
• He had been abusive to the mother in front of the children – often fuelled by alcohol abuse;
• He had controlled and isolated the mother;
• He had little involvement with the children's service providers;
• His claim for joint custody (and in closing submissions, parallel parenting) was not supported by the evidence.

[28] The mother was also more successful with respect to the regular access schedule. The parties had agreed that the children would be with the father on three out of every four weekends. The exchange terms were an important issue because of safety concerns for the mother and the children having been exposed to adult conflict on the exchanges. The mother proposed a Sunday drop-off at Access for Parents in Ontario (APCO). In his offer to settle, the father proposed a Sunday drop-off – but at a subway station. At trial, he sought a Monday drop-off at school. The court found that the father had breached the temporary order requiring Sunday drop-offs at APCO and that he had used this breach as an opportunity to harass the mother, manipulate the children and return the children late. Sunday drop-off was ordered at APCO.

[29] The father was successful in having the weekends extended until Monday mornings if his access weekend was followed by a statutory holiday.

[30] The mother was more successful on mobility and travel issues. The father wanted to restrict the mother's ability to travel to Sri Lanka – particularly with the youngest child. The mother was given unfettered travel rights. The mother consented to the father being able to travel out of the country with the older two children, but not the youngest child. That order was made. The father wanted to restrict the mother from moving her residence outside of Toronto. The mother proposed a non-removal order from Ontario – this was ordered. An additional term was added that if the mother intended to move more than 60 km. from Toronto, she was to give the father notice and he would have the opportunity to move to court to prevent the move.

[31] The mother sought orders to obtain government documentation for the children and to travel outside of Canada with them without the father's consent. The father opposed this. Again, the mother was successful on this issue.

[32] There was divided success on the holiday access issue. The court gave the father more access than the mother offered, but less than he sought.

[33] The mother was successful regarding terms restricting contact between the parties. The court ordered most of the terms set out in her offer to settle.

[34] The mother was more successful on the support issues. In her offer to settle, she proposed that support start on February 1, 2017, based on a minimum wage income imputed to the father. At trial, she sought support back to January 1, 2015 on this basis. The father proposed that support start on January 1, 2018, based on an annual income of $25,000. The court ordered that the father's support obligation begin on January 1, 2017, based on an annual income of $20,200, increasing to $25,000 as of January 1, 2018.

[35] The mother was the successful party at trial. The presumption that she is entitled to costs was not rebutted.

Costs Assessment

[36] In making this decision, the court considered the factors set out in subrule 24(12), which 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.

[37] The case was important to the parties. The father made it more difficult by making several assertions that were disproved by the mother. This increased the length of the trial and the time required by the mother to prepare for it.

[38] The mother acted reasonably. The father's claim for joint custody was completely unrealistic and should not have been made. He also acted unreasonably by breaching the court order to arrange access exchanges at APCO. He also acted unreasonably by failing to pay any temporary child support until February, 2018.

[39] The father did not contest the time claimed by the mother's counsel. The time claimed by her appears to be proportionate given that:

• It is not dissimilar to the time claimed by father's counsel in his bill of costs.
• She had to spend additional time preparing a reply trial affidavit.
• She had to spend additional time gathering evidence to successfully refute much of the father's evidence.
• The court was left with little doubt that a large part of the mother's success at trial was due to these additional efforts by her counsel.

[40] The mother made a very reasonable severable offer to settle. Many parts of the offer should have been accepted by the father.

[41] The fees claimed by the mother's counsel are reasonable for a lawyer of her skill and experience.

[42] The expenses claimed by the mother are reasonable.

[43] The court considered both Boucher et al. v. Public Accountants Council for the Province of Ontario; and Delellis v. Delellis and Delellis. 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.

[44] The court considered the father's ability to pay the costs order. See: MacDonald v. Magel. He only earns annual income of $25,000. He has few assets. He lives with his mother.

[45] 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, particularly when they act unreasonably. See: Snih v. Snih pars. 7-13. In the case of Takis v. Takis, [2003] O.J. No. 4059 (S.C.J.), the court found that the respondent's lack of income and assets, though a relevant consideration, could not be used as a shield in unnecessary litigation.

[46] The court adopts the comments of Justice Heather McGee in Mohr v. Sweeney, 2016 ONSC 3338, where she writes, "those who can least afford to litigate should be most motivated to seriously pursue settlement, and avoid unnecessary proceedings."

[47] The father made a very poor decision taking most of these issues to trial. His poor decision significantly increased the costs in this case.

Order

[48] Taking into account all of these considerations, an order shall go that the father shall pay the mother's costs fixed in the amount of $22,500, inclusive of fees, disbursements and HST.

Released: August 2, 2018

Justice S.B. Sherr

Footnotes

[1] The father could have made this request by Form 14B motion on notice to the mother.

[2] Subrule 17(23) reads as follows:

(23) Confidentiality of settlement conference.— No brief or evidence prepared for a settlement conference and no statement made at a settlement conference shall be disclosed to any other judge, except in,

• (a) an agreement reached at a settlement conference; or
• (b) an order.