Court File and Parties
Date: October 29, 2019
Court File No.: D91887/16
Ontario Court of Justice
Between:
Aliya Tahir Zhara Khedri, for the Applicant
Applicant
- and -
Muhammed Tahir Ali Khan Acting in Person
Respondent
Heard: In Chambers
Justice: S.B. Sherr
Costs Endorsement
Part One – Introduction
[1] A trial was held on September 18 and 19, 2019 concerning the applicant's (the mother's) motion to change the final child support order of Justice Robert Spence, dated October 24, 2017 and the respondent's (the father's) motion to change the final custody order of Justice Spence dated July 17, 2017 and the final access order of Justice Spence dated April 24, 2018.
[2] The mother sought an increase in child support. The father sought orders for joint custody and equal parenting time with respect to the parties' five children.
[3] For oral reasons given at the end of the trial, the father's motions to change the custody order and the access order were dismissed. He failed to establish a material change in circumstances that affected or was likely to affect the best interests of the children.
[4] The court released reasons for decision regarding the support issues on September 23, 2019. See: Tahir v. Khan, 2019 ONCJ 663. The mother's motion to change support was granted. The father's monthly support payments were increased from $454 to $1,168. The father's claim for undue hardship pursuant to section 10 of the Child Support Guidelines was dismissed. Support was ordered retroactively to July 1, 2018. At the mother's request the father was given the opportunity to pay the arrears generated by the order at $50 each month.
[5] The parties were given the opportunity to make written costs submissions and both did. The mother seeks her costs of $8,698.37, inclusive of fees, disbursements and HST. The father asks that no costs be ordered.
Part Two – Legal Considerations
[6] 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).
[7] 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.
[8] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.
[9] 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.
[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, [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. See: Lawson v. Lawson, [2008] O.J. No. 1978 (SCJ).
[11] 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.
[12] 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).
[13] 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.
[14] Close is not good enough to attract the costs consequences of 18(14). The offer must be as good or more favourable than the trial result. However, even if the offer does not attract the costs consequences set out in subrule 18(14), it may be considered under subrule 18(16). See: Gurley v. Gurley, 2013 ONCJ 482.
[15] 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.
[16] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel, 67 O.R. (3d) 181 (Ont. C.A.). 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. See: Snih v. Snih, pars. 7-13. Those who can least afford litigation should be the most motivated to avoid unnecessary proceedings. See: Mohr v. Sweeney, 2016 ONSC 3238.
Part Three – Offers to Settle
[17] Both parties made offers to settle the motions.
[18] The father's offer was that he would not seek a change in custody if the mother did not seek an increase in support. He was not successful and the mother was justified in rejecting this offer.
[19] The mother's offer to settle was more favourable to the father than the result on the motions. She proposed that there be no change to the custody or access orders. This was the final result. She asked that monthly support be increased to $1,168 each month. This was ordered. She also proposed that retroactive support begin on August 1, 2018. It was ordered from July 1, 2018. She also was prepared to accept monthly support at a lower rate from August 1, 2018 until August 31, 2019 than was ordered by the court. The only issue she was less successful on at trial was that the arrears were ordered to be paid at $50 each month, as opposed to the $100 each month proposed in her offer to settle. However, the lower amount was only ordered because she took the more generous position at trial.
[20] The court finds that the costs consequences set out in subrule 18(14) apply and that there is no basis to order otherwise – the father should have accepted the mother's generous offer. The mother will be entitled to her costs up to August 21, 2019 when she made her offer and her full recovery costs after that date.
Part Four – Analysis
[21] This motion was important to the parties. It was not complex or difficult.
[22] The court finds that the time and rates claimed by the mother are reasonable and proportionate. The father is very fortunate that counsel for the mother is only claiming costs at a rate of $150 each hour.
[23] The expenses of $197.67 claimed by the mother are reasonable.
[24] The mother acted reasonably. She tried very hard to resolve this matter without bringing it to court and she then made a reasonable offer to settle.
[25] The father acted unreasonably by:
a) Failing to meaningfully respond to the mother's requests to resolve this matter out of court.
b) Delaying in providing the mother his financial disclosure.
c) Taking an unreasonable position on custody and access. He did not even meet the threshold of showing a material change in circumstances.
d) Not making a reasonable offer to settle. He should have offered some compromise and increase in child support. It was not reasonable to maintain support based on an annual income of $20,535.
[26] The court found that it will be very difficult for the father to meet his child support obligations. He has five children to support and earns annual income of $42,000. The court considered that the costs sought by the mother will add to his financial challenges.
Part Five – Final Order
[27] Taking into account all of these factors the father shall pay the mother's costs fixed in the amount of $7,500, inclusive of fees, disbursements and HST, payable within 60 days.
[28] Due to the extent of the father's unreasonable behaviour the court is not inclined to order the payment of costs over an extended period of time. The mother can enforce this order as she sees fit.
Part Six – Should the Court Order that Costs be Paid to Legal Aid Ontario?
[29] The mother asks that the costs order be paid to Legal Aid Ontario, or in the alternative to either her or her counsel.
[30] The case law is well settled that the receipt of legal aid is not a factor in determining costs. See: Ramcharitar v. Ramcharitar, 62 O.R. (3d) 107 (S.C.J.); Alvarez v. Smith, [2008] O.J. No. 941 (SCJ); Loncar v. Pendlebury, 2015 ONSC 4673; S.G. v. A.S., 2015 ONSC 1882.
[31] Subsection 46(1) of the Legal Aid Services Act, 1998 sets out that "the costs awarded in any order made in favour of an individual who has received legal aid services are recoverable in the same manner and to the same extent as though awarded to an individual who has not received legal aid services". A legally aided client "stands before the court in exactly the same position as any other litigant". See: Baksh v. Baksh, 2017 ONSC 3997, per Justice Ronald Kaufman.
[32] If the court should not consider the receipt of legal aid services when assessing costs it follows that the court should not involve itself in the internal relationship between a litigant and legal aid.
[33] Further, as this court set out in John v. Vincente, 2016 ONCJ 78 and Silva v. Queiroz, 2016 ONCJ 599, the court prefers not to become involved in retainer arrangements and make such orders. This sentiment was also expressed by Justice Roselyn Zisman in S.O. v. E.A., 2017 ONCJ 564. This is not and should not be the court's concern.
[34] The mother can execute an irrevocable direction or assignment of costs and deliver it to the father. The court notes that subsection 46(4) of the Legal Aid Services Act states that all costs ordered by a court to be paid to an individual who has received legal aid services are the property of the Corporation and shall be paid to the Corporation.
[35] The costs are payable to the mother.
Released: October 29, 2019
Justice S.B. Sherr