Court File and Parties

Date: December 10, 2020

Court File No.: D31309/19

Ontario Court of Justice

Between:

G.T.C.

RIDDHI AGARWAL, for the APPLICANT

APPLICANT

- and -

S.M.G.

FERNANDO PIETRAMALA, for the RESPONDENT

RESPONDENT

Heard: In Chambers

Justice: S.B. Sherr

Costs Endorsement

Part One – Introduction

[1] On November 9, 2020, the court released its reasons for decision arising from a trial of motions to change the final order of Justice Carole Curtis, dated July 19, 2018. See: G.T.C. v. S.M.G., 2020 ONCJ 511. The trial was about parenting and child support issues regarding the parties' three-year-old daughter (the child).

[2] The court gave the parties until November 23, 2020 to make written costs submissions. The applicant (the mother) seeks her costs of $25,917.65. The respondent (the father) made his own claim for costs of $1,455.16, arising from procedural steps that took place prior to the trial.

[3] The parties were given until December 9, 2020 to respond to the other's costs claims. The parties ask that the other's costs claim be dismissed. The father used his responding submissions as an opportunity to seek an additional $11,901.50 costs against the mother. This claim was inappropriate. The father should have made this claim in his original costs submissions so that the mother could respond. However, since his claim lacked any merit, the court did not seek further submissions from the mother.

Part Two – Legal Considerations

2.1 General Principles

[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 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.

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

[7] 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.

[8] The rules do not require the court to allow the successful party to demand a blank cheque for their costs. See: Slongo v. Slongo, 2015 ONSC 3327. The court retains a residual discretion to make costs awards which are proportional, fair and reasonable in all the circumstances. See: M.(C.A.) v. M.(D.); Jackson v. Mayerle, 2016 ONSC 1556.

[9] A useful benchmark for determining whether costs claimed are fair, reasonable and proportionate is to consider the amount that the unsuccessful party paid for their own legal fees and disbursements in the same matter. See: Durbin v. Medina, 2012 ONSC 640; Scipione v. Del Sordo, 2015 ONSC 5982; Zhang v. Guo, 2019 ONSC 5767; Laidman v. Pasalic and Laidman, 2020 ONSC 7068.

2.2 Offers to Settle and Success

[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. The court should also examine who was the successful party, based on the positions taken in the litigation. See: Lazare v. Heitner, 2018 ONSC 4861.

[11] Subrule 24(6) sets out that if success in a step in a case is divided, the court may apportion costs as appropriate.

[12] Divided success does not equate with equal success. It requires a comparative analysis. Most family cases have multiple issues. They are not equally important, time-consuming or expensive to determine. See: Jackson v. Mayerle, 2016 ONSC 1556, paragraph 66.

[13] The determination of whether success was truly divided does not simply involve adding up the number of issues and running a mathematical tally of which party won more of them. See: Thompson v. Drummond, 2018 ONSC 4762.

[14] Where there are multiple issues before the court, the court should have regard to the dominant issue at trial in determining success. See: Firth v. Allerton, [2013] O.J. No. 3992 (SCJ); Mondino v. Mondino, 2014 ONSC 1102.

[15] 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.

[16] 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).

[17] 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. See: Gurley v. Gurley, 2013 ONCJ 482.

[18] 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.

[19] 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)).

2.3 Factors Under Subrule 24(12)

[20] 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.

2.4 Ordering Costs for Prior Steps in a Case

[21] Subrule 24(11) 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.

[22] However, courts are 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; Cameron v. Cameron, 2018 ONSC 6823.

[23] In Berge v. Soerensen, 2020 ONCJ 403, Justice Roselyn Zisman found that costs should only be awarded at trial for prior steps in a case where:

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

[24] Courts will award costs accrued from activity not specifically related to the step. Activity not requiring judicial intervention is often better dealt with at the end of the case and not by the motions judge. See: Houston v. Houston, 2012 ONSC 233; Walts v. Walts, 2014 ONSC 98. This activity includes time spent for meetings with the client and reviewing and preparing pleadings and financial statements. See: Czirjak v. Iskandar, 2010 ONSC 3778.

2.5 Bad Faith

[25] The mother is alleging that the father acted in bad faith and seeks full recovery costs.

[26] Subrule 24(8) of 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.

[27] Subrule 24(8) requires a fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made. See: Cozzi v. Smith, 2015 ONSC 3626; Scipione v. Del Sordo, 2015 CarswellOnt 14971 (Ont. SCJ).

[28] There is a difference between bad faith and unreasonable behaviour. The essence of bad faith is when a person suggests their actions are aimed for one purpose when they are aimed for another purpose. It is done knowingly and intentionally. See: S.(C.) v. S.(M.).

[29] Bad faith is not synonymous with bad judgment or negligence; rather, it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. Bad faith involves intentional duplicity, obstruction or obfuscation. See: Scipione, supra.

2.6 Ability to Pay Costs

[30] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel. 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.

[31] 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.

[32] Family law litigants are responsible for and accountable for the positions they take in the litigation. See: Heuss v. Surkos, 2004 ONCJ 141.

Part Three – Analysis

3.1 Entitlement to Costs

[33] The parties both made offers to settle.

[34] Neither offer to settle attracted the costs consequences set out in subrule 18(14). The offers were considered under subrule 18(16).

[35] The mother's offer to settle is dated October 28, 2020. It was non-severable and mirrored the position that she took at trial. It was served only one day before the start of the trial.

[36] In E.O. v. O.K., 2018 ONCJ 578, this court set out that offers to settle served so close to the hearing run the risk of being given little weight in a costs analysis. Parties require a reasonable period of time to process and make an informed decision about whether to accept an offer. The mother did not give the father reasonable time to do this – she should have made an offer to settle much earlier.

[37] The mother was successful at trial in obtaining a sole custody order – the existing order of Justice Curtis had been for joint custody of the child. The mother proposed a graduated parenting time plan for the father, starting as fully supervised. However, she also sought an order that the father's parenting time be conditional on his completion of anger management and alcohol addiction programs. The court did not order those pre-conditions. It ordered graduated day parenting time, with only the exchanges to be supervised by a professional agency, to be paid for by the father. This changed the order of Justice Curtis who had ordered more frequent day parenting time for the father, with no third-party exchange requirement.

[38] The mother sought other relief that was not ordered, such as parenting exchanges taking place at a police station, police enforcement of the order and compensation for a bill the mother claimed that the father had incurred in her name.

[39] Some elements of the mother's offer were more favourable to the father than the trial result, but because her offer was not severable, the father would have been required to accept several terms that were not ordered by the court. The father was justified in not accepting the mother's offer as it was structured.

[40] The father's offer to settle is dated October 19, 2020. The offer severed the parenting and support terms. This was a wise decision as it resolved the support issue.

[41] The father sought sole custody of the child in his offer to settle, with the primary residence of the child to be with the mother. At trial, he only sought an order for joint custody of the child. He was unsuccessful on this issue.

[42] The father's offer to settle his parenting time mirrored the position that he took at trial. He sought immediate full weekend and extended holiday time with the child. He was unsuccessful on those issues. The court order limited him to day parenting time, the length of the visits to be increased on a graduated basis. It did not order the holiday time he sought.

[43] The father sought unsupervised parenting time. He was partially successful on this issue, as the court did not order full supervision. The court ordered that the parenting exchanges be supervised by a professional access supervisor. The court found that this was required to ensure safe and conflict-free transitions. It was also ordered to act as a safeguard against any unilateral overholding of the child by the father.

[44] The court finds that there was divided success on the issue of the father's parenting time, but overall, the mother was the more successful party on this issue.

[45] The parties resolved the child support issue based on the father's offer to settle. It was a minor issue.

[46] The court finds that the mother was the more successful party on the motions to change. The presumption that she is entitled to her costs was not rebutted by the father.

[47] The father made a costs claim of $1,455.16 arising from his Form 14B motion to adjourn the trial (that had been scheduled for September 22, 2020) and for an extension of time to file his materials. The adjournment request was based on his retaining his present lawyer on August 19, 2020 – the lawyer needed more time to properly prepare for the trial. This request was opposed by the mother, who sought her costs if the adjournment was granted.

[48] On August 28, 2020, the court granted the adjournment request and set new filing timelines. The court endorsed that a short adjournment would permit the father's new counsel to properly prepare for trial and let the court decide these issues on the best possible evidence. The court found that there would be little prejudice to the mother and any prejudice could be compensated in costs.

[49] It was understandable why the mother opposed the adjournment request. The trial was originally scheduled for April 29, 2020 but had to be postponed due to the pandemic. A new court date was scheduled on July 31, 2020 for trial planning, and new filing timelines set. The father was not represented by counsel at that time. He delayed in providing the required court material. The mother's counsel was not contacted by the father's counsel until August 27, 2020 – less than 4 weeks before the scheduled trial date. The mother had already begun her trial preparation. She would not have known that a new trial date could be arranged so quickly.

[50] The court finds that the father is not entitled to the costs of this step.

3.2 Amount of Costs and Order

[51] These issues were important to the parties. The case was not complex or difficult.

[52] The court found that the mother had acted unreasonably by unilaterally denying the father's parenting time without bringing the matter back to court – although the evidence would have justified reducing his parenting time on a temporary basis. She also was unreasonable by waiting until the day before the trial to make an offer to settle. This will adversely affect the amount of costs that will be awarded to her.

[53] The father also acted unreasonably. It was his volatile and impulsive behaviour that resulted in the court changing the joint custody order to sole custody for the mother, reducing his parenting time and requiring professional supervision of the parenting exchanges. His child support payment history is poor. His position of maintaining the joint custody order was unrealistic and took up considerable time. He delayed in obtaining counsel, resulting in an adjournment of the trial and additional costs to the mother.

[54] However, the father's behaviour did not come close to approaching the legal standard for make a finding of bad faith.

[55] The court finds that the rates and disbursements claimed by the mother are reasonable and proportionate.

[56] The court compared the parties' bills of costs for the time frame after September 16, 2020 (when the father's bill of costs began). The mother claimed less time than the father. This informs the court that the time claimed by the mother during this time frame was reasonable and proportionate.

[57] The court reserved costs for the case conference held on February 21, 2020. It is also appropriate for the court to now determine costs for the trial planning conference that took place on July 31, 2020.

[58] The mother claimed approximately 70 hours for work done prior to September 16, 2020. There were only two court appearances during this time. The court recognizes that trial preparation also took place in anticipation of the September 22, 2020 trial date. However, the amount claimed is not reasonable or proportionate for a trial that took one and one-half days.

[59] The court has considered that the father has limited means. The court will order that he may pay the costs over four years to ameliorate any financial hardship to him.

[60] Taking into account all of these factors, the father shall pay the mother's costs of the motions to change at $13,805, calculated as follows:

Fees: $11,000

Disbursements: $1,102

HST – 13%: $1,703

[61] The father may pay the costs at $290 each month, starting on January 1, 2021. However, if he is more than 30 days late in making any payment, the entire amount then owing, shall immediately become due and payable. The father's costs claims are dismissed.

Released: December 10, 2020

Justice S.B. Sherr