Court File and Parties

DATE: 2021 03 01 COURT FILE No.: D20882/18 ONTARIO COURT OF JUSTICE

BETWEEN:

TASHANNA ATKINSON Applicant

— AND —

NEIL HUGH JOHNSON Respondent

Before: Justice Curtis

Written submissions regarding Costs Reasons for Decision released on 1 March 2021

Counsel: Olivia Oprea, for the Applicant Mother Misha Leslie, for the Respondent Father

CURTIS, J.

Index

Over-view
The Parties’ Positions re Costs
Background
The Costs Analysis (a) The Law of Costs i. Entitlement ii. The Evolution of Costs as an Instrument of Social Policy (b) Success (c) Behaviour of the Parties (d) Costs and Ability to Pay (e) Offers to Settle (f) Quantum of Costs
Order

Over-view

[1] This is the decision about the amount of costs to be ordered for a two-day trial held to determine what child support the father should pay for four children. The issues at trial were the father’s income for support purposes, and his claim for reduced support due to undue hardship under the Child Support Guidelines. The mother was successful at trial and was awarded costs. [2] This decision deals only with the issue of the amount of costs.

The Parties’ Positions re Costs

[2] The mother claimed costs of the trial on a substantial recovery basis of $9,000 all in (fees plus HST, disbursements plus HST).

[3] The father claimed that there should be no costs of the trial (although costs were awarded to the mother in the trial decision). In the alternative, the father claimed costs should be ordered “payable in the cause” (a costs construct that does not apply to Family Law) [3]. In the alternative he asks that costs be fixed at $5,000.

Background

[4] The parents were not married and did not live together. They had a 10 year relationship, and are the parents of four children (ages 19, 17, 14 and 10 at trial).

[5] The mother started this court case on 7 June 2018. The father’s Answer disputed paternity of all four children and he obtained an order for paternity testing made 29 May 2019 by Zisman, J., but he did not take paternity tests.

[6] The father amended his Answer on 11 November 2020 (about three weeks before the trial) to claim reduced child support due to undue hardship under the Child Support Guidelines. [4] The father has 11 children with four mothers.

[7] These were the child support issues at the trial: (a) what was the father’s income for child support purposes, that is, whether there should be income imputed to him for the purposes of child support; (b) what was the proper start date for child support; and, (c) are the two oldest children, Taneilyah (19) and Shaneil (17), eligible for child support.

The Costs Analysis

The Law of Costs

Entitlement

[8] Entitlement to costs was determined at trial. The mother was successful at trial and was awarded costs. [5] This decision deals only with the issue of the amount of costs. However, some analysis and consideration of costs theory is helpful in determining the amount of costs.

[9] Modern costs rules are designed to foster four fundamental purposes: [6] (a) to indemnify successful litigants for the cost of litigation; (b) to encourage settlement; (c) to discourage and sanction inappropriate behaviour by litigants; and, (d) to ensure that cases are dealt with justly.

[10] In addressing the issue of costs, the court must ultimately be guided by the primary objective of the Family Law Rules as set out in Rule 2(2), which is to enable the court to deal with cases justly. [7]

[11] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. [8]

[12] The traditional purpose of an award of costs was to indemnify the successful party in respect of the expenses sustained. For some time, however, courts have recognized that indemnity to the successful party is not the sole purpose, and in some cases not even the primary purpose, of a costs award. The principle of indemnification, while paramount, is not the only consideration when the court is called on to make an order of costs; indeed, the principle has been called "outdated" since other functions may be served by a costs order, for example to encourage settlement, to prevent frivolous or vexatious litigation, and to discourage unnecessary steps. This change in the common law was an incremental one when viewed in the larger context of the trend towards awarding costs to encourage or deter certain types of conduct, and not merely to indemnify the successful litigant. [9]

[13] The traditional approach to costs can also be viewed as being animated by the broad concern to ensure that the justice system works fairly and efficiently. Because costs awards transfer some of the winner's litigation expenses to the loser, rather than leaving each party's expenses where they fall, they act as a disincentive to those who might be tempted to harass others with meritless claims. In addition, because they offset to some extent the outlays incurred by the winner, they make the legal system more accessible to litigants who seek to vindicate a legally sound position. These effects of the traditional rules can be connected to the court's concern with overseeing its own process and ensuring that litigation is conducted in an efficient and just manner. In this sense it is a natural evolution in the law to recognize the related policy objectives that are served by the modern approach to costs. [10]

[14] Modern costs rules accomplish various purposes in addition to the traditional objective of indemnification. An order as to costs may be designed to penalize a party who has refused a reasonable settlement offer. Costs can also 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. [11]

Success

[15] An award of costs, however, is subject to the factors listed in rule 24(11) [12], the directions set out under rule 24(4) (unreasonable conduct), rule 24(8) (bad faith) and rule 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party. [13]

Behaviour of the Parties

[16] Rule 24 (5) provides criteria for determining the reasonableness of a party’s behaviour in a case (a factor in determining quantum, Rule 24 (12)). 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.

[17] One of the purposes of costs is to change behaviour.

[18] The justice system is a precious public resource. Access to the justice system by individuals must be balanced with the need to ensure that the resource is available for all those who need it. This is one of the purposes of Rule 2.

[19] Family law litigants are responsible for and accountable for the positions they take in the litigation. [14]

[20] The decision respecting liability is ultimately a discretionary one that must be informed by the overall conduct of the parties and all of the circumstances and dynamics of the case. One of the most important functions of costs is to ensure that litigants conduct themselves in a manner that upholds the integrity of our justice system as a whole. A careful consideration of the conduct of the parties is therefore a key component to the costs analysis. The court has an obligation to ensure that litigation is not utilized as a tool to harass parties, and that the resources of the justice system are not unduly drained by unmeritorious claims. [15]

[21] Parties to litigation must understand that court proceedings are expensive, time-consuming and stressful for all concerned. They are not designed to give individual litigants a forum for carrying on in whatever manner they may choose, oblivious to the impact of that conduct on the other side and, perhaps most importantly, for the purposes of this case, oblivious to the mounting costs of the litigation. [16]

[22] A finding of bad faith is not a condition precedent to full recovery of costs by the other side under the Family Law Rules. [17] The court need not find that bad faith or other special circumstances exist to make a costs award approaching substantial or full recovery. [18]

[23] When awarded on a full recovery scale, costs can serve to express the court’s disapproval of unreasonable conduct during the litigation. [19]

[24] The unreasonable conduct of a litigant is a factor in both the awarding of costs and in fixing the amount of costs.

[25] It must be made clear to family law litigants that there is no right to a day in court, or at least, that the right to a day in court is tempered with the requirement that the parties take a clear-headed look at their case before insisting on their day in court. The court must sanction this behaviour clearly, or it will invite more of this behaviour.

[26] This is the evidence at trial and the findings of the court regarding the father’s behaviour that are relevant on the issue of costs: (a) The father is a 40 year old man with 11 children, ranging in age from 19 years to five months. He has chosen to have 11 children, and has had 11 children in 19 years, with four women. Based on the ages of the children, for some time he appeared to be in relationships with three of the mothers simultaneously, and was having children with three of the mothers; (b) The father’s behaviour regarding the number of children he has had and the four mothers involved was found to be flagrant, reckless, unacceptable, and profoundly irresponsible; (c) These four children are the oldest of the father’s children. While he was still in a relationship with the mother, he began relationships with two other women, and had four children with them. Then he sponsored his current wife to come to Canada and had three children with her in five years, including a child born only a few months before the trial started; (d) The father has had large families with three women, and he has had two more children since this court case was started. And then, when he already had eight children, and was not paying support for some of them, perhaps not for any of them, he started a relationship with a financially dependent woman, and had three more children in five years with her; (e) The father’s recent five-year income averaged $98,191.40 per year. But for all those years, he was not supporting these four children. In 2019 the father earned $111,542. Yet he asked the court to order support based on income of $24,000 in 2020 and $48,000 in 2021; (f) The court suspected that the father was actually earning what he is capable of earning and was not disclosing it. If he is not earning what he is capable of earning, it is due to his own decisions and his own fault; (g) The father made choices in this litigation not to make full and frank disclosure, and in fact, not to even make the minimum level of disclosure required in such cases. He delayed making disclosure, failed to produce requested, reasonable disclosure and did not make full and frank disclosure as required. A payor cannot fail to comply with the rules about disclosure and then benefit from his behaviour. [20] The court drew an adverse inference from father’s lack of disclosure and failure to comply with orders for disclosure; (h) The father was not forthright and honest with the court on many issues, including his sources of income, the source of the bank deposits, and his current working situation; (i) The father paid no child support for the four children until the court order made 10 October 2019, and then paid support for what appears to be one to two months. He has not supported these four children for their entire lives (the oldest child is 19 years old). During this period, he earned a good income, and, according to his evidence, was supporting other children; (j) In fact, according to the father’s evidence, these four children are the only children of his that he has not supported. If his evidence is to be believed, all of the other seven children have had the benefit of receiving child support from him; [21] (k) The father benefitted financially for many years by not paying any support for these four children; (l) by asking the court to reduce support for these four children to below the table amount due to undue hardship (a claim that was not made out) the father was asking that the four oldest children (the children in this court case) subsidize his care of his seven other children, and particularly his care of his three youngest children with his current wife; (m) Due to the fact that they have not received support from the father, for many years (the oldest child is 19) these four children have, in fact, been subsidizing the father’s life and his choice to have seven other children. They have particularly subsidized his life with his current stay-at-home wife and their three children; (n) The father’s Answer disputed paternity of all four children and he obtained an order for paternity testing in May 2019, but he did not take paternity tests; (o) The father amended his Answer about three weeks before the trial to claim reduced child support due to undue hardship under the Child Support Guidelines; [22] and, (p) The father made an unsuccessful argument that s. 1(d) of the Child Support Guideline’s objectives mandates equal treatment for all his children, and that this means that they should all be receiving exactly the same amount of child support. This argument was not supported by any case law.

[27] Although the mother had not received any support for these children (the oldest of whom is 19 years old), she requested a support start date of 1 January 2018, a very reasonable position on her part. Had she claimed support to start on an earlier date, it is likely such an order would have been made.

[28] In his costs submissions, the father urged the court to “exercise sympathy upon him” in determining costs. He also submitted that he came to court “with clean hands”. While there is place in family law cases for the court to take a party’s circumstances into account, and to consider showing sympathy or compassion, such a request is not a legal argument. As well, the Reasons for Decision at trial were clear that the father did not come to court with clean hands, and was not a sympathetic figure.

Costs and Ability to Pay

[29] Success is given presumptive pre-eminence in Rule 24. While Rule 24(11)(f) [23] does permit the consideration of ability to pay (under the umbrella of “any other relevant matter”), it is given significantly less prominence than the presumption that costs will follow success [24].

[30] Ability to pay may be relevant to the issue of the quantum or scale of costs, but not to another party’s entitlement to costs [25].

[31] Ability to pay alone cannot, nor should it, over-ride the other factors in Rule 24(11). [26] [27]

[32] The (financial) means of the unsuccessful party may not be used to shield him from liability for costs, particularly when he has acted unreasonably. [28]

[33] A party’s limited financial means will also be accorded less weight in quantifying costs if the court finds that the party acted unreasonably. [29]

Offers to Settle

[34] Offers to settle are a significant part of the landscape in family law in Ontario. They are important to the possible resolution of cases. In addition, they are important to determining costs.

[35] Parties and their lawyers have a positive obligation to behave in ways which enable the court to move cases forward to resolution (Rule 2). Rule 2(4) imposes a duty on parties and their lawyers to promote the primary objective of the rules to deal with cases justly (Rule 2(2)). This includes taking appropriate steps to save time and expense (Rule 2(3)). Offers to settle play an important role in saving time and expense by promoting settlements, focusing parties and often narrowing issues in dispute. [30]

[36] To attract the automatic costs consequences of rule 18(14), an Offer to Settle a trial must be served at least seven days before the trial (rule 18(14) 2). An Offer that does not meet the criteria of rule 18(14) can still be considered under rule 18(16).

[37] The mother made a very reasonable Offer to Settle on 1 December 2020. This Offer was more favourable to the father than the decision at the trial, on almost every issue (i.e., what incomes were used, whether child support was reduced below the table amounts). The father should have accepted this Offer.

[38] The father made an Offer to Settle on 4 December 2020. It proposed a result dramatically different than the outcome at trial.

[39] While the mother’s Offer to Settle may not have qualified for the automatic costs consequences under Rule 18(14), it can be considered under Rule 18(16).

Quantum of Costs

[40] Once liability for costs has been established, the court must determine the appropriate quantum of costs. These are general principles relating to the quantum issue: a) ultimately, costs decisions should reflect what the court considers to be a fair and reasonable amount that the unsuccessful party should pay; b) costs need to be proportional to the issues and amounts in question and the outcome of the case; c) amounts actually incurred by the successful litigant are not determinative; and, d) in assessing what is fair and reasonable, the expectation of the parties concerning the amount of a costs award is a relevant consideration. [31]

[41] The court’s decision on the appropriate quantum of costs must also be informed by the principle of proportionality. Timeliness, affordability and proportionality are essential components of a legal system that ensures true access to justice. In the context of the costs analysis, these factors require the court to ensure that expenses claimed make sense having regard for the importance and complexity of the issues that were litigated. [32]

[42] The over-riding principle is reasonableness. 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. [33]

[43] In the context of family law disputes, a court need not find special circumstances to make a costs award approaching substantial recovery. [34]

[44] In considering the quantum of costs, the court should also consider Rule 1(8), which provides that the court may respond to a failure to follow the Rules or abide by an order by making an order for costs, and Rule 2(2), which provides that one of the primary objectives of the Rules is to ensure that cases are dealt with justly. [35]

[45] Determining the amount of costs is not simply a mechanical exercise. Costs must be proportional to the amount in issue and the outcome. [36]

[46] Costs awards should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties, rather than any exact measure of the actual costs to the successful litigant. It is not appropriate to simply take the number of hours spent by counsel on a particular matter and multiply those hours by a determined hourly or per diem rate. [37]

[47] Rule 24(12), which sets out factors relevant to setting the amount of costs, specifically emphasizes "reasonableness and proportionality" in any costs award. [38] These are the factors in Rule 24(12) to consider in determining the amount of costs in family law matters:

Setting Costs Amounts (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. O. Reg. 298/18, s. 14.

[48] In determining the amount of costs in this matter, the court took into account these factors set out in R. 24 (12): (a) the reasonableness and proportionality of each party’s behaviour, as it relates to the importance and complexity of the issues: While the issues were important to the parents involved, the case was not complex. The mother’s behaviour was reasonable, as reflected in her claims and in her Offer to Settle. The father should have seriously considered the mother’s position and should have accepted her Offer, which was a better result for him than the trial result. The trial decision highlighted behaviour of the father which was unreasonable; (b) the reasonableness and proportionality of the time spent by each party, as it relates to the importance and complexity of the issues: The time spent by the mother’s lawyer was reasonable. The father’s lawyer did not present a summary of the time spent by him on this case. No objection was raised about the time spent by the mother’s lawyer; (c) the reasonableness and proportionality of any written offers to settle, including offers that do not meet the requirements of rule 18, as it relates to the importance and complexity of the issues: The mother’s offer qualified for consideration under Rule 18(16). The terms of the mother’s offer are more favourable to the father than the trial outcome; (d) the reasonableness and proportionality of any legal fees, including the number of lawyers and their rates, as it relates to the importance and complexity of the issues: The rate claimed by the mother’s lawyer was reasonable. The father made no objection on that basis; and, (e) the reasonableness and proportionality of any other expenses properly paid or payable, as it relates to the importance and complexity of the issues: The disbursements claimed by the mother were modest, under the circumstances ($279.80 plus HST). The father made no objection on that basis.

[49] The court must determine an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of this case. This determination is not merely an arithmetical exercise of calculating time spent by a suitable hourly rate.

Order

[50] The father shall pay the mother costs of the trial. Costs decisions should reflect what the court considers to be a fair and reasonable amount that the unsuccessful party should pay, and should be proportional to the issues and amounts in question and the outcome of the case. The over-riding principle is reasonableness.

[51] A fair and reasonable costs order, and one that is proportionate to the issues involved, in all of these circumstances, is an order for costs fixed at $9,000 all in (fees plus HST and disbursements plus HST). In all of the circumstances, this is a modest amount, but it is what was claimed.

[52] These costs relate entirely to the issue support, and shall be enforced by the Family Responsibility Office.

[53] The father may not bring a motion to change without leave, obtained in advance, with a Form 14B motion, maximum two pages in support, not to be served on the other side unless the court orders. The court shall take into account any outstanding costs orders in determining the leave request.

Released: 1 March 2021 Justice Carole Curtis

[1] Ont. Reg. 391/97, as amended.

[2] Atkinson v. Johnson, 2021 ONCJ 15 (Ont. Ct.), para. 172.

[3] “Costs in the cause” is a costs construct in which the court holds off dealing with costs until the case is over and one party is successful, at which time costs could then be awarded to the successful party. In this case, costs were awarded to the mother in the trial decision. As well, this costs construct has not applied to Family Law for many years, at least not since the Family Law Rules were introduced in 1999.

[4] The mother may be entitled to costs regarding this amendment under the Family Law Rules, O. Reg. 114/99, as amended, R. 11 (3).

[5] Atkinson v. Johnson, 2021 ONCJ 15 (Ont. Ct.), para. 172.

[6] Mattina v. Mattina, supra, 2018, (Ont. C.A), para. 10.

[7] Darling v. Booth, 2017 ONSC 6261 (Ont. Sup. Ct.); Lawrence v. Lawrence, 2017 ONCJ 431 (Ont. Ct.), para 27; Kukyz v. Simeoni, 2017 ONSC 6732 (Ont. Sup. Ct.), para. 21.

[8] Beaver v. Hill, 2018 ONCA 840 (Ont. C.A.).

[9] British Columbia (Minister of Forests) v. Okanagan Indian Band, [2003] 3 S.C.R. 371, 2003 SCC 71, paras. 21-24.

[10] British Columbia (Minister of Forests) v. Okanagan Indian Band, supra, 2003 (S.C.C.), para. 26.

[11] British Columbia (Minister of Forests) v. Okanagan Indian Band, supra, 2003, (S.C.C.), para. 25.

[12] The factors are now contained in Rule 24(12).

[13] M. (C.A.) v. M. (D.) (2003), 43 R.F.L. (5th) 149, 231 D.L.R. (4th) 479, 67 O.R. (3d) 181, 176 O.A.C. 201 (Ont. C.A.), paras. 40-43; Berta v. Berta, 2015 ONCA 918, para. 94.

[14] Heuss v. Sarkos, 2004 ONCJ 141 (Ont. Ct.); Peers v. Poupore, 2008 ONCJ 615 (Ont. Ct.), para. 62.

[15] Beaver v. Hill, 2018 ONSC 3352 (Ont. Sup. Ct.), para 38.

[16] Heuss v. Sarkos, supra, 2004, (Ont. Ct.), para. 20.

[17] Osmar v. Osmar, 8 R.F.L. (5th) 387 (Ont. Sup. Ct.), para. 11.

[18] Sordi v. Sordi, 2011 ONCA 665 (Ont. C.A.), para. 21; Beaver v. Hill, supra, 2018, (Ont. Sup. Ct.), para 41.

[19] Prinzo v. Baycrest Centre for Geriatric Care, 60 O.R. (3d) 474 (Ont. C.A.), para 76.

[20] Tanhehco v. Cao, 2018 ONCJ 388 (Ont. Ct.), para. 78.

[21] No support was paid for these four children until payments were court ordered on 10 October 2019, and then payments were stopped in January 2020.

[22] The mother may be entitled to costs regarding this amendment under the Family Law Rules, O. Reg. 114/99, as amended, R. 11 (3).

[23] Now Rule 24(12)((b).

[24] Biant v. Sagoo, para. 16.

[25] Izyuk v. Bilousov, supra, 2011, (Ont. Sup. Ct.), para. 51.

[26] Now Rule 24(12).

[27] Peers v. Poupore, supra, 2008, (Ont. Ct.), para. 42.

[28] Gobin v. Gobin, 2009 ONCJ 278, 71 R.F.L. (6th) 209 (Ont. Ct), para. 24.

[29] Beaver v. Hill, supra, 2018, (Ont. Sup. Ct.), para 55.

[30] Laing v. Mahmoud, 2011 ONSC 6737, [2011] O.J. No. 5134 (Ont. Sup. Ct.), para. 7.

[31] Serra, Boucher v. Public Accountants Council (Ontario); Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (Ont. C.A.); Beaver v. Hill, supra, 2018, (Ont. Sup. Ct.), para 39.

[32] Hryniak v. Mauldin, [2014] 1 S.C.R. 87, 2014 SCC 7 (S.C.C.); Jackson v. Mayerle, 2016 ONSC 1556 (Ont. Sup. Ct.); Beaver v. Hill, supra, 2018, (Ont. Sup. Ct.), para 45.

[33] Boucher et al. v. Public Accountants Council for the Province of Ontario, supra, 2004, (Ont. C.A.); Farjad-Tehrani v. Karimpour, 2009 CarswellOnt 2186 (Ont. Sup. Ct.), para. 32, aff’d 2010 ONCA 326 (Ont. C.A.), para. 4.