Court File and Parties

Date: August 4, 2022 Court File No.: D56415/12

ONTARIO COURT OF JUSTICE

B E T W E E N:

CHANTAL BLACKWOOD, APPLICANT KATIE GABOURY, for the APPLICANT

- and -

ALEXANDER NICHOLS, RESPONDENT LISA BAUMAL, for the RESPONDENT

HEARD: In Chambers

JUSTICE S.B. SHERR

COSTS ENDORSEMENT

Part One – Introduction

[1] On July 7, 2022, the court released its endorsement regarding the applicant’s (the mother’s) motion to lift the April 3, 2017 stay of her motion to change (the stay order) and the respondent’s (the father’s) cross-motion seeking pre-conditions for the lifting of the stay order, including an order for security for costs. See: Blackwood v. Nichols, 2022 ONCJ 313.

[2] The court ordered pre-conditions to lift the stay order and gave the mother 120 days to meet them. The father’s motion for security for costs was dismissed.

[3] The parties were given the opportunity to make written costs submissions. The father seeks his costs of $5,000. The mother asks that no costs be ordered.

Part Two – General Costs 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 awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.

[6] 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.

[7] 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).

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

[9] 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.

[10] 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 ONSC 4900; Mondino v. Mondino, 2014 ONSC 1102.

Part Three – Determination of Success

[11] Neither party served an offer to settle the motions. Accordingly, the court must examine the positions taken by the parties in their notices of motion and at the hearing of the motions.

[12] The father acknowledged that there was divided success on the motions. He submits that he was the more successful party and is entitled to costs. He also submits that the mother acted unreasonably and increased his costs.

[12] The mother claims that success was equally divided. She denies that she acted unreasonably.

[13] In his cross-motion, the father sought a stand alone order that the mother provide security of costs of $10,000. In his supplementary affidavit, filed one week before the hearing of the motions he amended that position. He sought an order for security for costs of $7,500 as a pre-condition to lifting the stay order.

[14] The father was unsuccessful in obtaining an order for security for costs. The court also declined his claim that the mother pay $5,000 costs for these motions as a pre-condition for lifting the stay order.

[15] However, the court agreed with the father that meaningful pre-conditions had to be ordered prior to it lifting the stay order.

[16] An important element of the stay order had been the requirement for the mother to provide financial disclosure that she had not provided prior to the stay being ordered.

[17] On these motions, the mother continued to avoid her financial disclosure obligations. The motions were first returnable on May 5, 2022. The court explained to the mother that her financial disclosure was insufficient, explained what the court required and adjourned the motions to give her the opportunity to provide this evidence.

[18] The mother did not come close to complying with the court’s expectations (see paragraphs 56 to 65 of the July 7, 2022 endorsement). She provided a number of excuses that the court found unacceptable. The court wrote in its endorsement that the mother has not been transparent about her financial affairs for a very long time.

[19] The court found that the father should not be put to the cost of chasing after financial disclosure from the mother yet again and observed that the mother’s history was that she would not provide this disclosure unless pre-conditions to lifting the stay order were imposed.

[20] The court ordered many of the pre-conditions sought by the father. The court ordered that:

a) The mother shall provide the father with the following disclosure within 120 days: i. Complete copies of her personal and corporate income tax returns from 2019 to 2021. ii. Her monthly bank account and credit card statements, both personal and corporate, from January 1, 2020 to the present. iii. Financial statements for any corporation in which she has an interest from 2019 to the present. iv. The current leases for the properties listed in paragraph 25 of the father’s affidavit sworn on June 27, 2022. v. Documentary evidence of her 2022 income form all sources. This should include any business ledgers showing revenues and expenses. vi. If the mother does not have any of these corporate income tax returns, corporate financial statements, corporate bank accounts and credit cards or the two lease agreements, then she is to serve and file an affidavit setting out that this is the case with an explanation as to the nature of these businesses, the extent and nature of her involvement with the corporations, when they have and have not operated and why these documents are not available. b) The mother shall keep her ongoing child support payments in good standing, pay the outstanding child support arrears of $1,467.16 and the outstanding costs amount of $435.97 to the father within 120 days.

[21] The essence of these motions was whether meaningful pre-conditions should be ordered for the stay order to be lifted. The mother opposed any pre-conditions. Although not all of the pre-conditions that the father requested were ordered by the court, he was the more successful party because meaningful pre-conditions were ordered.

[22] The presumption that the father is entitled to costs was not rebutted by the mother.

Part Four – Amount of Costs

[23] 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.

[24] This case was important to the parties. It was not complex or difficult. However, there were additional costs because the mother did not provide the financial information required on the first return date of the motions and the hearing of the motions was adjourned.

[25] Neither party served an offer to settle the motions. This was unreasonable. Otherwise, the father acted reasonably on the motions.

[26] The mother acted unreasonably by failing to provide adequate financial disclosure.

[27] The mother acted reasonably by paying most of the outstanding costs order in between the two hearing dates for these motions.

[28] 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: Smith Estate v. Rotstein, 2011 ONCA 491 (Ont CA); Durbin v. Medina, 2012 ONSC 640 (SCJ); Scipione v. Del Sordo, 2015 ONSC 5982 (SCJ); Zhang v. Guo, 2019 ONSC 5767 (Div Ct); Laidman v. Pasalic and Laidman, 2020 ONSC 7068.

[29] The mother did not produce her own bill of costs. The court draws an adverse inference against her for failing to do this. The court repeats its comments made at paragraph 38 in S.W.-S. v. R.S., 2022 ONCJ 11, as follows:

[38] Further, the father did not submit documentation showing his own fees and expenses to the court for comparison. An adverse inference is drawn against him for failing to do this. Providing this documentation is required pursuant to subrule 24 (12.2). This subrule reads as follows:

(12.2) A party who opposes a claim for costs respecting fees or expenses shall provide documentation showing the party’s own fees and expenses to the court and to the other party.

[30] However, 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 (SCJ). The court retains a residual discretion to make costs awards which are proportional, fair and reasonable in all the circumstances. See: Jackson v. Mayerle, 2016 ONSC 1556.

[31] In determining the appropriate quantum, the court should consider the amount that the unsuccessful party could reasonably have expected to pay in the event of lack of success in the litigation. See: Arthur v. Arthur, 2019 ONSC 938.

[32] The rates claimed by the father’s lawyer ($400 per hour for a 1992 call to the bar) are reasonable.

[33] The father claimed that his full recovery costs are just under $10,000 and that he is only claiming half of those costs due to the divided success.

[34] The court finds that the time claimed by the father was high given the low level of complexity and difficulty for these motions. It was more than the mother could have reasonably expected to pay if she was unsuccessful on the motions.

[35] 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.). The mother is of modest means.

[36] The ability to pay will be less of a mitigating factor when the impecunious party has acted unreasonably. See: Gobin v. Gobin, 2009 ONCJ 278; D.D. and F.D. v. H.G., 2020 ONSC 1919. 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.

[37] The court finds that it is reasonable and proportionate for the mother to pay the father’s costs in the amount of $3,600, inclusive of fees, disbursements and HST. The mother should have reasonably expected to pay this amount of costs if the father was successful on the motions.

[38] The court will address any hardship to the mother by permitting her to pay costs in the amount of $300 each month.

Part Five – Enforcement by the Family Responsibility Office

[39] The father seeks an order that all of his costs be payable as support and enforced as an incident of support by the Director of the Family Responsibility Office (the Director) pursuant to clause 1 (1) (g) of the Family Responsibility and Support Arrears Enforcement Act.

[40] The mother opposes this request.

[41] The court has discretion to allocate what portion of the costs are attributable to support, particularly when there are multiple issues being litigated. See: Sordi v. Sordi, 2011 ONCA 665.

[42] A flexible approach has been endorsed when the court is determining what proportion of costs should be allocated to the support issues. See: Shelley v. Shelley, 2019 ONSC 2830.

[43] The mother’s purpose in seeking a lifting of the stay order is to pursue her motion to change the parenting terms in the existing order. However, that is not the only issue before the court. The father has a motion to change support before the court – particularly for special and extraordinary expenses. He also needs financial disclosure to assess if he should amend his motion to change to seek a retroactive increase in support.

[44] Further, if the mother is successful in having the child’s primary residence changed to her, the support order will need to be changed. Her financial disclosure will be essential to making the support assessment – particularly if a shared parenting order is made as requested by her.

[45] The court will order that 50% of the costs ordered be payable as support and by enforced by the Director as an incident of support.

Part Six – Conclusion

[46] A final order shall go on the following terms:

a) The mother shall pay the father’s costs fixed at $3,600 inclusive of fees, disbursements and HST. b) The mother may pay the costs at the rate of $300 each month, starting on September 1, 2022. c) Costs in the amount of $1,800 shall be payable as support and enforced as an incident of support by the Director of the Family Responsibility Office pursuant to clause 1 (1) (g) of the Family Responsibility and Support Arrears Enforcement Act. d) There will be a further condition for the lifting of the stay order that the mother be in good standing in making the monthly costs payments ordered.

Released: August 4, 2022 _____________________ Justice S.B. Sherr