Court File and Parties

DATE: January 18, 2023 COURT FILE NO.: D42290/22

ONTARIO COURT OF JUSTICE

B E T W E E N:

N.M.

APPLICANT

LAUREN ISRAEL, for the APPLICANT

- and -

S.M.

RESPONDENT

ACTING IN PERSON

HEARD: In Chambers

JUSTICE S.B. SHERR

COSTS ENDORSEMENT

Part One – Introduction

[1] On October 24, 2022, the court released its reasons for decision after a two-day trial about the parenting and support arrangements for the parties’ two children. See: N.M. v. S.M., 2022 ONCJ 482.

[2] The parties were given the opportunity to make written costs submissions. The applicant (the mother) seeks her costs of $15,000. The respondent (the father) asks that no costs be ordered. In the alternative, he asks that he pay costs fixed at $2,000.

Part Two – General costs principles

[3] 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).

[4] 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, 2003 S.C.C. 71, paragraph 25.

[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] O.J. No. 3992 (SCJ); Mondino v. Mondino, 2014 ONSC 1102.

Part Three – Determination of success

[11] The mother was the more successful party at trial. The father acknowledged this in his costs submissions. However, the mother did not obtain every parenting term she sought and there was divided success on some of the issues.

[12] The father made two offers to settle. Neither offer was more favourable to the mother than the trial result on any issue. The mother did not make an offer to settle.

[13] The father sought an order for joint decision-making responsibility and equal parenting time at trial. The court ordered that the children have their primary residence with the mother. It ordered that both parties may make decisions about the children’s cultural, religious and spiritual training, as they see fit, when the children are in their care. Otherwise, the mother was granted sole decision-making responsibility for the children.

[14] The court made a parenting time order similar to the one sought by the mother at trial. It granted her requests to be able to obtain government documentation for the children and to travel with them outside of Canada without the father’s consent.

[15] The court did not place a total prohibition on the father taking the children to his gym, or give the mother a right of first refusal, if the father was unavailable for his parenting time, as she requested.

[16] The mother asked the court to impute the father’s annual income at $70,000 and to order child support retroactive to February 1, 2020. The father proposed to only pay ongoing support of $550 each month. This is the Child Support Guidelines table amount for two children based on an annual income of $36,300.

[17] The mother was successful in obtaining child support retroactive to February 1, 2020.

[18] There was divided success on the imputation of the father’s annual income, although the mother was more successful than the father. The court imputed annual income to the father of $40,000 for 2020 and 2021 and $57,378, starting on January 1, 2022.

[19] The father did not rebut the presumption that the mother is entitled to costs.

Part Four – Amount of costs

[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.

[21] 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.

[22] This case was important to the parties. It was not complex. The case was made more difficult due to the father’s failure to provide complete or timely financial disclosure.

[23] The mother acted unreasonably by failing to make an offer to settle. It was difficult for her to make a financial offer to settle because of the lack of financial disclosure from the father. However, she should have made an offer to settle the parenting issues.

[24] Otherwise, the mother acted reasonably.

[25] The father acted reasonably by making two offers to settle. His September 8, 2022 offer to settle was a comprehensive proposal. Although, the mother was justified in not accepting the offer, it represented an effort by the father to resolve the case.

[26] However, there was considerable unreasonable behaviour by the father as follows:

a) He disregarded many court orders to provide the mother with financial disclosure.

b) He provided the mother with late and partial financial disclosure just prior to trial.

c) He filed no evidence about his 2022 income.

d) He failed to follow the trial directions of Justice Roselyn Zisman.

e) He failed to advise the mother of his witnesses in advance of the trial. Instead, he brought them to court on the first day of trial, apparently attempting to surprise and rattle the mother.

f) He brought the mother’s estranged father to the trial. It appeared that he did this to intimidate the mother.

[27] The mother filed a bill of costs setting out that her full recovery costs were $19,341.

[28] The father submitted that the time and rates claimed by the mother are unreasonable because she is in receipt of legal aid.

[29] However, the case law is well settled that the receipt of legal aid is not a factor in determining costs. See: Ramcharitar v. Ramcharitar (2002), 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.

[30] The rates claimed by the mother’s counsel ($400 per hour for a counsel with 29 years experience) are reasonable.

[31] The mother included some time spent for prior steps in the case – specifically the costs for a First Appearance Court appearance, a case conference and a settlement conference.

[32] 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.

[33] However, courts continue to be 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.

[34] In Laidman v. Pasalic and Laidman, 2020 ONSC 7068 the court set out that the presumption remains that costs should be determined at each stage, and there are good reasons for this. Parties should have an ongoing awareness of the cost consequences of litigation decisions they make. Reserving costs may impede final resolution by needlessly inflating and complicating the list of future issues still to be dealt with. A judge who has just completed a step in a case will usually be in the best position to evaluate all of the relevant Rule 18 and 24 considerations. Reserving costs to a future event – often to a different judge – can result in later confusion and controversy about what really happened at the earlier step.

[35] In Berge v. Soerensen, 2020 ONCJ 265 Justice Roselyn Zisman set out the following circumstances where costs of a prior step should be awarded:

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.

[36] Here, costs were reserved by Justice Zisman at the June 2, 2022 case conference. The court will award costs for that prior step.

[37] However, costs were not reserved for the settlement conference. There are no exceptional circumstances that warrant ordering costs for that step.

[38] This does not preclude the court from awarding costs accrued from activity not specifically related to a step in the case. 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. The court will award costs for this activity which includes the drafting and review of pleadings and the preparation and review of financial statements.

[39] The court will also order costs for the attendance at First Appearance Court. These are appearances before a court clerk to ensure that the case is ready to send to a judge for a case conference. There should be no expectation that costs will be addressed at this step of a case. See: Thomas v. Saunchez, 2022 ONCJ 532.

[40] The balance of the time claimed by the mother was reasonable and proportionate.

[41] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel (2003), 67 O.R. (3d) 181 (Ont. C.A.). The father was imputed with annual income of $57,378 and now must make ongoing and retroactive support payments. His ability to pay costs is limited.

[42] 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.

[43] The court will consider the father’s limited financial circumstances by permitting him to pay these costs over three years. However, this allowance will be subject to his maintaining his support and costs payments in good standing.

[44] The court finds that the father should have reasonably expected to pay the costs that will be ordered if the mother was successful at trial.

Part Five – Mother’s request to have costs paid directly to Legal Aid Ontario

[45] The mother seeks an order that the father pay the costs ordered directly to Legal Aid Ontario. The court will not make that order. This is the same request that was made to the court in Tahir v. Khan, 2019 ONCJ 781 where the court wrote at paragraphs 29 to 34:

[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 (2002), 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.

[46] The costs are payable to the mother.

Part Seven – Conclusion

[47] Balancing all of these considerations, a final order shall go on the following terms:

a) The father shall pay the mother’s costs of $10,000 for fees, $196 for disbursements and $1,325 for HST for a total amount of $11,521.

b) The father may pay the costs at the rate of $320 each month, starting on February 1, 2023. However, if he is more than 30 days late in making any child support or costs payment after February 1, 2023, the entire amount of costs then owing shall immediately become due and payable.

Released: January 18, 2023 _____________________ Justice S.B. Sherr