DATE: October 10, 2023 COURT FILE NO. D40528/20 ONTARIO COURT OF JUSTICE

B E T W E E N:

G.P. NILUFA HUSEIN, for the APPLICANT APPLICANT

• and –

R.P. RESPONDENT ACTING IN PERSON

HEARD: In Chambers

JUSTICE S.B. SHERR

COSTS ENDORSEMENT

Part One – Introduction

[1] On September 11, 2023, the court conducted a focused trial regarding whether it should make a restraining order against the respondent pursuant to section 46 of the Family Law Act, or in the alternative, make orders restricting contact and communication between the parties pursuant to section 28 of the Children’s Law Reform Act.

[2] On September 13, 2023, the court released its reasons for decision. The court ordered pursuant to section 28 of the Children’s Law Reform Act that:

a) The respondent shall not communicate with or contact the applicant, except in accordance with any family court order or with her written consent.

b) The respondent shall not attend within 100 metres of the applicant’s home, place of work, place of worship or any other place he may reasonably expect her to be.

c) The respondent shall only communicate with and have contact with the parties’ children in accordance with the parenting time terms set out in a family court order. To be specific, he is not to attend at their schools, meet them in the community or arrange parenting time with them directly unless he obtains a new family court order permitting him to do so.

[3] The court dismissed the applicant’s claim for a restraining order pursuant to section 46 of the Family Law Act.

[4] The parties were given the opportunity to make costs submissions. The applicant made written costs submissions and seeks costs of $15,848. The respondent did not make costs submissions.

Part Two – Legal considerations

2.1 General principles

[5] 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

a) to partially indemnify successful litigants;

b) to encourage settlement;

c) to discourage and sanction inappropriate behaviour by litigants and;

d) 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).

[6] 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.

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

[8] 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.

2.2 Success

[9] 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).

[10] To determine whether a party has been successful, the court should examine who was the successful party, based on the positions taken in the litigation. See: Lazare v. Heitner, 2018 ONSC 4861. This assessment includes the positions taken in the pleadings, and the specific relief sought at the hearing, if different. See: Kyriacou v. Zikos, 2022 ONSC 401. The court may also take into account how the order compares to any settlement offers that were made. See: Lawson v. Lawson, [2008] O.J. No. 1978 (SCJ); Todor v. Todor, 2021 ONSC 3463; G.E. v. J.E., 2023 ONSC 1743; Kyriacou v. Zikos, supra.

2.3 Offers to settle

[11] Subrule 18 (4) sets out that an offer shall be signed personally by the party making it and also by the party’s lawyer, if any.

[12] 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.

[13] 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)) or, in assessing the reasonableness of a party under sub-clause (iii) of subrule 24 (12) (a).

[14] 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 ONSC 4609.

[15] 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.

[16] Close is not good enough to attract the costs consequences of 18 (14). The offer must be as good as or more favourable than the trial result. See: Gurley v. Gurley, 2013 ONCJ 482.

[17] The technical requirements of subrules 18 (4) and 18 (14) must be met to attract the costs consequences in subrule 18 (14). See: Sader v. Kekki, 2014 ONCJ 41; Jakubowski v. Kopacz-Jakubowski; Weber v. Weber, 2020 ONSC 6855; Clancy v. Hansman, 2013 ONCJ 702; Ajiboye v. Ajiboye, 2019 ONCJ 894.

[18] In Mussa v. Iman, 2021 ONCJ 92, this court found that offers in an email not signed by the client and in an unsigned, draft minutes of settlement did not comply with subrule 18 (4) and accordingly were not rule 18 offers – so even subrule 18 (16) did not apply. They could be considered though under paragraph (iii) of subrule 24 (12) (a). Also see: Rogers v. Porga, 2021 ONSC 5442.

2.4 Bad Faith

[19] The applicant is alleging bad faith against the respondent. 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.

[20] 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 ONSC 5982.

[21] 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.) (2007), 38 R.F.L. (6th) 315 (Ont. SCJ).

[22] 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.

2.5 Steps in a case

[23] 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.

[24] 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.

[25] 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.

[26] 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

2.6 Other factors affecting costs orders

[27] 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:

b) each party’s behaviour,

c) the time spent by each party,

d) any written offers to settle including offers that do not meet the requirements of rule 18,

e) any legal fees, including the number of lawyers and their rates,

f) any expert witness fees, including the number of experts and their rates,

g) any other expenses properly paid or payable; and

h) any other relevant matter.

[28] 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.). Difficult financial circumstances are a factor but not are always a reason to deprive a successful party of costs or to reduce the amount of costs. See: Beaulieu v. Diotte, 2020 ONSC 6787. Ability to pay will be less of a mitigating factor when the impecunious party has acted unreasonably, or where their claim was illogical or without merit. See: Gobin v. Gobin, 2009 ONCJ 278; D.D. and F.D. v. H.G., 2020 ONSC 1919.

[29] 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.

[30] Even where the "full recovery" provisions of the Rules are triggered – either by an offer which meets Rule 18(14) requirements, or by a finding of bad faith – quantification of costs still requires an overall sense of reasonableness and fairness. See: Goryn v. Neisner, 2015 ONCJ 318.

[31] 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: MacDonald v. Magel, [2003] O.J. No. 3707; Scipione v Scipione, 2015 ONSC 5982, [2015] O.J. No. 5130 (supra). See: Jackson v. Mayerle, 2016 ONSC 1556.

[32] 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.

Part Three – Offers to settle and success

[33] The applicant made several offers to settle. However, none of those offers met the technical requirements set out in rule 18. Accordingly, the costs consequences set out in subrule 18 (14) do not apply.

[34] In her costs submissions, the applicant included an offer to settle contained in a settlement conference brief. The court did not consider this offer. Subrule 17 (23) is clear that no brief, evidence or statement made at a settlement conference is to be disclosed unless in an agreement reached at a settlement conference or an order. There is no exception for the offers to settle in a settlement conference brief to be disclosed in submissions for costs. See: Entwistle v. MacArthur; Farooq v. Majeed, 2011 ONCJ 827; Wiafe v. Afoakwa-Yeboah, 2021 ONCJ 488; G.H.F. v. M.D.E., 2019 ONCJ 766; M.M. v. K.M., 2023 ONCJ 427.

[35] On January 6, 2023 and on April 3, 2023, the applicant sent unsigned draft orders to the respondent. However, the draft orders submitted were incomplete and missing pages and the offers were non-severable. The court put no weight on these offers.

[36] It appears that another unsigned draft order was sent to the respondent on June 9, 2023. Unlike the previous draft orders this only addressed the issue for trial. The applicant proposed terms of no contact and communication similar to those set out in the court’s decision at trial.

[37] The applicant sent a similar favourable offer to the respondent on June 18, 2023. However, it was only signed by the applicant’s counsel. The applicant was required to sign this offer to attract the costs consequences set out in subrule 18 (14).

[38] The respondent did not make an offer to settle.

[39] At trial, the applicant’s claim for a restraining order was dismissed. However, she was successful in obtaining meaningful no contact and communication orders to protect her.

[40] Overall, the applicant was the successful party at the focused hearing.

[41] The respondent did not rebut the presumption that the applicant is entitled to costs.

Part Four – The amount of costs and court order

[42] This case was important to the parties. It was not complex or difficult.

[43] The applicant claimed in her submissions that the respondent acted in bad faith. However, most of her submissions related to the respondent’s conduct during the case management process. The respondent did not act in bad faith at the focused hearing of the remaining issue between the parties. He was entitled to resist the applicant’s claims and did successfully resist the applicant’s claim for the restraining order. He conducted himself in an appropriate manner at trial. Being unsuccessful does not equate to bad faith. See: Okafor v. Okafor, 2022 ONCJ 290.

[44] The applicant acted reasonably. The respondent should have made an offer to settle.

[45] The applicant’s counsel’s rates of $400 per hour are reasonable for a 1997 call to the bar.

[46] Much of the time claimed by the applicant related to prior steps in the case. The only issue sent for the focused trial was the restraining order/no contact claim. All other issues had been resolved in the case management process.

[47] The case management judge did not reserve the costs of any prior steps to the trial judge.

[48] The trial court is not in a better position than the case management judge to determine costs of prior steps that related to the parenting and support issues.

[49] No exceptional circumstances exist that warrant the trial court ordering costs for prior steps in the case.

[50] If the applicant wishes to seek the costs of these prior steps she will need to address this with the case management judge.

[51] This was a very short and focused hearing. The applicant’s trial affidavit was 5 pages plus exhibits. The time claimed in the applicant’s bill of costs was excessive and disproportionate for this step in the case.

[52] The court finds that the respondent has the ability to pay the costs that will be ordered. He should also have reasonably expected to pay this level of costs if he was unsuccessful.

[53] An order shall go that the respondent shall pay the applicant’s costs fixed at $4,500, inclusive of fees, disbursements and HST. The costs are due and payable in 45 days.

Released: October 10, 2023

Justice Stanley B. Sherr