Court File and Parties

DATE: 2024 02 23 COURT FILE No.: Toronto D 31133/19 ONTARIO COURT OF JUSTICE

BETWEEN:

NUREL HUDA ALUMARI Applicant

– AND –

ALAULDEEN HASAN ALI Respondent

Before Justice Curtis

Written submissions regarding Costs Reasons for Decision released on 23 February 2024

Counsel: Alawi Mohideen, for the Applicant Mother Ashraful Karim, for the Respondent Father

CURTIS, J.

INDEX

Over-view
Background
Litigation History
The Costs Claims
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) Offers to Settle (e) Costs and Legal Aid (f) Quantum of Costs
Order

Over-view

[1] This is a decision regarding costs of a two-day trial heard 9 and 10 July 2023. The trial was conducted as a Rule 1 focused hearing, with affidavits for the evidence-in-chief, and time-limited cross-examinations.

[2] The issues initially for trial were these: (a) Decision-making responsibility; (i) Primary residence; (ii) Travel; (iii) Documents; (b) parenting time; (i) In person; and, (ii) Virtual.

[3] On the first day of the trial, many of these issues (decision-making responsibility, primary residence, travel with the children for the mother and documents, virtual parenting time) were resolved though Minutes of Settlement.

Background

[4] The mother was 34 at the trial (born 1 January 1989). The father was 40 (born 30 August 1982). They were married on 19 July 2007, and separated on 21 February 2018. There are two children of the marriage:

Daniel, born 11 October 2009 (13 years old at trial); and Adam, born 23 October 2013 (9 at trial).

Litigation History

[5] During the court case the father was working as a doctor in the United States. Now, he is working in Iraq as a doctor at a private clinic.

[6] On the eve of trial (in June 2023) the father moved to Iraq to live. The father did not tell the mother of this move (she learned from the children). Adam (then 9 years old) was very distressed about the father’s move, and was crying. Daniel (then 13 years old) appeared to be withdrawing.

[7] At trial the mother’s claims were: (a) No order re parenting time for the father, or, parenting time as arranged by the parents; (b) No order regarding change of the children’s names; and, (c) Father cannot travel with the children without the mother’s consent.

[8] At trial the father made these claims: (a) a schedule for in person parenting time; (b) the children be allowed to travel with the father; and, (c) an order preventing the mother from changing the children’s names.

[9] The father had not claimed a prohibition on the mother changing the children’s names. However, this did not become an issue at trial, as the mother’s evidence was that she had no plans to change the children’s names. The father had also not claimed an order permitting him to travel with the children. Nonetheless, he raised these issues as claims at the trial opening, and said those were his claims. He was permitted to call evidence, cross-examine the mother, and to argue these issues at trial.

[10] In addition, at trial the father wanted to claim a change in child support, due to his recent move and change in jobs. A consent final order was made regarding child support by Paulseth, J. on 21 April 2023. Father was present that day, and was assisted by duty counsel. The order was not appealed. No motion to set aside the order was brought by the father. and no motion to change was brought. The order of 21 April 2023 is a valid, subsisting final order regarding child support. At trial, the father’s request to make claims to change child support was dismissed.

[11] These are the orders made at trial: (a) Reasonable parenting time when the father is in Toronto, on 30 days’ notice (absent emergency); (b) Additional parenting time as the parents can agree; (c) Father’s request regarding travelling outside Canada with the children is dismissed (on the merits, not on the basis that no such claim was made); and, (d) Father’s request regarding restrictions on change of children’s names is dismissed (on the merits, not on the basis that no such claim was made).

The Costs Claims

[12] In written submissions, the mother claimed costs of the trial to be fixed at $11,769.90 on a full recovery basis. The father disputed the mother’s entitlement to costs, and the amount she claimed. The father asked for costs of $13,392 on a full recovery basis.

The Costs Analysis

The Law of Costs

Entitlement

[13] Under the Family Law Rules, O. Reg. 114/99, as amended (“the Rules” or “the rules”), rule 2(2), the court is required to deal with cases justly. This is the primary objective of the Family Law Rules. Parties and their lawyers are required to deal with their cases in ways which promote the primary objective of the Rules (Rule 2(4)). Costs are an important component in any decisions made by parties about continuing with a court case.

[14] The courts have a broad discretion to award costs. The general discretion of the courts regarding costs is contained in the Courts of Justice Act, R.S.O. 1990, c. C. 43, as amended, s. 131(1), which sets out three specific principles: (a) the costs of a case are in the discretion of the court; (b) the court may determine by whom costs shall be paid; and, (c) the court may determine to what extent the costs shall be paid.

[15] Modern costs rules are designed to foster four fundamental purposes: (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.

[16] 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.

[17] Rule 2(2) needs to be read in conjunction with Rule 24. Rule 2(4) of the rules states that counsel have a positive obligation to help the court to promote the primary objective under the Family Law Rules. Rules 2(3)(a) and (b) set out that dealing with a case justly includes ensuring that the procedure is fair to all parties and saving time and expense.

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

[19] 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.

[20] 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.

[21] 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.

Success

[22] The starting point in any costs analysis is the presumption that a successful party is entitled to costs, in Rule 24(1).

[23] Success must be measured not only against the parties’ offers to settle, but also against the claims made by each.

[24] An award of costs, however, is subject to the factors listed in rule 24(11), 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.

[25] The mother was the successful party at trial. She is entitled to costs.

Behaviour of the Parties

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

[27] 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.

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

[29] 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.

[30] 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.

[31] Matrimonial litigation is an occasion for sober consideration and thoughtfulness rather than intemperate behaviour.

[32] 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 i. (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.

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

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

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

[36] 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.

Offers to Settle

[37] 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.

[38] 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.

[39] The mother made an Offer to Settle (dated 11 April 2023). This Offer came closer to replicating the final outcome than the father’s Offer, and even included a schedule for parenting time. It was a reasonable Offer.

[40] The father made an Offer to Settle (dated 7 July 2023, two days before the start of the trial), but it contained terms that were not claimed by him (travel with the children, prohibition on changing the children’s names).

Costs and Legal Aid

[41] 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".

[42] A legally aided client stands before the court in exactly the same position as any other litigant.

[43] The court is not restricted to ordering costs at a legal aid rate.

[44] Although the father did not quantify this amount, he argued that the mother’s costs ought to be restricted to the amount paid by legal aid, as the mother was assisted by legal aid. This is clearly not the law.

Quantum of Costs

[45] 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.

[46] 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.

[47] 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.

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

[49] 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.

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

[51] 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.

[52] Rule 24(12), which sets out factors relevant to setting the amount of costs, specifically emphasizes "reasonableness and proportionality" in any costs award. 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 vii. any other relevant matter. O. Reg. 298/18, s. 14.

[53] 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, particularly as many issues were settled at the beginning of the trial. The father is a doctor, and is an educated, capable and intelligent person. In the four years of this litigation, he was mostly represented by lawyers, and had three lawyers in this case. At trial he attempted to claim (for the first time) and argue two issues which had not been claimed (travel with the children, and prohibiting their names from being changed) and one issue that had been recently settled (child support). He was represented by a lawyer when his Answer in this case was filed, and he should have made the claims then that he was trying to raise at trial, or else, should have sought leave to amend his Answer (in the three years since it was filed). Also the father made a significant and dramatic change in his life and living arrangements very close to the trial (he moved from a very successful career in the U.S. to Iraq, the month before the trial), and did not tell the mother, and did not involve the mother in telling the children about this move. The mother had sole decision-making responsibility, and therefore, had discretion regarding changing the children’s names. The father was represented by a lawyer, and should not have attempted to claim this at trial. That issue had been resolved. The father’s behaviour, on many issues, was not reasonable; (b) the reasonableness and proportionality of the time spent by each party, as it relates to the importance and complexity of the issues: As both lawyers presented summaries of the time spent, the court was able to see that they spent very similar numbers of hours on this case. No objection was raised by either side regarding the time spent by the other side; (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 terms of the mother’s Offer came closer to replicating the final outcome. The father’s Offer, made very late, did not, and included terms that were not claimed; (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 rates claimed by the mother’s lawyer were reasonable, for a lawyer of his experience and specialty; (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 mother claimed disbursements of $74.40, a very modest amount. No objection was made to this claim.

[54] 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.

[55] This case should not have required a trial. And it certainly should not have required a two-day trial.

Order

[56] A fair and reasonable costs order, and one that is proportionate to the issues involved, in all of these circumstances, is an order for the father to pay the mother costs as claimed, fixed at $11,769.90 all inclusive (fees plus HST, disbursements plus HST).

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

Released: 2024 02 23

Justice Carole Curtis