Court File and Parties

Date: March 7, 2024 Court File No.: D42342/22

Ontario Court of Justice

Between:

TRISHAWNA SHIRLEY Applicant

And:

CRAIG WELLINGTON Respondent

Counsel: Efua Cobbina and Natasha Love, for the Applicant Acting in Person, for the Respondent

Heard: March 5, 2024

Justice S.B. Sherr

Costs Endorsement

Part One – Introduction

[1] On March 5, 2024, the court delivered oral reasons regarding the applicant’s (the mother’s) motion for temporary decision-making responsibility and child support for the parties’ 4-year-old child (the child).

[2] The mother was the successful party on the motion. She sought her full recovery costs of $5,763. The respondent (the father) opposed this.

[3] The mother submitted that the costs consequences set out in subrule 18(14) of the Family Law Rules (all references to rules in this decision are to the Family Law Rules) apply to two offers to settle she made. This raised two issues for the court to consider about these offers:

1. Should an offer to settle that requires acceptance of its terms on a final basis attract the costs consequences set out in subrule 18(14) when determining costs on a temporary motion?
2. Should the court apply the costs consequences set out in subrule 18(14) when the offer to settle is served on an unrepresented litigant the day before the motion is heard?

Part Two – General Legal Considerations

[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).

[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.

Part Three – Success

[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] The mother was the successful party on the motion. The father did not rebut the presumption that she is entitled to costs.

Part Four – Subrule 18(14)

[9] 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.

[10] The onus of proving that the offer is as or more favourable than the motion result is on the person making the offer. See: Neilipovitz v. Neilipovitz [2014] O.J. No. 3842 (SCJ).

[11] 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.

[12] Even if the costs consequences set out in subrule 18(14) are not applied, 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).

Part Five – The Mother’s First Offer to Settle

[13] The mother made a severable offer to settle dated December 11, 2023. She submits that it attracts the costs consequences set out in subrule 18(14) as it met the pre-conditions set out in the subrule.

[14] The court disagrees. This was an offer to settle that required acceptance of its terms on a final, not a temporary basis. The offer extended beyond the scope of this motion. Issues decided on a temporary basis are always subject to being changed, either on a subsequent motion, or after a trial. The offer did not address the issues before the court on a temporary basis. It was not more favourable to the father than the motion result.

[15] The court recently addressed this issue in Swaby v. Foreshaw, 2024 ONCJ 111, writing at paragraph 15:

The mother’s offer to settle did not attract the costs consequences set out in subrule 18(14). It contained terms that extended beyond the scope of this motion and required acceptance of its terms on a final basis. The mother should have made an offer to settle the discrete issue on this motion.

Part Six – The Mother’s Second Offer to Settle

[16] The mother made a second severable offer to settle dated March 4, 2024.

[17] The mother served the offer to settle the day before the hearing of the motion.

[18] This offer to settle specifically addressed the subject matter of this motion. All aspects of the offer to settle were as favourable or more favourable to the father than the motion result.

[19] Subrule 18(14) provides that the offer to settle must be served at least one day before the motion date. This was done.

[20] Even if all the preconditions set out in subrule 18(14) are met the court has the discretion not to apply the costs consequences set out – to order otherwise.

[21] If this offer had been served in a more timely manner it would not have hesitated to apply the costs consequences set out in subrule 18(14).

[22] This court has previously addressed offers to settle served one day before a motion.

[23] In E.H. v. O.K., 2018 ONCJ 578 both parties were represented by counsel. An offer to settle met all the pre-conditions set out in subrule 18(14). However, it was served the day before the hearing of the motion. The court exercised its discretion and did not apply the costs consequences set out in subrule 18(14). It ordered otherwise. The court wrote at paragraphs 26 to 28:

[26] Parties require a reasonable period of time to process and make an informed decision about whether to accept an offer. See: Oduwole v. Moses, 2016 ONCJ 653. What constitutes a reasonable period of time will depend on the complexity of the case.

[27] These were complex motions. The mother’s offer to settle should have been served much earlier (closer to the 7 day time requirement for a trial) – particularly since the hearing of the motions had been scheduled in January, 2018.

[28] Rule 2 (dealing with cases justly) applies when a court is determining whether to “order otherwise” with respect to a subrule 18(14) offer. Making an offer to settle that is only open for one day before a complex motion is to be heard may have some value for parties as a litigation tactic, but will have little probative value for this court when determining whether to apply subrule 18(14). The court finds that it would not be just for it to fully apply the costs consequences of subrule 18(14) in these circumstances.

[24] In Abrahiumkhill v. Khaled, 2022 ONCJ 324 the court found it is even more important, if asking to apply the costs consequences set out in subrule 18(14) against an unrepresented party, to serve the offer to settle in a timely manner. The court wrote at paragraphs 20 and 21:

[20] In determining what constitutes a reasonable period of time, counsel should also expect that courts will require offers upon self-represented litigants to be served earlier than the minimum times set out in subrule 18(14). Rule 2 provides that courts have an obligation to ensure that self-represented litigants are dealt with justly. [1] Counsel are also required to help the court promote this objective. See: subrule 2(4). Dealing with a case justly includes ensuring that the procedure is fair to all parties. See: clause 2(3)(a).

[21] Making an offer to settle to a self-represented litigant that permits only one day for acceptance before costs activate may have some value as a litigation tactic, but it has little probative value for this court when determining whether to apply subrule 18(14). The respondent was not given sufficient time to consider the offer or to obtain advice. The offer did not meet the primary objective to deal with cases justly set out in rule 2.

[25] Here, service of the offer to settle on the father one day before the motion was not reasonable for the following reasons:

a) The father is unrepresented. b) The father should have been given more time to process this offer and make an informed decision. c) This motion date was set on January 8, 2024. The offer should have been served much earlier.

[26] The court will not apply the costs consequences set out in subrule 18(14). It would not be just within the meaning of rule 2 to do so in these circumstances. The court orders otherwise.

Part Seven – Takeaways

[27] Parties hoping to make successful subrule 18(14) costs claims on temporary motions should take away the following from this decision:

a) When making an offer to settle a temporary motion, make a discreet and severable offer to settle the temporary issues before the court. This does not mean that a comprehensive offer to settle the case isn’t important. It just means that it is unlikely to attract the costs consequences set out in subrule 18(14) on the temporary motion. b) The court has discretion to apply the costs consequences set out in subrule 18(14) if the offer to settle is made the day before the hearing of a motion. However, waiting that long to serve the offer is not advisable. The offer should be served as soon as possible after the motion date is set – particularly if the other party is unrepresented. Doing this will make it far more likely that the costs consequences set out in subrule 18(14) will be applied if the preconditions in the subrule are met. It will also mean that more time spent on the motion will be eligible for full recovery costs.

Part Eight – Amount of Costs

8.1 Legal Considerations

[28] 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.

[29] Poor litigation decisions and advancing unreasonable claims or filing meritless and incomplete pleadings may also justify an elevated costs award. See: Hughes v. Hughes, 2024 ONSC 1119; Ali Hassan v Abdullah, 2023 ONCJ 186, at para 61; Beaver v Hill (ONSC), at para 51.

[30] 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.

[31] 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.

[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.

8.2 Analysis

[33] This motion was important to the parties. It was not complex or difficult.

[34] The father was previously represented by counsel. His counsel sent an offer to settle the case on a final basis on September 1, 2023. This offer did not address the issues on the temporary motion. However, it was a reasonable effort to settle the entire case.

[35] The mother acted reasonably.

[36] The father took unreasonable positions on this motion. He provided evidence of significant conflict, mistrust and poor communication between the parties. He has not exercised parenting time since November 2023. He still sought temporary joint decision-making responsibility for the child. This was an unrealistic position.

[37] The father also asked the court to order less than the Child Support Guidelines table amount of support for the child. There was no legal basis to do so.

[38] It is important to send the message to the father that litigation is expensive. If he takes unreasonable positions he will have to bear the cost.

[39] The time claimed by the mother’s counsel for this motion was reasonable.

[40] The rate of $450 each hour claimed by the mother’s counsel is reasonable for a 2009 Call to the Bar. The rate claimed for her law clerk ($225 each hour) was high. See: Ahluwalia v. Ahluwalia, 2022 ONSC 2169, where the court stated that $125 per hour was an appropriate rate for a senior law clerk.

[41] The court finds the father should have reasonably expected to pay the costs that will be ordered if he was unsuccessful on the motion.

[42] The court further finds the father has the ability to pay the costs that will be ordered, if he is permitted to pay them over a reasonable time frame. His annual income is approximately $67,000.

[43] The court will order the father to pay the mother’s costs fixed at $4,400.

[44] The father may pay the costs at $250 each month, starting on April 1, 2024.

Part Nine – The Order

[45] An order shall go as follows:

a) The father shall pay the mother’s costs of the motion in the amount of $4,400, inclusive of fees, disbursements and HST. b) The father may pay the costs at $250 each month, starting on April 1, 2024.

Released: March 7, 2024

Justice S.B. Sherr

[1] Also see: Pintea v. Johns, 2017 SCC 23.