Court File and Parties

Date: June 5, 2024 Court File No.: D43904/23 Ontario Court of Justice

B E T W E E N:

F.S. APPLICANT

- and –

N.J. and T.S. RESPONDENTS

Counsel: Tara J. Engel, for the Applicant Glenda Perry, for the Respondent, N.J. The Respondent, T.S. in default

Heard: In Chambers

Justice S.B. Sherr

Costs Endorsement

Introduction

[1] On April 22, 2024, the court released its reasons for decision after a three-day trial. The court dismissed the applicant’s (the paternal grandmother’s) claim for contact with her 6-year-old granddaughter (the child) and dismissed the respondent N.J.’s (the mother’s) claim for a restraining order against the paternal grandmother. The respondent T.S. (the father) is in jail and did not participate in the trial.

[2] The court gave the paternal grandmother and the mother the opportunity to make written costs submissions. Both made submissions. The paternal grandmother also filed responding submissions to the mother’s costs submissions.

[3] The paternal grandmother and the mother both seek costs against each other. The paternal grandmother seeks costs of $9,627. The mother seeks costs in excess of $70,000.

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) of the Family Law Rules (all references to the rules in this decision are to the Family Law Rules).

[5] 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.

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

[7] 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.

Subrule 18 (14)

[8] The paternal grandmother made a non-severable offer to settle dated February 26, 2024. She proposed having contact with the child once each month at Access and Parents for Children in Ontario (APCO). She also proposed not having any communication with the mother except through APCO and not to come within 100 meters of her.

[9] The mother made a severable offer to settle dated March 20, 2024. It reflected her position at trial. She proposed that the paternal grandmother have no contact with the child. She also proposed that the paternal grandmother agree to a restraining order regarding her and the child. The offer provided that the paternal grandmother could accept one or both of these terms. The offer also set out that if the paternal grandmother accepted both terms by March 28, 2024, there would be no order for costs. If she accepted the offer in part, or accepted it in full after March 28, 2024, costs would be determined by the court.

[10] 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.

[11] 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).

[12] 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 ONSC 4509.

[13] 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.

[14] The rebuttable presumption in subrule 18 (14) also confers discretion on the court to “order otherwise” even where that subrule is presumptively engaged. See: Snelgrove v. Kelly, 2017 ONSC 4625. The court may consider it appropriate to order otherwise for a variety of reasons. One reason may be when, for example, the unsuccessful party has also served an offer to settle which proposes a settlement that is very close to the outcome at trial, albeit perhaps less so than the offer made by the successful party. See: Sabeeh v. Syed, 2018 ONCJ 580, per: Justice Robert Spence.

[15] The paternal grandmother’s offer did not attract the consequences of subrule 18 (14). Although she made a reasonable proposal to limit her communication and contact with the mother, she tied that proposal to the court making a contact order. The court finds that the paternal grandmother did not obtain an order at trial that was as favourable or more favourable to her than her offer.

[16] The court dismissed the paternal grandmother’s application for contact. This was as favourable a result to the mother as the severable term in her offer that the paternal grandmother have no contact with the child. Presumptively, the costs consequences set out in subrule 18 (14) apply to the contact issue.

[17] However, the court finds this is an appropriate case to order otherwise – to not apply the costs consequences set out in subrule 18 (14). In Beaver v. Hill, 2018 ONCA 840, the court wrote at paragraph 16, that the failure of an offer to settle to contain a true element of compromise is a factor to be considered in deciding whether the offer properly impacts on the appropriate award of costs.

[18] If the mother’s offer had proposed no costs order if the paternal grandmother agreed to the dismissal of her application for contact, the mother could have argued there was an element of compromise. However, she tied the costs incentive to a restraining order being made against the paternal grandmother. This order was not made. The mother’s offer regarding contact contained no element of compromise. Her offer mirrored her Answer/Claim and her position at trial.

[19] Although the paternal grandmother’s offer did not attract the costs consequences set out in subrule 18 (14), it was a reasonable attempt to settle the case. Her contact proposal was much more modest than the position she took at trial, where she sought contact twice each month, including a weekend visit. She also made a very reasonable proposal regarding contact and communication with the mother.

[20] The court also took into account the paternal grandmother’s modest financial circumstances in making the determination to “order otherwise”. See: MacDonald v. Magel, 67 O.R. (3d) 181 (Ont. C.A.). She is on public disability benefits. She lives in subsidized housing. She relies on food banks.

Success

[21] 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).

[22] 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.

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

[24] 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.

[25] 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 5090; Mondino v. Mondino, 2014 ONSC 1102.

[26] The contact issue was the dominant issue in this case. The mother was the successful party on that issue. The paternal grandmother did not rebut the presumption that the mother is entitled to her costs. The court took into consideration the paternal grandmother’s offer in assessing the extent of the mother’s success and the amount of costs that will be ordered.

[27] The mother’s request for a restraining order issue was a secondary issue. The paternal grandmother was the successful party on that issue. Her success on that issue will reduce the costs she has to pay to the mother.

Amount of Costs

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.

[28] Being unsuccessful does not equate necessarily to being unreasonable. See: Wauthier v. McAuliff, 2019 ONSC 5302; W.H.C. v. W.C.M.C., 2021 ONCJ 363.

[29] 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; Durbin v. Medina, 2012 ONSC 640; Scipione v. Del Sordo, 2015 ONSC 5982; Zhang v. Guo, 2019 ONSC 5767; Laidman v. Pasalic and Laidman, 2020 ONSC 7068.

[30] 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.

[31] 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.

[32] In Laidman v. Pasalic and Laidman, supra, 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.

[33] 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

[34] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel, supra. A party’s limited financial circumstances will not be used as a shield against any liability for costs but will be taken into account regarding the quantum of costs, particularly when they have acted unreasonably and are the author of their own misfortune. See: Snih v. Snih pars. 7-13.

[35] 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.

[36] 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.

Analysis and Order

[37] The issues in this case were important to the parties. There was some complexity and difficulty to the case. In particular, the mother’s counsel conducted multiple searches of family and criminal court records to obtain probative evidence. She obtained business records to successfully challenge the paternal grandmother’s credibility. There was some complexity to the legal issues.

[38] The mother acted reasonably, although maintaining her claim for a restraining order at trial was an overreach.

[39] The paternal grandmother acted reasonably by making her offer to settle. The court emphasizes that it does not fault her for pursuing her contact claim to trial. Her offer to settle demonstrated a sincere effort to compromise and settle the case.

[40] The legal rates claimed by both counsel were reasonable.

[41] The paternal grandmother’s counsel spent 55 hours for the trial step. The mother’s counsel spent about 79 hours for this step. The court recognizes that the mother had to conduct additional searches to obtain important evidence.

[42] The mother is also claiming costs for 41 hours her counsel spent on prior steps in the case. The court will consider costs for the two trial management conferences conducted by Justice Carole Curtis. Costs are not ordinarily ordered at a trial management conference, as the trial judge will be in a better position to assess success. That is the case here.

[43] The mother included costs for two case conferences before Justice Curtis. Justice Curtis did not order or reserve costs at these appearances. She was in a better position than the trial court to assess costs for these steps. There are no exceptional circumstances. The court will not order costs for these steps.

[44] This does not preclude the court from awarding costs accrued from activity not specifically related to any step. Activity not requiring judicial intervention is often better dealt with at the end of the case and not by the case management judge. See: Houston v. Houston, 2012 ONSC 233; Walts v. Walts, 2014 ONSC 98; F.S. v. M.B.T., 2023 ONCJ 144. This includes initial interviews, meetings and settlement discussions before filing the application, the application document itself, financial statements (not prepared for motions or conferences), document preparation and review and settlement meetings relating to issues for trial. The mother is entitled to have these costs considered now. See: Czirjak v. Iskandar, 2010 ONSC 3778; I.O. v. I.G., 2024 ONCJ 3.

[45] The disbursements claimed by the mother are reasonable.

[46] The court considered the paternal grandmother’s financial circumstances. The court will address this factor by reducing the amount of the costs award and permitting the paternal grandmother to make payments she can afford.

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

The Order

[48] An order shall go as follows:

a) The paternal grandmother shall pay the mother’s costs in the amount of $12,000, inclusive of fees, disbursements and HST. b) The paternal grandmother may pay these costs at the rate of $100 each month, starting on July 1, 2024. However, if she is more than 30 days late in making any payment, the entire amount then owing shall immediately become due and payable. c) The father’s costs claim is dismissed.

Released: June 5, 2024

Justice Stanley B. Sherr