Court File and Parties

COURT FILE NO.: FC-20-00000081-0000 DATE: 2023/03/13 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Nemanja Grujicic and Georgina Grujicic, Applicants AND: Brittney Trovao, Respondent

BEFORE: Justice L. Madsen

COUNSEL: Applicants are Self-Represented Anna Towlson, Counsel for the Respondent

HEARD: November 21 – 25, 28 – 30 and December 1, 2 and 6, 2022

COSTS ENDORSEMENT

[1] On December 23, 2022, I released my decision in the trial of this parenting and grandparent contact case and invited costs submissions from the parties.

[2] I have received costs submissions of the Respondent, Brittney Trovao (“Brittney”) and of one of two Applicants, Georgina Grujicic (“Georgina”). I did not receive submissions from Nemanja Grujicic (“Nem”), the co-Applicant.

[3] Brittney was successful at trial. She seeks costs in the amount of $90,798.20 as against Georgina, whom I found to have been the driving force in the litigation. She does not seek costs against Nem. Georgina seeks an order that there be no costs.

[4] For the reasons set out below, I order that Georgina pay costs of $50,000.00, inclusive of HST and disbursements. At Georgina’s option, the Costs Order may be paid in installments of no less than $1,000 per month commencing May 1, 2023. However, any portion of the total amount not paid by April 30, 2023 shall attract post-judgment interest which shall start to accrue on May 1, 2023. The amount shall be paid to Brittney’s counsel.

Applicable Legal Principles

[5] The determination of costs is governed by s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as am., and r. 24 of the Family Law Rules, O. Reg. 114/99, as am. (the “Family Law Rules” or the “Rules”). Rule 24 must be interpreted in the context of the Rules more generally, in particular r. 2. Rule 2 provides that the primary objective of the Rules is to deal with cases justly.

[6] Courts have held that modern Ontario costs rules have four fundamental purposes: to partially indemnify the successful litigant; to encourage settlement; to discourage and sanction inappropriate behaviour by litigants; and, to ensure that cases are dealt with justly: see Serra v. Serra, 2009 ONCA 395; Mattina v. Mattina, 2018 ONCA 867.

[7] Reasonableness and proportionality are the touchstone considerations in fixing the amount of costs in family law matters: see Beaver v. Hill, 2018 ONCA 840.

[8] The objective of any costs determination is to determine an amount that is fair and reasonable for the unsuccessful party to pay: see Boucher v. Public Accountants Council (Ontario), 71 O.R. (3d) 291; Selznick v. Selznick, 2013 ONCA 35, at para. 3; Jackson v. Mayerle, 2016 ONSC 1556, at para. 18.

Rule 24(1) and Rule 18(14), “Success”

[9] Under r. 24(1) of the Family Law Rules, the successful party is presumptively entitled to costs. This presumption is the starting point of the analysis: see Sims-Howarth v. Bilcliffe, 6 R.F.L. (5th) 430, at para. 2.

[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 e.g. 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, at para. 6, citing Johnstone v. Locke, 2012 ONSC 1717, at para. 12.

[11] The assessment of who is “successful” also requires consideration of r. 18. Rule 18 sets out cost consequences where a party fails to accept an offer which the other party then meets or exceeds at trial. In that case, the successful party is entitled to costs until the offer was served, and “full recovery” of costs from that date: see r. 18(14).

[12] The costs consequences are not automatic, but are, rather, a rebuttable presumption that does not displace judicial discretion to determine whether the cost consequences are appropriate: see Arthur v. Arthur, 2019 ONSC 938, at para. 21.

[13] The onus of proving that the offer is as or more favourable than the trial result is on the person making the offer: see r. 18(15); Delulio v. Persi, 2019 ONSC 6975, at para. 16, citing Neilipovitz v. Neilipovitz, 2014 ONSC 4849.

[14] 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, 72 R.F.L. (7th) 362, at para. 25.

[15] Having said that, close is not good enough to attract the costs consequences of r. 18(14). The offer must be as good or more favourable than the trial result: see Thomas v. Saunchez, 2022 ONCJ 532, at para. 9, citing Gurley v. Gurley, 2013 ONCJ 482. Even if the offer does not attract the costs consequences set out in subrule 18 (14), it may be considered under subrule 18(16): see Chakravarty v. Tharani, 2019 ONCJ 520, at para. 10.

“Full recovery”

[16] The term “full recovery” refers to the full amount which the party has claimed, subject to any adjustments that the court considers appropriate based on the reasonableness and proportionality of the costs claimed. In other words, it means the total reasonable and proportional amount that a court determines the party should have spent in dealing with the case: see Jackson v. Mayerle, 2016 ONSC 1556, at para. 91. It is ultimately a matter of the court’s discretion to determine whether full recovery is appropriate having regard for the particular circumstances of the case: see Arthur v. Arthur, 2019 ONSC 938, at para. 40.

Deciding Costs at Each Step

[17] Rule 24(10) provides that costs are to be determined promptly after each step in the case, or expressly reserved for determination at a later stage in the case. However, r. 24(11) provides that the failure of the court to act under subrule 10 in relation to a step in the case does not prevent the court from awarding costs at a later stage.

[18] Nevertheless, courts remain cautious about awarding costs at trial where not awarded at earlier stages: see Baezner v. Brunnenmeir, 2018 ONCJ 956; Nabwangu v. Williams, 2019 ONCJ 171. See also Saunders v. Vargas, 2018 ONCJ 4531; Cameron v. Cameron, 2018 ONSC 6823; Lewis v. Silva, 2019 ONCJ 795.

[19] In Cameron v. Cameron, 2018 ONSC 6823, Kurz J. held that there is a rebuttable presumption against ordering costs for steps not addressed or expressly reserved by the judge hearing the step: at paras. 83-88. There is an onus on a party seeking costs of prior steps to provide a detailed summary of each prior step and explain why he or she should now be granted costs of that step: Cameron v. Cameron, 2018 ONSC 6823, at para. 87.

[20] As Pazaratz J. explained in Laidman v. Pasalic and Laidman, 2020 ONSC 7068, at para. 14:

The presumption remains that costs should be determined at each stage, for good reason. 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.

[21] In Berge v. Soerensen, 2020 ONCJ 265, at para. 40, following Cameron, Zisman J. 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.

Rule 24(8), Bad Faith

[22] Rule 24(8) provides that if a party has acted in bad faith, the court shall decide costs on a full recovery basis and order the party to pay them immediately.

[23] The meaning of bad faith has been explored and developed in a number of important decisions drawing on an extensive body of caselaw: see e.g., S.(C.) v. S.(M.), 38 R.F.L. (6th) 315; Scipione v. Del Sordo, 2015 ONSC 5982, 68 R.F.L. (7th) 66; Jackson v. Mayerle, 2016 ONSC 1556. Several principles have been articulated, including the following:

a. Bad faith requires a “fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made”: Jackson v. Mayerle, 2016 ONSC 1556, at para. 56; Scipione v. Del Sordo, 2015 ONSC 5982, at para. 99. b. 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 v. Del Sordo, 2015 ONSC 5982, at para. 96. c. 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. d. To establish bad faith the court must find some element of malice or intent to harm: see Harrison v. Harrison, 2015 ONSC 2002, at para. 9. e. In order to constitute bad faith, behaviour must be “shown to be carried out with the intent to inflict financial or emotional harm on the other party or other persons affected by the behaviour, to conceal information relevant to the issues, or to deceive the other party or the court”: S.(C.) v. S.(M.)., at para. 17. See also Harrison v. Harrison, 2015 ONSC 2002, at para. 8. f. Even where the "full recovery" provisions of the Rules are triggered such as 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, at paras. 42-47.

Rule 24(12), Setting Costs Amounts

[24] Rule 24(12) provides that in setting the amount of costs, the court shall consider:

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.

[25] It is under r. 24(12) that an unsuccessful party’s unreasonable behaviour is considered. Rule 24(5) provides that in assessing unreasonable behaviour, the court shall examine the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle; the reasonableness of any offer the party made; and any offer the party withdrew or failed to accept.

[26] The reasonable expectations of the unsuccessful party can assist in determining an amount that is fair and reasonable in the circumstances of the case. A comparison of the costs incurred by each party can assist in what is within the reasonable expectation of the unsuccessful party: see M. (C.M.) v. C.(D.G.), 2015 ONSC 3582, at paras. 48-49. See also Delellis v. Delellis, at para. 9.

[27] Ability to pay is a relevant consideration under r. 24(12). The financial situation of the parties can be taken into account in setting the amount of costs: see MacDonald v. Magel, 67 O.R. (3d) 181 (C.A.), at para. 42. Ability to pay goes not to liability for costs but to quantum: see L.C.M. v. C.A.V., 49 R.F.L. (5th) 439, at para. 6.

[28] However, “inability to pay costs, or impecuniosity, is not a shield from liability; it cannot be used to excuse a party’s litigation conduct”: Vantriet v. Ogutu, 2020 ONSC 50, at para. 22. Ability to pay alone cannot and should not override other factors in r. 24(12): see Peers v. Poupore, 2008 ONCJ 615, at para. 42.

[29] Ability to pay is 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.

[30] Although not specified in r. 24(11) as factors in determining costs, the financial means of the parties, the ability to pay a costs order and the effect of any costs ruling on the parties and the children of the family are also relevant considerations in reaching a determination on the issue of costs: see Fyfe v. Jouppien, 2012 ONSC 97, at para. 11.

[31] Impecuniosity does not grant a litigant the right to unrestricted access to the courts. Such access has to be exercised responsibly and reasonably: see G.S.W. v. C.S., 2018 ONCJ 378.

[32] The case law is well settled that the receipt of legal aid is not a factor in determining costs: see Ramcharitar v. Ramcharitar, 62 O.R. (3d) 107 (S.C.); Alvarez v. Smith, 53 R.F.L. (6th) 53; Loncar v. Pendlebury, 2015 ONSC 4673; Graham v. Sherman, 2015 ONSC 1882.

[33] Pursuant to subsection 46(1) of the Legal Aid Services Act, 1998, S.O. 1998, C.26, "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" (emphasis added). A legally aided client "stands before the court in exactly the same position as any other litigant": Baksh v. Baksh, 2017 ONSC 3997, at para. 18.

Application

[34] In applying the legal principles to the facts of this case, I make the following determinations:

Success

[35] Brittney is the successful party in this trial and in the case, having regard to her position in the litigation as set out in her pleadings and her orders sought at the commencement of trial. The court ordered parenting time for Nem and Georgina largely as sought by Brittney in her draft order submitted at the commencement of the trial.

[36] I am also prepared to find that Brittney met the terms of her Rule 18 Offer to Settle. Although parenting time and grandparent contact was structured differently in the Offer than in my Order, what was ordered was, in terms of quantity of time, essentially the same, taking a global view. This means, subject to the application of other principles affecting the costs determination, that Brittney is entitled to “full recovery” from the time the Offer was served, namely, December 1, 2021.

Costs of Each Step

[37] The costs sought appear to reflect fees billed from March 2020 to the tendering of costs submissions in January 2023. Numerous steps were taken throughout the proceeding. As can be seen below, costs were reserved to the trial judge on only one occasion:

a. Case Conference before Justice Gordon, December 2, 2020: costs neither ordered nor reserved; b. Motion before Justice Piccoli, converted to Settlement Conference and motion adjourned, March 4, 2021: costs reserved to the trial judge; Time in court set at 1 hour and 50 minutes; c. Settlement Conference before Justice Piccoli, August 9, 2021: costs reserved to the motions judge (Justice Braid, see below; she did not order costs); d. In Chambers Motion before Justice Breithaupt Smith, October 28, 2021: with order that there be no costs on the motion; e. Long Motion before Justice Braid, January 17, 2022: costs neither ordered nor reserved (costs of August 9, 2021 had been reserved to this date); f. Trial Management Conference before Justice Piccoli, March 18, 2022, adjourned: costs neither ordered nor reserved.

[38] Brittney’s submissions appear to assume that all time incurred since March 2020 should be recoverable upon her success at trial, and do not consider the fact that on most appearances, costs were not reserved. Nor do the submissions account for the occasion on which it was explicitly ordered that there be no costs. As seen above, the onus is on the party seeking such costs to provide an explanation and analysis. No such explanation was provided in the submissions.

[39] While fees incurred not directly in relation to the appearances listed above may potentially be recoverable (such as for letters, email correspondence, meeting with Brittney and the like), the amounts billed have not been parsed out such that the court can readily ascertain the services for which various amounts have been incurred. It is not the court’s role to wade through the dockets or invoices to piece together how much time was spent on each task and whether those tasks have been accounted for at previous steps where costs were or were not reserved. This analysis, if such costs were being claimed, should have been provided to the court as part of the submissions.

[40] The supporting documents submitted are somewhat challenging to follow. There are two “civil accounts”, submitted to Legal Aid Ontario, which set out block amounts of time spent but which do not itemize time; and two detailed invoices, which cover lawyer time from August 8, 2021, producing some overlap. However, I conclude that the total lawyer hours worked of 204.60 fairly reflects the time spent.

[41] In my view, in this case, in light of the listing of appearances in paragraph 37, above, and considering the treatment of costs of each step, costs are appropriately assessed from the day after the trial management conference before Justice Piccoli on March 18, 2022, in addition to the costs explicitly reserved by Justice Piccoli on March 4, 2021 (which she set at 1 hour and 50 minutes).

[42] By my count, it appears that after March 18, 2022, 10.7 hours reflected on the invoice dated August 5, 2022 is appropriately included, in addition to the 130.4 hours of counsel time reflected on the invoice dated January 13, 2023, for a total of 141.1 hours. Adding the 1.8 hours reserved by Justice Piccoli results in a total of 142.9 hours of counsel time which I am prepared to consider.

[43] Law clerk time worked of 17.55 hours has been claimed. The invoices are a bit difficult to follow, but I am prepared to attribute 30% of that to the period after the trial management conference, being 5.27 hours.

Bad Faith

[44] Brittney’s counsel argues that I should find that Georgina’s conduct was in bad faith.

[45] While I have great difficulty with Georgina’s conduct both in the case and in the trial, and find that her positions were not reasonable, I am not prepared to find that this amounts to bad faith within the meaning of the caselaw set out above. In the trial decision, I found that Georgina did not lie or deliberately mislead the court. I found that her perspectives, while misguided, were honestly held.

[46] Georgina’s unreasonable conduct is addressed below under r. 24(12).

Setting amounts under Rule 24(12)

[47] I make the following findings under r. 24(12):

a. While important to all parties, this case was not legally complex. b. Brittney’s conduct throughout the case was reasonable. c. This trial could have been avoided had Georgina taken a reasonable position and had she approached Brittney with respect to requesting time with the child. Instead, Georgina approached Brittney with disrespect and conflictual behaviour at each turn. Her overly generous view of her own “expertise” toxified her approach to Brittney notwithstanding voluminous evidence that Brittney is a good mother, parenting the child lovingly and capably. d. The time spent by Brittney’s counsel in this matter was very reasonable. Counsel’s hourly rate of $375, having been called to the bar in 2002, is also reasonable. e. The parties exchanged Rule 18 Offers to Settle. Brittney met the terms of her Offer. Had that offer made in December 2021 been accepted, this family would have been spared the trial which was taxing and stressful for all, and implicated virtually all of Georgina’s family (Nem, and both of Nem’s brothers). f. Georgina’s offer was reasonable in the sense that it reflected the child continuing to reside with Brittney (not the position taken at trial), and, although it was overreaching in terms of parenting time and grandparent contact, it is still a positive that the offer was served. g. I find that the legal fees and expenses (adjusted as set out above) are reasonable in all of the circumstances. h. While Georgina asserts that she cannot afford to have any amount of costs ordered against her, the court does not have direct evidence of her financial circumstances. However, she attached her CV to her cost submissions, which indicates that she is a college and high school teacher in Waterloo Region, presently employed by both the Waterloo Regional District School Board as well as Conestoga College. During the trial, she indicated that she owns at least one property. The court does not have evidence that Georgina is “impecunious”. i. Even if Georgina were impecunious, the extent of her unreasonable conduct in the case is such that it must be sanctioned through a costs award. There is an obligation to exercise one’s access to the courts in a reasonable and responsible manner: see G.S.W. v. C.S., 2018 ONCJ 378, at para. 49. j. I do note the evidence that Nem resides with Georgina and his source of income is ODSP. While he is 31 years of age, he lives with intellectual challenges and currently relies on accommodation provided by Georgina. I would be concerned were this cost order to compromise Georgina’s housing. I address this in the structure of the cost order set out below. k. Finally, Georgina seems to suggest that because Brittney was legally aided there should be no costs award, and notes that any costs award wouldn’t help Brittney or the child “in any way.” A party is not free to litigate with impunity when the other party is legally aided and must nevertheless take reasonable positions. Further, the law is clear that in calculating the award, regard is had to the lawyer’s actual hourly rate not the legal aid rate.

A note about costs and Nem’s case

[48] In her cost submissions, Brittney did not seek costs against Nem, only against Georgina. In her responding submissions, Georgina did not suggest this should be otherwise.

[49] In this decision, I order costs only against Georgina on the basis, as found in the trial decision, that she drove the litigation and that it was she, not Nem, who behaved unreasonably. Indeed, had Georgina not started this case, naming Nem as co-Applicant for her own purposes, Nem and Brittney would almost certainly have worked out parenting arrangements on their own.

Conclusion regarding Quantum

[50] In all of the circumstances, I find that the appropriate amount of costs payable is $50,000.00, inclusive of HST and disbursements.

[51] This amount rests on the following calculation: 142.9 hours of counsel time at a rate of $375/hour, for a total of $60,553.88 inclusive of HST, law clerk fees of $595.51 inclusive of HST (5.27 hours @ $100 per hour plus HST), and disbursements from March 18, 2022 forward estimated at approximately $74.00, based on invoices produced, for a total of $61,223.39.

[52] As seen above, full recovery is not “automatic” and discretionary considerations of reasonableness and proportionality continue to apply. The amount I am ordering accounts for factors including the following: Brittney’s success at trial in relation to her pleadings, her position taken at trial, and her Offer to Settle; Georgina’s unreasonable behaviour in the case; my finding that while unreasonable, Georgina did not act in bad faith; the reasonableness of the overall legal fees given that this was an 11-day trial; Georgina’s assertion that she cannot afford a cost order against her, coupled with the reality that Georgina houses Nem, and my concern not to affect her ability to continue to do so.

[53] I have kept at the forefront the overriding principles of reasonableness, fairness, and proportionality. I have applied my discretion to arrive at a determination that I view as just within the meaning of r. 2.

[54] Post-judgment interest shall accrue to any unpaid portion of the $50,000.00 owing as at May 1, 2023. If not paid in full by April 30, 2023, this costs amount may be paid at a rate of no less than $1,000 per month on the first of each consecutive month until paid in full. I permit this to address Georgina’s concern about ability to pay and to recognize that she is presently housing Nem. The payments shall be made to Brittney’s counsel, Anna Towlson.

L. Madsen J. Date: March 13, 2023