Court File and Parties

COURT FILE NO.: FC-365-21 DATE: 2024/05/14 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Katherine Churchill, Applicant AND: Christopher David Elliot, Respondent Sandra Ward, Respondent, Noted in Default

BEFORE: The Honourable Mr. Justice A. Pazaratz

COUNSEL: Brent Balmer, Counsel for the Applicant Jonathan Krashinsky, Counsel for the Respondent

HEARD: March 27, 2024

Costs Endorsement

[1] I have reviewed written costs submissions flowing from my motion endorsement of April 2, 2024.

[2] A quick recap:

a. More than 500 pages of motion materials were filed on the issue of whether parenting arrangements regarding an 11-year-old child should be changed on an interim basis, three months prior to a scheduled 10-day trial.

b. The Applicant mother argued that an earlier status quo should be reinstated. The Respondent father argued that the existing two-year-old status quo should not be disturbed pending trial.

c. A legal issue arose as to the appropriate consideration of previous “without prejudice” characterizations.

d. A separate issue arose with respect to the mother’s attempt to utilize aspects of an OCL s.112 report prior to trial.

e. The immediate prior-to-trial changes sought by the mother were quite significant, including a transfer of primary residence; a change of schooling; a change in decision-making authority; and a request for child support. The parenting changes would have had a major impact on the child.

f. There were significant factual disputes to be resolved at trial, as evident from the estimated length of the trial and the large number of witnesses.

g. The result: The mother’s motion as dismissed in its entirety.

[3] Costs rules are intended 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 pursuant subrule 2(2) of the Family Law Rules ("the Rules"). Mattina v. Mattina, 2018 ONCA 867; Serra v. Serra, 2009 ONCA 395.

[4] Costs awards are discretionary. In exercising that discretion, the court should be mindful of two touchstone considerations: reasonableness and proportionality. Beaver v. Hill, 2018 ONCA 840.

[5] Costs are an important tool to promote the efficient use of judicial resources and the orderly administration of justice. 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. Costs can be used to sanction behaviour that increases the duration and expense of litigation, or is otherwise unreasonable or vexatious. British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71; Lawrence v. Lawrence, 2017 ONCJ 431; Peladeau v. Charlebois, 2020 ONSC 6596; Pugsley v. Adamantidou, 2021 ONCJ 590; N.P. v. D.H., 2023 ONCJ 2; F.K.T. v. A.A.H., 2023 ONCJ 185; Ali Hassan v. Abdullah, 2023 ONCJ 186.

[6] The right to bring or respond to a case does not grant either party a license to litigate without regard to the financial and other consequences of litigation. Particularly in family court, litigants must be mindful that court proceedings are expensive, time-consuming, and stressful not only for parents but also for children and extended family. Sabo v. Sabo, [2013] O.J. No. 4628; DeSantis v. Hood, 2021 ONSC 5496; Forbes v. Forbes, 2022 ONSC 1787.

[7] The reasonableness of the parties’ positions, arguments and conduct are relevant to the issue of costs. An important function of costs is to uphold the integrity of our justice system. Costs are one way of ensuring the resources of the justice system are not unduly drained by clearly unreasonable claims and ill-advised litigation strategy. Weber v. Weber, 2020 ONSC 6855; Swaby v. Foreshaw, 2024 ONCJ 111.

[8] However, the court must also ensure that the threat of costs does not interfere with access to justice. Potential litigants should not be deterred from pursuing legitimate claims out of fear of overly burdensome costs consequences. Weber v. Weber, 2020 ONSC 6855; Spadacini-Kelava v. Kelava, 2021 ONSC 2490; Thompson v. Drummond, 2018 ONSC 4762.

[9] Rules 18 and 24 govern the determination of costs in family law proceedings.

[10] Consideration of success is the starting point. Rule 24(1) creates a presumption of costs in favour of the successful party. Sims-Howarth v. Bilcliffe.

[11] The mother acknowledges the father was entirely successful and that he is entitled to costs. The only issue is quantum.

[12] One factor in determining success is to compare how the eventual order compares to any settlement offers that were made. Lawson v. Lawson; Ajiboye v. Ajiboye, 2019 ONCJ 894. Rule 18(14) sets out the consequences of a party's failure to accept an offer to settle that is as good or better than the hearing's result.

[13] On this motion neither party filed an offer. (The father says he filed a January 15, 2024 offer to resolve the entire case on a final basis, but that offer did not specifically address the interim issues on this motion.)

[14] There is generally no obligation to make an offer to settle. However, the Rules expressly provide that depending on the conduct of the parties and the presence or absence of offers to settle, a judge may increase or decrease what would otherwise be the appropriate quantum of costs awarded. Beaver v. Hill, 2018 ONCA 840.

[15] Offers to Settle are the most powerful documents in family law litigation. Kapila v. Chhina, 2023 ONSC 3261. They play an integral role in saving time and expense by promoting settlements, focusing parties, and often narrowing the issues. In most cases it is unreasonable behaviour for a party not to submit an offer to settle. Potter v. DaSilva, 2014 ONCJ 443; Laing v. Mahmoud, 2011 ONSC 6737; Menchella v. Menchella, 2013 ONSC 367; J.S. v. M.M., [2016] O.J. No. 1566; Ellis v. Ellis, 2024 ONSC 1766.

[16] The absence of an offer to settle may excused in certain circumstances:

a. If the opposing party fails to provide meaningful financial disclosure, then it may be impossible to submit a financial offer. Oduwole v. Moses, [2016] O.J. No. 5636.

b. If there is a narrow issue involving a binary choice – an “either/or” case -- there may be no way to compromise. The absence of an offer to settle should not be used against a party in determining costs if the situation is one where it is unrealistic to expect offers to be made. Beaver v. Hill, 2018 ONCA 840; Kostyrko v. Kostyrko, 2020 ONSC 3537; N.M.L. v. A.T.C., 2022 ONCJ 250; N.P. v. D.H., 2023 ONCJ 2.

c. This factor should not play a material role in determining liability or quantum of costs, if there was no realistic way of compromising on the central issue(s) in dispute. Weber v. Weber, 2020 ONSC 6855.

[17] The mother submits this was one of those cases in which it was unrealistic to expect that offers could be made because of the binary nature of the dispute: One party would prevail in their position and the other party would not. However, I don’t believe that’s completely accurate.

a. On the threshold issue of whether any interim variation should be granted three months prior to trial, this was indeed an “either/or” situation.

b. However, the mother’s motion included many components which could have been broken down in a severable offer.

c. As well, during submissions the mother’s lawyer identified various possible options with respect to specific time-sharing, resolution of the school issue, and even quantification of support. These claims could have been set out individually, in a severable offer.

d. The father’s position was simple: he wanted the mother’s motion to be dismissed. He could have addressed this in an offer which could have included tempting terms in relation to costs, if the mother agreed to dismiss or withdraw her motion prior to the hearing.

e. Accordingly, I find that both parties – but particularly the mother – could and should have filed offers to settle.

[18] Rule 24(10) establishes the general principle that the court shall promptly after dealing with a step in the case determine in a summary manner who, if anyone, is entitled to costs in relation to that step and set the amount of any costs, or alternatively shall expressly reserve the decision on costs for determination at a later stage in the case. Bortnikov v. Rakitova, 2016 ONCA 427; Islam v. Rahman, 2007 ONCA 622; Weber v. Weber, 2020 ONSC 6855.

[19] Quite appropriately, neither party is alleging that the other acted in bad faith. That acknowledgement, combined with the absence of a successful offer under Rule 18(14), means that there is no basis for full recovery costs. Indeed, the father acknowledges he is not seeking costs on a full indemnity basis.

[20] Rule 24(5) provides criteria for determining the reasonableness of a party’s behaviour in a case. Rule 24(5)(a) requires that 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.

[21] Lack of success will not, in itself, attract enhanced costs. Being unsuccessful is not necessarily the same as being unreasonable. But an unsuccessful party pursuing an unreasonable legal position may be liable for enhanced costs. Climans v. Latner, 2020 ONCA 554; Nour v. Youssef, 2021 ONSC 5539; W.H.C. v. W.C.M.C., 2021 ONCJ 363; S.W.-S. v. R.S., 2022 ONCJ 11; Wauthier v. McAuliff, 2019 ONSC 5302; Rebujio v. Rosario, 2022 ONCJ 452; Kerr v. Moussa, 2023 ONCJ 82; F.K.T. v. A.A.H., 2023 ONCJ 185.

[22] The rules in relation to costs are equally applicable in relation to parenting issues.

a. Unsuccessful parents cannot expect to be shielded from costs liability simply by claiming that they believed their proposal was in the best interests of the child. Almost all parents believe their proposal is in their child’s best interests. L.L.M. v. T.Z., 2022 ONSC 624.

b. There are strong arguments to suggest costs consequences should be more strictly enforced in parenting cases. It is in the best interests of children that their issues be resolved efficiently and amicably. Parents have an obligation to do everything possible to avoid the financial and emotional damage of protracted, repetitious and needlessly destructive litigation.

[23] With the mother acknowledging that the father is entitled to costs, the court must consider Rule 24(12) which outlines the factors to be considered in quantifying costs.

[24] Determining costs requires more than a simple mathematical totalling of how much the successful party paid their lawyer.

a. The amounts actually incurred by the successful litigant are not determinative. The court’s role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees. Aprile v. Aprile, 2016 ONCJ 678; Kommineni v. Guggilam, 2022 ONCJ 191; Bell v. Placidi, 2023 ONSC 6701.

b. The overall objective is to fix an amount that is fair and reasonable from the unsuccessful party’s perspective. This includes considering the amount the unsuccessful party could reasonably have expected to pay if they were unsuccessful in the litigation. Boucher v. Public Accountants Council of Ontario; Arthur v. Arthur, 2019 ONSC 938; Mussa v. Imam, 2021 ONCJ 92; Kerr v. Moussa, 2023 ONCJ 82; Swaby v. Foreshaw, 2024 ONCJ 111.

c. The emphasis on proportionality has led to a de-emphasis on hourly rates and time spent by counsel as the key factor in fixing costs. Delellis v. Delellis; Spadacini-Kelava v. Kelava, 2021 ONSC 2490; DeSantis v. Hood, 2021 ONSC 5496.

[25] Rule 24(12.1) requires that any claim for costs must be supported by documentation satisfactory to the court. This generally requires a bill of costs setting out services and corresponding legal fees with sufficient particularity to allow the court to make a determination of reasonableness and proportionality.

[26] There is no form for a bill of costs or a costs outline under the Family Law Rules. Tintinalli v. Tutolo, 2022 ONSC 6276. Whatever format is used, it is essential that the party seeking costs provide a detailed breakdown or what services were rendered and which issues the services relate to. As this court stated in Benzeroual v. Issa and Farag, 2017 ONSC 6225:

There is no absolute requirement that a bill of costs must follow an “itemized by date and task” format. But particularly where large amounts of money are being claimed, the party seeking costs has an obligation to provide sufficient information:

a. To particularize what work had to be performed and why.

b. To address varying levels of indemnification which may apply to different issues.

c. To reassure the court that costs are not currently being claimed for previous steps or events where costs have already been dealt with (or should already have been dealt with). This requires more than a generic statement that unrecoverable costs are not being claimed.

[27] Under Rule 24(12)(a)(ii) and (iv), the court must review the lawyer's rates and the "time spent by each party" on the case.

[28] Fees for the assistance of a law clerk can be appropriate in especially complex matters. Dybongco-Rimando Estate v. Jackiewicz; Woodland v. Kirkham, 2022 ONSC 1393.

[29] Where a bill of costs delineates which items of work were performed by specific law firm employees, the credentials of those individuals should be set out (including whether the individual is a lawyer, articling student, law clerk or assistant). Capar v. Vujnovic, 2022 ONSC 5920.

[30] 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. Smith Estate v. Rotstein, 2011 ONCA 491; Scipione v. Del Sordo, 2015 ONSC 5982; Steinberg v. Steinberg, 2019 ONSC 3870; Kang v. Kang, 2020 ONSC 2571; Snively v. Gaudette, 2020 ONSC 3042; Zhang v. Guo, 2019 ONSC 5767; F.K. v. A.K. and CAS of Hamilton, 2020 ONSC 4927; Mohr v. Sweeney, 2016 ONSC 3238; Hakim v. Hakim, 2020 ONSC 6587; Laidman v. Pasalic and Laidman, 2020 ONSC 7068; Mussa v. Imam, 2021 ONCJ 92; Wiafe v. Afoakwa-Yeboah, 2021 ONCJ 424; Pugsley v. Adamantidou, 2021 ONCJ 590; Tsavaras v. Avati, 2023 ONCJ 307.

[31] A significant discrepancy in the amount of fees charged by the respective lawyers may prompt the court to embark upon a more detailed scrutiny of the costs claimed to ensure that the amount meets the overall objectives of reasonableness and proportionality. Consideration of the other party's bill of costs is particularly helpful if a party challenges a costs claim as on the basis of alleged excessive hours or services. Mullin v. Sherlock, 2017 ONSC 6762; Brar v. Brar, 2017 ONSC 6372; Bielak v. Dadouch, 2017 ONSC 4255; Forbes v. Forbes, 2022 ONSC 1787.

[32] The mother’s financial situation was referred to as both an aggravating and mitigating factor.

[33] The father’s submission includes the following:

“The Applicant is legally aided. The Respondent is not. Her excessively litigious approach to this file is reflective of this. She has conducted herself throughout in a manner that serves to exhaust the Respondent financially, both by causing him to incur excessive legal fees, and refusing to pay a dime in support for the child whose care she seeks to change on the eve of trial.”

[34] The mother disputes the relevance of Legal Aid to any costs analysis. But more to the point she notes that she is no longer on Legal Aid because her income is too high. She has privately retained her lawyer for the services in relation to this motion. She says her lawyer is charging her a reduced rate because of her limited finances. She asks that her difficult financial situation be taken into account in quantifying costs.

[35] The financial implications of legal fees - and costs orders - must be form part of the costs analysis. But this can be a complicated issue.

a. A costs order should take into consideration the ability of a party to pay costs. MacDonald v. Magel, 67 O.R. (3d) 181.

b. Although they are not specified in Rule 24 as factors in determining costs, the financial means of the parties, their ability to pay a costs order, and the effect of any costs ruling on the parties and the children are relevant considerations in reaching a determination on the issue of costs. Fyfe v. Jouppien, 2012 ONSC 97; Volgemut v. Decristoforo, 2022 ONSC 2520.

c. A party's financial circumstances cannot be used as a shield against any liability for costs. Derziyan v. Shebarin, 2021 ONCJ 17. Ability to pay will be taken into account regarding the quantum of costs. Snih v. Snih; Dhillon v. Gill, 2020 ONCJ 68.

d. While difficult financial circumstances are a factor to be considered, they do not always justify depriving a successful party of costs, or reducing the amount of costs. Beaulieu v. Diotte, 2020 ONSC 6787; Pugsley v. Adamantidou, 2021 ONCJ 590; N.P. v. D.H., 2023 ONCJ 2.

e. Courts have repeatedly cautioned litigants that they cannot rely on their impecuniosity to shield themselves from cost sanctions, particularly when they have taken an unreasonable position or acted unreasonably in the conduct of the trial. McLellan v. Birbilis, 2022 ONSC 3467; Ricketts v. Ricketts, 2024 ONSC 1403.

f. Costs consequences typically have a negative impact on the unsuccessful party. Those consequences should be anticipated at the very outset of the litigation – and revisited on an ongoing basis – to encourage efficient and economical resolution. Freitas v. Christopher, 2021 ONSC 5233.

g. Ability to pay alone cannot, nor should it, over-ride the other factors in Rule 24(12). Peers v. Poupore, 2008 ONCJ 615; Lawrence v. Lawrence, 2017 ONCJ 431; Hales v. Lightfoot, 2022 ONSC 5892.

h. Parties cannot expect to be immune from an order of costs based on their lack of income or assets. If this were the case, parties would be free to conduct litigation as they wished without fear of reprisal in the form of adverse costs orders and this would be contrary to the philosophy and requirements of the Rules. Culp v. Culp, 2019 ONSC 7051; Mark v. Bhangari, 2010 ONSC 4638; Hackett v. Leung.

i. All family law litigants are responsible for and accountable for the positions they take in the litigation: Heuss v. Surkos, 2004 ONCJ 141; Bernard v. Fuhgeh, 2020 ONSC 4850; Hodgson v. Hodgson, 2021 ONSC 1357; Capar v. Vujnovic, 2022 ONSC 5920; Mulik v. McFarlane, 2023 ONCJ 7.

j. Those who can least afford litigation should be the most motivated to seriously pursue settlement and avoid unnecessary proceedings. Mohr v. Sweeney, 2016 ONSC 3238; T.L. v. D.S., 2020 ONCJ 9; Balsmeier v. Balsmeier, 2016 ONSC 3485; Kommineni v. Guggilam, 2022 ONCJ 191; Fenton v. Charles, 2023 ONCJ 74; F.K.T. v. A.A.H., 2023 ONCJ 185; Kapila v. Chhina, 2023 ONSC 3261; Thomas v. Charles, 2024 ONCJ 138.

k. It is counter-intuitive to suggest that the objectives of a cost award are less applicable to a person of modest means. J.Y. v. L.F., 2017 ONSC 6039; Oliver v. Coderre, 2021 ONSC 5423; Kapila v. Chhina, 2023 ONSC 3261; Ricketts v. Ricketts, 2024 ONSC 1403.

l. Litigation is expensive, time-consuming and stressful for all concerned. The court process is intended to resolve disputes fairly and efficiently. Family court is not a forum for individual litigants to carry on in whatever manner they choose, oblivious to unnecessary expense and other complications they create for the opposing party. Carmichael v. Carmichael, 2019 ONSC 7224; M.B. v. A.F., 2021 ONSC 6488; Sabo v. Sabo, [2013] O.J. No. 4628; Dabideen v. Ghanny, 2022 ONSC 5212.

m. An unsuccessful party's ability to pay must be assessed in conjunction with the successful party's ability to absorb legal fees which should not have arisen in the first place. Scipione v. Del Sordo, 2015 ONSC 5982; Mcdermid v. Mcdermid, 2021 ONSC 8542.

[36] In this case the father is the primary resident parent and he is receiving no child support from the mother.

[37] Where children are involved, the impact of a costs determination on household budgets applies to both unsuccessful and successful parties. An inadequate costs order in favour of a successful primary residence parent may result in deprivation for a child in their care. The court must ensure that litigation expenses do not impoverish the child’s household – particularly where those litigation expenses were incurred to successfully resist a request which was deemed to be contrary to the child’s best interests. D.D. & F.D. v. H.G., 2020 ONSC 1919. F.K. v. A.K. and CAS of Hamilton, 2020 ONSC 4927; Benzeroual v. Issa and Farag, 2017 ONSC 6225; Guertin v. Dumas, 2021 ONSC 5646; E.M. v. C.V., 2023 ONSC 1178.

[38] The father submits higher costs are appropriate on this motion because the mother previously brought a series of similar motions, and she has taken an excessively litigious approach throughout the case.

a. The mother denies engaging in needless litigation and notes that previous motions generally resulted in a progression of modest gains with respect to parenting time with a child who used to be primarily in her care.

b. Costs in relation to earlier steps should have been addressed at the time, or specifically reserved to the trial judge.

c. My only involvement on this file has been this particular motion. I am not prepared to base my costs award on consideration of what may or may not have happened at earlier steps in the process.

d. While a retrospective overview of litigation behaviour may be appropriate when the case is resolved on a final basis, any such consideration is best left to the judge dealing with the completion of this matter.

[39] The bill of costs for the father’s lawyer totals $32,564.63 including $1,111.36 in disbursements. He suggests “substantial indemnity” costs are approximately $26,000.00 and partial indemnity costs would be around $21,000.00.

[40] I agree with the mother’s lawyer that the father appears to be claiming costs for work related to other aspects of this case, in addition to this specific motion. For example, the bill of costs goes back to November 2023 but the mother didn’t serve her motion documents until December 14, 2023. As well, almost $4,000.00 attributed to a law clerk and paralegal seems high, with little explanation as to the necessity.

[41] The mother’s lawyer attached a review of the father’s bill of costs, and submitted that a more realistic figure for the father’s motion-related fees would be $13,315.00 (plus HST and disbursements).

[42] The mother’s comparable bill of costs totals around $9,580.00 (plus HST and disbursements).

[43] Ultimately, the mother suggested costs in the range of $6,000.00 to $9,000.00 would be appropriate.

[44] I have reviewed and attempted to balance all of these considerations, with a focus on reasonableness and proportionality.

[45] In the final analysis:

a. The mother shouldn’t have brought her motion. The case law should have made it clear that the mother lacked the evidence or justification to seek a major change to a long-standing status quo, on the eve of trial.

b. The father was completely successful. The mother admits the father is entitled to costs. The only issue is quantum.

c. I have considered the comparative financial circumstances of the parties, and the mother’s ability to pay. But this is a classic case where the mother should have given more thought to the significant legal expense she was creating for the father, by bringing and vigorously pursuing a motion which had no chance of success.

d. I won’t go so far as to characterize the mother’s litigation behaviour as intentionally attempting to exhaust the father financially. But the mother should have known ahead of time that her motion involved extremely serious issues; that it was inevitable that the father would be forced to incur significant legal fees opposing her motion; and that if her motion was unsuccessful the father would be entitled to significant reimbursement for costs. All of this should have been entirely foreseeable to the mother, particularly since she was no longer on Legal Aid so she must have been aware how quickly legal fees can add up.

e. My determination of quantum includes consideration of the mother’s ability to pay. However, this case is yet another reminder that rich or poor, litigants are responsible for the choices they make. People who can’t afford to pay costs if they lose their case should be very careful about what claims they pursue.

f. Even though the father’s financial circumstances are better, I must also be mindful of the negative impact of completely unnecessary costs on the household of the primary resident parent, particularly in circumstances where the unsuccessful party on this motion is not paying child support.

[46] The Applicant mother shall pay to the Respondent father costs of this motion fixed in the sum of $14,000.00 inclusive of HST and disbursements.

Date: May 14, 2024 Justice Alex Pazaratz