Court File and Parties

Court File No.: Toronto D30888/03 Date: 2012-11-28 Ontario Court of Justice

Between:

Robert Blanchard Applicant

— AND —

Joan Walker Respondent

Before: Justice Curtis

Heard on: 16 November 2012

Endorsement released on: 28 November 2012

Counsel:

• Sunny Chhabra ……………………………………………………… counsel for the Applicant Father
• Lorne Gershuny ........................................................ counsel for the Respondent Mother

CURTIS, J.:

INDEX

1. Overview
2. The Parties' Claims re Costs
3. Litigation History
4. The Costs Analysis
   • a. The Law of Costs
     • i. Entitlement
   • b. The Evolution of Costs as an Instrument of Social Policy
   • c. Offers to Settle
   • d. Analysis
     • i. Costs and Reasonable Behaviour
     • ii. Behaviour of the Parties
     • iii. Costs and Ability to Pay
     • iv. Quantum of Costs
5. Order

1. Overview

[1] This is the costs decision in a three-day trial regarding custody of Jewel, born 14 February 2003, who is now nine years old.

[2] The mother claimed sole custody, reasonable access on reasonable notice for the father, and child support.

[3] The father claimed (among other things) sole custody, structured access for the mother, a non-removal order and child support.

2. The Parties' Claims re Costs

[4] Both parents were represented at trial and at the costs argument.

[5] The father claims costs of the trial, on a full recovery basis, under Rules 24(1), 24(8), 24(11) and 18(16) of the Family Law Rules, O. Reg. 114/99, as amended, and s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C. 43, as amended, based on his position that the mother acted unreasonably in proceeding to a trial, and acted in bad faith. He claims $36,389.06 all in (fees + HST, disbursements + HST).

[6] The mother says the father is not entitled to costs of the trial, but that if he is, that the amount he has claimed is excessive and disproportionate, and that in any event, she has no ability to pay.

3. Litigation History

[7] Although started as an application, this court case was essentially a motion to change the final consent order of Waldman, J. made 5 August 2003 for joint custody of the child, with the child's primary residence to be with the father, and specified access to the mother.

[8] The litigation surrounding the motion to change was acrimonious. There is a long history of conflict and litigation between the parents over many years.

[9] The child lived with the father for five years after the joint custody order was made. At the mother's request, and on consent, the child came to live with the mother in June 2008. The father said that this resulted from Jewel's wish to go to school with her sister Nancy, and that this arrangement was to be only for one year. The mother started this application for sole custody in May 2009. The father also claimed sole custody.

[10] Several subsequent consent orders provided for without prejudice temporary sole custody to the mother, with progressively increased access to the father.

[11] On 16 August 2011, Spence J. made a consent order for the following:

a) The father is to be informed of and involved in all programmes of treatment for the child, including and not limited to SNAP [1], SCAN [2] and CSAT [3];

b) The child is to become involved with a children's mental health centre that can address her complex needs; and,

c) The child is to undergo a neuro-psychological assessment through Hospital for Sick Children or other accredited institution to rule out fetal alcohol syndrome or other organic disorders.

[12] The trial decision, released 26 July 2012 made (among other orders) the following orders:

a) sole custody of Jewel to the father effective immediately, with sole decision-making authority regarding the child's health, education, religion, and welfare to the father;

b) specified access to the mother;

c) The mother shall not bring a motion to change the custody or access arrangements until she has become involved with a psychiatrist to assess her mental health issues and has followed up with any suggested medication and counselling;

d) The father his wife shall do the following regarding care of Jewel:

i. become involved with the SNAP program in order to learn parenting strategies for parenting Jewel;

ii. ensure that Jewel becomes involved with a children's mental health centre (such as Aislings Discoveries) that can address her complex needs; and,

iii. ensure that Jewel undergoes a neuro-psychological assessment through Hospital for Sick Children to rule out fetal alcohol syndrome or other organic disorders;

e) The mother shall not remove the child from Ontario without the father's prior written consent or court order; and,

f) Court staff shall send a copy of this decision to Children's Aid Society of Toronto for investigation regarding the mother's care of her other child Nancy.

4. The Costs Analysis

The Law of Costs

Entitlement

[13] These are the findings at trial that are relevant on the issue of costs:

a) All the professional evidence strongly presented significant concerns about the mother's ability to meet the child's needs;

b) The evidence was over-whelming that the child was not doing well, and that she needed help and the evidence was from many sources (the SNAP reports, the report of the Children's Lawyer, and the child's teacher);

c) The SNAP reports (dated 1 and 2 February 2011) identified significant concerns regarding Jewel, the mother, Nancy (Jewel's sister) and Mr. Ellis (the mother's partner), and made recommendations about all of them. The SNAP reports found that the mother's own history of trauma gets in the way of her parenting, and that she should be involved in individual treatment. SNAP categorized the family as high risk and the relationship between the mother and Mr. Ellis as unstable. There was frequent children's aid society involvement. The SNAP report regarding Jewel identified serious and concerning behaviours, including physical aggression towards others, destroying property, lying, cheating, stealing, lack of remorse, swearing, yelling, being disrespectful and crying often, regularly getting into trouble at school and at home, and sexualized behaviours. The SNAP treatment recommendations for Jewel were concrete, clear, and explicit (specific therapy programs for Jewel's sexualized behaviours and a tutor for Jewel). The mother followed none of these recommendations. The writers of the SNAP reports were not cross-examined by the mother. The findings of the SNAP program and its recommendations were not challenged in any way by the mother at trial.

d) The Children's Lawyer Report (dated 5 May 2011) made serious findings about the mother, and about Jewel. The report found that the mother's history of childhood trauma impacted her deeply, and affected her ability to parent. Professionals had contacted C.A.S.T. with concerns of neglect, concerns about the mother's ability to meet Jewel's needs, especially in terms of supervision, and her ability to deal with Jewel's challenging behaviour, including sexualized behaviour. The report made serious findings about the child, including that the child was exhibiting serious behavioural issues, lacking in social skills, demonstrating sexualized behaviour and behind academically, and that the conflict between the mother and Mr. Ellis has negatively affected both Jewel and her sister Nancy. The mother did not file a dispute to the Children's Lawyer report, and did not cross-examine the writer of the report. Like those in the SNAP reports, the findings of the Children's Lawyer report and its recommendations were not challenged in any way by the mother at trial.

e) The Children's Lawyer Report recommended sole custody to the father immediately, with access to the mother every other week-end; therapy and counselling for the mother; and therapy for Jewel;

f) The father wanted the recommendations of the Children's Lawyer report implemented entirely; and,

g) At trial, the child had not started any counselling or assessments, despite the recommendations of SNAP and Dr. Sheinin, the Report of the Children's Lawyer, and a court order that she do so (the consent order of Spence J. made 16 August 2011).

[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, s. 131(1), which sets out specific principles regarding costs:

(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 three fundamental purposes: Fong v. Chan, 46 O.R. (3d) 330, 181 D.L.R. (4th) 614, para. 24, and Serra v. Serra, 2009 ONCA 395:

(a) to indemnify successful litigants for the cost of litigation;

(b) to encourage settlement; and

(c) to discourage and sanction inappropriate behaviour by litigants.

[16] Rule 2 (2) of the Family Law Rules adds a fourth fundamental purpose for costs: to ensure that the primary objective of the rules is met – that cases are dealt with justly. This provision needs to be read in conjunction with rule 24 of the rules: Sambasivam v. Pulendrarajah, 2012 ONCJ 711, para. 37.

[17] Pursuant to Rule 24(1) of the Family Law Rules, the father is presumed to be entitled to costs because he was successful at the trial.

The Evolution of Costs as an Instrument of Social Policy

[18] 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: British Columbia (Minister of Forests) v. Okanagan Indian Band, [2002] S.C.R. 371, paras. 21-24.

[19] 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: [British Columbia (Minister of Forests) v. Okanagan Indian Band, 2002, S.C.C., supra, para. 26.

[20] When awarded on a full recovery scale, costs can serve to express the court's disapproval of unreasonable conduct during the litigation: Prinzo v. Baycrest Centre for Geriatric Care, para 76.

[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: [British Columbia (Minister of Forests) v. Okanagan Indian Band, 2002, S.C.C., supra, para. 25.

Offers to Settle

[22] Offers to settle are a significant part of the costs landscape in family law in Ontario. They are important to the possible resolution of cases. In addition, they are important to determining costs.

[23] 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: Laing v. Mahmoud, 2011 ONSC 6737, para. 7.

[24] To determine whether a party has been successful, the court should take into account how the order compares to any settlement offers that were made: Lawson v. Lawson. The position each party took at trial should also be examined.

[25] The costs consequences of offers to settle are set out in Rule 18 (14) 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.

[26] The court has a discretion to take into account any written offer to settle, the date it was made and its terms, even if Rule 18(14) does not apply to the offer to settle, when exercising its discretion over costs (Rule 18(16)).

COSTS — DISCRETION OF COURT

18 (16). When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.

[27] Rule 18 (16) invites consideration of any and all offers to settle: Osmar v. Osmar, para. 7.

[28] In deciding whether a party has acted reasonably or unreasonably in a case, the court shall examine the reasonableness of any offer the party made (Rule 24(5)(b)): M. (J.V.) v. P. (F.D.), 2011 CarswellOnt 13510, ONCJ 616.

[29] Offers to settle are important and can be the yardstick by which to measure success. They are significant in determining both liability for costs and quantum: [Osmar v. Osmar, 2000, Ont. Sup. Ct., supra, para. 7.

[30] The father made an offer to settle in a letter dated 6 June 2011. The father's offer does not qualify as an offer under Rule 18 (14), but is an offer that the court can consider under Rule 18 (16). There is no evidence that the mother made an offer to settle.

[31] The father offered to settle on the terms of the then recently released report from the Office of the Children's Lawyer. The father's offer to settle was very close to the custody and access regime ordered at trial. In fact, the father was granted each item of relief requested in his pleadings, and in his offer to settle of 6 June 2011.

Analysis

Costs and Reasonable Behaviour

[32] Rule 24 (5) provides criteria for determining the reasonableness of a party's behaviour in a case (a factor in Rule 24 (11)(b)). It reads as follows:

DECISION ON REASONABLENESS

(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] Family law litigants are responsible for and accountable for the positions they take in the litigation: Heuss v. Sarkos, 2004 ONCJ 141, and Peers v. Poupore, 2008 ONCJ 615, para. 62.

[34] The unreasonable conduct of an unsuccessful litigant is a factor in both the awarding of costs and in fixing the amount of costs. The court should express disapproval of a litigant who proceeds to trial without adequate evidence to prove her claims, and should send the message that the successful party should have redress by awarding costs on a full recovery basis.

[35] A finding of bad faith is not a condition precedent to full recovery of costs by the other side under the Family Law Rules: [Osmar v. Osmar, 2000 (Ont. Sup. Ct.), supra, para. 11.

Behaviour of the Parties

[36] 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: [Heuss v. Sarkos, 2004, Ont. Ct., supra, para. 20.

[37] Matrimonial litigation is an occasion for sober consideration and thoughtfulness rather than intemperate behaviour: [Heuss v. Sarkos, 2004, Ont. Ct., supra, para. 20.] The father conducted himself in the former manner, but the mother acted in the latter manner.

[38] One of the purposes of costs is to change behaviour. The justice system is a precious public resource, as is trial time. Access to the justice system and to trial time 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.

[39] This case should not have gone to trial. The evidence against the mother's position was over-whelming. And the strongest and most damaging evidence (the reports from SNAP and from the Children's Lawyer) were available one year before the trial. The mother refused to re-consider her position and the likelihood of success given the over-whelming evidence against her, and insisted on going to trial. Courts must discourage this behaviour. Unless courts discourage this behaviour, it will continue and increase. Orders for costs are one way to discourage this behaviour.

Costs and Ability to Pay

[40] Ability to pay may be relevant to the issue of the quantum or scale of costs, but not to another party's entitlement to costs: Izyuk v. Bilousov, 2011 ONSC 7476, para. 51.

[41] Success is given presumptive pre-eminence in Rule 24. While Rule 24(11)(f) does permit the consideration of ability to pay (under the umbrella of "any other relevant matter"), it is given significantly less prominence than the presumption that costs will follow success: Biant v. Sagoo.

[42] Ability to pay alone cannot, nor should it, over-ride the other factors in Rule 24(11): [Peers v. Poupore, 2008, (Ont. Ct.), supra, para. 42.

[43] The (financial) means of the unsuccessful party may not be used to shield her from liability for costs, particularly when she has acted unreasonably: Gobin v. Gobin, 2009 ONCJ 278, para. 24.

[44] The mother lives with her partner Vernon Ellis, her stepfather, and her other child Nancy (10 years old). Mr. Ellis is Nancy's father. Neither the mother nor Mr. Ellis work outside the home, and both receive social assistance income. Mr. Schell works as a school bus driver. The mother's current ability to pay costs is very limited, even non-existent.

[45] The mother is 29 years old. She is young, and has many years in which to earn sufficient money to contribute towards a costs award. Her unreasonable behaviour in choosing to go to trial in the face of the strong evidence against her position requires a strong message. The mother is the author of her own misfortune. Had she acted reasonably, she could have avoided a trial altogether, and avoided liability for costs. The mother should not be shielded from liability for costs in this case merely due to a current limited ability to pay costs. To do this would allow those of limited financial means free license to litigate unreasonably. That is not consistent with the current law of costs.

Quantum of Costs

[46] Determining the amount of costs is not simply a mechanical exercise. Costs must be proportional to the amount in issue and the outcome: Boucher et al. v. Public Accountants Council for the Province of Ontario.

[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: [Boucher et al. v. Public Accountants Council for the Province of Ontario, 2004, Ont. C.A., supra.

[48] The factors to consider in determining the amount of costs in family law matters are (Rule 24(11)):

a) The importance, complexity or difficulty of the issues;

b) The reasonableness or unreasonableness of each party's behaviour in the case;

c) The lawyer's rates;

d) The time properly spent on the case, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order;

e) Expenses properly paid or payable; and

f) Any other relevant matter.

[49] In determining the amount of costs, the court took into account the factors set out in R. 24 (11), as follows:

a) The importance, complexity or difficulty of the issues: although the case was important to the parents, it was neither complicated nor difficult. This case should have settled. It should not have resulted in a three day trial;

b) The reasonableness or unreasonableness of each party's behaviour in the case: The father acted reasonably and appropriately throughout the trial. The mother should not have proceeded to trial. She did not have sufficient evidence to support her claims, and the evidence against her was strong and overwhelming. The most powerful evidence against her was from professionals and was available to the mother more than one year before the trial started;

c) The lawyer's rates: the rates claimed by the father's lawyer (a reduced rate of $190 per hour (reduced from $225 per hour) for a 16 year lawyer with 13 years of family law experience) were reasonable for his level of experience, and the expertise required to prepare for and conduct this trial; and,

d) The time properly spent on the case: the court asked the lawyers to prepare an Agreed Statement of Facts, a Joint Documents Brief, Trial Opening Statements, Trial Closing Statements, and to present as much evidence as possible through affidavits for the evidence in chief of collateral witnesses. The lawyers did this. As a result, there was additional time spent on trial preparation. This time spent directly resulted in a shorter and more focused trial. The time claimed by the father's lawyer for work on the trial was reasonable, in all the circumstances.

[50] The dynamics on this case are all too common, and cry out for judicial response. In a troubled economy there are more unrepresented parties in family court, and certainly more people with limited finances. Inevitably, these ingredients create greater strains on the administration of justice. Combined with limited judicial resources, the need to encourage settlement and discourage inappropriate behaviour by litigants has never been more pressing: [Izyuk v. Bilousov, 2011, Ont. Sup. Ct., supra, para. 58.

[51] This is a clear case for costs on a full recovery basis. It must be made clear to family law litigants that there is no right to a trial, or at least, that the right to a trial 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.

[52] No finding of bad faith is required to support full recovery of costs, as there is ample evidence that the mother's behaviour was unreasonable (under Rule 24(11)(b) and Rule 24(5)). Full recovery of costs is the appropriate remedy here.

[53] The father's lawyer presented a detailed summary of the amount of time spent in his claims for costs. His lawyer spent about 180 hours in preparation for the trial, including meetings with his client; preparation of the Joint Documents Brief, the Request to Admit, the Trial Record, the Statement of Agreed Facts, Trial Opening Statement, affidavits for the evidence in chief of the father's witnesses, Trial Closing Statement; preparation of examination in chief and cross-examination plans for the witnesses; meetings with witnesses; and legal research on the appropriate case law. The trial lasted three days, and the father's lawyer claimed 2½ days counsel fee for this work.

[54] The father presented detailed claims for disbursements for the trial. In total, the father claimed disbursements in the amount of $2,046.10. These are the disbursements that will be allowed regarding costs of the trial (the father's lawyer indicated these amount included HST):

Category	Amount
Couriers	$160.00
Process Servers	$135.00
Photocopying, fax, and printing (3,946 pp. @ $.35 per page)	$1,381.10
Witness fees (Ms. Sairan and Mr. O'Shaughnessy)	$110.00
Total	$1,786.10

5. Order

[55] The court must determine an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case. This determination is not merely an arithmetical exercise of calculating time spent by a suitable hourly rate.

[56] The costs award in this case should take into account and reflect the amount of work necessary for the father to respond to the mother's claims. The time spent by the father's lawyer and the rate he proposes in his costs claim are reasonable.

[57] The over-riding principle in determining the amount of costs is reasonableness. A fair and reasonable costs award, in all of these circumstances, is $30,000 all inclusive (fees + HST, disbursements + HST). The mother shall pay the father's costs in the amount of $30,000.

[58] The mother shall not bring a motion to change without permission from the court obtained in advance, with a Form 14B motion and no more than two pages in support. The payment of the costs ordered shall be a factor for the court in determining whether permission should be granted.

Released: 28 November 2012

Justice Carole Curtis

Footnotes

[1] The SNAP Program ("Stop Now and Plan") is a cognitive behavioural therapeutic group program for children of ages six to eleven and their parents to address behavioural issues.

[2] Suspected Child Abuse and Neglect program at Sick Children's Hospital.

[3] This program was not described or named in full, other than as shown.