Court File and Parties

Court File No.: D53637/11 Date: 2013-03-12

Ontario Court of Justice

Toronto North Family Court

Between:

Bernadette Bokor Applicant

- and -

Peter Hidas Respondent

Counsel:

• Richard H. Parker, for the Applicant
• The Respondent, Acting in Person

Heard: In Chambers

Justice: S.B. Sherr

Costs Endorsement

Part One - Introduction

[1] On February 4, 2013 I released my trial decision granting the applicant (the mother) custody of the parties' three children, specified access to the children for the respondent (the father) and fixing the amount of child support the father has to pay to the mother (including the fixing of arrears accumulated under the temporary order of Justice Zuker, dated June 28, 2011). I gave the mother the opportunity to make written costs submissions and gave the father the opportunity to make written reply.

[2] The mother made written costs submissions. She seeks her full recovery costs of $7,880. This amount did not include any expenses or HST. The mother also asks for an order that the entire sum of costs be enforceable as child support by the Family Responsibility Office. The father also made written costs submissions. He submits that no costs should be paid.

Part Two – Analysis

[3] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395, [2009] O.J. 1905 (Ont. C.A.) stated that modern costs rules are designed to foster three fundamental purposes, namely to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants bearing in mind that the awards should reflect what the court views is a fair and reasonable amount that should be paid by the unsuccessful party.

[4] A finding of bad faith is not a condition precedent to full recovery of costs by the other side under the rules: Osmar v. Osmar, 2000 O.J. No. 2504 (Ont. Sup. Ct.), paragraph 11.

[5] Subrule 24(1) of the Family Law Rules (the rules) creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs. Sims-Howarth v. Bilcliffe, [2000] O.J. No. 330 (SCJ- Family Court). 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, [2008] O.J. No. 1978 (SCJ). The position each party took at the trial should also be examined.

[6] Subrule 18(4) of the rules sets out that an offer shall be signed personally by the party making it and also by the party's lawyer.

[7] Subrule 18(14) of the rules 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.

[8] The court has a discretion to take into account any written offer to settle, the date it was made and its terms, even if subrule 18(14) does not apply, when exercising its discretion over costs (subrule 18(16)). Further, 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 (clause 24(5)(b) of the rules). By contrast, a party's failure to serve an offer to settle may be viewed as an adverse factor in determining the issue of costs. M. (J.V.) v. P. (F.D.), 2011 CarswellOnt 13510 (Ont. C.J.).

[9] Neither party attached an offer to settle made by them to the other in their costs submissions. However it appears that the parties were actively negotiating settlement in November of 2012.

[10] The father attached a letter from the mother's counsel (to his counsel at the time), dated November 5, 2012, setting out "suggested changes to the proposed settlement". The "proposed settlement" was not attached to either of the costs submissions.

[11] This letter was not an offer as envisioned by subrule 18(4) of the rules as it was not signed by the mother. Accordingly the costs consequences set out in subrule 18(14) do not apply.

[12] I also have difficulty applying subrule 18(16) of the rules to this letter. The letter wasn't submitted by the mother, who is the person who stands to benefit from it in the costs analysis. There is little context provided about the letter, as the proposed settlement it responds to was not submitted to the court. The letter uses the wording "suggested changes to the proposed settlement". It is unknown if this was intended to be a firm offer or if it was just the continuation of a settlement discussion that would not be binding until the clients signed an agreement. It is unknown if the father made a reasonable offer to settle. Lastly, there are several notes written on the letter. It was not explained who made them and what they relate to.

[13] What I do conclude from the letter and the father's submissions is that both parties were actively attempting to settle the case, so the failure of the parties to submit an offer to settle as defined in rule 18 will not be viewed as an adverse factor against either of them in assessing costs in this case.

[14] The mother was clearly the successful party based on the positions that the parties took at trial. The father sought custody of the children, equal parenting time, and orders requiring the mother to send her own mother back to Hungary and for the mother to obtain a psychiatric assessment. He was unsuccessful on each request. The mother sought sole custody of the children and an order that the father have access to the children on alternate weekends. She was successful on these issues. The mother sought child support based on the father's actual income of $80,000 per annum. This request was granted. The father had asked that no child support be paid for two years.

[15] In making this decision, I considered the factors set out in sub-rule 24(11) of the rules, which reads as follows:

Factors in Setting Costs

24(11) A person setting the amount of costs shall consider,

(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.

[16] The case was important for the parties. It was not complex or difficult.

[17] Sub-rule 24(5) of the rules provides criteria for determining the reasonableness of a party's behaviour in a case (a factor in clause 24(11)(b) above). 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.

[18] 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. Surkos, 2004 ONCJ 141, [2004] O.J. No. 3351 (Ont. C.J.), paragraph 20; Blanchard v. Walker, 2012 ONCJ 799.

[19] The mother acted reasonably in this litigation. She could have sought to increase the father's child support obligation from the date his income increased significantly (January 1, 2012), but chose not to pursue this. The father did not act reasonably. His request to pay no child support for two years had absolutely no merit. He chose to disregard the temporary child support order of Justice Zuker, without a valid excuse, and he stopped paying any child support to the mother in October of 2012. Several of the father's parenting requests were not reasonable for the reasons set out in the trial decision. He used much of the trial as a forum to vent his grievances against the mother. He was disrespectful to the mother and her counsel at the trial. This trial was not necessary. The father should have agreed to the reasonable position taken at trial by the mother. He unnecessarily caused additional costs for her.

[20] The rates submitted by the mother's lawyer are reasonable for a lawyer with his experience.

[21] I carefully reviewed the bill of costs submitted by the mother's counsel. The time spent by him on the case (19.7 hours) was very reasonable to prepare for and attend at this trial that lasted one day. The time submitted also included time spent at a settlement meeting between the parties. This time is properly included in the bill of costs at this stage, as it is time not attributable to any prior step in the case. See: Czirjak v. Iskandar, 2010 ONSC 3778.

[22] I have also considered both Boucher et al. v. Public Accountants Council for the Province of Ontario, [2004] O.J.No. 2634 (Ont. C.A.) and Delellis v. Delellis and Delellis, [2005] O.J. No. 4345. Both these cases point out that when assessing costs it is "not simply a mechanical exercise." In Delellis, Aston J. wrote at paragraph 9:

However, recent cases under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended have begun to de-emphasize the traditional reliance upon "hours spent times hourly rates" when fixing costs....Costs must be proportional to the amount in issue and the outcome. 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, rather than an amount fixed by the actual costs incurred by the successful litigant.

[23] I find that the father has the ability to pay the costs that will be awarded to the mother. He earns over $80,000 per annum. I will give him 45 days to pay the costs award.

[24] The mother asked that 100% of the costs awarded to her be attributed to support to be collected by the Family Responsibility Office. This is not appropriate. The mother's counsel did not breakdown in his bill of costs the percentage of time that he spent on the support issue. Most of the time at trial was spent on the parenting issues. The father's income since January 1, 2012 was not contentious. I will allocate 25% of the time spent by counsel to the support issue when assessing costs. This amount will be enforceable as support by the Family Responsibility Office.

[25] Given the court's finding at trial that the father blatantly disregarded court orders, it is appropriate to order that he provide proof of payment of this costs award before he is permitted to initiate any further court proceedings in this court, unless he obtains prior leave of the court.

Part Three – The Order

[26] Taking into account all of these factors, an order shall go as follows:

a) The father shall pay the mother her costs fixed in the sum of $7,200, inclusive of fees, disbursements and HST, payable within 45 days.

b) The sum of $1,800 of these costs shall be enforceable as support by the Family Responsibility Office.

c) The father will not be able to initiate any further court proceedings in this court, without prior leave, until he first provides proof that he has paid the costs awarded in this decision.

Justice S.B. Sherr

Released: March 12, 2013