Court File and Parties

Court File No.: D40244/06 Date: 2013-09-04

Ontario Court of Justice

Toronto North Family Court

Between:

S.S. APPLICANT

- and -

S.K. RESPONDENT

Counsel:

• Eamon B. Nicholson, for the Applicant
• Lauren Israel, for the Respondent

Heard: In Chambers

Justice: S.B. Sherr

Costs Endorsement

[1] On August 7, 2013 I released my reasons for decision after hearing the trial of motions to change brought by both parties. I granted the respondent's (the mother) request to change the existing joint custody order to grant her sole custody of the parties' eight-year-old child. The applicant (the father) was granted alternate weekend and holiday access to the child. The mother's claim for retroactive child support was granted, effective September 1, 2009. The father's motion for further decision-making authority and more extensive access was dismissed.

[2] The trial was scheduled for two days, but was completed in one day.

[3] The mother has made written costs submissions. She seeks her full recovery costs of $9,500. The father also made written costs submissions. He asks that costs be fixed at $3,000, payable in 60 days.

Legal Framework for Costs

[4] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395 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.

[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. See: Sims-Howarth v. Bilcliffe. 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. See: Lawson v. Lawson.

Failure to Make Settlement Offers

[6] Neither party made an offer to settle. I repeat my comments made in paragraphs 4-5 of Klinkhammer v. Dolan and Tulk, 2009 ONCJ 774 where I wrote:

4 It was surprising that there were no formal offers to settle in this case. It is reflective of the polarity of the parties. It should be a fundamental step in any family law case to serve at least one offer to settle. Parties and their counsel now have a mandate under subrule 2(4) of the rules, to promote the primary objective of the rules; to deal with cases justly (subrule 2(2)). Dealing with a case justly includes taking steps to save time and expense (subrule 2(3)). Offers to settle play an important role in saving time and expense in a case. They are an important vehicle in promoting settlements, focus the parties and often narrow the issues in dispute.

5 There are consequences in the rules for not making or accepting reasonable offers to settle. Subrule 18(14) sets out the costs consequences of not accepting an offer to settle that is as good as or better than the final result. When determining the reasonableness of a party's behaviour in the case, clauses 24(5)(b) and (c) of the rules direct the court to examine the reasonableness of any offer made, withdrawn or not accepted. This does not preclude the court from examining the failure of a party to make an offer to settle.

Success of the Parties

[7] The mother was clearly the successful party based on the positions taken at trial. She was successful in obtaining sole custody of the child. The court preferred her access proposal. The mother sought retroactive support to September 1, 2008. The father opposed the court making any retroactive support order. The court ordered retroactive support to September 1, 2009. The father's requests to expand his decision-making rights and his access were dismissed.

[8] The father did not rebut the presumption in subrule 24(1) of the rules that the successful party is entitled to costs.

Bad Faith Analysis

[9] The mother submits that the father acted in bad faith. Subrule 24(8) of the rules states that if a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.

[10] 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. See: S.(C.) v. S. (M.).

[11] In the trial decision I was critical of the father for involving the child in the litigation and trying to recruit her to live with him. I also found that the father was unable to prove many of his allegations against the mother. However, this behaviour, while unreasonable, did not amount to bad faith. The father had a sincerely held (albeit skewed) belief that he was acting in the child's best interest and that she was better off living with him.

Factors Under Subrule 24(11)

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

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.

Importance, Complexity and Difficulty

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

Reasonableness of Behaviour

[14] The failure of both parties to submit an offer to settle was unreasonable behaviour. See: Laing v. Mahmoud, 2011 ONSC 6737. The mother's counsel submitted that the failure to make an offer to settle was her oversight and asks that this not be held against her client. She also submitted that the attitude of the father at the trial is indicative that no reasonable offer would have been accepted. It is important to keep sending the message to the family law community that at least one offer should be made in every case for the reasons I set out in Klinkhammer above. The failure to do so, whether it is due to solicitor oversight, or due to a belief that the offer is unlikely to be accepted, will likely result in adverse costs consequences.

[15] The mother acted reasonably in all other respects in this case. The same cannot be said about the father. He deliberately disobeyed Justice Curtis' order not to discuss the case with the child or involve her in the litigation. He provided incomplete financial disclosure. He asserted unreasonable positions at trial that were rejected.

Lawyer's Rates

[16] The rates claimed by the mother's lawyer ($300 per hour) were very reasonable for a lawyer with her skill and experience.

Time Spent

[17] Counsel should routinely submit a bill of costs when seeking costs. Otherwise, it is very difficult for a court to ascertain if the time spent on a case is appropriate or to determine if the time claimed is attributable to the specific step in the case. The trial judge should not deal with requests for costs that were addressed or should have been addressed at prior steps in the case. See: Islam v. Rahman, 2007 ONCA 622. The mother did not submit a bill of costs.

[18] The mother claimed time (8.6 hours) for correspondence, meetings, reviewing disclosure and attending at a settlement conference. This is a legitimate submission at the trial stage as this is work that is either not attributable to a discrete step in the case or is applicable to multiple steps in the case. See: Czirjak v. Iskandar, 2010 ONSC 3778 and my comments in Kardaras v. Kardaras, 2008 ONCJ 616.

[19] The mother also claimed time of 19.3 hours spent preparing for trial after Assignment Court. This is a reasonable amount of time to prepare for a scheduled 2-day trial. Both counsel are to be commended for focusing the trial and completing it in one day. This was the product of sound preparation by both of them.

Disbursements and Ability to Pay

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

[21] The father owns a property. I find that he can afford to pay this costs award.

Proportionality and Fairness

[22] I have also considered both Boucher et al. v. Public Accountants Council for the Province of Ontario and Delellis v. Delellis and Delellis. 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.

Costs Award

[23] Taking into account all of these considerations, an order shall go that the father shall pay the mother's costs fixed in the amount of $7,000, inclusive of fees, disbursements and HST.

Justice S.B. Sherr

Released: September 4, 2013