Court File and Parties

Court File No.: D53787/11 Date: 2013-09-24

Ontario Court of Justice Toronto North Family Court

Between:

K.H. The Applicant, Acting in Person

Applicant

- and -

T.K.R.

Respondent

Counsel: Daniel Boiani, for the Respondent

Heard: In Chambers

Before: Justice S.B. Sherr

Costs Endorsement

Background

[1] On July 30, 2013 I released my reasons for decision after hearing the trial of this case. I granted the respondent (the mother) final custody of the parties' children, made a specified access order, set out incidents of custody and access and ordered the applicant (the father) to pay the mother child support of $1,004 per month, including his share of special expenses for the children.

[2] The trial was completed in one day. The parties were given permission to make written costs submissions.

[3] The mother has asked the court to award her full recovery costs of $30,178.60. The father asks that no costs be ordered.

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.

Offer to Settle

[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 mother attached an offer to settle to her costs submission. It was only signed by her lawyer and not by her as required by subrule 18(4). Accordingly, the costs consequences set out subrule 18(14) do not apply.

[9] The mother's offer also failed to meet the requirement in paragraph 5 of subrule 18(14). Overall, her offer, while reasonable, was not as favourable as or more favourable than the trial result.

[10] However, the mother's offer to settle is a very relevant costs consideration under subrule 18(16) of the rules. This subrule reads as follows:

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.

[11] The mother's offer to settle generally reflected her position at trial.

[12] The father did not make an offer to settle.

Success at Trial

[13] The father submits that no costs should be awarded because there was divided success at trial. Subrule 24(6) of the rules reads as follows:

Divided Success

(6) If success in a step in a case is divided, the court may apportion costs as appropriate.

[14] There was some divided success in this case. However, the mother was the more successful party on the major issues in the case, being the issues of decision-making and child support.

[15] The father achieved success on the following issues:

a) He obtained a division of responsibility for transportation on access. The mother asked that he be fully responsible for transportation.

b) He obtained an equal division of summer vacation. The mother sought an order that each party have one exclusive week with the children in both July and August.

c) He obtained an order that the mother has to obtain his consent prior to travelling with the children outside of Canada.

[16] The mother was clearly the successful party on the following issues:

a) She obtained a sole custody order. The father initially sought a joint custody order and at trial, sought a parallel parenting order. Most of the trial time was spent on this issue.

b) The father's weekday access was eliminated. The mother made an offer on parenting time that was more favourable than the final result.

c) The father's request for police enforcement of the access order was denied.

d) The father's request to adjust prior support arrears was denied.

[17] The mother was the more successful party on the child support issue. She offered to settle child support by having the father pay her $1,112 per month, inclusive of special expenses. The father wanted to pay child support based on his lower 2012 income ($687 per month), with no contribution to special expenses. The final support order required the father to pay child support of $1,004 per month, including special expenses.

[18] Several minor access terms requested by the parties weren't granted (See: paragraphs 83, 84, 107 and 109 of the reasons for decision).

Factors in Assessing Costs

[19] 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.

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

[21] The reasons for decision set out that both parties have acted unreasonably about access. The mother's litigation behaviour has been reasonable. The same cannot be said about the father. He was very slow in providing very basic financial disclosure and took untenable positions about decision-making and child support at trial. He should have settled this case.

[22] The father also failed to submit an offer to settle, despite being represented by counsel throughout much of the case. The failure to make an offer to settle is unreasonable behaviour and will be an adverse factor in assessing costs. See: Laing v. Mahmoud, 2011 ONSC 6737.

[23] The rates claimed by the father's lawyer ($350 per hour) are very reasonable for a lawyer called in 1992.

Procedural Issues with Costs Claim

[24] Subrule 24(10) sets out that costs are to be determined in a summary manner after each step in the case by the presiding judge. A "step" in the case is one of the discrete stages recognized by the rules such as a case conference, settlement conference and the like. See: Husein v. Chatoor, 2005 ONCJ 487. The trial judge should not deal with requests for costs that were addressed or should have been addressed at these prior steps in the case. See: Islam v. Rahman, 2007 ONCA 622. This is where the mother's claim for costs became problematic.

[25] The mother appears to be asking for full recovery costs of her legal fees since the beginning of the case. There have been several steps in this case, including motions and case conferences. Temporary agreements were reached at some of these appearances. Costs could have been dealt with at these steps. It is not appropriate to seek costs for these steps at this stage.

[26] It is possible to grant costs for time that is not attributable to any prior step or is only partially attributable to a prior step in the case. This could include time spent on preparing pleadings, financial statements, obtaining and reviewing disclosure and meetings with clients. See: Czirjak v. Iskandar, 2010 ONSC 3778 and my comments in Kardaras v. Kardaras, 2008 ONCJ 616.

[27] If a party wishes to make this type of claim it is incumbent upon them to clearly set out in their bill of costs how this claim was calculated. The mother failed to do this; she merely provided the court with bulk time spent on correspondence, phone calls, preparation and court appearances. The bill of costs does not set out when any of these services were provided. That said, the court recognizes that time had to be spent for these services.

[28] The mother also claimed $666.73 for disbursements, without setting out at what stage these disbursements were incurred.

Proportionality and Fairness

[29] 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.

[30] I considered the respondent's ability to pay the costs order. See: MacDonald v. Magel. I find that the father has the ability to pay the costs order that will be made, particularly since a repayment schedule will be ordered.

Post-Trial Conduct

[31] The father also asked that I reduce the mother's costs due to her post-trial behaviour. Shortly after the reasons for decision were released the father brought a contempt motion as he was not given the summer access ordered. The contempt hearing was held on September 20, 2013. The contempt motion was dismissed, as the father did not meet the high standard of proving the mother's contempt beyond a reasonable doubt. However, I did find that the mother had acted unreasonably in frustrating the father's access. I applied subrule 24(4) of the rules and awarded costs of $1,500 per month against the mother.

[32] I agree with the recent comments of Justice Ellen Murray in Bunce v. Peacock, [2013] ONCJ 498, where she questions whether post-trial conduct can impact upon the assessment of costs for the trial step. In any event, I have already considered the mother's post-trial behaviour with the recent costs order and it is not necessary to consider it any further.

Costs Award

[33] 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 $8,000, inclusive of fees, disbursements and HST.

[34] The costs award of $1,500 made against the mother on September 20, 2013, shall be set-off against this costs award, leaving a balance owing by the father to the mother of $6,500.

[35] The father shall be permitted to repay these costs at the rate of $200 per month, starting on November 1, 2013 until they are repaid. However, if he is more than 30 days late in making any payment, the entire amount remaining owing shall immediately become due and payable.

Justice S.B. Sherr

Released: September 24, 2013