Court File and Parties

Court File No.: 443/10 Date: 2013-10-15

Ontario Court of Justice

Re: Gianna Marcantonio, Applicant And: Paul Cronin - Respondent

Before: Justice S. O'Connell

Counsel:

• Bruce A. Macdonald, for the Applicant
• Paul Cronin, Respondent, acting in person

Costs Endorsement

[1] Introduction

The Applicant seeks her costs in the amount of $9,066.53[1] in this Motion to Change the parties' separation agreement brought by the Respondent. The Respondent opposes any award of costs in these proceedings.

Background

[2] Marriage and Separation Agreement

The parties were married on May 25, 1991 and separated on September 30, 2008. The parties have three children, now ages 18, 15 and 12 respectively. The parties entered into a separation agreement on August 24, 2009 regarding custody, access, child and spousal support, among other provisions, including a dispute resolution provision.

[3] Motion to Change

The Respondent father commenced this Motion to Change on July 30, 2012 seeking to terminate his obligation to pay support and to expunge all support arrears that have accrued since 2010. The Respondent then filed an amended Motion to Change seeking to change his scheduled access to provide that access shall be in accordance with the children's wishes with no regular schedule.

[4] First Case Conference - January 15, 2013

The first case conference in this matter was heard on January 15, 2013. At that time, I made an order requiring both parties to provide certain financial disclosure. Additionally, the Respondent was granted permission, at his request, to commence a fresh application to seek leave to have the parties' separation agreement set aside. The Respondent was ordered to provide his income disclosure within thirty days of my order, or two weeks prior to the next court date in the matter, whichever is sooner. The case conference was adjourned to March 6, 2013.

[5] Second Case Conference - March 6, 2013

At the return of the case conference on March 6, 2013, the Respondent had not provided any of his disclosure, including an updated financial statement. He also failed to attend the case conference. His counsel was unable to reach him and he left no instructions. The Respondent had further not prepared the fresh application to seek leave to set aside the separation agreement, which he had requested at the last case conference. As a result of the Respondent's conduct, I made the following order at that case conference:

"Mr. Cronin's conduct in failing to comply with the order for financial disclosure is unreasonable and hindering the progress in this case. There will be an order of $750.00 in costs against Mr. Cronin payable no later than March 28, 2013. Further, Ms Marcantonio is granted leave to bring a motion to strike Mr. Cronin's pleadings, if necessary."

[6] Third Case Conference - May 10, 2013

The matter was then adjourned for a case conference or motion to May 10, 2013. At the return of the third case conference, the Respondent had still not complied with the order for financial disclosure, including the basic requirement to provide his income tax documents, and was no longer represented by counsel. Based on the limited disclosure provided, it appeared in fact that the Respondent had underpaid support and owed child support arrears. The Applicant also brought her motion to strike the Respondent's pleadings at the same time as the case conference.

[7] Respondent Consents to Strike

At the May 10th case conference, the Respondent advised that he was not in a position to proceed with his motion to change and consented to an order striking his pleadings.

[8] Costs Submissions

The Applicant's counsel provided a bill of costs and made submissions regarding costs at the case conference. The Respondent requested time to respond to the costs' claim. I granted Mr. Cronin twenty days to prepare his response in writing to the costs submissions made by the Applicant's counsel.

[9] Late Response

Mr. Cronin did not provide a response to the costs claim until June 10th, 2013, contrary to the order that I made. The Applicant's counsel provided a written response on June 20, 2013.

Position of the Parties

[10] Applicant's Position

The Applicant submits that the Respondent refused to provide the income disclosure ordered notwithstanding that the onus was on him to establish that the support provisions in the parties' separation agreement should be terminated. The Applicant further submits that the Respondent refused to use the dispute resolution provisions in the parties' separation agreement. Instead, he commenced a court proceeding which the Applicant was required to respond to, incurring legal fees as a result. The Respondent then did not proceed with his motion and consented to an order striking his pleadings once it was apparent that he would not be successful and in fact, had underpaid child support.

[11] Respondent's Position

The Respondent submits that it was not his choice to go to court, but he had no alternative. He submits that the Applicant filed a false claim for support arrears with the Family Responsibility Office ("FRO"). He states that the Applicant has damaged his relationship with the children and that he is in dire financial circumstances. He also submits that he is suffering from a debilitating medical condition called Stills Disease that has affected his ability to earn income.

[12] Respondent's Challenge to Bill of Costs

Finally, the Respondent claims that the bill of costs submitted by the Applicant's counsel is excessive and that it makes no sense that the Applicant's counsel billed for forty four hours of work when his counsel only billed thirty hours, given the fact that he was the moving party.

The Governing Principles

[13] Rule 24 of the Family Law Rules

Rule 24 of the Family Law Rules, O. Reg. 114/99, governs the determination of costs in family law proceedings and the sections relevant to the circumstances of this case are as follows:

24. (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.

(4) Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party's own costs or ordered to pay all or part of the unsuccessful party's costs.

(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.

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

(7) If a party does not appear at a step in the case, or appears but is not properly prepared to deal with the issues at that step, the court shall award costs against the party unless the court orders otherwise in the interests of justice.

(8) 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) Promptly after each step in the case, the judge or other person who dealt with that step shall decide in a summary manner who, if anyone, is entitled to costs, and set the amount of costs.

[14] Factors for Setting Costs

Rule 24 (11) provides a further list of factors that a court should consider in dealing with costs:

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.

[15] Three Principles of Costs Rules

In Serra v. Serra, 2009 ONCA 395, at paragraph 8, the Ontario Court of Appeal confirmed that costs rules are designed to foster three important principles:

1. to partially indemnify successful litigants for the cost of litigation;
2. to encourage settlement; and
3. to discourage and sanction inappropriate behaviour by litigants.

[16] Presumptive Nature of Rule 24

Rule 24 created a new framework for determining costs in family law proceedings. The presumptive nature of Rule 24 has significantly curtailed the court's discretion regarding costs in family law proceedings and absent compelling circumstances or the exceptions set out in the rule itself, costs are generally awarded to the successful party. The Ontario Court of Appeal in C.A.M. v. D.M., at paragraph 40, held that while the Rules have not completely removed a judge's discretion, the Rules nonetheless circumscribed the broad discretion previously granted to the courts in determining costs. Courts must not only decide liability for costs, but also the amount of those costs.

[17] Fair and Reasonable Amount

The court's role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees. As was pointed out in Boucher et al. v. Public Accountants Council for the Province of Ontario, the award of costs must be fixed in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings rather than an exact measure of actual costs to the successful litigant.

[18] Ability to Pay

In deciding the amount of costs to be paid, I must also consider clause 24 (11) (f) which requires the court to consider any other relevant matter, including the ability to pay costs. See Biant v. Sagoo. In C.A.M v. D.P., Justice Rosenberg for the Ontario Court of Appeal states the following:

"I am also of the view that the financial situation of the parties can be taken into account in setting the amount of the costs award either under Rule 24 or Rule 18. Thus, while subrule 24(11) enumerates a number of factors that must be taken into account, the person setting the amount of the costs is directed to take into account "any other relevant matter". I agree with Aston J. in Sims-Howarth at para. 4, that the "Family Law Rules demand flexibility in examining the list of factors in subrule 24(11) without any assumptions about categories of costs". In my view, a consideration of particular relevance may be the financial position of the parties, especially of an unsuccessful custodial parent. See Biant at para. 17 and Brennan v. Brennan, [2002] O.J. No. 4743 (S.C.J.) at para. 11. In fixing costs the courts cannot ignore the best interests of the child and thus cannot ignore the impact of a costs award against a custodial parent that would seriously affect the interests of the child. [par. 42]"

[19] Proportionality of Costs

In Delellis v. Delellis and Delellis, at paragraph 9, Justice David R. Aston states the following:

"… 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..."

Analysis

[20] Entitlement to Costs

In my view, in considering all of the circumstances, the Applicant is entitled to her costs for the following reasons.

[21] Respondent's Unreasonable Conduct

The Applicant was clearly successful in having the Respondent's motion to change struck and all of his claims dismissed. The Respondent behaved unreasonably in these proceedings. This was the Respondent's Motion to Change the parties' agreement and to terminate support. Yet he failed to satisfy the onus to prove a change in circumstances and he failed to abide by the orders for financial disclosure that were made. He was unprepared for his own court case and on one occasion, did not even attend or leave instructions for his lawyer. He ultimately consented to an order striking his pleadings after putting the Applicant to considerable legal expense in responding to his motion.

[22] Failure to Use Dispute Resolution

Contrary to the Respondent's claim, it was in fact his choice to initiate court proceedings and he made no attempts to utilise the dispute resolution provisions of the parties' separation agreement. According to Mr. McDonald, counsel for the Applicant, he wrote eleven letters to the Respondent and/or his lawyer from July 2010 to May 2012. The Respondent refused to provide his income documents as required to review the issue of support. Instead, the Respondent commenced his court proceeding in August 2012. Once the Applicant had some limited disclosure from the Respondent, it was clear that his income was greater than it was at the time he signed the Separation Agreement dated August 24, 2009.

[23] False Claim Allegation

The court does not understand the Respondent's claim that the Applicant filed a false statement of support arrears with the Family Responsibility Office. It is not disputed that the Respondent stopped paying support in accordance with the parties' separation agreement in January of 2012. There is no evidence to support the Respondent's contention that the statement of arrears filed was false. The Applicant filed the parties' separation agreement with FRO and did not seek the enforcement of section 7 expenses.

[24] FRO Letter Allegation

The Respondent also alleges that he lost his employment due to a very damaging letter sent by FRO to his employer indicating that he was not a good father and that he had not paid support. This has nothing to do with the Applicant and her claim for costs, however it seems very unlikely that FRO would have sent such a letter to the Respondent's employer. The Respondent is likely referring to the standard support deduction notice that FRO sends to parties and their employers to collect the support owing, which notice would not have been sent if the Respondent had simply paid the support owing. There is no evidence that the Respondent's termination from his employment had anything to do with FRO attempting to collect the support owed.

[25] Damaged Relationship with Children

The Respondent's claim that the Applicant has damaged his relationship with the children has not been proven and in fact, was raised for the first time in his response to the Applicant's request for costs. The Respondent did not raise this issue in his Motion to Change, nor did he raise it at all in the case management process. However, he did file an Amended Motion to Change, seeking to eliminate the regular access schedule, which would seem to suggest that the Respondent was choosing not to exercise the access that he is entitled to exercise.

[26] Ability to Pay

The Court has very little evidence from the Respondent that he is not in a position to pay costs. Based on the limited disclosure provided, it appears that the Respondent has significantly underpaid support. He has also provided no evidence that his medical condition, Stills Disease, makes it impossible for him to earn income. Up until receiving the Respondent's response to the Applicant's bill of costs, he did not refer to this medical condition in any of his pleadings as a factor in not paying child and spousal support.

[27] Limited Means and Unreasonable Conduct

Furthermore, individuals of limited means should not be able to conduct litigation with impunity. The ability to pay costs is relevant to the quantum of costs but not to another party's entitlement to costs. A party's limited finances may not be used to shield liability particularly when the course of litigation was misguided or unreasonable. As Justice Spence stated in Peers v. Purpore, 2008 ONCJ 615, "in family law litigation, and particularly for parties of modest means, it behooves those parties to act reasonably and to avoid trial if at all possible."

[28] Reasonableness of Bill of Costs

Finally, the Applicant's bill of costs is reasonable. The Applicant's lawyer is a very experienced family lawyer and in fact only billed 14.5 hours of the total 44 hours claimed. The balance of hours was for clerk or student hours. The reason that the Applicant incurred more legal fees than the Respondent is because her lawyer actually did the work necessary in this proceeding. The Respondent did not file case conference briefs for all three case conferences held, he did not prepare or provide the financial disclosure that I ordered, he did not provide instructions to his lawyer, and he became self-represented after the second case conference.

[29] Quantum of Costs Award

In my view, a fair and appropriate amount of costs in all of the circumstances of this case is $7,500.00.

Order

[30] Costs Payment Terms

The Respondent shall pay to the Applicant costs in the amount of $7,500.00, inclusive of fees, disbursements and taxes. These costs shall be paid no later than 30 days from the date of this order, or to be paid at a rate of $300.00 per month, commencing December 1, 2013.

[31] Enforcement Through Family Responsibility Office

The order for costs shall be enforceable as part of a support order by the Family Responsibility Office. This court has the discretion to determine what part of a legal costs order should be enforceable as part of a support order by the Family Responsibility Office. See Sordi v. Sordi, 2011 ONCA 665. In this case, the issues in dispute in this motion to change were child support and spousal support.

Justice Sheilagh O'Connell

Date: October 15, 2013

Footnote

[1] The total costs originally sought by the Applicant were $10,487.93, however, the Applicant's counsel brought to the court's attention that a previous costs award made in the Applicant's favour in the amount of $750.00 were attributable to fees and expenses of $1,421.40 for the preparation and attendance at a case conference, so this amount was deducted from the bill of costs.