Court File and Parties

Court File No.: D51884/10 Date: 2014-03-06

Ontario Court of Justice

Toronto North Family Court

Between:

M.K. Applicant

- and -

T.R. Respondent

Counsel:

• Kathryn L. Smithen, for the Applicant
• Margarida M. Pacheco, for the Respondent

Heard: In Chambers

Justice: S.B. Sherr

Costs Endorsement

[1] On January 31, 2014 I released my reasons for decision after hearing this three-day trial. I granted the respondent (the mother) sole custody of the parties' two children and made a no-access order. I ordered (on consent) that the applicant (the father) pay child support of $345 per month, based on a minimum wage income, starting on August 1, 2013 and that there were no child support arrears as of July 31, 2013. I invited written costs submissions that have been delivered by the parties.

[2] The mother seeks her full recovery costs of $29,153.45. The father submits that there was divided success in the case – the mother was successful on the parenting issues and the father was successful on the child support issues. He claimed that his full recovery costs were $32,035.27, and submitted that given the divided success, it would be appropriate for the court to order no costs to either party.

[3] 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.

[4] 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.

[5] Subrule 24(6) of the rules provides that where there is divided success, the court can make a costs order that it considers appropriate.

[6] Neither party made a formal offer to settle. The father submitted that during the case he provided the mother with support scenarios that were, to use his words, "an offer of sorts". These scenarios had limited value. They were not dated or signed. There was no indication about when they were delivered and whether they were capable of acceptance, or merely prepared for discussion purposes. The parties should have made proper offers to settle. The failure to do so is an adverse consideration in determining costs. See: Laing v. Mahmoud, 2011 ONSC 6737.

[7] The parties advised the court at the outset of the trial that there would likely be a resolution of the support issues (which included the issue of support arrears). Minutes of Settlement regarding the support issues were submitted to the court on the final day of trial. No other time was spent at trial on these issues. The support issue was fairly straight-forward and should have involved little preparation time.

[8] The mother claimed retroactive support (as reflected in the trial management conference endorsement). This was not ordered. However, any lack of success on this issue is offset by my findings at trial that the father's evidence about his financial affairs was not credible, incomplete, inconsistent and misleading. It is a reasonable inference that his failure to provide credible financial information interfered with the mother's ability to settle this issue. The court finds that there was divided success on this issue.

[9] Where there are multiple issues before the court, the court should have regard to the dominant issue at trial in determining success. See: Firth v. Allerton, [2013] O.J. No. 3992 (S.C.J.); Mondino v. Mondino, 2014 ONSC 1102. The dominant issue at this trial was whether or not the father should have access to the children and the mother was the successful party on this issue. The court also granted the mother's requests for an order dispensing with the father's consent for her to obtain government documentation for the children and to travel with them outside of Canada (the issue of custody was not contested).

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

[11] 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.

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

[13] The mother acted reasonably in this case. The father did not act reasonably with respect to his financial information. He did act reasonably on the access issue. Although he was unsuccessful in obtaining access, the father's decision to proceed to trial was understandable. He was sincere in his desire to have a relationship with his children. Further, his position was supported by Dr. Daniel Fitzgerald, who provided the court with a psychological report.

[14] The rates claimed by both counsel were reasonable. The case law is well settled that the receipt of legal aid is not a factor in determining costs. See: Ramcharitar v. Ramcharitar and Alvarez v. Smith.

[15] A considerable portion of the costs claimed in both parties' bills of costs relate to previous steps in the case. Subrule 24(10) of the rules 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. Islam v. Rahman, 2007 ONCA 622.

[16] A party is entitled to claim time spent for meetings with the client and reviewing and preparing pleadings and financial statements as this is time not attributable to any one step in the case. See: Czirjak v. Iskandar, 2010 ONSC 3778. Costs accrued from activity not specifically related to the step (not requiring judicial intervention) should be dealt with at the end and not by the motions judge. See: Houston v. Houston, 2012 ONSC 233 and Walts v. Walts, 2014 ONSC 98. The parties' bills of costs did not clearly set out what costs might be claimed for work not specifically related to a step in the case. In the absence of a clear delineation this court took a cautious approach in awarding such costs.

[17] The major disbursement claimed by the mother is $2,625 for Dr. Fitzgerald's assessment. This is the appropriate stage to claim these costs. I have taken into consideration that the assessment did not support the mother's position. Disbursements were also claimed by the parties for postage, photocopies, faxes, couriers and filing fees, but it was not made clear in the parties' bills of costs what disbursements are attributable to prior steps in this case.

[18] Although they are not specified in subrule 24(11) of the rules as factors in determining costs, the financial means of the parties, their ability to pay a costs order and the effect of any costs ruling on the parties and the children of the family are also relevant considerations in reaching a determination on the issue of costs. See: MacDonald v. Magel and Fyfe v. Jouppien, 2012 ONSC 97.

[19] I have considered that the father has limited ability to pay costs. His ongoing support obligation is based on a minimum wage income. It is a logical inference that the agreement to fix child support arrears at zero as of July 31, 2013 reflected that the father has had a limited ability to pay child support.

[20] This is not a case where the father litigated recklessly and then pleaded poverty. His decision to litigate the access issue was reasonable. There was no settlement option available to the father that would have permitted him to see his children. However, there is a limitation to this mitigating consideration. It was in large part his abusive and controlling behaviour that necessitated the mother seeking the no-access order – a claim that was validated by the court.

[21] 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.

[22] 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. The father will be given a reasonable time to pay this costs order. The order may be repaid at the rate of $1,000 per year, with the first payment due on or before December 31, 2014, and the subsequent payments due on or before December 31st in each subsequent year, until they are paid in full. However if the father is more than 30 days late in making any costs payment, the entire amount shall become immediately due and payable.

Justice S.B. Sherr

Released: March 6, 2014