Court File and Parties
Court File No.: DFO 11 1109100 A3
Date: 2014-01-27
Ontario Court of Justice
Between:
Andrew Mark Sader Applicant
— And —
Natalie Lotti Kekki Respondent
Before: Justice E. B. Murray
Costs Decision released on January 27, 2014
Counsel
Mr. Andrew Mark Sader ......................................................... on his own behalf
Ms. Melanie Sager ...................................................................... for the respondent
Decision
MURRAY, E. B. J.
[1] Background
[1] The parties are the father and mother of a child, Annalie, born April 2, 2010. They were unable to agree on appropriate decision-making and residential arrangements for the child, and those issues (including some minor issues with respect to child support) were decided by me after a 6-day trial. Mother was represented by counsel at trial; Father, who is a lawyer, represented himself. The parties, at my direction, have made written submissions on costs.
[2] Mother filed submissions; a bill of costs; caselaw; Father's two Rule 18 offers to settle; correspondence from her lawyer to opposing counsel in response to one of those offers; her settlement conference brief, which included an offer to settle in the text; and unsigned draft minutes of settlement, which she says represents her response to Father's second offer to settle. Father filed submissions; Mother's Form 35.1 affidavit; his settlement conference brief, which included an offer to settle in its text; his two Rule 18 offers to settle; correspondence from his lawyer to opposing counsel with respect to Mother's response to his offer to settle; and accounts from his lawyers showing costs of $22,088 incurred prior to trial.
[3] Mother claims costs from Father in an amount of $55,234.87, inclusive of disbursements and HST, which amounts to costs on a full recovery basis for the period after Mother's lawyer made her response to Father's second offer to settle, approximately one month before trial. She refers to this response as an equivalent to an offer to settle. She submits that she should obtain costs at this level for two reasons:
She was significantly more successful than Father on the two major issues in the trial—1) should the order for custody be one of sole custody to her, or joint custody in the parallel parenting mode?; 2) what schedule should be put in place?
She made reasonable offers to settle, including one which was more favourable to Father than the terms of my decision.
[4] Father's position as to the appropriate order for costs, if any, was not articulated. He submits that success was divided, that his litigation conduct was reasonable prior to and during the trial, and that he made reasonable offers to settle. He argues that Mother made few if any efforts to settle or narrow issues in the case during the two years before trial. It was unclear whether Father's position was that neither party should pay costs, or that his liability for costs should be diminished because of the factors he cites, or that he should receive costs.
1. Preliminary Issue
[5] In addressing the issue of costs, each party submitted his/her settlement conference brief which contained an offer to settle. Many trial courts have held that the contents of a settlement conference brief—including any offer to settle which forms part of that brief—cannot be considered in the determination of costs. I agree with those decisions. To do so would violate the clear provisions of Rule 17(23), set out below:
- No brief or evidence prepared for a settlement conference and no statement made at a settlement conference shall be disclosed to any other judge, except in,
• (a) an agreement reached at a settlement conference; or
• (b) an order.
[6] Appellate opinion on a related issue takes the same view. In Cicciarella v. Ciciarella the Ontario Divisional Court held that a court was barred by Rule 17(23) from considering the contents of an affidavit that was attached to a settlement conference brief for a purpose other than those set out in the Rule.
[7] It has been suggested that, given the importance of encouraging settlement, that (at least where self-represented parties are concerned) Rule 17(23) might be relaxed to allow a court to consider an offer in a settlement conference brief when determining costs. I do not think this approach is feasible, as Rule 17 sets out no exception for use of the brief as regards submissions on costs. This may be an issue for the Rules Committee to consider, but as it stands, if a litigant wants an offer to be considered pursuant to Rule 18 or Rule 24, she must file a stand-alone offer.
[8] Accordingly, I cannot consider the offer which forms part of either party's settlement conference brief, and I will make no further reference to those briefs.
2. The Law
[9] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C-43, as amended, provides that the costs of a proceeding or a step in a proceeding is in the court's discretion. That discretion is circumscribed by rule 24 of the Family Law Rules, O. Reg. 114/99, as amended. The relevant portions of that rule are set out below:
SUCCESSFUL PARTY PRESUMED ENTITLED TO COSTS
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.
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.
DIVIDED SUCCESS
(6) If success in a step in a case is divided, the court may apportion costs as appropriate.
BAD FAITH
(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.
COSTS TO BE DECIDED AT EACH STEP
(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.
FACTORS IN COSTS
(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.
[10] The Ontario Court of Appeal has given us guidance as to the purpose of modern costs rules:
- Indemnification of a successful litigant;
- Encouragement of settlement;
- Discouragement of inappropriate behaviour.
[11] The Court of Appeal has also cautioned that the overall objective in determining costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances, rather than an amount reflecting the actual costs paid by the successful litigant.
3. Analysis
3.1 Success
[12] The usual yardstick for success is the result at trial compared to the relief sought in the pleadings and to the terms of offers to settle. In this case, however, the best measure of success is the result at trial compared to the order requested by each party at trial. I say this because the relief requested by each party in their pleadings changed in significant respects by the time of trial, and because one party did not serve an offer to settle, while the terms in the offer to settle served by the other party differed little from the relief he requested at trial.
The Pleadings
[13] When Father commenced his application, Annalie was one year old. Father requested an order for joint custody and frequent short periods of daytime access, with an increase to overnight weekend access within a few months. Mother requested an order for sole custody and frequent short daytime visits; she opposed an order for overnight access.
[14] By the time the matter came to trial, Annalie was three years old and was spending weekend overnights with Father, and the relief requested by each party had changed. Father refined his request for an order of joint custody to ask for a parallel parenting order, and asked that Annalie be with him 3 out of every 4 weekends, without any midweek visit. Mother requested visits on alternate weekends and one mid-week, non-overnight visit. Father, and to a lesser extent Mother, had developed a long list of other requested terms for an order, covering issues like transportation, communication between the parties, and mobility. Father also requested an order that provided that his contribution to Annalie's special expenses be calculated as 50% of the total, and not proportionate to income, the default order in the Guidelines; this request was opposed by Mother.
Offers to Settle
[15] As for offers to settle, there was little difference between the terms of Father's second offer and the order he requested at trial. The only notable difference was that in the offer Father provided that Annalie would be with him every 2 out of 3 weekends, as opposed to the 3 out of 4 weekends requested at trial.
[16] Mother submitted no offers to settle, as an offer is defined by Rule 18(4) of the Family Law Rules: in writing and signed by a party and her lawyer.
[17] What Mother says are offers to settle are not offers as defined by the Rules. The letter from Mother's lawyer to Father's lawyer dated January 11, 2013, responding to Father's first offer to settle, sets out a position on some of the issues in the offer and makes a proposal about temporary access; it is unsigned by Mother. The draft minutes of settlement indicate a position more favourable to Father on the issue of custody than the terms of my order, but these minutes are signed by neither Mother nor her lawyer, and are unaccompanied by any correspondence indicating that Mother would settle the case on these terms.
[18] There is debate in the caselaw about whether an offer which would qualify as an offer to settle under the common law but which does not meet the definition in the Family Law Rules (because it is not signed by both a party and her lawyer) may be considered Rule 18(16) in determining costs. Rule 18(16) provides:
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.
[19] In my view, Rule 18(16) refers to offers made as defined by Rule 18(4) which do not satisfy the other criteria set out in Rule 18(14), in that they were not made within the prescribed time frame or their terms are not uniformly better than that of the judgment. Rule 18(16) cannot refer to offers that do not meet the basic definition of an offer under the Rules—in writing and signed by the litigant and her lawyer.
Divided Success
[20] Success in this case was divided, but Mother was more successful than Father on the most important issues in the case, the type of custodial order to issue and the structure of Annalie's regular schedule.
• My order provided that Mother have sole custody of Annalie as she requested, not the parallel parenting regime requested by Father.
• My order provided that Annalie have access to Father on alternate weekends as requested by Mother, not 3 out of 4 weekends requested by Father.
[21] I also ordered that Father's contribution to section 7 expenses be proportionate to income, which rejected Father's approach to the issue.
[22] My order also provided for Annalie to spend time with Father each week for a midweek overnight stay. This was requested by neither party. Father's position was that required travel time made such any midweek visit unfeasible, and was adamant at trial that the only option which would give the child adequate time with him was the schedule of 3 out of every 4 weekends. Mother asked for a midweek non-overnight weekly visit, although she indicated in her trial testimony that she was open to this visit being overnight. In Father's submissions on costs, he characterizes my order in this respect as representing "success" for him, as it results in more monthly overnights than the schedule requested by either party. I am pleased that he appears to be content with this schedule, but I cannot characterize this portion of my order as representing "success" for either party when measured against the relief requested at trial.
[23] With respect to provision for Annalie's schedule for holiday and vacation access, my order did not exactly reflect the schedule sought by either party. I view the allocation of this time as being neutral in measuring success in the case.
[24] Father was more successful than Mother on some secondary issues in the case. By secondary issues I mean issues that were not highlighted by either party as of primary importance and which were not the subject of appreciable evidence or submissions.
• Mobility. As requested by Father, my order provided that if either party intends to move more than 5 kilometres further from each other than they currently reside, he/she shall advise the other at least 60 days in advance. Mother did not request any order on this issue.
• Communication between parents. As requested by Father, my order provided that the parties will communicate with each other by email or an online parenting program. Mother had requested that another option, communication by logbook, be included.
• Transportation. Father requested that Mother share transportation of Annalie equally, an order which she opposed when the trial opened. My order provided that Mother take responsibility to provide some of the transportation for visits, but for less than 50% of the visits.
3.2 Entitlement to Costs
[25] Mother's greater degree of success on the key issues in the case merits entitlement to some costs.
[26] Father did not allege that Mother exhibited bad faith conduct that would disentitle her to costs. Although, as seen below, I find that Mother's litigation conduct was unreasonable in one respect, I do not find that her unreasonableness reached a level that should deprive her of costs entirely pursuant to Rule 24(4). As I said in my trial decision, Mother generally took reasonable positions with respect to the issue of time that Annalie should spend with her father, given all the other factors in the case. She did not conceal evidence or, for example, lead "absurdly excessive" evidence to answer Father's claims.
3.3 Quantum of Costs
[27] Importance/complexity/difficulty of issues. The issues concerning Annalie's custodial arrangements and schedule were important to the parties, but they were neither difficult nor complex.
[28] Reasonableness/unreasonableness of litigation behaviour. I find that Mother's failure to serve an offer to settle constitutes unreasonable litigation behaviour, and that this should reduce any award of costs to which she is otherwise entitled.
[29] Mother engaged in settlement discussions, but made no offer. She also sometimes took an inordinate amount of time to respond to Father's settlement offers. For example, his offer of October 11, 2012 did not receive even a partial reply until January 11, 2013.
[30] As Justice Stanley Sherr has said: "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". An offer to settle under the Rules—as contrasted with a position floated in settlement negotiations—binds a litigant to end the case if accepted.
[31] I do not agree with Mother's submission that Father engaged in unreasonable litigation behaviour. Father advanced positions—such as his assertion that Mother was attempting to alienate Annalie from him—that I did not accept. That fact does not mean that he was acting unreasonably.
[32] Lawyer's rates. Father did not challenge the appropriateness of the rate of $350 per hour charged by Mother's lawyer. Given her level of experience in family law, I find that it is appropriate. The rate is similar to that charged by the experienced family law lawyer he employed prior to trial.
[33] Time properly spent on case. Mother's counsel spent a substantial amount of time in preparing for a trial that did not involve difficult or complex issues. Given Father's approach to the presentation of his case, however, detailed preparation by Mother's counsel to meet that case was justified. Father, in an attempt to demonstrate that Mother did not value his role as a parent, presented viva voce testimony and extensive documentary evidence (emails) about the interactions of the parties with respect to Annalie and her schedule over the three years since her birth. Mother's lawyer prepared to meet his attack in an equally detailed fashion.
[34] Disbursements. There is no challenge to the disbursements, which appear to be proper.
[35] Any other relevant matter. Father's current income is in excess of $138,000 annually. He did not submit that an order for costs in the amount sought by Mother would cause him financial hardship, and I do not find that his financial situation is such that the order for costs that I would otherwise find appropriate should be reduced.
4. Conclusion
[36] Considering the divided success in the case, Mother's greater degree of success on the key issues, and Mother's failure to submit an offer to settle, I have determined that appropriate award for costs is one of $30,000, payable to her by Father within 45 days.
Released on: January 27, 2014
Signed: Justice E. B. Murray
Footnotes
[1] Mother's total costs properly related to trial are $63,464; her total costs for the case are $79,739.
[2] See Entwhistle v. MacArthur; Bordynuik v. Bordynuik; Yarmo v. Friend, 2011 ONCJ 277; Courtemanche v. Lapointe, 2013 ONCJ 400.
[3] 25 O.A.C. 156
[4] Catsimbras v. Krstic, 2013 O.J. 3831 (O.C.J.)
[5] Serra v. Serra, 2009 ONCA 395
[6] Boucher v. Public Accountants Council (Ontario)
[8] Riss v. Greenough, 2003 CarswellOnt 204 (Ont. Fam. Ct.) says no; Deelstra v. VanOsch, 2003 CarswellOnt 204 (Ont. Fam. Ct.) says yes.
[9] Rule 18(14) provides:
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:
If the offer relates to a motion, it is made at least one day before the motion date.
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.
The offer does not expire and is not withdrawn before the hearing starts.
The offer is not accepted.
The party who made the offer obtains an order that is as favourable as or more favourable than the offer.
[10] Brennan v. Brennan, 2002 O.J. 4743 (S.C.)
[11] As did the successful party in Jones v. Scheltgen who was denied costs.
