Court File and Parties
Court File No.: D80220/15 Date: 2015-05-04
Ontario Court of Justice
Between:
KARLA BROWN
Applicant
- and -
JUSTIN SCOTT PULLEY
Respondent
Counsel:
- Adela Crossley and Theodora Oprea, for the Applicant
- Christine Marchetti, for the Respondent
Heard: In Chambers
Justice: S.B. Sherr
Costs Endorsement
[1] On April 9, 2015, the court released its reasons for decision after a three-day hearing. The court ordered the applicant (the mother) to return the' two children to their habitual residence in North Carolina pursuant to the Convention on the Civil Aspects of International Child Abduction (the Hague Convention). The court also stayed the mother's claim for custody of the children that she had brought in this court.
[2] The court gave the parties the opportunity to make written costs submissions. The respondent (the father) made submissions and seeks full recovery costs of $38,304.87. The mother made written submissions and asks that no costs be ordered.
[3] The court has been advised that the mother has returned with the children to North Carolina.
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 (all references to rules in this endorsement are the Family Law 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.
[6] Neither party made an offer to settle.
[7] The father submitted that it was challenging to make an offer to settle because of the expedited nature of this matter and the "all-in" nature of the relief sought. The court finds that despite these challenges, the father should have still made an offer to settle. The offer to settle could have included undertakings and terms of the mother returning with the children to North Carolina, similar to those that were ordered by the court. This court has often written that it will usually be unreasonable behaviour to fail to make an offer to settle. The court wrote in paragraphs 4-5 of Klinkhammer v. Dolan and Tulk, 2009 ONCJ 774:
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
[8] The mother conceded that the father was the successful party based on the positions taken by the parties at the hearing.
[9] The mother did not rebut the presumption that the father is entitled to costs. The issue will be the amount of costs that should be awarded.
Factors in Determining Costs
[10] In making this decision, the court considered the factors set out in sub-rule 24(11), 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 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 of Issues
[11] The case was important for the parties. It was also complex as there were several legal issues involved. These were set out in paragraph 5 of the reasons for decision as follows:
- Does the Hague Convention apply? In particular:
i) Did the mother wrongfully remove the children from North Carolina?
ii) Was the removal of the children by the mother in breach of rights of custody attributed to the father, an institution or any other body, either jointly or alone?
iii) At the time of removal or retention, were those rights actually exercised, either jointly or alone, or would have they been so exercised but for the removal or retention?
a) If the Hague Convention applies to this case, would there be a grave risk that the children's return to North Carolina would expose them to physical or psychological harm or otherwise place them in an intolerable position?
b) If the Hague Convention is not applicable, should the court recognize and enforce the North Carolina order? In particular:
i) Was the mother given reasonable notice of the commencement of the North Carolina proceeding?
ii) Was the mother given an opportunity to be heard by the North Carolina court?
iii) Should the court supercede the North Carolina order because the children would suffer serious harm if returned to the father or removed from Ontario?
c) Should this court accept jurisdiction of this case pursuant to section 23 of the Act, based on a finding that the children would suffer serious harm if returned to the father or removed from Ontario?
d) If this court decides not to accept jurisdiction of this case pursuant to section 23 of the Act, should it make interim orders facilitating the return of the children to North Carolina, and if so, what orders should be made?
[12] An additional layer of difficulty was added to the case when the mother attempted to introduce a therapist's letter in her client's reply material. On its face, it appeared that this was being introduced as an expert report. This required the father's counsel to conduct legal research and prepare submissions regarding the admissibility of such a report. The court declined to admit the therapist's letter, but permitted the mother to call the therapist to give viva voce evidence. The therapist testified. She was not presented as an expert witness. Rather, she was called to testify about statements made to her by the children. The father's counsel had to conduct legal research about the admissibility of child statements and prepare for and conduct a voir dire on this issue. The court did not admit the children's statements.
[13] The court recognizes that this additional legal work had to be prepared in an extremely short time frame by the father's counsel.
Reasonableness of Parties' Behaviour
[14] The litigation behaviour of both parties was reasonable, save for their failure to make offers to settle.
[15] The mother acted unreasonably by wrongfully removing the children from North Carolina.
[16] The court made findings of domestic violence by the father against the mother. While the domestic violence did not rise to the degree necessary to justify the mother taking the children from North Carolina, the father is not an innocent victim. His unreasonable behaviour contributed to the series of events that led to the mother's actions.
Lawyer's Rates and Time Spent
[17] The rates claimed by the father's counsel were reasonable for a lawyer called in 2005.
[18] The father's counsel provided a detailed bill of costs. It reflects the intensive amount of work that had to be performed by her in a very short time span. The bill of costs appeared to the court to be reasonable.
Expenses
[19] The father's expenses claimed are also reasonable. He had significant photocopy costs as most of this case was presented through affidavits and exhibits. He had to pay $2,750 for technical services to participate in this case by video-conference from North Carolina.
Mother's Ability to Pay
[20] The court considered the mother's ability to pay costs. See: MacDonald v. Magel. Courts have reduced costs, or ordered them paid over a period of time, where they would impair a custodial parent's ability to care for the children. See: Cameron v. Cameron, 2006 NSCA 76; Church v. Church.
[21] The mother is of modest means. For the most part, she has worked in bars and restaurants. She has done this illegally, as she has no immigration status in the United States.
[22] The court heard evidence at the hearing that the parties jointly own their home. However, the court did not receive any evidence about what equity the parties have in the home.
[23] While a party's limited financial circumstances is a factor for the court to consider, it should not be used as a shield against any liability for costs and should only be taken into account regarding the quantum of costs, particularly when the party has acted unreasonably. See: Snih v. Snih. Further, a parent is not absolved from a costs disposition simply because he or she is the custodial parent, particularly where the court is not persuaded that the child's best interests would be negatively affected. See: Cassidy v. McNeil, 2010 ONCA 218.
[24] In this case, the mother's financial challenges and her ability to look after the children are relevant considerations. However, they are not a complete shield to costs, as submitted by her. The father has been put to significant cost by the wrongful actions of the mother. He was the successful party and should receive partial indemnification. Even more importantly, the court needs to send a strong message to parents that resorting to self-help and wrongfully removing children from their habitual residence is unacceptable. There will be significant costs consequences for doing this.
Suspension of Costs Order
[25] The mother intends to regularize her immigration status in North Carolina. She might face restrictions on finding work in the next year. Recognizing this limitation, the court will suspend payment of the costs order for one year. This will permit the mother to regularize her immigration status, stabilize her living arrangements with the children and ensure that appropriate support arrangements are in place before she is required to pay these costs. It will minimize the impact of this order on the children.
[26] There will be two exceptions to the suspension of this costs order, being:
The father may enforce this order against any interest the mother has in real property; and
The father may set-off these costs against any property settlement owing to the mother or (subject to any order to the contrary by the court in North Carolina) a court order for property division owing to the mother.
[27] The court in North Carolina will be better suited to determine a repayment schedule for this costs order after the one year suspension, taking into consideration the parties' respective property and support claims.
Proportionality of Costs
[28] The court has 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.
Order
[29] Taking into account all of these considerations, an order shall go as follows:
a) The mother shall pay the father's costs fixed in the amount of $20,000, inclusive of fees, disbursements and H.S.T.
b) Payment of this costs order is suspended for one year with the following exceptions:
The father may enforce this order against any interest the mother has in real property; and
The father may set-off these costs against any property settlement owing to the mother or, subject to any order to the contrary by the court in North Carolina, a court order for property division owing to the mother.
Justice S.B. Sherr
Released: May 4, 2015