Court File and Parties

Court File No.: D72262/14 Date: 2015-08-20

Ontario Court of Justice

Between:

ASTON REID Applicant

- and -

VELSIELYN PENNANT Respondent

Counsel:

• Cherry Isaacs-Reynolds, for the Applicant
• Adela Crossley, for the Respondent

Heard: August 19, 2015

Justice: S.B. Sherr

Costs Endorsement

Background

[1] The respondent (the mother) seeks costs of $6,780, arising out of three court appearances. The applicant (the father) opposes the mother's request.

[2] The father brought an urgent motion regarding access on March 2, 2015. His motion was dismissed. The issue of costs was reserved.

[3] The mother brought a travel motion returnable on July 21, 2015. The father consented to the relief requested on the return date. The parties were also able to resolve parenting issues on a final basis at a case conference held that day. The issue of costs was reserved.

[4] The mother brought a motion for temporary child and spousal support that was heard on August 19, 2015. The father brought a cross-motion pleading undue hardship pursuant to section 10 of the Child Support Guidelines (the guidelines). He also sought extensive financial disclosure from the mother. This motion was also heard on August 19, 2015.

[5] The court dismissed the father's claim for undue hardship. He was ordered to pay the mother temporary child support of $669 per month. He was also ordered to pay the mother temporary spousal support of $150 per month. The court agreed with the mother's request to begin support as of January 1, 2015. It permitted the father to repay the arrears created by the order at the rate of $150 per month. The court ordered the mother to provide the father with financial disclosure, but not to the extent requested by him. Otherwise, the father's motion was dismissed.

Legal Framework for Costs

[6] 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.

[7] 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.

Settlement Offers

[8] Subrule 18(14) 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.

[9] The mother made two offers to settle. The father did not make an offer to settle.

[10] 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.

[11] These comments apply equally to making offers to settle on contested motions. See: H.F. v. M.H., 2014 ONCA 86.

[12] The mother's best offer did not meet the conditions under subrule 18(14). She sought temporary spousal support of $400 per month. Only $150 per month was ordered.

[13] The court has a discretion to take into account any written offer to settle, the date it was made and its terms, even if subrule 18(14) does not apply, when exercising its discretion over costs (subrule 18(16)). The mother's offer regarding child support was the same as the court order. The court agreed with her start date for support. She also made a reasonable proposal to settle the costs issue.

[14] The father did not want to pay any spousal support and asked to significantly reduce his child support obligation. This was not a reasonable position to take. Family law litigants are responsible for and accountable for the positions they take in the litigation: See: Heuss v. Surkos, 2004 ONCJ 141.

Success and Presumption of Costs

[15] The mother was the successful party at each court appearance, although there was some divided success on the spousal support issue at the last court appearance. The presumption that she is entitled to costs was not rebutted.

Factors in Setting Costs

[16] In making this decision, the court considered the factors set out in subrule 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 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.

Application of Factors

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

[18] The mother's behaviour was reasonable in the case. The father delayed in providing financial disclosure to the mother. He has not paid any support since January 1, 2015. He should have consented to the mother's travel motion without forcing her to bring a motion. He did not make an offer to settle. This behaviour was not reasonable.

[19] The mother's lawyer's rates claimed are reasonable.

[20] The time claimed by the mother's lawyer was reasonable. The court considered that the parties made good use of the July 21, 2015 appearance and settled the parenting issues. It is not appropriate to order complete recovery costs for that appearance.

[21] The court considered the father's ability to pay costs. See: MacDonald v. Magel. A party's limited financial circumstances will not be used as a shield against any liability for costs but will be taken into account regarding the quantum of costs, particularly when they have engaged in unreasonable behaviour. See: Snih v. Snih. The father is a financial mess. He incurred significant support arrears with respect to his first family that he is still repaying. He has an ongoing spousal support obligation to his ex-wife. He now owes support arrears in this case. However, this mess is mostly of his own making and due to his dereliction in meeting his support obligations.

[22] The court 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

[23] Taking into account all of these considerations, an order shall go as follows:

a) The father shall pay the mother's costs of the three court appearances fixed in the amount of $6,000, inclusive of fees, disbursements and H.S.T.

b) The father may repay these costs at the rate of $250 per month, starting on October 1, 2015. However, if he is more than 30 days late in making any support, arrears or costs payment, the entire amount of costs remaining owing shall immediately become due and payable.

Justice S.B. Sherr

Released: August 20, 2015