Court File and Parties

Court File No.: D42192/07 Date: 2015-01-07

Ontario Court of Justice

Between:

MAXINE STEPHENSON Acting in Person APPLICANT

- and -

MARK THOMAS RESPONDENT

Counsel: Gordon Zlatko Bobesich, for the Respondent

Heard: In Chambers

Justice: S.B. Sherr

Costs Endorsement

Background

[1] On December 11, 2014, the court released its reasons for decision with respect to motions to change the existing support order brought by both parties. The court reduced the respondent's (the father) support arrears by $6,468 to $288.42. The basis for this reduction was that the parties' twenty-year-old son (the child) was not eligible for support from July 1, 2013 until August 31, 2014. The court revived the father's child support obligation as of September 1, 2014, as the child had returned to school on a full-time basis. The court also ordered the father to pay towards the child's special expenses, pursuant to section 7 of the Child Support Guidelines (the guidelines) in addition to the guidelines table amount of support.

[2] The court gave the parties permission to make written costs submissions. They have both done this. The father has requested the sum of $7,500 in his amended costs submissions.[1] The applicant (the mother) asks that the father pay her costs of $700.

Legal Framework for Costs

[3] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395 confirmed 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 creates a presumption of costs in favour of the successful party.[2] 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. The position each party took at the hearing of the motions should also be examined.

Failure to Make Settlement Offers

[5] Neither party presented an offer to settle in costs submissions. This is disappointing, particularly when a party is represented by counsel. It is also unreasonable behaviour. The court repeats its comments made in paragraphs 4-5 of Klinkhammer v. Dolan and Tulk, 2009 ONCJ 774 where it wrote:

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.

[6] Unfortunately, these comments have to be continuously repeated. This court hears far too many motions and trials where no offer to settle has been made.

Analysis of Success

[7] The failure of the parties to make offers to settle means that the court must look at their respective positions at trial to determine who was successful. Both parties claimed success.

[8] The father's position at trial was that his support obligation should be terminated as of July 1, 2013 and it should not be revived. In the alternative, he argued that if his support obligation was revived, it should be based on an annual income of $43,128 per annum. It is also important to note that until the start of the trial the father maintained that his annual income was $33,507 per annum.

[9] The mother's position at trial was that if the father's arrears were to be reduced, it should only be for a three-month period in 2014. She asked for an order that the father contribute to the child's section 7 expenses, starting on September 1, 2014. She also asked the court to continue to impute the father's income at $50,000 per annum for support purposes.[3]

[10] The court finds that there was divided success at trial. The father was successful in reducing his support arrears by $6,468. This was the credit for support accrued for the 14 months that the court found the child ineligible for support. The mother was successful in reviving support for the child as of September 1, 2014 and in obtaining an additional order for special expenses. She was also successful in continuing to have the father's income imputed at $50,000 per annum.

[11] The court finds that the father was slightly more successful than the mother due to the $6,468 support credit. This was the dominant issue in the case.

[12] Subrule 24 (6) states that where success is divided, the court may apportion costs as appropriate.

Factors in Determining Costs

[13] In making this decision, the court also considered the factors set out in subrule 24 (11). This subrule 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.

[14] The issues before the court were important for the parties. They were not difficult or complex.

[15] Subrule 24 (4) provides that 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.

[16] Subrule 24(5) provides criteria for determining the reasonableness of a party's behaviour in a case (a factor in clause 24(11)(b) above). It reads as follows:

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.

[17] Family law litigants are responsible for and accountable for the positions they take in the litigation. See: Heuss v. Surkos, 2004 ONCJ 141.

Unreasonable Behaviour of Both Parties

[18] There was unreasonable behaviour by both parties. Neither party made an offer to settle. The mother refused to terminate support after the child finished school in 2013, leaving the father with little option other than to start his motion to change.

[19] On the other hand, the court did not find the father's financial evidence to be reliable. Until trial, he represented that he was earning only $33,507 per annum. He only increased that figure to $43,128 per annum at the start of the trial. His financial disclosure was incomplete, repeating a pattern of failing to provide full financial disclosure over the long history of this case.

[20] The rates claimed by both parties are reasonable. The father's counsel was called to the bar in 1976 and charges $400 per hour. The sum of $700 claimed by the mother is very reasonable for a self-represented litigant.

[21] Subrule 24(10) 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. See: Islam v. Rahman, 2007 ONCA 622. Little detail was provided in the father's lawyer's bill of costs. He just attached a summary of accounts sent to the father. It was difficult to ascertain what work was done for this step in the case. There were only two appearances before a judge, including the hearing of the motions to change.

[22] 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.

Mother's Unreasonable Conduct and Duty to Report

[23] Given the divided success and the unreasonable behaviour by both parties, the court considered making no order as to costs. However, the court cannot overlook the fact that it was the mother's unreasonable refusal to terminate support that caused this round of litigation. It was clear from the mother's evidence and her costs submissions that she remains very angry at the father concerning support issues. She has some basis for this anger. The father has brought several change motions over the years that have been dismissed due to his failure to provide proper or accurate financial disclosure.[4] She has had to make many appearances in court over the years to obtain and maintain appropriate support. Unfortunately, this anger interfered with her ability to act reasonably when the request to terminate support was made.

[24] It is also important to send a general message to support recipients that they must report to the Director of the Family Responsibility Office (the Director) when a child is no longer eligible for support, particularly when they receive a direct inquiry about this (as the mother did) from the Director. The integrity of the support collection system relies on honest reporting. The mother did not meet this obligation.

Consideration of Mother's Financial Circumstances

[25] The court also considered the mother's ability to pay the costs order. 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 acted unreasonably and are the author of their own misfortune. See: Snih v. Snih pars. 7-13. The mother is of fairly modest means, earning about $44,000 per annum. This order shall provide that she may repay costs in an affordable manner.

Costs Order

[26] Balancing all of these factors the court finds that the mother shall pay the father's costs in the sum of $1,200. The mother may repay this amount in the sum of $100 per month, starting on February 1, 2015.

Justice S.B. Sherr

Released: January 7, 2015

Footnotes

[1] The only differences between the original costs submissions and the amended costs submissions were that the father increased the costs requested and attached a bill of costs. Otherwise, the content of his submissions remained the same.

[2] All references to rules in this endorsement are to the Family Law Rules.

[3] This was the amount of income imputed to the father in the existing support order.

[4] Costs were awarded against the father on these failed motions.