Court File and Parties

Court File No.: D80852/15 Date: 2015-10-20

Ontario Court of Justice

Between:

EKATERINA KUZNETSOVA Theodora Oprea, agent for Adela Crossley, for the Applicant

APPLICANT

- and -

RAYMOND FLORES

RESPONDENT

Jyotsana Panwar, for the Respondent

Heard: October 19, 2015

Justice: S.B. Sherr

Costs Endorsement

Background

[1] This is a costs decision arising out of a motion brought by the applicant (the mother) on October 19, 2015, seeking temporary child and spousal support from the respondent (the father).

[2] At a case conference held on September 1, 2015, the parties consented to an order that the father pay ongoing temporary child support for their one-year-old daughter in the sum of $529 per month. The support was based on the father's declared annual income of $58,240. A financial disclosure order was made. The father was ordered to provide this financial disclosure by September 15, 2015. The mother was given leave to bring a motion for temporary spousal support and for an order that both child and spousal support begin from the date the parties separated (May 15, 2015).

[3] The father did not provide any of the financial disclosure ordered.

[4] The mother brought her motion. The father did not file any evidence in response to this motion.

[5] At the outset of the motion the parties advised the court that they had agreed to an order that the father pay ongoing temporary spousal support of $967 per month. This was the low range of support in the Spousal Support Advisory Guideline calculation provided to the court, based on the father's stated annual income of $58,240.

[6] The parties advised the court that they did not agree on the start date of temporary child and spousal support. This issue was argued.

[7] The court ordered that temporary child and spousal support begin on June 1, 2015. It permitted the father to repay the support arrears created by the order at the rate of $125 per month (the amount very reasonably requested by the mother during the motion), provided that he kept his support payments in good standing.

[8] The mother seeks her costs of $6,000. The father asks that no costs be ordered.

Legal Framework for Costs

[9] 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.

[10] 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.

[11] 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.

Settlement Offers

[12] The mother made an offer to settle. The father did not make an offer to settle.

[13] The mother offered to settle the issue of child support for the period from May to August of 2015, and spousal support for the period from May to September of 2015, for a global amount of $4,500. The court ordered total support for these periods of $5,455 (having started support as of June 1, 2015).

[14] The mother offered to settle the issue of ongoing spousal support at the rate of $1,110 per month. She agreed on October 19, 2015 to settle the issue at $967 per month.

[15] The mother also offered that each party bear their own costs if her offer was accepted by October 15, 2015, failing which the father would be required to pay full recovery costs to her. The amount of full recovery costs was not specified.

[16] The offer was very close to the result on the motion. However, it was not more favourable to the father. The court's decision permitted the father to repay the arrears over a lengthy period of time. The offer did not provide for any repayment. Further, the offer did not specify the costs that the father would be required to pay if he accepted the offer after October 15, 2015 – just that he would have to pay full recovery costs based on the mother's counsel's hourly rate of $300. The costs consequences set out in subrule 18(14) do not apply.

[17] 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 was very reasonable and was indicative of a genuine attempt by her to fairly resolve the issues on this motion.

Success on the Motion

[18] The mother was the successful party on this motion, based both on her offer to settle and her position taken on the motion.

[19] The father did not rebut the presumption that the mother is entitled to costs for her motion.

Factors in Determining Costs

[20] 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

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

[22] The mother's behaviour was reasonable in the case. The father's behaviour was not reasonable. He did not comply with the court's financial disclosure order. He did not make an offer to settle. The father does receive some credit for resolving the ongoing spousal support issue at court.

[23] The rates claimed by the mother's lawyer were reasonable.

[24] The mother did not provide a bill of costs to support her claim. It is sound practice to present a bill of costs on a costs submission. The time claimed by the mother appeared to be excessive for a motion of this nature. A bill of costs might have assisted the court in coming to a different conclusion.

[25] The father argued that he does not have the financial ability to pay the costs required. A party's ability to pay costs is a relevant consideration in a costs analysis. See: MacDonald v. Magel. However, the father failed to provide any evidence of financial hardship. He was ordered to provide financial disclosure and failed to do so. It will be very difficult for a party to successfully plead financial inability to pay costs when he or she completely ignores a financial disclosure order.

[26] 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.

Costs Order

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

a) The father shall pay the mother's costs fixed in the amount of $4,000, inclusive of fees, disbursements and H.S.T.

b) The father may repay these costs at the rate of $400 per month, starting on December 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: October 20, 2015