Court File and Parties

Court File No.: D52429/10 Date: 2015-02-18

Ontario Court of Justice

Between:

Anna Yee Mae Chow Acting in Person Applicant

- and -

John Vincent Rider Respondent

Counsel: James B.C. Edney, for the Respondent

Heard: In Chambers

Justice: S.B. Sherr

Costs Endorsement

Background

[1] On January 2, 2015, the court released its reasons for decision regarding motions to change brought by both parties, to change the child support order of Justice Geraldine Waldman, dated December 9, 2011. The court found that there was no support owing by either party as of December 31, 2014, and set out the respondent's (the father) ongoing support obligations for the parties' two children, ages 19 and 16.

[2] The court gave the parties the opportunity to make written costs submissions. Both parties sought costs. The father filed a written reply to the mother's costs submissions. The father seeks costs of $18,654.56. The applicant (the mother) seeks costs of $10,000.

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. [1] 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.

Settlement Offers

[5] Both parties made offers to settle. The father submits that his offer was as or more favourable than the final result. 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.

[6] The court finds that the father's offer was close to being as or more favourable than the final result. He proposed that his child support obligation be based on an income of $218,211 per annum starting on January 1, 2015. He offered to pay support at a higher rate for November and December of 2014 (he had paid a higher amount than ordered as well for September and October). The court calculated his support obligation based on an annual income of $218,211 from September 1, 2014. The father proposed that no support be owed by either party as of December 31, 2014 and that the mother have no further claim against his RESP. This was the same as the final result.

[7] Overall however, the offer was not more favourable than the final result. The father did not offer to pay support for the older child during the months that the child was not in attendance at university. The court ordered that he pay the mother $300 per month for these five months each year. This results in an additional $1,500 each year for the mother. Further, the court ordered the father to pay the table amount of child support for 5 months each year – the father proposed paying this amount for 4 months. This results in an additional $2,369 each year for the mother. Lastly, the court ordered the father to contribute his proportionate share of the children's hockey, dental and therapy costs, in addition to the special expenses he proposed to contribute to in his offer.

[8] The mother's offer to settle was not close to the final result. She proposed that the father's income be imputed at $300,000 per annum for the calculation of ongoing support. She asked that the father pay her over $48,000 to adjust for support obligations as of December 31, 2014. None were ordered. She wanted the father to pay all of the younger child's private school costs. He was only ordered to pay his proportionate share of these costs. She sought costs of $6,000.

[9] Subrule 18 (16) provides that 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. The father was clearly the successful party based on the offers to settle.

Success on the Issues

[10] The father was also more successful on the following issues, based on the positions taken at the hearing of the motions:

a) No child support was found owing as of December 31, 2014. The mother sought an order that the father pay her $42,270.86. The father had sought an order that the mother pay him $20,452.

b) His income was imputed at $218,211 per annum for child support purposes. The mother asked to impute his income at $375,000 per annum.

c) He only had to pay his proportionate share (not the full amount requested by the mother) for the younger child's private school costs.

d) He did not have to credit the mother with 50% of the funds in his RESP, as requested by the mother. [2]

[11] The mother was successful on the following issues:

a) Her income was fixed at $100,000 per annum (as she proposed) for the calculation of her proportionate share of the children's special expenses pursuant to section 7 of the Child Support Guidelines. The father sought to impute her income at $140,000 per annum.

b) The father was required to contribute his proportionate share to hockey, dental and therapy expenses for the children (in addition to the other special expenses agreed to).

[12] There was divided success on the issue of support for the older child. The father did not offer any child support for the months (seven) that the child attended university out-of-town. The mother wanted the full table amount of child support for the entire year. The court found the guidelines amount to be inappropriate and ordered the father to pay the full table amount for five months each year, and $300 per month for the seven months that the child was at university. In addition, the court accepted the father's proposal that the child should make some contribution to his special expenses.

[13] The father was the more successful party based on the positions taken at the hearing. The mother clearly overreached in her request for support. On the dominant issues of determining income and support recalculation as of December 31, 2014, she was unsuccessful.

[14] Subrule 24 (6) states that where success is divided (and here, the mother had some success), the court may apportion costs as appropriate.

[15] The presumption that the father is entitled to costs was not rebutted by the mother.

Factors in Setting Costs

[16] 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.

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

[18] Notwithstanding the allegations submitted by the parties, the court finds that the behaviour of the parties in the litigation was reasonable. The court specifically finds that the father did not act in bad faith, or attempt to delay this matter, as alleged by the mother.

[19] The rates claimed by both parties are reasonable. The mother retained counsel to assist her in preparing her documentation and for court. If she had been the successful party, this would have been a reasonable cost to claim.

[20] It appears from the father's Bill of Costs, that he claimed some time for prior steps in the case (such as attendance at First Appearance Court). 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.

[21] It is instructive to the court that the mother's legal costs are comparable to the father's – particularly when it is considered that her assisting counsel did not attend at court.

[22] The expenses claimed by the father are reasonable.

[23] The court considered that the father did not appear to be responsive to the mother's requests to negotiate the issues in this case prior to her starting this case.

[24] The court considered that there was a mutual benefit to the parties in the court creating a clearer mechanism to calculate future support.

[25] 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.

[26] The mother has the ability to pay the costs that will be ordered. She earns $100,000 per annum and has a net worth of about $900,000. She spent substantial money on counsel to assist her. The order will provide that the costs may be paid on a monthly basis.

[27] The mother is a sophisticated litigant. In a prior motion to change she was awarded costs of $6,000. She was aware that the unsuccessful party would likely have to pay significant costs.

Costs Award

[28] Balancing all of these factors the court orders that the mother shall pay the father's costs in the sum of $7,000. The mother may repay this amount in the sum of $500 per month, starting on March 1, 2015.

Justice S.B. Sherr

Released: February 18, 2015

Footnotes

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

[2] It should be noted that the court did grant the mother some consideration in the reasons for decision for RESP funds that she had contributed to. This was a factor when not granting the father a support credit (that he would have otherwise been entitled to) as of December 31, 2014.