Court File and Parties

Ontario Court of Justice

Date: December 11, 2015 Amended: December 14, 2015 Further amended: January 8, 2016

Court File No.: Halton 432/12

Between:

Christopher Jerry Chowzun Applicant

— And —

Senna Elizabeth Lee Respondent

Before: Justice Victoria Starr

Submissions Heard: September 30, 2015

Decision and Reasons for Costs

Counsel:

Irina Nastase-Davis, counsel for the respondent
Christopher Chowzun, on his own behalf

STARR J.:

INTRODUCTION

[1] This is the court's decision regarding costs of a trial and for prior steps for which costs could not be recovered until the final adjudication of the case.

BACKGROUND

[2] The applicant father, Christopher Chowzun ("the father") and the respondent (mother), Senna Elizabeth Lee ("the mother") are a very high conflict couple with a now 7 year old son, Matias. They separated on November 1, 2009, when Matias was 14 months old and executed a comprehensive separation agreement on February 17, 2011. Less than 1 ½ years later, in October 2012, the father started these proceedings.

[3] The focus of the case and the trial was on custody and parenting time. Child support and section 7 expenses were also issues to be decided but very little actual time was spent by the parties addressing this issue either before or during the trial.

[4] The trial lasted six days. This court's decision and reasons relating to custody and access were given orally; the decision and reasons with respect to support, in writing; both on June 23, 2015. Direction and clarification with respect to the terms of this court's multidirectional order was sought. In the ensuing discussions that took place over the summer and early fall of 2015, the parties negotiated and agreed upon additional changes to the order, all of which are now reflected in the final order of June 23, 2015, amended September 23, 2015.

COSTS SOUGHT AND POSITIONS

[5] The mother seeks a cost award in her favour of $75,000. She submits that this amount is based on partial indemnity (65%) of the costs she incurred from the start of the case up to the date of her final offer to settle and 80% indemnity thereafter. In the alternative, she seeks costs of $61,249.74. This amount is roughly 65% of her total costs.

[6] The mother's position is that she is entitled to an award of costs for these primary reasons:

(a) She was the more successful party with respect to the most intensely litigated issue – custody;

(b) Her last offer on access was very close to what was ordered;

(c) The s. 7 expenses was a minor issue, did not consume much trial or litigation time, and thus, the father's success ought to be minimized;

(d) She was the reluctant respondent in litigation fuelled by the father;

(e) She has been financially crippled by the legal fees she has been forced to incur to defend the litigation - fees that she otherwise should have had for the benefit and support of the parties' son;

(f) She was reasonable throughout the litigation;

(g) The father was unreasonable not only in his position throughout the litigation, but also in his offers and in his behaviour; and,

(h) The father's behaviour amounted to bad faith.

[7] The father asks that this court dismiss the mother's request for costs primarily for these reasons:

(a) Success was divided; while the mother got sole custody, he was successful in: securing more time with Matias; restrictions on the mother's mobility; preserving his ability to continue with his volunteer activities at Matias's school; and in securing an order that Matias will be raised in the Catholic faith. He also succeeded on the issue of child support;

(b) He acted reasonably;

(c) He made repeated attempts to try and settle the issues between and after the litigation started. For example, he requested a three way meeting and proposed mediation;

(d) He had no choice but to start the litigation because the mother was not adhering to the spirit of the separation agreement and had changed the child's residence three times since its signing. He tried to negotiate a resolution prior to litigating the issue. Those negotiations were not fruitful;

(e) The mother was unreasonable as she would not engage in settlement dialogue, preferring instead to put forth written offers from which she would not budge;

(f) Because the mother would not budge on such issues as the parenting schedule, mobility, and the religious upbringing issue, it was necessary to litigate the issues. But for the litigation, he would never have secured these successes; and,

(g) The fact that success was divided illustrates that some of the positions he took were, in fact, reasonable.

THE ISSUES

[8] The issues that this court must decide are:

(a) Is the mother entitled to costs?

(b) If costs are to be awarded, what should be the amount?

(d) Should any costs awarded to the mother be enforced by the Family Responsibility Office ("FRO") as an incident of support?

LEGAL FRAMEWORK

[9] I have, in reaching my decision, considered the statutory and regulatory framework and legal principles as set out in section 131 of the Courts of Justice Act, RSO 1990, c. C-43, as amended as well as Rules 2 and 24 of the Family Law Rules, O. Reg. 114/99, as amended.

[10] The relevant sub rules within Rule 24 are as follows:

24(4) Despite subrule (1), 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.

24(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

24(6) If success in a step in a case is divided, the court may apportion costs as appropriate.

24(8) If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.

24(10) Promptly after each step in the case, the judge or other person who dealt with that step shall decide in a summary manner who, if anyone, is entitled to costs, and set the amount of costs.

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;

(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.

[11] Although offers to settle were exchanged, no offer to settle was made that would attract the cost consequences set out in subrule 18(14).

[12] In Serra v. Serra, 2009 ONCA 395, at paragraph 8, the Ontario Court of Appeal confirmed that costs rules are designed to foster three important principles:

(1) to partially indemnify successful litigants for the cost of litigation;

(2) to encourage settlement; and

(3) to discourage and sanction inappropriate behaviour by litigants.

[13] In reaching my decision I have kept the forgoing purposes in the forefront of my mind.

[14] Counsel for the mother also referred me to a number of cases. I have not referred to all of the cases. I have referred to those cases (as well as others) which I found most helpful.

ENTITLEMENT

Is the Mother Entitled to Costs on the Basis of her Success?

[15] As Grant J. notes in the case of Johans v. Tulford, 2010 ONCJ 756, success is assessed by comparing the terms of the order against the relief originally requested in the pleadings and against the terms of offers to settle. In this case I find that overall the mother was considerably more successful than the father and entitled to costs on a partial indemnity basis. The factors that have led me to this conclusion are addressed below.

[16] In his application the father sought:

a. Shared custody of Matias;

b. An equal division of the December 24 and December 25 Christmas celebration period;

c. A prohibition on relocating Matias's residence;

d. An order prohibiting travel with Matias outside of Canada without the consent of the other party; and,

e. Costs.

[17] In her answer–claim the mother sought:

a. Joint custody;

b. Primary residence of the child to be with her;

c. To maintain the status quo of liberal and generous access to the father including a right of first refusal and alternate weekend access from Friday to Sunday and a mid-week visit, except that the midweek visit to occur on Wednesdays instead of Mondays.

d. Child support (Table and section 7);

e. An order that the father maintain the child as beneficiary under his extended health care plan; and

f. An order that the father maintain life insurance to secure child support.

[18] By the time of trial each party had shifted somewhat in terms of the relief that he or she sought. The father sought the following orders:

a. Joint custody in the form of parallel parenting;

b. An equal time sharing residential schedule;

c. An order prohibiting the relocation of Matias's residence;

d. An order prohibiting travel with Matias outside of Canada without the consent of the other party;

e. A division of holidays in accordance with a specified schedule;

f. An order, in the event that the mother was awarded sole custody, that:

i. Matias shall be raised in the Catholic faith;

ii. The father be allowed to continue to participate and volunteer for school events and field trips; and,

iii. Matias' surname not be changed;

g. An order that he pay Guideline Table support; and

h. An order that he and the mother equally contribute towards the cost of Matias' daycare and swimming lessons and that he only be required to contribute towards any future section 7 expense if his written consent to the expense is secured in advance and in writing.

[19] At trial the mother sought:

a. Sole custody, or in the alternative joint custody with final decision making authority to her;

b. Access by the father each week from Friday until Sunday evening and on Wednesdays from after school until 7 p.m.;

c. A division of holidays in accordance with a specified schedule;

d. An order that the father pay Guideline Table support;

e. An order that the father reimburse her for his proportionate share of the cost of a variety of expenses she incurred from 2012 onwards, including daycare, martial arts, swimming lessons, music lessons, summer camps, etc…; and,

f. An order that the father contribute toward the cost of all agreed upon section 7 expenses, consent, not to be unreasonably withheld.

[20] The mother was awarded sole custody with consultation and in securing most of the terms governing the incidents of custody and access as reflected in the parenting plan she presented at trial and attached to her final offer to settle. It is that parenting plan which was used as a template/schedule to the final order made. Approximately 44 of its provisions were included in the final order.

[21] The father was successful in that the final order contained: a restriction on the mother's ability to move the child's residence and her ability to change the child's surname without his consent; a provision that Matias shall be raised in the Catholic faith; and an order that preserved his right to continue with his volunteer activities at Matias' school; and finally, a prohibition of travel abroad with Matias without the consent of the other party.

[22] On the issue of access or parenting time, neither party secured the order he or she sought; but the father was awarded increased access on alternating weekends from Friday to Monday morning and midweek overnight access on Wednesdays. The father was also successful in securing an equal division of the Christmas break.

[23] As I have noted, the mother sought orders relating to life insurance and extended health care coverage and annual financial disclosure. She succeeded in securing the latter two but was not successful in obtaining an order requiring the father to maintain life insurance to secure his support obligation.

[24] With respect to child support and section 7 expenses, the father was largely more successful than the mother. That is, the father successfully opposed the mother's request for many section 7 expenses, primarily on the basis that most were either not proper section 7 expenses, were unreasonable or unnecessary. In the result, the expenses which the court ordered the father to contribute towards were ones that the father, in essence, had already consented to. The father also initially sought to impute additional income to the mother for the purposes of determining each party's contribution to section 7 expenses. He abandoned this position following cross-examination of the mother.

[25] Several factors detract from the significance of the father's success on the financial issues. First, little or no time was spent at trial on the issue of financial disclosure, the father's income and the appropriate Table amount, extended health insurance or life insurance. Second, the father's success on the issue of section 7 expenses was really the result of the parties' failure to fully address this issue at trial and the time the court spent, as a result and following trial, combing through the documentary evidence in order to arrive at a decision. For these reasons I find that neither party is entitled to be credited with success on the financial issues.

[26] I reject the mother's submission that the most intensely litigated issue was custody. There were in fact two intensely litigated issues: custody and the regular parenting schedule. When one measures success on both of these issues by comparing the result with the relief sought by each party in his or her pleadings, at trial, and in their respective offers to settle, and against the amount of time spent at trial on both issues, the mother was substantially more successful than the father.

[27] For all these reasons I find that the mother is entitled to costs on a partial recovery basis. It is necessary however to reduce the total costs sought by the mother to reflect the father's successes. A reduction of the total amount of costs allowed by 30% will adequately capture these successes.

[28] The father submits that the mother should be deprived of any costs she is entitled to on the basis that she was guilty of unreasonable behavior. The onus is on the father to prove the facts which support the deprivation of the mother's entitlement to costs based upon her success. It is to that issue that I next turn.

QUANTUM

Should the Mother be Deprived of Costs By Virtue of Her Conduct?

[29] As part of my analysis of whether the mother acted unreasonably in relation to the issues from the time they arose, I considered the reasonableness of her efforts to settle including her offers to settle and the reasonableness of her decision not to accept the father's offers to settle. The mother made early efforts to settle. She served a total of six offers. When one compares the outcome at trial with the terms of her offers to settle, her offers, and her rejection of the father's offers to settle, demonstrate reasonable conduct on her part.

[30] These are some of the considerations that have led me to this conclusion: First, the mother's earliest offer was made on October 25, 2012. It provided for joint custody with access on alternate weekends; Mondays after school until 7 PM, and alternate Wednesdays from after school until 7 PM. This was in line with what the father had been requesting prior to commencing the litigation.

[31] Second, on the issue of custody, the mother's offer was more favorable than what was ordered at trial. She offered joint custody with final decision-making and she was awarded sole custody. Similarly, on the issue of access, the mother's offer came very close to what was ordered. She offered every Wednesday until 7 PM and alternate weekends until Monday morning. The father was awarded slightly more access, in that the midweek access granted was an overnight, rather than an evening visit.

[32] I also considered the incidents of custody and access as reflected in the parenting plan attached to the mother's final offer to settle. As I have noted, it is that parenting plan which was used as a template/schedule to the final order made; approximately 44 of its provisions were included in the final order. This is also a sign of reasonableness.

[33] Also indicative of the reasonableness of the mother's offers to settle is that although no section 7 expenses were ordered except for swimming and before/afterschool day care, the mother's offer provided that section 7 expense would only be payable if the parties consented to the expenses in advance, in writing, with consent not to be unreasonably withheld.

[34] I question the mother's judgment with respect to several aspects of her settlement conduct. The first troubling aspect arises out of the fact that the mother's offers to settle were extensive, comprehensive and not severable. There was no way for the father to accept some terms but not others. Further, all but one included terms that dealt with issues that were not before the court. These included such things as personal property and pensions, release of all claims, maintenance of life insurance policies, and terms that dealt with extended family. This was improper. I do not understand why the mother did not serve severable offers to settle or why she did not remove these superfluous items from her offers to settle.

[35] Another troubling aspect of the mother's conduct was the mother's settlement strategy. She refused to engage in settlement discussions with the father, and refused his invitation to attend at a three way meeting or mediation. Instead, she elected to respond to the father's settlement overtures by replacing existing offers with new comprehensive and non-severable ones.

[36] I accept the mother's reasonable perspective that it was virtually impossible for her to communicate or negotiate directly with the father, particularly given responses form him such as "I will not discuss this further" or "this will just have to wait until we are in front of the judge." I do not understand, however, why she did not attempt to narrow the issues by engaging in protected dialogue either through mediation or her lawyer. It is clear to me that there were specific areas where the parties were close or at idem. For example, travel outside of the country, changing the child's surname, and volunteering at the child's school, Table support and contribution towards daycare, summer camp, swimming, and towards future section 7 expenses. This approach was unreasonable.

[37] I also considered the mother's conduct in relation to the issues from the time they first arose to trial. I do not find the mother's conduct to be as flawless as her counsel portrays in her cost submissions. I also reject the mother's assertion that she was the reluctant respondent in a litigation fueled solely by the father. Similarly, I reject her position that her behaviour was always reasonable in relation to the issues throughout the litigation. The following excerpts from this court's oral reasons well illustrate the elements of the mother's conduct that contributed to the fueling of the conflict, and contributed to the necessity of a trial in this matter:

"But you saw it is marginalizing you, and I do not. I see some other things as not so much marginalizing you, but not allowing you to play the rule that you should have. But that is not one of them (referring to the early pickups from daycare)."

"She is on a campaign to impose structure and routine for Matias and to make sure that his life runs in an orderly manner and that he can participate in as many activities as possible. Unfortunately, I don't think that she views him spending time with you as important as some of those things, and for that, you will see later, I have adjusted the access schedule."

"Your actions have the ring tone of controlling Mr. Chowzun."

"I don't want the school called and told Mr. Chowzun can't get information from them, documentation from them, he can't volunteer there, he can't go there, he can't do anything. I do not want him labelled at the school, and so I have given you the order, sir, that you asked for, about volunteering at the school."

[38] I also found that the mother was not operating within the strict letter of the parties' separation agreement as she was not providing liberal and generous access and was not honouring the right of the first refusal provisions in the agreement.

[39] The aspects of the mother's behaviour that trouble me, illustrate poor judgment and unreasonable behaviour on her part, at times. They do not, either individually or collectively, amount to bad faith or unreasonable conduct of the ilk and extreme required to justify depriving her of all of her costs as the more successful party. Indeed, my overall assessment of the mother's approach and conduct with respect to the issues is aptly captured in the following quote from my oral reasons delivered at trial:

"I trust Ms. Lee will be inclusive because she has a track record of being inclusive. I trust that she will share information with you (Mr. Chowzun) because she has a track record of doing that. I trust that she will bend over backwards to make sure you (Mr. Chowzun) are included because those five volumes indicate she has such a track record. I trust she will make child focused decisions because she has…"

[40] For all these reasons I find that, despite its flaws, the mother's conduct in relation to the issues should not deprive her of her entitlement to an award of costs. They do, however, justify reducing the amount of costs awarded to her.

Did the Father Act in Bad Faith or Unreasonably?

[41] The mother asserts that the father has acted in bad faith. If a party is found to have acted in bad faith, costs are to be decided on a full recovery basis payable immediately. The onus to establish bad faith rests on the mother.

[42] The case of Biddle v. Biddle, a decision of Blishon, J. is helpful. In that case, Justice Blishon stated the following at paragraphs 14–16:

[14] As noted in Leonardo et. al. v. Meloche et. al., conduct that is intended to deceive or mislead can establish bad faith. In Hendry v. Martins, [2001] O.J. No. 1098 (S.C.J.), Justice Campbell relies on Black's Law Dictionary, 6th ed. (St. Paul Minnesota: West Publishing Company, 1990) in stating:

Bad faith is not simply bad judgment or negligence but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity…it contemplates a state of mind affirmatively operating with furtive design or ill will.

[15] Bad faith can be established by the intentional failure to fulfill an agreement in order to achieve an ulterior motive or, an intentional breach of court order with a view to achieving another purpose. See Erikson v. Erikson, , [2000] O.J. No. 1569 (S.C.J.) and Hunt v. Hunt, [2001] O.J. No. 5111 (S.C.J.).

[43] In Biddle v. Biddle, supra, however, the court found that there was insufficient evidence to find that he intentionally misled or deceived the applicant or the court for a dishonest purpose.

[44] At the trial in this case I made several findings with respect to the unreasonableness of the father's overall behavior and position. These included:

a. "It is very clear to me that a motivating factor is paying less child support";

b. "Nor do I find that Ms. Lee is on a campaign to marginalize the father, which is the father's main position";

c. He was "fixated on 50% time...";

d. At times his behaviour amounted to "game-playing";

e. "… Of the two of you, Mr. Chowzun, it is you who have abused your decision-making authority. It is you who have used the words "joint custody" to allow you to take Matias to your own doctor…. It is you who has demonstrated that you will use your power inappropriately….. Your focus was on rights, not on Matias".

[45] These are my additional findings with respect to the father's conduct:

a. He complicated trial preparation serving three separate and extremely lengthy requests to admit totaling 355 statements;

b. His positions: that the mother was on a campaign to marginalize him; that this was an appropriate case for parallel parenting; and that an equal time sharing regime was in Matias' best interests, were all completely without merit;

c. He changed his position, particularly with respect to the parenting schedule, 7 times;

d. He served 7 offers to settle. On the issues of custody and access, none of his offers to settle came even close to the range of possible outcomes, or the actual outcome at trial.

[46] I do not find that the father's lack of preparedness on the first day of trial unduly prolonged the trial. I note as well that counsel's complaint about the father refusing to acknowledge flow and context with respect to important e-mail and text communications, also applied, at times, to the mother. I make no finding that this conduct, on either party's part, unduly prolonged the trial.

[47] Even though the father engaged in all of the behaviours I have outlined above, his behaviour did not amount to bad faith. I cannot find that it implies the conscious doing of a wrong because of dishonest purpose, furtive design, moral obliquity, or ill will. Two excerpts from my oral reasons best illustrate my view of his motivations:

I also think about the proposals that you made for the schedule, how many of them you made, and how they vacillated all over the place. But Matias' needs didn't vacillate all over the place…. Matias is in this is the same boy consistently throughout this litigation, and yet you changed your schedule something like 6 or 7 times, the proposal that you wanted to put forward. Even three times is too many. Different configurations. I don't find that was malicious, per se, in any way. I understand you may have been trying to figure out what will work in this case. What was problematic is that you were fixated on 50% time, and this is why I didn't find it necessary to find you to be Ontario daddy man.

Throughout your communications with Ms. Lee, throughout your position in the litigation, it is very clear to me that a motivating factor is paying less child support, and I find that it is, I do not believe that it is the only, or, your primary focus. I do believe you wish to have a meaningful role within your son's life, so I don't agree with Ms. Lee that that's your only motivation at all. I think you struggle with wanting both, because you're financially strapped and because you're a good and competent caregiver. But it is, nonetheless there, and it interferes with things.

[48] In reaching this conclusion I have also taken into consideration as a factor militating against a finding of bad faith, the father's efforts and certain elements of his offers to settle. The father did make a reasonable offer to settle the financial issues. In his April 15, 2014 offer he offered to share in any section 7 expenses that the parties agree upon in advance and to share daycare and summer camps equally. He also included in this offer a term for annual exchange of financial disclosure. This approximated the result at trial. In several of his offers to settle, the father also offered consistently to settle the issue of change of name, mobility, and volunteering at the child's school. Sadly, like the mother's, his offers were also non-severable.

[49] Finally, and as I have already noted, the father proposed a three way meeting and mediation. These were very reasonable attempts to settle. Having "case conferenced" the various subsequent changes that Ms. Lee primarily wished made to the final order and seen those issues successfully resolve, I am confident that had this dialogue taken place with the help of a facilitator, the issues for trial could have been narrowed dramatically.

[50] Taking into account all of the forgoing, I find that the father's conduct overall amounted to very bad judgment and was unreasonable, but it did not amount to bad faith.

[51] The father's actions and position on the issues and his conduct overall increased the mother's legal fees. It did so by turning resolution of minor issues into major and complicated productions; unjustifiably increasing the level of conflict, acrimony, and mistrust between the parties. All of this prolonged and complicated the parties' lives, the issues and the litigation. His behaviour is an aggravating factor; one that suggests an award of cost at the high end of partial recovery.

[52] I turn to consider the balance of the factors set out in sub rule 24(11).

The Importance, Complexity or Difficulty of the Issues

[53] Although not overly complex, it is undoubted that the issues were important; the custody of and access to the children was at stake. While settlement could and should have been achieved early on in the proceedings on some issues, this was one of those cases where a trial was absolutely necessary. In this regard I note the following comments made by me in my oral reasons:

There was "an exceedingly excessive amount of issues over which there is conflict"
"The situation cries out for an adjustment so that there are clear lines of authority. It cries out for clear boundaries and limits, and clear method of resolving disputes."
"The parties are a high conflict couple, and they are not able to communicate with one another in an effective manner to facilitate the timely resolution of issues. They are not able to communicate, and there is very little goodwill and generosity of spirit."

[54] While the father was substantially more at fault in creating a climate of mistrust, conflict, and high conflict, because of his focus on his rights rather than Matias' needs, the mother's need to control the child's life, his time with his father, and the father's conduct, contributed to the conflict. So too, did her intractable position on mobility and her refusal to adhere to the "right of first refusal" and liberal and generous access" provisions in the parties' separation agreement. These parties needed to go to trial; they needed clarity and greater definition and specificity in their parenting plan. They needed finality brought to the debate about section 7 expenses. They could not move forward on their own. The multidirectional order ultimately made could only have been achieved by way of a trial.

The Lawyer's Rates and Disbursements

[55] The father does not criticize or take issue with the rates charged by the mother's solicitor or the nature and quantum of the disbursements claimed. It appears from the bill of costs that efforts were made to reduce fees by delegating work down to the least expensive individual with the requisite skill to perform the work (i.e. law clerks). I accept the rates and disbursements charged as reasonable.

Time Properly Spent on the Case

[56] The mother incurred fees, disbursements and HST, in the amount of $105,060.60. These were incurred between July 2012 and August 2015. In reducing the fees sought to $75,000, the mother has backed out costs for any step along the way for which costs could have been claimed and awarded at the time claimed as well as costs actually awarded to her, and discounts provided by her counsel.

[57] On the issue of her entitlement to claim costs for steps for which costs could not be recovered until the final adjudication, the case of Czirjak v. Iskandar, 2010 ONSC 3778, is instructive. In that case the court had this to say in allowing additional costs at trial:

The father is correct in submitting that the mother is not entitled now to claim costs for any step along the way for which costs could have been claimed and awarded at the time. These would include conferences, motions and consent orders. See rule 24(10) of the Family Law Rules, Islam v. Rahman, 2007 ONCA 622. However, there are a number of steps for which costs cannot be recovered until the final adjudication or settlement of the case. These include initial interviews, meetings and settlement discussions before filing the application, the application document itself, the reply, financial statements (not prepared for motions or conferences), questioning (in relation to issues for trial) and settlement meetings relating to issues for trial. The mother is entitled to have these costs considered now.

[58] Likewise in Houston v. Houston, the court wrote:

The Court of Appeal in Islam v. Rahman, accepted that there should be excluded from an award of costs at trial amounts claimed for steps taken in the course of the litigation where no order was made as to costs or where there was silence on the issue of costs. However, it is important to understand that the rule and the decision of the Court of Appeal speak to costs applicable to steps in a case which are addressed by a judge, such as motions and conferences. Surely the rule was not meant to extend to steps which do not require any form of judicial intervention, such as preparation of pleadings and financial statements, property evaluations, document production, attendance at questioning, review of transcripts, compliance with undertakings, and preparation for trial, to name but a few.

[59] The father did not take issue with either the time spent, the mother's method of calculating her costs, or her calculations. As he is self represented and in an effort to ensure fairness given the significant amount of the costs claimed, I reviewed the bill of costs carefully.

[60] Unfortunately, the bill of costs raises some concern in my mind. In some instances the docket for time spent on work for steps for which costs were awarded or could have been awarded is mixed with time spent on steps that the mother is entitled to now claim. For example, there are some dockets that mix preparation for a motion with work done on an offer to settle. Further, some of the work is described simply as a telephone call, meeting or correspondence and so I cannot tell what step it relates to. I also note that some of the time spent relates to issues on which the mother was not successful, such as preparation of financial statements. I am not prepared, nor required to conduct a line by line analysis to parse out what can and cannot be properly claimed. The concerns that I have identified here lead me to reduce the total amount the mother is entitled to by 10%.

[61] Far more problematic is the mother's calculation of the total fees she is entitled to claim. One of the first problems is that there is "double dipping" in terms of HST claimed. For example, when totaling the fees associated with a particular year, the mother added HST. She then, when totaling the fees for all years, again added HST.

[62] The second and far more serious problem is that the mother claims the total fees including HST that she is entitled to is $100,976.94. By my calculation the total is $67,190.43. This is how I arrived at my total:

(a) 2012: $6,219.62 allowable fees;

(b) 2013: $12,193.83 allowable fees;

(d) 2014-2015 (trial onwards): $25,421.87 allowable fees (made up of $4,036 – 2014 trial, + $19,068.87 for trial time spent by previous firm in 2015 and $2,317 for time charged by Gelman and Associates in 2015 up to June 25, 2015, shortly after the release of the decision on June 23, 2015);

(e) $8,094.73: add back of courtesy discount[^1].

= $55,846.70 before HST

(f) Plus HST on $55,846.70 = $7,260.07

= $63,106.77

(g) Plus disbursements including HST of $4,083.66

= $67,190.43

[63] The foregoing total does not include fees charged in 2015 for work charged after June 25, 2015 (post release of trial decision). The total charged after that date was $5,140.25. Some but not all of those fees, relate to time spent on tasks for which the mother is entitled to seek costs. For example, the mother is entitled to claim those costs related to seeking clarification with respect to the initial terms of the final order released on June 23, 2015 and preparing the initial draft of same. I see no reason why those costs should not be shared as both parties benefitted from this work and it fell upon the shoulders of counsel for the mother, solely because the father was self-represented. However, a significant portion of the time spent relates to negotiations and conferences which dealt with and resulted in further changes to the final order – changes sought by the mother and upon which there was eventual consensus. The mother is not entitled to recover those costs. To recognize a fair sharing of the additional fees I have added to the amount of the mother's costs as set out above an additional $2,000, not including HST.

[64] The mother has also incurred additional fees, over and above those reflected on her bill of costs for work done after August 18, 2015 - the date of the last time entry on her bill of costs for 2015). Such work includes preparing her costs submissions, attending at court to make submissions on costs, and preparing the draft amended orders for issuing. Again, the drafting work fell to the mother's counsel solely because the father was self-represented but inures to the benefit of both parties. To recognize her success in securing a cost award and a fair sharing of the additional fees I have added to the amount of the mother's costs as set out above an additional $3,000, not including HST.

[65] For all of the forgoing reasons I fix the total costs that the mother may claim up to and including June 25, 2015 at $67,190.43 inclusive of HST and disbursements, and I fix the costs she is entitled to thereafter at $5,650 ($2,000 + $3,000 + $650 in HST). Only the $67,190.43, however, is subject to further adjustment on account of the discounting I have found above should be applied. This discounting is set out below.

Any Other Relevant Matter

Ability to Pay

[66] The father submits that he could not afford a lawyer, did the best that he could, and that he cannot afford to pay a substantial cost award.

[67] In this case the father's ability to pay is not a compelling consideration for several reasons. First, as Justice R. Spence found in the case of Heuss v. Surkos, 2004 ONCJ 141, so do I find here that the father's unreasonable conduct made him the author of much of his own misfortune and it would be unfair to ask the mother to shoulder a disproportionate share of costs burden that the father had a hand in creating. In Parsons v. Parsons, Justice Campbell outlines the effect that such conduct has on the defence of inability to pay at paragraph 12:

A litigant's limited financial health may not be used as a shield against any liability for costs when that litigant has behaved unreasonably. It may be relevant to the issue of quantum or scale of costs, but not to another party's entitlement thereto.[^2]

[68] Second, the father has the greater ability to fund the litigation. His income is significantly greater than the mother's. He is not contributing to the cost of the many and expensive activities that Matias is enrolled in. He also lives with his mother and they share expenses. Finally, as he was self-represented, he is not saddled with legal costs related to this litigation. I find that although it will be difficult, he has an ability to pay substantial costs.

[69] Third, the mother has been left in financial distress as a result of this litigation and the trial. The legal expenses paid by her for her representation at this trial will more greatly affect the financial means with which she can bear the costs of Matias while he is in her care. As Justice McDermott noted in Polak v. Polak, 2013 ONSC 6243, at paragraph 27:

Accordingly, although the affordability of a cost award is a factor in the awarding of costs, this can work both ways, particularly where the needs of a child or children are in issue. While costs payable by a custodial parent may be mitigated by the needs of the child in that party's care, the opposite may apply where a successful party, as in the present case, has custody of the child. The legal expenses paid by Mr. Polak for his representation at this trial will affect the financial means with which he can bear the costs of the children in his care.

[70] Fourth, it would be unfair for the mother to bear the costs of this litigation alone particularly given her success and the fact that it was not she who acted more unreasonably but the father.

[71] Finally, any difficulty the father has meeting the payment can be addressed by allowing him to some time to pay them. The order I have made below will give him time to reorganize his financial affairs.

The Respondent's Reasonable Expectations

[72] As D.C. Price J. noted in the case of Vetro v. Vetro, 2011 CarswellOnt 14094, I must take into account the reasonable expectation of the parties concerning the amount of costs. I must in effect:

…step back and examine the overall award with a view to determining whether it is 'fair and reasonable' for the kind of matter involved. In making this determination, I take into account the reasonable expectation of the parties concerning the amount of costs.

[73] Given his cost generating and unreasonable conduct, the fact that the father has had costs awarded against him previously (i.e. $5,000 for a motion that he lost), and his own reason for being self-represented – he could not afford a lawyer - I find that the father could reasonably have expected to pay a substantial cost award in the event that he was not successful. I find that the father could reasonably have expected to pay costs, if unsuccessful, somewhere in the range of 65% to 100% of the mother's legal fees and disbursements.

The Need to Control Behaviour and Promote Settlement

[74] I have also considered the fact that the cost award I make must do more than address the objective of partial indemnification. It must also promote settlement and control unreasonable behaviour by discouraging it.[^3] As Justice Spence stated in Heuss v. Surkos, supra at paragraph 20:

Parties to litigation must understand that court proceedings are expensive, time-consuming and stressful for all concerned. They are not designed to give individual litigants a forum for carrying on in whatever manner they may choose, oblivious to the impact of that conduct on the other side and, perhaps most importantly for the purposes of this case, oblivious to the mounting costs of the litigation. Matrimonial litigation is an occasion for sober consideration and thoughtfulness rather than intemperate behavior.

[75] An award of costs that equates to an 80% recovery of the mother's total allowable costs rather than full recovery adequately addresses the mother's troubling conduct. It will also send a signal to the father and to other litigants that there is a direct correlation between how one behaves in litigation and the amount of costs one may be ordered to pay. That is, the worse the behaviour, the higher the award.

[76] By awarding an amount of costs that is closer to high end of partial indemnification in this case, the court hopes to give Mr. Chowzun and other litigants incentive to think twice, next time and before engaging in unreasonable cost and conflict generating behaviour and before taking unreasonable positions. Those who choose to represent themselves, must be held to the same standard of conduct as those who chose to be represented by counsel.

CONCLUSION AND AMOUNT AWARDED

[77] As I have noted, the mother's costs of $67,190.43 must be reduced to take a number of adjustments into account. First, there is 10% reduction I have found is warranted to address the more minor concerns I have with the mother's bill of costs. Second, there is the 30% reduction I have found is warranted to reflect the fact that she was not successful on all issues and to reflect the father's successes. This equates to a 40% reduction ($26,876.17). The total amount of costs I therefore consider appropriate to allow the mother to seek indemnity for is $40,314.26. 80% of this amount is $32,251.40. To this amount must be added the $5,650 in additional costs I have found she is entitled to and which are not subject to any discounting. The total amount I have awarded is thus, $37,901.40 ($32,251.40 + $5,650).

[78] Even if the discrepancy between the mother's calculation of time and fees and the court's calculation could be explained in favour of the mother upon further submissions, I would not change the amount of costs awarded to the mother for two reasons: first, it was incumbent on her to present the court with calculations that could readily be understood. Second, overall and taking all of the factors discussed above in this decision and excluding the calculation discrepancies, I find that a cost award of $37,901.40 inclusive of HST and all disbursements is fair, reasonable, proportionate and meets all of the objectives of modern cost awards.

[79] For all these reasons, I exercise my general discretion in relation to awarding costs and award the mother $37,901.40.

FRO ENFORCEMENT

[80] The mother seeks an order that any award of costs payable to her be enforced through the FRO as an incident of child support. This is not a measure simply meted out because parties request it. To order that all or even part of the costs I have awarded be enforced through FRO I must be satisfied that they were incurred and relate to the issue of support. Based on my findings above, very little, if any of the costs awarded to the mother relate to the issue of child support. I am thus, not prepared to make the order requested.

AWARD AND ORDER

The Applicant shall pay to the Respondent, her costs of the motion to change fixed in the amount of $37,901.40.
These costs ($37,901.40) are to be paid by the Applicant to the Respondent, in full, on or before March 31, 2016.
This Order bears post-judgment interest at the rate of 2% per annum effective from the date of this Order. Where there is a default in payment, the payment in default shall bear interest only from the date of default.
There shall be no need for either the December 11, 2015 order or the December 14, 2015 amended order to be issued and entered. Only the order that flows from this amended decision and reasons need be prepared, issued and entered.

Released: December 11, 2015 Amended: December 14, 2015 Further amended: January 8, 2016

Signed: "Justice Victoria Starr"

[^1]: The mother received a courtesy discount from the firm that represented her until April 2015 of $8,094.73. The mother reflected this in her bill of costs as a debit, which had the effect of reducing the total fees claimed for trial. For the reasons cited above, the amount claimed by the mother is subject to other downward adjustments. As such, a significant amount of the legal fees she has actually paid will be absorbed by her. The mother ought to be able to apply the discount she received to the additional fees she paid but which I have found is not entitled to claim. To do otherwise would be unfair to her and result, in effect, an undeserved and unrelated benefit to the father. For this reason I have added the $8,094.73 in my calculation.

[^2]: See also Polak v. Polak, 2013 ONSC 6243 at paragraph 29.

[^3]: See also H.P. v. W.P., 2008 ONCJ 615, at paragraph 62.

Chowzun v. Lee, 2016 ONCJ 99

Case Summary