Court File and Parties
Court File No.: D80852/15 Date: 2016-05-20
Ontario Court of Justice
Between:
EKATERINA KUZNETSOVA Applicant
- and -
RAYMOND FLORES Respondent
Counsel:
- Adela Crossley, for the Applicant
- Raymond Flores, Acting in Person
Heard: May 18, 2016
Justice: S.B. Sherr
Costs Endorsement
[1] This is a costs decision arising out of my trial decision released on April 13, 2016. The father's annual income was assessed at $50,800. He was ordered to pay child support of $458 per month and spousal support of $967 per month, the payments starting on June 1, 2015. The court invited written costs submissions.
[2] The mother made written costs submissions. She seeks costs of $7,288.50.
[3] The father sought and was given the opportunity to make oral costs submissions. He made these submissions on May 18, 2016. He asks that no costs be ordered.
[4] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395, [2009] O.J. 1905 (Ont. C.A.) 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.
[5] 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, [2000] O.J. No. 330 (SCJ- Family Court). 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, [2008] O.J. No. 1978 (SCJ).
[6] 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:
- If the offer relates to a motion, it is made at least one day before the motion date.
- 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.
- The offer does not expire and is not withdrawn before the hearing starts.
- The offer is not accepted.
- The party who made the offer obtains an order that is as favourable as or more favourable than the offer.
[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 based on an imputed income of $58,240 per annum to the father. This would have resulted in a monthly payment of $529 per month. This is more than the court ordered.
[14] The mother offered to settle the spousal support issue for exactly the same monthly amount that was ordered by the court. She offered to time-limit the order for five and one-half years. The court did not time limit support. Rather, it provided either party with the opportunity to review the order after April 1, 2019.
[15] While the mother's offer to settle was very reasonable and close to the final result, it was not more favourable than the trial result. The father was ordered to pay child support at a lower amount and was given a $759 credit, as he was paying temporary child support at a slightly higher rate than the final result. The costs consequences set out in subrule 18(14) do not apply.
[16] 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 indicative of a genuine attempt by her to fairly resolve the issues on this motion.
[17] The father did not make an offer to settle. His position at trial was to pay child support based on an annual income of $35,000 and to pay no spousal support.
[18] The mother was the successful party, based both on her offer to settle and her position taken at the trial.
[19] The father did not rebut the presumption that the mother is entitled to her costs for the trial.
[20] In Biant v. Sagoo (2001), 20 R.F.L. (5th) 284 (Ont. S.C.), the court wrote at paragraph 20:
The preferable approach in family law cases is to have costs recovery generally approach full recovery, so long as the successful party has behaved reasonably and the costs claimed are proportional to the issues and the result. There remains, I believe, a discretion under r. 24(1) to award the amount of costs that appears just in all the circumstances, while giving effect to the rules' preeminent presumption, and subject always to the rules that require full recovery or that require or suggest a reduction or an apportionment.
[21] This case was cited with approval in Berta v. Berta, 2015 ONCA 918, as revised on January 18, 2016, where the court wrote in paragraph 94 that a successful party in a family law case is presumptively entitled to full recovery costs. An award of costs on this basis, however, is subject to the factors listed in subrule 24(11), the directions set out under subrule 24(8) (bad faith) and subrule 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party.
[22] In making this decision, the court considered the factors set out in subrule 24(11), which reads as follows:
Factors in Setting 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;
(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.
[23] The case was important for the parties. It was not complex or difficult.
[24] The mother's behaviour was reasonable in the case. The father made no real effort to settle the case and provided his financial disclosure late. The mother had moved to strike the father's pleadings due to his failure to provide proper financial disclosure in February of 2016. An expedited trial date was set instead, with the father being warned by the court about the likelihood of an adverse inference being drawn against him if he did not comply with the court's financial disclosure orders. Costs of that appearance were reserved.
[25] The rates claimed by the mother's lawyer were reasonable.
[26] The time claimed by the mother's lawyer was also reasonable. She limited her claim to the time spent moving to strike the father's pleadings and her preparation for and attendance at trial.
[27] 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 (2003), 67 O.R. (3d) 181 (Ont. C.A.). The father did not provide evidence that would justify a reduction in the costs award.
[28] The father has already had one costs order made in this case against him ($4,000 on October 20, 2015) due to his unreasonable litigation behaviour. He should have known the consequence of taking an unreasonable position at trial.
[29] The father has acted unreasonably by paying nothing towards the previous costs order. The father had been given the opportunity to repay this order at a monthly rate of $400 per month. By ignoring the court's order, he has lost the privilege of being able to pay his costs over an extended period of time. The entire amount will be due and payable in 30 days.
[30] The court considered both Boucher et al. v. Public Accountants Council for the Province of Ontario, [2004] O.J.No. 2634 (Ont. C.A.) and Delellis v. Delellis and Delellis, [2005] O.J. No. 4345. 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.
[31] Taking into account all of these considerations, an order shall go that the father pay the mother's costs fixed in the amount of $6,800, inclusive of fees, disbursements and H.S.T. The costs are due and payable within 30 days.
Justice S.B. Sherr
Released: May 20, 2016