Court File and Parties

Court File No.: D47561/09 Date: 2016-06-02

Ontario Court of Justice

Between:

S.H. Applicant

- and -

R.A.A. Respondent

Counsel:

• Stephanie Okola, for the Applicant
• Acting in Person, for the Respondent
• Patricia A. Smyth, for the assignee, The Ministry of Community and Social Services

Heard: In Chambers

Justice: S.B. Sherr

Costs Endorsement

Background

[1] On May 4, 2016, the court released its reasons for decision after hearing a trial of the respondent's (the father) motion to change a final support order.

[2] The court reduced the father's support arrears by $14,940. This represented three years of support that had accrued while the child was not in the mother's care due to child protection proceedings. The balance of the father's motion to change (to rescind arrears and reduce ongoing support) was dismissed. The father was permitted to repay the remaining arrears at the rate of $75 per month.

[3] The Ministry of Community and Social Services (the assignee) participated in this trial as the father had sought to rescind arrears assigned to it by the mother. The court only reduced the arrears owed to the assignee by one month, as the mother was not in receipt of social assistance for most of the time that the child was out of her care.

[4] The participants were given permission to make written costs submissions. The mother and the assignee made costs submissions. The mother seeks costs of $1,584. The assignee seeks costs of $2,938. The father did not make costs submissions.

Legal Framework for Costs

[5] 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.

[6] Subrule 24(1) of the Family Law Rules (the 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. The position each party took at trial should also be examined.

Failure to Make Settlement Offers

[7] No participant made an offer to settle. In family law litigation this is 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.

Positions at Trial

[8] The court must next examine the positions that the participants took at trial. The father asked the court to reduce his child support payments to $150 per month and his outstanding arrears to $5,000, to be repaid at $50 per month. The mother in her opening statement, for the first time, agreed to give the father a support credit for three years. She asked that the balance of the father's motion to change be dismissed and that the remaining support arrears be repaid at $250 per month. The assignee asked for no reduction to the arrears of $5,810 owed to it by the father. It proposed that the father repay these arrears at the rate of $75 per month.

[9] The mother and the assignee were the successful participants based on these positions. In particular, the father was only able to reduce one month of support owed to the assignee.

[10] The father did not rebut the presumption that the mother and the assignee are entitled to costs.

Factors in Setting Costs

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

[12] The case was important for the participants. It was not difficult or complex.

Reasonableness of Behaviour

[13] Subrule 24(5) of the rules states:

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.

[14] With the exception of its failure to make an offer to settle, the behaviour of the assignee was reasonable.

[15] The mother failed to notify the Family Responsibility Office that the child was out of her care for three years. Support continued to accrue. She initially resisted any reduction of arrears. She only conceded a reduction in support in her opening submissions. The father had to bring this motion to obtain this significant reduction in arrears. The mother also did not make an offer to settle. This was not reasonable behaviour.

[16] The father was justified in bringing a motion to change to reduce arrears for the three years the child was not in the mother's care. His other claims had no merit. He also did not act reasonably. He failed to comply with financial disclosure orders in a timely or complete manner. If he had provided meaningful financial disclosure a trial might have been avoided. The father was also found not to be a credible witness. He attempted to represent that he was earning far less income than he was earning.

[17] While the court finds that the father's behaviour was unreasonable it does find that it rose to the higher level of bad faith that was claimed by the mother and the assignee.

Rates, Time, and Expenses

[18] The rates and time claimed by counsel for the mother and the assignee were very reasonable and proportionate. Counsel for the assignee took the lead at trial in cross-examining the father and reviewing the case law. The expenses claimed by the assignee were also reasonable.

Ability to Pay

[19] The court considered the father's ability to pay costs. See: MacDonald v. Magel. However, 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. See: Snih v. Snih. This order will permit the father to pay the costs in instalments.

Proportionality of Costs

[20] 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.

Costs Order

[21] Taking into account all of these considerations, an order shall go that the father shall pay the assignee's costs fixed in the amount of $2,500, inclusive of fees, disbursements and H.S.T and the mother's costs fixed at $500, inclusive of fees, disbursements and H.S.T.

[22] The father may repay the costs as follows:

a) $50 per month to the mother.

b) $50 per month to the assignee, increasing to $100 per month, once the mother's costs have been paid in full.

c) These payments shall start on July 1, 2016.

Released: June 2, 2016

Justice S.B. Sherr