Court File and Parties
Court File No.: D90318/16 Date: 2016-08-26
Ontario Court of Justice
Between:
Anna Karina Palaganas Applicant
- and -
Christopher Junior Marshall Respondent
Counsel:
- Jacob Stall, for the Applicant
- Acting in Person, for the Respondent
Heard: In Chambers
Justice: S.B. Sherr
Costs Endorsement
[1] This is a costs decision arising out of the court's endorsement released on July 21, 2016, relating to motions brought by both parties.
[2] In its endorsement, the court granted the applicant (the mother) temporary custody of the parties' two children. A temporary parenting schedule was set out. The mother was permitted to travel with the children without the respondent's (the father) consent. The father was ordered to pay temporary child support to the mother retroactive to July 1, 2015 and to pay the arrears created by the order ($11,577) to the mother within 30 days. The father's motion for joint custody, shared parenting time and child and spousal support was dismissed.
[3] The court invited written costs submissions.
[4] The mother seeks costs of $9,094.74. The father seeks his costs of approximately $1,800.
Legal Framework for Costs
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.
[5] Subrule 24(1) of the Family Law Rules (all references to rules in this endorsement are to 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.
Costs Consequences of Failure to Accept Offer
[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.
[7] The mother made an offer to settle. The father did not make an offer to settle.
[8] The mother's offer to settle is dated June 1, 2016. The offer includes the following terms:
- Temporary custody of the children to the mother.
- Temporary reasonable and liberal access to the father as mutually agreed upon.
- The mother to be permitted to travel with the children outside of Canada without the father's consent.
- The father to pay temporary child support of $765 per month to the mother (with no start date).
[9] The mother's offer to settle was the same as the order for items 1 and 3 above and more favourable than the order for item 4. It was less favourable than the order for item 2, as the father was granted a specified parenting schedule. While the mother's offer to settle was very reasonable and close to the final order, it was not more favourable than it. The costs consequences set out in subrule 18(14) do not apply.
[10] However, 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 court can consider the mother's offer under subrule 18(16). The mother's offer was a serious attempt to resolve the motions. Instead of meaningfully trying to resolve these issues the father chose to pursue claims for joint and shared custody and child and spousal support that had no merit.
[11] The mother was the successful party on the motions, based upon both her offer to settle and her position taken on the hearing of the motions.
[12] The father did not rebut the presumption that the mother is entitled to her costs for the motions.
Principles Governing Costs Awards
[13] In Biant v. Sagoo, 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.
[14] 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.
Factors in Determining Costs
[15] 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.
[16] The case was important for the parties. It had some complexity as the mother successfully moved for retroactive temporary child support. It was made more difficult by the father's multiple claims that had no merit.
[17] The mother's behaviour was reasonable in the case. The father made no real effort to settle the case. He also had not given the mother any child support. This was unreasonable behaviour.
[18] The rates claimed by the mother's lawyer were reasonable. However, he also claimed rates for work done by two of his law clerks that were excessive – one clerk being billed at rates higher than the lawyer's.
[19] The time claimed by the mother's lawyer was somewhat high for motions of this nature.
[20] The amount claimed by the mother for expenses was reasonable.
[21] 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. The father did not provide evidence that would justify a reduction in the costs award. His financial statement shows net worth of over $177,000.
[22] 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 Award
[23] Taking into account all of these considerations, an order shall go that the father pay the mother's costs fixed in the amount of $6,000, inclusive of fees, disbursements and H.S.T. The costs are due and payable within 30 days.
Released: August 26, 2016
Justice S.B. Sherr