Court File and Parties
Court File No.: D80967/15 Date: 2016-10-06
Ontario Court of Justice
Between:
Maria De Fatima Desousa E Silva Applicant
- and -
Filipe Aleixo Queiroz Respondent
Counsel:
- Darlene Rites, for the Applicant
- Gagan Sekhon, for the Respondent
Heard: In Chambers
Justice: S.B. Sherr
Costs Endorsement
Background
[1] On August 26, 2016, the court released its reasons for decision after hearing a trial regarding the respondent's (the father's) child and spousal support obligations.
[2] The court ordered the father to pay child and spousal support to the applicant (the mother) retroactive to January 1, 2015. It fixed support arrears at $14,860. The father was ordered to pay ongoing child support for the parties' child in the amount of $675 each month together with $48 per month for his proportionate share of the child's section 7 expenses. The father was also ordered to pay spousal support of $500 each month to the mother. The court ordered that spousal support may be reviewed by either party after September 1, 2018.
[3] The participants were given permission to make written costs submissions. The mother seeks costs of $6,000. The father submitted that he cannot afford to pay costs.
Legal Framework for Costs
[4] 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 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. The position each party took at trial should also be examined.
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] To trigger the full recovery costs consequences set out in subrule 18(14) the court is not required to examine each term of the offer as compared to the terms of the order and weigh with microscopic precision the equivalence of the terms. What is required is a general assessment of the overall comparability of the offer as contrasted with the order. See: Wilson v. Kovalev, 2016 ONSC 163, paragraph 25.
Analysis of Settlement Offers
[8] The parties both made offers to settle.
The mother's offer to settle dated August 6, 2016 was served on the father on August 8, 2016.
[9] In conducting a general assessment of the mother's offer to settle as contrasted with the final order, the court finds that her offer to settle has met all of the requirements of subrule 18(14).
[10] The mother proposed settling child support at $516 per month. The court ordered child support of $559 each month starting on January 1, 2015 and increased it to $675 each month starting on February 1, 2016.
[11] In addition, the court ordered the father to pay $48 each month for the child's section 7 expenses.
[12] The mother proposed that the father pay spousal support of $277 each month, terminating on August 1, 2020. The court ordered the father to pay spousal support of $500 each month starting on January 1, 2015, increasing to $825 each month, starting on February 1, 2016. The court provided for a review of spousal support at the request of either party, after September 1, 2018.
[13] The mother asked that arrears be fixed at $15,000. The court fixed them at $14,860. However, the court ordered a more aggressive repayment of the arrears than offered by the mother.
[14] The father's offer to settle was dated August 8, 2016. The father proposed paying child support of $516 each month, or in the alternative, child support of $350 each month and spousal support of $200 each month for 4 years. He asked that support arrears be set at zero. He proposed paying his proportionate share of the child's future section 7 expenses.
[15] The father's offer was nowhere close to the final result.
[16] The father should have accepted the mother's offer to settle.
[17] The court will apply the costs consequences set out in subrule 18(14). There is no basis to order otherwise. The mother will be awarded her costs up to the time she made her offer and full recovery of costs from the time she made her offer.
Factors in Setting Costs
[18] 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.
[19] The case was important for the parties. It was not difficult or complex.
[20] The behaviour of each party was reasonable.
[21] The father sought a reduction in costs because the mother is on legal aid. The case law is well settled that the receipt of legal aid is not a factor in determining costs. See: Ramcharitar v. Ramcharitar at para. 25 and Alvarez v. Smith at para. 17-19.
[22] The rates claimed by the mother's lawyer ($250 per hour for a 2011 call to the Bar) are reasonable.
[23] The time claimed by the mother (22.4 hours) to prepare for and conduct the trial is also reasonable. A review of the mother's bill of costs indicates that close to 30% of the time claimed was incurred after the mother's offer was delivered to the father. She will receive full recovery costs for this time.
[24] The expenses claimed by the mother are reasonable.
[25] The father submitted that he does not have the ability to pay the support ordered by the court or costs. Ability to pay is a factor when assessing 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 pars. 7-13.
[26] The court imputed annual income of $74,261 to the father in its trial decision. He is presently unemployed due to his own actions. The court finds that if payments are spread out over a period of time the father has the ability to pay the costs that will be ordered.
[27] 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 Award
[28] Taking into account all of these considerations, an order shall go that the father shall pay the mother's costs fixed in the amount of $5,200, inclusive of fees, disbursements and H.S.T.
[29] The father may repay the costs at the rate of $150 each month starting on November 1, 2016. However, if he is more than 30 days late in paying any ongoing child support payment, arrears payment or monthly costs payment, the entire amount of costs remaining owing at that time shall immediately become due and payable.
Payment Arrangements
[30] The mother asked that the costs be paid directly to legal aid in trust. As I set out in F.D.M. v. K.O.W., 2015 ONCJ 94 and John v. Vincente, 2016 ONCJ 78, the court prefers not to become involved in retainer arrangements and make such orders.
[31] The mother can execute an irrevocable direction or assignment of costs and deliver it to the father. The court notes that subsection 46(4) of the Legal Aid Services Act states that all costs ordered by a court to be paid to an individual who has received legal aid services are the property of the Corporation and shall be paid to the Corporation.
Released: October 6, 2016
Justice S.B. Sherr