Court File and Parties

Date: January 31, 2017

Court File No.: D43532/08

Ontario Court of Justice

Between:

Anne Black-Johnson Acting in Person Applicant

- and -

Greig Robert Black Respondent

Counsel: Glen Schwartz, for the Respondent

Heard: In Chambers

Justice: S.B. Sherr

Costs Endorsement

Background

[1] On December 2, 2016, the court released its reasons for decision arising out of a trial about the parties' child support obligations for their two children. Both parties had brought motions to change this court's order, dated May 10, 2011. The respondent (the father) claimed he had overpaid support of $43,302 to the applicant (the mother). The mother denied this and asked for an additional $26,919 for retroactive support adjustments.

[2] A core issue for the court to decide was where the parties' son (the son) had lived since September, 2014. The mother claimed that the son lived primarily with her and asked that the father continue to pay child support for both of their children. The father claimed that the son had lived with him. He proposed that since each party earned the same income, that each of them just pay the special and extraordinary expenses of the child in their care, pursuant to section 7 of the Child Support Guidelines (the guidelines).

[3] The court determined that the parties had a shared parenting arrangement (as defined in section 9 of the guidelines) for the son for the 2014-2015 school year, with the child living primarily with the father. Starting on September 1, 2015, the court determined that the son was living with the father.

[4] The court granted many, but not all of the section 7 expense adjustments sought by the parties. It also made a minor retroactive support order against the father. The father had asked to impute income to the mother for 2016 (equal to his) and on an ongoing basis. The court declined to do this until September 1, 2017, as the mother has been dealing with the significant behavioural needs of another one of her children.

[5] After making all adjustments, the court found that the mother owed the father $18,805.64 for overpayment of support. It required the father to pay the mother ongoing child support of $636 each month, starting on January 1, 2017 (based on the Child Support Guideline set-off amounts), but provided that this payment would be offset against the amount owed by the mother to the father. Starting on September 1, 2017, the order provides that the mother shall pay the father $33 each month for child support (the set-off amount, based on the incomes attributed to the parties as of that date). The court ordered the father to pay 72.4% of the children's section 7 expenses until August 31, 2017 and 49.2% of these expenses after September 1, 2017.

[6] The court gave the parties the opportunity to make written costs submissions. The father seeks his costs of $19,700. The mother asks that no costs be paid.

Legal Framework for Costs

[7] 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.

[8] 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.

[9] Subrule 24(6) sets out that if success in a step in a case is divided, the court may apportion costs as appropriate.

Settlement Offer Analysis

[10] 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:

1. If the offer relates to a motion, it is made at least one day before the motion date.
2. 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.
3. The offer does not expire and is not withdrawn before the hearing starts.
4. The offer is not accepted.
5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

[11] Even if subrule 18(14) does not apply, the court may take into account any written offer to settle, the date it was made and its terms when exercising its discretion over costs (subrule 18(16)).

[12] The father made an offer to settle. The mother did not make an offer to settle.

[13] The father claims that the trial result was more favourable to him than the terms set out in his offer and the costs consequences set out in subrule 18(14) apply. The mother claims that the trial result was more favourable to her than the father's offer, and subrule 18(14) does not apply.

[14] The onus of proving that the offer is as or more favourable than the trial result is on the person making the offer. See: Neilipovitz v. Neilipovitz, [2014] O.J. No. 3842 (SCJ).

[15] 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.

[16] Close is not good enough to attract the costs consequences of 18(14). The offer must be as good or more favourable than the trial result. See my comments in: Gurley v. Gurley, 2013 ONCJ 482.

[17] The father's offer to settle is dated August 29, 2016. The father offered to accept $10,000 in consideration of all support adjustments. He proposed that starting on September 1, 2016, he would pay the section 7 expenses for his son and the mother would pay the section 7 expenses for his daughter. He proposed a review in May, 2017.

[18] The father's offer to settle is very close to the final result, but not more favourable. If he had severed his offer to accept $10,000 for all support adjustments (the principal issue), subrule 18(14) would have applied.

[19] In assessing the father's offer, his support obligations for the period from January 1, 2017 until August 31, 2017 must be taken into consideration, as his offer provided for no support payable by him during this time. The court ordered the father to pay support of $5,088 for this period ($636 each month for 8 months). It also ordered him to pay 72.4% of the children's section 7 expenses for the 8 months, not just the son's section 7 expenses, as he proposed.

[20] The court agrees with the mother's submission that it cannot assess the benefit to the mother of having the father pay 72.4% of the children's section 7 expenses without a detailed accounting. The court is alert to the fact that the daughter's section 7 expenses were significantly higher in 2015 and 2016 than the son's, so the mother receives a significant credit for the father paying 72.4% of both children's section 7 expenses, as opposed to just paying the son's lower section 7 expenses for the next 8 months. Further, the mother could benefit by the father paying 49.2% of both children's section 7 expenses indefinitely, as opposed to the father only paying for the son's lower section 7 expenses.

[21] When the court considers the probable benefits to the mother set out in paragraphs 19 and 20 above, it is unlikely that the trial result will end up more favourable to the father than his offer to settle. He failed to meet his onus and subrule 18(14) will not be applied.

[22] This all said, the father's offer to settle represented a serious effort to settle this case on reasonable terms and will be considered under subrule 18(16). The mother should have settled this case.

Success Analysis

[23] The mother submitted that there was divided success on the issues argued at trial. This is true. The father was ordered to pay retroactive support and the mother was given credit for many of her section 7 expense claims. The court did not impute the mother's income until September 1, 2017, and accordingly, the father was ordered to pay ongoing child support starting on January 1, 2017. The father sought child support adjusted from November, 2014 – the court ordered it adjusted starting on September 1, 2015. The mother's success on these issues reduced the father's claim at trial for overpayment of support from $43,302 to $18,805.

[24] However, divided success does not equate with equal success. It requires a comparative analysis. Most family cases have multiple issues. They are not equally important, time-consuming or expensive to determine. See: Jackson v. Mayerle, 2016 ONSC 1556, paragraph 66, per Justice Alex Pazaratz.

[25] The dominant issue for the support determination was where the parties' son was living. The court, for the most part, accepted the father's evidence on this issue and this is why the mother owes the father a sizeable sum for overpayment of support. If the mother's position on this issue had been accepted, the father would still be paying the guidelines table amount of support for both children.

[26] The court finds that the father was the more successful party, based on the positions taken at trial, and in particular, the position taken in his offer to settle.

[27] The mother did not rebut the presumption that the father is entitled to costs.

Factors in Determining Costs

[28] 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.

[29] The case was important for the parties. There was some complexity and difficulty due to the multiple issues and detailed accounting required.

[30] The father acted reasonably. The mother also acted reasonably, except for her failure to make an offer to settle the case. The mother was represented by counsel when this case was set for trial. It is disappointing that the mother made no formal offer to settle. This trial should have been avoided.

[31] Although this was only a one day trial, considerable trial time was saved because the parties prepared their direct evidence by affidavit.

[32] The mother caused the father to incur additional costs after trial, when she sought to make additional claims for section 7 expenses not presented at trial. This request was dismissed.

Time and Expense Claims

[33] The father included claims for significant time not related to the trial step. Subrule 24(10) sets out that costs are to be determined in a summary manner after each step in the case by the presiding judge. A "step" in the case is one of the discrete stages recognized by the rules such as a case conference, settlement conference and the like. See: Husein v. Chatoor, 2005 ONCJ 487. The trial judge should not deal with requests for costs that were addressed or should have been addressed at these prior steps in the case. See: Islam v. Rahman, 2007 ONCA 622.

[34] A party is entitled to claim time spent for meetings with the client and reviewing and preparing pleadings and financial statements as this is time not attributable to any one step in the case. See: Czirjak v. Iskandar, 2010 ONSC 3778. Costs accrued from activity not specifically related to the step (not requiring judicial intervention) should be dealt with at the end and not by the motions judge. Houston v. Houston, 2012 ONSC 233; Walts v. Walts, 2014 ONSC 98.

[35] The father failed to provide specific details of time claimed that fall into these categories. Instead, he just made a large general claim for time spent not attributable to a step in the case.

[36] The father also claimed time for work done by law clerks. This time was minor, but won't be allowed, as most of the work appeared to be secretarial in nature.

[37] The time claimed by the father for the trial step was reasonable.

[38] The expenses claimed by the father are reasonable.

Proportionality and Ability to Pay

[39] 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.

[40] The court considered the mother's ability to pay the costs order. See: MacDonald v. Magel. The court found at trial that the mother was justified in working part-time until September, 2017, to address the special needs of her other child. This means that it will be difficult for her pay this costs award in the short-term. However, once she goes back to work full-time as a school principal she will have the ability to pay the monthly payments for costs that will be ordered.

[41] The court will suspend payment of the costs award until February 1, 2018.

Costs Order

[42] Taking into account all of these considerations, an order shall go that the mother shall pay the father's costs fixed in the amount of $11,000, inclusive of fees, disbursements and HST. Payment of the costs is suspended until February 1, 2018. The mother may pay the costs ordered at the rate of $500 per month, starting on February 1, 2018.

Released: January 31, 2017

Justice S.B. Sherr