Court File and Parties

Court File No.: 13539/15 Date: May 11, 2017

Ontario Court of Justice

Re: Craig Atkinson – Applicant And: Rachel Houpt - Respondent

Before: Justice S. O'Connell

Counsel: Michael N. Freeman, for the Applicant Susan Harris, for the Respondent

Costs Endorsement

Introduction

[1] On January 19, 2017, the parties settled all of the issues between them at a settlement conference except costs. Both parties made written submissions on costs, the applicant mother on February 14, 2017, the respondent father on February 23, 2017, and a further reply by the applicant mother on February 28, 2017.

[2] The applicant mother ("Ms Houpt") is seeking a cost award of $18,788.88. She is also seeking an order that 50% of this award be declared an incident of support so that it can be enforced by the Family Responsibility Office.

[3] Ms Houpt submits that she was entirely successful in this application. She spent approximately $30,000.00 defending the father's application.

[4] The respondent father ("Mr. Atkinson") submits that both parties should be responsible for their own costs in this proceeding. In the alternative, if the court is inclined to make an order for costs, it should be a nominal amount that reflects the importance of the disputed issues to both the parties and the children and the efforts that both parties made to resolve the issues.

Background

[5] The parties commenced cohabitation in 1994. The parties separated in July 2010. The parties never married.

[6] There are two children of the parties' relationship, namely Sophie Isabel Houpt Atkinson, born March 18, 2005 ("Sophie") and Tessa Gabrielle Houpt Atkinson, born May 28, 2008 ("Tessa"). Sophia is now 12 years old and Tessa is now almost 7 years old.

[7] The parties entered into a separation agreement resolving all issues arising out of the breakdown of the relationship on October 27, 2011. The parties mediated a parenting plan ("the Parenting Plan") with Dr. Barbara Fidler, which was incorporated into the terms of the separation agreement and attached as a schedule to the agreement.

[8] The Parenting Plan provided that the parties have joint custody of the children and that the children shall reside with each of the parents in a four week rotating schedule that provided frequent and regular contact with both parents during the week and on weekends. In addition the parties equally shared the holidays.

[9] It is not disputed that during the regular parenting schedule, the children resided overnight with the father 11 out of 28 nights during the four week rotating schedule which is approximately 39% of the time. The balance of the time the children resided with Ms. Houpt. The summer holiday schedule was shared under a "week about" arrangement. It was the father's position that the total amount of time that the children spent with him, including the shared summer schedule was approximately 45% of the time. This was disputed by the mother.

[10] The preamble to the parenting plan dated October 27, 2011 provided that the parties were committed to the parenting plan and shall share in the parenting of the children including all major child related decisions.

[11] In addition, paragraph 3.2 of the separation agreement provides as follows:

"The terms of the parenting plan are premised on the parties residing in close proximity to each other and contemplate that their respective residences should be reasonably close, within 20 kilometres, to facilitate effective implementation of the parenting arrangements, as set out in the parenting plan which is attached to schedule a to this agreement."

[12] The separation agreement also provides that Mr. Atkinson shall pay child support to Ms Houpt in the amount of $1,715.00 per month and 50% of the nanny or child care expenses. This was the full table amount under the Child Support Guidelines.

[13] Mr. Atkinson met his new partner in November 2012. They married in June 2015. They have one child together who was born on December 4, 2014. Mr. Atkinson's new partner also has a daughter from a previous relationship. Mr. Atkinson's wife and her child live in Picton (Prince Edward County). After the birth of their child, Mr. Atkinson initially divided his time between Toronto and Picton.

[14] At the time that Mr. Atkinson commenced these court proceedings, Mr. Atkinson maintained an apartment in Toronto during the week (where he is employed) and so that he could continue to see Sophie and Tessa during the week in accordance with the Parenting Plan. He resided in Prince Edward County on the weekends with his new partner and child.

[15] It is not disputed that difficulties with the Parenting Plan started to occur in 2015, shortly after the birth of Mr. Atkinson's new child. In the court materials filed, the parties outlined different reasons for these difficulties.

[16] Ms. Houpt stated that after the birth of Mr. Atkinson's child, Mr. Atkinson commenced a campaign of agitation towards her, using their children as pawns, in an effort to force Ms. Houpt to agree to a new 50-50 "week about" parenting schedule.

[17] Mr. Atkinson states that Ms. Houpt interfered or intruded upon his time with the children and that she withheld the children from him in an effort to minimize the children's time with Mr. Atkinson's new partner and their half-brother in Picton. Mr. Atkinson further stated that the frequent midweek transitions and lack of consistency in the parenting schedule were disruptive and exhausting for the children and sought to change the Parenting Plan.

[18] The parties entered into closed mediation in 2015 with Dr. Barbara Fidler in accordance with the alternate dispute resolution provision set out in the Parenting Plan. The mediation was not successful.

Procedural History

[19] In December of 2015, Mr. Atkinson commenced this application. He sought a final order changing the Parenting Plan to provide the children reside with both parents in a shared "week about" arrangement with transitions to occur on Fridays at 3:30 PM. He further sought an order of varying the child support provisions of the separation agreement to provide that he would pay child support in the amount of $281.00 per month to Ms. Houpt instead of $1,715.00 per month to reflect the shared parenting arrangement that he was seeking.

[20] In her initial response, Ms Houpt sought a decrease in the father's parenting time to every other weekend and one overnight a week, counselling for Tessa (who the mother states was experiencing severe distress regarding the situation) and her costs. In her amended Answer, after the parties could not reach an agreement on a number of issues, including counselling for Tessa, Ms Houpt sought sole custody.

[21] Mr. Atkinson proposed that he would continue to divide his time between Toronto and Prince Edward County and that during his weeks with the children, he would live in Toronto and take the children to school. During alternate weeks he would live in Picton. He also wanted Sophie and Tessa to spend their weekends and holidays at his Picton home with their stepmother and half-brother.

[22] The first case conference in this matter took place on March 8, 2016, before me as case management judge. At that time, the parties entered into a temporary court order regarding the following:

a) therapy and counseling for Tessa, which was a very contentious issue;

b) the parties also agreed to attend a half-day mediation/arbitration on March 24, 2016 with Ms. Cheryl Goldhart to mediate the summer holiday schedule which could not be resolved;

c) the parties agreed to refer the issues of custody and access to the Office of the Children's Lawyer for a clinical social work investigation and report (a "section 112 report").

[23] On April 4, 2016 Ms. Houpt sought a motion date (by way of a 14b motion faxed to the court) to ensure compliance with the temporary consent order regarding summer holidays reached at the March 8th case conference. A motion date was scheduled for April 21, 2016. On April 19, 2016, the court received a further 14b motion requesting that the April 21 motion date be vacated as the parties had reached a settlement of the contested issues regarding summer holidays.

[24] There were several consent adjournments after that time to allow the Office of the Children's Lawyer (OCL) to conduct and complete its clinical investigation of the issues of custody and access. All of the consent adjournments of the case conferences were requested by 14b motion forms faxed to the court office, thereby reducing court appearances and saving legal costs for the parties.

[25] The OCL finally completed its investigation and a disclosure meeting was held with the parties and their respective counsel on September 29, 2016. The OCL's findings and recommendations were presented at that time. The parties were unable to resolve the issues at the disclosure meeting.

[26] On November 29, 2016, the OCL delivered its final report to the parties and the court. The clinical investigator made the following major recommendations, among several others:

1. That the mother be granted sole custody of the children;

2. That the father have access to the children on alternating weekends overnight from after school on Friday until the return of school on Monday morning;

3. That the father's access on alternate Monday overnights be discontinued;

4. That the father's Tuesday overnights continue, to begin at the start of the school day until the start of school on Wednesday;

5. That each party should attempt to arrange to share time with the children during the summer school holidays on a week about basis over the summer holidays however in doing so, the parties should consider Tessa's resistance to traveling to Prince Edward County for long periods and should try to gradually transition Tessa to a week about schedule over the summer.

[27] The case conference was adjourned again to January 19, 2017 in order to allow the parties to continue with their settlement discussions after receipt of the OCL report.

[28] In December of 2016, the father gave up his apartment in Toronto and started residing full time in Prince Edward County.

[29] The father sought an adjournment of the January 19, 2017 case conference by way of a 14b motion faxed to the court as he was no longer represented by his counsel and he was seeking to obtain new counsel. This request for an adjournment was vigorously opposed by the mother. The mother expressed concerns about the father's delay tactics and the harm a further delay in the litigation may cause to the children.

[30] As the request for the adjournment was opposed by the mother, the court directed both parties to attend the case conference and to make any further submissions in person at that time with respect to the adjournment request and any timelines should the adjournment be granted.

[31] Both parties attended before me on January 19, 2017. At that time, the father had retained new counsel, Mr. Michael N. Freeman.

[32] The case conference was held down for discussions between counsel and the parties. The parties worked very hard and by the end of the day, they had reached final and comprehensive minutes of settlement on all issues except costs.

[33] The final minutes which have now been incorporated into a final order of this court and include, among other provisions, the following:

1. The mother will have sole custody of the children;

2. The father's regular access schedule will be every other weekend from pick-up on Friday after school to Sunday at 7:30 PM and every Wednesday from pick-up after school at aftercare at 3:30 PM to 8 PM;

3. Such further and other times that the parties may agree from time to time in advance upon written notice.

4. The parties further agreed to a shared holiday schedule which will override the regular schedule, including a "week about" summer schedule.

5. The father will pay table child support to the mother in accordance with his annual income in the amount of $1,815.00 per month based upon an agreed-upon salary of $133,000 subject to annual disclosure. In addition, the father will pay his proportional contribution of $225.00 per month with respect to all section 7 expenses incurred, except insured medical and dental expenses, for a total monthly payment of support and section 7 expenses in the amount of $2,040.00 monthly.

The Law and Governing Principles

[34] Rule 24 of the Family Law Rules, O. Reg. 114/99, governs the determination of costs in family law proceedings and the sections relevant to the circumstances of this case are as follows:

"24. (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.

(4) Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party's own costs or ordered to pay all or part of the unsuccessful party's costs.

(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,

a) (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) (b) the reasonableness of any offer the party made; and

c) (c) any offer the party withdrew or failed to accept.

(6) If success in a step in a case is divided, the court may apportion costs as appropriate.

(7) If a party does not appear at a step in the case, or appears but is not properly prepared to deal with the issues at that step, the court shall award costs against the party unless the court orders otherwise in the interests of justice.

(8) If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.

(10) Promptly after each step in the case, the judge or other person who dealt with that step shall decide in a summary manner who, if anyone, is entitled to costs, and set the amount of costs."

[35] Rule 24 (11) provides a further list of factors that a court must consider in dealing with costs:

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. O. Reg. 114/99, r. 24 (11).

[36] Rule 18(14) and 18(16) of the Family Law Rules, which address the cost consequences of offers to settle, provide the following:

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. O. Reg. 114/99, r. 18 (14).

18 (16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply. O. Reg. 114/99, r. 18 (16).

[37] In Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, [2009] O.J. No. 1905, 2009 CarswellOnt 2475, at paragraph 8, the Ontario Court of Appeal confirmed that the costs rules are designed to foster three important principles:

(1) to partially indemnify successful litigants for the cost of litigation;

(2) to encourage settlement; and

(3) to discourage and sanction inappropriate behaviour by litigants.

[38] Rule 24 created a new framework for determining costs in family law proceedings. The presumptive nature of Rule 24 has significantly curtailed the court's discretion regarding costs in family law proceedings and absent compelling circumstances or the exceptions set out in the rule itself, costs are generally awarded to the successful party. The Ontario Court of Appeal in C.A.M. v. D.M., 67 O.R. (3d) 181 held that while the Rules have not completely removed a judge's discretion, the Rules nonetheless circumscribed the broad discretion previously granted to the courts in determining costs. Courts must not only decide liability for costs, but also the amount of those costs.

[39] The court's role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees. As was pointed out in Boucher v. Public Accountants Council for the Province of Ontario, 71 O.R. (3d) 291, 188 O.A.C. 201, 48 C.P.C. (5th) 56, [2004] O.J. No. 2634, 2004 CarswellOnt 2521 (Ont. C.A.), the award of costs must be fixed in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings rather than an exact measure of actual costs to the successful litigant.

[40] In considering the issue of costs in the context of a case that has settled, the most important factor in determining both entitlement and quantum of costs is the reasonableness and timeliness of the parties' respective offers to settle. It is not appropriate to go behind the freely negotiated terms of settlement and to engage in an exercise of determining which party's position on each issue would have been accepted by the trial judge if the matter had proceeded to trial. The reasonableness of the conduct of parties is a consideration but not the most important one. See O'Brien v. O'Brien, 2009 CarswellOnt 7194 (Ont. S.C.J.), Gzechowski v. Percy, 2011 ONCJ 644; Benoit v. Kerr, 2014 CarswellOnt 12838, (Ont. S.C.J.), Upton v. Harris, 2016 CarswellOnt 6721, (Ont. S.C.J.).

Analysis

[41] The father commenced the application to change the parties' Parenting Plan schedule to a "week about" schedule after he married his new partner and started living with her and their new child in Prince Edward County. It is not disputed that Prince Edward County is three hours away from the children's home and school in Toronto.

[42] It is understandable that people's lives change, and that they meet new partners and may have more children after a separation. The father's decision to remarry and to relocate three hours away to Prince Edward County with his new wife certainly triggered a change in his circumstances. A new residential parenting arrangement was obviously necessary.

[43] The court does not agree with the mother submissions that the father sought to increase his parenting time from 39% to 50% solely in order to reduce his child support obligation. It is apparent that the significant changes in the father's life circumstances including his decision to marry someone who lived in Prince Edward County were determinative factors in the father's request to review the Parenting Plan.

[44] However, the father's proposal that he would live in Toronto during his weeks with the children so that he could bring them to school, and then live in the alternate weeks with his wife and new child in Prince Edward County was clearly unrealistic. It was also not child-focused, but rather focused on the father's needs. The children had been in a parenting arrangement for a number of years where they enjoyed frequent and regular contact with both parents during the school week because their parents lived in close proximity to each other in Toronto. The children, particularly Tessa, had also expressed discomfort about the long drives to Prince Edward County and spending all of their weekends and holidays there.[1]

[45] The mother was entirely successful in this litigation, which was commenced by the father. In the Final Minutes of Settlement, the mother obtained even greater relief than what she had sought in her answer and amended answer to the father's application. The father's parenting time was decreased. The mother was granted sole custody. The father's application to reduce his child support also failed, and child support was in fact increased.

[46] I agree with counsel for Mr. Atkinson that a significant body of case law has developed which states that where parties have reached a settlement between themselves, the court should be very slow to make an award of costs against one of the parties. Unless there are compelling reasons to do so, costs in the circumstances of the settlement between parties should not be awarded by the court.[2]

[47] One of the rationales for this principle is the difficulty for the court in determining who the successful party is in a settlement. Unknown considerations may be at a play. Both parties may have made compromises. Success is often divided. The court wants to encourage the parties to settle at soon as possible and reward the parties for so doing.

[48] However, there may be instances where the settlement is a "clear capitulation" by one party in favour of another and it is very clear who the successful party is in the litigation.[3]

[49] This is one of those cases. The mother was entirely successful. The father abandoned his claims after commencing this court case. At the end of the day, the mother was more successful than the relief that she sought in her answer to the father's application. There is no evidence that the mother behaved unreasonably in this litigation.

[50] It is not disputed that the parties' communication completely broke down and the closed mediation was unsuccessful. There is no evidence before me regarding the reasons why the mediation broke down, but I agree with father's counsel that the Parenting Plan needed to be revisited. However, the relief sought by the father in his application was not reasonable.

[51] Having said that, although the father was entirely unsuccessful in his application, at the end of the day, he acted reasonably in accepting the recommendations of the Office of the Children's Lawyer. The OCL released its report on November 29, 2016 and Mr. Atkinson accepted those recommendations fairly quickly afterwards, leading to comprehensive minutes of settlement signed by both parties on January 19, 2017, only eight weeks later.

[52] In looking at the entire procedural history, the first case conference in this matter occurred on March 8, 2016 and the parties agreed on a number of important issues, including the referral of the custody and access issues to the Office of the Children's Lawyer. The next substantial case conference in this matter did not occur until January 19, 2017 and the parties settled. To the parties' credit, it is apparent that they exchanged a number of settlement proposals after receiving the OCL recommendations.

[53] While the father abandoned his claim and reduced his overall time with the children, he also avoided putting himself, the mother and the children through the cost and stress of further litigation by settling his application at a relatively early stage, namely the second substantive case conference. All other case conferences and court appearances were adjourned pending the receipt of the OCL report.

[54] In my view, although there should be some compensation to the mother for the legal fees incurred in responding to the father's unreasonable application, the court should also take into consideration the fact that the father settled fairly quickly after the release of the OCL report.

[55] Both parties incurred significant legal fees in this litigation. The father incurred approximately $36,000 in legal fees and the mother incurred approximately $30,000 in legal fees.

[56] The issues at stake were understandably very important to the parties although not complex or difficult. In reviewing all of the circumstances, I would certainly award some of the costs incurred to respond to the father's application and for the two court attendances.

[57] Ms. Harris was called to the bar in 2003 and her hourly rate is $345 per hour, a very reasonable rate for a Toronto counsel of her experience and expertise. The bill of costs submitted is high, nevertheless it was reduced considerably to $18,773.88.

[58] The time spent on reviewing and responding to Mr. Atkinson's application and on amending Ms Houpt's answer and claim to seek sole custody was approximately 12.1 hours, or $4,174.50. The time spent on preparing and attending both case conferences was approximately 17 hours, or $5,865.00. The time spent on the two case conferences appeared in my view, to be somewhat excessive.

Order

[59] In considering all of the circumstances of this case, the parties' settlement, and the relevant law and legal principles, Mr. Atkinson shall be required to pay Ms Houpt's costs fixed at $6,000.00, inclusive of fees, disbursements, and taxes. These costs are payable no later than 30 days from the date of this ruling.

Justice Sheilagh O'Connell

Date: May 11, 2017

Footnotes

[1] According to the section 112 OCL Investigation and Report.

[2] See Page v. Desabrais, 2012 ONSC 6875, [2012] O.J. No. 5790 (S.C.J.), para. 28; Blank v. Micallef, 2009 CarswellOnt 6790, para. 11; Gurzi v. Elliot, 2011 CarswellOnt 2169 (O.C.J.) para. 16.

[3] See Page v. Desabrais, 2012 ONSC 6875, [2012] O.J. No. 5790 (S.C.J.) at par. 30; Benoit v. Kerr, 2014 ONSC 5401 (S.C.J.).