Court File and Parties

Date: July 4, 2017

Court File No.: D71471/14

Ontario Court of Justice

Between:

Monique Malcolm

Applicant

- and -

Cal Charles Patrick McGee

Respondent

Counsel:

A. Sam Zaslavsky, for the Applicant

Cal Charles Patrick McGee, Acting in Person

Christine Maley, Agent, for the Assignee, City of Toronto

Heard: In Chambers

Justice: S.B. Sherr

Costs Endorsement

[1] On June 5, 2017, the court released its reasons for decision arising out of a trial about the respondent's (the father's) motion to change his child support obligations contained in this court's order dated January 26, 2015. See: Malcolm v. McGee, 2017 ONCJ 357.

[2] The court invited written costs submissions from the parties and the City of Toronto (the assignee), who had an interest in the support arrears accumulated until January 31, 2017.

[3] The applicant (the mother) seeks full recovery costs of $2,118.75 from the father. The father submits that no costs should be paid.

[4] The assignee 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 (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.

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

Offer to Settle Requirements

[8] 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.

[9] 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)).

Analysis of the Mother's Offer

[10] The mother made an offer to settle dated April 11, 2017. She submits that it attracts the costs consequences set out in subrule 18(14). The court does not agree.

[11] Paragraph 8 of the offer reads:

This offer to settle shall be open for acceptance until April 20, 2017 at 5 p.m., at which time it will expire.

[12] The offer does not meet the pre-condition for costs set out in paragraph 3 of subrule 18(14) which reads:

3. The offer does not expire and is not withdrawn before the hearing starts.

[13] This court's comments made in paragraphs 12 and 13 in Clancy v. Hansman, 2013 ONCJ 702 apply here. These paragraphs read as follows:

[12] A secondary deficiency in the offer to settle is that it was withdrawn 5 minutes before the commencement of the hearing. Paragraph 3 of subrule 18(14) requires that the offer must not have expired or been withdrawn before the hearing starts. This offer had expired before the hearing started. If counsel wish to put expiry clauses in their offers that will comply with the condition in paragraph 3 of subrule 18(14), the expiry date should be after the start of the hearing.

[13] The costs presumption in subrule 18(14) can have significant repercussions – full recovery costs from the date of the offer. Full technical compliance with the subrule is required for it to be applied by the court. The mother's offer to settle did not meet the conditions set out in subrule 18(14) and the presumptive cost consequences in the subrule were not triggered.

[14] The mother's offer is a very relevant consideration under subrule 18(16).

[15] The mother offered to reduce the father's monthly support obligation to $305, starting on November 1, 2016, based on an annual imputed income of $35,048. The father rejected this offer.

[16] At trial, the court did not reduce the father's support until June 1, 2017. The father had been fired due to his misconduct at work. The court ordered that the father pay child support of $227 each month, starting on June 1, 2017, increasing to $327 each month, starting on October 1, 2017. The court permitted the father to pay arrears at $125 each month, starting on January 1, 2018.

[17] The offer was more favourable to the mother than the final result. The father should have accepted it.

[18] The father did not make an offer to settle.

Positions at Trial and Divided Success

[19] The court also considered the positions of the parties taken at trial.

[20] The father asked the court to change the existing order, by ordering that he not be required to pay support for the period from October 1, 2016 until March 1, 2017 and by reducing his monthly child support obligation to $227, starting on March 1, 2017, based on an annual income of $25,680. The father also asked that any arrears accumulated under the existing order be reduced in accordance with this request.

[21] The mother asked the court to dismiss the father's motion to change that required him to pay monthly child support of $449.

[22] There was divided success based on the positions taken at trial.

Costs Factors Analysis

[23] 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.

[24] The case was important for the parties. It was not complex or difficult.

[25] The mother acted reasonably in this case. The father failed to make an offer to settle. He also did not pay support after March 1, 2017, even though he was working. This was not reasonable behaviour.

[26] The rates claimed by the mother's lawyer are reasonable.

[27] The time claimed by the mother are reasonable. She restricted her claim to the trial step.

[28] The expenses claimed by the mother are reasonable.

[29] 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.

Father's Arguments Against Costs

[30] The father submitted that he should not have to pay costs because:

a) He cannot afford it.

b) The mother does not really want costs – it will just be paid to legal aid.

[31] The father's ability to pay costs is a relevant consideration (see: MacDonald v. Magel). However, litigants are responsible for the positions that they take. See: Heuss v. Surkos, 2004 ONCJ 141. While ability to pay costs is a factor to consider, it does not insulate the father from costs liability. See: Snih v. Snih.

[32] The mother's receipt of legal aid is not a relevant consideration in determining costs. See: Ramcharitar v. Ramcharitar; Holt v. Anderson; Children's Aid Society of the Regional Municipality of Waterloo v. C.T., 2017 ONSC 3188.

Costs Award

[33] The court will address any financial hardship to the father by ordering that costs may be paid in instalments and defer those payments until January 1, 2018.

[34] 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 $1,800, inclusive of fees, disbursements and HST. The father may pay these costs at $75 each month, starting on January 1, 2018. However, if he is more than 30 days late in making any ongoing or arrears support payments, or costs payments, the entire amount of costs then owing, shall immediately become due and payable.

Legal Aid and Costs Direction

[35] 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.

[36] 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: July 4, 2017

Justice S.B. Sherr