Court File and Parties

Date: July 10, 2017

Court File No.: D90045-16

Ontario Court of Justice

Between:

Edwin Aitafoh Applicant

- and -

Maya Karlowski Respondent

Counsel:

• Barry Nussbaum, for the Applicant
• Godwin Oware, for the Respondent

Heard: July 7, 2017

Justice: S.B. Sherr

Costs Endorsement

Background

[1] On July 7, 2017, the court delivered oral reasons for judgment after hearing a trial on multiple issues between the parties, including parenting of their two children, incidents of custody, child support and the respondent's (the mother's) request for a restraining order.

[2] At the conclusion of the trial the applicant (the father) sought costs of $11,684.61. The mother asked that no costs be payable.

Legal Framework for Costs Awards

[3] 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.

[4] 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.

Settlement Offers and Subrule 18(14)

[5] 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 The offer does not expire and is not withdrawn before the hearing starts.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.

[6] 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).

[7] 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. However, even if the offer does not attract the costs consequences set out in subrule 18(14), it may be considered under subrule 18(16). See: Gurley v. Gurley, 2013 ONCJ 482.

[8] The father made two offers to settle. The mother made one offer to settle. None of the offers satisfied the pre-conditions to trigger the costs consequences in subrule 18(14).

[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 Settlement Offers

[10] The father's offers to settle were much closer to the final result than the mother's offer.

[11] The mother's offer to settle sought joint custody of the children, alternate weekend and extensive holiday access for her with the children, including one month in the summer and the entire winter school break. She offered no child support. She sought a non-removal of the children from Canada without her consent. She sought costs of $2,500.

[12] The father's two offers to settle were similar. He sought: sole custody of the children; access to the mother as agreed upon by the parties in the first offer and Saturday access from 9 a.m. to 7 p.m. in the second offer; the ability to obtain government documentation and to travel with the children outside of Canada without the mother's consent; imputation of the mother's income at $23,712 per annum in the first offer, with support starting on October 1, 2016 and imputation of her income at $23,400 per annum, with child support of $351 per month, starting on January 1, 2016, in the second offer. The second offer proposed no costs if accepted.

Trial Outcome

[13] The court ordered sole custody of the children to the father. The mother was given the rights of information set out in subsection 20(5) of the Children's Law Reform Act. The mother was given specified day access to the children each Saturday, as well as day access on 4 additional holidays. The father was permitted to obtain government documentation and to travel with the children outside of Canada without the mother's consent. Annual income of $15,000 was imputed to the mother and she was ordered to pay child support to the father of $195 each month, starting on November 1, 2016. Payment of the mother's support arrears at $100 each month was deferred until January 1, 2018. The mother's claims for a restraining order and a non-removal order were dismissed.

[14] At trial, the mother's position was similar to her offer to settle. The one notable exception was that she only sought day access on a weekly basis. She continued to seek extensive holiday access and joint custody of the children. The father's position at trial mirrored his second offer to settle.

[15] The father was the more successful party based both on the offers to settle and the positions taken at trial.

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

Factors Under Subrule 24(11)

[17] 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.

Application of Subrule 24(11) Factors

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

[19] This trial was originally scheduled for January 3, 2017. The parties had been given filing timelines for their trial affidavits at the court appearance on November 8, 2016. Neither party complied with the timelines. Neither party was prepared for trial on the return date. Counsel for the mother did not even attend at court. A valuable court sitting date was completely wasted. The court ordered that the case was stayed until counsel could satisfy the court that they were prepared to proceed with the trial. This was unreasonable behaviour by both parties. The stay of the case was not lifted until June 5, 2017 and this trial date was set.

[20] The mother never filed a financial statement. She provided no financial disclosure until the day of trial. She has never paid child support. She has not looked for work since the parties were separated in 2013 and income was imputed to her for support purposes. Her requests for joint custody and extensive overnight access were unrealistic given that she has infrequently exercised the temporary access ordered. This was all unreasonable behaviour.

[21] The rates of counsel for the father are reasonable.

[22] The expenses claimed by the father are also reasonable.

[23] The court will not award costs for time spent by the father arising out of preparation for the aborted trial on January 3, 2017, attendance at court that day or steps taken to lift the stay of proceedings. A party should not be compensated when a trial day is lost due to lack of readiness and compliance with court orders – even if the other party is equally to blame.

Proportionality and Discretionary Considerations

[24] 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.

[25] The court considered that it was dealing with relatively low amounts of child support. If this was the only issue, the costs claimed would not be proportional to the amounts in dispute. However, the parenting, travel and restraining order issues were of significant importance to the father and the children and the time spent by counsel on these issues was proportional and necessary.

Ability to Pay

[26] The court considered the mother's ability to pay the costs order (see: MacDonald v. Magel). She is of modest means and is presently on Ontario Works. However, a party's limited financial circumstances will not be used as a shield against any liability for costs but will only be taken into account regarding the quantum of costs, particularly when they have acted unreasonably and are the author of their own misfortune. See: Snih v. Snih pars. 7-13. In the case of Takis v. Takis, [2003] O.J. No. 4059 (S.C.J.) the court found that the respondent's lack of income and assets, though a relevant consideration, could not be used as a shield in unnecessary litigation.

[27] The court adopts the comments of Justice Heather McGee in Mohr v. Sweeney, 2016 ONSC 3238, where she states at paragraph 17: "Those who can least afford to litigate should be most motivated to seriously pursue settlement, and avoid unnecessary proceedings." The mother did not do this.

Costs Award

[28] 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 $5,000, inclusive of fees, disbursements and HST.

[29] In the trial decision, the court deferred payment of the mother's support arrears until January 1, 2018, to give her time to start looking for work. The court will do the same with the costs order.

[30] The mother may pay this costs order at the rate of $100 each month, starting on January 1, 2018. However, if she is more than 30 days late in making any ongoing support payment, arrears payment, or costs payment, the entire amount of costs owing at that time shall immediately become due and payable.

Released: July 10, 2017

Justice S.B. Sherr