Court File and Parties
Date: November 20, 2017 Court File No.: D10724/17
Ontario Court of Justice
Between:
TRANG NGUYEN Lauren Israel, for the Applicant
APPLICANT
- and -
SURASAK (AUSTIN) KHOOKRATHOK Glen Cook, for the Respondent
RESPONDENT
Heard: November 17, 2017
Justice: S.B. Sherr
Costs Endorsement
Background
[1] On November 17, 2017 the court delivered oral reasons for judgment after hearing a focused trial about whether the parties should have joint custody of their two children, ages 2 or 4, or whether the applicant (the mother) should have sole custody of the children.
[2] The court made a final order that the mother have sole custody of the children.
[3] The mother seeks costs of $8,000. The respondent (the father) asks that if costs are awarded they be fixed at $2,500.
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.
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- The offer does not expire and is not withdrawn before the hearing starts.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] The mother made an offer to settle dated November 3, 2017. She proposed that there be no order for costs if the father agreed that she would have sole custody of the children. This offer satisfied all the criteria for the costs consequences in subrule 18(14) to be applied.
[8] The father also served an offer to settle proposing that there be no order for costs if there was a final order for joint custody.
[9] The mother was the successful party at trial. The presumption that she is entitled to costs was not rebutted by the father.
Factors in Determining Costs
[10] 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.
Importance, Complexity and Difficulty
[11] The case was important for the parties. It was not complex or difficult.
Reasonableness of Parties' Behaviour
[12] The mother acted reasonably.
[13] The court made findings that the father was controlling, angry, vindictive and lacked respect for the mother. This did not come anywhere close to being a joint custody case. The father should have accepted the mother's offer to settle.
[14] The father acted reasonably in resolving all other issues in the case. His litigation behaviour was also reasonable.
Lawyer's Rates
[15] The rates of counsel for the mother are reasonable for senior counsel ($400 per hour).
Time Spent on the Case
[16] The mother did not submit a Bill of Costs. Counsel should always have a Bill of Costs prepared if they plan to seek costs at any stage of a case – whether it is at the end of a trial or at the end of a motion.
[17] Without a Bill of Costs, it becomes very difficult for the court to assess what work was done before and after the mother's offer to settle was made on November 3, 2017. This is important, as subrule 18(14) sets out different scales of costs for pre-offer and post-offer work claimed.
[18] It also becomes difficult for the court to assess what work was attributable to this step in the case. 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.
[19] Lastly, it becomes very difficult for the court to assess what work wasn't attributable to a step in the case. 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.
[20] The father's counsel stated he only required 5.5 hours to prepare for and conduct the focused trial. The mother's counsel is claiming closer to 20 hours of time.
[21] The court finds that a fair assessment of the time required was somewhere close to the middle of these time estimates. The trial was very focused. The parties had resolved all other issues between them. The direct evidence was by affidavit of the parties only. The mother prepared two short affidavits (under 3 pages). Counsel focused their examinations of the parties and the trial was completed in less than 3 hours.
[22] There was additional work created by the father. He attached a lengthy string of text messages between the parties. The mother's counsel had clearly reviewed these in detail and was able to use them to her client's advantage in a very effective cross-examination of the father.
Proportionality and Fairness
[23] 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.
Ability to Pay
[24] The court considered the father's ability to pay the costs order (see: MacDonald v. Magel). He is of modest means, paying child support on an annual income of just over $30,000. 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.
[25] The court adopts the comments of Justice Heather McGee in Mohr v. Sweeney, 2016 ONSC 3338, where she writes, "those who can least afford to litigate should be most motivated to seriously pursue settlement, and avoid unnecessary proceedings."
Costs Order
[26] 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 $5,000, inclusive of fees, disbursements and HST.
[27] The father may pay the costs at the rate of $100 per month starting on January 1, 2018. However, if the father is more than 30 days late in making any child support or costs payment, the entire amount of costs owing at that time shall immediately become due and payable.
Released: November 20, 2017 Justice S.B. Sherr