Court File and Parties
Ontario Court of Justice
Date: March 14, 2018
Court File No.: FO-16-91410
Between:
A.W. Applicant
— And —
S.W. Respondent
Before: Justice Melanie Sager
Written submission on costs
Decision on Costs released on March 14, 2018
Counsel:
- J. Richard Forget, counsel for the applicant
- Sarah Conlin, counsel for the respondent
Decision
Sager J.:
Overview
[1] This is a decision on the issue of costs of the trial that proceeded on November 15, 2017 and January 12, 2018.
[2] The father brought an Application in which he was seeking access to the parties' daughter, Z.W., born October 13, 2010. The mother opposed the father's request for access and claimed a restraining order against the father.
[3] On February 1, 2018, the court released its decision from the trial dismissing both the father's request for access and the mother's request for a restraining order.
[4] The parties were invited to make costs submissions.
The Parties' Positions on Costs
[5] The mother asks for an order for costs against the father in the amount of $32,498.38 on the basis that she was successful at trial, that she behaved reasonably throughout the litigation and that the outcome at trial matched the terms of her Offer to Settle dated November 9, 2017.
[6] The father seeks an order for costs against the mother in the amount of $17,736.95 on the basis that the father was "successful on the DNA testing and on defending a restraining order", which resulted in "mixed" success.
Background and the Litigation History
[7] The parties met in Afghanistan in approximately 2008. Their relationship, which they describe very differently, resulted in the birth of Z.W. in 2010.
[8] The mother came to Canada with her family, including Z.W., in 2014.
[9] The father came to Canada on four occasions between March 2015 and March 2016 during which he had contact with the mother but only saw Z.W. on one occasion in March 2016.
[10] The father commenced this Application in August 2016 when he claimed he realized that the mother was not going to return to Afghanistan with Z.W. to live with the father.
[11] The mother claims that the father commenced this Application when she ended their relationship once and for all.
[12] While the parties described a very different relationship when they both lived in Afghanistan, including the level of involvement the father had in Z.W.'s life, there was no dispute regarding the following facts:
(a) The father had no contact with Z.W. between September 2014, when she was almost 4 years old and March 2016 when she was almost 6 years old;
(b) The father had a brief encounter with Z.W. outside of her school in March 2016 but she did not know who the father was;
(c) The father has not had any contact with Z.W. since March 2016; a period of one year and 11 months as of the last day of trial;
(d) Z.W. does not know the father; and,
(e) Z.W. believes that the mother's husband is her biological father.
[13] In his Application the father asks for the following access to Z.W.:
(a) At all reasonable times;
(b) Weekly by Skype; and,
(c) In person and alone at least 4 times a year.
[14] In his Application the father also asked for an order that the mother not be permitted to remove Z.W. from the Greater Toronto Area without his written permission and that he be permitted to obtain information about Z.W. from her school and doctors.
[15] At the commencement of trial the court was advised that the father was requesting an order that he be permitted Skype access to Z.W. once per week for 20 minutes and access to her school and medical records.
[16] The father's position at trial is that he is Z.W.'s biological father and he would like to have a relationship with her and believes that it is his daughter's right to know her biological father and where she came from.
[17] The mother's position on the father's Application was that there was no benefit to Z.W. having contact with the father and that access was not now in her best interests. The mother also argued that the father had no viable plan to introduce Z.W. to the father through weekly Skype sessions. Finally, the mother argued that it would be wrong to subject the mother to an ongoing relationship with the father by ordering access as he has caused her untold suffering.
[18] The mother asked the court to dismiss the father's Application and that she be granted a restraining order against the father.
[19] After one and a half days of trial, a decision was released on February 1, 2018, dismissing the father's request for access to Z.W. and denying the mother's request for a restraining order.
Legal Framework
[20] Costs orders are governed by Rule 24 of the Family Law Rules. Under Rule 24(1) there is a presumption that the successful party is entitled to costs. Subrule 24(11) sets out the factors the court must consider when fixing the amount of a costs order.
[21] The courts have a broad discretion to award costs. The general discretion of the courts regarding costs is contained in the Courts of Justice Act, R.S.O. 1990, c. C. 43, as amended, s. 131(1), which sets out three specific principles:
a) the costs of a case are in the discretion of the court;
b) the court may determine by whom costs shall be paid; and,
c) the court may determine to what extent the costs shall be paid.
[22] Modern costs rules are designed to foster three fundamental purposes: Fong v. Chan, 46 O.R. (3d) 330, 181 D.L.R. (4th) 614, 1999 CarswellOnt 3955 (Ont. C.A.), para. 24:
a) to indemnify successful litigants for the cost of litigation;
b) to encourage settlement; and,
c) to discourage and sanction inappropriate behaviour by litigants.
[23] Rule 2(2) of the Family Law Rules adds a fourth fundamental purpose for costs: to ensure that the primary objective of the rules is met, that cases are dealt with justly. This provision needs to be read in conjunction with Rule 24 of the rules.
[24] Justice Pazaratz in Chomos v. Hamilton, 2016 ONSC 6232, set out the governing principles for costs:
Rules 18 and 24 of the Family Law Rules govern the determination of both liability for costs and the amount of costs. While these rules have not completely eliminated judicial discretion, the rules nonetheless circumscribe the broad discretion previously granted to the courts in determining costs. C.A.M. v. D.M.; Andrews v. Andrews; Wilson v. Kovalev, 2016 ONSC 163;
Rules 18 and 24, and most of the case law focus on two words: "Success" and "Reasonableness". The latter entails two components:
- a. Reasonableness of behaviour by each party;
- b. Reasonableness of the amount of costs to be awarded;
- In Serra v. Serra, 2009 ONCA 395, the Ontario Court of Appeal confirmed that costs rules are designed to foster three important principles:
- a. To partially indemnify successful litigants for the cost of litigation.
- b. To encourage settlement; and,
- c. To discourage and sanction inappropriate behaviour by litigants;
The assessment of costs is not a mechanical exercise. It's not just a question of adding up lawyer's dockets: Boucher et al. v. Public Accountants Council for the Province of Ontario; Dingwall v. Wolfe, 2010 ONSC 1044; and,
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: Selznick v. Selznick, 2013 ONCA 35; Delellis v. Delellis; Serra (supra); Murray v. Murray; Guertin v. Guertin, 2015 ONSC 5498.
[25] The traditional purpose of an award of costs was to indemnify the successful party in respect of the expenses sustained. For some time, however, courts have recognized that indemnity to the successful party is not the sole purpose, and in some cases not even the primary purpose, of a costs award. The principle of indemnification, while paramount, is not the only consideration when the court is called on to make an order of costs; indeed, the principle has been called "outdated" since other functions may be served by a costs order, for example to encourage settlement, to prevent frivolous or vexatious litigation, and to discourage unnecessary steps. This change in the common law was an incremental one when viewed in the larger context of the trend towards awarding costs to encourage or deter certain types of conduct, and not merely to indemnify the successful litigant.
[26] The traditional approach to costs can also be viewed as being animated by the broad concern to ensure that the justice system works fairly and efficiently. Because costs awards transfer some of the winner's litigation expenses to the loser, rather than leaving each party's expenses where they fall, they act as a disincentive to those who might be tempted to harass others with meritless claims. In addition, because they offset to some extent the outlays incurred by the winner, they make the legal system more accessible to litigants who seek to vindicate a legally sound position. These effects of the traditional rules can be connected to the court's concern with overseeing its own process and ensuring that litigation is conducted in an efficient and just manner. In this sense it is a natural evolution in the law to recognize the related policy objectives that are served by the modern approach to costs.
[27] Modern costs rules accomplish various purposes in addition to the traditional objective of indemnification. An order as to costs may be designed to penalize a party who has refused a reasonable settlement offer. Costs can also be used to sanction behaviour that increases the duration and expense of litigation, or is otherwise unreasonable or vexatious. In short, it has become a routine matter for courts to employ the power to order costs as a tool in the furtherance of the efficient and orderly administration of justice.
[28] When awarded on a full recovery scale, costs can serve to express the court's disapproval of unreasonable conduct during the litigation.
Success
[29] Success must be measured not only against the parties' Offers to Settle, but also against the claims made by each.
[30] An award of costs, however, is subject to the factors listed in rule 24(11), the directions set out under rule 24(4) (unreasonable conduct), rule 24(8) (bad faith) and rule 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party.
[31] Rule 24(6) directs the court to consider whether there was divided success, and if so, to apportion costs appropriately.
[32] In Jackson v. Mayerle, 2016 ONSC 1556, Justice Pazaratz wrote, ""Divided success" does not necessarily mean "equal success". And "some success" may not be enough to impact on costs."
[33] In this case the issues to be decided were whether the father should have access to Z.W. and whether the mother should be granted a restraining order against the father.
[34] The mother was successful on the issue of access and the father was successful on the issue of the restraining order.
[35] The majority of the trial time was spent on the issue of access. Therefore, the mother was entirely successful on the more time consuming issue.
[36] While the father was successful on the issue of the restraining order, very little time was spent on this issue. Some of the evidence relied upon by the mother in support of her request for a restraining order was also relied upon in support of her request for an order dismissing the father's request for access.
[37] While the mother achieved success on the issue that was more demanding of trial time, it was noted at trial that "Both parties provided the court with a considerable amount of evidence that was either entirely irrelevant or mostly irrelevant to the issue I had to decide."
[38] It is important to note that a considerable amount of the mother's evidence was not helpful in reaching a decision. At paragraph 53 of the decision, the court stated, "I find several aspects of both parties' accounts of their relationship to be difficult to believe. That being said, I do not have to make any findings of credibility in this case to decide the issue before me. In fact, much of the evidence given about the parent's relationship is irrelevant or of diminished value on the issues before me. There are sufficient facts that are not in dispute that the court can and will rely upon in coming to a decision."
[39] The mother was the successful party on this motion, and she is entitled to costs.
[40] The father claims he was successful on the issue of the DNA test and refuting the mother's claim for a restraining order. The issue of the DNA test was not an issue at trial and will not factor in the quantum of costs ordered against the father. With respect to the restraining order, little time was spent on this issue and the quantum of costs granted to the mother will take into account the success achieved by the father on this issue.
Factors for the Court to Consider When Fixing the Amount of Costs Pursuant to Rule 24(11)
Importance, Complexity or Difficulty of the Issues
[41] This case was of course extremely important to the parties. It was not complex nor difficult.
The Reasonableness or Unreasonableness of Each Party's Behaviour in the Case
[42] Rule 24(5) provides criteria for determining the reasonableness of a party's behaviour in a case (a factor in Rule 24(11)(b)). It reads as follows:
DECISION ON REASONABLENESS
24(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,
(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) the reasonableness of any offer the party made; and
(c) any offer the party withdrew or failed to accept.
[43] One of the purposes of costs is to effect change in the litigants' behaviour. Family law litigants are responsible for and accountable for the positions they take in the litigation.
[44] Parties to litigation must understand that court proceedings are expensive, time-consuming and stressful for all concerned. They are not designed to give individual litigants a forum for carrying on in whatever manner they may choose, oblivious to the impact of that conduct on the other side and, perhaps most importantly for the purposes of this case, oblivious to the mounting costs of the litigation.
[45] Matrimonial litigation is an occasion for sober consideration and thoughtfulness rather than intemperate behaviour.
[46] The father's behaviour in the litigation was unreasonable. Here are some examples:
(a) The father has not obtained any advice or assistance from a professional with expertise in child development on how to approach a relationship with Z.W. who does not know he is her father;
(b) The father has no specific plan as to how he will introduce himself to Z.W. over Skype and how she will be prepared for such contact;
(c) The father travelled to Toronto on four occasions between 2014 and 2016 during which he did not see Z.W. except for one brief meeting in the playground in March 2016, yet he did not take any steps to address this fact. He did not retain a lawyer and he did not commence court proceedings until August 2016 when Z.W. was already 6 years old;
(d) The father lives in Afghanistan and has no plans to come to Canada in the near future. His only plan right now is for 15 minutes of Skype access per week;
(e) The father has no plans to develop the relationship with Z.W. beyond 15 minutes of Skype access per week; and,
(f) The father requested Skype access to a 7 year old girl who does not know he is her father without giving any thought or consideration to how extremely traumatic it might be for Z.W. to be required to begin a relationship, via Skype, with her biological father at this point in her life.
[47] While the mother was successful on the issue of access, her behaviour in the litigation is not without fault, as the court found a significant amount of her evidence to be irrelevant or mostly unhelpful in coming to a decision on the issues. The court also noted that it found several aspects of both party's description of how they met and the nature of their relationship to be difficult to believe.
Offers to Settle
[48] Offers to settle are a significant part of the landscape in family law in Ontario. They are important to the possible resolution of cases. In addition, they are important to determining costs. Whether a party has or has not made an Offer to Settle or responded to an Offer to Settle is relevant to the issue of whether they behaved reasonably or unreasonably (Rule 24(5)(b)).
[49] Parties and their lawyers have a positive obligation to behave in ways which enable the court to move cases forward to resolution (Rule 2). Rule 2(4) imposes a duty on parties and their lawyers to promote the primary objective of the rules to deal with cases justly (Rule 2(2)). This includes taking appropriate steps to save time and expense (Rule 2(3)). Offers to settle play an important role in saving time and expense by promoting settlements, focusing parties and often narrowing issues in dispute.
[50] Offers to settle are important and can be the yardstick by which to measure success. They are significant in determining both liability for costs and quantum. 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. The position each party took in the case should also be examined.
[51] The costs consequences of offers to settle are set out in Rule 18(14) 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.
[52] The mother made an Offer to Settle on November 9, 2017. The Offer to Settle meets the requirements of subrule 18(4) of the Family Law Rules. She acknowledges that the Offer to Settle does not "strictly comply" with subrule 18(14) of the Family Law Rules, in that it was not made at least 7 days before the trial but that this does not make the Offer to Settle irrelevant. Any Offer to Settle may be taken into account by the court when exercising its discretion over costs pursuant to subrule 18(16).
[53] The mother's Offer to Settle proposed that the father's Application be dismissed and that the parties pay their own costs provided that the Offer to Settle is accepted by 4:00 p.m. on November 13, 2017. If accepted after that time and until one minute after commencement of the trial, the father shall pay the mother's costs fixed at $5,000.00.
[54] The father argues that the mother's Offer to Settle should be accorded no weight by the court as it was made at the last minute after all the trial preparation was completed, offered no compromise and did nothing to resolve the litigation without the need for a trial.
[55] The father did not make an Offer to Settle. It is unreasonable for a family law litigant not to make an Offer to Settle.
[56] The mother was successful at trial and the trial decision matched the substantive content of her Offer to Settle. She is entitled to her costs.
The Lawyer's Rates and the Time Properly Spent on the Case
[57] Counsel for the mother has been practicing law for 9 years. Her hourly rate of $360.00 to $385.00 per hour is reasonable, and was not challenged by the father.
[58] Counsel for the mother provided a very detailed bill of costs setting out a breakdown of the time spent addressing the father's Application.
[59] Counsel for the father provided a bill of costs that is not detailed, did not set out his year of call and provided no breakdown whatsoever for the time spent on this matter. He bills $550.00 per hour and claims he spent 27.3 hours between November 9, 2016 and January 12, 2018 for which his client is entitled to be reimbursed.
[60] According to her Bill of Costs, counsel for the mother spent 75.8 hours on this matter between September 14, 2016 and the last day of trial on January 12, 2018.
[61] The Respondent mother prepared the Trial Record, which the Applicant is obliged to do and she served and filed a Brief of Authorities at the trial.
[62] The time spent by counsel for the mother was extensive and must be discounted due to the court's finding that much of the mother's evidence was not relevant to the issues to be decided. Counsel's Bill of Costs sets out approximately 15 hours for meeting with the mother and preparing her affidavit evidence.
[63] The preferable approach in family law cases is to have costs recovery generally approach full recovery, so long as the successful party has behaved reasonably and the costs claimed are proportional to the issues and the result.
[64] In the context of family law disputes, a court need not find special circumstances to make a costs award approaching substantial recovery.
[65] Determining the amount of costs is not simply a mechanical exercise. Costs must be proportional to the amount in issue and the outcome.
[66] Costs awards should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties, rather than any exact measure of the actual costs to the successful litigant. It is not appropriate to simply take the number of hours spent by counsel on a particular matter and multiply those hours by a determined hourly or per diem rate.
[67] The over-riding principle is reasonableness. 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.
[68] In reaching a decision on the quantum of costs to be ordered payable by the father, particular consideration has been given to the success each party achieved, the reasonableness of each party's behaviour in the litigation, the amount of time attributable to irrelevant evidence and the court's finding that both parties' version of the contested evidence was difficult to believe.
[69] A fair and reasonable costs order and one that takes into consideration the behaviour of the parties, as well as the complexity of the issues and the amount of work involved is $15,000.00, inclusive of disbursements and H.S.T.
Order
[70] The father shall pay the mother her costs of the Application and the trial heard on November 15, 2017 and January 12, 2018 fixed in the amount of $15,000.00 payable forthwith.
Released: March 14, 2018
Signed: Justice Melanie Sager