Court File and Parties
Date: August 9, 2018
Court File No.: D81861/15
Ontario Court of Justice
Between:
Joe Callaghan Acting in Person Applicant
- and -
Lora Sousa Respondent
Sarah M. Boulby and Kenneth Fishman, for the Respondent
Heard: August 8, 2018
Justice: S.B. Sherr
Costs Endorsement
Part One - Introduction
[1] On August 8, 2018, the court gave oral reasons for decision dismissing the applicant's (the father's) motion to change its order dated December 5, 2016 (the existing order).
[2] The respondent (the mother) seeks her costs of $23,000. She is agreeable to the father paying her costs in equal monthly amounts over two years.
[3] The father submits that if costs are ordered, they should be fixed at $5,000. He proposes to pay this in equal monthly amounts over two years.
Part Two – History of the Case
[4] The parties are the parents of a 6-year-old boy (the child).
[5] The parents separated in 2013.
[6] On October 26, 2015, the father issued an application for joint custody of the child. He asked that the child be placed in his primary care.
[7] On December 5, 2016, the parties consented to the existing order. The major terms of the multi-directional existing order are as follows:
a) The child is in the primary care of the mother.
b) The parties are to jointly make major decisions affecting the child, but in the event of disagreement, after using alternative dispute mechanisms, the mother makes the final decision.
c) The father has alternate weekend access, an overnight mid-week visit in alternate weeks and a division of holiday time with the child.
d) Neither party pays child support to the other.
e) The child shall stay in his present school until grade 6.
[8] The father issued his motion to change the existing order within the year – on August 11, 2017. He sought a joint custody order and equal parenting time with the child. He sought to change the child's school and he asked for child support.
[9] The father then brought a Form 14B motion seeking permission to bring an urgent motion to change the child's school. The court dismissed the motion and reserved the issue of costs.
[10] The parties attended at First Appearance Court on October 6, 2017. The mother was given an extension of time to file her responding materials.
[11] The parties attended at a case conference on January 16, 2018. They reached a consent on access for the summer of 2018.
[12] The parties attended another conference on May 18, 2018. They worked out March Break access on an ongoing basis and agreed to some communication terms. The father agreed to withdraw all aspects of his motion to change except for his request for equal parenting time during the child's school year. The parties agreed to filing timelines for the hearing of the motion. Costs of the conference were reserved.
Part Three – Legal Considerations
[13] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395, [2009] O.J. 1905 (Ont. C.A.), 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.
[14] 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, [2000] O.J. No. 330 (SCJ- Family Court). 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, [2008] O.J. No. 1978 (SCJ).
[15] 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.
[16] 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)).
[17] The onus of proving that the offer is as or more favourable than the motion result is on the person making the offer. See: Neilipovitz v. Neilipovitz, [2014] O.J. No. 3842 (SCJ).
[18] Close is not good enough to attract the costs consequences of 18(14). The offer must be as good or more favourable than the motion result. See: Gurley v. Gurley, 2013 ONCJ 482.
[19] Subrule 24(12) sets out considerations for the court in setting the amount of costs. This subrule reads as follows:
24(12) In Setting the Amount of Costs, the Court Shall Consider:
a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues:
(i) each party's behaviour,
(ii) the time spent by each party,
(iii) any written offers to settle including offers that do not meet the requirements of rule 18,
(iv) any legal fees, including the number of lawyers and their rates,
(v) any expert witness fees, including the number of experts and their rates,
(vi) any other expenses properly paid or payable; and
(b) any other relevant matter.
[20] The court must consider the proportionality of the costs request. In Boucher et al. v. Public Accountants Council for the Province of Ontario, [2004] O.J. No. 2634 (Ont. C.A.), and Delellis v. Delellis and Delellis, [2005] O.J. No. 4345. 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.
[21] The court considered the father's ability to pay the costs order (see: MacDonald v. Magel (2003), 67 O.R. (3d) 181 (Ont. C.A.). 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. See: Snih v. Snih. In Mohr v. Sweeney, 2016 ONSC 3338, 2016, the court wrote, "those who can least afford to litigate should be most motivated to seriously pursue settlement, and avoid unnecessary proceedings."
Part Four – Offers to Settle
[22] The mother made an offer to settle dated June 14, 2018.
[23] The mother's offer to settle was more favourable to the father than the final result. The mother proposed that the father could have flexibility in choosing his mid-week overnight visit – otherwise there would be no changes to the existing order. Most importantly, she proposed that each party pay their own costs if the offer was accepted by June 20, 2018.
[24] The father should have accepted the mother's offer.
[25] The presumption that the mother is entitled to the costs consequences set out in subrule 18(14) was not rebutted by the father.
[26] The father emailed an offer to settle to the mother on August 2, 2018. He proposed that the child spend each weekend with him during the school year.
[27] This was an interesting offer since the father had submitted during the motion to change that the main reason he sought a week-about schedule during the school year was because the child was often late to school during the mother's parenting time. This offer had very little to do with that issue, as primarily, it just increased his weekend time with the child. The offer confirmed the court's observation during its oral reasons for decision that the father had been unhappy with his agreement to the existing order and essentially wanted a do-over of the entire case.
Part Five – Analysis
[28] This case was important for the parties. It was not complex or difficult.
[29] The parties behaved reasonably during the case. The father agreed to withdraw most of his motion to change on May 18, 2018. The parties agreed to a proportionate process to resolve the remaining issue.
[30] The mother claimed costs for all stages of the case. She should receive costs that were reserved arising out of the father's unsuccessful Form 14B motion for an urgent motion to change the child's school and for her preparation of pleadings. The court won't order costs for the First Appearance Court appearance, as that was used to obtain a filing extension for the mother. The mother will get partial costs for her preparation and attendance at the two conferences. They are partial, as the parties were able to reach some agreements at these conferences. The mother was more successful on the May 18, 2018 conference as the father withdrew most of his motion to change. Costs of that conference were reserved.
[31] The court reviewed the mother's bill of costs. The time claimed prior to her offer to settle on June 14, 2018 is too high and not proportionate, given the straight-forward nature of the matter. The pleadings and conference briefs were routine.
[32] The time claimed by the mother after the June 14, 2018 offer is appropriate and proportionate. The mother will be granted full recovery costs after that date.
[33] The legal fees claimed by the lawyers representing the mother are reasonable.
[34] The expenses claimed by the mother are reasonable.
[35] The court considered that the father is not working. He has minimal assets. He is staying at home and looking after two very young children. His wife financially supports the family.
[36] The court also considered that the father is living a comfortable lifestyle. He and his wife rent a home in Rosedale, paying $2,800 each month. The father has a PhD in mathematics and has previously taught at the University of Toronto. He has chosen not to work for several years. He is not paying child support to the mother.
[37] The mother had to incur significant legal expenses to defend a motion to change that shouldn't have been brought by the father. She also shouldn't have been put through the emotional stress of litigating the issues of custody, parenting time, school placement and child support again – particularly so soon after the previous 13 month bout of litigation with the father.
[38] Taking into account all of these considerations the court will award the mother $12,500 for her fees. It will also award her the $1,079.08 claimed for her expenses. The HST on these amounts is $1,765.28, for a total costs award of $15,344.36.
[39] The father will be permitted to pay the costs in equal monthly payments over 24 months ($640), provided that he keeps the payments in good standing.
Part Six - Conclusion
[40] An order shall go on the following terms:
a) The father shall pay the mother's costs fixed in the amount of $15,344.36, inclusive of fees, disbursements and costs.
b) The father may pay the costs at the rate of $640 each month, starting on September 1, 2018. However, if he is more than 30 days late in making any payments, the entire amount of costs then owing, shall immediately become due and payable.
Released: August 9, 2018
Justice S.B. Sherr