Court File and Parties

Date: January 9, 2018

Court File No.: D81015/15

Ontario Court of Justice

Between:

Luis Joel Arriagda Gallardo Acting in Person Applicant

- and -

Krisztina Fajta Respondent

Peter Ivanyi, for the Respondent

Heard: January 8, 2018

Justice: S.B. Sherr

Costs Endorsement

[1] On January 8, 2018 the court delivered oral reasons for judgment after hearing the Respondent's (the mother's) motion to change this court's order dated December 15, 2015 (the existing order).

[2] The court made significant changes to the existing order.

[3] The mother seeks her costs of $6,000. The Applicant (the father) asks that no costs be paid.

[4] 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.

[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, [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).

[6] Subrule 24(6) sets out that where success is divided the court may apportion costs as it finds appropriate.

[7] Neither party made an offer to settle.

[8] The court wrote about the importance of making offers to settle in paragraphs 4-5 of Klinkhammer v. Dolan and Tulk, 2009 ONCJ 774, [2009] O.J. No. 6370 (OCL), as follows:

4 It was surprising that there were no formal offers to settle in this case. It is reflective of the polarity of the parties. It should be a fundamental step in any family law case to serve at least one offer to settle. Parties and their counsel now have a mandate under subrule 2(4) of the rules, to promote the primary objective of the rules; to deal with cases justly (subrule 2(2)). Dealing with a case justly includes taking steps to save time and expense (subrule 2(3)). Offers to settle play an important role in saving time and expense in a case. They are an important vehicle in promoting settlements, focus the parties and often narrow the issues in dispute.

5 There are consequences in the rules for not making or accepting reasonable offers to settle. Subrule 18(14) sets out the costs consequences of not accepting an offer to settle that is as good as or better than the final result. When determining the reasonableness of a party's behaviour in the case, clauses 24(5)(b) and (c) of the rules direct the court to examine the reasonableness of any offer made, withdrawn or not accepted. This does not preclude the court from examining the failure of a party to make an offer to settle.

[9] The court must next examine who was the successful party based on the positions taken by the parties at the hearing of the motion to change.

[10] The mother asked that the father's access to the parties' 6-year-old child (the child) be in her discretion. The father asked that he continue to have two overnight visits on alternate weeks plus holiday time. The court ordered that the father have one day visit each week, fully supervised. It further determined that if the father's criminal release terms were changed to permit unsupervised access with minors, this would constitute a material change in circumstances affecting the best interests of the child. There was divided success on this issue, but the mother was the more successful party.

[11] The mother also sought terms that:

a) She be able to obtain and renew all government documentation, including passports for the child without the father's consent.

b) She be able to travel outside of Canada with the child without the father's consent.

c) The father not remove the child from Canada.

d) The father keep her appraised of the status of his criminal proceeding.

[12] The father opposed the first three terms.

[13] The court granted these terms sought by the mother, with minor modifications. She was the successful party on these issues.

[14] The mother sought an increase in child support from the amount in the existing order which was $281 per month for the Child Support Guidelines (the guidelines) table amount (table amount) and $150 per month towards the child's special expenses, pursuant to section 7 of the guidelines (section 7 expenses). This totaled $431 per month.

[15] The mother asked for an order that the father pay table support of $343 per month plus his share of her claimed monthly section 7 expenses (63.4% of $950) of $602 per month for a total of $945 per month.

[16] The father proposed paying $250 per month towards section 7 expenses for a total monthly payment of $566.

[17] The court ordered the father to pay the table amount of $316 per month, together with $357 per month (the mother not proving a significant portion of the claimed section 7 expenses) towards section 7 expenses for a total of $673 per month.

[18] There was divided success on the support issue. The mother was required to come to court to obtain a significant increase in support, but the final result was closer to the position taken by the father at the hearing of the motion to change.

[19] Overall, the mother was the more successful party than the father. The father did not rebut the presumption that the mother is entitled to costs.

[20] 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.

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

[22] Except for not making an offer to settle the mother acted reasonably.

[23] The father acted unreasonably when he refused to consent to the mother traveling with the child to Hungary in the summer of 2017. This necessitated a motion by the mother. The court gave the mother travel permission and ordered costs of $2,400 against the father. The father's unreasonable behaviour has already been sanctioned and will not be taken into consideration in this costs determination. Except for his failure to make an offer to settle, the father has acted reasonably.

[24] The mother did not submit a Bill of Costs. In Nguyen v. Khookrathok, 2017 ONCJ 783, this court wrote in paragraphs 17-19 that counsel should always have a Bill of Costs prepared if they plan to seek costs at any stage of a case. Without a Bill of Costs, it becomes very difficult for the court to assess what work was done for this step of the case and whether the work done was reasonable and proportionate. 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. Also, 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.

[25] The court reserved costs for the appearance on September 20, 2017. It is appropriate for the mother to seek costs for that appearance.

[26] The court considered both 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.

[27] The court considered the father's ability to pay the costs order. See: MacDonald v. Magel, 67 O.R. (3d) 181 (Ont. C.A.). He is of modest means, paying child support on an annual income of just over $36,000. 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.

[28] 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."

[29] 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 $3,000, inclusive of fees, disbursements and HST.

[30] The father may pay the costs at the rate of $125 per month starting on February 1, 2018.

Released: January 9, 2018

Justice S.B. Sherr