Court File and Parties

Ontario Court of Justice

Date: December 27, 2018

Court File No.: D91639/16

Between:

M.T. Applicant

— And —

J.L.-T. Respondent

Before: Justice Roselyn Zisman

Heard by: Written submissions

Reasons for Judgment released on: December 27, 2018

Counsel:

Reide L. Kaiser, counsel for the applicant
Leroy A. Bleta, counsel for the respondent

Cost Endorsement

ZISMAN, J.:

Background

[1] The Applicant ("mother") seeks costs against the Respondent ("father") that arise out of a focused trial with respect to child support for their two young children.

[2] The parties are both deaf and the trial proceeded over several days and required a deaf interpreter and two ASL interpreters.

[3] The mother sought to impute income to the father of $47,129, being his average salary for the three years when he was employed full-time, on the basis that the father left his employment that provided him with a good income and employment benefits. The mother also sought that the father pay his proportionate share of the children's section 7 expenses.

[4] The father sought to pay child support based on his receipt of ODSP and some minimal employment income.

[5] The mother was completely successful on the trial as I found that the father quit a well-paying unionized job despite being aware of the many obstacles facing a deaf person obtaining employment. He did so without first securing other employment and without making any effort to improve his working conditions. Since leaving his employment, I found that the father had made minimal attempts to find employment. Although the father returned to school and took training to be a deaf interpreter and a sign language instructor he was at present only working a few hours a week.

Position of the Parties

[6] It is the mother's position that she was completely successful and is presumptively entitled to costs. Counsel for the mother served an Offer to Settle and received an order that was substantially more favourable than his Offer to Settle. Counsel for the mother therefore seeks full recovery of costs of $4,365.47 at the legal aid tariff rates or $12,800 at a rate commensurate with his years of experience.

[7] Counsel for the father seeks that no costs be payable based on the father's financial inability to pay costs. He further submits that as both parties are in receipt of legal aid and in good faith settled the important issues of custody and access. He further submitted that neither party would have expected to pay the opposing counsel's market or hourly rate if either was unsuccessful.

General Principles

[8] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides that cost orders are in the discretion of the court.

[9] Family Law Rules 24 sets out a framework for awarding costs for family law cases.

[10] The Ontario Court of Appeal has held that modern family cost rules are designed to foster three fundamental purposes:

(1) to partially indemnify successful litigants;

(2) to encourage settlement, and;

(3) to discourage and sanction inappropriate behaviour by litigants.[1]

[11] FLR 2(2) adds a fourth fundamental purpose namely, to ensure that cases are dealt with justly.[2]

[12] I am also mindful that the court's role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees. As was pointed out in Boucher v. Public Council[3] the award of costs must be fixed in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings rather than an exact measure of actual costs to the successful litigant.

[13] FLR 24(12)[4] which sets out factors relevant to setting the amount of costs, specifically emphasizes "reasonableness and proportionality" in any costs award.

[14] FLR 24(1) creates a presumption of costs in favour of the successful party.[5] Consideration of success is the starting point in determining costs.[6]

[15] However, a cost award is subject to the factors listed in FLR 24(12), the directions set out under FLR 24(4) (unreasonable conduct), FLR 24(8) (bad faith) and FLR 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party.[7]

[16] FLR 24(12) sets out a list of factors the court shall consider in determining an appropriate amount of costs as follows:

(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.

[17] The FLR only expressly contemplate full recovery costs in specific circumstances that is, where a party has behaved unreasonably, in bad faith or has obtained an order that is more favourable than an offer to settle under FLR 18(14).

[18] FLR 24(4) addresses the situation in which a successful party has behaved unreasonably.

Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party's own costs or ordered to pay all or part of the unsuccessful party's costs.

[19] FLR 24(5) provides guidance on how to evaluate reasonableness:

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.

[20] FLR 24(8) discusses the cost consequences for a party who has acted in bad faith:

If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.

[21] Offers to settle are an essential part of family litigation. The parties and counsel have a positive obligation to conduct their cases to ensure that the primary objective of FLR 2(2) is met that is, to deal with cases justly. This includes taking appropriate steps to save time and expenses, per FLR 2(3).

[22] Offers to settle play an integral role in saving time and expenses by promoting settlements, focusing parties and often narrowing the issues in dispute. Severable offers to settle or separate offers to settle specific issues are particularly helpful in attempt to settle cases.

[23] The recent case of Beaver and Hill, wherein the Ontario Court of Appeal indicated that offers to settle were not relevant on the issue of costs, dealt with a case where there was no compromise and any offer to settle would have been a capitulation. However, in most family law cases there are compromises that can be made. Offers to settle therefore remain important in any consideration of the issue of costs.

[24] The consequences of an offer to settle are set out in Family Law Rules 18(14) as follows:

(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.

[25] The Ontario Court of Appeal in the case of Beaver and Hill[8] has recently clarified several aspects of the cost rules namely, that there is no provision in the FLR that provides for a general approach of fixing costs at "close to full recovery" and that "proportionality and reasonableness are the touchstone considerations" to be applied in fixing the amount of costs.

Application of Principles

[26] In considering these principles, in this case the mother acted reasonably. She made an extremely reasonable offer to settle that income be imputed to the father at minimum wage of $29,120 and that he pay child support of $447 per month as of January 1, 2018 and pay $100 per month towards the children's extraordinary expenses as of January 1, 2018 and be given credit of the amounts already made in 2018. Whereas, the court order required the father to pay child support of $699 per month as of October 1, 2017 and $711 per month as of December 1, 2017 based on an imputed income of $47,129 with credit for any payments made pursuant to the temporary order of January 5, 2017. The father was also ordered to pay 70% of the children's reasonable extraordinary expenses.

[27] The offer to settle was served 2 weeks prior to the commencement of the trial and accordingly within the requirement of FLR 18. This provided the father with sufficient time to reconsider his position.

[28] It appears from the submissions of father's counsel that as the father was in receipt of legal aid, he never considered that if he was unsuccessful on the trial he would be required to pay costs. It is the obligation of counsel to advise parties of possible costs consequences of proceeding to trial especially when he was served with an offer to settle. Parties should not feel because their legal fees are being paid by legal aid that this provides them with an impunity to litigate. I find that the father acted unreasonably in failing to accept the mother's offer to settle.

[29] The Bill of Costs submitted by mother's counsel sets out his fees from April 9, 2018 to September 17, 2018 with a breakdown of the time spent and work done. He spent was 32 hours[9] for meeting with his client, drafting her affidavit, preparation for trial and attendance at trial. All of the work done related to the trial and not with respect to any other steps in the proceedings. The trial took place over 3 half days and I find that the time spent is extremely reasonable. Counsel for the mother was called to the bar in 1992 and based on the legal aid tariff of $136.43 per hour the total costs claimed are $4,365.76 and based on an hourly rate of $400 the total costs claimed are $12,800. There are no claims for any disbursements.

[30] Counsel for the father did not dispute mother's counsel hourly rate that I assume meant the market rate of $400 per hour which is a reasonable rate for counsel with 26 years of experience. As has been made clear by various courts[10], the amount of costs to be awarded in favour of a party is not affected by the fact that the person is legally aided.

[31] Mother's counsel prepared an excellent affidavit as the mother's evidence in chief, he cross-examined the father with great skill and made excellent submissions to support the mother's position and also served an offer to settle to avoid the trial.

[32] I have considered that the father's ability is a relevant consideration.[11] However, a party's limited financial circumstances should not be used as a shield against any liability for costs but will be taken into consideration regarding the amount of the costs, particularly when that party has acted unreasonably and is the author of his own misfortune.[12]

[33] However, I have considered that the father not only must now pay child support at the rate higher than he is actually earning at the present time and that there is a retroactive aspect to the order and despite the fact that the mother served an offer to settle, I am prepared to slightly reduce the order of costs.

[34] Having considered the reasonableness and proportionality of the relevant factors and in particular the mother's offer to settle, the father's unreasonable behaviour in not accepting the offer and the father's ability to pay that a fair and reasonable cost order is $10,000.00.

[35] There will be an order as follows:

The Respondent shall pay to the Applicant the costs of $10,000.00.
The order will be enforced as a support order by Family Responsibility Office.
Support Deduction Order to issue.
Counsel for the Applicant shall prepare this order and approval by the Respondent is dispensed with.

Released: December 27, 2018

Signed: Justice Roselyn Zisman