ONTARIO COURT OF JUSTICE
CITATION: Mitchell v. Longley, 2019 ONCJ 161
DATE: 2019 03 19
COURT FILE No.: Toronto DFO-18-000155526-0000
BETWEEN:
STEPHEN MICHAEL MITCHELL
Applicant
— AND —
KELLY LYNETTE LONGLEY
Respondent
Before Justice O’Connell
(In Chambers)
Stephen Michael Mitchell.......................................................................... on his own behalf
Simon P. Valleau........................................................................ counsel for the respondent
O’CONNELL J.:
Introduction:
[1] On November 8, 2018, the parties reached a final consent on all issues in this matter, except the issue of costs. The primary issue in dispute between the parties was the parenting plan for their five year old son.
[2] The application was brought by the father for an equal time sharing parenting plan and an adjustment to child support. The father’s application, issued May 10, 2018 sought the following:
An Order that the parties have an equal time sharing arrangement relating to the child so as to enable the child to spend the maximum amount of time with both parents;
An Order for offset child support, based upon the shared parenting of the child.
[3] At the final settlement conference in this matter, the father at first intended to withdraw his application. He decided not to do this, however, he fired his lawyer and then abandoned his claim for an equal shared parenting plan and reduced child support. The parties’ final consent closely resembled the parties’ existing parenting plan, as set out in their separation agreement, dated July 8, 2015.
[4] Both parties were permitted to seek costs, which were reserved to the court. Both parties have now provided written submissions, including bills of costs and offers to settle.
[5] The mother seeks her costs of defending this application on either a full indemnity basis of $12, 206.25 or a partial indemnity basis of $7,721.25.
[6] It is the mother’s position that this was a wasted application and as a result, she faced excessive and unnecessary legal costs.
[7] The father is seeking his costs of $4,523.89 on a partial indemnity basis or $7,166.11 on a full indemnity basis.
[8] It is the father’s position that he was forced to bring an application because the mother backed out of earlier negotiations after he accepted her settlement proposal. He believes that her position was unreasonable. He states that he ended the court proceedings because he “did not have the energy to continue the fight”.
The Law and Governing Principles:
[9] The starting point in addressing the issue of costs is Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C-43. Section 131 gives the court discretion as to determination of costs. However, that discretion is structured by Rule 24 of the Family Law Rules, O. Reg. 114/99 (all references to rules in this endorsement are to the Family Law Rules).
[10] Rule 24 governs the determination of costs in family law proceedings.
[11] The sections of Rule 24 relevant to the circumstances of this case are as follows:
SUCCESSFUL PARTY PRESUMED ENTITLED TO COSTS
- (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal. O. Reg. 114/99, r. 24 (1).
SUCCESSFUL PARTY WHO HAS BEHAVED UNREASONABLY
(4) 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. O. Reg. 114/99, r. 24 (4).
DECISION ON REASONABLENESS
(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. O. Reg. 114/99, r. 24 (5).
DIVIDED SUCCESS
(6) If success in a step in a case is divided, the court may apportion costs as appropriate. O. Reg. 114/99, r. 24 (6)...
BAD FAITH
(8) 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. O. Reg. 114/99, r. 24 (8).
DECIDING COSTS
(10) Promptly after dealing with a step in a case, the court shall, in a summary manner,
(a) determine who, if anyone, is entitled to costs in relation to that step and set the amount of any costs; or
(b) expressly reserve the decision on costs for determination at a later stage in the case. O. Reg. 298/18, s. 14.
(10.1) Revoked: O. Reg. 298/18, s. 14.
SAME
(11) The failure of the court to act under subrule (10) in relation to a step in a case does not prevent the court from awarding costs in relation to the step at a later stage in the case. O. Reg. 298/18, s. 14.
SETTING COSTS AMOUNTS
(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. O. Reg. 298/18, s. 14.
SUPPORTING MATERIALS
(12.1) Any claim for costs respecting fees or expenses shall be supported by documentation satisfactory to the court. O. Reg. 298/18, s. 14.
[12] Recently, in Mattina v. Mattina, 2018 ONCA 867, the Ontario Court of Appeal expanded upon the Court’s well-known decision in Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905 (C.A.) and stated that modern costs rules are designed to foster four fundamental purposes:
to partially indemnify successful litigants for the cost of litigation;
to encourage settlement;
to discourage and sanction inappropriate behaviour by litigants bearing in mind that the award should reflect what the court views is a fair and reasonable amount that should be paid by the unsuccessful party;
to ensure that cases are dealt with justly under subrule 2 (2) of the Family Law Rules.
[13] Modern costs rules accomplish various purposes in addition to the traditional objective of indemnification. Costs can 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. See: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, at paragraph 25.
[14] Costs awards are discretionary. In the recent decision of Beaver v. Hill, 2018 ONCA 840, the Court of Appeal also held that two important principles in exercising discretion regarding costs are reasonableness and proportionality.
[15] As is clear from subrule 24(1), the Family Law Rules create 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 22584 (ON SC), [2000] O.J. No. 330 (S.C.J.).
[16] When determining 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 23496 (ON SC), [2008] O.J. No. 1978 (SCJ).
[17] 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.
[18] The onus of proving that the offer is as or more favourable than the final result is on the person making the offer. See: Neilipovitz v. Neilipovitz, [2014] O.J. No. 3842 (SCJ).
[19] The court is not required to examine each term of the offer as compared to the terms of the order and weigh with microscopic precision the equivalence of the terms. What is required is a general assessment of the overall comparability of the offer as contrasted with the final order. See: Wilson v. Kovalev, 2016 ONSC 163.
[20] The technical requirements of subrule 18 (4) must be met to attract the costs consequences in subrule 18 (14). See: Clancy v. Hansman, 2013 ONCJ 702; T.M.B.-P. v. B.P.G., 2018 ONCJ 517.
[21] 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 et al. v. Public Accountants Council for the Province of Ontario, 2004 14579, 71 O.R. (3d) 291, 188 O.A.C. 201, 48 C.P.C. (5th) 56, [2004] O.J. No. 2634, 2004 CarswellOnt 2521 (Ont. C.A.), 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.
Awarding Costs in a Case that has Settled:
[22] Courts have often held that where parties reach a settlement, the court should be slow to award costs in favour of one of the parties unless there are compelling reasons to do so. Courts want to encourage parties to settle their cases in order to avoid costs. It is also sometimes very difficult to determine who is the “winner” and the “loser” in a negotiated settlement. See Witherspoon v. Witherspoon, 2015 ONSC 6378; Davis v. Davis, [2004] O.J. No. 2256 (S.C.J.); Talbot v. Talbot, 2016 ONSC 1351.
[23] Some courts have held that it is not appropriate to go behind the freely negotiated terms of settlement and to engage in an exercise of determining which party's position on each issue would have been accepted by the trial judge if the matter had proceeded to trial. See O'Brien v. O'Brien, [2009] O.J. No. 5019, 2009 CarswellOnt 7194 (Ont. S.C.J.), Gzechowski v. Percy, [2011] O.J. No.5507, 2011 ONCJ 644; Benoit v. Kerr, 2014 CarswellOnt 12838, (Ont. S.C.J.), Upton v. Harris, 2016 CarswellOnt 6721, (Ont. S.C.J.).
[24] However, there are cases when costs may be awarded when parties reach a signed agreement. There may be instances where a settlement is a “clear capitulation” by one party in favour of another, and it is obvious who the successful party is in the litigation. See Atkinson v. Houpt, 2017 ONCJ 316.
[25] For example, in Scipione v. Del Sordo, 2015 ONSC 5982, the father brought a motion to change which was unsuccessful. The parties filed a final Consent disposing of the father’s motion. Justice Pazaratz awarded some costs in favour of the mother. In making this award, Justice Pazaratz set out the following factors that he considered at paragraph 64 of his decision:
“While the court in Davis identified that it may sometimes be difficult to determine success (or relative success) when the parties sign a settlement document, the mere fact that settlement was by way of Minutes does not pre-empt a full costs analysis.
a. Rule 24(1) states that there is a presumption that a successful party is entitled to costs.
b. The August 6, 2015 Consent filed by the parties specifically set out that even though all other issues were resolved, costs were still to be determined by this court.
c. Parties are always encouraged to try to settle. Even up to the last moments of a motion or trial.
d. It is not uncommon for the court to receive last minute settlements which resolve all issues other than costs.
e. A party's behaviour in settling a case and signing Minutes may be a relevant factor in deciding costs.
f. But if a party eventually makes a good litigation choice by signing Minutes, that epiphany doesn't automatically wipe out any history of bad litigation choices which would otherwise justify costs. Settling in the face of the inevitable may be little more than damage control.
g. A party who has behaved reasonably throughout – and who may quite accurately perceive imminent success in an ongoing hearing – should not be discouraged from signing Minutes which reflect that success, out of fear that they will jeopardize a potentially sizable costs claim.
h. If we make execution of Minutes the determining factor precluding costs, it will create a disincentive for settlement at trial.
i. And in some cases – particularly motions to change where the onus of proof is quite clear – determination of success may be relatively straightforward.
j. If a party brings a motion asking to change almost everything, and at the last minute signs a Consent which changes almost nothing, how can they possibly argue that a judge will have a hard time figuring out who was successful?”
Application and Analysis:
[26] This is one of those cases in which the settlement agreement was a “clear capitulation” by the father. The mother was entirely successful. The mother had no choice but to respond to the father’s application as she would otherwise be noted in default. The father abandoned his claim for equal shared parenting and a reduction of child support at the last day of the hearing in this matter after firing his lawyer.
[27] The mother was put to great expense in responding to the father’s application.
[28] The mother’s position was reasonable. She has always agreed to move towards a shared parenting plan with the father but wanted to phase in the shared parenting plan in a graduated child-focused manner. She had proposed a three stage schedule with a view to moving towards the equal shared parenting arrangement.
[29] The mother proposed this plan even before the father commenced his application. The father does not dispute this. This was the mother’s position in pre-court mediation. The correspondence between counsel and the mother’s answer to the father’s application demonstrates this.
[30] At the time of the father’s application, the child was only four years old. It is not disputed that the father’s parenting time was limited to only six overnight visits over a five week period. Further, the father had never cared for the child for more than two night at a time.
[31] The father’s position was not reasonable. He was not prepared to exercise additional access to the child in a graduated and expanded parenting plan unless there was a full and equal shared parenting plan in place pursuant to a signed agreement or final order.
[32] The father made that very clear during the case management process. He had a number of days in his work schedule in which he could have spent more time with the child but he refused to do so, including his scheduled time off and vacations. As the father states in his Case Conference Brief dated November 8, 2018, “the Applicant [father] cannot accept an offer of increased access in stage II” (as proposed by the mother) until “he has a commitment that the Respondent [mother] will agree to stage III [an equal shared parenting plan] ...The Applicant is therefore reluctantly withdrawing his claim for more access.”
[33] The father stated that he needed a shared/equal parenting signed agreement or consent order in place for his workplace to accommodate the changes in his schedule necessary for a shared parenting plan.
[34] This proved not to be accurate. On the last court appearance, despite previous requests, the father finally produced an agreement arranged months previously with his employer and union. This agreement had already allowed him to make the changes he sought.
[35] The father also stated that in order to secure rental accommodation closer to where the child was residing with the mother he needed an equal shared parenting plan in place so that his child support could be reduced.
[36] The father did not provide any evidence regarding the difference in the cost of rental accommodation in the mother’s neighborhood and his neighborhood or that he required a reduction in child support in order to move.
[37] However, in his written costs submissions, the father again stated that he would have to increase his rental cost and transportation costs by a “potential” $850.00 per month in order to move closer to the child. He states that: “Currently I pay $960.00 per month in child support. If I had equal shared custody of Christopher, my child support would drop to an estimated $150.00 per month. That would be a savings of $810.00 per month.”
[38] The father was not prepared to gradually increase his parenting of the child while still living in his own neighborhood before transitioning to an equal parenting plan, which could have been readily achievable.
[39] The father’s position was “all or nothing”. There was no middle ground for him. When he did not achieve “all” immediately, he withdrew his claim and blamed the mother.
[40] The father’s position was not child-focused. It was about his rights as a father and not about what was in his child’s best interests. The following statement made by the father in his Cost Submissions clearly demonstrates this:
“… my [former] lawyer made his best efforts to avoid taking this matter to court. He advised me that the result may not be what I hoped to achieve and that my rights as a father doesn’t matter. All that matters is what is best for the child. I went in hoping he was wrong.” [Emphasis added.]
[41] As indicated, the mother was put to great expense for what was an entirely wasted application and court process.
[42] The application was completely unnecessary. The father could have achieved his stated goal of spending more time with the child, moving towards an equally shared parenting plan and thereby reducing his child support if he had accepted the increased parenting time that was offered to him before court and had recognized that the best interests of the child demanded a gradual approach.
[43] The mother is the successful party and should be entitled to some costs. The mother did not serve a formal Rule 18 Offer to Settle. She is therefore not entitled to her full recovery of costs ($12, 206.25), or “full indemnity” as puts it in her costs submissions. The partial indemnity amount is $7,721.25, according to the mother’s bill of costs.
[44] In my view, in considering all of the factors above, the mother is entitled to costs in the amount of $6,000.00, inclusive of HST and disbursements.
Order:
[45] Therefore, this Court orders that the father shall pay the mother’s costs in the amount of $6,000.00, to be paid no later than 60 days from the date of this Order.
Released: March 19, 2019
Signed: Justice S. O’Connell