ONTARIO COURT OF JUSTICE
CITATION: Godinez v. Espin, 2019 ONCJ 168
DATE: March 8, 2019
COURT FILE No.: D23290/03
BETWEEN:
LILEY VANESSA GODINEZ
Applicant
— AND —
PATRICIO ESPIN
MINISTRY OF COMMUNITY AND SOCIAL SERVICES
Respondents
Before Justice Roselyn Zisman
Heard by written submissions
Reasons for Judgment released on March 8, 2019
Aron David....................................................................................... counsel for the applicant
Rita Gonsalves............................................... counsel for the respondent Patricio Espin
Jean Hyndman agent for the Ministry of Community and Social Services, Assignee
Cost Decision
Zisman, J.:
Introduction
[1] This is a cost decision arising from the Respondent, Patricio Espin’s Application for a paternity test and if negative a declaration of non-parentage[^1] declaring that he is not the biological parent of the child T.G. born […], 2003 and an order to change the final orders of January 5, 2004 and August 27, 2008.
Background
[2] On January 6, 2004 a final order was made on a default basis that the Respondent pay child support for the child T.G. born […], 2003 in the amount of $539.00 per month based on an imputed income of $80,000.00.
[3] On March 31, 2008 the Respondent brought his first motion to change his support obligation based on his current income. On August 27, 2008 on consent the order was varied and the Respondent was then required to pay child support of $601.00 per month based on his stated income of $65,000.00. The Respondent had the assistance of duty counsel and a Spanish interpreter.
[4] On August 24, 2009 the Respondent brought his second motion to change wherein he sought to reduce his child support obligation based on his claimed income of $24,000.
[5] On January 12, 2010, the motion to change was dismissed on its merits as the court held that the Respondent had “freely admitted that his financial disclosure is unreliable, given that he works for cash in the construction industry and failed to report it in his income tax return”. The transcript of that hearing, filed on this motion, also notes that the Respondent was asked if he understood English and he agreed that he did as a Spanish interpreter was not present.
[6] The Respondent then commenced an Application to change the orders of January 6, 2004 and August 27, 2008 to not only reduce the ongoing child support and the arrears but he also sought a paternity test. The matter proceeded as an Application as for the first time the Respondent raised the issue of non-parentage of the child.
[7] A paternity test confirmed that he was the biological parent of the child.
[8] At the hearing before me, I found that the Respondent was not a credible witness and that his evidence was just as unreliable at the present time as it was found to be in 2010. It was obvious that his declared income was not his actual income.
[9] I also rejected the submission by Respondent’s counsel that the Respondent could not understand the proceedings on January 12, 2010 as he did not have the benefit of a Spanish interpreter. Counsel for the Respondent could not point to any portion of the transcript of the hearing where it appeared that that Respondent did not understand what was being asked of him.
[10] For reasons outlined in my decision of January 2, 2019 the Respondent’s Application was dismissed. A timetable was set out for costs submissions to be filed if the issue was not resolved. All counsel have filed their written cost submissions.
Position of the parties
[11] The Applicant seeks costs $7,486.25 on a full recovery basis against the Respondent.
[12] It is the Applicant’s position that she was completely successful at trial in that the Respondent’s Application was dismissed and further she obtained an order that was substantially better than what she offered in her Offer to settle.
[13] The Ministry of Community and Social Services (Assignee) seeks costs of $1,500.
[14] It is the position of counsel for the Assignee that she was also totally successful and obtained an order that was substantially better than the Offer to settle she made but as an institutional litigant is only seeking partial indemnity costs of $1,500.
[15] It is the Respondent’s position that the Offers to Settle made by both the Applicant and the Assignee were not affordable and that he had made reasonable Offers to Settle the motion. It is submitted that the Respondent has substantial arrears and that the court should use its discretion to not award any costs or in the alternative that full indemnity costs are excessive.
General principles
[16] 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.
[17] Family Law Rules (FLR) 24 sets out a framework for awarding costs for family law cases.
[18] 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.[^2]
[19] FLR 2 (2) adds a fourth fundamental purpose namely, to ensure that cases are dealt with justly.[^3]
[20] 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[^4] 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.
[21] FLR 24(12)[^5] which sets out factors relevant to setting the amount of costs, specifically emphasizes "reasonableness and proportionality" in any costs award.
[22] FLR 24(1) creates a presumption of costs in favour of the successful party.[^6] Consideration of success is the starting point in determining costs.[^7]
[23] However, pursuant to FLR 24 (2), this presumption is deemed not to apply in a child protection case or to a party that is a government agency. However, pursuant to FLR 24 (3) the Court retains the discretion to award costs to or against a party that is a government agency.
[24] 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.[^8]
[25] 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.
[26] 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).
[27] 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.
[28] 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).
[29] 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 attempts to settle cases.
[30] The recent case of Beaver and Hill[^9], 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 capitalization. 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.
[31] 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 at trial should also be examined.[^10]
[32] 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.
[33] A party’s ability to pay costs 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 her/his own misfortune.[^12]
Application of general principles to the facts
[34] There is no dispute that the Applicant and Assignee were completely successful at trial.
[35] The Applicant acted reasonably throughout these proceedings. Despite the lack of merit in the Respondent’s position that there had been a material change in his circumstances, she served an offer to settle on September 27, 2018 to reduce the income at which the Respondent was paying child support namely, from $65,000 to $55,000 which in turn would have reduced his child support obligation from $651.00 to $507.00 per month.
[36] The Respondent made 2 offers to settle. The October 1st, 2018 offer to settle provided that child support be reduced to $248.03 per month based on an imputed income of minimum wage for 2017 of $29,120, the child support arrears from February 1, 2010 to October 30, 2018 be recalculated based on an imputed minimum wage and that he pay a lump sum of $10,000 by towards the arrears and payments of $200 per month towards the child support arrears.
[37] The October 10th, 2018 offer to settle provided that child support be reduced to $304.00 per month based on an imputed income of $35,000, child support arrears from February 1, 2010 to October 30, 2018 be recalculated based on an imputed annual income of $35,000, a lump sum of $10,000 payable towards the arrears and payment of $250.00 per month towards the arrears.
[38] The Assignee did not serve a formal offer to settle but responded to the Respondent’s offer to settle by letter dated October 10th, 2018 and offered to base the recalculation of child support for three years back from the dare of the Application to 2014 and on an imputed income of $42,000. The Assignee was prepared to accept $10,000 for its arrears from 2014 to 2016 with repayment at the rate of $550.00 per month. The Assignee took no position and had no interest in the ongoing child support or support payable as of January 1, 2017 when the Applicant was no longer in receipt of social assistance.
[39] The Respondent did not accept the offers to settle by the Applicant or the Assignee. The result obtained at trial, namely a complete dismissal of the Respondent’s claims, resulted in the Applicant and the Assignee obtained an order that was substantially better than what was offered.
[40] The Applicant’s offer to settle was served in accordance with the requirements of FLR 18 (14) and she is therefore entitled to costs to the date the offer was served on a full recovery basis.
[41] Although the Assignee did not serve an offer in accordance with FLR 18 (14) the court pursuant to FLR 18 (16) may take into consideration any written offer to settle even if subsection (14) does not apply.
[42] In considering the factors set out in FLR 24 (12), I find that the Applicant acted reasonably throughout these proceedings. She agreed to paternity testing despite the fact that the Respondent had never raised this issue previously. A reasonable offer to settle was made and the Applicant’s counsel conducted the trial in an extremely focused manner. Although the trial and submissions were only heard over two half days, the issues were made somewhat complex due to the Respondent’s inconsistent and unreliable evidence, his questionable and potentially fraudulent paystubs and the number of previous proceedings.
[43] On the other hand, the Respondent acted unreasonably throughout these proceedings. He made a request for a finding of non-parentage in the wrong court and raised this issue for the first time despite this case being before the court since 2004.
[44] The Respondent was found to be an unreliable witness and his evidence was found to be just as unreliable in this proceeding as had been found to be unreliable in the motion to change heard in 2010.
[45] The Respondent produced contradictorily pay stubs from the same employer without any explanation raising serious questions as to whether he fabricated false paystubs. The Respondent claimed he was a seasonal worker whereas his pay stubs did not vary seasonally. The Respondent “forgot” that he received a $20,000 loan from his employer and could not explain why his employer would loan him $20,000 when he purportedly only earned less than $18,000 and that this was the same employer who the Respondent testified fired him in July 2018.
[46] The Respondent also claimed that he could not understand the proceedings in 2010 where no Spanish interpreter was present but could not point to any portion of the transcript that indicated he did not understand the proceedings and could not explain why he told the presiding judge that he did not require the Spanish interpreter.
[47] The Respondent also claimed to be medically unfit to work but provided no medical documentation to substantiate this claim.
[48] The Respondent made many attempts to mislead the court and his behaviour throughout this proceeding was unreasonable.
[49] Although counsel for the Respondent submitted that the bill of costs was “excessive” she made no specific submissions with respect to the bill of costs submitted by the Applicant’s counsel. Counsel’s bill of costs only relates to the trial and trial preparation and his hourly rate of $250.00 and $175.00 for junior counsel are both extremely reasonable.
[50] The Assignee’s bill of costs also only relates to the trial and trial preparation and her hourly rate of $350.00 is reasonable.
[51] The costs claimed by both counsel for the Applicant and the Assignee are reasonable and proportionate to the issues in the trial.
[52] I have considered that the court can and should consider the Respondent’s ability to pay. It is submitted by counsel for the Respondent that the Respondent simply does not have the ability to pay and that is the reason he could not accept the offer to settle made by the Applicant and the Assignee and that as a result of this order he has substantial arrears to pay.
[53] However, the court did not accept the Respondent’s position that he only had the ability to earn an income $19,727.00 or that this was his actual income. As a result of dismissing the Respondent’s Application the court confirmed that the Respondent had the ability to earn or in fact was actually earning at least $65,000.00. Therefore based on this income, the Respondent does have the ability to pay costs.
[54] Further, while I appreciate there are substantial child support arrears owing, this is a result of the Respondent not paying what he should have paid over these many years. Other than making a few voluntary payments in 2008 and the $20,000 payment just before the court hearing, the Respondent has not paid support in all of the years he was required to support his daughter.
[55] The Respondent shall be required to pay the Applicant’s costs on a full recovery basis fixed at $7,486.25.
[56] I have considered that although the Assignee was successful and has only requested $1,500.00 in costs, there is no presumption that a successful government agency is entitled to costs. Any further cost order will deprive the Applicant of funds that she needs to support her daughter and accordingly, I exercise my discretion not to award any costs to the Assignee.
Order as follows:
The Respondent shall pay to the Applicant costs fixed at $7,486.25 inclusive of disbursements and applicable taxes.
The Family Responsibility Office shall enforce this order as a support order.
Support Deduction order to issue.
Counsel for the Applicant shall prepare this order and the approval of the Respondent as to form and content is hereby dispensed with.
Released: March 8, 2019
Justice Roselyn Zisman
[^1]: As noted in the decision the Ontario Court of Justice does not have the jurisdiction to make a declaration of a finding of non-parentage per s. 1(1) Children’s Law Reform Act. [^2]: Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, at para. 8; Fong v. Chan (1999), 1999 2052 (ON CA), 46 O.R. (3d) 330 (C.A.), at para. 22. [^3]: Mattina v. Mattina, 2018 ONCA 8867, at para. 10 citing with approval the cases of E.H. v. O.K., 2018 ONCJ 578, at para. 8 and Sambasivam v. Pulendrarajah, 2012 ONCJ 711 at para. 37. [^4]: (Ontario) (2004), 2004 14579 (ON CA), 2004 CarswellOnt 2521, [2004] O.J. No. 2634 (Ont. C.A.); Delellis v. Delellis, 2005 36447 (Ont. S.C.J.) [^5]: FLR 24(12) was amended in July 2018 although counsel referred to the previous wording of FLR 24 (12). [^6]: Berta v. Berta, 2015 ONCA 918, 128 O.R. (3d) 730, at para. 94. [^7]: Sims-Howarth v. Bilcliffe (2000), 2000 22584 (ON SC), 6 R.F.L. (5th) 430 (Ont. Sup. Ct.), at para. 1. [^8]: Berta v. Berta, ibid [^9]: 2018 ONCA 840 at paras. 15-16. [^10]: Lawson v. Lawson, 2008 23496 (ON SC), [2008] O.J. No. 1978 (SCJ). [^11]: See Macdonald v.Magel (2003), 2003 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.). [^12]: See Snih v. Snih, 2007 20774 (Ont. S.C.) at paras. 7-13.