CITATION: I.L.P. v. S.C., 2019 ONCJ 52
DATE: January 31, 2019
COURT FILE NO. D20537/18
ONTARIO COURT OF JUSTICE
B E T W E E N:
I.L.P.
MATTHEW PRICE, for the APPLICANT
APPLICANT
- and -
S.C.
PAULINE MALCOLM, for the RESPONDENT
RESPONDENT
HEARD: IN CHAMBERS
JUSTICE S.B. SHERR
COSTS ENDORSEMENT
[1] On January 2, 2019, the court released its reasons for decision arising out of a two-day trial about the parenting and residency arrangements for the parties’ child (the child). See: I.L.P. v. S.C., 2019 ONCJ 2.
[2] The court granted the respondent (the mother) custody of the child and permitted her to live with the child in Sault St. Marie. The court gave the applicant (the father) specified and graduated access to the child in both Toronto and Sault Ste. Marie. The court also made a number of orders dealing with incidents of custody and access.
[3] The court provided the parties with the opportunity to make written costs submissions.
[4] The mother seeks her costs of $12,322.16. The father asks that minimal costs be ordered.
[5] The Ontario Court of Appeal in Mattina v. Mattina, 2018 ONCA 867, set out that modern costs rules are designed to foster four fundamental purposes:
(1) to partially indemnify successful litigants;
(2) to encourage settlement;
(3) to discourage and sanction inappropriate behaviour by litigants and;
(4) to ensure that cases are dealt with justly under subrule 2 (2) of the Family Law Rules (all references to the rules in this decision are to the Family Law Rules).
[6] 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, 2003 S.C.C. 71, paragraph 25.
[7] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.
[8] An award of costs is subject to: the factors listed in subrule 24(12), subrule 24(4) pertaining to unreasonable conduct of a successful party, subrule 24(8) pertaining to bad faith, subrule 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party. See: Berta v. Berta, 2015 ONCA 918, at paragraph 94.
[9] Subrule 24(1) 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 CanLII 22584 (ON SC), [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 CanLII 23496 (ON SC), [2008] O.J. No. 1978 (SCJ).
[10] In her submissions the mother relies upon the case of Biant v. Sagoo, 2001 CanLII 28137 (ONSC), for the oft-cited proposition that the preferable approach in family law cases is to have costs recovery generally approach full recovery, so long as the successful party has behaved reasonably and the costs claimed are proportional to the issues and the result. However, the Ontario Court of Appeal, in Beaver v. Hill, supra, recently stated that it is an error in law to apply this approach to family law cases. The court writes the following at paragraphs 8 to 13:
[8] Yet, that is not how the costs in this case were determined. Rather, the resulting award approached a full recovery amount. In defence of that result, the respondent relies on what is contended to be the principle from Biant v. Sagoo, 2001 CanLII 28137 (ON SC), [2001] O.J. No. 3693, 20 R.F.L. (5th) 284 (S.C.J.) that costs in family proceedings should “generally approach full recovery”. I would make a couple of points in response to that contention.
[9] First, while the judge in Biant does make that statement, it is based on two decisions of other Superior Court judges, a close reading of which do not support the thrust of that statement. What those other cases do establish is that under the Family Law Rules, O. Reg. 114/99, judges are not constrained to the normal scales of costs found in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, since no scales of costs are mentioned in the Family Law Rules. Also, the Family Law Rules expressly provide that, depending on the conduct of the parties and the presence or absence of offers to settle, a judge may increase or decrease what would otherwise be the appropriate quantum of costs awarded.
[10] Second, the respondent’s assertion that this court’s decision in Berta v. Berta, 2015 ONCA 918, 128 O.R. (3d) 730 supports the “full recovery” approach to costs in family matters also reflects a failure to read the decision closely. What this court endorsed in that case was the principle that “a successful party in a family law case is presumptively entitled to costs” (at para. 94) subject, though, to the factors set out in Rule 24. This caveat is an important one since, as this court pointed out in Frick v. Frick, 2016 ONCA 799, 132 O.R. (3d) 321, the Family Law Rules “embody a philosophy peculiar to a lawsuit that involves a family” (at para. 11).
[11] There is no provision in the Family Law Rules that provides for a general approach of “close to full recovery” costs. Rather, r. 24(12) sets out the appropriate considerations in fixing the quantum of costs. It reads:
(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
[12] As the wording of the rule makes clear, proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs.
[13] Further, a “close to full recovery” approach is inconsistent with the fact that the Family Law Rules expressly contemplate full recovery in specific circumstances, e.g. bad faith under r. 24(8), or besting an offer to settle under r. 18(14). Consequently, the motion judge erred in principle in adopting a “close to full recovery” approach in fixing the costs of these motions. I would note that such a result also appears inconsistent with her determination that full recovery costs were not appropriate in this case.
[11] 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.
[12] 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)).
[13] The onus of proving that the offer is as or more favourable than the trial result is on the person making the offer. See: Neilipovitz v. Neilipovitz, [2014] O.J. No. 3842 (SCJ).
[14] Close is not good enough to attract the costs consequences of 18 (14). The offer must be as good as or more favourable than the trial result. See: Gurley v. Gurley, 2013 ONCJ 482.
[15] The mother’s offer to settle, dated December 19, 2018, was more favourable to the father than the trial result. She offered him more access with fewer conditions and more input into decision-making than the court ordered. The offer met the conditions required for the costs consequences in subrule 18 (14) to apply. The father should have accepted the offer. The mother was the successful party in this case.
[16] The rebuttable presumption in subrule 18(14) also confers discretion on the court to “order otherwise” even where that subrule is presumptively engaged. The court may consider it appropriate to order otherwise for a variety of reasons. See: Snelgrove v. Kelly, 2017 ONSC 4625; Sabeeh v. Syed, 2018 ONCJ 580; E.H. v. O.K., 2018 ONCJ 578.
[17] This is a case where it is appropriate to “order otherwise”.
[18] The court found that the mother engaged in unreasonable behaviour in this case by denying the father’s access requests for a lengthy period of time after their separation and by moving to Sault Ste. Marie without informing him. Her facilitation of reasonable access only happened close to the trial. This is behaviour that cannot be encouraged or rewarded. Costs is a mechanism to address such behaviour.
[19] It was reasonable for the father to apply to the court to ensure that he would have a relationship with the child.
[20] The court also repeats its comments set out in paragraph 12 of Kawamata v. Phan, 2015 ONCJ 96, where it wrote:
[12] The court also considered that mobility cases are challenging for everyone involved. By their very nature, an approved move will usually compromise a parent’s relationship with his or her child. For this reason such cases are difficult to resolve and often need to be decided by the court. It is understandable for parents to contest such requests. See: Bridgeman v. Balfour, 2009 CarswellOnt 7214 (Ont. SCJ).
[21] In making this decision, the court considered the factors set out in subrule 24 (12) (set out in the reference to Beaver v. Hill in paragraph 10 above).
[22] This case was very important to the parties.
[23] The case was not complex or difficult.
[24] The trial conduct of the parties was reasonable, although the father should have conceded the custody issue much earlier – the mother was put to additional cost as a result.
[25] The court made findings at trial that the father was emotionally abusive to the mother and was largely responsible for the mother having to move into her mother’s home in Sault Ste. Marie with the child.
[26] The time and rates claimed by the mother’s counsel are reasonable and proportionate. The quality of counsel’s work was exemplary.
[27] Although it wasn’t more favourable to the mother than the trial result, the father made an offer to settle the case.
[28] The disbursements claimed by the mother are reasonable.
[29] The court has taken into consideration that the father will have difficulty paying the costs sought by the mother. See: MacDonald v. Magel (2003), 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.). He submitted that he is now unemployed. However, a party’s limited financial circumstances will not be used as a shield against any liability for costs but will be taken into account regarding the quantum of costs. See: Snih v. Snih, 2007 CanLII 20774 (Ont. SCJ pars. 7-13).
[30] The court will take the father’s ability to pay the costs order into account when it determines how he will pay the costs order that will be made. The parties are returning to court on February 25, 2019 for a case conference on the financial issues and further submissions can be made at that time.
[31] 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 $5,000, inclusive of fees, disbursements and HST. If the parties cannot agree, the court will hear further submissions about payment of the costs on February 25, 2019. Payment of the costs is suspended pending further order.
Released: January 31, 2019
_____________________ Justice S.B. Sherr