Court File and Parties

Court File No.: Toronto D91380/16 Date: 2019-10-10 Ontario Court of Justice

Between:

Aaeshah Bilal Philips Applicant (Mother)

— and —

Unjum Iqbal Shoaib Khalid Respondent (Father)

Before: Justice Robert J. Spence

Heard in Chambers

Costs endorsement released on October 10, 2019

Counsel:

• Ms. Adela Crossley, counsel for the Applicant
• Respondent in person

Costs Endorsement

1: INTRODUCTION

[1] On August 29, 2019, following a five-day trial, I released my judgment which addressed issues of mother's mobility, father's access and child support.[1] I gave the parties leave to make submissions in writing respecting costs.

[2] The mother claims that she was the successful party. She has filed costs submissions wherein she seeks her full recovery of costs in the amount of $37,516 payable to her by the father.

[3] The father claims that he was the successful party. He has also filed costs submissions wherein he seeks full recovery of costs in the amount of $51,767, or partial recovery of costs in the amount of $31,060.

2: THE FAMILY LAW RULES

[4] Rules 18 and 24 of the Family Law Rules (Rules) are the starting point for addressing costs.

[5] Subrule 24(1) creates a presumption of entitlement to costs in favour of the successful party.

[6] Accordingly, before the court considers any entitlement to costs, the court must decide which of the mother or the father was the successful party.

[7] Rule 18 deals with offers to settle. If a party makes an offer to settle which fully complies with the conditions set out in subrule 18(14), that party is presumptively entitled to his or her costs on a full recovery basis.

[8] The Rules must be considered within the context of legal principles enunciated by the courts.

[9] The Ontario Court of Appeal in Mattina v. Mattina, 2018 ONCA 867, stated at paragraph 10 [my emphasis]:

This court 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: Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, at para. 8; Fong v. Chan (1999), 46 O.R. (3d) 330 (C.A.), at para. 22. Rule 2(2) adds a fourth fundamental purpose: to ensure that cases are dealt with justly: Family Law Rules, r. 2(2); E.H. v. O.K., 2018 ONCJ 578, at para. 8; Sambasivam v. Pulendrarajah, 2012 ONCJ 711, at para. 37. And Rule 24(12)[1], which sets out factors relevant to setting the amount of costs, specifically emphasizes "reasonableness and proportionality" in any costs award.

[10] Once the successful litigant is identified, the court must decide the amount of costs having regard to the factors listed in subrule 24(12). The court must also consider subrule 24(4) – whether a successful party behaved unreasonably; subrule 24(8) – whether a party acted in bad faith; and subrule 18(16) – any offer to settle, even if it does not fall within the parameters of subrule 18(14).

[11] And in the context of the foregoing, the court must ultimately decide the amount of costs based on overall considerations of "reasonableness and proportionality". See also, Beaver v. Hill, 2018 ONCA 840.

3: COMPARING THE PARTIES' SUCCESS AT TRIAL

[12] Before I turn to the issue of which of the two parties was the successful party at trial, I will make some comments about the father's overall submission. The father submits [my emphasis]:

He was, on balance, more successful than the Applicant [mother] when Offers to Settle are considered

[13] In making this submission, the father has conflated two issues, namely, the issue of who was successful at trial and the parties' respective offers to settle made prior to the commencement of trial. For example, at trial the father opposed outright the mother's request to relocate to Australia. However, he claims that he was the successful party on this issue because he made an offer to settle wherein he agreed to the relocation[2] which the mother did not accept.

[14] Rules 18 and 24 are discrete Rules. They cannot be conflated into a single rule to determine who was the successful party at trial. The presumption of an entitlement to costs set out in subrule 24(1) is about who was successful in the trial. See, for example, Eustace v. Eustace, [2016] OJ No 7135.

[15] To be clear, the determination of success and therefore the entitlement to the presumption under subrule 24(1), is not about who served offers to settle under Rule 18, and what those offers said. The costs rules essentially provide for a two-step process. The first step is the determination of success at trial. The second step requires the court to consider offers to settle under Rule 18.[3]

[16] Accordingly, the court will now turn to the determination of who the successful party was at trial.

[17] There were four primary issues at trial.

[18] First, the mother sought an order permitting her to move with the children to Australia. The father opposed this move.

[19] On the mobility issue, the court granted the mother's request to relocate with the children to Australia. Mother was the successful party in respect of that issue.

[20] Second, the father sought to pay child support based on an expert's income valuation report that his annual income for support purposes was $69,000. The mother sought child support based on imputing annual income to father in the amount of $160,000.

[21] On this issue, the court imputed income to the father in the amount of $112,000. Accordingly, the court concludes that success on this issue was divided.

[22] Third, the father sought an access regime which was considerably more extensive than what the court ultimately ordered. The mother sought an order of somewhat more limited access than what the court ordered. However, the access order which mother sought at trial was far closer to what the court ordered, compared to the father's access request. Accordingly, on the issue of access, the court concludes that the mother achieved a greater level of success than the father.

[23] Fourth, the father sought a reduction in his Child Support Guideline table support, arguing that he would be required to incur high access costs by travelling from Qatar to the children's residence – whether in Canada or in Australia – in order to visit with the children. The court did not grant the father's request to reduce his table child support. On this issue, the mother was the successful party.

[24] Overall, and having regard to the amount of court time spent on the issues during the five-day trial, the court concludes that the mother was the successful party. Accordingly, pursuant to subrule 24(1), she is presumptively entitled to her costs.

4: OFFERS TO SETTLE

[25] For the purpose of this part of my reasons, the relevant portions of Rule 18 state [my emphasis]:

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:

1. If the offer relates to a motion, it is made at least one day before the motion date.
2. 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.
3. The offer does not expire and is not withdrawn before the hearing starts.
4. The offer is not accepted.
5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer. O. Reg. 114/99, r. 18 (14).

COSTS CONSEQUENCES — BURDEN OF PROOF

(15) The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14). O. Reg. 114/99, r. 18 (15).

COSTS — DISCRETION OF COURT

(16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply. O. Reg. 114/99, r. 18 (16).

[26] Both parties served offers to settle.

[27] The father made the first offer on October 10, 2018. That offer was comprehensive, as it addressed many of the issues eventually raised at trial. However, and without going into the details of that offer, the substance of that offer fell well short of the considerations set out in subrule 18(14).

[28] The father's second offer was made on August 9, 2019. However, immediately following the mother's acceptance of certain terms of that offer,[4] the father quickly emailed the mother's counsel to advise that he had sent that offer in error and that he would be sending another offer.[5]

[29] The father's next offer to settle was sent on August 10, 2019.

[30] That offer did not fall within subrule 18(14) of the Rules for two reasons. First, it was not served "at least seven days before trial" – which began on August 12, 2019. Second, that offer contained terms, some of which were borne out at trial, and others which were not. I do not find it necessary to discuss that offer in any detail apart from what I have just stated.

[31] The mother's first offer to settle was made on August 7, 2019. That offer did not fall within subrule 18(14) of the Rules for two reasons. First, it was not served at least seven days before trial; and second, that offer contained terms, some of which were borne out at trial, and others which were not. Once again, I do not find it necessary to discuss that offer in any detail apart from what I have just stated.

[32] The mother's second offer to settle was made on August 9, 2019. However, because of the timing of this offer – only three days prior to the start of trial – that offer did not fall within the provisions of paragraph 18(14)2 of the Rules. I will return to this offer shortly.

[33] In summary, all the parties' offers which were made in August 2019 failed to fall within the provisions of paragraph 18(14)2 of the Rules in that they were served too close to the start of trial.

[34] Apart from the failure of any of the offers to have been made within the time frame provided for in paragraph 18(14)2 of the Rules, none of the offers met the condition set out in paragraph 18(14)5 of the Rules, specifically:

The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

[35] The court next considers subrule 18(16), namely, whether it should exercise its discretion to [my emphasis]:

take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.

[36] Of all the offers that were made by the parties, the offer which came closest to falling within paragraph 18(14)5 of the Rules was mother's second offer. That said, while it was close to being as favourable or more favourable than the result at trial, I have decided not to exercise my discretion under subrule 18(16).

[37] I have come to this conclusion for two reasons; first, because of the timing of her offer. At all times approaching the trial of this matter, the father was self-represented. While a party's self-representation does not alter the interpretation of the Rules, self-represented parties generally require more time to understand and absorb the implication of legal proceedings and documents. In my view, it would be unfair to the father to impose on him an offer – or any terms of an offer – made less than seven days prior to the start of trial. I state all of this notwithstanding that the father was a sophisticated self-represented party who overall did an excellent job in representing himself at trial.

[38] Second, the mother's offer contained access terms which were more restrictive than what the court ultimately ordered.

[39] Based upon all of these considerations I conclude that the court's ultimate determination of costs should not be impacted by any of the offers to settle pursuant to Rule 18.

5: AMOUNT OF COSTS

[40] Mother alleges father acted in bad faith and, accordingly, he should be required to fully indemnify mother for her costs, pursuant to subrule 24(8). Her basis for making that claim are twofold. First, father's failure to make full financial disclosure; and second, the unreasonable position he took at trial.

[41] I do not find either of those considerations to be sufficient to make a finding of bad faith. Bad faith findings require a fairly high threshold of egregious behavior. And because of this requirement, bad faith is seldom found. See for example Cozzi v. Smith, 2015 ONSC 3626. The essence of bad faith is when an individual, knowingly and intentionally, suggests that their actions are aimed for one purpose when they are in fact aimed for another purpose. See for example S.(C.) v. S.(M.) (2007), 38 R.F.L., (6th) 315 (Ont. SCJ). As Justice Stanley Sherr noted in S.J.K. v. J.P.G., 2019 ONCJ 556, at paragraph 9 [my emphasis]:

Bad faith is not synonymous with bad judgment or negligence; rather, it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. Bad faith involves intentional duplicity, obstruction or obfuscation.

[42] Finally, the court turns to subrule 24(4), which provides:

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)

[43] The court concludes there is no basis for finding that the mother, as the successful party, behaved unreasonably and that she should be deprived of her costs, or that she should pay all or part of the father's costs.[6]

[44] I return then to the costs principles set out in Mattina, supra, one principle being the importance of partially indemnifying the successful party, in this case, the mother.

[45] For the reasons I have articulated, partial indemnification is the starting point for determining the amount of costs.

[46] In order to decide the amount of that partial indemnification, I must consider the factors listed in subrule 24(12).

[47] Subrule 24(12) provides:

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.

[48] Both parties conducted themselves appropriately at trial, as well as at the trial management conference beforehand. Notwithstanding the assertions made by both parties respecting the behavior of the other, I do not conclude that either party acted unreasonably.

[49] Time spent by mother's counsel was proportional to the issues to be decided at trial. Mother's counsel spent a total of 83 hours. This covered attendances at trial, preparation for each of the five days of trial, as well as immediate pre-trial work including trial management conference brief, attendance at trial management conference, attendance for settlement conference before another judge and preparation of trial record and documents brief. I find that time spent to be reasonable and proportionate having regard to the length of trial as well as the complexity of the issues involved.

[50] Both parties submitted written offers to settle. Neither party submitted offers that were patently unreasonable. Both parties took positions in their respective offers which, in certain respects, were ultimately not borne out at trial.

[51] Mother's counsel charged her client $400 per hour which, for a very experienced lawyer, is reasonable.

[52] Mother did not incur any other expenses for trial, as both the expert's report and his attendance at trial were paid for by the father.

[53] The court must also take into account the ability of a party to pay costs. See for example, MacDonald v. Magell (2003), 67 O.R. (3d) 181 (Ont. C.A.).

[54] In this case, I conclude that the father's ability to pay costs is not a significantly meaningful consideration, given the court's imputation of income to him in the amount of $112,000.

[55] Having regard to all of the foregoing considerations, including the need to partially indemnify mother for her costs, I find that the reasonable and proportionate order for costs is $25,000, inclusive of HST.

[56] The sum of $25,000 shall be paid by the father to the mother within 60 days.

[57] I would apportion 50% of those costs, or $12,500, to the child support issue. Accordingly, the sum of $12,500 is to be enforced by the Family Responsibility Office as part of the child support order which I made following the trial.

Released: October 10, 2019

Signed: Justice Robert J. Spence

Footnotes

[1] Immediately prior to the start of trial the parties settled a number of other issues, including finalizing custody in favour of the mother.

[2] However, with certain conditions attached which the court did not impose.

[3] With the additional considerations provided for in subrules 24(4) and (8), as noted earlier.

[4] The father had made the terms of that offer severable so that it was open for the mother to accept any of the terms without accepting the offer in full.

[5] Mother's counsel did not take steps to enforce her acceptance of the specified terms of the father's offer dated August 9, 2019.

[6] See my following comments in respect of subparagraph 24(12)(a)(i) of the Rules.