Court File and Parties

Date: April 23, 2020

Court File No.: D57183/12

Ontario Court of Justice

Between:

S.A.

APPLICANT

- and -

Y.M.

RESPONDENT

Counsel:

• Ryan Manilla, for the Applicant
• Acting in Person, for the Respondent

Heard: In Chambers

Before: Justice S.B. Sherr

Costs Endorsement

Part One – Introduction

[1] On March 16, 2020, the court released its reasons for decision arising out of a two-day trial about the parenting and child support arrangements for the parties' ten-year-old child (the child). See: S.A. v. Y.M., 2020 ONCJ 147.

[2] The court granted the mother primary residence and custody of the child and gave the applicant (the father) specified access. The court made a number of orders dealing with incidents of custody and access. The father agreed to the mother's proposal for ongoing child support while he was being cross-examined and this agreement was incorporated into the final court order.

[3] The court provided the parties with the opportunity to make written costs submissions.

[4] Both parties made submissions. The mother seeks costs of $30,000, enforceable as support by the Family Responsibility Office. The father asks that no costs be ordered.

Part Two – Legal Considerations

2.1 General Principles

[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, 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.

2.2 Success

[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] 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] O.J. No. 1978 (SCJ).

[10] Subrule 24(6) sets out that if success in a step in a case is divided, the court may apportion costs as appropriate.

[11] Divided success does not equate with equal success. It requires a comparative analysis. Most family cases have multiple issues. They are not equally important, time-consuming or expensive to determine. See: Jackson v. Mayerle, 2016 ONSC 1556, paragraph 66.

[12] Where there are multiple issues before the court, the court should have regard to the dominant issue at trial in determining success. See: Firth v. Allerton, [2013] O.J. No. 3992 (SCJ); Mondino v. Mondino, 2014 ONSC 1102.

2.3 Offers to Settle

[13] Subrule 18(14) sets out the consequences of a party's failure to accept an offer to settle that is as good as or better than the hearing result of the person making the offer. It 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:

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.

[14] 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)).

[15] 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).

[16] 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 order. See: Wilson v. Kovalev, 2016 ONSC 163.

[17] Close is not good enough to attract the costs consequences of 18(14). The offer must be as good or more favourable than the trial result. See: Gurley v. Gurley, 2013 ONCJ 482.

[18] The mother made a severable offer to settle. This was a wise decision. In Paranavitana v. Nanayakkara, 2010 ONSC 2257, [2010] O.J. No. 1566 (SCJ), Wildman J. writes about the advantages of severable offers to settle at paragraphs 13 and 14 as follows:

13 Unfortunately, this offer was not severable. There would have been no disadvantage to the wife in making the custody offer, in particular, severable from the financial and property terms. Severable offers are an underused tool that can confer considerable settlement and cost advantages. Because of the full recovery provisions of Rule 18(14), they can provide much more flexibility to the court to award full recovery for at least a portion of the overall costs, if the party is successful on only some of the issues. Had the custody terms of the wife's offer been severable from the other terms, I would have been prepared to consider ordering full recovery costs on the custody issue from the date of the offer forward. As this was the majority of the trial time, that would have been a significant cost advantage to the wife.

14 However, as the offer was not severable, the wife would have to do as well or better than all the terms of the offer, in order to take advantage of the full recovery cost provisions of Rule 18(14). Since the husband got an additional week of access, as well as an order that spousal support would reduce from $1000 in three years, Ms. Nanayakkara did not do as well as or better than her offer in its totality. Rule 18(14) does not apply but I can take this offer into account in determining costs under Rule 24, along with any other offers that have been made (Rule 18(16)).

2.4 Unreasonable Behaviour

[19] Subrule 24(5) provides some criteria for determining the reasonableness of a party's behaviour in a case. It reads as follows:

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.

2.5 Other Factors Affecting the Amount of Support

[20] Subrule 24(12) reads as follows:

24(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.

[21] The rules do not require the court to allow the successful party to demand a blank cheque for their costs. See: Slongo v. Slongo, 2015 ONSC 3327 (SCJ). The court retains a residual discretion to make costs awards which are proportional, fair and reasonable in all the circumstances. See: Jackson v. Mayerle, 2016 ONSC 1556.

[22] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel (2003), 67 O.R. (3d) 181 (Ont. C.A.). 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 pars. 7-13.

[23] Those who can least afford to litigate should be most motivated to seriously pursue settlement and avoid unnecessary proceedings. See: Mohr v. Sweeney, 2016 ONSC 3338; Balsmeier v. Balsmeier, 2016 ONSC 3485.

[24] Family law litigants are responsible for and accountable for the positions they take in the litigation. See: Heuss v. Surkos, 2004 ONCJ 141.

Part Three – Success

[25] The trial concerned motions to change brought by both parties to change the court's orders granting the parties joint custody of the child with primary residence to the mother. The parties both sought changes to the existing parenting schedule. The mother sought increased child support.

[26] The mother made an offer to settle dated January 4, 2020. It was served on the father on January 13, 2020. The father did not make an offer to settle.

[27] The mother's offer was severable.

[28] In Part One of her offer to settle the mother sought to change the existing joint custody order to one of sole custody of the child to her. She offered to consult with the father regarding any major decision regarding the child. This was the trial result. The father sought to preserve the joint custody order. The mother's offer in Part One was as favourable to the father as the trial result and the costs consequences set out in subrule 18(14) will be applied.

[29] In Part Two of her offer to settle the mother offered that the child would continue to primarily live with her. She also proposed that the father have parenting time with the child on alternate weekends from Saturday morning until Monday morning. She asked that all exchanges be supervised by a professional service provider, with the cost to be split between the parties. She also proposed a robust holiday schedule for the parties. Lastly, she offered that the orders be subject to police enforcement.

[30] The orders sought in Part Two of the mother's offer were not more favourable to the father than the trial result. In particular, the court ordered that the father's weekend access take place on alternate weekends from Friday after school until Monday morning. The court did not order police enforcement of the order. The costs consequences set out in subrule 18(14) will not be applied to this part of the offer. However, the offer was pretty close to the trial result and will be considered under subrule 18(16).

[31] The father's position at trial was that he should have primary residence of the child. The issue of primary residence was a major issue at trial. The court found that the father failed to establish a material change in circumstances affecting the best interests of the child regarding this issue. The mother was the successful party on this issue.

[32] In the alternative, the father sought alternate weekend access from Friday until Monday morning and mid-week parenting time. He did not believe that third party exchanges by a professional service provider were required. There was divided success on this issue. The court ordered the weekend access sought by the father. However, it did not order the mid-week access he sought. The court ordered the third party exchanges by a professional service provider sought by the mother. The father did not contest the holiday schedule proposed by the mother. The court finds that the mother was slightly more successful on these issues.

[33] In Part Three of her offer to settle the mother proposed that the father pay ongoing child support of $326 each month plus 50% of the child's special or extraordinary expenses pursuant to section 7 of the Child Support Guidelines. In Part Four of her offer to settle, the mother sought retroactive child support.

[34] At the outset of the trial the parties agreed not to address issues of section 7 expenses and retroactive support claimed by the mother and credits for support claimed by the father as none of these issues were claimed in their motions to change or identified as issues for trial at the trial management conference. Accordingly, the costs consequences set out in subrule 18(14) do not apply to Parts Three and Four of the mother's offer to settle, as they were not more favourable to the father than the trial result. Part Three of her offer will be considered under subrule 18(16).

[35] The father waited until his cross-examination to advise the court that he was agreeable to paying ongoing child support of $326 each month as sought by the mother. This was an increase in child support. Given the father's delay in reaching this agreement the court finds that the mother was the successful party on this issue.

[36] The court finds that the mother was the successful party at trial. The presumption that she is entitled to costs was not rebutted by the father.

Part Four – Factors Affecting the Amount of Support

[37] This motion was important to the parties. It was not complex. However, it was made more difficult due to multiple allegations of misconduct made by the father against the mother that were not supported by the evidence. The mother was able to gather evidence to disprove most of these allegations. Adding to the difficulty of the case was the father's delay in providing his trial evidence. He served the mother with a very different trial record than he filed with the court. The trial was delayed so that the mother could be given all of the father's documents.

[38] The mother acted reasonably in this case.

[39] The father did not act reasonably. In particular:

(a) The court referred the case to the Office of the Children's Lawyer (the OCL) at the father's request. The OCL agreed to conduct an investigation and report pursuant to section 112 of the Courts of Justice Act. The OCL could not complete its investigation due to the father's refusal to participate after he unreasonably became dissatisfied with the clinical investigator. The father also refused to sign required consents that would have permitted the clinical investigator to investigate his allegations against the mother.

(b) He delayed this case by not complying with timelines for filing documents and financial disclosure. The case was adjourned on October 15, 2019 because he was unprepared. Costs were reserved for that appearance and the subsequent appearance on December 6, 2019.

(c) He served the mother with very different trial material than he filed with the court.

(d) He failed to make an offer to settle the case.

(e) He waited until his cross-examination to agree to settle the support issue.

[40] Counsel for the mother has been in practice for eight years. The court finds that his hourly rate of $300 per hour is reasonable.

[41] The mother's bill of costs claims time spent of close to 100 hours. There is little itemization of the time spent in the bill of costs – it only sets out general breakdowns of time spent for each step. This makes it challenging to assess whether the amount claimed is reasonable and proportionate. See: Blank v. Micallef, 2009 CarswellOnt 6790 (SCJ).

[42] The court finds that the time claimed in the bill of costs is excessive for a two-day trial of this nature, even allowing for the time spent for the October 15, 2019 and December 6, 2019 appearances.

[43] The court also considered that the father is of modest means. However, the court's sympathy for him is limited because of his unreasonable behaviour.

[44] Taking into account all of these factors the father shall pay the mother's costs fixed in the amount of $15,000, inclusive of fees, disbursements and HST.

[45] The father may pay the costs at the rate of $400 each month starting on May 1, 2020. However, if the father is more than 30 days late in making any of his support or costs payments, the full amount of costs then owing shall become immediately due and payable.

Part Five – Enforcement by the Family Responsibility Office

[46] The mother asked that the entire costs award be payable as support and be enforced by the Family Responsibility Office.

[47] Under clause 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act, costs awards that relate to support or maintenance may be enforced by the Family Responsibility Office. This clause reads as follows:

In this Act

"support order" means a provision in an order made in or outside Ontario and enforceable in Ontario for the payment of money as support or maintenance, and includes a provision for,

(g) interest or the payment of legal fees or other expenses arising in relation to support or maintenance….

[48] The court's authority to make orders directing that legal fees be included as a support order and enforced by the Family Responsibility Office, is limited to costs awards arising out of support decisions. See: Clark v. Clark, 2014 ONCA 175. Where the decision involves a mix of support and other issues, the court has the discretion to determine what portion of the costs should be allocated to the support issue. See: Sordi v. Sordi, 2011 ONCA 665; Clark v. Clark, supra; A.A. v. Z.G., 2016 ONCA 737.

[49] The parenting issues were the dominant issues in this case. The support issue was not complicated.

[50] The court orders that 15% of the costs award ($2,250) is a support order within the meaning of clause 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act, and as such, it is enforceable by the Director of the Family Responsibility Office.

[51] This does not leave the mother bereft of enforcement options for the balance of the costs order if the father defaults.

[52] Subrule 26(2) provides that an order that has not been obeyed may, in addition to any other method of enforcement provided by law, be enforced as provided by subrule (3).

[53] Subrule 26(3) provides that a payment order[^1] may be enforced by,

(a) a request for a financial statement (subrule 27(1))[^2];

(b) a request for disclosure from an income source (subrule 27(7));

(c) a financial examination (subrule 27(11))[^3];

(d) seizure and sale (rule 28);

(e) garnishment (rule 29); and

(f) the appointment of a receiver under section 101 of the Courts of Justice Act.[^4]

[54] Further, subrule 1(8) provides remedies if a person fails to obey an order in a case. It states that the court may deal with the failure by making any order that it considers necessary for a just determination of the matter. This includes an order that the party is not entitled to any further order from the court unless the court orders otherwise. See: Clause 1(8)(e) of the rules.

Released: April 23, 2020

Justice S. B. Sherr

[^1]: A payment order includes the costs and disbursements in a case. See: Clause (i) in the definition of payment order in subrule 2(1).

[^2]: Pursuant to subrule 27(6) if the payor does not serve and file a financial statement within 10 days after being served with an order to produce one by the court under subrule 27(5), the court may, on motion with special service, order that the payor be imprisoned continuously or intermittently for no more than 40 days.

[^3]: Pursuant to subrule 27(20) if the payor without sufficient excuse fails to obey an order or direction by the court under subrule 27(19) regarding a financial examination, the court may, on motion with special service, order that the payor be imprisoned continuously or intermittently for no more than 40 days.

[^4]: Only the Superior Court of Justice has the authority to make an order for the appointment of a receiver. See: subsection 101(1) of the Courts of Justice Act.