Court File and Parties

Date: August 28, 2020

Court File No.: D30040/19

Ontario Court of Justice

Between:

D.M.M.D.

Katie Gaboury, for the Applicant

Applicant

- and -

J.W.

Ysamin McGann, for the Respondent

Respondent

Heard: In Chambers

Justice: S.B. Sherr

Costs Endorsement

Part One – Introduction

[1] On July 24, 2020, the court released its reasons for decision after a two-day trial about the parenting and child support arrangements for the parties' 4-year-old child (the child). See: D.M.M.D. v. J.W., 2020 ONCJ 330.

[2] The court gave the parties the right to make written costs submissions. The respondent (the mother) seeks costs of $14,226.35. The applicant (the father) asks that no costs be ordered.

Part Two – Legal Considerations

2.1 General Principles

[3] 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).

[4] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.

[5] 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

[6] 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).

[7] 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

[8] 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.

[9] 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)).

[10] 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).

[11] 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.

[12] 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.

2.5 Other Factors Affecting the Amount of Support

[13] 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.

[14] 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. 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.

[15] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel, 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.

Part Three – Analysis of Costs Entitlement

[16] The mother made two offers to settle – on July 3, 2020 and on July 13, 2020.

[17] The terms in the mother's second offer to settle were similar to those contained in the first offer. However, it was now severable. The mother divided her offer into four parts – custody, parenting time (including residency), government documents and child support. The father could accept all or any parts of the offer. Making a severable offer to settle was a wise decision by the mother.

[18] The father also made a severable offer to settle dated June 29, 2020. The offer did not attract the costs consequences of subrule 18(14) as it was premised on the child primarily living with him.

[19] The mother's offer to settle the custody issue was more favourable to the father than the trial result as she proposed a joint custody order. At trial, she was granted sole custody of the child. However, this was not an issue that consumed much time at trial as the parties agreed at the outset of the trial that the party who was granted primary residence of the child would have sole custody.

[20] The mother's offer to settle the parenting time and residency issues were close to, but not more favourable to the father than the trial result. The mother was granted primary residence of the child. While the parenting time proposed by the mother was very similar to the trial result, the court made an order for mid-week overnight visits for the father to start in September 2021. The mother proposed just evening visits.

[21] The parties resolved the government documentation issue prior to closing submissions on terms close to those proposed by the mother. This was such a minor issue that it was not a factor in this decision.

[22] Overall, the mother's child support proposal was more favourable to the father than the trial result. The mother offered to impute the father's income at minimum wage for child support purposes. The court imputed this income to the father for 2020 but increased the annual imputation of his income to $34,000 as of January 1, 2021. The mother sought an order for equal payment of section 7 expenses, but since none were being incurred the court declined to make that order. Support was a secondary issue and did not consume much time at trial.

[23] To summarize, the costs consequences of subrule 18(14) apply to the custody and support portions of the mother's offer to settle. The court finds no basis to order otherwise. However, these were not the dominant issues at trial and affected a smaller portion of the time claimed by the mother from July 13, 2020. The mother will be awarded full recovery costs on these parts of her offer from July 13, 2020 and costs on these issues for the time period prior to July 13, 2020.

[24] The court considered the balance of the mother's offer under subrule 18(16). Her offer was close to the final trial result on parenting time and she was successful in having the child's primary residence with her. These were the dominant issues in this case. The mother was the successful party on them. The presumption that she is entitled to costs was not rebutted.

Part Four – Analysis of Amount

[25] This case was important for the parties. It was not complex or difficult.

[26] The parties both acted reasonably in the matter. They both made offers to settle that provided the other with generous parenting time. They substantially agreed prior to closing submissions about the parenting time and incidents of custody that would be ordered for the party not granted primary residence of the child. Through their counsel, they focused the evidence, length and cost of the trial.

[27] That said, the father should have settled the matter. While he subjectively believed that the child should live primarily with him, an objective analysis of the evidence indicated otherwise. It wasn't a close call. The father had significant credibility problems that were set out in the reasons for decision and impacted the final decision.

[28] In his submissions, the father claimed that he had few settlement options – he lived in Vaughn, the mother in Oakville. However, the father and his partner chose to move to Vaughn from North York in September 2019, knowing that the mother lived in Oakville and the child attended daycare there. They could have moved closer to Oakville instead and this trial would likely have been unnecessary. The father's partner, who operates a hair salon from her home, could have done this anywhere. She had closed her shop in North York when she and the father moved in together.

[29] The father claimed that the mother's bill of costs is excessive.

[30] Comparing the bills of costs of counsel is often a good indicator of whether the time claimed is reasonable and proportionate. See: Goryn v. Neisner, 2015 CarswellOnt 8562 (Ont. C.J.). Here this comparison shows that counsel spent similar amounts of time on the case. The court does not find the time claimed by mother's counsel to be excessive.

[31] The mother also included time spent by her counsel's law clerks. However, much of the time claimed was essentially secretarial work and won't be allowed.

[32] The father made the interesting argument that additional court appearances were required to coordinate the trial due to the COVID-19 pandemic. He says that he should not have to pay for these additional costs – they were not his fault. There is some merit to this argument – these are unusual times, and in some cases, there are additional legal costs being incurred due to the pandemic. The court will take this into consideration. However, the mother, who is the successful party, also is not at fault for these additional costs and should be partially compensated for them. Accordingly, this will be a minor factor in determining the amount of costs.

[33] The expenses claimed by the mother are reasonable.

[34] About 50% of the time claimed by the mother in her bill of costs was incurred after July 13, 2020, when she became entitled to full recovery costs for the custody and support issues.

[35] The father submitted that the mother's costs were excessive because she is on legal aid. It is surprising that this argument continues to be made considering that the case law is so well established that whether a party is on legal aid is not a factor in making a costs decision. See: Ramcharitar v. Ramcharitar, 62 O.R. (3d) 107 (SCJ); Alvarez v. Smith, [2008] O.J. No. 941 (SCJ); Loncar v. Pendlebury, 2015 ONSC 4673; S.G. v. A.S., 2015 ONSC 1882; F.K. v. A.K. and CAS of Hamilton, 2020 ONSC 4927.

[36] The rates claimed by mother's counsel ($275 per hour) are reasonable.

[37] The court has considered that the father is not a high-income earner (although it expressed its doubts about the veracity of his stated income and how he supports his lifestyle in its reasons for decision). The court will take this into consideration and permit him to pay the costs ordered over three years, provided that he keeps his payments in good standing.

Part Five – Conclusion

[38] Taking into account all these factors, the father shall pay the mother's costs in the amount of $10,000, inclusive of fees, disbursements and HST.

[39] The father may pay these costs at the rate of $275 each month, starting on October 1, 2020. However, if he is more than 30 days late in making any payment, then the full amount of costs, then owing, shall immediately become due and payable.

Released: August 28, 2020

Justice S.B. Sherr