DATE : March 3, 2021 COURT FILE NO. D2015/01
ONTARIO COURT OF JUSTICE
B E T W E E N:
VERONICA LALONDE
ANTONIO VILLARIN, for the APPLICANT
APPLICANT
- and -
SERGE LALONDE
GARAV GILL, for the RESPONDENT
RESPONDENT
HEARD: IN CHAMBERS
JUSTICE S.B. SHERR
COSTS ENDORSEMENT
Part One – Introduction
[1] On February 12, 2021, the court delivered oral reasons after a two-day trial, regarding the respondent’s (the father’s) motion to change the order of Justice Marvin Zuker, dated September 23, 2010.
[2] The court reduced the father’s support arrears that had accumulated pursuant to Justice Zuker’s order, from $43,343 (the amount set out in the Family Responsibility’s Office statement of arrears) to $15,621.11. The court ordered that the father could pay these arrears at $200 each month.
[3] The court also increased the father’s ongoing child support obligation for his two children that are still eligible for support, to $1,042 each month, based on his annual income of $68,400. Support for the parties’ third child was terminated as of June 30, 2018.
[4] The father, in his motion to change, included a request for joint custody (now joint decision-making responsibility) of the parties’ two children. The applicant (the mother) consented to this request and it was ordered.
[5] The father asked for and was given the opportunity to make written costs submissions. He seeks costs from the mother of $9,100. He submitted that he is not claiming any costs for the parenting issues, or the ongoing support issue– just the arrears issues.
[6] The mother, in her written submissions, asks that no costs be ordered.
Part Two – Legal Considerations
2.1 General Principles
[7] 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).
[8] 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.
[9] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.
[10] 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
[11] 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 ONSC 22584, [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 ONSC 23496, [2008] O.J. No. 1978 (SCJ). The court should also examine who was the successful party, based on the positions taken in the litigation. See: Lazare v. Heitner, 2018 ONSC 4861.
[12] Subrule 24 (6) sets out that if success in a step in a case is divided, the court may apportion costs as appropriate.
[13] 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.
[14] 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
[15] 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 trial 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:
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.
[16] The technical requirements of subrule 18 (14) must be met to attract the costs consequences in subrule 18 (14). See: Weber v. Weber, 2020 ONSC 6855; Ajiboye v. Ajiboye, 2019 ONCJ 894.
[17] 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)) or, in assessing the reasonableness of a party under sub-clause (iii) of subrule 24 (12) (a). See: Mussa v. Imam, 2021 ONCJ 92.
[18] 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).
[19] 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.
[20] 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.
2.4 Other Factors Affecting Costs Orders
[21] 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.
[22] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel (2003), 2003 ONCA 18880, 67 O.R. (3d) 181 (Ont. C.A.). Ability to pay will be less of a mitigating factor when the impecunious party has acted unreasonably, or where their claim was illogical or without merit. See: Gobin v. Gobin, 2009 ONCJ 278; D.D. and F.D. v. H.G., 2020 ONSC 1919.
Part Three – Success
[23] The father made two offers to settle. Neither offer attracted the costs consequences set out in subrule 18 (14).
[24] The father’s first offer to settle was made on January 18, 2021. He proposed that arrears be set at $8,124 and that he pay ongoing child support to the mother of $837 each month for the two children, based on an annual income of $54,912. He further proposed that support be reduced to $506 each month, for one child, starting on March 1, 2021.
[25] The father’s second offer to settle was made on February 9, 2021 - between the first day of the trial (January 22, 2021) and the second day of the trial (February 12, 2021). Accordingly, it was not made in accordance with paragraph 1 of subrule 18 (14) which states that if the offer relates to a motion, it must be made at least one day before the motion date. Accordingly, the costs consequences in subrule 18 (14) do not apply to this offer.
[26] In his second offer to settle, the father proposed to pay ongoing child support of $854 each month for the two children, reduced to $517 for one child, starting on March 1, 2021. He proposed to fix the support arrears of $15,000, payable at $100 each month. This offer to settle was not more favourable to the mother than the trial result.
[27] The mother made one offer to settle. It was made on January 28, 2021, between the first and second day of the trial. It was not made in accordance with paragraph 1 of subrule 18 (14). The offer also wasn’t more favourable to the father than the trial result. The mother offered to set the support arrears at approximately $43,000, payable at $100 each month. She also proposed that the father pay ongoing child support of $854 each month.
[28] None of the offers to settle were severable.
[29] The court next examined the positions taken at trial to determine who was the more successful party.
[30] In his motion to change, the father asked to fix support arrears at $10,000. At trial, he changed this position. He argued that a reconciliation between the parties in 2011 had terminated Justice Zuker’s order. He asked that all arrears be rescinded. In his motion to change, he asked the court to base support on an annual income of $39,360. He was earning far more income than that. At trial, he advised the court of a new job and agreed to pay ongoing child support, based on his new annual income of $68,400.
[31] At trial, the mother asked to fix the father’s support arrears at approximately $43,000. She also asked for an order that he pay ongoing child support in accordance with his actual income.
[32] The court finds that the mother was slightly more successful on the issue of ongoing support. The father took an unrealistic position at the outset of this case that he should pay support on much lower income than he was earning. In his offers to settle, he proposed to reduce support, starting on March 1, 2021. The court did not order this. However, by the later stages of the case the parties had agreed that the father should pay ongoing support based on his actual income for two children. The father was candid about his pay increase and this issue was easily resolved at trial.
[33] The main issue in this case was the father’s request to rescind all or part of his arrears. Although he was unsuccessful at trial in terminating Justice Zuker’s order, based on an alleged reconciliation of the parties in 2011, the father was clearly the more successful party on this issue. The father’s offers to resolve this issue were realistic. The mother wouldn’t budge on her position of maintaining the full amount of arrears reflected in the records of the Family Responsibility Office. The court substantially reduced the arrears reflected in those records.
[34] The father offered to pay arrears at $100 each month. The court ordered him to pay the arrears at $200 each month. The mother was the successful party on this issue. However, it was a minor issue that did not take up much time.
[35] Overall, the father was the successful party in this case.
[36] The mother did not rebut the presumption that the father is entitled to his costs.
Part Four – Amount of Costs
[37] The case was important to the parties. It was made more complex and difficult because the mother kept changing her claim about the arrears owning. Twice, during these proceedings, she submitted additional and substantial amounts in her claim for arrears with the Family Responsibility Office.
[38] The father acted reasonably in the case.
[39] The mother acted unreasonably by failing to advise the Family Responsibility Office in a timely manner that:
a) She had reconciled with the father for 29 months, starting in 2016.
b) The father had been making substantial direct support payments to her for many years.
c) The eldest child had left school as of June 30, 2018. The child did not return to school.
[40] The mother did not notify the Family Responsibility Office about these important matters until after case conferences had been held in this case.
[41] The rates and time claimed by counsel for the father are reasonable.
[42] The father made a more realistic attempt than the mother to resolve the arrears issue.
[43] The court finds that the mother has the ability to pay the costs that will be ordered.
[44] Balancing all of these considerations, the mother shall pay the father’s costs fixed at $4,500, inclusive of fees, disbursements and HST.
Released: March 3, 2021 _____________________ Justice S.B. Sherr