Court File and Parties

ONTARIO COURT OF JUSTICE DATE: 2021 01 26 COURT FILE No.: D40565/20

BETWEEN:

Sara Nevile-Smith Applicant (Mother)

— AND —

Kevin Nevile-Smith Respondent (Father)

Before: Justice Robert J. Spence

Endorsement on Costs following Written Submissions Released: January 26, 2021

Counsel: Ms. Poroshad Mahdi...................................................... counsel for the applicant mother Ms. Theresa Maclean................................................... counsel for the respondent father

R. J. SPENCE J.:

1: Introduction

[1] On December 23, 2020, I released my decision following a contested motion on the issue of temporary spousal support. [1] In that decision I ordered the respondent father to pay $3,900 per month to the applicant mother as temporary spousal support, commencing September 1, 2020.

[2] My endorsement gave leave for the mother to make written costs submissions, with timelines for filing those submissions, as well as timelines for responding submissions by the father.

[3] The mother has filed her submissions in which she seeks partial recovery costs in the amount of $12,500.

[4] The father’s response seeks an order that no costs be awarded in favour of the mother.

2: Legal Considerations

2.1 General principles

[5] The case of Mattina v. Mattina, 2018 ONCA 867, sets out the following fundamental purposes of modern costs rules:

(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] The Court of Appeal in Beaver v. Hill, 2018 ONCA 840, emphasized the importance of reasonableness and proportionality, in the exercise of the court’s discretion in awarding costs.

[7] 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.

[8] 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 consider how the order compares to any settlement offers that were made. See: Lawson v. Lawson, 2008 ONSC 23496, [2008] O.J. No. 1978 (SCJ).

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

2.2 Offers to settle

[10] 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 or motion 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 [my emphasis]:

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.

[11] Even if subrule 18(14) does not apply, subrule 18(16) provides that 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.

[12] The onus of proving that the offer is as good 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).

[13] The technical requirements of subrule 18(14) must be met to attract the costs consequences that subrule. See: Ajiboye v. Ajiboye, 2019 ONCJ 894.

2.3 Other factors affecting costs orders

[14] Subrule 24 (12) reads as follows [my emphasis]:

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.

[15] Subrule 24(5) provides criteria for determining the reasonableness of a party’s behaviour in a case (a factor in clause 24(12)(a) (i) above). 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.

[16] Family law litigants are responsible for, and accountable for, the positions they take in the litigation. See: Heuss v. Surkos, 2004 CarswellOnt 3317, 2004 ONCJ 141.

[17] 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.). 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 ONSC 20774 pars. 7-13).

[18] 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.

4: Analysis

4.1: Offers to Settle

[19] Both parties served offers to settle. The applicant’s offer to settle was made on November 23, 2020. The offer proposed settling the motion on the basis that the respondent pay the applicant $4,126 per month, commencing October 1, 2020.

[20] The applicant did not achieve a result more favourable than her offer to settle.

[21] The respondent served his offer to settle on December 10, 2020. That offer proposed settling the motion on the basis that the respondent pay $2,500 per month to the applicant, commencing January 1, 2021, until December 1, 2022. The payment would be made directly to the applicant’s landlord and, as such, would not be considered income to the applicant for tax purposes.

[22] The respondent did not achieve a result more favourable than his offer to settle. [2]

[23] Accordingly, subrule 18(14) does not apply to the respective offers to settle.

[24] That said, neither offer to settle was unreasonable. Both offers were in a range which could have promoted a settlement of the motion.

4.2: Applicant was the successful Party

[25] In comparing the respective offers to settle, the applicant’s offer to settle was much closer to the order made by the court, than the respondent’s offer to settle.

[26] The applicant’s offer to settle was closer both in terms of the amount ordered by the court as well as the start date for the support. Furthermore, neither the applicant’s offer to settle, nor the court order set a termination date for the support, whereas the respondent’s offer to settle did provide for a termination date for support.

[27] The court concludes the applicant was the successful party and, accordingly, the presumption provided for in subrule 24(1) that she is entitled to costs, applies to the facts of this case.

4.3: Applicant has a Legal Aid Certificate

[28] The respondent raises what appears to be a preliminary issue about the applicant’s claim for costs.

[29] Respondent discloses to the court that Legal Aid Ontario is funding the applicant’s litigation. Respondent argues that this either disentitles the applicant to costs or disentitles her to costs based of her lawyer’s “private” rates.

[30] The fact that the applicant is the recipient of legal aid certificate ought not to have been disclosed by the respondent to the court.

[31] In Cropper v. Cropper, [1974] O.J. No. 477 (Ont. C.A.), the court of appeal stated, at paragraph 11:

. . . it is clearly irrelevant to these proceedings whether the wife is a legally aided person or not. The fact that she has a Legal Aid Certificate ought not, in my view, have even been brought to the attention of the court. It is of no concern to the husband in this case. A legally aided person stands before the court in exactly the same position as any other litigant.

[32] This legal principal is a long-standing one and has been affirmed by courts on numerous occasions, including recently in the case of Goffi v. Goffi, [2019] OJ No 1960 (ONSC).

[33] Accordingly, I conclude that the respondent’s argument on this issue is without merit.

4.4: Amount of costs to be Awarded

[34] Having concluded that the applicant is entitled to costs, I turn to the question of what costs ought to be awarded.

[35] The court in Beaver, supra, held that full recovery of costs can be granted only in specific circumstances, namely, where an offer to settle is bested or if the opposite party acted in bad faith.

[36] The applicant argues that the respondent acted in bad faith. [3] She alleged that the respondent’s sudden decision to stop paying the applicant’s full rent on her apartment and to pay only a portion of their daughter’s post-secondary expenses, necessitated an “emergency” motion by the applicant for spousal support.

[37] These actions do not constitute bad faith.

[38] In Jackson v. Mayerle, 2016 ONSC 1556, Justice Alex Pazaratz stated at paragraph 58 [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: Children’s Aid Society of the Region of Peel v. F.(K.J.), 2009 ONCJ 252, [2009] O.J. No. 2348 (OCJ); Biddle v. Biddle, 2005 ONSC 7660; Leonardo v. Meloche, 2003 ONSC 74500; [2003] O.J. No. 1969 (SCJ); Hendry v. Martins, [2001] O.J. No. 1098 (SCJ)

[39] The respondent’s action in writing to the applicant that he was intending to immediately reduce his contribution toward the applicant’s rent, and his stated intention to pay only half of his daughter’s expenses is not conduct which falls within the definition of bad faith. It may have been poor judgment resulting from a desire to conserve his own financial resources; it may have even been negligent, thoughtless, or simply self-serving. But none of this rises to the level of conduct which could be characterized as bad faith.

[40] The type of conduct which will constitute bad faith is a difficult threshold to reach. It is for that reason that courts rarely find that a party has acted in bad faith.

[41] Having decided that full recovery is not appropriate, I must now decide what amount is reasonable and proportionate.

[42] I deal with the various factors and considerations under rule 24 in the following paragraphs of these reasons.

[43] This is a support case. It is apparent from the pleadings and the affidavits which the parties have filed, that both parties consider the issue to be important.

[44] Within that context I do not consider either party to have acted outside the bounds of reasonable behaviour. While the respondent may have been unreasonable in unilaterally and with little notice to the mother, taking steps to reduce his financial contribution to the family prior to the commencement of the litigation, once the litigation commenced the parties both retained counsel and acted reasonably.

[45] In concluding that the respondent’s behaviour was within the bounds of what the court considers appropriate once he retained counsel, the court notes that he did serve an offer to settle and that offer, while not as favourable as the order of the court, was not patently unreasonable.

[46] Mother’s lawyer was called to the bar in 2002 and she charges an hourly rate of $430. While perhaps a bit on the high side, I do not consider her rate to be unreasonably high.

[47] The mother’s lawyer also employed an articling student at the rate of $200 per hour and a “clerk” at the rate of $185 per hour. The court was provided with no information about the clerk, for example, whether this is a legally trained person or, perhaps an untrained or minimally trained office person.

[48] I consider some of the time spent by the applicant’s counsel either excessive or not part of the motion, for example:

• 2.1 hours of lawyer time for a case conference in October - $903 in fees. Time spent on case conference matters are not part of the motion.
• 22.2 hours of lawyer time for motion preparation including review of respondent’s material - $9,546 in fees. In my view this is an excessive amount of time for the preparation of the motion, particularly for a lawyer as senior as mother’s counsel.

[49] I also note the following with respect to the articling student time spent and the clerk time spent:

• 4.9 hours of articling student time to do filings, prepare affidavit of service, organizing and copying and preparing a Bill of Costs - $980 in fees. It is not clear why all this work could not have been performed by a non legally trained office person. Furthermore, I expect that “preparing” a Bill of Costs consists of little more than pressing a few buttons on a computer, as it is difficult to imagine that any experienced senior lawyer is not fully computerized when it comes to time docketing and record keeping.
• 2.2 hours of clerk time to “diarize”, contact court, organize and copy - $407 in fees. This appears to be nothing more than clerical work for a non legally trained office person.

[50] In total, the applicant’s counsel submitted a Bill of Costs for 30.9 hours of lawyer time, charged at $13,287. She also charged $1,180 for 5.9 hours of articling student time and $407 for 2.2 hours of clerk time. Total fees, inclusive of H.S.T. amounted to $16,857.

[51] As I noted at the outset, the applicant seeks a costs award in the amount of $12,500.

[52] Subrule 24(12) provides that the amount of costs ordered by the court shall be reasonable and proportionate. In the court’s view, the applicant’s requested costs are not reasonable and proportionate.

[53] The court is mindful that the entitlement for costs in this case is partial recovery. It must be partial recovery based on all the factors set out in subrule 24(12).

[54] Before fixing the award of costs, I wish to comment on the father’s submission that his financial circumstances are such that he cannot pay any costs award. As the court noted earlier, any costs order must take into consideration the opposite party’s ability to pay such an award.

[55] However, I reject the father’s submission that “any costs ordered against him would virtually cripple [his] ability to properly defend his position in these proceedings.”

[56] Not only does the respondent receive a guaranteed monthly tax-free income, but those income amounts also increase automatically by about $200 per month on January 1st of each year. And on January 1, 2023, the respondent will receive a guaranteed payment of $1,000,000 tax-free. [4]

[57] The court does not consider the respondent’s financial position as tantamount to “crippling” such that there should be any meaningful reduction in the costs order.

[58] After balancing all the principles referred to in these reasons, I have concluded that a reasonable and proportionate costs award is $7,000. I fix the costs owing by the father to the mother in the amount of $7,000, inclusive of disbursements and H.S.T. These costs shall be paid at the rate of not less than $600 per month, until fully paid, commencing March 1, 2021. In the event the respondent fails to make any one of the monthly payments, the entire costs award will become immediately due and payable.

[59] There will be an order to go accordingly.

Justice Robert J. Spence (Signed electronically)

[1] Nevile-Smith v. Nevile-Smith, 2020 ONCJ 614

[2] The tax benefit to the applicant would possibly have meant a greater net benefit to the applicant than $2,500 per month. However, the court has not been provided with the calculations, if any, which would determine whether the net result to the applicant would have been greater than $2,500 and, if so, by how much. Furthermore, the proposed start date for the support in the offer to settle was less beneficial to the applicant. The onus is on the person making the offer to prove that the offer is as good as, or more favourable than the court order – see Ajiboye, supra.

[3] Although for whatever reason, the applicant did not then take the next step in her submissions and request costs on a full recovery basis.

[4] The respondent’s income details are set out in Nevile-Smith, supra at footnote 1.