Court File and Parties

DATE: November 17, 2021 COURT FILE NO.: D40508/21

ONTARIO COURT OF JUSTICE

B E T W E E N:

KYLE PUGSLEY

APPLICANT

- and –

NIKOLETA MARIE ADAMANTIDOU

RESPONDENT

BEFORE: Justice S.B. Sherr

COUNSEL: Connor Thornewell, for the Applicant Allison Hines, for the Respondent

HEARD: In Chambers

Costs Endorsement

Part One - Introduction

[1] On October 19, 2021, the court delivered its oral reasons for decision on the parties’ motions for temporary primary residence, decision-making responsibility, parenting time and incidents of parenting regarding their two year old child (the child).

[2] In brief, on a temporary basis, the court ordered that the child have her primary residence with the respondent (the mother). The mother was granted decision-making responsibility for the child. The court ordered that the applicant’s (the father’s) parenting time with the child be supervised by a professional parenting time supervisor.

[3] The parties were given the opportunity to make written costs submissions. The mother seeks costs of $10,635. The father asks that no costs be ordered, or if they are ordered, that they be minimal.

Part Two – General Costs Principles

[4] 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).

[5] 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, 2003 S.C.C. 71, paragraph 25.

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

[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.

Part Three - Success

3.1 Legal Principles

[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] O.J. No. 330 (SCJ-Family Court).

[9] To determine whether a party has been successful, the court should examine who was the successful party, based on the positions taken in the litigation. See: Lazare v. Heitner, 2018 ONSC 4861. The court may also take into account how the order compares to any settlement offers that were made. See: Lawson v. Lawson, [2008] O.J. No. 1978 (SCJ); Todor v. Todor, 2021 ONSC 3463.

[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.

[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 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:

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)) or, in assessing the reasonableness of a party under sub-clause (iii) of subrule 24 (12) (a).

[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 as or more favourable than the trial result. See: Gurley v. Gurley, 2013 ONCJ 482.

3.2 Offers to Settle

[18] The mother made two severable offers to settle. The first was dated October 1, 2021 – the second dated October 12, 2021.

[19] The terms of the mother’s first offer to settle were reasonable but not more favourable to the father than the result. In particular, the order provides that the mother has to promptly advise the father about major decisions she makes for the child and provide him with a list of the child’s service providers within 30 days. These terms were not included in her first offer. The first offer proposes that the father’s parenting time be supervised by his mother or her partner. The father was opposed to this and it wasn’t ordered.

[20] The terms in the mother’s second offer to settle were more favourable to the father than the result regarding the issues of primary residence and decision-making responsibility. It was also more favourable to the father on the parenting time issue as it provided for longer parenting time by a professional parenting time supervisor than was ordered. The costs consequences set out in subrule 18 (14) apply to these parts of the mother’s offer. There is no basis for the court to order otherwise.

[21] The terms in the mother’s second offer regarding government documentation and travel issues were not more favourable to the father than the result.

[22] The father made a severable offer to settle dated October 12, 2021. It was not more favourable to the mother than the motions result on the dominant issues of primary residence, decision-making responsibility and parenting time. The offer was more favourable, or as good as the result to the mother on the issues of government documentation and travel. The costs consequences set out in subrule 18 (14) apply to these parts of the father’s offer. There is no basis for the court to order otherwise.

3.3 Success at the Hearing

[23] Based on their positions taken at the hearing of the motions, the mother was the successful party on the dominant issues of primary residence, decision-making responsibility and the father’s parenting time. The father was the more successful party on the secondary issues of government documentation and travel.

Part Four – Amount of Costs

4.1 Legal Considerations

[24] 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.

[25] Subrule 24 (8) of the rules states that if a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.

[26] Subrule 24 (8) requires a fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made. See: Cozzi v. Smith, 2015 ONSC 3626; Scipione v. Del Sordo, 2015 CarswellOnt 14971 (Ont. SCJ).

[27] There is a difference between bad faith and unreasonable behaviour. The essence of bad faith is when a person suggests their actions are aimed for one purpose when they are aimed for another purpose. It is done knowingly and intentionally. See: S.(C.) v. S. (M.) (2007), 38 R.F.L. (6th) 315 (Ont. SCJ).

[28] 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. See: Scipione, supra.

[29] A bad faith finding on some specific issue does not necessarily have a spill-over effect to other issues. See: Hunt v. Hunt, [2001] O.J. No. 5111 (SCJ); Kardaras v. Kardaras, 2008 ONCJ 616.

[30] 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.

[31] 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.). Difficult financial circumstances are a factor but not are always a reason to deprive a successful party of costs or to reduce the amount of costs. See: Beaulieu v. Diotte, 2020 ONSC 6787. 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.

[32] 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.

[33] Family law litigants are responsible for and accountable for the positions they take in the litigation: Heuss v. Surkos, 2004 CarswellOnt 3317, 2004 ONCJ 141, per Justice Robert Spence.

[34] Even where the "full recovery" provisions of the Rules are triggered – either by an offer which meets Rule 18(14) requirements, or by a finding of bad faith – quantification of costs still requires an overall sense of reasonableness and fairness. See: Goryn v. Neisner, 2015 ONCJ 318 (OCJ).

[35] 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: M.(C.A.) v. M.(D.), [2003] O.J. No. 3707; Scipione v Scipione, 2015 ONSC 5982, [2015] O.J. No. 5130 (supra). See: Jackson v. Mayerle, 2016 ONSC 1556.

[36] In determining the appropriate quantum, the court should consider the amount that the unsuccessful party could reasonably have expected to pay in the event of lack of success in the litigation. See: Arthur v. Arthur, 2019 ONSC 938.

[37] A useful benchmark for determining whether costs claimed are fair, reasonable and proportionate is to consider the amount that the unsuccessful party paid for their own legal fees and disbursements in the same matter. See: Smith Estate v. Rotstein, 2011 ONCA 491 (Ont CA); Durbin v. Medina, 2012 ONSC 640 (SCJ); Scipione v. Del Sordo, 2015 ONSC 5982 (SCJ); Zhang v. Guo, 2019 ONSC 5767 (Div Ct); Laidman v. Pasalic and Laidman, 2020 ONSC 7068.

4.2 Analysis and Order

[38] The mother alleges that the father acted in bad faith. She states that the father made unsupported allegations against her and made disrespectful statements about her and her family. The court finds that this amounted to unreasonable behaviour but not the high standard required to make a finding of bad faith. This finding might be different after a trial if the father persists in this behaviour.

[39] The court finds that the father also acted unreasonably by having proxies send the mother abusive emails and by accosting people he feels are having a relationship with her.

[40] The father’s position on primary residence and decision-making responsibility was unrealistic and should have been conceded without a motion being brought. He took a more reasonable position on these issues in his offer to settle that was served one week before the hearing.

[41] The mother acted unreasonably by not complying with a consent order to change the child’s name. Her excuses for not doing so were not accepted by the court.

[42] Otherwise, the mother acted reasonably. She made very reasonable offers to settle.

[43] The issues on the motions were very important for the parties. They were not complex, but were made more difficult due to the father’s unreasonable behaviour.

[44] The rates claimed by counsel for the mother are reasonable.

[45] The father submits that the time claimed by the mother is excessive. She submitted a costs outline amounting to $5,932.50. The actual time spent by his counsel was less than half of that claimed by the mother’s counsel.

[46] The court carefully reviewed the mother’s bill of costs and finds that it is a bit excessive. There appears to be some duplication of work as two counsel worked on the file for her. Time claimed for collateral interviews was also excessive.

[47] The court took into consideration that the father is of modest means. It will take this factor into consideration by giving him a reasonable amount of time to pay the costs ordered.

[48] Taking into account these considerations the court makes the following order:

a) The father shall pay the mother’s costs of these motions fixed in the amount of $5,500, inclusive of fees, disbursements and HST.

b) The father may pay these costs at $250 each month, starting on December 1, 2021.

Released: November 17, 2021 Justice S.B. Sherr