Court File and Parties
Date: December 3, 2021 Court File No.: D30296/19
ONTARIO COURT OF JUSTICE
B E T W E E N:
M.A. DILANI GUNARAJAH, for the APPLICANT APPLICANT
- and -
M.E. ACTING IN PERSON RESPONDENT
HEARD: IN CHAMBERS JUSTICE S.B. SHERR
COSTS ENDORSEMENT
Part One – Introduction
[1] On November 3, 2021 the court released its reasons for decision arising out of a trial that was about the parenting and support arrangements for the parties’ five children. See: M.A. v. M.E., 2021 ONCJ 555.
[2] The court provided the parties with the opportunity to make written costs submissions. The applicant (the mother) seeks her costs of $10,000. The respondent (the father) did not make submissions regarding the mother’s costs claim.
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 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.
[5] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.
[6] 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
[7] 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).
[8] 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.
[9] Subrule 24 (6) sets out that if success in a step in a case is divided, the court may apportion costs as appropriate.
[10] 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.
[11] 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
[12] 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.
[13] 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).
[14] 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).
[15] 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.
[16] 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.
[17] The technical requirements of subrules 18 (4) and 18 (14) must be met to attract the costs consequences in subrule 18 (14). See: Sader v. Kekki, 2014 ONCJ 41; Jakubowski v. Kopacz-Jakubowski, [2008] O.J. No. 1442 (SCJ); Weber v. Weber, 2020 ONSC 6855; Clancy v. Hansman, 2013 ONCJ 702; Ajiboye v. Ajiboye, 2019 ONCJ 894.
2.4 Other factors affecting costs orders
[18] 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.
[19] 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.
[20] 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.
[21] 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.
Part Three – Subrule 18 (14)
[22] The mother made an offer to settle dated October 27, 2021. The father did not make an offer to settle.
[23] The mother should have made an offer to settle much earlier. Paragraph 2 of subrule 18 (14) states that the offer must be made at least 7 days before the trial. Here, the offer was made the day before the trial. This gave the father, a self-represented litigant, virtually no time to process it.
[24] Since the technical requirements of subrule 18 (14) were not complied with, the costs consequences set out in subrule 18 (14) do not apply.
[25] The mother’s offer to settle was also not severable. This court has often written about the advantages of making severable offers to settle. See for example: J.C.M. v. K.C.M., 2016 ONCJ 551, paragraphs 36-39. Those advantages are apparent here. The mother proposed parenting terms that were slightly more favourable to the father than the trial result. However, she intertwined those terms with support terms that were not more favourable to the father than the trial result. Specifically, the mother sought to impute the father’s annual income at $104,760 from January 1, 2020. The court imputed his annual income at $52,000. Overall, the mother’s offer to settle was not more favourable to the father than the trial result. If the mother had severed the parenting terms in her offer, subrule 18 (14) could have still been applied to the parenting issues.
[26] Given the flaws with the mother’s offer to settle the court gave it little weight in its analysis.
Part Four – Success
[27] At trial, both parties asked that the children have their primary residence with them. They both asked for sole decision-making responsibility for the children and various incidents of parenting. They both sought orders that the other parent have alternate weekend parenting time with the children.
[28] The mother was the successful party on all these issues.
[29] At trial, the mother sought retroactive support starting on April 1, 2018. The father opposed any retroactive support order. The court ordered child support to start on June 1, 2018. The mother was the successful party on this issue.
[30] The father’s 2018 income was assessed at the level sought by the mother. For 2019, the mother asked the court to assess the father’s income at $126,592 – it was assessed at $100,651. The father had opposed any retroactive assessment. The mother was the successful party on this issue.
[31] Starting on January 1, 2020, the father asked the court to assess his income based on the actual income he was receiving. In 2020, this was $35,596. In 2021, it was $26,000. The mother sought to impute the father’s annual income at $104,760. The court imputed the father’s annual income, starting on January 1, 2020 at $52,000. There was divided success on this issue.
[32] The mother was far more successful than the father on the issue of credits that the father should receive for support paid since June 1, 2018.
[33] The mother was the successful party. The father did not rebut the presumption that she is entitled to costs.
Part Five – Determining the amount of costs and order
[34] This case was very important for the parties. It was not complex. The support issue was made more difficult due to the father’s failure to provide complete or timely financial disclosure.
[35] The mother acted unreasonably by failing to make a timely offer to settle. Otherwise, she acted reasonably.
[36] The father did not act reasonably. He failed to pay child support in an amount anywhere close to what he should have been paying. He did not provide complete disclosure ordered by the court. His disclosure was not made in a timely basis. This made it more difficult to assess his income and support obligations. His positions at trial lacked any merit. He did not make an offer to settle.
[37] The rates claimed by the mother were reasonable. The disbursements of $124.60 she claimed were also reasonable.
[38] The mother failed to itemize her time spent in her bill of costs – she just put in an amount for the total time spent. This is not helpful in assessing whether the time spent was reasonable or if it involved time spent for previous steps in the case. However, the mother is not seeking the full amount of costs that she says were incurred ($13,185). She is claiming $10,000.
[39] On May 4, 2021, Justice Jones reserved the costs of that appearance to the trial judge. The court has taken the costs for that appearance (which will be in favour of the mother) into consideration in making this order.
[40] The father should have expected to pay costs approaching the range sought by the mother if he was unsuccessful at trial.
[41] The father has the ability to pay this costs order.
[42] An order will go that the father shall pay the mother’s costs in the amount of $8,500 inclusive of fees, disbursements and HST. The costs are due and payable in 60 days.
Released: December 3, 2021 _____________________ Justice S.B. Sherr
