Costs Endorsement

DATE: January 11, 2022 COURT FILE NO.: D41314/21

Ontario Court of Justice

BETWEEN:

S. W.-S. Applicant

AND:

R.S. Respondent

COUNSEL: Pamila Bhardwaj, for the Applicant Mikesh H. Patel, for the Respondent

HEARD: In Chambers

BEFORE: Justice S.B. Sherr

Part One – Introduction

[1] On December 9, 2021 the court released its endorsement regarding the applicant’s (the mother’s) motion to restrict the respondent’s (the father’s) parenting time with the parties’ two children because the father was choosing not to vaccinate himself and was not following COVID-19 health protocols. See: S.W.-S. v. R.S., 2021 ONCJ 646.

[2] The court gave the mother the opportunity to make written costs submissions and for the father to make a written response. The mother seeks her costs of the motion in the amount of $6,610.

[3] The father filed his costs submissions after the deadline ordered. The court accepted them. There was no prejudice to the mother in doing so and it was important to receive the father’s input to make this decision.

[4] The father asks that no costs be ordered.

Part Two – Legal considerations

2.1 General principles

[5] 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).

[6] 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.

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

[8] 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 and offers to settle

[9] 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).

[10] 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.

[11] 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.

[12] 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).

[13] 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.

[14] 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.

[15] 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).

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

2.3 Other factors affecting costs orders

[17] 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.

[18] 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.

[19] Being unsuccessful does not equate necessarily to being unreasonable. See: Wauthier v. McAuliff, 2019 ONSC 5302; W.H.C. v. W.C.M.C., 2021 ONCJ 363.

[20] 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.

[21] 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.

[22] 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.

[23] 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.

[24] 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.

Part Three – Analysis

[25] The mother was the more successful party on the motion. The father did not rebut the presumption that she is entitled to her costs.

[26] The mother made an offer to settle. The father did not.

[27] The pre-conditions for the costs consequences set out in subrule 18 (14) to apply were not met by the mother. Her offer was not more favourable than the motion result. She proposed that the father’s temporary parenting time be entirely virtual. This was not ordered.

[28] The mother took a position that was similar to her offer when the motion was heard. The father asked that there be no changes to his parenting time.

[29] While the mother did not achieve complete success based on her position on the motion, the court took her safety concerns seriously and she was mostly successful. The court reduced the father’s parenting time from alternate weekends and a weekday overnight to day visits on Sunday afternoons. The court also made orders regarding the children’s safety on the visits, including a masking requirement.

[30] The mother acted reasonably on the motion. She offered to reinstate the father’s parenting time if he became fully vaccinated.

[31] The father submits that while he may have been naïve, he was not malicious and that like many within his socioeconomic bracket he has unfortunately fallen prey to the torrent of disinformation that exists online.

[32] The court never found the father to be malicious and the mother has not alleged that he acted in bad faith. However, the father acted unreasonably by not making an offer to settle and by not making any effort to address the mother’s safety concerns for the children. That said, the father’s behaviour does not rise to a level justifying full recovery costs, as requested by the mother.

[33] The issue on the motion was important to the parties. It was not complex or difficult.

[34] The court finds that the rates claimed by the mother for her counsel are reasonable ($450 per hour for a 1994 call).

[35] The father submits that the time claimed by mother’s counsel is excessive. He also submits that it is far in excess of what he reasonably expected to pay for costs if he was unsuccessful. He submitted that the mother’s counsel had advised his counsel at one point that costs of $2,000 would be sought if he continued to oppose her motion. The father submits that if he had known the financial repercussions of opposing the motion he would have had a change of heart.

[36] The court finds that the time claimed on the motion by the mother’s counsel is slightly high as the motion material was straight-forward. The court finds that the additional legal research time claimed by the mother was reasonable as she provided relevant vaccination and COVID-19 safety case law to the court.

[37] The court is skeptical that the father would have taken a different position if he had known he was facing more than a $2,000 costs order. His counsel would or should have advised him that his costs exposure on this contested motion was much higher. The mother is not restricted to claiming costs based on what her lawyer told the father’s lawyer she might claim back in October 2021, prior to the motion being adjourned.

[38] Further, the father did not submit documentation showing his own fees and expenses to the court for comparison. An adverse inference is drawn against him for failing to do this. Providing this documentation is required pursuant to subrule 24 (12.2). This subrule reads as follows:

(12.2) A party who opposes a claim for costs respecting fees or expenses shall provide documentation showing the party’s own fees and expenses to the court and to the other party.

[39] The court finds that the father should have reasonably expected to pay the costs that will be ordered if the mother was successful on her motion.

[40] The father provided no evidence in his costs submissions that he is unable to pay the costs sought by the mother. However, a review of the financial statements filed shows that the father has modest income. The court will address his financial circumstances by giving him a reasonable amount of time to pay the costs that will be ordered.

Part Four – The Order

[40] An order will go as follows:

a) The father shall pay the mother the sum of $3,900 for the costs of her motion, inclusive of fees, disbursements and HST.

b) Starting on February 1, 2022, the father may pay these costs at the rate of $300 each month. However, if he is more than 30 days late in making any costs payment, the full amount of costs then owing, shall immediately become due and payable.

Released: January 11, 2022 Justice S.B. Sherr