DATE: April 22, 2022 COURT FILE NO. D52592/10
ONTARIO COURT OF JUSTICE
B E T W E E N:
P.I.
ACTING IN PERSON
APPLICANT
- and -
R.O.
ACTING IN PERSON
RESPONDENT
WILLIAM HUTCHESON, on behalf of the OFFICE OF THE CHILDREN’S LAWYER, on behalf of the children
HEARD: In Chambers
JUSTICE S.B. SHERR
COSTS ENDORSEMENT
Part One – Introduction
[1] On March 21, 2022, the court released its reasons for decision regarding the parties’ motions to change the parenting and support terms contained in the court’s order dated April 27, 2021 (the existing order). See: P.I. v. R.O., 2022 ONCJ 120.
[2] The court terminated the existing order and ordered that the parties’ two children (the children) primarily reside with the respondent (the father) and that he have decision-making responsibility for them. The court significantly reduced the applicant’s (the mother’s) parenting time with the children due to the dysfunction in their relationships. The court ordered the mother to pay child support to the father starting on September 1, 2021.
[3] The court found that the father was the successful party on the motions to change. The father was permitted to make written costs submissions and the mother was provided with the opportunity to make a written response.
[4] The father made written costs submissions. He seeks costs of $20,750. The mother did not respond to his submissions.
Part Two – General costs 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 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 - Costs and self-represented litigants
[8] Justice George Czutrin reviewed considerations for determining costs for self-represented litigants in Jordan v. Stewart, 2013 ONSC 5037 as follows:
a) A self-represented litigant does not have an automatic right to recover costs. The matter remains fully within the discretion of the trial judge. Moreover, self-represented litigants, be they legally trained or not, are not entitled to costs calculated on the same basis as those of the litigant who retains counsel. The self-represented litigant should not recover costs for the time and effort that any litigant would have to devote to the case. Costs should only be awarded to those lay litigants who can demonstrate that they devoted time and effort to do the work ordinarily done by a lawyer to conduct the litigation, and that as a result, they incurred an opportunity cost by foregoing remunerative activity;
b) Parties who litigate against a self-represented person should not be able to ignore the potential for costs. The court retains the discretion to fashion an award of costs that is fair and reasonable in the circumstances of the case before it;
c) Where one party is represented by a lawyer and the other is not, the hourly rate that the represented litigant's lawyer is entitled to claim on an assessment of costs should inform the reasonable expectations of both parties as to the costs that they will likely be required to pay if unsuccessful. Otherwise, litigants represented by lawyers would be less circumspect with regard to their conduct and their response to the opposing party's efforts to settle because that party is a self-represented litigant.
d) It is near impossible to come up with an objective way of fixing an in-person party's hourly rate or the amount of time they spent, not at the court, doing what we might otherwise consider lawyer's work.
e) Ultimately, the overriding principle in fixing costs is "reasonableness".
f) Courts addressing costs should consider Bills of Costs certified by lawyers who have provided assistance, even if not on the record throughout the case.
[9] Justice Laura Fryer added the following considerations in Browne v. Cerasa, 2018 ONSC 2242:
a) Determination of costs for self-represented litigants should take into account all of the objectives which costs orders should promote. Rules 18 and 24 apply. Otherwise the resulting amount can render the entitlement to costs illusory; undermine access to justice by self-represented litigants; and frustrate the administration of justice.
b) If a self-represented litigant, in performing the tasks that would normally have been performed by a lawyer, lost the opportunity to earn income elsewhere, this may be a relevant factor. But costs for self-represented parties are not the same as damages for lost income. Remunerative loss is not a “condition precedent” to an award for costs.
c) To require proof of lost income would disqualify litigants who are homemakers, retirees, students, unemployed, unemployable and disabled; and deprive courts of a tool required re administration of justice.
d) Lost income may be one measure. But even if no income was lost, the self-represented party’s allocation of time spent working on the case may still represent value. The fact that a self-represented litigant is not a lawyer who charges a standard and commonly accepted hourly rate makes it more difficult – but not impossible – to assess their costs. However, the difficulty in valuing the time and effort of the lay litigant is not a good reason to decline to value it.
e) An applicable hourly rate should be taken into account when quantifying even a self-represented lay litigant’s costs. But the appropriate hourly rate, once determined, is only one of several factors to be considered.
f) In considering the hourly rate, the court should consider what the lay litigant’s reasonable expectations were as to the costs he or she would pay if unsuccessful.
g) As with counsel, the appropriate hourly rate may be affected by the level of indemnification or recovery deemed to be appropriate, given all of the rule 18 and 24 considerations.
[10] Several courts have fixed hourly rates for self-represented litigants in assessing costs. In Jahn-Cartwright v. Cartwright, 2010 ONSC 2263, 2010 91 R.F.L. (6th) 301 (SCJ) an hourly rate of $200.00 was applied, which was approximately two-thirds of what the husband’s lawyer would have been entitled to claim. In Cassidy v. Cassidy, 2011 ONSC 791, 2011 92 R.F.L. (6th) 120 (Ont. S.C.J.), an hourly rate of $150 was applied. In Agmon v. James, 2018 ONCJ 240, Anyumbe v. Kebe, 2018 ONCJ 865 and in Ferlisi v. Boucher, 2021 ONCJ 101, this court used an hourly rate of $125 in assessing costs for a successful self-represented litigant. This amount was also recently applied by Justice Mandhane in Ahluwalia v. Ahluwalia, 2022 ONSC 2169. In Izyuk v. Bilousov, 2011 ONSC 7476, the court fixed the self-represented party’s hourly rate at $100 per hour. This amount was followed in Browne v. Cerasa, 2018 ONSC 2242.
Part Four – Subrule 18 (14)
4.1 Legal considerations
[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:
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.
[12] 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).
[13] 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 ONSC 4690.
[14] 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.
[15] 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.
4.2 Does subrule 18 (14) apply to all or part of the father’s offer to settle?
[16] The father made an offer to settle dated January 28, 2022. The mother did not make an offer to settle.
[17] The father wisely made his offer to settle severable.
[18] The father’s offered to settle the issues of decision-making responsibility for the children and the mother’s parenting time to the older child on terms that were as favourable to the mother as the final result. Subrule 18 (14) applies to these Parts of his offer.
[19] The father offered the mother more parenting time with the younger child than was ordered. This Part of his offer was more favourable to the mother than the final result. Subrule 18 (14) applies to this Part of the offer.
[20] The father proposed that the mother pay child support of $477 each month starting on September 2, 2021. He also asked for a $1,000 reimbursement of support that he had paid pursuant to the existing order.
[21] The court did not order the reimbursement sought by the father. The court ordered the mother to pay child support of $557 each month starting on September 1, 2021, changing to $388 each month starting on January 1, 2022, and then increasing to $477 each month, starting on July 1, 2022.
[22] The court also deferred the payment of arrears created by the order. The mother was permitted to pay the arrears at $150 each month, starting on July 1, 2022.
[23] Although the support Part of the father’s offer was close to the final result, it was not more favourable to the mother. Subrule 18 (14) does not apply to this Part of the offer.
[24] The mother did not rebut the presumption that the costs consequences set out in subrule 18 (14) should apply to the parenting issues. For these issues, the father will receive his costs up until January 28, 2022, and his full recovery costs after that date.
[25] The court found in its trial decision that the father was the successful party on the support issues. The mother was resistant to paying any child support at the hearing. She did not rebut the presumption that the father is entitled to his costs for this issue.
Part Five – Costs for prior steps in the case
5.1 Father’s position
[26] The father is claiming costs for the entire time he spent on this case.
[27] In particular, the father is claiming costs for the temporary motion heard by the court on September 1, 2021. In its decision dated September 2, 2021, the court gave the father until September 16, 2021 to make written costs submissions. He did not make submissions.
[28] The father explained that he did not make costs submissions because he did not want the mother to feel that he was attacking her. He hoped that foregoing costs would focus her on the fact that he was only interested in the children’s best interests, and not the financial aspects of the case. He submits that it turned out he was wrong and that “the onslaught by the mother on me and my family continues”.
5.2 Legal considerations
[29] Subrule 24 (11) provides that the failure of the court to order costs in relation to a step in a case does not prevent it from awarding costs in relation to the step at a later stage in the case.
[30] However, courts continue to be cautious about awarding costs at the trial stage where costs were not awarded at earlier steps in a case. See: Baezner v. Brunnenmeir, 2018 ONCJ 956; Nabwangu v. Williams, 2019 ONCJ 171.
[31] In Laidman v. Pasalic and Laidman, 2020 ONSC 7068 the court set out that the presumption remains that costs should be determined at each stage and said that there are good reasons for this. Parties should have an ongoing awareness of the cost consequences of litigation decisions they make. Reserving costs may impede final resolution by needlessly inflating and complicating the list of future issues still to be dealt with. A judge who has just completed a step in a case will usually be in the best position to evaluate all of the relevant Rule 18 and 24 considerations. Reserving costs to a future event – often to a different judge – can result in later confusion and controversy about what really happened at the earlier step.
[32] In Berge v. Soerensen, 2020 ONCJ 265, Justice Roselyn Zisman set out the following circumstances where costs of a prior step should be awarded:
a) Costs have been reserved to the trial judge.
b) When, considering subsequent events, the trial judge is better situated to determine the costs of the prior step than the judge presiding over the step or;
c) In exceptional circumstances.
5.3 Analysis
[33] The case law set out above applies to situations where costs were either not addressed or were reserved at prior steps in the case.
[34] Here, the father is seeking costs for a step in the case (the temporary motion) where costs were addressed by the court in its decision. The father was given the opportunity to make costs submissions. He chose not to seek them. While his reasons were understandable, it is not just to order costs for that step now, just because the father is unhappy that the mother did not change her approach to the case and he regrets not having sought costs when permitted. The mother is entitled to the litigation certainty that if costs were not claimed by the father when permitted, that he could not hold them in reserve until the end of the case.
[35] There are also no exceptional circumstances to warrant ordering costs for the case conferences held during this case. The mother cooperated during these conferences in having the matter referred to the Office of the Children’s Lawyer and in setting up the process to determine these issues in an expeditious and cost-effective manner.
[36] However, the father is entitled to his costs for time spent on the case that are not attributable to any step in the case. The trial judge is usually in a better position to assess costs for this work. See: Houston v. Houston, 2012 ONSC 233; Walts v. Walts, 2014 ONSC 98. Here, this would include time the father spent:
a) Preparing his motion to change and change information form.
b) Preparing his amended motion to change materials.
c) Preparing his financial statements.
d) Preparing his Form 35.1 affidavit
e) Serving and filing these documents.
f) Gathering and organizing his evidence.
g) Pursuing financial disclosure from the mother.
h) Preparing and filing his offer to settle.
[37] The father’s preparation for the hearing and his costs submissions are part of the trial step.
Part Six – Other factors affecting the amount of the support order
6.1 Legal considerations
[38] 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.
[39] 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.
[40] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel, 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.
[41] 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.
[42] 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.
6.2 Analysis
[43] The case was very important to the parties. It was not complex or difficult.
[44] The father acted reasonably in the case. He made a very reasonable offer to settle.
[45] The mother acted reasonably by agreeing to expedite the hearing of the matter and agreeing to a focused procedure. She did not make an offer to settle. This was unreasonable. She also acted unreasonably by inappropriately involving the children in adult conflict as outlined in the hearing decision.
[46] The father asks that he be compensated for his time at $150 per hour. The court will use the same hourly rate it applied for self-represented litigants in the Agmon, Anyumbe and Ferlisi cases set out above – being $125 per hour.
[47] The father presented his case very well. The court accepts his submission that he lost many hours of work attending to this matter. However, the 145 hours he claimed that he spent on the case is excessive. He also included time and effort that any litigant would have to devote to the case.
[48] The court will assess the father’s costs in two stages. The first stage is up until he made his offer to settle on January 28, 2022. For this stage, the father will be compensated for work done that was not attributable to any other step in the case, together with the preparation of his affidavit and financial statement that were used for his direct evidence at the hearing. The court finds that 40 hours is a reasonable amount to compensate the father for this stage.
[49] The father is entitled to his costs for the first stage of the case. However, he is not entitled to his full recovery costs as this time preceded his offer to settle. The court finds that $4,000 is a reasonable and proportionate amount to order the mother to pay for the father’s costs for the first stage of the case.
[50] The second stage is the period after the father made his offer to settle on January 28, 2022. The father will be compensated for his time spent that was not attributable to any step in the case and for his time spent for the trial step. The court finds that 20 hours is a reasonable and proportionate time for the father to have spent for the second stage of the case.
[51] The father is entitled to his full recovery costs for the second stage of the case regarding the parenting issues and his costs regarding the support issues. The court finds that $2,000 is a reasonable and proportionate amount to award the father for his costs for the second stage of the case.
[52] The court finds that the mother should have reasonably expected to pay this level of costs if she was unsuccessful. The court further finds that the mother, who is a homeowner, has the ability to pay this amount of costs.
Part Seven – Conclusion
[53] An order shall go that the mother pay the father costs of $6,000. The costs are due and payable within 30 days.
Released: April 22, 2022
Justice S.B. Sherr
