DATE: June 27, 2022
COURT FILE NO. D11580/17
ONTARIO COURT OF JUSTICE
B E T W E E N:
FERDINAND OKAFOR, APPLICANT (Pamila Bhardwaj, for the Applicant)
- and -
CHINOSO OKAFOR, RESPONDENT (Edosa Adams-Idode, for the Respondent)
HEARD: In Chambers
JUSTICE S.B. SHERR
COSTS ENDORSEMENT
Part One – Introduction
[1] The respondent (the mother) seeks costs totalling $5,436 for two temporary motions brought by the applicant (the father) within his motion to change the parenting and support terms contained in the court’s order dated July 31, 2018.
[2] The father concedes that the mother was the successful party and is entitled to costs regarding a motion he brought for production of their children’s documents. This motion was dismissed by Justice Carole Curtis on September 7, 2021 and costs were reserved to the case management judge. However, the father submits that the costs claimed by the mother of $2,407.50 for this motion are excessive. He submits that costs should be fixed at $1,039.60.
[3] The father claims that he, and not the mother, was the successful party on a motion he brought for temporary parenting time. This motion was settled on December 29, 2021 at the outset of the motion. The father seeks his costs of this motion in the amount of $3,305.25. [1]
Part Two – General legal 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 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.
[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 ONSC 22584, [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. This assessment includes the positions taken in the pleadings, and the specific relief sought at the hearing, if different. See: Kyriacou v. Zikos, 2022 ONSC 401. The court may also take into account how the order compares to any settlement offers that were made. See: Lawson v. Lawson, 2008 ONSC 23496, [2008] O.J. No. 1978 (SCJ); Todor v. Todor, 2021 ONSC 3463; Kyriacou v. Zikos, supra.
[9] 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.
[10] 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.).
[11] 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: Jackson v. Mayerle, 2016 ONSC 1556.
[12] 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.
[13] 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 – The September 7, 2021 motion
[14] The mother was the successful party on this motion and is entitled to her costs.
[15] The rates claimed by the mother’s counsel, being $400 per hour for a counsel with 15 years of experience, is reasonable.
[16] The father submitted a bill of costs that his counsel spent 3.3 hours on the motion. This included time drafting the motion material.
[17] The amount claimed by the mother for the time her counsel spent on the motion (5.5 hours) was a bit high. The motion was simple. The mother did not prepare responding material. The court appearance only took 30 minutes. Some of the time claimed by the mother included time her counsel spent becoming familiar with the issues on the motion to change. If the mother is successful on the motion to change, she will be able to claim costs for this time later.
[18] The mother submitted that the father acted in bad faith on this motion. The mother did not come anywhere close to establishing the high standard required for a court to order costs on this basis under subrule 24 (8). See: Scipione v. Del Sordo, supra. The father wanted the children’s documentation to support his immigration application. Being unsuccessful does not equate with bad faith, or even unreasonable behaviour. See: Wauthier v. McAuliff, 2019 ONSC 5302; W.H.C. v. W.C.M.C., 2021 ONCJ 363. The father did not act in bad faith by bringing this motion once the mother refused his request to provide him with these documents.
[19] The court finds that the father can afford to pay the costs that will be ordered. He should have reasonably expected to pay these costs if he was unsuccessful on his motion.
[20] The court finds that the father should pay costs to the mother of $1,500 for this motion.
Part Four – The December 29, 2021 motion
4.1 Sequence of events
[21] The parties attended for a case conference on November 29, 2021.
[22] The parties agreed that they would attempt to organize supervised parenting time between the father and the parties’ youngest child. The court endorsed that counsel would work on the details and send any consent to the court for approval. The matter was adjourned until February 23, 2022.
[23] The father’s counsel prepared a draft consent. The mother did not agree to it. The father’s counsel subsequently notified the mother’s previous counsel that if a consent could not be reached then a motion date would be sought. The mother’s previous counsel did not respond. A second request was sent and the mother’s counsel indicated that he was still awaiting instructions from the mother.
[24] The father brought a Form 14B seeking a motion date for temporary parenting time. The mother did not respond to the Form 14B motion and a date was set to hear the motion on December 29, 2021.
[25] On December 22, 2021, the father served the mother with an offer to settle that mirrored the draft consent his counsel had prepared at the November 29, 2021 case conference. The father proposed that he have supervised parenting time, supervised by Side-by-Side Supervised Access Services. He would pay the costs of Side-by-Side.
[26] The offer to settle stated that it was open until one minute before the motion began.
[27] The mother did not accept this offer to settle. She made her own offer to settle dated December 24, 2021. It was very similar to the father’s offer to settle. However it added these two terms: [2]
a) The father shall not use his parenting time with the child to discuss or ask questions regarding the mother’s residential arrangements, personal life or activities.
b) If the offer to settle is accepted before 2 p.m. on December 28, 2021 no costs shall be payable. If accepted after, the father shall pay the mother costs of $1,875 up until December 28, 2021 and thereafter, her costs on a substantial or full indemnity basis, to be determined by the court.
[28] On December 26, 2021, the father’s counsel asked the mother’s counsel to convert her offer to settle into Minutes of Settlement.
[29] On December 27, 2021, the mother’s counsel wrote back to the father’s counsel stating that once the mother’s offer to settle is accepted by the father she will prepare the Minutes of Settlement. The father’s counsel responded the same day that the offers are essentially the same and asked the mother’s counsel to draft the Minutes as she was out of the country.
[30] The matter was held down at the start of the scheduled motion on December 29, 2021. The agreement reached was essentially the same as that proposed by the father in his Offer to Settle (which was the same as the consent drafted on November 29, 2021). The additional communication term sought by the mother was not included in the agreement. The issue of costs was reserved. [3]
4.2 Does subrule 18 14) apply to either offer to settle?
4.2.1 Legal considerations
[31] Subrule 18 (4) sets out that an offer shall be signed personally by the party making it and also by the party’s lawyer, if any.
[32] 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.
[33] 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).
[34] 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 4509.
[35] 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.
[36] 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.
[37] 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 ONSC 17000; Weber v. Weber, 2020 ONSC 6855; Clancy v. Hansman, 2013 ONCJ 702; Ajiboye v. Ajiboye, 2019 ONCJ 894.
4.2 The mother’s offer to settle
[38] The costs consequences in subrule 18 (14) do not apply to the mother’s offer to settle. It was not more favourable to the mother than the final result. The agreement reached did not include the additional communication clause sought by the mother set out in paragraph 27 above.
[39] Further, the mother’s offer to settle included a pre-determined costs amount of $1,875 up until December 28, 2021. An offer to settle substantive terms which also includes a predetermination of costs perverts the subrule 18(14) analysis, because the party ends up trying to claim credit for accurately predicting a costs determination a judge has not yet made. An offer which includes costs obligations not yet determined by the court, cannot satisfy the strict requirements of this section. See: Chomos v. Hamilton, 2016 ONSC 6232; Hall v. Hall, 2029 ONSC 4198.
4.3 The father’s offer to settle
[40] Although the father’s offer to settle was as favourable to the mother as the result on the motion it did not meet the technical requirements of subrule 18 (14). This court wrote at paragraph 13 of Clancy, supra.:
The costs presumption in subrule 18 (14) can have significant repercussions – full recovery costs from the date of the offer. Full technical compliance with the subrule is required for it to be applied by the court. The mother’s offer to settle did not meet the conditions set out in subrule 18 (14) and the presumptive cost consequences in the subrule were not triggered.
[41] The costs consequences in subrule 18 (14) do not apply if the offer to settle has expired before the hearing starts. See: Paragraph 3 of subrule 18 (14). Here, the father’s offer to settle expired one minute before the hearing. This is similar to Clancy, supra, where the offer expired 5 minutes before the hearing and in Ajiboye, supra, where the offer expired at 9 a.m., before the hearing started. In both cases the court found that the costs consequences in subrule 18 (14) did not apply.
Part Five – Ordering costs in settled matters
[42] In Davis v. Fell, 2016 ONCJ 84, at para. 79, Justice Sheilagh O’Connell wrote:
[W]here parties make a settlement as between themselves, the court should be very slow to make an award of costs against one of the parties. Unless there are compelling reasons to do so, costs in the circumstances of a settlement between parties ought not to be awarded by the court.
Also see for similar comments: Frape v. Mastrokalos, 2017 ONCJ 915; Muncan v. Muncan, 2021 ONSC 1369.
[43] However, in Scipione v. Del Sordo, supra, Justice Alex Pazaratz found that costs can be ordered if the court determines that one party was more successful overall than the other party. Justice Pazaratz wrote at paragraph 64:
- While the court in Davis identified that it may sometimes be difficult to determine success (or relative success) when the parties sign a settlement document, the mere fact that settlement was by way of Minutes does not pre-empt a full costs analysis.
a. Rule 24(1) states that there is a presumption that a successful party is entitled to costs.
b. The August 6, 2015 Consent filed by the parties specifically set out that even though all other issues were resolved, costs were still to be determined by this court.
c. Parties are always encouraged to try to settle. Even up to the last moments of a motion or trial.
d. It is not uncommon for the court to receive last minute settlements which resolve all issues other than costs.
e. A party’s behaviour in settling a case and signing Minutes may be a relevant factor in deciding costs.
f. But if a party eventually makes a good litigation choice by signing Minutes, that epiphany doesn’t automatically wipe out any history of bad litigation choices which would otherwise justify costs. Settling in the face of the inevitable may be little more than damage control.
g. A party who has behaved reasonably throughout – and who may quite accurately perceive imminent success in an ongoing hearing – should not be discouraged from signing Minutes which reflect that success, out of fear that they will jeopardize a potentially sizable costs claim.
h. If we make execution of Minutes the determining factor precluding costs, it will create a disincentive for settlement at trial.
i. And in some cases – particularly motions to change where the onus of proof is quite clear – determination of success may be relatively straightforward.
j. If a party brings a motion asking to change almost everything, and at the last minute signs a Consent which changes almost nothing, how can they possibly argue that a judge will have a hard time figuring out who was successful?
Also see for similar comments: Quesnelle v. Todd, 2021 ONSC 7259.
Part Six – Analysis
[44] It is unfortunate that the communication between the parties and their counsel was so poor that considerable time was wasted in arriving at the temporary settlement and that the start of the father’s parenting time was delayed.
[45] It was anticipated on November 29, 2021 that the parties would submit a consent for temporary supervised parenting time between the father and the parties’ youngest child. The father drafted a consent that was essentially the same as the eventual agreement. The mother acted unreasonably by not responding to this. This forced the father into bringing, first, a Form 14B motion for permission to bring a temporary motion (that the mother did not respond to) and then, the temporary motion.
[46] Unlike many cases where it is difficult for a court to ascertain success when a case is settled, the factual trail here is easy to follow. The court finds that these circumstances justify an award of costs for the time spent by the father to prepare the Form 14B motion and his time spent to bring the temporary parenting time motion. The father claimed that his counsel spent 2.2 hours to do this work. This is very reasonable and proportionate. The father was successful in implementing the supervised parenting time he requested. The presumption that he is entitled to costs for this work was not rebutted by the mother.
[47] The father acted reasonably by making an offer to settle that mirrored the eventual result.
[48] The mother acted reasonably by making an offer to settle that added the communication term. Although the offers were similar, they were not the same.
[49] The father should have just accepted the mother’s offer to settle, instead of asking the mother’s counsel to draft minutes of settlement based on the mother’s offer to settle. Any confusion as to whether the mother considered the father’s counsel’s request an acceptance of her offer to settle was clarified when the mother’s counsel wrote the father’s counsel on December 27, 2021 that she would only draft the Minutes of Settlement once the father accepted the offer to settle. The father never accepted the offer to settle.
[50] The agreement that was eventually reached reflected the father’s offer to settle – not the mother’s offer to settle.
[51] The court will not order costs for any time claimed by either party after December 22, 2021.
[52] The court finds that the rates claimed by the father’s counsel, being $450 per hour for a counsel with 27 years of experience, are reasonable.
[53] The court finds that the mother should have reasonably expected to pay the costs that will be ordered if the court found that she had acted unreasonably.
[54] The court finds that a reasonable and proportionate costs award for this motion is $750 payable by the mother to the father.
Part Seven – Conclusion
[55] An order shall go on the following terms:
a) The father shall pay the mother’s costs of $1,500 for the September 7, 2021 motion.
b) The mother shall pay the father’s costs of $750 for the December 29, 2021 motion.
c) The costs shall be set off. This means that the father owes the mother $750 for costs.
d) The costs are due and payable in 30 days.
Released: June 27, 2022
Justice S.B. Sherr
[1] The mother claimed costs of $3,028.50 for this motion.
[2] The father’s offer to settle included a term that he provide the mother with his contact information. The mother’s offer to settle clarified that he was to provide his email address.
[3] On February 23, 2022, the mother asked the court to address costs for the two temporary motions. The court set a timeline for costs submissions. The mother did not make her submissions within the timelines. On May 3, 2022, the court agreed to the mother’s request to extend the filing timelines. The parties both made submissions. On June 7, 2022, the court granted the mother additional time to respond to the father’s costs submissions and the mother filed her submissions on June 16, 2022.