DATE: December 2, 2022 COURT FILE NO. D31535/19
ONTARIO COURT OF JUSTICE
B E T W E E N:
NNENNA MPAMUGO
PAMILA BHARDWAJ, for the APPLICANT
APPLICANT
- and -
RANDY NYECHE-WOLUCHOR
ACTING IN PERSON
RESPONDENT
HEARD: In Chambers
JUSTICE S.B. SHERR
COSTS ENDORSEMENT
Part One – Introduction
[1] On October 27, 2022, the court released its reasons for decision after a two-day trial regarding child support issues for the parties’ 11-year-old son (the child). See: Mpamugo v. Nyeche-Woluchor, 2022 ONCJ 488.
[2] The court ordered that the respondent pay the applicant child support retroactive to January 1, 2017. The child support arrears were fixed at $26,964.31. The respondent was ordered to pay ongoing child support of $508 each month, based on an annual imputed income to him of $55,100.
[3] The parties were given the opportunity to make costs submissions. The applicant seeks her costs of $24,654.89. The respondent did not make costs submissions.
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 this discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.
[7] Subrule 24(1) creates a presumption of costs in favour of the successful party. 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] O.J. No. 1978 (SCJ); Todor v. Todor, 2021 ONSC 3463; Kyriacou v. Zikos, supra.
[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.
Offers to Settle and Subrule 18(14)
Legal Considerations
[9] 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.
[10] 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.
[11] 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).
[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.
Analysis
[15] The respondent made three offers to settle. None of them came close to being more favourable to the applicant than the trial result. All three offers contained terms that the applicant pay the respondent spousal support.
[16] The respondent withdrew his claim for spousal support at the outset of the trial.
[17] The applicant also made three offers to settle.
[18] The applicant’s first offer to settle was dated January 4, 2022. The applicant sought child support retroactive to January 1, 2013. The court ordered support to start on January 1, 2017.
[19] The applicant made the offer severable. The offer contained separate paragraphs, broken down by year, setting out the income the applicant sought to impute to the respondent, and how much support he would pay for that year. The offer provided that the father could accept any paragraph of the offer. This was a creative approach. However, although the imputed income amounts in some years were close to the final result, none were more favourable to the respondent than the trial result.
[20] The applicant’s first offer to settle did not attract the costs consequences set out in subrule 18 (14).
[21] The applicant’s second offer to settle was dated April 21, 2022. She did not withdraw this offer prior to trial.
[22] The applicant’s second offer was more favourable to the respondent than the trial result. The applicant proposed that support be retroactive to January 1, 2019 – the court ordered support to start on January 1, 2017. She also proposed that ongoing child support be based on an imputed annual income to the respondent of $50,000. The court ordered ongoing support based on an imputed annual income to the respondent of $55,100.
[23] The court also ordered the respondent to pay $831 for special expenses. He would not have had to pay that amount if he had accepted the offer.
[24] The applicant’s second offer to settle met all the preconditions for the costs consequences set out in subrule 18 (14) to apply.
[25] The costs consequences set out in subrule 18 (14) are presumptive. The respondent did not rebut this presumption.
[26] The applicant restricted her costs claim to costs incurred after her second offer to settle was made. She is entitled to her full recovery costs from that date – April 21, 2022.
Part Three – The Amount of Costs
[27] An award of full recovery costs does not necessarily mean that the applicant will receive the full amount of costs claimed. The claim must still be reasonable and proportionate. It must also reflect, to some extent, the reasonable expectations of the paying party. See: Tintinalli v. Tutolo, 2022 ONSC 6276.
[28] In Jackson v. Mayerle, 2016 ONSC 1556 the court wrote at paragraph 91:
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. Goryn v. Neisner 2015 ONCJ 318 (OCJ). The Rules do not require the court to allow the successful party to demand a blank cheque for their costs. 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. M.(C.A.) v. M.(D.), [2003] O.J. No. 3707(supra); Scipione v Scipione 2015 ONSC 5982, [2015] O.J. No. 5130 (supra).
[29] Subrule 24 (12) sets out factors for the court to consider in determining the reasonableness and proportionality of a costs claim. It 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.
[30] 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.).
[31] However, the 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. 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.
[32] Family law litigants are responsible for and accountable for the positions they take in the litigation. See: Heuss v. Surkos, 2004 CarswellOnt 3317, 2004 ONCJ 141.
[33] This case was important to the parties.
[34] The case was made more complex and difficult due to the respondent’s conduct. He actively attempted to conceal his financial circumstances from the applicant and the court. He did not reveal bank accounts or all his sources of income. His financial disclosure was incomplete and incomprehensive. It was not delivered in a timely manner. The applicant had to go to considerable efforts to prove he was earning more than he claimed.
[35] The case was also made more complex because the respondent disputed the parties’ date of separation. The applicant had to gather additional evidence to prove that they had separated in 2013.
[36] The court found that the respondent misrepresented he had cohabited with the applicant until September 2019. It found that he was living separately from her since 2013.
[37] Additional time was spent at trial for the applicant to establish that the respondent entered into a ceremonial marriage with another woman in Nigeria in 2021. This was relevant to the respondent’s lifestyle, as this was an expensive wedding.
[38] The respondent denied having this marriage. The applicant produced photos and a video clip of the ceremonial wedding that had been sent to her by one of the respondent’s family members in 2021 and identified the respondent as the groom in the photographs. The respondent continued to deny at trial any knowledge of the people in the photographs. However, it was evident that he was the groom beside the bride in those photographs and not telling the truth.
[39] The case was made more difficult and complex because the respondent asserted a spousal support claim that he did not withdraw until the outset of the trial. The claim had no merit. The applicant was put to additional time and expense to defend that claim.
[40] The applicant acted reasonably. She even made a reasonable third offer to settle, dated October 14, 2022.
[41] The respondent did not act reasonably, as set out above.
[42] The rates claimed by the applicant’s counsel are reasonable ($450 per hour, for a 1994 call to the bar).
[43] The court finds that the time claimed by the applicant in her bill of costs was reasonable and proportionate. She only included her costs for the trial step. She could have made a claim for costs not associated with prior steps in the case but chose not to do so. This includes the drafting of pleadings and financial statements. See: Houston v. Houston, 2012 ONSC 233; Walts v. Walts, 2014 ONSC 98.
[44] The disbursements claimed by the applicant are reasonable.
[45] The respondent should have reasonably expected to pay the costs that are being sought by the applicant if he did not accept her offer and the offer was more favourable to him than the trial result. He was represented by counsel throughout most of the case and should have been aware of the costs consequences set out in subrule 18 (14).
[46] The court considered that the costs order will cause the respondent some hardship. However, the court has limited sympathy for him. Due to his deceptive and manipulative conduct he is the author of his own misfortune.
[47] If a party chooses to play the “catch me if you can” game, they should expect that there will be harsh costs consequences if they are caught.
[48] The court will not adjust this costs order due to the respondent’s financial circumstances. It will also not order a payment schedule. Based on his abysmal payment history, the court has no confidence that the respondent would comply with it.
Part Four – Conclusion
[49] A final order shall go that the respondent shall pay the applicant’s costs fixed at $24,654.89, inclusive of fees, disbursements and HST. Costs are payable within 30 days.
Released: December 2, 2022
Justice S.B. Sherr