CITATION: F.S. v. M.B.T., 2023 ONCJ 144
DATE: March 30, 2023
COURT FILE NO. D42128/21
ONTARIO COURT OF JUSTICE
B E T W E E N:
F.S.
LAUREN ISRAEL, for the APPLICANT
APPLICANT
- and -
M.B.T.
SHEILA C. MACKINNON, for the RESPONDENT
RESPONDENT
HEARD: In Chambers
JUSTICE S.B. SHERR
COSTS ENDORSEMENT
Part One – Introduction
[1] On March 6, 2023, the court released its reasons for decision after a two-day trial regarding parenting arrangements for the parties’ 12-year-old daughter (the child) and spousal support. See: F.S. v. M.B.T., 2023 ONCJ 102.
[2] The court ordered that the child have her primary residence with the applicant (the mother) and that the mother have decision-making responsibility for her. It ordered that the respondent’s (the father’s) parenting time with the child shall be in the mother’s discretion, taking into consideration the views and wishes of the child. The mother was granted incidents of parenting, including the ability to obtain government documentation for the child and to travel with the child outside of Canada without the father’s consent. The court ordered the father to pay the mother spousal support of $350 each month for five years.
[3] The parties were given the opportunity to make costs submissions. The mother seeks her costs of $15,000, to be paid in 60 days. The father submits that if costs are ordered that they should not exceed $5,000, and be payable to Legal Aid Ontario, on terms to be negotiated between Legal Aid Ontario and him.
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] 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 – Offer to settle and subrule 18 (14)
[8] 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.
[9] 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).
[10] 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).
[11] 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.
[12] 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.
[13] The mother made an offer to settle dated February 14, 2023. The offer met all the preconditions for the costs consequences set out in subrule 18 (14) to apply. It was more favourable to the father than the trial result. He should have accepted the offer.
[14] The costs consequences set out in subrule 18 (14) are presumptive. The father did not rebut this presumption.
[15] The mother is entitled to her costs up until February 14, 2023, and her full recovery costs after February 14, 2023.
Part Four – The amount of costs
[16] 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.
[17] 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 CanLII 18880 (ON CA), [2003] O.J. No. 3707(supra); Scipione v Scipione 2015 ONSC 5982, [2015] O.J. No. 5130 (supra).
[18] 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.
[19] 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.
[20] This case was important to the parties. It was moderately difficult and complex.
[21] The parties both acted reasonably in the litigation. Counsel cooperated to focus the trial and save both parties time and expense.
[22] The father also served an offer to settle. It was not nearly as favourable to the mother as the trial result. However, being unsuccessful does not necessarily equate to being unreasonable. See: Wauthier v. McAuliff, 2019 ONSC 5302; W.H.C. v. W.C.M.C., 2021 ONCJ 363.
[23] The rates claimed by the applicant’s counsel are reasonable ($450 per hour, for a 1994 call to the bar).
[24] 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 and time spent that was not related to prior steps in the case. See: Houston v. Houston, 2012 ONSC 233; Walts v. Walts, 2014 ONSC 98.
[25] The mother’s total bill of costs for the time she is claiming is $25,679. However, she is only claiming $15,000 costs from the father. This would be a reasonable and proportionate costs claim even if the costs consequences in subrule 18 (14) did not apply.
[26] Subrule 24 (12.2) provides that 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. An adverse inference may be drawn against the party who fails to provide such documentation. See: S.W.-S. v. R.S., 2022 ONCJ 11; M.H.S. v. M.R., 2022 ONCJ 28; Kasmieh v. Hannora, 2023 ONSC 1643; Morsillo v. Quartarone, 2022 ONCJ 591.
[27] The father did not submit his own bill of costs with his costs submissions. An adverse inference is drawn against him.
[28] The father submitted that costs should be discounted because he paid privately for counsel and the mother was in receipt of legal aid. However, the case law is well settled that the receipt of legal aid is not a factor in determining costs. See: Ramcharitar v. Ramcharitar, (2002), 2002 CanLII 53246 (ON SC), 62 O.R. (3d) 107 (S.C.J.); Alvarez v. Smith, 2008 CanLII 10047 (ON SC), [2008] O.J. No. 941 (SCJ); Loncar v. Pendlebury, 2015 ONSC 4673; S.G. v. A.S., 2015 ONSC 1882.
[29] The father also submitted that costs should be reduced because courts should take a tempered approach to ordering costs related to parenting disputes so as not to dissuade parties from asserting meritorious claims. See: Wallengham v. Wallengham, [2015] O.J. No. 6889 (SCJ- Family Court).
[30] This case is distinguishable from Wallengham for several reasons. First, in Wallengham, success was divided. Second, the court found that both parties took unreasonable positions. Third, one party did not have the ability to pay costs, fourth, the costs consequences set out in subrule 18 (14) were not engaged and fifth, here, the mother was the successful party regarding almost every material fact in dispute including that:
a) The father had perpetrated significant family violence against her and the child.
b) She had not alienated the father from the child.
c) The child’s expressed view and preference not to see the father was clear, consistent, independent, understandable and justified.
d) She was entitled to spousal support and had strong compensatory and non-compensatory support claims.
[31] These factors gave the court no basis to deviate from the presumptive costs consequences set out in subrule 18 (14).
[32] The disbursements claimed by the mother are modest and reasonable.
[33] The father should have reasonably expected to pay the costs that are being sought by the mother if he did not accept her offer and the offer was more favourable to him than the trial result.
[34] The father has the ability to pay the costs ordered. He earns annual income of over $70,000. However, the court finds that 60 days is too tight a time frame for the father to pay the costs that will be ordered and will permit him to pay the costs in three equal instalments.
[35] The court will not order costs to be paid directly to Legal Aid Ontario, as requested by the father.
[36] If the court should not consider the receipt of legal aid services when assessing costs it follows that the court should not involve itself in the internal relationship between a litigant and legal aid. See: Tahir v. Khan, 2019 ONCJ 781.
[37] Further, as set out in John v. Vincente, 2016 ONCJ 78 and Silva v. Queiroz, 2016 ONCJ 599, the court prefers not to become involved in retainer arrangements and make such orders. This sentiment was also expressed by Justice Roselyn Zisman in S.O. v. E.A., 2017 ONCJ 564. This is not and should not be the court’s concern
[38] The mother can execute an irrevocable direction or assignment of costs and deliver it to the father. The court notes that subsection 46 (4) of the Legal Aid Services Act states that all costs ordered by a court to be paid to an individual who has received legal aid services are the property of the Corporation and shall be paid to the Corporation.
Part Five – Conclusion
[39] A final order shall go that the father shall pay the mother’s costs fixed at $15,000, inclusive of fees, disbursements and HST.
[40] The father may pay the costs ordered to the mother as follows:
a) $5,000 by June 30, 2023.
b) $5,000 by September 30, 2023.
c) $5,000 by December 31, 2023.
[41] If the father defaults on any costs payment by more than 14 days, the full amount of costs then owing shall immediately become due and payable.
Released: March 30, 2023
Justice Stanley B. Sherr