CITATION: Mulik v. McFarlane, 2023 ONCJ 7
DATE: January 5, 2023
COURT FILE NO. D41467/21
ONTARIO COURT OF JUSTICE
B E T W E E N:
DIANA MALGORZATA MULIK
APPLICANT
- and -
MICHAEL WESLEY MCFARLANE
RESPONDENT
COUNSEL:
MONIKA CURYK, for the APPLICANT
ACTING IN PERSON, RESPONDENT
HEARD: In Chambers
JUSTICE S.B. SHERR
COSTS ENDORSEMENT
Part One – Introduction
[1] On November 30, 2022, the court released its endorsement regarding the applicant’s motion to strike the respondent’s Answer/Claim. See: Mulik v. McFarlane, 2022 ONCJ 555. The court struck the respondent’s Answer/Claim and provided him with the ability to reinstate it if he provides specified financial disclosure and specified amounts towards his support arrears and outstanding costs by January 16, 2023.
[2] The court provided the parties with the opportunity to make written costs submissions. The applicant seeks her costs of $5,985, which she submits are her full recovery costs. The respondent did not make costs submissions.
Part Two – Legal considerations
2.1 General principles
[3] 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).
[4] 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.
[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.
2.2 Success
[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 CanLII 22584 (ON SC), [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 on the motion. 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 CanLII 23496 (ON SC), [2008] O.J. No. 1978 (SCJ); Todor v. Todor, 2021 ONSC 3463; Kyriacou v. Zikos, supra.
2.3 Subrule 18 (14)
[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] 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.
2.4 Other factors affecting costs orders
[14] 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.
[15] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel (2003) 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.).
[16] 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;
[17] 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.
Part Three – Success
[18] The applicant made an offer to settle the motion. The respondent did not make an offer.
[19] The applicant’s offer to settle was reasonable. However, it was not more favourable to the respondent than the final result. The applicant’s offer required the respondent to provide her with the outstanding financial disclosure and to pay her $10,685 by November 7, 2022 to prevent his Answer/Claim from being struck. She also added a term that the respondent had to maintain his support payments of $3,546 each month, plus pay $1,5000 each month towards his arrears, failing which she could move without notice to strike his Answer/Claim.
[20] The court struck the respondent’s Answer/Claim. However, it gave him until January 16, 2023, to reinstate it if he provided the outstanding financial disclosure and paid a total of $17,185 towards his outstanding costs and support arrears. The court did not require the respondent to make the monthly payments of $5,046 each month, sought by the applicant to preserve his Answer/Claim.
[21] The costs consequences set out in subrule 18 (14) do not apply to the applicant’s offer.
[22] The applicant was the successful party based on the positions taken by the parties on the motion. She succeeded in having the respondent’s Answer/Claim struck and obtained significant pre-conditions for him to have it reinstated. The respondent asked that the motion be dismissed and submitted that he should not have to pay any ongoing spousal support.
[23] The presumption that the applicant is entitled to her costs was not rebutted by the respondent.
Part Four – Amount of costs
[24] The issue on the motion was important to the parties. It was not complex.
[25] The applicant acted reasonably on the motion. She made a reasonable offer to settle.
[26] The respondent acted unreasonably on the motion. The court found that his non-compliance with orders has been deliberate and abysmal. It found that he has deliberately caused the applicant to incur significant legal fees while he has delayed the case, refused to pay costs orders, has not complied with disclosure orders and has placed her and the child in difficult financial circumstances by refusing to pay the support ordered.
[27] The respondent has been given multiple opportunities to remedy his breaches.
[28] The respondent filed no material on the motion.
[29] The court found that it would be unjust and contrary to the administration of justice to permit the respondent to continue to defy orders, while requiring the applicant to further litigate this matter.
[30] Parties need to be held responsible for their behaviour to maintain respect for the system.
[31] The rates claimed by the applicant’s counsel are reasonable given her experience. She was called to the Bar in 2009 and her rate is $350 each hour.
[32] The respondent did not contest the reasonableness of the time spent on the motion by the applicant’s counsel. The court reviewed the applicant’s bill of costs and finds it to be reasonable
[33] The court finds that the respondent should have reasonably expected to pay the costs that will be ordered if the applicant was successful on her motion. He was ordered to pay costs of $5,085 when he was unsuccessful on the temporary support motion. See: Mulik v. McFarlane, 2022 ONCJ 180.
[34] The court further finds that the respondent has the ability to pay the costs that will be ordered. His support payments are based on an annual income of $129,000.
Part Five – The order
[35] An order shall go as follows:
a) The respondent shall pay the applicant’s costs of her motion in the amount of $5,424. This consists of $4,800 for fees and $624 for HST.
b) These costs are due and payable within 30 days.
Released: January 5, 2023
Justice S.B. Sherr