Court File and Parties

ONTARIO COURT OF JUSTICE DATE: 2024·07 12 COURT FILE No.: Woodstock F01/23

BETWEEN:

Irene Strizzi Applicant

— AND —

Rocco Traetto Respondent

Before Justice S. E. J. Paull In Chambers

Reasons on Costs Released on July 12, 2024

Counsel: Applicant........................................................................................................... on her own behalf Meghann Melito................................................................................ counsel for the respondent

PAULL J.:

[1] Before the court is the issue of costs following the trial in this matter which preceded over five full days and one partial day between April 22 and May 1, 2024. Reasons for Judgment were released on June 6, 2024. In the Reasons the court invited written submissions on the issue of costs if the parties were not in agreement.

[2] The respondent seeks substantial indemnity costs of $72,111.31 (inclusive) which includes prior steps in the case and $1500 for preparing the costs submissions. Alternatively, he seeks substantial indemnity costs for trial of $41,149 (inclusive). He submits that he was entirely successful on the primary issues related to parenting and submits that Ms. Strizzi behaved unreasonably.

[3] Ms. Strizzi seeks no order as to costs on the basis of the divided success and her precarious financial circumstances. She disputes that her approach has been unreasonable.

[4] The issues at trial related to the decision-making and residency schedule for the parties two children and spousal and child support.

[5] Ms. Strizzi sought an order for joint decision-making with the children in her care on alternate weekends until she moved back to Brantford at which point there would be a shared parenting schedule, along with child support and spousal support payable by Mr. Traetto. Mr. Traetto sought sole decision-making and primary residence with child support payable by Ms. Strizzi, and his spousal support obligation calculated on the basis of an imputed income on Ms. Strizzi.

[6] The court ordered sole decision-making and primary residence to Mr. Traetto with regular parenting time to Ms. Strizzi. Mr. Traetto was ordered to pay spousal support above the SAGG, and no child support was payable by Ms. Strizzi on the basis that no income was imputed to her. Mr. Traetto’s income for support purposes was found to be higher than he submitted. Arrears in spousal and child support payable by Mr. Traetto to Ms. Strizzi were fixed at $9924 payable within 14 days of the order.

[7] 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 Rule 2 (2) of the Family Law Rules. Mattina v. Mattina, 2018 ONCA 867.

[8] 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. British Columbia (Minister of Forests) v. Okanagan Indian Band, 2002 SCC 25, 2002, S.C.C., paragraph 25.

[9] Rule 24(1) of the Family Law Rules creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs. Sims-Howarth v. Bilcliffe , [2000] O.J. No. 330 (SCJ- Family Court). 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. 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. Kyriacou v. Zikos, 2022 ONSC 401. The court may also take into account how the order compares to any settlement offers that were made. Lawson v. Lawson , [2008] O.J. No. 1978 (SCJ); Todor v. Todor, 2021 ONSC 3463; Kyriacou v. Zikos, supra.

[10] Rule 18 (14) of the Family Law Rules 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:

1. If the offer relates to a motion, it is made at least one day before the motion date.
2. 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.
3. The offer does not expire and is not withdrawn before the hearing starts.
4. The offer is not accepted.
5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

[11] The court has a discretion to take into account any written offer to settle, the date it was made and its terms, even if Rule 18(14) does not apply, when exercising its discretion over costs. (Rule 18(16)).

[12] Mr. Traetto made two offers to settle. The first offer to settle was dated April 8, 2024 and included the following:

1. Sole decision-making and primary residence with Mr. Traetto, with alternate weekends and alternate Wednesdays with Ms. Strizzi.
2. Mr. Traetto’s obligation to pay child support to terminate December 31, 2023. Mr. Traetto has overpaid child support in the amount of $5020 which is repayable by Ms. Strizzi at a rate of $250 per month.
3. Commencing January 1, 2024 child support payable by Ms. Strizzi of $311 per month on an imputed income of $20,000, increasing to $30,000 or any higher actual income on January 1, 2025.
4. No retroactive spousal support.
5. Commencing May 1, 2024 spousal support payable by Mr. Traetto at a rate of $546 per month until December 31, 2024 when spousal support terminates.

[13] The second offer to settle dated April 10, 2024 included the following:

1. The same terms regarding decision-making and parenting time as the previous offer.
2. Mr. Traetto’s child support obligation terminates December 31, 2023.
3. The same terms regarding Ms. Strizzi’s obligation to pay child support as the previous offer except that the overpayment of child support by Mr. Traetto of $5020 was not repayable by Ms. Strizzi. Rather, Mr. Traetto will be entitled to a credit for this amount against any future child support obligation that may arise.
4. No spousal support arrears up to April 30, 2024, and either $546 per month payable to Ms. Strizzi until April 30, 2026 when it terminates or a lump sum payment of $11,000 within 30 days in satisfaction of any remaining spousal support obligation.

[14] Ms. Strizzi provided no offers to settle.

[15] The onus of proving that the offer is as or more favourable than the trial result is on the person making the offer. Neilipovitz v. Neilipovitz [2014] O.J. No. 3842 (SCJ).

[16] 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. However, even if the offer does not attract the costs consequences set out in Rule 18 (14), it may be considered under Rule 18 (16). Gurley v. Gurley, 2013 ONCJ 482.

[17] 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. Wilson v Kovalev, 2016 ONSC 163.

[18] Based on the positions taken by the parties in their pleadings, at trial, and in the offers to settle, Mr. Traetto was clearly the successful party on the parenting issues. The final order generally mirrors what he proposed in the offers and what he sought at trial. With respect to the financial issues Ms. Strizzi was the more successful party overall. Mr. Traetto did not achieve equal or greater success on the following financial issues:

1. His obligation to pay child support terminated on March 31, 2024 rather than December 31, 2023.
2. He was unsuccessful in imputing any income on Ms. Strizzi for support purposes.
3. His income was fixed at higher amounts for 2023 and 2024 that he submitted at trial.
4. There was no overpayment of child and spousal support by him as he argued, but an underpayment of both with arrears fixed at $9924 payable within 14 days of the order.
5. Ongoing spousal support was at a rate above his offers and the SSAG with no fixed termination date.

[19] Neither of Mr. Traetto’s offers were severable or met or exceeded the order overall. However, given the parenting order made he was successful in terminating his child support obligation and significantly reducing his spousal support obligations from what would have resulted had the shared parenting arrangement been continued as Ms. Strizzi sought.

[20] The next issue is to consider if there was divided success. Rule 24 (6) states that if success in the case is divided, the court may apportion costs as appropriate. Divided success does not equate with equal success. It requires a comparative analysis. Most family cases have multiple issues. They are not equally important, time-consuming or expensive to determine. Jackson v. Mayerle, 2016 ONSC 1556, paragraph 66.

[21] There was clearly divided success in this matter, however, Mr. Traetto was the more successful party overall. While Ms. Strizzi was more successful at trial on the financial issues, I agree that the parenting issues were of primary importance to the parties and consumed a majority of trial time.

[22] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. Beaver v. Hill, 2018 ONCA 840.

[23] An award of costs is subject to: the factors listed in Rule 24(12), Rule 24(4) pertaining to unreasonable conduct of a successful party, Rule 24(8) pertaining to bad faith, Rule 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party. Berta v. Berta, 2015 ONCA 918 at para. 94.

[24] In making this decision the court has considered the factors set out in Rule 24 (12) of the rules which 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, (vi) 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.

[25] Rule 24(5) provides criteria for determining the reasonableness of a party’s behaviour in a case (a factor in clause 24(12)(a) (1) 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.

[26] Counsel for Mr. Traetto provided a Bills of Costs for the entire proceeding totaling $87,703.58 inclusive, and a Bill of Costs for preparation and attendance at trial of $49,175.56 inclusive. The hourly rate for counsel is reasonable given her years of experience, as was the time she spent for the trial. However, while there was significant documentary evidence the amounts claimed for junior counsel and clerical assistance in the Bill for the entire proceeding was nearly $20,000 and for the trial was approximately $10,000. These amounts are excessive given the issues and evidence at trial. Further, Mr. Traetto filed three large volumes of document briefs at trial but only a portion of these documents were entered as exhibits. The remaining documents in the volumes did not form part of the evidentiary record.

[27] Further, costs were addressed at two prior motions in this matter. The motion argued on November 8, 2023 resulted in an order for no costs, and the motion argued on March 19, 2024 resulted in a costs order of $750 payable by Ms. Strizzi to Mr. Traetto. While the attendances for the arguments of these motions were not included in the Bill of Costs, significant amounts related to these motions were listed including preparations of pleadings and materials, legal research, and preparation for argument of the motions. These amounts relate directly to appearances where costs have already been determined.

[28] Mr. Traetto takes the position that Ms. Strizzi has acted unreasonably in this matter. As noted in the Reasons for Judgement, both parties were responsible for exposing their children to adult conflict. In this regard they have both behaved unreasonably, however, Ms. Strizzi’s behaviour was noted as a particular concern.

[29] I find that Mr. Traetto’s offers to settle were reasonable and reflect a genuine effort to resolve the matter prior to trial. Ms. Strizzi provided no offers to settle which was unreasonable. Ms. Strizzi moving to another city as she did just prior to trial while still advocating for a return to the shared arrangement with no clear plan when or if she would move back was not a reasonable or tenable position.

[30] Mr. Traetto was also generally diligent and consistent in paying the temporary child and spousal support ordered, and paid additional amounts to permit Ms. Strizzi to relocate. In this regard Mr. Traetto behaved reasonably.

[31] Overall Mr. Traetto’s approach in this matter has been more reasonable, and there were aspects of Ms. Strizzi’s approach which were unreasonable.

[32] The applicant seeks recovery of significant costs incurred for prior steps in this matter.

[33] 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 a step at a later stage in the case.

[34] However, courts continue to be cautious about awarding costs at the trial stage where costs were not awarded at earlier steps in a case. Baezner v. Brunnenmeir, 2018 ONCJ 956; Nabwangu v. Williams, 2019 ONCJ 171.

[35] In Cameron v. Cameron, 2018 ONSC 6823, Justice Marvin Kurz interpreted the changes to the costs rules regarding prior steps in a case as creating a rebuttable presumption against ordering costs for these steps if they were not addressed or reserved by the judge hearing the step. Justice Kurz concluded that a judge hearing a trial should only grant the costs of a previous step in one of the following circumstances:

a. when they have been reserved to the trial judge; or b. when, in light of subsequent events, the trial judge is better situated to determine the costs of the prior step than the judge presiding over that step. In that case, the process of determining costs will involve a broad consideration of the prior step within the context of the case as a whole; or c. in exceptional circumstances.

[36] There are good reasons for the presumption that costs should be determined at each stage. 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 can result in later confusion and controversy about what really happened at the earlier step. Laidman v. Pasalic and Laidman, 2020 ONSC 7068.

[37] I am not prepared to order recovery of costs for prior steps in this proceeding. Mr. Traetto has not rebutted the presumption that costs should have been addressed at each step. As previously noted, costs were determined at the time of two previous motions. The court is not in a position to evaluate each of the approximately 12 remaining pretrial court appearances which spanned over 16 months to determine if either party’s conduct warrants a consideration of costs. None of the prior endorsements reserved costs to the trial court and there are no other exceptional circumstances in this matter.

[38] The court should also take into consideration the ability of a party to pay costs. MacDonald v. Magel, (2003) , 67 O.R. (3d) 181. A party’s limited financial circumstances will not be used as a shield against any liability for costs but will be taken into account regarding the quantum of costs, particularly when they have acted unreasonably and are the author of their own misfortune. Snih v. Snih, pars. 7-13.

[39] Those who can least afford to litigate should be most motivated to seriously pursue settlement and avoid unnecessary proceedings. Mohr v. Sweeney, 2016 ONSC 3338; Balsmeier v Balsmeier, 2016 ONSC 3485.

[40] 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. Arthur v. Arthur, 2019 ONSC 938.

[41] The costs determination must reflect proportionality to the issues argued. There should be a correlation between legal fees incurred (for which disbursement is sought) and the importance or monetary value of the issues at stake. Amounts actually incurred by the successful litigant may therefore not be determinative. Hackett v. Leung, , [2005] O.J. No. 4888 (Ont. S.C.J.). The Rules do not require the court to allow the successful party to demand a blank check for their costs. O’Brien v. O’Brien, 2017 ONSC 2017.

[42] I have considered Ms. Strizzi’s financial circumstances. She has at present no legal ability to work and has limited resources. The court will address this factor by reducing the quantum of costs and permitting them to be paid over time.

[43] I also find that Ms. Strizzi should have reasonably expected to pay the costs that will be ordered if Mr. Traetto was successful on the main issues related to decision-making and primary residence.

[44] The issues in this matter were not particularly complicated but were clearly important to the parties.

[45] Overall, it is appropriate to award costs to Mr. Traetto based on his greater success at trial and Ms. Strizzi’s unreasonable approach at times. It was particularly unreasonable that she continued to litigate for a shared parenting arrangement when she unilaterally moved without notice and on the eve of trial to a different city with someone she had just met online, with no clear plan when or if she would return.

[46] Family law litigants are responsible for and accountable for the positions they take in the litigation: Heuss v. Surkos, 2004 CarswellOnt 3317, 2004 ONCJ 141.

[47] Having considered all these issues partial recovery for Mr. Traetto is appropriate. On the basis of the foregoing, I find that a fair and reasonable quantum in the particular circumstances of this case to be $10,000 (inclusive), payable by the applicant to the respondent at a rate of $250 per month commencing August 1, 2024.

[48] Mr. Traetto once again seeks an order pursuant to Rule 1(8) preventing Ms. Strizzi from pursuing further litigation until any costs order made herein is paid. This same request was made at the end of trial on the basis that Ms. Strizzi had a previous costs order of $750 which remained unpaid at that time. For reasons outlined in the Judgement the court was not prepared to grant that order but did require Ms. Strizzi to pay the $750 within 30 days. In Ms. Strizzi’s responding submissions on costs she indicates that she has paid that amount as ordered. If she has done so she is not in breach of any order at this time. Rather, Ms. Strizzi alleges that it is Mr. Traetto who is presently in breach of the final order to pay the arrears of child and spousal support.

[49] This claim was requested and denied at trial, and there are no additional circumstances which warrant a reconsideration at this time, particularly when the court has no confirmation of whether either party has complied with their payment obligations in the final order.

[50] With respect to the request that any costs order be enforceable by FRO, Mr. Traetto concedes that the trial was substantially focused on parenting issues and that the financial issues were “ancillary” and consumed “a much smaller percentage of trial time”. No child support obligation was imposed on Ms. Strizzi and trial time was focussed on parenting issues. As such, the court is not prepared to order any portion of the costs to be enforceable by FRO as an incident of support. However, the parties may choose to set off this costs order against Mr. Traetto’s monthly spousal support obligation.

[51] On the basis of the foregoing a final order shall issue as follows:

1. The applicant to pay costs to the respondent fixed in the amount of $10,000, inclusive.
2. This shall be paid at a rate of $250 per month starting August 1, 2024, unless agreed otherwise by the parties.
3. Approval of this order is waived.

Released: July 12, 2024 Signed: “Justice S. E. J. Paull”