DATE: September 13, 2024 COURT FILE NO.: D51701/10 ONTARIO COURT OF JUSTICE

B E T W E E N:

RUN MOHAMED, APPLICANT

AND:

YUSUF HASSAN, RESPONDENT CITY OF TORONTO ASSIGNEE

COUNSEL: Bradley Berns, for the Applicant The Respondent, Acting in Person Masia Shaw, agent, Family Support Unit, for the Assignee

HEARD: September 10 and 11, 2024

JUSTICE S.B. SHERR

COSTS ENDORSEMENT

Introduction

[1] On September 11, 2024, the court delivered oral reasons for decision after hearing a two-day trial regarding the respondent’s (the father’s) motion to change the child support order of Justice Robert Spence, dated November 25, 2010.

[2] The applicant (the mother) sought her costs of $12,000. The father asked that no costs be ordered. The mother had assigned her interest in child support prior to February 1, 2017 to the City of Toronto. The City of Toronto did not seek costs.

[3] The court reserved its decision. These are the court’s reasons for ordering costs.

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: a) to partially indemnify successful litigants; b) to encourage settlement; c) to discourage and sanction inappropriate behaviour by litigants and; d) 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, paragraph 25.

[6] Costs awards are discretionary. Two important principles in exercising 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.

Offers to Settle

[8] 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.

[9] 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:

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.

[10] 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).

[11] 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.

[12] 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.

[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.

[14] Both parties made offers to settle.

[15] The father’s offer to settle was non-severable. It was not more favourable to the mother than the result at trial and did not attract the costs consequences set out in subrule 18 (14). The father proposed reducing support arrears to $5,000. That was not close to the result at trial.

[16] The mother made a multi-paragraph severable offer to settle. The father agreed to the date proposed by the mother to terminate his payment of section 7 expenses. Otherwise, the offer was not more favourable to the mother than the result at trial and did not attract the costs consequences set out in subrule 18 (14).

Success

Legal Considerations

[17] 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.

[18] 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; Todor v. Todor, 2021 ONSC 3463; G.E. v. J.E., 2023 ONSC 1743; Kyriacou v. Zikos, supra; Reichert v. Bandola, 2024 ONSC 4573.

[19] Subrule 24 (6) sets out that if success in a step in a case is divided, the court may apportion costs as appropriate.

[20] 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. See: Jackson v. Mayerle, 2016 ONSC 1556, paragraph 66.

[21] Where there are multiple issues before the court, the court should have regard to the dominant issue at trial in determining success. See: Firth v. Allerton, 2013 ONSC 5000; Mondino v. Mondino, 2014 ONSC 1102.

Analysis

[22] There were three issues on the motion to change.

[23] The main issue was the father’s request to retroactively reduce his child support payments from 2010, in accordance with his income reported each year to the Canada Revenue Agency.

[24] The court dismissed this part of the motion to change. The father did not establish there had been a material reduction in his annual income since 2010. Further, since the father did not provide the mother with sufficient financial disclosure to assess his claim until August 1, 2024, the court found August 1, 2024 would have been the presumptive start date to change support. The court found it would not have deviated from the presumptive start date. See: Colucci v. Colucci, 2021 SCC 24.

[25] The second issue was the father’s claim to terminate support for each of the parties’ four children once they reached 23 years of age.

[26] The mother’s position was that support should terminate for the parties’ oldest child as of January 1, 2017, and for the second oldest child, as of May 1, 2018. She disagreed that support should be terminated for the two younger children.

[27] The court made the following orders: a) Support for the oldest child was terminated as of June 30, 2014. She was 22 years old. The father was more successful. b) Support for the second oldest child was terminated as of June 30, 2015. He was 21 years old. The father was more successful. c) Support for the third oldest child was terminated as of June 30, 2022. It was then revived, for two years, starting on September 1, 2024. There was divided success on this issue. d) Support for the youngest child was terminated as of June 30, 2022. It was then revived for two years, starting on September 1, 2024. There was divided success on this issue.

[28] The third issue was what credits, if any, the father should receive for direct payments he claimed he had made to the mother and the children. He claimed he was paying $4,800 most years after 2010. The mother asked the court not to give the father any credits. The court did not find the father credible and only awarded him credits of $2,500. The mother was much more successful than the father on this issue.

[29] There was some divided success. However, overall, the mother was the more successful party. The father did not rebut the presumption that the mother is entitled to her costs.

Amount and Payment of Costs

Legal Considerations

[30] 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: b) each party’s behaviour, c) the time spent by each party, d) any written offers to settle including offers that do not meet the requirements of rule 18, e) any legal fees, including the number of lawyers and their rates, f) any expert witness fees, including the number of experts and their rates, g) any other expenses properly paid or payable; and h) any other relevant matter.

[31] Conduct which unduly complicates or unduly lengthens and increases the cost of a proceeding constitutes unreasonable conduct under subrule 24 (4). See: Goldstein v. Walsh, 2019 ONSC 3174; Hutchinson v. Peever, 2021 ONSC 4587; Jackson v. Mayerle, 2016 ONSC 1556.

[32] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel. Difficult financial circumstances are a factor but not are always a reason to deprive a successful party of costs or to reduce the amount of costs. See: Beaulieu v. Diotte, 2020 ONSC 6787. 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.

[33] 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.

[34] The mother seeks an order that her costs be payable as support and enforced as an incident of support by the Director of the Family Responsibility Office pursuant to clause 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act, 1996. The court has discretion to allocate what portion of the costs are attributable to support, particularly when there are multiple issues being litigated. See: Sordi v. Sordi, 2011 ONCA 665.

Analysis

[35] This case was important to the parties. There was some difficulty and complexity, as the father was seeking a downward retroactive adjustment to support back to 2010. He was also claiming support credits for direct payments he said he had made to the mother and the child. Further, the parties had to address determining the self-employment income of the father for several of those years.

[36] The mother acted reasonably.

[37] The father did not act reasonably in providing late and incomplete financial disclosure. The court found his evidence of his income was not reliable or credible. It also found his evidence about making direct payments to the mother and the children was not credible or reliable.

[38] The father did not pay support to the mother, leaving her and their children in poverty conditions.

[39] The father acted reasonably by making an offer to settle.

[40] The father’s behaviour did not rise to the high level required to make a finding of bad faith and order full recovery costs. See: Cozzi v. Smith, 2015 ONSC 3626; Scipione v. Del Sordo, 2015 ONSC 5800.

[41] The rates claimed by the mother’s counsel ($450 per hour) are reasonable for a 1987 call to the bar.

[42] The mother only claimed her time for the trial step. The time claimed was reasonable and proportionate.

[43] The court considered the father’s financial circumstances. He is earning $52,000 annually and was ordered to pay $400 towards support arrears. It will be a struggle for him to comply with his financial obligations.

[44] The mother agreed with the court’s suggestion to address any hardship to the father by ordering low monthly payments until his child support obligation ends in two years.

[45] The father will be ordered to pay the mother $7,500 for costs and pay the costs at $125 each month until June 30, 2026. This is when his child support obligation ends. Starting on July 1, 2026, he shall pay the balance of costs owing at $400 each month.

[46] The issues in this case were completely attributable to support. The court will order that the costs shall be payable as support and enforced as an incident of support by the Director of the Family Responsibility Office pursuant to clause 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act.

Conclusion

[47] A final order shall go on the following terms: a) The father shall pay the mother’s costs fixed at $7,500, inclusive of fees, disbursements and HST. b) The father shall pay the costs at $125 each month, starting on October 1, 2024. Starting on July 1, 2026, the father shall pay the costs at $400 each month. c) The costs shall be payable as support and enforced as an incident of support by the Director of the Family Responsibility Office pursuant to clause 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act. d) Nothing in this order precludes the Director of the Family Responsibility Office from collecting costs, in addition to the monthly payments ordered, from any government source (such as income tax returns, GST/HST returns), lottery or prize winnings, or any inheritance.

Released: September 13, 2024 Justice Stanley B. Sherr