Court File and Parties

Date: October 23, 2024 Court File No.: D45346/24 Ontario Court of Justice

B E T W E E N:

MYKAYLA DAVIS, Applicant Jaclyn Mackenzie, for the Applicant

- and –

DANIEL MOCHARENKO and SHERRI MCPHERSON, Respondents Alexei Goudimenko, for the Respondent, Daniel Mocharenko The Respondent, Sherri McPherson, acting in person

Heard: In Chambers

Justice S.B. Sherr

COSTS ENDORSEMENT

Part One – Introduction

[1] On September 23, 2024, the court heard motions brought by the three parties. They all sought orders for primary residence and decision-making responsibility for the subject child N, who is now 22 months old (the child). The respondent, Sherri McPherson (the maternal grandmother), sought a temporary order permitting her to relocate with the child to Prince Edward Island. The applicant, Mykalya Davis (the mother) and the respondent, Daniel Mocharenko (the father), sought an order requiring the maternal grandmother to return the child to Ontario.

[2] The court gave oral reasons and made the following findings and temporary orders:

a) The child is habitually resident in Ontario. b) The maternal grandmother improperly relocated the child to Prince Edward Island. c) The child is placed in the primary residence of the mother. d) The mother shall have decision-making responsibility for the child. e) The maternal grandmother is to return the child to Ontario no later than September 30, 2024. f) The father shall have supervised parenting time by a professional parenting time supervisor, with a graduation in the time for the visits. g) The maternal grandmother shall have virtual parenting time with the child, and in person parenting time if she comes to Toronto.

[3] The parties were given the opportunity to make written costs submissions.

[4] The maternal grandmother subsequently brought a Form 14B motion asking for the mother to transport the child to Toronto. This motion was dismissed. The court ordered that the mother may include the costs of responding to that motion in her costs submissions.

[5] The mother seeks costs of $8,460 against the maternal grandmother and costs of $940 against the father. The father asks that no costs be payable by him. The maternal grandmother did not make costs submissions.

Part Two – Legal considerations - General principles

[6] 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).

[7] 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.

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

[9] 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

[10] 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] O.J. No. 330 (SCJ- Family Court).

[11] 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; G.E. v. J.E., 2023 ONSC 1743; Kyriacou v. Zikos, supra; Reichert v. Bandola, 2024 ONSC 4573.

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

[13] 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.

[14] 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.

2.3 Offers to settle

[15] 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.

[16] 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).

[17] 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 4400.

[18] 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.

[19] 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.

[20] The technical requirements of subrules 18 (4) and 18 (14) must be met to attract the costs consequences in subrule 18 (14). See: Sader v. Kekki, 2014 ONCJ 41; Jakubowski v. Kopacz-Jakubowski; Weber v. Weber, 2020 ONSC 6855; Clancy v. Hansman, 2013 ONCJ 702; Ajiboye v. Ajiboye, 2019 ONCJ 894.

Part Three – Analysis of success

[21] The mother is the only party who made an offer to settle. However, it was served the evening before the motion. This means service was effective the date of the motion. See: Subrule 5 (11) (b). Accordingly, the offer did not meet the technical requirements of subrule 18 (14) and the costs consequences in the subrule do not apply.

[22] It is important that offers to settle be served with sufficient time for parties to process them and respond. Offers served the day before a motion will usually be given limited value in assessing costs awards. See: E.O. v. O.K., 2018 ONCJ 578; Oduwole v. Moses, 2016 ONCJ 653.

[23] The mother was the successful party in this case. She was completely successful with respect to her dispute with the maternal grandmother. The court ordered the return of the child to Ontario to reside with her and she was given temporary decision-making responsibility for the child.

[24] There was some divided success on the issue of the father’s temporary parenting time. The mother sought fixed supervised parenting time for the father to be supervised either by Access for Parents and Children in Ontario or herself. The court ordered that any professional supervised parenting time supervisor could supervise the parenting time and provided for gradually expanded hours for the visits. It found it was not a good idea for the mother to supervise the father’s parenting time.

[25] The father was unsuccessful on his claims for temporary primary residence, decision-making responsibility and unsupervised parenting time.

[26] The mother is presumptively entitled to her costs against the maternal grandmother and the father. The maternal grandmother did not rebut this presumption. The father partially rebutted this presumption.

Part Four – Bad faith

[27] The mother seeks her full recovery costs against the maternal grandmother. She claims the maternal grandmother acted in bad faith.

4.1 Legal considerations

[28] Subrule 24 (8) of the rules states that if a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.

[29] Subrule 24 (8) requires a fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made. See: Cozzi v. Smith, 2015 ONSC 3626; Scipione v. Del Sordo, 2015 ONSC 5970.

[30] There is a difference between bad faith and unreasonable behaviour. The essence of bad faith is when a person suggests their actions are aimed for one purpose when they are aimed for another purpose. It is done knowingly and intentionally. See: S.(C.) v. S. (M.) (2007), 38 R.F.L. (6th) 315 (Ont. SCJ).

[31] Bad faith is not synonymous with bad judgment or negligence; rather, it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. Bad faith involves intentional duplicity, obstruction or obfuscation. See: Scipione, supra.

4.2 Analysis

[32] The mother submitted the maternal grandmother acted in bad faith because:

a) The maternal grandmother overheld the child in Prince Edward Island during the middle of a contested court case. She believes this was a vindictive action against her. b) The maternal grandmother directed the child’s daycare provider in Prince Edward Island not to speak to her. c) The maternal grandmother breached the order to return the child to her in Ontario by September 30, 2024. The mother indicated in her costs submissions she was flying to Prince Edward Island to pick up the child. The maternal grandmother booked the flights for her. d) The maternal grandmother re-directed the Canada Child Benefit to herself. e) The maternal grandmother late-filed her motion material, and it did not comply with Practice Direction.

[33] The court finds the maternal grandmother acted unreasonably. However, her conduct did not rise to the high threshold required to make a finding of bad faith against her.

[34] The maternal grandmother believes she was acting in the child’s best interests. There is no evidence her motivations were vindictive. She was self-represented and was not familiar with court process. She expressed financial concerns about bringing the child back to Ontario. She arranged flights for the mother.

Part Five – Amount of costs

5.1 Legal considerations

[35] 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.

[36] The reasonableness of the parties’ positions, arguments and conduct are relevant to the issue of costs. An important function of costs is to uphold the integrity of our justice system. Costs are one way of ensuring the resources of the justice system are not unduly drained by clearly unreasonable claims and ill-advised litigation strategy. See: Weber v. Weber, 2020 ONSC 6855.

[37] 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.

[38] A high or full recovery costs award may be justified where a party persists in advancing unreasonable claims or arguments. See: Lawrence v. Lawrence, 2017 ONCJ 431; M.A.B. v. M.G.C., 2023 ONSC 3748.

[39] In considering the reasonableness of the parties’ conduct, the judge deciding costs should also address their mind to whether they have complied with court orders and the Rules during the proceeding. Rules 1(8)(a) and 1(8.1) provide that if a person fails to obey an order in a case or a related case or with the Rules, the court may deal with the failure by making an order for costs. See: M.A.B. v. M.G.C., supra.

[40] 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.). 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.

[41] 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.

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

[43] 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.

5.2 Analysis

[44] This case was important to the parties. It was not complex or difficult.

[45] The mother acted reasonably regarding the maternal grandmother, although she should have made her offer to settle much earlier.

[46] The mother acted unreasonably regarding the father. She sent the child to stay with the maternal grandmother for the summer of 2024, in the middle of a court case, without seeking his consent, or even notifying him. This will reduce her costs claim.

[47] The father generally acted reasonably. He should have made an offer to settle. Also, he should not have pursued his claim for temporary primary residence and decision-making responsibility for the child since the child had never met him. Some costs will be awarded against him for maintaining this claim on the motions.

[48] As set out above, the maternal grandmother acted unreasonably. This conduct increased the costs of the motions.

[49] The mother’s counsel’s rates of $350 per hour, for a 2014 call to the bar are reasonable.

[50] The court reviewed the mother’s bill of costs. The time claimed on the motions is reasonable. She limited her claim to the motions.

[51] The maternal grandmother and the father should have reasonably expected to pay the level of costs that will be ordered if they were unsuccessful.

[52] The court considered the maternal grandmother’s financial circumstances. She said she was struggling financially. She said she has a new job. She supports another child. She provided no other information to the court. The court will take into consideration her financial circumstances by permitting her to pay the costs over a reasonable time frame.

[53] The court also considered the father’s financial circumstances. He is not working. The court will make a modest costs order against him.

Part Six – Conclusion

[54] A final costs order shall go as follows:

[55] A final costs order shall go as follows:

a) The maternal grandmother shall pay the mother her costs fixed at $6,500, inclusive of fees, disbursements and HST. b) The maternal grandmother may pay the costs at $500 each month, starting on November 1, 2024. However, if she is more than 30 days late in making any payment the entire amount then owing shall immediately become due and payable. c) The father shall pay the mother her costs fixed at $400, inclusive of fees, disbursements and HST. d) The father may pay the costs at the rate of $50 each month, starting on November 1, 2024. However, if he is more than 30 days late in making any payment, the full amount then owing shall immediately become due and payable.

Released: October 23, 2024 Justice Stanley B. Sherr