Court File and Parties

Date: December 18, 2024 Court File No.: D42445/22 Ontario Court of Justice

Between: Vivien Onyinye Obitulata-Ugwu, Applicant

And: Chenedu Kenneth Ugwu, Respondent

Counsel: Theodora J. Oprea, for the Applicant Acting in Person, for the Respondent

Heard: In Chambers

Costs Endorsement

Part One – Introduction

[1] On November 19, 2024, the court released its reasons for decision following a trial of the parties’ motions to change the support terms set out in the final order of Justice Carole Curtis, dated July 31, 2023 (the existing order). See: Obitulata-Ugwu v. Ugwu, 2024 ONCJ 586.

[2] The court found that the applicant (the mother) was the successful party, as it dismissed the father’s motion to significantly reduce his child and spousal support obligations in the existing order.

[3] The mother asked to make written costs submissions. Timelines were set by the court for her to make her submissions and for the respondent (the father) to make his written response.

[4] The mother seeks costs of $13,000. She also asked that the costs be enforced as support by the Director of the Family Responsibility Office (the Director).

[5] The father did not make costs submissions.

Part Two – General costs 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, 2003 S.C.C. 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.

Part Two – Did the mother’s offer to settle attract the costs consequences set out in subrule 18 (14)?

[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:

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 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.

[12] In Mussa v. Iman, 2021 ONCJ 92, this court wrote at paragraph 22:

The costs presumption set out in subrule 18 (14) can have significant repercussions – full recovery costs from the date of the offer. That is why full technical compliance with subrules 18 (4) and (14) is required.

[13] In Ajiboye, the offer to settle expired at 9 a.m., before the hearing started. In Balzano v. D’Alessandro, 2024 ONCJ 609, the offer expired one minute prior to the hearing of a motion. In both cases, the offers to settle were not in compliance with paragraph 3 of subrule 18 (14), as they had expired before the hearing started. The court did not apply the costs consequences set out in subrule 18 (14).

[14] The mother’s counsel was alive to the requirement in paragraph 3 of subrule 18 (14) that an offer to settle cannot expire or be withdrawn before a hearing starts, for the costs consequences in the subrule to apply. Twice in her costs submissions she submitted that the mother’s offer to settle was open until one minute after the trial started. Unfortunately, the mother’s offer to settle sets out that it was only open for acceptance until one minute before the trial began. It had already expired when the trial started.

[15] The mother’s offer to settle does not attract the costs consequences set out in subrule 18 (14).

[16] When subrule 18 (14) does not apply, the court may still consider any written offer to settle, the date it was made and its terms under subrule 18 (16) and when assessing the reasonableness of a party under sub-clause (iii) of subrule 24 (12) (a).

Part Three – Legal considerations for the amount of costs

[17] 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.

[18] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel, 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.

[19] 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.

[20] 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 Four – Analysis of the amount of costs the father should pay to the mother

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

[22] The mother took reasonable positions. She succeeded in having the father’s motion to change entirely dismissed. She did not succeed on a minor issue. The court did not make an order requiring the father to obtain leave of the court before starting further proceedings in this court.

[23] The mother made a very reasonable offer to settle. The father should have accepted it. She proposed a slight increase in child support from $1,533 each month to $1,598 each month. She also proposed to fix support arrears at $15,800 and offered a generous payment plan to the father. The court kept the child support payments at $1,533 each month. However, it did not reduce the support arrears ($17,329, as of August 20, 2024) and did not make a payment order for arrears.

[24] The father did not act reasonably. He did not make an offer to settle. The court found that he was deliberately under-employed and unemployed. The court noted a pattern where the father significantly reduced his income whenever the matter was before the court or when the Family Responsibility Office was enforcing the existing order. The court found that this was not a coincidence. It found he had not established a material change in his income and dismissed his motion to change.

[25] The mother’s counsel’s rates claimed of $400 per hour are reasonable for a 2014 call to the bar.

[26] The mother’s costs claim includes time for all steps in the case. This includes a case conference before Justice Curtis.

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

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

[29] In Laidman v. Pasalic and Laidman, 2020 ONSC 7068 the court set out that the presumption remains that costs should be determined at each stage, and there are good reasons for this. 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 – often to a different judge – can result in later confusion and controversy about what really happened at the earlier step.

[30] In Berge v. Soerensen, 2020 ONCJ 265 Justice Roselyn Zisman set out the following circumstances where costs of a prior step should be awarded:

a) Costs have been reserved to the trial judge. b) When, considering subsequent events, the trial judge is better situated to determine the costs of the prior step than the judge presiding over the step or c) In exceptional circumstances.

[31] Justice Curtis did not reserve the costs of the case conference held before her. This court is not better situated to determine the costs of that step, at this stage. No exceptional circumstances exist that warrant the court ordering costs for this prior step at the trial stage.

[32] However, this does not preclude the court from awarding costs accrued from activity not specifically related to any step. Activity not requiring judicial intervention is often better dealt with at the end of the case and not by the case management judge. See: Houston v. Houston, 2012 ONSC 233; Walts v. Walts, 2014 ONSC 98; F.S. v. M.B.T., 2023 ONCJ 144. This includes initial interviews and meetings before filing the application, preparation of the application and financial statements, and document preparation and review. The mother is entitled to have these costs considered now. See: Czirjak v. Iskandar, 2010 ONSC 3778.

[33] The mother claims costs for her attendance at First Appearance Court. In Thomas v. Saunchez, 2022 ONCJ 532, this court ordered costs for the attendance at First Appearance Court. These are appearances before a court clerk to ensure that the case is ready to send to a judge for a case conference. There should be no expectation that costs will be addressed at this step of a case. The mother is entitled to her costs for this step in the case. Also see: N.M. v. S.M., 2023 ONCJ 23.

[34] The court finds that the time claimed by the mother’s counsel is reasonable and proportionate.

[35] The father can afford to pay the costs that will be ordered, particularly if he is given a reasonable payment plan.

[36] The father should have reasonably expected to pay the costs that will be ordered if he was unsuccessful.

[37] The court finds that the father should pay total costs to the mother of $9,000, inclusive of fees, disbursements and HST. He may pay the costs at $375 each month, starting on January 1, 2025. This gives him two years to pay the costs. However, if he is more than 30 days late in making any costs payment, the entire amount of costs then owing shall immediately become due and payable.

Part Five – Why the court will order the costs to be enforced as an incident of support by the Director

[38] The mother seeks an order that her costs be payable as support and enforced as an incident of support by the Director pursuant to clause 1 (1) (g) of the Family Responsibility and Support Arrears Enforcement Act, 1996.

[39] 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.

[40] This case was entirely about support. The court will make the order sought by the mother.

Part Six – The order

[41] An order shall go as follows:

a) The father shall pay the mother’s costs fixed at $9,000, inclusive of fees, disbursements and HST. b) The father may pay the costs at $375 each month, starting on January 1, 2025. However, if he is more than 30 days late in making any costs payment, the entire amount of costs then owing shall immediately become due and payable. c) The costs shall be payable as support and enforced as an incident of support by the Director pursuant to clause 1(1) (g) of the Family Responsibility and Support Arrears Enforcement Act, 1996. d) Nothing in this order precludes the Director 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: December 18, 2024 Justice Stanley B. Sherr