Costs Endorsement
Part One – Introduction
[1] On February 24, 2025, the court delivered written reasons for decision after a focused trial of support issues concerning the parties’ 7-year-old child (the child). See: Maggio v. Sousa, 2025 ONCJ 98.
[2] The court ordered the following:
a) The respondent (the father) shall pay the applicant (the mother) child support of $1,182 each month, starting on March 1, 2025. This is comprised of the guidelines table amount for one child of $812 each month, based on the father’s imputed annual income of $87,225, and $370 each month, being 74% of the child’s section 7 tutoring expenses.
b) The father’s support arrears are fixed at $37,006.
c) The father may pay the support arrears at the rate of $1,000 each month, starting on March 1, 2025.
[3] The parties were given permission to make written costs submissions. The mother seeks her costs of $28,092. The father submits this amount is excessive and unreasonable. He proposes that the court order costs for her of $12,000, inclusive of fees, disbursements and HST.
Part Two – General costs principles
[4] The costs provisions in the Family Law Rules (all references to the rules in this decision are to the Family Law Rules) were amended on January 22, 2025. The court will apply those amendments in this decision.
[5] 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).
[6] 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, para 25.
[7] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.
[8] An award of costs is subject to the factors listed in subrule 24(14), subrule 24(7) pertaining to unreasonable conduct of a successful party, subrule 24(10) pertaining to bad faith, subrule 24(12) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party. See: Berta v. Berta, 2015 ONCA 918, para 94.
Part Three – Did the parties’ offers to settle attract the costs consequences set out in subrule 24(12)?
[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] The costs 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, is now set out in subrule 24(12). It reads as follows:
COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER
24(12) 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 good as or better than the offer.
[11] Subrule 24(13) sets out that the onus of proving that the order is as good as or better than the offer to settle is on the party who claims the benefit of subrule 24(12).
[12] The technical requirements of subrules 18(4) and 24(12) must be met to attract the costs consequences in subrule 18(14). See: Sader v. Kekki, 2014 ONCJ 41; Jakubowski v. Kopacz-Jakubowski, [2008] O.J. No. 1442 (SCJ); Weber v. Weber, 2020 ONSC 6855; Ajiboye v. Ajiboye, 2019 ONCJ 894; Obitulata-Ugwu v. Ugwu, 2024 ONCJ 655.
[13] The costs presumption set out in subrule 24(12) 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. See: Mussa v. Iman, 2021 ONCJ 92.
[14] The father made an offer to settle dated September 17, 2024. It was not as good as or better than the trial result. He offered to have his annual income imputed at $46,000 and to fix his support arrears at $2,500.
[15] The mother’s offer to settle was better than the trial result for the father. She offered to impute the father’s ongoing income at $85,667 – it was assessed at $87,225. She also offered to fix arrears at $34,486 – they were fixed at $37,006.
[16] The problem with the mother’s offer to settle was that it was only served one day before the trial. Paragraph 2 of subrule 24(12) requires an offer to be served at least 7 days before the trial for the costs consequences in the subrule to apply.
[17] This court has frequently criticized the practice of serving offers to settle a day before an event – particularly on self-represented litigants. In Abrahiumkhill v. Khaled, 2022 ONCJ 324, the court wrote the following:
[20] In determining what constitutes a reasonable period of time, counsel should also expect that courts will require offers upon self-represented litigants to be served earlier than the minimum times set out in subrule 24(12). Rule 2 provides that courts have an obligation to ensure that self-represented litigants are dealt with justly. Counsel are also required to help the court promote this objective. See: subrule 2(4). Dealing with a case justly includes ensuring that the procedure is fair to all parties. See: clause 2(3)(a).
[21] Making an offer to settle to a self-represented litigant that permits only one day for acceptance before costs activate may have some value as a litigation tactic, but it has little probative value for this court when determining whether to apply subrule 24(12). The respondent was not given sufficient time to consider the offer or to obtain advice. The offer did not meet the primary objective to deal with cases justly set out in rule 2.
[18] The court finds that the costs consequences set out in subrule 24(12) do not apply to the mother’s offer to settle. The offers to settle can be considered under sub-clause (iii) of subrule 24(14)(a). However, since the mother’s offer was served the day before the trial, it had little value in this analysis.
Part Four – Success
[19] Subrule 24(3) sets out a presumption that the successful party is entitled to costs. The father concedes that the mother was the successful party and costs should be awarded to her.
Part Five – Amount of costs
[20] Subrule 24(14) reads as follows:
24(14) 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.
[21] This case was important to the parties. It was more difficult than it needed to be due to the father’s obstruction in providing financial disclosure.
[22] 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.
[23] 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. See: M.A.B. v. M.G.C., 2023 ONSC 3748.
[24] The mother acted reasonably in this case, except for her failure to make a timely offer to settle.
[25] The father did not act reasonably regarding the support issues. The court made the following findings of fact at trial:
a) The father initially did not reveal all his assets. He did not disclose in his first financial statement that he had an account with the CIBC. He denied having a CIBC account when asked by the mother. Only when the mother said she would summons someone from the CIBC to court did the father sign an authorization for the mother to obtain his CIBC bank statements. These statements revealed substantial additional income.
b) The father misrepresented his annual income to the mother when she asked him for child support.
c) The father delayed in providing the mother with the financial disclosure required in the Automatic Disclosure Order that was issued together with the Application. Two further orders were made for him to provide his financial disclosure. The disclosure he provided was incomplete.
d) The father initially represented he was only earning annual income of about $16,000.
e) The father seriously neglected his child support obligations.
[26] The father’s conduct hovered very close to bad faith.
[27] The court found that the father acted more reasonably after his CIBC account was disclosed. He was much more forthcoming about his income at trial.
[28] The rates of $400 per hour claimed by the mother’s lawyer are reasonable for a 2011 call to the bar.
[29] The father claimed costs for all steps in this case, including for the parenting issues. The court will not order costs for the parenting issues at this stage. The parties negotiated agreements that did not include or reserve the issue of costs. The father acted reasonably in settling those issues.
[30] The court will limit the mother’s costs claim to the support issues.
[31] The court finds that the time claimed for the support issues is excessive. This was a focused half-day trial.
[32] The mother also claimed time for prior steps in the case.
[33] Subrule 24(1) sets out that promptly, after dealing with a step in a case, the court shall, in a summary manner, determine who, if anyone, is entitled to costs in relation to that step and set the amount of costs or reserve the decision on costs for determination to a later step in the case.
[34] Subrule 24(2) sets out that the failure of the court to make a costs order, or reserve costs after a step in a case does not prevent the court from awarding costs in relation to that step at a later step in the case.
[35] 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.
[36] The conferences in this case involved a mix of parenting and support issues. Costs were not ordered or reserved at those conferences. There are no exceptional circumstances for awarding costs for those appearances at this stage of the case.
[37] Costs accrued from activity not specifically related to a prior step in a case can be ordered at the end of a case. Activity not requiring judicial intervention is often better dealt with at the end of the case and not by the motions judge. See: Houston v. Houston, 2012 ONSC 233; Walts v. Walts, 2014 ONSC 98; F.S. v. M.B.T., 2023 ONCJ 144. The mother will be awarded costs for preparing her application and obtaining and reviewing financial disclosure from the father.
[38] Costs for the attendance to organize this hearing will be ordered. They are attributable to the trial step.
[39] In reviewing the mother’s bill of costs, the court agrees with the father’s submission that there is some duplication of work between the lawyers who worked on the case.
[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. See: Arthur v. Arthur, 2019 ONSC 938. The court finds the father should have reasonably expected to pay the costs that will be ordered if he was unsuccessful.
[41] The court finds that the father can afford these costs. He owns a home with significant equity.
[42] The court finds it reasonable and proportionate to order the father to pay the mother her costs of $12,000 plus 13% for HST, for a total of $13,560.
Released: April 7, 2025
Justice Stanley B. Sherr