DATE: May 26, 2025

COURT FILE NO. D44395/23
ONTARIO COURT OF JUSTICE

B E T W E E N:

T.R.
ACTING IN PERSON
APPLICANT

• and –

S.G.
OLAYEMI AYOOLA, for the RESPONDENT
RESPONDENT

HEARD: In Chambers
JUSTICE S.B. SHERR

COSTS ENDORSEMENT

Part One – Introduction

[1] On April 23, 2025, the court issued its reasons for decision after hearing a trial about parenting and support orders regarding the parties’ 13-year-old daughter (the child). See: T.R. v. S.G., 2025 ONCJ 224.

[2] The applicant (the mother) was the successful party at trial. She was given permission to make written costs submissions and the respondent (the father) was given time to provide a written response.

[3] The mother seeks costs of $19,668. The father did not make costs submissions.

Part Two – 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:

(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).

[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, para 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(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 – Success

[8] Subrule 24(3) sets out a presumption that the successful party is entitled to costs.

[9] The court found in its reasons for decision that the mother was the successful party.

[10] The mother was overwhelmingly successful at trial. She was granted primary residence, sole decision-making responsibility and incidents of decision-making responsibility for the child. The court ordered that the father’s parenting time with the child was to be in the mother’s discretion. It imputed annual income of $62,106 to the father and ordered him to pay the mother support arrears of $37,627. It dismissed the father’s claims.

[11] The presumption that the mother is entitled to costs was not rebutted.

Part Four – Did any of the parties’ offers to settle attract the costs consequences set out in subrule 24(12)?

[12] 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.

[13] 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:

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 good as or better than the offer.

[14] The technical requirements of subrules 18(4) and 24(12) must be met to attract the costs consequences in subrule 24(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.

[15] 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.

[16] None of the offers made by the parties complied with the technical requirements in subrule 24(12).

[17] The mother’s counsel sent a letter to the father on March 7, 2023 containing an offer to settle in the body of the letter. It was not signed by the mother as required by subrule 18(4). Accordingly, the costs consequences set out in subrule 24(12) do not apply. See: G.P. v. R.P., 2023 ONCJ 437; Rogers v. Porga, 2021 ONSC 5442.

[18] The mother also attached in her costs submissions an offer to settle contained in her settlement conference brief. This is not admissible in a costs submission. Subrule 17(23) is clear that no brief, evidence or statement made at a settlement conference is to be disclosed unless in an agreement reached at a settlement conference or an order. There is no exception for the offers to settle in a settlement conference brief to be disclosed in submissions for costs. See: Entwistle v. MacArthur; Milonas v. Copsas, 2018 ONCJ 794; Wiafe v. Afoakwa-Yeboah, 2021 ONCJ 488; G.H.F. v. M.D.E., 2019 ONCJ 766; M.M. v. K.M., 2023 ONCJ 427.

[19] The father served an offer to settle after 11 p.m. on April 13, 2025. The trial started on April 14, 2025. The offer did not comply with paragraph 2 of subrule 24(12) since it was not served at least 7 days before the trial. The offer was also nowhere near as good as the final trial result for the mother. The costs consequences set out in subrule 24(12) do not apply to this offer.

[20] The mother’s offer dated March 7, 2023 and the father’s offer to settle were considered under sub-clause (iii) of subrule 24(14)(a).

Part Five – Bad faith

5.1 Legal considerations

[21] The mother seeks full recovery costs. She claims the father acted in bad faith.

[22] Subrule 24(10) 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.

[23] Subrule 24(10) 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 CarswellOnt 14971 (Ont. SCJ).

[24] 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.), 38 R.F.L. (6th) 315 (Ont. SCJ).

[25] 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.

[26] A bad faith finding on some specific issue does not necessarily have a spill-over effect to other issues. See: Hunt v. Hunt, [2001] O.J. No. 5111 (SCJ); Kardaras v. Kardaras, 2008 ONCJ 616; Kumar v. Nash, 2024 ONCJ 16.

5.2 Analysis

[27] The court finds that the father acted unreasonably. He did not pay child support until ordered to do so by the court in April 2024. Instead, he bought a Porsche after he was served with the mother’s application in September 2023. He only partially complied with the temporary support order. He delayed in providing financial disclosure. Four court orders were required for him to produce it. However, none of this behaviour reaches the high threshold required to make a bad faith finding.

[28] At paragraph 63 of its reasons for decision, the court found that the father maliciously called the police and the Children’s Aid Society against the mother and that it was likely he did this to emotionally hurt her and to improve his litigation position. The court finds this conduct was bad faith. The mother will receive full recovery costs for a portion of her parenting claim.

Part Six – Amount of costs

6.1 Legal considerations

[29] 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.

[30] 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.

[31] The court considered the mother’s ability to pay costs. See: MacDonald v. Magel (2003), 67 O.R. (3d) 181 (Ont. C.A.). However, difficult financial circumstances are a factor but are not always a reason to deprive a successful party of costs or to reduce the amount of costs. See: Beaulieu v. Diotte, 2020 ONSC 6787.

[32] 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] 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.

6.2 Importance, complexity and difficulty of the case

[34] This case was important to the parties. It was not complex. It was made more difficult because the father delayed in providing basic financial disclosure, took unreasonable positions on all issues, and made unsubstantiated allegations against the mother that she had to refute.

6.3 Unreasonable behaviour

[35] 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. The court may award elevated costs where one party's conduct has been unreasonable. See: Barrett v. Watson, 2024 ONSC 1118 (SCJ); Houston v. Houston, 2025 ONSC 2824.

[36] Conduct which unduly complicates or unduly lengthens and increases the cost of a proceeding constitutes unreasonable conduct under subrule 24(14)(a)(i). See: Goldstein v. Walsh, 2019 ONSC 3174 (SCJ); Hutchinson v. Peever, 2021 ONSC 4587 (SCJ); Jackson v. Mayerle, 2016 ONSC 1556 (SCJ).

[37] 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; Thomas v. Charles, 2024 ONCJ 138; Churchill v. Elliot and Ward, 2024 ONSC 2757 (SCJ). Poor litigation decisions and advancing unreasonable claims or filing meritless and incomplete pleadings may also justify an elevated costs award. See: Hughes v. Hughes, 2024 ONSC 1119; Ali Hassan v Abdullah, 2023 ONCJ 186, para 61.

[38] The reasonableness of litigation conduct must be gauged over the totality of the proceeding. A court can order increased costs to express disapproval of unreasonable conduct. The amount may be higher where a party has had to incur unnecessary added expense as a result of the other party’s unreasonable conduct. See: Rolfe v. Boneo, 2023 ONSC 2269; John v. John, 2020 ONSC 6437 (SCJ); O’Brien v. Chuluunbaatar, 2019 ONCJ 882 (OCJ); Habibi v. Aarabi, 2022 ONSC 240 (SCJ).

[39] In Chakravarty v. Tharani, 2019 ONCJ 520 this court increased costs when financial disclosure was provided, but very late. This meant extra work for the mother as her counsel had to prepare for different scenarios. It also made it difficult for her to make an offer to settle.

[40] The mother acted reasonably throughout the case. She attempted to settle the case in her offer to settle dated March 7, 2023. The father should have accepted that offer. It was much more favourable to him than the trial result.

[41] The father did not act reasonably, as set out above. He also did not make an offer to settle until the night before the trial started. He took unreasonable positions at trial. The court found almost every material finding of fact in dispute against him at trial.

6.4 Legal rates

[42] The mother retained counsel on a limited-scope retainer for the trial. Counsel represented her until just before the trial. Her counsel prepared, served, and filed her trial material on her behalf. They assisted her in preparing her testimony and her cross-examinations at trial. They prepared her costs submissions.

[43] The mother benefitted from this legal assistance. Her trial materials were organized and focused. She conducted a strong cross-examination of the father.

[44] Limited scope retainers or unbundled legal fees are one way to attempt to address access to justice and legal representation. Consistent with this need, courts addressing costs should consider Bills of Costs certified by lawyers who have provided assistance, even if not on the record throughout the case. See: Jordan v. Stewart, 2013 ONSC 5037.

[45] The mother is not claiming costs for her own time. She is only claiming time charged to her by her counsel. This is very reasonable.

[46] The mother’s counsel charged her $300 per hour. This is very reasonable for a 1981 call to the bar.

6.5 Prior steps in the case

6.5.1 Legal considerations

[47] The mother is seeking full recovery costs for all her legal fees in this case. This is problematic.

[48] 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.

[49] 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.

[50] 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 costs 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.

[51] In Cameron v. Cameron, 2018 ONSC 6823, Justice Marvin Kurz found that there is a rebuttable presumption against ordering costs for prior steps in the case if they were not addressed or reserved by the judge hearing the step. He wrote at paragraphs 83 to 86:

[83] In sum, a trial judge has the jurisdiction under R. 24(11) to determine the costs of earlier steps in the proceeding. However, in light of the continued application of R. 24(10), it should be presumed that a judge who does not determine or reserve the costs of a step before her or him does not find that the conduct of the parties during the course of that step merits an award of costs.
[84] That presumed finding should be entitled to deference by subsequent judges. It should be accorded even greater deference when, as here, the previous step was conducted before R. 24(11) was formally amended on April 23, 2018.
[85] If the judge of a step prior to trial does not wish the presumption to apply, I suggest that he or she should say so. The judge can then expressly reserve the costs of the step to a later date, such as the trial. If that occurs, brief reasons would be helpful. I know that many judges are reluctant to award costs of a conference or even reserve them for fear that such a decision may adversely affect the potential for settlement. However, with the increasingly onerous costs of family litigation, it is always salutary for the parties to be reminded at every stage of the proceeding of the potential costs consequences of their litigation.
[86] In light of the presumption, 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.

This approach has been followed in T.L. v. D.S., 2020 ONCJ 9; Berge v. Soerensen, 2020 ONCJ 265; and in G.P. v. R.P., 2023 ONCJ 437.

[52] 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. This can include time spent preparing and reviewing pleadings, preparing and reviewing financial statements, obtaining and reviewing financial disclosure, meetings with clients, meetings and discussions with professionals and discussions with opposing counsel. See: Jansen v. DiCecco, 2025 ONCJ 256.

6.5.2 Analysis

[53] The mother claimed costs for case conferences, motions and Form 14B motions heard by Justice Carolyn Jones, the case management judge.

[54] The mother claimed costs for a motion heard on August 13, 2024. Justice Jones made a $1,000 costs order against the father. Costs for that appearance have been determined and will not be dealt with further in this decision.

[55] Justice Jones reserved costs for an appearance on April 9, 2024. Costs for that appearance will be included in this decision.

[56] Costs were not decided or reserved at any other appearance. The court finds that costs should have been sought at those appearances or a request should have been made to reserve costs. Justice Jones was better situated than the trial judge to make costs determinations for those appearances. There are no exceptional circumstances that persuade the court at this stage to order costs for them.

[57] The mother will be awarded costs for activity not attributable to prior steps in the case.

[58] The mother will be awarded costs for her preparation for and 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. See: Thomas v. Sanchez, 2022 ONCJ 532; N.M. v. S.M., 2023 ONCJ 23.

[59] The mother will also be awarded costs for her preparation for and attendance at the Trial Management Conference. This is an appearance connected with the trial and the trial judge is usually better situated to determine costs for these appearances than the judge hearing the case management judge.

6.6 Other factors and the amount of costs

[60] The disbursements of $141 claimed by the mother are reasonable.

[61] The court finds that the father, if given a reasonable payment order, has the ability to pay the costs that it will be ordered.

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

[63] The court will order the father to pay the mother costs of $14,000, inclusive of fees, disbursements and HST. This is in addition to the costs previously ordered. The father may pay the costs at $500 each month, starting on June 1, 2025. However, if he is more than 30 days late in making any payment, the entire amount of costs then owing shall immediately become due and payable.

Part Seven – Enforcement by the Family Responsibility Office

[64] 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 (the Director) pursuant to clause 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act.

[65] 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.

[66] A flexible approach has been endorsed when the court is determining what proportion of costs should be allocated to the support issues. See: Shelley v. Shelley, 2019 ONSC 2830; Blackwood v. Nichols, 2022 ONCJ 357.

[67] The court finds that an allocation of 50% of the costs to the child support issues is appropriate in this case.

Part Eight – Conclusion

[68] A final order shall go as follows:

a) The father shall pay the mother’s costs fixed at $14,000, inclusive of fees, disbursements and HST.

b) The father may pay the costs at $500 each month, starting on June 1, 2025. However, if he is more than 30 days late in making any payment, the entire amount of costs then owing shall immediately become due and payable.

c) The amount of $7,000 (50% of the overall costs award) is payable as support and shall be enforced as an incident of support by the Director pursuant to clause 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act.

Released: May 26, 2025

Justice Stanley B. Sherr