COURT FILE AND PARTIES

COURT FILE NO.: 166/13
DATE: 2014/10/02

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Christine Adele Ball, Applicant

AND

Daniel Watson Ball, Respondent

BEFORE: Mr. Justice Timothy Minnema

COUNSEL:
Carolyn Shelley, for the Applicant
Lindall S. McDonald, for the Respondent

HEARD: September 22, 2014

COSTS ENDORSEMENT

Issue

[1] The issue in this case is what costs if any should be awarded after the parties have settled.

Background Facts

[2] Christine Ball brought her Application on April 3, 2013, seeking various heads of family law relief including sole custody and primary residence of the two children. She also sought a restraining order. Daniel Ball filed his Answer and Claim by Respondent on April 5, 2013, seeking joint custody and shared parenting. Between them child support, equalization of property, and an appointment of counsel for the children were also claimed.

[3] The parties attended on a case conference and a settlement conference. Costs of those attendances were not reserved. A motion and a cross-motion for interim relief were heard in February 2014. At that time Mr. Ball’s access was increased. An order was also made, on consent as I understood it, to request an investigation and report by the Children’s Lawyer. Costs for those motions were not reserved, and neither party was seeking them.

[4] The parties then settled all the property issues by way of a Partial Separation Agreement. It says “The parties will pay their own costs for the negotiation and preparation of this Agreement.”

[5] Offers to Settle had been exchanged prior to the resolution of the property issues. The parties had also exchanged offers at the settlement conference and with respect to the above noted interim motions.

[6] On March 28, 2014, trial dates were set for four days commencing September 22, 2014.

[7] The Office of the Children’s Lawyer declined the request to become involved. In June of 2014, Mr. Ball proposed that a custody and access assessment be conducted. Ms. Ball did not agree. Mr. Ball then served a notice of motion returnable on July 16, 2014, to have the assessment ordered. Three days before the motion Ms. Ball agreed. The order was formally made at the trial management conference on July 15, 2014. While costs of the conference itself were not reserved, the parties consented to an order that the assessment be “paid for by the Respondent, without prejudice to the Respondent’s right to request a reapportionment of the costs of the Assessment by the trial judge, including but not limited to the costs of the Motion for Assessment returnable July 16, 2014.”

[8] The report from the Custody and Access Assessment is dated August 22, 2014. On August 27, 2014, less than a week later, Ms. Ball made a formal Offer to Settle incorporating almost all of the detailed recommendations. Her offer also dealt with child support. The next week the parties resolved the litigation by way of Minutes of Settlement executed on September 5, 2014, mirroring the offer in most respects. A final order based on the Minutes of Settlement was obtained on September 11, 2014, and indicated that “all other claims shall be withdrawn”. Both the minutes and the order contain the following paragraph:

44. Costs shall be as agreed by the parties prior to September 22, 2014, failing which costs shall be determined by the Court, without prejudice to the Respondent’s right to include his costs incurred with respect to the motion for a custody assessment and the costs of the assessment itself in his submissions on costs.

Law

General

[9] Pursuant to subsection 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 as amended, costs are discretionary. I am to assess the costs guided by Rule 24 of the Family Court Rules, O. Reg. 114/99 as amended. The fundamental purposes of that rule, as restated in Serra v. Serra, 2009 ONCA 395 at para. 8, are: “(1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behavior by litigants.”

Entitlement to Costs

[10] There is a presumption that the successful party is entitled to costs (subrule 24(1)). If success is divided, the court may apportion costs (subrule 24(6)). Factors such as generous offers to settle, reasonableness (including a consideration of all offers to settle), preparedness, and bad faith may also effect entitlement: subrules 24(4), (7), (8), and 18(14).

[11] Regarding entitlement to costs in the face of a settlement, Ms. Ball relied on Johanns v. Fulford, [2011] O.J. No. 4071 (S.C.J.), for the proposition that I have the authority to make such an order. That legal position was not disputed; indeed Mr. Ball was seeking his own costs. The court in Johanns distinguished Cogan v. Groulx [2004] O.J. No. 5541 (S.C.J.), where the court had declined to fix costs following a settlement finding that it would be impossible to do so judicially given lack of prior participation in the case and the absence of evidence on which to base a decision. Johanns stands for the logical flip side of that same proposition, namely that the court can take jurisdiction where there is an extensive record with supporting documentation.

[12] I accept the following summary statement from Orkin, The Law of Costs, 2nd Ed., (2014 Looseleaf) at para. 403: “Costs are generally not appropriate for a consent order on the reasoning that the order was not made as a result of adjudication on the merits of the application.” Without adjudication, it can be very difficult to know who has had success. As noted in Barber v. MaGee, [2013] O.J. No. 4657 (O.C.J.) at para. 23:

Consideration of success is the starting point in determining costs. However, any attempt to determine a "winner" or "loser" in a settlement is, in most cases, complex if not impossible. … Unless there are compelling reasons to do so, costs in the circumstances of the settlement between parties ought not to be awarded by the court. See: Page v. Desabrais, 2012 ONSC 6875, [2012] O.J. No. 5790, para. 28; Blank v. Micallef, 2009 60668 (ON SC), [2009] O.J. No. 4636, 2009 CarswellOnt 6790, para. 11; Gurzi v. Elliot, [2011] O.J. No. 1427, 2011 CarswellOnt 2169 (O.C.J.) para. 16.

Similarly, the court’s ability to determine whether there has been inappropriate behaviour by a litigant based only on submissions, when the court has not adjudicated the merits or received sworn evidence in keeping with the rules of procedural fairness, is also very limited.

Amount of Costs

[13] The overriding principle is that costs are to be fixed in a way that is fair to the parties and reasonable in the circumstances (Murray v. Murray (2005), 2005 46626 (ON CA), 79 O.R. (3d) 147 (C.A.)). This includes considering the reasonable expectations of the losing litigant regarding costs (Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40; Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.)). It also includes a consideration of the impact that the cost award will have on the party ordered to pay (see Murray above).

[14] As costs are to be decided promptly after each step in the case (sub-rule 24(10)), they are not awarded for preliminary steps (conferences and motions) that have been addressed by another judicial officer where the costs have not been reserved: see Islam v. Rahman, 2007 ONCA 622, 41 R.F.L. (6th) 10. This does not mean, however, that the costs order should only relate to matters concerning the hearing. As clarified in Houston v. Houston, 2012 ONSC 233, 12 R.F.L. (7th) 115 (Div. Ct.), steps not requiring any form of judicial intervention, such as the preparation of pleadings, are not covered by this rule.

Positions

[15] Ms. Ball was seeking costs of $64,761.80 on a full recovery basis. Although I referred her counsel to the law in the above paragraph, she still persevered in seeking costs for all the conferences, as well as for the Partial Separation Agreement despite it saying otherwise. I see no basis for awarding costs on those preliminary steps and I find, given there was no trial, that Ms. Ball’s proper claim if allowed would only be a fraction of the above amount. Mr. Ball was seeking costs of $21,749.96 broken down as $5,000 for defending the request for a restraining order that was never obtained, $7,500 for the Motion for Assessment, and $9,249.96 being the full costs of the Assessment.

Analysis

[16] I only have the parties’ submissions and some documents before me. They did not provide a statement of agreed facts. There was no sworn evidence.

[17] Regarding who was successful, Ms. Ball obtained the sole custody and principal residence she was seeking. Mr. Ball obtained more access than Ms. Ball initially offered. Ms. Ball sought a restraining order but at some point abandoned that claim. The parties claimed child support pursuant to the Child Support Guidelines, making it hard to weigh who had success in the settlement. Offers were exchanged. The settlement was not as favourable as or more favourable to a party than the early offers which included property and were not severable. Ms. Ball’s last offer to settle was basically accepted on its terms as reflected in the Minutes of Settlement.

[18] It is difficult here to even ascertain how to measure success. In family law proceedings parties often adjust their initial allegations or positions by the time they get to trial. Upon disclosure being received, equalization positions change. As children get older, and depending on how the visits and contact proceed, positions on access often change. Here, Mr. Ball wants me to compare the access he obtained in settlement against what Ms. Ball initially offered or pled, rather than against the access he was actually exercising. If this were a trial, I would have identified the final positions of the parties at the outset, allowed pleadings to be amended if appropriate, and adjudicated on only the remaining issues in dispute. I find that it would be arbitrary for me to pick an access regime that might not have been asserted by Ms. Ball at trial, and weigh it against the settlement to determine Mr. Ball’s success.

[19] Mr. Ball argued that he should have his full costs of the Custody and Access Assessment and related motion regardless of other considerations, as these were specifically reserved to the court. He pointed out that he was the one who pursued the assessment and Ms. Ball resisted, forcing him to bring a formal motion. The parties ultimately settled custody and access on substantially the same terms that the assessor recommended. He therefore argued that it was his efforts that resulted in the settlement and avoided the trial, and for that reason he should have those costs. I do not agree. Ms. Ball had valid reasons to resist the assessment. She was fearful it would cause the trial to be adjourned, and, being confident about her case, she was apprehensive about the unnecessary added costs. She only agreed when these two concerns were addressed. While the assessment certainly played a hand in the timing of the settlement, this may well have been as a result of Mr. Ball capitulating upon receiving recommendations that validated Ms. Ball’s position. For Mr. Ball to suggest that Ms. Ball would not have settled earlier on similar terms without the assessment is pure speculation and unsupported. Mr. Ball pushed for an expert report in the hope it would bolster his position; it did not, and he now wants Ms. Ball to reimburse him. In my view it is only fair that he assume those costs.

[20] I find that, overall, success has been divided, and there is no compelling reason to make a costs order or to reapportion costs.

[21] Both parties argued that I should award costs in their favour because the other party behaved unreasonably. Despite my pointing out that I would not be awarding costs for the preliminary steps, they both alleged unreasonable behavior in relation to them. As an example, each argued that I should find that the other was unreasonable in the negotiations regarding property. I do not see how I can award costs to a party on the custody issue as a sanction for alleged inappropriate behaviour on the property issues that were settled without costs. In my view, only the behaviour related to the issues on which I am being asked to award costs should be relevant. I also note that most of the facts on reasonableness were disputed. The following are two examples. Each party maintained that they proposed mediation and the other party refused. Without evidence I cannot determine who is right. While there was no dispute that Ms. Ball abandoned her initial request for a restraining order, there was a dispute as to when; she alleged she did this early on while Mr. Ball alleged it was much later. There was no evidence setting out what efforts, if any, were put into pursuing or defending that particular claim. I find that, overall, I do not have the evidence to judicially determine unreasonableness and award costs.

Decision

[22] In summary then, I am unable to find compelling reasons on the materials before me to make an award of costs against either party. No order as to costs.

Mr. Justice Timothy Minnema

Date: October 2, 2014