COURT FILE AND PARTIES

COURT FILE NO.: 4680-15

DATE: 2015/12/24

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Kelli-Lyn Wallegham, Applicant

AND:

Kevin James Spigelski, Respondent

BEFORE: The Honourable Madam Justice Deborah L. Chappel

COUNSEL:
Michael P. Clarke, Counsel, for the Applicant

Melinda Graham, Counsel, for the Respondent

HEARD: October 23, 2015

COSTS ENDORSEMENT

PART I: INTRODUCTION

[1] These are my Reasons on the issue of costs relating to a motion which the Respondent brought and which I heard on October 23, 2015. The motion related to the child of the parties’ relationship, Zackery Spigelski, born January 9, 2015 (“Zackery”).

[2] By way of background, the parties were married on October 31, 2008 and separated on May 1, 2015. The child has been in the primary care of the Applicant since the separation. On June 26, 2015, Harper, J. made an order providing for Zackery to remain in the primary care of the Applicant, and granting the Respondent daytime visits three days per week with the child in the former matrimonial home and in the presence of the Applicant. The parties subsequently agreed to move the visits to the home of the child’s maternal aunt, under the monitoring of the aunt, due to the level of conflict between the parties.

[3] In his motion, the Respondent requested unsupervised access with Zackery every weekend from Friday at 6:00 p.m. until Sunday at 8:00 p.m., as well as every Wednesday evening from 6:00 p.m. until 8:00 p.m. He also requested that he be permitted to exercise his time with Zackery in London Ontario, where members of his family live. The Applicant requested that the Respondent’s access be supervised at the YWCA access centre.

[4] At the conclusion of the hearing, I made an order granting the Respondent access beginning with daytime visits three times per week at the same times as provided for in the June 26, 2015 order. However, the order permitted the Respondent to have access in his home, without supervision by the Applicant, but monitored by the child’s paternal grandmother. The order provided for a gradual progression of the Respondent’s access towards a regime commencing November 23, 2015 of two evening visits during the week and a visit each weekend from Friday at 6:00 p.m. until Saturday at 1:00 p.m. The order removed the requirement of monitoring by the paternal grandmother by November 23, 2015, and also allowed the Respondent to exercise his time with Zackery in London as of that time.

[5] The Respondent seeks full recovery costs on the basis that he was overall the more successful party. The Applicant’s position is that there was mixed success on the motion. She suggests that the result of the motion was more in accord with the Respondent’s position than the position taken by the Applicant. However, she submits that the appropriate amount of a costs award should be no more than $750.00, and that this amount should be offset by the cost that she incurred in preparing Costs Submissions, given that she offered to settle the costs issue by paying the Respondent $1,500.00.

[6] For the reasons that follow, I have ordered that there shall be no costs payable by either party.

PART II: THE LAW

A. General Principles

[7] The starting point in addressing the issue of costs is section 131 of the Courts of Justice Act[^1], which provides that subject to the provisions of any Act or rules of court, costs are in the discretion of the court, which may determine by whom and to what extent the costs shall be paid. Rule 24 of the Family Law Rules[^2] sets out a number of principles to guide the court in the exercise of its discretion.

[8] The Ontario Court of Appeal established in Serra v. Serra[^3] that modern rules respecting costs have the goal of fostering the following three fundamental purposes:

a. to partially indemnify successful litigants for the cost of litigation;

b. to encourage settlement; and

c. to discourage and sanction inappropriate behaviour by litigants.

[9] In determining how these objectives can be most appropriately achieved, the court must balance the goal of indemnifying the successful litigant for their costs with the importance of not unduly deterring potential litigants from pursuing legitimate claims for fear of overly burdensome cost consequences.[^4]

[10] The Court of Appeal has highlighted the discretionary nature of costs awards, and the importance of the court considering all relevant factors.[^5] It has emphasized that although court rules respecting costs have circumscribed the broad discretion which section 131 of the Courts of Justice Act grants the court in regard to costs, they have not completely negated this discretion.[^6]

B. Liability for Costs

[11] As noted above, Rule 24 of the Family Law Rules sets out additional principles and guidelines that apply in determining costs in Family Law proceedings. The Rule sets out a number of factors relevant to the preliminary issue of liability for costs. Rule 24(10) establishes the general principle that the court should determine the issue of costs promptly after each step in the case. If a specific order for costs is not made at the end of a step in the case, including a conference or motion, or costs are not reserved, a judge dealing with a subsequent step or the trial judge should not generally consider the costs associated with that step when determining costs.[^7]

[12] Rule 24(1) establishes a presumption that a successful party to a motion, enforcement, case or appeal is entitled to costs. This presumption set out in Rule 24(1) does not apply where the successful party has acted unreasonably, in which case that party may be deprived of all or part of their costs or may be ordered to pay the unsuccessful party’s costs.[^8] It is not any type of unreasonable conduct that will disentitle a successful party to costs. However, the misconduct need not meet the high threshold of bad faith within the meaning of Rule 24(8) for the court to exercise its discretion pursuant to Rule 24(4) to deny costs despite a party’s success. A pattern of conduct which shows lack of respect for the letter and spirit of court orders and the relationship between a parent and child is the type of behaviour which should cause the court to seriously question the appropriateness of a costs award in favour of the successful party in a Family Law proceeding involving the child.[^9]

[13] Where success in a step in a case is divided, the court may exercise its discretion to order no costs, or to apportion costs as appropriate.[^10] The court may also in those circumstances award costs to the party who was more successful on an overall global basis.[^11] Similarly, if the parties have reached a negotiated resolution of the issues in their case, costs can nonetheless be ordered if the court determines that one party was more successful overall than the other party.[^12]

[14] Rule 24(7) stipulates that the absence of a party at a step in the case, or inadequate preparation to deal with the issues, create a presumption that costs should be ordered against the offending party. In these circumstances, the court may decide not to order costs if it is in the interests of justice that no costs be awarded. A finding that a party has acted in bad faith also results in liability for costs as against the offending party. Rule 24(8) provides 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. This costs provision is subject to the general principle that costs claimed must be reasonable.

[15] Another important consideration in determining both entitlement to and the quantum of costs is whether or not any party has served an Offer to Settle.[^13] Rule 18(14) establishes costs consequences for failing to accept an Offer to Settle that complies with the requirements of that Rule. In deciding costs, the court may also take into consideration as a favourable factor any written Offer to Settle, the date it was made and its terms, even if the conditions and presumptive consequences set out in Rule 18(14) do not apply.[^14] A party’s failure to serve an Offer to Settle may also be viewed as an adverse factor in determining the issue of costs.[^15]

[16] The circumstances discussed above are not the only ones which will give rise to liability for costs. Liability for costs must be assessed taking into consideration all of the circumstances and dynamics of the case. In deciding this issue, the overall reasonableness of each party’s conduct and the positions which they have taken in the litigation is an important consideration.

C. Quantum of Costs

[17] Once liability for costs has been established, the court must determine the appropriate quantum of costs. In Serra v. Serra,[^16] Boucher v. Public Accountants Council (Ontario),[^17] and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC,[^18] the court set out the additional general principles relating to the quantum issue:

a. Ultimately, costs decisions should reflect what the court considers to be a fair and reasonable amount that the unsuccessful party should pay.

b. Costs need to be proportional to the issues and amounts in question and the outcome of the case.

c. Amounts actually incurred by the successful litigant are not determinative.

d. In assessing what is fair and reasonable, the expectation of the parties concerning the amount of a costs award is a relevant consideration.[^19]

[18] In Boucher, the court emphasized that a failure to follow the overriding principle of reasonableness in assessing costs can produce a result that is contrary to the fundamental objective of access to justice.

[19] Rule 24(11) prescribes some of the factors which the court should consider in deciding the appropriate quantum of costs. These factors include the following:

FACTORS IN COSTS

24 (11) A person setting the amount of costs shall consider,

(a) the importance, complexity or difficulty of the issues;

(b) the reasonableness or unreasonableness of each party’s behaviour in the case;

(d) the time properly spent on the case, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order;

(e) expenses properly paid or payable; and

(f) any other relevant matter.

[20] In considering the issue of costs, the court should consider Rule 24 in conjunction with Rule 2(2), which provides that one of the primary objectives of the Rules is to ensure that cases are dealt with justly.[^20] The court should also turn its mind to Rule 1(8), which provides that the court may respond to a failure to follow the Rules or abide by an order by making an order for costs.

[21] Where the court concludes that a party has acted in bad faith, Rule 24(8) directs the court to order costs against that party on a full recovery basis, payable immediately. This costs provision is subject to the general principle that costs claimed must be reasonable.

[22] Although not specified in Rule 24(11) as factors in determining costs, the financial means of the parties, their ability to pay a costs order and the effect of any costs ruling on the parties are also relevant considerations in reaching a determination on the issue of costs, both under Rule 24 and Rule 18(14).[^21] However, ability to pay is only relevant to the issue of quantum of costs and how payment should be effected, and not to the question of liability for costs.[^22] Furthermore, a litigant’s limited financial means will be given less weight in the costs analysis than the court’s determination regarding overall success in the litigation.[^23] Furthermore, ability to pay alone cannot override the other factors set out in Rule 24(11).[^24] A party’s limited financial means will also be accorded less weight if the court finds that the party acted unreasonably. As Curtis, J. stated in Mooney v. Fast, “[i]t must be made clear to family law litigants that there is no right to a day in court, or at least, that the right to a day in court is tempered by the requirement that the parties take a clear-headed look at their case before insisting on their day in court.”[^25]

[23] Finally, in cases involving custody and access claims, a more tempered approach to costs may be appropriate depending on the circumstances of the case. The rationale for this is that parties should not be discouraged from advancing bona fide custody or access claims that are meritorious out of fear of possible deleterious financial consequences.[^26]

PART III: ANALYSIS

[24] Upon carefully considering all of the fundamental principles outlined above regarding costs, I have concluded that there should be no order for costs in relation to the motion. In reaching this conclusion, I have considered the overall success of the parties and their general conduct in relation to the motion and the costs issue. I have also considered the Applicant’s financial means and her ability to pay a costs award.

[25] With respect to the issue of success on the motion, I find that success was divided. In my opinion, both parties adopted unreasonable positions. The order that I made amounted to a “middle ground” approach which was sensitive to the child’s needs, and which the parties should have reached on their own had they both been reasonable in attempting to resolve the time-sharing issue. Dealing first with the Respondent’s position, he sought an order for unsupervised access every Wednesday and every weekend for the entire weekend. I ordered that he have daytime visits only for a period of time, monitored by his mother, and that his access progress gradually to include two mid-week evening visits and one half of each weekend, without supervision or monitoring. I did not allow him to exercise access in London right away. The position which the Respondent took on the motion was in my view unreasonable having regard for his limited parenting experience and the very young age of the child.

[26] The Applicant’s position on the motion was equally unreasonable, for the reasons that I outlined in detail in my Reasons for Judgment on the motion. In particular, I find that the Applicant was extremely unreasonable in failing to accept the paternal grandmother as a person who could assist in monitoring the Respondent’s parenting of Zackery.

[27] The outcome of the motion was overall somewhat more favourable to the Respondent than the Applicant, taking into consideration the positions which each party took. Nonetheless, I decline to make an order for costs in favour of the Respondent for three reasons. First, the Respondent did not serve an Offer to Settle the issues in dispute on the motion. He should have considered settlement options and attempted to resolve the motion prior to the hearing by serving a formal Offer to Settle. Second, I have considered the Applicant’s financial means and her ability to satisfy a costs award. She is of very limited financial means at this time and a costs award would cause hardship to her and the child. Finally, the Applicant offered to settle the issue of costs. In her offer, she agreed to pay the Respondent costs in the amount of $1,500.00, payable from the proceeds from the sale of the former matrimonial home. If I had ordered costs against the Applicant, I would not have ordered costs in more than that amount. As a result of the Respondent’s failure to accept this reasonable offer, the Applicant was required to incur additional legal fees in the amount of approximately $904.00 to prepare Costs Submissions and review the Applicant’s Costs Submissions and Reply Costs Submissions.

[28] For the foregoing reasons, there shall be no costs payable by either party in connection with the motion.

The Honourable Madam Justice Deborah L. Chappel

Date: December 24, 2015

[^1]: Courts of Justice Act, R.S.O. 1990, c. C‑43, as amended.

[^2]: Family Law Rules, O. Reg. 114/99, as amended.

[^3]: Serra v. Serra, [2009] O.J. No. 1905, 2009 ONCA 395, 2009 CarswellOnt 2475 (C.A.).

[^4]: Cassidy v. Cassidy, 2011 CarswellOnt 1541 (S.C.J.).

[^5]: Andrews v. Andrews, 1980 3619 (ON CA).

[^6]: M. (C.A.) v. M. (D.), 2003 18880 (ON CA).

[^7]: Gammon v. Gammon, 2008 54968 (ON SC); Fawcett v. Richards, 2009 CarswellOnt 3229 (S.C.J.); Islam v. Rahman, 2007 ONCA 622.

[^8]: Rule 24(4).

[^9]: Horne v. Crowder, 2015 ONSC 1041 (S.C.J).