Court File and Parties
NEWMARKET COURT FILE NO.: FC-14-46730-00 DATE: 20160428 ONTARIO SUPERIOR COURT OF JUSTICE FAMILY COURT
BETWEEN: Mary Hang Yee Ho Applicant – and – Alain Chi-Piu Ho Respondent
Counsel: Ken H. Nathens, for the Applicant Stephanie Ansky, for the Respondent
HEARD: February 17, 2016
Ruling on Costs
JARVIS J.
[1] On February 19, 2016 the wife’s motion for spousal support and other relief was granted, and directions given for costs, if unable to be resolved between the parties. The parties could not agree.
[2] The wife was the successful party on the principal issues.
[3] Neither party made an Offer to Settle pursuant to the Rules.
[4] The wife seeks $10,000 in costs. Her counsel’s account records total costs incurred of $10,987.53 comprising fees ($9,375.50), disbursements ($268.92) and HST ($1,253.11). The husband submits that this claim is excessive, and that a more appropriate award is $2,500 inclusive of HST. For the reasons that follow, it is my view that the husband should pay to the wife her costs in the amount of $5,000 inclusive of HST.
Law
[5] Rules 24 and 18 deal, respectively, with costs and Offers to Settle, and govern litigation conduct and outcomes.
[6] Rule 24 (1), (5) and (11) are relevant, and provide as follows,
(1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.
(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,
(a) the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;
(b) the reasonableness of any offer the party made; and
(c) any offer the party withdrew or failed to accept.
- (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;
(c) the lawyer’s rates;
(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.
[7] The provisions of Rule 18 (14), (15) and (16) are also relevant,
(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:
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 favourable as or more favourable than the offer. O. Reg. 114/99, r. 18 (14) .
(15) The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14).
(16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.
[8] As observed by the Court of Appeal in Serra v. Serra, 2009 ONCA 395, modern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants.
[9] The overall objective in determining costs is fixing an amount that the “court views as a fair and reasonable amount that should be paid by the unsuccessful [party]”; Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291, 48 C.P.C. (5th) 56, 188 O.A.C. 201, [2004] O.J. No. 2634, 2004 CarswellOnt 521 (Ont.C.A.). Since the primary objective of the Family Law Rules is to enable the court to deal with cases justly, it is incumbent on parties who, by choice or necessity, litigate to act reasonably and in a cost effective manner. This means that family law litigants are responsible, and accountable, for the positions they take in their litigation: Heuss v. Sarkos, 2004 ONCJ 141, 2004 CarswellOnt 3317, and Peers v. Poupore, 2008 ONCJ 615, 2008 O.N.C.J. 615 (Ont. Ct.).
[10] The failure of either party to serve an Offer concerns the court, and does impact its decision with respect to, in this case, the amount of costs to be awarded.
[11] In Blanchard v. Walker 2012 CarswellOnt 16857, 2012 ONCJ 799 [2012] O.J. No. 6269, [2013] W.D.F.L. 932, 222 A.C.W.S. (3d) 452, 25 R.F.L. (7th) 487 (OCJ), Curtis J. commented on the importance of Offers to Settle:
22 Offers to settle are a significant part of the costs landscape in family law in Ontario. They are important to the possible resolution of cases. In addition, they are important to determining costs.
23 Parties and their lawyers have a positive obligation to behave in ways which enable the court to move cases forward to resolution (Rule 2). Rule 2 (4) imposes a duty on parties and their lawyers to promote the primary objective of the rules to deal with cases justly (Rule 2 (2)). This includes taking appropriate steps to save time and expense (Rule 3 (3)). Offers to settle play an important role in saving time and expense by promoting settlements, focusing parties and often narrowing issues in dispute: Laing v. Mahmoud, 2011 ONSC 6737, [2011] O.J. No. 5134, 2011 CarswellOnt 12972 (Ont. S.C.J.), para.7.
[12] Similarly in F. (H.) v. H. (M.) Sherr J. observed,
4 …it should be a fundamental step in any family law case to serve at least one offer to settle. Parties and their counsel now have a mandate under subrule 2 (4) of the rules, to promote the primary objective of the rules; to deal with cases justly (subrule 2 (2)). Dealing with a case justly includes taking steps to save time and expense (subrule 2 (3)). Offers to settle play an important role in saving time and expense in a case. They are an important vehicle in promoting settlements, focus the parties and often narrow the issues in dispute.
5 There are consequences in the rules for not making or accepting reasonable offers to settle. Subrule 18 (14) sets out the costs consequences of not accepting an offer to settle that is as good as or better than the final result. When determining the reasonableness of a party’s behaviour in the case, clauses 24 (5) (b) and (c) of the rules direct the court to examine the reasonableness of any offer made, withdrawn or not accepted. This does not preclude the court from examining the failure of a party to make an offer to settle.
Quantum of Costs
[13] In arguing for an award at the higher end of the scale, the wife pointed out that as early as September 2015, and notwithstanding there being outstanding financial disclosure issues with the husband, she was prepared to consent to an Order for less than the amount awarded. Several disclosure letters sent out over a period of eight months, some of which were clearly to be expected as part of the ordinary disclosure process, others which sought clarification of answers and documents provided, and also expressed frustration with the pace at which the husband was dealing with his disclosure obligations (some court-ordered).
[14] The husband emphasized that the exchange of correspondence between counsel evidenced his sincere efforts to approach a resolution of the parties’ outstanding issues in a less combative, more conciliatory fashion. Nothing in either counsel’s correspondence was inappropriate but it is clear, and should have been clear to the husband, that the wife was determined to proceed to obtain what was she regarded as her entitlement, and what the court ultimately determined in her favour.
[15] In my view, an appropriate award of costs in this case is $5,000 inclusive of HST. A higher, or different, award may have been considered had there been Offers to Settle exchanged. It is always important, and cannot be over-emphasized, that at each stage of a court proceeding, parties must not only adopt a reasonable, realistic approach, but, wherever possible, capture that in Offers to Settle.
Order
[16] The costs awarded shall be paid as follows:
(a) the sum of $2,500 on or before May 31, 2016; and
(b) the balance by July 15, 2016.
[17] Interest will only accrue on default of payment.
Justice D.A. Jarvis Date: April 28, 2016