Court File and Parties

COURT FILE NO.: 4459/15 DATE: 2017-05-26 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Benjamin Paul Hatcher, Applicant AND: Jennifer Anne Golding, Respondent

BEFORE: The Honourable Madam Justice L. Madsen

COUNSEL: Alisa P. Williams, Counsel, for the Applicant Theodore M. Charuk, Counsel, for the Respondent

HEARD: In Chambers

Costs Endorsement

[1] This is the Costs Endorsement in relation to the eight-day trial in this matter, wherein the majority of the issues related to custody and access, in a mobility context. The Court granted the Respondent’s request that the parties’ two children reside primarily with her in Brampton, Ontario, denying the Applicant’s request that the children remain in Hamilton, Ontario during the school week.

[2] There is no question that the Respondent was successful at trial, having met or exceeded every element of her Offer to Settle. The challenging issues to be addressed in this endorsement are to what extent, if any, the costs owed by the Applicant should account for the fact that this was a mobility case, which are so notoriously difficult to settle, and what can only be described as his precarious financial circumstances.

[3] The Respondent seeks costs in the amount of $35,206.50 ($37,975 less 7 hours at $350 plus HST, per her Reply submissions) on a full recovery basis. The Applicant argues that there should be no award of costs, or, in the alternative, that the amount of costs should be nominal.

Law and Analysis

[4] Both Rule 24, governing costs, and Rule 18, governing offers to settle, of the Family Law Rules are at play in this costs decision.

[5] In Serra v. Serra, O.J. No. 1905, the Ontario Court of Appeal held that modern Ontario costs rules are designed to partially indemnify the successful litigant, to encourage settlement, and to discourage and sanction inappropriate behaviour by litigants.

Success

[6] Under Rule 24(1) of the Family Law Rules, a successful party is presumptively entitled to costs. A consideration of success is therefore the starting point in determining costs. Sims-Howarth v. Bilcliffe, 2000 CarswellOnt 299.

[7] Where there are Offers to Settle, the success of a party should be measured against any settlement offers made by either party. Rule 18 provides that Offers to Settle must be in writing and signed both by the party and his or her lawyer. To fall within the rule, an Offer to Settle must be served at least seven days before trial, and must not be withdrawn prior to trial.

[8] Rule 18(14) sets out the cost consequences of failing to accept an Offer to Settle.

[9] Both parties served Offers to Settle in this case. Reviewing those Offers to Settle, it is clear that the Respondent was successful at trial in relation to her Offer to Settle served October 5, 2014, two months before the commencement of the trial. The Respondent’s Offer to Settle met the requirements of Rule 18. The Applicant should have accepted the Respondent’s Offer to Settle.

[10] The Respondent exceeded her Offer to Settle on the following issues: The Court granted her sole custody rather than joint custody as offered; the Court provided that the Applicant’s week-ends would end on Sunday evenings rather than on Monday mornings; and the Court ordered table child support under section 3 of the Child Support Guidelines, where there Respondent had offered a child support holiday for 24 months.

[11] The Respondent met her Offer to Settle on the following issues: The Court granted primary residency of the children to her; the Court provided that the Applicant would have parenting time with the children three weekends out of four; the Court provided that holidays would be shared equally; the Court provided for week-about time-sharing during the children’s summer break from school; and the Court provided that special and extraordinary expenses would be shared in proportion to income.

[12] Conversely, the result for the Applicant fell short of his Offer to Settle, dated September 20, 2016, on most issues. Joint custody was not awarded, the residential schedule awarded was not that sought by the Applicant, and child support was not ordered to be paid in accordance with section 9 of the Child Support Guidelines. The Applicant did meet his Offer to Settle with respect to holiday time, and in relation to special and extraordinary expenses, where his proposals were similar to those of the Respondent. However, his Offer to Settle was not severable.

[13] Overall, the Respondent was successful at trial on the issues central to the litigation, namely primary residency, her ability to move the children to Brampton and enroll them in school in that community, and decision-making.

Unreasonableness

[14] Rule 24(4) directs the Court to consider whether a successful party has “behaved unreasonably” during the case, in which case she may be deprived of all or part of her costs.

[15] I do not find that the Respondent behaved unreasonably during this case. She made her best efforts to share information related to parenting with the Applicant from separation and through to trial, attempted to involve him on issues related to the children. She sought his input and views. While it could be argued that it was not reasonable of the Respondent to enroll the children in school in Brampton during the summer of 2015, before she had consulted with the Applicant, the Court found that this took place when communication between the parties was difficult at best, and everything, including the schedule, was unsettled. There is no basis under Rule 24(4) to disentitle the Respondent to costs.

Divided Success

[16] Under Rule 24(6), where success is divided, the Court may apportion costs “as appropriate”.

[17] Success was not divided in this case.

Bad Faith

[18] Under Rule 24(8), where a party has acted in bad faith, the Court must decide costs on a full recovery basis.

[19] Neither party in this case has alleged bad faith on the part of the other. Having considered the parties’ respective conduct throughout this litigation, I do not find that either has acted in a manner that would constitute bad faith.

Costs to be decided at Each Step

[20] Rule 24(10) requires that costs are to be decided at each step in a case. A trial judge should not make an Order for costs in relation to an earlier step in a case where no costs were ordered. Islam v. Rahman, 2007 ONCA 622.

[21] The Respondent’s Bill of Costs includes time spent in relation to completing and reviewing the Trial Management Brief, preparing the Trial Scheduling Endorsement Form, and attending the Trial Management Conference on October 13, 2016. Costs were not addressed at that conference and should not be included in the Bill of Costs. The Respondent’s Bill of Costs should be reduced by 4.5 hours.

Application of Rule 24(11)

[22] Under Rule 24(11), the Court must consider the following factors in determining costs:

a. The importance, complexity, or difficulty of the issues; b. The reasonableness or unreasonableness of each party’s behaviour in the case; c. The lawyers’ rates; d. The time properly spent on the case; e. Expenses properly payable; and f. Any other relevant matter.

[23] There is no question that the issues in this trial were extremely important to both the Applicant and the Respondent. The issues were not complex, legally or factually, however, nor were they difficult.

[24] I do not find that either party’s behaviour in the case was unreasonable, as contemplated under Rule 24(11). I have already commented on the Respondent’s decision to unilaterally enroll the children in school in Brampton in the summer of 2015. While I found that the Applicant’s behaviour with respect to what was referred to as the “dental debacle” in the trial decision was unreasonable, I do not find that it was so unreasonable as to have a specific impact on the costs determination herein.

[25] Considering Rule 24(11)(c), I have no difficulty with Mr. Charuk’s rate in this case. The submissions indicate that he assisted the Respondent at the reduced rate of $350 per hour compared with his regular rate of $420. Mr. Charuk is a senior and experienced family lawyer. His rate is appropriate.

[26] Turning to Rule 24(11)(d), I have already commented on the inclusion of time on the Bill of Costs in relation to the Trial Management Conference. I concluded that Mr. Charuk’s bill should be reduced by 4.5 hours. This equates to $1,575 plus HST of $204.75.

[27] Regarding “expenses properly payable”, under Rule 24(11), the Respondent has not claimed any disbursements.

Any Other Relevant Matter

[28] Notwithstanding the guidance and directives to the judge in Rule 24, the rule has not completely removed the discretion of the trial judge in setting costs. Van Rassel v. Van Rassel, 2008 CarswellOnt 6600.

[29] Under Rule 24(11)(f), the Court is to consider “any other relevant matter”.

[30] There are three matters which are important to consider which have not been addressed above: first, that this case concerned mobility; second, the status quo leading up to the trial; and third, that the Applicant’s financial circumstances are precarious.

[31] At the core of the case was the question of whether the Respondent should be permitted to move the children to Brampton, to attend school there. Although Brampton is not far from Hamilton, in kilometres, practically speaking, any outcome with shared parenting time would have been very difficult to implement, and would have required considerable travel time for the children in a region where heavy traffic is an important factor.

[32] In Van Rassel supra, Justice Mossip commented on the challenges inherent in mobility cases:

There is no other area of family law litigation in which the idea of a winner and a loser is less applicable than that of a mobility case. It is also true that even with the very best parents, it is the area where “win-win” solutions can rarely if ever be fashioned. Parents involved in a mobility dispute have to resort to the courts, because even with the best of intentions, and with both parties doing their best to put their children’s interests before their own, they cannot find a solution to the desire of one parent to move with the child, and the other parent vehemently resisting that move.”

[33] Similarly in Bridgeman v. Balfour, 2009 CarswellOnt 7214, Justice Parayeski noted that the presence of a mobility dispute makes settlement very difficult. In that case, although the Applicant was successful, she was denied costs of the trial.

[34] Whether costs are appropriate in a mobility case depends on the unique facts of the case.

[35] In this case, while mobility was a central component of the litigation, the circumstances were less attenuated than in cases where parents propose to live provinces or countries apart. As was noted at the outset of the trial decision, “fortunately for the children, it is feasible for [the children] to spend meaningful, regular time with both parents throughout the year, notwithstanding that this is a mobility case.” See paragraph 2.

[36] Having said that, there is no question that this case was more difficult to settle because of the proposed move of the children. Had the parties been negotiating a parenting schedule within Hamilton, I think it far more likely that they would have been able to reach a resolution without the need for a trial. In my view, this mobility dimension, in this case, serves to mitigate (although not eliminate) the Applicant’s costs exposure.

[37] A second issue to be considered under Rule 24(11)(f) is the status quo leading in to the trial. As set out in the trial decision, the children had been residing with the Applicant in Hamilton during the school week for over a year, and spending time with the Respondent three week-ends out of four. The children had lived in Hamilton for many years. Although the Court found, for the detailed reasons set out in the trial decision, that it was in the children’s best interests to reside primarily with the Respondent in Brampton, it was not unreasonable for the Applicant to proceed to trial seeking essentially to continue the status quo. While the Court’s conclusion was that the status quo should be changed, it was not unreasonable, in the context of the proposed move, to seek the Court’s determination of the parenting arrangement in the children’s best interests.

[38] A final issue to be considered in this case under Rule 24(11)(f), is the financial situation of the Applicant and the potential impact of an award of costs against him.

[39] At trial, it was clear that the Applicant’s financial circumstances are precarious. Although he consented to the income of $36,865 per year being used for child support purposes, at the time of the trial he had been laid off from seasonal employment and was not employed. His financial statement, sworn November 9, 2016, showed a net worth of $6,199.82. That financial statement also showed monthly expenses of $2,998.82, before a consideration of monthly child support which the Court found to be payable, in the amount of $533 per month. He is paying $200 per month towards a Visa account and not making his monthly payments of $173 towards his student loans. None of Applicant’s expenses are excessive.

[40] Courts have held that while impecuniosity is not a shield against a costs award, at the same time, an award of costs should not jeopardize a parent’s ability to exercise the access deemed to be in the children’s best interests. Thus in Rawn v. Laviolette, 2007 CarswellOnt 6050, a case where both parents were found to be acting in what they perceived to be the children’s best interests, Justice Linhares de Sousa held that the Applicant should receive “some” contribution to his costs in a case where “neither party could afford this trial.” Similarly in Tesfamariam v. Drar, 2009 CarswellOnt 6425, the Court stressed that having limited resources does not amount to an immunity against costs; however, impecuniosity may affect the quantum of costs. The Court stated:

The most significant issue in determining the quantum of costs is Ms. Tesfamariam’s ability to pay, which can be considered as any other relevant matter pursuant to subrule 24(11)(f): see M.(C.A.) v. M.(D.) (2003), 67 O.R. (3d) 181 (Ont. C.A.). Although Ms. Tesfariam’s limited financial resources do not afford her immunity from a costs order, they will affect the quantum of costs.

[41] In M.(C.A.) v. M.(D.) (2003), 2003 CarswellOnt 3606, the Ontario Court of Appeal held that under Rule 18(14), the Court has discretion not to make an award of full recovery even where, as here, the party has met the conditions in Rule 18(14). The Court stated “Again, a relevant consideration would be the financial condition of the parties.”

[42] In this case, I have grave concerns about the impact of an award of full recovery costs against the Applicant, given his financial circumstances. Under the decision at trial, he is to have the children in his care three weekends out of four. He requires the ability to maintain appropriate housing with at least two bedrooms for the children to be comfortable during his parenting time. He requires the ability to provide for the children when they are with him. And, he must have the ability to pay the table child support in the amount of $533 per month, which was provided for in the Trial Decision. The award of costs sought by the Respondent would compromise the Applicant’s ability to provide an appropriate environment for the children during his time with them, and could compromise his ability to pay table child support as ordered.

Quantum

[43] There is discretion under Rule 24 to award an amount of costs which appears just in all of the circumstances. In assessing costs, the overriding principle is one of reasonableness. The costs order should reflect what the Court views as the fair and reasonable amount that should be paid by the unsuccessful party, rather than an exact measure of the actual costs of the litigant.

[44] In all of the circumstances of this case, balancing the fact that the Respondent was successful at trial, that this was a mobility case and therefore difficult to settle, that the Applicant had the benefit of the status quo going into the trial and was thus not acting unreasonably in taking his case forward, and his current precarious financial circumstances, I find that the fair and reasonable quantum for the Applicant to pay as costs is $12,500 inclusive of HST. I note that his sworn financial statement indicates that he has an investment with the Investments Planning Counsel having a value of $7,000. On that basis, $6,250 of the costs amount shall be paid forthwith, and the balance shall be paid at the rate of $150 each month until paid in full, unless the parties agree otherwise. Interest shall accrue at the post-judgment interest rate set out in the Courts of Justice Act.

Madsen, J. Date: May 26, 2017