Snelgrove v. Kelly, 2017 ONSC 4625

Court File No.: 876/16 Date: 2017-07-31 Superior Court of Justice – Ontario

Between: Katherine Snelgrove, Applicant – and – Tyler Kelly, Respondent

Counsel: Joel B. Kerr, for the Applicant Kanata J. Cowan, for the Respondent

Before: The Honourable Madam Justice Deborah L. Chappel

REASONS FOR JUDGMENT RESPECTING COSTS

PART I: INTRODUCTION AND POSITIONS OF THE PARTIES

[1] These are my Reasons for Judgment on the issue of costs in connection with a motion brought by the Respondent which I heard on August 26, 2016. The Respondent sought increased time with the child of the parties’ relationship, Connor Joseph Snelgrove, born December 14, 2013 (“Connor”). In my Reasons for Judgment issued on the same day as the hearing, I stipulated that if either party sought costs in connection with the hearing, they were to schedule a hearing date before me. The Respondent sought costs, and he therefore scheduled a hearing for November 28, 2016. Unfortunately, counsel for the Applicant could not attend on that date. A further hearing was eventually scheduled for July 19, 2017. The parties both submitted Written Submissions on the costs issue.

[2] The Respondent seeks full recovery costs in connection with the motion, in the amount of $10,270.00 on account of legal fees and $260.00 for disbursements, plus HST on both amounts. Upon reviewing the Respondent’s Bill of Costs, I noted that there is a mathematical error, and that the total amount on account of legal fees should be $10,470.00. In the Written Submissions of counsel for the Respondent, counsel indicated that the Respondent was also seeking an additional amount of $1,500.00 on account of preparation of his Bill of Costs and Costs Submissions. However, I note that the Respondent’s Bill of Costs includes 5 hours for preparation of Costs Submissions and attendance at the costs hearing that was scheduled for November 28, 2016. Accordingly, the proper amount of the claim for fees on a full recovery basis is $10,470.00, not including HST.

[3] The Respondent submits that he is entitled to costs because he was the successful party, he acted reasonably in relation to the issues addressed in the motion and he served two Offers to Settle that met the criteria of Rule 18(14) of the Family Law Rules, O. Reg. 114/99, as amended. With respect to his request for full recovery costs, he relies on the following factors:

1. He states that the outcome of the motion was significantly more favourable to him than the terms of two Offers to Settle that he served on the Applicant.
2. He relies on his numerous efforts to resolve the time-sharing issues prior to the hearing of the motion through various means.
3. He emphasizes the Applicant’s intransigence in failing to adopt a reasonable position and enter into meaningful negotiations respecting time-sharing.

[4] The Applicant acknowledges that the Respondent was the successful party on the motion, and that the Respondent’s Offers to Settle satisfy the criteria of Rule 18(14) so as to trigger the costs consequences of that Rule. However, she submits that any costs award against her should be minimal based on the following considerations:

1. She is of very limited financial means, and her only current source of support is student loan funding. She is funded by Legal Aid and is about to give birth to her second child, and thus there is no reasonable prospect of her being able to pay a significant costs award within the reasonably foreseeable future.
2. She has at all times during this litigation, including in the motion proceeding, been motivated by her genuinely-held beliefs regarding Connor’s best interests.
3. She raises concerns regarding the amount that the Respondent is claiming in relation to the motion, and notes that the Respondent’s Bill of Costs is not sufficiently detailed to determine whether the amounts claimed related directly to the motion, or when the amounts were incurred.

[5] For the reasons that follow, I conclude that the Respondent is entitled to costs in connection with the motion in the amount of $8,437.00, inclusive of HST and disbursements.

PART II: BACKGROUND

[6] As I reviewed in my Reasons for Judgment on the motion, the parties never cohabited and Connor has been in the Applicant’s primary care since his birth. The Respondent had short daytime visits with Connor following the child’s birth and requested further time as Connor got older. The parties were unable to reach agreement on the custody and access issues, and therefore the Applicant commenced these proceedings on December 8, 2014. The case conference and settlement conference occurred in Milton, where the application was issued. The parties were unable to reach a resolution through these conferences, and the case was eventually transferred to Hamilton on March 18, 2016.

[7] The Respondent and his counsel prepared the motion materials in mid-April 2016. However, counsel did not serve the materials until May 17, 2016. In his Notice of Motion, the Respondent requested increased time with Connor, in accordance with the following rotating two week schedule:

Week One: Monday overnight Wednesday overnight Friday after daycare until Monday morning

Week Two: Wednesday overnight

[8] In addition, the Respondent requested an order for two weeks of holiday time with Connor, including one week from July 18 to 25, 2016, as well as time with Connor on Father’s Day weekend from Saturday at 4:00 p.m. until Monday morning, when he would return Connor to daycare. When the Respondent served the motion materials, he also served an Offer to Settle dated April 18, 2016, in which he offered to resolve the motion by means of an order in accordance with the relief set out in his Notice of Motion.

[9] The Applicant did not take any steps to address the issues raised in the motion from when she was served on May 17, 2016 until mid-June 2016. The Respondent therefore set the motion down for a hearing on July 8, 2016. On June 17, 2016, the Applicant’s former counsel, Mr. Senior, advised that he was unavailable to deal with the motion on July 8, 2016. In response, the Respondent’s counsel, Ms. Cowan, sent correspondence to Mr. Senior dated June 17, 2016 in which she consented to a brief adjournment of the hearing until July 15, 2016, on the conditions that the Applicant file her responding materials by June 30, 2016 and that she allow the Respondent the one week of holiday time that he was requesting, from July 18 to 25, 2016. The Applicant’s former counsel Mr. Senior did not indicate acceptance of these terms of the requested adjournment. In fact, the Applicant was required to retain new counsel around this time due to the death of Mr. Senior’s law firm partner and Mr. Senior’s decision to join another law firm in Brampton. The Applicant learned of these developments through correspondence from Mr. Senior dated June 15, 2016. She acted promptly in locating new counsel, and met with her new lawyer, Mr. Kerr, for the first time on June 29, 2016.

[10] On June 30, 2016, Mr. Kerr, wrote to Ms. Cowan and advised that he was not available to argue the motion on July 8, 2016. He requested an adjournment for two weeks, until July 22, 2016, on proposed terms that the Respondent would have his one week of vacation time with Connor from July 18 to 25, 2016, that he would not take Connor outside of Ontario, that he would facilitate at least two telephone or skype communications between Connor and the Applicant during the holiday period and that he would advise the Applicant of any emergency situations that arose during the holiday time. Ms. Cowan responded to Mr. Kerr’s letter on July 5, 2016. She indicated that the Respondent was in fact seeking holiday time with Connor commencing Friday July 16, 2016, since that was when his regular weekend time began. She indicated that the Respondent would consent to an adjournment of the motion until July 29, 2016 if the Applicant agreed to the Respondent having holiday time commencing July 16, 2016. She also indicated that the Respondent could not agree to skype communication during the holiday period since he would not have internet access, and that telephone communication between the Applicant and Connor was not appropriate given that Connor was only 2.5 years old and was not yet talking on the telephone. The Applicant did not agree to these terms of adjournment, and therefore Ms. Cowan had to appear in court on the motion on July 8, 2016. The Applicant appeared in person and requested an adjournment, stating that Mr. Kerr could not attend and she had been unable to prepare responding materials. The Respondent contested the adjournment, but Brown, J. nonetheless adjourned the motion to July 15, 2016. Brown, J. set a deadline of July 12, 2016 for the Applicant to serve and file responding materials. Costs in connection with the appearance on July 8, 2016 were reserved.

[11] Unfortunately, a further adjournment was required when the matter returned to court on July 15, 2016 because Mr. Kerr required more time to prepare responding materials. However, a temporary order was made on consent on that date granting the Respondent a one week summer vacation period with Connor. The motion returned to court on August 5, 2016. However, yet another adjournment was necessary because Mr. Kerr had become very ill and the Applicant had only served her responding materials on the day of court. In addition, Mr. Kerr had a trial in another court that had gone longer than expected and was to continue on August 5, 2016. Brown, J. adjourned the motion to August 26, 2016, and made a temporary order granting the Respondent a full weekend visit with Connor from August 12 to 15, 2016. The issue of costs in connection with the appearances on the motion on July 15, 2016 and August 5, 2016 was reserved.

[12] The Respondent served a second Offer to Settle on August 24, 2016. In that offer, he proposed two alternative time-sharing arrangements to the Applicant, both of which involved the Respondent having 5 overnight visits with Conner over a two week period, rather than the 6 overnights that he had requested in the Notice of Motion. The Applicant did not accept this offer. In addition, the Respondent proposed another one week vacation period with Connor, with the Respondent to advise the Applicant by September 15, 2016 of his chosen week. The Offer to Settle also included a term that the Applicant pay the Respondent costs in the amount of $1,000.00 provided that she accepted the Offer to Settle by August 25, 2016, failing which the Respondent would seek costs on a substantial indemnity basis.

[13] As I have noted, the motion finally proceeded to a hearing before me on August 26, 2016. As of that time, the Respondent had time with Connor according to a rotating two week schedule. In Week One, Connor was with him for Tuesday overnight, on Thursday from 4:00 to 7:30 p.m. and from Saturday morning until Sunday evening. In Week Two, the Respondent had Connor overnight on Tuesday and for an evening visit on Thursday from 4:00 to 7:30 p.m. As I have indicated earlier in these Reasons, the Respondent sought to increase his time with Connor such that he would have six overnight visits with him in a two week period. The Applicant strongly opposed the regular time-sharing regime that the Respondent requested. Her position was that the Respondent’s time with Connor should be limited to Wednesday overnight in Week One, and from Friday after daycare until Sunday at 5:30 p.m. in Week Two.

[14] In my Reasons for Judgment on the motion, I concluded that neither of the proposals that the parties advanced were in Connor’s best interests. I granted the Respondent generally the amount of time that he had requested, i.e. six overnight visits in a two week period, but according to a rotating two week schedule that provided for Connor to be with him as follows:

Week One: From Wednesday after daycare until Friday morning

Week Two: From Monday after daycare until Tuesday morning From Friday after daycare until Monday morning

[15] I also made an order on August 26, 2016 providing that the parties were to share the period from December 24 to 26, 2016 equally. In addition, because of the intense level of conflict between the parties, I made an order at the request of the Applicant that all communications between the parties be by email except in urgent situations. In my Reasons for Judgment, I specifically directed the parties to engage in meaningful discussions regarding the issue of costs in connection with the motion before scheduling a hearing to address costs.

[16] The Respondent made reasonable attempts to resolve the costs issue following receipt of my Reasons for Judgment on the motion. In correspondence dated August 30, 2016, Ms. Cowan indicated to Mr. Kerr that the Respondent would accept costs in the amount of $7,895.88, rather than full indemnity costs, if he did not have to schedule and attend a hearing to deal with costs She did not receive a response to this correspondence, and therefore she sent a follow-up letter dated September 12, 2016 indicating that she would be scheduling a costs hearing if she did not receive a response by September 16, 2016. Mr. Kerr responded by correspondence dated September 13, 2016 in which he relayed that the Applicant was not accepting the offer with respect to costs.

PART III: THE LAW RESPECTING COSTS

I. General Principles

[17] The starting point in addressing the issue of costs is section 131 of the Courts of Justice Act, R.S.O. 1990, c. C-43, as amended, which provides that subject to the provisions of an 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 sets out a number of principles to guide the court in the exercise of its discretion.

[18] The Ontario Court of Appeal established in Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905, 2009 CarswellOnt 2475 (C.A.) that modern rules respecting costs aim to foster the following 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.

[19] In seeking to advance these objectives, 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 (Cassidy v. Cassidy, 2011 CarswellOnt 1541 (S.C.J.)).

[20] The Court of Appeal has highlighted the discretionary nature of costs awards, and the importance of the court considering all relevant factors (Andrews v. Andrews, 1980 CanLII 3619 (ON CA), [1980] O.J. No. 1503 (C.A.)). 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 (M. (C.A.) v. M. (D.), 2003 CanLII 18880 (ON CA), [2003] O.J. No. 3707, 67 O.R. (3d) 181; 2003 CarswellOnt 3606 (C.A.); Fielding v. Fielding, 2015 ONCA 901 (C.A.)).

II. Liability for Costs

[21] 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 (Islam v. Rahman, 2007 ONCA 622, 2007 CarswellOnt 5718 (C.A.); Bortnikov v. Rakitova, 2016 ONCA 427 (C.A.)).

[22] Rule 24(1) establishes a presumption that a successful party to a motion, enforcement, case or appeal is entitled to costs. The court may also award costs to the party who was more successful on an overall global basis or on the primary issue, subject to adjustments that the court may consider appropriate having regard for the lack of success on secondary issues and any other factors relating to the litigation history of the case (Gomez-Pound v. Pound, [2009] O.J. No. 4161 (O.C.J.); Boland v. Boland, 2012 ONCJ 239, [2012] O.J. No. 1830 (O.C.J.)). 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 (Johanns v. Fulford, [2011] O.J. No. 4071 (S.C.J.)).

[23] Rule 24(6) provides that where success in a step in a case is divided, the court may exercise its discretion to order and apportion costs as appropriate. However, the determination of whether success was truly “divided” requires a contextual analysis that takes into consideration the importance of the issues that were litigated and the amount of time and expense that were devoted to the issues that required adjudication (Jackson v. Mayerle, 2016 ONSC 1556 (S.C.J.)).

[24] Rule 24(4) provides that the presumption that a successful party is entitled to costs does not apply where that 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. Rule 24(5) sets out factors that the court must examine when deciding whether a party has acted reasonably or unreasonably. These factors include the party’s behaviour in relation to the issues from the time they arose, whether the party made an Offer to Settle, the reasonableness of any Offer to Settle that the party made, and any Offer to Settle the party withdrew or failed to accept. It is not any type of unreasonable conduct that will disentitle a successful party to costs. In the context of a custody and access dispute, a pattern of conduct which shows lack of respect for the letter and spirit of court orders or 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 proceeding involving the child (Horne v. Crowder, 2015 ONSC 1041 (S.C.J)).

[25] Since costs are ultimately in the discretion of the court, a successful party may be denied costs for reasons other than unreasonable conduct (M. (C.A.)). In this regard, Rule 24 establishes additional presumptions regarding entitlement to costs that apply regardless of success. Rule 24(7) stipulates that if a party does not appear at a step in the case, or appears but is not properly prepared to deal with the issues at that step or otherwise contributes to that step being unproductive, the court shall award costs against the party “unless the court orders otherwise in the interests of justice.” A finding that a party has acted in bad faith will also result in liability for costs as against the offending party, regardless of that party’s success. 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.

[26] 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. Rule 18(14) establishes costs consequences for failing to accept an Offer to Settle that complies with the requirements of that Rule. In order for these costs consequences to come into play, the Offer to Settle must be signed by the party making the offer and their lawyer. Failure to comply with this requirement may result in the offer not being a valid formal offer that attracts the consequences outlined in Rule 18(14) (Riss v. Greenhough, 2003 CarswellOnt 1450 (S.C.J.); Jakubowski v. Kopacz-Jakubowski, 2008 CarswellOnt 2149 (S.C.J.)). The costs consequences, and conditions precedent to these consequences, are set out in Rule 18(14) as follows:

COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER

Rule 18(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:

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 favourable as or more favourable than the offer.

[27] With respect to the requirement that the order obtained be as or more favourable than the Offer to Settle, the court is not required to examine each term of the offer as compared to the terms of the order and weigh with microscopic precision the equivalence of the terms. Rather, what is required is a general assessment of the overall comparability of the offer as contrasted with the order that was ultimately made (Sepiashvili v. Sepiashvili, 2001 CanLII 25708 (ON SC), 2001 CarswellOnt 3459 (S.C.J.), additional reasons to 2001 CarswellOnt 3316 (S.C.J.); Wilson v. Kovalev, 2016 ONSC 163 (S.C.J.); Jackson). Where the Offer to Settle is not severable, however, the costs consequences set out in Rule 18(14) should only be applied if the judgment is on a general, overall comparison as or more favourable on all issues (Heon v. Heon, 1989 CarswellOnt 318 (Ont. H.C.); Coscarella v. Coscarella, 2000 CarswellOnt 146 (S.C.J.)).

[28] In deciding both liability for and quantum of 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 (Rule 18(16)). In this regard, the court may in the exercise of its discretion compare portions of the Offer to Settle dealing with discrete issues to the terms of the order. A party’s failure to serve an Offer to Settle may also be viewed as an adverse factor in determining the issue of costs (M. (J.V.) v. P. (F.D.), 2011 CarswellOnt 13510 (O.C.J.)).

[29] The fact that the parties have settled all or some of the issues in the case will also be relevant to the determination of costs liability and the quantum of any costs ordered. Settlement is often a by-product of reasonable behaviour and litigation expectations. Accordingly, the court should be hesitant to order costs when the parties have reached a resolution of their dispute, unless there are compelling reasons to do so (Talbot v. Talbot, 2016 ONSC 1351 (S.C.J.)).

[30] The circumstances discussed above are not the only ones which may give rise to costs liability. The decision respecting liability is ultimately a discretionary one that must take into consideration the overall conduct of the parties and all of the circumstances and dynamics of the case.

III. Quantum of Costs

[31] Once liability for costs has been established, the court must determine the appropriate quantum of costs. In Serra, Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634 (C.A.) and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 2005 CanLII 1042 (ON CA), 2005 CarswellOnt 189 (C.A.), the court set out the additional general principles relating to the quantum issue:

1. Ultimately, costs decisions should reflect what the court considers to be a fair and reasonable amount that the unsuccessful party should pay.
2. Costs need to be proportional to the issues and amounts in question and the outcome of the case.
3. Amounts actually incurred by the successful litigant are not determinative.
4. In assessing what is fair and reasonable, the expectation of the parties concerning the amount of a costs award is a relevant consideration

(See also Selznick v. Selznick, 2013 ONCA 35 (C.A.); Delellis v. Delellis, 2005 CanLII 36447 (ON SC), [2005] O.J. No. 4345 (S.C.J.); Hackett v. Leung, 2005 CanLII 42254 (ON SC), [2005] O.J. no. 4888 (S.C.J.)).

[32] Polowin, J. commented on these general principles respecting the quantification of costs in Sommerard v. I.B.M. Canada Ltd., 2005 CanLII 40140 (ON CA), [2005] O.J. No. 4733 (S.C.J.). She succinctly captured the essence of the quantification exercise based on the principles outlined above as follows, at paras. 53-59:

The fixing of costs is not a mechanical exercise of calculating hours times hourly rates. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding. In doing so, I must stand back from the fee produced by the raw calculation of hours spent times hourly rate and assess the reasonableness of the counsel fee from the perspective of the reasonable expectation of the losing party.

[33] 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; (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.

[34] In considering the quantum of costs, the court should also consider 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.

[35] In determining the appropriate quantum of costs, the court has an obligation to review the specifics of the costs claim to assess the reasonableness of the amounts requested and whether items claimed are properly the subject of a costs award (Donnelly v. Donnelly, 2004 CarswellOnt 2076 (S.C.J.)). The court must also consider whether the hours spent can be reasonably justified (Pagnotta v. Brown, [2002] O.J. No. 3033 (S.C.J.); Murphy v. Murphy, 2010 ONSC 7204 (S.C.J.); Jackson). However, this analysis should be undertaken in a global fashion. The court is not required to embark upon a painstaking, line-by-line analysis of Bills of Costs and second guess every hour and item claimed, unless there are clear concerns about excessive claims and overreaching (Docherty v. Catherwood, 2016 ONSC 2140 (S.C.J.), at para. 50).

[36] In deciding the quantum 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 (Mooney v. Fast, 2013 CarswellOnt 15659 (O.C.J.)). In addition, the principle of proportionality must be brought into the fold of the costs analysis. As Pazaratz, J. stated in Jackson, the Supreme Court of Canada recognized in Hryniak v. Mauldin, 2014 SCC 7 (S.C.C.) that timeliness, affordability and proportionality are essential components of a legal system that ensures true access to justice. In the context of the costs analysis, these factors require the court to ensure that expenses claimed make sense having regard for the importance and complexity of the issues that were litigated.

[37] 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. The full recovery portion of the award should relate to the issues affected by the bad faith. Once the full recovery analysis is complete with respect to those issues, the court should assess costs in relation to the other issues by considering the overall circumstances of the case in light of the factors outlined in Rule 24(11), and should use the discretion permitted by that section to reach a correct overall result (Hunt v. Hunt, 2001 CarswellOnt 4548 (S.C.J.); Likins v. MacKenzie, 2003 CarswellOnt 3007 (S.C.J.); additional reasons at 2004 CarswellOnt 2157 (S.C.J.)).

[38] As previously noted, Rule 18(14) relating to formal Offers to Settle is also relevant to quantum of costs. If an Offer to Settle does not meet the formal requirements of Rule 18(14), the court may nonetheless take into consideration as a favourable factor any written Offer to Settle, the date it was made and its terms (Rule 18(16)). A party’s failure to serve an Offer to Settle may also be viewed as an adverse factor in determining the quantum of costs (M. (J.V.)). This is so even if the party was the successful litigant (Smith v. Smith, 2007 CarswellOnt 1538 (S.C.J.)).

[39] The costs consequences set out in Rule 18(14) do not automatically apply when the requirements set out in the Rule are satisfied. The Rule simply establishes a rebuttable presumption regarding costs, and the court ultimately maintains the discretion to determine whether the costs consequences are appropriate having regard for all of the circumstances of the case (M.(C.A.); Cole v. Freiwald, 2011 CarswellOnt 10517 (O.C.J.)).

[40] 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 and any children are also relevant considerations in reaching a determination on the issue of costs, both under Rule 24 and Rule 18(14) (Tauber v. Tauber, 2000 CanLII 5747 (ON CA), [2000] O.J. No. 2133; additional reasons at 2000 CanLII 22280 (ON CA), [2000] O.J. No. 3355 (C.A.); Biant v. Sagoo, 2001 CanLII 28137 (ON SC), [2001] O.J. No. 3693 (S.C.J.); Van Rassel v. Van Rassel, 2008 CanLII 56939 (ON SC), [2008] O.J. No. 4410 (S.C.J.); M.(C.A.); Murray v. Murray, 2005 CanLII 46626 (ON CA), [2005] O.J. No. 5379 (C.A.); Clark v. Clark, 2014 ONCA 175 (C.A.)). The financial means of a custodial parent may be particularly relevant in assessing costs if a costs award would indirectly impact a child in a negative fashion. As the Ontario Court of Appeal stated in M. (C.A.), at para. 42, “[i]n fixing costs, the courts cannot ignore the best interests of the child and thus cannot ignore the impact of a costs award against a custodial parent that would seriously affect the interests of the child.” However, ability to pay will typically only be relevant to the appropriate quantum of costs and how payment should be effected, and not to the issue of liability for costs (Izyuk v. Bilousov, 2011 ONSC 7476, 2011 CarswellOnt 14392 (S.C.J.)). In addition, 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 (Biant; Gobin v. Gobin, 2009 CarswellOnt 3452 (O.C.J.)). Furthermore, ability to pay alone cannot override the other factors set out in Rule 24(11) (Peers v. Poupore, 2008 ONCJ 615 (O.C.J.)). 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, “[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.”

[41] One of the measures that the courts use in determining whether costs claimed are fair, reasonable and proportional is to consider the amount that the other party has paid for their own legal fees with respect to a matter (Durbin v. Medina, 2012 ONSC 640 (S.C.J.)). A significant discrepancy in the amount of fees that the parties have incurred may prompt the court to embark upon a more detailed scrutiny of the costs claimed to ensure that the amount meets the overall objectives of a costs order (Jackson, at para. 99).

[42] 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 (Weaver v. Tate, 1989 CarswellOnt 330 (H.C.)).

[43] The Ontario Rules of Civil Procedure refer to three “scales” or “ranges” for costs award, namely “partial indemnity costs,” “substantial indemnity costs” and “full indemnity” costs. The Family Law Rules do not make reference to these scales, but adopt the phrase “full recovery” costs as being the appropriate award in certain situations. The civil and Family Law Rules do not include definitions for any of these terms. While the Family Law Rules do not refer to the terms “partial” “substantial” and “full” indemnity, many judges determining the issue of costs in Family Law matters refer to the ranges used in the civil context in exercising their discretion regarding costs. While reference to these scales may provide guidance in deciding costs in Family Law litigation, it is not required under the Family Law Rules or by the case-law. In Sims-Howarth v. Bilcliffe, 2000 CanLII 22584 (ON SC), [2000] O.J. No. 330 (S.C.J), Aston, J. held that the concept of scales of costs that applies in the civil context is not the appropriate way to quantify costs under the Family Law Rules. In his words, “[h]aving determined that one party is liable to pay costs, the court must fix the amount at some figure between a nominal sum and full recovery. The Family Law Rules demand flexibility in examining the list of factors in subrule 24(11) without any assumptions about categories of costs.” The Ontario Court of Appeal supported this approach in M.(C.A.) In Costa v. Perkins, [2012] O.J. No. 2400 (Div. Ct.) the Ontario Divisional Court cited M.(C.A.) as support for the proposition that the Family Law Rules have eliminated the usual scales of costs that are relied upon in civil matters.

[44] With respect to the term “full recovery” costs referred to in the Family Law Rules, there has been some discussion about whether this phrase refers to the full amount which a party claims, subject to adjustments based on reasonableness, or something between the full amount claimed and the concept of “substantial indemnity.” (See Mary Jo Maur and Nicholas Bala, “Re-thinking Costs in Family Cases: Encouraging Parties to Move Forward,” paper presented at the National Family Law Program, July 2014, Whistler, British Columbia.). In my view, the term “full recovery” refers to the full amount which the party has claimed, subject to any adjustments that the court considers appropriate based on the reasonableness and proportionality of the costs claimed. In other words, it means the total reasonable and proportional amount that a court determines the party should have spent in dealing with the case (Jackson, at para. 91). This conclusion accords with the case-law in the civil context which has interpreted the phrase “full indemnity costs.” (Toronto Standard Condominium Corporation v. Baghai Development Ltd., [2012] O.J. No. 2746 (C.A.)). While the Family Law Rules outline certain circumstances in which full recovery costs are appropriate, the court is not limited to making a full recovery award in those specified situations (Sims-Howarth). It is ultimately a matter of the court’s discretion to determine whether full recovery is appropriate having regard for the particular circumstances of the case.

PART IV: ANALYSIS

I. ENTITLEMENT TO COSTS

[45] I am satisfied that the Respondent is entitled to costs in connection with the motion. He was clearly the successful party. Although my order dated August 26, 2016 implemented a regular time-sharing arrangement that was structured differently than the schedule that the Respondent requested, it gave him the same amount of time over a two week period as he had requested in his motion. In addition, through the motion process, he secured a one week summer vacation period with Connor and time-sharing during the Christmas season. The outcome was far more advantageous to the Respondent than the position that the Applicant took in the motion. The Respondent’s success generates a presumption that he should be awarded costs.

[46] There are no factors in this case that rebut the presumption of entitlement to costs. There is no suggestion that the Respondent acted in bad faith. I conclude that the Respondent took a fair and reasonable position on the time-sharing issues. He gave the Applicant ample time to consider the motion materials before scheduling a motion date, and served his Offer to Settle at the same time as serving the materials. All of these actions demonstrated a genuine and concerted attempt on his part to resolve the issues without the necessity of proceeding to a hearing. The Respondent also acted reasonably in attempting to negotiate appropriate terms of adjournment on the several occasions when the Applicant asked that the motion be adjourned. His materials filed in support of the motion were also reasonable and informative, and he did not in my view engage in any litigation conduct that had the effect of prolonging or inflaming the proceedings. He made a further concerted attempt to resolve the matter prior to the hearing date by serving a second Offer to Settle that included two alternative time-sharing options for the Applicant to consider. Although the case was stood down on August 26, 2016 because the Respondent did not attend court, the case would in all likelihood have not been heard until the end of the day in any event because of the highly contested nature of the motion.

II. QUANTUM OF COSTS

[47] The real issue in this case is the appropriate quantum of costs. I have broken down the quantification analysis into two periods, with the first being the period up to May 16, 2016 and the second period being from May 17, 2016 onward. As I have indicated, the Respondent served his first Offer to Settle on May 17, 2016. For reasons to be discussed in further depth below, I conclude that this Offer to Settle triggered the costs consequences of Rule 18(14).

[48] With respect to the first period, I conclude that the Respondent is entitled to 70% of his reasonable costs in connection with the motion. As a starting point, I have considered the Bill of Costs that the Respondent’s counsel submitted to determine if there are any concerns regarding the reasonableness or proportionality of the amounts claimed. Unfortunately, the Bill of Costs is not as detailed and precise as it should be to allow for a proper costs analysis where Rule 18(14) is triggered. Most significantly, it does not include dates for items claimed, which is key to the analysis of the appropriate quantum where an Offer to Settle has been served. There are certain items in the Bill of Costs that clearly fall within the first period, based on the dates when affidavits were sworn. For instance, item 1 (3 hours) relates to preparation of the Notice of Motion and the Respondent’s affidavit sworn April 18, 2016. Item 2 (2 hours) refers to preparation of the affidavits of Tara Kelly sworn April 25, 2016 and Robert Kelly sworn June 21, 2016. I have allocated half of this time, 1 hour, to the first period. Items 4 (3 hours) and 5 (5.4 hours) are undated and I could not ascertain the period that they relate to. It is incumbent on a party seeking costs to submit all pertinent details in support of their claim. In the absence of specifics regarding dates for items 4 and 5, I am allocating this time to the first period. Accordingly the total amount of time that I have allocated for the first period is 12.4 hours. The total amount of fees that the Respondent incurred for this period was $3,720.00. Of this amount, I am allowing 70%, which is $2,604.00. The total amount inclusive of HST is $2,942.52. I am rounding this figure up to $2,943.00

[49] In reaching my decision respecting the first period, I have taken into account the amount of time claimed and the importance and complexity of the issues involved. I am satisfied that the amount of time incurred was reasonable given the nature of the tasks that were required, the importance of the issues and the numerous communications between counsel. The time-sharing issues were of critical importance to both parties. I have taken into account the rate of $300.00 per hour that the Respondent’s counsel charged, and I have no concerns about this fee based on Ms. Cowan’s year of call and level of experience. I have chosen to allow 70% of the fees claimed rather than a lower amount based in large part on my conclusions regarding the conduct and positions of both of the parties. The Respondent took an extremely reasonable position and conducted himself in a fair and practical manner with respect to the motion. He was reasonable following Connor’s birth in accepting a gradual progression of time with the child, and was sensitive to the child’s needs. By the time this matter reached the hearing on August 26, 2016, he should have been enjoying the amount of time that he was seeking. I gave detailed reasons in support of this conclusion in my Reasons for Judgment. He took many reasonable steps to resolve the issues, both prior to and after serving the motion. These steps included attempts at mediation, negotiations between counsel, serving Offers to Settle, continuing the negotiations from the time the motion materials were served until the hearing and even serving a second Offer to Settle just prior to the hearing of the motion that proposed less time than his first Offer to Settle.

[50] By contrast, I conclude that the Applicant took an extremely unreasonable position and conducted herself through the motion proceedings in a manner that frustrated a resolution of the process. She did not take any action for approximately a month after being served with the motion materials. She requested an adjournment of the July 8, 2016 date, but then pushed for terms that were not appropriate given the Respondent’s lack of access to internet during his vacation period and the age of the child. This resulted in Ms. Cowan having to appear on the motion on July 8, 2016. When the matter was in court on August 5, 2016, Brown, J. granted the Respondent a full weekend of access with Connor. Despite this order, the Applicant persisted in her position at the hearing of the motion that Connor was not ready for full weekends with his father. She raised serious allegations that the Respondent had been physically aggressive with Connor, and that he suffered mental health difficulties that were likely to impact upon his parenting of the child. I concluded that the evidence did not support these areas of concern. In addition, I concluded in my Reasons for Judgment that the Applicant had in many ways marginalized the Respondent’s role in Connor’s life by failing to consult with him on important issues and putting roadblocks in the way of a reasonable progression of access. All of these conclusions respecting the parties’ conduct support a costs order at more than a partial indemnity rate for the first period under consideration.

[51] With respect to the period commencing May 17, 2016, the Respondent’s Offer to Settle that he served on that date (“the May Offer”) is a significant factor in the costs analysis. When I consider the various orders that the Respondent obtained through the motion process, I conclude that the overall outcome of the motion was as or more favourable to the Respondent than the terms of the May Offer. Specifically:

1. The Respondent requested 6 overnight visits in a two week period. He achieved this goal. Although the order that I made structured the Respondent’s time differently than the schedule that he requested, I am of the view that the outcome was in fact more favourable to the Respondent in that it provided him with two consecutive overnights with the child during the week when he does not have weekend access.
2. The Respondent proposed in the May Offer that his weekend access be extended by a day in the event that there was a holiday on either the Friday or the Monday. My order dated August 26, 2016 did not include such a term. However, I find that when the order is considered as a whole, its terms are nonetheless more favourable to the Respondent than the May Offer because of the two consecutive overnights during Week 1 of the rotation and the fact that the order results in shorter gaps of time between visits.
3. The Respondent requested two weeks of vacation time with Connor with the first week being from July 18 to 25, 2016. He obtained an order granting him a full week of summer vacation. He did not push the issue of a second week at the hearing, but he was successful in obtaining specified time during the Christmas season.

[52] Based on my conclusion that the May Offer triggered the operation of Rule 18(14), the Respondent is presumptively entitled to costs on a full indemnity basis from May 17, 2017 onward. Taking into consideration my discussions outlined above regarding the allocation of time to the two periods under discussion for the costs analysis, I have allocated 22.5 hours to the period from May 17, 2016 onward. As I have already noted, this total includes 5 hours on account of preparation of the Bill of Costs, Written Costs Submissions and attendance at court to argue costs. I have reviewed the items claimed for this period, and I find that the 4 hours claimed on account of reviewing the Applicant’s materials and preparing for the motion is excessive. I have reduced that item to two hours. Taking into account this adjustment, the fees relating to this period on a full recovery basis are $6,949.50, inclusive of HST. While the Respondent is presumptively entitled to this amount, I am reducing the amount to $5,200.00, inclusive of HST. This represents approximately 75% of the total reasonable costs relating to the period under discussion. There are two factors that have caused me to deviate from the presumption in favour of full recovery costs. First, a considerable amount of the time incurred in relation to the motion was attributable to delays and adjournments that flowed from the Applicant’s change in legal counsel and her second counsel’s illness and other trial commitments. These were factors that were beyond the Applicant’s control. Second, I have given considerable weight to the Applicant’s limited financial means at this time. She has been attending school until recently, and is about to give birth to her second child. There are serious issues about how she will be able to pay this costs award, and the indirect impact of a costs award on Connor while he is in her care. These considerations have led me to order costs at a lower rate than I would have otherwise ordered based on the facts of the case.

[53] Notwithstanding my decision to depart from the presumptive costs consequences of Rule 18(14), the costs order is still very onerous for the Applicant. While I appreciate that it will cause her financial hardship, I have taken into account the fact that the Respondent is also of very limited financial means. While the Applicant is able to live independently with her new partner, the Respondent has had to live with his parents and rely on their financial support to fund this litigation. The custody and access issues are still not resolved, and finances therefore continue to be a critical issue for both parties. I have framed the costs order in such a way as to mitigate the financial impact on the Applicant to a certain extent by allowing her six months to pay the costs. I have also taken into consideration the Applicant’s unreasonable position and conduct throughout the motion proceedings, as described above. In this regard, I have taken particular note of the fact that the Offer to Settle that the Respondent served on August 24, 2016, two days prior to the motion, proposed a resolution that was significantly less favourable to the Respondent than the order that I granted in the motion. I have also given considerable weight to the Respondent’s efforts to reach a reasonable settlement on the issue of costs. Again, the Applicant dismissed these efforts outright. She did not even propose a counter offer regarding costs.

[54] The limited financial means of a parent with primary residence of a child is a relevant consideration in determining costs. However, the court should not rely on this factor to whittle down costs awards to the point that the parent is essentially given a “carte blanche” to persist in advancing unreasonable positions and engaging in recalcitrant conduct that inflames and perpetuates the litigation. To do so would significantly undercut two of the main purposes of costs awards: to encourage settlement and to sanction unreasonable litigation positions and behaviour.

[55] In carrying out the costs analysis, I have also considered the disbursements claim that the Respondent has submitted, totalling $293.80, inclusive of HST. This is a reasonable amount, and I am including it in the costs award. I am rounding the figure up to $294.00.

[56] By way of summary, I conclude that the sum of $8,437.00 is a fair and reasonable amount of costs for the Applicant to pay the Respondent in relation to the motion, calculated as follows:

Fees for the period Until May 16, 2016 Inclusive of HST $2,943.00

Fees for the period from May 17, 2016 onward inclusive of HST $5,200.00

Disbursements Inclusive of HST $ 294.00

TOTAL: $8,437.00

PART V: TERMS OF ORDER TO ISSUE

[57] Based on the foregoing, an order shall issue as follows:

1. The Applicant shall pay the Respondent costs in connection with the motion heard on August 26, 2016 in the amount of $8,437.00, inclusive of HST and disbursements.
2. The costs referred to in paragraph 1 shall be paid by way of certified cheque made out to K. Cowan Law Professional Corporation, in trust for Tyler Kelly, to be delivered to the offices of Ms. Cowan by no later than January 31, 2018.

The Honourable Madam Justice Deborah L. Chappel Released: July 31, 2017