COURT FILE NO.: FS 963/15

DATE: 2018/05/29

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Brittany Beaver

Applicant

– and –

Kenneth Hill

Respondent

Sarah Strathopolous, Joanna Radbord, Scott Byers for the Applicant

Robert Halpern, Andrew Lokan for the Respondent

HEARD: March 6 and 27, 2018

The Honourable Madam Justice Deborah L. Chappel

REASONS FOR JUDGMENT RESPECTING COSTS

PART I: INTRODUCTION AND BACKGROUND

[1] These are my Reasons for Judgment regarding costs in connection with two motions which I heard in this case over an eight day period spanning from April 25, 2017 until September 5, 2017. I released my Reasons for Judgment regarding those motions on December 8, 2017, and invited the parties to file Written Submissions on Costs. I received Submissions from both parties in January 2018. I had many questions about the Applicant’s Written Submissions and Bill of Costs. Given these questions and the magnitude of the Applicant’s costs claim, I directed that a costs hearing be scheduled. The hearing occurred on March 6 and 27, 2018.

[2] By way of background, as I outlined in my Reasons for Judgment, the Applicant Brittany Beaver (“the Applicant”) and the Respondent Kenneth Hill (“the Respondent”) are the parents of Brody Kenneth Ryan Hill Beaver, born August 24, 2009 (“Brody”). They were in a relationship which ended in November 2013. The Respondent is a Haudenosaunee person and a member of the Six Nations of the Grand River (“the Six Nations”). He lives on the Six Nations Reserve. The Applicant and Brody are also Haudenosaunee and members of the Six Nations, but they live off reserve, in the city of Waterloo.

[3] The Applicant commenced an application in this court on December 8, 2015, seeking inter alia custody, child support for Brody and spousal support. The Respondent filed an Answer and Claim in the usual course in response to the application on February 4, 2016. However, on March 31, 2016, he served a Notice of Constitutional Question indicating that he intended to challenge the jurisdiction of this court and the applicability of the Family Law Act, R.S.O. 1990, c. F-3, as amended and its attendant regulations and associated statutes to his Family Law dispute with the Applicant, based on alleged aboriginal rights protected by s. 35(1) of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11 (hereinafter referred to as “s. 35(1)”). Subsequently, on June 8, 2016, the Respondent filed a Fresh as Amended Answer and Claim (“the Amended Answer”). In his Amended Answer, he sought an order dismissing the application in its entirety, or in the alternative, that the application be stayed, based on his constitutional challenges respecting the jurisdiction of this court and the applicable law.

[4] The filing of the Amended Answer prompted the two motions that I heard in this matter. The first motion was filed by the Respondent and was originally returnable on November 10, 2016. In that motion, the Respondent sought an order that the Family Law application be stayed pending the hearing and outcome of the constitutional questions raised in the Notice of Constitutional Question, and an order setting timelines relating to the hearing of the Respondent’s constitutional case. In addition, he requested leave to amend his Notice of Constitutional Question to include the application of the Children’s Law Reform Act, R.S.O. 1990 c. C-12, as amended in relation to its infringement on the Respondent’s aboriginal rights as a Haudenosaunee person and a member of the Six Nations.

[5] The second motion that I heard was brought by the Applicant and was originally returnable on November 30, 2016. In that motion, the Applicant sought various heads of temporary substantive relief, including temporary child support and spousal support, contribution from the Respondent for s. 7 expenses for Brody, relief relating to life insurance as security for support and dental/health benefits coverage for Brody. She further requested orders for financial disclosure from the Respondent, requiring the Respondent to produce an income determination report, compelling the Respondent to attend for questioning, and directing the Respondent to pay her interim disbursements and costs in connection with the application. In addition, she requested the following:

1. An order striking the Amended Answer;

2. An order striking the affidavit of Michael Chalupovitsch, sworn October 26, 2016, which the Respondent had filed in support of his motion;

3. A declaration that the Ontario Superior Court of Justice has jurisdiction to deal with the parties’ Family Law issues;

4. An order staying the Respondent’s constitutional case as against the Applicant and reconstituting it as a proceeding between the Haudenosaunee Confederacy Chiefs’ Council, the Attorney General of Ontario and the Attorney General of Canada; and

5. If the Respondent’s constitutional case is not stayed, an order for advance costs of $150,000.00 payable forthwith and such further and other funds as may be required to fund the Applicant’s involvement in the constitutional case.

[6] The Applicant withdrew her claim for an order reconstituting the case as a proceeding between the Haudenosaunee Confederacy Chiefs’ Council and the Attorney Generals on the first day of the hearing on April 25, 2017. On that date, I decided that I would deal first with the Applicant’s claims to strike the Amended Answer, for a declaration that this court has jurisdiction to hear the case, for an order staying the Respondent’s constitutional case, and for advance costs in the event that the constitutional case was allowed to proceed. I indicated that I would then hear the Respondent’s motion, and deal with the Applicant’s preliminary objection in that motion to the admissibility of the affidavit of Michael Chalupovitsch sworn October 26, 2016. I adjourned all of the other claims set out in the Applicant’s Notice of Motion pending the determination of these preliminary issues.

[7] The Applicant was successful in obtaining an order striking the Respondent’s Amended Answer, obtaining a declaration that this court has jurisdiction to deal with the Family Law application, and resisting the Respondent’s request for a stay of the Family Law proceeding to allow his constitutional challenge to proceed. She now seeks costs in connection with the motions in the amount of $500,000.00, inclusive of disbursements and HST. In addition, she seeks an order designating the costs award as being a support order within the meaning of s. 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act, S.O. 1996, c. 31 (the “FRSAEA”), and as such, that it be enforceable by the Director of the Family Responsibility Office (the “FRO”). The Respondent submits that the costs which the Applicant has claimed are excessive and unreasonable, and that any costs award should not exceed $100,000.00, inclusive of disbursements and HST. In addition, he opposes the Applicant’s request that any costs order be designated as being in relation to support within the meaning of the FRSAEA.

[8] For the reasons that follow, I conclude that the Applicant is entitled to costs of the motions, and that the sum of $315,415.00, inclusive of disbursements and HST, is a fair and reasonable amount having regard for the nature of the proceedings and all of the considerations relevant to costs. In addition, I have found these costs to be in relation to support and as such, that they shall be enforceable by the Director of the FRO. I have ordered that these costs be payable by no later than June 15, 2018.

PART II: POSITIONS OF THE PARTIES

I. The Applicant’s Position

[9] Counsel for the Applicant filed a detailed Bill of Costs as well as a Revised Costs Summary in support of the Applicant’s claim for costs of $500,000.00. The general breakdown as to how counsel reached this figure is as follows:

1. The sum of $341,422.87 represents the fees, disbursements and HST for the work which the firm of Martha McCarthy & Company LLP (hereinafter referred to as “MMC”) performed.

2. The work performed by the firm of Niman, Gelgoot and Associates, LLP (“NGA”) totalled $77,506.76, inclusive of disbursements and HST.

3. The total amount billed by both firms prior to the costs hearing, inclusive of disbursements and HST, was therefore $418,929.63.

4. The Applicant claims an additional $39,900.44, inclusive of disbursements and HST, for work relating to the issue of costs. Of this amount, the sum of $24,060.84 related to work performed by the firm of MMC, and the work carried out by the firm of NGA totalled $15,839.60.

5. Finally, the Applicant seeks a premium with respect to costs, over and above the amount of the actual fees and disbursements incurred, in the amount of $41,169.93, to bring the total costs amount to $500,000.00.

[10] Counsel for the Applicant submitted that the Applicant was clearly the successful party on both motions, and that she is therefore presumptively entitled to costs by virtue of Rule 24(1) of the Family Law Rules, O. Reg. 114/99, as amended. In further support of entitlement, the Applicant argued that she conducted herself diligently and reasonably throughout the motion proceedings, took fair and sound positions, and made an attempt to resolve the issues by serving an Offer to Settle. Her position is that she has not engaged in any conduct that would disentitle her to a costs award.

[11] With respect to quantum, the Applicant acknowledges that the costs claim of $500,000.00 is very high, but submits that this sum is fair and reasonable in the circumstances of the case. The total amount of actual fees, disbursements and HST that she claims, excluding the premium, is $418,929.63. She seeks full recovery for this amount. Dealing first with the amount of time spent on the file, counsel submitted that it was fair and reasonable in the circumstances. On a general level, they noted that a significant amount of time was invested in the motions due to the complexity of the issues and their critical importance to both the Applicant and the public at large. They emphasized that the Respondent sought to completely insulate the Family Law proceeding from the reach of the court and the application of Ontario Family Law legislation in favour of Haudenosaunee and/or Six Nations dispute resolution processes and laws, of which the Applicant had no knowledge. Counsel also underlined that the complexity of the case was such that NGA counsel had to seek the assistance of counsel from MMC who had specialized expertise in the areas of Aboriginal and Constitutional Law. This need for highly specialized assistance necessitated additional time to allow for extensive preliminary discussions, ongoing consultations and strategy planning between the two firms, as well as coordination of efforts regarding the preparation of materials. The Applicant submitted that work relating to the motions began once the Respondent advised on March 24, 2016 that he intended to file an Amended Answer and his Notice of Constitutional Question. A significant amount of time was required to strategize about how to respond to the Respondent’s decision to advance the aboriginal rights claims. In addition, counsel for the Applicant indicated that an inordinate amount of time was incurred due to the Respondent’s lack of cooperation in attempting to schedule the motions for a hearing. They also noted that the hearing of the motions and the necessary preparation time were prolonged unnecessarily because of the Respondent’s failure to plead material facts and changes in his positions during the course of the motions. Finally, on the issue of time spent on the motions, counsel for the Applicant stressed that the Respondent failed to provide the court with his own Bill of Costs, which would have reflected that amount of time that his own counsel spent on the motions. She submitted that a negative inference should be drawn from his failure to do so.

[12] The Applicant submitted that the rates which counsel charged were also very reasonable, having regard for the expertise of the counsel involved, their years of call and the complexity of the issues. In this regard, Ms. Radbord emphasized that she charged only $450.00 per hour, despite her many years of experience and the particular expertise that she has developed in the areas of Constitutional and Aboriginal Law. In addition, she highlighted that MMC and NGA relied on Articling Students and Summer Law Students as much as possible as a means of reducing the expense incurred on the file.

[13] Counsel for the Applicant highlighted several factors in support of the Applicant’s request for full recovery costs. First, Ms. Radbord submitted that full indemnification is appropriate having regard for the complexity of the motions and the uncharted nature of some of the issues. Related to this point, she submitted that full and meaningful costs awards are a valuable means of encouraging highly experienced counsel to take on challenging and novel issues on behalf of litigants of limited means. In addition, counsel argued that costs on a full recovery basis are appropriate based on the unreasonable positions which the Respondent took on the motions, which the Applicant characterized as reckless and a waste of time. They submitted that full indemnity costs are also appropriate having regard for the unreasonable positions and litigation behaviour of the Respondent and his counsel in connection with the motions. Counsel for the Applicant submitted that the concerns regarding the Respondent’s legal positions and his litigation conduct reflect bad faith on his part, which is a basis upon which to order full indemnity costs under the Family Law Rules. They argued that even if his conduct and positions did not amount to bad faith, they were nonetheless so problematic and unreasonable that an award of full recovery costs is required in the interests of justice. In this regard, the Applicant’s counsel relied on the cases of British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371 (S.C.C.), at paras 21-24 (“Okanagan Indian Band”) and Lawrence v. Lawrence, 2017 ONCJ 431 (O.C.J.), at paras. 29-31, which highlight that modern costs rules have evolved into a tool for sanctioning positions and behaviour which increase the duration and expense of litigation, or that are otherwise unreasonable and vexatious.

[14] In further support of full recovery costs, the Applicant submitted that her positions on the motions and her conduct throughout the proceedings were fair and reasonable. She emphasized that she served an Offer to Settle dated January 10, 2017 in an attempt to resolve the constitutional claims and the Family Law issues on a temporary basis, but that the Respondent did not respond to this Offer or serve his own Offer to Settle. Counsel for the Applicant acknowledged that the court did not consider it necessary to address some of the Applicant’s arguments on the motions, and that some of her arguments did not prevail. However, they contended that the assessment of costs in a civil claim should not ordinarily be approached on a “granular, issue-by issue basis.” Counsel relied on the case of Eastern Power Ltd. v. Ontario Electricity Financial Corp., 2012 ONCA 36 (C.A.), which established that this type of “distributive costs” approach should be restricted to the rarest of cases. They argued that a global rather than issue-based approach to the costs analysis is appropriate in this case. They also stressed that it was appropriate for the Applicant to raise every reasonable argument in support of her claims, having regard for the critical importance of the issues to her, and that she should not be penalized in costs for advancing all reasonable arguments in support of her right to access Ontario Family Law and processes.

[15] The Applicant acknowledges that the quantum of costs should be reasonable and proportionate to the nature and importance of the issues at stake. She submitted that while her costs claim is high, the amount is nonetheless proportional in light of the critical importance to her of being able to access the same court and laws that other Ontario citizens are entitled to rely on in their Family Law disputes. She also emphasized that the proportionality assessment should involve consideration of whether her motion overall saved time and expense and minimized strain on the court’s resources. She stressed that it did so, since it eliminated the necessity of a protracted and extremely expensive Constitutional/Aboriginal Law challenge.

[16] As I have indicated, the Applicant seeks a “risk premium” over and above her full indemnity costs, in the amount of $41,169.93, to take into account the risk that her counsel assumed of potentially not being paid for their work. She submitted that the fixing of costs should not simply involve a calculation of hours times rates charged; rather, the amount ordered should ultimately be one that is fair and reasonable having regard for all of the circumstances of the case. Counsel noted that the retainers of MMC and NGA permitted the charging of a “results” fee that incorporated a risk element, and that the requested amount of $500,000.00 is overall a fair and just sum. The Applicant’s position is that this type of risk premium is appropriate to incorporate into costs awards in complex Family Law litigation such as the motions in question, since it encourages experienced counsel to take on important litigation on behalf of clients who will not have the financial means of paying their legal bill if they are unsuccessful. Counsel acknowledged that the Supreme Court of Canada rejected the notion that a risk premium could be incorporated into a costs order pursuant to the Ontario Rules of Civil Procedure, O. Reg. 575/07, s. 6 (1), in the case of Walker v. Ritchie, 2006 SCC 45, [2006] 2 S.C.R. 428 (S.C.C.), and that the Ontario Court of Appeal followed suit in the Family Law context in Debora v. Debora, 2006 CanLII 40663 (ON CA), 2006 CarswellOnt 7633 (C.A.). However, they submitted that the issue of whether a premium can be incorporated into Family Law costs awards should be revisited. In this regard, they argued that Walker and Debora were decided prior to the Supreme Court of Canada decision in Hryniak v. Mauldin, 2014 SCC 7, which called for more timely, affordable and effective access to justice, and before the recent amendments to the Family Law Rules, which establish that the primary objective of the Rules is to deal with cases justly. The Applicant further submitted that the motions in question were in the nature of public interest litigation, and that she was required to assume a role analogous to that of a government in a conventional constitutional challenge, since the Attorney Generals of Ontario and Canada chose not to participate. She relied on the case of Victoria (City) v. Adams, 2009 BCCA 563 (C.A.) as establishing that a risk premium should be allowed as part of a costs award in public interest litigation in certain circumstances, and that she had met the test for entitlement to such a premium.

[17] In addition to a risk premium, the Applicant seeks costs in connection with the time, disbursements and HST that she incurred to address the issue of costs. She submits that the case-law supports incorporating into costs awards the reasonable expenses incurred to pursue costs. She asserts that the sum that she is requesting in this regard is fair and reasonable having regard for the nature of the litigation and the large amount of costs at stake.

[18] Finally, the Applicant seeks an order designating any costs award in this matter as constituting a “support order” within the meaning of section 1(1)(g) of the FRSAEA. Such an order would render the costs award enforceable by the FRO by virtue of section 5 of the FRSAEA, and immune from discharge in a bankruptcy by virtue of section 178(1)(c) of the Bankruptcy Act, R.S.C. 1985, c. B-3. The Applicant submits that the Respondent has conceded the issue of custody in this case, and that the case was therefore fundamentally about child and spousal support. Her position is that her costs were in relation to support, since the motions were essential in order to pave the way for her support claims to be heard by the court. Counsel for the Applicant highlighted the broad wording of s. 1(1)(g), and argued that the scope of the section extends further than just costs incurred to obtain an actual support order. They submitted that the case-law supports an expansive interpretation of the section, and relied in particular on the case of Writer v. Peroff, 2006 CarswellOnt 6438 (S.C.J.); aff’d 2006 CarswellOnt 6218 (C.A.), in which the Court of Appeal upheld an order finding costs to be in relation to support where the costs related to a motion to strike an Answer to a child support claim. In that case, the Ontario Court of Appeal ordered the costs of the appeal to be enforceable as support by the FRO as well.

II. The Respondent’s Position

[19] As I have indicated, the Respondent’s position is that if the Applicant is granted costs, the award should not exceed $100,000.00, inclusive of disbursements and HST. As a starting point, the Respondent submits that the amount which the Applicant claims is unreasonable and disproportionate taking into account the nature and general course of the proceedings. Counsel for the Respondent argued that the amount of costs should reflect what the Respondent could reasonably have expected to pay if he was not successful. The Respondent advanced the following arguments in support of his position that the costs claimed are excessive:

1. First, he raised concerns about the number of counsel, Articling Students, Summer Students and Law Clerks involved in the file, and evidence of duplication of efforts.

2. Second, counsel argued that much of the docketed time related to internal communications between counsel, students and other staff, which they submitted the Respondent should not be responsible to cover.

3. Counsel argued that much of the time included in the Applicant’s Bill of Costs appears to relate to matters unrelated to the constitutional challenge and the issues involved in the motions. In this regard, they highlighted the very vague descriptions included in many dockets and their inability to determine the specifics of the work that those dockets related to, based on the content of the entries.

4. Counsel emphasized the number of counsel who attended the court appearances relating to the motions. They submitted that while the Applicant had a right to request the presence of more than one lawyer, the Respondent should not be saddled with the expense of numerous lawyers attending.

5. The Respondent also suggested that the rates charged by Mr. Niman, Ms. McCarthy and Ms. Radbord were unreasonable and excessive.

6. Counsel contended that much of the time claimed related to arguments and claims that the court did not feel a need to consider or accept. They argued that counsel for the Applicant unnecessarily spent significant amounts of time on those matters.

7. In addition, counsel for the Respondent noted that the Applicant withdrew her request that the constitutional case be reconstituted as a proceeding between the Haudenosaunee Confederacy Chiefs’ Council and the Attorney Generals of Ontario and Canada. They argued that additional unnecessary time was spent considering and preparing for that issue.

8. The Respondent’s counsel argued that there is no basis for the court to order costs relating to the pursuit of a costs award. Furthermore, they argued that the Costs Submissions filed on behalf of the Applicant were excessive, referenced irrelevant matters and set out details regarding the procedural history of the case that were well within my knowledge having presided over the motions. Given these considerations, it is the Respondent’s position that the Applicant should not be rewarded by allowing a “costs of costs” award. In the alternative, he submits that the amount which the Applicant has claimed on account of seeking costs is excessive.

[20] The submissions outlined above go to the issue of what a fair and reasonable full recovery amount would be in this case. On the issue of whether full recovery is appropriate, the Respondent submitted that there are no grounds for an award of full recovery costs on the facts of this case. He denied that he acted in bad faith or unreasonably in relation to the motions. With respect to the positions that he took, he emphasized the importance of aboriginal rights and the need to support First Nations peoples in their attempts to clarify and advance those rights. Counsel for the Respondent emphasized that there was no evidence to support the Applicant’s suggestions that the Respondent commenced his constitutional challenge simply to thwart or delay the hearing and resolution of her claims, or to “wear her down” financially so as to achieve his own ends. They argued that the Respondent took reasonable steps to obtain the expert evidence required to support his claims in a timely manner. In regard to the limited details in the Amended Answer regarding the alleged aboriginal rights that the Respondent was advancing, counsel stressed the challenges involved in obtaining proof in support of aboriginal rights claims, and the time required to gather such evidence. While counsel acknowledged that there had been delay in moving the case forward, they contended that the Respondent had supported Brody generously to date by paying monthly support to the Applicant, paying other expenses relating to the child, and purchasing a home for the Applicant and the child. The Respondent denied the suggestion that he had unduly delayed serving his original Answer and Claim, and noted that he served his Notice of Constitutional Question within approximately three months of the Applicant commencing her application. He submitted that he was not unreasonable or obstructionist with respect to scheduling of the motions. In regard to the Applicant’s Offer to Settle, he emphasized that it was non-severable, and that it included a term that the constitutional claims would be dismissed. Counsel submitted that this aspect of the Offer was unfair and unreasonable having regard for the importance of the aboriginal rights issues to the Respondent. Finally, in arguing against a significant costs award, counsel for the Respondent relied on the Supreme Court of Canada decisions in Lax Kw’alaams Indian Band v. Canada, 2011 SCC 56 and Delgamuukw v. British Columbia, 1997 CanLII 302 (SCC), [1997] 3 S.C.R. 1010 (S.C.C.), in which the court declined to order costs in the context of very protracted and complex Aboriginal Law litigation.

[21] With respect to the Applicant’s request for a risk premium as a component of the costs award, the Respondent submitted that the law does not support such a claim in Family Law litigation. He relied on the cases of Debora and Walker in support of this position. Counsel for the Respondent submitted that there is nothing in the Supreme Court of Canada decision in Hryniak or in the most recent amendments to the Family Law Rules to suggest that the court should revisit the issue of whether a risk premium may be included in Family Law costs awards. Furthermore, they argued that the law of costs in public interest litigation is not applicable to this case, and that in any event, it does not support an award over and above actual costs incurred in a case. They submitted that the test set out in Victoria referred to awards of special costs in public interest litigation, and not to the availability of a premium. Furthermore, counsel contended that the availability of special costs according to the test in Victoria is limited to exceptional and special circumstances.

[22] Finally, with respect to enforcement of any costs award, the Respondent’s position is that costs relating to the motions that I heard would not be “in relation to support” within the meaning of section 1(1)(g) of the FRSAEA, and should therefore not be designated as such for enforcement purposes. He argued that in order for costs to be “in relation to support,” they must relate to proceedings in which the substantive support issues were addressed or in some way relevant. His position was that section 1(1)(g) does not extend to proceedings of a procedural nature in which there is no real connection between the costs incurred and the substantive support issues. Counsel for the Respondent submitted that the portions of the motions that proceeded before me related to procedural and constitutional issues, that the support issues were not addressed and that the costs in question do not fall within the scope of s. 1(1)(g). They suggested that the Writer case was distinguishable in that the costs determination was in a general sense relative to the support payor’s unreasonable behaviour in relation to the substantive support issues. Furthermore, they emphasized that in Writer, the issue of enforceability by the FRO was not actually argued at trial or at the appellate level.

PART III: THE LAW RESPECTING COSTS

I. GENERAL PRINCIPLES AND PURPOSES OF COSTS AWARDS

[23] 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. This section must be read in conjunction with Rule 24 of the Family Law Rules, which sets out a number of principles to guide the court in the exercise of its discretion in the Family Law context.

[24] The traditional purpose of a costs award was to indemnify the successful party in relation to the expenses they incurred in either defending a claim or in pursuing a valid legal right (Ryan v. McGregor, 1925 CanLII 460 (ON CA), 58 O.L.R. 213 (Ont. C.A.), at p. 216); Okanagan Indian Band, at para. 2. However, the Supreme Court of Canada underlined in Okanagan Indian Band that developments in the law respecting costs have significantly broadened the purpose of costs awards such that they have become a valuable tool for furthering the efficient, orderly and fair administration of justice (at para. 25). For example, the court noted that costs awards are a means of sanctioning parties who refuse to engage in concerted settlement efforts, or who engage in behaviour that increases the duration and expense of litigation or that is otherwise unreasonable or vexatious (at paras. 25-26). The court also established that costs awards are an important tool for ensuring meaningful access to justice for litigants who seek to vindicate a legally sound legal position but who have limited financial means to do so (at para. 26). The Ontario Court of Appeal subsequently reiterated the importance of costs awards as a tool for promoting efficient, fair and meaningful access to justice in Fong v. Chan, 1999 CanLII 2052 (ON CA), 1999 CarswellOnt 3955, 181 D.L.R. (4th) 614, 46 O.R. (3d) 330 (C.A.) and Serra v. Serra, 2009 ONCA 395 (C.A.). In those cases, the court summarized 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.

[25] While these three objectives provide a general framework for the analysis of costs, the courts must also ensure that the law of costs does not become an impediment to the pursuit of justice. Accordingly, in seeking to advance these objectives, the court should also consider 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.)).

[26] In addressing the issue of costs, the court must ultimately be guided by the primary objective of the Family Law Rules as set out in Rule 2(2), which is to enable to the court to deal with cases justly (Darling v. Booth, 2017 ONSC 6261 (S.C.J.); Lawrence, at para 27; Kukyz v. Simeoni, 2017 ONSC 6732 (S.C.J.), at para. 21). The Court of Appeal has highlighted the discretionary nature of costs awards, and the importance of considering all relevant factors based on the unique facts of each case (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

A. Costs Liability to be Determined After Each Step in the Case

[27] The first issue to be determined in addressing costs is whether either party is liable to pay costs. Rule 24 of the Family Law Rules sets out a number of factors relevant to the preliminary issue of liability. Rule 24(10) establishes the general principle that the court should determine liability and quantum 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.)).

B. Factors Relevant to Liability for Costs

1. Degree of Success

[28] Rule 24(1) establishes a presumption that a successful party to a motion, enforcement, case or appeal is entitled to costs. This Rule must be considered in conjunction with Rule 24(6), which 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. The determination of whether success was truly “divided” does not simply involve adding up the number of issues and running a mathematical tally of which party won more of them (Brennan v. Brennan, 2002 CarswellOnt 4152 (S.C.J.)). Rather, it 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 which required adjudication (Jackson v. Mayerle, 2016 ONSC 1556 (S.C.J.); Slongo v. Slongo, 2017 ONCA 687 (C.A.)) Where the court concludes that success was in fact divided, it may award costs to the party who was more successful on an overall global basis or on the primary issue, subject to adjustments that it considers 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.)).

[29] If the parties have reached a negotiated resolution of some or all 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.); Scipione v. Del Sordo, 2015 ONSC 5982 (S.C.J.), at para. 64). As Pazaratz J. stated in Scipione, at para. 64, a party’s decision to enter into Minutes of Settlement at the end of the litigation journey “doesn’t automatically wipe out any history of bad litigation choices which would otherwise justify costs.”

2. Successful Party May Nonetheless Be Liable for Costs or Denied Costs

[30] 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, as follows:

DECISION ON REASONABLENESS

24(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.

[31] 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.)). 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.”

3. Bad Faith and Liability for Costs

[32] 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. Bad faith is not simply bad judgment or negligence. As the court stated in Biddle v. Biddle, 2005 CanLII 7660 (ON SC), 137 A.C.W.S. (3d) 1164, it implies “the conscious doing of a wrong because of dishonest purpose or moral obliquity… it contemplates a state of mind affirmatively operating with furtive design or ill will.” Perkins J. described the concept of “bad faith” within the meaning of this Rule in S.(C.) v. S. (M.), 2007 CanLII 20279 (ON SC), [2007] O.J. No. 2164 (S.C.J.), aff’d 2010 ONCA 196, [2010] O.J. No. 1064 (C.A.) as follows:

In order to come within the meaning of bad faith in rule 24(8), behaviour must be shown to be carried out with intent to inflict financial or emotional harm on the other party or other persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court… The requisite intent to harm, conceal or deceive does not have to be the person's sole or primary intent, but rather only a significant part of the person's intent. At some point a party could be found to be acting in bad faith when their litigation conduct has run the costs up so high that they must be taken to know their behaviour is causing the other party major financial harm without justification.

(See also Scalia v. Scalia, 2015 ONCA 492 (C.A.)).

[33] In Children’s Aid Society of the Region of Peel v. K.J.F. and K.P.F., 2009 ONCJ 252 (O.C.J.), at para. 25, Clark J. further explained that the concept of bad faith within the meaning of Rule 24(8) is not synonymous with bad judgment or negligence. Rather, as he stated, “it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. What this means is that bad faith involves intentional duplicity, obstruction or obfuscation.”

4. The Importance of Offers to Settle in Determining Liability for Costs

[34] 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.

[35] 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.)).

[36] In deciding both liability for and quantum of costs, Rule 18(16) directs that 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. 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 is also a highly relevant factor in determining both liability for costs and the appropriate amount of a costs award (Menchella v. Menchella, 2013 ONSC 367 (S.C.J.); Potter v. DaSilva, 2014 ONCJ 443 (O.C.J.)). As Zisman J. stated in Potter, at para. 22:

Offers to settle play an integral role in saving time and expense by promoting settlements, focusing parties and often narrowing the issues in dispute. Offers to settle are therefore important in any consideration of the issue of costs. In my view, it is unreasonable behaviour for a party not to make an offer to settle.

5. Financial Means of the Parties

[37] Although not specified in Rules 24 and 18 as factors in deciding costs, the financial means of the parties, their ability to pay costs and the effect of any costs ruling on the parties and any children are also relevant to the adjudication of both liability for costs and the appropriate quantum of a costs award (Murray v. Murray, 2005 CanLII 46626 (ON CA), 79 O.R. (3d) 147, [2005] O.J. No. 5379 (C.A.); 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.); Cassidy v. McNeil, 2010 ONCA 218 (C.A.); Biant v. Sagoo, 2001 CanLII 28137 (ON SC), [2001] O.J. No. 3693 (S.C.J.); M.(C.A.); Clark v. Clark, 2014 ONCA 175 (C.A.)). In most cases, a party’s limited financial means will be relevant to the appropriate quantum of costs and how payment should be effected, and not to the issue of liability for costs (Snih v. Snih, 2007 CanLII 20774 (ON SC), at paras. 7-13; Izyuk v. Bilousov, 2011 ONSC 7476, at para. 51). However, the court may decline to order costs against an unsuccessful party if it is clear that the party would be unable to pay the costs, and the practical effect of a costs order would be to destroy any chance that the party may have to achieve financial self-sufficiency (Murray, at para. 10). The financial means of a custodial parent may be particularly relevant in deciding costs if a costs award would indirectly impact a child in a negative fashion (M.(C.A.)). 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.”

6. The General Conduct of the Parties

[38] The decision respecting liability is ultimately a discretionary one that must be informed by the overall conduct of the parties and all of the circumstances and dynamics of the case. One of the most important functions of costs is to ensure that litigants conduct themselves in a manner that upholds the integrity of our justice system as a whole. A careful consideration of the conduct of the parties is therefore a key component to the costs analysis. The court has an obligation to ensure that litigation is not utilized as a tool to harass parties, and that the resources of the justice system are not unduly drained by unmeritorious claims. As Spence J. aptly stated in Heuss v. Surkos, 2004 ONCJ 141 (O.C.J.), at para. 20:

Parties to litigation must understand that court proceedings are expensive, time-consuming and stressful for all concerned. They are not designed to give individual litigants a forum for carrying on in whatever manner they may choose, oblivious to the impact of that conduct on the other side and, perhaps most importantly for the purposes of this case, oblivious to the mounting costs of the litigation. Matrimonial litigation is an occasion for sober consideration and thoughtfulness rather than intemperate behaviour.

III. QUANTUM OF COSTS

A. General Principles

[39] 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.)).

[40] The case-law decided since Serra has emphasized that in determining the appropriate quantum of costs, the court should consider the amount that the unsuccessful party could reasonably have expected to pay in the event of lack of success in the litigation (Lupien v. Carmichael, 2017 ONSC 2929 (S.C.J.); Darling v. Booth, 2017 ONSC 6261 (S.C.J.), at para. 12). Polowin J. commented on the 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.

[41] There are no presumptions respecting the quantum of costs in Family Law matters in Ontario apart from the specific provisions in the Family Law Rules discussed below directing the court to order full recovery costs in certain circumstances (Anderson v. Anderson, 2016 ONSC 7774 (S.C.J.)). Furthermore, the court need not find that bad faith or other special circumstances exist to make a costs award approaching substantial or full indemnity (Sordi v. Sordi, 2011 ONCA 665 (C.A.), at para. 21).

B. Factors Relevant to the Quantum of Costs

1. Rules 24(11), 1(8) and 2(2) of the Family Law Rules

[42] 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.

[43] 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, and 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.)).

2. The Appropriateness and Reasonableness of the Amounts Claimed

[44] As a starting point in determining the appropriate quantum of costs, the court has an obligation to review the specifics of the Bill of Costs 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.); Snelgrove v. Kelly, 2017 ONSC 4625 (S.C.J.)). The court must as part of this process consider whether all of the items claimed actually relate to the proceeding in question, and 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; Snelgrove). 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; Snelgrove).

[45] The court’s decision on the appropriate quantum of costs must also be informed by the principle of proportionality. As Pazaratz J. stated in Jackson, the Supreme Court of Canada recognized in Hryniak v. Mauldin, 2014 SCC 7 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. If the case was complicated and involved novel or important issues, the principle of proportionality may support a higher award (L.(J.K.) v. S.(N.C.), 2009 CarswellOnt 1017 (S.C.J.), at para. 34; Goodwin v. Goodwin, 2011 ONSC 2402 (S.C.J.), at para. 35).

[46] A useful benchmark for 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 and disbursements in the matter (Smith Estate v. Rotstein, 2011 ONCA 491 (C.A.); Durbin v. Medina, 2012 ONSC 640 (S.C.J.); Scipione v. Del Sordo, 2015 ONSC 5982 (S.C.J.)). Although there is no requirement that a party resisting costs file their own Bill of Costs, it is preferable that they do so to assist the court in dealing with costs in a fair and reasonable manner (Risorto et al. v. State Farm Mutual Automobile Insurance Co., 2003 ONSC 43566 (S.C.J.), at para. 10). Failure on their part to provide details regarding their own costs is a factor that the court may take into account in considering the reasonable expectations of the losing party, and may entitle the court to draw an adverse inference (Smith Estate, at para. 50; Scipione, at para. 126; 206637 Ontario Inc. (c.o.b. Balkan Construction) v. Catan Canada Inc., 2013 ONSC 5448 (S.C.J.), at para. 7). Consideration of the other party’s Bill of Costs is particularly helpful if that party challenges a costs claim on the basis of alleged excess and over-lawyering (Mullin v. Sherlock, 2017 ONSC 6762 (S.C.J.), at para. 89; Brar v. Brar, 2017 ONSC 6372 (S.C.J.), at para. 30; Bielak v. Dadouch, 2017 ONSC 4255 (S.C.J.), at para 10). As Winkler J. stated in Risorto, at para. 10, such allegations amount to “no more than an attack in the air” if the unsuccessful party fails to produce their own Bill of Costs. In addition, 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).

3. Offers to Settle

[47] As discussed above, 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.)).

[48] 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.)).

4. Bad Faith and General Conduct of the Parties

[49] As I have already noted in my discussion respecting liability for costs, Rule 24(8) directs the court to order costs against a party who has acted in bad faith. This Rule is also critical to the issue of quantum of costs, since it specifically requires that costs be awarded on a full recovery basis and 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.); Snelgrove).

[50] The general conduct of the parties is one of the major factors in determining costs, even if their conduct falls short of bad faith. As Campbell J. highlighted in Parsons v. Parsons, 2002 CarswellOnt 2536 (S.C.J.):

[W]hen the respondents have acted unreasonably, the applicants should not have to financially "pick-up" or absorb the result of those respondents' impulsive and punitive decisions. While the court recognizes that costs orders may "fan the fires", I interpret the rules as recognizing that there must be consequences for unreasonableness.

There is an element of behaviour modification to a costs order in that it encourages a change in attitude from a "litigate with impunity" mindset.

[51] In assessing the parties’ overall conduct, the court should consider Rule 24(5), discussed above, which sets out factors that the court must examine when deciding whether a party has acted reasonably or unreasonably. Evidence that a party engaged in litigation conduct that was disrespectful of the other participants or the court, which unduly complicated the proceedings, which needlessly increased the cost of the litigation or which was otherwise unreasonable may lead to increased cost consequences (Parsons, at para. 14). Similarly, a high or full recovery costs award may be justified where a party persists in advancing unreasonable claims (Lawrence, at paras. 58-60; Westendorp v. Westendorp, 2000 CarswellOnt 2047 (S.C.J.), at para. 4; Ojo v. Ojo, 2005 CarswellOnt 1239 (S.C.J.), at para 16). By contrast, evidence that a litigant “behaved in ways that saved time and expense and minimized strain on the court’s resources” will militate in that party’s favour in the costs analysis (Cornwall v. Jevons, 2015 ONCJ 772 (O.C.J.), at para. 1).

5. The Meaning of “Full Recovery Costs” Under the Family Law Rules

[52] The reference in Rules 18(4) and 24(8) to “full recovery” costs has led to discussion about the precise meaning of this phrase. This phrase is distinct from the “scales” or “ranges” for costs awards referred to in the Ontario Rules of Civil Procedure, namely “partial indemnity costs,” “substantial indemnity costs” and “full indemnity” costs. It is also distinct from the phrase “solicitor and client costs” that is referred to in some court Rules. The Family Law Rules do not make reference to these scales, and the civil Rules do not include definitions for any of these terms. 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.), and the Ontario Divisional Court followed suit in Costa v. Perkins, [2012] O.J. No. 2400 (Div. Ct.).

[53] With respect to the term “full recovery” costs referred to in the Family Law Rules, the question has arisen as to whether this phrase refers to the full amount which a party claims, subject to adjustments based on reasonableness, or something between the concept of “substantial indemnity” and the full amount claimed and (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.

6. Degree of Success in the Case

[54] As I have indicated, success in the proceeding is a critical factor in determining costs. If the case involves numerous issues, it is important both for liability and quantum purposes to consider whether one party was overall more successful than the other(s). If one party was indeed overall the most successful litigant, the court is entitled to make adjustments to the costs award to take into account that party’s lack of success on certain issues in the proceeding. The nature and extent of the adjustments will be a matter of discretion and will depend in part on the nature, importance and complexity of the issues on which the party was unsuccessful (Eastern Power Ltd., at para. 18). The court should adopt a broad and flexible approach in making such adjustments. It is not appropriate to engage in a detailed costs analysis respecting each separate issue and then tally up an ultimate “costs score-sheet.” The Ontario Court of Appeal cautioned against adopting this type of approach to formulating a costs order, which it referred to as a “distributive costs award,” in Oakville Storage and Forwarders Ltd. v. Canadian National Railway, 1991 CarswellOnt 440 (C.A.), stating that it found it difficult to imagine a situation in which this approach to the analysis of costs may be appropriate. It emphasized the importance of scrutinizing the success of each of the parties on particular issues in a case, but concluded that this analysis is more appropriately undertaken as part of the general exercise of discretion respecting costs, taking into consideration the factors outlined in the applicable Rules. In Skye v. Matthew, 1996 CarswellOnt 37 (C.A.), the court reiterated its caution about resorting to distributive costs orders, and expressed concern that such awards undermine the purposes of Offer to Settle provisions in court Rules, which are result-oriented rather than issue-driven. The Court of Appeal has clearly indicated that the use of distributive costs awards should be restricted to “the rarest of cases” (Eastern Power Ltd., at para. 18; Murphy v. Alexander (2004), 236 D.L.R. (45h) 302 (C.A.); Armak Chemicals Ltd. v. Canadian National Railway Co., 1991 CanLII 7060 (ON CA), 5 O.R. (3d) 1 (C.A.)).

7. Financial Means of the Parties

[55] As I have indicated, the financial means of the parties is a relevant factor to both liability for costs and the quantification of an award. Costs awards must take into consideration the reasonable prospects of a party being able to pay and the impact of an award on the ability of the party to meet their basic needs and those of any children in their care. However, 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 in quantifying costs 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

8. Public Interest and Access to Justice Considerations

[56] As I have indicated, the Applicant bases her claim for full indemnity costs in part on the importance of the issues involved in the case from a public interest perspective. She argued that the case had implications that went far beyond the litigants themselves, and that she was placed in the position of defending the jurisdiction of this court and the applicability of Ontario Family Law legislation for not only herself but for other Haudenosaunee litigants and their children. As I have stated, costs awards have been recognized as an instrument of policy to support access to justice for ordinary citizens who seek to pursue their rights or to address matters of general public interest. In Okanagan Indian Band, the Supreme Court of Canada emphasized that costs are a valuable tool for fostering access to justice, and that this purpose is particularly compelling in cases involving matters of consequence to the public as a whole (at para. 27). In Victoria (City) v. Adams, 2009 BCCA 563 (C.A.), the British Columbia Court of Appeal noted that litigation involving the public interest raises unique policy considerations that may, in exceptional circumstances, justify a departure from normal costs rules and principles. In particular, it held that the existence of a public interest component to a case may cause the courts to depart from ordinary costs awards in three general scenarios, as follows:

1. First, it may support an award of interim costs to assist a litigant who seeks to promote a matter of general public interest.

2. Second, it may permit the court to relieve an unsuccessful public interest litigant from a costs award or to grant them costs despite their loss.

3. Third, it may justify a higher quantum of costs than typically permitted under Rules of court to the litigant seeking to advance the public interest (at para 82).

[57] With respect to the third situation, in McCullock Finney c. Barreau (Québec), 2004 SCC 36, 2004 2 S.C.R. 17 (S.C.C.), the Supreme Court of Canada addressed whether the appellant was entitled to solicitor and client costs, which were limited to exceptional circumstances under the Supreme Court Act, R.S.C. 1985, c. S-26. The court awarded solicitor and client costs, largely on the ground that the appeal “raised issues of general importance concerning the application of the legislation governing the professions in Quebec, the implications of which go beyond her particular case.”

[58] The Applicant relies on the Victoria case as setting out the test for awarding a higher scale of costs in cases where there is a public interest component. However, the Supreme Court of Canada established in Carter v. Canada (Attorney General), 2015 SCC 5 that the British Columbia Court of Appeal had set the test too low for awarding a higher scale of costs in such circumstances. The court acknowledged that special costs are an important means of encouraging ordinary litigants to bring vital issues of general public interest before the courts. However, it emphasized that against this consideration, the court must weigh the caution that “[c]ourts should not seek on their own to bring an alternative and extensive legal aid system into being” (at para. 137). It emphasized that almost all constitutional cases involve matters of general public importance, and that issues of public significance do not automatically entitle a litigant to preferential treatment in terms of costs (at para. 139). The court articulated the following factors to guide the courts in determining whether it is appropriate to depart from the usual rules on costs and award special costs in cases involving public interest litigants (at para. 140):

1. First, the case must involve matters of public interest that are truly exceptional. It is not sufficient that the issues raised have not been previously resolved, or that they transcend the individual interests of the successful litigant. Rather, the issues must also have “a significant and widespread societal impact.”

2. Second, the party seeking the costs must have no personal, proprietary or pecuniary interest in the litigation that would justify the proceedings on economic grounds.

3. Third, the party must also show that it would not have been possible to effectively pursue the litigation in question with private funding.

[59] The Supreme Court of Canada also emphasized in Carter that an award of special costs does not grant the successful party the right to burden the other party with all expenses that they have accrued during the litigation. Rather, since costs awards are intended to encourage reasonable and efficient litigation, an award of special costs will only cover those expenses that are shown to be reasonable and prudent (at para. 142).

[60] As I have discussed, the concepts of “special costs” and “solicitor and client costs” have not been incorporated into the Family Law Rules. Rather, the overall quantum of costs is a matter of judicial discretion, subject to the circumstances discussed above in which the Rules direct that full recovery costs be ordered. However, I conclude that a higher costs award may be justified in a Family Law case if the criteria set out in Carter are satisfied. I find support for this conclusion from Rule 24(11)(a) of the Family Law Rules, which specifically lists the importance, complexity and difficulty of the issues as factors that are relevant to the amount of costs.

[61] Meaningful costs awards are also used as an instrument of policy to encourage experienced and specialized counsel to take on difficult litigation of broad concern on behalf of litigants who are unable to cover all or any of their fees. In such circumstances, costs further the important public interest in ensuring access to justice to those who may otherwise be unable to advance their legal rights (Broomer (Litigation Guardian of) v. Ontario (Attorney General), 2004 CanLII 27253 (ON SCDC), 187 O.A.C. 192 (Div. Ct.), at para. 20).

9. Whether a Costs Award Can Incorporate a “Risk Premium”

[62] As I have indicated, the Applicant requests that the court grant her costs over-and-above the amounts that she actually incurred in the nature of a “risk premium.” This request is founded on the fact that the Applicant’s counsel carried on the litigation for an extended period of time without full remuneration, and assumed the risk of ultimately not being paid by the Applicant. In making this claim, the Applicant relies in part on the fact that her retainer agreements with MMC and NGA permitted the charging of a “results fee.”

[63] I conclude that it is inappropriate to incorporate a “risk premium” into costs awards in Family Law litigation in Ontario. In reaching this decision, I rely on the Supreme Court of Canada decision in Walker v. Ritchie, [2006] S.C.R. 428 (S.C.C.), where the court held that the risk of potential non-payment to counsel was not a relevant factor in deciding the quantum of costs pursuant to the Ontario Rules of Civil Procedure. The court noted that this factor was not enumerated as one of the relevant considerations under Rule 57.01(1), and concluded that it did not fall within the scope of Rule 57.01(1)(i), which allowed the court to consider “any other matter relevant to the question of costs.” In reaching this decision, the court emphasized that costs principles should permit parties to reasonably assess the circumstances that could result in costs being awarded against them. It noted that a “risk premium” arrangement between a party and their counsel is not a matter about which the other parties would normally have knowledge or that they would be entitled to know (at para. 27). The court concluded that it would be unfair to introduce a risk premium into the costs analysis, since unsuccessful defendants should expect to pay similar amounts in costs across similar types of litigation involving similar conduct and counsel, regardless of the arrangements that the successful party may have made independently with their counsel (at para. 28). In rejecting the availability of a risk premium in costs awards, the court also held that the addition of such a threat could pressure parties with meritorious claims or defences to settle, and in turn encourage moving parties to pursue the least meritorious claims (at para. 34). Finally, the court rejected the argument that risk premiums are required to facilitate access to justice for parties who cannot pay their fees and who will not receive any monetary award from the litigation out of which fees may be paid. It held that there are numerous other alternative means for these plaintiffs to obtain funding. Although the court recognized that some such plaintiffs may be unable to secure funding for their litigation, it noted that “the costs scheme does not aim at perfection. Risk premiums cannot be justified on this basis” (at para. 41).

[64] In the case of Debora, the Ontario Court of Appeal applied the Supreme Court of Canada’s reasoning in Walker to conclude that a risk premium cannot be incorporated into costs awards in the Family Law context. The court specifically referred to the access to justice concerns, and concluded that disallowing a risk premium would not impede access to justice (at para. 86). Counsel for the Applicant, Ms. Radbord, suggested that the Supreme Court of Canada’s decision in Hryniak, with its emphasis on access to justice, and the developments in the Family Law Rules since 2006 necessitate further consideration of whether a risk premium should be available as part of costs awards in Family Law litigation. I do not find any basis in the Hryniak decision or the current Rules to support this proposition.

[65] The Applicant’s request that a risk premium element be incorporated into the costs award is premised on the assumption that the risk premium which MMC and NGA have incorporated into their retainer agreements with the Applicant is permitted. In Walker and Debora, the courts were not called upon to determine whether a “results-based” fee over and above the actual amounts incurred on the file was permitted in Family Law cases as between solicitor and client. The Ontario Court of Appeal squarely dealt with the validity of such a fee in Jackson v. Stephen Durbin and Associates, 2018 ONCA 424 (C.A.), in which it upheld the decision of Lofchik J. that such a charge is a contingency fee arrangement and is prohibited pursuant to s. 28.1(3)(b) of the Solicitors Act, R.S.O. 1990, c. S-15 (at para. 37). In reaching this decision, the court highlighted the fact that Family Law litigation is fundamentally different from civil litigation in that no outside funds form part of any financial recovery. It concluded that lawyers’ fees in Family Law litigation should not be in whole or in part contingent on success, because the emphasis in this litigation is on resolution, mediation, and saving time and expense in proportion to the complexity of the case. The court was of the view that a fee based on success could detract from and undermining this focus (at paras 45-46). The Jackson decision further supports my conclusion that a risk premium is not an appropriate component of costs awards in Family Law litigation in Ontario. Given that counsel are not permitted to charge their client such a fee, the inclusion of a risk element in a costs award would constitute a windfall to the litigant. Such an outcome would be inconsistent with the fundamental principle that costs are a form of indemnity and should not be a source of profit to the claimant (Perri v. Thind, 2009 CanLII 34977 (ON SC), 98 O.R. (3d) 74, at para. 25; Cassidy v. Cassidy, at para. 22).

10. Whether a Costs Award Can Include Costs Associated with Pursuing Costs

[66] As part of its discretionary authority respecting costs, the court may include as a component of a costs award the expenses and disbursements associated with pursuing the costs claim (C.(K.D.) v. C. (M.C.), 2007 ONCJ 210 (O.C.J.); Johanns v. Fulford, 2010 CarswellOnt 10903 (O.C.J.); Hesketh v. Brooker, 2013 ONSC 5433 (O.C.J.)). A request for costs relating to the preparation and advancement of a costs argument should be made as part of the general submissions respecting costs of the hearing in question, unless there are exceptional circumstances which satisfy the court that procedural and substantive justice cannot be achieved unless a separate costs hearing is held (C.(K.D.); Johanns; Osmar v. Osmar, 2000 CanLII 20380 (ON SC), [2000] O.J. No. 2504 (S.C.J.)).

IV. ENFORCEMENT OF COSTS BY THE FAMILY RESPONSIBILITY OFFICE

[67] The Applicant requests that any costs award be designated as arising in relation to support. The consequences of such a designation include that the costs award would be immune from discharge in a bankruptcy by virtue of s. 178(1)(c) of the Bankruptcy Act, R.S.C. 1985, c. B-3, and would be enforceable by the FRO pursuant to the FRSAEA. With respect to enforcement, the relevant legislative provisions are sections 5(1) and 1(1)(g) of the FRSAEA. Section 5(1) provides that it is the duty of the Director of the FRO to enforce support orders where the support order and the related support deduction order are filed in the Director’s office, and to pay the amounts collected to the person to whom they are owed. Section 1(1) of the Act includes the definition of “support order.” Section 1(1)(g) provides as follows:

1 (1) In this Act,

“support order” means a provision in an order made in or outside Ontario and enforceable in Ontario for the payment of money as support or maintenance, and includes a provision for,

(g) interest or the payment of legal fees or other expenses arising in relation to support or maintenance

[68] Trial and appellate courts have the authority to designate costs orders as arising in relation to support within the meaning of section 1(1)(g) of the FRSAEA and as such, that they be enforceable by the Director of the FRO (Drygala v. Pauli, 2002 CanLII 41868 (ON CA), [2002] O.J. No. 3731, 164 O.A.C. 241, 61 O.R. (3d) 711 (C.A.), at para. 16; Wildman v. Wildman, 2006 CanLII 33540 (ON CA), 2006 CarswellOnt 6042, 215 O.A.C. 239 (C.A.), at para. 56). The broad purpose of section 1(1)(g) is to support efforts to provide children with the financial support that they require to meet their basic needs in a timely manner. The section provides some assurance to parents who pursue support rights on behalf of their children that they will receive assistance in recovering costs which they have incurred in carrying out this task. In applying section 1(1)(g), the courts should interpret it broadly and in a manner that advances its child-focussed purpose.

[69] A judge addressing the issue of costs has a wide scope of discretion in deciding how to deal with a request that legal costs be designated as arising in relation to support. The need for discretion is particularly compelling in cases involving numerous Family Law issues in addition to support matters. In such circumstances, the judge may estimate the portion of the costs award that pertains to the support issue and designate that portion of the award as being enforceable by the FRO. Alternatively, the court may designate the entire costs order as arising in relation to support if the principal issues related to support and the court is satisfied that it is impractical and inappropriate to dissect the costs claim to determine which parts relate the support aspects of the proceeding (Stancati v. Stancati, 1984 CanLII 1775 (ON CJ), 49 O.R. (2d) 284 (Prov. Ct.), at 287; Wildman, at para. 59; Hatcher v. Hatcher, [2009] W.D.F.L. 5320 (Ont. S.C.J.), at para. 33; Sordi, at para. 25; Clark , at para. 81; Campbell v. Campbell, 2017 ONSC 3787 (S.C.J.), at para. 336).

[70] The designation of a costs award as being enforceable by the FRO is contingent on the court being satisfied that the costs arose “in relation to support” within the meaning of section 1(1)(g) of the FRSAEA. In order to fall within the scope of this section, the costs must in some way relate to the advancement of a support claim in the proceeding (Clark at para. 68). Accordingly, it is an error to designate a costs award as being in relation to spousal support if the litigant in whose favour the order is made has not advanced such a claim in their application, or if the step in the case had no connection to any support claims (Clark; Cline v. Moran, 2016 ONSC 6859 (S.C.J.), at para. 7). However, the costs in question need not necessarily relate to the hearing and adjudication of a support claim for the costs to fall within the scope of section 1(1)(g). They may pertain to a case management step in the case in which the issue of support was addressed (Meidell v. Meidell, 2013 ONSC 438 (S.C.J.)). Furthermore, costs relating to a step in a case can be characterized as “arising in relation to support” notwithstanding that the issues of entitlement and quantum of support were not specifically argued and adjudicated upon at that stage, provided that the step was taken to enable the party to advance and pursue their support claims in a fair and just manner. An example of such a step would be a motion by an Applicant seeking disclosure of financial information required to properly determine the support issues. Costs relating to a motion by a support claimant to strike the opposing party’s defence to the support claims are also properly characterized as arising in relation to support, since the purpose of the motion is to pave the way for a just and efficient adjudication of the claims. For instance, in Writer, the Applicant made a claim for child support against the Respondent, and brought a motion to strike the Respondent’s pleading on the basis of his failure to provide financial disclosure and contempt of disclosure orders. Backhouse J. struck the Answer and Claim, awarded the Applicant costs of the motion and directed that the costs order be enforceable by the FRO as “an incident of support” pursuant to the FRSAEA. On appeal, the Court of Appeal upheld the order striking the Respondent’s pleading and the costs award, designated the costs of the appeal as being in relation to support as well, and ordered that those costs be enforceable by the FRO (Writer, at paras. 3-4).

PART IV: ANALYSIS

I. RULING ON LIABILITY FOR COSTS

[71] Although counsel for the Respondent focussed on the appropriate quantum of costs, they did not clearly concede the issue of liability for costs. I conclude that the Applicant is entitled to costs in connection with both motions. She was the successful party on both motions with respect to the issues that I heard, and is therefore presumptively entitled to costs by virtue of Rule 24(1) of the Family Law Rules. In her own motion, she succeeded in obtaining a declaration that this court has jurisdiction and an order striking the Amended Answer. Although she withdrew her request that the constitutional case be reconstituted as a proceeding between the Haudenosaunee Confederacy Chiefs’ Council and the Attorney Generals of Ontario and Canada, this decision did not detract from her overall success in the case. The Applicant raised a number of issues and arguments in connection with her claims that I decided I did not need to address in my Reasons. In addition, I did not agree with all of the arguments that she advanced. These are considerations which I consider to be relevant to the quantum of costs rather than liability. The Applicant was also entirely successful in opposing the Respondent’s request for a stay of the Family Law proceeding pending the outcome of his Constitutional/Aboriginal Law case.

[72] I have considered whether the Applicant engaged in any conduct that would justify a denial of costs despite her overall success on both motions. I conclude that she did not. She was respectful and cooperative with the Respondent and his counsel in discussing how to respond to the Respondent’s Amended Answer and in attempting to schedule the motions. Her counsel were diligent and thorough in preparing the evidence, facta, legal summaries and Briefs of Authorities that were required to address the issues. They were extremely organized and prepared throughout the hearing of the motions, and they responded appropriately to requests from the court for further information, argument and legal authorities. Although I did not accept all of the Applicant’s arguments on the motions, none of the arguments were so problematic as to disentitle her to costs. The Applicant continued to engage in settlement discussions about the substantive Family Law issues despite the fact that these motions were still in process. I find that the Applicant also attempted to narrow and clarify the matters to be addressed on the motions by serving the Respondent with a Request to Admit that dealt with many issues pertaining to the motions.

[73] I have also carefully considered the Respondent’s conduct in relation to the motions in reaching my decision respecting liability for costs. I agree with the Applicant that the Respondent and his counsel were not sufficiently responsive and cooperative in arranging for scheduling of the motions, and that these scheduling challenges led to extensive delay in moving the motions to a hearing. In addition, while counsel from both sides indicated that there had been settlement efforts while the motions were ongoing, the Respondent did not serve any Offers to Settle the substantive Family Law issues after the motions began in an effort to avoid the need for the Constitutional/Aboriginal Law case and the complex motions that I heard. Although he objected to this court’s jurisdiction and the application of Ontario Family Law legislation, he could have served a formal offer to resolve the substantive issues relying on Haudenosaunee laws and practices as the framework for an offer. The Respondent also completely ignored the Applicant’s Request to Admit, and failed to take any procedural steps on his own initiative to shorten, streamline or simplify the hearing of the motions.

[74] The aboriginal rights claims that the Respondent advanced are obviously of great importance to him and other Haudenosaunee people. As I indicated in my Reasons for Judgment, it is important to keep in the mind the important goal of reconciliation between Canada’s Indigenous and non-Indigenous peoples in dealing with aboriginal rights claims and cases. This consideration must be kept in mind as well in addressing costs in these cases. The courts must be cautious to ensure that the threat of liability for high costs awards does not deter Indigenous peoples from pursuing meritorious aboriginal rights claims in the courts. I have weighed this consideration in reaching my decision respecting liability for costs in this matter. However, the circumstances of this case are unique from those in most aboriginal rights cases in that there was no government litigant, and both parties are Haudenosaunee. The right to access this court and to rely on Ontario Family Law legislation was as important and pressing to the Applicant as the Respondent’s aboriginal rights claims were to him. Furthermore, the costs implications in this case are far more significant to the Applicant than they would be to an institutional litigant. Having regard for these considerations, it is appropriate that the Respondent be held liable for costs in relation to the motions.

II. RULING ON QUANTUM OF COSTS

A. Overview

[75] Having carefully considered the law and the evidence in this case relevant to the quantum of costs, I conclude that the sum of $315,415.00, inclusive of disbursements and HST, is a fair, reasonable and proportionate amount to award the Applicant in connection with the two motions. The amount that I am awarding is $184,585.00 less than the Applicant has requested, and $215,415.00 more than the Respondent submitted would be appropriate. The factors that I have considered in reaching my decision are outlined below.

B. Rates Charged for Counsel, Students and Law Clerks

[76] I have considered the rates charged for Legal Counsel, Articling Students, Summer Students and Law Clerks who undertook work in relation to the two motions. In general terms, NGA was the firm primarily responsible for the management of the file, but sought the assistance of MMC to deal with the constitutional, aboriginal and jurisdiction issues involved in the two motions. I do not have any concerns regarding the rates charged for the Counsel, Articling Students and Summer Students who were involved in the motions. Although the rates of Ms. McCarthy and Mr. Niman are very high, they are not out of the ordinary for very senior counsel with their level of experience and expertise in Family Law. In addition, I find that they were diligent and prudent in seeking out the assistance of less senior counsel and students in their firms to undertake most of the work at lower rates. The rates charged for the other lead counsel involved in the file, Ms. Strathopolous and Mr. Byers, were well within the appropriate range for counsel of their experience and impressive level of competence.

[77] The firm of MMC relied on numerous Law Clerks to assist with respect to the motions. One Law Clerk, Ms. Brooks, was billed out at $300.00 an hour, which in my view is excessively high in the absence of explanation for this rate. However, I note that her involvement was limited to one very brief task. Four other Law Clerks were billed out at $200.00 per hour. Again, in the absence of information about the qualifications and level of experience of these Law Clerks, this rate is very high. While such a rate may be appropriate for a Law Clerk undertaking more complex tasks, my concern in this case is that many of the tasks for which the Law Clerks docketed time appear to be more in the nature of work that an Administrative Assistant could perform at a much lower rate. I discuss this concern in further detail below.

C. Whether the Amounts Charged Relate to the Motions and Represent a Reasonable Full Recovery Amount

1. Amounts Billed for Counsel, Articling Student and Summer Students

i. Period from late March 2016 to mid-June 2017

[78] As a starting point for deciding the amount of costs, I have carefully reviewed the Applicant’s Bill of Costs to determine whether the amounts claimed are appropriate, reasonable and proportionate having regard for the issues involved in the motions. As I have indicated, the Applicant claims $458,830.07 for all fees, disbursements and HST incurred, excluding the premium that she has claimed. In my view, an appropriate full recovery amount in this matter, inclusive of disbursements and HST, would be in the range of $371,000.00. In reaching this conclusion, I have considered the fact that work in connection with the motions began in late March 2016, when the Respondent indicated for the first time through correspondence that he intended to advance his constitutional challenges to the court’s jurisdiction and the application of Ontario Family Law legislation. It appears from reviewing the Applicant’s Bill of Costs that work relating to the preparation of materials for the two motions, including legal research, commenced in earnest sometime in mid to late June 2016, after the Respondent served his Amended Answer. Tasks performed from late March 2016 until that time would therefore have related to consultations between counsel, discussions with the Respondent’s counsel, consultations with the Applicant and planning a strategy to respond to the anticipated constitutional/aboriginal case. I have reviewed the items included in the Bill of Costs from late March 2016 until mid-June 2016 to determine whether the amounts claimed appear to actually relate to the motions and if they are reasonable. I have the following concerns respecting the items claimed during this period, as follows:

1. Mr. Niman charged $246.00 on March 17, 2016 to review and dictate correspondence. This occurred prior to the date on which the Applicant stated that she learned about the Respondent’s intention to advance his constitutional/aboriginal claims.

2. There is a charge for Mr. Niman on March 28, 2016 for $410.00 for reviewing a Reply and Case Conference Brief. These are not in my view tasks relating to the motions.

3. Mr. Niman charged $410.00 on May 3, 2016 for work that included reviewing a Request to Admit. However, the Request to Admit that was served in the context of the motions in question was not completed until June 6, 2017. Accordingly, it is not clear that this work related to the motions.

4. Ms. Strathopolous included work completed from January 31, 2016 until March 23, 2016 in her portion of the Bill of Costs, which was prior to counsel learning about the Respondent’s intention to advance his aboriginal rights claims. The amount of this work totalled $960.00.

5. The Bill of Costs also includes work carried out by Ms. Strathopolous commencing on March 28, 2016 that related to the case conference, drafting a Reply and drafting the Request to Admit referred to above. The amount claimed for this work totals approximately $3,840.00.

6. The dockets for Mr. Niman include some charges for discussions with other counsel which do not appear in the dockets of those counsel. On other occasions, reciprocal dockets are included for the other counsel. While this may be an issue of proper docketing, it is an important point given that Mr. Niman’s rate ranged from $820.00 to $880.00 per hour during the course of the proceedings. By way of example, Mr. Niman charged $492.00 for discussions and review with Ms. Strathopolous on March 31, 2016 and April 1, 2016. These are not found in Ms. Strathopolous’ dockets. On June 20, 2016, Mr. Nimal charged $164.00 for reviewing a memorandum from Ms. Strathopolous and correspondence, whereas there is no docket relating to the preparation of a memorandum around this time.

7. The total of the amounts outlined above is $6,522.00.

ii. Initial Preparation Period from mid-June 2016 until April 25, 2017

[79] I have also considered the amounts claimed for counsel, Articling Students and Summer Students from approximately mid-June 2016, when preparation for the motions began in earnest, until the commencement of the hearing of the motions on April 25, 2017. The amounts during this period were as follows:

NGA Bill of Costs:

Mr. Niman 5.6 hours $ 4,760.00

Ms. Strathopolous 83.8 hours $28,492.00

Vincent DeMarco 1.2 hours $312.00

TOTALS: 90.6 hours $33,564.00

MMC Bill of Costs:

Ms. McCarthy 1.2 hours $1,650.00

Ms. Radbord 119.2 hours $53,640.00

Scott Byers 68.9 hours $17,612.50

Deborah Perkins-

Leitman 24.5 hours $4,900.00

Valarie Matthews 9.8 hours $2,450.00

Maureen Edwards .7 hours $245.00

Faria Marlatt .4 hours $40.00

TOTALS: 224.7 hours $80,537.00

[80] With respect to the amounts claimed by NGA for Legal Counsel and Law Students during the preparation period leading up to the commencement of the hearing, much of the work which that firm undertook related the preparation of the affidavit evidence for the motion and addressing the substantive Family Law issues, which have not yet been addressed. NGA counsel assisted in drafting the factum for the motions in regard to the background facts and the Family Law issues. The dockets for NGA that cover the period under discussion do not provide specifics about the precise details of the work carried out and the issues that the work related to. Some of the work relating to the background evidence and the substantive issues was relevant both to the substantive issues that I did not address and to the issues that I dealt with in the motions. Taking into account these considerations, I estimate that approximately 50% of the work docketed by NGA counsel and students during this period ($16,800.00 rounded up) should be attributed to the matters that I dealt with. The remaining amount of approximately $16,800.00 should be attributed to the substantive Family Law issues that still need to be addressed by the court.

[81] Turning to the total amount of $80,537.00 claimed by MMC for Legal Counsel and Law Students during the preparation period from mid-June 2016 until the hearing commenced on April 25, 2017, the work which MMC undertook focussed on the aboriginal, constitutional and jurisdiction issues. I find that the amount billed is somewhat excessive, and that a reasonable full recovery amount for this work would have been $65,000.00. I appreciate that the issues involved in the case were exceedingly important to the Applicant, were complex, and involved numerous areas of legal research. Against these considerations, I have taken into account the additional amount charged by NGA as discussed above, and the fact that Ms. Radbord was retained to assist specifically due to her special expertise in Constitutional and Aboriginal Law matters. Having regard for this special expertise, it can be assumed that she had an excellent grasp of the law in most of the areas that were engaged in the two motions, and that this should have significantly reduced the amount of time that would have otherwise been required for research and drafting of the facta. The sum of $65,000.00 is a substantial amount for preparation for the motions. However, I note that Ms. Radbord spent a considerable amount of time addressing issues with counsel and court staff regarding the scheduling of the motions. As I have indicated, I am satisfied that the Respondent was primarily responsible for the scheduling challenges.

iii. Commencement of the Hearing Until the Conclusion of the Motions: April 25, 2017 to December 2017

[82] I have carefully considered the time spent and work undertaken by Legal Counsel, Summer students and Articling students from the time the hearing commenced on April 25, 2017 until December, 2017, after I released my decision. With respect to the charges covering this period of time, I note the following respecting the Bill of Costs of NGA:

1. Both Ms. Strathopolous and Mr. Niman docketed time for preparation for and attendance at the commencement of the hearing on April 25, 2017. Ms. Radbord was also present in court on that date and charged for both preparation and court attendance time. In my view, the presence of both Ms. Strathopolous and Mr. Niman on April 25, 2017 was unnecessary. The focus of the court attendance on that date was to determine the order in which the issues would be addressed. One of the significant questions was whether the hearing of the substantive Family Law issues could proceed before a determination was made respecting this court’s jurisdiction. Ms. Strathopolous indicated that both she and Mr. Niman attended court on April 25, 2017 because there was uncertainty as to whether the substantive issues would proceed to argument. If they did, Ms. Strathopolous was going to address the factual issues and Mr. Niman was prepared to address the legal issues. While the substantive issues were important to the Applicant, they were not in my view so overly complex as to require two counsel to argue them. While I do not have information about Ms. Strathopolous’ year of call, I note that she was billed out at a rate of $340.00 per hour when the hearing commenced. At this rate, I am assuming that she had significant knowledge and expertise in Family Law. As the counsel who was most knowledgeable about the facts and procedural history in the case, I conclude that her attendance on April 25, 2017 was necessary. The amount charged for Mr. Niman for preparation and attendance at court, totalling $5,950.00, was not in my view reasonable and proportionate. The other charges for work performed by Mr. Niman are fair and reasonable.

2. Ms. Strathopolous docketed 39.8 hours during this period, for a total charge of $13,553.00. I have no concerns regarding the charges, with the exception of time docketed for preparation and attendance on the return of the motion on May 24, 2017. Mr. Radbord and Mr. Byers were also in attendance on that date, and the argument focussed on the constitutional and stay issues. Ms. Strathopolous did not make submissions. While she had a great deal of background information respecting the case, Ms. Radbord and Mr. Byers had spent an extensive amount of time on the file as well by that point and would certainly have had a sound appreciation of any relevant background facts. Accordingly, in my view, the charges for Ms. Strathopolous’ preparation for and attendance at court on May 24, 2017 are not reasonable. These charges total $5,236.00.

[83] I have carefully considered the Bill of Costs of MMC for the period under discussion, and I make the following comments:

1. Ms. Radbord docketed approximately 249 hours, for a total of $112,215.00. Of that amount of time, approximately 95 hours related directly to travel to court and attendance for the hearing dates. Ms. Radbord was the counsel primarily responsible for handling the Constitutional and Aboriginal Law issues, and I am satisfied that her attendance at court was required for every day of the hearing. With respect to the remaining 154 hours that she spent on the file during the period in question, I am satisfied for several reasons that this was a fair amount of time for her to have devoted to the motions. The issues involved were extremely important to the Applicant and very complex. They had ramifications that went far beyond the family involved in this particular case. In addition, Ms. Radbord had to engage in regular consultation with the other counsel at MMC and NGA who were working on the file as well as the Law Clerks. A considerable amount of the time that Ms. Radbord spent during this period related to requests that I made during the course of the hearing for additional assistance on various legal issues. In short, Ms. Radbord had an exceedingly important role both in formulating and implementing the legal strategy and overseeing the general management of the litigation team with respect to the constitutional, aboriginal and jurisdiction issues.

2. Mr. Byers docketed 226.4 hours, for a total cost of $62,260.00. The amounts charged for Mr. Byers appear on the whole to be fair and reasonable. Mr. Byers was Ms. Radbord’s main co-counsel in dealing with the Constitutional, jurisdiction and Aboriginal Law issues, as well as the issue of advance costs. His responsibilities included carrying out extensive legal research, consulting with and managing the work of Law Clerks and Law Students involved in the file, overseeing the preparation of Supplementary Statements of Law and Briefs of Authorities, assisting Ms. Radbord with the preparation of Submissions, consulting with counsel and court staff around scheduling matters, preparation of procedural motion materials and attending court on May 23-26, 2017, June 27-28, 2017 and September 7, 2018. I am satisfied that his attendance in court on each of those dates was required, and he addressed the issues relating to conflict of laws, jurisdiction and admissions in a highly competent, organized and helpful manner. However, I do have some areas of concern about the amounts of time charged for Mr. Byers’ services. First, I note that he docketed approximately 41 hours for preparation for his court attendances from May 23 to 25, 2017. Given the amount of time that he appears to have spent and docketed in researching the issues and consulting with Ms. Radbord, I conclude that a more reasonable amount of time would have been 20 hours, which would result in a reduction in fees of $5,775.00.

3. Ms. Perkins-Leitman spent a total of 24 hours, at a cost of $4,800.00. This amount of time was fair and reasonable. Ms. Perkins-Leitman assisted in carrying out much of the additional legal research that was required as the case proceeded, assisting with the preparation of submissions, and drafting mid-hearing motion materials. MMC was responsible in delegating this work to Ms. Perkins-Leitman at a lower rate, and I have no concerns about the amount of time that Ms. Perkins-Leitman docketed for the work that she completed.

4. Ms. Edwards spent .7 hours on the file during this period, for a total charge of $245.00. Ms. Edwards is a senior lawyer with the firm, and this time was spent consulting with Mr. Byers and an Articling Student about the issues that Mr. Byers handled during the motions. The amount of time spent for this task is reasonable and fair.

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