Court File and Parties

COURT FILE NO.: FC-13-44239-01 DATE: 20180724

SUPERIOR COURT OF JUSTICE – ONTARIO – FAMILY COURT

RE: Natasha Nadine Saunders, Applicant AND: Jose Antonio Olivares Vargas, Respondent

BEFORE: The Honourable Mr. Justice R.E. Charney

COUNSEL: Bryan J.F. Teskey, for the Applicant Jose Antonio Olivares Vargas, Self-Represented

HEARD: In-Writing

Costs Endorsement

[1] On August 26, 2010, the respondent, Jose Vargas, was ordered to pay child support of $548 per month in a final order granted in an uncontested trial. The child in question was born on April 22, 2009.

[2] Mr. Vargas has an outstanding motion to change, to reduce his child support from $548 per month to $193 per month, based on his statement that the income imputed to him in 2010 is not his true income. Mr. Vargas is currently in arrears in the amount of $10,148. That motion to change was not before me.

[3] The motion before me was Mr. Vargas’ motion for an order that the child submit to a paternity test. That motion was heard first pursuant to the order of the judge who conducted the Settlement Conference on October 24, 2017. The Settlement Conference judge also reserved cost for the settlement conference and prior appearances before the Dispute Resolution Officer and Rule 39 Clerk, and ordered that they be addressed on this motion. I heard the paternity test/costs motion on February 28, 2018, and in reasons dated March 20, 2018, granted the paternity test motion and ordered that the child submit to DNA testing and that the full costs of the testing and testing report be borne by Mr. Vargas. Costs of the motion and costs for prior appearances were reserved pending the results of the paternity test and submissions.

[4] The paternity test confirmed that Mr. Vargas is the biological father of the child (probability of paternity 99.99%).

[5] The applicant is the child’s mother, Natasha Saunders. She opposed the motion for paternity testing, taking the position that the issue of paternity was res judicata because paternity was the subject of a final order following an uncontested hearing nearly eight years ago, and it was now too late for Mr. Vargas to challenge his paternity.

[6] In addition to opposing the motion for DNA testing, the applicant brought her own motion for an order dismissing Mr. Vargas’ motion for paternity testing, and for costs in relation to a previous settlement conference in which costs were reserved and prior proceedings and conferences in which no costs were ordered.

[7] Mr. Vargas, in turn, brought another motion, asking the court to dismiss Ms. Saunders’ motion to dismiss his motion, and for an order dismissing her motion for costs.

Position of the Parties

[8] Pursuant to Rule 24(1) of the Family Law Rules, the successful party on a motion is presumptively entitled to costs. In this case, Mr. Vargas was the successful party. Mr. Vargas was self-represented and does not seek costs on this motion.

[9] The applicant seeks costs in the amount of $18,281 in relation to the motion before me as well as various other court proceedings and case conferences in which the applicant was represented by counsel and no costs were ordered. These include the following appearances:

1. July 13, 2016 – Motion adjourned by Rule 39 Clerk to permit the Respondent to amend the motion to change and the Applicant to have time to respond.
2. October 5, 2016 – Motion adjourned by Rule 39 Clerk to permit the Respondent to amend the motion to change and provide financial disclosure for last three years.
3. November 30, 2016 – Motion adjourned by Rule 39 Clerk to permit the Respondent to amend the motion to change and file financial statements.
4. January 25, 2017 – Dispute Resolution Date set for February 27, 2017.
5. February 27, 2017 DRO Conference resulting in a consent order relating to the Respondent’s disclosure “made on a without costs basis”.
6. October 24, 2017 Settlement Conference – costs reserved.

[10] The applicant also seeks various other relief, including an order granting the applicant leave to note the respondent in default and to proceed with an affidavit for uncontested trial. At this stage of the proceedings, however, I am, dealing only with costs.

[11] The applicant takes the position that she made an offer to settle the paternity test issue. On October 25, 2017, applicant’s counsel wrote to the respondent with a proposed consent dealing with both child support and paternity testing. The applicant indicated that the proposed consent remained open until November 6, 2017. The portion of the proposed consent dealing with paternity testing was substantially similar to my order of March 20, 2018, and, in particular, provided that the applicant would not be required to reimburse the respondent for any past child support payments, even if the respondent was found not to be the biological father.

[12] This proposal was rejected by the respondent, who made a counter offer on November 8, 2017. The counter offer provided different terms with respect to child support, and proposed that the applicant be required to reimburse the respondent for all past child support payments (~$30,000) in the event that the respondent was found not to be the biological father.

Analysis

[13] The issue of potential reimbursement for past child support payments was central to the dispute between the parties. In my decision of March 20, 2018, I found that recent amendments to s. 14(2) of the Children’s Law Reform Act (CLRA) proclaimed in 2016 meant that repayment of past child support payments was not a possible outcome in this case, even if the paternity test found that Mr. Vargas was not the biological father.

[14] In deciding costs, the court may consider “the reasonableness of any offer the party made” (Rule 24(5) of the Family Law Rules).

[15] In addition, Rules 18(14) – (16) of the Family Law Rules provide:

COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER (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.

COSTS CONSEQUENCES — BURDEN OF PROOF (15) The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14).

COSTS — DISCRETION OF COURT (16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.

[16] In this case the costs consequences of Rule 18(14) do not apply for two reasons. The first is that the offer expired on November 6, 2017, and was therefore not left open until the start of the hearing. The second is that the offer was, in my view, part of a “package deal”, and while the order with respect to paternity testing was as favourable as the applicant’s offer to settle on this point, the order did not deal with the other issues addressed in the proposed consent (in particular, child support). There is no indication in the proposed consent or any of the correspondence that the applicant was prepared to settle the paternity testing issue separately from the child support issue.

[17] That said, the applicant’s position on paternity testing in her offer to settle was consistent with my order on that issue, while the respondent’s proposal insisted on reimbursement of past child support payments, a position that I found was inconsistent with s. 14(2) of the recently amended CLRA. I note that s. 14(2) of the CLRA was not referenced in either party’s submissions when the motion was argued before me. Perhaps if counsel for the applicant had referenced and relied on s. 14(2) of the CLRA, a settlement might have been achieved.

[18] As indicated above, the Applicant seeks costs for a number of earlier court appearances.

[19] As a general proposition, the court that hears the motion or proceeding should decide the costs issue as part of that proceeding. The court hearing the motion or proceeding is obviously in the best position to make any determination of the various factors that are considered in costs awards, including the reasonableness or unreasonableness of each parties behaviour. This is made clear by Rule 24(10) of the Family Law Rules, which provides that the court should make costs decisions “[p]romptly after dealing with a step in a case” [^1]. In the absence of some statement by the presiding judge regarding costs (e.g. whether one party or the other should have to pay costs if some future event happens or does not happen), it is usually very difficult for a subsequent judge to reconstruct the factors relevant to a costs determination (see Rule 24 (11) of the pre-July 1, 2018 rules, and Rule 24(12) of the amended rules).

[20] In Islam v. Rahman, 2007 ONCA 622, the Ontario Court of Appeal held that the trial judge erred in awarding costs for amounts claimed for earlier steps taken (previous motions or conferences) in the case where no order was made as to costs or where there was silence on the issue. The Court stated, at para. 2:

Rule 24(10) of the Family Law Rules provides that the judge who deals with a step in a case shall decide who, if anyone, is entitled to costs. If a party who has served an offer to settle the case as a whole wishes that fact taken into consideration in relation to a particular step, it is incumbent on that party to raise that issue with the judge who deals with that step. In this case, various steps were taken (e.g. motions, conferences) in relation to which either there was an endorsement that there be no order as to costs or the issue of costs was not addressed. In the absence of a specific order for costs in favour of the respondent, the trial judge should have disallowed costs claimed by the respondent in relation to such steps.

See also: Bortnikov v. Rakitova, 2016 ONCA 427, at para. 34:

Islam v. Rahman … confirms that a trial judge should not make an order for costs in relation to any earlier step where no costs were ordered or where there was silence on the issue.

[21] The July 1, 2018 amendment to Rule 24(11) of the Family Law Rules (O. Reg. 298/18, s. 14) now provides that:

(11) The failure of the court to act under subrule (10) in relation to a step in a case does not prevent the court from awarding costs in relation to the step at a later stage in the case.

[22] This amendment to Rule 24(11) modifies the impact of the Ontario Court of Appeal’s decision in Islam, and appears to follow the recommendation of Maur, Bala and Adams in their article “Re-Thinking Costs in Ontario Family Cases: Encouraging Parties to ‘Move Forward’”, (2014) 33 CFLQ 173, at p. 11:

The issue of the intent, scope and effect of Rule 24(10) is a matter that should be addressed in a future revision of the Ontario Family Law Rules. While the Rules should make clear that the issue of costs may be addressed at every step, and parties should be aware of the potential cost implication of each step, the Rules should not prevent a judge after a trial from considering the cost of the entire litigation, as the significance and unreasonableness of some actions and steps may only be clear when viewed after a trial or settlement and in the context of a pattern of behaviour.

[23] While the amendment to Rule 24(11) confirms that the court is not precluded from awarding costs at a later stage in the case, this should not be seen as an open invitation to counsel to ask a judge to review the conduct of the opposing party at previous conferences or hearings before a different judge. There is a risk that cases will no longer be about the issues that brought the parties to court in the first place, but turn into conflicts about what happened in previous court appearances and conferences. Trying to reconstruct the conduct of previous hearings and conferences that took place before a different judge is not an efficient use of judicial resources.

[24] While there may be circumstances in which the significance and unreasonableness of some actions may only become clear after the trial or settlement, the judge who deals with a step in the case generally remains best placed to decide and assess costs in relation to that step. In my view, it is incumbent on a party that requests the court to award costs in relation to an earlier step heard by a different judge, to explain why the later judge is in a better position than the judge who actually dealt with the particular step to assess the significance or unreasonableness of any steps taken.

[25] In this case a number of the steps relate to proceedings before the Rule 39 Clerk, who has no authority to order costs. This raises a somewhat different issue. In Mandryk v. Brown, 2011 ONSC 7498, McGee J. addressed the question of how the court should deal with claims for costs for past steps heard by court officers who cannot make costs orders. She stated, at paras. 18 - 23:

With the launch of the Dispute Resolution program in centres such as Newmarket, the Court has an additional consideration. How best to deal with costs arising from events at which a costs order could not have been made?

Dispute Resolution meetings are presided over by senior volunteers from the Bar in their role as an Officer of the Court…

Dispute Resolution Officers lack the jurisdiction to make orders. At the same time, I am certain that there is no legislative intent that Rule 17(9) make inoperative provisions for costs such as those set out in Rules 24(10) and 17(18.) Rule 17 equally governs both judicially led and officer led conferences. And while Rule 17 conferences are primarily fashioned for resolution; they do not inoculate litigants from the overall risk of costs.

That risk is enflamed when a litigant follows a consistent path of resisting disclosure, or promising disclosure and then failing to deliver.

In fixing an amount that is fair and reasonable, a Court may take into consideration the number of court attendances necessary to a final outcome, and whether a party’s overall course of conduct was reasonable. Specifically, the quality or number of attendances before a Dispute Resolution Office, or the frustration of a Judicial led Conference directly attributable to a party’s failure to make necessary and agreed disclosure may be factors under Rule 24(11)(b) and (d.)

[26] The July 1, 2018 amendment to Rule 24(11) of the Family Law Rules appears to endorse McGee J.’s approach.

[27] In the present case, the applicant was required to attend with her counsel on three “First Appearances” adjourned by a Rule 39 Clerk before a Dispute Resolution Date could be fixed. Each adjournment was required to permit the respondent to amend his motion to change. While the first such appearance may be forgiven when the moving party is unrepresented, the appearances of October 5, 2016 and November 30, 2016 should have been unnecessary, and the applicant should receive her legal costs for these appearances. According to the applicant’s counsel’s dockets the applicant was billed $218 for each of these appearances, and she should be awarded full indemnity for these costs.

[28] With respect to the DRO Conference on February 17, 2017, this resulted in a consent order relating to the Respondent’s disclosure “made on a without costs basis”, and, accordingly, no costs will be awarded in relation to this appearance.

[29] Another relevant consideration under Rule 24 of the Family Law Rules is the time spent by each party on the case. It is unclear to me why the applicant felt compelled to bring her own motion for an order dismissing the respondent’s motion, rather than just opposing the respondent’s motion. The proliferation of motions and counter motions on the same subject is a waste of time and money and should be discouraged. Certainly the motion to dismiss the respondent’s motion was an unnecessary (and unsuccessful) step and no costs should be awarded with respect to time expended on that motion. The same point would apply to the respondent’s motion for an order dismissing the applicant’s motion for an order to dismiss the respondent’s motion, if the respondent had sought costs.

[30] Finally, the $18,281 costs claimed by the applicant is a global amount relating to all work in relation to the respondent’s motions, including work with respect to the respondent’s motion to change. The motion to change was not before me, and no final decision has yet been made with respect to that motion. Accordingly, I am not including any costs in relation to the motion to change.

[31] Taking all of these considerations into account, I am of the view that it is appropriate to order nominal costs of $800 in favour of the applicant given the fact that the court order was substantially the same as the applicant’s written offer to settle on this issue. It appears to me that the respondent’s position, that if he was not the father he was entitled to repayment of past child support payments, was the primary obstacle to settlement of this motion. As an unrepresented litigant he was not aware of s. 14(2) of the CLRA, but at the end of the day, his position on that issue was rejected. I am also taking into account the fact that the paternity test confirmed that he is the biological father of the child, which is also consistent with the position taken by the applicant mother in these proceedings.

Conclusion

[32] The respondent, Jose Vargas, shall pay the applicant, Natasha Saunders, $1,236 costs, payable within 60 days. These costs are comprised of costs on a full indemnity scale for the court appearances on October 5, 2016 and November 30, 2016 in the total amount of $436 and on a partial indemnity scale in relation to the motion for paternity testing in the amount of $800.

Justice R.E. Charney Date: July 24, 2018

Footnotes

[^1]: Until July 1, 2018, Rule 24(10) provided: > (10) Promptly after dealing with a step in the case, the court shall, > (a) make a decision on costs in relation to that step; or > (b) reserve the decision on costs for determination at a later stage in the case > > As of July 1, 2018, Rule 24(10) provides: > (10) Promptly after dealing with a step in a case, the court shall, in a summary manner, > (a) determine who, if anyone, is entitled to costs in relation to that step and set the amount of any costs; or > (b) expressly reserve the decision on costs for determination at a later stage in the case.