Court File and Parties
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Jennifer Meijer Rappazzo
Applicant
– and –
Shane Albert Venturelli
Respondent
COUNSEL:
Monica Scholz, for the Applicant
Self-represented
BEFORE: The Honourable Madam Justice Deborah L. Chappel
REASONS RESPECTING COSTS
I. INTRODUCTION
1These are my Reasons respecting costs in connection with a motion that I dealt with on June 15, 22 and 29, 2018. The Respondent brought the motion to obtain an order establishing time-sharing arrangements for the child of the parties’ relationship, Isabella Venturelli, over the summer months. The motion initially came before me on June 15, 2018, but was adjourned on that date to June 22, 2018 to allow the Applicant time to serve and file responding materials. The matter did not proceed on June 22, 2018 due to the Respondent’s failure to confirm the motion. I finally heard the motion on June 29, 2018.
2I outlined the background respecting this matter in my Reasons for Judgment on the motion dated June 29, 2018. The motion was necessary because the parties were unable to finalize a summer time-sharing plan for Isabella despite the terms of the existing order dated March 26, 2012 which set out procedures for addressing summer time-sharing. As I indicated in my Reasons, the Applicant has first choice respecting summer vacation periods in even-numbered years. However, she did not provide her preferences for summer vacation weeks by the deadline for doing so which is set out in the order. The parties were unable to finalize a plan by early June 2018, and this prompted the Respondent to initiate the motion.
3The parties presented competing proposals for summer time-sharing at the hearing of the motion. I concluded for various reasons outlined in my Reasons for Judgment on the motion that the Respondent’s proposal was in the child’s best interests and was more compliant with the terms of the March 26, 2012 order respecting summer access. Accordingly, I made an order for summer time-sharing in accordance with the Respondent’s proposal.
4The Respondent now seeks costs in connection with the motion in the amount of $5,820.54, inclusive of disbursements. The Applicant submits that there should be no costs payable in connection with the motion, or in the alternative, that the Respondent should pay her costs on a partial indemnity basis. The Applicant submitted a Bill of Costs suggesting that she incurred fees and disbursements in relation to the motion in the amount of $9,657.04. For the reasons that follow, I conclude that the Respondent is entitled to costs of the motion, and that the sum of $1,760.00, inclusive of disbursements and HST, is a fair, reasonable and proportionate costs award.
II. THE LAW RESPECTING COSTS
A. General Principles
5The 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.
6The 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 (1926), 1925 CanLII 460 (ON CA), 58 O.L.R. 213 (Ont. C.A.), at p. 216); 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”), 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:
To partially indemnify successful litigants for the cost of litigation;
To encourage settlement; and
To discourage and sanction inappropriate behaviour by litigants.
7While 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.)).
8In 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 the court to deal with cases justly (Darling v. Booth, 2017 ONSC 6261 (S.C.J.); Lawrence v. Lawrence, 2017 ONCJ 431 (O.C.J.), 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.)).
B. Liability for Costs
9The 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)(a) establishes that the court dealing with a step in a case should generally determine in a summary manner the issue of liability for costs of that step and set the amount of costs payable. As an alternative, Rule 24(10)(b) permits the court to expressly reserve the decision on costs for determination at a later stage in the case. Notwithstanding these directives, Rule 24(11) expressly provides that the failure of the court to either decide costs or reserve costs relating to a step in the case does not prevent the court from awarding costs in relation to the step at a later stage in the proceeding.
10Rule 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.
11The presumption that a successful party is entitled to costs does not apply where that party has acted unreasonably. Rule 24(4) stipulates that a successful party who has behaved unreasonably during a case may be deprived of all or part of their own costs, or may be ordered to pay all of part of 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.
12Since 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.”
13A 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), 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.)).
14In 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.”
15Another 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:
If the offer relates to a motion, it is made at least one day before the motion date.
If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
The offer does not expire and is not withdrawn before the hearing starts.
The offer is not accepted.
The party who made the offer obtains an order that is as favourable as or more favourable than the offer.
16In 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 (M. (J.V.) v. P. (F.D.), 2011 CarswellOnt 13510 (O.C.J.); 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.
17Although 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), 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 (S.C.J.), 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 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.” In determining the weight that should be accorded to a party’s limited financial means in the costs analysis, that party’s overall conduct in the litigation should be considered. Parties who have limited financial means cannot be permitted to litigate with impunity without regard or concern for potential costs consequences at the end of the line. A party’s limited financial means will be accorded less weight if the court finds that they acted unreasonably.
18The decision respecting liability for costs 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. 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.
C. Quantum of Costs
1. General Principles Respecting Quantum of Costs
19Once 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:
Ultimately, costs decisions should reflect what the court considers to be a fair and reasonable amount that the unsuccessful party should pay.
Costs need to be proportional to the issues and amounts in question and the outcome of the case.
Amounts actually incurred by the successful litigant are not determinative.
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.)).
20The 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, 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.
21There 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).
22Rule 24(12) prescribes some of the factors which the court should consider in deciding the appropriate quantum of costs, as follows:
Setting Costs Amounts
24 (12) In setting the amount of costs, the court shall consider,
a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues:
i. each party’s behaviour,
ii. the time spent by each party,
iii. any written offers to settle, including offers that do not meet the requirements of rule 18,
iv. any legal fees, including the number of lawyers and their rates,
v. any expert witness fees, including the number of experts and their rates,
vi. any other expenses properly paid or payable; and
b) any other relevant matter. O. Reg. 298/18, s. 14.
23Rule 24(12.1) stipulates that any claim for costs respecting fees or expenses shall be supported by documentation satisfactory to the court. 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.)). Rules 2(3) specifically itemizes ways in which cases are dealt with justly at each stage of the litigation, including the costs analysis, as follows:
Dealing with Cases Justly
(3) Dealing with a case justly includes,
a) ensuring that the procedure is fair to all parties;
b) saving expense and time;
c) dealing with the case in ways that are appropriate to its importance and complexity; and
d) giving appropriate court resources to the case while taking account of the need to give resources to other cases. O. Reg. 114/99, r. 2 (3).
24Rule 2(4) directs that the court must apply the Family Law Rules to promote the primary objective, and that parties and their lawyers have a duty to help the court to promote the primary objective.
25As 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).
26The court’s decision on the appropriate quantum of costs must also be informed by the principle of proportionality. This factor is now specifically highlighted in Rule 24(12) as a key component of the framework surrounding the costs analysis. As Pazaratz J. highlighted in Jackson, the Supreme Court of Canada recognized in Hryniak v. Mauldin, [2014] 1 S.C.R. 87, 2014 SCC 7 (S.C.C.) that timeliness, affordability and proportionality are essential components of a legal system that ensures true access to justice. In the context of the costs analysis, these factors require the court to ensure that expenses claimed make sense having regard for the importance and complexity of the issues that were litigated. 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).
27A useful benchmark for determining whether costs claimed are fair, reasonable and proportional is to consider the amount of time and fees that the other party has incurred 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.)). Rule 24(12) now clearly indicates that the time and fees spent by all parties is relevant to the analysis. 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).
28As discussed above, Rule 18(14) relating to formal Offers to Settle is also relevant to quantum of costs. Rule 18(15) specifies that the burden of proving that the order which the court has granted is as favourable as or more favourable than the Offer to Settle is on the party who claims the benefit of subrule (14). 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.)).
29As 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).
30The general conduct of the parties is one of the major factors in determining the appropriate amount of a costs award, 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.
31In 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 costs 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).
32As 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.); Beaver v. Hill, 2018 ONSC 3352 (S.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.)).
33Finally, with respect to costs in favour of self-represented litigants such as the Applicant, the Ontario Court of Appeal established in Fong that parties representing themselves may be entitled to costs in appropriate circumstances. As an example of such circumstances, the court held that they may be awarded costs if they devote the time and effort in doing the work typically carried out by legal counsel, and they can establish that they have suffered a lost opportunity cost by foregoing remunerative activity as a result. However, the court emphasized that self-represented parties should not be compensated for costs relating to time and effort that any litigant would have reasonably had to devote to the case if they were represented by counsel. Some cases decided since Fong have held that a loss of remunerative opportunity is a precondition to awarding costs to self-represented litigants (see for example Mustang Investigations v. Ironside, 2010 ONSC 3444 (Ont. Div. Ct.); Gibson v. Duncan, 2013 ONSC 6245 (S.C.J.)) However, the more prevalent trend in recent years has been to allow costs to self-represented parties regardless of whether they have foregone remunerative activity to work on their case, provided that the costs claimed relate to tasks that would typically be carried out by legal counsel. For instance, in Jahn-Cartwright v. Cartwright, 2010 ONSC 2263, 2010 CarswellOnt 5657 (S.C.J.) and Cassidy v. Cassidy, 2011 CarswellOnt 1541 (Ont. S.C.J.), Price J. held that the focus in addressing costs in favour of self-represented parties must be on the value of the work done, which involves assessing not only the value of the time spent to the litigant who performed the work but also the usefulness of the work to the court. Price J. also held that in quantifying the value of the time spent to the litigant, one measure to use is the income which the litigant could have earned otherwise if they were not working on their legal case. Many subsequent cases have reflected this more liberal approach. Judges in these cases have highlighted the unfairness of denying costs awards to self-represented litigants who do not earn income, and have emphasized that such an approach augments the risk of these litigants being subjected to inappropriate litigation conduct by the other parties (see Izyuk; Witter v. Gong, 2016 ONCJ 722 (O.C.J.); McMurter v. McMurter, 2017 ONSC 725 (S.C.J.)).
III. ANALYSIS
34As I have indicated, I have concluded that the Respondent is entitled to costs in connection with the motion in the amount of $1,760.00, inclusive of HST and disbursements. My decision respecting costs is based on the following factors and considerations:
First, with respect to liability for costs, the Respondent was entirely successful in obtaining the relief that he requested in his motion. He is therefore presumptively entitled to costs by virtue of Rule 24(1) of the Family Law Rules.
I have considered the Respondent’s overall conduct in attempting to address the issue of summer access. I find that his conduct was extremely fair and reasonable. He met the deadline for submitting his preference for summer vacation as set out in the existing order, and he made numerous efforts to resolve the issue with the Applicant in an amicable and timely manner before filing the motion. His messages to the Applicant were appropriate. He only initiated the motion after the Applicant missed the deadline and then submitted a proposal for summer time-sharing that was not consistent with the spirit of the time-sharing provisions of the operative order. I am satisfied that the Respondent’s conduct in relation to the motion was fair and reasonable. He adjourned the motion on the first appearance to allow the Applicant further time to respond, and his materials in support of the motion were respectful but to the point. In addition, he continued to engage in settlement discussions with the Applicant during the course of the motion proceedings. In my view, there is no evidence of unreasonable conduct on his part that would disentitle him to his costs.
By contrast, I find that the Applicant was unreasonable both with respect to the position which she took on the motion and her conduct generally respecting summer access. She missed the deadline for submitting her preferences for summer vacation weeks, and then failed to respond to several messages which the Respondent sent to her and her counsel in March 2018 in an attempt to resolve the issue. She eventually presented a proposal that I concluded was not compliant with the terms respecting summer time-sharing and was not in Isabella’s best interests. She then failed to respond to further messages from the Respondent and his counsel relating to the summer time-sharing issue. Although she was non-compliant with the terms of the order respecting summer time-sharing, her main argument in support of her position was that she should be able to benefit from the term of the order that gave her first choice in even-numbered years. Her persistence in seeking to enforce the first choice clause in the face of her clear breaches of other aspects of the order was high-handed and inconsistent.
I have considered the Applicant’s Submissions respecting costs, and I find them most unhelpful. The Applicant referred at length to events that occurred between the parties and a four-way meeting that occurred with counsel in 2017 to address various issues. The matter of summer time-sharing does not appear to have been one of the issues which the parties dealt with at that time, and therefore this information is in my view irrelevant to the issue of costs of the motion. In addition, the Applicant attempted to paint the Respondent as the unreasonable party, since the parties had always complied with the first-choice provision of the existing order in past years, and neither party had insisted on strict compliance with the March 1st deadline in previous years. To characterize a party as unreasonable on the basis that they seek general compliance with a court order is simply not appropriate.
I have considered the Respondent’s Submissions regarding the quantum of costs, as well as the Applicant’s Bill of Costs for comparison purposes. Both parties claim an amount of costs and disbursements that is extremely unreasonable and disproportionate to the issues to be determined on the motion and the complexity of the issues at stake. Dealing first with the Applicant’s Bill of Costs, I note that it includes time for work carried out that was completely unrelated to the motion. I also note that many of the dockets lack the particulars which the court would require to determine whether the work actually pertained to the motion. Finally, I find that the many charges relating to the motion are excessive having regard for the relatively straightforward nature of the issue to be determined.
The amount which the Respondent claims for costs is similarly excessive. By way of example, his claim includes a component for lost wages for three days of court attendance for the hearing of the motion. However, the matter could not proceed on June 15, 2018 due to his failure to serve and file a Form 14B Confirmation. In addition, he claims $222.96 for lost wages for June 14, 2018, because he had to file reply materials. However, he could have hired a process server to carry out this task at a much more reasonable rate. He requests child care costs which he states he incurred due to the motion, but he did not attach any receipts to substantiate this expense. Moreover, child care expenses are not in my view an appropriate item for a costs claim. He also claims $1,762.30 on account of fees that he states he incurred for the services of Porter Law to address the summer time-sharing issues. However, in reviewing the Bill of Costs from Porter Law, many of the items clearly relate to work that was unrelated to the summer time-sharing. In addition, most of the dockets do not contain the type of details that the court would require in order to properly determine whether the work actually related to this motion. Finally, the amount which Porter Law charged for assistance in dealing with costs of the motion is in my view excessive, given that the materials were drafted and prepared by the Respondent himself. I conclude that a reasonable amount for fees for the services of Porter Law relating to the motion would be $250.00, inclusive of HST and disbursements. Finally, the Respondent claims $2,500.00 for 25 hours of time spent preparing and responding to materials for the motion, at a rate of $100.00 per hour. This amount is disproportionate to the nature and complexity of the issues, and I find that a more reasonable amount is $1,200.00, inclusive of time spent dealing with the issue of costs.
I am satisfied that the Respondent’s claims relating to mileage, courier costs and parking are all reasonable.
Upon carefully reviewing and considering the Respondent’s Bill of Costs, I conclude that the sum of $2,200.00, inclusive of disbursements and HST, is a reasonable full indemnity amount for costs of the motion. I conclude that the Respondent should be awarded 80% of this amount. I decline to award full indemnity costs for several reasons. First, both parties have been clearly aware for several years that the deadline for submitting preferences for summer time-sharing has been unworkable, and this has caused considerable problems for the parties in the past. Having regard for this difficulty, it was incumbent on both of them to cooperate and take the necessary steps to vary this problematic term. Second, although the Applicant’s conduct in relation to the summer time-sharing issue and the motion was unreasonable, it did in my view not demonstrate bad faith such as to attract a full indemnity award. Third, although the Respondent attempted to resolve the issue of summer access, he did not at any point serve a formal Offer to Settle. Finally, the Respondent’s costs claim was excessive and in my view resulted in unnecessary additional time and expense being incurred by both the Applicant and this court in finalizing this matter. Costs claims must be reasonable and proportionate, and over-shooting the mark must be sanctioned so as to ensure that reasonable access to justice is achieved and sustained.
IV. TERMS OF ORDER TO ISSUE
35Based on the foregoing, an order shall issue as follows:
The Applicant shall pay the Respondent costs in the amount of $1,760.00, inclusive of disbursements and HST.
This costs award shall be paid by no later than September 1, 2018
This Order bears post-judgment interest at the rate of 3% per annum, effective from the date of this Order. Where there is a default in payment, the payment in default shall bear interest only from the date of default.
The Honourable Madam Justice Deborah L. Chappel
Released: August 7, 2018
COURT FILE NO.: D 1918/10
DATE: 2018/08/07
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Jennifer Meijer Rappazzo
Applicant
– and –
Shane Albert Venturelli
Respondent
REASONS FOR JUDGMENT
Chappel J.
Released: August 7, 2018