Court File and Parties

COURT FILE NO.: FS 17-4190 DATE: 20190214 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

LISA DAWN HACKNEY Applicant – and – PAUL ALOYSIUS MARK WAQUE Respondent

COUNSEL: S. Hamilton, for the Applicant W. Abbott, for the Respondent

HEARD: In Writing

Decision on Costs

Wilcox, J.

[1] My endorsement of December 19, 2018, invited costs submissions if the parties could not agree on costs. Submissions have now been received from both sides. The applicant sought substantial indemnity costs of $3,000.00, alleging that she had prevailed at the motion. The respondent submits that no costs should be payable either way.

[2] The respondent had submitted an offer to settle in advance of the hearing of the motion. The applicant had not made an offer.

[3] By way of background, the applicant brought a motion for a temporary order that the respondent pay:

1. The table amount of child support, alleged to be $1,506.00 per month.
2. A proportionate amount of s. 7 expenses, and
3. Spousal support of $3,079.00 per month.

[4] The applicant had brought an application for relief including custody, access, child support, spousal support and property equalization. Various orders had been made. These included temporary support orders as well as the final order of Karam J dated September 5, 2017, made pursuant to a partial separation agreement in which various issues were resolved regarding:

1. The parties arrangements for the children,
2. Benefit coverage, and
3. Property and debt division.

[5] At the time of the motion, the children were living week-about with the parties and the respondent was required by a temporary order to pay his proportionate share of s. 7 expenses. So, there was no need to deal with the s. 7 expenses again within this motion. There was no other support order in place.

[6] The applicant’s position was that she had no income, was encroaching on capital to survive and required support.

[7] The respondent opposed the motion for spousal support. In doing so, he submitted:

1. That the applicant delayed bringing her motion,
2. That income should be imputed to the applicant, and
3. That there was conflicting evidence about applicant’s ability to earn an income.

[8] My endorsement after the motion:

1. Imputed income to the applicant, and
2. Required the respondent to pay interim child support, s. 7 expenses and spousal support based on the shared custody and the parties’ respective incomes.

[9] Section 131(1) of the Courts of Justice Act states that:

1. Subject to the provisions of an Act or rules the court, the costs of and incidental to a proceeding or a step in the proceeding are in the discretion of the court, and the court may determine by whom to what extent the costs should be paid.

[10] Costs in family law cases are provided for in rule 24 of the Family Law Rules. Rule 18 expands on the treatment of offers to settle in the computation of costs.

[11] A useful summary of the law of costs in family law cases is found in Smith v. Moulder, 2017 ONSC 807, where H. A. Vogelsang J. stated:

[7] In Blanchard v. Walker, 2012 ONCJ 799 (Ont. Ct.), Curtis J. said:

14 The courts have a broad discretion to award costs. The general discretion of the courts regarding costs is contained in the Courts of Justice Act, s. 131(1), which sets out specific principles regarding costs:

(a) the costs of a case are in the discretion of the court;

(b) the court may determine by whom costs shall be paid; and,

(c) the court may determine to what extent the costs shall be paid.

15 Modern costs rules are designed to foster three fundamental purposes: Fong v. Chan (1999), 46 O.R. (3d) 330, 181 D.L.R. (4th) 614 (Ont. C.A.), para. 24, and Serra v. Serra, 2009 ONCA 395, [2009] O.J. 1905 (Ont. C.A.):

(a) to indemnify successful litigants for the cost of litigation;

(b) to encourage settlement; and

(c) to discourage and sanction inappropriate behaviour by litigants.

16 Rule 2(2) of the Family Law Rules adds a fourth fundamental purpose for costs: to ensure that the primary objective of the rules is met -- that cases are dealt with justly. This provision needs to be read in conjunction with rule 24 of the rules: Sambasivam v. Pulendrarajah, [2012] O.J. No. 5404, 2012 ONCJ 711 (Ont. Ct) para. 37.

[8] Later decisions augment the general purposes of costs. The fifth, to protect and foster access to justice, was described by Czutrin J. in Jordan v. Stewart, 2013 ONSC 5037 (Sup. Ct.) …

[12] Previously, Pazaratz J. had stated in Chomos v. Hamilton, 2016 ONSC 5211, at paras 8-13:

[8] Rules 18 and 24 of the Family Law Rules govern the determination of both liability for costs and the amount of costs. While these rules have not completely eliminated judicial discretion, the rules nonetheless circumscribe the broad discretion previously granted to the courts in determining costs. C.A.M. v. D.M.; Andrews v. Andrews, [1980] O.N. No. 1503 (Ont. C.A.); Wilson v. Kovalevi, 2016 ONSC 163 (SCJ).

[9] Rules 18 and 24, and most of the case law focus on two words: “Success” and “Reasonableness”. The latter entails two components:

(a) Reasonableness of behaviour by each party.

(b) Reasonableness of the amount of costs to be awarded.

[10] In Serra v. Serra, 2009 ONCA 395 the Ontario Court of Appeal confirmed that costs rules are designed to foster three important principles:

(a) To partially indemnity successful litigants for the cost of litigation.

(b) To encourage settlement; and

(c) To discourage and sanction inappropriate behaviour by litigants.

[11] The assessment of costs is not a mechanical exercise. It’s not just a question of adding up lawyer’s dockets. Boucher et al. v. Public Accountants Council for the Province of Ontario; 71 O.R. (3d) 291 (Ont. C.A.); Dingwall v. Wolfe, 2010 ONSC 1044 (SCJ).

[12] The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant. Selznick v. Selznick, 2013 ONCA 35 (Ont. C.A.); Delellis v. Delellis (SCJ); Serra (supra); Murray v. Murray (Ont. C.A.); Guertin v. Guertin, 2015 ONSC 5498 (SCJ).

[13] The starting point in any costs analysis is the presumption that a successful party is entitled to costs. Rule 24(1); Sims-Howarth v. Bilcliffe (SCJ).

[13] On the question of success, I note:

1. With respect to child support: i. The applicant claimed $1,506.00 per month ii. The respondent had offered $751.00 per month, and iii. The respondent was ordered to pay $1,047.00 per month.
2. With respect to spousal support: i. The applicant claimed $2,079.00 per month, ii. The respondent had offered $593.00 per month, and iii. The respondent was ordered to pay $1,173.00 per month.
3. With respect to imputing income: i. The applicant claimed to have no income, ii. The respondent sought imputation of $50,000.00 per year, and iii. The court imputed $30,000.00 per year to the applicant.

It can be seen that success was divided. Although the applicant obtained some support and it was more than the respondent had offered, it was not all that she had claimed. The presumption that a successful party is entitled to costs does not come into play here.

[14] Even if the applicant was considered to be the successful party and the presumption was in play, that would not be the end of the analysis. The question of reasonableness arises.

[15] The applicant’s failure to make an offer to settle is a consideration in deciding whether a party has behaved reasonably or unreasonably. Family Law Rule 24(5)(a). See also, Wallegham v. Spigelski, 2015 ONSC 7400, para. 15. The court in Lawson v. Mikkelsen-Vestrocy, 2016 ONCJ 303 stated at paras. 30 and 31:

[30] … The failure to serve an offer to settle is an important factor that I should take into consideration in assessing costs, particularly given the requirements of Rule 18 of the Family Law Rules and the overall objectives and Rule 24(5) of the Family Law Rules, which provides that the failure to make an offer to settle is a factor that the court must consider in determining whether a party acted reasonably.

[31] Justice Stanley Sherr states the following in M.(J.V.) v. P.(F.D.), 2011 ONCJ 616, [2011] O.J. No. 5441 (Ont. C.J. [In Chambers]), and I adopt this reasoning in assessing the costs in these proceedings:

“…The failure to make an offer to settle much earlier by either party is unreasonable behaviour. Subrule 2(4) imposes a duty on parties and their lawyers to promote the primary objective of the rules to deal with cases justly (subrule 2(2)). This includes taking appropriate steps to save time and expense (subrule 2(3)). Offers to settle play an important role in saving time and expense by promoting settlements, focusing parties and often narrowing issues in dispute. See Laing v. Mahmoud, 2011 ONSC 6737, [2011] O.J. No. 5134, 2011 CarswellOnt 12972 (Ont. Fam. Ct.). The failure to serve an offer to settle will be an adverse factor when assessing costs.”

[16] Also, in imputing income to the applicant, I found that, although there was a prima facie case for interim spousal support, the applicant’s alleged inability to work was in stark contrast to other indications of her abilities. Furthermore, her stated expenses were questionable if not fantastic for someone claiming to have no income, as they exceeded even the respondent’s gross income per year, and were not satisfactorily explained.

[17] I find that the applicant acted unreasonably in these regards. Had she been otherwise entitled to some costs, this would have tended to reduce the quantum thereof.

[18] Accordingly, there will be no order for costs to either party.

The Honourable Justice James A. S. Wilcox Released: February 14, 2019