Court File and Parties

Court File No.: FC-14-2388 Date: 2019/07/03 Superior Court of Justice – Ontario

Re: Robert DeGroot, Applicant And: Nina Iouguina, Respondent

Before: J. Mackinnon J.

Counsel: Guillianna Ferri, for the Applicant Stacy Coulterman, for the Respondent

Heard: In Writing

Costs Endorsement

[1] This endorsement addresses the costs of the trial of a relocation issue heard in April 2019. The mother asks for full indemnity costs fixed at $36,859.84 inclusive of fees, disbursements and HST. The father seeks an order that each party bear their own costs.

[2] The mother was successful in obtaining the order she sought at trial allowing her to relocate the parties’ son to Australia for three years, on the terms of access she proposed for the father and son. Additional terms were ordered, designed to assure her compliance with the return of the child for access and at the end of the three year term. An extended visit of two weeks for the father and son was also ordered before the move could take place.

[3] Despite being the successful party the mother is not entitled to full indemnity costs. She did not match or best her offer on the key issue of relocation. Her offer would have enabled her to relocate the child to Australia on an indefinite basis. This represented a serious departure from the position she took at trial and could not have been expected to have been accepted by the father. Nor did her offer include any provisions to facilitate enforcement of the child’s return to Ottawa. The access offered did form the basis of the court’s order for access.

[4] The mother alleges bad faith by the father in the complaint he made against her husband to his disciplinary body. I made findings of credibility adverse to the father based on the evidence in relation to the complaint. I did not make any findings with respect to motivation or ulterior purpose that would support a finding of bad faith, stating only that whatever his motivation was it was not related to what would be best for his son. The facts found at trial do not support a finding of bad faith. Both parties provided additional unsworn information in their costs submissions in relation to the complaint. I place no weight on this information because it was not provided in proper evidentiary format.

[5] The mother made a second offer proposing settlement of only the issue of access in the event that the court allowed her to relocate to Australia. The terms of access were identical to those in her first offer. This offer was made too close to the commencement of trial to attract Family Law Rules, O.Reg. 114/99 as am, r 18(4). It was a good offer and ought to have been accepted by the father. Instead, he delivered proposed Minutes of Settlement during the trial incorporating the mother’s proposed access terms but also adding terms of access he would obtain if she were not allowed to relocate.

[6] The Minutes were not signed by the father. Access in Ottawa if relocation was not allowed was not an issue at the trial. The father was unreasonable in tying his willingness to resolve the access issue that was before the court to settlement of an issue that was not. That said, a finding of unreasonable litigation conduct does not mandate an award of full costs. It is a factor to consider in setting the amount of costs.

[7] The Offer to Settle the father made does not assist him on the issue of costs. It covered issues between the parties that were not engaged in this trial. It would not have allowed the child to go to Australia. Nor did it address the access the father would have if the child did go.

[8] The Ontario Court of Appeal has weighed in on the issue of full recovery costs in Beaver v. Hill, [2018] ONCA 840 where it held at paras 8 – 11:

8 … the resulting award approached a full recovery amount. In defence of that result, the respondent relies on what is contended to be the principle from Biant v. Sagoo, [2001] O.J. No. 3693, 20 R.F.L. (5th) 284 (S.C.J.) that costs in family proceedings should "generally approach full recovery". I would make a couple of points in response to that contention.

9 First, while the judge in Biant does make that statement, it is based on two decisions of other Superior Court judges, a close reading of which do not support the thrust of that statement. What those other cases do establish is that under the Family Law Rules, O. Reg. 114/99, judges are not constrained to the normal scales of costs found in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, since no scales of costs are mentioned in the Family Law Rules. Also, the Family Law Rules expressly provide that, depending on the conduct of the parties and the presence or absence of offers to settle, a judge may increase or decrease what would otherwise be the appropriate quantum of costs awarded.

10 Second, the respondent's assertion that this court's decision in Berta v. Berta, 2015 ONCA 918, 128 O.R. (3d) 730 supports the "full recovery" approach to costs in family matters also reflects a failure to read the decision closely. What this court endorsed in that case was the principle that "a successful party in a family law case is presumptively entitled to costs" (at para. 94) subject, though, to the factors set out in Rule 24. This caveat is an important one since, as this court pointed out in Frick v. Frick, 2016 ONCA 799, 132 O.R. (3d) 321, the Family Law Rules "embody a philosophy peculiar to a lawsuit that involves a family" (at para. 11).

11 There is no provision in the Family Law Rules that provides for a general approach of "close to full recovery" costs. Rather, r. 24(12) sets out the appropriate considerations in fixing the quantum of costs.

It reads:

(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

[9] In both Beaver v. Hill and Mattina v. Mattina, 2018 ONCA 867 ([2018] O.J. No. 5625), the Court of Appeal stresses the importance of reasonableness and proportionality as the “touchstone considerations” to be applied in fixing the amount of costs.

[10] The father makes two key submissions against an award of any costs to the mother. The first relates to the nature of the issue of relocation.

[11] There is a line of cases in Ontario expressing the view that relocation cases are very difficult to settle since there is rarely a middle ground between one parent’s desire to move and the other parent’s desire not to be left behind. Hatcher v. Golding, [2017] O.J. No. 2694 (SCJ) is a recent case which discusses how this reality may be configured into a claim by the successful party for costs. In Hatcher, the court considered that the proposed move from Hamilton to Brampton mitigated rather than eliminated the unsuccessful party’s exposure to costs, stating at para 35:

35 In this case, while mobility was a central component of the litigation, the circumstances were less attenuated than in cases where parents propose to live provinces or countries apart. As was noted at the outset of the trial decision, "fortunately for the children, it is feasible for [the children] to spend meaningful, regular time with both parents throughout the year, notwithstanding that this is a mobility case."

[12] Here the three year duration of the proposed move is an attenuating factor, despite the great distance involved, as is the fact of the mother’s stand alone Offer to Settle the father’s access during those three years if the move was allowed.

[13] The father also raises his financial circumstances in support of his position that no costs should be awarded against him. The Ontario Court of Appeal in C.A.M. v. D.M., [2003] O.J. No. 3707 held that the financial situation of the parties can be taken into account in setting the amount of costs in a family case, especially of an unsuccessful custodial parent. At para 42:

42 … In 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. That, however, was not a consideration in this case. The mother is not the custodial parent.

[14] In terms of ability to pay, the father’s source of income is ODSP in the amount of $13,629 per year. He has significant debt in relation to his assets. Although he is legally-aided, he says he has a contribution agreement with Legal Aid which has a lien against his condominium. He says when this matter is concluded, he will owe LAO approximately $25,000.00. Further, he owned his condo with his late mother. The condo is now part of ongoing estate litigation. Until that litigation is resolved, he is unable to access the little equity that remains in it. The father submits that any costs award against him would put him into bankruptcy and effectively eliminate any possibility of ever being able to visit his son in Australia.

[15] Hatcher was also a case where an unsuccessful access parent in precarious financial circumstances sought to avoid an adverse award of costs. That court stated at paras 40 and 42:

40 Courts have held that while impecuniosity is not a shield against a costs award, at the same time, an award of costs should not jeopardize a parent's ability to exercise the access deemed to be in the children's best interests…

42 In this case, I have grave concerns about the impact of an award of full recovery costs against the Applicant, given his financial circumstances… The award of costs sought by the Respondent would compromise the Applicant's ability to provide an appropriate environment for the children during his time with them, and could compromise his ability to pay table child support as ordered.

[16] Hatcher is distinguishable in that the mother will be bearing all of the costs to return the child for access visits with the father. The order does allow for additional access if the father travels to Australia at his own expense, but this was not something he could reasonably have expected to afford in any event of a costs award against him. Nor is he required to pay any child support or section 7 expenses, by agreement of the parties, while the child resides in Australia. No doubt he will have difficulty paying costs, but the father should not have expected to litigate with complete impunity. Knowing the extent of his own obligations to LAO, he would know the likely costs that the mother was incurring in pursuing her claim.

[17] Each award of costs depends on the unique facts of the case. The mother was the successful party at trial. Her offer with respect to relocation deviated significantly in her favour from her trial position and is a factor in reduction of costs to be awarded to her. The difficulty in settling a relocation case is another factor to take into account, noting that at latest from opening of trial the father knew her request was for three years only. Her access offer was reasonable, and as a stand-alone offer ought to have been accepted, rather than tying acceptance to achieving concessions on an issue not before this court. Ability to pay is also relevant to the amount of costs, but less so given that the mother will be paying for the access in Canada and the father will not be paying child support, for the duration of the order.

[18] For these reasons, I award the mother costs fixed in the amount of $12,500 inclusive. This amount is net in that I have deducted $1,000 for the costs she owes the father from a prior, unpaid order.

[19] Terms of payment can also be utilized to address the father’s ability to pay to some degree. There are other issues in the case that remain to be settled or litigated. Payment of this costs order is deferred until final resolution of those issues. Payment is also deferred until the completion of the estate litigation with respect to the condominium, without restricting the mother from registering against title now to protect her position as a creditor.

J. Mackinnon J. Date: July 3, 2019