Court File and Parties

COURT FILE NO.: FS–08–340963

DATE: 20190108

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Alisa Marcy (Feintuch) Shapiro, Applicant

AND:

Mitchell Feintuch, Respondent

BEFORE: P. J. Monahan J.

COUNSEL: Mercedes Igbhi, for the Applicant

Ryan Kniznik, for the Respondent

HEARD: November 6, 2018

COSTS ENDORSEMENT

[1] On November 13, 2018, I granted the Respondent’s request for a declaration that the Applicant had breached the provisions of an applicable court order (the “Order”) dealing with travel arrangements for their 14-year-old son YF. In particular, I found that by removing YF from school for five days and transporting him to New York to attend certain family events, the Applicant was in breach of the Order, since it required the prior consent of both parents for the removal of their children from school in order to travel.

[2] At the same time, however, I declined to order the Applicant to pay $2500 to the Respondent on account of “costs”, since this payment did not represent reimbursement for the Respondent’s legal fees or disbursements. Instead, the Respondent was seeking an order for the payment of $2500 as a “penalty” for breach of the Order. I found that ordering such a payment fell outside of the authority to order “costs” set out in Rule 1(8)(a), since costs are limited to the entitlement of a successful party to have its legal fees and disbursements paid for by the unsuccessful party. I also dismissed a cross motion brought by the Applicant in which she sought an order prohibiting the Respondent from bringing any further motions without leave of the court, as well as an order that YF’s passport be handed over to her for safekeeping.

[3] The parties have made written cost submissions and this Endorsement sets out my determination with respect to costs.

[4] The Respondent seeks costs in the amount of $31,975.26, inclusive of HST and disbursements, which is on a full recovery scale. He argues that he was successful on the motions and is therefore presumptively entitled to costs in accordance with Rule 24 (1). In particular, he argues that he succeeded in obtaining a declaration that the Applicant had breached the Order, and also succeeded in having the Applicant’s cross-motion dismissed. He seeks costs on a full recovery basis in light of the various Offers to Settle served by the parties prior to the argument of the motion, as well as the fact that the Applicant breached the Order, which is a serious matter that can amount to bad faith.

[5] In her costs submissions, the Applicant acknowledges that she was wrong to remove YF from school without the consent of the Respondent. She also apologizes for a particular email that was rude and demeaning of the Respondent and which escalated tensions between the parties. However she argues that success in this proceeding was clearly divided, as the Respondent did not succeed in requiring her to pay a penalty of $2500 on account of breach of the Order. She also argues that the entire motion could have been avoided if the Respondent had agreed to have the matter resolved by Mr. Philip Epstein, an arbitrator who had previously set out detailed arrangements as to how parenting decisions were to be made. Although the Applicant’s position is not entirely clear, she appears to propose that each party bear their own costs of the proceeding.

Legal Framework Governing Costs Awards in Family Law Cases

[6] It is well established that modern family cost rules are designed to foster three fundamental purposes: (i) to partially indemnify successful litigants; (ii) to encourage settlement; and (iii) to discourage and sanction inappropriate behaviour by litigants.[^1] Moreover, as the Court of Appeal emphasized recently in Mattina v. Mattina,[^2] a fourth fundamental purpose of costs awards in family law proceedings is to ensure that cases are dealt with justly, in accordance with Rule 2(2) of the Family Law Rules.

[7] Rule 24(1) creates a presumption of costs in favour of the successful party.[^3] While consideration of success is the starting point in determining costs, this presumption does not automatically require that the successful party be awarded his or her costs.[^4] Entitlement to costs is subject to a variety of factors, including whether the successful party has behaved unreasonably,[^5] whether there has been bad faith conduct,[^6] and the nature of any offers to settle made by either party.[^7]

[8] In determining the appropriate quantum of costs, Rule 24 (12) sets out the relevant considerations. It provides as follows:

(12) SETTING COSTS AMOUNTS – 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] While Rule 24(12) sets out the relevant considerations, the key principles governing awards of costs in family law proceedings are proportionality and reasonableness. As Nordheimer J.A. stated recently in Beaver v. Hill,[^8] “[p]roportionality is a core principle that not only governs the conduct of proceedings generally, but is specifically applicable to fixing costs in family law matters.” This conclusion flows directly from the fundamental Boucher principle, applied by Ontario courts on innumerable occasions, that costs awards should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties.”[^9]

[10] Nor is there any principle mandating that a successful party should receive costs that “generally approach full recovery”.[^10] In fact, any such “full recovery” principle would be inconsistent with the first objective of costs awards as set out by the Court of Appeal in Serra, which is that costs are intended to “partially indemnify successful litigants”. While the Rules contemplate full recovery in specific circumstances, such as bad faith under Rule 24(8), or besting an offer to settle under Rule 18(14), the quantum of costs must always meet the test of proportionality and reasonableness in light of the importance and complexity of the issues at stake in the litigation.

Appropriate Costs Award in This Case

[11] The starting point of the costs analysis is a consideration of relative success in the proceeding.

[12] As noted, the Respondent was partially successful in that he obtained a declaration that the Applicant was in breach of the Order by removing YF from school and arranging to have him transported to New York without the Respondent’s consent. Any breach of a court order is serious, and parties are to be discouraged from resorting to self-help in family law matters. The Respondent also succeeded in having a cross motion brought by the Applicant dismissed. Significantly, however, the focus of the argument on the motion was on the issue of whether the Applicant could be ordered to pay a penalty of $2500 on account of her breach of the Order. On this issue, the Respondent was not successful.

[13] Even accepting that the Respondent was somewhat more successful than the Applicant, and is therefore presumptively entitled to his costs under Rule 24 (1), the court must also consider whether the Respondent behaved unreasonably during the case and should be deprived of all or part of his own costs (or ordered to pay all or part of the unsuccessful party’s costs) on the basis of Rule 24(4).

[14] As I noted in my November 13, 2018 Endorsement, neither party behaved reasonably in this matter. It was for this reason that a relatively straightforward request by the Applicant to travel to New York for two family events, which would have involved taking YF out of school for at most two or three days, escalated into a bitter dispute which saw YF miss five days of school, produced litigation that extended over 6 months and occupied over 100 hours of counsel time, and which cost these parties a combined total of over $50,000 in legal fees and disbursements.

[15] As part of their cost submissions, the parties have submitted correspondence outlining their efforts to attempt to resolve the issues on the motion. The Respondent relies in particular on his two Offers to Settle, the first of which proposed that the Applicant pay him “costs” of $1500 pursuant to Rule 1(8)(a), the second of which would have involved the Applicant withdrawing her cross-motion. These offers were severable. The Respondent claims that he obtained a result that was as favourable as the second Offer to Settle, since the Applicant’s cross motion was in fact dismissed. He therefore argues that he is entitled to full recovery costs after the date of this Offer, pursuant to Rule 18 (14).

[16] It is true that the Respondent succeeded in having the Applicant’s cross-motion dismissed. However, even if his second Offer to Settle had been accepted, this would not have resolved the litigation since the Respondent was still proposing to proceed with his own motion, seeking an order for a penalty payment from the Applicant. On this issue – which, again, was the primary focus of the argument on the motion -- he was not successful. I would also observe that even assuming that Rule 18(14) is engaged by the Respondent’s second Offer to Settle, full recovery costs do not follow automatically since entitlement to full recovery costs under Rule 18(14) is subject to a court order to the contrary. In my view, it is appropriate and necessary to have regard to the entire context, particularly the reasonableness and proportionality of each party’s behaviour in accordance with Rule 24(12), in making a determination of entitlement to costs, whether on a full recovery scale or otherwise.

[17] My November 13, 2018 Endorsement described the circumstances which led to the Applicant transporting YF to New York without the Respondent’s consent, and will not be repeated here. I will simply reiterate that this unfortunate outcome was attributable to the unreasonable and uncompromising behaviour of both parties. In addition, I have now been provided with correspondence which indicates that, following the trip to New York, the Applicant proposed that issues relating to YF’s travel should be dealt with in an expedited manner by Arbitrator Epstein rather than through a motion. In his response to this proposal, the Respondent noted that issues relating to travel were “before the court and will be dealt with in November”. He suggested that if the Applicant did not want to proceed with the motions before the court, “you have my offers to settle in that regard and can decide how you want to deal with that.”

[18] I am concerned by the Respondent’s summary dismissal of this good faith attempt by the Applicant to have this matter resolved in expedited and cost-effective manner. The Respondent seemed determined to require the Applicant to pay a penalty of $2500 on account of her breach of the Order and was prepared to spend over $30,000 in pursuit of that outcome. In my view, this refusal to consider the reasonable alternative proposed by the Applicant is inconsistent with the obligation under Rule 2 to ensure that a case is dealt with in ways “that are appropriate to its importance and complexity”.

[19] I am also concerned by the approach taken in the Respondent’s costs submissions, in which he fails to acknowledge any responsibility for the circumstances which led to this litigation. Not only does the Respondent insist that his own conduct was entirely reasonable, he argues that the Applicant was unreasonable in bringing her cross-motion. In fact, what the Respondent fails to consider is whether his insistence on proceeding with his motion was reasonable and proportionate to the matters in dispute. In his effort to have the Applicant pay him a penalty of $2500, the Respondent was prepared to spend more than 10 times that amount which, in my view, is out of all proportion to the complexity and significance of the particular dispute which gave rise to this motion. Moreover, he now asserts an entitlement to full recovery costs even though he was unsuccessful on the primary issue that gave rise to the motion in the first place. In contrast, the Applicant accepts responsibility and accountability for her conduct which fuelled this dispute with the Respondent, and indicates a commitment to act differently in the future.

[20] As Arbitrator Epstein noted, due to the high conflict between these parties, “important decisions have been delayed and minor issues [have] become major ones which could not be quickly resolved.” This describes precisely what occurred in this case. Continued disputes over issues relating to YF is manifestly contrary to his best interests. What is required, as Kiteley J. noted in a March 2018 Endorsement dealing with an earlier dispute over travel with YF, is a change in approach by both the parties. I see no indication of a commitment to such a new approach on the part of the Respondent. Moreover, my concern is that if I were to make a substantial costs order in his favour, this could well be interpreted by him as approval of his conduct in this matter and encourage similar behaviour in the future. What is required is a commitment by both of these parties to work together in a spirit of collaboration and compromise, in furtherance of the best interests of YF.

[21] I accept that the Respondent is presumptively entitled to his costs as the more successful party on the motion. Further, the breach of the Order by the Applicant was a resort to self-help which was inappropriate and serious. However, in light of the circumstances and considerations outlined above, I am of the view that this is an appropriate case to exercise my discretion under Rule 24(4) to reduce the costs to which the Respondent might otherwise have been entitled.

[22] I therefore fix the costs payable by the Applicant to the Respondent in the amount of $2500, inclusive of HST and disbursements, to be paid by February 11, 2019.

P.J. Monahan J.

Date: January 8, 2019

[^1]: Serra v. Serra, 2009 ONCA 395 at paragraph 8. [^2]: 2018 ONCA 867 ("Mattina") at paragraph 10. [^3]: Berta v. Berta, 2015 ONCA 918 at paragraph 94. [^4]: Mattina at paragraph 13. [^5]: Rule 24(4). [^6]: Rule 24(8). [^7]: Rule 18(14) & (16). [^8]: 2018 ONCA 840 at paragraphs 12 and 19. [^9]: Boucher v. Public Accountants Council (Ontario) (2004), 2004 ONCA 14579, 71 O. R. (3rd) 291 (Ont. C.A.) at paragraph 24. [^10]: Beaver v. Hill, at paragraph 13.