Court File and Parties
COURT FILE NO.: FC-18-FS442 DATE: 2020-05-29 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
JASON EDWARDS Applicant – and – ALICIA McMAHON Respondent
Counsel: G.D. McLeod, for the Applicant B.T. Paquette, for the Respondent
The Honourable Madam Justice D. Piccoli
COSTS
[1] This Endorsement follows the release of my decision in this matter on April 6, 2020 which was corrected on April 16, 2020 as it pertained to the calculation of time the children were in the care of their Father, having regard to the fact that the Mother had the children in her care for two weeks in the summer.
[2] The court heard a seven-day trial which commenced November 12, 2019. The trial concerned custody, parenting schedules, and child support.
[3] After the trial, I made an Order that the Mother have sole custody of the child. I maintained the parenting schedule that had been in place since March 2019 during the school year and ordered that each parent have two (2) non-consecutive weeks during the summer of 2020 and three (3) non-consecutive weeks during the summer of 2021 and each summer thereafter. I restricted moving the children and dealt with other parenting issues.
[4] Holiday and special days (with the exception of summer and New Year’s access) were agreed upon by the parties.
[5] With respect to child support, the Mother sought full guideline child support under section 3 of the Child Support Guidelines and the Father initially sought that the Mother pay him $18.00 per month as set-off child support under section 9 of the Guidelines. The Father’s position at the end of trial was that there be no child support payable by either party. I made an order that the Father pay full guideline child support as he did not reach the 40% threshold of time with the children in his care.
[6] At the end of my decision and with respect to costs I made the following endorsement:
“If either party wishes to pursue a claim for costs in connection with this matter, they shall serve and submit to the court written submissions (not to exceed 4 pages in length), relevant case-law, a detailed Bill of Costs and copies of any Offers to Settle within 21 days. Any responding submissions shall be served and submitted to the court 14 days thereafter. Reply submissions if any, shall be served and submitted to the court 7 days thereafter. There shall be no extensions to these deadlines. If a party does not submit submissions respecting costs in accordance with these deadlines, there shall be no costs payable to that party, although costs may still be awarded against that party. As a result of Covid 19 these submissions are to be directed to the following legal assistants: Mona.Goodwin@ontario.ca and Lori.Rebelo@ontario.ca as well as Kitchener.Superior.Court@ontario.ca. It is imperative that counsel indicate in the subject line that these are costs submissions, and for which judge they are intended . When normal court operations resume the parties shall ensure their costs submissions are filed.”
[7] I received the following:
- The Mother’s costs submissions dated April 17, 2020 (4 pages, apart from schedules);
- The Father’s costs submissions dated April 23, 2020 (5 pages, apart from schedules);
- The Father’s “Response to Costs Submissions of the Respondent dated April 17, 2020” (5 pages, apart from schedules);
- The Mother’s Reply Submissions on costs dated May 1, 2020 (4 pages, apart from schedules); and
- The Father’s reply submissions to the Mother’s submissions dated May 1, 2020 (5 pages, apart from schedules).
[8] When the Mother, in her submissions of May 1, 2020, objected to the Father’s costs submissions as to length and bifurcation, the Father’s response was that he complied with the order and somehow interpreted my order to mean that each party was entitled to make separate submissions with respect to costs, with the right of response and reply. That was not the intention of my order. In the future, should clarification be required, it should be sought. The Father moved forward with this interpretation on the basis of his request that he seeks costs for a motion brought by the Mother for medical records, which I did not hear, and which was resolved on consent by the Father producing his psychiatrist’s file during the trial.
What Each Party Seeks (The Parties’ Positions on Costs?)
[9] The Mother seeks partial indemnity costs, for the trial only, to May 13, 2019 and full indemnity costs thereafter. She seeks in total, $52,189.28, which includes disbursements and HST. The legal fees are $45,321.00.
[10] The Father seeks costs in relation to the Mother’s motion for disclosure of his medical records on a full recovery basis stating that the Mother’s conduct was “unreasonable.” He pointed to the request itself, the timing of the request (some three months after the trial management conference), and the technical defect in the motion that did not seek leave of the court, which he argued “drove up his legal costs, for no justiciable reason.” He asks that she pay $13,132.92 if substantial indemnity costs are ordered and $8,023.06 if partial indemnity costs are ordered.
[11] The Father’s bill of costs for the trial is $45,994.27, which presents fees of $39,760.00, disbursements of $991.10 and HST of $5,243.17. This bill of costs does not include the time to draft his costs submissions. The Father argues that success at trial was divided with respect to the child-related issues. He relies on Rule 24(6). He also points out that the Mother did not abandon her claims for an imputation of income to the Father, retroactive child support, or a restraining order, until the commencement of trial. He also points to the fact that he is the only party to make a severable offer.
Analysis
[12] The award of costs is within the discretion of the court: Courts of Justice Act, R.S.O. 1990, c. C.43, at s. 131.1.
[13] The modern costs rules are designed to foster four fundamental purposes:
i. to partially indemnify successful litigants for the costs of litigation; ii. to encourage settlement; iii. to discourage and sanction inappropriate behaviour by litigants; iv. to ensure that cases are dealt with justly pursuant subrule 2 (2) of the Family Law Rules (“the Rules”)
Mattina v. Mattina, 2018 ONCA 867; Serra v. Serra, 2009 ONCA 395
[14] The Court of Appeal for Ontario has stated that proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs: Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at para. 12.
Determination of Success
[15] Rule 24(1) of the Family Law Rules, O. Reg 114/99, states that a successful party is presumptively entitled to their costs. Rule 24(12) outlines the factors to be considered by a court in setting the amount of costs, which centers around:
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 behavior; 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 the experts and their rates, vi. any other expenses properly paid or payable; and b) any other relevant matter.
[16] Rules 24(4) and 24(5) direct the court to evaluate whether a party has behaved reasonably or unreasonably, by examining:
a) the party’s behavior 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.
[17] Rule 24(6) allows the court to apportion costs as appropriate where success in a case is divided.
[18] Rule 24(8) deals with what the court may do if a party has acted in bad faith. Neither party is alleging bad faith.
[19] If offers to settle which meet the requirements of Rule 18 were made, I am required to consider Rule 18(14), which sets out the costs consequences of failing to accept an offer, which refers to a written offer that was made at least seven days before the trial and obtains an order as favourable or more favourable than the offer.
[20] Rule 18(15) provides that the burden of proving that the order is as favourable as, or more favourable than the offer to settle, is on the party that claims the benefit of the rule.
[21] Rule 18(16) states that costs are at the discretion of the court and the court may consider any written offer to settle, the date it was made, and its terms, even if Rule 18(14) does not apply.
[22] The Father commenced this application and sought joint custody, equal parenting time, and a set-off amount of child support. The Mother responded with a request for sole custody, specified access with no overnights during the week, and guideline child support. I ordered sole custody to the Mother, adopted her parenting schedule (save and except that I left in place the overnight each Wednesday), and ordered two weeks summer access this year and three weeks next year and every year thereafter until the children were old enough to express their own views and preferences about whether they wished to have time with each parent on an equal basis over the summer. I alternated New Year’s Eve/New Year’s Day as requested by the Father. I ordered the Father to pay full guideline support.
[23] The trial commenced on November 12, 2019.
[24] The Mother made three offers to settle the trial dated May 13, 2019, November 4, 2019 and November 13, 2019. The first two offers met the requirements of Rule 18. The third was made during trial and was therefore not a Rule 18 offer.
[25] The Father made one offer to settle the trial dated November 7, 2020. His offer was made less than seven days before trial and was therefore not a Rule 18 offer to settle.
[26] The Father indicated in his Reply submissions dated May 1, 2020 that he was not relying on Rule 18 and that the Mother’s costs submissions in reference to Rule 18 as it pertained to his offer are “entirely moot and inappropriate”. I do not agree.
[27] Offers to settle play an integral role in saving time and expense by promoting settlements, focusing parties and often narrowing the issues in dispute. Severable offers to settle or separate offers to settle specific issues are particularly helpful in attempts to settle cases. ( See: Forlippa v. Khabemba, 2019 ONCJ 170, 304 A.C.W.S. (3d) 576, at para. 34.
[28] Failure to make an offer to settle may constitute unreasonable behaviour under Rule 24. G.H.F. v. M.D.E., 2019 ONCJ 920 per Justice Paull at para. 28. See also M. (J.V.) v. P. (F.D.), 2011 ONCJ 616, [2011] O.J. No. 5441, in which Justice Stanley Sherr stated at para. 5:
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.
[29] The Father, in his submissions, makes much of the fact that his offer to settle was severable and the Mother’s offers to settle were not.
[30] The Father’s offer to settle severed the issues as follows: custody, parenting, summer, miscellaneous and child related issues, child support and remaining clauses. Of note is that he required the Mother to pay $4,000 in costs for the medical records motion as a condition to the acceptance of any parts of the offer. Furthermore, the Father was not successful on any part of the severed offer. Accordingly, the fact that the Father made a severed offer is of no assistance in this case.
[31] The fact that the Father only made one offer to settle, which offer was made less than seven days before the commencement of trial is unreasonable behaviour. Furthermore, despite the numerous submissions made by the Father respecting costs, I do not see that he responded at all to the Mother’s first offer made in May 2019.
[32] The Mother on the other hand, made three offers of settlement, although the last offer she made was during the trial. When reviewing the Mother’s first offer of settlement in May 2019, she succeeded with respect to (a) custody, (b) parenting time, save and except that where she offered that the Father return the children Wednesday at 7:00 p.m., I ordered that the children remain in the Father’s care until Thursday morning to school, (c) the summer period of care for this year, (d) most of the holiday periods of care (except there was some minor variation, which was resolved on consent, and New Year’s Eve/New Year’s day), and (e) child support. In addition, and as it pertained to moving, the Mother offered to provide 60 days’ notice of any intended move, which I ordered, but I also ordered a further restriction in that she could not move without the Father’s written consent or a court order. She sought retroactive child support in “an amount to be determined taking into account the Father’s income since the date of separation.” She abandoned her claim for retroactive child support at the commencement of the trial. In addition, she offered what I ordered in terms of the production of health cards and day-to-day decisions.
[33] The Father correctly points out that “The child-related issues of custody and residence consumed the large majority of the time spent at trial.” On those issues the Mother was successful.
[34] Justice Pazaratz in Chomos v. Hamilton, 2016 ONSC 6232, [2016] O.J. No. 5211, at para. 19, stated that the Court is not required to examine each term of the Offer, as compared to the terms of the Order, and weigh, with microscopic precision, the equivalence of the terms. What is required is a general assessment of the overall comparability of the Offer as contrasted with the Order.
[35] I find that the Mother was substantially successful at trial and that she acted reasonably throughout. She made good faith offers to settle and, on the issue of the Wednesday overnight, it cannot be forgotten that prior to trial, the Father was bringing the children to daycare much too early, such that I made an order regarding same and that he achieved the status quo by his unilateral actions in keeping the children.
[36] In all of the circumstances, the Father should pay costs to the Mother.
Costs of the Motion
[37] The Father seeks costs of a motion that I did not hear and that the parties resolved.
[38] From the information provided in costs submissions, it appears the Mother brought a motion for medical records disclosure, amended the motion and then the Father brought his own motion seeking that certain parts of the Mother’s affidavit be struck for various reasons. As a result of the length of the material, the motion became a long motion and was not reached before trial. The Mother states that in an abundance of caution, she made it returnable to the trial but limited her claim to the production of the records from the Father’s psychiatrist, Dr. Nasri. She furthermore issued and served a summons on Dr. Nasri’s office.
[39] During the trial, the Father voluntarily produced the psychiatrist file that was in his lawyer’s possession.
[40] It may be that the request being sought by the Mother was reasonable in light of the allegations. I did rely on the records in my reasons for Judgment in support of my finding that the Father had a bad temper that impacted on his ability to communicate with the Mother and, at times, his ability to properly parent.
[41] The Father is correct that this motion should have been made at the case conference stage and should have been the subject matter of a motion if unresolved prior to the trial management conference. Instead, the Mother brought the motion three months following the trial management conference and it was not reached prior to the trial. Having said that, it may be that the Father should have acceded to the request when it was made, without the need for a motion.
[42] Offers to settle this motion were exchanged by the parties. The first two offers to settle the motion made by the Father were predicated on the Mother paying costs. The Father’s offer of September 24, 2019 was not so predicated, but it was premised on counsel for the Father reading the medical file and redacting any and all information that did not relate to alleged mental health or anger issues.
[43] As this motion was never heard and argued and accordingly not dispensed with by a court, it is difficult to understand how I can be asked to deal with the costs of same.
[44] In Davis v. Fell, 2016 ONCJ 84, Justice O’Connell, at paragraph 79, states:
our courts have held that where parties make a settlement as between themselves, the court… should be very slow to make an award of costs against one of the parties ... and unless there are compelling reasons to do so, costs in the circumstances of a settlement between parties ought not to be awarded by the court.
[45] Justice Kurz's decision in the Frape v. Mastrokalos, 2017 ONCJ 815, summarizes previous authorities advancing the theme that there ought to be a compelling reason to make an award of costs in a situation where a matter settles. He relies on a number of decisions, and in the end, adopts the reasoning of Justice Starr in Shute v. Shute, 2017 ONCJ 533, where she stated, at para. 33:
Where a matter settles, the success and/or reasonableness of the conduct of the parties is a consideration but not the most important one. In such cases, the emphasis should be on discouraging inappropriate conduct and promoting settlement. Thus, instead of identifying a reason not to award costs, the court must identify a compelling reason to make an award.
[46] In Krueger v. Krueger, 2017 ONSC 1446, Justice George of the Superior Court of Justice stated, after a review of applicable authorities, including the decision of Templeton J. in Talbot v. Talbot, 2016 ONSC 1351, stated at para. 30, that: “[t]he bottom line is this. Courts should be wary to award costs when the parties reach a settlement.”
[47] I adopt this same reasoning, namely, there is no compelling reason in this case to order costs of this motion. Furthermore, given that I did not hear argument on the matter, I cannot predict what the outcome of the motion would have been.
[48] There are also policy reasons for not awarding costs in a post-settlement context. In Witherspoon v. Witherspoon, 2015 ONSC 6378, Justice Leach of the Superior Court articulated two at para. 42. First, permitting post-settlement claims for cost would actively discourage parties from making compromises in order to achieve settlement. Second, attempts to address these cost issues would unlikely promote judicial economy.
Quantum of Costs for the Trial
[49] Once liability for costs has been established, the court must determine the appropriate quantum of costs. Rule 24(12) prescribes some of the factors which the court must consider in deciding the appropriate quantum.
[50] Proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs: see Beaver, at para. 12.
[51] It is not lost on this court that the Father’s substantial indemnity costs for the motion alone are almost $14,000.00 and represent approximately 25% of the costs that the Mother seeks for the entire seven-day trial.
[52] Given that the Father does not dispute the reasonableness of the Mother’s Bill of Costs, I would have thought the parties should have been able to resolve the issue of costs.
[53] The assessment of costs is not a mechanical exercise. It is not just a question of adding up a lawyer’s dockets. The overall purpose is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances of the case: Jackson v. Mayerle, 2016 ONSC 1556, 130 O.R. (3d) 683, at paras. 16-21.
[54] In Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905; Boucher v. Public Accountants Council (Ontario) (2004), 71 O.R. (3d) 291 (C.A.) and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 75 O.R. (3d) 638 (C.A.), the Court of Appeal for Ontario set out the following additional general principles relating to quantum:
(i) Ultimately, costs decisions should reflect what the court considers to be a fair and reasonable amount that the unsuccessful party should pay. (ii) Costs need to be proportional to the issues and amounts in question and the outcome of the case. (iii) Amounts actually incurred by the successful litigant are not determinative. (iv) 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, [2013] W.D.F.L. 1013).
[55] Rule 24(12) sets out specific factors the court should consider. These include:
a. Each party’s behavior: Rule 24(12)(a)(i): In this respect, I find that the Mother’s behaviour was reasonable. She demonstrated a desire to resolve the issues as is seen from her three offers of settlement. Despite the fact that her offers were not severable, she was substantially successful. Having said that the timing of her abandonment of certain issues (namely retroactive child support, imputation of income and a restraining order) at the commencement of the trial have to be taken into account. b. The time spent by each party: Rule 24(12)(a)(ii): On this topic, I am satisfied that all of the time set out on Mr. Paquette’s bill of costs was required; reasonable; and only relates to this trial (as opposed to earlier legal steps). c. Written offers to settle: Rule 24(12)(a)(iii): I have already commented on the written offers exchanged in this case. d. The legal fees, including the number of lawyers and their rates: Rule 24(12)(a)(iv): In this respect, Mr. Paquette’s hourly rate of $380.00 is more than reasonable given his 48 years of experience and the skill and professionalism he maintained throughout. e. Any other expenses: Rule 24(12)(a)(v): All of the disbursements claimed are reasonable.
[56] Applying the principles of success to this case, the Mother is clearly entitled to her costs. Although I do not find that the Father acted in bad faith, I find that he did not act reasonably throughout. He made only one offer to settle and it was made very close to the commencement of the trial. It is clear that, throughout, he insisted on joint custody and an equal time-sharing arrangement. These are the arguments that consumed the bulk of the court’s time. The Mother is not entitled to her full costs, given that she abandoned certain issues at the commencement of trial.
[57] In all of the circumstances of this case, I find that the Mother is entitled to $45,000.00 in costs, inclusive of HST and disbursements.
Enforcement Clause
[58] The Mother argues that the full costs I order should be enforced by the Family Responsibility Office (FRO). I do not agree.
[59] In Clark v. Clark, 2014 ONCA 175, at paras. 80-81 the court stated:
It is appropriate to address one additional aspect of Gregory’s challenge to the Costs Order at this stage. Gregory argues that only costs related to support are eligible for enforcement by the FRO under the Act. Accordingly, he submits, the trial judge erred by failing to identify those costs of the trial that were unrelated to support issues and by failing to direct that only those costs relating to support should be enforceable by the FRO.
The decision of this court in Wildman provides a full answer to this claim. In Wildman, a similar argument was advanced and rejected. Wildman holds, at para. 59, that where, as here, a support claim is a principal issue at a multi-issue matrimonial trial, the allocation of costs as between support and non-support issues may be both impractical and inappropriate. Although a trial judge, in the exercise of his or her discretion, may identify those costs of a proceeding that were directly incurred in relation to a contested support claim, so as to designate those costs as enforceable by the FRO, this is not a necessary undertaking. As this court noted in Sordi, at para. 25, trial courts have considerable discretion concerning requests that legal costs in a multi-issue matrimonial proceeding be designated as support for the purpose of FRO enforcement. Absent legal error, designations of this kind attract considerable deference from this court.
[60] In this case child support was not the principal issue. The principal issue was custody and the parenting schedules. It is difficult to precisely analyze how much time was spent on the issue of child support as the Mother’s lawyer’s dockets do not particularize the issue. Given that the parties had agreed to the income of each of them and the submissions and discussions regarding child support assumed approximately ¾ of a day of a seven day trial, the issue of child support represented approximately 10% of time, and accordingly 10% of the court ordered costs shall be enforceable by FRO.
[61] Accordingly, of the $45,000.00 costs award, $4,500 is enforceable by FRO.
[62] This costs order is payable forthwith and shall attract interest in accordance with the Courts of Justice Act.
Justice D. Piccoli