Superior Court of Justice – Ontario – Family Court
Newmarket Court File No.: FC-18-56775-01 Date: 2020-12-21
Re: David Natale, Applicant And: Christina Crupi, Respondent
Before: A. Himel J.
Counsel: J. Singer, Counsel for the Applicant A. Schild, Counsel for the Respondent
Heard: December 21, 2020
Ruling on Costs
Background Facts
[1] The parties were involved in a relationship that ended in July 2018. In September 2018, the parents agreed that the child, M.N.-C. born _____, 2017 (then age 14 months) would follow a shared parenting (2/2/3/3) schedule.
[2] Provisions for the 50/50 schedule, joint custody and set-off child support were incorporated in a final consent Order on October 19, 2018 (the “Mullins Order”).
[3] Merely 10 months later, on July 5, 2019, the Respondent (the “Mother”) commenced a Motion to Change. On that date she brought an urgent motion alleging that the Applicant (the “Father”) improperly withheld the child.
[4] The Mother sought to vary the Mullins Order in the following ways: (1) To change from joint to sole custody; (2) To decrease the Father’s time (from the existing 50/50 schedule); (3) To address the payment of child support; (4) To respond to the Father’s harassing behaviours; and (5) To implement third party access exchanges.
[5] The Father disputed the Mother’s requested changes.
[6] The Mother submits that she has been wholly successful and states that the high litigation costs were incurred because of the Father’s unreasonable and litigious behaviour. The Mother states that she has beat or met her Offers to Settle and requests costs on a full indemnity basis in the amount of $105,842.66.
[7] The Father submits that each party should bear his/her costs since the parties resolved all issues on consent and given the access to justice issues related to the Covid-19 pandemic. He cites the decision of Witherspoon v. Witherspoon[^1] and argues that a party who makes concessions may do so because of a disinclination to continue with the litigation rather than the absence of merit to his/her position.
[8] In the context of this case I disagree. The Father ought to have resolved this matter at an early stage. His entrenched position increased the costs incurred by both parties.
[9] There is no bar to an Order for costs in the absence of an adjudicated resolution. Costs can and are awarded in multiple circumstances where parties resolve a dispute on consent[^2]. There are sound public policy reasons to support the issuance of costs in these circumstances.
[10] Through the course of this litigation the Father made repeated attempts to bring the matter before the court. The Mother states that she was often the successful party. I agree.
[11] Family litigation, particularly cases that go awry, are often expensive, emotionally draining and time-consuming. Someone must pay the price (aside from the child who, by default, always pays the price). In this case, the Mother is entitled to costs.
[12] As stated above, the first step in the Motion to Change was an emergency withholding motion before MacPherson J. While the motion resolved on consent it is not surprising that the urgent start to the case lay the groundwork for a full-blown high conflict dispute.
[13] Following a second urgent motion brought by the Mother, Kaufman J. made an interim, without prejudice, consent Order on September 13, 2019. He granted sole custody in favour of the Mother, and supervised daytime access to the Father on Saturdays. That motion was preceded by an incident of domestic violence (and criminal charges) between the Father and his partner which took place in the child’s presence.
[14] Kaufman J. also granted a consent temporary restraining Order.
[15] On October 30, 2019, the Father brought a motion to set aside the Kaufman J. consent Order. The motion was dismissed by McGee J.
[16] The Father continued to argue against the Mother’s requests for changes to the Mullins Order. His position was not reasonable given the events set out above and the ongoing conflict between the parties.
[17] The social science research (see, for example, the AFCC-Ontario Parenting Plan Guide – www.afccontario.ca) explains that shared parenting arrangements have the best chance of success where the parties have a good relationship, experience low conflict, have strong communication skills, live close to one another, the child is of school age and the parents have demonstrated that they can co-parent.
[18] If not clear to the Father before the commencement of the Motion to Change it should have been evident shortly thereafter that the joint custody and the 2/2/3/3 schedule was not workable nor in the child’s best interests.
[19] In November 2019, the Office of the Children’s Lawyer (“OCL”) was engaged to conduct a s.112 assessment. A disclosure meeting took place on April 2, 2020 and a report was delivered on May 20, 2020. The OCL recommended sole custody and primary residence to the Mother, with limited parenting time to the Father.
[20] The Father ultimately negotiated a better deal than what was recommended by the OCL.
[21] However, it was the Mother who was successful on all significant issues.
The Law and Analysis
[22] Family Law litigants are encouraged to settle their disputes without resort to the courts and to seek reasonable compromise whenever possible. Sections 18(14) 1, 3-5 and 24(1), (5) and (12)(a) and (b) of the Family Law Rules (“the Rules” or “Rule”) deal, respectively, with the exchange and non-acceptance of Offers to Settle and frame the exercise of the court’s discretion when awarding costs, providing as follows:
COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER
(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.
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.
SUCCESSFUL PARTY PRESUMED ENTITLED TO COSTS
24. (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.
DECISION ON REASONABLENESS
(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,
(a) the time properly spent on the case, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order;
(b) expenses properly paid or payable; and
(c) any other relevant matter.
SETTING COSTS AMOUNTS
(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.
[23] The principles guiding the court’s exercise of its discretion pursuant to the Rules are well-established. The primary objective, of course, is to enable the court to deal with cases in a fair and timely manner. Four fundamental purposes are served: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; (3) to discourage and sanction inappropriate behaviour by litigants;[^3] and (4) to ensure that cases are dealt with justly.[^4]
[24] Family law litigants must act in a reasonable and cost-effective way: they should, and will, be held accountable for the positions they take in their litigation.[^5] As observed by the Court of Appeal in Beaver v. Hill[^6] reasonableness and proportionality frame the exercise of the court’s discretion: the amount to be awarded is what the “court views as a fair and reasonable amount that should be paid by the unsuccessful [party]”: Boucher v. Public Accountants Council for the Province of Ontario.[^7]
[25] My determinations with respect to the parties’ settlement are as follows. As plainly stated by Pazaratz J. in Scipione v. Del Sordo,[^8] 2015 Carswell ONT 5982 (at para. 6), “Who got what they asked for?”:
(a) sole custody and primary residence – Mother was successful;
(b) third party transitions – Mother was successful;
(c) Our Family Wizard – Mother was successful;
(d) child support increased from $300 to $802 – Mother was successful;
(e) arrears to be repaid – Mother was successful;
(f) police enforcement – Mother was successful;
(g) restraining Order – Mother was successful;
(h) father’s parenting time more than the OCL’s recommendations – largely irrelevant as the OCL’s recommendations were never argued nor adopted by the Court; and
(i) father’s holiday/vacation time being more than Mother had proposed – Father was successful; however, this merely one issue in the context of a multi-issue case.
[26] With respect to Offers to Settle, the history is as follows:
(a) the Mother made an Offer on October 23, 2019, for relief prior to a motion. McGee J. found that it was premature to address the Offer on a final basis at that time. The Mother offered: (1) temporary sole custody; (2) parenting time for the Father on an expanding basis; and, (3) a restraining Order;
(b) the Father made an Offer on June 5, 2020. He admits that he gave the Mother “virtually everything she asked for in her Motion to Change”, which he argues is evidence of reasonable behaviour. Given the delayed timing, I disagree;
(c) the Mother made another Offer on June 24, 2020. She states that it largely formed the basis of the parties’ Minutes of Settlement. The terms were severable; and,
(d) the Mother made a final Offer on August 10, 2020. She states that it largely mirrored the second Offer and formed the foundation for the executed Minutes of Settlement. The terms were severable.
[27] The Father states that the Mother’s Offers reflect an extreme micro-management and are 16 and 17 pages respectively. His Offer was two pages.
[28] I agree that the Mother’s approach to the litigation was to seek a highly detailed roadmap for the parties to follow, which she advised was necessary given the significant difficulties and the conflict that arose after the consent final Order in 2018.
[29] While the Mother’s desire for a detailed plan had an impact on the overall costs of the litigation (which I will address below), the Father ultimately agreed to such a roadmap.
[30] The Father’s eventual willingness to capitulate to the Mother’s requests are not evidence of reasonableness. The Father’s offer was delivered 11 months after the start of the litigation and following an OCL report that was unfavourable to his position.
[31] The final Minutes of Settlement were similar to the Mother’s June 2020 Offer, with the issues narrowed further by way of the August 2020 Offer to Settle.
[32] However, the matter did not settle until after I completed three Settlement Conferences (August 13, 17 and September 14, 2020) for what was effectively intensive judicial mediation. I made recommendations with respect to many of the Mother’s proposed terms and the parties spent considerable additional time off-line engaged in negotiations.
[33] The matter resolved in accordance with Minutes of Settlement sent to the Father on September 21, 2020 which he accepted on October 11, 2020.
[34] I am not prepared to order costs on a substantial or full indemnity basis from any particular moment in time. The nuanced and detailed final Minutes of Settlement do not mirror any of the Offers to Settle and required considerable time (and judicial input) to finalize.
[35] As stated above, in arriving at an award of costs I am mindful that this Court must exercise a discretion based on principles of reasonableness and proportionality (see Beaver v. Hill, 2018 ONCA 840).
[36] While the issues before the Court were significant to the Mother, some of her demands were not proportionate (to the legal fees incurred) and were unreasonable. These include the Mother’s proposal for the sharing time when the child is staying at the hospital, limiting the Father’s contact to the child’s school if her older son attends the same school, and requiring the Father contribute to private school.
[37] The issues were also significant to the Father, however, he lacked insight into how the case would ultimately resolve (either on consent or by Order of the Court). For example, the Father’s attempts to litigate the parenting issues while the OCL investigation was ongoing added to the costs of the litigation. The decision to bring three urgent 14B requests for a Case Conference in April 2020 (the initial days of the Covid-19 pandemic and the suspension of normal Court operations), displayed very poor judgement, as did the original decision to overhold the child in July 2019. The Father’s overall position in the litigation until June 2020 was unreasonable.
[38] However, I agree that the Father’s proposals with respect to summer/holiday access were reasonable.
[39] I find that both parties incurred excessive fees as exemplified by the voluminous materials filed in June 2020 on the issue of a weekday access-exchange location. As stated by Jarvis J., the Father’s “70-paragraph affidavit is 11 pages in length and accompanied by 27 exhibits comprising 120 pages. The Mother has responded with a 192 page affidavit comprising 58 paragraphs over 12 pages and 180 pages of exhibits”[^9] (para. 4-5).
[40] Jarvis J. held as follows (emphasis added): “Neither party’s materials comply with the Chief’s Notice and clearly disregards Bennett J.’s direction to be mindful of it. Moreover, in Greco-Want v. Wang[^10], Kiteley J. observed that “members of the public…are not entitled to unlimited access to trial judges[^11]. While that was said in the context of trial scheduling it is equally, if not more pertinent, to temporary motions, especially in light of the Chief’s Notice. Without understating the matter, the parties’ material is disproportionate to the issue and an abuse of process”[^12] (para. 6).
[41] The Jarvis J. decision has been cited across Ontario as an example of unreasonable litigation behavior and the Court’s unwillingness to tolerate same, particularly during the ongoing Covid-19 pandemic.
[42] The Mother’s legal counsel was called to the bar in 2016. Her hourly rate of $375 is on the high side.
[43] The Father’s legal counsel was called to the bar in 1989. His hourly rate of $475 was discounted to $360 due to financial considerations. This is a reasonable rate.
[44] The case should have been straightforward. The primary claims, to change the joint custody, parenting time and child support should not have been complicated, particularly given the high conflict between the parties and the incidents that took place in summer and fall 2019.
[45] While the Father’s actions led to wasted time being incurred by the Mother, the amount of time she spent to respond is unwarranted.
[46] I have reviewed the Mother’s Bill of Cost. Ignoring the relatively nominal hours billed by three more senior lawyers or the law clerk, I note that the Mother’s counsel billed the following number of hours (rounded down) for the tasks described below:
(a) meetings and correspondence – 45;
(b) preparation of pleadings and review of opposing parties’ pleadings – 16;
(c) mother’s Urgent Motion (MacPherson J.) – not included in Bill of Costs;
(d) mother’s Urgent Motion (Kaufman J.) – 26;
(e) father’s Urgent Motion (McGee J.) – 19;
(f) case Conference (Bennett J.) – 14;
(g) settlement Conference (Bennett J.) – 9;
(h) settlement Conference (Bennett J.) – no time billed by that lawyer;
(i) father’s 14B Urgent Conference Request 1 (Jarvis J.) -0.5;
(j) father’s 14B Urgent Conference Request 2 (Jarvis J.) – 5;
(k) father’s 14B Urgent Conference Request 3 – 4.7 - costs not requested;
(l) urgent teleconference Case Conference (Bennett J.) – 11;
(m) urgent Motion Request (Jarvis J.) – 12 – costs not requested;
(n) settlement Conference on three dates (Himel J. ) – 27;
(o) negotiation of final Minutes of Settlement – 36; and
(p) costs submissions – 9.
[47] The Mother’s legal counsel billed 238 hours between July 2019 and November 2020.
[48] The Father’s legal counsel billed 94 hours between November 2019 and November 2020 (and billed a total amount of $48,680).
[49] I note the following: (1) The matter never proceeded to a long motion or to a trial; (2) All Court attendances from March 2020 onwards (Items (h) forward) were conducted by telephone/Zoom/in writing (such that there was no wasted travel or waiting time); (3) Costs were already awarded for certain events (and appropriately not claimed here).
[50] The family justice system benefits when parties are represented by lawyers, and clients can only afford to do so when the expenses they incur, and/or the costs they are ordered to pay, are rational. As stated recently by Spence J. “it is difficult for this court to conclude that the “reasonable expectation of the losing party” in this case would be liable for costs” in an amount anywhere close to $105,842.66.[^13]
[51] I am not inclined to order full recovery costs, and, “even if I had decided to that a full recovery award was appropriate, I would not have made an award based on the totals in counsel’s Bills of Costs.”[^14]
[52] In a very recent decision, Fearon v. Ellsworth,[^15] Spence J. eloquently summarized the meaning of “full recovery.” It bears repeating.
“[56] Not infrequently, counsel on behalf of parties seeking full recovery of costs submit their Bill of Costs and argue, in effect, here is what I charged my client for all my legal services, and so this is what the opposite party ought to pay.
[57] This is something akin to an older concept in civil cases where parties argued for costs on a “solicitor and his own client” scale. In theory, this meant that whatever a solicitor charged his or her own client, should be paid by the opposite party in those rarer cases where costs were being awarded at that highest scale of costs. See: Davies v. Davies, 1968 252 (ON SC).
[58] Those older concepts of costs on a “party and party” scale, “solicitor and client” scale and “solicitor and his own client” scale have fallen into disuse. They have been overtaken by a modernization of the costs rules, both in the Rules of Civil Procedure, as well as in the Family Law Rules.
[59] It is not the purpose of this decision to delve deeply into the evolution of the costs rules. However, it is important to point out that the seemingly widely held belief amongst counsel in family law proceedings that they can simply submit their Bill of Costs and ask for full payment from the opposite party is not at all what the modern costs rules contemplate.
[60] Simply put, the reference in subrule 18(14) to “full recovery” of costs does not mean, in effect, here is what I charged my client, so this is what you (opposite party) must pay.
[61] In Arthur v Arthur, 2019 ONSC 938, Justice Deborah Chappel had the following to say, at paragraph 28 [my emphasis]:
The principles of proportionality and reasonableness are “the touchstone considerations to be applied in fixing the amount of costs” (Beaver, at para. 12). In determining the appropriate quantum, 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 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.
[62] And at paragraph 40, the court continued [my emphasis]:
With respect to the term “full recovery” costs referred to in the Family Law Rules, the question has arisen as to whether this phrase refers to the full amount which a party claims, subject to adjustments based on reasonableness, or something between the concept of “substantial indemnity” and the full amount claimed. In my view, the term “full recovery” refers to the full amount which the party has claimed, subject to any adjustments that the court considers appropriate based on the reasonableness and proportionality of the costs claimed. In other words, it means the total reasonable and proportional amount that a court determines the party should have spent in dealing with the case (Jackson, at para. 91). This conclusion accords with the case-law in the civil context which has interpreted the phrase “full indemnity costs” (Toronto Standard Condominium Corporation v. Baghai Development Ltd., [2012] O.J. No. 2746 (C.A.)).
[63] I have taken the time to discuss the meaning of “full recovery” for the following reason. I believe it is helpful for the profession to understand that when counsel make submissions for full recovery of costs under the rules, it means something very different than simply submitting a Bill of Costs and asking for what amounts to full restitution of that Bill.”
[53] Litigants who believe that the Court will order full recovery on the basis of “wholesome success” may well be sorely mistaken. This can be an expensive lesson which, unfortunately, is often learned at the end of the case.
[54] For all the reasons set out above, I find that what is reasonable and proportionate in these circumstances is costs payable to the Mother in the sum of $35,000.
[55] On an aside, with the impending amendments to the Divorce Act[^16] and the Children’s Law Reform Act[^17] which come into force on March 1, 2021, I query whether parenting plan terms similar to those set out in the Mullins Order will be included or modified after that date. The legislated changes impose judicial oversight on parenting plans, as follows:
The court shall include in a parenting order or a contact order, as the case may be, any parenting plan submitted by the parties unless, in the opinion of the court, it is not in the best interests of the child to do so, in which case the court may make any modifications to the plan that it considers appropriate and include it in the order.
[56] Litigants and counsel will be expected to request consent Orders that are sustainable, and which prevent an expedited return to Court. Where concerns arise one option may be for the Court to direct the parties to “test drive” the parenting plan for several months before finalizing same.
[57] On or after March 1, 2021 (and perhaps before), litigants may find that questionable parenting plan terms are modified at the initial stage or following a “test drive”, if the Court determines that a failure to do so conflicts with the child’s best interests. Appropriate modifications may prevent additional unnecessary costs (financial, emotional and otherwise) and protect the child from the conflict.
[58] In the case at hand it is the Court’s expectation that the parties will follow the detailed roadmap, engage only in child-focussed communication and shield M.N.-C. from any further disputes.
[59] Order to Go as Follows:
- The Applicant Father shall, within 180 days, pay to the Respondent Mother costs in the amount of $35,000 inclusive of H.S.T.
Justice A. Himel
Date: December 21, 2020
[^1]: Witherspoon v. Witherspoon, (2015) O.J. No. 5406 at para. 24 [^2]: Scipione v. Del Sordo, 2015 Carswell ONT 5982 at para. 62 [^3]: Serra v. Serra, 2009 ONCA 395 [^4]: Mattina v. Mattina, 2018 ONCA 867 at para. 10 [^5]: Heuss v. Sarkos, 2004 ONCJ 141, 2004 CarswellOnt 3317; Peers v. Poupore, ONCJ 615 [^6]: 2018 ONCA 840, at para. 4 [^7]: (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, 48 C.P.C. (5th) 56, 188 O.A.C. 2001, [2001] O.J. No. 2634, 2004 CarswellOnt 521 (Ont. C.A.) [^8]: Supra, note 2 at para 6 [^9]: 2020 ONSC 3663 at para. 4 -5. [^10]: See 2014 ONSC 2466. [^11]: Ibid, para. 3. [^12]: Supra, note 9 at para. 6. [^13]: Fearon v. Ellsworth, 2020 ONCJ 583 at para. 83 [^14]: Ibid. at para. 55 [^15]: Ibid. at paras. 55-63 [^16]: Divorce Act Amendments, S.C. 2019, c. 16. Coming into force March 1, 2021 (Canada, Bill C-78, 42 Parliament, 1st Session) at s. 16.6(1) [^17]: Moving Ontario Families Forward Act, Bill 207, 1st Session, 42nd Legislature at s. 27(7)