Court File and Parties
COURT FILE NO.: FC-13-FO401
DATE: 2020-02-10
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: IGOR KAZBEROV, Applicant/Moving Party
AND:
TATYANA MIKHAILOVNA KOTLYACHKOVA, Respondent
BEFORE: MADAM JUSTICE J. BREITHAUPT SMITH
COUNSEL: STOJNI-KASSIK, L., Counsel for the Applicant/Moving Party GREEN, A., Counsel for the Respondent
HEARD: In Writing
COSTS ENDORSEMENT
[1] This is the decision on costs of a fourteen-day trial focussed on the primary question of mobility. Respondent Mother sought to move with the parties’ eight-year-old son, A., to Ann Arbor, Michigan. Applicant Father resisted the move, asking that their son remain in Waterloo Region where he has lived since birth. Secondary issues were adjustments to the residency schedule to accord with the circumstances since the Final Order in this matter was made and a change sought by Father to a week-about schedule during the Summer. Further, Father originally sought to adjust child support commensurate with his current income but effectively abandoned that claim at trial. Finally, Mother sought a declaration that Father is a vexatious litigant.
[2] Modern costs rules are designed to foster four fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement; (3) to discourage and sanction inappropriate behaviour by litigants and; (4) to ensure that cases are dealt with justly under Rule 2 (2) of the Family Law Rules.[^1]
[3] Costs awards are discretionary and engage two important principles in the exercise of judicial discretion: reasonableness and proportionality. Costs are awarded in family litigation subject to: Rule 18(14) regarding offers to settle; Rule 24(4) regarding unreasonable conduct of a successful party; Rule 24(8) regarding bad faith; the factors listed in Rule 24(12); and the reasonableness of the costs sought by the successful party. There is no distinction between family cases having a financial component and family cases that focus exclusively on parenting issues; costs consequences and considerations apply equally to all family litigation. Consideration of success is the starting point. Whilst there is a presumption that the successful party is entitled to costs, judicial discretion prevails; a costs award is not automatic.[^2]
Evaluating Success
[4] This case was not complex, but it was of the utmost importance to both parties. Mobility cases, by their very nature, impact upon the parent/child relationship. These difficult cases often need to be determined by a court, as they are understandably hotly contested.[^3] The assessment of proportionality becomes difficult as both parties see mobility litigation as “all or nothing.” As many prior courts have written, there is no “winner” or “loser” between parents in mobility matters[^4] – each mobility case is unique and, regardless of each court’s decision in these challenging matters, children do not benefit when partisan labels are attached to their parents. Having said that, for the purpose of evaluating costs, it is correct to say that the court’s ruling was consistent with Father’s position on the primary issue.
Offers to Settle
[5] Because of the unique nature of mobility cases, it can be difficult for either party to make an offer which genuinely reflects a compromise. The following comments of the Court of Appeal in Beaver v. Hill[^5] where the matter at issue was constitutional in nature resonate with mobility cases:
[15] … Further, before the absence of an offer to settle can be properly used against a party, the situation has to be one where it is realistic to expect offers to settle to be made. The case here was not a situation where the issues could have been settled in any practical way. Either the appellant was going to be able to proceed with his constitutional claim or he was not. There was no way of compromising on that central issue. Consequently, this was not a case where the presence or absence of offers to settle should have played any material role in determining the appropriate quantum of costs.
[16] That salient point also impacts on the respondent’s offer to settle. Her offer to settle does not reflect a compromise, given that it included a requirement that the appellant completely abandon his constitutional argument. It is recognized that the failure of an offer to settle to contain a true element of compromise is a factor to be considered in deciding whether the offer properly impacts on the appropriate award of costs. In addition, judges should be very cautious about relying too heavily on this factor to increase or decrease the quantum of costs… it is but one factor that is to be considered.
[6] It is also important to note that offers appended to conference briefs cannot be relied upon thereafter. Rule 17(23) specifically addresses this point. Further, Rule 17(24) prohibits the Settlement Conference Judge from hearing the issue except in circumstances that are not applicable to this matter. In Entwistle v. MacArthur,[^6] Pazaratz, J. conducts a detailed review of the caselaw and concludes at paragraph 32: “it is clear that the insular nature of settlement conference materials and discussions is intended to be impermeable” and at paragraph 40: “a number of other decisions confirm that, even at the final costs stage of a proceeding, the absolute confidentiality of the settlement conference process should be respected.”
[7] Setting aside the offers which were appended to the parties’ settlement conference briefs, each party made a single offer in advance of trial.[^7] Father’s offer was served April 6, 2017. It provided for joint custody with the child’s primary residence to be in Waterloo Region with Father, and with Mother having alternate weekends and an effectively equal division of vacation parenting time. Mother’s offer was served September 10, 2019. It is predicated upon Mother’s move to Michigan with A. and provides for alternate weekend access, with the location of weekend access to alternate between Father’s home in Waterloo Region and Ann Arbor, Michigan. Father and A. would see one another effectively two weeks per month, spending one at Father’s home in Waterloo and the other at a hotel in Ann Arbor.
[8] While appreciating that Father was successful in resisting A.’s proposed move to Ann Arbor, neither party achieved a result that was “as favourable or more favourable” than was outlined in the offers before the court. Neither of the offers made by either party allowed for acceptance of severable clauses. Neither party offered to maintain the status quo if the move were to be disallowed. To trigger full recovery costs a party must do as well or better than all of the terms of any offer (or a severable section of an offer).[^8] In this matter, Rule 18(14) is not engaged.
Conduct and Bad Faith
[9] This court must address a question raised in the Costs Submissions: ought the trial judge to consider the parties’ behaviour in the context of opinions given by conference judge(s)? This issue continues to be improperly raised in family litigation throughout Ontario. In Bordynuik v. Bordynuik[^9], Scott, J. confirmed that Rules 17(23) and 17(24) are intentionally drafted with a view to bolstering the confidentiality of conferences, including positions taken by the parties and opinions given by conference judges. In that matter, Her Honour declined to increase an award of costs against a party based on that party’s conduct being contrary to the judicial opinions expressed. Similarly, it is inappropriate in this matter to suggest that either party’s decisions in view of opinions given by conference judges should influence the determination of costs to be awarded. Litigants regularly have diametrically opposed perspectives. It would be incorrect to sanction a litigant who has taken a courteous and efficient approach to the proceeding with costs by characterizing his or her decision to continue through to trial as “unreasonable” behaviour. Similarly, the court cannot conclude that a view of the substantive issues which is consistent with judicial opinion expressed at the conference stage absolves an unsuccessful party of liability for costs at the trial stage. Reasonableness of a party’s behaviour throughout the litigation is determined by that party’s overall approach to the litigation process itself, it is not measured against a yardstick of acquiescence to judicial opinions given without the benefit of a complete evidentiary record.
[10] Each party alleges that the other behaved unreasonably and demonstrated an attitude of bad faith. The essence of bad faith is the representation that one’s actions are directed toward a stated goal while one’s secret, actual goal is something else.[^10] This was hotly-contested litigation in a high-conflict parenting situation, but neither party’s actions rose to the level of sanctionable conduct or bad faith.
Rule 24(12) Factors including Reasonableness and Proportionality of Costs Sought
[11] The Court of Appeal set out the following factors in assessing reasonableness and proportionality of costs:[^11]
Ultimately, costs decisions should reflect what the court considers to be a fair and reasonable amount that the unsuccessful party should pay.
Costs need to be proportional to the issues and amounts in question and the outcome of the case.
Amounts actually incurred by the successful litigant are not determinative.
In assessing what is fair and reasonable, the expectation of the parties concerning the amount of a costs award is a relevant consideration.
[12] The court is not required to conduct a line-by-line analysis of the Bills of Costs provided. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding.[^12]
[13] Looking comparatively at the Bills of Costs produced, they show total costs (inclusive of all disbursements and HST) of $205,185.74 claimed by Father and $139,521.64 claimed by Mother. Those amounts include time by the instructing lawyers and by their juniors and staff in addition to disbursements. None of the hourly rates put forward are unreasonable. While the figures themselves are quite large, they are not particularly surprising for a matter spanning 3 ½ years and resulting in a 14-day trial. Father was represented by the same counsel throughout this Motion to Change litigation; Mother had two counsel in sequence. The following chart compares the time expended on the file in generalized categories:
| Mother’s Counsel & Firm | Father’s Counsel & Firm |
|---|---|
| Lead Counsel: 332.6 hours | Lead Counsel: 301.3 hours |
| Junior Counsel: 32.1 hours | Junior Counsel: 22.6 hours |
| Students & Staff: 86.5 hours | Students & Staff: 442.5 hours |
| Interpreter: $6,508.00 | |
| Disbursements: $4,246.52 | Disbursements: $6,828.03 |
[14] Other than the cost of the interpreter, required by Father and his witnesses at trial, and the considerable additional time docketed by staff at Ms. Stojni-Kassik’s firm, in part for the reorganization of exhibits entered at trial at my request, the expenditure of time and the disbursements are roughly consistent. Father seeks partial indemnity costs in the amount of $157,223.35, representing approximately 76% recovery. Mother seeks partial indemnity costs in the amount of $93,030.41, representing 60% recovery. If a 60% factor is applied to the Bill of Costs produced on Father’s behalf, the recovery figure is $123,111.44. I find that the use of a 60% factor to represent partial indemnity costs is the correct approach in this particular matter.
[15] It is reasonable to conclude that Mother ought to have expected that Father was incurring costs similar to those she incurred. The 60% partial indemnity recovery amount for Father’s costs, being $123,111.44, is therefore further supported by its comparison to the actual costs incurred and paid by Mother to her counsel, being $139,521.64.
[16] The analysis continues, however, as the financial positions of the parties are properly considered as a “relevant matter” under Rule 24(12)(b). In fixing costs, the court 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.[^13] There is no question that an award of costs payable by Mother to Father in the amount of $123,111.44 would seriously affect the interests of A. Having said that, ability to pay is but one factor in the analysis and cannot override the others, nor should it do so.[^14]
[17] Having considered the reasoned submissions of counsel and all of the factors in assessing costs, I order that the Respondent Mother shall pay to the Applicant Father costs fixed in the amount of $65,000 inclusive of disbursements and taxes thereupon.
[18] This leaves the issue of the mechanism for payment. Without in any way suggesting that these reasons are to be interpreted as the setting off of costs against child support, due to the unique circumstances of this matter the only connection between these parties is their parent-child relationship with A. There are no other connections, financial, familial or otherwise, between them. A. is now eight years of age. The evidence at trial is that he is quite intelligent and studious, and having regard to his parents’ respective levels of education, it is safe to presume that he will attend post-secondary education. He may continue to qualify as a dependent for child support purposes for another fourteen years until he completes his first post-secondary degree at the approximate age of twenty-two. Thus, the connection between these parties is likely to continue for a further fourteen years. A monthly payment of $380 by Respondent Mother to Applicant Father would see the total costs award paid almost in full by the time this connection between the parties ends.
[19] Based on the foregoing, the following Order shall issue:
The Respondent, Tatyana Mikhailovna Kotlyachkova, shall pay costs to the Applicant, Igor Kazberov, fixed in the amount of $65,000.
Such costs shall be payable on the following terms, unless otherwise agreed between the parties in writing:
a. Commencing March 1, 2020 at the rate of $380 monthly until paid in full;
b. Pre-payment can be made at any time(s) and in any amount(s), with the parties to confirm any pre-payments by email exchange through Our Family Wizard or otherwise in writing by way of signed and dated receipts; and
c. When A. enrolls in post-secondary study, the parties may, in their discretion, agree to set off any or all costs then-remaining against the Applicant’s proportionate contribution to post-secondary expenses.
J. Breithaupt Smith J
Date: February 10, 2020
[^1]: Family Law Rules, rule 2(2); Mattina v. Mattina, 2018 ONCA 867 at paragraph 10. [^2]: Mattina, supra, at paragraphs 12 & 13. [^3]: Kawamata v. Phan, 2015 ONCJ 96 at paragraph 12. [^4]: Reid v. Mulder, 2006 9981 (ON SC), [2006] O.J. No. 1273 at paragraphs 9 and 10. [^5]: 2018 ONCA 840 at paragraphs 15 and 16. [^6]: 2007 17375 (ON SC), [2007] OJ No 1958 (S.C.) at paragraphs 23 – 44. [^7]: I would note that Mother’s Settlement Conference offer would not qualify in any event, as it expired one minute prior to the commencement of trial. Father’s Settlement Conference offers did not contain an expiry timeline. [^8]: Chomos v. Hamilton, 2016 ONSC 6232 at paragraph 19. [^9]: 2008 39219 (ON SC), [2008] OJ No 3049 (S.C.) at paragraphs 3 – 8. [^10]: S.(C.) v. S. (M.), 2007 20279 (ON SC), [2007] O.J. No. 2164, aff’d 2010 ONCA 196, [2010] O.J. No. 1064 (Ont. C.A.) at paragraph 16. [^11]: Snelgrove v. Kelly, 2017 ONSC 4625 at paragraph 31 citing Serra, Boucher v. Public Accountants Council (Ontario), 2004 14579 (ON CA), [2004] O.J. No. 2634 (C.A.) and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 2005 1042 (ON CA), 2005 CarswellOnt 189 (C.A.). [^12]: Sommerard v. I.B.M. Canada Ltd., 2005 39896 (ON SC) at paragraph 57. [^13]: M.(C.A.) v. M.(D)., 2003 18880 (ON CA), [2003] O.J. No. 3707 (C.A.) at paragraph 42. [^14]: Peers v. Poupore, 2008 ONCJ 615 at paragraph 42.