Court File and Parties
COURT FILE NO.: FC-16-FO564000 DATE: 2020/01/06
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: RACHEL ELIZABETH BEXON, Applicant AND: JASON ROBERT McCORRISTON, Respondent
BEFORE: Justice D.A. Broad
COUNSEL: Anna L. Towlson, for the Applicant Brian R. Kelly, for the Respondent
COSTS ENDORSEMENT
1The parties have been unable to settle the issue of costs and have each delivered written submissions on costs.
2The respondent submits that he was the successful party at trial respecting the remaining issue of child support and is therefore entitled to costs. He submits that there should be no order for costs made in respect of any period prior to March 2, 2018, when the parties settled the issues of the children’s time with the applicant and respondent and their respective responsibility for parenting decisions. The respondent seeks costs for the period commencing December 10, 2018, being the date of the continued Trial Management Conference through to the end of the trial on a partial indemnity basis in the sum of $15,000. In support of this claim, the respondent produced a printout of counsel time and disbursements for that period showing full indemnity fees of $20,881.86 and disbursements in the sum of $399.99, both inclusive of taxes.
3The applicant disputes that the respondent was successful on all or most of the issues before the court and asserts, based upon her four Offers to Settle, her success in achieving her objectives in commencing the litigation, namely more time with the children pursuant to their wishes and obtaining the lead for medical decision-making, and the unreasonable conduct and positions taken by the respondent, that the respondent should be ordered to pay costs to her from the commencement of the Motions to Change.
4The applicant’s claimed costs on a full recovery basis in the sum of $33,260 for fees, $4,323.80 for HST thereon and disbursements in sum of $2316.98, inclusive of applicable HST, for a total of $39,900.78. Her costs claimed on a partial indemnity basis was the sum of $25,705.50 in respect of fees, HST thereon in the sum of $3341.72, and disbursements in the sum of $2,316.98, inclusive of applicable HST thereon, for a total of $31,364.20.
5In the alternative, the applicant submits that, on the basis that there was divided success on the Motions to Change, it would be appropriate for each party to bear their own costs, pursuant to rule 24(6) of the Family Law Rules.
Guiding Principles
6Pursuant to sub rule 24(1) of the Family Court Rules, the successful party is presumed to be entitled to recover costs. Sub rule 24(11) requires the court, in setting the amount of costs, to consider a number of factors including the importance, complexity and difficulty of the issues, the reasonableness or unreasonableness of each party's behavior in the case, the lawyer's rates, the time properly spent on the case, expenses properly paid or payable, and any other relevant matter. These factors are to be applied flexibly (see M. (C.A.) v. M. (D.) 2003 CanLII 18880, (2003), 67 O.R. (3d) 181 (Ont. C.A.) at paragraph 42).
7Rule 18 deals with the impact of Offers to Settle which may have been served by the parties on the costs determination. Sub rule 18(14) provides that, unless the court orders otherwise, a party who makes an offer at least seven days before the trial, and obtains an order as favorable as, or more favorable than the offer, is entitled to costs to the date that the offer was served and full recovery of costs from that date. Even if sub rule (14) does not apply, the court may, under sub rule 18(16), take into account any written offer to settle served by a party, the date the offer was made and its terms.
8Consideration of the relative success of the parties on the issues in the case is the starting point in determining costs (see Butty v. Butty, 2009 CanLII 23111 (ON SC), [2009] O.J. No. 1887 (Ont. S.C.J.) at paragraph 4, citing Sims-Howarth v. Bilcliffe, 2000 CanLII 22584 (ON SC), [2000] O.J. No. 330 (Ont. S.C.J.)). In the case of Johanns v. Fulford, 2010 ONCJ 756 (Ont. C.J.) at paragraph 13, it was held that, for the purpose of sub rule 24(1), "success" is assessed by comparing the terms of an order against the relief originally requested in the pleadings and against the terms of any offers to settle.
9The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan, [1999] O.J. No. 3707 (Ont. C.A.) at paragraph 24).
10Importantly, the case law directs that a costs award must represent a fair and reasonable amount that should be paid, rather than an exact measure of the actual costs, must be consistent with what the unsuccessful party might reasonably have expected to have to pay, and must reflect some form of proportionality to the actual issues argued, rather than an unquestioned reliance on billable hours and documents created (see Mason v. Smissen, [2013] O.J. No. 4229 (Ont. S.C.J.) at paragraphs 5 and 6 and the cases therein referred to).
Analysis
11In my view, it is not appropriate to make an award of costs at this stage of the proceeding with respect to any costs incurred prior to March 2, 2018 when the Consent Order was made by Neill, J. resolving the issues of parenting time and decision-making for the children.
12Sub rule 24(10) of the Family Law Rules provides that, promptly after dealing with each step in a case, the court shall (a) make a decision on costs in relation to that step; or (b) reserve the decision on costs for determination of a later stage in the case. Sub rule 24(10.1) provides that, in that situation, the court shall decide in a summary manner whether anyone is entitled to costs and, if so, determine who is entitled and set the amount of the costs.
13In the Minutes of Settlement leading to the Order of March 2, 2018, the parties did not provide for the costs in relation to the issues of parenting time and decision-making to be reserved to a later stage in the case. Moreover, it is evident that no request was made by either party to Neill, J. to make a decision on costs in relation to that step.
14In the case of Day v. Dwyer, 2018 ONSC 5018 (S,C.J.) Sloan, J. at paragraph 5 endorsed the approach taken by Minnema, J. in Ball v. Ball, 2014 ONSC 5754 (S.C.J.), derived in turn from Orkin, The Law of Costs, 2nd Ed., (2014 Looseleaf) at paragraph 403, that “costs are generally not appropriate for a consent order on the reasoning that the order was not made as a result of adjudication on the merits of the application.”
15At paragraph 6 of Day v. Dwyer Sloan, J. noted that under the Family Law Rules the emphasis was placed squarely on the judge hearing a motion or conference to deal with costs at that time, because he or she was in the best position to do so. In keeping with this, it was incumbent upon the parties, if they wished to claim costs to that stage of the proceeding, to either request Neill, J. to make a ruling with respect to costs at the time of the Order of March 2, 2018, or alternatively to specifically reserve the issue of costs in their Minutes of Settlement.
16Following the making of the March 2, 2018 Order the remaining issues between the parties were child support and section 7 expenses. The threshold issue respecting entitlement to child support was whether the children’s time in school should be credited to the applicant mother or be considered neutral for the purposes of section 9 of the Federal Child Support Guidelines.
17I find that, although the respondent was successful with respect to the threshold issue of whether, for the purposes of section 9 of the Federal Child Support Guidelines, he should be considered to have physical custody of the children for not less than 40% of the time, the applicant was more settlement-focused. In addition to her two offers to settle served prior to the March 2, 2018 Order, the applicant served two offers to settle after the March 2, 2018 Order on September 19, 2018 and May 9, 2019 respectively. In each offer the applicant recognized that the children were in the care of the respondent over 40% of the time but proposed that the provision in the parties’ Separation Agreement providing for no child support to be payable by either party be maintained.
18In contrast, the respondent served no offers to settle after the March 2, 2018 Order, his only offer having been on November 16, 2016, in which he sought arrears of child support in the amount of $20,000 effective November 30, 2016. He was unsuccessful in this claim following trial. In my view, the failure of the respondent to serve an offer to settle displayed a relative lack of focus on settlement and an undue focus on his claim for arrears of child support for the period prior to commencement of the Motions to Change which had little chance of success.
19In the case of Ramsay v. Ramsay, 1999 CanLII 15027 (ON SC), [1999] O.J. No. 4835, Aston J. stated, at paragraph 10:
[…] the “presumption” [in sub rule 24(1)] that success determines entitlement to costs does not mean that a successful party is always entitled to costs, unless that party has “behaved unreasonably” as contemplated under sub-rule 24(4). In my view, the court’s discretion under section 131 of the Courts of Justice Act is wider than that and still allows for consideration of the factors expressed by Katarynych J. in Beaumont v. Fransden, supra. There may be an increased emphasis on the outcome or “success” as a factor, but the fact that success is only presumptive under Rule 24(1) invites consideration of other factors. Otherwise, Rule 24(1) would simply read “A successful party is entitled to costs”.
20This passage from Ramsay was endorsed by the Court of Appeal in M. (C.A.) v. M (D.), at paragraph 41.
21In M. (C.A.) v. M (D.) the Court of Appeal confirmed, at paragraphs 40 – 42, that:
a) although the Family Law Rules have circumscribed the broad discretion granted by section 131(1) of the Courts of Justice Act they have not completely removed the trial judge’s discretion;
b) although the general provision, sub rule 24(1), enacts a “presumption” that the successful party is entitled to costs of the case, it does not require that the successful party is always entitled to costs;
c) a successful party may not obtain a costs award in his or her favour even in circumstances not falling within sub rule 24(4);
d) there may be circumstances aside from the unreasonableness of the successful party’s conduct that rebut the presumption; and
e) the financial situation of the parties can be taken into account in setting the amount of the costs award either under Rule 24 or Rule 18 pursuant to the direction in sub rule 24(11) that the court take into account “any other relevant matter”.
22In my view, the presumption in rule 24(1) has been rebutted in the circumstances of the present case. The applicant’s position on the issue of child support was not frivolous and was put forward in good faith. This was not a case of the applicant unreasonably clinging to a position which was bound to fail.
Disposition
23In all of the circumstances I find that it is appropriate that no order for costs be made and that each party bear their own costs.
D.A. Broad
Date: January 6, 2020