COURT FILE NO.: 148-2018
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Marie-France Ladouceur, Applicant
AND:
Alain Dupuis, Respondent
BEFORE: Justice L. Lacelle
COUNSEL: Frédéric Huard, Counsel for the Applicant Russel A. Molot, Counsel for the Respondent
HEARD: By written submissions dated January 18th, 2021 and January 25th, 2021
COSTS ENDORSEMENT
1On December 22, 2020, I ruled in favour of the Respondent on his motion (Ladouceur v. Dupuis, 2020 ONSC 8048). This is my ruling on the costs to be awarded following the motion.
The positions of the parties
The Respondent
2The Respondent seeks a costs order in the amount of $8, 772.10, which represents full indemnity for his costs, including HST. He asks that these costs be made payable forthwith.
3The Respondent argues that in advance of preparing motion materials, he served the Applicant with an offer to settle on October 16, 2020, in an effort to avoid as much expense as possible. The offer reflected the estimated annual income for the Respondent, which figure was adjusted at the time of the hearing since his actual income was known by that time. The Respondent notes that while the actual monthly support ordered is slightly less than the offer because of that income adjustment, the arrears ordered totalled $6048.00, while the Respondent had offered to settle based on arrears payable of $3000. The Respondent emphasizes Rule 24 which permits the court to award full indemnity costs from the date the offer was made to compensate for unnecessary proceedings.
4The Respondent argues that the Applicant has taken unreasonable positions in this matter and submits that just because an argument can be made does not mean that it should be. The Respondent also emphasizes that the Family Law Rules provide that the successful party is entitled to have costs paid at the end of each step.
The Applicant
5The Applicant argues that she was partially successful at the motion and accordingly, it is appropriate that she pay costs to the Respondent in the amount of $2, 500. Further, she requests that the court order that these costs will be payable once costs for this matter as a whole are determined following the trial, or as determined by agreement between the parties in Final Minutes of Settlement.
6The Applicant argues that the Respondent’s reduction in income as a result of his new position made it reasonable for her to refuse the offer to settle and proceed to a motion. Further, she says she made efforts to settle the issue by way of her own offer on December 3, 2020.
7The Applicant claims partial success on the motion because while the Respondent had requested payment of arrears forthwith, my ruling permitted the arrears to be paid at the end of the proceedings or once the parties reached an agreement.
8The Applicant emphasizes case law that cautions that courts cannot ignore the best interests of children when they make a costs award against a custodial parent, where that would seriously affect the interests of the child. The Applicant reminds the court that she is a caregiver for two children. She submits an order to pay costs at a full indemnity rate would be crushing for her financially, particularly her funds are currently tied up in the equity of the matrimonial home. The Applicant also highlights that in all previous appearances on this matter, no costs were ordered, or they have yet to be determined. Finally, the Applicant disputes the appropriateness of the Respondent’s costs, since her own Bill of Costs, including HST, totals $5, 191.78, which is a significantly lower sum.
The governing principles
9Rule 24 of the Family Law Rules governs the court’s approach to awarding costs.
10Subrule 24(1) addresses entitlement to costs and sets out the presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.
11Subrule 24 (12) provides that 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.
12Subrule 24(5) provides further direction as to how a court may determine whether a party’s behaviour has been unreasonable. It directs the court to examine the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle.
13The importance of offers to settle, and the costs consequences associated with them, are further clarified in Rule 18. Subrule (14) provides that 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 certain conditions are met. One of those conditions is that the party who makes the offer obtains an order that is as favourable or more favourable than the offer. Regardless, pursuant to subrule (16), when the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.
14Further guidance as to the factors applicable to the exercise of the court’s discretion in awarding costs is found in the jurisprudence. In Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905 (C.A.), the Court of Appeal for Ontario confirmed at para. 8 that “modern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants”.
15These principles were more recently affirmed in Mattina v. Mattina, 2018 ONCA 867 at para. 10, which also confirms that
Rule 2(2) adds a fourth fundamental purpose: to ensure that cases are dealt with justly: Family Law Rules, r. 2(2); E.H. v. O.K., 2018 ONCJ 578 (Ont. C.J.), at para. 8; Sambasivam v. Pulendrarajah, 2012 ONCJ 711 (Ont. C.J.), at para. 37. And Rule 24(12)1, which sets out factors relevant to setting the amount of costs, specifically emphasizes “reasonableness and proportionality” in any costs award.
16Ultimately, the amount of any costs award is within the court’s discretion having regard to these Rules and principles.
Analysis and Decision
17I find it is fair, reasonable and proportionate that the Applicant pay $6, 000 (plus HST) in costs to the Respondent. I arrive at that conclusion for the following reasons:
First, I find that the Respondent is entitled to a costs award. He was the successful party on the motion. I do not accept that the Respondent’s success was qualified or shared by the Applicant either because his income was adjusted to reflect his actual income, or because the court exercised its discretion to permit the arrears ordered to be paid at a later date;
A costs award serves the purpose of reinforcing that the parties must behave reasonably and try to resolve issues through negotiation. The risk of failing to negotiate is in evidence in this case, where the Respondent made an offer to settle that was more favourable to the Applicant than the court’s ultimate order. The Applicant’s offer consisted of an offer to dismiss the motion without costs. Further and more meaningful attempts to negotiate may have avoided the need to have the motion argued, and all the costs associated with that step;
The Respondent made a reasonable offer to settle the matter well in advance of the motion, which would have avoided the costs involved for both parties. Given the Rules and the circumstances, a full indemnity award from the time of the offer is fair, reasonable, and proportionate;
While the issues in the motion were not complex, their resolution required the preparation of documents, client consultation, and legal research and drafting. All the same, I note that the difference between the Bill of Costs for each party is significant – while the difference is only 5 hours of legal work by counsel (16 hours by the Respondent’s counsel vs. 11 hours by the Applicant’s), the Respondent’s Bill of Costs reflects over 18 hours of work by an articling student and a senior legal analyst, with the articling student spending 16.7 hours on the file. I tend to agree with the Applicant that the Respondent’s Bill of Costs is somewhat high given the issues in the motion, and find that costs of $6, 000 (plus HST) are more proportionate to the issues;
The rules permit me to consider any other matter that I find relevant. Here, I find that the ongoing litigation in respect of the matrimonial home and other financial issues, and the Applicant’s circumstances because of that litigation, are appropriately considered, at least in respect of when the costs ordered must be paid. Accordingly, I agree that it is appropriate that the costs award from this motion be payable following the trial of this matter or in the context of a comprehensive resolution as may be agreed to by the parties.
Conclusion
18In the result, the Applicant shall pay costs of $6000 (plus HST) to the Respondent, with the timing of the payment of those costs to be as set out above.
The Honourable Justice Laurie Lacelle
Date: March 22, 2021