Court File and Parties

COURT FILE NO.: 1456/19 DATE: 2021-06-09 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Christopher Ryan Johnson, Applicant AND: Kaylin Patricia Johnson, Respondent

BEFORE: Justice D.A. Broad

COUNSEL: Applicant – Self-represented Kanata J. Cowan, for the Respondent

COSTS ENDORSEMENT

[1] The parties have been unable to settle the issue of costs of the proceeding following the trial and the release of my Reasons for Decision on May 5, 2021.

Positions of the parties

[2] The respondent has delivered written submissions on costs. The applicant has not delivered written submissions but rather sent a brief email referred to below.

[3] The respondent submits that she was the successful party following the trial. She seeks full indemnity costs in the sum of $38,058.75 comprised of fees in the sum of $32,637.50, disbursements in the sum of $1,117.12 and HST in the sum of $4,304.13.

[4] In the alternative, the respondent seeks partial indemnity costs in the total sum of $28,838.65 comprised of fees in the sum of $24,478.13, disbursements in the sum of $1,117.12 and HST in the sum of $3,243.40.

[5] The respondent submits that she was successful in securing an order for payment by the applicant of child support and section 7 arrears and guideline child support and section 7 expenses going forward, as well as two parenting orders which the parties were unable to resolve prior to trial.

[6] The respondent submits that, as the successful party, she is entitled to an award of costs.

[7] The respondent submits that the applicant aggravated the situation by making unsupported allegations of wrongdoing on the part of the respondent, took unreasonable positions throughout the matter, complicated matters by bringing an oral motion on the last day of trial, failed to provide disclosure in a timely fashion and did not comply with previous disclosure orders or legislation respecting his obligation for disclosure. He also failed to provide a sworn Financial Statement. As a result, the respondent submits that it was impossible for her to determine the applicant’s income in advance of the trial for the proper determination of child support both retroactively and prospectively.

[8] The respondent points to the fact that, although she served four Offers to Settle, the applicant served none. She says that the applicant did not communicate that he would agree to settle the parenting provisions, with the exception of the two contentious issues that were dealt with the trial, until March 15, 2021. She submits that, as a result, she should be entitled to costs on all of the settled issues that she was forced to pursue up to two weeks prior to trial.

[9] The respondent claims costs, not only in respect of the trial attendances, but also for the Settlement Conference held August 6, 2020 and the attendance to speak to the matter on September 15, 2020, the costs of each of which were reserved. In addition, she claims costs related to the Trial Management Conference of December 22, 2020 on the basis that it formed part of the trial.

[10] As indicated above, the applicant did not provide any formal written costs submissions. He sent a brief email to the court stating as follows:

“After receiving Ms. Johnson’s request I pay for her court costs, I will not be agreeing to pay for her costs. I am not looking for Ms. Johnson to pay any of mine. I feel no responsibility to pay for her costs in a process she started instead of trying to work it out outside of court.”

Guiding Principles Respecting Costs

[11] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that "subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid."

[12] Pursuant to sub rule 24(1) of the Family Law 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), 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.) at para 42).

[13] Consideration 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 para. 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 para. 13, it was held that, for the purpose of 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.

[14] In M. (C.A.) v. M (D.) the Court of Appeal confirmed, at paras. 40-42, that:

(a) although the Family Law Rules have circumscribed the broad discretion granted by s. 131(1) of the Courts of Justice Act, they have not completely removed the trial judge's discretion;

(b) although the general provision, 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".

[15] The 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 para. 24).

[16] Importantly, 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 paras. 5 and 6 and the cases therein referred to).

[17] In the case of Beaver v. Hill, 2018 ONCA 840 the Court of Appeal has recently stressed that proportionality and reasonableness are the touchtone considerations to be applied in fixing the amount of costs in family proceedings. Moreover, a “close to full recovery” approach is inconsistent with the fact that the Family Law Rules expressly contemplate full recovery in specific circumstances, for example bad faith or besting an offer to settle (see paras. 12-13).

[18] The Court in Beaver v. Hill also noted that, while it may be appropriate in the exercise of a judge’s overriding discretion to reduce the quantum of costs that a party will have to pay because of their financial condition, the principle does not apply in the reverse so as to increase the amount of costs as a consequence of the payor’s ability to pay.

Discussion

[19] In my view, the respondent was the successful party in the proceeding and is presumptively entitled to an award of costs. The applicant has not suggested any basis on which the presumption in rule 24(1) of the Family Law Rules should be displaced.

[20] The respondent demonstrated that she was settlement-focused as evidenced by the series of Offers to Settle that she served from April 23, 2020 to March 10, 2021. I accept the respondent’s submission that the applicant failed to discharge his obligations to provide full and complete financial disclosure, which frustrated the respondent’s ability to craft Offers to Settle based upon reliable information respecting the applicant’s income for child support purposes.

[21] Although the applicant failed to fulfil his disclosure obligations, I am not satisfied that he was guilty of bad faith. Rather I find that the applicant’s failure to comply with his disclosure obligations were the result of his negligence and lack of understanding and appreciation of his obligations.

[22] The respondent does not submit that the cost consequences set forth in sub rule 18(14) of the Family Law Rules have application on the basis that she obtained an order that is as favourable as or more favourable than one or more of her Offers to Settle.

[23] Accordingly, on the authority of Beaver v. Hill, I find that an award of full indemnity costs is not warranted.

[24] As noted, the Court of Appeal in Beaver v. Hill emphasized that proportionality and reasonableness are the touchtone considerations to be applied in fixing the amount of costs in family proceedings.

[25] The applicant has not taken issue with either the hours spent by the respondent’s counsel or the hourly rates utilized in preparation of the respondent’s Costs Outline.

[26] I find that the costs claimed by the respondent as set forth in her Costs Outline are both reasonable and proportionate to the issues and their importance to the parties. The amount claimed by the respondent on a partial indemnity basis is, or should have been, within the applicant’s reasonable expectations that he be required to pay in the event that he was unsuccessful at trial.

Disposition

[27] On the basis of the foregoing, it is ordered that the applicant pay to the respondent costs of the proceeding, including the trial, fixed on a partial indemnity basis in the sum of $28,838.65. This amount shall be paid within 30 days hereof.

[28] This costs award should be designated as relating to support and is therefore enforceable by the Family Responsibility Office. A Support Deduction Order shall issue.

[29] Approval of the formal order to give effect to the foregoing by the applicant is waived.

D.A. Broad, J.

Date: June 9, 2021