COURT FILE NO.: FS-20-51

DATE: 2021-01-18

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: N., Applicant

AND:

F., Respondent

BEFORE: Conlan J.

COUNSEL: Bryan R.G. Smith / Lindsey Love-Forester / Andrew Lokan, Counsel for the Applicant

Fareen L. Jamal / Fadwa Yehia / Edward C. Conway, Counsel for the Respondent

Estée Garfin / Hera Evans, Counsel for the Ministry of the Attorney General of Ontario

ENDORSEMENT on costs

I. Introduction

The Trial and the Judgment

[1] After an eleven-day trial, this Court, in a Judgment reported at 2020 ONSC 7789, ordered that two children (four years and one year old) be returned to Dubai, United Arab Emirates, pursuant to section 40, clause 3, of the Children’s Law Reform Act, R.S.O. 1990, c. C.12, as amended.

[2] This Court held that the mother had wrongfully retained the children in Ontario after she came to Canada with them in June 2020, allegedly for a vacation.

[3] This Court held that it had no jurisdiction to determine custody and access issues for the children, and that they ought to return to Dubai, the place of their habitual residence, for those determinations to be made there.

[4] The father was, thus, entirely successful and is presumptively entitled to some costs. The parties have been unable to agree on those costs, and written submissions have been filed by each side.

[5] Time is of the essence, as an expedited appeal of the trial Judgment will be heard within just a few days of the written submissions on costs having been filed, and all counsel have urged this Court to decide the costs before that hearing date. I shall not disappoint them, however, the resulting Endorsement is necessarily relatively brief.

The Positions of the Parties on Costs

[6] The Attorney General of Ontario took no part in the costs proceeding.

The Father’s Position

[7] The father, N., the successful party, seeks costs in the total amount of $486,000.00 (including $5000.00 for the costs submissions). In terms of fees, the father seeks 60% recovery up to the date of his October 30, 2020 offer to settle, and he seeks 80% recovery after that date.

[8] The father submits that (i) although the conduct of neither party was unreasonable, the mother made certain arguments at trial and took certain positions at trial that unduly lengthened the proceeding, (ii) the time spent and rates charged by his counsel are reasonable, (iii) the disbursements incurred for the assistance of the experts retained by him are reasonable, and (iv) his position on costs adequately takes into consideration the mother’s finances, her assets, and her ability to pay.

[9] Before turning to the mother’s position on costs, more must be said about the father’s October 30, 2020 offer to settle (which is included at pages 188-191 of the written costs submissions filed on behalf of the father). That offer was properly signed by the father and his counsel. It was open until five minutes after the start of the trial. It contained three options, any one of which was open for acceptance by the mother. All three options included terms that the children be returned to Dubai, with the travel costs (including those of the mother) to be borne by the father, and the claims made by the mother in the Ontario Court proceeding being stayed. The second and third options were more detailed and contained other provisions, such as the father being required to vacate the home in Dubai so that the mother and the children could reside there upon their return. The offer provided that no costs would be payable if any of the three options was accepted before 4:00 p.m. on November 4, 2020, while acceptance of any of the three options after that deadline would result in costs being paid to the father of $100,000.00 up to the date of acceptance.

The Mother’s Position

[10] The mother, F., submits that each side should bear his/her own costs. Alternatively, she argues that a much-reduced award of costs in favour of N. would be appropriate.

[11] On a full recovery basis, F.’s costs, all-in, are $220,041.95 (family law issues) plus $74,646.08 (Constitutional Application), totalling $294,688.03.

[12] The mother submits that (i) N.’s costs are excessive and offend the principles of reasonableness and proportionality, (ii) this Court has the discretion to award no costs in this case, (iii) both parties behaved reasonably and, in particular, she did not distract the trial with obviously unmeritorious arguments, (iv) she enjoyed some success at trial, for example, in having Ms. Parker’s expert evidence ruled admissible, against the position taken by N., (v) the issues were of paramount importance to both sides and of significant complexity, (vi) she made a reasonable offer to settle on October 22, 2020, (vii) N.’s claim for costs, if successful, would cripple her financially and destroy any chance of her becoming financially self-sufficient, especially considering that she is already of limited means and will not receive any support or property settlement because she will not return to the United Arab Emirates, and, finally, (viii) she cannot be blamed for proceeding to trial as she had no alternative but to do so; she cannot return to Dubai with the children.

[13] On the issue of alleged excessiveness, the mother points to some unspecified duplication in the work performed by N.’s team of counsel and the fact that N.’s substantial indemnity costs far exceed F.’s full recovery costs, something that F. could not have reasonably anticipated. It is submitted that N. may have “over-resourced” the matter.

[14] It is noteworthy that F. does not submit that N., after trial, did not meet or exceed his October 30, 2020 offer to settle. F.’s submissions are silent on that issue.

II. Analysis

The Basic Legal Principles on Costs

[15] The successful party, the father, is presumed to be entitled to some costs – 24(1) of the Family Law Rules (“Rules”). There is nothing here, in my opinion, that would serve to displace that presumption.

[16] Quantum of costs is largely discretionary. There is no exhaustive list of factors that a court can consider in determining quantum [24(12) of the Rules], although an offer to settle and its terms are certainly relevant and shall be examined in deciding whether a party has behaved reasonably or unreasonably: 24(5) of the Rules.

[17] A party who makes an offer to settle is, unless ordered otherwise, entitled to costs to the date that the offer was served and full recovery of costs from that date, provided that certain conditions are met. One of those conditions is that the party who made the offer must have obtained an order that is as favourable or more favourable than the offer. Having said all of that, in determining the quantum of costs, the court may consider any offer to settle, regardless of whether it meets the said conditions: 18(14) and 18(16) of the Rules.

[18] Recognizing that a costs order should (i) indemnify the successful party, at least partially, (ii) encourage settlement, and (iii) disapprove of bad faith or inappropriate conduct by or on behalf of a party, the overriding objective of a costs award, it is well accepted in the jurisprudence, is to make an order that is just, and fair, and reasonable, and proportionate. All of the circumstances should be taken into account, including the reasonable expectations of the unsuccessful side and his/her ability to pay.

The Decision

[19] There are three sub-issues to every contested costs proceeding: (i) entitlement, (ii) scale, and (iii) quantum.

Entitlement to Costs

[20] There is no merit to F.’s position that there be no costs awarded. After a lengthy and hard-fought trial, both parties with multiple lawyers privately retained, the father was completely successful. To deprive him of any costs would, in my view, be a serious error.

[21] On the first question of entitlement, I find in favour of N.

Scale of Costs

[22] On the second question of the appropriate scale of costs, I find that, absent a consideration of other factors such as ability to pay on the part of the mother, N. should receive partial indemnity costs up to October 30, 2020, the date of his offer to settle described above, and full recovery of costs from that date, in accordance with 18(14) of the Rules. Without dispute by F., I am satisfied on balance that N. obtained an order after trial that is as or more favourable to him than the terms of the said offer.

[23] In the end, however, the costs award in favour of the father will amount to partial indemnity, and the reasons for that decision are explained below.

Quantum of Costs

[24] On the third issue of quantum of costs, I reject the mother’s arguments about generalized duplication of effort by N.’s counsel, and I also reject the claim that the father may have “over-resourced” the matter. The former is not borne out on a careful examination of the dockets, which I have done even though such a tedious line-by-line analysis is strongly discouraged in practice. The latter is simply not true, especially when viewed as relative to the resources employed by the mother herself.

[25] I find favour, however, with the following arguments advanced by the mother. I agree that an award of $486,000.00 in costs is far beyond anything that F. could reasonably pay and would likely be devastating for her financially. I also agree that this case was essentially an “all or nothing” battle (my expression). No matter what offer to settle had been made by N., for so long as it included a requirement that the children be returned to Dubai, it was a non-starter for F. In that sense, she cannot be blamed for proceeding to trial.

[26] At the same time, though, not much hay could have been made with F.’s offer to settle. It was better than not having offered anything at all, but it could not have reasonably been accepted by the father as it would have meant condonation of the wrongful retention of the children in Ontario and, if he wanted any relationship at all with his son and daughter, the father being forced to quit his employment and move to Ontario.

[27] In other words, a case like this one must be contrasted with most family law disputes that we deal with, where there is always room for compromise.

[28] Yes, I agree with N. that a few of the arguments made on behalf of the mother at trial were very weak, the attornment issue as one example, but on the whole I find nothing unreasonable about her conduct or the way in which her counsel litigated the case such that it would be a factor on costs: 24(5) and 24(11)(b) of the Rules.

[29] In terms of the other factors outlined in 24(11) of the Rules, I find that (a) the issues were extremely important, fairly complex, and difficult to litigate and to decide, (c) the lawyers’ rates on both sides are reasonable, (d) the time spent by counsel on both sides is reasonable, and (e) the disbursements incurred, including experts’ expenses, on both sides are reasonable.

[30] That N.’s legal costs are significantly higher than F.’s does not, by itself, make the former excessive or unreasonable. All counsel on both sides were exemplary and very helpful to this Court, though my Reasons for Judgment make clear that I was particularly impressed and persuaded by the evidence presented and the arguments advanced by counsel for the father, Mr. Smith and Mr. Lokan. N.’s investment in their services was worth every penny.

[31] Interestingly, citing the decision of the Court of Appeal for Ontario in Beaver v. Hill, 2018 ONCA 840, a case involving some of the same counsel that appeared at our trial, N. states the following at page 4, paragraph 7 of the costs submissions filed on his behalf.

7. With respect to both pre and post October 30 costs, it is recognized that although N. is entitled to costs, such costs must be considered in proportion to the issues raised in the proceeding. Notably, in a family law matter, on an appeal of a seven day motion to strike that included a constitutional challenge (but no out of court or in court questioning), the Court of Appeal found costs (in a situation where Rule 18 did not apply) should have been fixed at $200,000.

[32] I think that the $200,000.00 costs figure approved of in Beaver, supra, is a useful guidepost, though the costs in our case should be higher on account of the relative length and type of the two proceedings.

The Order

[33] This is more art than science, admittedly. What is just and fair, reasonable and proportionate, given all that we know? $250,000.00 is one such figure, I have decided.

[34] I am confident that the said figure is commensurate with what F. ought to have reasonably anticipated before the trial even started, and I am equally confident that it takes into account her financial situation and her ability to pay.

[35] This Court, therefore, orders that F. shall pay costs to N. in the total, all-inclusive amount of $250,000.00.

Conclusory Remarks

[36] I want to close by acknowledging that the within costs award may be seen as being rather stingy. I am cognizant of the fact that N. had no choice but to pour everything that he had into this case, and that the stakes could not have been much higher. After all, had the mother succeeded on the jurisdictional argument, she would have also succeeded in placing herself in the enviable position of being the sole parent in the company of the children for well more than half a year before a court in Ontario determines custody and access. Intentional or otherwise, that would have gone some distance to making F.’s litigation positions a fait accompli. That is why N. had to expend every energy to try to redress the wrongful retention of the children in Ontario.

[37] I am also aware that the Constitutional Application brought by the mother had to be vigorously opposed by N. and, if successful, would have had far-reaching consequences for not just these two children but any child who is brought by a parent from a foreign land to Ontario, leaving another parent behind.

[38] It was not unreasonable for N. to have incurred legal expenses of a half a million dollars or more, in these circumstances.

[39] Still, given the respective financial positions of the parties and F.’s ability to pay, I am not moved off the $250,000.00 figure. I remain of the view that it is fair.

(“Original signed by”)

Conlan J.

Date: January 18, 2021