COURT FILE NO.: FS-19-00000109-00
DATE: 2021 11 05
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
H.R.
Applicant
- and -
P.R.
Respondent
S. Cocieru, for the Applicant
M. Conroy, for the Respondent
HEARD: In Writing.
COSTS ENDORSEMENT
DENNISON J.
[1] After a three-day trial, I determined that the parties’ son, J.R. should reside primarily with his mother, the Applicant, H.R., overturning an interim order that J.R. reside primarily with his father, the Respondent, P.R.
[2] At trial the evidence in chief of the parties was filed by way of affidavit and the parties were cross-examined. The report of the OCL was filed and the assessor was also cross-examined by both parties.
[3] I encouraged the parties to work out the issue of costs. However, if they were not able to do so, the parties were to file written submissions outlining their respective positions. I have now received the written submissions and bills of costs. These are my reasons for awarding costs to the Applicant in the amount of $28,000.
Position of the Parties
[4] The Applicant seeks costs on a full indemnity basis of $82,195.25 and on a partial indemnity basis in the amount of $61,663.93. The costs commence as of March 26, 2017 up to and including cost submissions.
[5] The Applicant submits that she made four offers to settle the outstanding issues on August 5, 2020, November 18, 2020, February 11, 2020, and July 23, 2021. She submits that all of these offers are similar to the terms ordered by the court. The parties resolved all other issues, aside from the primary residence of J.R. on June 4, 2021. The Applicant submits that she acted reasonably throughout the proceedings and did not bring any unnecessary motions before the trial. She submits that given her four prior offers to settle she is entitled to costs on a full indemnity basis.
[6] The Respondent submits that no costs should be awarded and if costs are awarded, they should not be awarded against him for more than $10,000 given his current financial situation and the behavior of the Applicant during these proceedings.
[7] The Respondent submits that he acted reasonably throughout the proceedings and that neither party was going to agree to give up primary residence with their son.
The Relevant Principles
[8] In Mattina v. Mattina, 2018 ONCA 867, the Court of Appeal confirmed that modern costs rules are designed to foster: i) partial indemnification of the cost of litigation for the successful litigants; ii) encouragement of settlement between parties; and iii) deterrence and sanctioning of inappropriate behavior by litigants. The Court also held at paragraph 10 that:
Rule 2(2) adds a fourth fundamental purpose which is to ensure that cases are dealt with justly and rule 24(1), which sets out factors relevant to setting the amount of costs, specifically emphasizes “reasonableness and proportionality” in any cost award.
[9] Rule 24(1) creates a presumption that the successful party in the proceeding is entitled to costs.
[10] The presumption that the successful party is entitled to costs does not mean that the successful party is entitled to whatever costs were incurred. The court, in assessing costs is still required to consider all relevant factors, including the factors set out in Rules 24(12), 24(4), 24(8) and Rule 18(14) in determining the appropriate award of costs.
[11] Rule 24(12) sets out a list of factors the court shall consider in determining an appropriate amount of costs:
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.
[12] The Family Law Rules only expressly contemplate full recovery costs in specific circumstances, e.g., where a party has behaved unreasonably, in bad faith or has beat an offer to settle under Rule 18(14).
[13] Rule 24(4) addresses the situation in which a successful party has behaved unreasonably. It states:
Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party’s own costs or ordered to pay all or part of the unsuccessful party’s costs.
[14] Rule 24(5) provides guidance on how to evaluate reasonableness:
In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,
the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;
the reasonableness of any offer the party made; and
any offer the party withdrew or failed to accept.
[15] Rule 24(8) discusses the cost consequences for a party who has acted in bad faith:
If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately. [Citations removed]
[16] The overall objective in determining cost is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case: see Boucher v. Public Accountants Council of Ontario, 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634 (C.A.).
Analysis
[17] The principles applied with respect to costs first require an assessment of the relative success of the parties, in light of the presumption that a successful party is entitled to costs, then consideration of scale and quantum.
[18] There is no dispute that the Applicant was the successful party at the trial as it relates to J.R.’s primary residence. I agree that I had concerns with the Applicant’s behaviour that resulted in the court imposing additional terms to ensure the Applicant fostered J.R.’s relationship with his father’s family.
[19] The parties also disagree as to whether costs should be awarded for different stages in the proceedings and who was successful at various stages where costs were to be awarded.
[20] The Applicant seeks costs for all court appearances with the exception of the August 2020 motion as set out in her bill of costs. The Respondent submits that the Applicant is not entitled to costs for all of the other steps in the proceedings. I will therefore review the various court attendances.
Case Conferences
[21] The Applicant’s bill of costs includes costs for the case conference. The Respondent submits that both parties were well prepared for the case conference and therefore no costs should be ordered for that attendance. The original case conference did not proceed on December 2, 2020 due to a filing issue. I do not have sufficient evidence before me to determine if this was the Respondent’s fault. In any event, the case conference proceeded on January 12, 2021. No costs were awarded at the case conferences. I am therefore of the view that no costs should be awarded for the case conferences.
August 2020 Motion
[22] The Applicant’s original bill of cost included costs for this motion. The Applicant filed a revised bill of costs that did not include this motion which appears to be approximately $1,000 deduction. The Respondent was granted interim primary residence of J.R. The Respondent received $1,500 in costs for that motion.
Settlement Conference
[23] The settlement conference was held on January 12, 2021. The parties were ordered to resolve all issues and a trial date would be set to deal with the issue of J.R.’s primary residency. The Respondent submits that no costs should be awarded in relation to the settlement conference as both parties were prepared. Costs are generally awarded at each step in the proceedings. There is no indication that costs for the settlement conference were to be determined by the trial judge. I therefore decline to award costs for the preparation and attendance at the settlement hearing.
Motion June 4, 2021
[24] The Applicant brough a further motion heard on June 4, 2021. She stated that this motion was necessary because the Respondent was not responding and trying to resolve the issues. The Respondent submits that he was the successful party and that he argued that the motion was res judicata. The matter was dismissed, and costs were reserved for the trial judge. The Respondent submits that he is entitled to costs for this motion. I am of the view that the Applicant is entitled to costs for this motion. In January 2021, the parties were ordered to resolve all matters aside from the primary residency of J.R. so that a trial date would be set. It should not have taken six months to agree to minutes of settlement on the other issues. The bringing of the motion resulted in matters moving forward. The Applicant had good reason to bring the motion.
Offers to Settle
[25] Determining the relative success of a party also requires an evaluation of any offers to settle, because courts are to encourage settlement: see Rules 24(5) and 24(12)(a)(iii).
[26] In this case, both parties made offers to settle that were very similar with respect to all terms except where J.R. should primarily reside. I understand the Respondent’s position that where J.R. would primarily reside would be the one term that neither party would agree to. There was no compromise in the offer to settle as it related to the primary residence of J.R.
Allegations of Bad Faith
[27] The Respondent submits the Applicant’s evidence presented at trial approaches bad faith. The court rejected the Applicant’s evidence about the toilet training issues and found that the Applicant lied when she said she told the Respondent that she was moving to Barrie before she did. I am not prepared to find the Applicant acted in bad faith, although some of her assertions at trial were not reasonable.
Ability to Pay
[28] The Respondent submits that he is in poor financial health and has to support not only J.R., but his daughter, and his two granddaughters. He is responsible for the mortgage on his property and his daughter’s property.
[29] The Respondent submits that the court should exercise its discretion to reduce the quant of costs that he has to pay because of his financial condition: See Beaver v Hill 2018 ONCA 840 at para. 18: Hamacher v. Hamacher 2000 CarwellOnt 1346.
[30] The Respondent stated that his corporation earned $18,013 in 2020. No income tax was paid by the corporation in 2020. The Respondent owns and operates a masonry company. The Respondent also filed his personal income tax returns which shows he earned $20,752.54 in 2020. In 2019, he earned approximately $35,000.
[31] The Applicant points out that the Respondent’s financial statement for the corporation states that in 2020 the corporation had gross sales of $292,145.00 and gross profits of $111,670.00 despite the fact that the income was only $18,013.00. I note that the financial statement also contains a list of considerable debt. The Applicant submits that the Respondent’s personal income tax returns do not accurately reflect his actual income because he works in the construction industry. I do not have sufficient information before me to make such a finding. Nor is it appropriate to take judicial notice of such a fact.
[32] The Applicant submits the Respondent is not financially responsible for his adult daughter and his two grand daughters and I should disregard these faces when determining costs. His name is on the mortgage and he is therefore at least financially responsible for that cost.
[33] I am of the view that the court is entitled to consider the means of the Respondent to pay costs including his current income and the mortgages he is responsible for paying. As set forth by the Court of Appeal in Boucher the overall objective of fixing cost is to fix costs in an amount that is fair and reasonable for an unsuccessful party to pay in the particular circumstances rather than an amount fixed by actual costs incurred by the successful litigant.
Quantum of Costs
[34] I must also consider the quantum of costs pursuant to Rule 24(12), which requires me to consider the time spent by each party, the legal fees and number of lawyers and their rates and any other expenses properly paid. Both parties provided the court with their bills of costs before I released my decision.
[35] As noted above, the Applicant’s bill of costs sets out all costs since the commence of the proceedings in March 2019 to the conclusion of cost submissions. The Applicant seeks full indemnity costs in the amount of $82,185.25 including disbursements of $3,085.06 and HST. This includes costs for the case conferences, settlement conference, the June 4, 2020 motion, and the trial. The bill of costs does not distinguish from the various portions of the proceedings. Counsel’s rate is $300 per hour.
[36] The court should not have to decipher what actions were done in furtherance of the trial as opposed to other matters. I am satisfied that the appropriate amount to award for the June 4, 2021 motion is $1,500. This motion was no more complex than the prior motion in August 2020, where the respondent was awarded $1,500. It is reasonable and proportionate to award costs at the same amount.
[37] With respect to the trial, the amount billed from June 8 to September 29, 2021 was approximately $37,230.00. I recognize that as the moving party on the motion to change, the Applicant did work that was related to the trial in this matter before this date.
[38] The Respondent’s bill of costs on a full recovery basis was $56,867.00 and $34,120.35 on a partial indemnity basis including disbursements of $1,130.00 and HST. This included the costs for the June 4, 2021 motion. Counsel’s hourly rate is $250.00.
[39] I find that the hourly rate charged by counsel is reasonable given their years of experience. The disbursements also appear reasonable.
[40] Two important principles in determining costs are reasonableness and proportionality. The fact that one party expends considerably more funds than the other party does not mean there are entitled to recover that sum in costs. The costs borne by each party must be proportionate and what the party would find reasonable to pay. In considering what is reasonable, the court may also consider the party’s ability to pay. This is not a case where the Respondent has excessive funds to pay costs.
[41] Each party acted reasonably in their offers to settle. The offers to settle that were similar except for the crucial issue – where should their son primarily reside. There was no way that a compromise could be arrived at on this point.
[42] After considering the principles set out in Rule 24 of the Family Law Rules and the importance of proportionality and reasonableness, I find that the Respondent is to pay the Applicant costs in the amount of $28,000.00 within 60 days of this decision.
Outstanding issue of Child Support
[43] The Applicant submits the Respondent is not paying child support. Neither party addressed the issue of child support in their submission or in their draft orders. I have no idea if the Applicant was paying child support previously.
[44] In the circumstances, the parties are encouraged to work out the issue of child support. If the parties cannot come an agreement, the parties may contact the trial coordinator’s office to schedule a date before me at 9:00 a.m. via Zoom. Each party will have 15 minutes to make oral submissions.
[45] The parties are encouraged to submit offers to settle because this is an area that should be resolved without the involvement of the court.
[46] The parties are required to file their materials in accordance with the Family Law Rules and the Family Law Practise Direction.
Dennison J.
Released: November 05, 2021
COURT FILE NO.: FS-19-00000109-00
DATE: 2021 11 05
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
H.R.
Applicant
- and -
P.R.
Respondent
COST ENDORSEMENT
Dennison J.
Released: November 05, 2021