SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: FC-17-1138
DATE: 2021/02/05
RE: Sean Smith, Applicant
AND
Brittany Reynolds, Respondent
BEFORE: Blishen J.
COUNSEL: Applicant, Self-Represented
Laura Pilon, for the Respondent
HEARD: In Writing
COSTS ENDORSEMENT
Introduction
[1] The focus of this nine-day trial was on decision-making, parenting time, and child support for the parties’ three-year-old son, Mason. Ms. Reynolds also sought life insurance to secure child support and a restraining order against Mr. Smith pursuant to s.46 of the Family Law Act, R.S.O. 1990, c.F.3, as am.
Positions of the Parties
[2] Ms. Reynolds argues that she is entitled to full indemnity costs in the amount of $65,534.12 as she was the successful party at trial, her behaviour was reasonable, while the Applicant’s was not, and she attempted to reduce trial time.
[3] Mr. Smith, who was self represented, indicates he incurred costs in the amount of $20,
741.94 and argues that each party should pay their own costs. He acknowledges he was not as successful as Ms. Reynolds but argues he was granted some parenting terms as requested and
behaved reasonably throughout the litigation while Ms. Reynolds did not. In addition, he argues a large costs award would cause him significant financial hardship.
General Principles
[4] Modern costs rules are designed to foster four fundamental purposes:
to partially indemnify successful litigants;
to encourage settlement;
to discourage and sanction inappropriate behaviour by litigants; and
to ensure that cases are dealt with justly pursuant to r. 2 (2) of the Family Law Rules
O.Reg. 114/99 as am. (FLRs). See Mattina v. Mattina, 2018 ONCA 867
[5] Pursuant to r. 24 (1) of the FLRs, there is a presumption that a successful party is entitled to costs. Consideration of success is the starting point in determining costs. See Sims-Howarth v. Bilcliffe, 2000 22584 (ON SC), [2000] O.J. No. 330 (S.C.J.-Family Court). Offers to settle are important and can be the yard stick by which to measure success. They are significant in determining both liability for costs and quantum. See Osmar v. Osmar (2000), 2000 20380 (ON SC), 8 R.F.L. (5th) 387, at para. 7 (Ont. S.C.) and Lawson
v. Lawson, 2008 23496 (ON SC), 2008 CarswellOnt 2819, at para. 7 (Ont. S.C.). In addition to a consideration of settlement offers, the position of the parties at trial should also be carefully examined.
[6] Although consideration of success is the starting point in determining costs, the successful party is not always entitled to costs. As noted by the Ontario Court of Appeal in Mattina v. Mattina:
An award of costs is subject to: the factors listed in r. 24(12), r. 24(4) pertaining to unreasonable conduct of a successful party, r. 24(8) pertaining to bad faith, r. 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party: Berta v. Berta, 2015 ONCA 918, at para. 94.
[7] Subrule 24 (6) of the FLRs provides that if there is divided success, a court may apportion costs where appropriate.
Offers to Settle
[8] Subrule 18 (14) of the FLRs states:
COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER
(14) 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 the following conditions are met:
If the offer relates to a motion, it is made at least one day before the motion date.
If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
The offer does not expire and is not withdrawn before the hearing starts.
The offer is not accepted.
The party who made the offer obtains an order that is as favourable as or more favourable than the offer. O. Reg. 114/99, r. 18 (14).
[8] Pursuant to subrule 18(16), when exercising discretion over costs, the court has may take into account any written offer to settle, the date it was made and its terms, even if subrule 18(14) does not apply.
[9] Ms. Reynolds provided Mr. Smith with three formal offers to settle, the last of which was dated September 19, 2019 and was severable. The trial commenced on October 3, 2019. The offer remained open to acceptance until one minute after the commencement of trial, provided the applicant paid $20,0000 towards the respondent’s legal costs.
[10] Ms. Reynolds obtained orders as favourable as her offers with respect to decision making, parenting time, and child support. She did not obtain a restraining order as requested at trial. She did offer to withdraw that request in her offer dated July 27, 2019 and it is not part of her final offer. Mr. Smith did not accept any of the offers to settle or parts of the severable offers.
[11] Mr. Smith sent six offers to settle. Although those offers do not strictly adhere to the criteria outlined under R.18, they may be taken into consideration pursuant to r. 18 (16). In each of the offers, Mr. Smith proposes joint custody and a close to equal shared parenting schedule.
With respect to child support, his initial offers did not indicate an amount of child support and his latter offers applied the set-off method to calculate child support, based on his request for shared parenting time. None of the orders made by the court after trial were as favourable or more favourable than any of Mr. Smith’s offers. It is clear however that Mr. Smith continued to be willing to negotiate, compromise and to attempt to resolve matters prior to trial.
[12] The court is not required to examine an offer and compare it to each term of the order and weigh with microscopic precision the equivalence of the terms. What is required is a general assessment of the compatibility of the offer as contrasted with the order. See: Wilson v. Kovale, 2016 ONSC 163.
Overall Success
[13] All of Ms. Reynolds’ offers and the position she took at trial requested orders: of sole- custody (decision making) in consultation with Mr. Smith; Mason’s primary residence to remain with her; Mr. Smith to have extensive access both while on work suspension and if he returns to employment; child support for one child as the per the Child Support Guidelines , O.Reg. 391/97 as am.; a proportionate share of special and extraordinary expenses; life insurance to secure child support and at trial she requested a restraining order.
[14] Although Mr. Smith’s offers requested orders for joint custody and shared parenting, his position at trial was for sole custody and a change in Mason’s primary residence to be with him in Cobden. In addition, at trial, he requested an order for a reduced amount of child support based on an argument of undue hardship.
[15] After trial, I made an order of sole custody (final decision making) to Ms. Reynolds with Mason’s primary residence to continue to be with her, with specified generous parenting time to Mr. Smith. I ordered Mr. Smith to pay child support as per the Guidelines and did not make a finding of undue hardship. I ordered a proportionate sharing of Mason’s extraordinary expenses and life insurance to secure the child support for Mason. I did not order a restraining order as requested by Ms. Reynolds at trial.
[16] Therefore, although Mr. Smith is correct that some of the details of the decision making process and other parenting issues were as requested by him in his draft order, there is no question that overall, without a microscope examination of each term of the offers as compared to the terms of the ultimate order, Ms. Reynolds was the successful party on the most important, time consuming and complex issues at trial. Therefore, she is entitled to costs.
Assessing the Quantum of Costs
[17] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See Beaver v. Hill, 2018 ONCA 840.
[18] Sub rule 24 (12) of the FLRs sets out the relevant factors in determining the quantum of costs:
SETTING COSTS AMOUNTS
(12) 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 t heir 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. O. Reg. 298/18, s. 14.
[19] In addition to the factors listed under r. 24 (12) an award of costs is also subject to r. 24 (4) pertaining to unreasonable conduct of a successful party, r. 24 (8) pertaining to bad faith, r. 18 (14) pertaining to offers to settle and the reasonableness of the costs sought by the successful party. See: Berta v. Berta, 2015 ONCA 918 ( at para. 94).
[20] Neither party argues bad faith in this case, but both argue that the other was unreasonable. The criteria for determining the reasonableness of the parties’ behaviour is outlined in r. 24 (5) as follows:
DECISION ON REASONABLENESS
(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,
(a) the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;
(b) the reasonableness of any offer the party made; and
(c) any offer the party withdrew or failed to accept. O. Reg. 114/99, r. 24 (5).
[21] Both parties made several offers which were detailed, comprehensive and not unreasonable. Both parties argue, however, that the other’s behaviour in relation to the issues was unreasonable.
[22] Mr. Smith argues that when represented by previous counsel, Ms. Reynolds behaviour was unreasonable in disallowing him access or any contact with Mason which required him to incur additional costs. I agree this behaviour was unreasonable. However, Ms. Reynolds has paid the costs awarded against her on the motions brought by Mr. Smith in seeking access. Her behaviour changed once she obtained new counsel and she was clearly remorseful.
[23] Ms. Reynolds argues that Mr. Smith’s behaviour was unreasonable as the trial was prolonged by his lengthy questioning and testimony on issues with little relevance and by his lack of preparation. Given the fact that Mr. Smith represented himself, some of the delays due to the nature of his questioning and testimony and his difficulties with some rules of evidence, although prolonging the trial, I do not find to meet the threshold of unreasonableness.
[24] In considering the legal fees and rates, I find the rate charged by counsel for Ms. Reynolds to be reasonable as were the disbursements. Although self-represented, Mr. Smith submitted a lengthy Bill of Costs totalling $20,741.94, outlining the work he did in preparation for trial claimed at a rate of $50 per hour.
[25] In Fong v. Chan, 1999 2052 (ON CA), 46 O.R. 3rd 330 at para 26, the Ontario Court of Appeal indicated:
“Self -represented litigants…are not entitled to costs calculated on the same basis as those of the litigant who retains counsel.”
[26] Self- represented or lay litigants should only be awarded costs if they can demonstrate they devoted time and effort to do the work ordinarily done by a lawyer and as a result, they incurred an opportunity cost by forgoing remunerative activity. See: Fong v Chan, supra and Jordan v. Stewart, [2013] O.J. No. 3707.
[27] During the trial, Mr. Smith remained suspended with pay from his employment as an OPP officer. He suffered no loss of employment income and did not have to forgo any employment opportunities in preparation for trial. In addition, his Bill of Costs requests compensation for time for learning how to conduct a trial, work which is not ordinarily done by a lawyer.
[28] I have considered Mr. Smith’s ability to pay a costs order. A party’s limited financial circumstances should not be used as a shield against any liability for costs but may be taken into consideration regarding the quantum of costs.
[29] Although not specified in subrule 24 (12), the financial means of the parties, their ability to pay a costs order and the effect of any costs ruling on the parties and the children of the family are also relevant considerations in reaching a determination on the quantum of costs. See Fyfe v. Jouppien, 2012 ONSC 97.
Conclusion
[30] Assessing costs is “not simply a mechanical exercise”. See: Delellis v. Delellis and Delellis, 2005 36447 (ON SC), [2005] O.J. No. 4345. In that case, Justice Aston indicated as follows at para 9:
Costs must be proportional to the amount in issue and the outcome. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant.
[31] There must be flexibility in examining the factors in subrule 24 (12). In this case, as previously noted Ms. Reynolds was successful overall with respect to the important and time- consuming issues of decision-making and parenting time. She was unsuccessful in her request for a restraining order.
[32] Taking into consideration all the circumstances in this case including Ms. Reynolds’ success on the important issues, the offers by both parties, the length of the trial, its importance to the parties, the time spent, and the financial circumstances of Mr. Smith, I find Ms. Reynolds entitled to 60-70% of her costs. I find a fair and reasonable costs award to be $42,000, inclusive of disbursements and HST, payable within 90 days.
Blishen J.
Date: February 5, 2021
COURT FILE NO.: FC-17-1138
DATE: 2021/02/05
ONTARIO SUPERIOR COURT OF JUSTICE
RE: Sean Smith, Applicant
AND
Britney Reynolds, Respondent
BEFORE: Blishen J.
COUNSEL: Applicant, Self-Represented
Laura Pilon, for the Respondent
COSTS ENDORSEMENT
Blishen J.
Released: February 5, 2021