Court File and Parties

COURT FILE NO.: FS-12-00034886-0002 DATE: March 21, 2022 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: LISA FORBES, Applicant AND: KENNETH FORBES, Respondent

BEFORE: Kurz J.

COUNSEL: B. Ludmer, for the Applicant K. Forbes, Self-represented

HEARD: October 6 - 8, 11 - 15, 18 - 19, 29, 2021

COSTS ENDORSEMENT

Introduction

[1] On January 24, 2022, I released my decision in this matter. I dismissed this motion to change, brought by the Applicant (“Lisa”). She moved to change the consent order of Woolcombe J. of July 24, 2017 (the “Woolcombe order”). That order terminated her child support obligations to the Respondent, Kenneth Forbes (“Ken”) regarding the parties’ youngest child, A and Ken’s indefinite term obligation to pay her spousal support. Both obligations terminated on A’s eighteenth birthday. Under the Woolcombe order, both parties were also required to attend together with A.’s counsellor, Shelly Cook, twice per year for the three following years, to discuss “parenting updates and options”. During the course of the trial in October 2021, Lisa amended her pleadings to seek relief under r. 1(8) of the Family Law Rules. Her amended claim was based on alleged 2018 and 2019 breaches of the Woolcombe order, two to three years earlier.

[2] I rejected Lisa’ claims regarding Ken’s representations just before she agreed to the terms of the Woolcombe order. I also rejected her interpretation of both the letter and spirit of that order. Instead, I found that Ken had not violated the Woolcombe order in either its letter or spirit.

[3] Ken seeks “full indemnity” costs of this proceeding, fixed at $67,000. He seeks that amount even though he was self-represented throughout this proceeding. He states that he is entitled to those costs because he retained counsel (two members of the same firm) to assist him throughout this proceeding. He seeks only the actual cost of his counsel. He states that he had no choice but to retain counsel, as he lacked the expertise to simply act on his own in the face of a very aggressive series of claims by Lisa and her counsel.

Outline of Costs Arguments

[4] Ken argues that:

1. He was the successful party and thus is presumptively entitled to the costs of this proceeding under r. 24(1).
2. Lisa engaged in unreasonable behaviour from the time that the issues arose in these proceedings: r. 24(5), 24(12)(a). He points to the fact that the first correspondence that he received from Lisa’s counsel, dated July 15, 2019, claimed that he had "committed a fundamental breach" of the Woolcombe Order. The letter continued with allegations that Ken refused to meet with Dr Cook twice per year in 2018 and 2019. Lisa’s counsel later wrote to Ken that he had “unilaterally terminated the [Cook] sessions without our client’s knowledge or consent”. I found that all of those allegations were false.
3. At para. 87 of my trial endorsement, I further found that “Lisa had rejected Ms. Cook's attempt to schedule meetings in 2018 and made clear to Ms. Cook that she did not wish any further meetings to occur." On the other hand, when the issue was raised in counsel’s correspondence, Ken arranged and attended at sessions with Ms. Cook, but Lisa failed to do so. Based on those findings, Ken argues that “ it is clear that the applicant knew all of these facts by August 2019, yet proceeded with this litigation on the basis of facts and allegations against me that she knew were a fabrication.”
4. Ken added that the transcript of the settlement conference before Woolcombe J. demonstrated that Lisa’s account of the events of that date was untrue. She asserted that she only agreed to the Woolcombe order on the basis that Ken would encourage and take active steps towards reconciliation between her and the children. I did not accept that contention. Ken continues by asserting that the trial before me was a “collateral attack” on the Woolcombe order, by reframing an order centred on finances into one about the parties’ children.
5. Ken points to my adverse credibility findings against Lisa, although he ignores the fact that I made similar ones against him.
6. Ken relies on the fact that his offer to settle called for the action to be dismissed while Lisa’s offer called for a variety of payments and penalties. It was far from my ultimate result.
7. Ken refers to one further alleged instance of unreasonable conduct on Lisa’s part: the attempt to use r. 1(8) to require him to pay spousal support. The request to add that claim for relief came only following the opening arguments stage of the trial. Ken pointed out that in Michener v Carter, 2018 ONSC 2780, a case in which Mr. Ludmer was counsel, McDermott J. found that r. 1(8) did not grant the court the jurisdiction to order a financial penalty for a breach of a court order. That remedy is reserved for a contempt motion. Yet, he argues, Lisa essentially sought a financial penalty in the form of spousal support under the rubric of r. 1(8).

[5] Lisa argues that costs, if any should be limited to $8,000 all inclusive, payable in 24 monthly installments over the next two years. She supports that argument by asserting that:

1. While the issues in this case are important, they were not overly complex;
2. I found Ken to be less than credible. She also attempts to use her costs submissions to relitigate the issues at trial, saying that Ken unreasonably berated her in the Cook meetings (a finding that I did not make). She also argues that it was reasonable for her to try to get Ken to do what she thought he had agreed to do, ignoring the fact that I rejected her claims in that regard,
3. I must fix a costs amount that is fair and reasonable in the circumstances. Full indemnity costs should only be awarded in the rarest of circumstances and only on clear and binding authority to do so.
4. Ken’s offer contained no element of compromise. It was simply to discontinue the proceeding without costs (which would have been advantageous to Lisa had she accepted). Nonetheless, she derisively describes it as “an invitation to capitulate”.
5. Lisa then defends her own offer, even thought it did not remotely approach the result at trial. She stated that all she wanted was Ken’s assistance to reconcile with the children, even though there were strong financial demands in the offer.
6. Lisa points to certain discrepancies in the bill of costs, including the claim for costs of a motion where costs were already decided; billing for work by a lawyer that could have been performed by a clerk; “excessive fees by the two lawyers assisting him (which in itself is the subject of complaint); the fact that costs of conferences were not reserved to trial (ignoring r. 24(11)), the costs of completing the costs submissions themselves (5 hours). That being said, as I will set out below, Lisa fails to offer her own bill of costs in order to allow the court to consider the issues of proportionality and reasonable expectations
7. Lisa’s ability to pay: her income was reduced to $71,000 in 2021.
8. The fact that this case is “about” children. She says this even though there are no dependant children involved in the litigation and it did not touch on either parenting arrangements or child support.

General Costs Principles

[6] The jurisdiction of this court to award costs arises from s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. That provision gives the court broad discretion to determine costs.

[7] Under r. 24(10)(a), courts are required "[p]romptly after dealing with a step in a case" to determine "in a summary manner ... who if anyone, is entitled to costs in relation to that step and set the amount of any costs".

[8] As the Ontario Court of Appeal noted in Serra v. Serra, 2009 ONCA 105, [2009] O.J. No. 432 (Ont. C.A.), at para. 8:

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: Fong v. Chan (1999), 46 O.R. (3d) 330, at para. 22.

[9] In Shute v. Shute, 2017 ONSC 4110, at para. 29, Justice Victoria Starr of the Ontario Court of Justice supplemented Serra's three costs purposes by offering a fourth that applies in family law proceedings: ensuring that the primary objective of the Family Law Rules, O. Reg 114/99, as amended ("FLR"), dealing with cases justly, is met. That finding was echoed by the Court of Appeal for Ontario in Mattina v. Mattina, 2018 ONCA 867, at para. 10, citing Fong v. Chan (1999), 46 O.R. (3d) 330 (Ont. C.A.), at para. 22.

[10] To those factors, Chappel J. of this court's Family Court add that "courts must also ensure that the law of costs does not become an impediment to the pursuit of justice... the court should also consider the importance of not unduly deterring potential litigants from pursuing legitimate claims for fear of overly burdensome costs consequences": Weber v. Weber, 2020 ONSC 6855, at para. 11.

[11] In Boucher v. Public Accountants Council for the Province of Ontario, [2004] O.J. No. 2634 (Ont. C.A.) ("Boucher"), at para. 24, the Ontario Court of Appeal concluded that costs awards should reflect "what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties."

[12] In Beaver v. Hill, 2018 ONCA 840, at para. 10, the Court of Appeal for Ontario clarified that proportionality and reasonableness, the two key factors set out in r. 24(12)(a), are the touchstone considerations to be applied in fixing the amount of costs in family law matters.

De-Emphasis on Counsel's Hourly Rates and Time Spent

[13] In Delellis v. Delellis, [2005] O.J. No. 4345 (S.C.J.), at para. 9, Justice David Aston of this court noted the emphasis on setting a "fair and reasonable" amount of costs for the unsuccessful party to pay that emerges from Boucher and the cases following it. Aston J. found that this approach has led to a de-emphasis on hourly rates and time spent by counsel as the key factor in fixing costs.

Scale of Costs

[14] In deciding costs in family law proceedings, judges are not constrained by the normal scale of costs found in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The court may increase or decrease what would ordinarily be an appropriate amount of costs based on the behaviour of the parties and the presence of absence of offers to settle (Beaver v. Hill, at para. 9). I add that there is no reference to any scale of costs in the Family Law Rules, other than the reference to “full recovery of costs” when a party’s offer is more favourable than the result, under in r. 18(14); and costs on a “full recovery basis” in r. 24(8) for bad faith.

Party Status does not Grant a License to Litigate Oblivious to the Consequences

[15] The right to bring or respond to a case does not grant either party a license to litigate in a manner that ignores the consequence of that litigation. Justice Carole Curtis of the Ontario Court of Justice emphasized this point in Sabo v. Sabo, 2013 ONCJ 4628, as follows at para. 38:

Parties to litigation must understand that court proceedings are expensive, time-consuming and stressful for all concerned. They are not designed to give individual litigants a forum for carrying on in whatever manner they may choose, oblivious to the impact of that conduct on the other side and, perhaps most importantly for the purposes of this case, oblivious to the mounting costs of the litigation...

Unaccepted Offers to Settle

[16] Rule 18 deals with offers to settle. Rule 18(1) defines the term "offer" as "an offer to settle one or more claims in a case, motion, appeal or enforcement, and includes a counter-offer." Although r. 18(1) does not explicitly define an offer as being one in writing, the rule implicitly imposes that requirement. For example, an offer under r. 18 must be signed personally by the party making the offer and by their lawyer, if any: r. 18(2).

[17] The terms of r. 18 apply even to an offer made before the case has started: r. 18(2).

[18] Sub-rules 18 (14) - (16) deal with the cost consequences of unaccepted offers to settle. They state:

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:

15. If the offer relates to a motion, it is made at least one day before the motion date.

16. 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.

17. The offer does not expire and is not withdrawn before the hearing starts.

18. The offer is not accepted.

19. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

COSTS CONSEQUENCES -- BURDEN OF PROOF

15. The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14).

COSTS -- DISCRETION OF COURT

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.

[19] Rule 18(14) requires a party to meet strict requirements regarding offers if they wish to take advantage of the opportunity to obtain full indemnity costs for the period after the offer is made.

[20] In Jackson v. Mayerle, 2016 ONSC 1556, Pazaratz J. considered the requirements for an order under r. 18(14). In order to determine whether a party has obtained a result "as favourable as or more favourable than the offer", the court need not compare the offer and the result with microscopic precision. Rather, as Pazaratz J. stated at para. 47:

To trigger full recovery costs a party must do as well or better than all the terms of any offer (or a severable section of an offer) ... The court is not required to examine each term of the offer as compared to the terms of the order and weigh with microscopic precision the equivalence of the terms. What is required is a general assessment of the overall comparability of the offer as contrasted with the order... [Citations omitted].

[21] Rule 18(16) is r. 18's basket clause for offers that may attract costs consequences. Covering "any written offer to settle", r.18(16) allows the court broad discretion regarding costs, even when the requirements of r. 18(14) are not met. But despite its broad discretionary nature, nothing in the wording of r. 18(16) obviates the requirement that an unaccepted offer must meet the r. 18 formal requirements in order to attract costs consequences.

[22] All of that said, as Lemon J. pointed out in Slongo v Slongo, 2015 ONSC 3327 (S.C.J.), (rev'd. on other grounds, 2017 ONCA 272), r. 18(14) does not require the presiding justice to allow the successful party to demand a blank cheque for his costs. The principle implicitly applies to r. 18(16) as well.

Rule 24 Factors

[23] FLR r. 24 sets out the factors that the court must consider in the exercise of its discretion regarding costs. However, the court retains its ultimate discretion to determine what costs are reasonable (C.A.M. v. D.M., at para. 43).

[24] The starting point, found in r. 24(1), is that the successful party is presumptively entitled to the costs of a motion, enforcement, case, or appeal. But that presumption is subject to the other r. 24 factors: Beaver v. Hill at para. 10. Further, as Rosenberg J.A. stated in C.A.M. v. D.M., at para. 41, r. 24(1) does not completely remove the court's discretion to refuse to grant costs to the successful party.

[25] Further, there is no presumption that the successful party in a family law proceeding is entitled to an amount approaching full or even substantial indemnity costs. The exceptions to that principle are bad faith (r. 24(8)) or besting an offer to settle (r. 18(14)), which can allow enhanced costs up to the point of full indemnity: Beaver v. Hill at paras. 11-13.

[26] While r. 18 deals with offers to settle and the consequences of their acceptance or rejection, r. 24 also looks to offers to settle as an important element in the determination of costs. It does so as a factor for determining the reasonableness and proportionality of a party's conduct in the litigation.

Analysis

[27] Ken was the successful party in this case. He succeeded in completely dismissing this motion to change, even after Lisa amended her pleadings to add a claim under r. 1(8).

[28] I agree with Ken that Lisa’s position in the litigation was unreasonable. She blamed Ken for the very conduct in which she engaged: unilaterally terminating the sessions with Ms. Cook, without admitting that it was she who had done so. She then engaged in extremely aggressive litigation that commenced when her lawyer unfairly and counter-factually claimed that he had acted badly and contrary to a court order.

[29] Lisa’s attempt to blame Ken for her failure to reconcile with her children and a breach of the Woolcombe order was the pillar on which she attempted to support the entire edifice of this litigation. She centred her claim for relief on the dubious proposition that she would be entitled to a restoration of support based on Ken’s attendance at four sessions with Ms. Cook. Of course, the fact that she refused to attend those sessions while Ken actually attended after she raised the issue, adds fuel to the argument that she acted unreasonably.

[30] When the premise of her case seemed to be insufficient following the commencement of this trial, she doubled down with a claim based on r. 1(8). She did so even though the alleged breaches took place years earlier and she did nothing about them at that time.

[31] While Lisa wants the court to accept the good faith of her motivations, arising out of the emotions she suffers from her estrangement from her children, this litigation was not the proper venue to air her grievances.

[32] While Lisa complains about the “excessive” costs billed to Ken by his counsel, she fails to offer her own bill of costs or even an indication of the amounts she actually paid to her own lawyer. It is hard for her to say that his costs requests are excessive when we do not know her own legal fees for the same trial: Goryn v. Neisner, 2015 ONCJ 309, at para. 43, Mohr v. Sweeney, 2016 ONSC 3238, at footnote 5, Hakim v. Hakim, 2020 ONSC 6587, at para. 12. Considering her counsel’s knowledge and experience, I can only surmise that she did not feel that disclosing that information would assist her costs submissions. I can further surmise that the costs claimed by Ken do not exceed her reasonable costs expectations in light of the fees that she paid to her own lawyer.

[33] I do note that Ken was self-represented. But he clearly had a great deal of assistance from counsel and is only seeking the costs of that assistance. While his forensic skills were not comparable to those of Lisa’s counsel, he was aware of the law and was able to creditably handle his case. Much of the credit likely goes to the document and trial preparation that he received from his counsel. I note as well that Ken does not seek any fee for his own preparation or trial, even though such a claim would be available, albeit at a reduced rate: Fong v. Chan, 46 O.R. (3d) 330, [1999] O.J. No. 4600 (Ont. C.A.), at para. 26; Jordan v. Stewart, 2013 ONSC 5037, citing: Izuk v. Bilousov, 2011 ONSC 7476, Jahn-Cartwright v. Cartwright, 2010 ONSC 2263, Rashid v Shaher, 2013 ONSC 738 (S.C.J.), at para. 16 and 78, Blustein v. Kromby, 2010 ONSC 1718. That fact further speaks to the reasonableness of his costs claims.

[34] That being said, Ken is not entitled to full recovery costs. His offer did not contain any element of compromise other than forgoing costs. His offer was not more favourable than the final result, save the costs element. It tied that result. However, I must acknowledge that when a proceeding is as ill-conceived as this one, it is hard to fault a litigant for refusing to offer anything more than Ken offered to Lisa. Lisa’s offer was far less reasonable than that of Ken. Thus, I can consider Ken’s offer under r. 18(16).

[35] The fact that Lisa characterizes Ken’s reasonable offer, as “an invitation to capitulate” rather than an off-ramp for costly and bootless litigation is an indication of the unreasonableness of her approach to this litigation. So too is her attempt to relitigate the issues in her costs submissions. This was not simply a matter of one party succeeding while the other did not. This proceeding should not have been brought.

[36] Lisa seeks a diminution of costs (less than 13% of actual fees paid to outside counsel) and two years to fully pay that limited percentage of costs because of her present financial circumstances. Yet she was presumably able to pay her own lawyer for this lengthy trial while Ken had to do the same for his counsel. This case was about her attempt to reclaim spousal support that she had agreed to forego. It was not about the best interests of children. Lisa owns a significant amount of rental cottage property, along with her husband. She is not a sole support.

[37] In considering Lisa’s request, I am reminded of the principle cited by McGee J. in Mohr v. Sweeney, above, at para.7, that:

An inability to pay costs cannot be used as a shield against liability. The purposes of a costs award (set out above) are no less applicable to litigants of modest means. To the contrary, those who can least afford to litigate should be most motivated to seriously pursue settlement, and avoid unnecessary proceedings.

[footnote citations omitted]

[38] I am also reminded of the parties of the comments of Justice Curtis in Sabo v. Sabo, at para. 15 above, to the effect that parties cannot litigate in a manner that is oblivious to the effect of the case on the other side.

[39] As a result, I see no reason to either diminish the costs that arise as a result of this litigation or make the costs payable in installments because of Lisa’s protestations regarding her financial status.

[40] In considering all of the factors set out above, including an enhanced level of costs for unreasonable conduct, and even the argument about double billing for a motion, I find that costs of the trial, fixed at $50,000 inclusive of disbursements and HST is fair, reasonable, proportionate and in line with Lisa’s reasonable expectations. The costs award is payable within 30 days.

“ Marvin Kurz J. ” Electronic signature of Justice Marvin Kurz Date: March 21, 2022