Court File and Parties
Court File No.: FC-19-351 Date: 2022-08-11 Superior Court of Justice – Ontario
Re: S.K. And: D.P.
Before: Justice D.J. Gordon
Counsel: Sean Johnson, for the Applicant Brent Balmer, for the Respondent
Heard: In writing
Supplementary Endorsement Re: Costs
- In my Reasons for Decision released April 20, 2022, as 2022 ONSC 2359, I invited written submissions from counsel on the issue of costs within 45 days. The timetable was subsequently amended by a consent order granted by Breithaupt Smith J. on June 21, 2022.
Issues at Trial
- The parties negotiated a settlement on the property and support issues, but not costs related to same, on the first day scheduled for trial. Thereafter, five days of trial were required to address the parenting issues along with the application of section 9, Child Support Guidelines.
Reasons for Decision
- In my Reasons for Decision, I granted a final order on the following terms:
a) respondent to have sole decision-making for healthcare after meaningful consultation with the applicant and the parties to share decision-making for all other important matters, with detailed terms;
b) applicant’s parenting time to continue as before until he relocates to the same community as the respondent; thereafter, parenting time to be equally shared with detailed terms;
c) applicant to pay child support of $504.00 monthly, to be terminated on relocation; and
d) related matters.
Request for Costs
- Mr. Johnson, counsel for the applicant, seeks a costs award on a full indemnity basis in the amount of $169,632.22. Mr. Balmer, counsel for the respondent, suggests each party should bear their own costs, save the expense incurred by his client regarding costs submissions. He seeks an award of $2,570.75, on a partial indemnity basis. Both counsel address offers to settle, success, reasonableness, and other factors in their written submissions.
Principles
The legislative authority for a costs award is section 131(1), Courts of Justice Act. Prior to the Family Law Rules coming into force, family law cases were subject to the Rules of Civil Procedure. In result, the general principle continues to be that a costs award is to be fair and reasonable and within the reasonable expectation of the parties. See: Boucher v. Public Accounts Council (Ontario), (2004) 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. C.A.).
The Family Law Rules came into effect in this court in 2004. While following the Rules of Civil Procedure in a general manner, these Rules recognized the unique features in family law. This is particularly evident in Rule 2 by identifying the primary objective. Rules 18 and 24 also altered the methodology in determining costs. There is no reference to a scale of costs in Rule 24. Rather, the court, in the exercise of its discretion, has the flexibility when addressing the relevant factors to determine a fair and reasonable costs award.
Given the new provisions, our Court of Appeal has determined such were designed to foster the following fundamental purposes:
i) To partially indemnify successful litigations;
ii) To encourage settlement; and
iii) To discourage and sanction inappropriate behaviour by litigants. See Sera v. Sera, 2009 ONCA 395.
While Rule 2(2) does not specifically address costs, the primary objective must be considered in every stage of a case. Litigants and lawyers must consider the factors involved, such as attempting to resolve disputes, litigating only what is necessary, presenting their case within a reasonable amount of time, and being focused on the issues in dispute. With the significant backlog of cases in our system, court resources have become a significant matter.
Offers to settle, reasonableness, and proportionality are core principles to be considered by a trial judge in exercising discretion as to a costs award, including whether such ought to be increased or decreased in the circumstances of the particular case. See Beaver v. Hill, 2018 ONCA 840.
Analysis
i) Full Recovery Costs – Rule 18
- Mr. Johnson submits full recovery costs are payable by the respondent on the parenting issues having regard to Rule 18. With respect, I disagree. As hereafter discussed, the offers to settle do not meet the requisite threshold.
ii) Success
- In my view, and as more specifically addressed in the following section, there was mixed success at trial having regard to the offers to settle.
iii) Offers to Settle
The applicant’s offers to settle dated February 20, 2020, and November 5, 2021, were provided with the submissions from Mr. Johnson. There is no reference in any of the material as to offers to settle by the respondent. Also concerning is the absence of offers immediately prior to trial.
The final offer to settle by the applicant was as follows:
The Applicant offers to settle all outstanding issues in these proceedings on the following terms, the numbered paragraphs of which, but not the subparagraphs of which are severable:
This Offer shall remain open until one (1) minute following the commencement of argument in the trial of this matter.
With respect to any issues settled by this Offer, costs shall be as agreed upon between the parties or as determined by the Court.
The parties shall jointly share decision-making authority for [K.P.K.]. For all areas of decision-making, except health care or a decision involving changing [K.P.K.’s] school, the Respondent shall be entitled to make a final decision in the event of disagreement. In decisions relating to health care, the parties shall follow the recommendations of any professionals treating [K.P.K.].
Neither party shall move more than 30 kilometres from the other party without the consent of the other party or a Court order.
[K.P.K.] shall transition to a fully shared parenting schedule (2-2-5-5) on a graduated schedule to be agreed upon between the parties, which shall afford the Applicant one (I) additional overnight each month until the schedule is fully shared.
There are no arrears of child support as of the date of this Offer.
Child support shall be payable on an ongoing basis as follows:
a. If the Applicant has less than 40% of the time with [K.P.K.], he shall pay child support based on an imputed income of $50,000.00.
b. If the parties have shared parenting time with [K.P.K.], no child support shall be payable by either party in view of the similarity in their incomes.
The Respondent shall pay to the Applicant $40,000.00 in full and final satisfaction of equalization and all claims for post-separation adjustments.
In the absence of an offer to settle from the respondent, reference is made to her position at trial:
a) consultation on decision-making with final authority in her favour in the event of disagreement; and
b) continue parenting time schedule with child being with applicant every Tuesday overnight, alternate Thursdays overnight, and alternate weekend and equal parenting time during non-school periods.
While the parties resolved the issue of child support, there was a dispute as to whether the existing parenting schedule met the section 9 threshold.
Neither party was completely successful at trial, having regard to the offer to settle and positions, as follows:
a) the applicant’s offer left costs outstanding;
b) contrary to the applicant’s present position, he was not successful on decision-making as, absent consent, health care or other matters may not be delegated to a non-party: See M. v. F., 2005 ONCA 277 and K.M. v. J.R., 2022 ONSC 111. Further, the role of a medical professional is to diagnose and recommend a treatment plan while the patient, or the parent, makes the ultimate decision and is entitled to seek a second opinion;
c) the applicant was successful on increasing his parenting time from slightly less than 40% to 50%; however, it was conditional on him moving to the same community where the applicant and child resided;
d) the respondent was successful on the section 9 issue;
e) the parties negotiated a settlement on child support, subject to the section 9 issue, that resulted in a payment of arrears by the applicant to the respondent;
f) the parties resolved the property issue, resulting in a payment by the respondent to the applicant in the amount of $35,000.00.
iv) Reasonableness and Proportionality
There is an interconnection between these factors. Simply put, both parties were unreasonable throughout this litigation and failed to address issues in a proportionate manner.
The applicant’s litigation expense is said to be almost $200,000.00. The respondent has incurred similar expense of approximately $55,000.00, although, she represented herself since 2021 with services provided by Mr. Balmer on a limited retainer basis, including part of the trial.
The issues in this case were not complex. The stated litigation expense bears no resemblance to what was required to address the parties dispute, even if a trial was required. The parties are of modest means. Their incomes are not sufficiently high as to warrant the expense incurred. The parties had accumulated assets prior to separation, the sale of real property likely having funded this case.
The parties allowed their personal conflict to dominate this litigation. This is unacceptable. Litigants must understand the manner of addressing disputes was fundamentally changed with the implantation of the Family Law Rules. They are required to conduct their case in accordance with the primary objective in Rule 2. As noted in Sera, supra, the Rules were designed, in part, to encourage resolution of disputes.
A resolution of financial matters, in part, occurred on the first scheduled day of trial. While it is not unusual to see a settlement at the eleventh hour, such should have been dealt with earlier. The settlement required a modest payment, hardly warranting a trial. It appears the litigation expense for each party exceeds the amount of the payment, hardly proportionate.
The parenting issues were resolvable. Absent in the time dockets provided is a reference to discussions between counsel in attempts to negotiate settlement. The appointment of the Children’s Lawyer was never considered, thus denying their child the right to be heard. Nor was there any reference to a section 30 assessment of utilizing the services of a mediator. Further, a focused settlement conference could have been scheduled prior to trial, or even a mid-trial conference, had a request been made. Such conferences are available, having regard to Rule 2.
While the parties may have been misguided as to the best interests of their child, there was no evidence to warrant a finding of bad faith.
I am not prepared to reward either party given the unreasonable manner in which this litigation occurred. An unnecessary trial means other litigations were delayed in their case.
Conclusion
- Given mixed success, and for the reasons above, I decline to award costs to either party. Each party must bear their own costs.
Further Comment
- In the event of appellate review, I feel compelled to provide further comment on the quantum of costs sought by the applicant, particularly the bill of costs, as follows:
a) there is duplication in services as a result of the involvement of different lawyers at the firm, and while such may have been required, the expense is not recoverable;
b) the time recorded is excessive having regard to the issues and the services required;
c) the hourly rates are well beyond what is reasonable. $430.00 for a lawyer called in 2018 is significantly more than that of the respondent’s counsel who was called in 2005 and exceeds the rate of many senior lawyers in this region; and
d) similarly, the hourly rate for law clerks is far too high and, as well, excessive time is claimed as, for example, during the trial when such services were not needed.
- Even if the applicant had been entitled to a cost award, it would have been difficult to determine a fair and reasonable amount on the bill of costs provided.
Released: August 11, 2022
Justice Gordon