I. Introduction

[1] John Dosu and Lydia Dosu are parties to family law proceedings that Lydia commenced in April 2019, following their separation the previous year. This endorsement addresses the costs consequences of these proceedings, following a six-day trial with written closing submissions.

[2] At trial, the principal issues in dispute were (i) the imputation of income for support purposes arising from the parties’ properties in Africa, (ii) each party’s claim for spousal support from the other, (iii) calculation of John’s net family property (NFP) for equalization purposes, (iv) Lydia’s claim for an unequal division of marital assets and post-separation adjustments, (v) John’s claim for sale of the matrimonial home and occupation rent, resisted by Lydia who sought a vesting order relating to support arrears, and (vi) Lydia’s request to defer granting of a divorce pending resolution of property litigation in Africa.

[3] As set out in Reasons for Judgment dated September 15, 2022 (reported at 2022 ONSC 5053), I made a final order that granted some of the relief requested by each party, as outlined further below. Costs were left to be determined following written submissions.

[4] In their costs submissions, each side claims costs from the other, with John seeking $85,000 and Lydia $45,000. Each side claims to be the more successful party, measuring success by comparing the relief awarded to the parties’ positions at trial and taking into account both parties’ offers to settle. Both sides also say that they acted reasonably and the other party unreasonably, justifying a costs penalty on the other party.

[5] For the reasons below, I have concluded that both parties should bear their own costs.

II. Legal principles

[6] The determination of costs is in the court’s discretion: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131. Further direction relating to costs is provided by the rules that govern the conduct of court proceedings.

[7] Modern costs rules are designed to foster three fundamental purposes: (i) to partially indemnify successful litigants for the cost of litigation; (ii) to encourage settlement; and (iii) to discourage and sanction inappropriate behaviour by litigants: Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, at para. 8; Fong v. Chan (1999), 1999 2052 (ON CA), 46 O.R. (3d) 330 (C.A.), at para. 22. In family proceedings, there is a fourth fundamental purpose, to ensure that cases are dealt with justly: Family Law Rules, O. Reg. 114/99, r. 2(2), Mattina v. Mattina, 2018 ONCA 867, at para. 10.

[8] There is a presumption in family cases that a successful party is entitled to costs: Family Law Rules, r. 24(1). However, a successful party who has behaved unreasonably during a case may be deprived of all or part of their own costs or ordered to pay all or part of the unsuccessful party’s costs: rr. 24(4) and 24(5). If success is divided, the court may apportion costs as appropriate: r. 24(6).

[9] Consistent with r. 24(1), consideration of success is the starting point in determining costs: Sims-Howarth v. Bilcliffe (2000), 2000 22584 (ON SC), 6 R.F.L. (5th) 430 (Ont. S.C.), at para. 1. To determine whether a party has been successful, it is appropriate for the court to compare the relief granted to the party’s position in court: Sim-Howarth, at paras. 1-2; Lawson v. Lawson, 2008 23496 (Ont. S.C.), at para. 7. When determining success, there is debate in the case law as to whether the court should also consider how the relief granted compares to settlement offers made: see DeSantis v. Hood, 2021 ONSC 5496, at paras. 40-53; Sims-Howarth, at para. 9; Lawson, at para. 7. However, there is no issue that any written offer to settle is a factor to be considered in setting the amount of costs: r. 24(12)(a)(iii).

[10] Where there are multiple issues and neither party is the unequivocal winner (as in the current case), the court undertakes a “contextual analysis” to determine who the successful party is or whether success is divided. If the court concludes that there is divided success, the court “may award costs to the party who was more successful on an overall global basis or on the primary issue, subject to adjustments that it considers appropriate having regard for the lack of success on secondary issues and any other factors relating to the litigation history of the case”: Thompson v. Drummond, 2018 ONSC 4762, 13 R.F.L (8th) 92, at para. 12; DeSantis, at paras. 37-39.

[11] As a general rule, “proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs” in family law proceedings: see Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at para. 12. That principle is reflected in r. 24(12)(a), which directs the court to consider the “reasonableness and proportionality” of a number of listed factors as they relate to “the importance and complexity of the issues”. Those factors include (i) each party’s behaviour, (ii) any written offers to settle, and (iii) legal fees and expenses.

[12] When fixing costs, r. 18(14) provides additional direction that applies where a party who makes a written offer to settle obtains an order that meets the conditions set out in that rule. Those conditions include a requirement that the offering party obtains a result that is “as favourable as or more favourable than the offer.” If the conditions are met, the offering party is “entitled to costs to the date the offer was served and full recovery of costs from that date”. When fixing costs, the court may take into account any written offer to settle, whether or not r. 18(14) applies: see rr. 18(16) and 24(12)(a)(iii).

III. Analysis

[13] To assess each party’s claim that they are the successful (or more successful) party, it is helpful to summarize the key determinations made in the Reasons for Judgment.

[14] In the Reasons, I made the following determinations on the key issues outlined above: (i) I declined to impute income for support purposes to either party arising from their African properties; (ii) I dismissed both parties’ claims for spousal support against the other; (iii) in calculating John’s NFP for equalization purposes, I denied the significant marriage date deductions John proposed and substantially accepted Lydia’s NFP calculations; (iv) I denied Lydia’s claims for unequal division of marital assets and post-separation adjustments; (v) I granted John’s request that the matrimonial home be sold but did not grant his claim for occupational rent or Lydia’s claim for a vesting order; and (vi) I granted a divorce effective in 31 days, rather than accepting Lydia’s position that the divorce should be deferred pending resolution of property litigation in Africa.

[15] John argues that on an overall basis, he was clearly the more successful party in the litigation. He claims complete success on the issues of divorce, imputation of income, matrimonial home sale, vesting order and unequal division of net family property. He also claims success on the issue of spousal support, given his written offer to settle that was issued seven days before trial on the basis that neither party pay spousal support to the other. He acknowledges his lack of success relating to marriage date deductions from NFP and occupation rent and proposes a downward adjustment to the amount of costs he would otherwise have been awarded. He also relies on r. 24(4) as justifying a costs penalty to Lydia, citing her unreasonable behaviour in failing to take advantage of his offers to settle that would have severed the divorce and allowed Lydia to buy out John’s interest in the matrimonial home or provide for the property’s sale, issues on which she was unsuccessful at trial. John also relied on his November 2019 offer to exclude African properties from NFP calculations, which he says, if accepted, would have reduced the number of required financial statements and shortened the time before the court.

[16] Lydia argues that a costs award should be made in her favour, as the more successful party at trial. She further submits that if I do not agree she is the more successful party overall, I should find that success was divided and not make a costs award.

[17] In support of her position, Lydia cites her success relating to the calculation of NFP for equalization purposes, a significant trial issue. She also noted both parties’ lack of success on spousal support (the other significant trial issue), including the imputation of income relating to their African properties. She acknowledges her lack of success in her claim for unequal division of marital assets and post-separation adjustments, but also notes John’s lack of success relating to marriage date deductions and occupational rent. She submits that she did not dispute the sale of the matrimonial home but unsuccessfully sought a vesting order, which did not take up significant court time. She also argues that it was reasonable for her to request delay of a divorce order and that the issue did not take up much court time. She also disputes the relevance of John’s offers to settle in determining costs in this case (as discussed further below) and alleges other bad faith and unreasonable litigation conduct on his part that should attract negative costs consequences.

[18] As outlined further below, I have concluded that there should be no costs award in this case in favour of either party. Comparing the parties’ position at trial to the results achieved, both parties enjoyed a measure of success but also failed to obtain key relief they sought. The various offers to settle the parties made do not materially affect that assessment.

[19] On the key issue of spousal support, neither party succeeded in their claim against the other. From Lydia’s perspective, I declined to impute income to John from his African properties, which meant that her income for support purposes was higher than John’s, effectively defeating her spousal support claim. From John’s perspective, I accepted his position that his income was lower than Lydia’s but found that in the circumstances of this case the difference was not sufficient to justify a spousal support order in his favour.

[20] John argues that Lydia should bear a cost penalty for failing to accept his offer to settle the spousal support issue shortly before trial (by mutually abandoning that claim). That position ignores the fact that the time-consuming income imputation issue would still have been a trial issue. John’s income would still have to be established to determine the level of child support payable to Lydia.

[21] In his costs submissions, John argues that the time before the court relating to income imputation could have been shortened if Lydia had accepted his November 2019 offer to exclude African properties from NFP calculations. I do not see how Lydia’s accepting that offer would have made a material difference. The issue of imputed income relating to those properties would have remained a live issue even if Lydia accepted his offer. John failed to provide court-ordered disclosure relating to those properties, thereby hampering Lydia’s capacity to assess whether to pursue her income imputation claim or to make an offer to settle that and other related issues. In these circumstances, I agree with Lydia that she did not act unreasonably by failing to accept John’s offer.

[22] I also agree with Lydia that she did not act unreasonably by failing to accept John’s offers that Lydia buy out John’s interest in the matrimonial home. The evidence does not establish the extent to which John’s offers were fair to Lydia from a financial perspective given (among other things) her financial means and the equity value of the property. As well, I agree with Lydia’s assessment that other issues upon which she was unsuccessful (including the matrimonial home sale/vesting order, unequal division of marital assets and the divorce) did not incrementally add to the trial time to any material extent, given the other issues that needed to be determined. The same may be said of John’s unsuccessful claim for occupation rent but not his claim for significant marriage date deductions for equalization purposes. the latter issue only a short time before the original trial date and provided scant documentary support for his position. It remained a significant issue at trial and was resolved against him in the final order.

IV. Conclusion

[23] In summary, I conclude that the trial resulted in divided success. I do not consider it appropriate to characterize one side as being more successful than the other. Given that finding and taking into account the parties’ conduct outlined above, I find that each side should bear their own costs.

R. A. Lococo J.

Released: November 4, 2022

Dosu v. Dosu, 2022 ONSC 6205

Case Summary

I. Introduction

II. Legal principles

III. Analysis

IV. Conclusion

Counsel

Parties

Areas of Law

Fact Patterns

Issues