COURT FILE NO.: FC-19-366
DATE: 2022/12/13
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Leighton Beacock, Applicant -and- Nicola Margaret Hayes, Respondent
BEFORE: Justice P. MacEachern
COUNSEL: Applicant, now unrepresented, previously represented by Grace Grozdana Djonin who provided cost submissions on his behalf David Howard, for the Respondent
HEARD: In Writing
costs ENDORSEMENT
Overview
[1] This is my decision on costs following the trial in this matter and my decision released on August 5, 2022.
[2] I have considered the submissions of both parties on costs.
Parties’ Positions
[3] Ms. Hayes seeks costs fixed at $13,217.06, including HST and disbursements. Her position is that she was the successful party, she acted reasonably in making multiple offers at early stages of the proceeding, and that Mr. Beacock acted unreasonably.
[4] In his submissions, Mr. Beacock does not contest that Ms. Hayes was the successful party at trial nor take issue with the reasonableness and proportionality of the fees she incurred. His position is that Ms. Hayes’s unreasonable conduct disentitles her to an award of costs and also warrants her paying his costs. Mr. Hayes also raised, in earlier submissions, that he would experience financial hardship if he had to pay cost to Ms. Hayes. He did not provide a financial statement or other evidence in support of his claim to financial hardship.
Factors in Determining Costs
[5] Modern costs rules are designed to foster four fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement; (3) to discourage and sanction inappropriate behaviour by litigants and (4) to ensure that cases are dealt with justly (Rule 2(2) of the Family Law Rules)[^1].
[6] Rule 24(12) of the Family Law Rules sets out factors relevant to setting the amount of costs, and specifically emphasizes “reasonableness and proportionality” in any costs award.
[7] There is a presumption of costs in favour of the successful party. This presumption does not, however, require that the successful party always be entitled to costs[^2]. An award of costs is subject to: the factors listed in Rule 24(12), Rule 24(4) pertaining to unreasonable conduct of a successful party, Rule 24(8) pertaining to bad faith, Rule 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party[^3].
[8] 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.
[9] 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).
[10] Rule 18(14) provides that a party is, unless the court orders otherwise, entitled to costs on a full recovery basis from the date an offer was served 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. Family Law Rules, O. Reg. 114/99, r. 18(14).
[11] Rule 24(4) addresses the situation in which a successful party has behaved unreasonably:
• 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.
[12] Rule 24(5) provides guidance on how to evaluate reasonableness:
• 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.
[13] 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.
Success
[14] Ms. Hayes was the successful party at trial and is presumptively entitled to an award of costs.
[15] Ms. Hayes’ success is illustrated by the following summary of the parties’ positions and the result:
a. Decision-making: I awarded Ms. Hayes sole decision-making, with an obligation to consult the father, which is the relief she sought. Mr. Beacock sought joint decision-making.
b. Regular parenting time: I ordered that the child continue to reside primarily with Ms. Hayes. Mr. Beacock was not successful in changing the existing regular parenting time schedule to have the child spend more time in his care under the regular schedule.
c. Holiday schedule: Mr. Beacock did not seek a specific holiday schedule at trial. I made an order for there to be a holiday schedule that was in line with Ms. Hayes’s proposed plan, with an additional week in the summer.
d. Incidental parenting orders: Mr. Beacock was not successful in the orders he sought regarding the child’s report cards, counselling, control of the child’s documents, and appointing a parenting coordinator. Ms. Hayes was not successful on the orders she sought regarding travel.
[16] The bulk of the time at trial was consumed by addressing Mr. Beacock’s allegations with respect to decision-making, and various allegations against Ms. Hayes in support of his position that he should have joint decision-making and equal parenting time. Mr. Beacock was entirely unsuccessful on these issues.
Costs Related to Parenting Issues
[17] The only issues at trial related to parenting. The parties settled the child support issues, including costs related to child support, prior to trial.
[18] There were several previous court appearances in this matter that determined costs.
[19] Costs of the May 23, 2019 urgent motion are payable in the cause, as ordered by Associate Justice Kaufman.
[20] No costs are payable for the June 25, 2019 case conference, as ordered by Associate Justice Fortier.
[21] Costs of the adjourned settlement conference on January 7, 2021 were determined by Justice Smith in his endorsement of the same date.
[22] Pursuant to Rule 24(11), I have the discretion to award costs in relation to previous court appearances, even though no order for costs was made at the time.
Actual Time Spent and Fees
[23] Ms. Hayes’ bill of costs shows total costs, inclusive of HST, of $14,164.95. This does not include the costs of the June 25, 2019, case conference, or the costs of the January 7, 2021 adjournment. This total also does not include costs related to child support, to which the parties agreed.
[24] Mr. Beacock did not take issue with the reasonableness of Ms. Hayes’ legal fees in his submissions on costs.
[25] These costs are based on Ms. Hayes’ counsel charging a heavily discounted hourly rate of $120. Her counsel has been practicing for 6 years at the time of trial. This rate is very modest and, again, heavily discounted.
[26] In comparison, Mr. Beacock’s counsel had been practicing for 1.5 years at the time of trial and charged an hourly rate of $350. Mr. Beacock’s counsel’s bill of costs for the period from approximately January of 2021 to the end of trial totals $98,558, inclusive of HST.
[27] In total, the fees incurred by Ms. Hayes are very reasonable and more than proportional given the issues and conduct involved.
Offers to Settle and Reasonableness
[28] Ms. Hayes made several offers to settle the matters in this Application. She attached six different offers made by her to her cost submissions – June 18, 2019, March 10, 2020, March 3, 2021, March 19, 2021, April 24, 2021, April 28, 2021.
[29] Mr. Beacock did not provide me with a copy of any offers he made to settle the issues in this Application. His cost submissions refer to him making an offer dated March 2, 2021, but a copy of this offer has not been provided to me. It is not disputed that Mr. Beacock did not obtain a result at trial that was as favourable, or more favourable, than his settlement offer. Ms. Hayes’, in her Reply submissions, describes Mr. Beacock’s offer as seeking joint custody (not granted) and equal parenting time (not granted). I accept this description of his offer, which mirrors the relief he was seeking at trial.
[30] Ms. Hayes seeks full indemnity costs from April 28, 2021 forward based on her offer to settle dated April 28, 2021. The April 28, 2021 offer was severable on the issues of decision-making, parenting time, and child support. Mr. Beacock accepted the child support terms.
[31] I agree that Ms. Hayes obtained a result as favourable or more favourable at trial on the parenting terms of her April 28, 2021 offer, with the exception that Mr. Beacock was awarded one extra week during the summer. However, Mr. Beacock did not seek a specific holiday schedule at trial, including a certain number of weeks, or any specific days, during the summer, and very little evidence was led at trial on this issue, or time spent on this issue.
[32] Because of the summer holiday difference, technically the April 28, 2021 offer does not qualify for full indemnity costs under Rule 18. But offers to settle are still important factors to be considered under Rule 24. Ms. Hayes’ offers demonstrate that she was reasonable in attempting to settle this matter at an early stage. As early as June 18, 2019, she offered to settle decision-making on the same terms as awarded at trial. She was also offering to settle parenting time based on the child being in Mr. Beacock’s care for two consecutive days per week, which is effectively the same time, over a two-week period (being 4 days per two-week period), as awarded at trial. At trial, the regular parenting time that was granted to Mr. Beacock was every Wednesday evening and alternate weekends, which is also roughly 4 days per two-week period.
[33] Ms. Hayes’ offers to settle are a significant consideration in determining costs and weigh heavily in favour of a higher award of costs. The offers demonstrate that Ms. Hayes was making early, reasonable, offers to settle, which is one of the fundamental purposes modern costs rules are designed to foster.
[34] I do not accept Mr. Beacock’s arguments that Ms. Hayes’ behaviour constituted “unreasonable conduct” that disentitles her to an award of costs or warrants an award that requires her to pay Mr. Beacock’s costs. Mr. Beacock argues that Ms. Hayes’ unreasonableness is demonstrated in three ways – her unreasonable settlement offers, her unreasonable requests for disclosure, and her unreasonable responses to his adjournment requests. I disagree, for the following reasons:
a. Ms. Hayes’ offers do not demonstrate unreasonable conduct. Rather they demonstrate early, reasonable efforts to settle and narrow the issues. This is particularly so in contrast to Mr. Beacock, who only refers to making one offer on March 2, 2021, that appears to have mirrored his position at trial on the parenting issues (he did not provide me with a copy of his offer).
b. I agree that Ms. Hayes’ offers do not qualify for costs under Rule 18. Mr. Beacock appears to be arguing in his cost submissions that the fact that the offer does not qualify under Rule 18 equates to the offer being “unreasonable”. This is not the case. Ms. Hayes’ offers were not unreasonable such that they disentitle Ms. Hayes to any costs or require her to pay Mr. Beacock’s costs.
c. Ms. Hayes’ requests for disclosure were not unreasonable. She requested an updated financial statement, tax returns and confirmation of current income - all of which are required under the Rules and applicable legislation and should have been provided proactively by Mr. Beacock without needing to be asked. Ms. Hayes’ requests for bank statements and confirmation of expenses were also reasonable given that Mr. Beacock declared self-employment income of $800 per month before expenses and was claiming undue hardship with respect to child support arrears. Also, Ms. Hayes’ disclosure requests related to the child support and the costs associated with child support were settled as part of the settlement of the child support issues. Costs incurred for child support do not form part of the costs being sought here by Ms. Hayes.
d. I do not find that Ms. Hayes’ response to Mr. Beacock’s adjournment requests disentitle her to costs nor warrant an award of costs against her. The costs related to Mr. Beacock’s request to adjourn the settlement conference on January 7, 2021, have already been determined by Justice Smith, and are not part of the costs being sought here. The settlement conference was adjourned because Mr. Beacock had retained counsel shortly before the conference. Justice Smith adjourned the conference but awarded Ms. Hayes $400 in costs. Ms. Hayes’s response to Mr. Beacock’s request to adjourn the trial was also reasonable. She proposed reasonable terms, being that the next trial dates be pre-emptive to Mr. Beacock, that he provide tax return information and confirmation of current income (which he is required to do under the law), that the parties request an updated OCL report, and that he address his outstanding non-compliance with the June 25, 2019 order. All of these terms were reasonable.
Mr. Beacock’s Behaviour
[35] Mr. Beacock did not provide me with a copy of his March 2, 2021 settlement offer. At trial, he insisted on joint decision-making and equal time, although ultimately sought three days per week. I accept that Mr. Beacock’s March 2, 2021 offer mirrored the relief he sought at trial, which was grounded in the aggressive, and unsupported, allegations against Ms. Hayes. I do not find that this offer demonstrates that Mr. Beacock made reasonable efforts prior to trial to settle the parenting issues.
[36] I raised concerns about Mr. Beacock’s conduct in my decision released on August 5, 2022, which I will not repeat here. This conduct is relevant to the determination of costs from the trial on the parenting issues. That a party was ultimately unsuccessful at trial on an issue does not, in and of itself, demonstrate unreasonable conduct. But in this case, when looking at the whole of the matter, including the numerous offers to settle from Ms. Hayes, the terms of those offers, and the aggressive allegations Mr. Beacock pursued against Ms. Hayes at trial (which were found to be unsupported), I agree that Mr. Beacock’s conduct was unreasonable such as to warrant a higher award of costs.
Other Factors
[37] In earlier submissions on costs, Mr. Beacock raised that he was seeking costs for the time that he lost at work, due to his attendance at court appearances and his preparation for those court appearances. These types of costs are not generally recoverable. They are considered “lost opportunity costs” that are incurred by any litigant who is a party to a court proceeding. In addition, Mr. Beacock is not entitled to costs because he was not the successful party, and neither his conduct, nor Ms. Hayes’ conduct, warrants overriding the presumption that Ms. Hayes is the party entitled to costs.
[38] Mr. Beacock also argued that an order of costs would cause him “undue hardship”. I do not accept this claim as a factor that warrants a reduction in the cost award. Mr. Beacock did not provide current financial information to support his claim, nor any explanation for what constituted his alleged “undue hardship”. His income is approximately $45,000 per year and, to the extent that he owes child support arrears, this is caused by his own failure to pay appropriate child support earlier, rather than any “undue” factors.
Disposition
[39] Taking all of the factors into consideration., I find that an order requiring Mr. Beacock to pay costs to Ms. Hayes fixed at $13,000 is reasonable and proportional, just, and furthers the purposes modern costs rules are intended to foster. These costs represent close to, but not complete, full indemnity to Ms. Hayes, which I find is just, in particular because of:
a. The overall reasonableness and proportionality of Ms. Hayes’ fees incurred.
b. Ms. Hayes’ reasonable offers to settle the matter and/or narrow the issues from an early stage, including making multiple offers to settle, both globally and severally.
c. Mr. Beacock’s failure to provide evidence of that he made reasonable offers to settle the parenting issues.
d. Mr. Beacock’s unreasonable conduct, and particularly the aggressive allegations made against Ms. Hayes at trial that were found to be unsupported; and
e. The amount of time spent at trial required to address Mr. Beacock’s unfounded allegations.
[40] I, therefore, make the following Order under the Family Law Rules:
a. Mr. Beacock shall pay costs of this Application to Ms. Hayes fixed at $13,000, inclusive of disbursements and tax, payable forthwith.
b. These costs shall bear post-judgment interest at the prescribed rate in accordance with the Courts of Justice Act.
Justice P. MacEachern
Date: Dec 13, 2022
COURT FILE NO.: FC-19-366
DATE: 2022/12/13
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Leighton Beacock, Applicant
-and-
Nicola Margaret Hayes, Respondent
BEFORE: Justice P. MacEachern
COUNSEL: Applicant, now unrepresented, previously represented by Grace Grozdana Djonin who provided cost submissions on his behalf
David Howard, for the Respondent
costs ENDORSEMENT
Justice P. MacEachern
Released: Dec. 13, 2022
[^1]: Family Law Rules, rule 2(2); Mattina v. Mattina, 2018 ONCA 867 [^2]: M.(C.A.) v. M.(D.), 2003 CanLII 18880 (ON CA), [2003] O.J. No. 3707, at para. 40 [^3]: Berta v. Berta, 2015 ONCA 918 at para. 94