Court File and Parties

Court File No.: FS-19-110 Date: 2023Apr28 Superior Court of Justice - Ontario

Re: A.P., Applicant And: J.G., Respondent

Before: Justice D.A. Broad

Counsel: Derek Janzen, for the Applicant Margaret McCarthy, for the Respondent

Costs Endorsement

[1] The parties have been unable to resolve the issue of costs and have each delivered written submissions on costs.

[2] The respondent (the “mother”) seeks costs fixed in the amount of $20,000 plus HST in the sum of $2,600 for a total of $22,600. The mother acknowledges that the outcome following trial was partially in the applicant’s (the “father”) favour, but she was nevertheless the more successful party overall. She says that her total costs on a partial indemnity basis are $31,530. The amount she claims in the sum of $20,000 represents less that two-thirds of her total partial indemnity costs.

[3] The father asserts that, although success following trial was divided, he was the more successful party. He did not specify an amount that he should be awarded for costs but submitted a Bill of Costs for the court’s consideration. The father’s Bill of Costs claims fees on a substantial indemnity basis totaling $41,850, disbursements in the sum of $769.64 and HST on fees and taxable disbursements in the sum of $5,540.55 for a total of $48,160.19.

Guiding Principles

[4] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that "subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid."

[5] Pursuant to rule 24(1) of the Family Law Rules, the successful party is presumed to be entitled to recover costs. Rule 24(11) requires the court, in setting the amount of costs, to consider a number of factors including the importance, complexity and difficulty of the issues, the reasonableness or unreasonableness of each party's behavior in the case, the lawyer's rates, the time properly spent on the case, expenses properly paid or payable, and any other relevant matter. These factors are to be applied flexibly (see M. (C.A.) v. M. (D.) (2003), 67 O.R. (3d) 181 (Ont. C.A.) at para 42).

[6] Rule 24(6) of the Family Law Rules provides that if success on a step in a case is divided, the court may apportion costs as appropriate.

[7] Rule 18(14) of the Family Law Rules provides that a party who makes an Offer to Settle at least one day prior to a motion or seven days prior to a trial, which did not expire, was not withdrawn and was not accepted, and obtains an order that is as favourable as or more favourable than the offer is entitled to costs to the date of service of the offer and full recovery of costs from that date, unless the court orders otherwise.

[8] Consideration of the relative success of the parties on the issues in the case is the starting point in determining costs (see Butty v. Butty, [2009] O.J. No. 1887 (Ont. S.C.J.) at para. 4, citing Sims-Howarth v. Bilcliffe, [2000] O.J. No. 330 (Ont. S.C.J.)). In the case of Johanns v. Fulford, 2010 ONCJ 756 (Ont. C.J.) at para. 13, it was held that, for the purpose of rule 24(1), "success" is assessed by comparing the terms of an order against the relief originally requested in the pleadings and against the terms of any offers to settle.

[9] In M. (C.A.) v. M (D.) the Court of Appeal confirmed, at paras. 40-42, that:

(a) although the Family Law Rules have circumscribed the broad discretion granted by s. 131(1) of the Courts of Justice Act, they have not completely removed the trial judge's discretion;

(b) although the general provision, rule 24(1), enacts a "presumption" that the successful party is entitled to costs of the case it does not require that the successful party is always entitled to costs;

(c) a successful party may not obtain a costs award in his or her favour even in circumstances not falling within rule 24(4);

(d) there may be circumstances aside from the unreasonableness of the successful party's conduct that rebut the presumption; and

(e) the financial situation of the parties can be taken into account in setting the amount of the costs award either under rule 24 or rule 18 pursuant to the direction in sub rule 24(11) that the court take into account "any other relevant matter".

[10] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan at para. 24).

[11] Importantly, the case law directs that a costs award must represent a fair and reasonable amount that should be paid, rather than an exact measure of the actual costs, must be consistent with what the unsuccessful party might reasonably have expected to have to pay, and must reflect some form of proportionality to the actual issues argued, rather than an unquestioned reliance on billable hours and documents created (see Mason v. Smissen, 2013 ONSC 5400 (Ont. S.C.J.) at paras. 5 and 6 and the cases therein referred to).

[12] As recently emphasized by the Court of Appeal in Beaver v. Hill, 2018 ONCA 840 at paras. 12-13, proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs in family proceedings and a "close to full recovery" approach is inconsistent with the fact that the Family Law Rules expressly contemplate full recovery in specific circumstances, e.g. bad faith under r. 24(8), or besting an offer to settle under r. 18(14).

Discussion

[13] The dispositive provisions of the Reasons for Judgment comprised some 30 separate paragraphs. Each party identified a number of specific paragraphs which they say were decided in their favour to support of their respective claim for costs.

[14] In my view looking at specific provisions of the order addressing different incidents of parenting and tallying them in an effort to determine which party was more successful is not the correct approach to determining costs in the case at bar.

[15] The Reasons for Judgment at paragraph 15 identified the fundamental differences between the parties and the predominant issues for determination by the court as follows:

(i) Parental decision-making — the mother proposes joint decision-making while the father proposes that he have sole decision-making responsibility. In submissions counsel for the father signified that he is amenable to inclusion of a duty on him to meaningfully consult with the mother on all major decisions affecting the child;

(ii) Parenting-time schedule — the mother proposes that the 2-2-3 rotating schedule in the existing temporary without prejudice Order be retained, while the father proposes that he have parenting time with the child from Sunday evening to Friday evening and the mother have parenting time each weekend from Friday evening to Sunday evening.

[16] Although the outcome respecting parental decision-making was divided as joint decision-making was ordered with the father to have final decision-making respecting educational decisions in the event of a dispute and the mother to have final decision-making in respect of medical decisions, in my view the mother was the more successful party as her overall proposal for joint decision-making and for a 2-2-3 rotating parenting-time schedule prevailed.

[17] As the more successful party the mother is presumed to be entitled to an award of costs. I find that this presumption has not been displaced.

[18] Although the parties exchanged offers to settle, rule 18(14) does not come into play as neither party obtained an order as favourable as or more favourable than their offer.

[19] In his submissions, the father did not take issue with the time expended by counsel or counsel’s hourly rate as set forth in the mother’s Bill of Costs. The father did take issue with the length of the mother’s costs submissions and the fact that they were not double-spaced and therefore not in conformity with the direction set by the court which limited submissions to four double-spaced pages exclusive of Bills and Costs and Offers to Settle.

[20] Respecting the length and presentation of the mother’s costs submissions, it is noted that the mother added a “time diary” to the end of her submissions setting forth the date and time for various pre-trial attendances by counsel. The written submissions themselves comprised four (4) pages inclusive of the title of proceedings. The line spacing of the respondent’s submissions was narrower than that of the applicant’s, but the lines were still spaced, and the text was legible. If the line spacing were widened, the submissions would still have been within the four pages allotted, excluding the title of proceedings. I am not satisfied that the presentation of the respondent’s written costs submissions is a relevant factor for the costs determination.

[21] Given the fact that the father was successful in obtaining final decision-making in respect of educational issues for the child, I find the mother’s proposal to fix her costs in the sum of $20,000 plus HST to be fair and reasonable. In comparing the father’s Bill of Costs, this amount would have been within the father’s reasonable expectations.

[22] The mother proposes that the costs award be paid by the father within 120 days.

[23] The mother requested that any costs award form part of the final court order so that the Family Responsibility Office (FRO) would be able to collect any costs from the father on the mother’s behalf.

[24] In my view it is appropriate that a portion of the costs awarded to the mother be regarded as being in respect of child support and therefore recoverable as support through FRO.

[25] Child support did not comprise a major portion of the issues in dispute and was ultimately settled by the parties. I would attribute 25% of the costs or $5,650 to the issue of child support and collectible by the Director.

Disposition

[26] In accordance with the foregoing, it is ordered as follows:

(a) the applicant shall pay costs to the respondent in the sum of $22,600 inclusive of fees disbursements and HST;

(b) of the said amount, the sum of $5,650 shall be attributable to child support and payment shall be enforced by the Director;

(c) the costs as set forth above shall be paid by the father within 120 days of the date hereof.

D.A. Broad, J. Date: April 28, 2023