Court File and Parties

COURT FILE NO.: FS-21-00026090 DATE: 2023-12-03

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Heather Margaret McArthur Applicant

– and –

Loc Phu Le (a.k.a. Jay Le) Respondent

Counsel: Mason Morningstar and Aiishwariya Haran (limited-scope retainer), for the Applicant, and the Applicant who was self-represented for part of the trial Kristen Normandin and Cara Senese, for the Respondent

HEARD: December 3, 2023 (in writing)

COSTS DECISION

Sharma J.

[1] On September 1, 2023, I released Judgment following a five-day trial. If parties were unable to resolve costs, parties were directed to deliver written submissions.

[2] Immediately prior to trial or mid-trial, parties resolved a holiday parenting schedule, a communication protocol, and a regular parenting schedule for the child. Remaining issues decided in my Judgment included decision-making responsibility, a determination of the parties’ income for support purposes, spousal and child support, and ownership of a dog.

[3] The Respondent was successful on all issues. Joint decision-making was ordered. A regular equal parenting schedule was implemented. The shared holiday schedule was consistent with the Respondent’s Offers to settle. The Applicant’s request for relocation was denied. On the parties’ incomes, the Respondent’s position was favoured. However, I did make findings against the Respondent with respect to his position on his previous income. I also reduced the quantum of child support that the Respondent sought be paid to him. The Applicant’s spousal support claim was dismissed.

[4] Overall, the Respondent was successful in obtaining the relief he sought. He is presumptively entitled to costs: rule 24(1) of the Family Law Rules (“FLR”).

[5] In my Judgment, I directed the Respondent to deliver cost submissions by September 22, 2023, and the Applicant to deliver responding submissions by October 13, 2023. The Respondent's submissions were delivered on time. On November 20, 2023, court staff inquired of the Applicant whether she intended to deliver responding cost submissions. On November 21, 2023, the Applicant advised court staff by email that she would not be filing cost submissions.

Respondent’s position

[6] The Respondent seeks full indemnity costs in the rounded amount of $340,000. This amount includes repayment of a cost award of $18,000 as ordered by Papageorgiou J. He argues that he achieved success as well or better than his several Offers to Settle, dated August 3, 2022, September 22, 2022, December 13, 2022, December 22, 2022, March 28, 2023, and May 12, 2023.

[7] Upon review of the Offers to Settle, I agree that he has met the criteria for full indemnity costs under Rule 18(14) of the FLR. In his Offer of September 22, 2022, the Respondent was proposing joint decision-making, just less than equal shared parenting time in favour of the Applicant, and the payment of child support to the Respondent. He also offered to provide her the opportunity to purchase the condo in which the parties lived at a discounted price, resulting in a benefit to the Applicant of $150,00. This was similar to a prior offer made on August 3, 2022. Subsequent offers made after September 22, 2022 included terms that were similar to the outcome at trial. The relevant Offers on substantive issues were all severable and open for acceptance until trial, or were superseded by new Offers to Settle with similar terms.

Analysis

[8] The modern rules respecting costs aim to foster the following four fundamental purposes: (a) to partially indemnify successful litigants for the cost of litigation; (b) to encourage settlement; (c) to discourage and sanction inappropriate behaviour by litigants; and (d) to ensure that cases are dealt with justly in accordance with the primary objective of the Family Law Rules set out in Rule 2(2). See: Ryan v. McGregor (1926), 1925 460 (ON CA), 58 O.L.R. 213 (Ont. C.A.), at p. 216; British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371 (S.C.C.); Fong v. Chan, 1999 2052 (ON CA), 1999 CarswellOnt 3955, 181 D.L.R. (4th) 614, 46 O.R. (3d) 330 (C.A.); Serra v. Serra, 2009 ONCA 395 (C.A.) and Mattina v. Mattina, 2018 ONCA 867 (C.A.)).

[9] When fixing costs, “the costs award should reflect what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful party.” See Zesta Engineering Ltd. v. Cloutier, 2022 25577 (ON CA) at para 4, cited with approval in Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA) at para 24.

[10] This case is one of the many family cases that present before this Court. One or both parties become intransigent or unreasonable in their position. As the case progresses, parties can becomes financially or emotionally entrenched and invested in their position, with reasonableness sacrificed. If an Offer to Settle has been made that is similar or beats the final Judgment, a presumption in favour of full indemnity costs results. As a result, the Court is in the unenviable position of having to make a significant cost order against the unsuccessful party. It is unenviable because the reality of the unsuccessful party's finances may be that they are unable to afford to pay the cost award. In cases involving children, it can be the children who will shoulder the burden of the cost order: Husein v. Chatoor (No. 2), 2005 ONCJ 487.

[11] In this case, the impact of legal costs on the child cuts both ways. Notwithstanding the Applicant's current income in excess of $200,000 as found in my Judgment, it will likely take years for her to pay the cost award sought by the Respondent, while also meeting her child support obligation and her own living expenses. On the flip side for the Respondent, consistent with the policy reasons underpinning rules 18 and 24 of the Family Law Rules, he should not bear the cost of unreasonable behaviour engaged by the Applicant. I found his current income to be significantly less than that of the Applicant. He will bear the burden of paying for his legal fees, caring for the parties' child, and his own living expenses.

[12] I am satisfied that the Applicant took unreasonable positions throughout the litigation and at trial. I found that she did not comply with her financial disclosure obligations, even when ordered to do so by the Court. The earliest of Offers made by the Respondent were reasonable, and the Applicant would have fared much better had she accepted any one of the Offers made. These are factors that support a full recovery cost order.

[13] The Court is shocked the Applicant did not deliver cost submissions, even after a courtesy email from court staff asking whether she intended to deliver cost submissions past the deadline. I can only assume her decision not to deliver submissions was intentional and in breach of the court ordered deadline.

[14] A significant issue at trial was the Respondent’s income. I did make negative findings with respect to his historical income. In my view, it would be unfair to pass all costs on to the Applicant, given the negative findings I made and the time spent at trial on this issue. Furthermore, even though the Applicant was late in agreeing to a shared parenting schedule (it was after much of the evidence had been received at trial), a penalty of full recovery costs would be a disincentive for parties to settle just prior to or during trial.

[15] I have considered the reasonableness of the overall costs sought by the Respondent, and whether they are what an unsuccessful litigant in similar circumstances would expect to pay. In my view, the total amount of costs sought by the Respondent is high, even on a full indemnity basis, and after factoring in the unreasonable conduct of the Applicant. I see that much of the legal work prior to trial was performed by a junior and less expensive lawyer. However, the rates of the junior and more senior lawyers are higher than an unsuccessful litigant may expect to pay.

[16] Having considered the above, I order the Applicant to pay the Respondent costs of this Application up to trial fixed in the amount of $250,000, inclusive of HST and disbursements.

[17] This cost order constitutes a "support order", as defined under s. 1(1) of the Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c.31. Unless the support order is withdrawn from the office of the Director of the Family Responsibility Office, it shall be enforced by the Director and amounts owing under this cost order shall be paid to the Director, who shall pay them to the Respondent.

[18] A Support Deduction Order shall issue.

Justice M. Sharma