Court File and Parties
Court File No.: FC-783-22 Date: 2024-05-13 Superior Court of Justice - Ontario
Re: Susan Enyedy-Goldner, Applicant And: Robert Goldner, Respondent
Before: The Honourable Mr. Justice A. Pazaratz
Counsel: Sarah Gulas, for the Applicant Malcolm Graham, for the Respondent
Heard: March 20, 2024
Costs Endorsement
[1]
Background
I have reviewed written costs submissions filed by both parties pursuant to my March 25, 2024 motion endorsement.
2The Respondent father’s March 6, 2024 motion included the following requests:
a. Spousal support retroactive to March 1, 2023.
b. Sale of the matrimonial home.
c. Home to be listed with the father’s real estate agent Parag Agarwal. Parties to accept first reasonable offer in the opinion of Agarwal. If the mother refuses an offer that is reasonable in the opinion of Agarwal, father may bring emergency motion on short notice to be given carriage of the sale.
d. Pending sale, mother to maintain home in presentable condition.
e. Abridgement of time.
f. Costs.
3The Applicant mother’s March 14, 2024 cross-motion included the following requests:
a. Father to pay child support for the parties two children in the sum of $459.00 per month commencing September 1, 2023, based on an imputed income of $30,000.00.
b. Father to pay 30% of section 7 expenses commencing September 1, 2023. In the alternative, father to pay a fixed portion of s7 expenses.
c. Costs.
4The mother asked that the father’s spousal support claim be dismissed. Basically, each party wanted to be on the receiving end of some form of support.
5At the commencement of the hearing of the motion I was advised that the parties had consented to an order that the home be sold, with a closing date not sooner than July 5, 2024. The motions in relation to particulars of the listing agreement were adjourned without a return date.
6Lengthy motion materials were filed, and the support motion was vigorously argued.
7My temporary order included the following:
a. The father was found to be entitled to spousal support. Entitlement had been disputed by the mother.
b. The mother’s request to impute income to the father was dismissed.
c. The mother was ordered to pay $2,800.00 per month spousal support.
d. Support payments commenced March 1, 2024. The father was not successful in seeking interim retroactive support back to March 1, 2023. Retroactivity was left to the trial judge.
e. The mother’s request to receive child support was dismissed.
[8]
Legal Principles
Costs rules are intended to foster four fundamental purposes:
a. To partially indemnify successful litigants;
b. To encourage settlement;
c. To discourage and sanction inappropriate behaviour by litigants; and
d. To ensure that cases are dealt with justly pursuant subrule 2(2) of the Family Law Rules ("the Rules") Mattina v. Mattina 2018 ONCA 867 (Ont CA); Serra v. Serra 2009 ONCA 395 (ON CA).
9There are generally three components to every contested costs determination: D. v. T. 2021 ONSC 4389 (SCJ)
a. Entitlement
b. Scale
c. Quantum
10Costs awards are discretionary. In exercising that discretion, the court should be mindful of two touchstone considerations: reasonableness and proportionality. Beaver v. Hill 2018 ONCA 840 (ON CA).
11Costs are an important tool to promote the efficient use of judicial resources and the orderly administration of justice. Access to the justice system by individuals must be balanced with the need to ensure that the resource is available for all those who need it. Costs can be used to sanction behaviour that increases the duration and expense of litigation, or is otherwise unreasonable or vexatious. British Columbia (Minister of Forests) v. Okanagan Indian Band 2003 SCC 71, 2003 S.C.C. 71 (SCC); Lawrence v. Lawrence 2017 ONCJ 431 (OCJ); Peladeau v Charlebois 2020 ONSC 6596 (SCJ); Pugsley v. Adamantidou, 2021 ONCJ 590 (OCJ); N.P. v. D.H., 2023 ONCJ 2 (OCJ); F.K.T. v. A.A.H., 2023 ONCJ 185 (OCJ); Ali Hassan v. Abdullah, 2023 ONCJ 186 (OCJ).
12The right to bring or respond to a case does not grant either party a license to litigate without regard to the financial and other consequences of litigation. Particularly in family court, litigants must be mindful that court proceedings are expensive, time-consuming, and stressful not only for parents but also for children and extended family. Sabo v. Sabo, [2013] O.J. No. 4628 (OCJ); DeSantis v. Hood, 2021 ONSC 5496 (SCJ); Forbes v. Forbes, 2022 ONSC 1787 (SCJ)
13Rules 18 and 24 govern the determination of costs in family law proceedings.
[14]
Analysis
Consideration of success is the starting point. Rule 24(1) creates a presumption of costs in favour of the successful party. Sims-Howarth v. Bilcliffe 2000 CanLII 22584 (SCJ).
15A person need not be successful on all issues and substantial success is sufficient to order costs. Hall v. Sabri, 2011 ONSC 6342 (SCJ); Durkin v. Cunningham, 2015 ONSC 1741(SCJ); Proulx v. Proulx, 2021 ONSC 6071 (SCJ).
[16]
Success on the Motion
In this case, the father was overwhelmingly successful on the most important and most time-consuming issues:
a. He succeeded in establishing entitlement to spousal support. Given the facts of this case, it was surprising that the mother challenged entitlement.
b. He succeeded in obtaining a significant spousal support award.
c. While the mother notes the father didn’t get as much as he asked for – and didn’t obtain an award in the “medium to high range” of the SSAG’s, as requested – the bottom line is that before he brought his motion he wasn’t receiving any spousal support, and as a result of bringing his motion he is now receiving $2,800.00 per month. That’s success.
d. The mother was unsuccessful in her alternate position that even if the father was entitled to spousal support, the amount should be significantly reduced as a result of a number of proposed calculations including imputing $30,000.00 income to the father.
e. The father was successful in resisting any imputation of income, and in resisting the mother’s claim for child support.
f. The father was unsuccessful in obtaining retroactive spousal back to March 1, 2023. But that issue remains alive. Retroactivity has been left to be dealt with at a (needlessly) lengthy trial now scheduled for September 2014.
17I am not prepared to attribute “success” to any aspect of the motion in relation to the matrimonial home.
a. The father brought a motion for the property to be sold. The mother consented. The materials did not focus on this issue, and no time was required for argument.
b. While the father complained of the mother’s delay in dealing with the house issue, as set out in my endorsement, the father himself was largely responsible for the inefficient and needlessly expensive manner in which this litigation has unfolded. Had he paid more attention to this proceeding when he was first served with an Application, many straightforward issues – like disposition of the house – could have been dealt with more quickly and less expensively.
c. The balance of the father’s motion in relation to the details of listing and marketing the home was adjourned on consent, without a return date. While I have not adjudicated those claims, my costs analysis must include determinations with respect to the reasonableness of each party’s behaviour. In relation to the matrimonial home, the father sought to strip the mother of legal rights and delegate enormous decision-making authority to his preferred real estate agent. Just as the mother shouldn’t have challenged entitlement to spousal support, the father shouldn’t have included in his Notice of Motion requests for control of the sale process which had no evidentiary basis.
[18]
Offers to Settle
One factor in determining success is to compare how the eventual order compares to any settlement offers that were made. Lawson v. Lawson 2008 CanLII 23496 (SCJ); Ajiboye v. Ajiboye 2019 ONCJ 894 (OCJ). Rule 18(14) sets out the consequences of a party's failure to accept an offer to settle that is as good or better than the hearing's result.
19The father served an offer to settle dated March 13, 2024 which does not trigger full recovery consequences pursuant to Rule 18(14):
a. He offered to “withdraw” the requests in relation to the matrimonial home. But that wasn’t the result. There was a consent order for sale, and his remaining requests in relation to the particulars of the sale process were adjourned and remain alive.
b. He requested ongoing support of $3,000.00 per month. This was slightly more than the $2,800.00 which was ordered.
c. He sought a determination of $36,000.00 in retroactive spousal support back to March 1, 2023, with a payment schedule. He did not obtain an order for any retroactive support at this time. As stated, retroactivity has been reserved to the trial judge.
d. The offer was not severable.
e. The father didn’t obtain any of the specific relief set out in his offer.
20The mother served two offers which were irrelevant to this costs analysis:
a. A March 13, 2024 offer to settle to settle the main application on a final basis. The non-severable terms are not consistent with the interim result on this motion.
b. A second March 13, 2024 offer to settle dealing with the motion. The terms were non-severable, failed to address spousal support, and included child support claims which were dismissed.
21Rule 24(6) provides that where success in a step in a case is divided, the court may exercise its discretion to order and apportion costs as appropriate.
22Comparative success can be assessed by asking some basic questions:
a. How many issues were there?
b. How did the issues compare in terms of importance, complexity and time expended?
c. Was either party predominantly successful on more of the issues?
d. Was either party more responsible for unnecessary legal costs being incurred?
Jackson v. Mayerle 2016 ONSC 1556 (SCJ); Angle v. Angle, 2024 ONSC 1758 (SCJ).
23The mother submits that no costs should be payable by either party as a result of divided success. However, I do not find that this was a situation of divided success. The father was clearly successful on the main support issues.
[24]
Reasonableness of Behaviour
Rule 24(4) provides that in some circumstances a successful party can be deprived of their costs – or even ordered to pay costs -- if they have behaved unreasonably. Ajiboye v. Ajiboye 2019 ONCJ 894(OCJ). However – apart from the father’s dubious attempt to have his chosen real estate agent take control of the house sale – I find that the father acted quite reasonably in relation to this motion.
25Rule 24(5) provides criteria for determining the reasonableness of a party’s behaviour in a case.
26Lack of success will not, in itself, attract enhanced costs. Being unsuccessful is not necessarily the same as being unreasonable. But an unsuccessful party pursuing an unreasonable legal position may be liable for enhanced costs. Climans v. Latner, 2020 ONCA 554 (Ont. C.A.); Nour v. Youssef, 2021 ONSC 5539 (SCJ); W.H.C. v. W.C.M.C., 2021 ONCJ 363 (OCJ); S.W.-S. v. R.S., 2022 ONCJ 11 (OCJ); Wauthier v. McAuliff, 2019 ONSC 5302; Rebujio v. Rosario, 2022 ONCJ 452 (OCJ); Kerr v. Moussa, 2023 ONCJ 82 (OCJ); F.K.T. v. A.A.H., 2023 ONCJ 185 (OCJ).
27The mother submits she had “no choice but to defend this motion” because she couldn’t afford to make a large retroactive spousal support payment, and she couldn’t afford the amount of ongoing support the father was demanding. Again, I disagree. If her “ability to pay” was her main concern, there were still lots of wise litigation choices the mother could have made.
a. She could have acknowledged the father’s entitlement to spousal support, without committing herself to any specific quantum or retroactivity.
b. She could have proposed that she start paying ongoing spousal support (even if quantum remained in dispute) with retroactivity to be left to the trial judge.
c. She could have offered to make a reasonable amount of ongoing spousal support.
d. She could have decided not to pursue a weak claim that income should be imputed to the father.
e. She could have avoided making an inappropriate request that she should be on the receiving end of (child) support, where there was clearly no ability to pay.
f. She could have filed a severable offer, so that each proposed term could have been accepted or rejected individually.
28Rule 24(10) establishes the general principle that the court shall promptly after dealing with a step in the case determine in a summary manner who, if anyone, is entitled to costs in relation to that step and set the amount of any costs, or alternatively shall expressly reserve the decision on costs for determination at a later stage in the case. Bortnikov v. Rakitova 2016 ONCA 427(Ont CA); Islam v. Rahman 2007 ONCA 622(Ont CA); Weber v Weber 2020 ONSC 6855 (SCJ). Particularly since these parties have scheduled a 14-day trial for September 2024, I find that it is important that they receive a timely reminder of the costs consequences of litigation.
[29]
Quantification of Costs
Having determined the father is entitled to costs, the court must consider Rule 24(12) which outlines the factors to be considered in quantifying costs:
30Rule 24(12.1) requires that any claim for costs must be supported by documentation satisfactory to the court. This generally requires a bill of costs setting out services and corresponding legal fees with sufficient particularity to allow the court to make a determination of reasonableness and proportionality.
31The father seeks costs as set out in his lawyer’s bill of costs, totalling $11,318.25.
32There is no presumption in the Rules that provides for a general approach of "close to full recovery" costs. Rules 18 and 24 expressly contemplate full recovery in only two specific circumstances:
a. Matching/exceeding an offer to settle (Rule 18(14)).
b. Bad faith (Rule 24(8)). Beaver v. Hill.
33In this case, there is no basis for “full recovery” costs.
34I have reviewed the bill of costs submitted on behalf of the father:
a. Counsel’s hourly rate ($450.00) is appropriate given the years of experience and skill with which the matter was advanced.
b. It is difficult to comment precisely on the lawyer’s time totaling 21.3 hours. I note that at least a small portion of that time may be applicable to the main application (eg. dealing with the mother’s offer to settle final terms). But without question, a lot of work was required.
c. The basis for the modest charge in relation to a law clerk (1.6 hours at $250.00 per hour) is unclear.
35Determining costs requires more than a simple mathematical totalling of how much the successful party paid their lawyer.
a. The amounts actually incurred by the successful litigant are not determinative. The Court’s role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees: Aprile v. Aprile, 2016 ONCJ 678 (OCJ); Kommineni v. Guggilam, 2022 ONCJ 191 (OCJ); Bell v. Placidi 2023 ONSC 6701 (SCJ).
b. The overall objective is to fix an amount that is fair and reasonable from the unsuccessful party’s perspective. This includes considering the amount the unsuccessful party could reasonably have expected to pay if they were unsuccessful in the litigation. Boucher v. Public Accountants Council of Ontario 2004 CanLII 14579 (Ont CA); Arthur v. Arthur, 2019 ONSC 938 (SCJ); Mussa v. Imam 2021 ONCJ 92 (OCJ); Kerr v. Moussa, 2023 ONCJ 82 (OCJ); Swaby v. Foreshaw, 2024 ONCJ 111 (OCJ).
36The mother does not dispute the father’s bill of costs. Her own lawyer’s bill of costs totals $7,170.42. Clearly, the mother should have understood that the legal fees associated with this bitterly contested motion were going to be significant for both parties.
[37]
Ability to Pay
The mother emphasizes that she cannot afford to pay significant costs, in light of her overall financial circumstances, including her obligations in relation to the children, the matrimonial home, and debts. I agree that this is a relevant factor. But I would note that those financial obligations were already taken into account when I determined that the father will be receiving less spousal support than he was requesting.
38The financial implications of legal fees - and costs orders - must be form part of the costs analysis. But this can be a complicated issue.
a. A costs order should take into consideration the ability of a party to pay costs. MacDonald v. Magel (2003) 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (Ont CA).
b. Although they are not specified in Rule 24 as factors in determining costs, the financial means of the parties, their ability to pay a costs order, and the effect of any costs ruling on the parties and the children are relevant considerations in reaching a determination on the issue of costs. Fyfe v. Jouppien 2012 ONSC 97 (SCJ); Volgemut v. Decristoforo 2022 ONSC 2520 (SCJ).
c. A party's financial circumstances cannot be used as a shield against any liability for costs. Derziyan v. Shebarin 2021 ONCJ 17 (OCJ). This admonition is particularly applicable where a party has acted unreasonably and is the author of their own misfortune. Volgemut v. Decristoforo 2022 ONSC 2520 (SCJ); Ricketts v. Ricketts, 2024 ONSC 1403 (SCJ)
d. Ability to pay will be taken into account regarding the quantum of costs. Snih v. Snih 2007 CanLII 20774 (SCJ); Dhillon v. Gill 2020 ONCJ 68 (OCJ). While difficult financial circumstances are a factor to be considered, they do not always justify depriving a successful party of costs, or reducing the amount of costs. Beaulieu v. Diotte, 2020 ONSC 6787 (SCJ); Pugsley v. Adamantidou, 2021 ONCJ 590 (OCJ); N.P. v. D.H., 2023 ONCJ 2 (OCJ).
e. Costs consequents typically have a negative impact on the unsuccessful party. Those consequences should be anticipated at the very outset of the litigation – and revisited on an ongoing basis – to encourage efficient and economical resolution. Freitas v Christopher 2021 ONSC 5233 (SCJ).
f. Parties cannot expect to be immune from an order of costs based on their lack of income or assets. If this were the case, parties would be free to conduct litigation as they wished without fear of reprisal in the form of adverse costs orders and this would be contrary to the philosophy and requirements of the Rules. Culp v. Culp 2019 ONSC 7051 (SCJ); Mark v. Bhangari 2010 ONSC 4638 (SCJ).
g. Ability to pay alone cannot, nor should it, over-ride the other factors in Rule 24(12). Peers v. Poupore 2008 ONCJ 615 (OCJ); Lawrence v. Lawrence 2017 ONCJ 431 (OCJ); Hales v. Lightfoot, 2022 ONSC 5892 (SCJ).
h. Although financial ability to pay is a factor in fixing costs, it cannot be a complete ‘defence’ to an award of costs. If it was, a party could litigate financial immunity. This result would be inconsistent with the policy of the Family Law Rules that litigants should be responsible for the positions they take in litigations. Hackett v. Leung 2005 CanLII 43354 (SCJ).
i. All family law litigants are responsible for and accountable for the positions they take in the litigation: Heuss v. Surkos 2004 ONCJ 141 (OCJ); Bernard v. Fuhgeh 2020 ONSC 4850 (SCJ); Hodgson v. Hodgson 2021 ONSC 1357 (SCJ); Capar v. Vujnovic, 2022 ONSC 5920 (SCJ); Mulik v. McFarlane, 2023 ONCJ 7 (OCJ).
j. Courts have repeatedly cautioned litigants that they cannot rely on their impecuniosity to shield themselves from cost sanctions, particularly when they have taken an unreasonable position or acted unreasonably in the conduct of the trial. McLellan v Birbilis 2022 ONSC 3467 (SCJ); Ricketts v. Ricketts, 2024 ONSC 1403 (SCJ)
k. An unsuccessful party's ability to pay must be assessed in conjunction with the successful party's ability to absorb legal fees which should not have arisen in the first place. Scipione v. Del Sordo, 2015 ONSC 5982 (SCJ); Mcdermid v. Mcdermid 2021 ONSC 8542 (SCJ).
39The mother submits that if costs of this motion are awarded, they should be fixed in the amount of $2,000.00, to match a previous $2,000.00 costs award the father, which he has never paid. This would amount to a set-off.
a. The issue of quantification of any previous costs award is not before me, and not relevant to my costs determination in relation to this motion.
b. However, I agree that if the father owes costs in relation to a previous order, those costs should be set off against any amount ordered herein.
[40]
Conclusion
Balancing all these considerations, the mother shall pay to the father costs of this motion fixed in the sum of $7,700.00 inclusive of HST and disbursements. Any previous costs order against the father shall be set off against this amount.
Date: May 13, 2024 Justice Alex Pazaratz