Court File and Parties
Court File No.: FS-18-92806 Date: 2024 06 18 Ontario Superior Court of Justice
Between:
Saira Naroo, Applicant Dimithri Antony and Anushka Anthony for the Applicant
– and –
Naveed Naroo, Respondent Naveed Naroo, Self Represented
Endorsement on Costs
Tzimas J.
Introduction
[1] This is my endorsement on costs for the family law trial that was heard in February 2023 for seven days and then continued for an additional day in June 2023. The issues in dispute were: primary residence for three children, parenting time and decision-making, child support, s.7 expenses, and equalization.
[2] The Reasons for Judgment were released on February 5, 2024, see Naroo v. Naroo, 2024 ONSC 777. The results of the trial were mixed. On primary residence, decision-making and child support, the Applicant was by and large the successful party, although on the primary residence for the eldest child, the proposed arrangement and direction of the court amounted to a partial success for the Respondent.
[3] On parenting time, the Respondent was successful on midweek access. The schedule also built in some flexibility for pick-ups on Fridays after school, as opposed to Saturday mornings. The Respondent’s formula for parenting time, which he proposed for the Applicant had he obtained primary residence for the children, guided the court’s decision.
[4] On section 7 expenses, there was never any real disagreement. The outcome is a success for both parties.
[5] On equalization, for the reasons already discussed in my judgment, the positions were difficult to follow and were lacking in evidence. The Respondent was marginally more successful than the Applicant. Although the Applicant received a payment award, for cost purposes, she had a net loss.
[6] From the point of view of offers advanced by the parties, on residency, parenting time, and child support, the outcomes at trial were similar to the terms contained in the January 2023 offer put forward by the Applicant, which the Respondent offered back to her in his offer of February 2023. On decision-making, the Respondent would have been better off accepting the Applicant’s offers. On equalization the Respondent faired slightly better, by $6,902.50 over what the Applicant proposed in her settlement offers.
[7] Against this backdrop, and for the reasons that follow, success at trial was divided and accordingly each party will bear their own costs.
The Law
[8] The jurisdiction to award costs arises from s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. That provision gives the court a broad discretion to determine costs. Under r. 24(10)(a) of the Family Law Rules, (“the Rules”) courts are required to "[p]romptly after dealing with a step in a case" to determine "in a summary manner ... who if anyone, is entitled to costs in relation to that step and set the amount of any costs".
[9] A successful party is presumptively entitled to an award of costs per Rule 24(1), but an award is neither a recovery of every dollar spent, nor a line-by-line analysis of what was, or ought to have been incurred in legal fees.
[10] Instead, the analysis is founded on what an unsuccessful party could have reasonably expected to pay in costs. Parties are responsible for the positions that they take in litigation, and for the costs incurred by the opposing party, if those costs were incurred as a result of a party’s unreasonable litigation conduct.
[11] The purposes of a costs award are to indemnify a successful litigant who has acted reasonably to resolve the dispute or to seek an equitable outcome; to discourage and sanction inappropriate litigation behaviour, and to encourage and incentivize settlement. Rule 2(2) adds a fourth purpose, to ensure that cases are dealt with justly, see Mattina v. Mattina, 2018 ONCA 867.
[12] When setting the amount of costs, the court shall consider the factors set out in Rule 24(12):
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
vii. Any other relevant matter.
[13] In Boucher v. Public Accountants Council for the Province of Ontario, [2004] O.J. No. 2634 (Ont. C.A.) ("Boucher"), at para. 24, the Ontario Court of Appeal concluded that costs awards should reflect "what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties."
[14] In Delellis v. Delellis, [2005] O.J. No. 4345 (S.C.J.), at para. 9, Justice David Aston noted the emphasis on setting a "fair and reasonable" amount of costs for an unsuccessful party to pay that emerges from Boucher. He found that such an approach has led to a de-emphasis on hourly rates and time spent by counsel as the key factor in fixing costs.
[15] This approach was recently confirmed by the Ontario Court of Appeal in Beaver v. Hill, 2018 ONCA 840, at para. 10, in which the Court clarified that proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs in family law matters.
Analysis
[16] I have considered the submissions by both parties, including their exchange of various offers. Given what the parties were negotiating and prepared to accept and comparing it to the trial outcomes, I am very troubled that this case had to go to trial at all. At the very least, they should have tried to narrow their issues for trial. Both parties ran up extraordinary costs, they became entrenched in their positions, they lost sight of their common ground, they failed to narrow their issues in dispute, and neither was actually prepared to lead their evidence at trial efficiently. Cumulatively, a trial that should not have exceeded three days, required eight days of trial time, in addition to opening and closing submissions. To award costs in these circumstances would be to reward ill-conceived litigation strategies and behaviour.
[17] With reference to the requirements of Rule 24(12) of the Family Rules, and the circumstances to be taken into account for a costs award to be made, I make the following specific findings.
i. Each party’s behaviour
[18] The Respondent was self-represented by the time of the trial. This imported a host of procedural difficulties which contributed to the length of the trial. That said, the difficulties because of the Respondent’s unwillingness to take responsibility for his actions and confront his realities and shortcomings. His overall strategy was to find a way to avoid paying child support. If he could be awarded primary residency for the children for 60% of their time, he could seek child support from the Applicant. But in doing so, as I said in my Reasons for Judgment, he demonstrated no insight into the children’s best interest. His insistence on the issue of residency and his resentment of the Applicant contributed significantly and unnecessarily to the length of the trial.
[19] The Applicant’s behaviour in relation to the trial was not much better than the Respondent. Although I am reluctant to visit my concerns on the Applicant directly, the reality is that her counsel did not follow the requirement that the Applicant’s evidence in chief be received in affidavit form. Affidavits were filed, but the evidence was incomplete. That meant that several hours were spent during the trial for the Applicant’s evidence in chief. With reference to the trial timeline, this added 2-3 more days to the overall trial.
[20] In the result, both parties, through their respective conduct, contributed to the length of the trial. Neither party should be rewarded for behaviour whose net effect was to increase the costs of the trial.
ii. The time spent by each party
[21] The concerns related to each party’s behaviour dovetail with the concerns about the time each side spent on their case. Neither side was well prepared to confront the actual issues in dispute. With the benefit of hindsight, and with my review of the offers exchanged, there was absolutely no reason for the parties to become so entrenched in their positions concerning the primary residence for the three children. To the extent that the residency for the older child presented difficulties for both parents, the parties could have isolated that specific issue and pursued a trial of an issue. That would have saved the parties both time and costs.
[22] On equalization, neither party came prepared with properly completed NFP tables, a comparative NFP, and with the corresponding evidence to support their positions. Both had difficulties engaging with basic questions of what ought to be equalized and what was merely a post-separation debt. These shortcomings only compounded the length of the trial and necessitated an adjournment to June 2023.
iii. Any written offers to settle, including offers that do not meet the requirements of Rule 18
[23] Multiple offers were exchanged between the parties but not all of them were produced in the Costs submissions for my consideration. It is therefore very difficult to engage in any meaningful review to evaluate the differences between what was offered, their respective positions and posturing during the trial, and the ultimate trial outcomes. That said, at a very high level, the similarities between the terms of various offers, and the actual outcome, underscore the futility of the trial.
[24] In her submissions, the Applicant refers to three offers, but only in summary fashion. She is silent on the offers the Respondent served on her prior to trial. In his submissions, the Respondent references an offer from October 2022 and another dated February 22, 2023. At least he attached the offers as schedules to his submissions, making it possible to gain some insight into the proposed settlement terms. However, he offers no comment on the offers he received from the Applicant. Nor does he explain why he rejected the offer of January 2023 but then served his own offer on February 22, 2023, containing the identical terms proposed by the Applicant.
[25] Even with the limited information before me, as I take a closer look at what was going on between the parties up until the eve of trial, I make the following observations. First, it is abundantly clear that the most difficult issue between the parties rested with the situation of the primary residence for the couple’s eldest son. As early as 2021, this issue was the primary driving force to the remaining disputes, with the exception perhaps of very unrealistic calculations related to equalization. The concern crystallized in the Respondent’s Settlement Brief of October 2021. Then in his Rule 18 Offer of October 2022, the Respondent formally proposed his preferred arrangement for his son’s residency.
[26] In 2021, the eldest son would have been between 14 and 15 years old. He was just starting high school and had not yet had his disagreements with his mom and her boyfriend. Had they focused on this specific issue, they may have been able to work out an arrangement, or alternatively, pursue a one-day trial of that issue. Its determination could have saved both parties significant time and money. Certainty over the eldest son’s primary residency would have made it easier for the parties to resolve their remaining differences. Instead, the parties became entrenched, their views intractable, and the litigation ran away on them. Effectively, the parties squandered their opportunity to resolve their differences at a fraction of the legal costs they subsequently incurred.
[27] Second, having failed to settle their case, the parties did not prepare well for trial. Neither side demonstrated any insight into the strengths and weakness in their claims and positions. This problem was further compounded by the Respondent’s excessive posturing and undermined any prospect of either a reasonable settlement or a focused trial of an issue.
[28] Third, seeing how close the trial outcomes were to the various terms that were being proposed for settlement, something really went off the rails. The Applicant served an offer to settle on January 26, 2023, just weeks before the trial began. Based on the summary outline of the Applicant’s offers, the January offer was not all that different from her September 2022 offer. Although the Respondent did not accept either of them prior to the trial, his offer to settle of February 22, 2023, had identical terms to those offered by the Applicant in her January 2023 offer, with the exception of costs.
[29] But with costs being their only real difference that stood in the way of a settlement, I fail to understand why the parties would not have sought the court’s assistance to either resolve costs or obtain the court’s decision on just that issue. The parties would not have required more than an hour in submissions for the court to make a costs ruling.
[30] As for the Applicant’s criticism that the Respondent was unreasonable for giving them only a day and a half to review his offer, that rang hollow, because after all, it was the Applicant who proposed the terms in the first place; there would not have been much to review. I do recognize that the Respondent’s late offer meant that the Applicant had already incurred significant trial costs. But the parties would still have been better off had they agreed to the substantive terms and limited their disagreement to costs. Their failure to capitalize on that opportunity ought and run an efficient trial should not be rewarded with costs.
[31] Fourth, the Applicant’s comparative table concerning her costs submissions glossed over some of the nuances of the judgment, whose net effect revealed mixed results. For example, on primary residence, the judgment outcome was more nuanced than the terms contemplated by the Applicant in her offers. Although in the very short term, primary residence for all three children was left with the Applicant, in the longer term, the judgment left the prospect open for the eldest son to live with the Respondent once he completed Grade 12. Similarly with parenting time, the judgment introduced flexibility to pick-ups and added a midweek day, something the Applicant was not prepared to accept voluntarily. In the result, on this issue, the Respondent was marginally more successful than what the Applicant was prepared to offer him.
[32] On equalization, it is difficult to evaluate the proposed offers because I was never provided with a clear picture of the basis for the Applicant’s various claims. Early on, she sought an equalization payment of approximately $100,000. That claim was gradually reduced to a significantly smaller sum. The judgment awarded her an equalization payment, it clearly fell short of her aspirations; received $28,097.50 instead of the $25,000 fixed sum the Respondent offered in 2021. The associated legal costs for an award that was greater by only $3,000 simply cannot be justified.
[33] In short, the various offers, especially when compared to the parties’ trial positions and the trial outcome, underscored the parties’ divided success and the futility in their effort.
iv. Any legal fees, including the number of lawyers and their rates
[34] In her costs submissions, the Applicant filed with the court 68 pages in raw dockets, without any summary roll-up of what hours were spent on the various activities and by whom. As a preliminary observation, litigants must appreciate that it is not the court’s role to wade through dockets to figure out the accounting, to consider any duplication of effort, and to otherwise evaluate the costs claimed.
[35] By virtue of counsel’s attendance at trial, I can agree that the Applicant was represented by counsel for eight days of trial. I can also agree that counsel would have undertaken some preparation, although the suggested hours of preparation seemed at times to be incongruent with the counsel’s acquaintance with the issues. Insofar as the Respondent took issue with the Applicant’s decision to be represented by counsel, that submission is without any merit. That said, even as presented, the Applicant’s Bill of Costs suggests significant duplication of effort. Senior counsel suggested in the submissions that the Applicant’s reliance on junior counsel reduced her costs. Except that what might have been gained in reduced costs was lost in the level of counsel’s experience.
v. Any expert witness fees, including the number of experts and their rates;
[36] This consideration is not an issue for this trial.
Conclusion
[37] In light of the foregoing analysis, the success at trial was divided. Both parties must take responsibility for not settling on terms that they proposed to each other and that most significantly were similar to the terms of the judgment. They are both to shoulder the burden of having participated in a trial that either should never have gone ahead, or that should have been limited significantly to not more than two to three days. Accordingly, each party will pay for their own costs.
Tzimas J.
Released: June 18, 2024