Brown v. Brown, 2025 ONSC 2336
Court File No.: FC-18-56046
Date: 2025-04-15
Superior Court of Justice – Ontario – Family Court
Re: Sarah Brown, Applicant
And: Wayne Douglas Brown, Respondent
Before: D.A. Jarvis
Counsel:
- Michael H. Tweyman (Agent, not on record)
- Behzad Sedghi, Counsel for the Respondent
Heard: 2025-02-18
Ruling on Costs
Introduction
On the eve of a high conflict trial, the parties signed comprehensive Minutes of Settlement which reserved the issue of costs to be determined by the court. The settlement was facilitated by a Dispute Resolution Officer and, shortly afterward, a final Order was issued. No judge was involved in the negotiations which resulted in the Minutes of Settlement being signed.
The applicant (“the wife”) seeks an all-inclusive costs award of $80,000 on a full recovery basis. The respondent (“the husband”) seeks an all-inclusive costs award of $82,182.72 on a substantial indemnity basis or, in the alternative, $66,773.56 on a partial indemnity basis or, in a further alternative, an order that each party bear their own costs.
Background
The parties were married on October 10, 2001, and separated on June 19, 2016. There are four children of the marriage.[^1] The three younger children have special needs. The wife started these proceedings on April 25, 2018, around the time that the husband left the matrimonial home.[^2] A Restraining Order was made by Douglas J. on April 27, 2018. The husband delivered an Answer and Claim. Both parties were self-represented. The Restraining Order was terminated on September 18, 2018. The wife was awarded primary residence of the children, and a parenting time schedule was ordered for the husband. The children have resided with their mother since their father left the family home.
According to the wife (not seriously disputed by the husband) the parties spent over 27 hours with two different mediators between October 2019 and March 10, 2021, in an attempt to resolve their domestic issues. One mediator (Ambrozic) authored two reports (both open). The first was dated December 11, 2020, and it summarized the parties’ partial understanding on the parenting, equalization payment and child support issues. The parties were advised to consult a lawyer. A second report was issued on March 11, 2021; it clarified and adjusted certain terms of the parties’ earlier understanding. The parties were again encouraged to consult a lawyer.
The court accepts that the husband was content with the terms of the mediation summaries, subject to obtaining legal advice. The wife proceeded to retain a lawyer (Cacciola) to prepare a Separation Agreement. Between May 2021 to October 13, 2022, the wife incurred $11,107.77 in legal costs for her lawyer’s drafting and negotiating efforts to conclude a signed agreement. During this time, the legal proceedings were held in abeyance. When no agreement could be concluded, the wife changed counsel and these proceedings were resurrected. They were vigorously contested and marked by professional conflict such that in a case conference endorsement made on December 13, 2022, Bennett J. felt it necessary to comment that the court was “extremely troubled about the fact that counsel on their own, agree that they do not get along well and apparently cannot communicate with each other” and, according to the wife’s counsel, “there was an earlier similar problem with previous counsel.”
A review of the court record discloses at least eight motions, several of which resulted in each party paying costs to the other, two case conferences, two settlement conferences, a trial scheduling conference, and an exit pre-trial conference with a Dispute Resolution Officer on November 25, 2024, that resulted in final Minutes of Settlement being signed.
The Offers to Settle and Bills of Costs
The wife delivered eight offers to settle between February 7, 2023, and November 8, 2024, none of which contained severable terms. The husband delivered thirteen offers between June 26, 2024, and November 25, 2024, the first two of which were withdrawn not too long after their service, four of the remaining seven offers contained severable terms and the terms of the other seven offers were non-severable. The husband’s last offer, which was dated earlier on the day that the parties settled, contained an amount for the aggregate payment to the wife ($325,000) which she had sought in her last offer almost three weeks before. All the parties’ offers complied with Family Law Rule 18. All the offers differed internally from their predecessors in terms of payment terms, severability, and explanatory reasons for the various terms. No offer mirrored the negotiated Minutes of Settlement (although the wife’s November 8, 2024, offer was very close to the outcome, but it contained an acceptance term that only she could request costs).
Each party submitted detailed Bills of Costs.
Each party referred the court to those aspects of their offers and accounts which they argued showed how reasonable they were and the other party unreasonable.
Before the final Order was issued, the parties requested that they be permitted to file materials well more than allowed by the CER Practice Direction. That request was denied. The order restricted submission time to two hours; there was not going to be a trial about costs.
Discussion
In Hassan v. Hassan, 2019 ONSC 1199, Akbarali J. was tasked with determining costs in circumstances where the parties had settled all their substantive issues before trial. The court reviewed the competing jurisprudence. One line of authority endorsed the approach followed by Czutrin J. in Wunsch v. Wunsch, 2013 ONSC 5208, para 11, also a case where the parties had settled their issues just before trial but could not agree on costs and consented to those being determined by the court. Czutrin J. had not had prior involvement with the case:
[11] Costs should not prevent settlement when parties can come to a reasonable settlement on all issues except costs. We should not force parties to go to trial and obtain success in order to recover disputed costs. A summary, fair, and reasonable determination of costs can encourage settlement (if costs are not part of the overall settlement). We need to find a way to address costs where costs impeded settlement.
This observation can only be viewed as aspirational since no summary approach was suggested or adopted. In his lengthy (nineteen page) ruling Czutrin J. noted that he had reviewed an arbitral award, valuation reports, financial statements, fifteen court endorsements, at least ten Offers to Settle, comparing all and then considering solicitors’ accounts before reaching conclusions about which party had acted more reasonably than the other.
The problems inherent in an aspirational approach adopted by Czutrin J. were pointedly critiqued by Leach J. in Witherspoon v. Witherspoon, 2015 ONSC 6378, para 42. In concluding that a costs determination following a settlement is fundamentally misconceived and inappropriate absent compelling reasons Leach J. reasoned that:
[42] …Moreover, attempts to address such cost issues in a post-settlement context are unlikely to promote judicial economy. Again, application of the cost rules presupposes that the court is in a position to rely on factual or other objective findings that either support or detract from the parties’ respective submissions. However, that self-evidently will not be the case where the parties rely on matters and considerations that have never been the subject of any judicial fact finding, or corresponding judicial determination on issues or reasonableness, unreasonableness, or alleged misconduct…The parties in the case before me seem to have come to such a realization either consciously or instinctively, given their respective efforts to now revisit contentious issues and evidence, and belatedly have such matters resolved in their favour in order to justify their cost positions. However, an exercise that effectively encourages and requires the parties and the court to revisit and essentially litigate such issues, which supposedly have been resolved by a substantive settlement, seems entirely and inappropriately retrograde in nature.
In Hassan, Akbarali J. contrasted the challenges presented by either approach:
[28] I agree with Czutrin J. that it can be problematic if costs are a barrier to settlement. However, I am not persuaded that attempting to address costs after a settlement is the right solution to the problem as a matter of course. As I have already reviewed, there are fundamental process problems in such cases as these. Either a judge who has not dealt with a step in an action is tasked with dealing with costs in a summary way, without a proper evidentiary foundation, or the proper evidentiary foundation is put before the judge, which risks an evidence-gathering process that may look much like the trial of the settled litigation would have looked. Which is preferable? Conclusions underpinned by findings made without evidence, or a process that leads to no or little judicial economy or savings (in time, money or stress) for the parties?
I agree with Akbarali J., as she did with Leach J., that “where parties settle as between themselves the court should be slow to award of costs and, unless there are compelling reasons to do so, costs in such circumstances should not be awarded.” This is especially so where the judge tasked with costs has had no prior involvement in the case.
In Natale v. Crupi, 2020 ONSC 8007, para 9, Himel J. observed that there is no bar to costs being sought absent an adjudicated resolution; there was a sound public policy reason why that should be permitted. But the challenge is how can costs be fairly assessed without defaulting to a trial clone involving evidence-gathering and wastage of judicial resources? Apart from “complete capitulation” on the eve of an event where there is an Offer whose terms are met, or very close to having been met, the court should decline to award costs.
It is not helpful in this case to weed through the minutiae of the parties’ ever evolving offers, serially evaluating success (or not), reasonableness (or not) and then trying to monetize those outcomes into an aggregate award. Submissions are not evidence. Even so, there are several compelling reasons to make an award in this case. These are:
(a) There was an agreement in principle reached after lengthy mediation efforts, the terms of which the husband approved but which required legal input. The mother incurred the cost of retaining a lawyer to prepare the agreement, after which the case descended into a flurry of court events. There were no submissions why the father declined to contribute to this expense.
(b) At all material times, the parties’ children were dependent on their mother. The three younger children have developmental needs. The terms of the settlement included payment of over $150,000 in child support arrears. Failure to pay proper child support is blameworthy conduct.
(c) Whether for tactical purposes (or not) the father proposed as a term of one of his offers (December 5, 2023) that a business operated by the mother had a $300,000 value. Given the parties’ circumstances, this value had no air of reality. In later offers, the value was reduced then disappeared altogether. It is not possible to make a finding of bad faith but, even so, adopting ill-conceived positions is a poor way of approaching a settlement and only productive of further conflict.
The most important factors are the inadequate child support and the domestic contract expenses incurred by the mother. In my view, adopting an overall sense of how this case devolved after mediation and considering the final settlement terms, it is my view that a fair and reasonable award to make in the circumstances is $40,000 to be paid from the father’s share of the settlement funds remaining in trust.
Justice D.A. Jarvis
Date: April 15, 2025
[^1]: The wife had an older child from a prior relationship.
[^2]: The husband lived either in the basement or garage of the home after the valuation date.