Ontario Superior Court of Justice

Court File No.: FS-21-0227-00
Date: 2025-01-28

B E T W E E N:
R.M.
Applicant
(L. Tocheri, for the Applicant)

• and -

C.D.
Respondent
(B. Rogers, for the Respondent)

Heard: Via Written Submissions
Justice: T.J. Nieckarz

Reasons on Costs

Introduction

[1] In my Reasons for Judgment after a three-and-a-half-day trial I invited submissions from the parties regarding the issue of costs. The facts and issues for the trial, along with the reasons for my decision may be found at R.M. v. C.D., 2024 ONSC 5525.

[2] Each party seeks costs. The Applicant (Father) seeks costs in the amount of $23,972.99 (inclusive of fees, disbursements, and HST). The Respondent (Mother) seeks costs associated with the trial in the amount of $6,842 ($5,736.37 plus HST).

[3] Each party claims that the decision at trial was more favourable to them than the other. In other words, that they were the successful party. In addition, the Father claims the Mother acted in bad faith.

[4] I have considered the submissions of the parties. I find that neither party can be said to be more successful than the other. Success was divided and no costs shall be awarded.

General Principles of Costs Applicable to this Case

[5] An award of costs is a matter in the discretion of the Court by virtue of s. 131(1) of the Courts of Justice Act, which provides:

Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in the proceeding are in the discretion of the court, and the court may determine by whom and to what extent costs shall be paid.

[6] Modern family cost rules are designed 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 under r. 2(2) of the Family Law Rules, O. Reg. 114/99

(Mattina v. Mattina, 2018 ONCA 867, para 10).

[7] There are a number of specific rules from the Family Law Rules that are applicable to the arguments of the parties and my exercise of discretion in determining the costs of this case.

[8] Rule 18(14) of the Family Law Rules is as follows:

18 (14) A party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:

1. If the offer relates to a motion, it is made at least one day before the motion date.
2. If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
3. The offer does not expire and is not withdrawn before the hearing starts.
4. The offer is not accepted.
5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

[9] The burden of proving that an order is as favourable or more favourable than the offer to settle is on the party claiming the benefit of it: Rule 18(5).

[10] Even if the court determines that subrule 18(14) does not apply, the court may take into account any written offer to settle, the date it was made, and its terms.

[11] Rule 24(1) of the Family Law Rules provides that there is a presumption that a successful party is entitled to their costs.

[12] Rule 24(8) requires the court to award costs on a full recovery basis if a party is determined to have acted in bad faith.

[13] In addition to any matter deemed relevant by the court in considering the question of costs, Rule 24(12) requires the court to consider the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues:

(a) each party’s behaviour;
(b) the time spent by each party;
(c) any written offers to settle, including offers that do not meet the requirements of rule 18;
(d) any legal fees, including the number of lawyers and their rates;
(e) any expert witness fees, including the number of experts and their rates; and
(f) any other expenses properly paid or payable.

[14] In determining the amount of costs the court must also keep in mind that a costs award should represent a “fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs of the successful litigant”:
Boucher v. Public Accountants Council (Ontario);
Kamboh v. Majeed, 2021 ONSC 1465.

Success and Offers to Settle

[15] In determining whether Rule 18(14) applies, Pazaratz J., in Chomos v. Hamilton, 2016 ONSC 6232, para 19, noted that:

a. To trigger full recovery costs a party must do as well or better than all the terms of any offer (or a severable section of an offer);
b. The court is not required to examine each term of the offer as compared to the terms of the order and weigh with microscopic precision the equivalence of the terms; and
c. What is required is a general assessment of the overall comparability of the offer as contrasted with the order.

[16] The Father made no offer to settle. The Mother made two offers to settle. The first offer is a partial offer to settle, contained in the Mother’s settlement conference brief dated November 22, 2022. The second offer is a formal offer to settle all issues in the proceeding, dated February 2, 2024.

[17] The February 2024 offer, as compared to the result at trial, is as follows:

a. Parenting:
The Mother’s offer was for joint decision-making and shared parenting of the children. With respect to the two oldest children, the parenting arrangements were to be subject to their views and preferences.

At trial, the Father was successful in achieving sole decision-making authority and primary care of all three children. There were a number of other parenting provisions designed to attempt to address the high conflict nature of the relationship between the parties that were not addressed in the offers.

b. Child support and section 7 expenses:
The Mother’s offer required the Father to pay child support for the three children based on shared parenting of the children and s. 9 of the Guidelines. Retroactive support was fixed at $23,196. Ongoing s. 7 expenses were to be paid 90% by the Father and 10% by the Mother.

The result at trial did not require payment of child support by the Father. The Mother is required to pay child support in the amount of $750 per month, which amount was to be adjusted if one of the children remained with the Mother. Retroactive support was fixed at $72,240, subject to various credits and adjustments as set out in the decision.

c. Property and spousal support:
The Mother’s offer with respect to property and spousal support was intertwined. She sought title to the former family residence, along with all of the contents, in exchange for releases of property and support. Alternatively, she proposed spousal support in the amount of $3,748 for 14 years (minimum), with a review after 9 years, and no entitlement to property.

At trial, the home was ordered sold, and the Mother entitled to one-half of the net sale proceeds after various adjustments required as a result of the Mother’s occupancy. The contents of the home were ordered to be divided. The Mother was ordered to pay for the mortgage and other expenses of the home pending sale. She was awarded spousal support in the amount of $2,550 for 10 years, subject to variation in the event of a material change.

[18] When considering success in light of the February 2024 offer, the Father achieved greater success with respect to the children, while the Mother can be said to have achieved greater success on the financial issues. While the Mother argues that she was more successful on 2/3rds of the issues, I disagree that this is how success should be measured. Clearly the hardest fought issue in this trial was parenting of the children. It is difficult to measure the value of success on the parenting issues as against the financial issues. The financial issues were not severable from the parenting issues in the Mother’s offer. I find that given the magnitude of the parenting issues as compared to the financial issues in this case, the parties had divided success in relation to the February 2024 offer and also in relation to their positions adopted at trial.

[19] My finding of divided success is not changed by the November 22, 2022, offer to settle of the Mother. This offer did not address parenting given that the OCL was still conducting its investigation. The Mother offered for the Father to pay child support on an ongoing basis, with no retroactive support. She sought a transfer of the family home and contents to her, along with a division of other assets such as the Father’s pension on an unspecified joint family venture basis. She was prepared to waive spousal support in return for the property provisions. Portions of the offer were not severable from the other. Given that non-specific monetary award sought on account of property and the lack of parenting provisions, this offer to settle cannot be considered a Rule 18 offer. Both offers may be considered by me in determining costs overall.

Bad Faith

[20] The Father alleges that the Mother acted in bad faith, as well as unreasonably. He argues that the Mother’s actions left him with little choice but to proceed to trial. I take from the Father’s costs submissions his position is that, as the successful party, he should receive a higher level of costs given the Mother’s conduct, or alternatively, if the Mother is more successful she should be deprived of her costs.

[21] Pazaratz J. in Chomos v. Hamilton, at paras. 42-49, reviewed the case law pertaining to “bad faith” in the context of costs considerations, which is summarized as follows:

• Rule 24(8) requires a fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made: S.(C.) v. S.(C.); Piskor v. Piskor; and Cozzi v. Smith, 2015 ONSC 3626.
• Bad faith is not synonymous with bad judgment or negligence. Rather, it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. Bad faith involves intentional duplicity, obstruction or obfuscation: Children’s Aid Society of the Region of Peel v. F.(K.J.), 2009 ONCJ 252; Biddle v. Biddle; Leonardo v. Meloche; and Hendry v. Martins, [2001] O.J. No. 1098 (ON SC).
• There is a difference between bad faith and unreasonable behaviour. The essence of bad faith is when a person suggests their actions are aimed for one purpose when they are aimed for another purpose. It is done knowingly and intentionally. The court can determine that there shall be full indemnity for only the piece of the litigation where bad faith was demonstrated: Stewart v. McKeown, 2012 ONCJ 644; F.D.M. v. K.O.W., 2015 ONCJ 94.
• To establish bad faith the court must find some element of malice or intent to harm: Harrison v. Harrison, 2015 ONSC 2002.
• In S.(C.) v. S.(C.), Perkins J. defined bad faith as follows:

In order to come within the meaning of bad faith in sub rule 24(8), behaviour must be shown to be carried out with intent to inflict financial or emotional harm on the other party or other persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court. A misguided but genuine intent to achieve the ostensible goal of the activity, without proof of intent to inflict harm, to conceal relevant information or to deceive, saves the activity from being found to be in bad faith. The requisite intent to harm, conceal or deceive does not have to be the person's sole or primary intent, but rather only a significant part of the person's intent. At some point, a party could be found to be acting in bad faith when their litigation conduct has run the costs up so high that they must be taken to know their behaviour is causing the other party major financial harm without justification.

[22] The conduct complained of by the Father does not amount to bad faith and was not so unreasonable that had I concluded the Mother was the successful party I would have deprived her of costs. The conduct complained of is that the Mother disagreed with the results of the OCL investigation and refused to follow the recommendations, necessitating a trial. She did so without filing a formal dispute. In the meantime, the Father alleges that the Mother continued to live in the family home, did not maintain it, caused damage to it, and paid very little towards the expenses. In the circumstances of this case, and based on the findings that I made at trial, there is no egregious behaviour that rises to bad faith, or that otherwise causes me to conclude that despite divided success the Father should have his costs. The Father dug in on financial issues, as did the Mother on the parenting issues. The Mother disagreed with the OCL, as she was entitled to do. The Father failed to deliver any offers or demonstrate a reasonable effort to resolve this matter. Both parties are equally responsible for this case proceeding to trial.

Order

[29] Given that there was divided success, neither party shall pay costs to the other. Each shall be responsible for their own costs.

“Original signed by” T.J. Nieckarz
Released: January 28, 2025