Smith v. Smith, 2025 ONSC 76
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Tamara Smith, Applicant/Responding Party
AND:
Francois Smith, Respondent/Moving Party
BEFORE: T. PRICE J.
COUNSEL: E. Kiernan - Counsel for the Applicant
G. Parrack - Counsel for the Respondent
HEARD: In Chambers, on written submissions
COSTS ENDORSEMENT
1Despite my strong encouragement that the parties settle the issue of costs following their trial regarding child support and special/extraordinary expenses, it appears that they were unable to do so.
2I have now received submissions from each of the counsel.
3Not surprisingly, each claims that their client was the successful party, and is entitled to costs.
4Mr. Parrack, counsel for the Respondent/Moving Party, Mr. Smith, requested costs in 3 different amounts: $9,481.59, as full indemnity costs; $7,111.19 as substantial indemnity costs, and $4,740.80 as partial indemnity costs. He did not, however, settle on which of those three amount he was requesting specifically on behalf of Mr. Smith.
5Mr. Kiernan, counsel for the Applicant/Responding Party, Ms. Smith, requested costs in the amount of $8,883.00, which he labelled as being “on the higher end of the partial indemnity scale.”
Applicable Family Law Rules
6Family Law Rules 18 and 24 are most pertinent to a costs determination. Rule 18 relates to offers to settle. It is not applicable in this case. Rule 24 lists the factors that a judge must consider when determining costs.
7While these rules have not eliminated judicial discretion, they nonetheless circumscribe the broad discretion previously granted to the courts in setting costs.1
Rule 24(1)
8Rule 24(1) is the starting point in a costs analysis.2 It provides that there is a presumption that a successful party is entitled to the costs of a motion, enforcement, case, or appeal. The presumption in Rule 24(1) can, however, be rebutted if the successful party has behaved unreasonably during the case or if success is divided.3
9The first question to be answered in the process of determining costs is, therefore, who was the successful party?
Determining Success
10Justice Pazaratz wrote the following about this process at paragraph 22 of Jackson v. Mayerle:
“To determine whether a party has been successful, the court should take into account how the order or eventual result compares to any settlement offers that were made (Lawson v. Lawson, [2008] O.J. No. 1978, 2008 CanLII 23496 (S.C.J.)).
Offers to Settle
11There were only 2 offers to settle made in this case. Both were made by Mr. Smith.
12The first, dated July 19, 2022, proposed that Mr. Smith pay monthly child support to Ms. Smith commencing January 1, 2018 in an amount that would accord with the Child Support Guidelines, with the amount to be adjusted annually thereafter on January 1. It also proposed that the agreed-upon expenses of travel hockey, tutoring and a YMCA membership be removed as segregated expenses for which a specific amount was to be contributed to monthly by Mr. Smith. It further proposed that Mr. Smith be permitted to immediately obtain an alternate life insurance policy in substitution for that which he was required to maintain under the terms of the existing order.
13The second, dated August 5, 2022, proposed that, commencing August 1, 2022, Mr. Smith would pay child support to Ms. Smith in the amount of $1,803.00 per month, based on his 2021 annual income, in accordance with the Child Support Guidelines. It also proposed that there be no retroactive child support and/or special or extraordinary expenses owing by either party to the other. It also included the same terms relating to removal from the existing order of the segregated, agreed-upon expenses and Mr. Smith being able to secure a substitute life insurance policy.
14Unfortunately for Mr. Smith, the judgment was not as favourable to him as the terms of his offer. Accordingly, not having achieved a more favourable result than proposed in his offers, he cannot rely upon them to assert that he is the successful party.
15That, however, is not the end of the search for the successful party.
Rules 24(1) and 24(6)
16Rule 24(1) must also be considered in conjunction with Rule 24(6), which provides that where success in a case is divided, the court may exercise its discretion to order and apportion costs as appropriate.4
17Justice Pazaratz wrote at paragraph 66 in Jackson v. Mayerle that, “[d]ivided success” does not necessarily mean "equal success.” And "some success" may not be enough to impact on costs.”
18Justice D. Chappel articulated the court’s task at this point at paragraph 14 of Arthur v. Arthur:
The determination of whether success was truly "divided" does not simply involve adding up the number of issues and running a mathematical tally of which party won more of them (Brennan v. Brennan, 2002 CarswellOnt 4152 (S.C.J.)). Rather, it requires a contextual analysis that takes into consideration the importance of the issues that were litigated and the amount of time and expense that were devoted to the issues which required adjudication (Jackson v. Mayerle, 2016 ONSC 1556 (S.C.J.); Slongo v. Slongo, 2017 ONCA 687 (C.A.)) Where the court concludes that success was in fact divided, it may award costs to the party who was more successful on an overall global basis or on the primary issue, subject to adjustments that it considers appropriate having regard for the lack of success on secondary issues and any other factors relating to the litigation history of the case (Gomez-Pound v. Pound, [2009] O.J. No. 4161 (O.C.J.); Boland v. Boland, 2012 ONCJ 239, [2012] O.J. No. 1830 (O.C.J.))
19To assist me in determining who succeeded in this case, I therefore turn to an examination of the issues, the parties’ positions in respect of those issues, and the results on each issue.
Issues, Parties’ Positions, and Results
Issue: Monthly child support
Mr. Smith’s Position
20In his Motion to Change, Mr. Smith sought a reduction in monthly child support payments, from $1,917.00 to $1,716.00 effective January 1, 2017.
21By the time of trial, over five years had passed since the Motion to Change had been issued. At trial, Mr. Smith sought an order requiring that child support be varied annually in accordance with his income.
22In his costs submission, Mr. Parrack argued that this was the outcome that Mr. Smith had been seeking from the outset. It was not, however, what he claimed as relief in his Motion to Change, where he asked that child support be based on his less-than-2016 “estimated” income as reflected in the then-existing order.
Ms. Smith’s Position
23Ms. Smith’s position was that, effective January 1, 2018, Mr. Smith’s monthly child support should be greater than his income would reflect because he was consistently underemployed.
Result
24Mr. Smith was found to have been intentionally underemployed in 2017 but not thereafter. Child support was adjusted for each year commencing January 1, 2019, based on Mr. Smith’s income for that year.
Successful Party as to this Issue
25I find Mr. Smith to have been the more successful party on this issue, in that his income was adjusted downward from 2017 to 2022, inclusive, resulting in lower monthly child support payments for those years.
26However, his success was tempered by:
a. the fact that he was denied the benefit of the reductions in 2017 and 2018 because he had not notified Ms. Smith at the time that his income had decreased; and
b. his income having been adjusted upwards for 2023 and 2024, resulting in greater monthly child support payments than he had been paying under the existing order.
Issue: Special or extraordinary expenses
Mr. Smith’s Position
27Mr. Smith requested that the terms of the order be amended so that the parties share, on an 80%/20% basis, the costs of only those special or extraordinary expenses agreed upon by them.
28He also requested that he be relieved of the obligation of paying $296.00 per month as his contribution toward the cost of travel hockey, tutoring and memberships at the YMCA.
Ms. Smith’s Position
29Ms. Smith requested that the terms of the existing order be amended by increasing Mr. Smith’s share of the monthly costs of travel hockey, tutoring and memberships at the YMCA to 80%, primarily based on the costs of the children’s participation in travel hockey.
30She also requested that Mr. Smith contribute 80% of the costs of a number of other expenses that she claimed were special or extraordinary expenses.
Result
31There had not been a material change in circumstances allowing for the terms of the previous order pertaining to special or extraordinary expenses to be varied.
32However, Mr. Smith was ordered to comply with the existing order by contributing to:
a. an expense specifically noted in the previous order (childcare costs), and
b. the cost of school uniforms, about which Ms. Smith had sought a contribution from Mr. Smith which he had unreasonably refused to pay.
33He was also ordered to pay 80% of the costs of the children’s uninsured orthodontic expenses and the eldest child’s contact lenses.
Successful Party as to this Issue
34The parties were equally unsuccessful in their effort to have the terms of existing order relating to special or extraordinary expenses varied because neither of them established a material change in circumstances.
35Notwithstanding, I find that Ms. Smith was the more successful party on this issue because she obtained an order requiring contributions from Mr. Smith for previously incurred expenses covered by the existing order.
Issues: Mr. Smith’s claim for credit for overpaid child support and special or extraordinary expenses;
Ms. Smith’s claim for payment of unpaid special or extraordinary expenses
Mr. Smith’s Position
36Mr. Smith sought an order that he be credited the sum of approximately $34,000.00 for overpayments made to Ms. Smith since 2016 for child support and special or extraordinary expenses.
Ms. Smith’s Position
37In addition to requesting that Mr. Smith’s claim in this regard be dismissed, Ms. Smith requested that he be ordered to pay her the sum of $14,474.66 for unpaid special or extraordinary expenses since 2016.
Result
38Mr. Smith was found to have overpaid child support, only, in the amount of $880.00. This amount was credited against his debt to Ms. Smith for unpaid special or extraordinary expenses in the amount of $3,322.28, resulting in Mr. Smith being indebted to Ms. Smith for $2,443.28.
Successful Party as to these Issues
39While each party was found to be entitled to a payment by the other, the amount to which Mr. Smith was entitled fell far below what he claimed, leaving him indebted to Ms. Smith after he was credited with the amount that she owed him for his marginal overpayment of child support. As a result, I find that Ms. Smith was the successful party as to these issues.
Issue: Change of life insurance
Mr. Smith’s Position
40Mr. Smith requested that he be authorized to substitute a policy said to be available to him through his employment for the private policy that was required under the terms of the existing order.
Ms. Smith’s Position
41Ms. Smith requested that Mr. Smith’s request be denied.
Result
42Mr. Smith’s claim was dismissed.
Successful Party as to this Issue
Ms. Smith.
Conclusion as to the Successful Party
43Having regard to the above, I find that success in this case was divided between the parties. Overall, however, I find that Ms. Smith was the more successful party and is the party entitled to costs of the proceeding.
44However, her entitlement to costs will be reduced to account for Mr. Smith’s success in respect of the retroactive reduction in child support payable for the years 2019 through 2022. In doing so, I am adopting the process described by Justice Chappel as “award[ing] costs to the party who was more successful on an overall global basis…, subject to adjustments that [the court] considers appropriate having regard for the lack of success on secondary issues…”
45To the latter point made by Justice Chappel, monthly child support payable by Mr. Smith was not a secondary issue. It was an equally important issue, and its importance will be reflected in the adjustment applied to the costs otherwise awarded to Ms. Smith.
Rules 24(4) and (5) - Successful Party Behaving Unreasonably
46Rule 24(4) authorizes the court to deprive a successful party of all or part of that party’s costs, or to pay all or part of the costs of the unsuccessful party, should the court find that the successful party has behaved unreasonably during the case.
47Rule 24(5) requires the court to examine 3 factors when deciding whether a party has behaved unreasonably. They consist of:
a. the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;
b. the reasonableness of any offer made by the party; and
c. any offer the party withdrew or failed to accept.
48Mr. Parrack submits that Ms. Smith behaved unreasonably because she sought to adjourn the trial on its first day because she had not yet, after several years, assembled all of the evidence that she required to prove her case with respect to special or extraordinary expenses. That request was denied. Whether the request was unreasonable or not, it was quickly dismissed and the trial proceeded.
49More significantly, it appears that Ms. Smith made no offer to settle. Mr. Kiernan did not address his client’s failure to serve a settlement offer in his submissions. It has been held that not making a settlement offer constitutes unreasonable behaviour.5 While this principle is not absolute, particularly in cases where there are only two possible outcomes6, this was not one of those cases. I will factor Ms. Smith’s failure to make an offer to settle into my final decision as to costs.
50For the reasons I have already noted, it was not unreasonable for Ms. Smith to have rejected the offers made by Mr. Smith.
Rule 24(8) – Bad Faith
51Neither party submitted that the other acted in bad faith, so this factor is inapplicable.
Rule 24(12) - Setting Costs Amounts
52Under Rule 24(12)(a), when setting costs, I am required to consider “the reasonableness and proportionality” of a number of factors as they “relate to the importance and complexity of the issues.”
53While the issues before the court were important to both parties, they were not especially complex. Accordingly, when assessing the costs factors set out under Rule 24(12)(a), I do so with that perspective in mind.
Rule 24(12)(a)(i) - Each Party’s Behaviour
54My conclusions about this factor as it pertains to Ms. Smith have already been detailed.
55However, I cannot allow to pass without comment the absolute failure of Mr. Smith to have provided Ms. Smith with his financial and income information over the years, as he ought to have done,. His attempt to excuse his actions was commented on by me in the trial judgment. In my view, keeping Ms. Smith in the dark about his financial circumstances not only violated the key obligation of Mr. Smith, as a party to a family case where child support was an issue, to be fully transparent about his income, it constituted unreasonable behaviour.
56That unreasonable behaviour was already addressed in the judgment by my decision to deprive Mr. Smith of the benefit of reduced child support for the years 2017 and 2018, so he will not be further penalized in costs.
Rule 24(12)(a)(iii)[^7] - Any Written Offers to Settle, including those not meeting Rule 18
57I have discussed this issue, above.
Rule 24(12)(a)(ii) - Time Spent by Each Party
58Both counsel submitted detailed information about their claims for costs.
59Mr. Parrack and his associates devoted 94 hours to preparation for and attendance at trial. Of those hours, 61 were related to work undertaken by the two law students working under Mr. Parrack’s direction. He devoted 33 hours to the efforts.
60Mr. Kiernan and his clerk devoted approximately 50 hours to preparation for and attendance at trial.
61Given the issues in the case, particularly the financial calculations required to justify positions advanced, I find that the time expended by both counsel and those working under their direction were reasonable.
Rule 24(12)(a)(iv) - Legal Fees, including Number of Lawyers and Their Rates
62Mr. Parrack, who has 11 years’ experience, charged his time to his client at the rate of $250.00 per hour. This was very reasonable.
63With my consent, the two law students assisting Mr. Parrack participated in the trial. For their efforts, both in preparing for trial and in assisting at trial, he has charged their time at the rate of $20.19, which he indicates is the summer job rate paid by Western University, which they both attend. I have no issue with the amounts that he has charged for their efforts.
64Mr. Kiernan, who has 24 years’ experience, charged his time at the rate of $400.00 per hour. Again, this is not an unreasonable amount.
Rule 24(12)(a)(vi) - Other Expenses Properly Paid or Payable
65Neither counsel made a claim for any expenses paid.
Law
66The law with respect to the setting of costs is well-established. It is contained in several Court of Appeal decisions including:
Beaver v. Hill, 2018 ONCA 840, [2018] O.J. No. 5412 (C.A.)
12 As the wording of [Rule 24(12)] makes clear, proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs.
19 What is most important, however, is that the motion judge did not consider the principle of proportionality. Proportionality is a core principle that not only governs the conduct of proceedings generally, but is specifically applicable to fixing costs in family law matters, as I have set out above.
21 There is a final factor to which the motion judge appears to have given only passing consideration: the respondent's motion that sought a wide variety of relief, almost all of which she was unsuccessful in obtaining and which greatly extended the hearing time. The motion judge did not make any adjustment to the costs award arising from this element of divided success.
Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 587, [2022] O.J. No. 3632 (C.A.)
61 The overarching objective is to fix an amount of costs that is objectively reasonable, fair, and proportionate for the unsuccessful party to pay in the circumstances of the case, rather than to fix an amount based on the actual costs incurred by the successful litigant…
62 While the reasonable expectation of the parties concerning the amount of a costs award is a relevant factor that informs the determination of what is fair and reasonable, it is not the only, determinative factor and cannot be allowed to overwhelm the analysis of what is objectively reasonable in the circumstances of the case. To hold otherwise would result in the means of the parties artificially inflating costs with the concomitant chilling effect on access to justice for less wealthy parties. As this court cautioned in Boucher8, at para. 37:
The failure to refer, in assessing costs, to the overriding principle of reasonableness, can produce a result that is contrary to the fundamental objective of access to justice.
64 … Again, the question is…whether the costs are reasonable, fair, and proportionate for the losing party to pay in the particular circumstances of the case or whether the magnitude of the costs "generally exceeds any fair and reasonable expectation of the parties".
65 Costs that are reasonable, fair, and proportionate for a party to pay in the circumstances of the case should reflect what is reasonably predictable and warranted for the type of activity undertaken in the circumstances of the case, rather than the amount of time that a party's lawyer is willing or permitted to expend. The party required to pay the successful party's costs "must not be faced with an award that does not reasonably reflect the amount of time and effort that was warranted by the proceedings": Gratton-Masuy Environmental Technologies Inc. v. Building Materials Evaluation Commission (2003), 2003 CanLII 8279 (ON SCDC), 170 O.A.C. 388 (Div. Ct.), at para. 17.
Analysis
67The costs claims of the parties bear some similarities.
68The discrepancy between the amount ($14,805.00) that Mr. Kiernan might have identified, had he been so inclined, as “full indemnity costs” in relation to preparation for and attendance at trial, together with a modest amount for the preparation of costs submissions, is substantially larger than the amount that Mr. Parrack has claimed as “full indemnity costs” ($9,481.59).
69Of course, neither party is entitled to full indemnity costs. This fact was directly acknowledged by Mr. Kiernan, who requested that Ms. Smith be awarded costs of $8,883.00, an amount that represents 60% of the amount that would have represented full indemnity costs. Mr. Parrack acknowledged it more tacitly by placing before me for consideration not only a claim for full indemnity costs but also claims for substantial and partial indemnity costs.
70Looking at the costs claims from the perspective of Mr. Smith, his partial indemnity costs claim represented 50% of his full indemnity costs claim.
71Mr. Kiernan’s partial indemnity costs claim amounted to 60% of what could have been his full indemnity costs claim.
72The average of the two is 55%. Applying that percentage would increase Mr. Smith’s partial indemnity costs claim to $5,215.00 (rounded).
73Applying the same percentage to Ms. Smith’s notional full indemnity costs claim would reduce her claim for $8,883.00 to $8,143.00 (rounded).
74Because Mr. Smith was the more successful party in respect of his claim for amendments to monthly child support, he must be given credit for that success.
75I am of the view that, since this was one of the two major issues in the case, it would be reasonable to reduce Ms. Smith’s claim for partial indemnity costs by a fixed percentage. While that percentage most likely would have been 50% had Mr. Smith’s success in respect of this issue been total, it was not.
76Therefore, to account for what I earlier called facts which “tempered” his success, I find that an appropriate amount to set off in reduction of the costs claimed by Ms. Smith is 40% of the $5,215.00 notional partial indemnity costs of Mr. Smith. That amounts to $2,086.00.
77Deducting that amount from the revised partial indemnity costs claimed by Mr. Kiernan on behalf of Ms. Smith leaves her claim at $6,057.00.
78I apply a further reduction to that in the amount of $500.00 in relation to Ms. Smith’s unreasonable behaviour in not making a settlement offer.
79That leaves the reduced partial indemnity claim of Ms. Smith at $5,557.00, which I round up to $5,560.00.
80I hasten to note that the use of partial, substantial and full indemnity costs is no longer fully appropriate. The real question is whether costs in the amount of $5,560.00 are “objectively reasonable, fair, and proportionate for [Mr. Smith as] the [primarily] unsuccessful party to pay in the circumstances of the case.”
81I find that they are. The amount lies slightly less than half-way between Mr. Smith’s claims, were he to have been the successful party, for partial and substantial indemnity costs. I am of the view that, with the reductions I have applied to the claim for costs by Ms. Smith, the amount “reasonably reflects the amount of time and effort that was warranted by the proceedings.”
82I am also of the view that Mr. Kiernan’s request that the costs be enforceable by the Director of the FRO as they relate to child support is reasonable.
83For the above reasons, I therefore make the following order.
Order
The Respondent, Francois Smith, shall pay costs to the Applicant, Tamara Smith, in the amount of $5,560.00.
The costs shall be enforceable by the Director of the Family Responsibility Office since they relate to claims pertaining to child support.
Justice T. Price
Date: January 6, 2025
Footnotes
- Jackson v. Mayerle (2016), 2016 ONSC 1556, 130 O.R. (3d) 683 at para. 19 (S.C.J.)
- Scipione v. Del Sordo, 2015 ONSC 5982, [2015] O.J. No. 5130 at para. 18 (S.C.J.)
- Wylie v. Leclair, 2003 CanLII 49737 (ON CA), [2003] O.J. No 1938, at para. 24 (C.A.)
- Arthur v. Arthur, [2019] O.J. No. 3494 at para. 14 (S.C.J.)
- Palod v. MacDonald, [2018] O.J. No. 4180 (O.C.J.); Stephens-Hinds v. Hinds, [2020] O.J. No. 4402 (S.C.J. – Family Court)
- Beaver v. Hill, 2018 ONCA 840, [2018] O.J. No. 5412 at para. 10 (C.A.)
- Boucher v. Public Accountants Council (Ontario) (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.)
- I am rearranging the order in which I consider the factors listed in Rule 24(12)(a) because, in my view, those set out in Rules 24(12)(a)(ii) and 24(12)(a)(iv) are closely related. As a result, I will be referring to Rule 24(12)(a)(iii) before Rules 24(12)(a)(ii) and 24(12)(a)(iv.)