Blanchard v Walker: determining costs when one party acts unreasonably
In this judgement, Justice Carole Curtis of the Ontario Court of Justice (OCJ), thoroughly reviews the law of costs in the context of family law proceedings. Most importantly, Justice Curtis clarifies the question of whether a party may be shielded from cost liability merely due to a current limited ability to pay.
This cost decision arose out of a three-day trial regarding the custody of the parties’ daughter, J, born February 14, 2003, who was nine years old at the time of trial.
On August 5, 2003, an order was made on consent by Justice Waldman, stipulating that the parties share joint custody of J, with the child’s primary residence being with the father. Although J lived with the father for five years after the consent order was made, at the mother’s request and on consent from the father, J went to live with the mother so that she could attend school with her half-sister, N. Although this arrangement was to last only one year, in May 2009 the mother initiated an application for sole custody of J.
The trial decision, released July 26, 2012, awarded sole custody to the father effective immediately, with specified access to the mother. The order further stipulated that J become involved with the children’s mental health centre and other such programs in an effort to help manage her behavioural problems. Prior to trial, and against the consent order of Justice Spence (dated August 16, 2011), the mother failed to attend such programs with J or adopt any of the recommendations in the SNAP (Stop Now and Plan™) report, an award-winning cognitive-behavioural strategy that helps children and parents regulate angry feelings by getting them to stop, think, and plan positive alternatives before they act impulsively.
At the cost decision, heard November 16, 2012, Justice Curtis condemned the mother for failing to listen to professional evidence presenting significant concerns about the mother’s ability to meet the child’s needs; failing to listen to evidence that the child was not doing well; failing to follow previous court orders and SNAP recommendations regarding behavioural programs for J to deal with her sexualized behavioural issues; failing to take into account the Children’s Lawyer Report painting her in an extremely negative light and recommending sole custody to the father; and for failing to implement any form of counselling in the period when she had sole custody of J.
The Law of Costs
Justice Curtis’s exhaustive review of the law of costs in this case is an important read for any party or lawyer involved in a family law proceeding.
Justice Curtis commenced her analysis with a review of the principles regarding costs (s.131(1), Courts of Justice Act):
- The costs of a case are in the discretion of the court;
- The court may determine by whom costs shall be paid; and
- The court may determine to what extent costs shall be paid.
Moreover, the modern costs rules are designed to foster three purposes (Fong v Chan; Serra v Serra):
- To indemnify successful litigants for the cost of litigation;
- To encourage settlement;
- And to discourage and sanction inappropriate behaviour by litigants.
Finally, Rule 2(2) of the Family Law Rules (FLR) read in conjunction with Rule 24(1) adds a fourth fundamental purpose: to ensure that cases are dealt with justly. In other words, that the person who is successful at trial is entitled to costs. Justice Curtis notes, however, that while the objective of indemnification is paramount, it is not the sole objective, and that costs may also be used as a tool to sanction or penalize a party who refuses a reasonable settlement offer or behaviour that increases the duration and expense of litigation or is otherwise unreasonable or vexatious.
Justice Curtis then reviewed offers to settle and the cost consequences of failure to accept an offer. S. 18(6) of the CJA allows the court to take into account an offer to settle, even when it does not meet the criteria outlined in s. 18(14); namely, that that the offer be in writing and that it be made a certain number of days in advance of the proceeding. In this case, the father had made an offer to settle in a letter to the mother. Although it did not qualify as an offer to settle under s. 18(14), it was nevertheless a factor in the court’s decision (Omar v Omar). In the letter, the father had offered to settle on terms of the then recently released report of the Office of the Children’s Lawyer. Also important was the fact that the father’s offer was very close to the custody and access regime ultimately ordered at trial.
Justice Curtis then evaluated whether the parties had acted reasonably in the context, noting at para 37 that,
Matrimonial litigation is an occasion for sober consideration and thoughtfulness rather than intemperate behaviour…The father conducted himself in the former manner, but the mother acted in the latter manner.
In the end, she concluded that,
This case should not have gone to trial. The evidence against the mother’s position was overwhelming. And the strongest and most damaging evidence (the reports from SNAP and the Children’s Lawyer) were available one year before the trial. The mother refused to re-consider her position and the likelihood of success given the overwhelming evidence against her, and insisted on going to trial…Unless courts discourage this behaviour, it will continue and increase. Orders for costs are one way to discourage this behaviour.
Perhaps the most interesting part of Justice Curtis’s judgment was the portion of her analysis dealing with costs and ability to pay. In this instance, the mother lived with her partner, her step-father, and her other child, N. Neither the mother nor her partner worked outside the home, and both were in receipt of social assistance income at the time of judgment. Noting that Rule 24(1) permits the court to consider a litigant’s ability to pay, it nevertheless “is given less prominence than the presumption that costs will follow success” (Biant v Sagoo).
In this instance, had the mother acted reasonably, she could have avoided trial altogether, as well as liability for costs. Consequently, Justice Curtis was of the opinion that the mother should not be shielded from liability simply due to her current ability to pay. As she noted at paragraph 45, to order otherwise would allow those of limited financial means free license to litigate unreasonably.
After all was said and done, Justice Curtis ordered that the father should receive costs on a full recovery basis, remarking that “it must be made clear to family law litigants that there is no right to a trial, or at least, that the right to a trial is tempered with the requirement that the parties take a clear-headed look at their case before insisting on their day in court.” Justice Curtis ordered that the mother pay the father’s legal fees, in the amount of $30,000 all inclusive.
What might be interesting to know in this case is whether the mother’s lawyer was insistent on settling, or whether the lawyer played some part in feeding the mother’s lustfor litigation. In the end, it appears that the mother was suffering from certain mental health issues that may have impacted her ability to make rational decisions. Nevertheless, the lawyer also has a duty to advise the client of their potential cost liabilities.