Cost Consequences in Ontario Family Law
Wallegham v. Spigelski, 2015 ONSC 8066 (SCJ)
This case provides an overview of the current law regarding cost consequences in Ontario family law. More specifically, this case addresses the ways in which the costs principles set out in Rule 24 of the Family Law Rules interact with relevant jurisprudence and the residual discretion afforded to judges by Section 131 of the Courts of Justice Act.
The parties were married in 2008 and separated May 1, 2015. The parties had one child, born January 9, 2015, who had remained in the mother’s primary care since the date of separation.
Pursuant to a court order made June 26, 2015, the child was to remain in the mother’s primary care and the father was granted daytime access supervised by the mother three days per week in the matrimonial home. Due to conflict between the parties, they later agreed that the father’s access would take place at the mother’s sister’s home under her supervision.
The father subsequently brought a motion, heard on October 23, 2015, to change the terms of his access.
Positions of the Parties and Decision Regarding Access
The father sought unsupervised access every weekend from 8:00 p.m. Friday to 8:00 p.m. Sunday and every Wednesday from 6:00 p.m. to 8:00 p.m., with the option to bring the child to visit family in London, Ontario, during said access.
The mother’s position was that the father’s access should be supervised at a YWCA access centre.
The judge ordered a progressive access schedule that provided the following:
- Initially, the father was to have the child during the daytime on three days per week, as provided by the previous court order, but access was to take place in the father’s home, supervised by his mother;
- Commencing November 23, 2015, the father’s access increased to two evenings per week and one overnight per weekend from 6:00 p.m. Friday to 1:00 p.m. Saturday, unsupervised, and he may visit London during his time with the child.
The Issue of Costs
The father sought costs on a full recovery basis as his position was that he was more successful on the motion.
The mother conceded that there was mixed success on the motion with the father being the more successful party, however, her position was that the father’s costs should be limited to $750.00 less the costs she incurred preparing costs submissions because she had offered to pay the father $1,500.00 to settle the costs issue and he failed to accept same.
Decision Regarding Costs
The court ordered that neither party shall pay costs.
The Law on Costs
The court summarized the law on costs and relied on the rules and principles set out below in determining costs in this matter.
Judicial Discretion regarding Costs
Section 131 of the Courts of Justice Act provides for judicial discretion in determining who must pay costs and in what amount.
Rule 24 of the Family Law Rules sets out guiding principles for the court’s exercise of discretion when determining costs in family law matters.
The court reviewed the following fundamental objectives, as set out by the court in Serra v. Serra 2009 ONCA 395, which courts must balance when determining costs, which are as follows:
a. to partially indemnify successful litigants for the cost of litigation;
b. to encourage settlement; and
c. to discourage and sanction inappropriate behavior by litigants.
The court also noted the emphasis placed on the court’s discretion in the caselaw, which highlights the importance of judges considering all relevant factors when exercising their discretion to award or deny costs as appropriate given the circumstances of each case.
Presumption of Costs for the Successful Party
Pursuant to Rule 24(1), there is a presumption that the successful party is entitled to costs.
In the event of divided success on a matter or issue, Rule 24(6) allows the court to exercise discretion to apportion costs or order that no costs are payable. The relevant caselaw further provides that a court may also assess success on a global basis and award costs to whichever party was more successful.
Similarly, where the parties have settled the matter or issue by negotiated agreement, the caselaw provides that a court may award costs to the party who was more successful overall.
Unreasonable Behavior; Failure to Attend or Prepare; and Offers to Settle
When deciding whether to award costs and the appropriate quantum of costs, courts may consider all of the circumstances of the particular case and the reasonableness of the parties behavior and positions throughout the litigation.
If the successful party acted unreasonably, Rule 24(4) gives the court discretion to entirely deprive the successful party of costs, apportion costs between the parties in a way the court sees fit, or require that he or she pay the other party’s costs. According to the relevant caselaw, such unreasonable behavior can include a “pattern of conduct” reflecting a party’s lack of respect for court orders and the parent-child relationship and it need not amount to bad faith. However, a party who has acted in bad faith will be liable for costs on a full recovery basis payable immediately pursuant to Rule 24(8), provided that the costs claimed are reasonable.
Where a party has failed to attend or is not sufficiently prepared to participate in addressing the issues, Rule 24(7) creates a presumption that the unprepared or absent party will pay the other party’s costs. However, courts may exercise discretion where it is in the interests of justice not to award costs.
In determining entitlement to costs and quantum of costs, an important consideration is whether either party has made an offer to settle the matter or issue. Failure to accept a reasonable offer can result in costs consequences if the offer meets the criteria set out in Rule 18(14). Where Rule 18(14) does not apply, courts may nevertheless consider the date on which any written offer was made, the terms of any such offer, or the failure to make an offer when determining costs.
Quantum of Costs: Additional Guiding Principles and Factors
The court summarized the principles set out in the relevant caselaw which courts should consider when determining the quantum of costs that should be awarded once entitlement is established. The following principles should guide the court:
a. The amount awarded is not determined by actual costs incurred by the successful party;
b. The quantum of costs must be proportional in relation to the issues and amounts dealt with and the outcome regarding same;
c. Costs should be fair and reasonable; and
d. Parties’ expectations regarding the amount of costs that will be awarded is a relevant consideration in determining what is fair and reasonable.
Courts should also consider the following case-specific factors, which are set out in Rule 24(11):
a. Importance, complexity, or difficulty of issues addressed;
b. Reasonableness or unreasonableness of each party;
c. Rates of the lawyer(s);
d. The amount of time properly spent working on the case;
e. Cost of any expenses properly paid or payable; and
f. Anything else that is relevant.
Caselaw also indicates that, when deciding the quantum of costs, courts should consider the ability of parties to pay costs and the impact that doing so will have on a party given their available financial resources. However, this factor will have a less significant impact on the determination of the quantum of costs than a party’s overall success with respect to the matter. Additionally, a party’s ability to pay costs will be given less weight than the reasonableness of his or her behavior.
Courts have also held that a more cautious approach to costs is appropriate in matters involving claims for custody or access so as to not deter those with meritorious claims from pursuing said claims.
The court found that no costs should be awarded for the motion in question given the following:
- Overall success was divided, though the father was somewhat more successful;
- Both parties maintained unreasonable positions with respect to parenting time;
- The father was unreasonable in seeking such drastic changes in access arrangements which were not appropriate given his inexperience as a parent and the young age of the child, whereas the mother was unreasonable in rejecting the paternal grandmother as someone who could supervise the father’s access;
- The court felt they should have been able to agree on their own to a compromise like that of the “middle ground” approach taken by the court, which the court felt was in the child’s best interest;
- The father failed to make an offer to settle the matter out of court;
- The mother had limited financial means with which to pay costs; and
- The mother made an offer to pay costs in an amount equal to or higher than what the court would have awarded and the father failed to accept the offer;