The recent case of Drover v Drover, 2021 ONSC provides a succinct summary of the Family Law Rules and factors that can influence a court’s determination of costs on a motion.
BACKGROUND
The Applicant submitted a motion seeking disclosure on March 4, 2021. They were successful, albeit through an order for partial disclosure. Given his success, the Applicant claimed he should be entitled to his costs of the motion which totaled $2,181.47 after tax and disbursements.
The Respondent argued that each party should bear their own costs of the motion, or in the alternative, costs should be fixed at a minimal $100. They argued that the Applicant was not fully successful on the motion as only partial disclosure was ordered. The Respondent further claimed that they acted reasonably in making an offer to settle the motion the day before their responding materials were due, while the Applicant had acted unreasonably.
ANALYSIS
The court highlights four fundamental purposes under Rule 2(2) of the Family Law Rules when awarding costs:
- To partially indemnify successful litigants
- To encourage the parties to settle
- To discourage inappropriate behavior by the parties
- To ensure that cases are dealt with justly
There exists a presumption that the successful party will be entitled to costs. However, this entitlement is not full proof. The court emphasizes “reasonableness and proportionality” in any costs award, while enumerating a number of factors that aid in such a determination. Rule 24(12) provides a list of factors for the court to consider, including; each party’s behavior, the time spent by each party, any written offers to settle, the number of lawyers and their rates, the number of expert witnesses and their rates, and any other proper expenses incurred.
Despite the presumption for the successful party being entitled to costs, Rule 24(4) provides that unreasonable conduct by the successful party can deprive them of all or part of their costs award. The court may even determine the conduct warrants the successful party paying the costs of the unsuccessful party. When deciding whether the parties’ behavior was ‘unreasonable’, the court shall examine the party’s behavior, whether they made settlement offers, the reasonableness of such offers, and any offer they withdrew or failed to accept.
If a party is found to have acted in bad faith, the court shall award costs on a full recovery basis and paid immediately to the opposite party, pursuant to Rule 24(8).
If the opposing party fails to accept an offer that you have proposed, and you later obtain an order that is equally or more favorable than that offer, then you would be entitled to costs. The costs award would be for the period until the offer was served, and entitlement to full recovery of costs thereafter.
APPLICATION
The Applicant was successful in obtaining a partial order for disclosure, but not the entire relief sought. The court held the applicant was the more successful party on the motion and is presumptively entitled to costs. Though the Respondent provided an offer to settle prior to the motion date, she did not achieve an order as favorable as the offer, and hence does not qualify under Rule 18. The court also reduced the weight given to the offer as it was made only a day in advance of the due date for responding materials, after the Applicant had already prepared to argue the motion.
The Court had concerns about the behavior of both parties. The Applicant failed to serve an offer to settle the motion, and his relief sought from the motion included seeking 3rd parties to produce documents despite them not being served. However, the court found the Respondent’s conduct to be more unreasonable. She argued that disclosure would be too onerous but failed to provide any evidence in support of this, while already possessing some of the requested disclosure already. This unreasonable behavior led the court to increase its award of costs to the Applicant.
The court finalized the costs award at $1,300. The court also ruled that the substantial arrears in costs that the Respondent already owed should not be a reason to insulate them from further costs awards.
CONCLUSION
This case shows success on a motion does not automatically entitle a party to an award of costs. The court will consider a number of factors in determining whether awarding costs is reasonable and proportionate given the parties’ behavior. Parties must be wary of their behavior and settlement offers to best position themselves for a favorable costs determination.
For more information, please call us at Feldstein Family Law Group P.C. or contact our firm online.