Considerations for costs awards pursuant to Ayotte v. Ayotte, 2023 ONSC 4677
The Applicant was successful in seeking an order to compel the sale of certain properties under the Partition Act, to allow for the release of a portion of proceeds from the previous sale of the matrimonial home, and to obtain a vesting order for child support. Due to the Applicant’s success, she sought substantial indemnity costs amounting to $7,637.90.
1. Who is entitled to costs?
2. How much are they entitled to?
Entitlement to Costs
The Applicant is presumptively entitled to costs as per rule 24(1) of the Family Law Rules (FLR), O. Reg. 114/99 due to her success on the issues. The Respondent did not provide a response to the Applicant’s costs submissions, but the award must still be fair and reasonable in the circumstances of this case.
How much is the Applicant entitled to?
Discretion of the Judge
The discretion to determine entitlement and quantum of costs is vested in the judge, in accordance with Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43.
Legal Framework for Cost Orders
Rule 24 delineates the framework for cost orders in family cases, as established by Mattina v. Mattina, 2018 ONCA 867. The modern cost rules encompass four fundamental purposes: partially indemnifying successful litigants, encouraging settlements, discouraging inappropriate behaviour, and ensuring a just case resolution (r. 2(2)).
Factors to Determine Quantum of Costs
Rule 24(12) necessitates the consideration of various factors in determining the quantum of costs. These factors include the reasonableness and proportionality of each party's behaviour, time spent, offers to settle, legal and expert fees, expenses, and other relevant matters.
Conduct of the Parties and Offers to Settle
Unreasonable behaviour by a party can lead to an elevated costs award. The court examines the party's behaviour in relation to the issues, reasonableness of offers, and any withdrawn or unaccepted offers (r. 24(5)). Rule 18(14) and (16) outline the cost consequences of offers to settle, even when rule 18(14) doesn't directly apply.
In this case, the Respondent’s unreasonable conduct was evident from his non-compliance with court orders, inappropriate messages, uncooperative attitude regarding property sale, and failure to share financial details. The Applicant’s favourable offer to settle, which aimed to sell properties and resolve financial matters, was disregarded by the father. This unreasonable behaviour warrants an elevated costs award.
Complexity, Time Spent, Rates, and Ability to Pay
The complexity of the case and time spent are crucial in determining costs. The Applicant’s legal fees, totalling $9,547.37, were incurred primarily due to the property sale. The hours and rates charged by counsel were deemed to be reasonable and commensurate with the work done. The Respondent did not demonstrate an inability to pay.
The primary objective of costs is to fix a fair and reasonable amount for the unsuccessful party to pay, not necessarily based on actual costs incurred. Considering the Applicant’s success in this case, the Respondent’s unreasonable conduct, complexity, billings, and the costs' reasonableness, an elevated cost award of $7,500 was deemed fair and reasonable. The costs were to be deducted from the funds held in trust with the real estate lawyer from the sale of the matrimonial home.