



COURT OF APPEAL FOR ONTARIO

CITATION: Beaver v. Hill, 2018 ONCA 840

DATE: 20181022

DOCKET: M49327 (C64766)

Lauwers, van Rensburg and Nordheimer JJ.A.

BETWEEN

Brittany Beaver

Applicant (Respondent)

and

Kenneth Hill

Respondent (Appellant)

Chris G. Paliare, Bryan R.G. Smith, and Andrew
    K. Lokan, for the appellant

Harold Niman, Martha McCarthy, Sarah
    Strathopolous, Joanna Radbord, and Scott Byers, for the respondent

Manizeh Fancy and Estee L. Garfin, for the
    Attorney General of Ontario, intervenor

Heard: September 11, 2018

On appeal from the order of Justice D.L. Chappel of the
    Superior Court of Justice, dated December 8, 2017, with reasons reported at
    2017 ONSC 7245, 4 R.F.L. (8th) 53, and reasons on costs reported at 2018 ONSC
    3352, 8 R.F.L. (8th) 288.

Nordheimer J.A.:

[1]

In addition to appealing the decision of the motion judge, the appellant
    also brought a motion for leave to appeal the costs award made by the motion
    judge.  The parties agreed that this aspect of the appeal could be dealt with
    by way of submissions in writing.

[2]

This court has since allowed the appellants appeal.  Thus, the
    appellant no longer requires leave to appeal the costs disposition which
    inevitably requires reconsideration as a result of the successful appeal on the
    merits.

[3]

Nevertheless, in my view, the respondent is still entitled to the costs
    of the original motion to strike the amended answer.  She was successful on
    that motion and that success remains.  This courts decision, on the merits
    appeal, simply provides the appellant with the opportunity to seek to amend his
    answer to properly plead his constitutional argument.  His failure to do so in
    the first instance is what led to the motion to strike.  The respondent should
    not bear the consequences of that failure.

[4]

I begin with the basic premise that costs awards are discretionary and
    entitled to deference.  However, in my view, the motion judge erred in her
    costs decision as a result of her failure to apply two important principles. 
    One is proportionality and the other is the reasonableness evaluation of the ultimate
    award.  That error led to a costs award that was excessive.

[5]

This matter began as a motion, by the appellant, to stay the family law
    proceedings until the constitutional issue was heard and determined.  In
    response, the respondent brought a motion seeking 14 different orders or
    declarations, including an order to strike the appellants pleading, a
    declaration that the Superior Court of Justice had jurisdiction to deal with
    the family law issues, and an order staying the appellants constitutional
    case.  It is not clear why the respondent launched such a broad and sweeping
    response, but, having done so, she bears a significant share of the
    responsibility for the unwarranted eight days of court time it took to address
    the issues, even with the serious constitutional issue that was raised.

[6]

On that latter point, it must be remembered that the motion judge was
    not being called on to determine the constitutional issue.  Her task was, in
    essence, to determine whether the answer adequately pleaded the constitutional
    issue and, if so, whether that issue ought to proceed before, after, or
    concurrently with the family law claims.  Unfortunately, the motions traversed
    into other issues, the answers to which were either obvious or unnecessary to
    the narrow issues that were before the motion judge.

[7]

In terms of her costs award, the motion judge correctly concluded that a
    risk premium could not be awarded.  She also correctly concluded that this was
    not a case for a full recovery award of costs.

[8]

Yet, that is not how the costs in this case were determined.  Rather,
    the resulting award approached a full recovery amount.  In defence of that
    result, the respondent relies on what is contended to be the principle from

Biant
    v. Sagoo
, [2001] O.J. No. 3693, 20 R.F.L. (5th) 284 (S.C.J.) that
    costs in family proceedings should generally approach full recovery.  I would
    make a couple of points in response to that contention.

[9]

First, while the judge in
Biant
does make that statement, it is
    based on two decisions of other Superior Court judges, a close reading of which
    do not support the thrust of that statement.  What those other cases do
    establish is that under the
Family Law Rules
, O. Reg. 114/99, judges
    are not constrained to the normal scales of costs found in the
Rules of
    Civil Procedure
, R.R.O. 1990, Reg. 194, since no scales of costs are
    mentioned in the
Family Law Rules
.  Also, the
Family Law Rules
expressly provide that, depending on the conduct of the parties and the
    presence or absence of offers to settle, a judge may increase or decrease what
    would otherwise be the appropriate quantum of costs awarded.

[10]

Second,
    the respondents assertion that this courts decision in
Berta v. Berta
,
    2015 ONCA 918, 128 O.R. (3d) 730 supports the full recovery approach to costs
    in family matters also reflects a failure to read the decision closely.  What
    this court endorsed in that case was the principle that a successful party in
    a family law case is presumptively entitled to costs (at para. 94) subject,
    though, to the factors set out in Rule 24.  This caveat is an important one
    since, as this court pointed out in
Frick v. Frick
, 2016 ONCA 799, 132
    O.R. (3d) 321, the
Family Law Rules
embody a philosophy peculiar to a
    lawsuit that involves a family (at para. 11).

[11]

There
    is no provision in the
Family Law Rules
that provides for a general
    approach of close to full recovery costs.  Rather, r. 24(12) sets out the
    appropriate considerations in fixing the quantum of costs.  It reads:

(12) In setting the amount of costs, the court shall consider,

(a) the reasonableness and proportionality of each of the
    following factors as it relates to the importance and complexity of the issues:

(i) each partys behaviour,

(ii) the time spent by each party,

(iii) any written offers to settle,
    including offers that do not meet the requirements of rule 18,

(iv) any legal fees, including the
    number of lawyers and their rates,

(v) any expert witness fees,
    including the number of experts and their rates,

(vi) any other expenses properly
    paid or payable; and

(b) any other relevant matter

[12]

As
    the wording of the rule makes clear, proportionality and reasonableness are the
    touchstone considerations to be applied in fixing the amount of costs.

[13]

Further,
    a close to full recovery approach is inconsistent with the fact that the
Family
    Law Rules
expressly contemplate full recovery in specific circumstances,
    e.g. bad faith under r. 24(8), or besting an offer to settle under r. 18(14). 
    Consequently, the motion judge erred in principle in adopting a close to full
    recovery approach in fixing the costs of these motions.  I would note that such
    a result also appears inconsistent with her determination that full recovery
    costs were not appropriate in this case.

[14]

This
    error underlies the problem with the motion judges ultimate costs assessment. 
    The motion judge did undertake a review of the hours spent, and made a number
    of reductions to them.  I would note, in passing, however, that she left
    untouched some problematic inclusions such as time and expenses associated with
    travelling to court.  Having reviewed the hours charged, though, the motion
    judge did not evaluate the hourly rates charged with the proportionality and
    reasonableness principles in mind.

[15]

The
    motion judge also gave undue weight to the respondents offer to settle, along
    with the appellants failure to make an offer to settle.  Although I accept
    that the presence or absence of offers to settle can properly be taken into
    account in fixing costs, it remains the fact that the appellant was not under
    any obligation to proffer an offer to settle.  Further, before the absence of
    an offer to settle can properly be used against a party, the situation has to
    be one where it is realistic to expect offers to settle to be made.  The case
    here was not a situation where the issues could have been settled in any
    practical way.  Either the appellant was going to be able to proceed with his
    constitutional claim or he was not.  There was no way of compromising on that
    central issue.  Consequently, this was not a case where the presence or absence
    of offers to settle should have played any material role in determining the
    appropriate quantum of costs.

[16]

That
    salient point also impacts on the respondents offer to settle.  Her offer to
    settle does not reflect a compromise, given that it included a requirement that
    the appellant completely abandon his constitutional argument.  It is recognized
    that the failure of an offer to settle to contain a true element of compromise
    is a factor to be considered in deciding whether the offer properly impacts on
    the appropriate award of costs.  In addition, judges should be very cautious about
    relying too heavily on this factor to increase or decrease the quantum of
    costs, when the specific Rules regarding such offers are not directly engaged. 
    Even under r. 24(5)(a) of the
Family Law Rules
, it is but one factor
    that is to be considered.

[17]

The
    motion judge also determined that it was appropriate to award the respondent
    85% of her full recovery costs.  The motion judge did not explain where she
    drew this percentage from or why it was appropriate to apply it in this case.    On
    that point, I would note that employing 85% seems to simply be another way of
    utilizing a close to full recovery approach.

[18]

Another
    concerning aspect of the motion judges costs award is the fact that she
    appears to have increased the amount of costs as a consequence of the
    appellants ability to pay, along with her perception that the respondent was
    in need of a larger award in order for her to have the ability to pay her
    legal bills.  Neither of these considerations are appropriate ones when fixing
    the quantum of costs.  There is no principle relating to costs that requires
    wealthier individuals to pay more for costs for the same step in a proceeding
    than less wealthy ones.  While it may be appropriate, in the exercise of a
    judges overriding discretion, to reduce the quantum of costs that a party will
    have to pay because of their financial condition, this principle does not apply
    in the reverse.
[1]

[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.

[20]

The
    motion judge never considered whether a costs award of over $300,000 was proportionate
    to the issues raised by the motions that were before her.  It was an error in
    principle for her not to do so.

[21]

There
    is a final factor to which the motion judge appears to have given only passing
    consideration: the respondents 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.
[2]

[22]

In
    terms of quantum, the appellant suggested, before the motion judge, that the
    upper limit for a costs award in this case should be $100,000.  On appeal, the
    appellant has adjusted that upper limit to $200,000.  In my view, both of those
    amounts are exceptional for what was actually involved in these motions.  That
    said, I am conscious of the fact that a court should avoid overly penalizing
    the parties for errors made by their counsel in terms of the overall conduct of
    the matter.  In the end, I adopt the appellants revised upper limit and fix
    the costs of the original motions at $200,000 payable by the appellant to the
    respondent, inclusive of disbursements and HST.

[23]

I
    would not interfere with the motion judges conclusion that the costs should be
    designated as relating to support and thus enforceable by the Family
    Responsibility Office, although I do note that the appellant has since paid the
    costs so this issue would appear to be moot.

[24]

This
    leaves the costs of the appeal itself.  If the parties have not resolved those
    costs, they may make brief written submissions (no more than five pages and no
    case authorities need be filed).  The appellant shall file his submissions
    within 10 days and the respondent shall file her submissions within 10 days
    thereafter.  No reply submissions are to be filed.

Released: October 22, 2018

I.V.B. Nordheimer J.A.

I agree. P. Lauwers J.A.

I agree. K. van Rensburg J.A.





[1]

That this approach applies in the family law context seems
    implicit in this courts decision in
C.A.M. v. D.M.
(2003), 67 O.R. (3d) 181 (C.A.) at para. 42.



[2]

Divided success is an appropriate consideration in fixing
    costs in family law matters  see r. 24(6).


