“It is well established that modern family cost rules are designed to foster three fundamental purposes: (i) to partially indemnify successful litigants; (ii) to encourage settlement; and (iii) to discourage and sanction inappropriate behaviour by litigants. Moreover, as the Court of Appeal emphasized recently in Mattina v. Mattina, a fourth fundamental purpose of costs awards in family law proceedings is to ensure that cases are dealt with justly, in accordance with Rule 2(2) of the Family Law Rules.
Rule 24(1) creates a presumption of costs in favour of the successful party. While consideration of success is the starting point in determining costs, this presumption does not automatically require that the successful party be awarded his or her costs. Entitlement to costs is subject to a variety of factors, including whether the successful party has behaved unreasonably, whether there has been bad faith conduct, and the nature of any offers to settle made by either party.
In determining the appropriate quantum of costs, Rule 24(12) sets out the relevant considerations. It provides as follows:
(12) SETTING COSTS AMOUNTS – 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 party’s 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.
While Rule 24(12) sets out the relevant considerations, the key principles governing awards of costs in family law proceedings are proportionality and reasonableness. As Nordheimer J.A. stated recently in Beaver v. Hill, “[p]roportionality is a core principle that not only governs the conduct of proceedings generally, but is specifically applicable to fixing costs in family law matters.” This conclusion flows directly from the fundamental Boucher principle, applied by Ontario courts on innumerable occasions, that costs awards should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties.”
Nor is there any principle mandating that a successful party should receive costs that “generally approach full recovery”. In fact, any such “full recovery” principle would be inconsistent with the first objective of costs awards as set out by the Court of Appeal in Serra, which is that costs are intended to “partially indemnify successful litigants”. While the Rules contemplate full recovery in specific circumstances, such as bad faith under Rule 24(8), or besting an offer to settle under Rule 18(14), the quantum of costs must always meet the test of proportionality and reasonableness in light of the importance and complexity of the issues at stake in the litigation.”