“A successful party is presumed to be entitled to his or her costs, pursuant to Rule 24(1) of the Family Law Rules. The preferable approach in family law cases is to allow costs on a full recovery basis, provided the successful party acted reasonably and the costs claimed are proportional to the issues and results and were within the range that the opposing party should have expected if unsuccessful in the motions Family Law Rules, O Reg. 114/99, Rule 224(1); Sims-Howarth v. Bilcliffe, 2000 ONSC 22584 (CanLII), para. 11; Biant v. Sagoo 2001 ONSC 28137 (CanLII), para. 1.
Costs Orders are designed to achieve three principal purposes, (a) to indemnify successful litigants; (b) to sanction unreasonable conduct of the litigation; and (c) to encourage settlement: Paranavitana v. Nanayakkara, 2010 ONSC 2257 (CanLII).
A litigant whose conduct was reasonable and who is successful in a proceeding should not be required to bear the costs of having his rights tested: Serra v Serra 2009 ONCA 395 (CanLII). However, an unsuccessful litigant should not be required to pay the costs of a motion that the successful litigant precipitated by his unreasonable conduct, or be so heavily burdened with costs as to discourage other litigants from submitting issues to the court where the outcome is not a foregone conclusion that should have been anticipated.
Historically, the successful party in a motion made necessary by the responding party’s breach of a court order was entitled to costs on a substantial indemnity scale: Cassidy v. Cassidy, 2011 ONSC 791 (CanLII), para. 14; Astley v. Verdun [2013] ONSC 6734 (SCJ) at paras 52 to 58. This was because a finding of contempt is a finding of unreasonable conduct. Substantial indemnity costs did not follow automatically or invariably from a finding of contempt, but such a finding gave rise to a rebuttable presumption that the successful party was entitled to costs on a substantial indemnity scale. In Astley v. Verdun, (2013), Goldstein J. described the jurisprudence governing the imposition of substantial indemnity costs as it pertains to contempt, he stated:
I characterize the test this way: there is a rebuttable presumption that substantial indemnity costs are appropriate in a contempt of court case. The presumption may be rebutted where the contemnor is suitably contrite, has attempted to purge his or her contempt, has taken steps to minimize costs incurred by the other party, and the contempt itself is towards the lower end of the “flagrant and wilful” scale: at para 57.
[Emphasis added]
In the present day, the Family Law Rules do not explicitly provide for costs on either a partial or substantial indemnity scale. Rule 18(14), dealing with the costs consequences of a failure to accept an Offer to Settle, instead differentiates between “costs” and “full recovery of costs”. Rule 24(8) also refers to “costs on a full recovery basis,” where a party has acted in bad faith. In a family law case, the court need not find “special circumstances” before ordering costs on a full recovery basis: Sordi v. Sordi, 2011 ONCA 665 (CanLII), 283 O.A.C. 287. It has a range of costs awards open to it, from nominal to just short of full recovery.
In Sims-Howarth v Bilcliffe, (2000), Aston J. held that the two traditional scales of costs are no longer an appropriate way to quantify costs under the Family Law Rules: 2000 CanLII 22584 (ON SC), [2000] O.J. No. 330 (S.C.J.). He stated that, having determined that one party is liable to pay costs, the court must fix the amount at some figure between a nominal sum and full recovery, having regard to the factors set out in Rule 24, without any assumptions about categories of costs. This characterization of costs under the Family Law Rules was approved by the Ontario Court of Appeal in C.A.M. v D.M.: 2003 CanLII 18880 (ON CA), [2003] O.J. No. 3707 (C.A.), at para. 42.
In Berta v. Berta, (2015), the Court of Appeal stated:
In Biant v. Sagoo (2001), 2001 CanLII 28137 (ON SC), 20 R.F.L. (5th) 284 (Ont. S.C.), the court considered the costs award scheme under the rules and commented, at para. 20:
[T]he preferable approach in family law cases is to have costs recovery generally approach full recovery, so long as the successful party has behaved reasonably and the costs claimed are proportional to the issues and the result. There remains, I believe a discretion under Rule 24(1) to award the amount of costs that appears just in all the circumstances, while giving effect to the rules’ preeminent presumption, and subject always to the rules that require full recovery or that require or suggest a reduction or an apportionment.
This court has repeatedly endorsed the Biant court’s approach to the determination of costs in family law disputes: see for example, Ruffudeen-Coutts v. Coutts, 2012 ONCA 263 (CanLII), 15 R.F.L. (7th) 35, at para. 4; Sordi v Sordi, 2011 ONCA 665 (CanLII), 134 R.F.L. (7th) 197, at para. 21; M. (A.C.) v. M. (D.), 23003), 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (C.A.), at para. 40: Berta v. Berta, 2015 ONCA 918 (CanLII), at paras. 92-93.
Costs must always be proportional to what is at stake in the case, and to the unsuccessful party’s reasonable expectation as to what costs he may face if he is unsuccessful. In appropriate circumstances, unreasonable behavior will result in a higher award of costs. In Perri v. Thind et al., (2010), Henderson J. granted leave to appeal to the Divisional Court from a costs award that was a marked departure from the normal or routine costs made in motions court: 2009 CanLII 34977 (ON SC), 98 O.R. (3d) 74 (S.C.). In doing so, he stated that costs orders are not designed mainly to be a punishment, but acknowledged that costs, when awarded on a higher scale, can serve to express the court’s disapproval of unreasonable conduct: Perri, at paras. 24-26, 32-33.”
Chrabalowski v. Chrabalowski, 2018 ONSC 6716 (CanLII) at 15-21