“The jurisdiction of this court to award costs arises from s. 131 of the Courts of Justice Act. That provision gives the court broad discretion to determine costs.
General Costs Principles
As the Ontario Court of Appeal noted in Serra v. Serra, 2009 ONCA 105 (CanLII), [2009] O.J. No. 432 (O.C.A.), at para. 8:
Modern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants: Fong v. Chan (1999), 1999 CanLII 2052 (ON CA), 46 O.R. (3d) 330, at para. 22.
In Shute v. Shute, [2017] O.J. No. 4110, Justice Victoria Starr of the Ontario Court of Justice supplements Serra’s three costs purposes by offering a fourth which apply in family law proceedings: ensuring that the primary objective of the Family Law Rules (“FLR”), dealing with cases justly, is met. Starr J. wrote:
29 Subrule 2(2) of the Rules adds a fourth fundamental purpose for costs: to ensure that the primary objective of the Rules is met — that cases are dealt with justly. This provision needs to be read in conjunction with Rule 24 of the Rules. Subrule 2(4) of the Rules states that parties have a positive obligation to help the court to promote the primary objective under the Rules. Clauses 2(3)(a) and (b) of the Rules set out that dealing with a case justly includes ensuring that the procedure is fair to all parties and saving time and expense. [See: Sambasivam v. Pulendrarajah, 2012 ONC 711 (CanLII)].
In Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634 (O.C.A.) (“Boucher”), at para. 24 the Ontario Court of Appeal stated that costs awards should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties.”
De-Emphasis on Counsel’s Hourly Rates and Time Spent
In Delellis v. Delellis and Delellis, 2005 CanLII 36447 (ON SC), [2005] O.J. No. 4345, (S.C.J.), Justice David Aston of this court noted the emphasis on setting a “fair and reasonable” amount of costs that emerges from Boucher and the cases following it. Aston J. found that this approach has led to a de-emphasis on hourly rates and time spent by counsel as the key factor in fixing costs. He continued at para. 9:
…Costs must be proportional to the amount in issue and the outcome. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant. [Citations omitted]
In Beaver v. Hill, 2018 ONCA 840 at para. 10, the Ontario Court of Appeal clarified that proportionality and reasonableness, the two key factors set out in r. 24(12)(a), are the touchstone considerations to be applied in fixing the amount of costs in family law matters.
Scale of Costs
In deciding costs in family law proceedings, judges are not constrained by the normal scale of costs found in the Rules of Civil Procedure. The court may increase or decrease what would ordinarily be an appropriate amount of costs based on the behaviour of the parties and the presence of absence of offers to settle. (Beaver v. Hill at para. 9).
Party Status does not Grant a License to Litigate Oblivious to the Consequences
The right to bring or respond to a case does not grant either party a license to litigate in a manner that ignores the consequence of that litigation. Justice Carole Curtis of the Ontario Court of Justice emphasized this point in Sabo v. Sabo, [2013] O.J. No. 4628 (O.C.J.), as follows at para. 38:
Parties to litigation must understand that court proceedings are expensive, time-consuming and stressful for all concerned. They are not designed to give individual litigants a forum for carrying on in whatever manner they may choose, oblivious to the impact of that conduct on the other side and, perhaps most importantly for the purposes of this case, oblivious to the mounting costs of the litigation…
Rule 24 Factors
FLR Rule 24 sets out the factors that the court must consider in the exercise of its discretion regarding costs. However the court retains its ultimate discretion to determine what costs are reasonable (C.A.M. v. D.M., 2003 CanLII 18880 (Ont. C.A.) at para. 43).
The starting point, found in r. 24(1) is that the successful party is presumptively entitled to the costs of a motion, enforcement, case or appeal (see also Beaver v. Hill and Berta v. Berta, 2015 ONCA 918). But as Rosenberg J.A. stated in C.A.M. v. D.M., at para. 41, that provision does not completely remove the court’s discretion to refuse to grant costs to the successful party. Further, as the Ontario Court of Appeal stated in Beaver v. Hill, there is no presumption that the successful party in a family law proceeding is entitled to an amount approaching full or even substantial indemnity costs. The exceptions to that principle are bad faith (r. 24(8)) or besting an offer to settle (r. 18(14)) (see paras. 11 and 13).
Further, under r. 24(6), if success in a step in a case is divided, the court may apportion costs as appropriate.”