“The Ontario Court of Appeal has reiterated the importance of costs awards as a tool for promoting efficient, fair and meaningful access to justice in Fong v. Chan, 1999 CanLII 2052 (ON CA), 1999 CarswellOnt 3955, 181 D.L.R. (4th) 614, 46 O.R. (3d) 330 (C.A.), Serra v. Serra, 2009 ONCA 395 and Mattina v. Mattina, 2018 ONCA 867 (C.A.). In those cases, the court held that modern rules respecting costs aim to foster the following four fundamental purposes:
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- To partially indemnify successful litigants for the cost of litigation;
- To encourage settlement;
- To discourage and sanction inappropriate behaviour by litigants; and
- To ensure that cases are dealt with justly, in accordance with the primary objective of the Family Law Rulesset out in Rule 2(2).
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While these four objectives provide a general framework for the analysis of costs, the courts must also ensure that the law of costs does not become an impediment to the pursuit of justice. Accordingly, in seeking to advance these objectives, the court should also consider the importance of not unduly deterring potential litigants from pursuing legitimate claims for fear of overly burdensome costs consequences (Cassidy v. Cassidy, 2011 CarswellOnt 1541 (S.C.J.); Climans v. Latner, 2020 ONCA 554 (C.A.), at para. 90).
The Court of Appeal has highlighted the discretionary nature of costs awards and the importance of considering all relevant factors based on the unique facts of each case (Andrews v. Andrews (1980), 1980 CanLII 1913 (ON CA), 32 O.R. (2d) 29 (C.A.)). It has emphasized that although court rules respecting costs have circumscribed the broad discretion which section 131 of the Courts of Justice Act grants the court in regard to costs, they have not completely negated this discretion (M.(C.A.) v. M.(D.), 2003 CanLII 18880 (ON CA), [2003] O.J. No. 3707, 67 O.R. (3d) 181, 2003 CarswellOnt 3606 (C.A.); Fielding v. Fielding, 2015 ONCA 901 (C.A.).
The determination of costs is a two-stage process. First, the court must decide whether any party is liable for costs. If costs liability is established, the court must then determine the appropriate amount of the costs award. Rule 24(10) of the Family Law Rules establishes the general principle that the court shall promptly after dealing with a step in the case determine in a summary manner who, if anyone, is entitled to costs in relation to that step and set the amount of any costs, or alternatively shall expressly reserve the decision on costs for determination at a later stage in the case. However, Rule 24(11) provides that the court’s failure to act pursuant to Rule 24(10) in relation to a step in the case does not prevent a judge from awarding costs in relation to the step at a later stage in the case.”