The Reason Behind Costs Awards in Family Law Matters
When parties are involved in family law litigation, it is possible that the court will find one party liable to the other for their costs of the proceeding. In 2018, in the case of Mattina v. Mattina, the Court of Appeal confirmed that rules with respect to costs are designed to foster four fundamental purposes:
- to partially reimburse successful litigants;
- to encourage settlement;
- to discourage and sanction inappropriate behaviour by litigants; and
- to ensure that cases are dealt with justly.
The Framework for Awarding Costs in Family Law Matters
In determining costs, the courts will first consider which party was successful, as section 24(1) of the Family Law Rules creates a presumption of costs in favour of the successful party. In deciding which party was successful – which is not always a straightforward task – the court will take into account how the final order compares to any settlement offer that the parties made, as well as the position each party took at trial.
In fixing the amount of costs, section 24(12) of the Family Law Rules states that the court must consider the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues in question:
- each party’s behaviour;
- the time spent by each party;
- any written offers to settle;
- any legal fees, including the number of lawyers and their rates;
- any expert witness fees, including the number of experts and their rates; and
- any other expenses properly paid or payable.
The court also has the discretion to consider “any other relevant matter.”
In considering each party’s behaviour, the court will focus on determining if they acted reasonably throughout the litigation. In doing so, the court will examine:
- the party’s behaviour in relation to the issues form the time they arose, including whether the party made an offer to settle;
- the reasonableness of any offer the party made; and
- any offer the party withdrew or failed to accept.
The court may also be asked to consider whether a party acted in bad faith. If the court determines that a party has acted in bad faith, the Family Law Rules provides that the court must decide costs on a full recovery basis and order the party to pay the costs immediately. That said, it should be noted that the law sets out a fairly high threshold of egregious behaviour to reach a finding of bad faith. As an Ontario court stated:
Bad faith is not synonymous with bad judgment or negligence. Rather, it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. Bad faith involves intentional duplicity, obstruction or obfuscation. To find bad faith the court must find some element of malice or intent to harm.
As noted above, in considering costs, the court will also consider whether either party made an offer to settle. The consequences of an offer to settle are set out in section 18(14) of the Family Law Rules. Specifically, s. 18(14) states that unless the court orders otherwise, a party who makes an offer is entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:
- If the offer relates to a motion, it is made at least one day before the motion date.
- If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
- The offer does not expire and is not withdrawn before the hearing starts.
- The offer is not accepted.
Finally, the court may be asked to consider a party’s ability to pay when making a costs award. It is important to remember, however, that having limited means is not a bar to being liable for costs. That is, someone whose financial circumstances are limited may still be ordered to pay a costs award, particularly if that party has acted unreasonably.
Lessons Learned
Your behaviour during litigation may impact whether costs are awarded to you, against you, or not at all. Contact Gelman & Associates if you are involved in a separation or divorce and have questions about your rights. At Gelman & Associates, our lawyers provide exceptional legal representation in all family law matters. Our goal is to always empower clients to make informed decisions about their future. We give all prospective clients a comprehensive family law kit during their initial consultation, as well as a copy of our firm’s handbook on separation and divorce. This information is full of resources that will help you understand and navigate the difficult and often complicated separation and divorce process.
With six offices throughout Aurora, Barrie, Downtown Toronto, Mississauga, North York and Scarborough, we are easily accessible by transit and off-highway. Our phone lines are open Monday to Friday from 8:00 a.m. to 8:00 p.m. Call us at (844) 736-0200, or contact us online to schedule an initial consultation.
