The Reality of Costs in Family Law Disputes

A recent decision by the Ontario Superior Court provides divorcing parents with a cautionary tale about allowing outstanding disputes to get out of control and racking up huge costs.

What Happened?

Following their separation, the parties at issue resolved many of the outstanding financial issues on their own. The remaining issues all related to parenting more specifically, the children’s estrangement from the father, and his subsequent efforts to remedy this estrangement, with some minor residual financial disputes.

For most of the five years leading to the litigation, the father had been fine with the children residing primarily with the mother. At that time, he had sought regular parenting time only. However, by September 2015, the father’s relationship with the children had significantly deteriorated and he was seeking a custody reversal to allow him to participate in the Family Bridges Program.

The mother sought to move to Arizona with the children. She proposed that the children spend monthly blocks of time and extended holiday time with the father who was going to remain in Ontario.

The trial to resolve these issues lasted a total of 12 days. The above parenting issues took 11 days to address, and the financial issues took the remaining time.

The Party’s Positions on Costs

The father submits that he had been successful on the main parenting issues in disputes, that the mother had taken an unreasonable position on costs, and that her actions amounted to bad faith. He conceded that the court’s final order resembled aspects of the parenting plan that had been proposed by the mother, but that her actions leading up to and during the trial should outweigh any final outcome. He sought partial recovery costs that amounted to just over $235,000.

The mother also argued that she had been successful on the parenting issues. She asked the court to disregard any positions she had taken leading up to the trial, but to only focus on the position she had taken at trial. She further noted that the final order was very close to what she had proposed in terms of parenting duties at the outset of the trial. She additionally denied acting in bad faith, and submitted that her position at trial and her behavior during the proceedings were reasonable in light of the domestic violence that had occurred during the marriage. The mother sought full recovery costs amounting to just over $530,000.

Both the father and mother argued that the lengthy litigation left them in a “seriously compromised financial position” and asked the court to consider this in determining costs.

General Costs Principles

In a well-established decision, the Ontario Court of Appeal stated that costs rules are intended to serve three fundamental purposes:

1. Partial indemnification of the cost of litigation for successful litigants;
2. Encouragement of settlement between parties;
3. Deterrence of inappropriate behavior by litigants.

Costs should ultimately reflect what the court views as a fair and reasonable amount to be paid by the unsuccessful party.

In family law, the “preferable approach” is to have costs generally approach full recover so long as the successful party behaved reasonably and the costs they are claiming are proportional to the issues in dispute and the ultimate result.

Under s. 24(1) of the Family Law Rules, the starting point of any costs analysis is the presumption that a successful party is entitled to costs.

The Court’s Conclusions on Costs

The court concluded that the parenting issues had been the primary focus of the trial, and occupied the majority of the court’s time. More specifically, the court found that:

• The success of each party on the parenting issues was mixed;
• The father did not achieve his desired custody reversal, and the mother did not obtain an order allowing her to move to Arizona with the children;
• While the mother may have been successful in terms of the obtaining a final order whose terms were similar to the draft order she submitted, the draft order had been submitted “late in the day” and after much of the preparation for the trial had already been done;
• The mother’s altered position did not shorten or expedite the trial;
• The father had some success relative to the issue of mobility of the children, but the emphasis during the trial had been on the estrangement and the appropriate remedy for it;
• Neither party was successful in terms of their offers to settle the remaining parenting issues; and
• Each party adopted different positions regarding the parenting issues at various stages of the litigation, and therefore neither could be said to be more reasonable than the other.

The court ultimately concluded that in light of the above, it “would not be fair or reasonable to require either party to pay costs to the other” with respect to the parenting issues.

In terms of the financial issues, the court found that the mother “had more success”:

• The mother served a separate offer to settle the financial claims, and the ultimate result was closer to that offer;
• The mother’s position on the financial issues was more reasonable;

On the financial issues, the court found that the mother was entitled to costs incurred to resolve those issues and ordered the father to pay the mother $20,000 in costs within 60 days.

Lessons Learned

More than anything, this case illustrates how quickly the cost of a family law dispute can add up. Here, the full trial lasted from September until December 2015, and the party’s expenses were divided into three phases:

• Pre-trial prep from September 8, 2015 to November 15, 2015;
• Trial from November 15, 2015 to December 1, 2015; and
• Preparation of written submissions.

According to his submitted Bill of Costs, the father spent as follows:

• Pre-Trial Phase: $158,897.58
• Trial Phase: $112,825.12
• Written Submissions: $28,639.85
• Experts fees: $37,343.32 (primarily related to the parenting issues).

The mother’s Bill of Costs indicated that she spent:

• Pre-Trial Phase: $229,979.86
• Trial Phase: $190,749.65
• Written Submissions: $68,055.38
• Experts fees: $30,737.38 (primarily related to the financial issues).

The court found the father’s fees “on whole reasonable and appropriate”, but noted that the mother’s fees were “somewhat on the high side” as a result of having retaining two senior counsel. The court specifically noted that the $68,000 spent for the preparation of written closing submissions was “excessive”.

In the end, the parties spent almost $800,000 in legal fees, and ultimately only recovered $20,000. Individuals involved in family law disputes should understand the high costs of litigation, be realistic, and choose their battles accordingly. In this case, both parties were convinced that they had each been successful with respect to the final outcome, but neither received costs on a full indemnity basis.

If you have questions about separation, divorce, custody disputes, or any other family law issues, contact the family lawyers at Gelman & Associates. We have six offices throughout Ontario for your convenience and our phone lines are open Monday to Friday from 8 AM to 8 PM. Call us at (416) 736-0200 or 1-844-736-0200 or contact us online for an initial consultation.