This recent decision by Justice Fryer of the Superior Court of Justice is a well written decision that provides a very good summary of the law of costs. However, it also serves as a caution to family law litigants as to the costs of litigation, and reminds litigants that even if they feel as though they were largely successful with respect to the outcome of the case, this does not necessarily mean that they will be receiving their costs of the litigation on a full indemnity basis. The parties in this case spent nearly $800,000.00 in legal fees, and ultimately, only $20,000.00 in costs were awarded. This case serves as a stark reminder to family law litigants to weight the costs of litigation beforehand.
Following their separation, the parties in this matter commenced the litigation process. The litigation preceding this trial lasted approximately five years. Over that period of time, the parties’ had resolved many of the financial issues with respect to their matter, but the parenting issues, and minor financial issues, remained outstanding.
The trial lasted a total of 12 days, and took place in November – December, 2015. The parenting issues took up at least 11 full days of the trial, with the financial issues taking up the remainder.
The trial judge released her decision in May, 2016, following which the parties attempted to resolve the issues of costs. Notwithstanding same, the matter came before the judge in the herein matter for a determination of costs of the litigation.
The Court commences the analysis by outlining the basic principles of the law with respect to costs, and notes that the rules with respect to costs are designed to foster three fundamental principles:
- Partial indemnification of the cost of litigation for successful litigants;
- Encouragement of settlement between parties; and
- Deterrence and sanctioning of inappropriate behaviour by litigants
Ultimately, the Court notes, costs should reflect what the court views as fair and reasonable to be paid by the unsuccessful party.
The Court further notes that the 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. However, the assessment of costs is not a rigid exercise, and they must be proportional to the outcome.
As per Rule 24(1) of the Family Law Rules, the starting point in any costs analysis is the presumption that a successful party is entitled to costs. The Court found that on the balance of consideration of the rules related to costs, the parenting issues were divided between the parties, and the mother enjoyed success on the financial issues.
The father expended $300,362.75 in fees, and the mother expended $488,784.00 in fees. The Court found the father’s fees to be, on the whole, reasonable, and found the mother’s to be somewhat high, and specifically noted a $68,055.00 fee for the preparation of written closing submissions, to be excessive.
In determining what to award, the Court noted that the means of the parties were such that the costs of the trial would be devastating to both of them. Given the divided success with respect to the parenting issues, the Court found that it would be neither fair nor reasonable to require either party to pay costs to the other with respect to same. Given that the Mother had more success with respect to the financial issues, she was entitled to some costs with respect to same, which the judge set at $20,000.00 inclusive of disbursements and HST, to be paid within 60 days.