Case law: The costs of unwillingness to settle

In Jackson v Mayerle (2016 ONSC 1556), Justice Pazaratz has written another colourful decision, this time in a case where the mother refused to accept a number of offers to settle presented by the father and, after a 36-day trial in which the father was successful on all substantive issues, he sought costs from the mother.

The couple separated in 2011 and the trial was concluded in 2016. The father’s legal expenses came to $300,000 and the mother’s to more than $200,000.

Justice Pazaratz, before considering the costs issue, had this to say:

But pause for a minute to consider the overwhelming tragedy of this case. These are nice, average people. Of modest means (now considerably more modest). They drive old cars and probably pinch pennies shopping at Costco. And yet somehow, between them, they spent more than half a million dollars on lawyers . . . No matter what costs order I make, the financial ruin cannot be undone. They’ll never recover. Their eight-year-old daughter’s future has been squandered. How did this happen? How does this keep happening? What will it take to convince angry parents that nasty and aggressive litigation never turns out well?

While the decision is long, its essence is simple: where one party persistently rejects reasonable offers to settle made by the other party, that party will bear some financial consequences.

In reaching this conclusion and setting a costs amount, Justice Pazaratz reviews both statute and case law. He notes that Rules 18 and 24 of the Family Law Rules and most of the case law are focused on the concepts of success (which party is more successful than the other at the end of proceedings) and reasonableness (of each party and of the amount of costs to be awarded).

He then considers in detail the extensive pre-trial back and forth between the parties, which included numerous offers to settle by the father, all of which were rejected by the mother. The key issue was the custody of their daughter, although money and property were also in dispute.

With respect to their daughter’s custody, there had been a section 30 assessment that recommended that the father have sole custody. The father suggested that this recommendation prevail.

There were also offers to settle made by the father with respect to a mental health assessment of the mother, spousal support, child support and the disposition of the matrimonial home.

At trial, the father was awarded sole custody of the child, with final decision making authority with respect to all issues in the child’s life. The child support order was more favourable to the father than his offer to settle, while the spousal support order was more favourable to the mother. The property division issues were resolved in a manner different from that proposed by the father in his offer to settle.

In other words, the father was successful on the most substantive issue at stake – custody – but was not successful on the issue of spousal support.

Justice Pazaratz determined that the father should be awarded costs, and considered a number of factors in deciding on the amount of costs that would be reasonable to both parties:

He found the mother’s behaviour on the main parenting issue to have been unreasonable both before and during the litigation:

This was not just a case of two loving parents being committed to their child. The respondent set out to demolish the applicant’s relationship with his daughter. It backfired, and now she’s scrambling to avoid her time with the child being further eroded.

He found that there had been some bad faith behaviour by the mother, which increases the amount of costs to be awarded.

He also noted that the applicant’s request for more than $250,000 in costs “must be considered in the context of fairness, proportionality, affordability and reasonable expectations and allocation of resources. As he wrote:

Winning – even winning big time – does not automatically mean the loser has to write a blank cheque on costs.

In the end, Justice Pazaratz ordered the mother to pay $192,000 in costs to the father.

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