Can an Order for Costs Be Reduced due to COVID-19’s Impact on Income?
In the recent case of Levin v. Levin, the Ontario Court of Appeal rejected an application to reduce the costs order requiring the husband to pay a portion of the wife’s legal expenses.
- Background: The Original Costs Order
In its previous endorsement, the Superior Court of Justice referred to its discretionary assessment to determine costs based on any offers to settle submitted prior to trial and the date of which they were submitted to the other party. In Levin, the wife had submitted two offers to settle prior to trial; both of which the husband declined. Rule 18(14) of the Family Law Rules states that the wife is entitled to costs up until the date that the offer was served and fully recover costs from that date. In this case, the wife was only seeking costs relating to the date of the second offer to settle.
In its consideration of the issue, the Court assessed the husband’s application to dismiss costs at several stage of the case, namely: a motion, two trial management conferences, a mid-trial conference, and a third-party records motion. The Court responded as follows:
Should Mr. Levin be awarded costs for his motion returnable at trial?
[5] Mr. Levin states that Ms. Levin refused to attend for questioning on October 30, 2017, just days before the November trial sittings when the matter was expected to be called for trial, because he would be present at the questioning. He had to bring motion to preclude Ms. Levin from relying on the transcript of his questioning at the upcoming trial. He states that after the second trial management conference held on January 18, 2018, Ms. Levin abandoned her refusal to attend and agreed to be questioned in his presence. No consent or order was made withdrawing Mr. Levin’s claim for costs for the non-attendance or for the motion.
[6] Ms. Levin states that she agreed to be questioned only after McGee J. gave specific directions as to how Mr. Levin was to conduct himself. The issue became moot. The motion was never argued. No costs award was made against her.
[7] Rule 24(11) states that the failure of the court to determine costs or reserve costs after a step in the case does not prevent the court from awarding costs in relation to that step at a later stage in the case. At trial, there was some evidence regarding why Ms. Levin did not wish to be questioned in Mr. Levin’s presence. She is the successful party at trial. Accordingly, I decline to award Mr. Levin costs associated with this motion.
Should Ms. Levin be awarded costs of the trial management conferences held on July 20, 2017 and January 18, 2018?
[8] Mr. Levin states that the costs of these conferences were not reserved to the trial judge so they should not be awarded to Ms. Levin.
[9] Again, Rule 24(11) does not require that costs be reserved to the trial judge. She is the successful party at trial. Accordingly, I decline to deny her the costs of the trial management conferences.
Should Ms. Levin be awarded costs of the mid-trial conference?
[10] I suggested that the parties attend the mid-trial conference. It did not significantly lengthen the trial. The parties were unable to settle. Because Ms. Levin is the successful party at trial, the costs of the mid-trial conference are properly payable by Mr. Levin.
Should Ms. Levin be awarded the costs of the third party records motion?
[11] McGee J. reserved the costs of this motion to the trial judge. Mr. Levin states that no costs should be awarded to Ms. Levin for the motion. Ms. Levin had to bring this motion regardless of Mr. Levin’s position because he did not have authority to consent to it.
[12] I note that the result of this motion was that Mr. Levin’s partner, Helen Sanders, was ordered to produce certain financial records. McGee J. stated that trial unfairness would result if the records were not produced. Although Mr. Levin’s counsel did not represent Ms. Sanders and nobody attended for her, Mr. Levin opposed the motion. Mr. Levin states that Ms. Levin delayed in bringing this motion so it had to be heard on an urgent basis. The parties waited all day for the motion to be heard.
[13] This motion did not request an order against Mr. Levin. He correctly states that he could not consent to it. Ms. Sanders could have opposed the motion. She did not attend. Therefore, the motion could have proceeded on an uncontested basis which would have resulted in a modest amount of costs. The costs of this motion resulted from Mr. Levin’s opposition to it. The order was granted. Ms. Levin is entitled to the costs of this motion.
The Court concluded its assessment by taking into account the consequence that awarding costs would have on the husband’s financial situation. It was determined that the husband had earned considerably more than was declared within the relevant financial disclosure and concluded that the costs obligation would not be enough to seriously harm his financial situation in the long-term.
- Court of Appeal’s Ruling on COVID-19 Impact
The husband then brought an appeal seeking to overturn the trial judge’s original order relating to spousal support, child support, net family property, and costs. After this unsuccessful appeal, the wife sought further costs on a partial indemnity basis in the amount of $13,585.00.
The husband sought to reduce this amount to $10,000.00 by relying on the negative impact that the COVID-19 pandemic has had on his self-employment income. However, no proof of such economic repercussions due to the pandemic were submitted.
The Court of Appeal concluded that a reduction of $1,585.00 was reasonable in light of the appeal being heard in writing and not requiring in-person attendance.
