If the Parties Settle, Who’s Entitled to Legal Costs?
The father had applied to the court for an order setting up an equal time-sharing parenting plan for his 5-year old son, and to have his child support obligations adjusted accordingly. He felt this would allow the child to spend the maximum amount of time with both him and the child’s mother.
However, he waited until the final settlement conference to consider withdrawing his application – then decided against. Instead he fired his lawyer. He then abandoned the claim entirely, himself.
He and the mother ended up reaching an agreement on consent, which the court said “closely resembled” the parenting plan that they had in the first place, as part of their separation agreement from three years earlier.
In light of the father’s fruitless and excessive application, and the unneeded legal fees and court time it required, the mother asked for her full costs of over $12,200.
In response, the father asked for his costs of over $7,100, on the basis that he was forced to bring the application because the mother backed out of earlier negotiations after he accepted her settlement proposal. He felt her position was unreasonable, and that he ended the court proceedings because he “did not have the energy to continue the fight.”
The court was asked to decide which of them was entitled to legal costs from the other. It started by confirming the basic principles on how legal costs are to be awarded in Family Law proceedings, including the presumption that the successful party is entitled the costs of a motion, enforcement, case or appeal. Plus, a party who has behaved unreasonably may be deprived of all or part of the costs to which they would otherwise be entitled.
However, there are dedicated costs rules covering situations where the parties end up settling their issues with each other. As the court wrote:
Awarding Costs in a Case that has Settled:
Courts have often held that where parties reach a settlement, the court should be slow to award costs in favour of one of the parties unless there are compelling reasons to do so. Courts want to encourage parties to settle their cases in order to avoid costs. It is also sometimes very difficult to determine who is the “winner” and the “loser” in a negotiated settlement. …
However, there are cases when costs may be awarded when parties reach a signed agreement. There may be instances where a settlement is a “clear capitulation” by one party in favour of another, and it is obvious who the successful party is in the litigation. …
Simply because the parties have settled, this does not mean that a court cannot still undergo a full costs analysis, taking into account the usual factors. A court may even consider a party’s behaviour in actually settling the case, adding:
But if a party eventually makes a good litigation choice by signing Minutes, that epiphany doesn’t automatically wipe out any history of bad litigation choices which would otherwise justify costs. Settling in the face of the inevitable may be little more than damage control.
If a party brings a motion asking to change almost everything, and at the last minute signs a Consent which changes almost nothing, how can they possibly argue that a judge will have a hard time figuring out who was successful?”
In this case, the settlement agreement was a “clear capitulation” by the father; he had completely abandoned his claim for equal shared parenting and a reduction of child support on the last hearing day, after firing his lawyer. He had also refused to exercise additional access to the child gradually, unless there was a full and equal parenting plan in place by court order or agreement. In fact, there were days leading up to the settlement where he could have spent more time with the child, but refused to do so.
As the court put it:
The father’s position was “all or nothing”. There was no middle ground for him. When he did not achieve “all” immediately, he withdrew his claim and blamed the mother.
The father’s position was not child-focused. It was about his rights as a father and not about what was in his child’s best interests. …
On the other hand, the court decided the mother had behaved reasonably throughout, and had been “put to great expense” in responding to the father’s unreasonable application, which was “an entirely wasted application and court process.”
As the successful party, the mother should be entitled to some costs, but not the full $12,200 claimed because she had never served a formal offer to settle. Instead, the court order the father to pay her $6,000.
For the full text of the decision, see:
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