How To Determine Costs When Resolution Is Reached Before A Trial Concludes
It’s always great when parties involved in legal disputes outside of the courts. It’s one of the reasons we offer mediation services to our clients. While settling out of court saves a lot of money, there can still be some bills left to pay. In situations such as this it’s natural to ask who is responsible for those. This very question was recently addressed in a recent decision from the Ontario Court of Justice.
Reaching a resolution
The parties reached final consent on all issues relating to their separation on November 8, 2018. The largest issue they were dealing with was around the parenting plan for their son, who was five-years-old at the time of the trial. The only issue left outstanding was that related to costs.
The father had brought the application on May 10, 2018 and had asked for an order that imposed an equal time sharing plan for both parents. He also sought an order seeking to offset child support based on the shared parenting of the child.
Ultimately, the father abandoned his request for an equal shared parenting plan and reduced child support. The parties instead reached an agreement that closely resembled the parenting plan they already had in place.
Following the resolution, both parties were permitted to seek costs, and both did. The mother sought full costs of $12,206.25, or in the alternative, partial costs of $7,721.25. She argued that the application was a waste and forced her to incur unnecessary legal costs. The father also sought costs of partial indemnity of $4,523.89 or full indemnity of $7,166.11. The father’s position was that he was forced to bring the application after the mother backed out of earlier negotiations after he accepted her settlement proposal. He stated her position was unreasonable and that he stopped pursuing the matter because he “did not have the energy to continue the fight.”
The court started its analysis by covering the awarding of costs, eventually explaining the rules for when parties settle before a trial concludes. The court wrote,
“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.
“Some courts have held that it is not appropriate to go behind the freely negotiated terms of settlement and to engage in an exercise of determining which party’s position on each issue would have been accepted by the trial judge if the matter had proceeded to trial.
“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.”
In applying the law to the situation before it, the court found that the father took an “all or nothing position” and refused to find middle ground. It was only after he was unable to achieve what he wanted that he withdrew his application. The court wrote,
“The application was completely unnecessary. The father could have achieved his stated goal of spending more time with the child, moving towards an equally shared parenting plan and thereby reducing his child support if he had accepted the increased parenting time that was offered to him before court and had recognized that the best interests of the child demanded a gradual approach.”
The court found that the mother was entitled to some costs and awarded her $6,000.
While the parties in this case did not go through mediation, it is still an alternative to many issues and is worth exploring with your lawyer. To speak with an experienced Windsor lawyer about the mediation process and how it might benefit your case, call 519.973.1500 or contact us online. Many of our clients are referred to us by former and current clients, as well as by lawyers, accountants and other professionals.