Court File and Parties
Court File No.: Brampton 1486/08 Date: November 20, 2015 Ontario Court of Justice
Between: Jason Orvis, Applicant
— And —
Terri-Ann Eadie, Respondent
Before: Justice J.W. Bovard
Ruling on Costs released on: November 20, 2015
Counsel:
- Mr. Orvis: Self-represented
- Ms. J. Connon: Counsel for the respondent
BOVARD J.:
[1] Introduction
This is a ruling with respect to costs in the following matters:
- The respondent's motion to change;
- The applicant's response to the motion to change; and
- The respondent's motion to strike the applicant's pleadings.
[2] Procedural History
The court rendered its decision with regard to these matters on March 16, 2015. The deadline for costs submissions was April 16, 2015. The court apologizes to the parties that it took so long to render its ruling on costs.
The Applicant's Position
[3] Applicant's Submissions
The applicant did not make submissions regarding costs.
The Respondent's Position
[4] Costs Requested
The respondent requests costs on a full indemnity basis in the amount of $44,321.62.
[5] Enforcement Through Family Responsibility Office
The respondent asks that any costs order be enforced by the Family Responsibility Office as falling under s. 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act, S.O. 1996, Chapter 31; in other words, payable as child support.
The Law
[6] Presumption of Costs
Rule 24 of the Family Law Rules states that there is a presumption that the successful party is entitled to the costs of the action.
[7] Factors for Determining Costs
The factors that the court must consider in setting the amount of costs are in subrule 24(11):
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness or unreasonableness of each party's behaviour in the case;
(c) the lawyer's rates;
(d) the time properly spent on the case, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order;
(e) expenses properly paid or payable; and
(f) any other relevant matter.
[8] Fair and Reasonable Amount Standard
In Johanns v. Fulfourd, 15 R.F.L. (7th), para. 18, the court cited Boucher v. Public Accountants Council (Ontario) (2004), 188 O.C.A. 201 for the proposition that:
In a determination of costs, a judge considers all the factors set out in R. 24(11), but the Ontario Court of Appeal has said that at the end of the day, the judge must consider a "fair and reasonable amount" for the losing party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs of the successful litigant.
[9] Modern Cost Rules Objectives
In Quercia v. Francioni, [2011] O.J. No. 5208 (Ont.S.C.), paras. 43, 44, McGee J. cited the Court of Appeal's holding in Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905 (CA), para. 8, that modern cost rules are designed to:
- partially indemnify successful litigants for the cost of litigation;
- encourage settlement; and
- discourage and sanction inappropriate behavior by litigants.
Justice McGee stated that "The court's role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees. There is a component of reasonableness which must be considered when awarding costs. A cost award should reflect what the court views as a fair and reasonable amount".
[10] Analysis of Factors
I will now consider each of the factors set out in subrule 24(11).
(a) The Importance, Complexity or Difficulty of the Issues
[11] Nature of the Matters
The matters before the court were important, complex and difficult. They dealt with Ms. Eadie's motion to change Justice Pawagi's final order regarding access and child support, including s. 7 expenses for the parties' 8 year old child, Calli Alexandra Eadie Orvis.
[12] Additional Relief Sought
Ms. Eadie also sought orders regarding outstanding financial disclosure, and an order to terminate access "upon any further breaches" of Justice Pawagi's order.
[13] Motion to Strike
In addition, in a separate motion, Ms. Eadie sought an order striking Mr. Orvis's pleadings.
[14] Applicant's Counterclaims
In his response, Mr. Orvis asked for an order changing Justice Pawagi's order giving custody to Ms. Eadie. He requested an order for joint custody. He also asked for numerous changes to access. Mr. Orvis also submitted that he could no longer work, which would necessitate changes in Justice Pawagi's order for child support.
[15] Length of Ruling
The court's ruling with regard to all of the parties' proceedings was 27 pages long.
(b) The Reasonableness or Unreasonableness of Each Party's Behaviour in the Case
[16] Applicant's Obstruction of Financial Disclosure
Mr. Orvis made it very difficult for the court and Ms. Eadie to obtain financial disclosure from him. For example, the court was obliged to add Mr. Orvis's mother as a party. Over the course of the proceedings it became apparent that an investigation of her finances could shed much needed light on Mr. Orvis's financial circumstances because there was evidence that there were financial links between them, which Mr. Orvis was not fully divulging.
[17] Court's Findings on Financial Disclosure
With regard to the difficulties in assessing Mr. Orvis's true financial situation see paragraphs 129–162 of the court's ruling. I note especially paragraphs 131, 133, 134, 135, 136, and paragraph 159 where the court found:
…Mr. Orvis failed to provide sufficient financial disclosure in order that the court might best determine his actual income. This, coupled with the other factors mentioned above, lead me to conclude that Mr. Orvis is deliberately concealing his actual income.
[18] Importance of Financial Disclosure
Justice Hardman highlighted the importance of financial disclosure for the effective resolution of family law disputes in Godmer-Godin v. Alford:
In litigation generally, disclosure is the cornerstone of fairness. In this matter for example, the mother was prevented from knowing the case that she was to meet despite the motions and intervention of the court. The day before the trial commenced, there was still information missing and frankly no amount of adjournments would seem to be able to rectify the problem.
[19] Applicant's Unreasonable Conduct
Due to Mr. Orvis's obfuscation of his income and its sources, and his deliberate attempts to conceal his total financial situation, behaviour which can arguably be characterized as dishonest, the court was required to impute income to him. I find that Mr. Orvis's conduct in these proceedings was clearly unreasonable. I will discuss below if it constituted bad faith.
[20] Respondent's Reasonable Conduct
In contrast, I find that Ms. Eadie conducted her side of the litigation in a reasonable manner.
(c) The Lawyer's Rates
[21] Counsel's Hourly Rates
Ms. Connon was called to the bar in 1982. Her hourly fee of $450 is reasonable. Ms. Connon billed $175 per hour for her law clerk who has 14 years of experience. I find that this is reasonable.
(d) The Time Properly Spent on the Case
[22] Overview of Bill of Costs
I find the bill of costs confusing. First of all it is important to note that the bill of costs is supposed to be for costs incurred in the litigation of Ms. Eadie's motion to change and her motion to strike Mr. Orvis's pleadings. Ms. Eadie filed her motion to change on July 23, 2012. She filed her motion to strike Mr. Orvis's pleadings on May 30, 2014. These matters were argued on April 16, 2014 and October 27, 2014. The court released its ruling on March 16, 2015.
[23] Periods Covered
Ms. Connon claims costs for expenses incurred in the following periods:
- July 20, 2012 to January 8, 2013
- January 16, 2013 to October 4, 2013
- November 15, 2013 to March 26, 2015
[24] Items of Concern – Other Bills of Costs
Items that cause the court concern for which Ms. Connon claims costs during these periods are the following:
1. Other Bills of Costs
a. Within her bill of costs Ms. Connon included in italics two bills of costs for which the court already awarded costs on January 29, 2013 and March 11, 2014. I do not know what the purpose of this is because the court has already dealt with these costs.
b. In addition, it appears that inadvertently Ms. Connon claims costs for expenses incurred for what appears to be related to these already ordered costs:
i. $175.00 for drafting a bill of costs; $135.00 for reviewing a bill of costs; $1,125.00 for drafting costs submissions (December 12, 2013).
ii. Since the already issued costs order cited above was January 29, 2013, I assume that is what these expenses relate to. I do not know why Ms. Connon would include these expenses in her present bill of costs since they were already adjudicated on.
iii. $85.00 + $90.00 for drafting and reviewing a bill of costs (April 16, 2014).
- Since the other already issued costs order cited above was March 11, 2014, I assume that this is what these expenses relate to. Again, I do not know why Ms. Connon would include these expenses in her present bill of costs since they were already adjudicated on.
iv. $87.50 for drafting a bill of costs (September 29, 2014).
- The bill of costs for the matter that I am deciding now does not explain to what this expense relates. It is dated before the court's ruling on Ms. Eadie's motions so it cannot be for costs incurred in relation to that.
v. $437.50 for updating a bill of costs, plus other work (October 23, 2014).
- For the same reasons that I gave under the immediately preceding paragraph, I do not think that this expense relates to work done on Ms. Eadie's motions for which I am deciding costs now.
All of these costs pre-date the release of the ruling for which I am now deciding costs and some seem to be with regard to costs already ordered. I cannot understand how the court can appropriately allow these costs. They total $2,135. This amount will be deducted from the bill of costs.
2. Preparation of Orders
a. $35.00 of the preparation of orders to be issued by the court (February 19, 2013); $87.50 (June 26, 2013)
b. $70.00 "Draft Order of Justice Bovard" (March 17, 2014)
The bill of costs does not explain what these expenses have to do with the motion to change or the motion to strike Mr. Orvis's pleadings. Again, they pre-date the release of the ruling for which I am now deciding costs.
Consequently, the court feels that these amounts should be deducted from the bill of costs. They total $192.50.
3. Work Done with Regard to FRO
a. $225.00 for preparation for a FRO hearing (June 10, 2013)
b. $3,105.00 for attendance at a FRO hearing (June 11, 2014)
c. $35.00 for a draft letter to FRO + call to Ms. Eadie's father (June 12, 2013)
d. $45.00 to revise letter to FRO (June 14, 2013)
e. $270.00 to draft letters to FRO and Mr. Orvis's mother (July 19, 2013)
f. $45.00 to revise letter to FRO and Mr. Orvis's mother (July 22, 2013)
g. $90.00 to draft letter to FRO + $525.00 for "Work on Affidavit; Draft letter to FRO; Telephone call to client" (April 24, 2014)
h. $900.00 + $180.00 for attendance at a FRO hearing and drafting a letter to FRO and email to Mr. Orvis (April 29, 2014)
i. $990.00 for attendance at a FRO hearing (August 12, 2014)
These costs were all incurred prior to argument in the proceedings at bar was completed. At first, one might say that these matters did not have anything to do with the motions at issue in the proceedings that relate to this costs ruling.
But in the case at bar, since Mr. Orvis was so evasive with regard to his financial situation, it became necessary to track his every move in this regard. For example, during FRO proceedings the delinquent party's financial situation is a subject of investigation. The party is regularly asked to divulge his income. Therefore, FRO proceedings provided quite a fruitful source of information regarding Mr. Orvis's financial picture. Consequently, I find that billing for these "FRO costs" is justified.
However, that does not mean that I agree with all of the amounts billed for this work. There are three amounts that I find concerning:
1. $3,105.00 for attendance at a FRO hearing (June 11, 2014)
a. I searched the endorsement records and there was no court appearance on this date for a FRO matter or for any other matter. This may be a typographical error.
b. There was an appearance on June 11, 2013, by Ms. Eva Iacobelli who appeared as agent for Ms. Connon at Mr. Orvis's motion for a refraining order, but she only appeared in the capacity of an observer. She did not make submissions.
c. There is an appearance on June 10, 2013 for a settlement conference and a motion, but Ms. Connon billed for that appearance.
d. In any case, my search of the endorsement records (FRO endorsement record and the regular endorsement record) does not show any appearance by Ms. Connon on June 11, 2014, or on June 11, 2013 for a FRO matter. If she inadvertently listed herself as attending while intending to bill for Ms. Iacobelli's attendance as an observer, Ms. Iacobelli's attendance would not justify such a large sum. I also note that there is no information in the bill of costs regarding Ms. Iacobelli's year of call or hourly rate so it is not possible to assess the costs of her appearance beyond a nominal sum, which I will set as $500. I agree that monitoring of these proceedings was in Ms. Eadie's best interests and that as her counsel Ms. Connon rightly expended resources in doing this.
This reduces the amount of costs that I will order for this appearance by $2,605.00
2. $90.00 to draft letter to FRO (Ms. Connon) + $525.00 for "Work on Affidavit; Draft letter to FRO (law clerk); Telephone call to client" (April 24, 2014)
a. Ms. Connon billed for three hours for work by her law clerk at $175.00 per hour. The bill of costs does not specify what the affidavit was for or how much time was spent working on it though. But it is safe to assume that it had to do with a FRO matter since the two letters referenced are to FRO. The bill of costs does not explain why both Ms. Connon and her law clerk had to draft a letter to FRO, however. I find this amount a bit high, so I will reduce it by $250.00
3. $900.00 + $180.00 for attendance at a FRO hearing and drafting a letter to FRO and email to Mr. Orvis (April 29, 2014)
a. On this date Ms. Connon appeared with Ms. Eadie at a FRO hearing. Ms. Connon appeared only as an observer. She did not address the court.
The FRO issue was how much should Mr. Orvis pay per month towards his child support arrears. At the hearing the FRO representative revealed that after I denied Mr. Orvis's refraining motion on June 12, 2013, he made an arrangement with FRO based on incomplete financial disclosure to pay $50.00 per month. I perused my endorsement of this date and it seems that the hearing could not have lasted much longer than 30 minutes or so.
As stated above, because of Mr. Orvis's evasiveness regarding his true income, Ms. Connon was obliged to track his FRO proceedings. Therefore, I find that it is appropriate to bill for this attendance, but since Ms. Connon did not have to address the court, and simply observed, I think that an appropriate amount for her attendance would be $630.00. This is a reduction of $450.00.
4. $990.00 for attendance at a FRO hearing (August 12, 2014)
a. My endorsement of this date shows that this appearance was lengthier and more involved than the one on April 29, 2014. It dealt with Mr. Orvis's arrears. He failed to appear and I issued a warrant for his arrest under s. 41(1) of the Family Responsibility and Support Arrears Enforcement Act. I also made various orders regarding repayment of arrears.
b. Ms. Connon and Ms. Eadie appeared as observers. However, Ms. Connon did speak to the issue of the amount of arrears owing. Other than that, FRO counsel did all of the work during the hearing.
c. I find that a fair and reasonable amount for this attendance would be $500.00. This is a reduction of $490.00.
5. Work Done for Settlement Conferences
a. $262.00 for work on a settlement conference brief + drafting letters and telephone call to client (May 8, 2013)
b. $900.00 for reviewing file and work on a settlement conference brief + email to client (May 17, 2013)
c. $225.00 + $402.50 for work on a settlement conference brief, motion and affidavit (May 22, 2013)
d. $90.00 for work on a settlement conference brief (June 3, 2013)
e. $45.00 for work reviewing Mr. Orvis's settlement conference brief (June 3, 2013)
f. $90.00 for work on drafting a Confirmation (I assume for the settlement conference) (June 6, 2013)
g. $270.00 for work to prepare for the settlement conference (June 7, 2013)
h. $1,800.00 for attendance at the settlement conference (June 10, 2013)
i. $210.00 + $675.00 + $175.00 for drafting, revising, settlement conference/trial management conference brief and preparing the brief with attachments to be served (October 4, 2013)
[25] Issue Regarding Settlement Conference Costs
The issue in regard to these costs is whether it is appropriate to order costs for conferences leading up to the argument of Ms. Eadie's motions.
[26] Cook v. Cook Principle
In Cook v. Cook the court stated:
The endorsements made at the various conferences are accordingly crucial to the overall determination of costs as the Court of Appeal of this province has interpreted Rule 24(10) to exclude from an overall costs award the time taken to prepare and attend on conferences which may well have been productive events, but where the endorsement is often silent as to costs. In order to obtain costs of those events as part of an overall costs award, counsel must speak to the issue of costs and reserve those costs to the trial judge. Without that, the law of this province as interpreted by the Court of Appeal is that costs of those events cannot be included in an overall costs award.
[27] June 10, 2013 Settlement Conference
Items a. thru g. relate to a settlement conference held on June 10, 2013. The settlement conference was long and complicated. It started with Mr. Orvis's then counsel advising that three days prior there had been a breakdown in their relationship and she could no longer act for Mr. Orvis. The court removed her from the record. Mr. Orvis filed a notice of change in representation that day. He said that he was going to apply for legal aid but he had not yet done so.
[28] Costs Reserved at June 10, 2013 Conference
Also heard on that day was a motion brought by Ms. Eadie to add Mr. Orvis's mother as a party, which the court granted. Therefore, while at first it may seem that $1,800 is excessive for an appearance at a settlement conference, I find that in this case it is not. Ms. Connon asked and the court agreed that costs would be "in the cause".
[29] October 16, 2013 Settlement Conference
Item i. refers to a settlement conference scheduled for October 16, 2013. Due to a delay for Mr. Orvis to speak to duty counsel and a heavy court docket, the matter had to be adjourned to another day. Costs of this appearance were reserved to the next day, November 25, 2013.
[30] November 25, 2013 Appearance
On November 25, 2013, the parties agreed to forego the settlement conference and to schedule a date to argue their motions instead. However, they did argue Ms. Eadie's motion for financial disclosure by Mr. Orvis's mother, who was not a party to the case. The court granted the motion and ordered that the parties serve and file costs submissions with regard to this motion. This is not related to the costs submissions that I am now deciding. In any case, the court has already ruled on costs with regard to this motion heard on November 25, 2013.
[31] October 16, 2013 Costs Deduction
Costs of the October 16, 2013 appearance were not spoken to. Since on November 25, 2013, the parties agreed not to proceed with the settlement conference, which was adjourned from October 16, 2013, I do not think that it would be appropriate to order costs for the preparation of the materials for this settlement conference. Therefore, I will deduct $1,060.00 from the bill of costs.
[32] Reasonableness of Time Spent
I find that the time spent for the matters that she indicates are reasonable. Due to Mr. Orvis's extreme evasiveness concerning his income and its sources, Ms. Connon was forced to go to great lengths to try to uncover information that would assist her client and the court to determine Mr. Orvis's true income. She had to do corporate searches of his company, vehicle searches had to be done, and she had to bring a motion to add Mr. Orvis's mother as a party.
[33] Applicant's Lack of Diligence
Mr. Orvis's extreme lack of diligence and openness with regard to his financial situation forced the court to constantly have to make financial disclosure orders and keep after Mr. Orvis in order to extract from him the required information to resolve the parties' child support issues.
[34] Applicant's Problematic Conduct
Mr. Orvis dismissed his counsel practically on the eve of a major motion (June 10, 2013), failed to appear in court without a credible reason, and consented to orders that Ms. Eadie sought on motion on the day of the argument of the motion.
[35] FRO Negotiations
Once, after the court denied Mr. Orvis's motion for a refraining order he negotiated with FRO for a reduction in the amount of child support that he was paying. A FRO representative advised the court later that Mr. Orvis conducted these negotiations based on incomplete financial disclosure.
[36] Examples of Problematic Conduct
I will supply examples of these occurrences, all of which occurred as part of the litigation of the proceedings for which Ms. Eadie seeks costs.
[37] Dismissal of Counsel
Regarding Mr. Orvis dismissing his counsel practically on the eve of a major motion, I referred to this incident above. His failure to advise Ms. Eadie's counsel or the court of the breakdown in his relationship with his counsel necessitated work to be done and an appearance in court by Ms. Eadie's counsel that could have been avoided had he notified her before the day of the court appearance.
[38] Last-Minute Consents to Orders
Regarding consenting to orders at the last minute:
After the court added Mr. Orvis's mother as a party, Ms. Eadie was forced to bring a motion to obtain financial disclosure from her. On November 25, 2013, the day of the motion, Mr. Orvis made submissions on behalf of his mother. She did not attend. Mr. Orvis consented to the disclosure being sought. Had he done so prior to this day Ms. Eadie's counsel would not have been obliged to prepare the motion and come to court to argue it. Mr. Orvis did not put forth any reasonable excuse why he waited until the last minute to consent to the disclosure sought. This is an example of how his actions ran up the costs in this case.
When I rendered my ruling regarding costs of the motion to add Mr. Orvis's mother as a party I noted that it had been quite a challenge to determine Mr. Orvis's income. That was why I added his mother as a party: so that she could be discovered, too. However, she did not comply with the court's financial disclosure orders. Mr. Orvis, who represented her in court because she never appeared, never provided a good reason for this failure. I found that Mr. Orvis behaved unreasonably in waiting until the day of the motion to consent to the order that Ms. Eadie sought.
Another example of Mr. Orvis consenting to orders at the last minute took place on October 27, 2014. The parties appeared to argue Ms. Eadie's motion to change, for which she is seeking costs now. One of the issues was custody. Mr. Orvis was seeking a change in Justice Pawagi's final order, which gave custody to Ms. Eadie. He wanted joint custody. On the day of the motion, he informed Ms. Eadie and the court that he now consented to Ms. Eadie having custody. Again, this last minute way of doing things caused Ms. Eadie to incur substantial legal costs.
[39] Applicant's Failures to Appear
Regarding Mr. Orvis failing to appear in court without a credible reason or with a dubious reason:
On March 24, 2014, Mr. Orvis failed to appear for a settlement conference because he said that he confused the dates. Although Ms. Connon's law clerk called him to tell him of the correct date, he filed a brief that had the date of the settlement conference as March 25, 2014.
On August 12, 2014, Mr. Orvis failed to appear regarding FRO enforcement of his child support arrears. He did not advise anyone that he was not going to appear. The court paged him throughout the day until 4:28 p.m. Mr. Orvis was present on April 29, 2014 when the court adjourned the case to August 12, 2014. The court issued a warrant for his arrest pursuant to s. 41 of the Family Responsibility and Support Arrears Enforcement Act.
On September 29, 2014, Mr. Orvis was supposed to be in court to make his submissions on Ms. Eadie's motion to change and his claims in response. He had not served or filed a response to Ms. Eadie's motion to strike his pleadings. He did not appear. His 16 year old son called Ms. Connon's legal assistant to tell her that Mr. Orvis went to the hospital that morning because of dizzy spells and that he was on intravenous.
The court adjourned the motion to October 27, 2014 and ordered that seven days prior to the next appearance Mr. Orvis serve and file medical proof to explain his non-attendance. All that he provided was a record from Trillium Hospital that he was registered at the hospital at 5:10 a.m. and was discharged at 11:00 a.m. feeling "much better".
[40] FRO Negotiations After Refraining Motion Denied
Regarding negotiating with FRO for a reduction in the amount of child support that he was paying after the court denied his refraining motion:
On April 29, 2014, Mr. Orvis appeared in court to address his FRO matters. During this appearance, the FRO representative, student-at-law, Ms. G. Nagarajah, told the court that Mr. Orvis reached a payment agreement with FRO based on incomplete financial disclosure given to them by Mr. Orvis.
[41] Applicant's Financial Disclosure Failures
Regarding constantly having to make financial disclosure orders to extract from Mr. Orvis the required information to resolve the parties' child support issues, Mr. Orvis's extreme lack of diligence and openness with regard to his financial situation forced the court to constantly have to make financial disclosure orders and keep after Mr. Orvis in order to extract from him the required information to resolve the parties' child support issues. There are too many examples to mention them all here; however, I will mention some of the more striking incidents. Although the court stressed on many occasions to Mr. Orvis that he had to provide full financial disclosure in order to resolve in an efficient manner the child support issues that he had with Ms. Eadie:
Mr. Orvis did not file income tax returns until Ms. Eadie brought her motion to change.
Mr. Orvis failed to include four vehicles in his financial statement.
Mr. Orvis failed to disclose his business in his financial statement.
Mr. Orvis failed to disclose the expenses that he incurred for his son's sports activities.
Mr. Orvis misrepresented his income in his financial statement, dated November 27, 2012.
Mr. Orvis misrepresented his income in his financial statement, dated June 11, 2013.
Mr. Orvis did not submit any evidence regarding his income for 2014 and 2015 as part of his presentation of his case on Ms. Eadie's motion to change.
Mr. Orvis did not provide updated medical information to support his claim that he could not work as a result of injuries.
Mr. Orvis not only did not provide full and frank disclosure regarding his income, I found that he concealed his income from the court and from Ms. Eadie.
[42] Applicant's Strategy
Suffice it to say that with regard to disclosure of his financial situation Mr. Orvis's strategy in this case was one of denial, delay, and throwing up smoke screens.
Other Problems with the Bill of Costs
[43] October 27, 2014 Attendance
I have a concern with regard to:
October 27, 2014, attendance for motion, 8 hours, $3,600
a. The normally scheduled judicial court day is from 10 a.m. to 4:30 p.m. I doubt that this motion took the whole day because the endorsement shows that on September 29, 2014, the court adjourned the case to October 27, 2014 at 10 a.m. for 60 minutes. The purpose of the adjournment was for continuation of Mr. Orvis's submissions regarding Ms. Eadie's motion to change, her motion to strike his pleadings and to address FRO matters. Although I understand that counsel have to attend prior to court commencing to deal with any last minute preparation that may be required, it is hard to justify 8 hours for attendance at this motion.
b. The bill of costs does not give any particulars as to why 8 hours were billed for this attendance. Judging from my endorsement of October 27, 2014 regarding what transpired on this day, I find that 3 hours is a reasonable amount of time.
[44] Revised Costs for October 27, 2014 Attendance
I will order costs in the amount of $1,350 (3 hours @ $450 per hour) for this appearance. This reduces Ms. Connon's bill by $2,250.
(e) Expenses Properly Paid or Payable
[45] Disbursements
I find that the disbursements for which Ms. Connon claims are modest and reasonable. In spite of this protracted litigation, she only claims $697.97 in disbursements and HST.
(f) Any Other Relevant Matter
[46] No Other Relevant Matters
There has been no other relevant matter brought to the court's attention.
Bad Faith
[47] Structure of Analysis
This issue would normally be addressed under the reasonableness or unreasonableness of each party's behaviour in the case, but the way that I structured this ruling causes me to have to deal with it separately to avoid repetition of the discussion under (d) the time properly spent on the case…
[48] Respondent's Submissions on Bad Faith
Ms. Connon asks the court to make a finding of bad faith and order full recovery pursuant to s. 24(8) of the Family Law Rules. She states in her submissions that Mr. Orvis acted in bad faith for the following reasons:
Mr. Orvis made a deal with FRO to reduce his child support arrears payments without notifying Ms. Eadie or the court;
Mr. Orvis's reluctance to provide financial disclosure caused Ms. Eadie to incur unnecessary legal costs;
Mr. Orvis behaved unreasonably and took untenable positions on all of the issues;
Mr. Orvis failed to pay child support;
The Law
[49] Rule 24(8) – Bad Faith
Rule 24(8) of the Family Law Rules provides that "If a party has acted in bad faith the court shall decide costs on a full recovery basis and shall order the party to pay them immediately".
[50] Case Law on Bad Faith
Ms. Connon cited a number of cases to support her position that Mr. Orvis acted in bad faith. I will refer to the two that I find most helpful.
[51] Qaraan v. Qaraan – Bad Faith Criteria
In Qaraan v. Qaraan, 2014 ONSC 2191, the court found that the respondent acted in bad faith based on the following criteria:
Mr. Qaraan's failure to provide accurate and timely disclosure was a significant factor contributing to the unnecessary length of this case that started in 2007 and ended in 2012. The time dockets filed on behalf of Ms. Qaraan, and the orders exhibit brief filed at trial, demonstrate that Ms. Bennett, who was Ms. Qaraan's counsel throughout this lengthy case, faced continuous, ongoing struggles to get meaningful, complete and timely disclosure from Mr. Qaraan. Paragraphs 189 to 195 of the reasons for judgment describe this conduct and include the following:
- financial statements filed by Mr. Qaraan throughout the case were replete with inaccuracies and non-disclosure;
- failure by Mr. Qaraan to disclose assets;
- breach of court orders by Mr. Qaraan that imposed timelines for financial disclosure, including an order dated December 6, 2007 that required Mr. Qaraan to provide an updated financial statement within 60 days, but which was not delivered until February 2009;
- in November 2008, Mr. Qaraan was found in contempt of two orders (one of them a consent order) relating to production of financial disclosure.
In 2010, Mr. Qaraan sold property that he owned in Jordan, in contravention of an interim order restraining depletion of assets (see para. 25 of the reasons for judgment). Mr. Qaraan placed an additional mortgage on his residence in contravention of a "freezing" order against that property and other assets owned by Mr. Qaraan. I reject entirely Mr. Qaraan's submission that the contempt finding was not a "significant contempt" because the amount of costs ordered was only $1,000. The contempt finding was serious. Mr. Qaraan was found in contempt of two orders, with one of the orders being a consent order.
It is abundantly clear that Ms. Bennett was distracted from focussing her efforts on resolution and settlement-based strategies by being regularly side-tracked with disclosure issues. Mr. Qaraan's conduct included the following negative effects:
- it increased legal costs unnecessarily;
- it delayed significantly the just resolution of this case;
- it compromised the effectiveness of any conferences and it robbed Ms. Qaraan of any early ability to engage in a meaningful assessment of the case for the purpose of submitting a constructive and informed offer to settle.
[52] Risto v. Marcelais – Bad Faith Conduct
In Risto v. Marcelais, 2014 ONSC 2896, the court found that the respondent acted in bad faith when he behaved in the following manner:
Throughout this litigation, Mr. Marcelais has behaved both unreasonably and in bad faith. He has disregarded, with impunity, his obligation to appropriately and completely disclose all of his assets, his disposition and encumbrance of assets, and financial transactions in his attempts to thwart Ms. Risto's legitimate claims under the Family Law Act, R.S.O. 1990, c. F.3, and common law arising out of his long common law relationship with her. He has continued to dispose and encumbrance his property in the face of court orders to the contrary. Finally, he has failed to make support payments and to satisfy cost orders made against him. One can only conclude that Mr. Marcelais did all of this intentionally and hence acted in bad faith throughout.
[53] Timeline of Proceedings
Ms. Eadie filed her motion to change on July 23, 2012. She filed her motion to strike Mr. Orvis's pleadings on May 30, 2014. Argument on the matters concluded on October 27, 2014, more than two years after she filed her motion to change.
[54] Definition of Bad Faith
In S.(C) v. S.(M.), [2007] O.J. No. 2164 (Ont. S.C.J.), affirmed 2010 ONCA 196, [2010] O.J. No. 1064 (Ont. C.A.), Perkins J. stated the following with regard to bad faith (paras. 16, 17, 18):
"Bad faith" has been explained as "not simply bad judgment or negligence but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity ... it contemplates a state of mind affirmatively operating with furtive design or ill will." See Biddle v. Biddle (2005), 137 A.C.W.S. (3d) 1164, [2005] W.D.F.L. 2089, [2005] O.J. No. 1056, 2005 CarswellOnt 1053 (Ont. Fam. Ct.), at para. [14]. The definition of "bad faith" in The Concise Oxford Dictionary of Current English (5th ed., 1964, ed. by H.W. Fowler and F.G. Fowler) is simply "intent to deceive". The essence of bad faith is the representation that one's actions are directed toward a particular goal while one's secret, actual goal is something else, something that is harmful to other persons affected or at least something they would not willingly have supported or tolerated if they had known. However, not all bad faith involves an intent to deceive. It is rare, but not unknown in family law cases, for bad faith to be overt -- an action carried out with an intent to inflict harm on another party or a person affected by the case without an attempt to conceal the intent.
In order to come within the meaning of bad faith in subrule 24(8), behaviour must be shown to be carried out with intent to inflict financial or emotional harm on the other party or other persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court. A misguided but genuine intent to achieve the ostensible goal of the activity, without proof of intent to inflict harm, to conceal relevant information or to deceive, saves the activity from being found to be in bad faith. The requisite intent to harm, conceal or deceive does not have to be the person's sole or primary intent, but rather only a significant part of the person's intent. At some point, a party could be found to be acting in bad faith when their litigation conduct has run the costs up so high that they must be taken to know their behaviour is causing the other party major financial harm without justification.
In construing subrule 24(8), I think there is an implication from the context of the provision that the bad faith must relate to the issues at stake in the case or to the conduct of the case -- not behaviour outside the issues in the case or in a separate (even if related) case -- in order to justify a costs penalty in the case.
[55] Single Act Sufficient for Bad Faith
When one considers Justice Perkins' definition of bad faith, one can infer that it does not take a long string of outrageous acts before the court is entitled to make a finding of bad faith. If it is bad enough, one act can constitute bad faith. As Justice Perkins stated, bad faith implies "the conscious doing of a wrong because of dishonest purpose or moral obliquity". He did not say that bad faith implies a "series" of acts, or a "pattern" of conduct.
[56] Cumulative Conduct
However, it is safe to assume that the usual situation in a case where the court finds that a party acted in bad faith will be that the party did a number of things that the court considers cumulatively in making a finding of bad faith.
[57] No Threshold Test
I acknowledge that the party that exhibited bad faith in Qaraan and in Risto v. Marcelais did more "bad faith things" than has Mr. Orvis and that the court looked at their acts cumulatively as constituting bad faith. However, this does not mean that these cases set down a threshold test for bad faith. Nor did the judges that decided them purport to do that.
[58] Bad Faith Finding Possible
I find that it is possible to make a finding that a party acted in bad faith even though the party's actions did not match the number or gravity of the acts listed in Qaraan and Risto v. Marcelais, or probably in any other case for that matter.
[59] Case-Specific Assessment
When determining if the effects of a party's actions in the case before it amounts to bad faith the court must assess the case in light of the jurisprudence, but also in light of the particular circumstances of the case being adjudicated.
[60] Applicant's Strategy and Misrepresentations
I found above after considering the cumulative effect of Mr. Orvis's many actions and omissions with regard to disclosure of his financial situation that his strategy in this case was one of denial, delay, and throwing up smoke screens. And more damning is that he misrepresented his income in his financial statement, dated November 27, 2012 and in his financial statement, dated June 11, 2013.
[61] Finding of Bad Faith
As a result, based on the jurisprudence cited above and on my findings regarding Mr. Orvis's actions and the intent with which he performed them, I find that Mr. Orvis acted in bad faith.
The Success of the Parties
[62] Respondent's Success
Given my finding that Mr. Orvis acted in bad faith, it may not be necessary to analyze the parties' respective success on the motions. However, for the sake of completeness I will point out that Ms. Eadie was almost overwhelmingly successful. She won on access; Mr. Orvis conceded that she have custody; and Ms. Eadie won on child support and s. 7 expenses.
[63] Applicant's Limited Success
Mr. Orvis won on the issue of his pleadings being struck. The court did not strike them.
Ruling
[64] Costs Order
The court's finding that Mr. Orvis acted in bad faith entitles Ms. Eadie to her costs on a full recovery basis and to have them paid immediately. The court orders that Mr. Orvis pay costs immediately to Ms. Eadie in the amount of $34,889.50. The court orders that they be paid as child support pursuant to s. 1(1)(g) of the Family Responsibility and Support Arrears Enforcement Act, S.O. 1996, Chapter 31.
Released: November 20, 2015
Justice J.W. Bovard