Court File and Parties

Court File No.: Toronto DFO 13 10593 Date: 2016-11-22 Ontario Court of Justice

Between:

Sheila Mary Wilson Applicant

— And —

John Andrew Cunningham Respondent

Before: Justice E. B. Murray

Decision on Costs released on: November 22, 2016

Counsel:

• Mr. Christopher Burrison, counsel for the applicant
• Mr. John Cunningham, on his own behalf

MURRAY, E. B. J.

Background

[1] Sheila Wilson and John Cunningham are the parents of two children, Lindsay, aged 17, and Stuart, aged 12. They separated in 2008 when they lived in Hong Kong. A Hong Kong court made two orders requiring John to pay child support.

[2] The parties returned to Canada. Sheila registered the Hong Kong (HK) orders with this court for enforcement pursuant to the Interjurisdictional Support Orders Act (ISOA). John moved to change the orders. Sheila opposed his motion, and requested other relief, including an order providing for security for child support. On October 11, 2016, I released a decision with respect to the motions.

[3] Sheila now claims costs of $208,728.79 with respect to the motions and with respect to work devoted to private enforcement of the HK orders. Sheila claims costs at a full recovery level, arguing that:

• she was successful;
• The order I made was more favourable to her than the terms of the offer to settle she made to John, which was unaccepted; and that
• John acted in bad faith.

[4] John says that success was divided. He submits that a fair order as to cost would:

• reduce the costs claimed by Sheila, which he says are excessive, by $46,562;
• deduct from the balance of Sheila's costs the costs paid by him of $55,219.87;
• divide the balance in half, resulting in an order for him to pay Sheila costs of $53,473.

The Law

[5] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C-43, as amended, provides that the costs of a proceeding or a step in a proceeding is in the court's discretion. That discretion is circumscribed by rule 24 of the Family Law Rules, O. Reg. 114/99, as amended. The relevant portions of that rule are set out below:

Successful Party Presumed Entitled to Costs

24.(1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.

24.(4) Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party's own costs or ordered to pay all or part of the unsuccessful party's costs.

Decision on Reasonableness

24.(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,

• (a) the party's behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;
• (b) the reasonableness of any offer the party made; and
• (c) any offer the party withdrew or failed to accept.

Divided Success

24.(6) If success in a step in a case is divided, the court may apportion costs as appropriate.

Bad Faith

24.(8) 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.

Deciding Costs

24.(10) Promptly after dealing with a step in the case, the court shall,

• (a) make a decision on costs in relation to that step; or
• (b) reserve the decision on costs for determination at a later stage in the case.

Same

24.(10.1) In making a decision on costs in relation to a step in a case, the court shall decide in a summary manner whether anyone is entitled to costs and, if so, determine who is entitled and set the amount of the costs.

Factors in Costs

24.(11) A person setting the amount of costs shall consider,

• (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.

[6] The relevant provisions of Rule 18 with respect to the consequences of offers made prior to a decision in a case, including a motion, are set out below.

Definition

18.(1) In this rule,

"offer" means an offer to settle one or more claims in a case, motion, appeal or enforcement, and includes a counter-offer.

Application

18.(2) This rule applies to an offer made at any time, even before the case is started.

Making an Offer

18.(3) A party may serve an offer on any other party.

Offer to be Signed by Party and Lawyer

18.(4) An offer shall be signed personally by the party making it and also by the party's lawyer, if any.

Withdrawing an Offer

18.(5) A party who made an offer may withdraw it by serving a notice of withdrawal, at any time before the offer is accepted.

Time-Limited Offer

18.(6) An offer that is not accepted within the time set out in the offer is considered to have been withdrawn.

Offer Expires When Court Begins to Give Decision

18.(7) An offer may not be accepted after the court begins to give a decision that disposes of a claim dealt with in the offer.

Confidentiality of Offer

18.(8) The terms of an offer,

• (a) shall not be mentioned in any document filed in the continuing record; and
• (b) shall not be mentioned to the judge hearing the claim dealt with in the offer, until the judge has dealt with all the issues in dispute except costs.

Costs Consequences of Failure to Accept Offer

18.(14) A party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:

1. If the offer relates to a motion, it is made at least one day before the motion date.
2. If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
3. The offer does not expire and is not withdrawn before the hearing starts.
4. The offer is not accepted.
5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

Costs Consequences — Burden of Proof

18.(15) The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14).

Costs — Discretion of Court

18.(16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.

[7] The Ontario Court of Appeal has given us guidance as to the purpose of modern costs rules:

1. Indemnification of a successful litigant;
2. Encouragement of settlement;
3. Discouragement of inappropriate behaviour.

[8] The Court of Appeal has also cautioned that the overall objective in determining costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances, rather than an amount reflecting the actual costs paid by the successful litigant.

[9] The approach which a court should follow under Rule 24 in dealing with a claim for costs is set out in Sims-Howarth v. Bilcliffe and Biant v. Sagoo.

The Facts of the Case

[10] The HK orders, made January 21, 2010 and October 21, 2011, provided that John pay child support of $4,453.75 monthly and a contribution to the children's private school fees totalling $3,691 monthly, making a total payment of $8,144.75 monthly.

[11] John's employment with HSBC was terminated in November 2011. He ceased paying child support. Sheila believed that he had left the bank voluntarily, and that he was intentionally unemployed or under-employed.

[12] Sheila registered the HK orders for enforcement in this court in November 2013. She withdrew from the Family Responsibility Office, and retained counsel to enforce the orders.

[13] John began his motion to change child support in December 2013. His financial statement showed that he had $1,620,576 in a bank in Vancouver. He did not disclose that this amount was held in US funds, thus misleading Sheila and the court as to the extent of his resources.

[14] John was ordered by the case management judge to pay support arrears of $220,897.60 before the motion could proceed. After he did not pay the arrears and indicated an intention to return to Hong Kong, an order was issued for John's arrest as an absconding debtor. John then paid the arrears. No order was made with respect to costs on that motion.

[15] Over the next 2½ years 5 case conferences were held. At one conference John was ordered to pay Sheila costs of $1,500 because he was unprepared. Otherwise, no costs were ordered at the conferences.

[16] Orders were made with respect to financial disclosure by John. Disclosure was not completed until February 2016. Even then, John did not produce what Sheila regarded as a critical piece of disclosure—his employment file from HSBC that would show the circumstances of his termination.

[17] As part of Sheila's efforts to enforce the HK support orders, she obtained an extra-provincial garnishment order from the Ontario court to obtain monies from John's account in Vancouver. On January 6, 2016, John moved unsuccessfully to have that garnishment set aside. The case management judge reserved the costs of that motion to the judge hearing the motion to change.

[18] In May of 2016 Sheila's lawyer's conducted a questioning of John over a 2 hour period. John was 2 hours late in arriving for the questioning.

[19] On September 20, 2016 John's motion and Sheila's cross-motion were argued before me. John was self-represented and Sheila was represented by counsel, as she had been throughout the case. The hearing took most of the day. Sheila's lawyer prepared a factum for the hearing.

Issues in Case

[20] The key issues in this case were:

1. Has John demonstrated a material change in circumstances since the date of the HK orders relevant to the issue of child support?

   • John said he did, by virtue of his termination from HSBC in 2011. Sheila said he had not, asking the court to draw a negative inference from the suspicious timing of his termination and the fact that he had failed to produce his employment file from HSBC.

2. Assuming John demonstrates a material change, should his support obligation be retroactively decreased?

   • Sheila opposed the retroactive claim.

3. Assuming John demonstrates a material change, what is his Guideline income now, and in the prior years under consideration?

   • John's position was that his Guideline income since his termination should be imputed as $67,500 annually. Sheila asserted that undisclosed capital gains, averaged over 2013-2015, established a Guideline income of $438,205. She also maintained that the court could infer that John would be able to earn income at a similar level in the future.

4. Assuming John demonstrates a material change, should he be obligated to contribute to the children's private school fees now and in prior years under consideration?

   • Sheila said this expense was necessary and reasonable. John disagreed.

5. Should John be obligated to provide security for future support payments in an amount of $250,000?

   • John opposed this request.

[21] I ordered as follows:

1. I found that John had established a material change in circumstances by virtue of his termination from HSBC.

2. I did not order a retroactive decrease (a decrease starting before John commenced his motion to change in December 2013) in his support obligation, despite the fact that his income was under $100,000 in 2012. My reasons are set out at paragraphs 116-121 of the decision. Prominent among those reasons was John's refusal to comply with orders for child support, despite having resources to do so, his efforts to conceal funds from Sheila and the court in order to thwart support enforcement, and his delays in making financial disclosure.

3. I found that John's annual income for 2014 and 2015 was $438,205.

4. Based on that income I ordered that John pay child support in a table amount of $5,297 monthly for 2014 and 2015.

5. I also ordered that John pay 70% of the children's school fees for those years, or $42,000 annually.

6. I ordered that commencing January 1, 2016, John pay support in a table amount of $1,493 monthly. This was based on an annual income of $106,304 (comprised of employment income imputed to him of $67,500 and notional investment income of 2%).

7. I did not order that John contribute to the children's school fees after 2015.

8. I asked for further submissions on the amount of arrears, given my order.

9. I ordered that John provide security for child support, subject to further submissions as to the appropriate amount, given that the amount of ongoing support ordered was substantially below that requested by Sheila.

Success in the Case

[22] Success in a case can be measured by comparison of the terms of the order made to the relief requested, or to the terms of any offer to settle.

[23] Sheila made an offer to settle on November 26, 2014 that remained open until the commencement of the argument on the motions. John did not submit an offer to settle as defined by Rule 18, despite the direction of the case management judge in August 2014 that the parties exchange such offers.

[24] Sheila's offer provided as follows:

• John to pay $40,000 in full satisfaction of all amounts owing on the 2 HK orders, including interest up to November 30, 2014;
• John to pay $135,000 in full satisfaction of the children's private school expenses until the expected date of completion of each child's secondary school program;
• John to pay $75,000 as table support for the children until the expected date of completion of each child's secondary school program;
• The above payments were to be "fixed and non-variable regardless of any change in circumstances";
• Sheila was to be at liberty to seek further support for each child after the expected date of completion of each child's secondary school program;
• John and Sheila each were to contribute $50,000 to a post-secondary educational fund for each child. The fund was to be administered by Sheila, and unused funds were to be returned to each parent.
• John to contribute equally to any other s.7 expenses for the children;
• John to pay $75,000 in full satisfaction of Sheila's costs to date, including the HK costs order. If accepted after December 4, 2014, Sheila to be at liberty to seek further costs.
• The terms were non-severable.

[25] Sheila's counsel, citing Baldwin v. Funston, urges me to assess success in the case by looking at the ultimate financial results of my decision as compared with her offer, rather than on an issue-by-issue basis. This type of analysis may be appropriate when the offer and the judgment follow the same template. However, as Justice Sachs recognized in Baldwin, some offers do not lend themselves to that analysis; for example, in that case, the payor offered to pay support in an amount less than her order, but also offered a trust fund for the children, relief which was not requested and could not have been granted by the court. Justice Sachs found that she could not compare the terms of the offer and judgment, as they were not in the same form.

[26] In this case, whether we analyze on an issue-by-issue basis or look at final financial results, success cannot be assessed by comparing the terms of Sheila's offer to my decision. Sheila's offer included terms that could not have been ordered by the court, such the provision that John prepay $100,000 into a fund for post-secondary education, and lump sum, non-variable payments towards other expenses. In any event, I am not persuaded that the terms of my decision assessed today are financially more favourable to Sheila than those of her offer. In the calculations submitted by counsel, the results of my order (barring speculation as to how long child support payments will continue) show that Sheila recovers more than $20,000 less than what she proposed in her offer that John should pay.

[27] Turning to consideration of success on the key issues in the case when the terms of my order are compared to the relief sought, I find that there was divided success, but that Sheila was more successful than John.

• John was successful in establishing that there was a material change in circumstances, a threshold issue.
• John was successful in establishing that his annual income was substantially lower than the $300,000 he had enjoyed in 2010 and 2011 for the period following his termination and continuing into 2012. However, Sheila was successful in defending John's claim for a retroactive variation, which if ordered would have obligated her to repay him more than $150,000.
• Sheila was successful in establishing that John's income in 2014-2015 was higher than $300,000 annually, and she obtained a support award, including an order for payment of the children's school fees, higher than that provided for in the HK orders for those years.
• John was successful in establishing that his annual income was substantially lower than the $300,000 in 2016 and on an ongoing basis. The order I made for table support was much lower than that the support provided for in the HK order.
• Commencing January 2016, John was not required to pay towards the children's school fees in an amount of $42,000 per year or in any amount.
• Sheila was successful in obtaining an order for security for child support, in an amount to be determined.

[28] I cannot be mathematically precise as to what degree of success Sheila enjoyed. Sheila benefitted substantially from my order, both in terms of monies that she did not have to repay to John and in terms of financial on the issue of support for 2014-2015. Although John was successful on establishing a material change and on the issues of his support obligation commencing in 2016, the long term benefit of that order remains to be seen, since it is variable if there is a material change in circumstances.

Bad Faith?

[29] Sheila says that, even if her offer does not lead to an order for full recovery of costs, she should receive costs at that level because John acted in bad faith.

[30] There is a high bar to a finding that a party has acted in bad faith. Such a finding requires more than evidence that a party has acted unreasonably, even very unreasonably.

[31] Justice Perkins considered the meaning of bad faith in C.S. v. M.S., a bitter case involving custody and access.

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.

[32] This articulation of what constitutes bad faith for the purpose of a costs decision in a family case was adopted by the Ontario Court of Appeal in Scalia v. Scalia, 2015 ONCA 492.

[33] In C.S. v. M.S. Justice Perkins declined to find that the father was acting in bad faith in many instances in which he displayed highly unreasonable behaviour because he had a sincere but misguided belief in the rightness of his actions. Justice Perkins did find that the father's persistent efforts to alienate the children from the mother and his disobedience of court orders constituted bad faith. Other courts have found that a party seeking to change a support order is guilty of bad faith if he refuses to comply with the order pending a hearing of the motion to change, despite having the means to pay.

[34] I find that John was guilty of bad faith for the following reasons:

• John deliberately did not pay child support provided for in the HK orders, despite having the means to do so.
• John did not bring a motion to request a stay of the HK orders pending his motion to change. He exercised self-help to try to avoid enforcement.
• When John did begin to make any child support payments in June 2015, he paid only what he thought appropriate.
• John misled the court and Sheila about his resources. His half million dollar capital gain was not declared by him on his financial statement or tax return, but uncovered only through counsel's scrutiny of his records. John played a shell game, moving money between various accounts, one time even transferring funds to an account held jointly with his sister, all in order to avoid enforcement.
• John did not comply with a comprehensive order for financial disclosure for over a year, and even when he complied did not provide what could likely have settled a critical issue in the case—whether he had voluntarily left his employment at HSBC.
• John had an appreciation of the costs of these legal proceedings, which involved 5 case conferences, 2 interim motions, and a questioning before the final hearing of his motion to change. He had retained counsel himself for over a year and a half and had paid substantial legal fees. John had to know the financial harm which his conduct caused Sheila.

[35] What is the effect of a finding of bad faith under R. 24(8) on a determination of costs? In C.S. v. M.S. Justice Perkins observed that the effect is not the same in every case.

The wording of the rule (for which I must take some responsibility, I acknowledge) is brief and leaves some unanswered questions. If a party has acted in bad faith on one occasion, are the costs of the whole case to be awarded against the party on a full recovery basis? What if it was a small act of bad faith? What if it was only in relation to one issue, and on the other issues the party behaved properly? Are the costs to be a full recovery only in respect of the consequences of the bad faith? What impact do the factors and the discretion in subrule 24(11) have on the full recovery mandated by subrule 24(8)? My tentative conclusion is that full recovery costs should be awarded in relation to the issues affected by the bad faith and then the whole picture should be looked at again in light of the considerations in subrule 24(11) and the discretion in that provision should be used as necessary to produce the correct overall result.

[36] In Hunt v. Hunt, 2001 O.J. 5111, Justice Mackinnon found a mother had acted in bad faith by moving a child out of the jurisdiction when the issue of mobility was pending before the court. Justice Mackinnon held that this constituted bad faith in relation to her motion to allow the move, and disentitled her to costs with respect to that issue, but that it did not disentitle the mother or entitle the father to costs related to other issues before the court.

[37] In this case, John's bad faith behaviour continued throughout the proceeding and caused the case to be much longer and more expensive than necessary. Late, incomplete, and sometimes misleading disclosure related to more than one issue, including the circumstances of John's termination from HSBC and his income and ability to earn income since that time.

[38] Because John acted in bad faith, I find that he is not entitled to costs on the issues on which he was successful. I find that Sheila is entitled to full recovery of costs on the issues on which she was successful, assessed by reference to the factors set out in Rule 24 (10) and (11).

[39] This does not mean that she is entitled to be reimbursed for all the amounts billed by her lawyer. As Justice Pazaratz observed in Jackson v. Mayerle, 2016 ONSC 1556:

Even where the "full recovery" provisions of the Rules are triggered -- either by an offer which meets Rule 18(14) requirements, or by a finding of bad faith -- quantification of costs still requires an overall sense of reasonableness and fairness. Goryn v. Neisner, 2015 ONCJ 318. The Rules do not require the court to allow the successful party to demand a blank cheque for their costs. Slongo v. Slongo, 2015 ONSC 3327. The court retains a residual discretion to make costs awards which are proportional, fair and reasonable in all the circumstances. M.(C.A.) v. M.(D.) (supra); Scipione v. Scipione (supra).

Steps in the Case

[40] Sheila's bill of costs deals with all legal costs incurred by her since the commencement of the case in 2013, including costs for steps in the case for which no costs were awarded or reserved. These include costs for case and settlement conferences and motions. I am unable to consider costs related to these steps, except for the motion heard January 6, 2016 in which the case management judge reserved the issue of costs pending final disposition of the case.

[41] The Ontario Court of Appeal has held that Rule 24(10) means that if at a step of a case a court does not make an order as to costs or is silent as to costs, then a court dealing with the case at a later stage does not have jurisdiction to make an order as to the costs of that earlier step. It is apparently possible to make an order at the conclusion of a step in the case reserving costs of that step to the trial judge.

[42] That does not mean that I cannot consider the costs of work not devoted to any step of the case that does not involve judicial intervention, such as preparation of pleadings and financial statements, document production and analysis of financial disclosure furnished, and preparation for trial.

[43] I turn to the factors in Rule 24(11).

Rule 24(11) Factors

[44] Importance/complexity of issues. The issues in the case—support for two children, including financial support for them to continue in the private schools which they had attended for some time-- were important to the parties. The potential financial consequences for each parent were significant—either an obligation for John to pay substantial arrears and high ongoing support, or for Sheila to repay significant funds that had been collected. There was factual complexity in the case related to the assessment of John's efforts to earn income and his income from all sources.

[45] Reasonableness. No argument was made that Sheila behaved unreasonably. Even though I ultimately found that I could not infer from the evidence that John caused his own unemployment, it was not unreasonable for her to aggressively pursue disclosure with respect to the circumstances of his termination given the suspicious timing of that termination and his persistent refusal to take the necessary efforts to obtain and produce his personnel file from HSBC.

[46] With respect to John's reasonableness, my finding of bad faith deals with that issue. A failure to make an offer to settle in itself can constitute unreasonable litigation behaviour.

[47] Lawyer's rates. As for the lawyer's rates, the rate charged for the primary lawyer on the file ($400, rising over three years to $485) was reasonable given his 13 years of experience and the location of his practice (Toronto). The hourly rates charged for junior lawyers involved in the file and for the clerk ($225, $275, and $195) were also reasonable.

[48] Time spent on the case. I find the time spent on the case excessive. This was a motion to change, determined without a viva voce hearing after a 2-hour questioning. The primary lawyer billed for over 333 hours. The three junior lawyers billed for over 67 hours. The clerk billed for 13.92 hours.

[49] The bill of costs is difficult to analyze. Total fees related to particular activities, such as preparation of pleadings, are not clearly grouped in relation to total number of hours billed for. It is not easy to remove from consideration the work devoted to preparing documents for excluded steps, since that work is not clearly grouped together. Many entries are simply for sending or reviewing email or correspondence or telephone conversations, when it is unclear what issue the activity related to.

[50] With respect to the contents of the bill of costs that appears to deal with work not performed on the excluded steps, I have the following comments with respect to work which I find excessive.

• Much time is devoted to lengthy conversations, meetings, or emails between counsel and his client, or her father. Although the client may have expected this level of attention from counsel, this does not mean that the work involved should be reimbursed in a costs order.
• A second solicitor billed for attending the questioning and the motion hearing. I am not persuaded that this was required. There were not massive amounts of documents to manage. The second solicitor did not participate in the questioning or in making submissions in the hearing.
• The time expended for some work was unreasonable. For example, a total of approximately 26 hours (including 12 hours of the primary lawyer's time) was billed for initial review of John's motion to change, meeting with the client, and preparing her response and financial statement.

[51] The work which I have considered as properly the subject of an order for costs is as follows.

• Review of John's initial pleadings, meeting with client to take instructions, draft response, including financial statement, and draft motion to change brought by client.
• Review of John's amended motion to change, meeting with client to take instructions, draft response, including updated financial statement.
• Prepare and update from time-to-time Statement of Money Owed.
• Prepare request for disclosure and review of disclosure furnished on an ongoing basis.
• Legal research on various issues in proceeding (junior lawyer)
• Settlement discussions (not in a settlement conference) with counsel and related consultations with client April 2014-January 2016
• Take instructions, prepare comprehensive offer to settle, and meet with client to review and execute on November 26, 2014.
• Draft and obtain extra-provincial garnishment order, conversations and correspondence with B.C. enforcement agency, receive and review John's motion to set garnishment aside, draft responding affidavit and meet with client to review affidavit, attend January 6, 2016 to argue motion.
• Prepare for and attend questioning on May 13, 2016; review responses to undertakings and prepare schedule of responses.
• Give instructions to and review report from Ms. Alterman, income analyst.
• Prepare for and attend settlement meeting with John (not in a settlement conference) on September 1, 2016.
• Review file, draft affidavit from client's father, draft factum, and prepare for hearing of motion to change.
• Attend and argue motion.

[52] The fees which appear to be attributable to this work total approximately $97,000—without any reduction for time spent that might be excessive and before any reduction with respect to issues upon which Sheila was not successful.

[53] Expenses paid. I find the expenses paid by counsel on account of fees for photocopies, process server, the questioning, courier, and for Ms. Alterman's report are reasonable. They total $12,913.25.

[54] Other factors. Although the Rule does not identify "ability to pay" as a factor in determining quantum, cases have recognized that it is one factor which may be considered. It has also been recognized that inability to pay is not a defence against litigation behavior that is unreasonable or in bad faith. In any event, John has substantial funds which will allow him to pay any reasonable amount of costs.

Conclusion

[55] Taking into account

• my finding of bad faith by John,
• Sheila's relative degree of success on the issues,
• time reasonably spent by Sheila's lawyer on work not devoted to excluded steps, and
• what an unsuccessful party might reasonably expect to pay in a case such as this on a full recovery basis,

[56] I find that a fair and reasonable order is that John pay to Sheila costs of $63,000, inclusive of disbursements and HST and enforceable as child support.

Released on: November 22, 2016

Signed: Justice E. Murray