Court File and Parties

Date: March 19, 2018

Court File No.: D81099-15

Ontario Court of Justice

Between:

C.A.B. Applicant

-and-

A.E.H. Respondent

Counsel:

• Adeleke Oyegunie, for the Applicant
• Rono A. Baijnath, for the Respondent

Heard: March 9, 2018

Justice: S.B. Sherr

Costs Endorsement

Background and Relief Sought

[1] On March 9, 2018 the court delivered oral reasons for judgment after hearing the two-day trial of the respondent's (the father's) motion to change this court's order dated August 14, 2015 (the existing order).

[2] The court made an order that the father shall have unsupervised access with the parties' three-year-old son (the child). A specified access schedule was set out, with access gradually increasing to overnights. It terminated a restraining order against the father. The court dismissed the father's request for joint custody of the child.

[3] The father seeks his costs of $18,000. The applicant (the mother) asks that no costs be paid, or in the alternative, that costs be fixed at $1,500.

Legal Framework for Costs Awards

[4] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395, [2009] O.J. 1905 (Ont. C.A.), stated that modern costs rules are designed to foster three fundamental purposes, namely: to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants bearing in mind that the awards should reflect what the court views is a fair and reasonable amount that should be paid by the unsuccessful party.

[5] Subrule 24(1) of the Family Law Rules (all references to rules in this endorsement are the Family Law Rules) creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs. See: Sims-Howarth v. Bilcliffe, [2000] O.J. No. 330 (SCJ- Family Court). To determine whether a party has been successful, the court should take into account how the order compares to any settlement offers that were made. See: Lawson v. Lawson, [2008] O.J. No. 1978 (SCJ).

[6] Subrule 2(2) adds a fourth fundamental purpose for costs: to ensure that the primary objective of the rules is met – that cases are dealt with justly. This provision needs to be read in conjunction with rule 24. See: Sambasivam v. Pulendrarajah, 2012 ONCJ 711.

[7] Subrule 24(6) sets out that where success is divided the court may apportion costs as it finds appropriate.

Offers to Settle

[8] Neither party made an offer to settle pursuant to subrule 18(4). This subrule reads as follows:

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.

[9] The mother made an offer to settle after the completion of the first day of the trial. This offer was contained in a letter sent by her lawyer to the father's lawyer. It was not signed by the mother pursuant to subrule 18(4). The mother offered supervised visits to the father, albeit for full days, and wanted to continue the restraining order. The final order provided a much better result for the father than the mother's offer.

[10] The parties should have both made offers to settle the case in the form set out in subrule 18(4) – particularly since the court endorsed on December 21, 2017, when this trial was scheduled:

Offers to settle should be exchanged.

[11] The court wrote about the importance of making offers to settle in paragraphs 4-5 of Klinkhammer v. Dolan and Tulk, 2009 ONCJ 774, [2009] O.J. No. 6370 (OCL) as follows:

4 It was surprising that there were no formal offers to settle in this case. It is reflective of the polarity of the parties. It should be a fundamental step in any family law case to serve at least one offer to settle. Parties and their counsel now have a mandate under subrule 2(4) of the rules, to promote the primary objective of the rules; to deal with cases justly (subrule 2(2)). Dealing with a case justly includes taking steps to save time and expense (subrule 2(3)). Offers to settle play an important role in saving time and expense in a case. They are an important vehicle in promoting settlements, focus the parties and often narrow the issues in dispute.

5 There are consequences in the rules for not making or accepting reasonable offers to settle. Subrule 18(14) sets out the costs consequences of not accepting an offer to settle that is as good as or better than the final result. When determining the reasonableness of a party's behaviour in the case, clauses 24(5)(b) and (c) of the rules direct the court to examine the reasonableness of any offer made, withdrawn or not accepted. This does not preclude the court from examining the failure of a party to make an offer to settle.

[12] The failure of the parties to comply with the court's direction regarding offers to settle was unreasonable behaviour.

Determination of Success

[13] The court must next examine who was the successful party based on the positions taken by the parties at the trial of the motion to change.

[14] The mother asked at the outset of the trial that the father's access be supervised at the Toronto Supervised Access Centre. In closing argument, she made the access proposal set out in her offer to settle. The mother asked that the restraining order contained in the existing order be maintained and that the father's claim for joint custody of the child be dismissed.

[15] The father, at trial, sought a gradual increase in unsupervised access time with the child. He sought extended holiday visits starting in the summer of 2018. The court made an access order similar to that sought by the father, although it deferred the start of holiday access until the winter holiday in 2018. The father was the more successful party on the access issue. He was able to obtain specified, increased and unsupervised access.

[16] The father was also the more successful party on the restraining order issue. It was terminated, although terms were ordered controlling contact and communication between the parties, pursuant to section 28 of the Children's Law Reform Act.

[17] The mother was the more successful party on the joint custody issue. The father's claim was dismissed, although the court gave him specific rights to information about the child and some rights to participate in medical and academic matters regarding him.

[18] Overall, there was divided success, with the father being the more successful party.

[19] The presumption that the father is entitled to costs was not rebutted by the mother.

Factors in Determining Costs

[20] In making this decision, the court considered the factors set out in subrule 24(11), which reads as follows:

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.

[21] The case was important for the parties. It was made more complex and difficult by the mother.

[22] The father acted unreasonably by being late for the trial management conference on December 21, 2017 (where costs were reserved) and by being one hour late on the first day of trial. He also acted unreasonably by failing to make an offer to settle when directed to do so by the court.

[23] The legal rates claimed by the father's counsel are reasonable for a 2007 call ($350 per hour).

[24] The father's bill of costs set out total costs of $30,404.24. It included time spent for all steps in the case. The trial judge should not deal with requests for costs that were addressed or should have been addressed at these prior steps in the case. See: Islam v. Rahman 2007 ONCA 622. However, a party is entitled to claim time spent for meetings with the client and reviewing and preparing pleadings and financial statements as this is time not attributable to any one step in the case. See: Czirjak v. Iskandar, 2010 ONSC 3778.

[25] The mother argued that costs should be reduced because the father is on legal aid. The case law is well settled that the receipt of legal aid is not a factor in determining costs. See: Ramcharitar v. Ramcharitar, (2002), 62 O.R. (3d) 107 (S.C.J.); Alvarez v. Smith, [2008] O.J. No. 941 (SCJ); Loncar v. Pendlebury, 2015 ONSC 4673; S.G. v. A.S., 2015 ONSC 1882. It is clear that pursuant to subsection 46(1) of the Legal Aid Services Act, 1998, "the costs awarded in any order made in favour of an individual who has received legal aid services are recoverable in the same manner and to the same extent as though awarded to an individual who has not received legal aid services". A legally aided client "stands before the court in exactly the same position as any other litigant". See: Baksh v. Baksh, 2017 ONSC 3997, per Justice R.P. Kaufman.

[26] The court considered both Boucher et al. v. Public Accountants Council for the Province of Ontario, [2004] O.J. No. 2634 (Ont. C.A.) and Delellis v. Delellis and Delellis, [2005] O.J. No. 4345. Both these cases point out that when assessing costs it is "not simply a mechanical exercise." In Delellis, Aston J. wrote at paragraph 9:

However, recent cases under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended have begun to de-emphasize the traditional reliance upon "hours spent times hourly rates" when fixing costs....Costs must be proportional to the amount in issue and the outcome. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant.

[27] The court considered the mother's ability to pay the costs order. See: MacDonald v. Magel (2003), 67 O.R. (3d) 181 (Ont. C.A.). She is of modest means, in school and studying to become a teacher. She is the main support for the child.

[28] Balancing all of the factors set out above the court would have ordered the mother to pay the father costs, but in an amount far less than that sought by him.

The Mother's Conduct and Bad Faith

[29] However, that is before the court takes into account the mother's conduct.

[30] A dominant aspect of this case was the court's findings about deliberate misrepresentations made by the mother.

[31] The mother deposed that the father had sporadic contact with the child after the existing order was made in 2015. She stated that the father only had irregular daytime access to the child, supervised by her father, when her father came back to the city from his cottage in the Peterborough area, "about once a month, or once every two months, or once every three months". She also claimed that she and the father had not lived together after the existing order was made.

[32] The truth was much different.

[33] The parties actually reconciled for a full year after the existing order was made – at least for the entirety of 2016. The father spent parts of almost every day with the child in 2016. Further, in 2017, the parties were still working on their relationship and the father often had unsupervised overnight access with the child.

[34] The court found that the mother unilaterally stopped all access in September, 2017, mainly because she became upset when the father's lawyer contacted her seeking to formalize the parenting arrangements. At the time of the trial, the father was still on the waiting list to attend the supervised access centre (the father had agreed to start access there on a temporary without prejudice basis) and had not seen the child since September.

[35] The mother only conceded that she had misrepresented this material evidence after being presented with evidence by the father of his contact with her and the child during 2016 and 2017. He provided photographs of their trips together to New York and the Dominican Republic in 2016. He provided multiple photographs of outings he had with the child during this time. He provided proof that the child attended daycare near his home in Brampton in 2016.

[36] The mother still attempted to minimize her misrepresentations at trial, claiming that she had just skimmed through her trial affidavit and "just signed it". She also claimed that since she had kept a mailing address with her mother in 2016, she didn't really consider that she and the father were living together throughout that year. This still didn't address her allegation that the father was only having sporadic contact with the child.

Analysis of Bad Faith

[37] Subrule 24(8) states 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.

[38] Subrule 24(8) requires a fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made. See: Cozzi v. Smith, 2015 ONSC 3626; Scipione v. Del Sordo, 2015 CarswellOnt 14971 (Ont. SCJ). There is a difference between bad faith and unreasonable behaviour. The essence of bad faith is when a person suggests their actions are aimed for one purpose when they are aimed for another purpose. It is done knowingly and intentionally. See: S.(C.) v. S. (M.) (2007), 38 R.F.L. (6th) 315 (Ont. SCJ). Bad faith is not synonymous with bad judgment or negligence; rather, it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. Bad faith involves intentional duplicity, obstruction or obfuscation. See: Scipione, supra.

[39] A bad faith finding on some specific issue does not necessarily have a spill-over effect to other issues. See: Hunt v. Hunt [2001] O.J. No. 5111 (SCJ).

[40] The father had to spend a considerable amount of time gathering and organizing evidence to contradict the mother's false allegations and to provide evidence establishing that:

a) The parties lived together in 2016.

b) The parties continued to work on their relationship until September, 2017.

c) The father spent significant time with the child after the existing order was made.

d) The mother disregarded the restraining order after the existing order was made.

[41] These factual determinations were critical in the court's assessment of the issues of access and the termination of the restraining order.

[42] The father should not have had to incur significant legal fees to prove these facts.

[43] The court finds that the mother acted in bad faith with respect to these factual issues. Her behaviour was done knowingly and intentionally, with the intention of creating a false narrative in order to frustrate the father's relationship with the child and obtain an advantage in the litigation – which she was able to do in the short-term. Her behaviour was dishonest and malicious.

[44] A strong message needs to be sent to litigants that this type of behaviour is unacceptable. It is critical to the integrity of the family law system that such behaviour be met with meaningful costs consequences.

[45] The court has considered the mother's limited financial means. However, a party's limited financial circumstances will not be used as a shield against any liability for costs but will only be taken into account regarding the quantum of costs, particularly when they have acted unreasonably and are the author of their own misfortune. See: Snih v. Snih pars. 7-13.

[46] This principle resonates even more when the litigant has acted in bad faith.

Costs Order

[47] Taking into account all of these considerations, an order shall go that the mother shall pay the father's costs fixed in the amount of $12,000, inclusive of fees, disbursements and HST.

Released: March 19, 2018

Justice S.B. Sherr