DATE: January 2, 2024 COURT FILE NO. D41815/21 ONTARIO COURT OF JUSTICE

B E T W E E N:

I.O. ACTING IN PERSON APPLICANT

• and –

I.G. LEROY A. BLETA, for the RESPONDENT RESPONDENT

HEARD: In Chambers

JUSTICE S.B. SHERR

COSTS ENDORSEMENT

Part One – Introduction

[1] On November 27, 2023, the court released its reasons for decision following a trial about the parenting and child support arrangements for the parties’ four children (the children). See: I.O. v. I.G., 2023 ONCJ 520.

[2] The parties were given the opportunity to make written costs submissions. The respondent (the mother) seeks her full recovery costs of $45,000. She asks that the costs be enforceable as support by the Director of the Family Responsibility Office.

[3] The applicant (the father) spent most of his submissions rearguing his case and criticizing the family law judges who have managed this matter. The only submission he made that was relevant to the costs issue was that he is in debt due to this case and a related criminal law case.

Part Two – Legal considerations - General principles

[4] The Ontario Court of Appeal in Mattina v. Mattina, 2018 ONCA 867 set out that modern costs rules are designed to foster four fundamental purposes:

a) to partially indemnify successful litigants;

b) to encourage settlement;

c) to discourage and sanction inappropriate behaviour by litigants and;

d) to ensure that cases are dealt with justly under subrule 2 (2) of the Family Law Rules (all references to the rules in this decision are to the Family Law Rules).

[5] Costs can be used to sanction behaviour that increases the duration and expense of litigation, or is otherwise unreasonable or vexatious. In short, it has become a routine matter for courts to employ the power to order costs as a tool in the furtherance of the efficient and orderly administration of justice. See: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, 2003 S.C.C. 71, paragraph 25.

[6] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.

[7] An award of costs is subject to the factors listed in subrule 24 (12), subrule 24 (4) pertaining to unreasonable conduct of a successful party, subrule 24 (8) pertaining to bad faith, subrule 18 (14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party. See: Berta v. Berta, 2015 ONCA 918, at paragraph 94.

Part Three – Success

[8] Subrule 24 (1) creates a presumption of costs in favour of the successful party.

[9] The mother was the successful party in this case. The father did not rebut the presumption that she is entitled to her costs.

[10] Both parties sought primary residence and decision-making responsibility for the children. These were the primary issues at trial. The mother was completely successful on these issues.

[11] The father sought generous unsupervised parenting time with the children if the court ordered that they live with the mother. The mother sought an order for supervised parenting time once the father had completed a parenting course. She modified that position in closing submissions and proposed graduated parenting time if conditions were met.

[12] The court ordered parenting time between the father and the children in three stages. The first stage was to be fully supervised at Access for Parents in Ontario (APCO) for two hours. The second stage was to take place at the later date of April 6, 2024, or after six stage one visits had taken place. These would be four-hour visits in the community with exchanges at APCO. The third stage was to take place at the later date of September 11, 2024, or after eight successful stage two visits had taken place. These would be single overnight visits each week with two of the children and one Saturday visit each month with all four children.

[13] The court did not require the father to attend a parenting course before starting his parenting time, as requested by the mother. The court found that the father lacked the insight to obtain any benefit from a parenting course.

[14] The mother was substantially successful on the parenting time issues.

[15] The mother was completely successful in obtaining the incidents of parenting she sought at trial. These included orders for her to obtain government documentation for the children without the father’s consent and to travel internationally with the children without the father’s consent.

[16] Child support was a secondary issue at trial.

[17] The mother asked the court to impute the father’s annual income at $64,926 for support purposes and to start child support in December 2022. The father asked the court to assess his annual income at $34,926 and to only order ongoing child support.

[18] There was divided success on this issue. The court assessed the father’s annual income at $34,926 and ordered child support to start on January 1, 2023.

[19] Overall, the mother was the successful party at trial.

[20] The father did not rebut the presumption that the mother is entitled to costs.

Part Four – Bad faith

4.1 Legal considerations

[21] Subrule 24 (8) of the rules 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.

[22] 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).

[23] 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).

[24] 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.

[25] 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); Kardaras v. Kardaras, 2008 ONCJ 616.

4.2 Analysis

[26] The mother submitted that the father acted in bad faith because:

a) He kept insisting that the case management judges had just cut and pasted everything that the mother and her lawyer had asked for.

b) He claimed that his previous counsel had confirmed this.

c) He claimed that the mother’s counsel was facilitating the mother’s lies to the court.

d) He externalized blame for his failure to see the children on everyone other than himself.

e) He claimed that the mother had no idea of how to parent the children without any supporting evidence.

f) He had emotionally abused the mother and the children.

[27] The father spent an inordinate amount of time in his affidavit and at trial insulting the case management judges. He wrote insulting letters to the mother’s lawyer and accused him of knowingly presenting false evidence to the court. This was very unreasonable behaviour.

[28] Although this was a close call, the court finds that the father’s behaviour did not rise to the high threshold required to make a finding of bad faith. While misguided, the court finds that the father believed what he was saying and that he was presenting his perspective in the hope that the court would agree with him and rectify the injustices that he felt had been done to him. The court does not find that he made these statements maliciously.

[29] That said, there will be serious costs consequences arising from this conduct. Attacks of this nature on justice participants cannot be condoned. It undermines the integrity of and the respect for the administration of justice and must be sanctioned with elevated costs.

Part Five – Amount of costs

5.1 Legal considerations

[30] Subrule 24 (12) reads as follows:

24 (12) In setting the amount of costs, the court shall consider,

a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues:

b) each party’s behaviour,

c) the time spent by each party,

d) any written offers to settle including offers that do not meet the requirements of rule 18,

e) any legal fees, including the number of lawyers and their rates,

f) any expert witness fees, including the number of experts and their rates,

g) any other expenses properly paid or payable; and

h) any other relevant matter.

[31] The reasonableness of the parties’ positions, arguments and conduct are relevant to the issue of costs. An important function of costs is to uphold the integrity of our justice system. Costs are one way of ensuring the resources of the justice system are not unduly drained by clearly unreasonable claims and ill-advised litigation strategy. See: Weber v. Weber, 2020 ONSC 6855.

[32] Conduct which unduly complicates or unduly lengthens and increases the cost of a proceeding constitutes unreasonable conduct under subrule 24 (4). See: Goldstein v. Walsh, 2019 ONSC 3174 (SCJ); Hutchinson v. Peever, 2021 ONSC 4587 (SCJ); Jackson v. Mayerle, 2016 ONSC 1556 (SCJ).

[33] A high or full recovery costs award may be justified where a party persists in advancing unreasonable claims or arguments. See: Lawrence v. Lawrence, 2017 ONCJ 431; M.A.B. v. M.G.C., 2023 ONSC 3748.

[34] In considering the reasonableness of the parties’ conduct, the judge deciding costs should also address their mind to whether they have complied with court orders and the Rules during the proceeding. Rules 1(8)(a) and 1(8.1) provide that if a person fails to obey an order in a case or a related case or with the Rules, the court may deal with the failure by making an order for costs. See: M.A.B. v. M.G.C., supra.

[35] Substantial indemnity costs of $44,703 were ordered on an appeal when the appellant parents made unwarranted allegations of impropriety against Children’s Aid Society workers and of racism, unprofessional conduct and colluding with the court against its counsel. The appellants also alleged that a previous judge was biased. See: Kenora-Rainy River Districts Child and Family Services v. P.N.R. & K.R., 2023 ONSC 7117. The court wrote the following at paragraphs 38 and 42 of its decision:

[38] Beyond that, there is no greater damage to a lawyer’s professional reputation than to accuse him or her, without proof, of unethical conduct. The courts have long recognized that a professional reputation is the work of a lifetime. It is the currency by which lawyers are known. To willfully attempt to destroy a lawyer’s reputation, without grounds, calls for elevated costs sanctions to show the court’s disapproval of such reprehensible conduct. For that reason, substantial indemnity costs are warranted here.

[42] This is perhaps one of the most egregious examples of bad faith because it calls the administration of justice into disrepute. In these circumstances, substantial indemnity costs are warranted to express the court’s disapproval of the appellants’ reprehensible conduct.

[36] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel (2003), 67 O.R. (3d) 181 (Ont. C.A.). Difficult financial circumstances are a factor but not are always a reason to deprive a successful party of costs or to reduce the amount of costs. See: Beaulieu v. Diotte, 2020 ONSC 6787. Ability to pay will be less of a mitigating factor when the impecunious party has acted unreasonably, or where their claim was illogical or without merit. See: Gobin v. Gobin, 2009 ONCJ 278; D.D. and F.D. v. H.G., 2020 ONSC 1919.

[37] Those who can least afford to litigate should be most motivated to seriously pursue settlement and avoid unnecessary proceedings. See: Mohr v. Sweeney, 2016 ONSC 3338; Balsmeier v Balsmeier, 2016 ONSC 3485.

[38] Litigants cannot “hide behind their impecuniosity” when making unfounded attacks on their lawyers. See: Mohamed v. Mohamed, 2018 ONCJ 530. This principle was applied when a party made unfounded attacks on their trial lawyer in a child protection appeal. See: E.K.B. v Jewish Family and Child Services, S.K.B. and R.G., 2020 ONSC 2924, where the court ordered $25,000 costs against the appellant who was in receipt of social assistance.

[39] This court finds that this principle also applies to unfounded attacks on the integrity of lawyers for opposing parties.

[40] In determining the appropriate quantum, the court should consider the amount that the unsuccessful party could reasonably have expected to pay in the event of lack of success in the litigation. See: Arthur v. Arthur, 2019 ONSC 938.

[41] Subrule 24 (11) provides that the failure of the court to order costs in relation to a step in a case does not prevent it from awarding costs in relation to the step at a later stage in the case.

[42] However, courts continue to be cautious about awarding costs at the trial stage where costs were not awarded at earlier steps in a case. See: Baezner v. Brunnenmeir, 2018 ONCJ 956; Nabwangu v. Williams, 2019 ONCJ 171.

[43] In Laidman v. Pasalic and Laidman, 2020 ONSC 7068 the court set out that the presumption remains that costs should be determined at each stage, and there are good reasons for this. Parties should have an ongoing awareness of the cost consequences of litigation decisions they make. Reserving costs may impede final resolution by needlessly inflating and complicating the list of future issues still to be dealt with. A judge who has just completed a step in a case will usually be in the best position to evaluate all of the relevant Rule 18 and 24 considerations. Reserving costs to a future event – often to a different judge – can result in later confusion and controversy about what really happened at the earlier step.

[44] In Berge v. Soerensen, 2020 ONCJ 265 Justice Roselyn Zisman set out the following circumstances where costs of a prior step should be awarded:

a) Costs have been reserved to the trial judge.

b) When, considering subsequent events, the trial judge is better situated to determine the costs of the prior step than the judge presiding over the step or

c) In exceptional circumstances

5.2 Analysis

[45] This case was important to the parties. It was not complex. It was made more difficult due to the father taking unreasonable positions and late-filing documents.

[46] Neither party made an offer to settle. The mother submitted that the court should consider her draft order as an offer to settle. This court discussed why it would not do that and the importance of making offers to settle in paragraphs 8 and 9 of L.W.-A. v. J.C., 2017 ONCJ 825, as follows:

[8] There is a significant difference between a formal offer to settle and a draft order. They have different purposes. The court ordered that draft orders be exchanged and filed at the outset of the trial pursuant to clause 1 (7.2) (m) of the rules. This order was made to promote the primary objective of the rules – to deal with cases justly. A draft order specifically sets out a party’s trial position – not their settlement position. It forces the party to clearly consider the relief he or she is seeking. It provides clarity about what relief is being sought and the court with context in assessing the evidence. The draft order helps to avoid a common problem where a party will fail to clearly articulate his or her position at the outset of the case and shifts his or her position during the trial.

[9] The offer to settle, on the other hand, is a settlement position and is confidential between the parties. It is not to be disclosed to the trial judge until after he or she has dealt with all the issues in dispute except costs. See: Subrule 18 (8). An offer to settle, unlike a draft order, will attract costs consequences pursuant to subrules 18 (14) and (16).

[47] Before the absence of an offer to settle can be used against a party, the situation has to be one where it is realistic to expect offers to settle to be made. Either/or cases are not conducive to offers to settle – there is no way to compromise. See: Beaver v. Hill, 2018 ONCA 840. However, here, there were considerable opportunities for the parties to compromise. 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. The court finds that the failure of the parties to make offers to settle was unreasonable behaviour.

[48] Otherwise, the mother acted reasonably.

[49] The father acted unreasonably. In particular:

a) He made unwarranted allegations against the mother’s lawyer and the case management judges. For instance, he claimed that Justice Carole Curtis had intentionally ignored the law and aided and abetted the mother to alienate the children against the father with harsh and hard to understand endorsements.

b) He took unreasonable positions. He insisted on having primary residence and decision-making responsibility for the children even though he had seen the children infrequently from the time he separated from the mother in July 2021 until the trial in November 2023.

c) He did not comply with Justice Curtis’ May 11, 2023, temporary order to attend for supervised parenting time at APCO. He did not see the children after that date.

d) He was disdainful of court orders. Details were set out in paragraph 86 of the trial decision.

e) He often called the police and the Children’s Aid Society to complain about the mother’s parenting of the children, without any basis, as a method to exercise coercive control over her.

f) He acted in a manipulative, selfish and controlling manner. Details were set out in paragraph 80 of the trial decision.

g) The tone of the father’s trial affidavit and his evidence at trial were consistently harsh and insulting to anyone he perceived as opposing him.

h) The court wrote at paragraph 92 of its decision:

[92] The father has continued to perpetuate this family violence against the mother and the children since the parties separated. He cancelled their health coverage. He took money from the children’s RESP. He continues to attack, mock, demean and diminish the mother. The court finds that it is likely that the father will continue to perpetuate family violence if given the opportunity. This is an important factor in crafting any parenting orders.

[50] The father’s costs submissions continued these themes. His submissions considerably exceeded the page limits permitted. He tried to reargue his case and continued his attack on the mother, her counsel, judges and the family court system. He took no accountability for his conduct.

[51] The applicant’s counsel’s rates of $400 per hour are reasonable.

[52] A considerable amount of time that was claimed by the mother in her bill of costs related to prior steps in the case, including for the preparation for and attendance at multiple case conferences and motions.

[53] The mother included costs for a motion argued on November 22, 2022. Justice Debra Paulseth heard that motion and ordered no costs. It is not appropriate to claim costs for that step.

[54] The case management judges did not order costs or reserve the costs of any of the other prior steps to the trial judge.

[55] The court will order costs for the two trial management conferences conducted by Justice Curtis. Costs are not ordinarily ordered at a trial management conference, as the trial judge will be in a better position to assess success. That is the case here.

[56] Otherwise, the court is not in a better position than the case management judges to determine the costs of the other prior steps in the case.

[57] No exceptional circumstances exist that warrant the court ordering costs for those prior steps in the case at the trial stage.

[58] However, this does not preclude the court from awarding costs accrued from activity not specifically related to any step. Activity not requiring judicial intervention is often better dealt with at the end of the case and not by the case management judge. See: Houston v. Houston, 2012 ONSC 233; Walts v. Walts, 2014 ONSC 98; F.S. v. M.B.T., 2023 ONCJ 144. This includes initial interviews, meetings and settlement discussions before filing the application, the application document itself, the reply, financial statements (not prepared for motions or conferences), questioning (in relation to issues for trial), document preparation and review and settlement meetings relating to issues for trial. The mother is entitled to have these costs considered now. See: Czirjak v. Iskandar, 2010 ONSC 3778.

[59] The court reviewed the mother’s bill of costs. The time claimed for the work that will be considered at this stage was within a reasonable range.

[60] The father should have reasonably expected to pay the level of costs that will be ordered if he was unsuccessful.

[61] The court considered the father’s financial circumstances. He earns a modest income. He has dug a financial hole for himself by having unreasonably taken this case to trial when the outcome of the parenting issues should have been evident to a reasonable person. The father decided to take an overly aggressive approach to this litigation despite his limited financial circumstances. His behaviour does not warrant much sympathy.

[62] The court also considered that the father chose to purchase an expensive vehicle in September 2023.

[63] The court will order the father to pay $24,000 for the mother’s costs, inclusive of fees, disbursements and HST.

[64] Any hardship to the father can be addressed through a payment order. The court will permit the father to pay the arrears at the rate of $500 each month, starting on February 1, 2024, provided that he maintains his child support and costs payments in good standing.

Part Six – Request for enforcement by the Director of the Family Responsibility Office

[65] The mother asks that the entire amount of costs be payable as support and enforced as an incident of support by the Director of the Family Responsibility Office pursuant to clause 1(1) (g) of the Family Responsibility and Support Arrears Enforcement Act.

[66] The court has discretion to allocate what portion of the costs are attributable to support, particularly when there are multiple issues being litigated. See: Sordi v. Sordi, 2011 ONCA 665.

[67] The mother did not separate in her bill of costs the time spent on the support issues. Counsel should do that when making requests to have costs payable as support and enforced as an incident of support by the Director of the Family Responsibility Office.

[68] A flexible approach has been endorsed when the court is determining what proportion of costs should be allocated to the support issues. See: Shelley v. Shelley, 2019 ONSC 2830.

[69] The main focus of this trial was on the parenting issues. There was divided success on the financial issues. The court also considered that the father’s unreasonable conduct extended to all the issues. The court will allocate $6,000 of its costs order to the support issues.

Part Seven – Conclusion

[70] A final costs order shall go as follows:

a) The father shall pay the mother her costs fixed at $24,000, inclusive of fees, disbursements and HST.

b) The father may pay the arrears at the rate of $500 each month, starting on February 1, 2024. However, if he is more than 30 days late in making any child support or costs payment, the full amount then owing, shall immediately become due and payable.

c) Pursuant to clause 1(1) (g) of the Family Responsibility and Support Arrears Enforcement Act, the sum of $6,000 of this costs award shall be payable as support and enforced as an incident of support by the Director of the Family Responsibility Office.

Released: January 2, 2024

Justice Stanley B. Sherr