Court File and Parties

COURT FILE NO.: FS-21-00044492-0000 DATE: 2023-01-10 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Courtney Daciuk, Applicant AND: Darryl Daciuk, Respondent

BEFORE: Kurz J.

COUNSEL: Angela Grant Lee, Ariel Kirzner for the Applicant

HEARD: April 26, June 6, July 27 and December 23, 2022

Endorsement

[1] This endorsement follows my previous endorsement of January 3, 2023. In that endorsement, I solicited a further DivorceMate calculation from the Applicant in order to calculate the appropriate lump sum spousal and child support based upon the scenario that I had determined. I also reserved the issue of costs and left open the option of an updated costs submission. Since I did not receive a supplementary costs submission, I rely on the submission already received.

Lump Sum Support

[2] Based upon the DivorceMate calculation which I have received and accept, the range of lump sum payments to which the Applicant is entitled are as follows:

SSAG Low SSAG Mid SSAG High Child support (table and s. 7): $197,139 $199,933 $201,155 Spousal Support $ 44,411 $100,871 $159,569 Total $241,550 $300,804 $360,724

[3] In my previous endorsement, I cited the "symbiotic relationship between amount and duration" in the determination of spousal support: Fisher v. Fisher, 2008 ONCA 11, at para. 109. I found that in this case, spousal support should be paid to the Applicant until the child turns 18. That is at the high end of duration for the parties’ seven year relationship. That being the case and in the circumstances of this case as set out in my previous endorsement, I find that quantum should be at the low end of the range. Thus, I order that the Respondent pay to the Applicant lump sum child support of $197,139 and lump sum spousal support of $44,411, for a total of $241,550. This amount shall be paid within 60 days, failing which, the consequences set out in my previous endorsement apply.

Costs

[4] Regarding costs, the Applicant seeks a full indemnity award of $66,686.25. In the alternative, she seeks “substantial indemnity” costs of $53,349 and partial indemnity costs of $40,011.75.

[5] I point out that there is no reference to scales of costs in the family law rules, and in particular, a partial or substantial indemnity scale, as found in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194: Knapp v. Knapp, 2021 ONCA 305 at para. 45. Nonetheless, in Knapp, the Court of Appeal for Ontario did not interfere with an award of substantial indemnity costs in the face of a great deal of unreasonable behaviour. Similarly, in the earlier case of Sordi v. Sordi, 2011 ONCA 665, the Court of Appeal upheld an award “approaching substantial indemnity” as a reasonable one. As Epstein J.A. wrote for the court at para. 21, "[i]n the context of family law disputes, a court need not find special circumstances” to make such an award.

[6] In making her request for “full indemnity” costs of $66,686.25, the Applicant cites the following factors: a. The Respondent’s failure to provide her with disclosure: rr. 1(8.1) and 13; b. His absence from the proceedings: r. 24(7); c. His alleged (but unparticularized) bad faith conduct: r. 24(8); and d. His unreasonable and disproportionate conduct.

[7] She further argues that the Respondent is responsible for the conduct that led to the termination of his employment; which has adversely affected the Applicant and the child. She adds that he is capable of paying those costs out of his interest in the matrimonial home.

[8] There is a great deal of overlap between the factors that the Applicant relies upon; primarily centring on the manner in which the Respondent failed to participate in this proceeding.

Relevant Costs Authorities

[9] I set out the legal principles that apply to the determination of costs in a proceeding in Forbes v. Forbes, 2022 ONSC 545. I adopt and rely on that analysis for the purpose of this costs endorsement. In doing so, I wish to highlight a few particular authorities and principles.

[10] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, gives the court broad discretion to determine costs. Rule 18 governs the reliance on formal and written offers to settle, particularly if a party obtains as or more favourable a result than their offer calls for: r. 18(14). However I may consider any written offer to settle: r. 24(16). Here, that factor is irrelevant because no offers to settle have been brought to my attention.

[11] Rule 24 sets out the factors that a court must rely upon in determining costs in family law proceedings. Under r. 24(1) a successful party is presumptively entitled to costs. Under r. 24(6), when success is divided, the court has the explicit discretion under r. 24(6) to determine the allocation of costs. I set out the factors to consider in that event in Forbes v. Forbes.

[12] Subrule 24(12), sets out the following factors relevant to the setting of costs:

Setting Costs Amounts (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: (i) each party’s behaviour, (ii) the time spent by each party, (iii) any written offers to settle, including offers that do not meet the requirements of rule 18, (iv) any legal fees, including the number of lawyers and their rates, (v) any expert witness fees, including the number of experts and their rates, (vi) any other expenses properly paid or payable; and (b) any other relevant matter.

[13] In addition, I rely on the statement of the Court of Appeal for Ontario in Beaver v. Hill, 2018 ONCA 840, at para. 10. There, the court clarified that proportionality and reasonableness, the two key factors set out in r. 24(12)(a), are the touchstone considerations to be applied in fixing the amount of costs in family law matters. Earlier, in Boucher v. Public Accountants Council for the Province of Ontario, at para. 24, the Court of Appeal concluded that costs awards should reflect "what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties."

[14] The calculation of the reasonableness of counsel fees must be considered “from the perspective of the reasonable expectations of the losing party”. That means that this part of the consideration is not “what the respondent's counsel was entitled to charge his or her own client, but rather what amount was reasonable to impose upon the loser”: Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, at para. 8.

[15] There are only two circumstances in which costs may be ordered on a “full recovery basis”: bad faith or besting an offer to settle under rule 18(14): Beaver v Hill at para. 13.

[16] In order to meet the definition of bad faith in r. 24(8), a litigant's conduct must fall far below the standard expected of parties to a proceeding. The misbehaviour must be deliberate and intended to harm, conceal or deceive. It need not be the only factor in the parties’ conduct, but it must be a significant part of that intent: S.(C) v. S.(C). Deliberate disobedience of a court order can be bad faith if that disobedience is intended to achieve an ulterior motive: Fatahi-Ghandehari v. Wilson, 2018 ONSC 460 at para. 39; or inflict financial harm (S.(C) v. S.(C)).

[17] As Pazaratz J. wrote in Jackson v. Mayerle, 2016 ONSC 1556: "...Rule 24(8) requires a fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made." Pazaratz J. was careful to distinguish bad faith from bad judgment, negligence, or unreasonable behaviour. Bad faith requires some element of conscious wrongdoing. As Pazaratz J. put it at paras. 58-59:

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... 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. The court can determine costs at a far higher level than those that there shall be full indemnity for only the piece of the litigation where bad faith was demonstrated.

[18] Nonetheless, the court may order enhanced costs, even if not on a full recovery basis, based upon a party’s unreasonable conduct of the litigation: Climans v. Latner, 2020 ONCA 554, at para. 92.

Analysis of Costs Arguments

[19] Here, I agree with the Applicant that the Respondent’s failure to make any disclosure whatsoever, despite a legal obligation to do so, dramatically increased her legal costs. The Applicant should be indemnified for much of those costs. But while the Respondent was unresponsive, uncooperative and can even be said to be the author of his (financial and employment) misfortune, I cannot find that he meets the Jackson v. Mayerle high standard of “the conscious doing of a wrong because of dishonest purpose or moral obliquity”.

[20] That being said, I do find that the Respondent’s conduct was unreasonable. That finding entitles the Applicant to enhanced costs.

[21] In considering all of the facts set out above, I find that the hourly fees charged by counsel are reasonable. So too the disbursements claimed, with two exceptions; one unparticularized claim to $113 and another claim for “Family Matter” of $99.44.

[22] I also find that counsel was required to engage in far more work than one would expect in an uncontested proceeding because of the nature of relief requested (much of which was granted) and the failure of the Respondent to cooperate or offer any disclosure whatsoever. Thus, the Applicant’s counsel was required to do both their client’s work and in regard to the issue of imputation of income, the work of the Respondent in bringing out a variety of employment and pension evidence as well.

[23] Nonetheless: a. While the Applicant was completely successful with regard to the parenting issues, they were not contested and did not require a great deal of extraordinary effort. Other than a failure to respond, there can be no argument of unreasonable litigation conduct by the Respondent in regard to the parenting issues. The argument applies to the financial issues. b. While the Applicant achieved a substantial degree of success in regard to the financial issues before the court, she was not completely successful. I did not grant her the unequal division of net family property she sought. I also did not grant her spousal support at the high end of the SSAG range. Thus, at least in part, success was divided: r. 24(6). c. At least a portion of the work that the Applicant’s counsel performed became necessary because the court had not earlier been provided with the necessary evidence and information to fully determine this matter. The same can be said for the number of attendances in this uncontested proceeding. d. While the Applicant claims a counsel fee for each court attendance, it was not necessary for two counsel to attend at court for each hearing.

[24] In the circumstances, I find that costs for this proceeding, fixed at $50,000, all inclusive, are fair, reasonable, and proportionate in the circumstances. While I cannot speak to the reasonable cost expectations of the Respondent, I can say that by failing to participate or offer any disclosure at all, he could have expected to have significantly increased the Applicant’s costs. Thus, a great proportion of the costs that I have awarded are due to his unreasonable conduct, which dramatically increased the work that the Applicant’s counsel was required to perform.

Marvin Kurz J. Electronic signature of Justice Marvin Kurz, Date: January 10, 2023