Court File and Parties

COURT FILE NO.: FS-22-103269-00 DATE: 2023 05 30

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

Sahil Kapila, Applicant Irina Davis, for Sahil Kapila

- and -

Rubi Chhina (Prem Kumar Kapila removed as a party), Respondents Lorna Yates, for Rubi Chhina Prem Kumar Kapila, Self-Represented

HEARD: March 24, 2023

COSTS ENDORSEMENT

MCGEE J.

[1] In reasons released April 13, 2023 I granted the added respondent’s motion to be removed from the proceeding because there were no claims made against him in the Application, as contemplated within Rule 7(3) of the Family Law Rules O. Reg. 114/99 under Courts of Justice Act, R.S.O. 1990, c. C.43. (“the Rules”)

[2] Mr. Prem Kapila (“Prem”) now seeks a full recovery of his costs of $11,304.50 plus HST for the period of June 24, 2022 to April 25, 2023 from his former daughter-in-law, Rubi Chhina (“Rubi”) who named him as a party in her Claim by Answer filed in response to an Application issued by Sahil Kapila (“Sahil.”) Sahil is Prem’s son and Rubi’s former spouse. Sahil’s lawyer, Irina Davis acted as Prem’s lawyer on the motion.

[3] Prem served an Offer to Settle on November 3, 2022, the terms of which were more favourable than the result on the Motion heard March 24, 2023. As a result, Rule 18(14) operates to provide Prem with a full recovery of his costs incurred after November 3, 2022 unless the court orders otherwise. His Bill of Costs indicates that $9,953.20 of the $11,304.50 in fees were incurred after his Offer to Settle was served.

[4] Rubi asks that her costs be limited to $6,500 for two reasons. First, because she made a mistake by relying on the legal advice of her former counsel and second, because she is of modest means.

[5] I will briefly address each ground before setting out the balance of my reasons for a costs award of $10,250 in fees and disbursements, plus HST. Costs are payable forthwith.

Acting on the Advice of Former Counsel

[6] Rubi argues that her conduct in adding Prem as a party to this action and then refusing to release him was not unreasonable litigation conduct because she was following the advice of her former counsel. She states at paragraph 4 of her submissions that “[t]his was a mistake.” She has since changed counsel.

[7] Adding to the unusual nature of her assertion is the fact that her former counsel is her sister-in-law, who is an employed lawyer at her brother’s law firm, where she has been employed as a law clerk. The materials filed on this motion indicate that she has been residing with her brother and sister-in-law who assist and support her in all aspects of the separation, not just her legal representation.

[8] Rule 24(9) of the Rules provides:

Costs caused by fault of lawyer or agent

(9) If a party’s lawyer or agent has run up costs without reasonable cause or has wasted costs, the court may, on motion or on its own initiative, after giving the lawyer or agent an opportunity to be heard,

(a) order that the lawyer or agent shall not charge the client fees or disbursements for work specified in the order, and order the lawyer or agent to repay money that the client has already paid toward costs;

(b) order the lawyer or agent to repay the client any costs that the client has been ordered to pay another party;

(c) order the lawyer or agent personally to pay the costs of any party; and

(d) order that a copy of an order under this subrule be given to the client. O. Reg. 114/99, r. 24 (9) .

[9] Rubi neither cites Rule 24(9) nor asks the Court to order that her sister-in-law not charge her for work performed or reimburse her for monies that she may be ordered to pay in costs. Instead, she reframes “reasonableness” in Rule 24(5) as a reliance on legal advice.

[10] I cannot accept this approach. First, reasonableness as set out in Rule 24(5) and as a factor in Rule 24(12) is an objective view of a party’s overall litigation behaviour, not that of her counsel. If it is Rubi’s view that her behaviour was wrongfully informed, the issue lies between her and her former counsel, on notice. The issue does not involve her former father-in-law who as a successful litigant is entitled to be relieved of his reasonable and proportionate costs.

Second, I have no record before me as to the advice or instructions given or received between Rubi and her former counsel. Rubi does not waive her solicitor and client privilege. It would be wholly improper to speculate, or to inquire into communications protected by solicitor-client privilege irrespective of whether there is a familiar relationship between Rubi and her former lawyer.

Modest Means

[11] As evidence of her modest means, Rubi describes her present financial circumstances and attaches her April 5, 2023 Financial Statement to her costs submissions. She points to Sahil’s continued occupation of the former matrimonial home and his failure to pay child and spousal support following his assertion that he has lost his employment. These are compelling circumstances.

[12] Equally compelling is the fact that prior to separation Prem advanced the approximate sum of $300,000 for safekeeping which Rubi invested in her name through her brother’s law office. As at the date of the motion, she had resisted a full accounting of its whereabouts. Her April 5, 2023 Financial Statement acknowledges the receipt of the $300,000, and the investment of $165,000 in a “third mortgage investment.” The balance of $135,000 is shown under Part 4(g) Other Property as “Funds held in trust by real estate lawyer for future investments,” with the details shown as “TBD.”

[13] I am not clear as to Rubi’s present income, and I accept that she does not have the use of her equity in the matrimonial home. At the same time, her sworn statement indicates that she has $300,000 under her control which Prem advanced to her from his personal funds, $135,000 of which is liquid.

[14] Modest means is not a basis on which to deny an award of costs. It has long been held that a party’s limited financial circumstances cannot be used as a shield against any liability for costs, particularly when the unsuccessful party has acted unreasonably, see Snih v. Snih.

[15] In other words, parties cannot expect to be immune from an Order of costs based on their limited financial resources. If this were the case, parties would be free to conduct litigation as they wished without fear of reprisal in the form of adverse costs Orders. This would be contrary to the philosophy and requirements of the Rules, see: Culp v. Culp, 2019 ONSC 7051 (SCJ) and Mark v. Bhangari, 2010 ONSC 4638 (SCJ). As I wrote in Mohr v. Sweeney 2016 ONSC 3238, citing Balaban v. Balaban, those who can least afford to litigate should be the most motivated to seriously pursue settlement, and to avoid unnecessary proceedings.

[16] Rubi has in her control the ability to satisfy a costs award from monies advanced to her by the successful party on this motion. The ultimate characterization of those monies as a loan or a gift, to her and Sahil as a couple, or to Sahil alone is yet to be determined; but in the interim, I do not accept that she has an inability to pay an award of costs or that she should be relieved of her responsibility to pay costs as a result of modest means.

The November 3, 2022 Offer to Settle

[17] Prem’s November 3, 2022 Offer to Settle was made in accordance with Rule 18(14) of the Rules:

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.

[18] Offers to Settle are the most powerful documents in family law litigation. When accepted, they narrow or resolve cases. When they are not accepted, they place the other side at risk should the offering party achieve a better result. Even an Offer to Settle that does not hit the mark is advantageous because it can mitigate a payment of costs from the unsuccessful offeror if the Offer is found to have been reasonable. A reasonable Offer to Settle is presumptively reasonable litigation conduct.

[19] Litigation is one of many forms of dispute determination. Litigation is not a form of leverage. Costs awards change litigation conduct by commending reasonable litigation conduct and sanctioning unreasonable litigation conduct.

[20] Here, Rubi refused to provide Prem with the basis of her claims against him, or the particulars of her claims, stating that they will be “proven at trial.” She copied Prem with all the family law correspondence between she and his son. As set out in my reasons, she served Prem with an Application that read as a 115-paragraph affidavit and a lengthy Request for Information untethered to the legal issues in the case. She made no Offer to Settle and did not accept Prem’s Offer to Settle that her claims against him be withdrawn without costs up to November 10, 2022 and with a full recovery of costs thereafter. I see no reason not to award a full recovery of Prem’s costs after November 3, 2022.

[21] That said, even a full recovery must be measured by the factors set out in Rule 24(12) of the Rules. Not every dollar is recoverable, nor are costs a blank cheque. The parties have succinctly summarized the Rule 24(12) factors and the general law of costs within their submissions, such as the four purposes of a costs award, the requirement that an award be fair, reasonable, and proportionate, and that cases are dealt with justly.

[22] I grant Prem costs in the amount of $10,250 plus HST for a total of $11,582.50. I calculate this amount as a partial recovery of his fees prior to November 3, 2022, and a full recovery of fees after November 3, 2022 less fees for a duplicative consultation with Mr. Slan and some administrative overlap between counsel and her law clerk. I find that the fees charged by Prem’s counsel on the motion are otherwise fair, reasonable, and proportionate. Those fees accord with those charged by Rubi’s former counsel: $10,650.25, so they ought to have been well within her contemplation to pay were she unsuccessful.

[23] Order to issue that Rubi forthwith pay costs of $11,582.50 to Prem.

McGee J. Released: May 30, 2023