ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-21-2118-0000 DATE: 2024 11 04

B ET W EE N:

NIJHER, Hardeep Singh Applicant

KALRA, Lalit, for the Applicant Email: lalit@kmlawgroup.ca

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DHALIWAL, Manpreet Respondent

Self Represented, for the Respondent Email: dhaliwallmanpreet@gmail.com

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Gurmeet Singh Nijher, Devinder Kaur Nijher, Mandeep Kaur Nijher and Jaspreet Singh Defendants

JOSHI, Siddarth, for the Defendants

HEARD: In Writing

ENDORSEMENT

LEMAY J.

[1] This matter proceeded as a trial before me for eight days in January and February of 2024. The Applicant had been seeking a simple divorce after fourteen (14) months of marriage. The Respondent opposed this relief and sought spousal support, equalization and various damages for mental distress and other torts. On March 19th, 2024, I released my decision (2024 ONSC 1591) in which I granted the Respondent an equalization payment of $6,534.50 and dismissed all of her other claims.

[2] The parties were unable to agree on costs, and costs submissions were provided to me. These reasons set out my disposition of the costs issues.

Background

[3] Given that the Respondent was self-represented, that there were two separate counsel for the other parties and that there were a number of related actions, it is necessary to sketch a brief background of the history of this matter. That background is also necessary for understanding my disposition of various issues in this case.

[4] The Applicant and the Respondent were married on May 11th, 2018 and separated on July 10th, 2019. For the bulk of their marriage, they lived with the Applicant’s parents, Gurmeet and Devinder, in a house in Brampton. The marriage was not a success as the Applicant and the Respondent were not compatible with each other.

[5] There were a series of events that led to the separation. Those events ended up involving the Applicant’s parents, his sister Mandeep, and a family friend and neighbour Jaspreet Randhawa.

[6] After separation, the Applicant brought this Application seeking a simple divorce. The Respondent, as described above, sought additional relief. She also brought a separate civil action against the Applicant’s parents, his sister and Ms. Randhawa, the family friend. Those actions were consolidated and heard before me as one matter.

[7] There was also a small claims court action, started by the Respondent, for various jewelry and other items. This matter was resolved shortly before the trial started and I was advised of that fact at the outset of trial, although I was not given any details of the settlement.

[8] Given the fact that there were multiple parties and multiple claims, there were two sets of counsel for the parties on the Applicant’s side. One was Mr. Kalra, who acted for the Applicant. The second was Mr. Joshi, who acted for the rest of the Applicant’s family and Ms. Randhawa in the civil matter. Collectively, they were the Defendants in the civil matter and I will refer to them as the Defendants when I consider them collectively.

Positions of the Parties

[9] The Applicant seeks full (or substantial) indemnity costs in the sum of $92,523.94 inclusive of HST and disbursements for the following reasons:

a) The Applicant did better than his offer to settle at trial. b) The Respondent engaged in bad faith conduct, including bringing a multiplicity of proceedings, starting and abandoning claims and making false accusations of sexual assault and domestic violence against the Applicant.

[10] The Defendants seek full indemnity costs in the sum of $85,486.32 inclusive of HST and disbursements on the basis of the Respondent’s bad faith conduct. These costs are over and above what the Applicant has sought. The Defendants also argue that they were entirely successful at trial and that, even if I do not find bad faith, I should still award elevated costs on the basis of the offers to settle and the Respondent’s conduct.

[11] The Respondent argues that the other parties should bear their own costs. She supports this argument by reference to the offers to settle and the conduct of the other parties. In the alternative, she argues that the costs sought by both counsel are excessive. In that respect, I note that the costs sought against the Respondent total nearly $180,000.00.

General Legal Principles

[12] There are some general principles that I am guided by in assessing the costs in this case. First, and most importantly, there is a presumption that the successful party (or parties) will be entitled to their costs. See Rule 24(1) of the Family Law Rules.

[13] Then it is important to consider the purposes of modern costs awards. Those purposes are set out in a number of decisions, including Serra v. Serra 2009 ONCA 395 and Beaver v. Hill 2018 ONCA 840, (2018) 143 O.R. (3d) 519. Serra sets out three primary goals of modern costs awards, as follows:

a) To partially indemnify successful litigants for the costs of litigation; b) To encourage settlement; and c) To discourage and sanction inappropriate conduct by litigants.

[14] Beaver concludes that the ‘close to full recovery’ approach adopted in some case-law is, in most cases, inconsistent with the fact that the Family Law Rules expressly contemplate full recovery in specific circumstances. Therefore, costs are generally recovered on a partial indemnity basis. In that respect, while counsel for the Applicant referred me to the decision in Biant v. Sagoo [2001] O.J. No 3693, this decision does not seem to apply in light of the law as set out in Beaver.

[15] In addition, Rule 2(2) of the Family Law Rules also sets out a fourth principle, which is to ensure that cases are dealt with justly. See also Selznick v. Selznick 2013 ONCA 35 and Mattina v. Mattina 2018 ONCA 867.

[16] There are two circumstances in which the Family Law Rules envision substantial or full recovery costs being paid. The first is where a party engages in bad faith conduct. If bad faith conduct is established, then the costs are to be fixed on a full indemnity basis and are ordered to be payable immediately. Rule 24(8) of the Family Law Rules. Second, if a party makes an offer to settle and does as well or better than the offer at trial, then the party making the offer may be entitled to full indemnity costs from and after the date the offer is made. Rule 18(14) of the Family Law Rules.

[17] One of the interesting questions in this case is whether the combination of family law and civil law changes the rules about substantial or full recovery costs. Rule 18(14) is quite clear that a party is entitled to full indemnity costs from the date of their offer unless the Court orders otherwise. However, Rule 49 under the Rules of Civil Procedure is equally clear in the opposite direction. Defendants who do as well or better than their offers to settle are only entitled to partial indemnity costs unless the other party has engaged in reprehensible, scandalous or outrageous conduct. S & A Strasser v. Richmond Hill (Town), (1990) 1 O.R. (3d) 243 (C.A.). I will briefly address that issue in my analysis below.

Issues

[18] There are two main issues that I have to determine at this point: the scale of costs and the quantum of costs. I will deal with each issue in turn.

Scale of Costs

[19] There are two arguments being advanced by the Applicant’s/Defendants’ counsel in support of a claim for full indemnity costs: that the Applicant/Defendants achieved a result that was as good as or better than what they achieved at trial and that the Respondent engaged in bad faith conduct. I will deal with each issue in turn.

a) Offers to Settle

[20] In order to determine whether the Applicant/Defendants were as successful or more successful at trial than their respective offers to settle, the results of the trial have to be considered. The Defendants were successful in that the civil action against all of them was dismissed in its entirety. The Respondent had some limited success in that she received an equalization payment of $6,534.50. Her other claims were dismissed.

[21] The Applicant argues that he beat at least some of his offers to settle. In support of that position, the Applicant set out a chart of his offers as part of his costs submissions. I note the following about his offers to settle:

a) The November 10th, 2020 offer to settle is of no assistance to the Applicant, as the Respondent clearly obtained more money at trial than was offered in this settlement. b) The April 5th, 2021 offer to settle was for a total of $14,750.00 to resolve all issues. The phrase “all issues” appears to include the resolution of the jewelry claim as well as the issues that were before me. c) The offers of May 13, 2022 and April 3, 2023 provided the Respondent with over $16,000 plus all of the jewelry that was claimed by either side.

[22] Given that the jewelry claims were resolved separately, the offers to settle of May 13th, 2022 and April 3rd, 2023 trigger the costs consequences of Rule 24, and the Applicant is entitled to full recovery costs unless I decide otherwise.

[23] The Defendants were clearly as successful at trial as their offer to settle. On September 5th, 2023, several months before the trial commenced, the Defendants offered to settle the civil action on the basis of a dismissal without costs. This offer was open until one minute after the trial commenced and was never accepted. The Defendants will do better than this offer, as they will be entitled to at least some costs.

[24] As I set out at paragraph 17, there is an interesting legal question on whether the civil or family law rules in respect of costs apply to the civil action. It was ordered to be heard together with the family law action. Counsel for the Defendants assumed that the applicable rules for costs purposes were under the Family Law Rules, even though the matter was clearly brought as a civil proceeding. The Applicant is self-represented and did not raise the issue.

[25] As I will come to, I have determined that the Respondent has also engaged in bad faith conduct in this litigation and that will determine the scale of costs in both proceedings. However, I will briefly observe that I am not aware of any decisions that address which set of Rules should take precedence in a hybrid proceeding. In this case, because the claim against the Defendants is a civil claim, I would be inclined to apply the costs provisions under the Rules of Civil Procedure to it. However, this issue was not argued and I do not have to resolve it in this case.

b) Bad Faith Conduct

[26] The concept of bad faith is explained in detail in Jackson v. Mayerle, 2016 ONSC 1556, (2016) 130 O.R. (3d) 683. In that decision, the Court noted (at paras 56-60):

[56] But Rule 24(8) requires a fairly high threshold of egregious behaviour, and, as such, a finding of bad faith is rarely made (S. (C.) v. S. (M.), [2007] O.J. No. 2164; Piskor v. Piskor, [2004] O.J. No. 796; Cozzi v. Smith, [2015] O.J. No. 2926, 2015 ONSC 3626 (S.C.J.)).

[57] In S. (C.) v. S. (M.), supra, Perkins J. defined bad faith as follows [at para. 17]:

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.

[58] 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: Children's Aid Society of Peel Region v. F. (K.J.), [2009] O.J. No. 2348, 2009 ONCJ 252; Biddle v. Biddle, [2005] O.J. No. 1056; Leonardo v. Meloche, [2003] O.J. No. 1969; Hendry v. Martins, [2001] O.J. No. 1098, 2001 CarswellOnt 952 (S.C.J.).

[59] 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 [page699] another purpose. It is done knowingly and intentionally. The court can determine that there shall be full indemnity for only the piece of the litigation where bad faith was demonstrated (Stewart v. McKeown, [2012] O.J. No. 4851, 2012 ONCJ 644; M. (F.D.) v. W. (K.O.), [2015] O.J. No. 903, 2015 ONCJ 94).

[60] To establish bad faith, the court must find some element of malice or intent to harm (Harrison v. Harrison, [2015] O.J. No. 1533, 2015 ONSC 2002 (S.C.J.)).

[27] I am of the view that this case rises to the level of bad faith conduct for two reasons. First, the Applicant has pointed out that, in one of the exhibits at trial, the Respondent stated (on November 27th, 2020), that “in your letter, my motives are in question. For that, [the Applicant] is more than welcome if he wants to reconcile things and try to fix whatever has gone wrong. But if he thinks there is no scope for that, then I seek compensation for my loss.” Counsel for the Applicant argues that this demonstrates that the case was about “revenge” and that the Respondent was “offended” that the Applicant chose to end the relationship.

[28] While I am not prepared to ascribe precise motives to the Respondent, I am prepared to accept that she did have ulterior motives for advancing the claims that she advanced in this case. I also note that this case was extensively pre-tried. It has also been the subject of a number of motions, so that the Respondent should have had a full picture of the legal and factual issues in this case before trial, even though she was self-represented.

[29] Second, I find that the allegations of domestic violence and of misconduct on the part of the Defendants in this case were made in bad faith. I reach that conclusion on the basis of my factual findings as set out in my original decision. In Liu v. Huang, 2018 ONSC 7441, the court stated (at para. 19):

[19] The Mother has acted in bad faith throughout these proceedings. This bad faith is characterized by false allegations of domestic violence and false allegations as to Mr. Liu’s role in parenting CL prior to separation; indicating in conferences and Consent Orders that she would consider reviewing and expanding access and then refusing to do so unless threatened with a motion or motions were brought; requiring supervised access for a significant period of time based on nothing other than false allegations; resiling from an agreement to move forward with a Brief Focussed Assessment to determine an appropriate parenting schedule after suggesting the assessment to resolve a motion; calling 911 and telling the police, falsely, that the Father was essentially abducting the child; and providing misleading evidence at trial with respect to a number of issues, including making serious allegations of abuse, in order to advance her claim that sole custody in her favour was in the best interests of the child.

[30] The allegations of domestic violence included, towards the end of the trial, a claim that the Applicant had sexually assaulted the Respondent. This is a very serious allegation. There was no basis for any of the Respondent’s, and I rejected her evidence on these points (see paras. 181-186 of the merits decision). Given the context of how and when the Respondent advanced these allegations, I have no hesitation in finding that they were not truthful and were designed to advance the Respondent’s position in the litigation. These allegations were made against both the Applicant and the Defendants. They should attract full indemnity costs, even in the civil context. Advancing these allegations without any foundation is the type of conduct described in Strasser.

[31] In terms of the decision to bring multiple actions, the Respondent states in her costs submissions, “it is unrealistic to expect a survivor to file both family and civil claims to receive different forms of financial relief after the end of a violent relationship.” However, the Respondent filed a civil claim in this case in response to the family law claim. This created a multiplicity of proceedings and made the action more difficult to manage. The fact that the Respondent eventually consented to having them heard as one trial does not change the complexity of the matter or the fact that she brought a multiplicity of proceedings. Bringing a multiplicity of proceedings is an indicia of a vexatious litigant and can fit within the meaning of the term bad faith.

[32] In her costs submissions, the Respondent directs my attention to Rule 57.01(1)(h), which requires the Court to consider whether it is appropriate to award any (or more than one set) of costs where a party either commenced separate proceedings for claims that should have been made in one proceeding or, in defending a proceeding, separated unnecessarily from another party in the same interest or was defended by a different lawyer.

[33] In my view, the principles set out in Rule 57.01(1)(h) are the sorts of principles that should be considered in family law cases as well, even though the relevant Family Law Rules do not specifically mention them. I am permitted to take into account other factors beyond those specifically enumerated in the Rules. In addition, Rule 1(7) of the Family Law Rules is applicable here. It states “if these rules do not cover a matter adequately, the court may give directions, and the practice shall be decided by analogy to these rules, by reference to the Courts of Justice Act and the Act governing the case and, if the court considers it appropriate, by reference to the Rules of Civil Procedure.” In my view, both of these grounds permit me to take the principles set out in Rule 57.01(1)(h) of the Rules of Civil Procedure into account in a family law proceeding.

[34] In my view, the principles underlying Rule 57.01(1)(h) apply to the conduct of both parties. The Respondent ran up the costs by starting multiple proceedings. In my view, the interests of the Applicant and all of the Defendants were the same. I am not persuaded that it was necessary to retain separate counsel. I will address this issue in more detail in the next section.

Quantum of Costs

[35] Based on my review of her submissions, the Respondent is advancing the following arguments to either justify costs towards herself or to at least reduce the costs payable to the Plaintiffs:

a) The Respondent seems to suggest that she had some success in this matter. b) The Applicant and the Defendants acted in bad faith by dragging out the jewelry matter. c) The Applicant and the Defendants ran the costs up by engaging two separate lawyers in order to defend the claims, in spite of the fact that everyone’s interests were the same.

[36] I will address the questions of who the successful party was and the reasonable expectations of the losing party. I will then address each of these three points in turn.

a) Who was the Successful Party?

[37] The question of who the successful party was is determined, at least in part, by asking who got what they asked for. Scipione v. Scipione 2015 ONSC 5982 at para. 6. In this case, the Defendants were entirely successful in having the claim dismissed against them.

[38] The Applicant was almost entirely successful. He was able to resist the claims for spousal support and mental distress damages. He was required to pay a small equalization payment, but the Respondent did not succeed in her positions that the Applicant had a loan from his uncle, her position on the value of the Applicant’s investment property or her claim that the Applicant had an interest in his parents’ home.

[39] The equalization payment was a relatively minor success and justifies only a small reduction in costs as against the Applicant’s claim only. As noted in Jackson (at para 66), “’divided success’ does not necessarily mean ‘equal success’. And ‘some success’ may not be enough to impact on costs.” The Respondent’s win on the equalization payment issue barely rises to the level of success that should affect costs.

b) The Reasonable Expectations of the Losing Party

[40] I have detailed the procedural history of this matter in my original reasons and have discussed that issue above. Suffice it to say that the Respondent made this case far more complicated than it needed to be. In addition, the trial was eight days long and involved numerous witnesses.

[41] While proportionality is an important principle, it should not force a reduction in the costs where the unsuccessful party has forced a long and expensive trial. Jackson, at para. 95, Philippe v. Bertrand, 2015 ONSC 2449 at para. 15 (b). However, even where costs are ordered on a full indemnity basis, “the quantification of costs still requires an overall sense of reasonableness and fairness.” Jackson, at para. 91.

[42] As a result, I am of the view that a losing party’s reasonable expectations in terms of the costs of this action would be somewhere in excess $100,000 on a full recovery basis if there was no deduction for either divided success or a settlement of part of the issues. Put another way, the bills of costs submitted by counsel for the Applicant and counsel for the Defendant are entirely reasonable in the circumstances of this case subject to the issue of duplication of time, which I will come to below. The reasonable expectations of the losing party do not support any reduction in the costs payable in this case.

c) The Jewelry Claim

[43] I have observed that I do not know enough about the jewelry claim to be able to determine either how it was resolved or how it was litigated. As a result, I cannot accept the Respondent’s claim that this portion of the litigation was dragged out.

[44] However, I do accept that the jewelry claim was resolved between the parties. I also accept that it consumed some portion of the time that was spent litigating this case. While there are exceptions, I am generally of the view that when parties resolve a matter between themselves, there is no successful party. Generally, a settlement involves a compromise between the two parties. Settlements are to be encouraged, and one of the ways of doing that is for the Courts to decline to pick a winner and award one side or the other costs when they reach a settlement. In this case, the fact that the jewelry matter was resolved justifies a reduction in the costs otherwise payable by the Respondent.

[45] I note that I reach this conclusion without reference to what the settlement of the jewelry matter was. Applicant’s counsel has raised concerns in his reply submissions that reference to the settlement in the jewelry case was improper. I am not sure I agree with that position, as the Court might have had to consider the settlement in terms of determining whose positions were more reasonable. However, given my findings on both this issue and the issue of the offers to settle, it is not necessary for me to resolve this dispute.

d) Two Separate Lawyers for the Same Claims

[46] I have set out my analysis of the effect of this issue at paragraphs 32 to 34, above. The question that I must address is how my conclusions should affect the costs that are awarded to the successful parties. I see two possible options. The first is to award one set of costs to the successful parties based on the Applicant’s costs outline. The second is to reduce the amount of costs payable to each party in order to take into account the significant duplication of costs in this case.

[47] I am of the view that the appropriate approach in this case is to provide costs in a reduced quantum to both the Applicant and the Defendants. That will allow me to divide the costs to reflect the different levels of contribution of each counsel. In this case, the Applicant’s counsel took the lead on a number of the key issues, including the property issues. The Applicant also bore the expenses associated with the experts. However, the Defendants’ counsel represented other individuals and played an important role in the trial, especially in presenting the evidence of his clients. As a result, I am of the view that the global costs award should be divided between the Applicant and the Defendants, with the Applicant receiving a larger share of it.

[48] I should also add that my conclusion that the costs should be reduced because of the duplication is not a comment on whether the work was actually performed by each lawyer. As I have stated above, I accept that the costs incurred by both parties are entirely reasonable in this case. It is just a question of whether, in the circumstances of this case, the Respondent should be required to pay for the costs of two lawyers.

e) Overall Analysis

[49] When I step back and consider the costs in this case, I am of the view that the Respondent engaged in bad faith conduct in her pursuit of the allegations of domestic violence and in the bulk of her other claims of mistreatment at the hands of the Applicant and the Defendants. As a result, full indemnity costs are appropriate.

[50] However, for the reasons that I have set out above, I am not prepared to award either the Applicant or the Defendant the entirety of their full indemnity costs. The Applicant’s counsel took the lead on more issues at trial and was responsible for calling the expert witnesses. As a result, I am of the opinion that the Applicant should be entitled to recover more of the costs in this matter.

[51] When I take all of these points into account, I am of the view that the Respondent should pay costs to the Applicant in the sum of $50,000.00 and a second set of costs to the Defendants in the sum of $35,000.00.

Conclusion

[52] For the foregoing reasons, I have determined that the Respondent shall pay costs to the Applicant in the sum of $50,000.00 inclusive of HST and disbursements. Given my finding of bad faith on the part of the Respondent, those costs are to be fixed and payable immediately.

[53] I have also determined that the Respondent shall pay costs to the Defendants in the sum of $35,000.00 inclusive of HST and disbursements. This is a second set of costs. Although I have made findings of bad faith on the part of the Respondent, the reasonableness expectations and the application of the principles under Rule 57.01(1)(h) result in a reduction of the Defendants’ substantial indemnity costs. The Respondent shall have thirty (30) days to pay those costs.

[54] The Respondent’s approval as to the form and content of both Orders is dispensed with.

LEMAY J

Released: November 4, 2024