Court of Appeal for Ontario

Date: 2025-06-19
Docket: COA-24-CV-0322 & COA-24-OM-0072
Panel: J.C. MacPherson, Grant Huscroft, Steve Coroza JJ.A.

Between:
K.K. (Applicant/Appellant)
and
M.M. (Respondent)

Appearances:
Brian Ludmer, for the appellant
Aida Pasha, for the respondent

Heard: February 18, 2025

On appeal from the order of Justice Cynthia Petersen of the Superior Court of Justice, dated February 21, 2024, and from the costs order dated February 21, 2024, with reasons reported at 2024 ONSC 1092.

A. Introduction

[1] This appeal arises from lengthy and acrimonious litigation between K.K. (the “husband”) and M.M. (the “wife”), following the parties’ separation in 2012. From 2013 until 2022, the parties litigated decision-making responsibility for their children, child and spousal support obligations, and parental alienation.

[2] There were approximately 40 pre-trial court appearances. Over the course of the proceedings, pre-trial costs were ordered against the husband and the wife at different times. In March 2014, a motion judge found that the wife was engaging in parental alienation against the husband and granted sole custody to the husband. In 2021, the trial judge found that the wife had not engaged in parental alienation and instead was the victim of alienation by her husband.

[3] Following an 18.5-day trial, the trial judge awarded pre-trial and trial costs to the wife on a full recovery basis, and stayed the enforcement of five interim costs orders that were previously made by other judges against the wife.

[4] The husband commenced an appeal with respect to the trial judge’s decision to stay five historical costs awards made by other judges totalling over $100,000 in favour of the appellant (payment of which remained outstanding), dating back to 2013.

[5] The husband also filed a motion for leave to appeal the trial judge’s decision to award $211,411 in pre-trial and trial costs to the wife. These matters were consolidated and heard together by this court.

B. The Costs Decision

(1) Trial Costs

[6] The trial judge awarded costs in the amount of $146,027 to the wife on a full recovery basis. She found that the wife was the successful party at trial on all the major issues in dispute, including the imputation of significant income to the husband, entitlement to spousal support, the amount and duration of spousal support and numerous parenting issues, including the issue of parental alienation. Although the wife was unsuccessful on certain peripheral issues, these issues consumed relatively little time and did not lengthen the trial.

[7] The husband argued at trial that the wife’s conduct was unreasonable. He alleged that she failed to make timely financial disclosure, made unsuccessful requests to add witnesses and interview the parties’ children, attempted to introduce hearsay evidence, gave inconsistent testimony, and sought to introduce opinion evidence from healthcare practitioners without producing their files. The trial judge considered and rejected each of these allegations and concluded that the wife’s conduct was not unreasonable. She found no basis upon which to deprive the wife of her costs under r. 24(6) of the Family Law Rules, O. Reg. 114/99.

[8] The trial judge found that the wife was entitled to full recovery of her costs because the husband acted in bad faith throughout the litigation. The trial judge pointed to several instances in her trial decision where she made findings of the husband’s bad faith, including the fact that he breached his financial disclosure obligations; improperly requisitioned his wife’s medical records; misled the court and ignored its orders; and obtained an adjournment of the trial under false pretenses. The trial judge found that there was no question that the husband acted in bad faith, noting:

[The husband] deliberately concealed relevant evidence from the court and knowingly presented fabricated evidence to the court. He did so as part of a campaign against [the wife], intending to cause her emotional and financial distress. He was engaged in a longstanding pattern of relentless psychological abuse directed at [the wife], and he misused the court processes to advance his personal agenda.

[9] The husband argued that the wife’s trial counsel’s costs submissions were insufficient to support her claim. The trial judge disagreed, noting that although it would have been preferable for her costs submissions to include more detail, they were sufficient to allow the husband to respond to her claim and for the court to perform its assessment role. The trial judge found that the wife’s claim for costs was reasonable and proportional to the issues in dispute at trial.

(2) Pre-trial Costs

[10] The wife sought costs for all the pre-trial steps in the proceeding, including i) steps where costs were explicitly reserved to the trial judge; ii) steps where no costs order was made; iii) steps where the wife was ordered to pay the husband’s costs; and iv) steps where an order of “no costs” was made. Relying on r. 24(11) and Cameron v. Cameron, 2018 ONSC 6823, the trial judge made several orders with respect to pre-trial costs, ultimately finding that the wife was entitled to pre-trial costs in the amount of $65,414 on a full recovery basis. [2]

[11] The trial judge awarded pre-trial costs which had been specifically reserved to her, as well as pre-trial costs where no costs order was made. She noted that at some of the pre-trial steps where costs had been reserved or no order was made, the motion judge did not have the benefit of a full trial record, which now established that it was the husband, and not the wife, who engaged in parental alienation and demonstrated bad faith throughout the litigation.

[12] The trial judge found that she had no jurisdiction to set aside orders for “no costs” made by the case management judge at four pre-trial motions. She declined to grant the wife’s request for costs incidental to these steps in the proceeding.

[13] Finally, the trial judge awarded the wife pre-trial costs not associated with any court appearances as well as specific disbursements she had paid directly. The trial judge also ordered that a portion of the total costs awarded to the wife be enforced by the Family Responsibility Office.

(3) The Stay of Pre-trial Costs Awards Against the Wife

[14] The trial judge was not prepared to change prior costs orders on the basis that her authority to do so was restricted by the circumstances listed in r. 25(19), namely where: i) the order was obtained by fraud; ii) the order contains a mistake; iii) the order needs to be changed to deal with a matter that was before the court that it did not decide; iv) the order was made without notice; or v) the order was made with notice, if an affected party was not present when the order was made because the notice was inadequate or the party was unable for a reason satisfactory to the court to be present. The trial judge found that none of these circumstances was engaged.

[15] At the same time, the trial judge held that she did have jurisdiction under s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “CJA”) to stay the pre-trial costs orders made in the husband’s favour. She relied on Buttarazzi v. Buttarazzi and Peerenboom v. Peerenboom, 2020 ONCA 240, to hold that, since the authority under s. 106 has been used to stay the execution of final judgment in a family law proceeding, she had the authority to stay costs orders in the proceeding before her.

[16] In her view, given the exceptional circumstances of extreme bad faith by the husband, it would be oppressive to permit the husband to enforce the pre-trial costs orders against the wife. She therefore stayed the enforcement of five historic costs orders:

1. Justice Edwards’ Costs Order, dated August 8, 2013, in the amount of $45,000.
2. Justice Van Melle’s Costs Order, dated April 4, 2014, in the amount of $63,000.
3. Justice Van Melle’s Costs Order, dated January 22, 2015, in the amount of $5,000.
4. Justice Van Melle’s Costs Order, dated December 21, 2017, in the amount of $5,000.
5. Justice Richetti’s Costs Order, dated February 6, 2020, in the amount of $500.

C. Issues

[17] The questions raised on appeal are:

1. Should leave to appeal the trial judge’s costs order be granted?
   If so, did the trial judge err in:
   a) awarding the wife full recovery costs on all issues; or
   b) her application of r. 24 of the Family Law Rules?
2. Did the trial judge err in permanently staying pre-trial costs orders made by other judges?
3. Did the trial judge’s conduct and decision give rise to a reasonable apprehension of bias?

D. Positions of the Parties

(1) The Husband’s Position

(a) The Motion for Leave to Appeal

[18] The husband asks this court to grant him leave to appeal the trial judge’s costs decision. He asserts that she erred in awarding the wife costs on a full recovery basis on all the issues throughout the case, despite having denied her requested relief on numerous matters. He further submits that the trial judge erred in her application of r. 24 of the Family Law Rules, which sets out the factors that a court must consider when awarding costs.

[19] The husband submits that the trial judge did not properly consider the wife’s behaviour in her costs decision. He submits that the wife engaged in “unreasonable litigation behaviour”, pointing to her delay in financial disclosure and the fact that she was unsuccessful on her motion to reinstate her equalization claim. The husband further submits that the wife’s costs submissions were insufficient and that her failure to provide a detailed bill of costs was fatal to her costs claim.

[20] The husband also asserts that the trial judge erred in her application of r. 24 of the Family Law Rules, specifically by reconsidering earlier costs decisions within the proceedings. He submits that the judge who deals with a step in the case generally remains best placed to decide and assess costs in relation to that step and whether the parties’ behaviour in that step at that time was reasonable. He submits that making a second award of costs for a period of time that had already been the subject of prior costs awards would be contrary to rr. 24(10) and (11) of the Family Law Rules. The husband lists several cases that he says stand for the proposition that if the costs decision is not appealed, the matter is res judicata. [3]

(b) The Stay Appeal

[21] The husband asks this court to set aside the trial judge’s order permitting a permanent stay of previous costs orders awarded in favour of the husband against the wife. He asks that the original costs orders made by other judges be reinstated.

[22] The husband asserts that the trial judge erred in applying the principles of law when she ordered a permanent stay of the historical costs orders. He contends that the trial judge erred by reopening and staying the issue of costs orders of other judges, which were either previously awarded or specifically addressed, contrary to the Family Law Rules.

[23] The husband acknowledges that Peerenboom stands for the proposition that the court “may consider, in very rare circumstances” staying a pre-trial order. The husband relies on the Superior Court decision, Cao v. Monkhouse Law Professional Corporation, 2024 ONSC 196, in which Brownstone J. noted at para. 9 that the stay must “not cause an injustice to the party entitled to judgment”. The husband argues that the trial judge’s reopening of prior costs decisions that were awarded in the husband’s favour amounted to an injustice against him.

(c) Reasonable Apprehension of Bias

[24] The husband also asserts that he was not provided with an independent and impartial proceeding. In support of this claim, he refers to the trial judge’s decision to stay all prior costs orders despite her acknowledgement at paras. 1-2 of the costs decision that: (i) the family law proceeding “commenced on January 3, 2013, and concluded on September 28, 2022”; and (ii) “[t]here were approximately 40 pre-trial court appearances at conference and motion hearings. I was not involved in any of the pre-trial steps.” He also refers to the trial judge’s designation of issues where the husband was successful as “peripheral” such that “it would not be accurate to characterize the outcome of the trial as ‘divided success’”.

[25] The husband also refers to the trial judge going “out of Her Honour’s way” to justify numerous instances of what would otherwise be viewed as unreasonable litigation behaviour by the wife, while the husband did not get the same consideration.

(2) The Wife’s Position

(a) The Motion for Leave to Appeal

[26] The wife asks this court to dismiss the husband’s motion for leave to appeal the costs decision. The wife disagrees with the husband’s position that the trial judge erred by awarding the wife full recovery costs on all issues throughout the case. She submits that the trial judge applied a contextual approach in determining the outcome of the case by taking into account the overall success and weighing success in terms of time and effort put into each claim. In doing so, the wife contends that the trial judge correctly found that the wife’s cumulative success on the central matters at trial outweighed her limited success on peripheral issues that were minor and not time consuming.

[27] The wife further disagrees with the husband’s assertion that the trial judge failed to appropriately apply r. 24 in determining her entitlement to costs. She contends that the trial judge’s decision was consistent with the principles outlined in r. 24 and her analysis appropriately balanced all the factors.

(b) The Stay Appeal

[28] The wife asks this court to dismiss the husband’s appeal regarding the trial judge’s order to stay the enforcement of historical costs orders in favour of the husband.

[29] The wife contends that the trial judge did not err in staying the historical costs orders made against her. She submits that s. 106 of the CJA empowers the court to act on its own initiative to stay a proceeding in the court on terms considered just. The wife submits that the trial judge properly relied on the cases of Peerenboom and Buttarazzi to conclude that it would be oppressive in the circumstances of this case to permit the husband to enforce the pre-trial costs orders against the wife given the trial judge’s findings that this case met the threshold of exceptional circumstances based on the husband’s “extreme bad faith”.

(c) Reasonable Apprehension of Bias

[30] On the issue of bias, the wife asserts that, “the decision on costs cannot manifest a bias against the husband as every part of the decision of the trial judge, including the stay of historical cost orders, was supported with factual information obtained at trial and sound reasoning based on referenced jurisprudence and correct principles of law.”

E. Analysis

(1) Leave to Appeal the Costs Decision

[31] The test to grant leave to appeal a costs order is stringent. This court recently summarized the test in Canadian Tire Corporation, Limited v. Eaton Equipment Ltd., 2024 ONCA 25, at para. 13:

Leave to appeal a costs order will not be granted except in obvious cases where the party seeking leave convinces the court there are “strong grounds upon which the appellate court could find that the judge erred in exercising his discretion”: Brad-Jay Investments Limited v. Village Developments Limited, 218 O.A.C. 315 (C.A.), at para. 21, leave to appeal refused, [2007] S.C.C.A. No. 92. This test is designed to impose a high threshold because appellate courts recognize that fixing costs is highly discretionary and that trial and motion judges are best positioned to understand the dynamics of a case and to render a costs decision that is just and reflective of what actually happened on the ground: Algra v. Comrie Estate, 2023 ONCA 811, at para. 48.

[32] Rule 24 of the Family Law Rules sets out the factors for the court to consider in awarding costs. Subrule 24(3) establishes a presumption that a successful party is entitled to costs. Here, the wife was successful at trial.

[33] This was an 18.5-day trial over which the trial judge presided. She was undoubtedly in the best position to assess success at trial. The trial judge noted:

In this case, M.M. was successful at trial on all the major issues in dispute, including the imputation of significant income to K.K., M.M.’s entitlement to spousal support, the appropriate amount and duration of spousal support, and numerous parenting issues (i.e., whether K.K. engaged in family violence; whether either spouse engaged in parental alienation; determination of the children’s principal residence; allocation of parental decision-making authority; and parenting time). These were the issues that consumed the bulk of the trial. There was some mixed success on s.7 expenses, as well as the imputation of income to M.M., but those were peripheral issues.

[34] In the trial judge’s opinion, these were the issues that “consumed the bulk of the trial”. And while the trial judge acknowledged “mixed success” on the issues of s. 7 expenses and imputation of income to the wife, in her view these issues were “peripheral”. There is no basis for this court to interfere in the trial judge’s assessment of the parties’ relative success.

[35] Under the Family Law Rules, costs awards on a full recovery basis are appropriate under r. 24(10) where a party has acted in bad faith.

[36] In setting the amount of costs, as the rule was at the time, the court “shall” consider the following factors:

• (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.

[37] Here, the trial judge set out in detail, at para. 35 of her decision, her findings of fact from her trial decision that clearly grounded a finding of bad faith by the husband. She concluded that the husband had:

• signed an authorization form on the wife’s behalf to requisition her confidential medical records without her consent to gain an advantage in the litigation;
• tried three times to obtain an ex parte order from the Ontario Court of Justice for sole custody of the parties’ children, and for police to apprehend the children and bring them into his care;
• filed fraudulent affidavits before the court, concealing the fact that he was facing criminal charges;
• knowingly tendered a fraudulent hospital record during trial purporting to document an attempted suicide by the wife “in a deliberate effort to mislead the court and to inflict further psychological harm”;
• lied to doctors, CAS workers, police and the court; and
• coached the children not to participate in scheduled parenting time with their mother.

[38] Given these factual findings there can be no doubt that the trial judge had sufficient and appropriate grounds on which to make a finding of bad faith and to award costs of the trial on a substantial indemnity basis. The husband has raised no basis on which this court should interfere with the trial judge’s order.

(2) The Stay Appeal

[39] Under s. 106 of the CJA, a stay is a discretionary remedy. As such, it will not be set aside unless the judge exercised this discretion based upon a wrong principle, failed to consider a relevant principle or misapprehended the evidence: Mobile Mini Inc. v. Centreline Equipment Rentals Ltd., at para. 2. In my view, the trial judge did not take into account improper considerations or fail to consider the appropriate factors.

[40] Instead, she relied on the principle articulated by this court in Peerenboom to conclude at para. 113 of her decision that, “it would be oppressive to permit K.K. to enforce the pre-trial costs Orders against M.M.” The trial judge found that K.K.’s “extreme bad faith … infected the entire litigation proceeding” and that not only would a stay cause no injustice to K.K., but “[o]n the contrary, the interests of justice require that payment of those costs be withheld.” This is the very principle articulated by this court at para. 34 of Peerenboom as appropriate for staying the execution of a judgment under s.106 of the CJA:

A stay of execution of a judgment may be granted [under s.106 of the CJA] in rare circumstances where the conduct of the judgment creditor is oppressive or vexatious or an abuse of process of the Court, and where the stay would not cause an injustice to the plaintiff: 1247902 Ontario Inc., at paras. 8, 10, citing Gruner v. McCormack (2000), 45 C.P.C. (4th) 273 (Ont. S.C.), at para. 30, per Epstein J. This test for the stay of proceedings was cited with approval by this court in Yaiguaje v. Chevron Corporation, 2013 ONCA 758, 370 D.L.R. (4th) 132, at paras. 54-55, aff’d 2015 SCC 42, [2015] 3 S.C.R. 69, a case involving the stay of an action for the enforcement of a foreign judgment. [Emphasis added.]

[41] Having relied on the precise principle already articulated by this court in Peerenboom, I see no basis on which to interfere with the trial judge’s exercise of discretion based on her factual findings in this case.

[42] This was a truly exceptional case. As already noted above, the trial judge made findings of extreme bad faith. She summarized these findings at para. 35 of her costs decision and it is worthwhile to set out some of them here to illustrate the true exceptionality of this case:

i. When M.M. left the matrimonial home and moved into a women’s shelter with the children, K.K. attended at a medical clinic where he used to practice and signed a patient authorization form on M.M.’s behalf without her consent. He did so to requisition her confidential medical records from a hospital without her consent, with the intent of using the records to gain a strategic advantage in family law proceedings. His actions resulted in complaints against him to the Information and Privacy Commissioner and the College of Physicians and Surgeons, as well as criminal charges against him for forgery and theft (paragraphs 443-449).

ii. K.K. then tried three times to obtain an ex parte order from the Ontario Court of Justice for sole custody of the parties’ children, and for police to apprehend the children and bring them into his care. His motions were denied because he did not serve notice of the motions on M.M. Rather than serving M.M., he commenced this proceeding before the Superior Court of Justice by bringing yet another emergency ex parte motion for sole custody. He succeeded in obtaining a temporary order on this fourth attempt (i.e., his first attempt in Superior Court) because he obtained and filed M.M.’s confidential hospital records without her consent (paragraphs 450-460, 463).

iii. At the outset of this proceeding, K.K. filed a sworn Form 35.1 Affidavit in which he falsely stated that there had been no prior custody or access cases involving the children, having just recently made three failed attempts to obtain ex parte interim custody orders in the Ontario Court of Justice.

iv. In his sworn Form 35.1 Affidavit, he also concealed the fact that he was facing criminal charges in connection with his alleged forgery of signatures on M.M.’s patient authorization form, and for allegedly assaulting M.M. and their daughter V.K. (paragraphs 461-462).

v. During the trial, K.K. knowingly tendered a fraudulent hospital record purporting to document an attempted suicide by M.M. during a visit to India. His counsel ambushed M.M. with the document during her cross-examination. K.K. then lied to the court about why it had not previously been disclosed to M.M. (paragraphs 285-316).

vi. Throughout the proceeding, K.K. lied repeatedly to Children Aid Society workers about matters relevant to the children’s welfare and the family law proceeding (e.g., paragraphs 430-431, 456, 458, 480). He later sought to rely on the CAS records in the court proceeding.

vii. In December 2017, K.K. intentionally misrepresented to the case management judge that he had no intention of traveling to India with the children. In fact, he was actively planning such a trip, despite a May 2017 court order prohibiting him from doing so. He was stopped with the children at the airport by police who were alerted by M.M. (paragraphs 523-531).

viii. K.K. ignored and breached court Orders to surrender V.K.’s Indian passport, to obtain a Canadian passport for V.K., and to take steps to cancel a fake Indian birth certificate issued in the name of the parties’ son J.K., who was born in Canada (paragraphs 524, 650).

[43] Rule 24(1) requires the court to, promptly after dealing with a step in a case, in a summary manner:

• (a) determine who, if anyone, is entitled to costs in relation to that step and set the amount of any costs; or
• (b) expressly reserve the decision on costs for determination at a later step in the case

[44] As the trial judge properly noted at para. 65 of her costs decision, “[a]lthough r. 24(11) expressly permits a trial judge to award costs for previous steps in the proceeding, it is generally best for judges to decide costs of each step as they occur.”

[45] The trial judge also properly determined that none of the conditions under Rule 25(19) were satisfied such that she could change the prior costs orders.

[46] Rule 25(19) of the Family Law Rules provides that, on a motion, the court may change an order where the order:

• (a) was obtained by fraud;
• (b) contains a mistake;
• (c) needs to be changed to deal with a matter that was before the court but that it did not decide;
• (d) was made without notice; or
• (e) was made with notice, if an affected party was not present when the order was made because the notice was inadequate or the party was unable, for a reason satisfactory to the court, to be present.

[47] Instead, the trial judge found that she had the authority to stay the enforcement of the previously made costs orders on her own initiative under s. 106 of the CJA.

[48] Section 106 of the CJA provides:

A court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the court on such terms as are considered just.

[49] The ordinary test for a stay of a proceeding is the three-part test set out in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, at para. 43. In order to grant a stay of proceedings, the court must consider: 1) whether there is a serious issue to be tried; 2) whether there will be irreparable harm to the applicant if the request is denied; and 3) whether the balance of convenience favours a stay.

[50] The authority to stay a “proceeding” has been extended to include the execution after judgment process: 1247902 Ontario Inc. v. Carlisle Power Systems Ltd., [2003] O.J. No. 6300 (Div. Ct.), aff’d [2005] O.J. No. 118 (C.A.). In 1247902 Ontario Inc., the Divisional Court found that although the court has the authority to stay the execution of a judgment, such authority must be used “very sparingly”: at para. 10. The key questions that the Divisional Court identified to determine whether such authority should be exercised are i) whether the refusal to grant a stay would be oppressive or vexatious or an abuse of process of the court; and ii) whether the stay would cause an injustice to the plaintiff.

[51] In Buttarazzi, the Ontario Superior Court granted a stay of a judgment obtained in estate litigation. McGee J. found that a husband’s consent to judgment represented an abuse of process and was entered into for an improper purpose: to defeat claims in parallel family law proceedings between the husband and wife. The court found that allowing the creditor to enforce the judgment would cause grave prejudice to the wife.

[52] This court has interpreted s. 106 as providing the authority to stay the execution of a family law judgment as well. In Peerenboom, this court found that a stay of the execution of the husband’s default judgment was justified under s. 106 of the CJA. This court was asked to stay the enforcement of a “friendly” judgment that had been obtained by a family litigant’s parent. The effect of that judgment was to reduce the family litigant’s equalization obligations to his wife. This court found that, “a stay of execution of a judgment may be granted in rare circumstances where the conduct of the judgment creditor is oppressive or vexatious or an abuse of process of the Court, and where the stay would not cause an injustice to the plaintiff”: at para. 34, citing 1247902 Ontario Inc., at paras. 8, 10. This court stayed the enforcement of the judgment because it amounted to an abuse of process. The judgment effectively placed the family litigant’s property out of reach of his wife or the court in his family law matter.

[53] The court’s power under s. 106 is discretionary.

[54] The amount of the costs awards stayed by the trial judge was significant: $120,500 (Justice Edwards’ award of $45,000; Justice Van Melle’s orders of $65,000, $5,000 and $5,000; and Justice Richetti’s order of $500). The trial costs awarded to the wife on a full recovery basis were not much more than that, namely, $146,027.

[55] Given the summary nature of costs awards made at pre-trial steps, it is possible for circumstances to be discovered at trial that render the prior costs awards wholly inappropriate. Such circumstances will be very rare.

[56] In my view, this is such a case.

[57] Trial judges routinely revisit support awarded at interim steps and make adjustments with retroactive effect. As McDermot J. noted in Rushton v. Cuff, 2020 ONSC 490, at para. 41: “Courts, have acknowledged, as have the SSAGs themselves, that there may be challenges in inadequately ascertaining precise income figures at the interim stage. Interim support can be adjusted retroactively later at trial if the income figures chosen were incorrect”.

[58] And while these routine adjustments in spousal support do not generally result in changes to the interim cost awards that accompanied them – see e.g., Armstrong v. Armstrong, 2016 ONSC 126, at para. 306, and Manabat v. Smith, 2018 ONSC 4181, at para. 72, where the court specifically said that they could not change costs orders previously made – this does not detract from the use of the discretionary stay power under s.106 in truly exceptional circumstances.

[59] While the wife could point to no other decision in which a court had exercised its authority under s.106 of the CJA to stay the enforcement of a costs order made in the same proceeding, one would be hard-pressed to find another case with facts as egregious as the husband’s actions were in this case.

[60] To properly exercise her authority under s.106 the trial judge was required to find that it would be oppressive, vexatious or an abuse of process for the prior costs awards to be allowed to stand. Here she found, at para. 113, that it would be “oppressive” to permit the husband to enforce on any of the costs awards made in his favour because of “extreme bad faith … which resulted in protracted litigation with ruinous financial consequences to the wife”. In the trial judge’s opinion, the husband’s “bad faith actions were not limited to specific issues and were not restricted to the conduct of the trial”.

[61] In the overwhelming majority of cases, consistent with the direction in r. 24 that costs are to be decided at each step, costs orders made at interim stages should stand unaffected by the outcome at trial. The stay power under s.106 of the CJA should only be exercised in a manifestly exceptional case. This was just such a case.

[62] In my view, there is no basis to interfere with the trial judge’s exercise of discretion in this case.

(3) Reasonable Apprehension of Bias

[63] The test for reasonable apprehension of bias is well-settled: would a reasonable and informed person viewing the matter realistically and practically and having thought it through, conclude that the judge, consciously or unconsciously, would not decide fairly? The Supreme Court of Canada noted at para. 22 of Yukon Francophone School Board, Education Area #23 v. Yukon (Attorney General), 2015 SCC 25 that"[t]he objective of the test is to ensure not only the reality, but the appearance of a fair adjudicative process". [Emphasis in original.]

[64] The threshold for finding a reasonable apprehension of bias is extremely high: see Lloyd v. Bush, 2012 ONCA 349, at para. 23. There is a strong presumption in favour of the impartiality of the trier of fact and the question of reasonable apprehension requires a highly fact-specific inquiry.

[65] I agree with the wife that the trial judge’s decision was supported with information obtained at trial. In my view, nothing in the decision comes anywhere close to creating a reasonable apprehension of bias on the part of the trial judge.

F. Disposition

[66] I would not grant leave to appeal the trial judge’s costs award. I would dismiss the appeal with respect to the other grounds of appeal.

[67] The respondent is entitled to her costs of the appeal fixed at $20,000 inclusive of disbursements and HST.

“J.C. MacPherson J.A.”

Huscroft J.A.:

[68] I agree with my colleague on his proposed disposition of the issues of trial costs and reasonable apprehension of bias. However, I conclude that the trial judge erred in principle in staying the prior costs orders under s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “CJA”). Accordingly, I would allow the appeal to this extent.

The trial judge erred in staying the costs orders on the prior motions

[69] The husband argues that the trial judge erred by staying the costs orders made previously by other judges and that this has resulted in an injustice to him.

[70] The starting point in considering this argument is the recognition that in family law proceedings, as in civil proceedings generally, costs are typically awarded following each step in the proceedings, as the judge conducting the motion is best placed to determine costs. The Family Law Rules currently provide as follows: [4]

Deciding costs
24. (1) Promptly after dealing with a step in a case, the court shall, in a summary manner,
(a) determine who, if anyone, is entitled to costs in relation to that step and set the amount of any costs; or
(b) expressly reserve the decision on costs for determination at a later step in the case. O. Reg. 10/25, s. 4.
Same
(2) The failure of the court to act under subrule (1) in relation to a step in a case does not prevent the court from awarding costs in relation to the step at a later step in the case.

[71] Costs orders may be appealed with leave to the Divisional Court, but the wife did not appeal any of the impugned costs orders. Nor did the wife pay the orders as she was required to do. Thus, the trial judge’s decision to stay the costs orders against the wife was possible only because of her non-compliance with the rules.

[72] The trial judge had authority under the Family Law Rules to change orders made previously within the proceeding, but that authority was limited. Rule 25(19) of the Family Law Rules provides that, on a motion, the court may change an order that:

• (a) was obtained by fraud;
• (b) contains a mistake;
• (c) needs to be changed to deal with a matter that was before the court but that it did not decide;
• (d) was made without notice; or
• (e) was made with notice, if an affected party was not present when the order was made because the notice was inadequate or the party was unable, for a reason satisfactory to the court, to be present.

[73] The trial judge determined that none of the five conditions was engaged in this case. Although she found that the husband had acted in bad faith, the trial judge found that fraud had not been established. She accepted that the husband concealed and misrepresented information during the pre-trial motions and observed that it could have been argued that he procured the costs orders by fraud. But the wife had not advanced that argument and the trial judge found that she did not have authority to change the costs orders made by other judges on the earlier motions. These were the circumstances in which she invited the parties to make submissions on whether she should grant a stay of the orders pursuant to s. 106 of the CJA.

[74] Section 106 of the CJA provides:

A court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the court on such terms as are considered just.

[75] There is no question that the trial judge was entitled to raise the possibility of a stay under s. 106. Moreover, it is clear that the trial judge acted in a procedurally fair manner by permitting the parties to make submissions prior to granting the stay. The question on appeal is whether the trial judge erred in exercising her discretion to grant the stay.

[76] It is well established that the court will not set aside an exercise of discretion to grant a stay under s. 106 of the CJA unless it is based upon a wrong principle, a failure to consider a relevant principle or a misapprehension of the evidence: see e.g., Mobile Mini Inc. v. Centreline Equipment Rentals Ltd., at para. 2; BTR Global Opportunity Trading Limited v. RBC Dexia Investor Services Trust, 2011 ONCA 518, at para. 3. The court will also set aside a stay if the stay would bring the administration of justice into disrepute: see Phillion v. Ontario (Attorney General), 2014 ONCA 567, 121 O.R. (3d) 289, at para. 56, leave to appeal refused, [2014] S.C.C.A. No. 411.

[77] This court held in Peerenboom that the ability to stay a proceeding under s. 106 of the CJA extends to execution of a judgment by a judgment creditor, but only in rare circumstances. Peerenboom concerned the enforcement of a writ of execution against the parties’ matrimonial home obtained by the husband’s father. Although the father had a valid judgment against the husband, there was no question that his objective in enforcing it was to defeat the wife’s equalization claim. In staying the father’s writ of execution, this court held that a stay of the execution of a judgment may be granted where the conduct of the judgment creditor is oppressive or vexatious or an abuse of process of the court, provided the stay would not cause an injustice to the plaintiff: at para. 34. However, there is no authority supporting the exercise of the court’s discretion under s. 106 of the CJA to stay the enforcement of a costs order made in the same proceeding, as is the case here.

[78] With respect, the trial judge erred in principle by failing to consider a relevant principle, namely that promptly after each step in the proceedings, the presiding judge shall decide costs and, in general, costs orders are payable forthwith. See e.g., Olaveson v. Olaveson, at para. 7; D.L. v. H.L., 2008 ONCJ 150, at para. 19; Weidenfeld v. Weidenfeld, 2018 ONSC 5930, at para. 17, aff’d 2019 ONCA 415, leave to appeal refused, [2019] S.C.C.A. No. 430; Mark M. Orkin, The Law of Costs, loose-leaf, 2nd ed. (Toronto: Thomson Reuters, 1987), at §4:3. Had the wife complied with her obligation to pay the costs orders promptly, there would have been nothing for the trial judge to stay. Having failed to pay the costs orders as required, she should not be rewarded by having their enforcement stayed years later.

[79] An order permanently staying unpaid costs orders would encourage litigants to defer paying costs orders made against them. Such an incentive has no place in litigation – especially in family law proceedings, which are designed to promote the most expedient and least costly resolution of disputes in the very difficult context of matrimonial breakdown.

[80] It is no answer to this concern to say that the decision to grant a stay can be reserved to rare or even egregious circumstances. To use the stay power to undo the costs decisions of different judges on prior motions is to undermine basic precepts and expectations of civil procedure. It would also expand considerably the narrow range of circumstances in which the Family Law Rules contemplate the varying of orders. Bad faith falls considerably short of fraud, which is required under r. 25(19) to vary an order. Unless the motion judge reserves the issue of costs to the trial judge, any costs award made at a particular stage must be understood as appropriate at the time it was made unless demonstrated otherwise under r. 25(19).

[81] Accordingly, I would allow the appeal in part and would reinstate the costs orders. As the wife was substantially successful on the appeal, I agree she is entitled to costs of $20,000, all inclusive.

Released: June 19, 2025
“J.C.M.”
“Grant Huscroft J.A.”
“I agree. Coroza J.A.”

[1] This appeal is subject to an order prohibiting the publication of the names of the parties and their children.

[2] Changes were made to Rule 24 of the Family Law Rules on January 22, 2025, including a change from the use of the phrase “shall consider” to “may consider” in the subrule listing relevant considerations for setting costs amounts. In my view, these changes do not affect the outcome of this appeal.

[3] Zhao v. Chandi, 2021 BCSC 322, at para 21; TLH v. MGD, 2017 ABQB 408, at para. 104; Hart v. Hart, at para. 9; Harris v. Crawford, 2013 ONCJ 388, at para. 18; Di Bratto v. Sebastiao, 2015 ONSC 3979, at paras. 33-34; and Jackson v. Mayerle, 2018 ONSC 258, at paras. 23-24.

[4] Rule 24 was amended in 2025: see O. Reg. 10/25, s. 4. Previously, rr. 24(1) and (2) were codified at rr. 24(10) and (11). When the first three historical costs orders at issue were made, the rule required the court, after each step in the case, to decide who was entitled to costs and set the amount. When the fourth and fifth orders were made, the rule expressly provided that the court could decide costs in relation to that step or reserve the decision for later determination.