Court File and Parties

Court File No.: Toronto D55356-11 Date: 2012-11-08 Ontario Court of Justice

Between:

Luyen Thi LE Applicant

— AND —

Huy Thiet TRAN Respondent

Before: Justice E.B. Murray

Costs decision released on: November 8, 2012

Counsel:

• Leo W. Monaco, for the applicant
• Murray E. Lightman, for the respondent

Decision

MURRAY J.:

[1] This is my decision on the Applicant mother's claim for costs in an amount of $33,006.67 with respect to the decision I made on September 25, 2012 on her claims: support for the child Brian Le, born June 1, 2000; retroactive child support, commencing the date of the child's birth; provision by the Respondent father of a policy of life insurance to secure his obligation to pay support; and coverage for the child under any health/dental plan provided to the Respondent as a benefit of employment. As the parties agreed, the claim was determined by way of motion, on the basis of documentary evidence.

[2] The Respondent's position from the time that paternity was confirmed in December 2011 was that he was willing to pay Guideline support from the date of the first demand for support in August 2011, and that he was willing to provide coverage under his medical/dental plan. I made those orders on consent at the outset of the hearing. After hearing submissions, I ordered further retroactive support commencing January 1, 2010, resulting in an amount of $14,000 owing, to be paid in four equal annual instalments. I declined to order the Respondent to provide life insurance coverage because the Applicant advanced no evidence that would support such an order, given this court's limited jurisdiction.

[3] The amount claimed in costs represents full recovery for the Applicant for the entire case. In support of the claim she says that, although the amount I awarded on her retroactive claim was far below what was requested and below the amounts set out in her two offers to settle, she was successful in that she obtained retroactive support in an amount greater than that offered by the Respondent. She alleges further that the Respondent was guilty of "bad faith" as contemplated by R. 24(8) because he did not begin payments of support until four months after his paternity of the child was confirmed and because he requested access in discussions between counsel, although he did not pursue that issue or raise it in the litigation. She further submits that the Respondent was unreasonable in requesting a DNA test to confirm paternity.

[4] The Respondent submits that there should be no costs, as each party's offer to settle fell "almost equally short" of the amount awarded on the most significant issue in contention, retroactive child support. He asks that I award him costs with respect to the work undertaken by his lawyer in preparing the submissions on costs.

Analysis

[5] R. 24(1) provides that a successful party is presumptively entitled to a costs award. Success can be determined issue by issue. It can be assessed by comparing the award made to the relief requested, or to the quantum set out in written offers to settle. In this case, the Applicant presented two written offers to settle and the Respondent presented one written offer to settle. None of the offers qualifies for the automatic costs consequences set out in R. 18(14). The Respondent's submissions refer to oral offers exchanged at a settlement conference. While these offers may indicate reasonableness of the offering party, I have not considered them in measuring success, as they were not capable of acceptance under the Rules.

[6] Two issues were settled long before the hearing of this case—child support payable from the date of demand, and coverage under the Respondent's health/dental plan. The Applicant was unsuccessful on the relatively minor issue of life insurance.

[7] With respect to the major issue of retroactive support, the amount I awarded was $6000 less than the Applicant's last offer, and $8575 more than the Respondent's offer. In my view, the Applicant enjoyed success on the issue of retroactive support. I say that because she was required to litigate to obtain the amount ultimately awarded, an amount which exceeded the Respondent's offer to settle. See MacKinnon v. MacKinnon, 2004 CarswellOnt 2227, para. 6, (Sup. Ct.), and Hatcher v. Hatcher, (2009) O.J. 148, para. 52, (Sup. Ct.).

[8] I find that the Applicant is presumptively entitled to receive some costs on the issue of retroactive support. There is no allegation pursuant to R. 24(4) of any unreasonable litigation behaviour on her part that would deprive her of costs.

[9] There is no basis, however, to award costs at a full-recovery level.

[10] A finding of bad faith leads to an automatic award of costs on a full-recovery basis. The caselaw sets out a high standard which must be met to establish a finding of bad faith. See, for example, Hendry v. Martins, 2001 CarswellOnt 952 (Sup. Ct.): "Bad faith…implies conscious doing of a wrong because of dishonest purpose or moral obliquity. It contemplates a state of mind affirmatively operating with furtive design or ill will." Conduct which entails bad faith may, for example, consist of intimidation geared to prevent a litigant from proceeding with a claim, or calculated misrepresentation of income, or deliberate flouting of a court order.

[11] A finding of unreasonable litigation behaviour by the losing party is one factor that may be considered in determining the quantum of costs. Unreasonable litigation behaviour includes a failure to make prompt and complete financial disclosure or failure to submit any offer to settle once disclosure has been completed by both parties.

[12] I do not agree with the Applicant's submissions that the Respondent was guilty of "bad faith" or unreasonable litigation behaviour. He made prompt disclosure, accepted his obligation to pay support once paternity was established, and made an offer to settle well before the hearing date. The Applicant complains that there was a four-month delay in the commencement of payment of child support. This delay was occasioned in part by the Applicant's failure to respond to requests for information that would allow direct bank transfers to be made to her. It appears that a problem in communication between counsel delayed the payment. I do not understand the Applicant's submission that the Respondent's exploration of the possibility of access constituted bad faith or unreasonable behaviour. In any event, access was not an issue in this case, and the fact that counsel may have spent some time discussing the issue is not relevant for my consideration of quantum of costs.

[13] I do not agree with the Applicant's submission that the Respondent's request for a paternity test was unreasonable, given the circumstances of the parties' cohabitation. He was entitled to be certain of paternity before he acknowledged an obligation to pay support.

[14] I have considered the factors set out in R. 24(11) with respect to quantum of costs. I am also mindful of the provisions of R. 24(10). My observations relevant to the fixing of quantum are as follows:

• The case was not complex or difficult. Retroactive child support claims are common in family law, and clear guidance has been given to counsel by the Supreme Court in the case of D.B.A. & S.R.G. v. T.A.R. & L.J.W., 2006 SCC 37, 2 S.C.R. 231.

• Much of the work set out in the bill of costs of the Applicant's solicitor is work done in reference to previous steps of the case (case conferences), steps that pursuant to R. 24(10) will not be considered by me. If a claim for costs was to be made with respect to these steps, it should have been made to the case conference judge before that step was concluded.

• The time of almost 72 hours set out in the bill of costs is excessive. It includes many entries billed at the solicitor's rate of $400 per hour for tasks that are properly performed by a secretary or clerk, tasks such as preparation of a memo to a process server or of SDO (support deduction order) forms.

• I note and take into account that the Applicant's solicitor met with his client, received instructions, drafted an application and reviewed an Answer, and prepared and reviewed offers to settle. This case was not resolved through a viva voce trial, but was argued in a morning on affidavit evidence. The Applicant's counsel prepared a 4½-page affidavit, reviewed the Respondent's affidavit and financial statement, and prepared a four-page reply.

[15] If I was to award costs on a full recovery basis for all work which I can properly consider, the award would be in the range of $7,000-$8,000. However, I am mindful of the fact that the Applicant was unsuccessful on the issue of life insurance, and that in her last offer she fell significantly short of the amount awarded. I am also guided by the reasoning of the Ontario Court of Appeal in Boucher v. Public Accountants Council (Ontario), 2004 CarswellOnt 2521. The Court held that a court, in determining costs, should fix an amount which is fair and reasonable for the unsuccessful party to pay in the circumstances of the case, rather than an amount calculated in reference to the actual costs incurred by the successful litigant.

[16] In my view, the fair and reasonable amount for the Respondent to pay to the Applicant in costs is the amount of $3,000, and I so order. That amount may be enforceable as child support. I award no costs to either party with respect to the preparation of submissions on costs.

Released: November 8, 2012

Signed: "Justice E. B. Murray"