Court File and Parties

Court File No.: 453/13 Date: 2014-05-05

Ontario Court of Justice

Re: William Jeanotte (Applicant) And: Kristy Thorne (Respondent)

Before: Justice S. O'Connell

Counsel:

• William Jeanotte, acting in person
• David Godard, for the Respondent

Heard: In Writing

Costs Endorsement

Written Submissions Received on April 3, 2014 and April 14, 2014

Background

[1] The respondent mother seeks her costs of this application in the amount of $3,891.72, on a full recovery basis.

Brief Background

[2] The parties were married on July 15, 1994 and separated in December of 1996. In 2005, the parties entered into an amended separation agreement which provided for a shared parenting arrangement of the children. This arrangement broke down in October of 2012 when the children, twin daughters, started to primarily live with their mother. The children have not resided with their father since that time. They started living with their mother when they were 16 years old.

[3] The children attend Robert Bateman High School on a full-time basis in the Life Skills Program which combines a co-op program with classroom education. It is expected that they will complete this program at the end of the 2014/2015 academic year. Both children have been identified as having mild intellectual deficiencies.

[4] On October 30, 2013, the applicant father commenced an application for sole custody of the parties' two daughters when they were four months away from turning eighteen years of age. In the same application, he also sought an order that the mother be ordered into "addiction and mental health assessment and treatment" and also requested an order that the mother "conduct and pay for a paternity test between the applicant father and the children."

[5] In his application, the father claimed that the children had been subject to coercion and pressure by the respondent mother and that they were refusing to see him as a result of her undue influence. He also made a number of historical allegations about the mother's mental health when the children were significantly younger, and prior to the parties entering into the shared parenting agreement. It is unclear why he sought the paternity test given his claim for custody.

[6] In her answer, the mother claimed that the children's relationship with their father had deteriorated over a lengthy period of time and became acrimonious in October of 2012 when the children returned to her home and advised her that they did not wish to return to their father's residence. According to the mother, the children reported ongoing verbally abusive and belittling behaviour by the father towards them. She denies influencing the children and stated that the children had made this decision themselves. She sought the appointment of the Children's Lawyers to ensure that the children's independent views and preferences were before the court.

[7] The mother further denied the applicant's claims and allegations about her in the past, which dated back to 2004, prior to the parties entering into the 2005 shared parenting agreement. She stated that she has been in a stable common law relationship for the past ten years, has maintained stable employment and housing and has met all of the children's needs.

[8] Very significantly, the mother submitted that the only reason that the father was bringing this application prior to the children's eighteenth birthday was to secure his ongoing child tax benefit for the children and to potentially obtain other financial benefits as their litigation guardian once the children turned 18 years old. The mother claimed that the father took no action until September of 2013, when she advised ODSP, the father's income source, that the children were no longer living with him. She states that she did this so that she could be eligible for the children's child tax credit. The father continued to collect the child tax benefit for the children even though they had stopped living with him in October of 2012. The father commenced his custody application immediately after the mother applied for the children's tax credit.

[9] There were two case conferences in this matter (there was one other case conference scheduled but the court was not available). The applicant father was not present for either case conference. The father sought adjournments for both case conferences for health reasons. His sister attended the case conferences on January 21, 2014 and March 18, 2014 and advised that the applicant was in the hospital and unable to attend. It is not disputed that the applicant has some very serious health problems and he is currently receiving disability benefits (ODSP).

[10] The children turned 18 years old on February 2, 2014. At the last hearing before me on March 18, 2014, for oral reasons delivered, I dismissed the father's application, as I no longer had any jurisdiction to make a custody order.

[11] The mother seeks her costs on a full recovery basis. She submits that the father embarked on this application in bad faith for an improper purpose, solely to secure a financial benefit for himself and to avoid the reassessment of his past eligibility for the Canada child tax benefit for the children. The mother further submits that the father also made inflammatory and serious allegations against her, solely to cause her harm and to intimidate her in an effort to discourage her from resisting his application.

[12] The father submits that he brought the application because the mother was in clear violation of the party's custody agreement and he wanted to compel the respondent to honor the terms of their agreement, with his children's well-being in mind and for no other reason. He denied that his claim had anything to do with money and states that he continued to provide financial assistance to the children throughout the period that they were residing with the mother. He further submits that the only reason that he had to adjourn and delay the proceedings was for serious medical issues, including the amputation of his right leg and parts of both of his hands, causing very serious pain and suffering. He submits that had those serious medical issues not been present, he would have been successful in his application on the merits before the children turned 18 years old.

[13] The adult children attended the last court appearance, although they initially waited outside in the hallway and did not come into court. According to the mother, they expressed a desire to address the court. As they were now adults, I agreed to let them enter the court room and I heard from them from the body of the court. The adult daughters both clearly and consistently expressed that it was their choice to reside with their mother. They both expressed that they loved their father and wished to maintain some contact with him, either by phone or correspondence at this time. However, they both expressed feelings of hurt regarding some of their father's past conduct towards them. Both daughters pointed out to the court that their father did not call or attempt to get in touch with them on their birthday, and they were clearly upset about this.

[14] I was satisfied that these young women, now adults were speaking independently. I was impressed with both young women, who provided the court with detailed plans regarding their future and what they hoped to achieve as they entered adulthood. Both were very much enjoying their co-op placements in a school kindergarten and restaurant and both planned to eventually live independently.

The Governing Principles

[15] Rule 24 of the Family Law Rules, O. Reg. 114/99, governs the determination of costs in family law proceedings and the sections relevant to the circumstances of this case are as follows:

24. (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.

(4) Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party's own costs or ordered to pay all or part of the unsuccessful party's costs.

(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,

(a) the party's behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;

(b) the reasonableness of any offer the party made; and

(c) any offer the party withdrew or failed to accept.

(6) If success in a step in a case is divided, the court may apportion costs as appropriate.

(7) If a party does not appear at a step in the case, or appears but is not properly prepared to deal with the issues at that step, the court shall award costs against the party unless the court orders otherwise in the interests of justice.

(8) If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.

(10) Promptly after each step in the case, the judge or other person who dealt with that step shall decide in a summary manner who, if anyone, is entitled to costs, and set the amount of costs.

[16] Rule 24(11) provides a further list of factors that a court must consider when setting the amount of costs:

(a) the importance, complexity or difficulty of the issues;

(b) the reasonableness or unreasonableness of each party's behaviour in the case;

(c) the lawyer's rates;

(d) the time properly spent on the case, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order;

(e) expenses properly paid or payable; and

(f) any other relevant matter.

[17] In Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, at paragraph 8, the Ontario Court of Appeal confirmed that costs rules are designed to foster three important principles:

1. to partially indemnify successful litigants for the cost of litigation;
2. to encourage settlement; and
3. to discourage and sanction inappropriate behaviour by litigants.

[18] Further, if a successful party has behaved unreasonably "in relation to the issues from the time they arose (Rule 24(5))," then pursuant to Rule 24(4), they may be "deprived of all or part of the [their] costs or ordered to pay all or part of the unsuccessful party's costs." Behaviour under Rule 24(5) is not restricted to behaviour associated with offers to settle. See Family Law Rules, Rule 24(4), (5) and 11(b); Lawson v. Lawson, 2004 CarswellOnt 3154 (S.C.J.), para. 44.

[19] Rule 24(10) of the Family Law Rules also provides that the judge who deals with a step in a case shall decide who, if anyone, is entitled to costs. It is well established that in order to obtain costs for prior steps, there must be an order reserving those costs to the trial judge, or to the motions judge. A trial judge or motions judge is not entitled to make an award for costs covering prior steps such as case conferences and settlement conferences. Those prior steps are not within the judge's discretion particularly where there was no order as to costs or the issue of costs was not addressed. See Family Law Rules, Rules 24(10); Islam v. Rahman, 2007 ONCA 622, 2007 CarswellOnt 5718 (Ont. C.A.) at paragraph 2; Jepson v. Cresnjovec, 2007 CarswellOnt 7255 (O.C.J.) at para. 8; MacIntosh v. MacIntosh, 2008 CarswellOnt 655 (S.C.J.) at paras. 22-23 and Debora v. Debora, 2005 CarswellOnt 676 (S.C.J.), para 20.

Bad Faith

[20] I also consider the submissions of the mother that I should find that father acted in bad faith, thereby attracting liability to pay the full recovery of costs in this matter.

[21] "Bad faith" is not defined under subrule 24(8). The case law is clear that bad faith is something significantly more than unreasonable litigation behaviour. In one of the leading cases, C.S. v. M.S., Justice Craig Perkins explained that bad faith means the following:

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.

Ability to Pay

[22] I must also consider clause 24(11)(f) which requires the court to consider any other relevant matter, including the ability of the losing party to pay costs. In C.A.M. v. D.M., 67 O.R. (3d) 181, Justice Rosenberg for the Ontario Court of Appeal states the following regarding the ability to pay costs:

I am also of the view that the financial situation of the parties can be taken into account in setting the amount of the costs award either under Rule 24 or Rule 18. Thus, while subrule 24(11) enumerates a number of factors that must be taken into account, the person setting the amount of the costs is directed to take into account "any other relevant matter". I agree with Aston J. in Sims-Howarth at para. 4, that the "Family Law Rules demand flexibility in examining the list of factors in subrule 24(11) without any assumptions about categories of costs". In my view, a consideration of particular relevance may be the financial position of the parties, especially of an unsuccessful custodial parent. See Biant v Sagoo at para. 17 and Brennan v. Brennan, [2002] O.J. No. 4743 (S.C.J.) at para. 11. In fixing costs the courts cannot ignore the best interests of the child and thus cannot ignore the impact of a costs award against a custodial parent that would seriously affect the interests of the child.

[23] Nevertheless, individuals of limited means should not be able to conduct litigation with impunity. The ability to pay costs is relevant to the quantum of costs but not to another party's entitlement to costs. See Peers v. Purpore, 2008 ONCJ 615.

Analysis and Conclusion

[24] It is clear that the respondent mother was the successful party in this matter and is therefore presumed entitled to costs. In my view, this custody application was misguided and should never have been brought, especially four months before the children were becoming adults. At the first case conference, the court explained to the applicant's sister that the court would lose jurisdiction and would have no authority to make a custody order once the children became adults. The court also explained that given the children's ages, it was highly unlikely that a court would enforce the terms of the previous custody agreement against the children's wishes. Nevertheless, the applicant father persisted, through his sister as his agent, and sought a further adjournment and hearing. In my view, this was unreasonable.

[25] The timing of this application is suspicious and appears to support the mother's claim that the father brought this custody application for financial reasons, prior to the children's eighteenth birthday so that he would not be subject to a reassessment and penalty by Canada Revenue for receiving the children's tax credit even though they were clearly not residing with him. The father claims that the only reason he delayed the proceedings was because of his very serious medical issues and because he was led to believe that the children would be returning to the previous parenting schedule.

[26] Notwithstanding the above, the mother has not established 'bad faith', as defined by the case law on the evidence before me so as to receive her full recovery of legal costs. I do not have evidence to determine whether the father intended to inflict emotional and financial harm on the mother, which must be established for the court to find bad faith. Although very suspect, I further do not have enough evidence to conclusively determine that the father brought this application improperly for his own benefit, and not because of his concerns regarding the children's best interests, and to force the mother to honour the terms of their previous agreement, which the father vigorously asserts. Further, the mother did not serve a Rule 18 offer to settle, also required by the Rules. For these reasons, I am not prepared to grant the mother her full recovery of costs.

[27] I am also concerned that the mother did not seek costs at each step or appearance in these proceedings, nor sought at least to reserve the issue of costs. It is well established that in order to obtain costs for prior steps, there must be an order reserving those costs to the trial judge, or to the motions judge. Those prior steps are not within the judge's discretion. See Islam v. Rahman, 2007 ONCA 622.

[28] Finally, the applicant father is in receipt of social assistance and has a limited ability to pay costs. As he indicates in his submissions, any cost award will cause serious financial hardship. It is not disputed that the applicant is seriously disabled, having lost his leg and part of both hands, and has very limited means. Nevertheless, a party's limited finances may not be used to shield liability particularly when the course of litigation was misguided or unreasonable. As Justice Spence stated in Peers v. Purpore, 2008 ONCJ 615, "in family law litigation, and particularly for parties of modest means, it behoves those parties to act reasonably and to avoid trial if at all possible." The mother is also of limited financial means and had to incur considerable legal expense by retaining a lawyer, not to mention shouldering the costs of two adult children in her home.

[29] Having considered all of the circumstances above, I order that the father pay costs in the amount of $400.00, inclusive of taxes and disbursements, to be paid at a rate of $50.00 per month, commencing June 1, 2014.

Justice Sheilagh O'Connell

Date: May 5, 2014

Footnote

[1] The Ontario Court of Justice only has jurisdiction under Part III of the Children's Law Reform Act to make a custody order regarding a child who is under 18 years of age. See Section 18(2) of that Act. This is significantly different from the definition of 'child' under Section 2 of the Divorce Act which permits a court of competent jurisdiction to make a custody order regarding an adult child "of two ... former spouses who, at the material time, ... (b) is the age of majority or over and under their charge but unable, by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessaries of life". See Perino v. Perino, [2012] O.J. No. 2208 (S.C.J.).