Court File and Parties

Ontario Court of Justice

Date: 2015-04-01

Court File No.: Toronto DFO 10 11545

Between:

Andreas Veneris Applicant

— And —

Mipha Koh Veneris Respondent

Before: Justice E. B. Murray

Decision on Costs released on April 1, 2015

Counsel:

• Ms. Judith M. Nicoll — counsel for the applicant
• Ms. Nicole Tellier — counsel for the respondent

Decision

MURRAY, E. B. J.:

Background

[1] The Applicant (Andreas) and the Respondent (Mia) are the father and mother of a child, Eirini, born September 19, 2013. This litigation commenced immediately after separation. On February 3, 2015, I released a decision on an interim motion by Andreas and cross-motion by Mia which dealt with the appropriate residential schedule for Eirini, child and spousal support, and a number of secondary and procedural issues.

[2] Mia now requests an order for costs payable to her on a partial recovery basis of $12,000, reflecting Andreas' partial success on the motion. Andreas submits that Mia acted in bad faith in not complying with a prior consent order for participation in a one-day mediation. He does not request an order for costs, but submits that no order for costs should be made.

1. The Law

[3] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C-43, as amended, provides that the costs of a proceeding or a step in a proceeding is in the court's discretion. That discretion is circumscribed by rule 24 of the Family Law Rules, O. Reg. 114/99, as amended. The relevant portions of that rule are set out below:

Successful Party Presumed Entitled to Costs

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.

Decision on Reasonableness

(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.

Divided Success

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

Bad Faith

(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.

Costs to be Decided at Each Step

(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.

Factors in Costs

(11) A person setting the amount of costs shall consider,

• (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.

[4] The relevant provisions of Rule 18 with respect to the consequences of offers made prior to a decision in a case, including a motion, are set out below.

18.(1) In this rule,

"offer" means an offer to settle one or more claims in a case, motion, appeal or enforcement, and includes a counter-offer.

Application

(2) This rule applies to an offer made at any time, even before the case is started.

Making an Offer

(3) A party may serve an offer on any other party.

Offer to be Signed by Party and Lawyer

(4) An offer shall be signed personally by the party making it and also by the party's lawyer, if any.

Withdrawing an Offer

(5) A party who made an offer may withdraw it by serving a notice of withdrawal, at any time before the offer is accepted.

Time-Limited Offer

(6) An offer that is not accepted within the time set out in the offer is considered to have been withdrawn.

Offer Expires When Court Begins to Give Decision

(7) An offer may not be accepted after the court begins to give a decision that disposes of a claim dealt with in the offer.

Confidentiality of Offer

(8) The terms of an offer,

• (a) shall not be mentioned in any document filed in the continuing record; and
• (b) shall not be mentioned to the judge hearing the claim dealt with in the offer, until the judge has dealt with all the issues in dispute except costs.

Costs Consequences of Failure to Accept Offer

(14) A party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:

1. If the offer relates to a motion, it is made at least one day before the motion date.
2. If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
3. The offer does not expire and is not withdrawn before the hearing starts.
4. The offer is not accepted.
5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

Costs Consequences — Burden of Proof

(15) The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14).

Costs — Discretion of Court

(16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.

[5] The Ontario Court of Appeal has given us guidance as to the purpose of modern costs rules:

1. Indemnification of a successful litigant;
2. Encouragement of settlement;
3. Discouragement of inappropriate behaviour.

[6] The Court of Appeal has also cautioned that the overall objective in determining costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances, rather than an amount reflecting the actual costs paid by the successful litigant.

2. Analysis

2.1 Success

[7] The motion and cross-motion dealt with multiple issues, which I summarized in my decision:

On this motion, Andreas seeks orders for the following relief:

1. An order directing that Mia and he attend for a one-day closed mediation with Elizabeth Hyde within two weeks, pursuant to the consent order made July 18, 2014;
2. An order that Eirini reside with him three times weekly, including one overnight visit (Tuesday and Sunday from 9:45 a.m. to 3:45 p.m. and Thursday from 10 a.m. to Friday at 3:45 p.m.);
3. An order that neither party may apply for a replacement birth certificate for Eirini without further court order.

Although Andreas's notice of motion requested an order for joint custody, in argument his lawyer stated that she was content that no order for custody be made at this time.

Mia seeks order for the following relief:

1. An order restructuring the child's current residential schedule with Andreas, so that the daytime visits which now take place 4 times weekly shall take place 3 times weekly, but be comprised of the same amount of parenting time;
2. A "conduct order" regulating the parties' use of the communication book and behaviour with the child, the particulars of which are set out in paragraph 87 of Mia's affidavit sworn November 18, 2014;
3. An order giving direction as to provision of "makeup time" to either party if there is a disruption in the child's residential schedule;
4. An order for production of documents contained in her Request for Information which was served October 6, 2014;
5. An order permitting questioning on financial issues;
6. An order for child support in the amount of $1355 monthly;
7. An order for spousal support in the amount of $3752 monthly retroactive to the date of separation;
8. An order that the parties select a mutually agreeable pediatrician for the child and, failing agreement, that the selection be made by the court.

[8] At the commencement of argument of the motions, Andreas consented to the conduct order sought by Mia and indicated that he would not pursue his request for an order for joint custody at that time.

[9] The two major contested issues in the motions were:

1. Should Eirini have more time with Andreas, including overnight stays?
2. Does the waiver of spousal support in the marriage contract disentitle Mia to support? If Mia is to receive support, what is the appropriate quantum? Should support be retroactive to the date of separation?

[10] Success was divided on the first issue; Mia was successful in most respects on the second issue, and Andreas' position on that issue was not accepted.

[11] On the issue of Eirini's schedule, I ordered a modest extension of the overall time the child spends with Andreas, consistent with her best interests – shorter than the time which Andreas sought, but more than the status quo which Mia argued should continue. I did not order overnight stays at this time.

[12] With respect to spousal support, Andreas' position was that the marriage contract disentitled Mia to support, and that no support should be ordered. During argument Andreas' lawyer submitted that if temporary support was ordered, that the quantum should be substantially less than the minimum suggested by the Spousal Support Advisory Guidelines (SSAG). Mia's lawyer argued that there was good reason to think that the agreement did not comply with either prong of the Miglin test, that Mia was in great need, and that an award in the lower end of the SSAG range would be appropriate recognition of the possibility that Mia might not succeed on this issue at trial.

[13] I found that I had authority to order spousal support because Mia had raised a triable issue as to whether the agreement should be set aside with reference to s. 33(4)(a) of the Family Law Act. I ordered spousal support at the lower end of the SSAG range, retroactive to the month following Mia's Answer (in which spousal support was claimed), without prejudice to her right to claim spousal support from the date of separation at trial.

[14] In addition, Mia was successful in obtaining an order for extensive further financial disclosure from Andreas and for questioning. Mia's success on these issues was significant as regards her ability to pursue her claims for child and spousal support.

[15] With respect to the other secondary issues in the motions:

• Andreas was successful in obtaining the order sought for enforcement of the prior mediation agreement and to prevent either party from obtaining a replacement birth certificate.
• Mia was unsuccessful in obtaining an order changing the child's pediatrician (although she was given leave to pursue the issue at a later date).
• The order made as to "makeup time" for the child did not reflect either party's position.

2.2 Bad Faith?

[16] Given that Mia enjoyed greater success than Andreas, she should receive some costs from him unless she is guilty of bad faith or unreasonable litigation behaviour to such a degree that she should be deprived of costs.

[17] Andreas submits that Mia is guilty of bad faith in that she refused to attend mediation pursuant to the July 2014 consent order. Andreas says that if Mia had complied with the order that many if not all issues might have been resolved, and further litigation rendered unnecessary.

[18] A finding of bad faith has very serious consequences; Rule 24(8) requires that costs shall be ordered on a full recovery basis to be paid immediately.

[19] I find that Mia's behaviour in failing to participate in the limited agreed-upon mediation was unreasonable, but far from the standard required to make a finding of bad faith. In most cases, more than a failure to obey a court order is required for such a finding.

[20] Justice Craig Perkins considered what constitutes bad faith behaviour in C.S. v. M.S.:

"Bad faith" has been explained as "not simply bad judgment or negligence but rather it implies the 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." See Biddle v. Biddle. The definition of "bad faith" in The Concise Oxford Dictionary of Current English (5th ed., 1964, ed. by H.W. Fowler and F.G. Fowler) is simply "intent to deceive". The essence of bad faith is the representation that one's actions are directed toward a particular goal while one's secret, actual goal is something else, something that is harmful to other persons affected or at least something they would not willingly have supported or tolerated if they had known. However, not all bad faith involves an intent to deceive. It is rare, but not unknown in family law cases, for bad faith to be overt -- an action carried out with an intent to inflict harm on another party or a person affected by the case without an attempt to conceal the intent.

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.

[21] There are many cases in which a party acts unreasonably and does not comply with an order, out of anger or a mistaken but honest belief in the rightness of his or her position. Absent a prolonged campaign which continues despite evidence or judicial direction to the contrary, courts have not found that this conduct constitutes bad faith. For example, in Singh v. Singh, 2006 ONCJ 217, a father with temporary custody failed to make the children available for access ordered by the court because he believed that one child did not want to attend and because the mother had acted irresponsibly in the past. The court found that he acted unreasonably, but not in bad faith, because of his sincere belief in his position.

[22] Andreas argues that failure to fulfill an agreement constitutes bad faith, citing Piskor v. Piskor. Piskor is a case in which a former husband withdrew a motion to change spousal support resulting from a consent order, a motion which Justice Jennifer Blishen characterized as "a new stage in one of the longest running and most protracted family law cases in the Ottawa courthouse." Mr. Piskor withdrew his motion after it was stayed because he "unilaterally and intentionally" refused to pay despite the ability to do so. Justice Blishen made the finding of bad faith, concluding that Mr. Piskor's conduct could be characterized as failure to comply with an agreement or order with a view to achieving an ulterior purpose.

[23] There is no evidence that Mia declined to participate in the mediation for a "dishonest purpose" or in order to harm Andreas. Mia changed solicitors after she consented to the order to participate in mediation. Her evidence is that her new solicitor advised her that she was likely to be screened out as an inappropriate candidate for mediation, based on the issues of domestic violence raised in the case, and thus, mediation would be a waste of time and money.

[24] My finding that Mia was unreasonable in not complying with the July 2014 order is a factor that will reduce the costs to Mia which I would otherwise order.

2.3 Other Factors in Determining Quantum

[25] Importance, difficulty and complexity of the issues. The issues of Eirini's schedule and of spousal support were important to both parties, but, with one exception, not complex or difficult. The issue of Mia's entitlement to spousal support on a temporary basis given the waiver in the marriage contract and Andreas' sponsorship of Mia was of some complexity.

[26] Reasonableness or unreasonableness of behaviour. I have already found that Mia was unreasonable in not complying with the consent order for mediation. The consequences of that failure are not clear; it is speculative to conclude that the motion would have been unnecessary if a one-day mediation had taken place.

[27] I find that Andreas' behaviour was unreasonable in that he did not consent to questioning or to provide the disclosure I eventually ordered. Given the issues surrounding the marriage contract and the relative complexity of the issues about his income, it was clear that this disclosure should have been made and that questioning was in order.

[28] Lawyer's rates. I find counsel's rates reasonable, given her experience.

[29] Time properly spent on the case. The motion was argued in a half-day. It had to be rescheduled once, because of unavailability of the former case management judge. Andreas' lawyer argues that the duplication of work resulting from this should be eliminated from consideration of time properly spent. I do not agree. Although the delay and resulting additional preparation time was not the fault of either party, it is a factor that affected the costs incurred by each party, and should be considered in assessing an appropriate award.

[30] I agree with the submission of Andreas' lawyer that Mia's bill of costs includes charges at a rate of $175 - $225 per hour for work by law clerks that is essentially secretarial, and that this is not justified.

[31] In my view, the time of 24.6 hours spent by Mia's lawyer, with respect to preparation and review of materials, research, correspondence, preparation and argument of the motion and preparation of the bill of costs, is within the range of reasonable.

[32] Other factors. Andreas argues that if costs are ordered against him that I should reduce what I might otherwise order because of Mia's behaviour in making unjustified allegations against him of domestic violence, which resulted in criminal charges. Andreas says that because of those charges he incurred expenses for supervised access early in the case and for a criminal lawyer. The Crown ultimately withdrew those charges because of her assessment that there was no reasonable prospect of conviction.

[33] If I had heard evidence which established that Mia fabricated a story of abuse by Andreas, to block his access to Eirini or to cause him legal difficulty, then I would certainly take this into account in assessing costs of the motion. Such conduct could amount to bad faith. I have not heard that evidence, however. The Crown's assessment of the evidence is not sufficient for me to assess Mia's credibility on this issue.

Conclusion

[34] Taking into account all the factors set out above, in my view the appropriate order is that Andreas pay Mia costs of $8,000, and I so order. That award shall be enforceable as support.

Released: April 1, 2015

Signed: Justice E. B. Murray