Court File and Parties
Ontario Court of Justice
Date: 2018-06-28
Court File No.: Woodstock D58/13
Between:
Carol Ashley Alexandra Lynn Forler Applicant
— AND —
Denise Lambkin Lawrence Lambkin Brentt Martland Respondents
Before: Justice S. E. J. Paull
In Chambers
Reasons on Costs Released on: June 28, 2018
Counsel
Grant Rayner — counsel for the applicant
James Battin — counsel for the respondents, D. and L. Lambkin
Brentt Martland — on his own behalf
Costs Endorsement
PAULL J.:
Background
[1] Over five days between March 27 and April 19, 2018 the court heard the trial in this long and bitter custody and access proceeding brought by the applicant seeking to vary the current order that had her son residing in the care of his paternal grandparents.
[2] By way of background, Liam was 8 years old at the time of trial and had lived with his grandparents since he was approximately 6 months old as a result of his parents' inability to care for him at that time because of their struggles with substance abuse.
[3] The applicant sought to vary the order of MacKenzie J. dated August 13, 2013 by placing him in her primary care. The respondents opposed these claims with the grandparents seeking to maintain the order of August 13, 2013 which provided for joint custody between the grandparents and the applicant, with primary residence with the grandparents and frequent access to the applicant.
[4] In Reasons for Judgment dated May 28, 2018 the court ordered Liam be placed in the sole custody and primary care of the applicant with access to the respondents. I invited written submissions on the issue of costs if the parties were not able to agree. I received submissions from the applicant and the grandparents. No submissions were received from Mr. Martland.
Positions of the Parties
[5] The applicant seeks costs in the amount of $12,000 inclusive, which represents partial indemnity recovery of $1000 up to the date of her offer to settle on November 9, 2017, with full recovery after that time of $11,000. Alternatively, the applicant seeks full recovery from November 9, 2017, the date of service of her offer to settle.
[6] She takes this position on the basis that the order granted exceeded her offer to settle, and on the basis of the court's negative findings against the grandparents in the Reasons for Judgment which, she submits, establish an improper motive and bad faith on their part.
[7] The grandparents dispute that they acted in bad faith or unreasonably and submit that they were motivated by a genuine concern for Liam's best interests. They agreed with the alternate claim by the applicant.
Entitlement to Costs
[8] The modern cost rules are designed to foster three fundamental purposes:
a. to indemnify successful litigants for the cost of litigation;
b. to promote and encourage settlement; and
c. to control behaviour by discouraging frivolous suits or defenses that lack merit.
Fong v. Chan, [1999] O.J. No. 4600 (Ont. C.A.).
[9] Subrule 2(2) of the Family Law Rules adds a fourth fundamental purpose for costs: to ensure that the primary objective of the Rules is met in that cases are dealt with justly. This provision needs to be read in conjunction with Rule 24. Subrule 2(4) of the Rules states that counsel have a positive obligation to help the court to promote the primary objective of the Family Law Rules. Clauses 2(3)(a) and (b) of the Rules set out that dealing with a case justly includes ensuring that the procedure is fair to all parties and saves time and expense. Sambasivam v. Pulendrarajah, [2012] ONCJ 711.
[10] Subrule 24(1) of the Rules creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs. Sims-Howarth v. Bilcliffe, [2000] O.J. No. 330 (SCJ-Family Court). To determine whether a party has been successful, the court should take into account how the order compares to any settlement offers that were made. Lawson v. Lawson, [2008] O.J. No. 1978 (SCJ). The position each party took in the proceeding should also be examined.
[11] In making this decision I have considered the factors set out in subrule 24(11) of the Rules which reads as follows:
24(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 lawyers' rates;
d. the time properly spent on the case, including conversations between the lawyer and the parties 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.
[12] Subrule 24(5) provides criteria for determining the reasonableness of a party's behaviour in a case (factors in clause 24(11)(b) above). It reads as follows:
(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.
[13] Offers to settle are the yardstick with which to measure success and are significant in determining both liability and quantum of costs. The court has a discretion to take into account any written offer to settle, the date it was made and its terms, even if subrule 18(14) does not apply, when exercising its discretion over costs (subrule 18(16)).
Analysis
[14] There is evidence of only one offer to settle which was made by the applicant and dated November 7, 2017 and served on November 9, 2017. It offered a resolution based on a shared custody arrangement between the applicant and Mr. Martland.
[15] The applicant was clearly the successful party in this matter. She was entirely successful on the issue of custody and primary residence, and the order made exceeded her offer to settle.
[16] The applicant seeks to support her claim for costs on the basis of a finding that the grandparents acted in bad faith in this matter based on the negative findings the court made with respect to them, and a submission that the extremely negative position the grandparents took towards the applicant flowed from an improper motive.
[17] In Scipione v. Del Sordo, 2015 CarswellOnt 14971 (Ont. S.C.), Pazaratz J. reviewed the law of bad faith:
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 the Region of Peel v. F. (I.J.), 2009 ONCJ 252, [2009] O.J. No. 2348 (OCJ); Biddle v. Biddle, [2005] O.J. No. 1056 (SCJ); Leonardo v. Meloche, [2003] O.J. No. 1969 (SCJ); Hendry v. Martins, [2001] O.J. No. 1098 (SCJ).
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 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 ONCJ 644; F.D.M. v. K.O.W., 2015 ONCJ 94.
To establish bad faith the court must find some element of malice or intent to harm. Harrison v. Harrison, 2015 ONSC 2002.
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.(C.) (supra); Piskor v. Piskor, [2004] O.J. No. 796 (SCJ); Cozzi v. Smith, 2015 ONSC 3626.
[18] In the circumstances of this case I am not prepared to make a finding of bad faith on the part of the grandparents. Their claim of seeking to maintain the status quo when their own position was that Liam was not safe in his mother's care, and their serious allegations against the applicant, which were not supported by the evidence, were in my view unreasonable and reflect poor judgment as opposed to being motivated by malice or an intent to harm. These positions did, however, add significantly to the time and costs required to resolve this matter.
[19] Further, family law litigants are responsible for and accountable for the positions they take in the litigation. Heuss v. Surkos, [2004] ONCJ 141.
[20] The hourly rate of counsel (which appears to be the top-tier Legal Aid rate) is reasonable having regard to his years of experience. Counsel for the applicant provided dockets outlining a breakdown of the time spent which are not unreasonable given the issues involved and the length of the trial.
[21] However, while the court was critical of the grandparents' approach, the applicant shares some of the responsibility for the unfortunate circumstances. As outlined in the Reasons for Judgment, all the parties shared the responsibility for the state of communication between them, and the parents were also responsible for not being more active in addressing Liam's academic and behavioural issues at school.
[22] Further, prior to Mr. Rayner being retained the applicant failed to attend court on January 30, 2017, May 16, 2017, June 12, 2017, and June 21, 2017 which resulted in her motion to change being struck by the court on June 21, 2017 with the matter being adjourned to June 29, 2017 for an uncontested hearing.
[23] Ms. Forler attended court on June 29, 2017 and sought an adjournment to rectify the striking of her motion to change. The uncontested hearing was adjourned to August 14, 2017. On that date Mr. Rayner attended having been recently retained and sought a further adjournment to bring the motion.
[24] On September 6, 2017 the court made an order reinstating the applicant's status and pleadings and adjourned the matter to assignment court.
[25] The actions by the applicant in not attending court on several occasions to advance her motion to change were not reasonable and significantly added to the time required to resolve this matter, and put the respondents to unnecessary time and expense.
[26] Further, the applicant's offer to settle did not include a right of access to the grandparents. In the final order the grandparents were granted one full weekend of access per month.
[27] I have also considered the cases of Boucher et al. v. Public Accountants Counsel for the Province of Ontario, [2004] O.J. No. 2624 (O.C.A.) and Delellis v. Delellis and Delellis, [2005] O.J. No. 4345. Both these cases point out that when assessing costs it is "not simply a mechanical exercise." In Delellis, Ashton J. wrote at paragraph nine:
"However, recent cases under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended have begun to de-emphasize the traditional reliance upon 'hours spent times hourly rates' when fixing costs…. Costs must be proportional to the amount in issue and the outcome. The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant".
[28] The costs determination must reflect proportionality to the issues argued. There should be a correlation between legal fees incurred (for which disbursement is sought) and the importance or monetary value of the issues at stake. The Rules do not require the court to allow the successful party to demand a blank check for their costs. O'Brien v. O'Brien, 2017 ONSC 2017.
[29] The issues in this matter were not particularly complex but were clearly important in the context of this family. The applicant was entirely successful on the issue of custody and primary residence, she exceeded her offer to settle, and the grandparents took positions the court found were unreasonable and not supported by the evidence. The grandparents were, however, granted monthly access. Further, the applicant also behaved unreasonably by not attending court when required which delayed this matter for several months in 2017, and as noted in the Reasons for Judgment she bears some of the responsibility for the state of communication and for not being more active in addressing Liam's academic and behavioural issues.
[30] Having considered all these issues, partial indemnity recovery for the applicant is appropriate. Taking into account all the factors outlined herein, I find that a fair and reasonable quantum in the particular circumstances of this case to be $7,500.00 (inclusive), payable by the grandparents to the applicant forthwith.
Released: June 28, 2018
Signed: "Justice S.E.J. Paull"