CITATION: D.G. v. A-G.D., 2019 ONCJ 112
DATE: February 28, 2019
COURT FILE NO. D81902/15
ONTARIO COURT OF JUSTICE
B E T W E E N:
D.G.
COURTNEY KAZEMBE and RENARD PATRICK, for the APPLICANT
APPLICANT
- and -
A-G. D.
ANTHONY MARTIN, for the RESPONDENT
RESPONDENT
HEARD: In Chambers
JUSTICE S.B. SHERR
COSTS ENDORSEMENT
Part One - Introduction
[1] On January 29, 2019, the court released its reasons for decision arising out of a four-day trial about the parenting arrangements for the parties’ child (the child) and the respondent’s (the mother’s) request for a restraining order against the father. See: D.G. v. A-G.-D., 2019 ONCJ 43.
[2] The court granted the mother custody of the child and gave the applicant (the father) specified and graduated access to the child. The court made a number of orders dealing with incidents of custody and access. It did not make a restraining order, but did make orders regulating contact and communication between the parties pursuant to section 28 of the Children’s Law Reform Act (the Act).
[3] The court provided the parties with the opportunity to make written costs submissions.
[4] Both parties made submissions seeking costs. The mother filed responding costs submissions. The father just relied on his original submissions.
[5] Both parties have claimed that they were the successful party at trial. The father seeks costs of $49,439.68 against the mother and her counsel. He also asks that a portion of these costs (an unspecified amount) be paid by the mother’s counsel. The mother seeks costs of $51,341.67 against the father.
Part Two – Legal considerations
2.1 General principles
[6] The Ontario Court of Appeal in Mattina v. Mattina, 2018 ONCA 867, set out that modern costs rules are designed to foster four fundamental purposes:
(1) to partially indemnify successful litigants;
(2) to encourage settlement;
(3) to discourage and sanction inappropriate behaviour by litigants and;
(4) to ensure that cases are dealt with justly under subrule 2 (2) of the Family Law Rules (all references to the rules in this decision are to the Family Law Rules).
[7] Costs can be used to sanction behaviour that increases the duration and expense of litigation, or is otherwise unreasonable or vexatious. In short, it has become a routine matter for courts to employ the power to order costs as a tool in the furtherance of the efficient and orderly administration of justice. See: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, 2003 S.C.C. 71, paragraph 25.
[8] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.
[9] An award of costs is subject to the factors listed in subrule 24 (12), subrule 24 (4) pertaining to unreasonable conduct of a successful party, subrule 24 (8) pertaining to bad faith, subrule 18 (14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party. See: Berta v. Berta, 2015 ONCA 918, at paragraph 94.
2.2 Success
[10] Subrule 24(1) creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs. See: Sims-Howarth v. Bilcliffe, 2000 CanLII 22584 (ON SC), [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. See: Lawson v. Lawson, 2008 CanLII 23496 (ON SC), [2008] O.J. No. 1978 (SCJ).
[11] Subrule 24 (6) sets out that if success in a step in a case is divided, the court may apportion costs as appropriate.
[12] Divided success does not equate with equal success. It requires a comparative analysis. Most family cases have multiple issues. They are not equally important, time-consuming or expensive to determine. See: Jackson v. Mayerle, 2016 ONSC 1556, paragraph 66.
[13] Where there are multiple issues before the court, the court should have regard to the dominant issue at trial in determining success. See: Firth v. Allerton, [2013] O.J. No. 3992 (SCJ); Mondino v. Mondino, 2014 ONSC 1102.
2.3 Offers to settle
[14] Subrule 18 (14) sets out the consequences of a party’s failure to accept an offer to settle that is as good as or better than the trial result of the person making the offer. It reads as follows:
COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER
18(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:
If the offer relates to a motion, it is made at least one day before the motion date.
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.
The offer does not expire and is not withdrawn before the hearing starts.
The offer is not accepted.
The party who made the offer obtains an order that is as favourable as or more favourable than the offer.
[15] Even if subrule 18 (14) does not apply, the court may take into account any written offer to settle, the date it was made and its terms when exercising its discretion over costs (subrule 18 (16)).
[16] The onus of proving that the offer is as or more favourable than the trial result is on the person making the offer. See: Neilipovitz v. Neilipovitz, [2014] O.J. No. 3842 (SCJ).
[17] The court is not required to examine each term of the offer as compared to the terms of the order and weigh with microscopic precision the equivalence of the terms. What is required is a general assessment of the overall comparability of the offer as contrasted with the order. See: Wilson v. Kovalev, 2016 ONSC 163.
[18] Close is not good enough to attract the costs consequences of 18 (14). The offer must be as good as or more favourable than the trial result. See: Gurley v. Gurley, 2013 ONCJ 482.
[19] The technical requirements of subrule 18 (4) must be met to attract the costs consequences in subrule 18 (14). See: Clancy v. Hansman, 2013 ONCJ 702; T.M.B.-P. v. B.P.G., 2018 ONCJ 517.
[20] The parties did not make severable offers to settle. Several courts have discussed the value of severable offers. See: Lawson v. Lawson, 2004 CanLII 6219 (ON SC), 2004 O.J. No. 3206 (SCJ); Paranavitana v. Nanayakkara, 2010 ONSC 2257, [2010] O.J. No. 1566 (SCJ).
[21] In Lawson, Quinn J., wrote at paragraph 26:
26 I would discourage the making of all-or-nothing offers. The severable variety allows for the prospect that some of the outstanding issues might be settled, thereby reducing the length and expense of the motion or trial, as the case may be. All-or-nothing offers sometimes have a heavy-handed air about them and certainly they possess a much lower chance of being accepted than severable offers.
[22] In Paranavitana, Wildman J. writes at paragraphs 13 and 14 as follows:
13 Unfortunately, this offer was not severable. There would have been no disadvantage to the wife in making the custody offer, in particular, severable from the financial and property terms. Severable offers are an underused tool that can confer considerable settlement and cost advantages. Because of the full recovery provisions of Rule 18(14), they can provide much more flexibility to the court to award full recovery for at least a portion of the overall costs, if the party is successful on only some of the issues. Had the custody terms of the wife's offer been severable from the other terms, I would have been prepared to consider ordering full recovery costs on the custody issue from the date of the offer forward. As this was the majority of the trial time, that would have been a significant cost advantage to the wife.
14 However, as the offer was not severable, the wife would have to do as well or better than all the terms of the offer, in order to take advantage of the full recovery cost provisions of Rule 18(14). Since the husband got an additional week of access, as well as an order that spousal support would reduce from $1000 in three years, Ms. Nanayakkara did not do as well as or better than her offer in its totality. Rule 18(14) does not apply but I can take this offer into account in determining costs under Rule 24, along with any other offers that have been made (Rule 18(16)).
2.4 Behaviour
[23] Subrule 24 (5) provides some criteria for determining the reasonableness of a party’s behaviour in a case. It reads as follows:
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.
[24] The surreptitious taping of conversations can be unreasonable behaviour. See: Sheidaei-Gandovani v. Makramati, 2014 ONCJ 82.
[25] The father is alleging bad faith against the mother. Subrule 24 (8) of the rules states that 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.
[26] Subrule 24 (8) requires a fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made. See: Cozzi v. Smith, 2015 ONSC 3626; Scipione v. Del Sordo, 2015 CarswellOnt 14971 (Ont. SCJ).
[27] 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. See: S.(C.) v. S. (M.) (2007), 2007 CanLII 20279 (ON SC), 38 R.F.L. (6th) 315 (Ont. SCJ).
[28] 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. See: Scipione, supra.
[29] A bad faith finding on some specific issue does not necessarily have a spill-over effect to other issues. See: Hunt v. Hunt, [2001] O.J. No. 5111 (SCJ); Kardaras v. Kardaras, 2008 ONCJ 616.
2.5 Costs caused by fault of lawyer
[30] The father seeks costs personally against the mother’s lawyer. Subrule 24 (9) permits the court to order a party’s lawyer to pay the costs of another party if the lawyer has wasted costs. This subrule reads as follows:
COSTS CAUSED BY FAULT OF LAWYER OR AGENT
(9) If a party’s lawyer or agent has run up costs without reasonable cause or has wasted costs, the court may, on motion or on its own initiative, after giving the lawyer or agent an opportunity to be heard,
(a) order that the lawyer or agent shall not charge the client fees or disbursements for work specified in the order, and order the lawyer or agent to repay money that the client has already paid toward costs;
(b) order the lawyer or agent to repay the client any costs that the client has been ordered to pay another party;
(c) order the lawyer or agent personally to pay the costs of any party; and
(d) order that a copy of an order under this subrule be given to the client.
[31] In Hunt v. Worrod, 2018 ONSC, 2133, the court at paragraphs 33 and 34, set out the legal test for the court to follow in determining whether to order costs personally against a lawyer as follows:
[33] The courts have endorsed a two-part test for awarding costs against a lawyer personally:
(i) Does the lawyer’s conduct fall within the ambit of the rule in the sense that he or she caused costs to be incurred or wasted unnecessarily and without reasonable cause, and
(ii) As a matter for discretion, is an order for costs personally warranted in the circumstances?
[34] With respect to the court’s discretion, former Chief Justice McLachlin J. explained in Young v Young, 1993 CanLII 34 (SCC), [1993] 4 S.C.R. 3 at para 263:
Courts must be extremely cautious in awarding costs personally against a lawyer, given the duties upon a lawyer to guard confidentiality of instructions and to bring forward with courage even unpopular causes. A lawyer should not be placed in a situation where his or her fear of an adverse offer of costs may conflict with these fundamental duties of his or her calling.
[32] A costs order against a lawyer is not restricted to a situation where the lawyer has acted in bad faith. See: Covriga v. Covriga, 2010 ONSC 3030. However, the court should exercise extreme caution before ordering costs against a solicitor. See: Rand Estate v. Lenton, 2009 ONCA 251; Sambasivam v. Pulendrarajah, 2012 ONCJ 711.
[33] In Galganov v. Russell (Township), 2012 CarswellOnt 7400 (Ont. C.A.), the court set out the following factors to consider before making a costs order against a lawyer:
a. The first step is to determine whether the conduct of the lawyer comes within the rule; this is, whether his or her conduct caused costs to be incurred unnecessarily. To do so, the court must consider the facts of the case and the particular conduct attributed to the lawyer.
b. The rule allowing costs against a lawyer is not intended as punishment for professional misconduct. Rather, it is as indemnity for the time wasted and expenses unnecessarily expended as a result of the conduct of a lawyer.
c. Neither negligence nor bad faith is a requirement for imposing costs against a lawyer.
d. Mere negligence or conduct that does not meet the level of negligence may be sufficient to attract costs against a lawyer.
e. The costs rule is intended to apply " . . . only when a lawyer pursues a goal which is clearly unattainable or is clearly derelict in his or her duties as an officer of the court . . . "
f. In determining whether the rule applies, the court must examine "the entire course of the litigation that went on before the application judge". This requires a "holistic examination of the lawyer's conduct" in order to provide an "accurate tempered assessment". But a general observation of the lawyer's conduct is not sufficient. Instead, the court must look at the specific incidents of conduct that are subject to complaint.
2.6 Other factors affecting costs orders
[34] Subrule 24 (12) reads as follows:
24 (12) In setting the amount of costs, the court shall consider,
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.
[35] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel (2003), 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.). However, a party’s limited financial circumstances will not be used as a shield against any liability for costs but will be taken into account regarding the quantum of costs. See: Snih v. Snih, 2007 CanLII 20774 (Ont. SCJ pars. 7-13).
Part Three – Analysis
3.1 Success
3.1.1 The offers to settle
[36] The father’s offer to settle did not meet several criteria for the costs consequences in subrule 18 (14) to apply, as:
a) The offer to settle was not signed by the father or his counsel as required by subrule 18 (4).
b) The offer to settle is dated 4 days prior to the trial – not the requisite 7 days. It was not served on the mother until the first day of trial.
c) The offer to settle wasn’t more favourable to the father than the trial result. In particular:
He was not granted the right to obtain information directly from the child’s service providers.
He was not granted daily telephone or video contact with the child.
He was not given immediate alternate weekend access, or immediate holiday access.
He was not given mid-week access.
A requirement that he first consent to the mother traveling outside of Canada with the child was not ordered.
His request to travel with the child outside of Canada was not ordered.
His request for a name change was not granted.
Restrictions on his contact and communication with the mother were ordered pursuant to clause 28 (1) (c) of the Act. The offer contained no restrictions.
[37] The court considered the father’s offer to settle pursuant to subrule 18 (16) and notes the following positive aspects of his offer:
a) He proposed sole custody of the child to the mother. This was ordered.
b) He was given immediate single overnight access, graduating to full weekend access. The father had sought immediate full weekend access in his offer.
c) His holiday time offer was similar to the final order.
d) He proposed supervised exchanges – this was ordered in a slightly different form.
e) His proposal to limit the child’s residence to the Greater Toronto Area was granted.
[38] Unfortunately for the father, the positive aspects of his offer to settle had limited value because his offer was not severable. If he had severed the issue of custody, for instance, from the other issues, his offer would have had much more value. Instead, he linked his concession of the custody issue to several other terms that were not palatable to the mother and not ordered by the court.
[39] The mother’s offer to settle was dated January 2, 2019. The costs consequences set out in subrule 18 (14) do not apply as the offer is not more favourable to the mother than the trial result. In particular:
a) The court did not grant the restraining order she requested.
b) The court ordered immediate overnight access. The mother proposed day access, increasing to overnight access if the father met certain conditions. The court did not order the conditions sought by the mother.
c) The court permitted the father to travel within Canada with the child without the mother’s consent.
[40] The court considered the mother’s offer to settle pursuant to subrule 18 (16) and notes the following positive aspects of her offer:
a) The court made custody and informational orders similar to those proposed by her.
b) The court ordered holiday access similar to the terms proposed by her, although it started it earlier.
c) Her proposals for access exchanges and make-up access were similar to those ordered by the court.
d) Although the court did not make a restraining order, the court did make orders restricting the father’s contact and communication pursuant to clause 28 (1) (c) of the Act.
e) The travel orders were similar to those proposed by the mother.
[41] As with the father’s offer, the positive aspects of the mother’s offer to settle had limited value because her offer was not severable. Her offer required the father to jump through more hoops before overnight access started and for him to agree to an indefinite restraining order. The balance of the terms in her offer were reasonable, but were linked to these unpalatable terms for the father – terms that were not ordered by the court.
3.1.2 Positions taken at trial
[42] The court next looks at the positions taken at trial to determine the successful party.
[43] The mother took the same position as that set out in her offer to settle.
[44] The father took a more aggressive position at trial regarding the parenting issues than he did in his offer to settle. His position also kept changing during the trial. The court wrote the following at paragraph 2 of its trial decision.
[2] The father’s position was a moving target. In his application, he sought joint custody of the child and equal-parenting time. His draft order at the outset of the trial sought a parallel parenting order, with primary residence of the child to be with the mother. In the draft order, the father proposed that he have access on alternate weekends, on one alternate weekday evening and on holidays. His factum, delivered near the end of the trial, proposed that the mother have sole custody of the child – his parenting time proposal was the same as in his draft order. In closing submissions, the father reverted to a position of joint custody and equal-parenting time.
[45] The father’s position at trial regarding the other issues was the same as set out in his offer to settle.
[46] The dominant issues at trial were custody, access and whether a restraining order should be made.
[47] Secondary (but important) issues were: the father’s access to information about the child, travel terms and the father’s request to change the child’s name.
[48] The mother was completely successful on the custody and decision-making issues.
[49] There was divided success on the access issues, although the mother was more successful based on the position taken by the father by the end of the trial. He did not come close to obtaining an equal-parenting order. However, he was granted immediate overnight access, without the conditions sought by the mother. He was also given holiday access starting this summer. If he had limited his trial request to that contained in his offer to settle, the court might have found him to be the more successful party on this important issue – but he didn’t do this.
[50] There was divided success on the restraining order issue. A restraining order wasn’t granted, but significant limitations were placed on contact and communication pursuant to clause 28 (1) (c) of the Act. The father was slightly more successful on this issue.
[51] The mother was successful on the secondary issues of name change and the father’s access to information.
[52] The mother was more successful on the secondary travel issue, although the court did not restrict the father from traveling with the child within Canada.
[53] The court finds that although there was divided success, overall the mother was the more successful party at trial. The presumption of her entitlement to costs was not rebutted.
3.2 Unreasonable behaviour
[54] The court made findings of unreasonable behaviour by the father as follows:
a) For a long period of time he improperly recorded all interactions with the mother, often surreptitiously.
b) The father hired a private investigator to follow the mother from the supervised access centre to locate her address. The court had ordered that access take place at the supervised access centre to ensure the safety of the mother and the child and to allay the mother’s concern that the father would attempt to locate her home on access exchanges. The father’s behaviour undermined the purpose of the court order and served to escalate the mother’s fears and the resultant cost of the litigation.
c) He was evasive about his whereabouts starting from October, 2018.
d) He was evasive about his financial circumstances.
[55] The court made a finding that the mother, at times, acted unreasonably by failing to facilitate the father’s access with the child. When the Supervised Access Program site the parties used closed, the mother balked at going to another site and a court order was required to restore access. There were also missed visits, either cancelled by the mother or cancelled because the supervised access centre was closed, that were not made up.
[56] The court also considered that the mother made several allegations against the father that had no evidentiary basis, such as an allegation that the father and his agents were placing tracking devices on her car. She also made allegations that the father was responsible for attacking her former lawyer and damaging vehicles, but provided no tangible evidence to support these allegations. These allegations lengthened the trial and required the father to incur additional legal costs to defend himself from these claims.
3.3 Bad faith
[57] The most concerning behavioural issue, though, relates to the mother improperly holding back an important piece of evidence at trial. The details of this behaviour are set out in paragraphs 90 to 104 of the trial decision and can be summarized as follows:
a) The mother alleged that the father followed her from a supervised access exchange and stalked her at a Loblaws store.
b) The mother claimed that the store videotapes she reviewed with the police corroborate her evidence.
c) The mother relied on this incident to obtain a temporary restraining order against the father.
d) The father made several pre-trial requests for the video. During the trial, the father’s counsel advised the court that he was attempting to serve a summons on the police officer who had reviewed the store video with the mother, so that he could view it.
e) It was learned for the first time, during cross-examination of the mother, that she had had possession of the videotapes for two months and failed to disclose this – even though she was well aware that the father was seeking this disclosure and it was an important piece of evidence. She testified that the videotapes were now being held by her lawyer.
f) The court ordered disclosure of the videotapes. It was agreed that due to the high camera angle no persons could be independently identified on the videotapes.
g) The incident at Loblaws occurred on July 15, 2017 – almost one year before the motion for the temporary restraining order was brought before Justice Jones. The mother did not disclose this date to Justice Jones or to the court.
h) The court found the mother to be evasive in testifying about this incident. The court wrote at paragraph 103:
It is highly concerning that the mother held back a vital piece of evidence and did not reveal the time of the alleged incident to either Justice Jones or the court. The mother’s version of these events was simply not credible.
[58] It became clear that the mother did not reveal the videotapes because they did not support her evidence about the father stalking her and the dates on the videotapes would reveal that the alleged incident took place about one year before the temporary motion date before Justice Jones.
[59] The court finds that the mother deliberately held back this important piece of evidence for an improper purpose. The behaviour constitutes intentional duplicity, obstruction or obfuscation as described in Scipione, supra. It also increased the length and the cost of the trial, as the case had to be adjourned mid-trial for production of this evidence.
[60] As in Kardaras, supra, the bad faith conduct by the mother relates to a specific incident (that had an impact on the access and restraining order issues) and the costs consequences do not necessarily spill over to the other issues.
[61] However, the court wants to send a clear message to litigants that this type of litigation behaviour will not be condoned by the courts and it will be costly. The costs that the mother would have otherwise been entitled to will be significantly reduced by this bad faith conduct.
3.4 Costs claim against mother’s counsel
[62] The court is not making a costs order in the father’s favour – payable by either the mother or her counsel. The court has considered the case law that the court should exercise extreme caution before ordering costs personally against counsel.
[63] The mother’s counsel should have immediately informed the father’s counsel and the court that he had possession of the videotapes – he knew that the father’s counsel was seeking this evidence. However, the court accepts his representation that he did not view the tapes and did not know what was on them. The court views this as poor judgment, rather than deliberately obstructive behaviour by him. There is no evidence that he wasted or ran up any costs that haven’t been addressed in this decision with the reduction of the mother’s costs award.
[64] The effect of the bad faith conduct of the mother and the poor judgment of her counsel related to the videotapes will be to reduce her costs, both for her fees and disbursements.
3.5 Other factors affecting the amount of costs
[65] The issues in this case were important to the parties. They were not complex or difficult.
[66] It is informative that the parties claimed a similar amount for costs. This is helpful for the court in determining if the fees claimed by the mother are proportionate and reasonable. See: Goryn v. Neisner, 2015 CarswellOnt 8562 (Ont. C.J.).
[67] The court notes that counsel prepared for a one-week trial and worked very hard to focus their examinations so that the trial was completed in time. This required considerable pre-trial work to prepare trial affidavits and document briefs.
[68] The court finds that the time and rates claimed by the mother are reasonable and proportionate.
[69] The court finds that the expenses claimed by the mother are reasonable.
[70] The court finds that the father has the ability to pay the costs that will be ordered.
Part Four – Final order
[71] Taking into account all of these factors the father shall pay the mother’s costs of $12,430, calculated as follows:
Fees: $10,000
Disbursements: $1,000
HST: $1,430
[72] The father shall have 90 days to pay the costs ordered.
Released: February 28, 2019
_____________________ Justice S.B. Sherr