Court File and Parties
Date: July 15, 2019 Court File No.: D90024/16
Ontario Court of Justice
Between:
Saumen Chakravarty Acting in Person Applicant
- and -
Zahra Tharani Respondent
Counsel: Jason W. Gottlieb, for the Respondent
Heard: July 12, 2019
Justice: S.B. Sherr
Costs Endorsement
Part One - Introduction
[1] On July 12, 2019, the court gave oral reasons regarding the respondent's (the mother's) motion to change the March 2, 2015 order of Justice Eileen Martin (the parenting order) and the court's order dated October 21, 2016 (the support order).
[2] The court dismissed the mother's motion to change the parenting order. It made retroactive adjustments to the support order that added $6,293 to the applicant's (the father's) support obligation. It also increased his Child Support Guidelines (guidelines) payments to $427 each month for table support and to $311 each month for special and extraordinary expenses pursuant to section 7 of the guidelines, starting on August 1, 2019.
[3] At the conclusion of the motion to change the mother sought $5,000 plus HST for her costs. The father sought $5,000 for his costs.
Part Two – Legal Considerations
[4] 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).
[5] 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, paragraph 25.
[6] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.
[7] 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.
[8] 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] 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] O.J. No. 1978 (SCJ).
[9] 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.
[10] The court may take into account any offer to settle pursuant to subrule 18(16) even if it does not attract the costs consequences set out in subrule 18(14).
[11] Subrule 24(6) states that if success in a step 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, per Justice Alex Pazaratz.
[13] Subrule 24(8) 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.
[14] 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). 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.), 38 R.F.L. (6th) 315 (Ont. SCJ). 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.
[15] 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).
[16] 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.
[17] The court should also take into consideration the ability of a party to pay costs. See: MacDonald v. Magel, 67 O.R. (3d) 181 (Ont. C.A.).
Part Three – Offer to Settle and Success
[18] The mother served a severable offer to settle dated July 9, 2019.
[19] The costs consequences set out in subrule 18(14) do not apply to the mother's offer. No part of the offer was more favourable to the father than the hearing result.
[20] The mother's offer would have added $12,100 to the father's support obligation – the court added $6,293. The mother did better with respect to the ongoing child support issue at the hearing than in her offer to settle. At the hearing the court ordered a total of $738 each month. The mother offered to settle for $620 each month. If those issues had been severed, the mother would have attracted the costs consequences in subrule 18(14) for the ongoing support issue.
[21] In her motion to change the mother sought to eliminate one overnight visit for the father in alternate weeks and also sought a term requiring that all overnights take place at his home (she was opposed to the child spending overnights at his girlfriend's home). The mother's offer to settle only sought the term that the child spend overnights at the father's home. The mother was unsuccessful at the hearing as her motion to change the parenting order was dismissed.
[22] The court considered the mother's offer to settle under subrule 18(16).
[23] The father did not make an offer to settle the case.
[24] The mother's position at the hearing on the parenting issues mirrored her offer to settle. She asked that the father pay her an additional $14,102 for support and sought to impute his income at $52,040 annually to calculate support on an ongoing basis (his income was assessed annually at $46,000 for this purpose). The father asked that the mother's motion to change both orders be dismissed. He offered no compromise.
[25] There was divided success in this case. The father was successful on the motion to change the parenting order. The mother, although she did not achieve everything she sought, was the more successful party on the support issues.
[26] More time was spent on the support issues. However, the father was put to the cost of defending himself from multiple allegations regarding the parenting issues.
Part Four – Analysis
[27] These motions were important to the parties. They were not complex. However, they were made more difficult by the father's lack of timely financial disclosure. He did not disclose his 2018 income information until two weeks before the hearing and only provided his 2019 income information at the hearing. This made it very difficult for the mother to evaluate and settle the case. It led her to make a request to impute the father's 2018 and 2019 income at a higher income than he was earning and to produce evidence to support this request. If she had received the father's financial information in a timely manner she would not have incurred the expense of preparing and arguing this portion of her claim.
[28] Lack of timely financial disclosure by the father was a pattern in this case. Despite his obligation to annually provide financial disclosure to the mother, the father frustrated her by delaying in sending this to her. Although he was self-represented, the father is a sophisticated and intelligent litigant who has been in court with the mother for much of the past five years. He did a very good job presenting his case at this hearing. However, he also chose to be difficult to deal with. The mother has never trusted the father and his behaviour unnecessarily increased her mistrust of him.
[29] The mother generally acted reasonably in this matter, although she claimed that the father had not paid any section 7 expenses for 2016 and 2017. The father produced statements from the Family Responsibility Office showing that he had paid all of the section 7 expenses claimed by the mother for those years.
[30] The father did not act reasonably by failing to provide timely disclosure and not making any effort to compromise. The father has not paid any section 7 expenses since January 1, 2018. At the very least he should have offered to pay his share of these expenses. This constituted most of the additional support that he was ordered to pay. The father also knew that his income increased at the end of March, 2019 and should have offered to increase the guidelines table amount of support.
[31] The father's uncompromising and difficult behaviour was consistent with Justice Martin's description of him in her March 2, 2015 decision where at paragraph 65, she described him as rigid and uncompromising in his evidence.
[32] If the father had produced timely financial disclosure, paid section 7 expenses after January 1, 2018 and adjusted his support payments when his income increased in 2019, the mother's motion to change support would have been unnecessary. Instead, she had to start a court action and retain counsel to obtain the support that she was entitled to.
[33] While the father's behaviour was unreasonable, it did not rise to the level of bad faith. The father was not trying to hide his income – he was just being difficult to deal with. There will be a cost to that, but it won't be a full recovery cost.
[34] The court finds that the time and rates claimed by the mother are reasonable and proportionate. Counsel's bill of costs was for $18,497.82, but the mother claimed only $5,000, given the divided success.
[35] The expenses claimed by the mother are reasonable.
[36] The father has the ability to pay the costs that will be ordered.
[37] A clear message needs to be sent that the court will not tolerate deliberate delay and obfuscation in providing financial disclosure. As happened in this case, it increases mistrust and it creates unnecessary litigation.
Part Five – Final Order
[38] Taking into account all of these factors the father shall pay the mother's costs of $4,000, inclusive of fees, disbursements and HST. The costs shall be an incident of support and shall be enforced as support by the Family Responsibility Office.
[39] The father's claim for costs is dismissed.
[40] The parties have been frequently litigating since 2014. In addition to this motion to change they had a lengthy trial in Peel in 2014, a trial on a previous motion to change in this court in 2016, and a travel motion addressed in this court on January 3, 2017. On January 3, 2017 the court made an order that neither party shall bring any further proceedings in this court without first obtaining leave of the court. A preliminary motion for leave is to be made by Form 14B, not exceeding one page and shall not be served on the other party. If the court finds that it is warranted, then it will order the leave motion to be served on the other party. This order shall remain in full force and effect.
Released: July 15, 2019
Justice S.B. Sherr
