SUPERIOR COURT OF JUSTICE – ONTARIO

FAMILY COURT

Court File No.: FC-11-39619-00
Date: 20130116

RE: Gina Menchella Applicant

AND:

Anthony Menchella, Respondent

BEFORE: The Honourable Madam Justice H.A. McGee

COUNSEL: Harold Niman and Daniel Bernstein, for the Applicant
Gary Joseph and Kristy Maurina, for the Respondent

COSTS ENDORSEMENT

McGEE J.

[1] The applicant mother seeks costs of $14,189.69 for her fees resulting from the motion heard August 1, 2012 and October 17, 2012. The respondent father disputes that the mother is entitled to her costs. Alternatively, he seeks an award limited to $3,000.00 inclusive of disbursements and HST.

[2] The relief sought by the mother exceeded the time available for hearing. She chose not to proceed on the claim to strike pleadings. That relief may be returned on a date to be set by the Trial Coordinator after a Settlement Conference has been held. Costs, if any, arising from that attendance will be decided following the attendance.

[3] On the relief heard, the applicant was the successful party. She received an order for exclusive possession of the home effective December 1, 2012. The order was predicated on a series of text messages sent by the father to the mother that the court found to constitute violence per section 24(3) (f) of the Family Law Act.

[4] The motion was originally returnable on August 1, 2012 and was adjourned on consent with terms for the payment of support and a release of disclosure. The latter was signed in a timely manner, but appeared to have only been delivered to the employer who was to release the disclosure on the day before the return of the motion. The father had not served a current Financial Statement. I found that the respondent was not diligent in providing disclosure.

Bad Faith

[5] The applicant seeks a finding of bad faith. Such a finding would entitle her to a full recovery of costs.

[6] Conduct that is intended to deceive or mislead can establish bad faith. Bad faith can also be established by the intentional failure to fulfill an agreement in order to achieve an ulterior motive or, an intentional breach of a court order with a view to achieving another purpose: Piskor v. Piskor (2004), 2004 5023 (ON SC), 129 A.C.W.S. (3d) 123, [2004] O.J. No. 796 (S.C.J.)

[7] 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. To come within the meaning of bad faith in rule 24(8), behaviour must be shown to be carried out with the intent to inflict financial or emotional, harm on the other party or other persons affected by the behaviour, to conceal information relevant to the issue or to deceive the other party or the court. S.(C.) v. S.(M.) (2007), 2007 20279 (ON SC), 38 R.F.L. (6th) 315, [2007] O.J. No. 2164 (S.C.J. affirmed in 2010 ONCA 196, 2010 CarswellOnt 1493 (OCA.))

[8] Unreasonable conduct stemming from bad judgment, carelessness, negligence, or otherwise should not be equated with bad faith. Husein v. Chatoor, 2005 ONCJ 487, [2005] O.J. No. 5715.

[9] The applicant’s allegations of bad faith do not differentiate between the finding for exclusive possession, and the finding that the respondent failed to provide timely disclose. Nor does her Bill of Costs divide the time between the issues. The issues must be considered separately.

[10] I make no finding of bad faith on the award of exclusive possession. The texts which supported the finding of violence were wholly undisguised. As unseemly as they were, there was no intent to deceive the mother, or conceal the father’s true intent.

[11] The finding that the father failed to provide timely disclose is another matter.

[12] It appears that he deliberately frustrated the release of disclosure from his employer by signing the consent on August 15, 2012, but then only delivering the release to his employer on October 16, 2012. The evidence supporting this chronology is the consent, and a fax from his employer. The date on the former is not contested. The effect of the latter is contested.

[13] The father states in his costs submissions that he did initially authorize the disclosure on August 15th, but was asked to resend the authorization before the motion.

[14] Bad faith requires a finding of intent to conceal information relevant to an issue, or to deceive the other party or the court. The potential for an innocent explanation does not inoculate a party from a finding of bad faith, but neither is it to be ignored absent evidence of intent.

[15] A finding of bad faith must be approached cautiously as the consequences will often extend beyond an increased award of costs. In high conflict matters such as this, a finding can escalate conflict as parties battle to hold, or to reclaim the litigation high ground.

[16] I am not prepared to make a finding of bad faith on these facts. The evidence is limited to the affidavits of the parties on which I cannot make findings of credibility. There is no sworn evidence from the person who handwrote the date of receipt of the release. Neither is there evidence as to whether it was the first receipt of the authorization.

Lack of Offer to Settle and Date of Service of Affidavits Containing Text Messages

[17] Rule 24(1) sets out the basic assumption that a successful party is entitled to costs of the motion. Rule 24(11) provides a further list of factors for a court to consider in dealing with the costs. Subsection (b) of that rule relates to the reasonableness of each party’s behavior in a case.

[18] Rule 24(5) reads:

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. O. Reg. 114/99, r. 24 (5).

[19] The applicant mother did not serve an Offer to Settle. The evidence of the text messages exchanged between September 28 and October 5th, 2012 was contained in an affidavit served ten days later on October 15th, only two days before the motion.

[20] The primary goal of family court is the resolution of cases. Parties and their lawyers have a positive obligation to behave in ways which enable the court to deal with cases justly (subrule 2(2)) and to take steps in a manner that save time and expense to the parties (subrule 2(3)). Offers to settle are as integral and essential to the court process as the very claims made by the parties and the evidence upon which those claims rely.

[21] I find that it was unreasonable for the mother to fail to serve the father with an Offer to Settle; and to serve him with the affidavit seeking exclusive possession on the basis of text messages on the last possible day for filing materials before the hearing of the motion.

[22] This is a novel area of law. Although the texts were equally in the possession and knowledge of the father, neither he, nor his counsel could have reasonably anticipated that the mother would rely on the text messages within a comprehensive notice of motion that sought relief as broad as the striking of pleadings. The father had little opportunity to reconsider his litigation position, or serve his own Offer within the one day period before the hearing of the motion as prescribed in Rule 18(14)1.

[23] I accept the respondent’s cost submission that $4,611.00 within the mother’s Bill of Costs relates to the reviewing of the text messages, preparing the affidavit containing the messages and attending the motion. The respondent submits that this amount is excessive and should be reduced to an award of $3,000.00 in costs.

[24] I will not repeat the basis for an award of costs as set out in my costs decision released May 1, 2012 following on the mother’s first motion for exclusive possession. There has been no change in counsel and the factors in Rule 24(11) remain consistent with my earlier decision. What distinguishes this costs analysis is the success of the mother’s motion for exclusive possession, and the finding that the father had been “neither forthright nor diligent in his disclosure.”

[25] A party is generally not entitled to a full recovery of costs unless he or she establishes bad faith or serves a Rule 18 Offer and meets or exceeds the terms of that offer. The applicant mother is thus unable to assert a claim for full recovery.

[26] Applicant’s counsel quantifies a partial recovery of fees in the amount of 65% of a full recovery: $9,223.30. This amount is not an unreasonable sum for a motion dealing with important matters that was heard over two attendances; but it must be discounted to reflect:

a) the most comprehensive relief sought – the striking of pleadings – was outside the scope of a one hour motion and not addressed,

b) the mother served evidence of, and notice that she was relying on the text messages only two days before the return of the motion,

c) given the novelty of the grounds for relief, service only two days before the motion return effectively preempted the father from making an Offer to Settle per Rule 18( 14)1,

d) the costs associated with the evidence and attendance which resulted in the order for exclusive possession is in the range of $4,611.00,

e) the mother did not serve an offer to settle.

[27] The father also seeks an accommodation in any award of costs to reflect an inability to pay. I reject this submission. I have no evidence of the father’s current financial circumstances.

[28] I award the applicant mother $4,010.00 in costs, discounted from $9,223.30 to reflect the considerations in paragraph 25 above. Costs are payable forthwith.

Justice H. McGee

Date: January 16, 2013