COURT FILE AND PARTIES

COURT FILE NO.: FC-11-964
DATE: 20131107

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: AMANDA DESJARDINS (THERRIEN), Applicant

AND

JARRED DESJARDINS, Respondent

BEFORE: Blishen J.

COUNSEL: Jennifer M. Wood, for the Applicant

D. Larry Segal, for the Respondent

HEARD: By Written Submissions

ENDORSEMENT regarding costs

Introduction

[1] The focus of this 11 day trial was on the parenting arrangements for the parties’ four year old daughter, Sophie. In that regard, custody relevant to decision making and an appropriate schedule of parenting time were at issue. Parenting time during the summer and other holiday periods was not an issue as the parties were able to reach an agreement prior to trial. Other issues at trial were: child support, equalization, including Mr. Desjardins’ claim for an unequal division of net family property or damages for malicious prosecution and his claim for money owing as a share of joint household expenses.

[2] Ms. Therrien argues overall she was the successful party; she conducted her case reasonably and should be awarded costs between $34,000 and $46,000. Not surprisingly, Mr. Desjardins takes the opposite position. He argues overall he was the successful party and, given the applicant’s bad faith and unreasonable behaviour, he should be awarded costs in the amount of $90,000 on a partial indemnity basis or $142,397 on a full indemnity basis.

Success

[3] Pursuant to subrule 24(1) of the Family Law Rules, O. Reg. 114/99 (the “Rules”), there is a presumption that a successful party is entitled to costs. Offers to Settle are important and can be the yardstick by which to measure success. They are significant in determining both liability for costs and quantum: see Osmar and Osmar, 2000 20380 (ON SC), 8 R.F.L. (5th) 387, [2000] O.J. No. 2504 (Ont. Sup. Ct.).

[4] As stated by Mackinnon J. in Neill v. Egan, 2000 21156 (ON SC), [2000] O.J. No. 1567, 2000 CarswellOnt 1516 at para. 6:

Both parties should make an offer covering in detail all aspects of the case. Even where the case appears intractable, an offer can serve to settle some issues or narrow the issues, with a saving to time and effort for all concerned.

[5] Under the Rules, Offers to Settle are quasi obligatory. Service of at least one Offer to Settle should be a basic step in every family law proceeding.

[6] In this case, both parties served numerous Offers to Settle. Two of Ms. Therrien’s offers were severable whereas Mr. Desjardins’ were not. In addition, most of Ms. Therrien’s offers remained outstanding at the time of trial whereas only Mr. Desjardins’ last offer remained outstanding.

Custody – Decision Making

[7] Both parties’ offers included joint custody with shared decision making. Ms. Therrien’s last offers indicated that in the absence of agreement, the final say over the issues of daycare, education and religion would be hers whereas the final say regarding medical and dental needs would be that of Mr. Desjardins. Mr. Desjardins’ last offer included equal time sharing, primary residence with him and final decision making on education matters with Ms. Therrien having final decision making regarding medical, dental and religious matters.

[8] I find that Ms. Therrien was the successful party on the issue of custody and decision making as I ordered joint custody, primary residence of Sophie to remain with her mother and, as in Ms. Therrien’s offer, final decision making on education, daycare and religion would rest with Ms. Therrien.

Parenting Time

[9] As noted, primary residence of Sophie remained with her mother. All Mr. Desjardins’ offers were for equal 50/50 time sharing whereas Ms. Therrien offered Mr. Desjardins three and one half days and four nights in a two-week period. The final Order was for Mr. Desjardins to have parenting time with Sophie five and one half days and five nights in a fourteen-day period. Therefore, neither party was successful on this issue.

Child Support

[10] Given my Order that Mr. Desjardins have physical custody of Sophie for at least 40% of the time over the course of a year, I ordered child support on a set-off basis, as outlined in Mr. Desjardins’ offer. It is to be noted that on November 5, 2012, Ms. Therrien also offered set-off child support but only if Mr. Desjardins obtained an order for greater than 40% of the parenting time with Sophie which was not in any of her offers. Mr. Desjardins was the more successful party on this issue.

Equalization

[11] Ms. Therrien was the successful party on this issue, as she obtained an Order for an equalization payment in an amount more than five of her seven offers. In addition, Mr. Desjardins was unsuccessful in obtaining an order for either unequal division of net family property or for malicious prosecution.

Money Owing

[12] Mr. Desjardins claimed that Ms. Therrien owed him money for household expenses. I found that no money was owing by Ms. Therrien which was consistent with the offers of both parties. Therefore, I find this to be a neutral issue.

Summary

[13] In summary, overall Ms. Therrien was the more successful party at trial. In particular, she was successful on the time consuming and important issues of custody, decision making and primary residence. She was also successful on the equalization issue whereas Mr. Desjardins’ claims for malicious prosecution and unequal division of net family property were dismissed, as was his claim for money owing. Neither party was successful on the issue of parenting time. Mr. Desjardins was largely successful on the issue of child support.

Full Recovery Costs

[14] Pursuant to Rule 18(14), under certain conditions, a party who makes an Offer to Settle is entitled to costs to the date the offer was served and full recovery of costs from that date. The conditions are outlined as follows:

(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. O. Reg. 114/99, r. 18 (14).

[15] As outlined above, Ms. Therrien obtained an Order that was largely as or more favorable than the offers made by her, commencing with the offer made on November 5, 2012, including joint custody, primary residence, decision making as in her offer and an equalization payment higher than her offers of November 15 and 19, 2012. Therefore, consideration is to be given to full recovery costs on those issues from the date the offers were made.

Reasonableness and Bad Faith

[16] Mr. Desjardins argues that Ms. Therrien acted in bad faith and behaved unreasonably throughout the proceedings. Ms. Therrien argues that Mr. Desjardins conducted his case unreasonably.

[17] Pursuant to Rule 24(4), a successful party who has behaved unreasonably may be deprived of all or part of the party’s own costs or may be ordered to pay all or part of the unsuccessful party’s costs. Rule 24(5) outlines the factors that the Court must examine in order to determine reasonableness 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. O. Reg. 114/99, r. 24 (5).

[18] Pursuant to Rule 24(8), if a party has acted in bad faith, the Court must decide costs on a full recovery basis and order the party to pay them immediately,.

[19] Mr. Desjardins argues that Ms. Therrien acted in bad faith or at the very least, unreasonably by calling the gun registry and alleging an assault which led ultimately to a criminal charge. This further resulted in a Children’s Aid Society investigation and Mr. Desjardins being deprived of access to Sophie for approximately two months after his arrest. Mr. Desjardins further argues that Ms. Therrien’s bad faith behavior ultimately led to a criminal trial where there was insufficient evidence on the assault and mutual peace bonds were ordered. He paid over $21,000.00 in legal fees for his criminal lawyer and incurred other costs as a result of the arrest and charge. Finally, Mr. Desjardins argues there were problems with Ms. Therrien’s credibility during the trial before me, which demonstrated her bad faith and unreasonableness.

[20] I am not prepared to find that Ms. Therrien acted in bad faith. In order to find bad faith, there must be evidence that the party acted to intentionally obstruct the case or damage the other parties’ interest or both. If a party intentionally breaches a court order, perhaps to achieve an ulterior purpose or acts to deceive or mislead the other party or the Court, bad faith may be established: see, for example: D.J. v. S.F., 2010 ONCJ 756, 15 R.F.L. (7th) 178, Piskor v. Piskor and McGrath, 2004 5023 (ON SC), [2004] O.J. No. 796, 2004 CarswellOnt 846 (Ont. Fam. Ct.) and Erickson v. Erickson, 2000 29675 (ON SC), [2000] O.J. No. 1569, 2000 CarswellOnt 1517 (Ont. Fam. Ct.).

[21] In his submissions with respect to bad faith, Mr. Desjardins appeared to be re-arguing the issues surrounding the alleged assault, his arrest and criminal charge. I was unable to find on a balance of probabilities that Mr. Desjardins assaulted Ms. Therrien or indeed that she assaulted him, as he alleged. I did find the hostility and conflict between the parties was putting Sophie at risk of emotional harm. The consequences both financial and otherwise to Mr. Desjardins of the criminal assault charge were significant but he was unsuccessful in his malicious prosecution claim for damages and in his claim for an unequal division of net family property. Again, these issues were dealt with at trial and are not the foundation of an argument as to bad faith. I do not find Ms. Therrien acted intentionally to obstruct the case or to damage Mr. Desjardins’ interests nor did she act to deceive or mislead the Court.

[22] With respect to reasonableness, only the parties’ behaviour with respect to the conduct of the litigation is relevant, not their behavior towards one another within the family relationship. Both parties made numerous Offers to Settle and attempted to resolve all issues right up to the date of trial. They were able to agree on a summer and holiday parenting schedule.

[23] This case is not comparable to Ladesic-Hartmann v. Hartmann, [2008] O.J. No. 3476, 2008 CarswellOnt 5308 (Ont. Sup. Ct.), a case cited by Mr. Desjardins,. In that case, the Court found Mrs. Ladesic-Hartmann had acted unreasonably in pursing false allegations aware of the financial harm she was causing Mr. Hartmann. The Court stated that “…the numerous allegations she has made over the years were totally fabricated without any substance and were used to attempt to gain an advantage in their custody litigation. I found her actions to be mean and vindictive in the hopes of hurting her husband.” (para. 10)

[24] Although there were some difficulties with Ms. Therrien’s credibility, as there were with Mr. Desjardins, I did not make a finding that she totally fabricated numerous allegations regarding her husband without any substance in order to gain an advantage in the custody litigation.

[25] As previously noted, I found difficulties with the credibility of both parties. Ms. Therrien’s testimony regarding her relationship with Mr. Desjardins and his temper and abusive nature was contradicted by other witnesses as was her testimony regarding his ability to parent Sophie. Her black and white presentation undermined her credibility. In addition, there were some difficulties with her financial disclosure and evidence regarding financial issues.

[26] Mr. Desjardins continued to portray himself at trial as a blameless victim of Ms. Therrien’s manipulative passive-aggressive behaviour. As with Ms. Therrien, I found that such a black and white presentation undermined his credibility. In addition, as with Ms. Therrien, I had concerns regarding Mr. Desjardins’ financial disclosure and evidence regarding financial issues.

[27] Therefore, overall, I find both parties behaved somewhat unreasonably in the conduct of their case.

Quantum

[28] Rule 24(11) outlines the relevant factors in determining the amount of costs as follows:

(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. O. Reg. 114/99, r. 24 (11).

[29] As previously noted, the most important, complex and difficult issue in this case was the appropriate parenting arrangement for four year Sophie. This issue took the vast majority of the 11 day trial. I note, as I did in my judgment, that a great deal of evidence was provided as to the past conduct of the parties, which I did not find relevant to the ability of either Ms. Therrien or Mr. Desjardins to act as Sophie’s parent. I found that since separation, both parties have been devoted parents committed to meeting Sophie’s needs. The time consuming, past conduct evidence, led largely by Mr. Desjardins, was more relevant to his claim for damages and/or an unequal division of family property. He was ultimately unsuccessful on both those claims.

[30] As noted above, both parties acted somewhat unreasonably in their conduct of the case. However, both parties made genuine efforts to negotiate a settlement and served numerous Offers to Settle right up to the date of trial.

[31] In considering the lawyers’ rates, I find the rates charged by counsel for Ms. Therrien to be reasonable, the time billed properly spent and the expenses necessarily incurred. I note that, as required by the Rules, counsel for Ms. Therrien did not include in her Bill of Costs time spent on previous steps in the proceeding.

[32] The rates charged by counsel for Mr. Desjardins were likewise reasonable, however there are some difficulties with his Bill of Costs as follows:

1. He claimed approximately $28,000.00 for time spent on previous steps in the proceeding including a case conference, a motion and two settlement conferences. Rule 24(10) notes the entitlement to costs and the quantum of costs is to be decided promptly after each step in the case. Therefore, costs for the conferences and motion cannot be claimed months later, after trial.

2. Mr. Desjardins also claimed time attributable to mediation and other work prior to the commencement of the court proceeding.

3. Some of the time billed appears excessive; for example, trial preparation costs of approximately $32,000.

[33] Mr. Desjardins argues he is under significant financial strain and further costs, if awarded to Ms. Therrien, would put him in a financially unsustainable position.

[34] A parties’ limited financial means is not to be used as a shield against liability for costs, particularly when the party has behaved unreasonably. However, the ability to pay costs may be relevant to the issue of quantum or scale of costs: see Parsons v. Parsons (2002, 2002 45505 (ON SC), 29 R.F.L. (5th) 137, 2002 CarswellOnt 1922 (Ont. Fam. Ct.) and Panny v. Gifford (1997), 1997 9579 (ON CJ), 31 R.F.L. (4th) 440, 1997 CarswellOnt 2028 (Ont. Prov. Div.).

Conclusion

[35] There must be flexibility in examining the factors under Rule 24(11): As the Ontario Court of Appeal noted in Zesta Engineering Ltd. v. Cloutier (2002), 2002 25577 (ON CA), 21 C.C.E.L. (3d) 161, “In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.”

[36] This approach is equally applicable in family law cases.

[37] Taking into consideration all the factors noted above, I order Mr. Desjardins to pay Ms. Therrien costs in the amount of $35,000 inclusive of disbursements and HST, payable in full within 90 days.

Blishen J.

Date: November 7, 2013

COURT FILE NO.: FC-11-964

DATE: 20131107

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: AMANDA DESJARDINS (THERRIEN), Applicant

AND

JARRED DESJARDINS, Respondent

BEFORE: Blishen, J.

COUNSEL: Jennifer M. Wood, for the Applicant

D. Larry Segal, for the Respondent

ENDORSEMENT regarding costs

Blishen, J.

Released: November 7, 2013