CITATION: Gonzalez v. Trobradovic, 2015 ONSC 1430

COURT FILE NO.: FS-14-0729

DATE: 2015-03-04

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

DR. PATRICIA GONZALEZ

Paul C. Buttigieg, for the Applicant

Applicant

• and -

EDIN TROBRADOVIC

Sandra J. Meyrick, for the Respondent

Respondent

Price J.

COSTS ENDORSEMENT

NATURE OF PROCEEDING

[1] Ms. Gonzalez moved before a case conference, on grounds of urgency, for an order restoring her to possession of her home and primary care of the parties’ one year old daughter, Lara. Mr. Trobradovic argued that the motion was not urgent, because Ms. Gonzalez had found alternative accommodation and he was giving her access to Lara, and that the motion was premature until the trial of a criminal charge that he had caused to be laid against Ms. Gonzalez was held in November 2014.

[2] In reasons released on April 17, 2014, I concluded that Ms. Gonzalez’ arrest on Mr. Trobradovic’s uncorroborated complaint, and the ensuing abridgement of her parental right to custody of Lara, and of her right to possession of the home she had owned since before her cohabitation with Mr. Trobradovic, were circumstances of urgency that justified dispensing with a case conference so that an immediate adjudication could be made of the issues of temporary custody of Lara and possession of Ms. Gonzalez’ home with reference to the applicable principles of family law.

[3] I further concluded that, as there was no lawful basis for Mr. Trobradovic remaining in the home following Ms. Gonzalez’ delivery of a notice pursuant to the Trespass to Property Act,[^1] and that, as Ms. Gonzalez had been Lara’s primary caregiver before her arrest and the house was Lara’s home, and she required continuity and stability during her parents’ transition to separate households, Ms. Gonzalez should be restored immediately to possession of the home. I ordered that Lara reside primarily with Ms. Gonzalez, subject to liberal access by Mr. Trobradovic.

POSITIONS OF THE PARTIES

[4] The court received costs submissions form Ms. Gonzalez. It did not receive submissions from Mr. Trobradovic.

ANALYSIS AND LAW

[5] Indemnification of the successful party is the paramount objective, but not the only one, to be served by a costs order. Other objectives that the court has recognized include encouraging settlement, discouraging frivolous proceedings and unnecessary steps in litigation,[^2] and preserving access to justice.[^3]

[6] An appropriate costs order balances two conflicting principles, namely, that:

1. A blameless litigant who is successful in a proceeding should not be required to bear the costs of prosecuting or defending the proceeding.

2. Citizens should not be made to feel unduly hesitant to assert or defend their rights in court by the prospect that, if unsuccessful, they will be required to bear all the costs of their opponent.

[7] The ultimate objective in balancing these two principles is to ensure that the justice system works fairly and efficiently.[^4]

The Discretion to be Exercised

[8] The entitlement to costs and the amount to be paid are “within the court’s discretion.”[^5] The court must exercise its discretion with due regard to the objectives of costs awards, and to rule 24(11) of the FLR which sets out the factors that are relevant to how the objectives are best attained in the circumstances of a particular case.

Objectives to be Served

[9] Consideration of the relative success of the parties on the issues in the case is the starting point in determining costs.[^6] In Johanns v. Fulford, it was held that, for the purpose of Rule 24(1), “success” is assessed by comparing the terms of an order against the relief originally requested in the pleadings and against the terms of any offers to settle.[^7] Ms. Gonzalez was substantially successful in her motion, having secured an order for exclusive possession restoring her to her home and an order restoring custody of Lara to her.

Factors to be Considered

[10] Rule 24(11) of the Family Law Rules lists the factors the court should consider when quantifying costs:

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 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.[^8]

Importance, Complexity, and Difficulty

[11] The motion was of great importance to the parties. The longer the status quo was maintained, with Mr. Trobradovic in de facto exclusive possession of the home, the more disruptive it would be to Lara to be restored to her mother’s care.

[12] The motion was more complex than a conventional motion for exclusive possession of a matrimonial home by a number of factors which increased the costs beyond the normal range for such motions. These included the following:

a) The fact that the issue of possession of the home was raised by a common law spouse who had not contributed to the purchase of the house, which Ms. Gonzalez had owned before he moved in with her, but who asserted a constructive trust interest in the house based on contributions allegedly made during their eighteen month relationship;

b) The fact that the issue of possession of the home was intertwined with the issue of Lara’s primary residence in the home and the need to maintain stability and continuity in her life amidst the turmoil in her parents’ lives;

c) The fact that the criminal proceeding that Mr. Trobradovic had set in motion against Mr. Gonzalez had displaced her from both the home and her primary care of Lara;

d) The fact that Mr. Trobradovic’s allegation that Ms. Gonzalez suffers from “depression and severe anxiety disorder” required her to refute his allegations in order to prove her fitness to resume care of Lara.

Reasonableness of Each Party’s Behaviour – Scale of Costs

[13] Rule 24(4) of the Family Law Rules gives explicit recognition of the principle that costs may be used to express the court’s disapproval of a litigant’s unreasonable conduct. It provides:

24.(4) Despite sub-rule (1) [which provides that a successful party is presumed to be entitled to the costs of a motion], “a successful party who has behaved unreasonably during a case may be deprived of all or part of the party’s own costs or ordered to pay all or part of the unsuccessful party’s costs.

[14] Ms. Gonzalez seeks costs on a full recovery basis against Mr. Trobradovic on the ground that he acted in bad faith. In Nairn v. Lukowski, and in Piskor v. Piskor, Blishen J. adopted the definitions of bad faith that the court had formulated in Erickson v. Erickson,[^9] and Hunt v. Hunt.[^10] In those cases, it was held that bad faith could consist of conduct that was intended to deceive or mislead,[^11] or of an intentional failure to fulfill an agreement in order to achieve an ulterior motive, or of an intentional breach of a court order with a view to achieving another purpose.

[15] These formulations of bad faith are consistent with the definition set out in Black’s Law Dictionary, 6th ed. (St. Paul, Minn.: West Publishing Co., 1990):

Generally implying or involving actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation not prompted by an honest mistake as to one’s rights or duties but by some interested or sinister motive. Bad faith is not simply bad judgment or negligence but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity; it is different from the negative idea of negligence in that it contemplates a state of mind affirmatively operating with furtive design or ill will.[^12] [Emphasis added]

[16] Perkins J. gave a more extensive explanation of bad faith in S.(C.) v. S.(C.):

…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 will not willingly have supported or tolerated if they had known. However, not all bad faith involves an intent to deceive. It is rare, but not unknown in family cases, for bad faith to be overt – an action carried out with an intent to inflict harm on another person or a person affected by the case without an attempt to conceal the intent.

In order to come within the meaning of bad faith in Rule 24(8), behaviour must be shown to be carried out with intent to inflict financial or emotional harm on the other party or persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court. A misguided but genuine intent to achieve the ostensible goal of the activity, without proof of intent to inflict harm, to conceal relevant information or to deceive, saves the activity from being found to be in bad faith. The requisite intent to harm, conceal or deceive does not have to be the person’s sole or primary intent, but rather only a significant part of the person’s intent. At some point a party could be found to be acting in bad faith when their litigation conduct has run the costs up so high that they must be taken to know their behaviour is causing the other party major financial harm without justification.[^13]

[17] I find that Mr. Trobradovic acted unreasonably and in bad faith in the following respects:

a) by persisting in alleging Ms. Gonzalez’s criminal misconduct and mental unfitness and by continuing to press the issue of her unfitness as a parent.

b) In his affidavit, Mr. Trobradovic claimed that Ms. Gonzalez suffers from “depression and severe anxiety disorder” and a “blood disorder which manifests itself, among other ways, in severe headaches and severe moodiness”. He tendered no evidence to support these allegations.

c) As set out in my reasons dated April 17, 2014, there is substantial reason, based on Mr. Trobradovic’s own text messages to Ms. Gonzalez, that his allegations to the police concerning her were false.

d) He misrepresented the baby-sitter, Ms. Hizon’s, motivation for providing the evidence she did, which required Mr. Gonzalez to secure a further affidavit from her;

e) He apparently lied to Ms. Gonzalez’ real estate lawyer, claiming that she was in Argentina when he must have known that she was not.

[18] The court disapproves of reckless and unfounded allegations of mental illness and criminal misconduct against a co-parent. When such allegations are made, as here, with no evidence offered to support them, and they are disproved to the extent that Ms. Gonzalez has done so here, it is reasonable that the court register its disapproval by imposing costs on a higher scale.[^14]

[19] Not every instance of unreasonable conduct attracts an order that costs be paid on a substantial indemnity scale. Substantial indemnity costs, like their predecessor, solicitor and client costs, are exceptional. Mark M. Orkin, in The Law of Costs,[^15] cites the Supreme Court of Canada in Young v. Young, in this regard: “Solicitor and client costs are generally awarded only where there has been reprehensible, scandalous, or outrageous conduct on the part of one of the parties.”

[20] In Empire Life Insurance Co. v. Krystal Holdings Inc., Archibald J. stated: “Substantial indemnity costs are an exceptional award, saved for extenuating circumstances such as situations where there has been egregious conduct … or where a motion has been brought unreasonably”[^16] The same principle applies where, as here, a motion is unreasonably opposed.

[21] Family law litigants are responsible for and accountable for the positions they take in the litigation.[^17] Mr. Trobradovic’s opposition to Ms. Gonzalez’ motion compounded the unreasonableness of his earlier false allegations concerning her.

[22] A finding of bad faith is not a condition precedent to full recovery of costs by the other side under the FLR: Osmar v. Osmar.[^18] A finding that the motion should not have been brought, or opposed, is sufficient to attract costs on this higher scale.

[23] An award of costs on a substantial indemnity scale is especially warranted in this case, which is governed by the FLR as distinct from the Rules of Civil Procedure, R.R.O. 1990, Reg 194. Under the FLR, the traditional assumption that there are only two levels of costs (“party-and-party”/“solicitor-and-client”; or “partial indemnity”/“substantial indemnity”) no longer applies. The court is simply required to consider the range between a nominal amount of costs and full recovery.^19In a family law case, the court need not find “special circumstances” before ordering costs on a substantial or full indemnity scale.[^20] Within this range, Mr. Trobradovic’s unreasonable conduct attracts costs on a substantial indemnity, or full recovery, scale.

Lawyer’s rates

[24] In determining the appropriate hourly rates to be assigned to the lawyers involved in the motion, the court follows the approach taken by Aitkin J. in Geographic Resources.[^21] That is, the starting point is the successor of the Costs Grid, namely, the “Information for the Profession” bulletin from the Costs Sub-Committee of the Rules Committee (the “Costs Bulletin”), which can be found immediately before Rule 57 in the Carthy or Watson & McGowan editions of the Rules, sets out maximum partial indemnity hourly rates for counsel of various levels of experience.

[25] The Costs Bulletin suggests maximum hourly rates (on a partial indemnity scale) of $80.00 for law clerks, $225.00 for lawyers of less than 10 years’ experience, $300.00 for lawyers of between 10 and 20 years’ experience, and $350.00 for lawyers with 20 years’ experience or more.[^22] The upper limits in the Costs Bulletin are generally intended for the most complex and important of cases. Having regard to the complexity of the motion, Mr. Farooq, who was senior counsel at the hearing, is entitled to the maximum hourly rate for a lawyer of between 10 and 20 years’ experience.

[26] The Costs Bulletin, published in 2005, is now dated. Aitkin J. considered adjusting the Costs Subcommittee’s hourly rates for inflation, as Smith J. did in First Capital (Canholdings) Corp. v. North American Property Group,[^23] but the unadjusted rates of the lawyers in her case were only slightly less than the actual fees they charged, so she elected to use their unadjusted rates. Normally, however, it is appropriate to adjust the hourly rates in the Costs Bulletin to account for inflation since 2005.

[27] Based on the Bank of Canada Inflation Calculator, available online at http://www.bankofcanada.ca/rates/related/inflation-calculator/, the current (2014) equivalent of the hourly rates in the Costs Bulletin are $93.52 for law clerks, $263.03 for lawyers of under 10 years’ experience, $350.71 for lawyers of between 10 and 20 years’ experience, and $409.16 for lawyers of over 20 years’ experience.

[28] The court is guided by the rates in the Costs Bulletin, not the actual hourly rates charged. The actual rates charged are relevant only as a limiting factor, in preventing the costs awarded from exceeding the actual fees charged. The Costs Subcommittee’s rates apply to all lawyers and all cases, so everyone of the same level of experience starts at the same rate.

[29] The court adjusts the hourly rate, or the resulting fees, to reflect unique features of the case, including the complexity of the proceeding, the importance of the issues, and the other factors set out in Rule 57.01(1). If an excessive amount of time was spent, or too many lawyers worked on the file, the court reduces the resulting amount of fees accordingly. As long as the resulting amount does not exceed the amount actually charged to the client, the actual fee that the client agreed to pay is irrelevant.

[30] Ms. Gonzalez’ lawyer, Mr. Buttigieg, was called to the Bar in 2001 and had practiced law for 13 years when he argued this motion. The Costs Bulletin entitled a lawyer of his experience to claim a maximum hourly rate in 2005 of $300 on a partial indemnity scale, which translates to $250.71 after adjusting for inflation. I round this amount to $250.

[31] Rule 1 of the Rules of Civil Procedure defines substantial indemnity costs as meaning "costs awarded in an amount that is 1.5 times what would otherwise be allowable in accordance with Part I of Tariff A" - i.e. 1.5 times the partial indemnity rate.[^24] The application of Rule 1 of the Rules of Civil Procedure[^25] to a family law proceeding is authorized by Rule 1(7) of the FLR.[^26] Costs calculated on a substantial indemnity scale, obviously, represent something less than full indemnity. Courts have estimated substantial indemnity costs to be approximately 90% of costs on a full recovery basis.[^27]

[32] Based on Rule 1, Mr. Buttigieg’s authorized hourly rate on a substantial indemnity scale is $375. His full recovery rate would be $412.50 ($375 + 10%). He has claimed an hourly rate of $325, which I find to be reasonable.

Time Properly Spent on the Case

[33] Rule 24(11)(d) of the FLR directs me to consider “the time properly spent on the case, including conversations between the lawyer and the party or witness, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order.”

[34] Mr. Buttigieg spent 51.6 hours in correspondence, preparing motion material, reviewing to Mr. Trobradovic’s material, attending court on February 18, attending a case conference on March 11, 2014, and attending court for the hearing of the motion on April 1, 2014. I am including the costs of the case conference with the costs of the motion on the reasoning I have set out in Kaverimanian v. Kaverimanian.[^28]

[35] Having reviewed Ms. Buttigieg’s Bill of Costs, I find that the 51.60 hours he spent, while high, was reasonable, in the unusual circumstances of the present case, having regard to the necessity of refuting conclusively the allegations that Mr. Trobradovic had made, and the criminal proceedings he had set in motion.

Other Relevant Matters

[36] I must “step back and examine the overall award with a view to determining whether it is ‘fair and reasonable’ for the kind of matter involved.” In determining what is fair and reasonable, I must take into account the reasonable expectation of the parties concerning the amount of costs.[^29]

[37] I have considered the following awards of costs in motions for exclusive possession of a matrimonial home:

a) McGee J. awarded costs of $4,611 on a partial indemnity scale in Menchella v. Menchella.[^30]

b) McDermott J. awarded $12,000 on a partial indemnity scale in Fuda v. Fuda.[^31]

c) MacKinnon J. awarded $16,000, part of which was on a substantial indemnity scale (based on an offer to settle) in Copping v. Copping.[^32]

d) Stevenson J. awarded $11,000 on a partial indemnity scale in Freeman v. Freeman.[^33]

e) Czutrin J. awarded $7,412.80 inclusive of HST on a full indemnity scale in Lowe v. Minor.[^34]

f) Conlan J. awarded $19,000 on a full recovery basis in T.N. v. R.N.[^35]

[38] The foregoing results in similar motions, especially T.N. v. R.N., decided in 2013, where costs of $19,000 were awarded on a full recovery basis, should have informed Mr. Trobradovic’s reasonable expectation as to the costs he would face if he was unsuccessful in opposing Ms. Gonzalez’ motion. As noted above, the exceptional circumstances of the present case, outlined above, including the intertwining of the issue of possession of the home with the issue of Lara’s primary residence and Mr. Trobradovic’s claim to a constructive trust interest in the home, increased the costs beyond those normally awarded in motions involving exclusive possession alone. In all the circumstances, I find that the costs claimed are proportionate to those awarded in other cases.

Conclusion and Order

[39] For the foregoing reasons, it is ordered that:

1. Mr. Trobradovic shall pay Ms. Gonzalez her costs on a full recovery basis in the amount of $20,000 inclusive of HST and disbursements, payable within 60 days. He shall pay pre-judgment interest on this amount at the rate of 3% from April 17, 2014.

Price J

RELEASED: March 4, 2014

CITATION: Gonzalez v. Trobradovic, 2015 ONSC 1430

COURT FILE NO.: FS-14-0729

DATE: 2015-03-04

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

DR. PATRICIA GONZALEZ

Applicant

• and -

EDIN TROBRADOVIC

Respondent

COSTS ENDORSEMENT

Price J.

Released: March 4, 2015

[^1]: Trespass to Property Act, R.S.O. 1990, c T.21, s. 5

[^2]: Fellowes, McNeil v. Kansa General International Insurance Co. 1997 12208 (ON SC), 1997 12208, 37 O.R. (3d) 464 (ON S.C.), para. 10

[^3]: 1465778 Ontario Inc. v. 1122077 Ontario Ltd. 2006 35819 (2006), 82 O.R. (3d) 757 (ON C.A.), per Feldman J.A., at para. 45

[^4]: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371, at paras. 25, 26 [Okanagan].

[^5]: Courts of Justice Act, s. 131.

[^6]: Butty v. Butty 2009 23111 (ON SC), [2009] O.J. No. 1887 (SCJ) at para. 4, citing Sims-Howarth v. Bilcliffe 2000 22584 (ON SC), [2000] O.J. No. 330 (SCJ)

[^7]: Johanns v. Fulford 2010 ONCJ 756, at para. 13

[^8]: Family Law Rules, O. Reg. 114/99 [as amended]

[^9]: Erickson v. Erickson (May 16, 2000), Doc. 00-FL-868 (Ont. S.C.J.)

[^10]: Hunt v. Hunt, [2011] O.J. No. 5111 (Ont.S.C.J.)

[^11]: Nairn v. Lukowski, (2002), 2002 78091 (ON SC), 29 R.F.L. (5th) 117 (Ont.S.C.J.), per Blishen J., at p. 120

[^12]: Piskor v. Piskor, 2004 5023 (ON SC), [2004] O.J. No. 796 (Ont. S.C.J.), per Blishen J., at paras. 9 to 12

[^13]: S.(C.) v. S.(C.), 2007 20279 (ON SC), [2007] O.J. No. 2164 (Ont.S.C.J.), per Perkins J. at paras. 16 and 17

[^14]: See, for example, Bergen v Sharpe, 2013 74188 (ON SC); Kaverimanian v. Kaverimanian, 2013 ONSC 5265

[^15]: M. M. Orkin, The Law of Costs, 2d ed., looseleaf (Aurora, Ont.: Canada Law Book, 1987), at p. 2-46 [Orkin]; Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, at p. 154, re-stated in Perri.

[^16]: Empire Life Insurance Co. v. Krystal Holdings Inc, [2009] O.J. No. 1095 (S.C.), at para. 19.

[^17]: Heuss v. Sarkos, 2004 ONCJ 141.

[^18]:Osmar v. Osmar, 2000 20380 (ON SC), 2000 20380 (Ont. S.C.), at para. 11, Aston J

[^20]: Sordi v. Sordi, 2011 ONCA 665, 283 O.A.C. 287.

[^21]: Geographic Resources Integrated Data Solutions Ltd. v. Peterson, 2013 ONSC 1041, paras. 7 and 11 to 16

[^22]: “Information for the Profession” bulletin (“the Costs Bulletin”) from the Costs Sub-Committee of the Rules Committee (that the Costs Sub-Committee of the Rules Committee issued to replace the Costs Grid, which it repealed in 2005). The Costs Bulletin has advisory status only and not statutory authority, as it was not included in the Regulation that repealed the Costs Grid.

[^23]: First Capital (Canholdings) Corp. v. North American Property Group, 2012 ONSC 1359, 2012 ONSC 1359 (S.C.J.)

[^24]: See Hanis v. University of Western Ontario, 2006 23155 (ON SC), [2006] O.J. No. 2763 (Ont. S.C.), per Power J.

[^25]: Rules of Civil Procedure, R.R.O. 1990, Reg. 194

[^26]: See Zeleny v. Zeleny, 2004 5094 (ON SC), para. 22

[^27]: 680195 Ontario Ltd. v. 2169728 Ontario Limited o/a Stoneybrook Auto Service, 2010 ONSC 4064, para. 8, citing Hanis v. The University of Western Ontario et. al., 2006 23155 (ON SC), [2006] O.J. No. 2763 (S.C.J.), Power J., at para. 46.

[^28]: Kaverimanian v. Kaverimanian, 2013 ONSC 5265, paras. 20 to 45

[^29]: See: Boucher; Moon; Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA), 75 O.R. (3d) 638 (C.A.).

[^30]: Menchella v. Menchella, 2013 ONSC 367,

[^31]: Fuda v. Fuda, 2011 ONSC 1452

[^32]: Copping v. Copping, 2014 ONSC 6067

[^33]: Freeman v. Freeman, 2013 ONSC 5756

[^34]: Lowe v. Minor, 2013 16783 (ON SC)

[^35]: T.N. v. R.N., 2013 ONSC 7458