Nermeen Hamdy v. Magdy Hamdy, 2015 ONSC 5605

NEWMARKET COURT FILE NO.: FC-11-39621-00

DATE: 20150909 CORRECTED DATE: 20150914

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Nermeen Hamdy, Applicant AND: Magdy Hamdy, Respondent

BEFORE: THE HON. MADAM JUSTICE R.A. WILDMAN

COUNSEL: J. Nicoll, Counsel for the Applicant L. Wickham, Counsel for the Respondent

HEARD: July 2, 2015 and by written submissions

Corrected Decision: The text of the original Endorsement was corrected on September 14, 2015 and the description of the correction is appended.

ENDORSEMENT

1There are two parts to this decision. The first section confirms that a temporary order freezing assets in a family law file ends when a final order is made at trial. The second section deals with the costs of a lengthy trial.

PART ONE – The Urgent Motion After Trial Regarding Dr. Hamdy’s Bank Accounts

2Dr. and Mr. Hamdy have been engaged in acrimonious litigation for over three years. Dr. Hamdy filed an Application in December 2011; Mr. Hamdy filed an Answer in February 2012. The file was concluded with an 18 day trial before me, which extended from May 21 to November 26, 2014.

3My trial decision was released on May 22, 2015. I awarded Mr. Hamdy an equalization payment of over $600,000 and several years of spousal support. The equalization and support payments were structured to try to balance Mr. Hamdy’s needs against those of the two children of the marriage, who also rely on Dr. Hamdy for all of their financial needs. The first payment to Mr. Hamdy was due 90 days after I released my decision regarding the costs of the trial, as it was possible that the pretrial offers could trigger a cost liability that would reduce the final amount that Mr. Hamdy would be receiving.

4The first case conference in this matter was held before Justice Nelson on March 19, 2012. The parties and their counsel filed a consent to an “interim” order¹, which included a term, “freezing assets of both parties wherever located in the world”. (“Justice Nelson’s order”). Apparently, Mr. Wickham never registered that order for enforcement or notified the financial institutions with which Dr. Hamdy dealt that her assets should be frozen.

5During the trial, Dr. Hamdy’s financial accounts were examined in detail. Mr. Wickham was aware that, for over three years, Dr. Hamdy had been continuing to operate her business. There had never been any restriction on her use of the bank accounts and there was never any suggestion that the business account was an “asset” that had, or should have, been frozen by Justice Nelson’s temporary order. In order to run her medical practice, she needed to use this account to deposit her billings and pay her business expenses. She also needed to have access to the funds she was generating from this account, to support herself and the children with next to no assistance from Mr. Hamdy. Their daughter, Nadine, was in university in Egypt and Dr. Hamdy was also paying all of her education costs and living expenses. At the end of the trial, Mr. Hamdy agreed it was a priority for Dr. Hamdy to continue to pay these expenses, as it was important that Nadine complete her university education in Egypt.

6During the trial, both counsel were asked to provide draft orders to the court to outline what orders they were requesting. Ms. Nicoll provided a draft order. Mr. Wickham did not, despite several requests.

7Ms. Nicoll’s draft order did not include a specific term to vacate Justice Nelson’s temporary order. However, during closing submissions on November 26, 2014, she did make reference to that order. She commented that “presumably that should be vacated (by the final order) … just in terms of tidying up”. When asked by the Court if he agreed, Mr. Wickham’s response was “Yes, of course, Your Honour”.

8There was no further discussion of Justice Nelson’s order in the closing submission. Mr. Wickham did not make any request for an order to preserve assets or to provide security for the equalization payment or spousal support. Had he suggested there should be any restriction on Dr. Hamdy’s use of her bank accounts after trial, Dr. Hamdy’s counsel would have had an opportunity to point out the obvious need to ensure that the cash flow generated by Dr. Hamdy’s medical practice could not be affected. However, by the end of closing submissions, it appeared that there was a common understanding that “of course” the temporary order would longer be in effect once a final order was made.

9Unfortunately, a month after the trial decision was released, Mr. Wickham used the temporary order from the case conference to freeze Dr. Hamdy’s business accounts at Scotiabank. On June 25, 2015, he sent Scotiabank a letter, enclosing a certified copy of Justice Nelson’s March 19, 2012 temporary order. He instructed the bank that all of Dr. Hamdy’s assets, including “those she has access to or controls through her ownership interest in any professional corporation” should be frozen until further order of the court.

10This was highly improper.

11First, Mr. Wickham’s letter goes beyond the wording of Justice Nelson’s order, which did not refer to assets controlled through her professional corporation and it did not include the term “until further order of the court”. The wording of Mr. Wickham’s letter did not make it clear that this was Mr. Wickham’s interpretation of the order, rather than the wording that had been ordered by the Court.

12Secondly, Dr. Hamdy’s practice is the sole economic engine that is keeping this family going. By interfering with her business operations, Mr. Hamdy (or Mr. Wickham) jeopardized the economic underpinnings of the awards that were made in the trial decision, which granted Mr. Hamdy an equalization payment, relief from child support, and future spousal support.

13It is difficult to understand why Mr. Wickham thought the court would support this. In even the most difficult family law files, a basic principle is that the children’s need for support has priority over other financial issues. Not only was it inappropriate to try to suddenly deprive Dr. Hamdy and the children of any access to funds to meet their basic business and living expenses, it was ill-advised and short-sighted from the point of view of protecting Mr. Hamdy’s rights under the trial judgment. Without the use of a bank account to operate her business, Dr. Hamdy would have no way to generate the funds to pay Mr. Hamdy the money she owed him.

14Thirdly, Mr. Wickham’s representation to Ms. Nicoll and the Court that “of course” Justice Nelson’s order should be vacated by the final order created an impression that he understood that a temporary order ends when the final order had been issued. By indicating his agreement, and failing to ask for any continuing order relating to Dr. Hamdy’s use of her assets, Mr. Wickham lulled Ms. Nicoll and the Court into the impression that this was a non-issue. In my view, even if he believed that the temporary order was still in effect due to an oversight by the court in not including a specific term to terminate it in the final order, it was sharp practice for him to rely on it, given his comments at trial.

15Finally, and most importantly, the order Mr. Wickham sent to Scotiabank was a temporary order, which had not been relied upon for over three years. A temporary order is subsumed in a final order. Otherwise, what is the purpose of calling it “temporary”?

16This basic understanding of the common sense meaning of the words “interim” or “temporary” has long been recognized by various courts. In Ford v. Ford, the Court confirmed Justice Zuber’s comments in Sypher:

… interim orders are intended to cover a short period of time between the making of the order and trial. I further observe that interim orders are more susceptible to error than orders made later; but the purpose of the interim order is simply to provide a reasonably acceptable solution to a difficult problem until trial.²

17In B. (A.) v. A. (N.L.), Justice Czutrin observed:

Except for motions to change orders under Rule 15 or summary judgment motions under Rule 16, most motions are either procedural or result in temporary orders which are intended to last only until a subsequent consent final order or a final order made after a trial.³

18In Oxley v. Oxley, Justice Boswell noted:

Temporary orders for support, as the name suggests, are not final orders. They were formerly known as "interim orders", referencing the fact that they were intended to cover the interim period between the commencement of proceedings and trial. The Family Law Rules now use the term "temporary" to underscore the notion that they are not intended to be long term solutions. They are by their nature imperfect solutions. They are based on limited and typically untested information. They are meant to provide "a reasonably acceptable solution to a difficult problem until trial": see Chaitas v. Christopoulos, 2004 66352 (ON SC), [2004] O.J. No. 907 (Ont. S.C.J.) per Sachs J.⁴

19Ms. Nicoll had to bring an urgent motion on July 2, 2015 to “unfreeze” the bank account, as Dr. Hamdy went to the bank the day before Canada Day, only to discover that she could not use her account to pay her staff or withdraw money for herself and the children for the upcoming holiday. Mr. Wickham refused to agree that the business account should be unfrozen. Due to the urgency, I added this motion to an already full motions list, and made an order to clarify that all temporary orders made in the Hamdy file were null and void as of the date of the trial decision, unless specifically continued by the final order. Specifically, the temporary order of Nelson J. dated March 19, 2012 was of no force and effect as of May 22, 2015.

20Due to the time restriction that day, I also reserved the right to provide additional reasons and a written decision regarding the motion at a later time. The issue of costs for the motion was to be dealt with by written submissions as part of the trial costs submissions.

21Ms. Nicoll was unable to get instructions from her client that day to consent to an order preserving the equity in the matrimonial home until I released my costs decision. While that issue was not before me on the urgent motion, Ms. Nicoll indicated that she was about to be going on vacation out of the country. Given the unfortunate tenor of the litigation at that point, I was concerned that, while Ms. Nicoll was away, there might be an attempt by Mr. Hamdy to bring another “urgent” motion to freeze Dr. Hamdy’s assets.

22In an effort to avoid any more motions, I made a temporary order relating only to preserving the equity in the matrimonial home until my cost decision was released. On consent of Mr. Hamdy, but not Dr. Hamdy, I ordered that the matrimonial home was not to be sold or encumbered without a further order of the court, except on consent of both counsel to effect a payment to Mr. Hamdy for his equalization payment. This order was to expire shortly thereafter, as soon as I received costs submissions and released my decision about costs of the trial.

23As this endorsement fixes the costs of the trial, I wish to make it perfectly clear that the temporary order of July 2, 2015 relating the matrimonial home is now terminated. There is no longer any order in effect that restricts Dr. Hamdy’s use of any of her assets.

Costs of the Urgent Motion

24The urgent motion should never have been necessary. Dr. Hamdy was successful in obtaining an order clarifying that the temporary order was void and should not have been provided to the bank. Under Rule 24(1), she is presumed to be entitled to her costs. As she made an offer to resolve this issue without the need for an attendance in Barrie, she should receive costs approaching full recovery for her legal fees in connection with this motion.

25I have read Mr. Wickham’s cost submissions in which he argues that his client should be entitled to full recovery costs for the motion to unfreeze Dr. Hamdy’s business assets. The basis of much of his submission is that I was wrong. He continues to refer to the temporary order as a “validly subsisting preservation order” and argues that he had a “professional obligation to protect his client’s interests”. He states that “[i]t is inconceivable that competent counsel would not have acted on a validly subsisting preservation order in the circumstances”. Finally, he concludes his argument with the statement:

The court is deemed to know the law and its insistence that the temporary order had been rescinded and that counsel had acted improperly both send a message to counsel that is apt to negatively impact counsel’s pursuit of client rights specifically; and access to justice generally.

26With respect, if Mr. Wickham feels the Court’s ruling was incorrect, his remedy is to appeal my decision. It is not a persuasive argument to relieve his client of the obligation to pay costs.

27Mr. Wickham also seems to argue that the decision I made to pre-empt another urgent motion, possibly in Ms. Nicoll’s absence, by making a short-term order that the matrimonial home would not be sold or encumbered, somehow entitles his client to costs. It does not.

28The issue that was argued on the motion was whether or not Mr. Hamdy, or Mr. Wickham, acted properly in freezing Dr. Hamdy’s accounts by using a temporary order from three years ago. Mr. Hamdy was unsuccessful on that motion. He is therefore required to pay costs.

29“Reasonableness” and offers to settle are very important in deciding costs. Mr. Hamdy’s conduct was completely unreasonable. Before preparing her material, and travelling to Barrie for this motion, Ms. Nicoll asked Mr. Wickham to “unfreeze” Dr. Hamdy’s bank accounts. He refused to do so.

30In my view, the position taken on behalf of Mr. Hamdy was so unreasonable that it merits sanction by imposing a costs award close to full recovery.

31I have reviewed Ms. Nicoll’s Bill of Costs. The time spent and hourly rate are reasonable, particularly given the urgent circumstances she was operating under. Her total fee was $4,000 plus HST, along with $132.21 in disbursements, for a total of $4,652.21 in fees, HST, and disbursements.

32I am prepared to order that Mr. Hamdy is to pay Dr. Hamdy fees, HST and disbursements, fixed at an all-inclusive number of $4,500. This amount will be satisfied as an offset against the costs that I will be ordering for the trial, as set out below.

Should Mr. Wickham be personally responsible for the costs of the motion?

33The circumstances of this motion require me to direct Mr. Hamdy to Rule 24(9) of the Family Law Rules.⁵ It provides:

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. O. Reg. 114/99, r. 24.

34Rule 24(9) may be relevant to the issue of who should pay the $4,500 costs related to the urgent motion. The question of whether a temporary order survives trial is a legal question, which would normally be the responsibility of the lawyer, rather than the client. It is possible that Mr. Hamdy may wish Mr. Wickham to contribute to the costs arising from the decision to try to enforce a temporary order after trial.

35I order that Mr. Wickham is to provide Mr. Hamdy with a copy of this endorsement. If Mr. Hamdy feels that Mr. Wickham should pay some of the costs personally, or not charge him for the work done related to the motion, and the two of them cannot agree about what should happen, Mr. Hamdy should notify the Trial Coordinator in Newmarket by October 2, 2015 that he wishes to schedule a hearing before me about that issue. This is the right of Mr. Hamdy, not Mr. Wickham, and Mr. Hamdy will either have to act for himself or retain counsel to represent him. Mr. Wickham will have an opportunity to make submissions, or retain counsel, before a decision is made. Hopefully, a hearing will not be necessary, and Mr. Wickham and Mr. Hamdy will be able to come to a mutually agreeable solution.

PART TWO – Costs of the Trial

THE LAW

36The Family Law Rules govern the approach to costs in family law cases. Some of the principles from those Rules, and the caselaw that has applied them, are set out below.

a) Costs are to be decided promptly by the presiding judge after each step of the case.⁶

b) A successful party is presumed to be entitled to costs.⁷

c) If success is divided, the court may apportion costs as appropriate.⁸

d) A person’s success is not determined with reference to the pleadings but with regard to the position at trial.⁹

e) Offers to settle are the yardstick with which to measure success, and a prime consideration in determining the quantification of costs.¹⁰

f) If a person has done as well or better than an offer made under Rule 18, he or she is entitled to partial recovery costs up to the date of the offer and full recovery costs thereafter.¹¹

g) Even if Rule 18(14) does not apply, the court may consider offers in deciding how to exercise its discretion regarding costs.¹²

h) A person who has acted in bad faith is required to pay full recovery costs.¹³

i) A successful party may be deprived of costs, or ordered to pay some of the unsuccessful party’s costs, if he or she has behaved unreasonably.¹⁴

j) In deciding costs, the court shall take into account the reasonableness of each party’s conduct and position, as well as the time spent, having regard to the importance, complexity or difficulty of the issues.¹⁵

k) Disclosure is the cornerstone of (child support) litigation. Failure to provide disclosure may attract full recovery costs.¹⁶

DISCUSSION

The successful party and the amount claimed

37As Mr. Hamdy received an award for a substantial equalization payment, as well as an order for several years of spousal support, he is the successful party and is presumed entitled to his costs under Rule 24(1). I do not agree with Dr. Hamdy that she is entitled to any costs because success was “divided”. Dr. Hamdy was not successful, either in her argument that Mr. Hamdy owed her an equalization payment, or in her position that Mr. Hamdy should receive no spousal support. As the unsuccessful party, she is required to pay Mr. Hamdy some costs.

38Mr. Hamdy is requesting “partial indemnity” costs, plus disbursements, totalling $385,428.44. In addition, Mr. Wickham requests a 30% increase for costs incurred after the December 10, 2012 offer to settle as a “bonus”. Mr. Wickham feels he is entitled to this bonus because he “undertook the retainer at great personal financial risk”. The bonus requested is $53,078.24.

39Much of Mr. Hamdy’s cost submissions are difficult to follow. The language and approach seems to be drawn from the Rules of Civil Procedure, rather than the Family Law Rules, which is not the correct approach for family law cases.¹⁷ Also, many of the “submissions” are not in the actual body of the submissions. Instead, they are inserted as commentary or footnotes in the Bill of Costs.

40In particular, there is one reference in small font towards the end of the Bill of Costs to the reasoning in support of a 30% increase in the costs after a December 10, 2012 offer to settle. It states that this increase is “in accordance with the ordinary rule that partial indemnity costs is [sic] usually about one third less than substantial indemnity costs…[which would increase] the adjusted costs to $203,544.90 instead of $156,573”.

41“Partial indemnity” and “substantial indemnity” are not terms used in the Family Law Rules.¹⁸ In any event, $156,573 appears to be Mr. Wickham’s calculation of “partial indemnity” costs incurred after a December 10, 2012 offer was made. Although the calculations are not set out very clearly, it may be that the reference to a “bonus” relates to an increased amount being awarded by virtue of an argument analogous to the provisions of Rule 18. That rule provides that a party’s cost recovery may be increased to full recovery costs, if that party does better than his or her pretrial offer. If so, the appropriateness of awarding higher costs, rather than a “bonus”, will be considered later in the section discussing the offers that were made.

42In any event, the bottom line appears to be that Mr. Hamdy is requesting costs totalling $438,506.68. Although it is not specified in the Bill of Costs, I am assuming that this figure would be equivalent to “full recovery costs” under the Family Law Rules.

Costs of prior attendances

43Mr. Wickham’s Bill of Costs does not set out any dates for the services provided, but it includes large amounts for preparation and attendance at previous court appearances, such as the case, settlement and trial management conferences. Rule 24(10) makes it clear that such costs, if they are going to be requested, are to be determined by the presiding judge at the time that step is completed.¹⁹ I am not dealing with costs related to preparation for or attending a prior “step” or court appearance. As none of the costs from other attendances were reserved to the trial judge, they should have been deducted from the costs claimed by Mr. Hamdy for trial.

Costs prior to the current proceedings

44The Bill of Costs also includes 257 hours of time during the year-and-a-half before the family law proceedings were commenced by Dr. Hamdy. Mr. Wickham claims $61,680 for this time on a “partial indemnity” basis, while indicating that the “actual rate” was $400 per hour, or $102,800.

45Mr. Hamdy was a destitute client, who was working part-time for minimum wage at a convenience store or driving a taxi. In the section below regarding proportionality, I will discuss the appropriateness of charging Mr. Hamdy, or any client, over $100,000 for advice about his family law issues, without any serious negotiations or Family Law Act proceedings being started.

46In any event, I am only dealing with costs of the matter that culminated in the trial before me. As the Bill of Costs gives no indication of what portion of the pre-Application costs could be reasonably connected to the current family law action, it is not reasonable to expect that Dr. Hamdy will be responsible for any of Mr. Hamdy’s costs prior to that action being commenced.

The offers and pretrial negotiations

47The Family Law Rules place a great deal of emphasis on pretrial offers. People are expected to try to resolve their disputes without expensive and prolonged litigation. If reasonable offers are made and rejected by the other side, this pushes the level of recovery higher up the scale from partial recovery closer to full recovery.

48The costs submissions reveal that the following offers and proposals were made:

1. On December 10, 2012, Mr. Hamdy offered to settle some of the issues on the following terms: i. Mr. Hamdy would receive indefinite spousal support of $15,000 per month, retroactive to August 8, 2011. ii. Mr. Hamdy would receive an equalization payment of $675,000.
2. Although no date is given, Dr. Hamdy’s counsel advises that Dr. Hamdy made a pretrial²⁰ offer to give Mr. Hamdy an equalization payment of $100,000. There would be no spousal support payable.
3. During the trial, the parties were given two opportunities to speak to another judge about settlement options. Dr. Hamdy’s counsel advises that her offers were increased, but she does not provide details.²¹ Mr. Hamdy’s counsel says that Mr. Hamdy offered to settle for all-inclusive figures of $900,000 on May 28, 2014, and $1,000,000 on November 26, 2014.

49At trial, Mr. Hamdy was awarded an equalization payment of $607,569.66 (to be paid in instalments over three-and-a-half years) and spousal support in varying amounts between $490 and $3,722 per month. Spousal support was to terminate on August 1, 2020. Dr. Hamdy was to be responsible for all of the children’s section 7 expenses, including post-secondary costs. Mr. Hamdy was to pay offsetting child support of $322 to $392 per month.

50Ms. Nicoll has calculated the approximate gross value of the spousal support awarded at $173,516 (or approximately $86,758 after tax). Adding this to the $607,569.66 equalization payment means that Mr. Hamdy was awarded the equivalent of approximately $780,000 as a result of the trial decision.

51Ms. Nicoll also provided a DivorceMate calculation, which estimated that the lump sum value of Mr. Hamdy’s $15,000 indefinite spousal support offer would be $2,976,618 (including Mr. Hamdy’s after-tax benefit), which would cost Dr. Hamdy $2,317,563 (after tax). This would mean that Mr. Hamdy’s pretrial settlement offer was for the equivalent of just under $3,000,000.

52It is clear that neither party did as well or better than either of the pretrial offers. Although Mr. Hamdy’s offer for the property settlement was far closer to the trial result than was Dr. Hamdy’s, once his $15,000 per month spousal support proposal is factored in, Dr. Hamdy’s pretrial offer²² was much closer to the trial award than was Mr. Hamdy’s. Using the pretrial offers as a yardstick to measure success, I am satisfied that, until the May 28, 2014 settlement discussions, success was divided. Neither party came close to their settlement positions, nor did either party make a reasonable proposal that might have avoided a trial. Both must bear some responsibility for the litigation costs up to that point.

53However, Mr. Hamdy’s midtrial proposal of $900,000 was much closer to the result at trial, particularly when his entitlement to costs is factored in. As this was a verbal offer, it does not invoke the cost advantages of Rule 18. However, it does satisfy me that, at least during the midtrial discussions, Mr. Hamdy was making some effort to resolve the issues. Dr. Hamdy’s decision to reject his proposal and continue with the trial exposes her to a substantial award of costs. It was not reasonable for her to continue litigating without making a proposal that recognized Mr. Hamdy’s entitlement to an equalization payment for one-half of the net family property, as well as some spousal support.

Reasonableness and bad faith

54The Family Law Rules stress the importance of acting reasonably during family law litigation. Despite the hurt, pain, and anger that often accompany the breakdown of a marriage, parties need to understand that litigation is expensive, both financially and emotionally. They are expected to try to conduct their court case reasonably and make some attempt to resolve their dispute, if possible, without a costly and damaging trial. When deciding costs, Rule 24(5)(a) requires the court to consider the reasonableness of a party’s behaviour in relation to the issues from the time they arose.

55Good family law counsel should understand this. While I agree with Mr. Wickham that a lawyer has a duty to fearlessly advance his client’s case, this should not be done in a way that unnecessarily increases costs. If the dispute has been escalated or prolonged by overly aggressive or unproductive litigation tactics, Rule 24(4) provides authority to reduce or eliminate a successful party’s costs.

56Dr. Hamdy goes beyond saying that Mr. Hamdy’s cost entitlement should be reduced because he acted unreasonably. She submits that Mr. Hamdy should be deprived of his costs, or be ordered to pay some of her costs, as he has acted in bad faith.

57Bad faith is a serious allegation. It implies some element of dishonesty, such as an intent to deceive or mislead, or an intentional breach of a court order to achieve another purpose.²³ Bad faith is not simply bad judgment or negligence but, rather, implies the conscious doing of a wrong because of a dishonest purpose or moral obliquity. It contemplates a state of mind affirmatively operating with furtive design or ill will.²⁴

58Dr. Hamdy cites several examples of Mr. Hamdy’s conduct that she argues constitute bad faith. Her allegations are set out or summarized in the headings below, and I will consider each of them individually. Much of Mr. Hamdy’s conduct was unreasonable, which will reduce the costs he will be awarded. However, I am not satisfied that he has exhibited a level of bad faith, either individually or cumulatively, that is sufficient to negate Dr. Hamdy’s own unreasonable conduct, and completely relieve her of her obligation to pay costs.

59Some of the examples cited relate to matters that would normally be the responsibility of his lawyer. As previously discussed in paragraph 35, I am prepared to allow Mr. Hamdy until October 2, 2015 to contact the Trial Coordinator in Newmarket to arrange a hearing before me, if he believes that Mr. Wickham should be indemnifying him for some of the reduction in costs resulting from the litigation tactics that I will discuss below. However, given Mr. Hamdy’s financial circumstances and Mr. Wickham’s admirable agreement to represent Mr. Hamdy on this lengthy trial without the benefit of financial assurance that he would be paid, I am hopeful that Mr. Hamdy and Mr. Wickham will be able to resolve their final financial arrangements without need for the Court’s assistance.

60I turn now to the examples of bad faith alleged by Dr. Hamdy and their effect on costs.

“Commencing a partition action prior to the parties’ separation”

61The first example involves a Partition and Sale action that Mr. Hamdy started in Brampton in January 2011, several months before the family law proceedings in this Newmarket file began.

62For the reasons set out below, none of the work related to that action is properly included in either party’s costs for the current proceedings. That action was ultimately discontinued or dismissed prior to the current proceedings being commenced. However, some of the actions taken regarding that litigation are relevant to the issue of “reasonableness” of Mr. Hamdy’s behaviour from the time that the issues arose, which is one of the factors I am directed to consider under the Family Law Rules²⁵.

63In January 2011, Mr. Hamdy was living in the matrimonial home with Dr. Hamdy and the children. He gave Dr. Hamdy no prior indication that he wished to separate. Following a weekend at home celebrating Dr. Hamdy’s birthday and their anniversary, Mr. Hamdy surprised Dr. Hamdy by having her served with a court application at work. The relief sought was partition and sale of the matrimonial home.

64I find that this does not amount to bad faith. As Mr. Wickham points out, Mr. Hamdy was legally entitled to start this action. Technically, he was not legally required to start it in the jurisdiction where the parties were residing, or where the matrimonial home was located.

65However, I do find that this was an extremely unreasonable way to behave. There was no reason for Mr. Hamdy to start court proceedings without telling Dr. Hamdy that he wished to separate. There was no reason to start court proceedings without, at least, sending a letter to Dr. Hamdy, inviting negotiations prior to starting the proceedings. He should have made a proposal to avoid the cost and stress of litigation. There was no need to serve her at work. There seems to have been no thought given as to how this would affect the children, particularly Nadine, who was in her final year of high school.

66Multiplicity of proceedings is to be discouraged. It is difficult to understand Mr. Wickham’s submission that it was appropriate to deal with the partition issues in Brampton, where no one other than him was located, and then deal with the “family law litigation” separately at some undetermined later date. When a party starts an action to extract his equity from the joint family residence so that he can separate, it is unrealistic to expect that this issue could be dealt with without considering claims for equalization of net family property under the Family Law Act²⁶.

67This was a totally unnecessary and unproductive first step. It escalated the conflict. It blindsided Dr. Hamdy and upset the children. While I agree with Mr. Wickham that a lawyer does not owe a duty of care to a non-client, the decision to start a partition action was not in Mr. Hamdy’s ultimate interests, as it could have been combined with the family law action, to avoid multiple proceedings and reduce costs. It is certainly not standard practice to deal with partition and sale claims separately from the Family Law Act claims and I have not been directed to any case in which a party was granted an order for Partition of the matrimonial home with no examination of potential claims regarding equalization of the net family property. It would be totally illogical to deal with partition claims in isolation from the family law issues.

68At the time, Nadine, the oldest child, was in her final year of high school and in the process of applying to universities. She was understandably upset that Mr. Hamdy surprised everyone by serving her mother with this Partition Application.

69Again, without any consultation or discussion with his wife, Mr. Hamdy elected not to proceed with his Partition Application in Brampton. A Notice of Discontinuance was filed on February 14, 2011 by someone²⁷, and Mr. Wickham attended on February 25, 2011 and had the matter “adjourned sine die”. Although I am not sure why it is particularly significant, Mr. Wickham has stressed in his submissions that Dr. Hamdy was not present that day.

70Nothing happened for several months. The family resumed their regular life and Mr. Hamdy continued to live in the matrimonial home with his wife and children. Nadine was accepted into university in Egypt, and the whole family travelled with her to Egypt in late July of 2011 to get her settled in.

71Then, on August 8, 2011, Mr. Hamdy abruptly left the home. He had decided to end the marriage, again with no notice to or consultation with Dr. Hamdy. Once again, he simply disappeared, leaving her to wonder where he was and whether he would be coming back. She testified at trial about the difficulties she had trying to figure out what to tell their son, Kareem, and Mr. Hamdy’s refusal to communicate with her about his intentions.

72On October 11, 2011, Mr. Wickham wrote to Dr. Hamdy to advise her that he had filed a Notice of Return of Application of the Partition Application in Brampton. He urged her to retain a lawyer for the return date of November 17, 2011.

73Dr. Hamdy and her counsel, Mr. Crackower, were both present with Mr. Wickham when the matter came back on before Justice MacKenzie in Brampton on November 17, 2011. The application was dismissed without prejudice to Mr. Hamdy “remounting his application as he, through counsel, may deem appropriate”.

74Mr. Wickham has made extensive submissions about what happened, and has filed a copy of the decision from the Law Society regarding his conduct. I do not intend to delve into the specifics of the Law Society complaint, as I fail to see the relevance to the costs decision I am making about the family law proceedings. I am not dealing with the costs of the Partition and Sale proceedings.

75The primary importance of the Brampton action is to illustrate that this couple’s litigation and separation started in an unreasonable way. This increased the bitterness and distrust between them, and the poor dynamics between their legal representatives²⁸. Mr. Hamdy’s unreasonable conduct set in motion the destructive climate that, sadly, culminated in a crushingly expensive trial.

76As mentioned previously, I am not prepared to find that Mr. Hamdy acted in bad faith by starting, or attempting to proceed with, this partition application. However, I do find that he acted unreasonably in how he started and served it; in failing to explore resolution options prior to filing a court action; and in trying to proceed with the partition issues separately from the balance of the family law claims.

“Entering into a Notice of Discontinuance with the wife and filing it with the Court in February 2011 and then proceeding to return the matter to the Brampton Court in the fall, despite the fact this it had been withdrawn”

77As mentioned previously, I am not prepared to make a finding about what happened related to the filing of the Notice of Discontinuance, as this was not a focus of the trial before me, and the evidence I heard did not establish clearly what had happened. However, it is not proper for Mr. Wickham to try to continue to litigate this issue and provide evidence from counsel directly in his costs submissions. Mr. Wickham’s personal commentary about what happened was inappropriate, as were his attempts to introduce evidence from the Law Society proceedings and his retainer agreement through the costs submissions. If Mr. Hamdy intended to rely upon any of this evidence, it should have been properly introduced through one of the witnesses at trial, so that Ms. Nicoll would have had an opportunity to ask questions and lead any evidence upon which Dr. Hamdy wished to rely.

78I am not prepared to make a finding of bad faith, nor am I going to consider the events surrounding the Notice of Discontinuance in my decision regarding costs, other than to note that the Notice of Discontinuance was filed and the partition action did not proceed, which has already been discussed above.

The fraudulent transactions in Egypt

79In the fall of 1999, while his wife was at work, Mr. Hamdy suddenly packed a suitcase and left home. He disappeared to Egypt for several months. He did not advise his wife that he was leaving. She says she had no idea whether he was ever coming back, until he suddenly reappeared at their home in Canada in June 2000.

80While he was gone, Mr. Hamdy agreed to have millions of dollars of shares put into his name to help a friend’s brother hide the assets until he could find a buyer.

81A year or two later, once Mr. Hamdy had returned to the marriage, some documents arrived in Canada for Mr. Hamdy to sign to facilitate the sale of the shares. Dr. Hamdy discovered the documents and was shocked to see that her husband was the registered owner of millions of dollars of shares in Egypt.

82Mr. Hamdy refused to tell her anything about the shares or what had happened. It was not until well into this family law litigation that he would even acknowledge that he had been registered as an owner of the shares.

83Mr. Hamdy’s failure to offer any explanation, combined with his lack of forthrightness throughout the marriage and at the time of separation, caused Dr. Hamdy to be highly suspicious about whether Mr. Hamdy was disclosing all his assets for the equalization calculation. Understandably, this was a major problem standing in the way of negotiations, and caused the costs of the litigation and trial to escalate unnecessarily.

84I do find that Mr. Hamdy acted in bad faith by failing to provide an explanation and by participating in the questionable scheme to hide assets for his friend. His secrecy and deception related to a major issue in this case. Mr. Hamdy’s behaviour from the time that issue arose, both when Dr. Hamdy originally discovered he was a registered owner of the shares, and later when she asked for details in this litigation, is properly considered under Rule 24(5)(a). I will be reducing the costs that I might otherwise have awarded Mr. Hamdy because of his bad faith in failing to be forthright about how he came to be shown as the registered owner of substantial assets in Egypt, as well as his delay in explaining how and why he had transferred his interest in those assets prior to the separation date.

85However, I also find that Dr. Hamdy was not reasonable on this issue. She failed to appreciate the concept of the burden of proof, and was not logical about how her husband might have managed to acquire these shares, given his minimal income. When faced with the share register that clearly showed the shares had been transferred out of Mr. Hamdy’s name long before the end of the marriage, she continued to maintain her position during this trial that he had an investment portfolio in Egypt worth $5,850,000.

86Particularly considering Mr. Hamdy’s impoverished circumstances and lack of resources, Dr. Hamdy was taking a very unreasonable position, which unduly increased the cost of this litigation. Mr. Hamdy was living in destitute circumstances in a friend’s basement. It was not reasonable for her to refuse to consider sharing even the equity in their family home with him because she continued to believe she could prove that he was a secret millionaire. Her lack of success on this issue satisfies me that she should be responsible for making a significant contribution to Mr. Hamdy’s costs.

Mr. Hamdy’s treatment of the children

87Mr. Wickham has provided letters dated July 29, 2013 and August 12, 2013, which indicate that Mr. Hamdy was insistent that Dr. Hamdy acknowledge that Mr. Hamdy was the primary caregiver for the children as a prerequisite to any negotiations. However, despite his claim that he was the primary caregiver, Mr. Hamdy essentially abandoned the children after he left the home, and has left all parenting to Dr. Hamdy. He is completely estranged from Nadine and is choosing not to exercise any access to Kareem, despite Dr. Hamdy agreeing to a court order for access, and practically begging him to see Kareem.

88Although Mr. Hamdy has had very little to do with Kareem since he abandoned the family on August 8, 2011, it was not until the first day of trial that Mr. Hamdy agreed to a final order that Kareem would remain in Dr. Hamdy’s custody.

89It is hard to reconcile Mr. Hamdy’s treatment of the children following separation with his insistence that Dr. Hamdy acknowledge that he was the primary caregiver during the marriage.

90Dr. Hamdy testified at trial that her children are the most important thing in her life. It would be highly unlikely that she would be prepared to acknowledge that Mr. Hamdy was the primary caregiver, particularly in the face of Mr. Hamdy’s Answer claiming sole custody of Kareem. Mr. Hamdy’s counsel’s insistence that Dr. Hamdy acknowledge Mr. Hamdy as the primary caregiver was unnecessary, unproductive, and unreasonable. It sidetracked the issues from a resolution of the finances matters into an emotional and unnecessary evaluation of the parenting contributions of each party. It raises the spectre of using a claim for custody as a “bargaining chip”, which is very concerning.

91If Mr. Hamdy’s point was that his childcare responsibilities were relevant to his spousal support claim, Mr. Wickham should have couched his correspondence in language that made that clear. Mr. Hamdy’s voluntary withdrawal from the children’s lives since separation, while continuing to assert a custody claim, and his insistence that Dr. Hamdy acknowledge him as the primary caregiver, may fall short of bad faith but it was extremely unreasonable.

“The husband was in default of his child support for some considerable time”

92I do not find that Mr. Hamdy was acting in bad faith, or even unreasonably, by failing to pay child support. Given the income differential, as well as the difference in their abilities to earn income post-separation, it was Dr. Hamdy who was acting unreasonably regarding support.

93Dr. Hamdy is a medical doctor. Mr. Hamdy worked part-time as a taxi driver or as a clerk in a convenience store. Dr. Hamdy and the children continued to reside in the four-bedroom matrimonial home while Mr. Hamdy was homeless and sleeping in a friend’s basement. Clearly, Dr. Hamdy’s obligation to pay spousal support far outweighed Mr. Hamdy’s ability to pay child support, and there should have been a proposal to advance some funds to Mr. Hamdy long before the end of the trial.

“The husband chooses to work entirely for cash, thereby making his tax returns meaningless for support purposes while at the same time, the husband has chosen to be underemployed, leaving the wife to shoulder the burden of the children’s expenses”

94Mr. Hamdy acknowledged that income should be imputed to him for child support purposes. However, the reality is that he does not have the skills that Dr. Hamdy has, and he has not been requalified as a civil engineer in Canada. I was not satisfied at trial that he was deliberately underemployed to avoid child support. I found that he had tried to make a contribution to the household through his work at the convenience store and driving a cab. The fact that his employers choose to pay him in cash is not something of his creation, although he certainly should have been declaring that income for tax purposes. I do note, however, that Dr. Hamdy’s accountant prepared Mr. Hamdy’s tax returns throughout the marriage, so it is somewhat disingenuous for her to now make an issue about the content of those returns.

95Mr. Hamdy’s decisions about his employment do not relate to the issues that caused this litigation or the cost of the trial. “Reasonableness” in the context of the costs analysis does not relate to reasonableness of lifestyle choices. To be relevant to costs, the behaviour must have some connection to the litigation expenses that were incurred. I find that Mr. Hamdy’s employment choices are not examples of bad faith or unreasonable conduct that should affect the costs he receives.

“The husband surreptitiously taped the wife’s phone calls and had his lawyer rely upon those calls, despite the fact that he was not on the telephone during the exchanges. The husband was charged criminally for this conduct”

96Ms. Nicoll has referred me to the case of Fappiano v. Campbell, which held that the surreptitious taping of discussions, including with counsel for the wife, can constitute bad faith.²⁹

97I agree. The Court cannot condone such tactics and needs to express its disapproval in the strongest possible terms. I find that Mr. Hamdy was acting in bad faith when he did this, and I will be imposing cost sanctions to attempt to convey to any litigant that this is not acceptable conduct in a family law file.

“The husband has routinely ignored the requests of the Court including to file a draft form of order at the commencement of trial or shortly thereafter. The husband has missed the two deadlines for filing costs submissions and, instead of filing a five-page document, he has filed 100 pages of filings 17 days after his submissions were due, thereby rendering it almost impossible for the wife to respond to that submission “

98I agree. It was troubling that Mr. Wickham ignored the Court’s request to provide various documents (such as a draft order or a written outline of his closing submissions) without making any advance attempt to address the request and explain why it might be problematic. However, that problem was relatively minor in comparison to the flagrant disregard for the Court’s direction regarding closing submissions, as well as the inappropriate content of those submissions.

99Counsel originally estimated that this trial would take eight days, including litigating the issue of access. Mr. Hamdy’s access was resolved by the parties near the beginning of the trial, which should have reduced the time needed for trial.

100Instead, this trial continued for 18 days. Due to the grossly inadequate estimate of time, these parties were not able to complete their trial during the May 2014 sittings, and had to wait until the November 2014 sittings to complete their hearing.

101Both parties contributed to the length of this trial. They had some midtrial discussions to eliminate witnesses and resolve accounting issues but, ultimately, it was up to them and their counsel to decide how they wished to present their cases.

102However, once the trial ended and I released my decision, I felt it was important to try to put some parameters around the costs submissions, so that they would be more focused than the trial had been. Having observed the spiralling cost of the trial and the stress it had caused for both parties, I set out a timeline for exchanging offers and, if necessary, cost submissions. I also directed the parties to specific parts of the Family Law Rules regarding costs that they should address in their cost submissions. Finally, I directed that submissions were to be limited to five single-spaced letter-sized pages, plus any applicable offers and case law, as well as a detailed Bill of Costs.

103Mr. Wickham decided that direction was too restrictive. Rather than filing a 14B motion, or even requesting a conference call with Ms. Nicoll and the Court to explain his problem, and request an extension of time and the permitted length of submissions, he chose to ignore the Court’s instruction and file lengthy closing submissions.³⁰ Those submissions were not served until August 4, 2015, which was long past both the original date specified in my order and the consent (court ordered) extension of July 17, 2015.

104Mr. Wickham attached a brief covering e-mail to the Court, indicating:

I apologize for the delay in delivery but it could not be helped in the circumstances. I wish Her Honour to know that the content of my submissions were dictated by the particular facts of the case; coupled with the lengthy trial, her extensive reasons and the multitude of issues that potentially impact costs. I determined that it was in my client’s best interests to address the matter of costs in a comprehensive and thorough manner. The special circumstances required just that.

For that reason it was simply not possible for me to adhere to the page limit as set by Her Honour, especially in light of the July 2, 2015 motion.

I trust that Her Honour would appreciate counsel’s reasons for applying his professional judgment as he has in this situation.

105Ms. Nicoll was left with one day before the August 5 deadline to respond to these lengthy submissions. She did an admirable job.³¹ Her submissions were received on time and were limited to five pages, including a DivorceMate Lump Sum calculation, as well as Bills of Costs. Her material was focused, addressed the cost issues I had suggested, and was much more helpful to the Court than the respondent’s costs submissions.

106In addition to being late, ignoring the page limit imposed by the Court, and dealing with the Rules of Civil Procedure rather than the Family Law Rules, Mr. Wickham attempted to introduce new evidence through the costs submissions. As previously mentioned, he referred to proceedings before the Law Society, which was not part of the evidence in the trial before me. He included a letter related to the negotiations regarding the Islamic divorce, which was not entered in evidence or put to Dr. Hamdy while she was being questioned at the trial. He tried to give his personal explanation of his client’s demeanour in court, although my comments in the trial decision about Mr. Hamdy’s demeanour were not relevant to the issue of what costs he should receive. Mr. Wickham also provided his personal account of two alleged instances of problematic conduct by Dr. Hamdy during the trial, even though he admitted that he had an opportunity to raise these incidents at trial but chose not to do so.

107I do not intend to review all the examples of Mr. Wickham trying to provide evidence himself through the costs submissions. The point is that any attempt to do this is highly improper.

108It is difficult to know how to deal with Mr. Wickham’s conduct. Ms. Nicoll’s suggestion was that “any submission of the husband beyond the five pages ordered by the Court should be ignored or, in the alternative, any allegations that he has made that were not raised at trial should not be considered”.

109Unfortunately, it is impossible to determine costs based on only the first five pages of Mr. Wickham’s submissions, so I have elected to read them all. I decided not to ask that he redo his submissions, or ask Ms. Nicoll if she wished an extension to respond, as these parties need an end to this litigation, and I do not think any further submissions would be productive.

110However, I do find that, particularly in the face of specific judicial direction to the contrary, the length and content of Mr. Hamdy’s submissions was unreasonable. The consequence that I have decided is appropriate is to completely disallow the $8,100 Mr. Wickham claimed for preparing and submitting those costs, and consider this as another example of “unreasonable conduct” when deciding what level of recovery of costs I should provide to Mr. Hamdy. As a partial penalty, I will be deducting this amount from the costs that I determine would otherwise be recoverable by Mr. Hamdy.

Proportionality

111As noted previously, Mr. Wickham has included no dates on his Bill of Costs, so it is difficult to determine when the services were rendered. However, assuming that his “blocks” of fees are presented chronologically, he is claiming $61,680 on a partial indemnity basis for services rendered prior to his client receiving the family law Application from Dr. Hamdy. As mentioned in paragraph 44, the Bill of Costs indicates that his actual rate up to that point was $102,800.

112That is not a proportionate or cost-effective use of resources. Mr. Hamdy’s evidence was that he was essentially destitute, sleeping in his friend’s basement, and unable to afford much needed dental work. It would not be reasonable for anyone, let alone him, to incur over $100,000 in legal fees, before the family law litigation had even been commenced.

113Part of the description of these services indicates that Mr. Wickham charged Mr. Hamdy to “advise on legal obligations and expectations; frequent repetition of legal information and advice for during [sic] first year and a half following retainer, with numerous telephone calls on all days of the week and at all hours; the client permitted to contact counsel on counsel’s cellular phone 24 hours a day due to the special circumstances of the client”.

114It is not reasonable for Mr. Hamdy to expect that Dr. Hamdy would reimburse him for a year-and-a-half of repetitious advice, or telephone calls to his lawyer at all hours of the day or night. Given Mr. Hamdy’s dire financial circumstances, part of Mr. Wickham’s professional responsibility was to ensure that the legal services were being delivered in a manner that was proportionate to the client’s limited resources.

115The amount being charged is even more surprising given Mr. Wickham’s indication that he does not practise family law, so he was unable to justify purchasing DivorceMate software to assist with spousal support calculations because “there was no business justification for an investment on the basis of a single file”. Mr. Wickham also says that he had no support staff to assist with the preparation of documents and “no money from the client to hire any”. Presumably, that means that some of the costs Mr. Wickham is claiming may relate to work that would normally be performed by a secretary or assistant.

116Particularly given Mr. Wickham’s lack of familiarity with family law, the fees he has included in his Bill of Costs for costs before the action started are unreasonable and should not be recoverable.

117The excessive pretrial fees call into question the legitimacy of the balance of Mr. Wickham’s account. Given the lack of a detailed Bill of Costs, it is difficult to determine what is or is not reasonable, as it is hard to understand specifically what was done and when. I have therefore turned to Ms. Nicoll’s Bill of Costs to get an idea of what an experienced family law lawyer has charged for this trial.

118Ms. Nicoll has 31 years of experience and practises primarily, if not exclusively, family law. She was retained by Dr. Hamdy in July of 2013, and her total fees amount to $98,800 plus HST on a substantial indemnity basis, and $74,100 plus HST on a partial indemnity basis. “Partial indemnity” seems to be calculated at three quarters of the total account.

119Prior to Ms. Nicoll being retained, Dr. Hamdy had paid $78,941.77 to her previous lawyer. As I do not have a Bill of Costs for his services, I cannot determine what portion of those fees related to other steps in the proceeding. As he was not counsel at trial, Dr. Hamdy would be entitled to recover items such as his time spent preparing the Application, or dealing with the Egyptian investigators, as part of the cost related to the trial. However, I would presume that it would be extremely generous to assume that even one-half of his account, or $40,000, would properly be included as costs in the trial award.

120Adding $40,000 to $98,800 plus HST produces a total for full recovery (or substantial indemnity) of approximately $150,000. In my view, those fees are far more realistic and appropriate for this file than were those charged by Mr. Wickham. Mr. Hamdy, in particular, was of very modest means. He deserved to receive cost-effective legal services that were rendered in a manner that was proportionate to the claims before the court and his ability to pay.

121Mr. Wickham has claimed disbursements, including HST, of $7,754.19. Those disbursements are reasonable, and in line with the disbursements that Ms. Nicoll has incurred of $9,858.98 including HST.

122I agree with Ms. Nicoll that the Court must “step back” and determine if the costs order is fair and reasonable, and whether it is in line with the principle of proportionality.³² I also agree that, in determining what is fair and reasonable, one of the measures is what the other party paid for their own fees.³³

DECISION

123Having considered all of the factors in the Family Law Rules and the cases to which I have been referred, I believe that a reasonable number to use for full recovery costs would be $150,000 (including HST) and $7,754.19 for disbursements.

124Mr. Hamdy is the successful party and he is entitled to recover some costs. Dr. Hamdy did not take a reasonable position at trial, as she made no proposals to pay Mr. Hamdy a reasonable equalization payment or any spousal support. She persisted with a completely unreasonable and unsupportable theory that Mr. Hamdy was a secret millionaire, and she refused to pay him any money prior to trial. Having been unsuccessful at trial, she is now required to pay some costs.

125However, Mr. Hamdy’s costs should be limited to the low end of partial recovery, which I am fixing at approximately 50%, or $75,000 including HST. I am reducing Mr. Hamdy’s costs to 50% as a result of some of the unreasonable behaviour outlined above, particularly his failure to make a reasonable offer to settle until well into the trial. In my view, both parties should bear some of the cost burden up to that point. I have also considered Mr. Hamdy’s conduct in illegally taping his wife’s telephone calls, which the Court needs to sanction by reducing his level of cost recovery to the low end of partial recovery.

126As noted in paragraph 110, I am going to deduct $8,100 plus $1,053 HST as a penalty for Mr. Wickham ignoring the Court’s direction about costs submissions. I am also deducting the $4,500 that I have found Dr. Hamdy is entitled to for costs of the motion relating to the improper use of the temporary order after trial.

127This brings the total down from $75,000 to $61,347. I have agreed that $7,754.19 claimed for disbursements is reasonable. The total is $69,101.19.

128Bearing in mind that I am fixing costs, rather than assessing them, I order that Dr. Hamdy pay Mr. Hamdy costs of these proceedings fixed at $70,000, inclusive of fees, HST and disbursements, within 60 days of the release of this decision.

129I am also ordering that Mr. Hamdy be provided with a copy of this decision immediately and informed that he may contact the Trial Coordinator in Newmarket by October 2, 2015, if he wishes me to determine whether Mr. Wickham has any obligation to contribute to the cost consequences that followed from some of the conduct referred to above. Both he and Mr. Wickham will have the right to be represented by counsel and the hearing is to be limited to a half-day.

130Another alternative, if Mr. Hamdy and Mr. Wickham cannot agree about how my costs decision impacts on Mr. Hamdy’s legal bill, is to have his account assessed.

131Mr. Wickham represented Mr. Hamdy in this difficult case without any assurance that he would be paid. Although I have commented on my reservations about Mr. Wickham claiming $438,506.68 in costs on this file, he deserves to be appropriately compensated for his time and the litigation risk that he assumed.

132There is a process available to determine an appropriate amount for a lawyer to charge a client. I direct that Mr. Wickham should advise Mr. Hamdy of the procedure to assess Mr. Wickham’s account, should the two of them need assistance in determining what Mr. Wickham should be paid.

133Orders to go accordingly.

WILDMAN J.

Date: September 14, 2015

September 14, 2015 – Corrections:

Paras. 48(b) and (c), paras. 52 and 105 have been corrected by footnote to address an error made by Dr. Hamdy’s counsel regarding the date of Dr. Hamdy’s only settlement offer. Dr. Hamdy’s offer was made the second week of trial, rather than prior to the trial, and she did not make any further offers during the trial.

Ms. Nicoll apologized but correctly pointed out that Mr. Wickham’s late delivery of his Costs Submissions left her with only one day to respond, and, in her haste to submit her Costs Submissions, she made this error. 

The timing of Dr. Hamdy’s offer and her failure to increase it during the trial, does not affect my decision about the amount of costs she should pay to Mr. Hamdy. I have taken Dr. Hamdy’s failure to make a reasonable settlement proposal into account in determining her obligation to pay Mr. Hamdy’s costs. (See paras. 53 and 124.) 

Ms. Nicoll is to be applauded for attempting to reverse the problematic dynamics by quickly sending an initial letter to Mr. Wickham indicating that, “Like yourself, I am hopeful that we will better be able to move towards a resolution in this case that does not involve a lengthy and expensive trial for this family.” She explained that, “Dr. Hamdy chose to change lawyers … because she was very concerned that the climate between her own lawyer and you was not conductive to moving this matter forward in a positive and constructive way. To that end, I have assured Dr. Hamdy that the tone of the correspondence that prevailed to this date will not continue in my office”.

Unfortunately, the olive branch was not accepted. Mr. Wickham’s response to Ms. Nicoll’s letter was not as conciliatory, and focused on justifying his prior correspondence and the position being taken by his client.

Footnotes

1. 1"Interim" orders are now referred to as "temporary" orders in family law matters.
2. 22015 SKCA 23 at para. 29, citing Sypher v. Sypher (1986), 1986 6337 (ON CA), 2 R.F.L. (3d) 413 (Ont. CA).
3. 32013 ONSC 2990 at para. 119.
4. 42010 ONSC 1609 at para. 25.
5. 5O. Reg. 114/99, as am.
6. 6O. Reg. 114/99, Rule 24(10).
7. 7O. Reg. 114/99, Rule 24(1).
8. 8O. Reg. 114/99, Rule 24(6).
9. 9F.I. v. S.P.P., [2012] O.J. No. 450 (OCJ).
10. 10Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905.
11. 11O. Reg. 114/99, Rule 18(14).
12. 12O. Reg. 114/99, Rules 18(16) and 24(5).
13. 13O. Reg. 114/99, Rule 24(8).
14. 14O. Reg. 114/99, Rule 24(4).
15. 15O. Reg. 114/99, Rule 24(5) and (11)
16. 16Rondolet v. Neff, 2011 ONCJ 407, [2011] O.J. No. 3911 (OCJ.).
17. 17O. Reg. 114/99, Rule 1(2); Polychronopoulos v. Polychronopoulos, [2006] O.J. No. 4368 (S.C.J.) at para. 21.
18. 18The Family Law Rules reflect a shift towards “plain language” and costs awards are couched in terms of “partial” or “full recovery” rather than partial or substantial indemnity.
19. 19See also Islam v. Rathman, [2009] O.J. No. 3416 (C.A.); Davis v. Davis, [2004] O.J. No. 2256 (S.C.J.); and Raaymakers v. Green, [2005] O.J. No. 6218 (S.C.J.) varied 2006 719 (ON CA), [2006] O.J. No. 124 (C.A.).
20. 20The day after this decision was originally released, Ms. Nicoll contacted my assistant to advise that she had made an error in her Costs Submissions. Dr. Hamdy’s only offer was served on June 2, 2014, which was the start of the second week of trial.
21. 21See Footnote 20.
22. 22The references in this paragraph to Dr. Hamdy’s “pre-trial” offer should be amended to refer to her “June 2, 2014” offer as set out in Footnotes 20 and 21.
23. 23Ontario (Director, Family Responsibility Office) v. Grant, 2003 64323 (ON SC), [2003] O.J. No. 1931 (S.C.J.).
24. 24Hendry v. Martins, [2001] O.J. No. 1098 (S.C.J.).
25. 25O. Reg. 114/99, Rule 24(5)(a).
26. 26R.S.O. 1990, c. F.3, as am.
27. 27There is apparently some mystery surrounding who filed the Notice of Discontinuance. As it is not relevant to the costs decision, it is not necessary to get sidetracked on that issue.
28. 28As previously noted, Ms. Nicoll was not Dr. Hamdy’s counsel at the time. The conflict between Dr. Hamdy’s former counsel and Mr. Wickham was so concerning that Dr. Hamdy chose to file a Notice of Change of Representation in July 2013.
29. 292002 46717 (ON SC), [2002] O.J. No. 608 (S.C.J.).
30. 30Although they are not consecutively numbered, Ms. Nicoll indicates the submissions are 100 pages long. The initial submissions are 25 double-spaced pages, followed by a 17-page Bill of Costs, which is sprinkled with continuing submissions related to various aspects of Rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. There are also several tabs of supplementary material, including offers, correspondence, caselaw, a Retainer Agreement, and correspondence from the Law Society.
31. 31Ms. Nicoll has subsequently advised that she made an error in her submissions as set out in Footnotes 20 and 21.
32. 32Vetro v. Vetro, 2011 CarswellOnt 14094.
33. 33Durbin v. Medina, 2012 ONSC 640.