Superior Court of Justice - Ontario

CITATION: Salehi v. Tawoosi, 2016 ONSC 1141

COURT FILE NO.: FS-13-387197

DATE: 20160216

RE: Faranak Salehi, Applicant

– and –

Farzad Tawoosi, Respondent

BEFORE: F.L. Myers J.

COUNSEL: Anthony Macri, for the Applicant

Elena Mazinani, for the Respondent

READ: February 15, 2016

COSTS endorsement

[1] By Reasons for Judgment, reported at 2016 ONSC 540, I gave judgment after an eight day trial. In para. 1 of the Reasons, I referred to the issues as follows: access, travel with the child, spousal and child support, equalization of net family property, a request for a restraining order, disposition of the parties’ matrimonial home, and the enforceability of an Iranian marriage contract and an Iranian court judgment.

[2] The bulk of the trial time related to determining the incomes of the parties and the ownership and valuation of their properties in Iran both at the date of marriage and at the valuation date in June, 2013. However, the respondent also used the trial to blame the applicant for the failure of the marriage and for his business and immigration problems in Iran in 2010 as well. The respondent pleaded at some length a conspiracy theory concerning the applicant’s family and their alleged illicit relationship with government apparatus in Iran which had no place in this proceeding.

[3] This trial was organized with the benefit of a comprehensive trial management order made by Stevenson J. on October 14, 2015. The order was designed to assist in making the trial more efficient and affordable for the parties. The parties were required to deliver in advance of the trial their opening statements, their written evidence in chief, and a draft order.

[4] The respondent delivered an opening at the opening of the trial.

[5] His affidavit in chief was not delivered until several days into the trial and only after I ordered that it be done a second time. By then, the respondent had the benefit of having heard the cross-examination of the applicant. When it was finally delivered, the affidavit contained many paragraphs containing inadmissible evidence of spousal misconduct and collateral facts. The applicant brought a successful motion to strike much of the affidavit.

[6] The respondent failed to deliver a draft order.

[7] During the trial, the respondent tried to call surprise witnesses, tried to introduce documents that had not been disclosed previously, and called expert witnesses without producing expert reports or acknowledgements of expert’s duties from them as required by Rule 20.1. Rather than preparing for an efficient and organized trial, the respondent ignored the trial management order and the applicable Family Law Rules.

[8] Much time was spent by the respondent at the trial on irrelevant and collateral facts. The respondent made several wholly bald allegations of sexual or other misconduct against the applicant and other witnesses, including his Iranian government conspiracy theory, and he raised an issue concerning the applicant’s virginity, that was irrelevant and simply should not have been advanced. The respondent just wanted to throw mud. Much time was wasted in a 2 day cross-examination of the applicant that was full of inadmissible allegations of misconduct and collateral allegations raised with no reasonable basis to do so.

Costs

[9] The basic, normative approach to costs is set out in Rule 24(1) of the Family Law Rules as follows:

24. (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.

[10] The court also has a discretion to deal with unreasonable behaviour under Rules 24(4) and (5):

(4) Despite subrule (1), 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. O. Reg. 114/99, r. 24 (4).

DECISION ON REASONABLENESS

(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,

(a) the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;

(b) the reasonableness of any offer the party made; and

(c) any offer the party withdrew or failed to accept. O. Reg. 114/99, r. 24 (5).

[11] Offers to settle are an important element of the issue of unreasonable behaviour. The goal, of course, is to encourage settlement as much as possible. Accordingly, a review of offers to settle is helpful.

[12] Rule 18(14) provides the terms under which offers to settle affect costs. It says:

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).

[13] The respondent delivered a last minute offer to settle that was not signed by him or his counsel in breach of Rule 18(4). Moreover, despite being dated earlier, it was not delivered seven days before the trial. Therefore the final offer does not meet the preconditions for Rule 18(14). There is a residual discretion to consider a non-compliant offer under by Rule 18(16). However, I would not consider the late offer here as it was delivered at or just after the opening of trial. That is, it did not present a bona fide offer to settle the trial in advance. As will be discussed below, the respondent failed to deliver his affidavit of his evidence in chief, his opening statement, and his draft order before the trial as ordered by the judge at the TMC. The respondent deprived the applicant of time and content against which to weigh the late offer.

Issue by Issue Outcome

[14] The result of the trial compared to the parties’ positions set out in their pre-trial offers to settle is as follows:

Result on Issue

Applicant’s Offer Nov./2015

Respondent’s Offer Jan./2014

Access/Travel – Parties to give notice to other before traveling. Both parties prohibited from taking the child to Iran without consent.

Applicant entitled to travel outside Ontario with limits on length of time to be spent in Iran.

Applicant not entitled to travel outside Ontario without respondent’s consent

Equalization/Matrimonial Home – Applicant to pay respondent over $225,000. Matrimonial Home to be sold. Gold in Mahr excluded.

No equalization payment. Matrimonial Home to the applicant

Equalization to include gold in Mahr. Matrimonial Home to be sold.

All three Iranian properties counted in applicant’s net family property. Title to Iranian land not declared. No trusts recognized.

Two Iranian properties to be owned by the applicant. One Iranian property to respondent.

Isfahan office to be owned by the respondent. Other two Iranian properties to applicant.

Child support follows CSG. Income imputed to respondent at $40,000. No spousal support. Applicant’s income imputed at $50,000

No support

Child support under CSG. Spousal support to respondent with applicant’s income imputed at $77,000.

[15] The respondent proposed to prevent the applicant from leaving Canada with their child because he was afraid that she will go to Iran where he believes he cannot go at present. I required both parents to provide ample notice to the other of travel plans and prohibited both from taking the child to Iran without the consent of the other. This issue had no clear winner.

[16] Equalization was the major issue at the trial as it was the issue to which the ownership and value of the parties’ interests in land resolved. The respondent won the issue although the gold coins are dealt with in the Iranian judgment. No one sought a different outcome on the Iranian judgment at trial. I did not declare actual ownership of Iranian land one way or the other. So the parties’ offers dividing up the ownership do not speak to the outcome of the trial per se. I provided for the equalization of the value of the parties’ net family property under Ontario law. The actual ownership of land in Iran may remain in issue in Iranian proceedings.

[17] The respondent won on the spousal support issue in that he does not have to pay spousal support to the applicant. He did not win the imputation of income for the applicant that was the basis for his offer however. As noted in my Reasons, the respondent’s request for spousal support was only advanced weakly at the trial. The applicant offered to waive all support but she wanted the respondent to sign over his half of the matrimonial home in exchange. That did not happen.

Outcome

[18] In all, it seems to me that the respondent succeeded on virtually all of the issues that were seriously pursued at the trial. He did not beat his offer to settle however. On that basis, I would start from the position that the respondent ought to be entitled to his costs of the proceeding on a partial indemnity basis. His costs include all matters properly referenced under the Rules other than time related to prior proceedings where costs were not awarded or reserved to the trial.

[19] It seems to me however, that the respondent engaged in unreasonable behaviour that greatly expanded the time required for the trial. A trial is not a place to lash out on the spur of the moment. The trial management order required the respondent to plan for an efficient trial. Had he done so, his opening statement and examination in chief should have been delivered in advance and been limited to admissible evidence on issues that were properly before the court. Expert evidence rules could have been consulted to ensure that the preconditions for desired expert evidence were fulfilled. Witnesses would have been identified and documents produced on a timely basis. Disputes could have been ironed out at the outset or even before the trial commenced. In all, the trial would have and should have been at least 50% shorter in my view.

[20] The respondent seeks an order requiring the applicant to pay him costs of $80,285 all-in on a partial indemnity basis on actual costs of $129,282. Ms. Mazinani’s hourly rate of $180 on a partial indemnity basis is 60% of her full rate of $300 which strikes me as reasonable. She billed trial time of $33,000 before HST on a full indemnity basis which, at 60%, yields $22,375 including HST. In my view, the respondent should be denied his costs of the trial as a result of his ignoring the trial management order, the time spent on his efforts to allege inadmissible misconduct, and other unreasonable behaviour as set out above. Saleh v Nebel, 2015 ONSC 3680.

[21] Moreover, there is a lack of detail in the respondent’s costs outline that makes it difficult to determine whether steps were reasonably undertaken and which steps relate to prior proceedings for which there is no outstanding costs entitlement.

[22] For example, the applicant notes that there were costs reserved to the trial judge on the respondent’s unsuccessful motion to hold the applicant in contempt of court. I have not been provided with any information as to what was in issue on that motion or whether or how any issues resolved at trial might have been relevant to that motion. Accordingly, I am not in a position to award any costs of that motion to the applicant. But neither should costs for that motion be included in the respondent’s costs outline.

[23] The court’s discretion is guided by the principle of indemnity for the successful party, the reasonable expectations of the unsuccessful party, the amount claimed and recovered, and the reasonableness of settlement efforts. Overall, the court is required to consider what is “fair and reasonable” in fixing costs, and is to do so with a view to balancing compensation of the successful party with the goal of fostering access to justice: Boucher v Public Accountants Council (Ontario), 2004 14579 (ON CA), (2004), 71 O.R. (3d) 291, at paras 26, 37.

[24] Overall, deleting the costs claimed for the trial, considering the uncertainty of the respondent’s costs outline, and balancing all of the foregoing factors, in my view, the applicant should be required to pay costs to the respondent in the amount of $50,000 all-in and I so order.

F.L. Myers J.

Date: February 16, 2016