Court File and Parties

OTTAWA COURT FILE NO.: FC-13-202 DATE: 2016-05-16 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sakina Wehbe, Applicant AND Michael Mohammed Wehbe and Local Motion Transportation Inc., Respondents

BEFORE: Justice A. Doyle

COUNSEL: Michael D. Heikkinen, for the Applicant Michael Mohammed Wehbe, appearing in person

HEARD: By written submissions

Costs Endorsement

[1] On March 1, 2016, the Court rendered a final decision after a six-day trial. The Court found the wife was entitled to:

i) An equalization payment of $168,132.53, which would be paid by the vesting of the Gaultois property in the wife;

ii) A $50,000 lump-sum spousal support payment, which would be paid from the lien on the Gaultois property; and

iii) Support arrears accumulated from previous interim orders.

The Court also held that spousal support could be varied after August 2019 should there be a material change of circumstances.

[2] After considering the written submissions on costs and for reasons set out below, the Court orders the husband and Local Motion Transportation Inc. to pay to the wife the amount of $65,000 (inclusive of HST and disbursements) in costs.

Wife’s position

[3] The wife is seeking costs in the amount of $147,642.86 on a full indemnity basis against the husband and his company, Local Motion Transportation Inc., on the following bases:

i) She obtained a judgment more favourable than her offer to settle dated May 26, 2015. This offer provided the following:

• the Gaultois property would vest in the name of the wife
• upon the transfer, the wife would assume responsibility of the mortgage payments, taxes and utilities
• upon the sale of the Gaultois property, the wife would provide the husband with the amount of $35,000
• there would be a final release to all other claims including spousal support.

ii) The husband has demonstrated bad faith by chronically disobeying Court orders and not providing disclosure. Pursuant to Rule 24(8) of the Family Law Rules, O. Reg. 114/99, the wife submits that since the husband’s behaviour was designed to frustrate and ultimately defeat her claims, he has engaged in bad faith over a long period of time and she should be entitled to costs on a full indemnity basis.

[4] The wife is also requesting a vesting order with respect to costs as the husband is unlikely to cooperate and pay the costs. The husband is already in breach of two outstanding costs awards in these proceedings.

[5] Finally, the wife is requesting that costs ordered be awarded specifically as support-related costs that may be enforced by the Director of the Family Responsibility Office (FRO) pursuant to subsection (g) of the definition of “support order” contained in section 1(1) of the Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31 [FRSAEA], as the husband has made an assignment into bankruptcy since the release of the trial decision.

Husband’s position

[6] Although the husband was represented by counsel at trial, he is now self-represented. He was granted an extension to file his written submissions on costs.

[7] His position is that the Court must first determine whether the wife has been successful.

[8] The husband’s offer to settle dated May 25, 2015 offered to settle the matter as follows:

• he would pay spousal support of $500 per month until he reached the age of 65 years;
• the wife would be entitled to retain the $50,000 advance he alleged that he provided to her during the marriage;
• the Gaultois home would be sold and the wife would receive half of the equity upon the sale, which according to his estimation would be $110,250;
• there would be a “release from the Family Responsibility Office.”

[9] The husband indicates that he was reasonable and cooperated with financial disclosure. He explains that he:

• provided irrevocable directions for the wife to enable her to obtain information from financial institutions;
• was unable to value the taxi license from the City of Ottawa; and
• was not able to travel to Lebanon.

[10] The husband indicates the wife acted unreasonably by withholding evidence directly related to the Lebanon property, and not producing a valuation of her business or bank statements beyond March 2013.

[11] Finally, he submits that the Court should consider the fact that he is of modest means. This resulted in his inability to comply with the support orders but he states that he was able to pay $40,000 to satisfy arrears as ordered.

Costs and Offers to Settle

Legal Principles

[12] The modern costs rules are designed to foster three fundamental purposes:

• to partially indemnify successful litigants for the cost of litigation
• to encourage settlement
• to discourage and sanction inappropriate behaviour by litigants

See Fong v. Chan (1999), 46 O.R. (3d) 330 (C.A.), at para. 22, and Serra v. Serra, 2009 ONCA 395, 66 R.F.L (6th) 40, at para. 8.

[13] Costs awards should reflect “what the Court views as a fair and reasonable amount that should be paid by the unsuccessful parties”. See Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.), at para. 24.

[14] The Court retains discretion when ordering costs within the framework of the Family Law Rules. See M. (C.A.) v. M. (D) (2003), 67 O.R. (3d) 181 (C.A.) [M. (C.A.)].

[15] In Delellis v. Delellis and Delellis, Justice Aston stated that the determination of costs is: “[t]he overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant” (at para. 9).

[16] The cost of litigation was also fully explored by Justice Pazaratz in Jackson v. Mayerle, 2016 ONSC 1556. He awarded the husband the amount of $192,000 in costs and found that approximately 10% of the trial related to support or maintenance and therefore $19,000 of the costs order would be enforceable through the FRO. In making his order, he took into account, among other things, the following factors:

• The husband’s request for “more than a quarter of a million dollars in costs must be considered in the context of fairness, proportionality, affordability, and reasonable expectations and allocation of resources.”
• Winning does not mean the loser has to write a “blank cheque on costs”
• “[T]he greater the amount being requested, the greater the need to explain exactly what legal work was done, and why it had to be done.” In this regard, Justice Pazzaratz expressed that the husband’s bill of costs should have been more informative “particularly as to why so many lawyers and support staff had to work on this one file”.

[17] Rule 24 of the Family Law Rules creates a presumption of costs in favour of the successful party. Rule 24(11) sets out the factors that a Court shall consider in determining costs.

(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.

[18] Rule 18 of the Family Law Rules deals with the cost consequences of failure to accept an offer, and allows the Court discretion to take into account any written offer to settle, the date it was made and its terms. Specifically, Rule 18(14) states:

(14) A party who makes an offer is, unless the Court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:

1. If the offer relates to a motion, it is made at least one day before the motion date.

2. If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.

3. The offer does not expire and is not withdrawn before the hearing starts.

4. The offer is not accepted.

5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

[19] Rules 18(15) sets out the burden of proof:

(15) The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of sub rule (14).

Analysis

Success

[20] Based on the offers to settle and reasons set out below, the Court finds that the wife was the successful party.

[21] In the wife’s offer to settle dated May 26, 2015, she was prepared to accept the vesting order of the Gaultois property in her favour and upon sale of the property, would provide the husband with $35,000. Both parties agree that the approximate equity in the Gaultois property was $200,000. Therefore, under the terms of her offer she would have retained approximately $165,000. In addition, she was prepared to waive accumulated support arrears from previous interim orders, costs ordered from previous Court orders and prospective spousal support.

[22] Clearly, she was successful as the Court found that the husband owes an equalization payment of $168,132.53 plus $50,000 in lump-sum spousal support, totaling $218,132.53. The wife is also entitled to the costs and support arrears accumulated from the orders of Justices Mackinnon and Minnema.

[23] Since the final judgment was more favourable than the terms of the offer and was open for acceptance until the commencement of the trial, Rule 18(14) is triggered and, consequently, gives rise to costs consequences. As stated above, Rule 18(14) provides that a party who makes a written offer at least seven days before the trial, and obtains an order as favorable as or more favorable than the offer, is entitled, unless the Court orders otherwise, to costs to the date that the offer was served and full recovery costs from that date. As discussed below, the wife is claiming full recovery costs in the amount of $53,873.11 from the date of the offer until she submitted her costs submissions (March 15, 2016).

[24] On the other hand, the husband offered half of the Gaultois property (valued by the husband at approximately $110,000) and periodic spousal support. The husband quantified support to be $30,000 but of course, this does not take into consideration the fact that periodic support attracts tax consequences for both payor and recipient. This totals $140,000. In addition, he was prepared to allow the wife to retain the $50,000 advance he claims to have paid her during the marriage.

[25] On the latter issue, the Court found in favour of the wife (i.e. that the husband had not made an advance).

[26] The amount of support arrears outstanding from previous interim orders remains an issue. The wife indicates that the amount owing is $46,141.00. The husband through previous counsel disagrees with that amount. This issue is addressed at the end of this endorsement.

[27] In conclusion, it is clear that the wife obtained a judgment more favourable at trial than her offer made on May 26, 2015 and hence she has been successful.

Quantum

[28] In determining quantum of costs, the Court considers the factors set out in Rule 24(11):

(a) The importance, complexity or difficulty of the issues

[29] The financial issues were important to both parties. Specifically, the wife left the marriage with few assets other than some household items. She is living on very little income and requiring the financial aid of her children. The litigation was important to her to obtain her share of the assets and financial support after a long-term marriage. The matter involved numerous assets and debts, the determination of the ownership and value of the Lebanon property and the valuation of assets such as the taxi-license plates. An income valuation and business valuation were required to be obtained by both parties. The litigation was rendered more difficult and complex by the fact that the husband did not comply with various Court orders. This required the wife to make her own efforts to prove values of assets including the value of the taxi cab license which was to have been valued by the husband.

(b) The reasonableness or unreasonableness of each party’s behavior in the case

[30] The Court has already set out its admonition of the husband’s failure to comply with Court orders. His lack of co-operation in providing information and valuations certainly demonstrated his flagrant disregard for the Court process and his legal responsibilities. To that end, the Court finds that he has been unreasonable.

[31] However, the wife has also demonstrated her lack of candour by providing relevant documents relating to the Lebanon property for the first time while she was in the witness stand. During the trial, the husband was shown photos of the property and a document which purported to show that the husband was the owner of the property. Relevant documents should be produced during the course of the discovery process and/or when they are discovered not at the trial by engaging in a “trial by ambush” tactic. In addition, it appears that the wife also failed to provide disclosure including a valuation of her business, although this failure is tempered somewhat by the absence of any evidence that her business was anything other than a small business that generates minimal income to her.

(c) The lawyer’s rates

[32] The wife’s counsel submits a bill of costs which includes the following rates, which fluctuated during the course of the litigation from December 2013 to present:

Lawyers:

1. Michael Heikkinen – Called to the Bar in 2011 From $175 to $210 per hour
2. Craig Bater – Called to the Bar in 1982 From $375 to $400
3. Philip Augustine – Called to the Bar in 1982 $375 to $400 per hour
4. Mary Jane Binks – Called to the Bar in 1971 From $375 to $425 per hour
5. Amanda Hall – Called to the Bar in 2001 $265 to $275 per hour
6. Jonathan Richardson – Called to the Bar in 2007 $225 to $275 per hour
7. Lauren Angle – Called to the Bar in 2012 $165 per hour
8. Emily G. Villeneuve – Called to the Bar in 2013 $165 to $185 per hour
9. Kaitlin A. Bradley – Called to the Bar in 2015 $165 per hour
10. Jennifer Williams – Called to the Bar in 2014 $165 per hour

[33] In addition, the bill of costs identifies the following non-lawyers, who had rates ranging from $100 to $125 per hour during the course of litigation:

Daniel Pinsky (student) Allison Rouble (law clerk) Jocelyne Cusson (law clerk) Puja Dheer (law clerk) Diane Lockhard (no designation) Articling Student - unnamed

[34] Given the lawyers’ call to the bar dates and experience, the Court finds that the rates are reasonable. In addition, the rates of the non-lawyers are within the appropriate range.

(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

[35] The wife has separated the costs incurred from the date the application was issued to the date she served her offer to settle, May 25, 2015 (excluding costs for motions, as these had been determined by the motions’ judge). Another bill of costs sets out the legal fees incurred after May 25, 2015.

[36] The husband did not provide submissions regarding the reasonableness of the costs requested.

[37] The wife’s total entitlement is at least $218,000. Her claim for costs is $147,642.86. These figures demand an examination of proportionality in the analysis of the appropriate quantum of costs. The Court must examine what is reasonable and fair in light of the results obtained.

[38] There were 16 people who had involvement in this file. There is no explanation why this was needed. Save for the change of articling students, there is no detail as to why numerous lawyers and law clerks had to work on the file.

[39] The description of the work completed titled “fee items” is as follows:

Communication and meetings with client (including all emails, telephone conversations, letters); Obtaining updated Title Search, Preparation of Offer to Settle; Settlement negotiations with opposing party; Review of Respondent’s document brief; Preparation of Submissions Brief; Preparation of Trial Submissions; Communications with bank manager at TD Bank; Communications with City of Ottawa Taxi Licensing Department; Communication and meetings with other lawyers at Augustine Bater Binks; Preparation of Affidavit for trial regarding unchanged financial statement; Revision of business records notice; Preparation of factum for trial; Preparation and revision of cross-examination of Michael Wehbe; Preparation and revision of witness examination outlines; Communications with Dave Clarke; Attendance at trial; Communications with FRO; Preparation of Support Calculations; Preparation of Retroactive and prospective support chart; Revision of Factum; Research of law; Preparation of Written Submissions, Preparation of Book of Authorities; Review of Judgment of Justice Phillips; Preparation of draft Divorce Order; Preparation of Costs Submissions; Bill of Costs and Research; communications with the Court and Leonard Levencrown re approval of draft Divorce Order.

[40] Although pursuant to Rule 18(14) there is a presumption that the wife is entitled to full recovery, the Court retains discretion as set out in M. (C.A.).

[41] As stated in Jackson, at para. 91: “quantification of costs still requires an overall sense of reasonableness and fairness. Goryn v. Neisner 2015 ONCJ 318 (OCJ). The Rules do not require the Court to allow the successful party to demand a blank cheque for their costs. Slongo v. Slongo 2015 ONSC 3327 (SCJ).”

[42] The approach to be used in assessing the quantum of costs when a party has been successful was aptly stated by Justice Perkins in Biant v. Sagoo (2001), 20 R.F.L. (5th) 284 (Ont. S.C.):

[T]he preferable approach in family law cases is to have costs recovery generally approach full recovery, so long as the successful party has behaved reasonably and the costs claimed are proportional to the issues and the result.

[43] The Court must consider whether the costs incurred are proportional to the issues argued. As stated in Pagnotta v. Brown, [2002] O.J. No. 3033 (S.C.), and Gale v. Gale, 2006 CarswellOnt 6328 (Div. Ct.): there should be a correlation between legal fees incurred and the importance or monetary value of the issues at stake.

[44] In Berta v. Berta, 2015 ONCA 918, 128 O.R. (3d) 730, the Court of Appeal sets out the principles in assessing costs in a family law matter. At para. 94:

[94] Thus, a successful party in a family law case is presumptively entitled to costs. An award of costs, however, is subject to the factors listed in r. 24(11), the directions set out under r. 24(4) (unreasonable conduct), r. 24(8) (bad faith) and r. 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party: M.(A.C.), at paras. 40–43.

[45] The evidentiary record supports a sizeable costs award to the wife. Based on the Court’s above findings, the husband prolonged the length of the trial and caused the wife to incur more legal costs and disbursements.

[46] However, it is noted that Mr. Clarke’s income analysis was outdated and for that reason, was not given significant weight in the determination of the husband’s income. In part, this could have changed had the husband not changed bank accounts and provided up to date financial documentation so that Mr. Clarke could update his figures.

[47] The wife’s disbursements for Mr. Clarke’s income analysis were, perhaps, money not well spent. Mr. Clarke’s income analysis was outdated and, for that reason, was not given significant weight in the determination of the husband’s income. On the other hand, the report may have been more useful to the Court had the husband not changed his bank accounts and/or had he provided up-to-date financial documentation to allow Mr. Clarke to update his figures.

[48] In Scipione v. Scipione, 2015 ONSC 5982, 68 R.F.L. (7th) 66, Justice Pazaratz confirms the Court’s discretion to make costs awards which are proportional, fair and reasonable in all the circumstances.

[49] This trial lasted five days. There were two expert witnesses and a witness dealing with the trends in the taxi industry.

[50] In reviewing the evidence and time spent on the trial, the Court notes the following:

a) The experts were examined extensively on the husband’s income and the value of his business which really focused on the value of the taxi-cab license;

b) Evidence was called on the Lebanon property and there was an in-depth analysis on its nature, description and existence, and on the money spent on the property. The parties’ son was called as a witness to describe it as well;

c) The husband’s failure to comply with Court orders lengthened the trial as these valuations could have been produced to the Court; and

d) Time was also spent on dealing with a voir dire on the photos introduced by the wife for the first time at trial.

(e) Expenses properly paid or payable

[51] The wife claims disbursements of $7341.97 for the period from May 26, 2015 through to her filing written costs submissions. The wife claims another $24,321.09 for disbursements incurred up to May 25, 2016. The claimed disbursements include:

(i) Photocopying, including offsite printing, totaling $5212.97

(ii) Fees paid to Collins Barrow for business and income determination reports, totaling $16,000

(iii) Attendance of Dave Clarke at Court in a the amount of $4986.83

(iv) Miscellaneous Court fees and process server fees

(v) HST

[52] Dave Clarke was a vital witness for the wife to determine the value of the husband’s company and taxi plate. His analysis of the husband’s income was not as helpful as his income determination was for 2012 and the trial took place in 2015. However, as stated earlier, he did not have recent financial disclosure from the husband.

[53] Nevertheless, an expert was necessary to the wife’s case and she is entitled to reimbursement of some of her disbursements.

[54] The wife is presumptively entitled to a full recovery of disbursements from the date of the offer to settle on May 26, 2015 and given her success at trial, she is entitled to recover some the expenses incurred in experts’ reports and other disbursements prior to that date.

[55] Therefore, a fair and reasonable amount for disbursements is $20,000 (including HST).

(f) Any other relevant matter

[56] There are a number of cases which confirm that the Court can consider a party’s ability to pay costs as a factor in determining the quantum of costs. See, for example, Cassidy v. McNeil, 2010 ONCA 218, 99 O.R. (3d) 81, where the Court of Appeal indicated that the financial circumstances of an unsuccessful party could be relevant in determining costs.

[57] In M. (C.A.), at para. 42, the Court of Appeal found that the financial situation of the parties can be taken into account in setting the amount of the costs award under either Rule 18 or Rule 24.

[58] The Courts have confirmed that a party’s limited financial means cannot be used as a “shield” against costs orders. Petruzziello v. Albert, 2014 ONCA 393. The Courts have stated that the ability to pay is relevant on the issue of quantum of costs, but not onto the issue of another party’s entitlement to costs. Izyuk v. Bilousov, 2011 ONSC 7476, 7 R.F.L. (7th) 358, and Spears v. Spears, 2010 ONSC 4882, 94 R.F.L. (6th) 229.

[59] The husband indicates that his taxi cab income has been reduced due to a number of factors as elaborated in the decision, specifically, his health.

[60] The reduction of his income and the fact that he still has other financial responsibilities to the wife, which place him in a financially vulnerable situation, must be considered as the backdrop to the fact that the wife is presumptively entitled to costs pursuant to Rule 18(14), as she obtained a judgment more favourable than her offer.

[61] Yet, the Court notes that the husband was not forthright in providing financial disclosure as ordered by the Court. His income had to be imputed based on the information that had been gathered and presented by the wife. The Court did not rely on his tax returns.

[62] Given the husband’s lack of candour in providing financial information, he cannot rely on this self-report of limited, modest means as a ground to limit the quantum of costs to be ordered against him. His allegation of hardship should be scrutinized on the evidentiary basis found at the trial that he was not a credible witness.

Bad Faith

[63] Rule 24(8) states: “If a party has acted in bad faith, the Court shall decide costs on a full recovery basis and shall order the party to pay them immediately.”

[64] Justice Perkins provided a frequently quoted analysis of what constitutes bad faith in S. (C.) v. S. (M.) (2007), 38 R.F.L. (6th) 315 (Ont. S.C.), at para. 16, aff’d 2010 ONCA 196, following an 18-day trial which also focused on custody:

“Bad faith” has been explained as “not simply bad judgment or negligence but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity … it contemplates a state of mind affirmatively operating with furtive design or ill will.” See Biddle v. Biddle, [2005] O.J. No. 1056 (S.C.J. Fam. Ct.), at par. [14]. The definition of “bad faith” in The Concise Oxford Dictionary of Current English (5th ed., 1964, ed. by H.W. Fowler and F.G. Fowler) is simply “intent to deceive”. The essence of bad faith is the representation that one's actions are directed toward a particular goal while one’s secret, actual goal is something else, something that is harmful to other persons affected or at least something they would not willingly have supported or tolerated if they had known. However, not all bad faith involves an intent to deceive. It is rare, but not unknown in family law cases, for bad faith to be overt — an action carried out with an intent to inflict harm on another party or a person affected by the case without an attempt to conceal the intent.

[65] In this case, the Court sets out below some examples of the husband’s failure to provide disclosure and the husband’s explanation:

i) He did not provide a valuation of the taxi plate as per a Court order: the husband states that he understood that the City of Ottawa was to provide the same but the City was not able do not provide one;

ii) He did not provide a valuation of the Lebanon property as required by a court order: he did not believe he was the owner of the property and he was unable to travel to Lebanon;

iii) He did not provide up to date financial bank documents as requested: he provided signed consents for the bank accounts to the wife’s counsel; and

iv) He placed a mortgage on the Gaultois property contrary to a court order: he immediately arranged to remove it immediately when he was ordered.

[66] The Husband has indeed shown a disregard for Court orders. He does provide an explanation. The court finds that he was unreasonable but his actions do not cross the line to the point that his intent was to deceive and prevent the wife from obtaining the true picture of his financial assets and income. There was indeed some cooperation shown by the husband throughout the proceedings although not to the standard expected in a family law matter.

[67] There will be no finding of bad faith and his actions do not invoke the rule whereby the wife would be entitled to costs on a full recovery basis.

Conclusion

[68] The costs incurred since the wife made her offer on May 26, 2015 up to March 15, 2016, total $46,531.14 (including HST) plus disbursements of $7341.97 (including HST), for a total of $53,873.11. (The figures for the bill of costs after May 26, 2015 differ, in one section it states full indemnity would be $53,873.11 and in another section it states $57,362.55).

[69] The amount claimed up to the offer date of May 25, 2015 is $90,280.31. The total amount in the bill of costs is $147,642.86.

[70] Based on the wife’s offer, there is a presumption in accordance with Rule 18(14) that the wife should be entitled to her full costs from the date of her offer. However, the bill of costs is not detailed enough to determine if there was duplication of work between the lawyers and/or staff. It would seem that many people in the office docketed time on this file. No explanation is provided as to why so many people were involved or as to the exact nature of each of their work.

[71] The senior three partners were also involved in this file—presumably to provide guidance and advice to the counsel of record. Again, no specific details are provided as to exactly what the senior counsel or the other lawyers did on the file.

[72] When a large monetary claim is being made for costs, which does not lend itself to a hearing or cross-examination, the Court will benefit from some explanation of the need to have various players on the file. This is not meant as a criticism of the fact that numerous lawyers were working on the file. The Court would expect certain lawyers to work on the file by virtue of their expertise or because this is the process utilized in the firm. Nevertheless, an explanation is necessary when costs are being claimed in the amount of almost $150,000.

[73] In addition, there seems to be an extensive amount of time spent on the file by articling students. For example, Ms. Bronsard claims 178.70 hours, which is the equivalent of over four 40-hour weeks spent on this file. This in addition to another articling student who spent 40.8 hours. Both of these figures relate to time spent before May 25, 2015. After May 25, 2015, the articling students spent a further 30 hours and the clerks about 2 hours.

[74] The bill of costs should have been more informative to enable the Court to ensure that there was no duplication of effort and to identify the extent and nature of the work. This is especially important if there are 16 people working on one file.

[75] The Court certainly must size up whether the legal costs claimed are appropriate having regard to fairness, proportionality, affordability and reasonableness.

[76] The Court does not accept that the husband is impecunious.

[77] The wife claims full recovery fees of $46,531.14 from the date of the offer.

[78] It is not clear whether any of the time spent included preparation and attendances are case conferences and settlement conferences. Family Law Rules 24(10) dictates that costs must be determined at every step.

[79] Based on the above and having regard to the principles of fairness, reasonableness and proportionality to results obtained, the court orders costs of $30,000 from the date of the offer plus fees of $15,000 for work completed before the offer.

[80] Therefore, the Court finds that a fair and reasonable costs award, considering the issues involved, is $45,000 (inclusive of HST) plus $20,000 in disbursements.

Vesting order

Legal principles

[81] The trial decision dealt extensively with case law that addressed the issue of when a vesting order can be made pursuant to s. 100 of the Courts of Justice Act, R.S.O. 1990, c. C.43. That section provides:

A Court may by order vest in any person an interest in real or personal property that the Court has authority to order be disposed of, encumbered or conveyed.

[82] Authority to make a vesting order is also set out in s. 9(1)(d)(i) of the Family Law Act, R.S.O. 1990, c. F.3, which sets out the powers of the Court:

In an application under section 7, the Court may order, … (d) that, if appropriate to satisfy an obligation imposed by the order, (i) property be transferred to or in trust for or vested in a spouse, whether absolutely, for life or for a term of years…

[83] In this case, the Court found it had power to vest the Gaultois property in the wife pursuant to s. 9 of the Family Law Act as it related to the equalization payment.

[84] Given that the support order was made under the Divorce Act, the Court had no jurisdiction to grant a vesting order with respect to support owing.

[85] In Cunningham v. Montgomery, 2010 ONSC 1817, 85 R.F.L. (6th) 415, Justice Coats considered a request for a vesting order dealing with costs alone.

[86] “She found that s. 100 of the Courts of Justice Act did not give the Court the power to make a vesting order to enforce costs awards.”

[87] In McLean v. Danicic (2009), 95 O.R. (3d) 570 (S.C.), Justice Harvison Young found that the Court had jurisdiction to grant a vesting order for the common law spouse for her claim to quantum meruit, compensatory support, general damages for intentional infliction of mental suffering and emotional distress and costs of $200,000. She found jurisdiction under s. 100 and relying on Lynch v. Segal (2006), 82 O.R. (3d) 641 (C.A.). The Court relied on s. 34(1)(c) of the Family Law Act as the Court stated that it can be read broadly to allow not only a vesting order as it pertains to support orders but also with respect to making vesting order to secure amounts for quantum meruit damages and costs.

[88] The difficulty with s. 34(1)(c) of the Family Law Act, however, is that its ambit is restricted to applications for support. While there is clear authority for orders vesting property in the payor spouse as security for the payment of support … it is less clear that s. 34(1)(c) may be read broadly enough to permit the making of a vesting order to secure amounts representing the value of contributions made by a cohabiting but unmarried spouse, as in the present case. However, in the circumstances of this case, s. 100 of the Courts of Justice Act can legally ground each of the vesting orders sought.” [my emphasis; citations omitted]

Analysis

[89] Given the husband’s lack of co-operation in previous Court orders and non-payment of support and costs, the Court will consider the enforceability of costs against the husband.

[90] However, the wife’s support claim in this case here was ordered pursuant to the Divorce Act. In its decision, the Court found that it did not have the power to order a vesting order with respect to securing spousal support. The Court relies on the same analysis to conclude that a vesting order cannot be granted under the Divorce Act for the payment of costs.

[91] Hence, the Court declines to make a vesting order.

Enforcement

Legal Principles

[92] Regarding enforcement through the FRO, s. 1(1) of the FRSAEA defines “support order” as follows:

support order” means a provision in an order made in or outside Ontario and enforceable in Ontario for the payment of money as support or maintenance, and includes a provision for,

(a) the payment of an amount periodically, whether annually or otherwise and whether for an indefinite or limited period, or until the happening of a specified event,

(b) a lump sum to be paid or held in trust,

(c) payment of support or maintenance in respect of a period before the date of the order,

(d) payment to an agency of an amount in reimbursement for a benefit or assistance provided to a party under a statute, including a benefit or assistance provided before the date of the order,

(e) payment of expenses in respect of a child’s prenatal care and birth,

(e.1) payment of expenses in respect of DNA testing to establish parentage,

(f) the irrevocable designation, by a spouse who has a policy of life insurance or an interest in a benefit plan, of the other spouse or a child as the beneficiary, or

(g) interest or the payment of legal fees or other expenses arising in relation to support or maintenance,

and includes such a provision in,

(h) a domestic contract that is enforceable under section 35 of the Family Law Act, or

(i) a notice of calculation that is enforceable under section 39 of the Family Law Act. (“ordonnance alimentaire”)

[93] In Hatcher v. Hatcher, 2009 CarswellOnt 4733 (S.C.), Justice Quinn dealt with the enforceability of support and costs award under the FRSAEA. The trial dealt with parenting, divorce and support. The wife was entitled to a $10,000 lump sum award. The husband did not pay it and made an assignment in bankruptcy. The motion to change regarding payment was disposed of by consent except for costs. The Court ordered the husband to pay costs in the amount of $55,000 and ruled that the costs were enforceable as child support. In ordering that the costs be enforceable through the FRO, the Court found the husband had ignored his disclosure obligations and showed bad faith. Justice Quinn commented that he thought the Court should determine what portion of the costs are applicable to the issue of support and order that amount only to be enforceable under the FRSAEA.

[94] At para. 35, he found that the issue of the husband’s income and failure to comply permeated the entire change motion and, therefore, this is not a case where it would be practicable to tease out from the evidence only those costs related to the issue of child support. In any event, the scandalous conduct of the husband makes it unjust to do so, even if it were arithmetically possible.

[95] Justice Quinn stated that without costs being enforced through FRO, the husband who claimed to be unemployed would not pay and “[t]hat would be a travesty of justice and make a mockery of the costs award” (at para. 36).

[96] In Sordi v. Sordi, 2011 ONCA 665, 13 R.F.L. (7th) 197, the Ontario Court of Appeal dealt with the issue of enforceability of costs awards through the FRO. The trial judge had dealt with custody of the child and child support and awarded costs in the amount of $254,500, with $10,000 designated as a support order.

[97] At paras. 25 to 27, the Court of Appeal stated:

[25] The Court has considerable discretion over how to deal with a request that legal costs be designated as support for the purposes of enforcement by FRO, a designation that is complicated when, as here, in addition to support, a number of other issues are litigated. In this case the trial judge approached the problem one way – he did his best to identify the portion of the trial consumed by the support dispute, assigned a cost amount to it and ordered that amount designated as support. He may have chosen not to attempt to perform what is admittedly a somewhat arbitrary dissection of costs. But he cannot be faulted for doing what he did. The statute and case law support an approach of this nature: see Hatcher v. Hatcher, [2009] W.D.F.L. 5320, at paras. 30-36 (Ont. S.C.)

[26] In terms of the appellant’s position, it is my view that there is nothing that warrants interference with the trial judge’s designation of $10,000 of the costs award as part of the child support order for enforcement purposes. In terms of the cross-appeal, to designate all of the costs of the appellant by cross-appeal as support for the purposes of FRO enforcement would not only be an uncalled for interference with the discretion of the trial judge but also may be considered unjust in the light of the resources expended in pursuing issues unrelated to support, such as the malicious prosecution claim.

[27] Finally, the trial judge ordered that all amounts owed by the appellant be secured and enforceable against not only the appellant personally, but also against his dental business. This was an order that made sense, particularly given the length of time over which the appellant will be paying the equalization amount (10 years with no interest). (Emphasis added)

Analysis

[98] Regarding enforcement by the Director of the Family Responsibility Office pursuant to subsection (g) of the definition of “support order” in section 1(1) of the FRSAEA, to the extent that the costs related to the pursuit of support, the Court can specify that a certain amount of the costs can be enforced by FRO.

[99] The Court estimates that half of the trial dealt with the determination of income, entitlement to support and mode of support. Therefore 50% of the costs will be enforceable through the FRO.

[100] Therefore, the amount of $32,500 will be enforceable pursuant to subsection (g) of the definition of “support order” in s. 1(1) of the FRSAEA.

Draft Divorce Order

[101] Counsel for the wife had written to the Court for directions as the husband, through his previous counsel, disagreed on the quantum of support arrears owing as reflected in the draft divorce order.

[102] The husband is now self-represented and has not responded to the draft order nor has he approved it as to form and content.

[103] The parties are to arrange a hearing before me to be set by the Trial Coordinator’s office for the purpose of determining the quantum of arrears (if any) owing from the previous Court orders and settling the draft divorce order.

Madam Justice A. Doyle Date: May 16, 2016