X v. Y, 2016 ONSC 5551

CITATION: X v. Y, 2016 ONSC 5551

COURT FILE NO.: 36539/14

DATE: 2016 09 02

AMENDED: 2016 10 18

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

X

Applicant

– and –

Y

Respondent

Martha McCarthy and Jenna Beaton for the Applicant

Brian Ludmer for the Respondent

HEARD: June 24, 2016

COSTS ENDORSEMENT

Trimble J.

BACKGROUND:

[1] The unwinding of this couple’s marriage was bitter – more so than most. It would end with an 13 day trial and Y losing custody of the couple’s three children, Y being denied access to her children until she participated in the Family Bridges Program (this lack of access continues), and the couple’s squandering the family’s economic security. The cost of this fight is well in excess of $1 million.

[2] In the middle stood three children under 14 years of age.

[3] Things started off on January 7, 2014 with X, the father, telling Y, the mother, that the marriage was over. Thus began their road to perdition.

[4] Y was shocked. She reacted emotionally. She was angry. She began to exclude X from the children’s lives, although the couple lived separately in the same house. She planned meals so that X would not be home. She took the children into her bed, where they spent their evenings and slept. She refused his requests to see a collaborative lawyer. She refused to speak to him about a separation or divorce. When the couple did speak, it was in a fight.

[5] A month later, in order to gain the upper hand, X had Y charged with assault and uttering threats. Her release conditions provided that Y maintain a distance from and have no contact with X and the matrimonial home. This devastated Y.

[6] X realized that this was a mistake. X left the matrimonial home, took an apartment nearby, let Y back into the home where the three children still lived, arranged to have the charges dropped, and agreed to an interim custody and access arrangement.

[7] Y’s arrest, however, turned the couple’s road to perdition into the autobahn.

[8] Y’s anger, while extreme, is understandable. The end of the marriage came at a time when Y’s mother had a recurrence of cancer. Shortly thereafter, Y, herself, had a hysterectomy due to the presence of pre-cancerous cells.

[9] How Y dealt with her anger, however, is not understandable. After Y returned to the family home to live with the children, she continued to exclude X from the children’s lives. She worked to undermine their faith and trust in their father as a parent. Some of her actions were subtle, most not. She openly blamed him for the end of the marriage. She involved the children (especially A, the eldest) in her dispute with X.

[10] Y’s campaign to alienate the three children was very successful. Within four months of X announcing his desire to end the marriage, A (the couple’s eldest child) wanted no contact with her father and B was beginning to be affected. In March, 2014, a section 30 Assessment was ordered, and was completed by September. Y was found to be an alienating parent. The couple agreed to implement Phase I of the section 30 Assessors’ recommendations to restore A’s relationship with her father. Phase I was contained in a consent order which gave custody to X, and equal time for both parents with the children. Phase I did not work. An updated Assessment was done. The Assessors found that notwithstanding significant therapeutic intervention with the family, A’s alienation had deepened and B and C were both showing signs of alienation. Y’s behaviour had not changed. Indeed, the Assessors determined that Y’s behaviours were worse than originally thought.

[11] X was not prepared to lose his relationship with his children. He persevered through A’s incredible behaviour, which Y openly encouraged. He persevered though Y’s incredible behaviour conducted in front of the children, including attacks on X’s family when they attended the children’s functions when X could not. Y’s attacks occurred at B’s baseball games, A’s swimming lessons, at the children’s school, and in the driveway of the family home. Neighbours and principals intervened.

[12] X reacted to these behaviours, sometimes inappropriately, for example in the driveway of the family home on 4 July, 2014.

THE ECONOMIC IMPACT:

[13] As indicated in my February 5, 2016 Reasons for Judgment, X earned a very high income. The family lived an opulent life style. They could afford to have Y stay home and raise their children. They drove luxury cars, travelled frequently, owned a home in a tony part of Oakville, and built a beautiful cottage in northeastern Ontario. All the while, the family saved and invested money. But for their separation, the family’s future would have been secure. Instead, it was squandered on this litigation.

[14] How was it squandered?

[15] The section 30 Assessment, and the pre-trial the therapy intended to mend X’s relationships with his children and to assist Y with changing her alienating behaviour cost $207,920.

[16] The Family Bridges program which I imposed, designed to repair the children’s relationship with X, to improve X and Y’s parenting abilities, and to assist the children to have healthy loving relationships with both parents, cost $84,303.32 as of June 23, 2016.

[17] X paid these expenses.

[18] Y refused to participate in the Family Bridges program. Instead, she sought assistance through a recognized alienation specialist, although not one who was part of the Family Bridges program. I do not know those costs, but given Y’s evidence in June, I expect the cost for her therapy exceeds $25,000. Y was ordered, again, to participate in the Family Bridges program. Assuming she has done so, Family Bridges’ fees have increased.

[19] The couple had a large line of credit at the time of separation which was secured against the home. It increased after separation by over $207,000. Interest on the line since separation is approximately $19,000.[^1] This interest expense continued because Y refused to sell the family home. X paid this expense.

[20] X has paid interim spousal and child support. In addition, he says he has spent well in excess of $500,000 on legal fees. His Financial Statement filed October 29, 2015 indicates that he borrowed $320,000 for legal fees, which does not include fees for the trial or the fees since trial. He swears in an affidavit that his net worth has been reduced from slightly over $1 million before separation, to approximately $55,000, as of June, 2016.

[21] Y’s financial position is less clear as she filed only one Financial Statement – filed with her Answer. In her questioning just before trial, Y said that she borrowed $227,704 from family members to pay for legal fees. X says that Y has $250,000 in RRSP’s and $25,000 in savings (as best he can surmise from disclosure Y made in the month before trial following Y’s questioning). I have no way of testing this as Y was not cross examined on the costs hearing. In September, 2015, Y’s then counsel asked for a trial retainer of $400,000. She did not pay it but chose to become self-represented to save legal fees.

[22] Approximately $632,623 remains in trust from the sale of the matrimonial home. The cottage remains in the parties’ joint possession. Its appraised value two years ago was $199,000.

[23] This case is a high conflict case, by any measure. The parties agreed on many property issues and past spousal support, but only on the eve of trial. This left future child and spousal support, access and custody, and specific property issues (the line of credit, cottage, and business losses) to be tried. The main issue, overwhelmingly, was child custody. It consumed 200 of 305 paragraphs of the Judgment. The trial consumed 12 days, including submissions. It would have consumed three times that much had Y and counsel for X not been focussed and efficient at trial. I complimented them at trial, and do so again, for their efficiency.

[24] Against this background, I am to decide who pays costs to whom and in what amount, and who pays what amounts toward the s. 30 Assessment fees, and the Family Bridges Program fees.

CLAIMS FOR COSTS:

X’s Position:

[25] X claims $785,809.80 from Y, broken down as follows:

a. $492,280.20 for costs of the Application, on a full recovery basis, which he says does not represent his full legal bill;

b. $41,007.14 for costs of motions heard on November 18 and 20, 2015;

c. $12,279.27 for X’s overpayment toward interest on the joint line of credit that X paid since September, 2014;

d. $155,939.87, representing 75% of the professional fees associated with the section 30 Assessments performed;

e. $84,303.32 for the Family Bridges program incurred to date;

f. An order that Y be responsible for future costs associated with Family Bridges.

a) The Costs of the Action of $492,280.20:

[26] X says that he is entitled to costs as he was successful on all but two issues at trial: the cottage and business expenses. Y, however, was completely unsuccessful.

[27] X says that he is entitled to costs on a full recovery basis of $495,000, giving several reasons for this position. First, he was the more successful party at trial. Second, he made an offer to settle on September 25, 2015, which was amended on November 10 with respect to financial issues. X says that in all but two aspects of the Offer, he was successful. Third, he says that Y acted in bad faith as used in Rule 24(8).

[28] Even if Y’s conduct does not amount to bad faith, X says that he is still entitled to costs on a substantial indemnity basis as Y’s conduct directly caused delay in the litigation, and increased X’s legal fees. At all times, said X, whether she was represented or unrepresented, Y took a scorched earth approach to the litigation. She did not make complete production. She filed only one financial statement so the court never had a true picture of her financial position. She agreed to nothing, except at the last minute, and only after X incurred significant legal costs on the issues to which Y eventually agreed. She delayed matters by not making decisions. At the risk of mixing metaphors, X said that Y, having lived by the sword in her approach to litigation should be prepared to die by the sword in costs.

b) Cost of Motions on November 18 and 20, 2015 of $41,007.14:

[29] In October, 2015, Y brought a motion to adjourn the trial because a) she had dismissed her lawyers and needed to get new ones, and b) she needed to retain and instruct an expert in alienation/justified estrangement. In his handwritten endorsement of October 15, 2015, Gibson, J. dismissed the motion. He awarded costs to X, to be assessed. On 15 January, 2016, he fixed those costs at $7,500.00.

[30] On 18 November, 2016, I, as the trial Judge, heard X’s motion for an order that the trial should continue.

[31] What happened between October 15 and November 18 to justify another motion to adjourn the trial? As indicated in my endorsement of 22 November, A, with Y’s encouragement and complicity, commenced an application in the Ontario Court if Justice for an order declaring that all the children were in need of protection. She sought an order staying the Superior Court Application pending resolution in the Ontario Court.

[32] The motion to adjourn the trial was adjourned to 20 November, 2015 to permit Y to respond and to bring a cross motion in which she sought an order that the Superior Court proceeding should be stayed to allow A’s proceeding in the Ontario Court to continue, an order that the children have “the opportunity to have their wishes and preferences considered as part of …” this trial, and an order for joint custody (notwithstanding Gray, J.’s earlier order that X have interim custody). In my reasons of 22 November, 2016, I allowed X’s motion and dismissed Y’s motion. I held that Y’s motion and the Ontario Court proceeding was Y’s tactic to delay the Superior Court proceeding. I said I would deal with the costs as part of the trial costs.

[33] Here too, X seeks costs on a full recovery basis based on a) Y’s bad faith conduct, b) the motion was a last minute motion requiring significant and urgent work, and c) it was an abuse of process.

c) Interest on the Joint Line of Credit of $12,279.27:

[34] This is Y’s share of interest charges on the line of credit between September, 2014 and February, 2016, based on the findings at trial regarding responsibility for withdrawing $207,000 from the line.

d) Section 30 Assessment Fees of $155,939.87:

[35] Pursuant to the consent 6 March 2014 Order of Gray, J., a section 30 Assessment was to be done. X was to pay the fees associated with that assessment until the Trial Judge reapportioned them. As it turns out, the cost of the section 30 Assessment (including trial attendance fees) is $207,920, in total.

[36] X says that fees for the section 30 Assessments are properly disbursements in litigation, to which X is entitled to recover on a 100% basis. He argues, however, that both his and Y’s conduct should be considered and the fees should be apportioned to “fault” for incurring them. X says that he and Y are both to blame for the need for the assessment. He says, however, that on a relative basis, Y is much more to blame. The section 30 Assessment fees ought to be shared between Y and him on a 25/75% basis, respectively.

e) Family Bridges’ fees, currently at $84,3034.32:

[37] X says that the costs of Family Bridges’ services, too, are disbursements, which he is entitled to recover on a 100% basis. As with other costs, Y’s conduct is relevant. Her conduct has been “despicable and contributed heavily to the excessive quantum of professional fees. Where the fees were required in order to address the effects of Y’s alienating A, and attempting to alienate B and C from X. She should be responsible, wholly, for the Family Bridges’ fees.

Y’s Position:

a) Costs of the Action:

[38] Y says that the parties should each absorb their own costs for the following reasons:

a. Success was divided. X’s claim for ownership of the cottage was dismissed. This was the most important issue to X and consumed the most time at trial next to custody and access. His claim against Y for 50% of certain corporate expenses was also dismissed.

b. Y cannot afford to pay costs. Her actual income is $25,000, and she pays child support based on imputed income of $40,000.

c. Y paid almost $34,000 to defend herself against the baseless criminal charges X levied against her. Her debt load because of the separation is over $250,000, mostly to family.

d. X’s costs are excessive and disproportionate. After Y became self-represented, and after the section 30 Assessment was completed, X considered that he had a “licence to litigate” because Y would have to pay costs.

e. X is responsible for the litigation. He brought baseless charges against Y solely to obtain an advantage in the custody and access dispute. This conduct is reprehensible. It had a traumatic effect on Y and the family. Y called the charges the event that set “the trajectory of the remaining demise of the family conflict”. X, having started the litigation ball rolling, perpetuated it by his unreasonable conduct.

f. Y, on the other hand, made the sensible economic decision to represent herself to save costs. X did not make that sensible decision. Y was faced with two lawyers for X.

g. Y’s refusal to accept X’s offers was reasonable. X’s “offers” were really ultimatums or demands for capitulation. They did not contain the requisite compromise which marks an offer to settle.

b) November 18 and 20 Motions:

[39] Each party should absorb their own costs as X was only partially successful.

[40] Further, Y is not the appropriate payer. Mr. Glass, solicitor for A, brought the motion, not Y. In any event, the costs of the hearings in the OCJ as they relate to A’s motion to declare the children in need of protection, are still unresolved. This aspect of the Superior Court costs should be adjourned until after the OCJ costs issues have been resolved.

c) Interest on the Joint Line of Credit of $12,279.27:

[41] Y concedes that she owes this amount (as of June 23, 2016).

d) Section 30 Assessment Fees:

[42] Y says that the parties should contribute to the section 30 Assessment fees proportional to income as recommended by section 30 Assessor Howard Hurwitz in his September 23, 2014 report, p. 145. Therefore, they should be shared 87/13% between X and Y, respectively. Alternately, they should be shared 50/50 as the parties participated or used these services, equally since separation.

[43] Y says that X overused the services provided, and therefore should pay the majority of the expense. Y, however, spent “many hours of coaching to parent the party’s [sic] daughter and her view of her father after he had her mother arrested.”

[44] At another point, Y says that she cannot afford to pay the costs requested and therefore should pay none of them.

e) Family Bridges Fees:

[45] Y says that she should pay none of Family Bridges’ fees. She did not select Family Bridges. Y said that there is a conflict in Family Bridges’ acting. X knew about the conflict but intentionally did not raise it at trial lest it result in Family Bridges being denied as the reintegration therapists. Subsequent to receiving Y’s submissions, I held that there is no conflict.

[46] In any event, X’s having Y arrested led to additional counselling which would not have been necessary, otherwise.

[47] Either at her actual income of $25,000 or her imputed income of $40,000, Y cannot afford to pay the disbursements claimed.

THE LAW:

[48] In addressing costs, I am directed by the following portions of Rule 24:

SUCCESSFUL PARTY PRESUMED ENTITLED TO COSTS

(1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal. O. Reg. 114/99, r. 24 (1). …

SUCCESSFUL PARTY WHO HAS BEHAVED UNREASONABLY

(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).

DIVIDED SUCCESS

(6) If success in a step in a case is divided, the court may apportion costs as appropriate. O. Reg. 114/99, r. 24 (6).

BAD FAITH

(8) 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. O. Reg. 114/99, r. 24 (8).

DECIDING COSTS

(10) Promptly after dealing with a step in the case, the court shall,

(a) make a decision on costs in relation to that step; or

(b) reserve the decision on costs for determination at a later stage in the case. O. Reg. 235/16, s. 4 (2).

FACTORS IN COSTS

(11) In setting the amount of costs, the court shall consider,

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

(b) the reasonableness or unreasonableness of each party’s behaviour in the case;

(c) the lawyer’s rates;

(d) the time properly spent on the case, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order;

(e) expenses properly paid or payable; and

(f) any other relevant matter. O. Reg. 114/99, r. 24 (11); O. Reg. 235/16, s. 4 (3).

[49] In addition, with respect to offers to settle, I must consider the following portions of Rule 18:

COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER

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

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

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

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

4. The offer is not accepted.

5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer. O. Reg. 114/99, r. 18 (14).

COSTS CONSEQUENCES — 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 subrule (14). O. Reg. 114/99, r. 18 (15).

COSTS — DISCRETION OF COURT

(16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply. O. Reg. 114/99, r. 18 (16).

[50] The most recent and thorough treatment of costs in a family matter in which alienation and custody are at issue is that of Pazaratz, J., in Jackson v. Mayerle, 2016 ONSC 1556, to whom I am indebted.

[51] The principles I must consider in awarding costs and setting quantum are[^2]:

a. The purpose of costs is to a) partially indemnify successful litigants for legal fees incurred, b) to encourage settlement, and c) to discourage, sanction and correct a litigant’s inappropriate behaviour (see Serra v Serra, 2009 ONCA 395).

b. Assessing costs is not a mechanical process (see Boucher v. Public Accountants Council for the Province of Ontario (2004) 2004 CanLII 14579 (ON CA), 71 O.R. (3rd) 291 (C.A.); Dingall v. Wolfe, 2010 ONSC 1044 (SCJ).

c. Costs should be in an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances of the case, not necessarily the actual costs incurred by the successful litigant (see Selznick v. Selsnick, 2013 ONCA 35; Serra, supra; Murray v. Murray (2005) CanLII 46626 (Ont. C.A.); Guertin v. Guertin, 2015 ONSC 5498 (SCJ).

d. The Trial Judge has broad discretion, although that discretion is curtailed by Rules 18 and 24 (see CAM v. DM, 2003 CANLII 18880 (Ont. C.A.) and Wilson v. Kovalev, 2016 ONSC 163).

DISCUSSION:

Who was “Successful” at trial - Rule 24(1) and (6)?

[52] X is entitled to costs from Y. While success was divided, the final result was more favourable to X’s position. When looking at the positions of the parties in their pleadings, X was wholly successful at trial on all issues of access and custody. He was predominantly successful on financial issues.

What Effect do Offers Have?

[53] X made an offer on 25 September, 2015. The offer contained four parts (custody and access, prospective support, property and past support, and additional terms) each of which was severable. It was amended on 10 November, 2016, with respect to property and retroactive support. X says that the result at trial was as favourable as or more favourable to him than his offer as it pertained to custody, access, mobility and support. Ergo, X claims costs on a substantial indemnity basis for those items. Assuming those items consumed 90% of trial time, X claims to be entitled to $391,365.62 for those substantial indemnity costs, per Rule 18(14)5.

[54] Y made an offer on 15 November, 2015, the terms of which were not as, or more favourable to Y than the judgment. This offer does not trigger Rule 18(14) cost consequences.

[55] I agree that X’s amended offer is the same as the decision on custody and access, which I have factored into my quantification of costs. Beyond that, I disagree that the trial judgment was as or more favourable than X’s Offer. The Offer, as amended, does not trigger Rule 18(14) cost consequences.

Factors Affecting Quantum – Importance and Complexity of Issues:

[56] The central issue of the trial was alienation by Y. The parties agree the issues were complex and of the utmost importance.

Factors Affecting Quantum – Bad Faith:

[57] Rule 24 and 18, in referring to “reasonableness”, refer to the reasonableness of the behaviour of each party, and of the of thequantum (see Jackson, supra at para. 20). Therefore, under Rule 24(11)b, I look at both parties’ conduct. X says that Y was acting in bad faith.

[58] First, I turn to bad faith.

[59] Bad faith requires a high level of bad behaviour (see Jackson, supra, para. 56). While any conduct that one party does not like is called “bad faith”, in fact, tt is rarely made out.

[60] In order to prove bad faith, one party must show that the other carried on with the intention of inflicting financial or emotional harm on the other, to conceal information relevant to the issues, or to deceive the other party or the Court. A misguided but genuine intent to achieve the ostensible goal of the activity, without proof of intent to harm, conceal or deceive is insufficient. Intent must be proved or inferred from the activity. The onus is on the person alleging bad faith. The intention to harm, conceal or deceive need not be the predominant intention, but must be a significant part of the party’s intent. Conduct may be in bad faith when it runs up costs so high that the party must have understood that his/her behaviour is causing financial harm without justification (see S.(C.) V. S.(c.), 2007 CanLII 20279 (Ont. S.C.), S.(C.) v. S.(M.), 2007 CarswellOnt 3485 (S.C.J.), and Piskor v. Piskor, 2004 CanLII 5023 (ON SC), [2004] O.J. No. 796 (S.C.J.); Jackson, supra).

[61] As Ricchetti, J. put it, “Full recovery of costs are only to be awarded on rare cases to punish a party for their conduct in the proceeding. Full recovery costs are even rarer than substantial indemnity cost, which themselves are rare. Partial indemnity costs are the norm unless there is good reasons to award a higher level of costs (see Blank v. Micallef, 2009 CanLII 60668 (ON SC), 2009 CarswellOnt 6790 (S.C.J.) at para. 19).

[62] A party may have acted in bad faith but only certain at times, and in certain aspects of the litigation. How does the Court deal with this?

[63] This does not entitle the other party to full recovery of costs on all aspects of the litigation. The Court still retains discretion. Individual findings of bad faith allow the Court to award full recovery costs on in respect of the instances of bad faith. As to the costs for the proceeding as a whole, the individual instances of bad faith are considered under the party’s conduct under Rule 24(11). They do not entitle full recovery on the whole of the litigation. Reasonableness and fairness still apply (see S.(C.) v. S.(M.), supra, at para 21 - 24; MacDonald v. Magal, 2003 CanLII 18880, 67 O.R. (3rd) 181 (C,A.); Guerten v. Guertin, 2015 ONSC 5498; Goryn v. Neisner, 2015 ONCJ 318); Greenberg v Greenberg, 2010 ONSC 792).

[64] X says Y acted in bad faith. He bears the onus of proving the requisite intent.

[65] X devotes 7 pages of his written submissions outlining instances where or circumstances in which Y acted in an unreasonable manner, and which X says amounts to bad faith. He devotes 3 pages to outlining 33 instances in which I found (explicitly or inferentially) that Y lied, manipulated the truth, displayed alienating behaviour, abused the litigation process, ignored her obligations in litigation.

[66] In my Reasons for Judgment, I remarked on the following instances concerning Y, which have the requisite intent for bad faith, and which I have considered in this award of costs:

a. Para. 100(5) – Y told others that she was arrested in front of her children, when two were in the house and Y refused to send the third in the house when police requested she do so.

b. Para. 100(6) – Y told others she was denied seeing the children for two weeks following her arrest, when she saw them during that time.

c. Para. 100(8) – Y told the Court that she never recorded X and then admitted that she did on many occasions.

d. Para. 102 – Y, knowing that she did not have any custodial rights, had the children interviewed by Ms. Gottlib-Case, and encouraged and facilitated A in finding and retaining counsel to bring the OCJ proceedings discussed elsewhere.

e. Para. 115 – Y blocked X’s family’s contacts on the children’s cell phones.

f. Para. 156 – Y told assessors and A that X had abandoned her and take the other two children on a vacation, when he had invited A, but A refused to go.

g. Para. 174 – Y told others, including the Assessors, that X had kidnapped the family dog, when she had asked him to care for the dog while she and the children took a 5 day vacation.

[67] I cannot say that Y acted with the intent required for bad faith, with respect to the other instances. As I held in my Reasons for Judgment, Y acts emotionally, acts and speaks impulsively, and her evidence was often incorrect, hyperbolic and unreliable. As I said at paragraph 101, whether any one of Y’s acts are intentional is difficult to tell, but in their totality, all cannot be dismissed as unintentional.

[68] X has failed to meet his onus to establish that Y acted with the requisite intent for bad faith, for other than the seven instances, above.

Factors Affecting Quantum – Reasonableness of Conduct:

[69] Both parties acted unreasonably, but not equally so.

[70] X acted unreasonably in having Y arrested. I found that this was a cynical, callous attempt to gain an advantage in the custody/access dispute. X’s conduct in this litigation was reasonable, otherwise. The charges set in motion the sequence of events that would follow. In my view, however, the sequence of events that followed X’s announcement he wanted to end the marriage would have followed without the arrest, although at a less intense level. With the exception of grabbing B’s arm and engaging in a tug of war with Y on 4 July, 2014, using B as the rope, X’s behaviour was, overall, reasonable.

[71] Y’s conduct, overall, was not reasonable. Setting aside the instances of bad faith that I have found, Y’s conduct in the litigation was one of scorched earth. Y cannot say that her conduct was the result of her status as an uninformed litigant. She was represented from the outset until September 2015. Whether Y was represented by counsel, or self-represented, she did not make disclosure as required. She did not file updated financial statements as required. She did not file an NFP statement, as required. While she did agree to many things, she waited until the eleventh hour to do so. Aside from making one offer, Y refused to discuss financial matters.

[72] With respect to the children, Y’s conduct was unreasonable. I have dealt with this extensively in my Reasons for Judgment and elsewhere in this endorsement.

[73] Y’s unreasonable conduct did not end with the trial. On February 5, 2016, I delivered my Reasons to the parties, in writing, and described certain key aspects, orally. I had asked that the children be present. They were not. Y did not feel it was in their best interests to be there. The children were brought in on my order.

[74] I met with the parents and the children (and a court reporter) in Motion Room A in the Milton Courthouse to tell the children about the new custody arrangements and the Family Bridges program. The family was upset, especially the children. As I described the new custody arrangements and Family Bridges program, the children became increasingly upset. Y held A and stroked her hair. X held the other two children. First A, and later C attempted to leave the room. I asked them to sit down until I was done speaking. Each resumed her seat, but only when I demanded that they do so. Each complied, although not without some hesitation. Throughout this time, X spoke to the children and tried to calm them. He reassured them. He asked them to sit down. Y said nothing. She did not try to calm the children. She did not ask A and then C to return to their seats.

[75] I allowed the family 20 minutes together after I spoke to them, but advised them that the children would go with X’s family as I wanted to speak to the parents again. Over the next two hours, two instances occurred which required my intervention.

[76] First, I stationed police officers at either end of the corridor leading to Motion Room A. I was concerned that one or more of the children might try to run away on hearing my decision. The police were there to prevent the children from doing anything that might cause them harm, such as running out of the building onto Steeles Avenue. On seeing the police, and in front of the children, Y accused X have trying to have her arrested again. I sent the parents back in to Motion Room A to tell the children that I stationed the police in the hall for their protection. I advised the parents that if they did not deliver this message, I would. The parents decided to be the messengers.

[77] Second, while X and Y were delivering the above message, A became upset and wanted to call Mr. Glass, whom she described as “her lawyer”. Y gave A Y’s cell phone to make the call.

[78] The effect of Y’s unreasonable behaviour has been to increase X’s litigation expenses.

[79] Pazaratz, J. was prophetic in Jackson, at paragraphs 113 to 115, when he said “All of this could have been avoided. All of this should have been avoided.”

Factors Affecting Quantum – Time Spent on the Action:

[80] I accept that X acted unreasonably in having Y arrested. Some of her actions may be seen as reacting to that event. Her actions, overall cannot be excused by her arrest. During the time she was represented, there is no excuse for not meeting her Rule requirements. None. This fact alone delayed the smooth and expeditious movement of the case.

[81] While Y did agree to resolve certain issues before trial, she only agreed in the two weeks before trial. X was put the expense of preparing for trial on these issues. For example:

a. She would not agree on past or future support, but would not make production that permitted this issue to be assessed by X.

b. Y would not agree to sell the house, the family’s main asset. She did not have it appraised. Presumably she wanted to remain in the house. Interst on the line of credit continued, as did the mortgage payments on the house.

c. Y would not agree to appraise the cottage. X had to do it. Y did not agree to the appraised value notwithstanding X’s appraiser was the only expert to give an opinion. She only agreed that the appraisal was correct after she cross examined the expert.

d. Y changed her position on the cottage. Originally, she wanted it sold. When X would not agree to sell it, preferring to buy Y’s interest, Y changed her position. She wanted it. She admitted that this was a pure “tit for tat” measure.

e. She only agreed to Phase I of the section 130 Assessors’ recommendations two days before the deadline, then delayed in appointing the recommended parent coordinator.

f. Y attempted to delay the trial, twice.

[82] Counsel for Y submitted that with respect to matters agreed to before trial, those matters cannot be subject to a costs award. Counsel submitted that this would have a chilling effect on litigants settling matters before trial.

[83] I disagree. Y is entitled to her day in court. She is entitled to agree to nothing. She is entitled to agree to matters only at the last minute. She is not entitled to do so this with impunity. Her argument would have more force had she made timely disclosure, followed the Rules and reached agreements in a reasonable time on those issues capable of agreement. Her failure to make disclosure and follow the Rules meant that decisions could not be made with respect to property and support issues (had Y been willing to make them), in any timely way. X was forced to prepare for these as trial issues.

[84] This case was about custody and access. Except for two financial issues (the cottage and imputing income to Y for support purposes) all issues were either settled and or capable of being settled well in advance of trial. This would have allowed the parties to prepare for trial in a more focussed and efficient way.

Factors Affecting Quantum – Proportionality:

[85] Costs to be paid by one party must be reasonable for the paying party to pay, and proportional to the monetary and non-monetary issues in the litigation (see Pagnotta v. Brown, [2002] O.J. No. 3033 and Gale v. Gale, (2006) CarwswellOnt, 6328).

[86] What is reasonable for the losing party to pay in costs? Often the expectation of the losing party is measured by the losing party’s own legal bill. That has not been provided.

[87] How do I devine Y’s expectation as to the legal costs she incurred, or would have incurred, had she had counsel throughout the trial?

[88] Y said that she cashed in her RRSP’s and borrowed approximately $227,000 from family to conduct this action. We do not know what she took from her RRSP. I accept that she borrowed $227,000 for legal fees.

[89] Y says that in September, 2015, her lawyers, Thomson Rogers, demanded a $400,000 retainer for trial. Given what Y spent and the retainer requested, the costs that X demands should not shock her. They are well within the range of the fees that she would have paid had she not dismissed her lawyers.

[90] Two other principles of proportionality apply. First, proportionality should not reduce costs where the unsuccessful party has forced a long and expensive trial on the other party (Murphy v. Murphy, 2010 ONSC 6204; Philippe v Bertrand, 2015 ONSC 2449, and Jackson, supra.). Second, where the unsuccessful party has forced a long trial, that does not provide a ‘licence to litigate’ to the other party. While fees may be higher because of the unsuccessful party’s conduct, fees must still be reasonable (Sepiashvili v. Sepiashvili, 2001 CanLII 25708 (ON SC), 2001 CarswellOnt 3459, additional reasons to 2001 CarswellOnt 3316 (SCJ). Costs that are grossly excessive, nor fair, and not reasonable will not be ordered (Murray v Murray, supra, at para.s 2, 6-7, 9, 11). Rates must also be reasonable.

Factors Affecting Quantum – Lawyer’s time and Rates:

[91] Y says that X should have had one lawyer, not two, and that the time spent by those lawyers was ridiculous. X’s lawyers looked at this file as a ‘licence to litigate’. X should have made the sensible decision, as she did, to self-represent. I reject this argument.

[92] As indicated, above, most of the time X’s counsel spent on the file was driven by Y’s approach to litigation.

[93] As to rates, full recovery costs are assessed at the full rate for the solicitor, assuming they are reasonable. The assessment of a lawyer’s reasonable rates for costs is not a comment on the economic arrangement between a client and a lawyer. Rather, the rates set should be fair and reasonable as full recovery rates for the paying party to pay. Substantial indemnity rates are usually 85% of the solicitor’s regular rates, and partial indemnity rates are usually 60%, approximately.

[94] Ms. McCarthy’s and Ms Beaton’s hourly rates of $725 and $275, respectively. No one provided guidance on what appropriate hourly rates are for a full recovery rate. I take no issue with Ms Beaton’s hourly rate. I have concerns about Ms McCarthy’s.

[95] How do I assess Ms McCarthy’s full recovery rate for this proceeding?

[96] I begin with the July 1, 2005 fee guidelines contained in the “Information for the Profession” that was issued following abolition of the costs grid. That bulletin set the partial indemnity rate for senior counsel at $350. This should be grossed up for inflation and to 100% from 60%. These are only guidelines, however.

[97] Second, I note that Ms McCarthy is a senior family litigation lawyer in Toronto. In Toronto, senior family counsel rates on a substantial recovery basis have been set as high as $615[^3] where actual rates charged to the client were $820. This proceeding, however, was brought in Halton. Senior family counsel rates in Halton have been assessed in a bad faith claim on a full recovery basis, most recently, at $550[^4].

[98] Third, this case involved very serious allegations of alienation, which I found to be substantiated. On this issue Y conceded no ground. Given the issues, the timing of the Ontario Court Application, the skill and efficiency with which the trial was conducted and Ms McCarthy’s skill and seniority, I allow Ms McCarthy’s full recovery/substantial/partial indemnity rates at $675/$550 and $475, respectively. I allow Ms Beaton’s rates at $275/$250/$200, respectively

DISPOSITION:

[99] As indicated at the outset of this costs endorsement, fixing costs is not an exact science. It is not the Court’s job to perform an accounting exercise. Rather, the Court must set costs that are reasonable for the losing party to pay, reasonable to indemnify the successful party, and proportional when applying the principles as I have set out above. In the following paragraphs, I have set out my decision with respect to each of the costs headings X has claimed.

a) Costs of the Action:

[100] X is entitled to costs of the action. I do not award full indemnity costs throughout either because of the offer X made, or because of Y’s bad faith. I have adjusted my award for the seven instances of bad faith I found, above.

[101] The real question is whether X recovers costs on a substantial or partial indemnity basis.

[102] For the reasons set out above, Y is to pay X costs of the proceeding on a substantial indemnity basis, fixed as below. I have factored into this calculation full recovery fees for those items on which I found that X acted in bad faith. For Trial, I have set a substantial indemnity per diem rate for both counsel of $9600, reflecting 12 hours per day. The trial lasted 10 days. There was one day of submissions concerning the evidence, then two days of submissions in June, 2016. There was ½ day to settle the order. The total is 13.5 days spent on trial. The reasonable, proportional costs of the Application that Y must pay to X are:

a. Fees: $325,000.00

b. HST on Fees: 42,250.00

c. Disbursements (incl. HST): $ 13,476.60

Total Application Costs: $380,726.60

b) Costs of the November 18 and 20, 2015 Motions:

[103] This motion is a perfect example of the rancour that the parties had for each other, and the level of determination Y had to exclude X from the children’s lives.

[104] While my endorsement of 22 November speaks for itself, I provide a synopsis of it, as background to the costs analysis.

[105] On November 10, 2015, A, the parties’ 13 year old daughter brought a motion in the Ontario Court of Justice seeking an order that the children were in need of protection from the emotional harm inflicted on them by their parents’ divorce proceedings. A purported to speak on behalf of all the children. She retained Lorne Glass as counsel, who also appeared before me on November 18.

[106] A’s motion does not exist in isolation. On October 15, Gibson, J. denied Y’s motion to adjourn the trial. Y sought the adjournment as she had dismissed her lawyers and wanted to retain new counsel, wanted to consider the Hurwitz section 30 Assessment report, and wanted to retain and instruct her own alienation expert. Gibson, J. denied the request, holding that the best interests of the children required the trial to go ahead in the November, 2015 sittings, as planned.

[107] At a Trial Management Conference on October 27, Coats, J. ordered the matter to proceed on the November sittings for 10 days. I presume this was ordered as Y raised the adjournment, again.

[108] In light of this background, and having been served with A’s Application in the Ontario Court, X brought an emergency motion returnable November 18, seeking an order that the Superior Court proceeding go ahead in the November trial sittings and that A’s Ontario Court Application be stayed. X’s motion was adjourned to November 20 to permit Y to respond. Y responded and brought a cross motion for custody, staying the Superior Court proceeding, and that the ‘children’s voices be heard’.

[109] I granted X’s motion that the Superior Court matter should not be stayed. I declined to interfere with the Ontario Court Application, leaving that to the Ontario Court to decide those matters before it. I dismissed Y’s motion. In doing so, I rejected Y’s position and her evidence. Based on the material before me, I held that the Ontario Court Application was a delay tactic and an abuse of process, begun to effect the stay of the Superior Court proceeding.

[110] Y argued at that motion that aside from taking A to see Mr. Glass at his office a couple of times, and paying his fee, she had nothing to do with the Ontario Court Application. I rejected this, entirely. I said at paragraph 49 c, page 6 to 7 of my Reasons for Judgment:

In any event, I do not accept the Mother’s position with respect to her own actions. She attempts, by limiting her role, to limit her responsibility as well. She took [A] to her meetings with Mr. Glass. She paid his fee. She provided him with certain assessment reports and court orders. At minimum, she must have appreciated that whatever [A] was doing with Mr. Glass would advance the Mother’s position in the SCJ proceedings. This explains why she did not speak to the Father before assisting [A] in seeing Mr. Glass. She did not insist that [A] speak to her father. She did not refuse to assist [A]. She said in her questioning that she wanted [A] to have a voice, and if she wanted one she should have one. Yet she said that she did not know where the meeting between [A] and Mr. Glass would lead. I reject this. By, by taking [A] to visit Mr. Glass and paying the fee, she facilitated and encouraged [A] in ultimately bringing the OCJ application.

[111] If I accepted (which I do not) that Y had nothing to do with planting the seed with A that she should start the Ontario Court proceeding or finding and retaining Mr. Glass, Y aided, encouraged and facilitated A at all steps. She did this with full knowledge that interim custody was with X, and that she acted without colour of right. I comment that Mr. Glass, a senior and experienced family law lawyer, must have known that X had interim custody of the children and that Y had no authority to act as she did. He must have known that A was acting without X’s knowledge. If he did not know all of this at the outset of his involvement, he certainly did after the Ontario Court Application was served on November 10.

[112] When a judge decides a motion, she or he decides it on the basis of the material filed on the motion. The Judge acts in a vacuum, unaware of what has gone on before or around the motion. Having conducted the trial, however, I now have the benefit of the ability to put the events surrounding the November 18 and 20 motion into the context of the overall litigation and the relationship of the parties.

[113] It is clear, in context, that the Ontario Court Application was another manner by which Y was determined to wage war on X. Part of the alienation process involves the alienating parent turning the alienated child into an ally in the war with the alienated parent. The Ontario Court Application illustrates how successfully Y had alienated A from her father. It also indicates that Y intended to open a new battle front with X, through her proxy, A. Y likely put the idea into A’s head of commencing her own proceeding assisted her to locate and retain Mr. Glass. Y then aided, encouraged and facilitated A in her mission.

[114] The most galling aspect of this is that Y then told the Court that she had nothing to do with it, except taking A to the appointments and paying the fee.

[115] By setting up A as her proxy in this second battle front, was Y betting that the Ontario Court would not impose a sanction for unreasonable behaviour (such as costs), on A, a child? Was she betting that X would not seek a costs sanction against A for the Ontario Court Application? Was she prepared to let A suffer any sanction imposed by the Ontario Court for this unsuccessful Application?

[116] Y presented no evidence on this. I am left to speculate. I held in my February 5, 2016 Judgment that Y acts and reacts emotionally. Whether Y considered the repercussions of the Ontario Court Application on the children (especially A) or whether her actions were by intent or inadvertence, it is clear that she caused and encouraged actions that were harmful to the children, furthered A’s alienation from X, and furthered the inevitable alienation of B and C from X.

[117] Applying Rule 24, I award costs of these motions to X. I do so separately from costs of the action for two reasons: a) Rule 24(10) requires that I assess costs at each step, and b) Y’s actions on the motion desire particular sanction.

[118] I award costs of the 18 and 20 November motion to X, on a full recovery basis. In doing so I have considered all relevant factors including those set out in Rule 24(11). I wish to concentrate on two: importance of the issue and Y’s conduct.

[119] X’s and Y’s motion addressed, indirectly and directly (respectively), the custody, access and well-being of the children, the central issue of this Application. X’s motion to forestall an adjournment was based on the view that the best interests of the children needed to be addressed by a trial as soon as possible at a trial in the Superior Court Action. Y’s opposition to X’s motion, her cross motion in the Superior Court, and the Ontario Court Application were Y’s attempt at avoiding a trial and maintaining a status quo largely of her own design, which had alienated A from X, and would have alienated the other two children, in time.

[120] It was a complex motion. The timing required intense work. X’s motion was a pre-emptive strike to prevent Y from requesting a stay of the Superior Court proceeding pending the Ontario Court Application. As a corollary, it raised staying the Ontario Court Application. Y’s cross motion put squarely before the Superior Court A’s and Y’s motivation and action in the Ontario Court Application. The issues as raised addressed not only custody and access (a matter already the subject of a consent order giving interim custody to X), but also the jurisdiction of the Superior and the Ontario Courts to stay a proceeding in the other. X’s motion was assembled and served in approximately 7 days. X’s response to Y’s motion was assembled overnight.

[121] Most important in my consideration is Y’s conduct, some of which I reviewed in my 22 November, 2015 endorsement, some of which I reviewed above. I held that the Ontario Court Application was an abuse of process[^5].

[122] What level of costs is required? McGee, J. held that where a proceeding is an abuse of process, there is no need to find bad faith under Rule 24(8). Costs should be assessed on a full indemnity basis (see: Buttarazzi v. Buttarazzi, 2009 CarswellOnt 8799 (S.C.J.).

[123] I agree. When a party brings a proceeding for an improper purpose, he or she must feel the sting of costs in the full measure, in part to punish the improper use of the Court’s process, in part as a warning to others.

[124] What is the amount of costs? X seeks costs of $41,007.15 on a full recovery basis.

[125] In assessing the quantum of the costs Y must pay for the 18 and 20 November motion, I am mindful of my finding of an abuse of process. Therefore, any doubts or questions I have concerning the bill of costs presented for those days, I resolve in favour of X.

[126] Full recovery costs are intended to fully indemnify the receiving party for his or her legal fees incurred in the proceeding. Proportionality and what is ‘reasonable’ for the paying party to pay, are much less important than they would be in an assessment of costs on a partial or substantial indemnity assessment. Full recovery costs are intended to be a sanction for conduct, but not punitive. Still, the time claimed and the rates of counsel must be reasonable. An award of full recovery costs is not intended to be a “licence to litigate” or to make the paying party pay for excess or unnecessary work.

[127] In this case, X’s counsel say that they have separated from their claim for costs any time relating to the Ontario Court Application. Y says that they have not. Separating work done on one file that benefits the client on a related matter, is a difficult task, more so in this case given how intertwined the issues are between the proceedings in the two Courts. I accept X’s lawyer’s submissions that they have parsed the time carefully, knowing that such a parsing must be imperfect.

[128] I have allowed rates at the full recovery rates discussed above.

[129] I take issue only with one aspect of the time claimed. Ms. McCarthy spent 21 hours preparing for the motions, and Ms. Beaton, 14 hours. The preparation time is not itemized between drafting material, reviewing them with X, revising them, discussing them between the junior and the senior lawyers, preparing the final versions, having them executed and commissioned, served and filed. Were the detail provided as indicated, assessing the amount of duplication or unnecessary work would be relatively easy. However, as indicated above, I err in favour of X where I have doubt. Ms McCarthy argued the motions on behalf of her client. Ms Beaton was present. I have no doubt that Ms Beaton did most of the leg work for the motions, under Ms McCarthy’s direction. This is the lot of a junior lawyer. Ms Beaton’s attendance at the motions, therefore, was necessary to provide Ms McCarthy with details required. Since Ms Beaton either did or should have done most of the preliminary work in preparation, I reduce Ms McCarthy’s preparation time to 14 hours from 21.

[130] Allowing for a modest reduction for duplication, I fix the reasonable full recovery rate for the costs for the motion as follows:

Fees: $28,000.00

HST on Fees: $ 3,640.00

Disb. (incl. HST) $ 245.21

Total: $32,085.21

c) Interest on the Line of Credit:

[131] At trial I fixed the responsibility for the capital amounts taken from the line of credit and ordered that interest should be apportioned in the same manner. I could not determine the amount of interest paid, and asked for more evidence. The parties have agreed that Y should pay X the sum of $12,279.27 for her share of the interest on the line of credit since September, 2014.

d) Section 30 Assessment Fees:

[132] On 6 March, 2014, Gray, J. issued a consent order that a parenting an assessment be done under section 30 of the Children’s Law Reform Act, to assess the children’s needs and the parties’ ability to meet those needs. X was ordered to pay for the costs of the Assessment, subject to reapportioning the costs after the trial.

[133] The fees related to the section 30 Assessment totalled $207,920, broken down as follows:

Hurwitz Fees for 2014 Assessment: $52,723.48

Hurwitz Fees for 2015 Assessment: $37,485.81

Michelle Hayes (Parental Coordinator) $67,427.78

Lourdes Giraldo $34,945.25

Olga Henderson $ 6,800.00

Total: $199,382.32

[134] The difference between the total above and $207,920 appears to be trial time for Mr. Hurwitz. If there are other expenses from Mr. Hurwitz, Ms Hayes, Ms Geraldo or Ms Henderson related to their reports, their services regarding the section 30 Assessment or their trial attendance, those should be shared according to this section of my costs decision.

[135] Neither party took issue with the total of $207,920, or that the work done and fees charged by the assessors and experts was unreasonable. The parties disagree over who caused these fees to reach these remarkable amounts.

[136] At trial, X took the position that these expenses should be shared according to fault, which he submitted was 25/75% in his favour. He seeks $155,939.87 from Y.

[137] Y says that the section 30 Assessors’ fees should be shared proportional to income or 87/13% in her favour. Therefore she says she should pay X $27,296. At trial I was given no authority by either party concerning any principled approach on how the Assessors’ fees should be apportioned, and invited further submissions.

[138] In their further submissions the parties took largely the same position they took at trial. X added that the section 30 Assessment fees are litigation disbursements like any other, and that X had a right to collect them from Y. He conceded, however, that his conduct had to be considered. He reiterated his claim for 75% recovery from Y.

[139] Y reiterated her position that the section 30 Assessment fees should be split according to income, as Howard Hurwitz recommended. As I said in paragraph 290 of my 5 February Reasons for Judgment, this is not an accurate representation of what Mr. Hurwitz recommended. Alternately, Y says that since the section 30 Assessment was for the good of the whole family, the parents should share the cost equally. However, Y says that she cannot afford to pay any of the costs.

[140] How do I apportion the section 30 Assessment fees?

[141] With respect to the fees of a section 30 Assessment, section 30 provides:

Fees and expenses

(12) The court shall require the parties to pay the fees and expenses of the person appointed under subsection (1). R.S.O. 1990, c. C.12, s. 30 (12).

Idem, proportions or amounts

(13) The court shall specify in the order the proportions or amounts of the fees and expenses that the court requires each party to pay. R.S.O. 1990, c. C.12, s. 30 (13).

Idem, serious financial hardship

(14) The court may relieve a party from responsibility for payment of any of the fees and expenses of the person appointed under subsection (1) where the court is satisfied that payment would cause serious financial hardship to the party. R.S.O. 1990, c. C.12, s. 30 (14).

[142] I asked the parties to re-attend and provide me with their submissions as to the principled approach I should take to apportioning section 30 Assessors fees. Were they like any other disbursement, such that the victor is presumed entitled to recover the whole of the amount provided it was reasonable?[^6] If that were the Legislature’s intention, would the Legislature not have said so? The Legislature did not say that section 30 assessors’ fees were to be treated like any other disbursement. Does this mean that they should be treated in some other way, for example divided on a fault based analysis?

[143] Case law dealing with apportionment of section 30 Assessment fees is sparse: two decisions from Alberta and two in Ontario. Such case law favours treating these expenses as litigation expenses, although it is not clear.

[144] In Alberta, the equivalent of Ontario’s s. 30 of the Children’s’ Law Reform Act is found in Practice Direction 7. It says with respect to payment for the assessment:

Each Order for an Intervention or an Assessment must address funding, time lines for funding, and each parent’s responsibility for that funding. Before ordering an Assessment or an Intervention, the Court must determine the ability of the parties to pay. If the parties cannot pay and subsidies are not available then an Intervention or an Assessment must not be ordered.

[145] In Chouinard v. Skippen, 2013 ABQB 465 (Q.B.), at para. 16, Ross, J. held that the payment provision of Practice Direction 7 addressed only interim funding of the assessment so that the assessment process is not frustrated by one side’s lack of means to pay for it. It did not address ultimate responsibility for payment of the assessment fees. The learned Judge said that ultimately liability for the cost of the assessment is to be determined by the principles applicable to litigation costs. Under Alberta Rule 10.33, the degree of success of either party is relevant to costs.

[146] In W.(L.D.) v M.(K.D.) 2011 ABQB 1032 (Q.B.), each party said that the other should pay the whole of the assessment cost, as the need for the assessment was entirely the other’s fault. Jeffrey, J., without any analysis, said it was common that assessment fees would be paid according to the parties’ income, or split equally. He considered the parties’ conduct and apportioned the assessment fees unequally, but only slightly so.

[147] In Ontario, L.(J.K.) v. S.(N.C.), 2009 CarswellOnt 1017 (S.C.J.), did not deal directly with a section 30 Assessment under the CLRA. By analogy, however, it is instructive.

[148] The father had alienated the son from his mother. The Court made an interim order that the mother could take the son to the U.S. to participate in a therapeutic process[^7]. The father was ordered to undergo a similar process with the son, in Canada, but did not do so. The issue Turnbull, J. addressed was whether the father should pay part or all of the expense of the U.S. therapeutic program. The mother wanted it treated as a regular litigation expert’s expense, paid by the father, in full, as the putative “loser”. The father took the position that the fees of the expert were s. 7 extraordinary expenses since the son was being treated. It should be shared pro rata to income.

[149] Turnbull, J. turned to Rule 24(12) which gives the Court the power to order one party to pay the expense of another in the litigation. The learned Judge noted that Rule 24(12) usually is used where, due to a party’s financial position, the court is asked to make an interim order that the other party pay all or a portion of the requesting party’s expenses so that the litigation may continue. He held that the Rule was not limited to this effect. The Rule allows the court to exercise its discretion in costs as a whole, in cases where the equities demand it. Turnbull J. found that the therapeutic program was necessary because of the father’s conduct. He rejected the s. 7 analogy, saying:

To accede to his submission would reward him for his irresponsible behaviour in alienating his son from his mother. It would punish the mother for resorting to the law to try to correct a situation which was clearly not in the best interests of the child. That is not the spirit of the Family Law Rules nor is it the guiding principle underlining the apportionment under section 7 of the Child Support Guidelines. … Where expenses are incurred because of the irresponsible conduct of one of the parents, the courts clearly have a discretion to vary from the “guiding principle” of proportional financial responsibility to one which reflects the equities of the case.”

[150] By analogy, while section 30 Assessments are litigation expenses, they deserve treatment under Rule 24(12), not under other sections of Rule 24.

[151] In Cozzi v. Smith, 2015 CarswellOnt 8574, it appears that each of the parties were ordered to pay part of that assessment cost. At the end of the case, the wife sought reimbursement for her share of the expense, as the assessor had recommended in her favour. McDermot, J. said that the result at trial is what drove the decision as to who paid for the section 30 assessors’ fees since “The cost of the assessment is a disbursement like any other to be awarded as part of the costs at trial.”

[152] With respect to these various basis for ordering payment of a section 30 Assessor’s fees, I find Turnbull, J.’s analysis most compelling. Assessors’ fees are properly a question of costs. Apportioning them under Rule 24(12) permits the Court to make an order that is fair and reasonable to the parties.

[153] What factors or considerations must I apply to apportioning section 30 assessors’ expenses under Rule 24(12)? I consider the following factors or considerations relevant to apportioning assessors fees under section 30 (13) and (14) of the CLRA:

a. Weigh the Factors enumerated in R. 24(11). This includes the conduct of the parties in creating the need for the assessment. It would also include the conduct of the parties following the release of the assessor’s report.

b. Is there bad faith under R. 24(8)?

c. Is there serious financial hardship under s. 10(14)? I consider serious financial hardship to mean that the person being asked to contribute is impecunious or his or her ability to care for children might be seriously impaired.

d. Was the order appointing the assessor made on consent, or contested, and if the latter, contested by the person being asked to contribute?

e. What was the custody and access decision at trial?

f. That were the opinions and recommendations of the assessor, and how did they influence the final decision?

g. Did the person being asked to pay part or all of the Assessors’ fees challenge the Assessor’s opinion and recommendations?

[154] I now address these factors.

[155] The Order providing for the section 30 Assessment was made on consent. The parties must have thought that the family needed this assessment and that both parties would benefit by it. The section 30 Assessors’ report was the only expert evidence put before the court. I imposed Phase II of the report, the parties having consented to implement Phase 1 of that report albeit successfully. I could not have made my decision without the Assessors’ report. It was of the utmost importance and influence.

[156] The first section 30 Assessment Report identified Y as an alienating parent. It said that Y will not allow the children to develop a relationship with X. Her parenting is intrusive. She is over protective. Her parenting is unhealthy, in its current form. She openly interferes with X’s relatives when they are looking after the children. She cannot separate from the children. A change of residence was in order.

[157] The parties agreed to abide by Phase I of the assessors’ report. By the New Year 2015, X was convinced Phase I was not working and began to insist on Phase II. It was decided that an intensive weekend of therapy was in order, which was held in February, 2015. When that failed, X pressed for implementation of Phase II, again. He brought a motion to that effect. Assessor Hurwitz recommended doing an updated report before moving to Phase II. X agreed and withdrew his motion.

[158] In the updated report, the Assessor’s opinion did not change. It sharpened. He said that it became clear in preparing the updated report how Y had made misrepresentations and distorted details of her relationship with X in her interviews done for the first and second report, and how her actions were at odds with her representations regarding them. She violated the Phase I recommendations by not observing the week about arrangement for the children. She had inappropriate conversations with and in the company of the children. It became clear that what she said she was doing, was not what she was doing in fact in terms of following Phase I. She told the Assessors what she thought she wanted them to hear, but her behaviour continued to be alienating. She is unable to co-parent. She is unable to encourage her children to have a relationship with X.

[159] The Assessor noted that A’s relationship had deteriorated since the first report was released. She ceased contact with X beginning in April, 2015. The assessor recommended imposing Phase II. Y objected.

[160] As indicated above, I do not find that Y acted in bad faith throughout the litigation. I do find that she acted in bad faith from time to time. Her conduct, whether in bad faith or not, weighs heavily in my decision with respect to payment of the assessors’ fees.

[161] In addition, Y’s behaviour, aside from bad faith, frustrated the assessment and therapeautic process. I offer two examples. First, I held that Y’s compliance with Phase I was compliance in name’s sake only. It was not meaningful compliance. She (and A under her influence) complied only so that they could say that they complied with Phase I. Y told A that she would not get her way if she did not comply; that she would not have her ’voice heard’ if she did not comply. Y believed that A was estranged from X because of his behaviour, not her actions. Y’s failure to comply with the assessors’ recommendations after the August, 2014 report (Ex. 62), which were incorporated into an order, wasted precious time and family resources. So too has her failure to comply with my order of January 5, 2016.

[162] Second, Y intentionally broke the two ground rules for the February 2015 therapeutic weekend and caused its failure. Y tried to frustrate an intensive session designed to kick start a reintegration between A and X.

[163] The notes from Ms Hayes, the parental coordinator, are instructive in the fault based analysis for the need for the section 30 Assessment, and its aftermath.

[164] Ms Geraldo and Mr. Hurwitz commented that Y used the parental coordinator to engage X in conflict. X used the parental coordinator as a way to not engage with Y. The majority of the parental coordinator’s fees were created by Y’s pressing with petty disputes. These were often inflammatory and unsubstantiated. She used the parental coordinator as a sword, he as a shield. Some issues were questions of interpretation of the Assessment’s recommendations. Some were minor (hockey equipment, baseball equipment, clothing, B’s haircuts, return of children’s luggage after travel, children’s bicycles). Some were fabrications or lies (X stealing the family dog). It is apparent from the parental coordinator’s notes that Y would not relinquish control of the children even when they were with X. She insisted that X have no contact with her family, yet insisted that she go to all children’s’ events, even if X’s family was present.

[165] X submits that Y’s use of the parental coordinator was in bad faith. I am unable to agree, although Y’s use of the parental coordinator, in its totality, was unreasonable. As indicated above, she used the parental coordinator as a weapon against X.

[166] X’s conduct is also relevant. Some of the “fault” for the expenses lies with him. He had Y arrested and charged with the intent of gaining advantage in the custody/access dispute. To some extent, Y’s reaction was a foreseeable consequence of this act. His responsibility for the ongoing conflict, however, diminished over time.

[167] Any costs associated with the production of the 1st section 30 Assessment, should be borne by the parties equally. Both agreed to the assessment, and both hoped to benefit by it. The fees for that assessment include Mr. Hurwitz’s and Ms Henderson’s fees.

[168] The fees of the parental coordinator were incurred, for the most part, by issues Y raised, that the parties should have worked out but for Y’s desire to control the agenda and outcome. Y is responsible for most of those fees.

[169] The second assessors’ report was due largely because of Y’s failure to abide by the first report, and her failure to be forthright with the assessor in the first report. While the assessors’ recommendations did not change, much of what the assessors inferred in the first report, or considered possible, was made plain or verified by the time of the second. The need for the second report was driven by Y’s failure to abide by Phase I of the first report’s recommendations.

[170] Ms Lourdes’ work occurred during the period between the reports. Her fees during this period are $32,195.25 and focussed almost exclusively on the children and reversing the effect of Y’s alienating behaviour. While X derived some benefit from it, the work was made necessary because of Y’s alienating behaviour.

[171] The balance of Ms Lourdes’ fees ($2,750) is her fee for attending at trial. It appears that $8,534, 68 (the difference between $207,920 and 199,382) is Mr. Hurwitz’ trial fee. Since Y was wholly unsuccessful on issues of custody and access, she should bears these fees in their entirety, as witness fees.

[172] For all of the reasons, a fair, reasonable and proportional allocation of the section 30 Assessors’ fees is 1/3 – 2/3rds in X favour. Accordingly, Y shall reimburse X $135,000 toward these fees.

e) Family Bridges Fees:

[173] The fees for Family Bridges are different from the assessors’ fees. The Assessors’ work was investigative, therapeutic and remedial. Family Bridges’ services, on the other hand, were required, solely, to reverse the alienation that Y caused. It is only appropriate that Y pay those costs. I adopt Turnbull, J.’s views, expressed above. To make X pay the Family Bridges fees in any significant proportion, rewards Y for her irresponsible behaviour in alienating A from X. It also punishes X for resorting to the law to try to correct a situation which was clearly not in the best interests of the children. It is in not the spirit of the Family Law Rules. Where expenses are incurred because of the irresponsible conduct of one of the parents, the courts clearly have a discretion to vary from the “guiding principle” of proportional financial responsibility to one which reflects the equities of the case.

[174] X conceded that he contributed to the breakdown of the marriage. The reports filed from Family Bridges and the evidence at the hearing on restoring access for Y indicate that X, too, derived benefit from his participation in Family Bridges. He learned strategies and parenting techniques that improved his ability to parent. This is independent of the work done to address Y’s alienation. It is not fair for Y to pay for this.

[175] The parties did not provide me with a breakdown of the fees from Family Bridges that allow me to assess, directly, what fees were incurred to assist X with his parenting abilities independent of Y’s alienating the children. My apportionment is arbitrary. Y shall reimburse X for 80% of those fees, or $67,442.66.

[176] As of mid-June, Y refused to participate in the Family Bridges program as ordered. Going forward, each parent will pay all expenses incurred for each of their time with Family Bridges. X and Y will share expenses 25/75%, respectively, related to the children’s work with Family Bridges or other therapists, whose work is necessary because of Y’s alienating behaviour or the marriage breakdown.

IMPECUNIOSITY

[177] Y says that she is impecunious and imposing any order for costs on her, or at least any substantial order for costs, is inappropriate.

[178] I reject this submission for several reasons.

[179] First, it is not a correct statement of fact. Y has approximately $330,000 in trust from the sale of the home. She has an interest in the cottage of $99,500. She also has the ability to generate income as outlined in my Reasons for Judgment.

[180] Second, being impecunious (if true) does not give the impecunious litigant the ‘licence to litigate’ on the theory that she or he is immune to a judgment for costs.

[181] The paying party’s ability to pay costs is relevant (see MacDonald v. Magel (2003) 67 O.J. no 2853; Murray 2005 CanLII 46626 (C.A); Chouinard, 2008 CanLII 64817 (on.s.c). The paying party’s ability to pay, however, is not a shield against any liability for costs and should only be taken into account regarding the quantum of costs (see Jackson, supra, at para. 107 and cases cited therein). For example, the Court must consider the impact of a large cost award on the paying party’s ability to meet child support obligations, or to provide for children while in that party’s care. An inadequate cost award may impair the receiving party’s ability to pay child support to provide for the children while in that party’s care (see Jackson, supra at para. 108 and cases cited therein).

[182] Y is, at the moment, of modest means. I have imputed income to her over the next few years as I have faith that with her MBA and her determination, she can re-establish herself in the business and academic community, and generate significant income. However, because of the income disparity, I have ordered X to pay spousal support. As indicated in my Reasons for Judgment, this is a net amount given that Y owes X child support based on her imputed income until it is re-calculated as her access begins and increases.

[183] On the other hand, X faces his own challenges. He has spent most of his net worth dealing with the litigation made necessary, in the main, by Y’s behaviour. He has made payments he has been asked or ordered to pay. He has borrowed money to pay legal fees. He is tapped out. That he is not now bankrupt is a result of his asset base at the start of his journey on the couple’s road to perdition, and his healthy income. I have faith that he will find employment.

[184] At the moment, X has custody and Y has no access. On the assumption that Y has begun with the Family Bridges program, the expectation is that the children will, eventually, and based on the recommendations of the Family Bridges therapists, spend equal time with each parent. The current custody and access arrangement is, therefore, temporary.

[185] I have considered Y’s expectations and her ability to pay in these reasons. I reject her plea that she is impecunious.

ORDER:

[186] Y shall pay to X the following sums:

a) Costs of the Application $380,726.60

b) Costs of the November 18 and 20 Motions: 32,085.21

c) Interest on the Line of Credit: 12,279.27

d) Section 30 Assessment Fees: 135,000.00

e) Family Bridges Fees: 67,442.66

Total: $625,337.40

[187] In the future each party will pay 100% of the Family Bridges fees incurred for each of their time with Family Bridges. X and Y will share expenses related to the children’s work with Family Bridges on 20/80% basis, respectively.

[188] The parties advise that $632,623 remains in trust from the sale of the family home. Y’s $316,311.50 share of the equity from the sale of the jointly owned matrimonial home shall be paid to X, on account of the costs award.

[189] Unless the parties make other arrangements with respect to Y paying the remaining $309,025.90, it shall be paid as follows beginning October 1, 2016:

a. Y will pay $2,000 per month until this sum is retired. The outstanding balance shall attract simple interest at the prejudgment rate applicable.

b. In my Reasons for Judgment, I held that Y shall pay X child support of $764.00 per month, and that X should pay Y spousal support of $3,538.00 per month. So long as X is obligated to pay Y spousal support, the $2,000 monthly payment shall be deducted from the spousal support payment made by X to Y.

c. If the net spousal support payment is less than $2,000 per month, Y shall pay the shortfall to X, monthy. FRO is to enforce.

d. The $2,000 monthly obligation Y has to X shall, under the Income Tax Act, be income received by the Respondent and deductible as support paid by the applicant.[^8]

e. The $2,000 shall be deemed support paid to the respondent by FRO.

[190] In intent with sub-paragraph d., above, is twofold. First, I want to ensure that Y’s payment of costs to X does not alter the tax status of either party following my support order. Second, I want to ensure that the costs repayment does not alter the Family Responsibility Office’s recording of support obligations and payments as set out in my Reasosn for Judgment.

[191] In other words, although the impact of this costs order is that Y may receive less cash that she is ordered to receive in support, for tax purposes, X is deemed to have paid the whole of the spousal support amount and Y to have received it. Likewise, Y is deemed to have paid the child support amount and X to have received it.

[192] Although the impact of this costs order is that X will pay less cash to Y for spousal support, the costs repayment shall not reflect in FRO’s recording of payemnts. For instance, spousal support is currently $3,538. While X will pay only $1,538,FRO shall record as $3,538 being paid.

Trimble J.

Released: September 2, 2016

Amended: October 18, 2016

CITATION: X v. Y, 2016 ONSC 5551

COURT FILE NO.: 36539/14

DATE: 2016 09 02

AMENDED: 2016 10 18

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

X

Applicant

– and –

Y

Respondent

Endorsement

Trimble J.

Released: September 2, 2016

Amended: October 18, 2016

[^1]: X and Y withdrew $207,000 at a ratio of approximately 1:2. The parties agree that Y owes over $12,000 to X for her share of the interest. Therefore, interest totals approximately $19,000.

[^2]: See Jackson, supra, beginning at para. 16.

[^3]: In Bordin v. Iacobucci, 2016 OBNSC 1975 (S.C.J.) Myers, J. approved this as the substantial indemnity rate. He calculated it by reducing to 75%, the billed rate of $820 for Harold Niman, one of the most senior family lawyers in Toronto. Myers, J. qualified this assessment as being akin to senior commercial counsel’s rates, which he considered reasonable because the issues in the family dispute were largely commercial.

[^4]: John Cox. The rate claimed and allowed on an assessment of costs in a successful contempt motion was $550 for senior counsel. See Blatherwick v Blatherwick, 2016 ONSC 4630, para. 41 per Ricchetti, J.

[^5]: I limited my finding of an abuse of process to the context of determining the issues of the stay of Superior Court proceeding. I specifically left any finding of abuse of process as it pertained in the Ontario Court Application to the Ontario Court. I was also limited to what evidence was before me. I note that on March 1, 2016, Kurz, J. dismissed the Ontario Court proceeding as an abuse of process, albeit for slightly different reasons, and on a much more detailed record. See 2016 ONCJ 111.

[^6]: In Hamfler v. Mink, 2011 ONSC 3331; 2011 CanLII 86201 (ON SC), M. Edwards, J., held that disbursements were subject to the same rules as fees: they should be reasonable and proportional. When reducing expert fees, the Court must give reasons, and have a rational reason for doing so: for example by looking at time spent by the expert, the value of the expert’s opinion to the Court, or the comparative fees charged by similar experts with similar expertise. This analysis requires evidence.

[^7]: Coincidentally, a program apparently similar to Family Bridges, and one of the providers of which was Warshak, the designer of Family Bridges.

[^8]: For similar result and wording, see Philippe v. Bertrand, 2015 ONSC 2449.