Court File and Parties
COURT FILE NO.: FS-14-81765-00 DATE: 2017-03-01
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Aryann Shalini Maharaj G. Deokaran, Counsel for the Applicant
- and -
Lincoln Wilfred-Jacob R. McQueen, Counsel for the Respondent
Heard In Writing
Costs Endorsement
Trimble J.
[1] In my reasons of December 15, 2016, I invited costs submissions with respect to the 11 day trial on custody, access and property issues. These are my reasons.
Positions of the Parties:
[2] Ms. Maharaj seeks cost on a full indemnity basis of $56,386.43, comprising $55,250 for fees and HST, and $1,136.43 for disbursements and HST. She claims full indemnity on the basis that Mr. Wilfred-Jacob acted unreasonably, and acted in bad faith.
[3] Mr. Wilfred-Jacob says that no costs should be awarded. If any are awarded, they should be minor as it would place an undue financial burden on him.
The Law:
[4] In addressing costs, I am directed by the following portions of Rule 24 of the Family Law Rules, O. Reg. 114/99:
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).
[5] In addition, with respect to offers to settle I must consider the following parts of Rule 18 of the Family Law Rules, O. Reg. 114/99:
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:
- If the offer relates to a motion, it is made at least one day before the motion date.
- 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.
- The offer does not expire and is not withdrawn before the hearing starts.
- The offer is not accepted.
- 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) .
[6] 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.
[7] The principles I must consider in awarding costs and setting quantum are: 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, 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; Guertin v. Guertin, 2015 ONSC 5498 (SCJ)). d. The Trial Judge has broad discretion, although that discretion is curtailed by Rules 18 and 24 of the Family Law Rules, O. Reg. 114/99 ( see CAM v. DM and Wilson v. Kovalev, 2016 ONSC 163).
Discussion:
[8] X is entitled to costs from Y.
Who was “Successful” at trial - Rule 24(1) and (6)?
[9] The final result was far more favourable to the Applicant’s position than the Respondent’s.
What Effect do Offers Have?
[10] Ms. Maharaj made an offer on 20 May, 2016. Her offer does not trigger Rule 18(14) of the Family Law Rules, O. Reg. 114/99 cost consequences. Her offer was more favourable to Mr. Wilfred-Jacob in many respects, but not favourable on the issue of child support.
Factors Affecting Quantum – Importance and Complexity of Issues:
[11] This was a complex case. One of the central issue of the trial was alienation if the child. The parties agree the issues were complex and of the utmost importance.
Factors Affecting Quantum – Bad Faith:
[12] Rule 24 of the Family Law Rules, O. Reg. 114/99 and Rule 18 of the Family Law Rules, O. Reg. 114/99, in referring to “reasonableness”, refer to the reasonableness of the behaviour of each party, and of the quantum claimed ( see Jackson, supra at para. 20). Therefore, under Rule 24(11)b of the Family Law Rules, O. Reg. 114/99, I look at both parties’ conduct. Each says that the other was acting in bad faith.
[13] First, I turn to bad faith.
[14] Bad faith requires a high level of bad behaviour ( see Jackson, supra, para. 56). In family litigation, every party calls any conduct that it does not like “bad faith”. In fact bad faith is rarely made out.
[15] 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.), S.(C.) v. S.(M.), 2007 CarswellOnt 3485 (S.C.J.), and Piskor v. Piskor, [2004] O.J. No. 796 (S.C.J.) ; Jackson, supra).
[16] 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 CarswellOnt 6790 (S.C.J.) at para. 19).
[17] 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?
[18] 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) of the Family Law Rules, O. Reg. 114/99. They do not entitle full recovery on the whole of the litigation. Reasonableness and fairness still apply ( see S.(C.) v. S.(C.), at paras 21 - 24; MacDonald v. Magal, 67 O.R. (3rd) 181 (C,A.) ; Guertin v. Guertin, 2015 ONSC 5498; Goryn v. Neisner, 2015 ONCJ 318); Greenberg v Greenberg, 2010 ONSC 792).
[19] Ms. Maharaj says that Mr. Wilfred Jacob acted in bad faith. Mr. Wilfred-Jacob says that if he is found to have acted in bad faith, he is not the only party to have done so. Each bears the onus of proving the requisite intent.
[20] I do not find that either party’s conduct amounted to bad faith, overall. Both acted unreasonably from time to time, although Mr. Wilfred-Jacob more so. Neither party acted virtuously. Each brought out the worst in the other. As set out at pages 5 to 12 of my Reasons, Mr. Wilfred-Jacob’s conduct was worse that Ms. Maharaj’s. As I said at para. 18 of the Reasons for Judgment, neither was particularly credible, although Ms. Maharaj was better only by a whisker.
[21] 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.”
[22] Ms. Maharaj has the onus to prove that Mr. Wilfred-Jacob acted in bad faith. She fails in that onus.
Factors Affecting Quantum – Time Spent on the Action:
[23] It appears that much of the expense in this file was generated by Mr. Wilfred-Jacob’s actions, whether in failing to produce documents, to agree to reasonable interim relief, and in making constant calls to CAS, police and others about Ms. Maharaj’s parenting and actions. There is no excuse for not meeting Rule requirements. None. This fact alone delayed the smooth and expeditious movement of the case.
Factors Affecting Quantum – Proportionality:
[24] 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 and Gale v. Gale).
[25] 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.
[26] 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 fact 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 CarswellOnt 3459, additional reasons to 2001 CarswellOnt 3316 (SCJ). Costs that are grossly excessive, or not fair, and not reasonable will not be ordered (Murray v Murray, supra, at paras. 2, 6-7, 9, 11). Rates must also be reasonable.
[27] Mr. Wilfred-Jacob says that he is a man of modest means and cannot afford to pay costs. He is a man of modest means. However, he has means. Further, unless he is impecunious or a costs award would affect his ability to care for Jayden, his means are not a controlling factor. In his submissions, Mr. Wilfred-Jacob says that any significant costs award would impact his ability to care for Jayden. This is given as a bald statement.
Factors Affecting Quantum – Lawyer’s time and Rates:
[28] Mr. Wilfred-Jacob says that Ms. Maharaj’s lawyer’s time was unreasonable.
[29] Most of the time Ms. Maharaj’s counsel spent on the file was driven by Mr. Wilfred-Jacob’s approach to litigation. Time for certain activities such as preparing argument, was excessive.
[30] I accept Ms. Maharaj’s lawyer’s hourly rate of $250. Her partial indemnity rate, therefore is $270 per hour.
Disposition:
[31] A reasonable, proportional and fair costs award, that is reasonable for Mr. Wilfred Jacobs to pay and fairly compensates Ms. Maharaj for this 11 day trial is $40,000, all inclusive.