Court File and Parties

Court File No.: FC-08-1090-03 Date: 2017-04-21 Superior Court of Justice - Ontario

Re: Rueben Lapshinoff, Applicant And: Christy Michelle Allen, Respondent

Before: McDermot J.

Counsel: L. Mongillo, for the Applicant K. Kieller, for the Respondent

Heard: By written submissions

Endorsement

Introduction

[1] On February 9, 2017, I heard the Applicant’s motion for a stay of the child support that he pays to the Respondent. The reason for the motion was that the shared custody arrangement between the parties had broken down, and the children now lived with the Applicant.

[2] The Respondent, strangely enough, resisted this claim. Under the Child Support Guidelines, [1] child support generally follows the primary residence of the children. These two teenaged children had formerly lived with both parties but in September, 2016, both had clearly “voted with their feet” and moved in with the Applicant. Although there was some suggestion that the children be disciplined for their failure to spend time with the Respondent, [2] that had only resulted in the children running away when the Applicant showed up at the school to pick up the children.

[3] I granted the Applicant’s motion to stay. I invited submissions on costs.

[4] The Applicant, as successful party, requests full recovery costs based upon a suggestion that the Respondent indulged in bad faith conduct. As well, Mr. Mongillo request costs against opposing counsel, Ms. Kieller. The Applicant claims costs in the amount of $25,609.42.

[5] Ms. Kieller acknowledges the Applicant’s success at the motion and that costs are payable. However, she disagrees that there was bad faith conduct. She also says that the costs claimed include negotiations and motions concerned with custody of the children, an issue settled prior to this motion being brought, and suggests that Mr. Mongillo is seeking costs for issues unrelated to this particular motion. She suggests that her client pay only $1,500 in partial recovery costs.

[6] There is no issue that the Applicant is entitled to his costs of this motion. The issues are therefore as follows:

• Was there bad faith conduct which would require costs to be paid on a full recovery basis?
• Should costs be awarded against counsel?
• What portion of the Applicant’s bill of costs should be reasonably included in this costs award?

Bad Faith Conduct

[7] It is trite that unreasonable conduct can affect a costs award: see Rules 24(5) and (11) of the Family Law Rules. [3]

[8] And I also believe that the Respondent’s position in this matter was unreasonable. As I noted in my decision, there were probably few decisions where a change in child support was resisted when custody changed for precisely the reason that child support is dictated by residency of the children. As well, it was unreasonable for the Respondent to have threatened to revoke her consent for the children to attend at St. Andrews College because she feared losing the shared custody regime, and the financial advantages of that regime. And, as I also noted in my motion endorsement, the Respondent’s behaviour at St. Andrews when she went to pick up the children, resulting in the police being called, was also unreasonable. The Respondent took steps in this litigation which were not in accordance with the children’s best interests, and she also appears to have done this because of the potential loss of child support, which, according to the Applicant, came up in numerous negotiations prior to the motion.

[9] However, bad faith conduct is another thing entirely. That is reflected in Rule 24(8), which provides that if there is a finding of bad faith, the court “shall” order full recovery costs payable immediately.

[10] As noted in the Applicant’s costs submissions, a useful case is that of S.(C.) v. S.(C.), [2007] O.J. No. 2164 (Ont.S.C.J.) where Perkins J. draws the distinction between bad faith and unreasonable conduct [at para. 17]:

In order to come within the meaning of bad faith in Rule 24(8), behaviour must be shown to be carried out with intent to inflict financial or emotional harm on the other party or persons affected by the behaviour, 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 inflict harm, to conceal relevant information or to deceive, saves the activity from being found to be in bad faith. The requisite intent to harm, conceal or deceive does not have to be the person's sole or primary intent, but rather only a significant part of the person's intent.

[11] As also noted in Parsons v. Parsons, [2002] O.J. No. 3034 (S.C.J.), failing to act in the children’s best interests does not necessarily mean that a party is acting in bad faith; there must be a finding of “the conscious doing of a wrong because of dishonest purpose or moral obliquity” [para. 6]. There must be some element of malice or bad intention with the intent to harm as its purpose.

[12] In the present case, it does appear that, for a period of time, the tail of child support was wagging the dog of the children’s best interests as far as the Respondent was concerned. However, appearances do not necessarily mean that I can make this type of a finding on the basis of the facts that are before me. The motivations of the Respondent may as well have been well intentioned in nature, resulting from her own inability to acknowledge the views and preferences of the children or that the children were better off in the Applicant’s care. And, as pointed out by the Respondent, she eventually conceded primary residence to the Applicant based upon the children’s views and preferences.

[13] Finally, the Respondent may very well have perceived that the Applicant also acted unreasonably. She certainly argued this based upon the failure of the Respondent in disciplining the children to force them to adhere to the shared custody relationship. She perceived that she was taken advantage of when she had been in a car accident, and subsequently agreed to the children going to St. Andrews.

[14] I therefore do not find that, on the balance of probabilities that the Respondent acted in bad faith in objecting to the stay of child support. She was willing to place money in trust to provide security for child support that she might have to return; although that did not help the Applicant’s financial situation (considering the more than $70,000 per annum that St. Andrews costs), it showed that she understood the need for a more reasonable stance than a pure demand for child support would have been. And there is no evidence of ulterior motive beyond the financial need for the Respondent remaining in York region to exercise her time sharing with the children. There is, in other words, insufficient evidence of malice or intent to harm to allow for a finding of bad faith conduct on the part of the Respondent.

[15] I do find that the Respondent is guilty of unreasonable conduct. That is largely for the reasons set out above. Her argument for child support was neither supported by the law nor by the Guidelines. She used the boys’ enrollment in St. Andrews as leverage to have her own way, and was unwilling to acknowledge the views and preferences of the children. She determined that she would pick up the children irrespective of those views and preferences, resulting in the children indulging in risky behaviour and also resulting in the police negotiating a time sharing arrangement for the parties. She put the children in a position that they should not have been put in.

[16] I therefore find unreasonable conduct on the part of the Respondent sufficient to affect the costs award in this matter.

Costs Against Counsel

[17] Mr. Mongillo seeks costs against Respondent’s counsel under Rule 24(9), which states that costs can be awarded against counsel who “has run up costs without reasonable cause or wasted costs”.

[18] It is to be noted that costs can be awarded against counsel even where bad faith is not proven. Two things have be proven:

a. The costs must have been run up because of the “fault” of the lawyer in question. This does not necessarily require a finding of bad faith, but a mere error in judgment will not do; and b. The case must be a case where costs against counsel are warranted, taking into account the fact that “extreme caution” must be exercised by the court in determining whether costs should be imposed against counsel;

See Ben Lolo v. Wang, [2012] O.J. No. 519 (Div. Ct.).

[19] On both those grounds, I do not think that costs should be awarded against Ms. Kieller. Mr. Mongillo suggests that the evidence of the “heart to heart” conversation between the Respondent and her lawyer was evidence that the lawyer was responsible for the Respondent’s unreasonable position regarding costs. That is not necessarily the case. There is no evidence that Ms. Kieller encouraged the Respondent to resist the claim for a stay of child support and it is just as likely that her client provided her with instructions that she followed. Mr. Mongillo argues that the Respondent’s counsel argued a position that was indefensible, but it is also just as likely that she did this on the instructions of her client as on her own volition. There is no definitive proof that this motion resulted from the “fault” of Ms. Kieller.

[20] Even if it was Ms. Kieller’s fault that this motion took place, I also do not find that this is the type of case where costs are warranted against counsel. There was no evidence of improper conduct that “ran up costs” or sharp practice or improper tactics which would have increased the Applicant’s costs.

[21] I also agree with Ms. Kieller when she states that caution should be used in cases such as this for fear that counsel’s advocacy of a client’s position might be impaired for fear of a costs award against counsel.

[22] There shall be no order for costs against counsel pursuant to Rule 24(8) of the Family Law Rules.

Quantum of Costs

[23] There are two subissues under this heading;

• Are all of the costs set out in the Applicant’s bill of costs properly included in the costs of this motion?
• What should be the measure of costs for this motion?

[24] Regarding the first issue, Ms. Kieller argues that the negotiations and the abortive motions leading up to a change in custody should be excluded from a consideration of costs of this motion. All that should be included are the preparation of the motion to stay and affidavit, as well as Mr. Mongillo’s appearance on the motion. Ms. Kieller relies upon the statement of Respondent’s counsel in September, 2016 that child support would not be the subject matter of an interim motion.

[25] I disagree. The issue of child support is directly related to the change in custody, and there was no opportunity to speak to costs in respect of that issue prior to this motion. The misconduct that I have found that the Respondent is guilty of was largely connected with custody, and I have already commented on whether the issue of child support can be divorced from where the children were residing as suggested by Ms. Kieller. This motion was the culmination of a series of events which began with the custody issues which arose in August and September which resulted in the parties ending up in court arguing the child support issues in February of this year. The fact that Respondent’s counsel stated that child support was not the subject of an interim motion should not affect the issue of whether the Applicant can requests costs of those interactions today. That was a statement, in my view, that reflected on what was important or urgent in September of 2016, and not a statement that should bind the Applicant to the completion of this litigation.

[26] Both parties made offers; neither party made an offer as defined by Rule 18. Mr. Lapshinoff made an offer to pay the Respondent $500 per month early on when attempting to negotiate residency of the children. Ms. Allen made an offer though counsel to hold $20,000 in trust as security for support assuming child support continued to run. The offer of Mr. Lapshinoff would have left Ms. Allen better off than my order of February 10, 2016.

[27] Under Rule 18(16), I can take into account any written offer made by a party, even where it does not meet the formal requirements of Rule 18. The $500 monthly payment was reflected in the email sent by Mr. Mongillo to Ms. Kieller on June 16, 2016; I can therefore take that offer into account in determining costs of this motion.

[28] I also take into account Ms. Allen’s unreasonable conduct in this matter as noted above.

[29] I therefore award costs on a partial recovery basis, but on a higher level than 50% of the Applicant’s costs which is often used for the minimum level of partial recovery costs. There shall be an order for costs payable by Ms. Allen in the amount of $17,000. As the funds from Ms. Allen’s house sale will be available this month according to Ms. Kieller’s costs submissions, those costs shall be payable by the Respondent within 45 days.

McDERMOT J.

Date: April 21, 2017

[1] SOR/97-175 [2] See the endorsement of Douglas J. made on October 14, 2016. [3] O. Reg. 114/99