Court File and Parties

CITATION: Segeren v. Segeren, 2017 ONSC 6103

COURT FILE NO.: 12160/13 (Chatham)

DATE: 20171013

SUPERIOR COURT OF JUSTICE – ONTARIO

FAMILY COURT

RE: Michelle Lynn Segeren, Applicant

AND:

Gary John Segeren, Respondent

BEFORE: Aston J.

COUNSEL: Daniel Scott, for Karen Labadie and Robert Ballance, for Kenneth W. J. Rhodes, counsel for the applicant

Jonathan M. Quaglia, counsel for the respondent

HEARD: September 26, 2017

ENDORSEMENT

[1] Five motions were before the court on September 26. The husband’s motion at tab 24 was adjourned to a date in October. The four other motions were decided on September 26 with reasons to follow. These are those reasons.

[2] This litigation started a few weeks after the parties separated, more than four-and-a-half years ago. It was scheduled for a trial date last year but struck from the trial list to enable the parties to attempt a mediated resolution. That process is stalled. The husband’s motion to get it back on the rails (tab 24 of the Continuing Record) was served on January 16, 2017. That motion was itself derailed by his follow-up motion to have Mr. Rhodes removed as the applicant’s solicitor and requests for other relief found in his motion at tab 27 of the Continuing Record. This latter motion and the subsequent motions at tabs 33 and 36 were adjourned several times before the submissions on September 26.

[3] Mr. Quaglia’s first request on behalf of the respondent was to cross-examine Mr. Rhodes and his longtime assistant Ms. Labadie on their respective affidavits. I found that Mr. Quaglia’s request met the test in FL Rule 20(5) because there were prima facie discrepancies in the signatures. Though the affidavits explained the sequence of events, cross-examination could possibly impeach the credibility of the deponents. However, I was concerned about the delay that would result from cross-examination before a special examiner, particularly taking into account the necessity of arranging for an out-of-town judge to hear these motions. With the consent of Mr. Rhodes and Ms. Labadie, they were cross-examined in open court before hearing submissions on the outstanding motions. Ms. Labadie was cross-examined first in the absence of Mr. Rhodes.

[4] The key issue is whether Mr. Rhodes gave false evidence and whether he knowingly commissioned the false evidence of Ms. Labadie in her first affidavit January 27, 2017. Did Mr. Rhodes backdate the letter(s) from his office dated January 13, 2017? Did Ms. Labadie backdate those letter(s) and sign Mr. Rhodes name without his knowledge?

[5] Ms. Labadie’s first affidavit, commissioned by Mr. Rhodes January 27, 2017, deposes that the letter Mr. Quaglia received by ordinary mail January 20 was signed by her, on Mr. Rhodes behalf, on Friday, January 13, 2017. She further deposed that she mailed that letter before receiving the husband’s motion material on Monday, January 16, 2017. In her subsequent affidavit sworn March 31, 2017, Ms. Labadie admits she lied to Mr. Rhodes and that the letter was in fact backdated by her and only mailed by her after receipt of the respondent’s motion material January 16.

[6] Ms. Labadie and Mr. Rhodes were closely cross-examined. There is no doubt in my mind that events unfolded as set out in their affidavits sworn March 31, 2017 at tabs 29 and 30 of the Continuing Record. In their demeanor, as well as in the answers themselves, Mr. Rhodes was genuinely outraged by the attack on his integrity and reputation and Ms. Labadie was sincerely contrite. Their explanation for the sequence of events and, in particular, the two versions of the letter of January 13 marked as exhibits 1 and 2 on their cross-examination in open court are credible and make sense.

[7] Ms. Labadie had a credible reason for backdating the letter and for lying to her employer, Mr. Rhodes, about it when she sent it. She had a credible explanation for the timeline and the two versions marked exhibits 1 and 2. Both Ms. Labadie and Mr. Rhodes confirmed that Ms. Labadie signs his name on certain “template” correspondence rather than “per” own signature. In the witness box, she offered to sign his name during her cross-examination, to demonstrate her ability to sign his “Special K” signature in a manner identical to the signatures on the January 13 letters. She was not taken up on that offer.

[8] I find that Mr. Rhodes did not know Ms. Labadie was giving false evidence in her first affidavit of January 27, 2017. I find the evidence of Mr. Rhodes and Ms. Labadie in their affidavits sworn March 31, 2017 to be truthful in every respect. Moreover, I accept that Ms. Labadie did not understand the gravity of her deception and never imagined the serious repercussions for herself or her employer. I am satisfied that Ms. Labadie’s remorse is genuine. I am confident she has “learned her lesson”. Ms. Labadie’s continued employment by Mr. Rhodes (after her four week suspension without pay) will not bring the administration of justice into disrepute.

[9] The motion to remove Mr. Rhodes as the applicant’s solicitor is ultimately without foundation. But for the question of costs, this disposes of the motion at tab 27, counsel for the respondent having withdrawn the requests in paras. 5 and 6 of that motion in his oral submissions.

[10] It is not necessary to rule upon Mr. Rhodes motion at tab 33 to strike out certain paragraphs of the respondent’s affidavit and the two prayers for relief in paras. 5 and 6 of his motion at tab 27. The motion at tab 33 is moot. However, the fact that the respondent’s affidavit is replete with statements that are argumentative and contain personal opinion, conjecture and suppositions will need to be taken into account on the question of costs. So too the requests in paras. 5 and 6 of the Notice of Motion at tab 27.

[11] The original motion of the respondent (tab 24 of the Continuing Record) to, inter alia, reinstate the mediation process was adjourned on consent to October 24, 2017. Except for costs, no other issues remain outstanding on the motions at tabs 27, 33, 35 or 36.

[12] These motions have been an expensive proposition for Mr. and Mrs. Segeren. Counsel for the applicant and Mr. Rhodes spent more than 50 hours on these motions; counsel for the respondent about 33 hours.

[13] At the risk of oversimplifying the legal test in relation to costs:

1. a successful party is presumptively (but not always) entitled to costs;

2. offers to settle may trigger cost consequences under FL Rule 18, but even if that rule does not apply, any offers may be considered;

3. litigation conduct that is unreasonable or which amounts to “bad faith” is a critical consideration notwithstanding success on substantive issues; and

4. quantification of costs as between the parties must, in the end, be fair and reasonable having regard to the complexity of the issues, the importance of what is at stake and the reasonable expectations of any unsuccessful party.

[14] Within that framework, these are the considerations I find most germane in this particular case:

1. The main issue was the husband’s request to remove the wife’s lawyer from the litigation. He failed in that request.

2. The husband “upped the ante” by adding requests for a Law Society investigation of Mr. Rhodes and an order barring him from appearing on any future cases before this court. These requests (paras. 5 and 6 of his motion at tab 27) were only abandoned at the hearing September 26. These requests did not advance the husband’s legitimate litigation interests and can only be seen as tactical intimidation. They amount to bad faith under FL Rule 24.

3. Mr. Rhodes livelihood and professional reputation was at stake based on allegations of dishonesty that proved to be unfounded. He was exonerated. On the other hand, until Mr. Rhodes and Ms. Labadie were cross-examined on September 26 there was at least some evidence to support the professed belief of the husband. Furthermore, Ms. Labadie did lie under oath in her first affidavit. It was not unreasonable for the husband to have brought the motion to remove Mr. Rhodes as a solicitor of record in the first instance.

4. The husband was successful in his request for cross-examination of Mr. Rhodes and Ms. Labadie. Ironically, I agree with his counsel that it was only on September 26, 2017, after those cross-examinations, that there was conclusive evidence Mr. Rhodes never signed exhibits 1 and 2.

5. None of this controversy would ever have arisen but for Ms. Labadie’s action in backdating a letter and then lying about having done so. Mr. Rhodes is vicariously liable for her actions. It is not unreasonable for the respondent to be able to set off against some of his costs liability to Mr. Rhodes, Ms. Labadie’s liability to the respondent on account of costs.

6. There was apparent merit to the motion to strike paragraphs from the husband’s affidavit and to strike the claims in paras. 5 and 6 of his motion at tab 27.

7. The Offer to Settle by the applicant and her counsel Mr. Rhodes dated September 14, 2017 does not attract costs consequences under FL Rule 18 but it does reflect a genuine effort to reasonably resolve all the issues. In particular, the only genuine issue of the husband – removal of the wife’s counsel – would have been resolved in his favour. However, I do note that most of the costs incurred predate the Offer of September 14, 2017.

[15] Taking these findings into account, the respondent is ordered to pay to the applicant $5,000 in costs, all inclusive. This sum shall also include the costs reserved by Verbeem J. on April 11, 2017.

“Justice D. R. Aston”

Justice D. R. Aston

Released: October 13, 2017