Court File and Parties

CITATION: Benzeroual v. Issa and Farag, 2017 ONSC 6225 COURT FILE NO.: 48/16 DATE: 2017-10-18

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Asmaa Benzeroual Applicant

– and –

Joseph Issa Respondent

Heidi Edourard Farag Respondent

Counsel: Jodi L. Feldman, for the Applicant Jas Dhaliwal, co-counsel for the Applicant Peter J. Chmiel, for the Respondent Kirsten Hughes, Counsel of Record for the Respondent but not appearing on this Motion

judgment THE HONOURABLE MR. JUSTICE A. PAZARATZ

Reasons for Decision

[1] On June 8, 2017, I heard a complex long-motion. On June 15, 2017, I issued a 29 page decision. I have now considered written costs submissions filed by the parties. This is my decision in relation to costs.

BACKGROUND

[2] This was a bitterly contested motion and cross-motion, entailing five thick volumes of materials; written factums; and two comprehensive books of authorities. One full day was required to argue the motions.

[3] The context:

a. The Applicant wife Asmaa Benzeroual is 32 years old.

b. The Respondent husband Joseph Issa is 51.

c. They started living together in late 2011.

d. They have a five year old daughter Lina, born April 16, 2012.

e. They were married on October 17, 2012.

f. They separated on January 13, 2016 when the Applicant discovered weapons, bullets and guns in the powder room vanity of the family residence, in an area where the young child could gain access to the weapons. The Respondent was eventually charged with 24 criminal offences, including assaults on the Applicant and the child. He was committed to trial following a two-day preliminary hearing in February 2017. His charges are currently scheduled for trial during the period of December 11 to 22, 2017.

g. There are serious concerns about the Respondent’s mental health, and he states he is on ODSP as a result of mental health issues which preclude him from working. As a result of allegations of violence and mental instability by the Respondent, the Applicant asked that the Respondent have no access to the young child who has remained in her custody since separation. There has been no access for a long time.

h. At the motion the Applicant argued the Respondent has a well-established history of having vast amounts of undeclared money, which has always allowed him to maintain a lavish lifestyle. She alleged he continues to have large amounts of money available to him which he is hiding, and on that basis she sought to impute income for child and spousal support purposes.

i. The Respondent denied allegations of violence or that he is a danger to the child. He denied being the secret or beneficial owner of various corporate and other assets. He denied having undisclosed income available to him.

j. While the access issue was obviously more important that the money issues, by far the majority of time at the motion was spent talking about money. Indeed, the Respondent’s lawyer didn’t even mention access in his factum.

THE CLAIMS & THE RESULT

[4] Determination of the Respondent’s income was the most intensively argued and the most complex issue:

a. The Applicant requested that income be imputed to the Respondent in the sum of $150,000.00 for the years 2016 and 2017.

b. The Respondent submitted his income was nominal – perhaps $10,000.00 per year.

c. The result: For the years 2016 and 2017 the Respondent's income for support purposes is imputed to be $150,000.00 per year.

d. The Applicant was entirely successful on this issue.

[5] Quantum and retroactivity with respect to child support were in issue:

a. The Applicant requested child support in the sum of $1,263.00 per month commencing January 1, 2017, with retroactive child support for 2016 in the sum of $15,156.00.

b. The Respondent proposed nominal child support with no retroactivity based on his purported nominal income.

c. I ordered child support for 2016 onward, as requested by the Applicant.

d. She was entirely successful on this issue.

[6] Spousal support was an issue:

a. The Applicant requested spousal support in the sum of $4,200.00 per month (high-end SSAG) or in the alternative $3,700.00 per month (medium range SSAG) commencing January 15, 2016.

b. The Respondent acknowledged neither entitlement nor ability to pay.

c. I ordered the Respondent to pay spousal support in the sum of $3,500.00 per month commencing January 15, 2016.

d. The Applicant was awarded less spousal support than she requested. But she obtained much more than the Respondent had proposed. She was substantially successful.

[7] Interim disbursements were contested:

a. The Applicant requested $25,000.00 interim disbursements to retain a business valuator; and $50,000.00 interim disbursements for legal fees.

b. The Respondent opposed any order for interim disbursements.

c. The result: The Applicant was awarded $25,000.00 (the amount requested) with respect to a business valuator, and $30,000.00 (less than requested) with respect to legal fees. She was substantially successful.

[8] There was fundamental disagreement with respect to the Respondent having access to the five year old daughter.

a. The Respondent proposed that he have access supervised by either his brother Tony; the co-respondent Farag; or at a supervised access center.

b. The Applicant opposed any resumption of access.

c. I dismissed the Respondent’s motion for access without prejudice to the Respondent returning this motion with better materials addressing his mental health and professional assistance for related issues.

[9] Involvement of the Office of the Children’s Lawyer (OCL) was disputed:

a. The Respondent requested OCL involvement.

b. The Applicant opposed it.

c. I agreed with the Applicant that because the main parenting issues and concerns related to adult issues like the Respondent’s behaviour and mental health, this was not an appropriate case for an OCL referral.

[10] The Applicant says since August 2016 she has incurred approximately $94,373.45 for legal services and disbursements.

a. She seeks full recovery of this amount – within the context of this motion -- payable within 30 days.

b. In the alternative she seeks costs fixed on a partial indemnity basis in the sum of $65,136.03.

RULES

[11] Rules 18 and 24 of the Family Law Rules govern the determination of both liability for costs and the amount of costs. While these rules have not completely eliminated judicial discretion, the rules nonetheless circumscribe the broad discretion previously granted to the courts in determining costs. C.A.M. v. D.M., 2003 18880 (ON CA), 2003 18880 (Ont. C.A.); Andrews v. Andrews, 1980 3619 (ON CA), [1980] O.J. No. 1503 (Ont. C.A.); Wilson v Kovalev, 2016 ONSC 163. (SCJ).

[12] Rules 18 and 24, and most of the case law focus on two words: “Success” and “Reasonableness”. The latter entails two components:

a. Reasonableness of behaviour by each party.

b. Reasonableness of the amount of costs to be awarded.

[13] The starting point in any costs analysis is the presumption that a successful party is entitled to costs. Rule 24(1); Sims-Howarth v. Bilcliffe, 2000 22584 (ON SC), 2000 22584 (SCJ); Chomos v. Hamilton, 2016 ONSC 6232 (SCJ).

OFFERS

[14] To determine the extent to which a party has been successful, the court must consider how the order compares to any settlement offers which were made. Lawson v. Lawson, 2008 23496 (ON SC), [2008] O.J. No. 1978 (SCJ); Dinyame v. Lukanu, 2017 ONCJ 561 (OCJ).

[15] The Applicant filed a Rule 18 offer to settle dated June 6, 2017 in relation to the June 8, 2017 motion.

a. Each paragraph of the offer was severable. This is a wise practice, to be encouraged.

b. The Applicant offered to settle child support from January 1, 2017 onward in the sum of $1,076.00 per month based upon an imputed income of $125,000.00. The Applicant obtained a more favourable result in the order.

c. The Applicant offered to settle spousal support from January 1, 2017 onward in the sum of $3,019.00 per month (mid-range SSAG) based upon an imputed income of $125,000.00. The Applicant obtained a more favourable result in the order.

d. The Applicant offered to settle child support for 2016 in the sum of $12,912.00 payable before June 30, 2017, based upon an imputed income of $125,000.00. The Applicant obtained a more favourable result with respect to quantum, but she did not obtain an order that retroactive child support for 2016 be “payable before June 30, 2017.”

e. The Applicant offered to settle lump sum spousal support for 2016 in the sum of $36,228.00 payable before June 30, 2017 based on an imputed income of $125,000.00 The Applicant was not successful in having 2016 spousal support characterized as “lump sum” (with resulting tax implications), although her proposed mathematical total for 2016 spousal support was consistent with my order.

f. The Applicant offered to settle advance disbursements for both legal and accounting fees in the sum of $25,000.00. The Applicant obtained a more favourable result in the order.

[16] The Applicant says she was successful in obtaining a result as favourable or more favourable than her offer on the main headings of relief and that accordingly she should be entitled to full recovery of costs pursuant to Rule 18(14). I note the following:

a. The full recovery consequences of Rule 18(14) apply to those severable headings in which the Applicant exceeded her offer.

b. For those headings in which the Applicant was successful but failed to match her offer, Rule 18(16) allows the court to consider the reasonableness of the offer.

c. However, the Applicant’s offer to settle was dated June 6, 2017 – only two days prior to the hearing of the motion. Any Rule 18(14) consequences flow from June 6, 2017 onward. This is important, given the fact that the Applicant appears to be claiming full recovery for legal fees pre-dating her offer (and also, arguably, in relation to some legal fees not specifically attributable to this motion).

[17] Clearly, the Applicant enjoyed substantial success on all issues. The Respondent was not successful with respect to any position he advanced. The scale of appropriate indemnification requires differentiation of those headings in which Rule 18(14) is triggered (and the triggering date); those areas in which Rule 18(16) is relevant; and more generally, the overall provisions of Rule 24.

BAD FAITH

[18] To further complicate the analysis, the Applicant submits that pursuant to Rule 24(8) the Respondent should pay costs on a full recovery basis, because he engaged in “bad faith”. In Scipione v. Scipione, 2015 ONSC 5982 this court reviewed the law in relation to bad faith.

[19] Rule 24(8) states: “If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.” But bad faith is not defined in the Rules.

[20] In Scalia v. Scalia, 2015 ONCA 492 the Ontario Court of Appeal confirmed that the legal test for bad faith in the family law context as set out by Perkins J.in S.(C) v. S.(C), 2007 20279 (ON SC), [2007] O.J. No. 2164 (S.C.J.).

a. In order to come within the meaning of bad faith in subrule 24(8), behaviour must be shown to be carried out with intent to inflict financial or emotional harm on the other party or other persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court.

b. 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.

c. 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.

d. At some point, a party could be found to be acting in bad faith when their litigation conduct has run the costs up so high that they must be taken to know their behaviour is causing the other party major financial harm without justification.

e. In short, the essential components are intention to inflict harm or deceive.

[21] Bad faith is not synonymous with bad judgment or negligence. Rather, it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. Bad faith involves intentional duplicity, obstruction or obfuscation: Children’s Aid Society of the Region of Peel v. F.(K.J.), 2009 ONCJ 252, [2009] O.J. No. 2348 (OCJ); Biddle v. Biddle, 2005 7660 (ON SC), 2005 7660, [2005] O.J. No. 1056 (SCJ); Leonardo v. Meloche, 2003 74500 (ON SC), [2003] O.J. No. 1969 (SCJ); Hendry v. Martins, [2001] O.J. No. 1098 (SCJ). To establish bad faith the court must find some element of malice or intent to harm. Harrison v. Harrison, 2015 ONSC 2002.

[22] There is a difference between bad faith and unreasonable behaviour. The essence of bad faith is when a person suggests their actions are aimed for one purpose when they are aimed for another purpose. It is done knowingly and intentionally. The court can determine that there shall be full indemnity for only the piece of the litigation where bad faith was demonstrated. Stewart v. McKeown, 2012 ONCJ 644, 2012 ONCJ 644 (OCJ); F.D.M. v. K.O.W., 2015 ONCJ 94 (OCJ).

[23] Bad faith can be established by the intentional failure to fulfill an agreement in order to achieve an ulterior motive or, an intentional breach of court order with a view to achieving another purpose: Piskor v. Piskor, 2004 5023 (ON SC), Erikson v. Erikson, 2001 39078 (ON SC), 2000 29675 (ON SC), [2000] O.J. No. 5789, 2000 CarswellOnt 5809 (SCJ); Hunt v. Hunt, 2001 39078 (ON SC), [2001] O.J. No. 5111 (SCJ).

[24] Needlessly complicating or prolonging a case with a view to inflicting financial harm or jeopardizing the opposing party’s wherewithal to continue to pursue claims may constitute bad faith. Jackson v. Mayerle, 2016 ONSC 1556 (SCJ).

[25] In Fard v. Fard, 2002 61493 (ON SC), 30 R.F.L.(5th) 316 (SCJ) Campbell J. held that bad faith “trumped” a somewhat “divided success” since, without bad faith, the parties would have avoided the huge emotional and financial costs of the litigation and could have both “succeeded” by saving tens of thousands of dollars that they could have used for their own and their children’s benefits.

[26] There is a high bar to a finding that a party has acted in bad faith. Such a finding requires more than evidence that a party has acted unreasonably – or even very unreasonably. Rule 24(8) requires a high threshold of egregious behaviour, and as such a finding of bad faith is rarely made. S.(C.) v. S.(C.), 2007 20279 (ON SC); Piskor v. Piskor, (supra), Wilson v. Cunningham, 2016 ONCJ 721 (OCJ) [2004] O.J. No. 796 (SCJ); Cozzi v. Smith, 2015 ONSC 3626, 2015 ONSC 3626 (SCJ); Jackson v Mayerle, (supra); X. v. Y., 2016 ONSC 5551 (SCJ)

[27] Bad faith is not an “all or nothing” determination. A party may have acted in bad faith at specific times or in relation to specific aspects of the litigation. The court has the discretion and responsibility to distinguish which aspects of a party’s behaviour may justify heightened costs consequences. Individual instances of bad faith may be relevant to the overall consideration of a party’s conduct under Rule 24(11). Some bad faith does not justify full recovery on all issues. Reasonableness and fairness still apply. X. v. Y. (supra).

[28] But even in the absence of bad faith, costs may be ordered on a full recovery basis and payable forthwith. Sims-Howarth v. Bilcliffe, (2000), 2000 22584 (ON SC), 6 R.F.L. (5th) 430

[29] In the case before me, some of the Applicant’s examples of alleged bad faith are not persuasive.

a. She says he acted in bad faith by failing to provide any financial support (child or spousal) until he was ordered to do so by the court. I do not agree that this in itself constitutes “bad faith” (although it is relevant in relation to the reasonableness of the Respondent’s behaviour).

b. She says he failed to comply with a temporary non-dissipation order by attempting to sell the matrimonial home. However, as part of this family’s complicated financial arrangement, the matrimonial home is actually registered in the name of the co-Respondent, Farag (that’s one of the reasons she’s named as a party). Any breach of the non-dissipation order appears to have been by Farag and not by the Respondent directly. In any event, the attempt to sell the home had apparently been aborted long ago, and it was not the subject matter of this motion.

c. She says the Respondent served his motion on the same day as the Applicant’s motion and did not address the relief he sought in his factum. The timing and adequacy of the Respondent’s materials may relate to overall considerations of reasonableness, but they do not give rise to a “bad faith” determination.

d. The Applicant says the Respondent acted in bad faith by intimidating the Applicant and her family members. There are serious consequences for such behaviour. The Respondent is already subject to some of those sanctions and restrictions. But the focus of this motion was primarily money, and to a lesser extent access. I do not find “bad faith” in relation to any specific facts under the heading “intimidation”.

e. The Applicant alleges the Respondent acted in bad faith by taking the position that no support determination should be made pending trial. But taking an unsuccessful position does not constitute bad faith.

f. The Applicant submits the only reason the Respondent brought a motion for access was because the Applicant sought financial relief. This is not an uncommon complaint from a custodial parent. But even a poor or questionable litigation decision in relation to parenting does not automatically constitute bad faith.

g. The Applicant says the Respondent refused to discuss settlement. The Respondent insists he participated in negotiations in good faith. While it is apparent that the Applicant took a more reasonable approach to resolving issues and trying to avoid this motion, I would not characterize the Respondent’s approach to settlement discussions as constituting bad faith.

[30] However, the Applicant’s primary “bad faith” argument relates to the Respondent’s inadequate, confusing and misleading financial disclosure. And on this topic I find there is merit to the Applicant’s position.

a. This was a case in which the Respondent simplistically claimed a below average amount of income, in circumstances in which by his own admission there has been a long history of having an above average amount of cash flow and expenditures. His lifestyle and pattern of spending was inconsistent with the threadbare information he was providing about his income and remunerative activities. The onus was clearly on him to do a lot of explaining.

b. While disclosure is fundamentally important in all cases, it is particularly important where there is a lot of financial activity which requires explanation.

c. The Respondent failed to provide adequate disclosure despite the Applicant requesting it as far back as one year prior to the hearing of the motion.

d. He filed incomplete, inconsistent and confusing financial statements. For example, the Respondent filed two financial statements dated March 10, 2016 and March 20, 2017. The date of separation debts on those two financial statements are dramatically different. No corroboration was provided with respect to any of the figures, and no explanation was provided with respect to the inconsistencies. As well, many of the entries on both financial statements were simply referred to as “TBD”. “TBD” is not disclosure.

e. He did not make proper (and required) disclosure of tax returns.

f. He adhered to the transparent fiction of historically affording a lavish lifestyle despite little visible income.

g. He refused to provide clarification even where specific explanations were requested in relation to various properties and businesses.

h. As of the date the motion was argued – more than a year after separation – the Respondent had still not obtained valuations with respect to significant assets.

[31] It is unclear why family court Judges are still required to spend so much time struggling with inadequate disclosure – and why we still have to explain the consequences. As stated in my June 15, 2017 judgment:

a. The most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing. Roberts v. Roberts, 2015 ONCA 450 (Ont. C.A.). Failure to abide by this fundamental principle impedes the progress of the action; causes delay; disadvantages the opposing party; and impacts on the administration of justice. Unnecessary judicial time is spent and the final adjudication is stalled.

b. Section 21 of the Guidelines and Rule 13 of the Family Law Rules largely preclude the necessity of anyone asking for disclosure. Indeed, in 2015 Rule 13 was amended to expand and emphasize each party's financial disclosure obligations.

c. The Respondent's current lawyer attempted to explain away deficient disclosure through a combination of "he's new to the file" and "no one ever asked for this before." But being relatively new to the file doesn't negate the fact that none of the Respondent's succession of lawyers produced the required disclosure. And it's never acceptable to say you didn't produce mandatory disclosure because nobody asked for it. Mandatory means you shouldn't have to ask.

d. Indifference or willful blindness to the most basic of disclosure obligations is more than a nuisance or irritant. Such contemptuous behaviour undermines the integrity of the court process and public confidence in our system.

e. And to the extent that inadequate disclosure creates a strategic advantage — by causing delay, frustration and needless expense for the opposing party — the court has both an obligation and a self-interest to severely sanction such mischief.

[32] Not every breach of the disclosure obligation will necessarily be so egregious as to constitute “bad faith”.

a. The adequacy of disclosure must be considered in the context of the circumstances of the case; the complexity of financial regime; and the nature and magnitude of potential claims.

b. In addition to the adequacy or volume of the disclosure produced, the court must also consider the intention or motivation behind the litigant’s approach to disclosure. Inattentiveness to the obligation will, at a minimum, constitute unreasonable behaviour. Deliberate concealment, evasiveness or obfuscation will more likely constitute “bad faith.”

c. Given the fundamental importance of income determinations with respect to the application of the Child Support Guidelines, persistent refusal by a party to make accurate financial disclosure and reveal their income will give rise to a level of bad faith. Ascento v. Davies, 2012 ONCJ 581 (OCJ).

d. Inadequate disclosure should always lead to costs sanctions. In some cases, the misconduct can be so serious as to constitute bad faith – with heightened cost consequences.

[33] The Respondent submits that while the Applicant complained about a lack of disclosure, she never actually brought a motion to compel disclosure. I do not accept that this argument reduces the Respondent’s liability for costs. All of the financial information the Applicant requested was disclosure which the Respondent would have been legally obliged to produce even without a formal request (let alone a motion for disclosure). The Respondent is attempting to deflect the onus.

[34] I find that the Respondent’s defiant, uninformative, and misleading approach to disclosure constitutes bad faith as contemplated by Rule 24(8).

a. He did not deny a long history of having and spending large amounts of money never disclosed for tax purposes.

b. He did not deny having the benefit of significant and expensive assets (like a house and cars, not in his name).

c. The Respondent is clearly quite sophisticated and shrewd in his financial dealings. He has managed to do very well for himself (and for his spouses at times when they have been on good terms with him).

d. I find that with the Respondent having deliberately created a complicated and largely invisible financial regime for his own benefit, there is a heightened onus on him to “uncomplicate” his finances by making comprehensive and comprehensible disclosure in a timely manner.

e. The Respondent has been playing an all-too-common game of “catch me if you can.” As Sherr J. noted recently in Matti v. Odish, 2017 ONCJ 538 (OCJ), these “chase” files create onerous and unfair burdens on opposing counsel, and threaten the integrity of our family law system. Such behaviour dictates that the court must be generous in compensating litigants who are forced to incur significant expense unravelling a financial puzzle.

[35] The bottom line: No matter how much we lecture, litigants will continue to flaunt disclosure obligations so long as they perceive that there may be a financial advantage to dragging things out and playing dumb. The only effective way to counteract this attitude is to use all of the tools available – including Rule 24(8) – to make it painfully clear that our court system has zero tolerance for non-disclosure.

COSTS CONSIDERATIONS

[36] In Serra v. Serra, 2009 ONCA 395 the Ontario Court of Appeal confirmed that costs rules are designed to foster three important principles:

a. To indemnify successful litigants for the cost of litigation.

b. To encourage settlement; and

c. To discourage and sanction inappropriate behaviour by litigants.

[37] The assessment of costs is not a mechanical exercise. It’s not just a question of adding up lawyer’s dockets. Boucher et al v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), 2004 14579; 71 O.R. (3d) 291 (Ont. C.A.); Dingwall v. Wolfe, 2010 ONSC 1044, 2010 ONSC 1044 (SCJ).

[38] The overall objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant. Selznick v Selznick, 2013 ONCA 35, 2013 ONCA 35 (Ont. C.A.); Delellis v. Delellis, 2005 36447 (ON SC), 2005 CarswellOnt 4956 (SCJ); Serra, (supra); Murray v. Murray, (2005) 2005 46626 (ON CA), 2005 46626 (Ont. C.A.); Guertin v Guertin, 2015 ONSC 5498, 2015 ONSC 5498 (SCJ); Jackson v. Mayerle, (supra).

[39] Overall, the determination of costs requires a careful balancing of many considerations.

[40] As noted above, the Applicant has established an entitlement to costs on a “full recovery” basis in relation to certain aspects of her claim.

a. Her June 6, 2017 offer to settle triggers Rule 18(14) cost consequences in relation to some issues, from the date the offer was filed (just two days before the motion was argued).

b. The Rule 24(8) bad faith determination also triggers full recovery of costs payable forthwith.

[41] But even where the “full recovery” provisions of the Rules 18(14) and/or 24(8) are triggered, quantification of costs still requires an overall sense of reasonableness, fairness and proportionality. Goryn v. Neisner, 2015 ONCJ 318, 2015 ONCJ 318 (OCJ). The Rules do not require the court to allow the successful party to demand a blank cheque for their costs. Slongo v. Slongo, 2015 ONSC 3327, 2015 ONSC 3327 (SCJ). The court retains a residual discretion to make costs awards which are proportional, fair and reasonable in all the circumstances. M.(C.A.) v. M.(D.), (2003) 2003 18880 (ON CA), 67 O.R. (3d) 181 (ONT. C.A.). Scipione v. Scipione, (supra); Jackson v. Mayerle, (supra).

[42] In Biant v. Sagoo, 2001 28137 (ON SC), 2001 28137, [2001] O.J. No. 3693 (SCJ) Justice Perkins stated:

“The preferable approach in family law cases is to have cost recovery generally approach full recovery, so long as the successful party has behaved reasonably and the costs claimed are proportional to the issues and the result.”

[43] In Sepiashvili v. Sepiashvili, (supra) Justice Wildman J stated at paragraph 20:

“…Regardless of the outcome of the case, a client is not entitled to direct vast resources to litigation and expect full reimbursement. When the rules use the term “full recovery costs”, there is an implied qualification that the costs incurred must be reasonable. There must be some assessment of the most effective use of resources to present the case, and some attempt to approach the matter in a cost-effective manner…..”

[44] The costs determination must reflect proportionality to the issues argued. There should be a correlation between legal fees incurred (for which reimbursement is sought) and the importance or monetary value of the issues at stake. Stetco v. Stetco, 2014 ONCA 370 (Ont.C.A.); Pagnotta v. Brown, [2002] O.J. No. 3033 (SCJ); Gale v. Gale, (2006) CarswellOnt 6328.

[45] By the same token, proportionality should not result in reduced costs where the unsuccessful party has forced a long and expensive hearing. Murphy v. Murphy, 2010 ONSC 6204, 2010 ONSC 6204 (SCJ); Philippe v. Bertrand, 2015 ONSC 2449, 2015 ONSC 2449 (SCJ).

[46] The Supreme Court of Canada has recognized in Hyrniak v. Mauldin, 2014 SCC 7 that timeliness, affordability and proportionality are essential components of any legal system that seeks to provide true access to justice. Affordability and proportionality require that lawyers budget their time. The expenditure of a disproportionate amount of docketed time will not be sanctioned by the court. Karkulowski v. Karkulowski, 2015 ONSC 3171, 2015 ONSC 3171 (SCJ).

[47] Ultimately, the court must engage in a balancing act:

a. The loser should not have to reimburse the winner for excessive or unnecessarily expensive litigation behaviour which might be regarded as “overkill”.

b. But if the loser’s unreasonable approach to the litigation forced the winner to incur significant extra legal expense, a more generous approach to indemnification will generally be appropriate.

[48] There are additional factors to consider:

[49] Rules 24(5); 24(8); and 24(11)(b) all direct the court to consider the reasonableness of each party’s behaviour. In this respect, I find that on all issues the Applicant acted and litigated in a reasonable manner. The Respondent did not.

[50] Rule 24(4) provides that a successful party might be deprived of their costs if they acted unreasonably. I find that there was no unreasonable behaviour by the Applicant which would justify any reduction in her entitlement to costs. She made all required disclosure. She diligently and patiently attempted to address disclosure, despite being stonewalled by the Respondent.

[51] There was no “divided success” here, as contemplated by Rule 24(6).

[52] The issues in this case were extremely important. The financial analysis became (needlessly) complex and difficult, as a result of the Respondent’s lack of cooperation and transparency.

[53] In every respect, there are strong indicators that the Applicant should be entitled to significant indemnification for costs in relation to this very expensive (and largely avoidable) exercise. But quantifying those costs remains a challenge. And no matter how reprehensible the Respondent’s conduct, costs must still be determined in a fair and reasonable manner.

[54] In support of her request for full indemnity costs in the amount of $94,373.45, the Applicant’s counsel has produced a Bill of Costs of less than two full pages. There’s not a lot of detail breaking down what services were provided on what dates; and what services related to the issues on this motion (as opposed to the overall action).

[55] There is no absolute requirement that a bill of costs must follow an “itemized by date and task” format. But particularly where large amounts of money are being claimed, the party seeking costs has an obligation to provide sufficient information:

a. To particularize what work had to be performed and why.

b. To address varying levels of indemnification which may apply to different issues.

c. To reassure the court that costs are not currently being claimed for previous steps or events where costs have already been dealt with (or should already have been dealt with). This requires more than a generic statement that unrecoverable costs are not being claimed. Chomos v. Hamilton, (supra).

[56] A much more detailed breakdown of the Applicant’s costs claim would have been both helpful and appropriate. Jackson v Mayerle, (supra). In Blank v. Micallef, 2009 60668 (ON SC), 2009 60668, 2009 CarswellOnt 6790 (SCJ) a costs claim was reduced because the lawyer’s bill of costs provided insufficient detail, and simply provided a general breakdown with a total of 49.2 hours. Ricchetti J. stated at paragraph 18: “It is impossible for me to determine whether the hours were reasonably necessary without a breakdown of the time spent on each task.”

[57] The Applicant’s bill of costs lacks sufficient particularity to allow meaningful application of Rule 24(10) – that costs are to be decided at each step of the proceeding.

a. The bill of costs sets out hourly rates of $650.00 for the Applicant’s counsel and $300.00 for co-counsel.

b. I would have had no difficulty with those rates generally. (Rule 24(11)(d).

c. The Respondent notes that in the Applicant’s costs submissions, counsel refers to her hourly rate at $600.00 and refers to this as reasonable. There is ambiguity as to the actual rate.

d. But the brief format and limited information in the bill of costs makes it difficult to fully assess the amount of time properly spent on the case. And the onus is on the party seeking costs to clearly explain the legitimacy and reasonableness of the claim.

e. The Respondent submits the Applicant’s bill of costs is obviously inflated. He cites as an example the fact that 5.0 hours of time are charged under the heading “To Prepare Bill of Costs.” Speaking plainly, I agree with the Respondent’s counsel that it is hard to understand how it could have taken 5.0 hours of a lawyer’s time to prepare a page and a half bill of costs that looks like it simply transcribed some numbers from a computerized ledger statement.

f. Similarly, the Respondent notes that the Applicant’s counsel has charged 64.4 hours to draft a motion and prepare a motion, and 32.5 hours for telephone calls, e-mails, correspondence, etc. That’s a lot of time being charged, without much elaboration.

[58] This was obviously a complicated and difficult matter, and Applicant’s counsel did an outstanding job. But the court’s responsibility is to determine a reasonable amount of costs to be paid by the Respondent in relation to this particular motion.

[59] Notably, while the Respondent’s counsel suggests the costs claimed by the Applicant are outrageous and wildly disproportionate to the issues, the Respondent does not provide any comparative information about his own legal fees.

a. There is no requirement for a losing party to file a bill of costs, although the absence of this information can be a factor when the court conducts its costs analysis. Smith Estate v. Rotstein, 2011 ONCA 491 (Ont. C.A.); Miller v. Young, 2016 ONSC 6577 (SCJ).

b. It is difficult to address the reasonable expectations of the losing party, without some information as to the cost the unsuccessful party incurred in addressing these same issues. Laurence v. Bridge, 2017 ONSC 1655 (Div Ct.); Kang v. Kang, 2016 ONSC 4469 (SCJ).

c. One measure of what is “fair and reasonable” to pay in costs may be arrived at by looking at what the unsuccessful party paid for their own legal fees. Goryn v. Neisner, 2015 CarswellOnt 8562; Mohr v. Sweeney, 2016 ONSC 3238 (SCJ).

d. While it is not mandatory for the unsuccessful party to reveal their own legal fees, such disclosure would generally be helpful, particularly if the main complaint is that the winner’s bill of costs is ridiculously high.

[60] Rule 24(11)(f) directs the court to consider any other relevant matter. This includes the aforementioned considerations of reasonable expectations and proportionality. As well, a court must consider a party’s ability to pay costs. MacDonald v. Magel, (supra); Biant v. Sagoo, (supra).

[61] The impact of legal fees on a successful custodial parent’s ability to provide for a child must also be considered. A large costs order against an unsuccessful party may affect their ability to provide for a child in their care. But inadequate reimbursement for costs may similarly impoverish a child residing in the successful party’s household. Jackson v. Mayerle, (supra).

[62] There has been a determination that the Respondent has vast financial resources, while the Applicant has virtually none. The court must guard against a party using their financial superiority to wear down and overwhelm a weaker opponent – particularly where children’s issues are involved.

[63] I must also consider that we are still at a relatively early stage in an ongoing proceeding. Given the fact that the Respondent has gotten off to a very bad start in terms of his approach, a meaningful costs sanction will hopefully have a salutary effect with respect to how the Applicant conducts himself during the balance of this case. This is consistent with the “encouraging settlement” and “discouraging inappropriate behaviour” objectives identified in Serra v. Serra (supra).

[64] I have considered the fact that interim disbursements of $30,000.00 were ordered against the Respondent to assist the Applicant in relation to legal fees. But those funds are for future legal fees. Costs are in relation to past legal work.

[65] The Respondent’s written submissions include the following conclusion: “It is submitted that the matter is an uncomplicated, long motion and the Respondent submits that the true costs which such (sic) be awarded to the Applicant should be in the range of $5,000.00 to $7,500.00.” Speaking plainly, it is incomprehensible how anyone could describe this as an “uncomplicated” matter. The range suggested is completely unrealistic.

[66] Precision in this type of determination is extremely difficult. But balancing all of the complex considerations, the Respondent shall pay to the Applicant costs in relation to this motion fixed in the sum of $39,550.00 inclusive of H.S.T. and disbursements. Half of that sum shall be payable forthwith.

[67] Given the fact that at least 80% of this motion related to the Applicant securing child and spousal support, there shall be an order that $31,640.00 of the total costs order shall be enforced by the Director of the Family Responsibility Office pursuant to section 1(1)(g) of the Family Law Responsibility and Support Arrears Enforcement Act, 1996. Wildman v. Wildman, 2006 33540 (ON CA), (2006) 82 O.R. (3d) 401 (Ont. C.A.); Sordi v. Sordi, 2011 ONCA 665 (Ont. C.A.); Wehbe v. Wehbe, 2016 ONSC 3227 (SCJ).

Pazaratz, J.

Released: October 18, 2017

CITATION: Benzeroual v. Issa and Farag, 2017 ONSC 6225 COURT FILE NO.: 48/16 DATE: 2017-10-18

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Asmaa Benzeroual Applicant

– and –

Joseph Issa Respondent

Heidi Edourard Farag Respondent

REASONS FOR JUDGMENT The Honourable Mr. Justice A. Pazaratz

Released: October 18, 2017