Court File and Parties
COURT FILE NO.: FC-16-846 DATE: 2018/06/25 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jessie Melanie Mancini AND Eric Mancini
BEFORE: Justice Mark Shelston
COUNSEL: Ozlem Eskiciolu, for the Applicant Michael Chambers, for the Respondent
HEARD: In Writing (at Ottawa)
Costs Endorsement
[1] On May 25, 2018, I released my endorsement in Mancini v. Mancini, 2018 ONSC 3282. I directed that the parties attempt to resolve the issue of costs. They were unable to do so. I have received their written submissions.
[2] In this case there were a number of contested issues, being:
(a) imputation of income to both parties; (b) retroactive and prospective child support; (c) retroactive and prospective spousal support; (d) an order that the respondent pay his share of the children’s special and extraordinary expenses; (e) an order rescinding any child and spousal support payable by the respondent pursuant to the order of Justice Engelking dated November 24, 2017 retroactive to November 1, 2017; (f) an order setting the appropriate amount of child support retroactive to November 1, 2017 with the respondent being credited with payments made; (g) an order for the rescission of all support arrears attributed to the respondent; and (h) costs of this motion.
Analysis
Successful party
[3] Under Rule 24 (1) of the Family Law Rules, there is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.
[4] The applicant submits that she was substantially more successful on the motion and seeks costs in the amount of $19,276.47.
[5] The respondent argues that there was divided success and that both parties should bear their own costs. In the alternative, the respondent submits that if costs are awarded, there should be a substantial discount to any costs awarded as a result of the clear split success on the issues of the motion. Consequently, the respondent submits that each party should be awarded 50% of the other’s legal costs.
[6] The most important part of the motion was the issue of imputation of income to the parties. Regarding the respondent’s income, the applicant proposed three different incomes to be imputed with the lowest amount being $100,000. The respondent’s position was that his income was $30,822.60 in 2017 and is anticipated to be $42,000 in 2018. I imputed income of $100,000 to the respondent and the applicant was successful on this issue.
[7] On the issue of imputation of income to the applicant, the applicant’s income consisted of social assistance, the child tax benefit and gross employment income of $240 per month. The applicant opposed any imputation of income while the respondent sought to impute an income to her in the amount of $28,000. I imputed income to the applicant in 2017 of $20,000 and in 2018 in the amount of $28,000. The respondent was successful on this issue.
[8] The respondent sought to rescind all arrears that had accrued since the consent order before Justice Engelking on November 16, 2017. This relief was denied, a new order was granted and the applicant was the successful party on this issue.
[9] The applicant sought retroactive support to November 2015 and, in the alternative, June 2016. The respondent submitted that this support should start as of November 2017. I ordered the support to commence as of August 2017 when the respondent served her notice of motion returnable November 16, 2017. I also reserved the claim for retroactive support prior to August 2017 to the trial judge. I find that success was divided on this issue.
[10] Regarding the table child support, there was an issue whether or not the child was in a shared custody arrangement. Based on the contradiction of the evidence presented on a motion for temporary relief, I ordered that the issue of the determination of the child’s residential arrangements prior to August 1, 2017 be reserved to the trial judge. However, for the purposes of the motion I found that the children were living in a shared custody arrangement and ordered the respondent to pay child support of $1,110 per month starting August 1, 2017 and $1,019 per month commencing January 1, 2018. Based on my finding that the respondent’s income was $100,000, even though I imputed an income to the applicant, the applicant was the successful party on this issue.
[11] The applicant sought contribution to section 7 expenses. I denied all of the claims except for the summer camp expenses on a without prejudice basis to the applicant providing better evidence at trial. The respondent was the successful party on this issue.
[12] On the issue of spousal support, the respondent did not deny that the applicant was entitled to spousal support but that based on his obligation to pay child support and, in his submission regarding his income, he had no ability to pay. I ordered the respondent to pay to the applicant spousal support of $1,380 per month commencing August 1, 2017 and $1,113 per month commencing January 1, 2018. The applicant was the successful party on this issue.
[13] Overall it appears that there was divided success. However, not all issues are of equal weight in determining success. The most important issue in this case was the determination of the respondent’s income. Much of the evidence provided by the parties centred on the imputation of the respondent’s income. The applicant was the successful party on the imputation of the respondent’s income, the amount of child support and the amount of spousal support. The respondent was successful on imputing an income to the applicant and on the issue of the section 7 expenses.
[14] I find that the applicant was the more successful party on the main issue at the motion and is presumptively entitled to costs.
The importance, complexity or difficulty of the issues
[15] The issues in this motion centred on financial issues. The issue was difficult because the respondent did not provide the financial disclosure that was relevant to the issue regarding the determination of his income.
The reasonableness or unreasonableness of each party’s behaviour
[16] Rule 24 (5) states that in deciding whether a party has behaved reasonably or unreasonably the Court shall examine:
(a) the parties’ 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.
[17] The applicant submits that the respondent’s conduct amounts to bad faith and that “he should face the highest award of costs available.” In the event that a court finds that 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 (Rule 24(8) of the Family Law Rules). On the issue of bad faith, in Scipione v. Del Sordo, 2015 ONSC 5982, 258 A.C.W.S. (3d) 547, Pazaratz J. reviewed the law of bad faith:
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. (I.J.), 2009 ONCJ 252, [2009] O.J. No. 2348 (OCJ); Biddle v. Biddle, [2005] O.J. No. 1056 (SCJ); Leonardo v. Meloche, [2003] O.J. No. 1969 (SCJ); Hendry v. Martins, [2001] O.J. No. 1098 (SCJ).
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).
To establish bad faith the court must find some element of malice or intent to harm. Harrison v. Harrison 2015 ONSC 2002.
Rule 24 (8) requires a fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made. S.(C.) v. S.(C.) (supra); Piskor v. Piskor, [2004] O.J. No. 796 (SCJ); Cozzi v. Smith 2015 ONSC 3626, 2015 ONSC 3626 (SCJ).
[18] Neither party made a formal offer to settle in this proceeding. On May 13, 2016, counsel for the applicant wrote to the respondent proposing that the respondent pay $2,184 per month in child and spousal support. This offer was sent in advance of a motion based on urgency scheduled for May 17, 2016. The offer was not accepted and the parties proceeded to attend a case conference on June 28, 2016. On November 13, 2017, counsel for the applicant sent a letter to the respondent proposing that he would pay $3,000 per month as a term of an adjournment for the motion set for November 17, 2017. The respondent agreed to pay $3,500 on the day of the motion and the matter was adjourned.
[19] The respondent made no offers to settle.
[20] There was no formal offer submitted by the applicant or the respondent. The applicant did submit two letters which were not accepted. I agree with counsel for the respondent that the offer of May 13, 2016 and the offer of November 13, 2017 were not in effect for the motion on May 17, 2018. Secondly, at the motion on May 17, 2018, there was no offer of any type submitted.
[21] I do not find that the respondent has acted reasonably in this proceeding. The motion on November 16, 2017 was served on the respondent on August 2, 2017. By the time the parties proceeded to the motion, the respondent had not complied with the disclosure order of Justice MacLeod dated June 28, 2016 and filed a reply affidavit and financial statement disclosing no income or expenses on November 14, 2017.
[22] I also note that the respondent refused to pay child support that he consented to on June 28, 2016 until July 2017. The respondent did not pay the child and spousal support that he consented to on November 16, 2017. The respondent ignored the order of November 16, 2017 and continued to pay the $600 per month consented to at the case conference on June 28, 2016. Further, the respondent did not provide disclosure until nearly 2 years after the case conference in June 2018.
[23] In my decision regarding imputation of income to the respondent, I found that the respondent failed to provide timely financial disclosure, that he failed to provide evidence to allow the court to conclude that he borrowed money to cover his expenses in excess of his declared income and I concluded that he was able to maintain the monthly expenses based on an income in excess of his declared income on his tax return. I found that the respondent’s evidence was contradictory and not credible.
[24] I do not find that the unreasonable conduct of the respondent rises to the level of bad faith. I do not find that there is evidence of malice or an intent to harm by the respondent. However, I find that the actions of the respondent were unreasonable.
The lawyer’s rates and disbursements
[25] I find that the hourly rates and disbursements submitted for the various lawyers and law clerks involved in this matter to be reasonable.
Time properly spent on the case
[26] In this case, the applicant had 124.20 billable hours and 3.9 non-billable hours resulting in total billable fees of $20,714. The respondent had 114.95 billable hours resulting in total billable fees of $23,866.25.
[27] I find that both parties spent an equivalent amount of billable hours in preparing for and attending on the motion.
[28] In deciding costs, I am not to necessarily reimburse the successful party for every dollar spent on legal fees but the award of costs must be fixed in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings (see Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.)).
Disposition
[29] Parties are responsible for their conduct and their positions taken before the court. I find that there was divided success but that the applicant was the more successful party on the most significant issue regarding the imputation of the respondent’s income which affected the quantum of child and spousal support. Further, I find that the respondent’s conduct relating to this motion was unreasonable.
[30] In the circumstances, I find that it is fair and reasonable that the respondent pay to the applicant costs in the amount of $12,000 inclusive of HST.
Shelston J. Date: June 25, 2018