Court File and Parties

COURT FILE NO.: FC-13-2569 DATE: 2018/10/02

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Chantal Teena Ouellette, Applicant – and – Gias Uddin, Respondent

COUNSEL: Douglas Menzies and Jonathan Solomon for the Applicant John E. Merner for the Respondent

HEARD: In Writing (at Ottawa)

COSTS ENDORSEMENT

SHELSTON J.

OVERVIEW

[1] The parties could not resolve the issue of costs after the release of my Reasons for Judgment. I have received submissions from both parties.

[2] The applicant submits that she was the successful party and seeks costs against the respondent in the amount of $129,650.25 including disbursements and HST based on a full indemnity basis or $89,052.99 including disbursements and HST based on a partial indemnity basis.

[3] The respondent argues that there was divided success on the issues before the court and that a costs award would be devastating to him financially.

Family Law Rules

[4] Under Rule 24(1) of the Family Law Rules, O. Reg. 114/99, there is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal. The factors to be considered in assessing costs are set out in Rule 24(11) of the Family Law Rules, which include:

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 witness, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of order; e) expenses properly paid or payable; and f) any other relevant matter.

ANALYSIS

Successful Party

[5] The successful party is presumptively entitled to costs. Success is determined according to the issues before the court, the offers to settle, the positions taken at trial and, eventually, the trial decision.

[6] In this case the issues for trial were:

a) custody and access regarding the child; b) retroactive and prospective child support; c) retroactive and prospective section 7 expenses; d) retroactive and prospective periodic spousal support; e) lump sum spousal support; f) equalization of the net family property; g) a restraining order against the respondent; and h) costs.

Custody/Access

[7] At trial, the applicant sought sole custody of the child; an order that the child’s ordinary residence would be with her; authorization to take the child for testing or evaluation at the Children’s Hospital of Eastern Ontario; an order for psycho-educational assessment; an order that the child participate in a psychological assessment; and an order that the respondent follow a course of therapy or counselling as recommended by the child’s psychologist.

[8] The respondent sought an order for joint custody with day-to-day residence of the child to be with the applicant subject to the respondent having overnight access one night per week, regular telephone access and an extended period of two weeks in the summer. During the trial, the respondent agreed to a psycho-educational assessment but refused to agree that the child be evaluated at the Children’s Hospital of Eastern Ontario.

[9] I granted the applicant sole custody of the child; granted to her the right to make decisions regarding the child’s education, health and activities; ordered that the child participate in a psycho-educational assessment; ordered that the child be examined at the Children’s Hospital of Eastern Ontario to attempt to ascertain that the child has a medical diagnosis for his challenges; deferred the issue of a psychological assessment until further medical information is available; and rejected an order compelling the respondent to attend therapy or counselling.

[10] Further, I ordered that the respondent be entitled to receive copies of the child’s school report cards and information from any of the child’s health care providers.

[11] On access, I rejected the request for two weeks’ vacation with the child; granted the respondent the right to communicate with the child by text or phone; and granted the respondent overnight access with the child as arranged between the child and the respondent.

[12] The applicant made an offer to settle dated November 4, 2016 and another one dated April 28, 2017. The first offer left open the issue of custody, access and parenting concerns pending the investigation report of the Children’s Lawyer. In the second offer dated April 28, 2017, the applicant’s offer permitted each subcategory to be accepted separately or the whole could be accepted. The applicant offered that there be an order for joint custody; that the child’s ordinary residence would be with her; that the parties retain a counsellor specializing in parenting issues; and, in the event there was still no agreement, that the applicant would have the final decision.

[13] The applicant offered that the respondent would have the child after school for one or two hours, after which the child would return home for supper; that the respondent would have access every second weekend from Saturday at noon until Sunday before supper three out of four weekends; and that both parties would be entitled to have the child for a period of a week or two.

[14] The respondent’s only offer to settle dated June 9, 2016 sought an order for joint custody; that the residence of the child be with the applicant; and that the respondent have overnight access every second weekend from Friday after school to Sunday evening, sharing of the major holidays and two weeks during the child’s summer vacation.

[15] When I compare the applicant’s last offer dated April 28, 2017, the respondent’s offer dated June 6, 2016 and my trial decision, the applicant was the more successful party. She was granted sole custody of the child when she offered joint custody. She offered one to two weeks of vacation when none was ordered. She offered access to the child during school as well as access every second weekend three of four weekends per month while I ordered that access would be as arranged between the child and the respondent.

[16] Further, the applicant’s offer on custody dated April 28, 2017 was severable from the rest of her offer to settle. The respondent should have accepted that offer to settle to avoid the cost of proceeding to trial.

Income Determination

[17] The determination of the respondent’s income was a significant issue during this trial. At trial, the applicant sought to impute an income to the respondent in the amount of $200,000 while the respondent submitted that his support should be based on an annual income of $40,000.

[18] The respondent’s offer to settle dated June 9, 2016 offered to determine the respondent’s income at $53,677.15.

[19] In the applicant’s first offer dated November 4, 2016, she offered to determine the respondent’s income at $100,000. In her second offer dated April 28, 2017, she offered to settle based on imputing an income of $75,000.

[20] In my trial decision, I imputed an income to the respondent of $150,000. The applicant was the successful party on this issue. This finding had significant consequences on all support issues.

Table Child Support

[21] Based on my finding that the respondent’s income was $150,000 per year, table child support was fixed at $1,299 per month. Both of the applicant’s offers were less than that amount. In the applicant’s offer dated November 4, 2016, she offered to settle on the payment of $880 per month. In her offer dated April 28, 2017, she offered to settle on the payment of $682 per month. The respondent’s offer was based on an annual income of $53,677. The applicant was the successful party on this issue.

Cost-of-Living Increase

[22] At trial, the applicant sought an order that the table child support be increased to the cost of living. Neither of the parties’ offers to settle addressed this issue. I rejected this request. The respondent was the successful party.

Section 7 Expenses

[23] At trial, the applicant sought a determination that 18 different expenses qualified as section 7 expenses. I rejected all of the proposed section 7 expenses based on a variety of reasons, including that the requested expenses did not qualify as being extraordinary expenses for extracurricular activities and, in certain cases, even if I did, I did not find that the expenses met the test of being necessary for the child’s best interests.

[24] I rejected other expenses, specifically therapies as I did not have sufficient evidence upon which to decide whether the expenses were necessary. The respondent was successful on this issue.

Equalization of the Net Family Property

[25] In the applicant’s offer dated November 4, 2016, she offered to settle for the payment of $300,000 to settle her claim for retroactive and ongoing spousal support, lump sum or periodic, and in satisfaction of her claims for an equalization payment. Her offer provided various methodologies to satisfy that payment.

[26] In the applicant’s offer dated April 28, 2017, she offered to settle with the payment of $300,000, again providing a methodology for the respondent to satisfy part of the equalization payment with the balance to be paid within 90 days of the acceptance of the offer.

[27] The respondent’s offer to settle dated June 9, 2016 proposed an equalization payment of $27,911.73.

[28] I ordered the respondent pay to the applicant an equalization payment of $194,453.09. The applicant was the successful party on this issue.

Retroactive and Prospective Periodic Spousal Support

[29] In the applicant’s offer to settle dated November 4, 2016, part of her offer to settle upon the payment of $300,000 included her claim for spousal support.

[30] In the applicant’s offer to settle dated April 28, 2017, the applicant offered to settle upon the payment of $50,000 to be paid within 90 days of acceptance of this portion of her offer.

[31] In the respondent’s offer to settle, he proposed that the parties waive any entitlement to spousal support.

[32] I ordered that spousal support be paid from October 1, 2015 up to and including August 1, 2022. The applicant was a successful party on this issue.

Lump Sum Spousal Support

[33] At trial, the applicant sought a lump sum amount for spousal support of either $164,473 or $66,123 depending on whether or not periodic support was granted. I found that the applicant could be compensated by way of a periodic spousal support order and I rejected the request for a lump sum payment. The respondent was successful on this issue.

Prejudgment Interest

[34] The applicant sought prejudgment interest from the date of separation on the equalization payment at the rate of 3% in accordance with section 128 of the Courts of Justice Act, R.S.O. 1990, c. C.43. Neither party’s offer to settle addressed the issue of prejudgment interest.

[35] I ordered equalization payment be subject to prejudgment interest in accordance with the prescribed rate that existed effective October 1, 2013 with the prescribed rate effective that date. The applicant was successful on this issue.

Life Insurance

[36] The applicant sought life insurance in an amount of not less than $500,000 as security for the payment of either child or spousal support. Neither party’s offer to settle addressed the issue of life insurance.

[37] I ordered the respondent to designate the applicant as the beneficiary of a policy of life insurance in the amount of $100,000 and ordered that the respondent’s obligation to pay child and/or spousal support be the first charge on his estate. The applicant was successful on this issue.

Transfer of 324 Laurier Avenue

[38] The applicant sought an order transferring ownership of this property in partial satisfaction of the equalization payment. I denied that request. The respondent was successful on this issue.

Restraining Order

[39] The applicant sought a restraining order against the respondent including an order forbidding the respondent from conducting any form of electronic surveillance or intrusion into the applicant’s privacy. I denied that request. The respondent was successful on this issue.

Summary

[40] The applicant’s offers on custody/access, income determination, child support and spousal support were more favourable than my trial decision. On the issue of equalization, the sum was closer to the applicant’s figure than the respondent’s offer.

[41] The respondent was successful on certain issues which required less trial time than the other issues. Further, the issues on which the applicant was successful are of a much greater monetary value than the issues won by the respondent.

[42] Considering all of the factors, I conclude that the applicant was the successful party and this was not a case of divided success.

THE IMPORTANCE, COMPLEXITY OR DIFFICULTY OF THE ISSUES

[43] There is no doubt that this trial canvassed very important issues to the parties, specifically with respect to custody, income determination, entitlement to spousal support, quantification of child and spousal support and the equalization of the net family property. The matters before the court were not difficult or complex.

THE REASONABLENESS OR UNREASONABLENESS OF EACH PARTY’S BEHAVIOUR

[44] In determining whether a party acted reasonably or unreasonably, I am to examine a party’s behaviour in relation to the issues from the time they arose, determine if an offer to settle was made, determine the reasonableness of any offer and consider if any offer that was withdrawn earlier was not accepted.

[45] Offers to settle are the yardstick with which to measure success and are significant both in considering liability and quantum as set out in Osmar v. Osmar, (2000), 8 R.F.L. (5th) 387 (Ont. S.C.).

[46] In Scipione v. Del Sordo, 2015 CarswellOnt 14971 (Ont. S.C.), Pazaratz J. reviewed the law of bad faith:

96 . 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).

[47] I found that the respondent was not a credible witness and that he tried to convince me that his income was significantly less than my finding and that the respondent deliberately attempted to mislead me. I found that the efforts by the respondent were done consciously for a dishonest purpose and this was not a case of bad judgment or negligence but was done to conceal his actual income with respect to child and spousal support as well as the calculation of the net family property calculation. I find that the respondent’s actions equated to bad faith.

[48] Further, I find that the respondent failed to provide court-ordered disclosure requiring the expenditure of more time, effort and legal fees to the applicant. I find that the respondent breached his obligation to make full and frank disclosure of his income, assets and liabilities.

Lawyer’s Rates and Disbursements

[49] I find that the hourly rates for the applicant’s various counsel to be reasonable.

[50] With respect to disbursements, I do not accept that the applicant’s claim for the Separation and Divorce Resource Centre nor the privately-retained bookkeeper for organization of trial expenses were compensable expenses. Further, the applicant was not successful on the claim for a lump sum spousal support and I will not consider the cost of the actuary for his report.

Time Properly Spent on the Case

[51] The respondent’s bill of costs indicates that his counsel spent 135 hours (without any claim for legal assistants) from the beginning of the case through to the case conference; questioning; two settlement conferences; meeting with the Children’s Lawyer; trial preparation; and attendance at the trial, preparing written submissions as well as costs submissions. The respondent’s bill of costs inclusive of HST totals $53,392. There is no indication if this is full indemnification or partial indemnification.

[52] On the other hand, Ms. Herscovitch spent 33.2 hours; Mr. Solomon spent 31.25 hours; and Mr. Menzies spent 189.65 hours for a total of 254.10 hours from after the preparation of the application and financial statements until trial.

[53] In addition, the legal assistants and law clerks spent approximately 130.35 hours. I find that some but not all of the time spent by the law clerks and legal assistants should be part of the bill of costs.

[54] I do not find that the applicant was justified in having two lawyers attend the trial, namely Mr. Menzies as lead counsel and Mr. Soloman. The applicant submits that Mr. Solomon was required because Mr. Menzies was away on holidays during the month leading up to the trial. Upon a review of the bill of costs, Mr. Solomon spent 15.77 hours in trial preparation when Mr. Menzies was away and 9 hours attending a 3-day trial. I will not accept Mr. Solomon’s time to attend the trial.

[55] However, the bill of costs fails to provide a detailed breakdown. I have no information regarding the section of the bill of costs entitled “Harassment” and consequently will not consider these expenses. The submissions of the respondent indicate that the emergency motion was never brought. As I have no information as to this step in the preceding, I will not consider it.

[56] The applicant’s bill of costs provides a schedule with the description of the services, including who performed the services, the hours spent, and the hourly rate based on partial indemnity or the actual rate. The applicant’s bill of costs does not provide a detailed breakdown of the actual legal services provided to substantiate the hours indicated on the bill of costs.

[57] The bill of costs covers various stages of the litigation, including a case conference; amending an application; questioning; an emergency motion; a settlement conference; a second settlement conference; interaction with the Children’s Lawyer; and preparation for and attendance at trial, including written submissions. I have no evidence as to how costs were addressed at the case conference and the two settlement conferences.

[58] Further, I find that the bill of costs is deficient in that it fails to provide me with sufficient information to determine whether or not the services provided were necessary and reasonable. The burden of proof is on the applicant to provide the court which such information. Justice Pazaratz in Benzeroual v. Issa and Farag, 2017 ONSC 6225, stated that if a party seeks a large amount of costs, it is incumbent on that party 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; and 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.

[59] My role in assessing costs is not necessarily to reimburse the litigant 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.)).

Any Other Relevant Factors

[60] The respondent submits that he will be required to liquidate part of his real estate assets to meet the equalization payment. Further, based on the increased child and spousal support payments as well as an order for retroactive child and spousal support and prejudgment interest, he submits that the imposition of a costs award would result in financial devastation.

[61] The applicant submits that the respondent has been responsible for failing to adequately disclose, despite court orders, that he did not increase the child support, that he caused this matter to be stressful and expensive and that consequently he should pay the full cost for this proceeding.

[62] The ability to pay may be relevant to the issue of the quantum or scale of costs but not to a party’s entitlement to costs (Izyuk v. Bilousov, 2011 ONSC 7476, 2011 CarswellOnt 14392).

[63] I have taken into consideration that on the date of the trial, the applicant owed her lawyer $22,324.41 as set out in her financial statement dated November 8, 2017, while the respondent showed no debt for legal services based on his financial statement dated November 7, 2017.

[64] I have found that the respondent failed to make full financial disclosure and attempted to mislead me with respect to his income and his assets. Now that a decision has been rendered against the respondent, he asks the court to make no order as to costs against him.

[65] Parties are responsible for their conduct and their positions taken during litigation. Now that the decision is rendered, it is too late for the respondent to avoid the ramifications of his actions.

[66] Taking all these factors into consideration, I find that the respondent should pay costs for the proceeding that he compelled the applicant to pursue.

DISPOSITION

[67] I have considered the factors set out in the Family Law Rules, the various offers to resolve this dispute, the positions taken by the parties at trial, that this was a three day trial, the trial result and the costs incurred by these litigants.

[68] I find it is fair and reasonable that the respondent pay to the applicant costs fixed in the amount of $60,000 inclusive of HST and disbursements.

Mr. Justice Mark Shelston

Released: October 2, 2018