COURT FILE NO.: FC-13-1556
DATE: 2018/11/22
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Umna Majeed Applicant
– and –
Javaid Iqbal Chaudhry Respondent
Sonia Smee, for the Applicant Kanwardeep Singh Sukhija for the Respondent
HEARD: In writing
REASONS FOR JUDGMENT
SHELSTON, J
1The parties have not been able to resolve the costs associated with this proceeding. The applicant claims she was successful at this trial and is entitled to full indemnity of legal fees and disbursements of $54,767.35. The respondent submits that both parties should pay their own costs.
Parties’ Trial Position
2The applicant sought retroactive and prospective spousal support on compensatory and non-compensatory basis, security by way of life insurance for spousal support, a claim that the respondent owes her $36,028.69; an order that the respondent remove her name from U.J. International Corporation and costs.
3The respondent’s position was that the applicant had no entitlement to either compensatory or non-compensatory spousal support, that there was no jurisdiction to divide the debt of $36,028.69 and costs.
Trial decision
4In my reasons, I ordered as follows:
(a) commencing July 1, 2013 to December 1, 2013 the respondent pay to the applicant spousal support of $1353 per month;
(b) for the year 2014 the respondent pay to the applicant spousal support of $665 per month;
(c) for the year 2015, the respondent to pay to the applicant spousal support of $607 per month;
(d) for the year 2016, spousal support of $1247 per month;
(e) commencing January 1, 2017, the respondent pay to the applicant spousal support of $1301 per month;
(f) the respondent to pay spousal support to the applicant up to and including June 1, 2026;
(g) the spousal support to be increased annually commencing January 1, 2019 and on the first day of January of each subsequent year by the percentage change in the consumer Price Index for Canada;
(h) I declined to make an order for security for spousal support; and
(i) I dismissed the claim by the applicant requesting that the respondent remove her name from U. J. International Corporation.
5During submissions, counsel for the applicant advised the court that her client was withdrawing any claim for the debt of $36,028.69.
ANALYSIS
Successful party
6The Family Law Rules provide that there is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.
7The central issue in this trial was the applicant’s entitlement to spousal support including quantum, commencement date and duration. The applicant was the successful party on that issue. She was not successful on the claim for security for support, the request to have the respondent remove her from U.J. International and the claim of $36,028.69.
8I reject the submission of the respondent the most important issue in this case was with respect to the division of property. The claim for an equalization of the net family property was not an issue for trial. Neither party raised this as an issue at trial.
The importance, complexity or difficulty of the issues
9I find that the issues were important to the parties but that they were not complex or difficult.
The reasonableness or unreasonableness of each party’s behaviour
10In 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 any offer that was withdrawn earlier that was not accepted.
Applicant’s Offers
11The applicant made one offer to settle dated September 1, 2017, the applicant offered to settle on the following terms:
(a) commencing November 1, 2011 to October 31, 2014, the respondent would pay to the applicant spousal support of $1807 per month for a total of $65,052;
(b) commencing November 1, 2017, until October 1, 2020, the respondent would pay to the applicant spousal support of $1807 per month;
(c) commencing November 1, 2021 until May 1, 2030, the respondent would pay to the applicant spousal support of $1581 per month. In the alternative, the respondent would pay to the applicant spousal support of $2517 per month commencing November 1, 2017 until October 1, 2024;
(d) The spousal support will be adjusted in accordance with a cost-of-living provision;
(e) the respondent would obtain life insurance policy in the amount of $250,000 as security for support;
(f) the applicant would be solely responsible for all debts to her sister.
Respondent’s Offers
12The respondent made two offers. The first offer was dated July 18, 2017 offering to pay $14,000 to the applicant for spousal support and the equalization of any property claim. The second offer made by the respondent was dated January 9, 2018 where he offered to pay to the applicant $50,000 as a final and full settlement of spousal support equalization claim with respect to any property.
13In reviewing the offers to settle, neither offer was more favourable than the trial decision. However, the applicant’s offer on spousal support was more successful that the respondent’s offers. As a result, I can consider the applicant’s offer and her position at trial in this decision.
Conduct of the parties
14I found that the respondent was not a credible witness and that he was evasive in answers, changed his testimony and was prepared to lie. This type of conduct cannot be condoned.
15I adopt the reasons in Scipione v. Del Sordo, 2015 CarswellOnt 14971 (Ont. S.C.) by Pazaratz J. where he reviewed the law of bad faith and stated:
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).
16Where there is a finding of bad faith, full indemnity costs is the starting point. However, other factors could impact on the decision. Izyuk v. Bilousov, 2011 ONSC 7476.
17I reject the respondent’s submission that counsel for the applicant was unprepared and unfocused resulting in long examinations without substance. Counsel for the applicant should have served the expert report from Mr. Pittman earlier but that delay was partially as a result of late disclosure from the respondent. The issue of late disclosure by the respondent was a recurring problem in this case.
The lawyer’s rates and disbursements
18I find that the hourly rate charged by counsel for the applicant to be reasonable.
19The applicant retained Mr. Steve Pittman as an expert witness to prepare and testify regarding an income report concerning the respondent’s income for support purposes. The total cost of the reports and testimony of Mr. Pittman was $20,276.17. The issue of income determination was required and the report and testimony of Mr. Pittman was necessary evidence required by this court. The fees are reasonable when comparing the respondent’s cost of $26,000 for his expert witness.
20The respondent retained an expert to counter Mr. Pittman’s report. Mr. Pittman’s report was served late just before the trial. Counsel for the respondent agreed to continue to have the witnesses testify at the trial in January but that the trial be adjourned to allow the respondent to retain his own expert witness. The trial restarted the third week of the trial sittings because the respondent was late in filing his expert report. Both parties are responsible for this delay.
21The report of Mr. Pittman was a necessary expense on the issue of income determination.
22The applicant seeks the costs of retaining a private investigator to determine if the respondent was living with another person. The respondent admitted that fact at a Trial Management conference. There is no evidence of the cost of said expense provided. Consequently, I reject this request.
The time properly spent on the case
23The applicant provided a detailed bill of costs. Counsel for the applicant indicates that she spent 228.34 hours including time for preparation a motion for disclosure, for a settlement conference and the trial.
24Costs were reserved at a motion held on October 24, 2016. Costs were awarded for the motion for disclosure and the endorsement of Justice Linhares De Sousa did not address costs at the settlement conference. Of these three hearings, I will only consider the time spent for the motion on October 24, 2016 as those costs were reserved.
25The respondent did not provided a detailed bill of costs and indicated he has paid more than $80,000 in legal fees and disbursements plus $26,000 for a report prepared by an expert witness retained by the respondent.
26While there is no requirement for a losing party to file a bill of costs, the absence of this information can be a factor when the court conducts its costs analysis. (See Smith Estate v. Rotstein, 2011 ONCA 491, 2011 ONCA 491 (Ont. C.A.); and, Miller v. Young, 2016 ONSC 6577, 2016 ONSC 6577 (SCJ).)
27It is difficult to address the reasonable expectations of the losing party without some information as to the costs the unsuccessful party incurred in addressing these same issues. (See Laurence v. Bridge, 2017 ONSC 1655, 2017 ONSC 1655 (Div Ct.); and, Kang v. Kang, 2016 ONSC 4469 (SCJ).)
28One 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. (See Goryn v. Neisner, 2015 CarswellOnt 8562; and Mohr v. Sweeney, 2016 ONSC 3238, 2016 ONSC 3238 (SCJ).)
29The Court’s 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.).
30In Mattina v Mattina 2018 ONCA 867, the court set out the four fundamental purposes of costs:
(a) to partially indemnify successful litigants;
(b) to encourage settlement;
(c) to discourage and sanction inappropriate behaviour by litigants; and
(d) to ensure that cases are dealt with justly.
31In Beaver v. Hill, 2018 ONCA 840, the Court indicated that cost awards are discretionary and two important principles in exercising discretion are reasonableness and proportionality.
Any other relevant matter
32At the end of the applicant’s submissions, the applicant’s counsel advised the respondent and the court, for the first time, that the applicant was withdrawing her claim seeking an order that the respondent pay her $36,028.69. The applicant’s sister testified on the loans advanced. Both parties also testified on the issue of the loans. I find that this issue required one day of testimony. Since the applicant withdrew her claim at the end of the trial, the respondent is entitled to an adjustment in costs related to that abandoned claim.
33The respondent submits that a cost award would be devastating to his ability to support his daughter with his present partner. 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). Limited ability to pay an unsuccessful party may not be used to shield that party from a liability for costs particularly when a party has acted unreasonably. (See Gobin v. Gobin, 2009 ONCJ 278, 71 R.F.L.(6th) 209.). A party is responsible for their position taken in the litigation. I note that the respondent retained three different law firms throughout this litigation at a cost of $80,000.
Disposition
34I do not find it reasonable that the parties pay their costs. The respondent denied any liability to pay spousal support. That was his decision. He compelled the applicant to retain an expert witness, proceed through the litigation process and attend a trial. He is responsible for this matter going to trial. He was not a credible witness and I found that he engaged in bad faith conduct. I have considered the effect of a cost award against the respondent.
35The applicant seeks an order that all of the costs be enforced as support by the Family Responsibility Office. I find that it is appropriate in this case that the cost award be enforced as support payable.
36Considering all the circumstances, I find that the respondent should pay to the applicant costs in the amount of $40,000 inclusive of disbursements and HST.
37Further, I order that the costs of $40,000 be payable as spousal support and enforceable as such by the Family Responsibility Office.
Mr. Justice Mark Shelston
COURT FILE NO.: FC-13-1556 DATE: 2018/11/22
ONTARIO SUPERIOR COURT OF JUSTICE
RE: Umna Majeed, Applicant AND Javaid Iqbal Chaudhry, Respondent
BEFORE: Shelston, J
COUNSEL: Sonia Smee for the Applicant Ajay Duggal and Pankaj Sharma for the Respondent
COSTS DECISION
Shelston, J
Released: November 22, 2018