Court File and Parties

Court File No.: FS-15-0141 Date: 2019-03-20

Superior Court of Justice – Ontario

B E T W E E N:

Michelle Grasso, Applicant Andrea Clarke, for the Applicant

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Rishi Bhatt, Respondent Self-represented Respondent

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Gunvantrai Bhatt, Third Party Respondent Ken Nathens, for the Third Party Respondent

Costs Endorsement

Petersen J.

[1] This decision deals with costs of a six day family law trial that was conducted between June 5, 2018 and July 31, 2018. My reasons for judgement were released on January 29, 2019.

[2] Ms. Grasso was successful in her claims against the Respondent Rishi Bhatt. She was unsuccessful in her claims against the Third Party Respondent, Dr. Gunvantrai Bhatt. Dr. Bhatt was partially successful in his counter-claims against Ms. Grasso.

[3] As set out in my reasons for judgement dated January 29, 2019, Rishi Bhatt did not participate in the trial, but he did file an Answer to Ms. Grasso’s Application, as well as some materials, and he attended pre-trial conferences.

[4] The evidence at trial included testimony by Ms. Grasso and her mother about issues raised by Ms. Grasso’s claims against Rishi Bhatt, but the trial was primarily focused on the issues in dispute between Ms. Grasso and Dr. Bhatt.

Positions of the Parties

[5] Dr. Bhatt is seeking an order for costs against Ms. Grasso in the total amount of $56,639.64, which represents his costs on a partial indemnity basis up to April 11, 2018 (the date of his last formal offer of settlement) and on a full recovery basis thereafter. He argues that he is entitled to his costs as the successful party: Family Law Rules, r.24(1). He requests costs on a full indemnity basis from the date of his offer to settle based on Rule 18(14).

[6] Ms. Grasso’s own costs amounted to $59,102.19, inclusive of HST. She asks the Court to order that no costs are payable by her on the following grounds: her claims against Rishi Bhatt had merit, Dr. Bhatt’s claim for occupation rent against her was unsuccessful (though he was awarded damages for trespass), she does not have the financial means to pay Dr. Bhatt’s costs (or her own costs), her ability to care for her child will be compromised if she is ordered to pay Dr. Bhatt’s costs, and Dr. Bhatt is wealthy.

[7] Ms. Grasso does not seek an order of costs in her favour, notwithstanding her success in her claims against Rishi Bhatt. She submits that she is unlikely to recover any monies from Mr. Bhatt, despite the orders I made against him for retroactive and prospective child support. This likely explains why she did not seek a costs order against him.

Analysis

[8] Although Dr. Bhatt is presumptively entitled to his costs based on Rule 24(1), and presumptively entitled to full recovery of costs after April 11, 2018 based on Rule 18(14), any costs award remains a matter of judicial discretion: Courts of Justice Act, R.S.O. 1990, c.C.43, s.131(1); M. (A.C.) v. M.(D.), 67 O.R. (3d) 181 (Ont.C.A.) at paras.40 and 42.

[9] In family law cases, the respective financial positions of the parties, the unsuccessful party’s ability to pay costs and the impact of any costs order against a custodial parent on the best interests of a child are all relevant considerations in determining both liability for costs and the appropriate quantum of a costs award: M. (A.C.) v. M. (D.), at paras.40-45. Any unreasonable behaviour by a party during the litigation is also a relevant factor for consideration: Rules 24(4) and 24(12)(a)(i) of the Family Law Rules. Finally, all of the factors set out in Rule 24(12) of the Family Law Rules must be taken into consideration.

[10] The parties’ relative financial positions are disparate. Dr. Bhatt, a retired physician, is far more financially secure than Ms. Grasso, who is a single mother with an ex-husband who is not paying any child support. The evidence does not, however, establish that she is in dire financial circumstances. She has lived rent-free in Dr. Bhatt’s condominium unit for several years. She is employed full-time and co-owns another property. There is no evidence that she has accumulated significant debt. Pursuant to my reasons for judgement, she owes Dr. Bhatt damages for trespass in the amount of $13,640, which is a substantial sum of money, but I am not persuaded that this is such a crushing debt that her ability to care for her son will be negatively impacted if she is also ordered to pay costs.

[11] Ms. Grasso brought Dr. Bhatt, a Third Party, into this matrimonial proceeding by making a claim to an equitable ownership interest in a property registered in his name. Her claim had no merit. Dr. Bhatt made a generous settlement offer in April 2018, including an offer to pay her $10,000, which would have covered her moving expenses and first and last month’s rent in an apartment. She did not accept the offer and instead pursued her unmeritorious claim in court. She therefore forced Dr. Bhatt to participate in a multi-day trial and to incur significant legal expenses as a result. In the end, I made orders that were less favourable to her than the terms of the offer of settlement that she rejected. In these circumstances, the fact that Dr. Bhatt has greater financial resources than she does is not sufficient to rebut the presumption that he is entitled to his costs and is entitled to costs on an elevated scale after the date of his offer to settle.

[12] Dr. Bhatt is not, however, entitled to full recovery of all of his costs because of his unreasonable behaviour during the trial. His unreasonable conduct prolonged the trial unnecessarily. As a witness, he was both evasive and combative. Even during his examination-in-chief, he frequently did not directly answer the questions asked by his own lawyer. He made pronouncements off-topic. His cross-examination was unduly long because of his refusal to respond to relevant questions and his tendency to interrupt both counsel and me as the trial judge. I was required to direct him repeatedly to answer the questions asked. The amount of costs awarded to him will therefore be reduced to account for wasted time caused by his unreasonable behaviour.

[13] In addition, some of the costs that he is claiming are neither reasonable nor proportionate.

[14] Dr. Bhatt is seeking $29,529.51 in costs for fees incurred during the course of his retainer with a previous counsel, who drafted his pleadings and Financial Statement, and attended all pre-trial conferences on this file. The previous counsel also had carriage of a related civil litigation file, in which Dr. Bhatt brought an action against Ms. Grasso. That action was not joined with Ms. Grasso’s family law Application, as his prior counsel’s summary suggests, but rather was stayed by order of this Court because it constituted a duplicate proceeding. He should not be rewarded with costs related to an unnecessary duplicate proceeding.

[15] It is unclear from Dr. Bhatt’s submissions and from the previous counsel’s summary of costs whether the amount of $29,529.51 represents partial indemnity, substantial indemnity or full indemnity costs. The fees are not broken down in the summary, so it is difficult for me to assess the reasonableness and proportionality of the time spent on various tasks. The total number of hours and the lawyer’s hourly rate are not provided.

[16] Based on the limited information available to me, I find that $8,500 is a reasonable and proportionate amount of costs (on a partial indemnity basis) for work performed by the prior counsel.

[17] With respect to his current counsel’s Bill of Costs, I find that the lawyers’ and law clerks’ hourly rates are reasonable, considering the level of experience of the lawyers. Mr. Nathens, senior counsel on the file, appropriately delegated tasks to more junior lawyers, an articling student and law clerks, in order to provide cost-efficient services. The amount of time spent on various tasks was reasonable and proportionate to the importance and complexity of the issues in dispute.

[18] The work performed by Mr. Nathens and his colleagues up to April 11, 2018 amounted to $3,726.50 in fees, which will be reduced to $2,400 to reflect partial indemnity rates. The work performed after April 11, 2018 amounts to $34,387.50. That amount will be reduced to $25,000 as a result of Dr. Bhatt’s unreasonable conduct, which prolonged the trial and caused both parties to incur unnecessary expense. The reduction in his fees also reflects the fact that he was only partially successful in his counter-claim for damages against Ms. Grasso. The disbursements incurred, in the amount of $1,016.67 are reasonable.

[19] The total fees are therefore $35,900 ($8,500 + $2,400 + $25,000) and the total disbursements are $1,016.67. Adding 13% for HST, the total costs awarded are $41,716.

[20] For the reasons set out above, Ms. Grasso is ordered to pay Dr. Bhatt’s costs in the amount of $41,716. Given her limited financial resources and Dr. Bhatt’s financial security, she is granted one year from the date of this endorsement to make the full costs payment.

Released: March 20, 2019 Petersen J.