COURT FILE NO.: FC-17-1870
DATE: 2019/03/22
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Karen Enid Elaine Martin
Applicant
– and –
David Blair Watts
Respondent
James D.S. Whyte, for the Applicant
Michael Rappaport, for the Respondent
HEARD: March 20, 2019
Endorsement
Aston J.
[1] This is a continuation of a motion first heard April 19, 2018 and continued May 17, 2018.
[2] The motion judge ordered costs of $4500 and $1000 in favour of the applicant on those attendances. The applicant did not ask that the respondent’s lawyer be responsible for any costs. On his own initiative, as expressly permitted by FLR 24(9), MacLeod J. raised the issue of Mr. Rappaport’s personal responsibility for costs under that subrule. He then adjourned the matter for a later determination of that single issue. MacLeod J. subsequently recused himself from any further involvement in this case, so the case management judge fixed this date, before a different judge.
[3] The applicant has not filed any material for this hearing, except a confirmation form. She takes no position on whether Mr. Rappaport ought to share liability for costs. She does ask the court to confirm that the costs are payable immediately and regardless of the ultimate outcome of the case. She also requests consequences against the respondent if his costs liability is not satisfied within 15 days, but has not served any formal Notice of Motion to that effect. At the opening of the hearing today, I ruled that I would not address this latter request without a formal Notice of Motion.
[4] Mr. Watts was in attendance. He did not file any material but he did confirm that his lawyer had provided him with a copy of the reasons of MacLeod J. dated April 24, 2018 and May 18, 2018 and that he has discussed with Mr. Rappaport the advisability of independent legal advice. He said he was content to rely on Mr. Rappaport’s submissions to the Court. He does not request an order that his lawyer be responsible for any of the costs awarded against him.
[5] Mr. Rappaport requested that the issue of his personal responsibility for costs be stayed until the ultimate resolution of the case, citing Director of Criminal and Penal Prosecution v Jodoin, 2017 SCC 26, [2017] 1 S.C.R. 478.
[6] Paragraph 36 of Jodoin concludes with the sentence
Ideally, the issue of awarding costs against a lawyer personally should be argued only after the proceedings has been resolved in its merits. (emphasis added)
I do not accept Mr. Rappaport’s submission that those words compel me to stay or adjourn the issue before Court today. The “ideal” in a family law case is distinguishable from a criminal case. The nature of the proceeding and the role of counsel are different.
[7] FLR 1(4) requires lawyers to promote the “primary objective” of the rules, which includes saving expense and dealing with the case in ways that are appropriate to its importance and complexity. Moreover, the court can only fulfill its own obligation under FLR 1(5) to promote the primary objective if counsel do not run up costs without reasonable cause or waste costs.
[8] The rules relating to conferences, financial and documentary disclosure, offers to settle and summary disposition of discrete issues within the litigation are all devoted to encouraging settlement and minimizing the cost of litigation. So too FLR 24 respecting orders for costs. An outstanding issue, including an issue over costs, is often an impediment to settlement. The “ideal” in family litigation is to dispose of discrete issues sooner rather than later if the disposition does not trigger prejudice to one of the parties or some other adverse consequence.
[9] Awareness of the costs being incurred, and a party’s responsibility for those costs, fosters settlement of family law cases. FLR 24 encourages a “pay as you go” approach to family law proceedings
[10] In this case the resolution of Mr. Rappaport’s obligation, if any, towards the costs ordered against the respondent will remove one impediment to the ultimate resolution of the case. It is not prejudicial to Mr. Watts to address the issue now. He is not in a conflict of interest with his lawyer and the circumstances here do not necessitate any intrusion on solicitor client privilege. I agree with counsel for the applicant that success on the ultimate outcome of the case is irrelevant to the costs of the motions before MacLeod J. last year. There is no principled reason to delay a decision on this issue.
[11] I therefore decline to stay or adjourn the issue before the court today.
[12] What is the test for when a lawyer will be held responsible for payment of costs?
[13] Jodoin was a criminal case. The Supreme Court distinguished between criminal and civil cases in its articulation of a common law test for the imposition of a costs liability on a lawyer. At paragraph 31 it recognized that greater deference or flexibility ought to be afforded to defence counsel in criminal cases. The Court stated that
Awards of costs made against lawyers personally [in criminal cases] are therefore purely punitive and do not include the compensatory aspect costs have in civil cases.
The Court explained in paragraph 32 that the role of a defence lawyer is not comparable in every respect to a lawyer in a civil case because “the latter has an ethical duty to encourage compromise and agreement as much as possible, whereas a defence lawyer has no obligation to help the Crown in the conduct of the case”. The Court’s discussion of the general principles and considerations that ought to guide the court’s discretion are nevertheless helpful for civil cases, so long as the different context is kept in mind. See, for example, paragraph 25-29 of Jodoin.
[14] The Jodoin case sets out a common law test. In family law cases in Ontario a test is legislatively defined by FLR 24(9). Costs can be imposed on a lawyer if the lawyer “has run up costs with without reasonable cause or has wasted costs.” I regard those words as a necessary threshold finding, but there is a secondary consideration. There is still a discretion to be exercised before costs are ordered against a lawyer, a discretion that reflects the common law jurisprudence.
[15] This two part test was recognized by Jarvis J. in Gibbons v. Mulock, 2019 ONSC 1226 at para 71, a case that also falls under FLR 24(9). The first step is to inquire whether the lawyer’s conduct falls within the words of the applicable rule. The second step is to consider as a matter of discretion, and applying the “extreme caution principle” enunciated in Young v. Young, [1993] S.C.R. 3, at paragraph 135-136 (and now also the principles to be gleaned from Jodoin, cited above), whether the imposition of costs against the lawyer is warranted. There is no doubt from the jurisprudence on point that the discretion to hold a lawyer responsible for costs should be exercised sparingly and with extreme care and caution. At the risk of oversimplification, costs are awarded against lawyers to ensure the integrity of the justice system.
[16] An overview of the family law cases in which costs have been imposed on a lawyer reveals specific findings of “unacceptable behaviour”, bad faith or unethical conduct. Counts have used words such as “deplorable” and “unprofessional” in describing behaviour by a lawyer to justify a costs order against that lawyer. An alternative expression found in many cases is “deserving of censure.”
[17] I am not aware of any family law case in which mere incompetence has resulted in a costs award against a lawyer.
[18] In this case the applicant has not adduced any evidence that Mr. Rappaport ran up costs unreasonably or wasted costs. The only basis for such a conclusion must be found in the words of the motion judge in his two endorsements. I assume that Mr. Rappaport was at all times acting on instructions from his client, there being no evidence to the contrary.
[19] In his first endorsement, at para 52, the motion judge stated:
I am deeply concerned by the manner in which this motion proceeded. As discussed above, the motion was unsuccessful because there were procedural errors and because the law was misstated or misunderstood. Procedural decisions and legal argument are the responsibility of counsel and not the individual client. I am therefor driven to question whether it is fair to order costs against the respondent.
[20] In his second endorsement, at para 5, the motion judge stated:
On the face of this motion, it was misguided, wrong in law and procedurally inappropriate. It appeared that the time and expense involved in the motion has unjustifiably run up costs and wasted costs to the detriment of the Applicant and the Respondent as well as the administration of justice.
[21] I agree with the motion judge that the motions brought by Mr. Rappaport on behalf of Mr. Watts reflect badly on Mr. Rappaport’s competence. For example, they reflect a failure to understand certain fundamental concepts in equalization of net family property, the inapplicability of The Partition Act and the test for introducing fresh evidence. His second motion illustrates an ignorance of, or disregard for, the scheduling process for motions in Ottawa.
[22] It is apparent from Mr. Rappaport’s factum and submissions today that he still fails to understand why the Bosch case is of no use to his client as a precedent. His latest affidavit evidence, which I ruled inadmissible, reveals a fundamental misunderstanding of the rule that prevents a lawyer from being both witness and advocate, to say nothing of the scandalous content of that affidavit. It is apparent from his unilateral expansion of the agenda for today with yet another motion (for disclosure) that the Court’s local scheduling protocol still apparently means nothing to him. These observations about today’s attendance do not bear directly on the issue of whether he should bear some responsibility for the costs for the earlier attendances before MacLeod J., but they do reinforce my conclusion that the motion judge had good reason to raise this issue of his own initiative.
[23] I conclude that the threshold test has been met. Mr. Rappaport has indeed added to the costs of this litigation without reasonable cause. Moreover there are wasted costs because the motions have not moved the case towards settlement or trial. Quite the opposite.
[24] Having said that, I accept that Mr. Rappaport is sincere when he says his hope was that the first motion would truncate the issues and pave a path to settlement. He was simply wrong about that. I also accept that Mr. Rappaport had on honest but mistaken belief in his understanding of the law regarding S.52 (2) of The Family Law Act, The Partition Act and the R. v. Palmer test for the introduction of fresh evidence.
[25] Though I find Mr. Rappaport’s conduct on the motion falls within the wording of FLR 24(9) I decline to exercise the discretion I have to order costs against him personally.
[26] It is significant that Mr. Watts does not ask the court to order Mr. Rappaport to share responsibility for the $5500 Mr Watts has been ordered to pay. It is significant that the applicant takes no position on the issue. However, those factors alone do not justify absolving Mr. Rappaport from responsibility for costs. The court has an independent duty to protect its process and reputation, as well as a duty under FLR 1(5) to promote the primary objective of the Family Law Rules.
[27] In this case there are legitimate concerns about competency, but there is no hint of dishonestly, unethical conduct, or bad faith. I believe Mr. Rappaport’s passion for his client’s cause is genuine and the motions he brought had no apparent ulterior motive. Keeping in mind that orders for costs against lawyers ought to be made sparingly and with extreme caution in light of the lawyer’s responsibility as an advocate I think such an order in this case would significantly lower the bar, and lower it too much.
[28] I therefore decline to order any costs payable by Mr. Rappaport personally for the motions heard by MacLeod J. last April and May.
[29] The respondent’s motion for particulars and disclosure returnable March 20 is dismissed without determination on the merits. It was withdrawn at the hearing but in any event was not properly before the court.
[30] The costs ordered by MacLeod J, fixed in total at $5500 have been unpaid for 10 months. They are to be paid within 30 days.
[31] The applicant’s oral request for sanctions under FLR 1(8) if costs are not paid within a specified time is premature and needs to be the subject of a formal Notice of Motion.
[32] No costs are payable for this final attendance on the disposition of the original motions. Though Mr. Rappaport has successfully resisted a costs order against him personally, the applicant never sought such an order and should not be penalized for the concerns of the motion judge. Moreover, Mr. Rappaport’s did waste costs and unreasonably add to the costs of resolving the litigation, even if that was not his intent.
“Justice D. R. Aston”
Aston J.
Released: March 22, 2019
COURT FILE NO.: FC-17-1870
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Karen Enid Elaine Martin
Applicant
– and –
David Blair Watts
Respondent
Endorsement
Aston J.
Released: March 22, 2019