COURT FILE NO.: FS-17-21888 DATE: 20190425 SUPERIOR COURT OF JUSTICE – ONTARIO
RE: S.P., Applicant AND: C.C., Respondent
BEFORE: C. Horkins J.
COUNSEL: Emma Katz, for the Applicant C.C., acting in person
HEARD at Toronto: In Writing
REASONS FOR COSTS DECISION
Introduction
[1] This dispute proceeded to trial and I released my decision on January 30, 2019 (2019 ONSC 685). The parties have not agreed on costs. The applicant mother has served and filed cost submissions. The respondent father has not filed any cost submissions, even though he had ample time to do so.
[2] The applicant seeks full recovery of costs in the amount of $44,770 all inclusive. A detailed Bill of Costs has been provided. It is the applicant’s position that she is entitled to full recovery costs because the respondent acted in bad faith throughout this application and her recovery at trial clearly exceeded her offer to settle.
Legal Framework
[3] The Family Law Rules are designed to foster four fundamental purposes: to indemnify successful litigants for the cost of litigation, to encourage settlements, to discourage and sanction inappropriate behaviour by litigants, and to ensure that cases are dealt with justly: Mattina v. Mattina, 2018 ONCA 867.
[4] Pursuant to rule 24(1) there is a presumption that a successful party is entitled to costs. This presumption is subject to the factors in rule 24(12) that the court “shall consider” in “setting the amount of costs” as follows:
(12) In setting the amount of costs, the court shall consider,
(a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues:
(i) each party’s behaviour,
(ii) the time spent by each party,
(iii) any written offers to settle, including offers that do not meet the requirements of rule 18,
(iv) any legal fees, including the number of lawyers and their rates,
(v) any expert witness fees, including the number of experts and their rates,
(vi) any other expenses properly paid or payable; and
(b) any other relevant matter.
[5] As this rule states, proportionality and reasonableness are the “touchstone considerations” to be applied when fixing the amount of costs: Beaver v. Hill, 2018 ONCA 840 at para. 12.
[6] Finally, the Family Law Rules expressly contemplate that a party shall receive full recovery costs in specific circumstances: when a party has acted in bad faith - rule 24(8) and when a party has beat an offer to settle - rule 18(14).
Analysis
[7] The applicant was successful on all of the issues at trial and is presumptively entitled to costs. In assessing the quantum of costs, I have taken into consideration the factors in rule 24(12) with the touchstone considerations of proportionality and reasonableness. I have also considered the offers to settle and the respondent’s bad faith conduct.
Bill of Costs
[8] The detailed Bill of Costs shows that the bulk of the work was shared by two lawyers whose efforts did not overlap. The first lawyer is a 2007 call. The second lawyer, who handled all of the work from July 2018 forward to date, is a 2013 call. Additional help was provided by law clerks. The allocation of work was appropriate and the hourly rates charged are fair. The hours incurred total 132.50 which represents about 16.5 days. This is reasonable and proportionate to the issues involved and the difficulties that the applicant faced because of the respondent’s conduct.
[9] The Bill of Costs also includes $2365.10 for disbursements and HST. This is reasonable and proportionate to the matter.
[10] The respondent’s conduct caused unnecessary court attendances and caused counsel to incur additional hours to investigate and prepare a case for imputation of income. The respondent’s late decision to participate in the trial also contributed to the expense because the applicant had no idea what he would do given his non-participation prior to the trial. His bad faith conduct is specifically addressed below.
[11] The only criticism I have about the Bill of Costs is minor. The applicant’s counsel included time for a court attendance before Stewart J. when no cost order was made and costs were not reserved to the trial, as was done for the other court attendances.
[12] The adjustment is small and amounts to a fee reduction of $2655. The fees of $37,529 are reduced to $29,874, plus HST of $3,883.62 for a total of $33,757.62. With the addition of disbursements plus HST ($2365.10) the final total is $36,122.72.
The Respondent’s Bad Faith
[13] In paras. 3-15 of my Reasons for Judgment I set out the procedural background leading up to the trial. The father’s conduct that is detailed in this excerpt of the judgment demonstrates that he acted in bad faith:
[3] The father’s participation throughout this application has been minimal. He has refused to comply with the Family Law Rules.
[4] The application was issued on November 22, 2017. Instead of accepting service of the mother’s documents, the father served the mother with signed notarized documents in which he claims to be a “sovereign”. He states that the court has no jurisdiction over him and that the laws do not apply to him. As a result of the father’s actions, the mother had to incur the expense of a motion to obtain an order that approved service of her documents on the father.
[5] The father did not serve and file an Answer, a sworn Financial Statement or any the financial disclosure, as required by the Family Law Rules.
[6] A case conference was held before Justice Stewart on March 5, 2018. The father did not attend or file a case conference brief. Justice Stewart ordered the father to produce various documentation and serve and file an Answer and Financial Statement within 60 days. The father did not comply.
[7] On June 5, 2018, the father sent mother’s counsel a six-page letter once again claiming that he is a sovereign and that the laws do not apply to him.
[8] A settlement conference was held on October 26, 2018, before Justice Akbarali. The father attended without counsel. Justice Akbarali’s endorsement records the following. The mother requested an undefended trial. The father told the Court that he identifies as a sovereign and disputes the Court’s jurisdiction. He requested that the parties attend a mediation outside of Court. Justice Akbarali noted that reaching an agreement was unlikely and ordered that the matter proceed to an uncontested trial for one day on January 14, 2019.
[9] Justice Akbarali ordered that if by November 30, 2018, the father filed his Answer, Financial Statement, and a Form 35.1 affidavit in support of custody and access with the Court, he would be entitled to request a Trial Management Conference “with a view to his meaningful and orderly participation in the trial”.
[10] On November 30, 2018, the father served and filed an incomplete Answer and Financial Statement with no supporting disclosure. He also served a Form 35.1 affidavit in support of his claim for custody and access. The Answer does not include any particulars to support his own claim for custody, access and child support or his dispute of the mother’s claims. In his Financial Statement, he marked his income as "N/A" and did not list any of his assets. He did list debts. His materials were not sworn or commissioned.
[11] On November 30, 2018, the father also served and filed an Affidavit in which he once again stated that he is a sovereign and that he "will not consent to being enslaved” or placed in “involuntary servitude".
[12] On December 17, 2018, the father served mother’s counsel with a Trial Management Brief for a trial management conference scheduled for January 2, 2019. The father unilaterally scheduled this date. He never contacted the mother’s counsel to see when they would be available. The mother’s counsel rearranged her schedule to attend.
[13] The father’s Trial Management Brief was not properly completed. It contained no information to support any of the issues in this case. The only information that the father included in the brief was the following: “Denial of consent enforce. There has been no agreement provided in evidence, or; the agreement disclosure has been withheld”.
[14] Despite having booked the Trial Management Conference, the father did not attend at the conference. Instead, he sent a friend to request an adjournment of the trial scheduled for January 14, 2019. The friend told the Court that the father has been too busy working 24 hours a day and has been unable to prepare for trial. The friend had no information about where the father was working and what he was doing at work. On consent, the trial was adjourned to January 21, 2019, peremptory to the father.
[15] The trial proceeded on January 21, 2019 and the father attended. At trial, the father stated that he is a sovereign and that the Court has no jurisdiction over him. The father chose to limit his participation in the trial. He made an opening (and closing) statement that focused on his role as a sovereign and did not address the issues in the case. He cross-examined the mother and asked mostly irrelevant questions. The father then advised the court that he would not testify or introduce any evidence. This was the father’s choice. It was made clear to him that if he wanted the Court to consider his evidence, he had to testify under oath. He refused to do so.
[14] The respondent’s conduct clearly prolonged the litigation between the parties and increased the applicant’s costs. Every step along the way, the applicant was met with the respondent’s delay and lack of cooperation. He wasted court attendances because he either failed to attend or showed up without complying with the Family Law Rules and court orders. At no point did the respondent ever make a genuine effort to comply with the Family Law Rules and the court orders. His failure to attend the Trial Management Conference caused the trial date to be adjourned. When given the chance to participate in the trial he called no evidence. Instead he maintained his position that the court has no jurisdiction over him. There was no legal basis for his jurisdictional position. The respondent’s conduct when viewed as a whole is bad faith. I find that his goal throughout this application was to avoid his support obligations and conceal the financial evidence about his income. He knew or had to know that his conduct caused the applicant and child financial harm.
The Offers to Settle
[15] In a letter dated June 5, 2018, the respondent offered to settle some of the child related issues. He offered to pay $400 a month for child support or the “equivalent of the Applicant’s salary”. He also included various terms about custody and access that would give him an involvement in major decision making. A parenting timetable was not included. This offer was not accepted.
[16] The applicant served an offer to settle dated January 3, 2019. The trial judgment was either as favourable, or more favourable than the applicant’s offer. She offered sole custody and received sole custody of the child at trial. She offered supervised access and this was ordered with a further order that supervised access would terminate if the respondent failed to commence his access. The applicant offered an imputed income of $175,000 with Guideline child support set at $1435. At trial the respondent’s income was imputed at $250,000 and he was ordered to pay Guideline child support of $1994. Finally, at trial the applicant obtained a more significant order for child support arrears and sharing of s. 7 expenses.
[17] Pursuant to rule 18(14), the applicant is entitled to full recovery costs from the date of her offer, unless the court orders otherwise.
The Costs Award
[18] The fact that the applicant beat her offer to settle, entitles her to full recovery costs from the date of the offer forward. Given the respondent’s bad faith conduct throughout this entire application, the applicant’s request for full recovery costs should not be limited. From the outset the respondent acted in bad faith and for this reason full recovery is allowed from the start of the bill of costs, to the end. The only adjustment I am making is a small fee reduction of $2655. I have already explained that the fees requested are reasonable and proportionate to the issues and challenges that the applicant faced. In summary, I fix the applicant’s costs at $36,122.72 (inclusive of all disbursements and all HST).
Conclusion
[19] I make the following orders:
(1) The respondent shall immediately pay the applicant costs that are fixed at $36,122.72 (inclusive of all disbursements and all HST).
(2) The amount of $36,122.72 shall be enforceable by the Family Responsibility Office as support pursuant to the Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31.