Court File and Parties

BARRIE COURT FILE NO.: FC-17-856-01 DATE: 2019-07-05 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Scott Michael Ainger, Applicant AND: Karen Leigh Posendorf, Respondent

BEFORE: The Honourable Mr. Justice J.P.L. McDermot

COUNSEL: S. Nadine Finbow, for the Applicant Jason J. Murphy, for the Respondent

HEARD: By written submissions

Costs Endorsement

[1] On February 28, 2019, I heard a motion in this matter. It concerned Mr. Ainger’s claim for security for a spousal support claim that he wished to bring in this proceeding, although that claim was not then tested by the courts. I dismissed the motion and ordered that funds held in trust from the sale of a property be released to Ms. Posendorf.

[2] Mr. Murphy seeks costs on behalf of his client, Ms. Posendorf. He says that, not only was his client successful, but that Mr. Ainger is also guilty of bad faith or unreasonable behaviour. As well, his client had made an offer to settle the issues on the motion that Mr. Murphy says should affect the Respondent’s costs entitlement. He claims full recovery costs of $22,038.10 based upon a Bill of Costs filed by him with his costs submissions.

[3] Mr. Ainger’s counsel, Ms. Finbow, acknowledges that, as a result of the Respondent’s success on the motion, Ms. Posendorf is entitled to costs. She suggests that the Applicant’s actions did not amount to bad faith conduct, and that the time that was spent on the motion by Mr. Murphy was disproportionate to the importance and complexity of the matter. She suggests that costs of $5,000 was a more appropriate award.

Analysis

[4] In Mattina v. Mattina, 2018 ONCA 867, the Court of Appeal made it clear that costs in family law matters are designed to foster four fundamental purposes:

(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 under r. 2 (2) of the Family Law Rules.

[5] In Beaver v. Hill, 2018 ONCA 840, the Court of Appeal confirmed these fundamental purposes, and also stated at para. 12 that “proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs.”

[6] The issues raised in the costs submissions therefore include the following:

(a) Was the Applicant guilty of unreasonable or bad faith conduct? (b) Was the Respondent’s offer sufficient to warrant full recovery costs? (c) Was the work done by the Applicant’s counsel proportionate to the issues before the court?

Unreasonable or Bad Faith Conduct

[7] Mr. Ainger committed several egregious acts leading up to the motion. Firstly, he and his daughter intentionally sabotaged a personal injury claim being made by the Applicant thereby making less money available for support, and less money available to meet the Applicant’s needs. Later, in providing information in support of the motion, he misrepresented the facts about his employment to the court: he stated that he was not working for the parties’ property management firm while the emails between him and his clients, as well as between him and his son made it apparent he was, in fact, working actively for that company.

[8] In my view, both of these acts cross the line from unreasonable conduct into bad faith behaviour. That is defined as behaviour described as being “shown to be carried out with intent to inflict financial or emotional harm on the other party or persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court” [Perkins J. in S.(C.) v. S.(C.), [2007] O.J. No. 2164 (Ont.S.C.J.)]. In other words, bad faith behaviour is largely determined based on the motivation behind the actions of the wrongdoer.

[9] In the present case, I can only describe the Applicant’s actions concerning Ms. Posendorf’s personal injury claim as having been motivated by personal malice against her. It was an action designed to injure or hurt her and it did both parties a disservice. Even if done, as stated by Mr. Ainger, to bolster his own spousal support claim, the actions of the Applicant and his daughter had an ulterior motive resulting in a severe financial impact on Ms. Posendorf.

[10] It is also clear that Mr. Ainger intended upon deceiving the court when he deposed that he was not working for the Ainger Group and that he was not receiving any sort of compensation from his former company. These were shown as being serious misrepresentations by the emails obtained from the company server by the Respondent, if not perjured evidence.

[11] I therefore find that Mr. Ainger is guilty of bad faith behaviour. Under r. 24(8) of the Family Law Rules, this means that the court “shall decide costs on a full recovery basis and shall order the party to pay them immediately.” There is no discretion for the court to depart from this determination, and I therefore find that Mr. Ainger is liable to pay full recovery costs forthwith.

Offer to Settle

[12] In light of the finding of bad faith behaviour, it is hardly necessary to “guild the lily” by examining the Respondent’s offer to settle made on the motion.

[13] I wish to note, however, that the Respondent’s offer made it clear that she was suggesting that a long motion should be brought concerning temporary spousal support and that the proceeds for sale not be distributed pending the hearing of the long motion.

[14] One of the major flaws that I found in the Applicant’s claim was that the issue of spousal support had not been tested by the court by way of motion or other judicial determination. In the absence of a motion for spousal support (which was a part of all of the cases concerning security for support), the Applicant would have still had to demonstrate a prima facie case for spousal support which he failed to do before me. Ms. Finbow had suggested that her client could not abide the delay that a long motion would have entailed, but the offer made it clear that the Applicant would not have been prejudiced by the delay as the money was to be held in trust pending the hearing of the long motion.

[15] Had I not determined bad faith behaviour, the offer would have warranted costs on a full recovery basis, at least from the date of the making of the offer under r. 18 of the Family Law Rules.

Quantum of Costs

[16] The Respondent claims costs of $21,190.60 in a Bill of Costs attached to his submissions.

[17] The Bill of Costs makes it plain that the majority of the costs were based upon the hours spent by Mr. Murphy on this motion. According to the Bill of Costs, he spent 48.7 hours working on preparation and attendance on the motion. This does not include the costs of preparation of costs submissions.

[18] Ms. Finbow suggests this is excessive and suggests that the costs be reduced to 25% of the amount claimed.

[19] The fact that I have found that the Respondent is entitled to full recovery costs is not a carte blanche for her to be awarded whatever amount she wants to claim. This is made apparent by the fact that r. 24(8) provides that the court “shall decide” the issue of full recovery costs.

[20] As well, I adopt the statement of Wildman J. from Sepiashvili v. Sepiashvili, [2001] O.J. No. 3843 (S.C.J.) where she states that, “Even if [the husband] had been entitled to full recovery costs on all issues, this amount [$23,573,60] far exceeds what would be appropriate for a two-hour motion regarding spousal support and procedural issues.”

[21] Further, although I find the hourly rates and disbursements to be reasonable, I cannot determine from the Bill of Costs how Mr. Murphy spent all that time. The document gives a global amount, and other than two half-day appearances detailed in the body of the Bill of Costs, there is no breakdown to enable me to determine the reasonableness of the costs claimed by counsel.

[22] I therefore have no option but to determine that the sum of $15,000 would be reasonable full recovery costs for a motion of this nature.

[23] The Applicant shall pay the Respondent’s costs for the motion on a full recovery basis in the amount of $15,000 inclusive of HST and disbursements. Costs shall be payable forthwith.

McDermot J. Date: July 5, 2019