Court File and Parties

BARRIE COURT FILE NO.: FC-18-157 DATE: 20190718 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Carlos Brito, Applicant AND: Maria Luisa Moniz, Respondent

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

COUNSEL: Ashley Taunton, for the Applicant Jessica Mor, for the Respondent

HEARD: By Written Submissions

Endorsement

[1] On March 7, 2019, I heard a confirmation hearing concerning Mr. Brito’s Motion to Change spousal and child support payable by him under a final order made in Ontario in 2008. In 2017, Mr. Brito brought a motion to vary that order and rescind arrears which had accrued under that order. After a brief motion held in 2017 without oral evidence, the Applicant was largely successful in reducing support and arrears. Mr. Brito sought an order confirming the provisional order.

[2] After submissions at the confirmation hearing, again without oral testimony, I found that much of the evidence of the Applicant lacked credibility or was inconsistent. Other than two years of support, I refused to confirm the provisional order.

[3] The parties have now made submissions as to costs. Ms. Mor, on behalf of the Respondent, claims full recovery costs of $7,339.79. She bases this request on her client’s success in the provisional proceedings, as well as bad faith behaviour on the part of the Applicant. She also says that her client made an Offer to Settle which was better than the result obtained by Mr. Brito at trial.

[4] Ms. Taunton argues that the costs claimed by Ms. Mor were excessive and that success was, in fact, divided. She says that there was no bad faith or unreasonable behaviour. She says that there should be no award of costs.

ANALYSIS

[5] As a general rule, under r. 24(1) of the Family Law Rules, costs follow the event and the successful party is presumed to be entitled to an award of costs. However, I may take into account unreasonable conduct by the party under r. 24(4) and even a successful party may be disentitled to costs by way of unreasonable conduct under that rule. Moreover, if I find bad faith on the part of a party, I am mandated to award costs under r. 24(8); those costs are to be awarded on a full recovery basis. Finally, if success is divided I may apportion costs as appropriate: see r. 24(6).

[6] In Mattina v. Mattina, 2018 ONCA 867, the Ontario 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).

[7] 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.”

[8] The issues raised by the costs submissions are therefore as follows:

(a) Was the Respondent the successful party in these proceedings, or was success divided? (b) Is the Applicant guilty of unreasonable or bad faith conduct? (c) Does the Respondent’s Offer to Settle warrant full recovery costs under r. 18?

Success on the Confirmation Hearing

[9] The result on the confirmation hearing was that the request for confirmation made by the Applicant was largely dismissed. The order of the Alberta court was only confirmed respecting the first two years that the Applicant moved to Edmonton. The evidence of the Applicant was deficient and failed to prove on the balance of probabilities that his income was as he suggested in his materials.

[10] In determining the success of the parties, the court will have regard to the major issue argued before the court: see Firth v. Allerton, 2013 ONSC 5490; Mondino v. Mondino, 2014 ONSC 1102. I note as well that divided success is not equal success, and there must be an analysis of the issues that took the majority of time and effort to address. (see Jackson v. Mayerle, 2016 ONSC 1556, at para. 66)

[11] In the present case, the vast majority of the argument addressed Mr. Brito’s present health issues, his work with the company owned by his partner and his present income. On those issues, Ms. Moniz was largely successful and provided a great deal of material disproving the assertions made by Mr. Brito regarding his lifestyle and lack of income. This resulted in a majority of the arrears being left in place along with the ongoing support under the original order.

[12] I find that the successful party on this confirmation hearing was the Respondent and that she is prima facie entitled to her costs.

Mr. Brito’s Conduct

[13] Ms. Mor suggests that Mr. Brito is guilty of bad faith conduct and because of this, Ms. Moniz is entitled to full recovery costs.

[14] I do not find there to be bad faith behaviour. As confirmed in Weber v. Merritt, 2019 ONSC 3029 citing Jackson v. Mayerle, 2016 ONSC 1556, a party’s conduct must meet a “fairly high threshold of egregious behaviour” for there to be a finding of bad faith under r. 24(8). There must be an element of intention “to inflict financial or emotional harm” on the other party; a “misguided but genuine attempt to achieve the ostensible goal of the activity, without proof of intent to inflict harm, to conceal relevant information or deceive” will not do. (see S.(C.) V. S(M.), 2007 20279 (ON SC), 2007 CarswellOnt 3485 (S.C.J.))

[15] I found that Mr. Brito was less than forthcoming with information and that his evidence lacked credibility. I also found that his evidence of lack of funds was largely inconsistent with his behaviour and lifestyle. That behaviour may have been unreasonable; it was not bad faith behaviour as he was attempting to reduce his support and not necessarily inflict harm on the Respondent.

[16] On the other hand, I find that Mr. Brito’s behaviour was unreasonable. He did not make full disclosure, stating that he could not afford to do so while able to make trips to both Europe and Central America. His medical evidence was incomplete. There was no evidence of an offer to settle made by Mr. Brito, also an element of unreasonable behaviour (see Beaver v. Hill, supra and Laing v. Mahmoud, 2011 ONSC 6737). I find that Mr. Brito is guilty of unreasonable conduct which can go to the quantum of costs to be awarded against him.

Offer to Settle

[17] Ms. Moniz says that she made an offer to settle, pointing to the section in her Case Conference Brief which contained a “proposal to resolve” the issues. That section provided the payment of $85,000 for the arrears, which was probably better than Mr. Brito’s result on the motion.

[18] However, the proposal is just that, a proposal or suggestion for settlement. It is not an offer capable of acceptance. That is because it also contained an alternative suggestion, and the offer was not severable which would have allowed Mr. Brito to accept portions of the offer. (See Paranavitana v. Nanayakkara, 2010 ONSC 2257, [2010] O.J. No. 1566 (S.C.J)) Also, one of the provisions under the offer, which was the suggestion that there be no rescission of arrears and that the income imputed to the Applicant stand, is what I did, but I did not take into account the reduction of arrears for the two years subsequent to Mr. Brito moving to Edmonton.

[19] I do not find there to be an offer to settle to allow for the mandatory full indemnity costs provisions contained in r. 18(14). The proposal will be taken into account in setting the amount of costs under r. 18(16).

Quantum

[20] As stated in Beaver v. Hill, supra, reasonableness and proportionality are extremely important in setting costs.

[21] I note that the Respondent was extremely detailed and meticulous in her research and in the preparation of material for the motion. She did a detailed analysis of Mr. Brito’s Instagram and Facebook accounts, allowing the court to make the adverse findings that it did against Mr. Brito.

[22] As well, the Respondent is not making any claim for costs for the work done by Ms. Shank at the case conference (really an inquiry into the factors under S. (D.B.) v. G. (S.R.), 2006 SCC 37, [2006] 2 S.C.R. 231) or otherwise prior to the matter proceeding. That can be seen as a windfall to the Applicant.

[23] The 22 hours spent by Ms. Mor in preparation of materials, preparation and attendance at the one-day hearing is reasonable under the circumstances.

[24] Considering the proposals for settlement made and the Applicant’s unreasonable behaviour, I find that the full recovery costs claimed by the Respondent (really partial recovery costs taking into account the absence of Ms. Shenk’s costs) to be reasonable.

[25] There shall be an award of costs in the amount of $7,000 payable by the Applicant to the Respondent for the confirmation hearing. As support was in issue, these costs shall be enforceable as support.

McDermot J. Date: July 18, 2019