Kingston Court File No.: 355/15
Date: 2019-10-29
Superior Court of Justice - Ontario
Re: Steven William Newstead, Applicant
And
Cynthia Marie Hachey, Respondent
Before: Mr. Justice Timothy Minnema
Counsel: Paul Andrews, for the Applicant No counsel for the Respondent
Heard: In Chambers (Written Submissions)
COSTS ENDORSEMENT
MINNEMA, J.
[1] Following a successful defence of a contempt motion brought by the respondent, the applicant seeks full indemnity costs of $8,296.52. The respondent raises a number of issues that she asks the court to consider in the mitigation of costs.
Law
[2] Following the amendments to Rule 24 of the Family Law Rules in July of 2018, the decisions in Beaver v. Hill, 2018 ONCA 840 and Mattina v. Mattina, 2018 ONCA 867 have clarified the law relating to costs in a family law proceeding. The excerpt below is from paragraphs 9, 10, and 12 to 15 from Mattina (citations and excerpts from the Family Law Rules omitted):
Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides that cost orders are in the discretion of the court. Rule 24 of the Family Law Rules sets out a framework for awarding costs for family law cases in the Family Court of the Superior Court of Justice …
This court has held that modern family cost rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement, and; (3) to discourage and sanction inappropriate behaviour by litigants: … Rule 2(2) adds a fourth fundamental purpose: to ensure that cases are dealt with justly: … And Rule 24(12), which sets out factors relevant to setting the amount of costs, specifically emphasizes “reasonableness and proportionality” in any costs award.
Rule 24(1) creates a presumption of costs in favour of the successful party …
Consideration of success is the starting point in determining costs. This presumption does not, however, require that the successful party always be entitled to costs. An award of costs is subject to: the factors listed in r. 24(12), r. 24(4) pertaining to unreasonable conduct of a successful party, r. 24(8) pertaining to bad faith, r. 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party.
Rule 24(12) sets out a list of factors the court shall consider in determining an appropriate amount of costs.
The Family Law Rules only expressly contemplate full recovery costs in specific circumstances, e.g. where a party has behaved unreasonably, in bad faith or has beat an offer to settle under r. 18(14).
Rule 24(4) addresses the situation in which a successful party has behaved unreasonably.
Rule 24(5) provides guidance on how to evaluate reasonableness.
Rule 24(8) discusses the cost consequences for a party who has acted in bad faith.
[3] In assessing what is just, reasonable, and proportional, considerations may include the impact that the cost award will have on the party ordered to pay (Murray v. Murray (2005), 2005 CanLII 46626 (ON CA), 79 O.R. (3d) 147 (C.A.)) and its effect on the care, maintenance or interests of children (C.A.M. v. D.M. (2003), 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.)).
Analysis
Success
[4] The respondent’s contempt motion, containing six separate charges, was dismissed. The applicant was therefore successful and is presumed to be entitled to costs.
Offers
[5] Contempt motions do not lend themselves easily to the Offer to Settle rule particularly where, as here, the incidents relied on were all based on past events. Regardless, the respondent made the only offer and concedes that the ruling on the motion was not more favorable to her.
Bad Faith
[6] The applicant seeks full indemnity costs arguing that the respondent in bringing the six unsuccessful contempt charges was operating in bad faith, defined in the caselaw as acting with one purpose but motivated by another. He points out that the allegations of contempt had little or no merit and posits that they were therefore brought for the purpose of perpetuating the litigation without a legitimate reason, and to attack him personally. I agree and made a similar comment in the closing paragraphs of my decision.
[7] The respondent called the police three times regarding the alleged contemptuous behaviours, and unable to get traction brought her ill-fated motion. She attempts to distance herself from that course of action now by stating that she did so “on direction” from the police and legal counsel, alleging she was assured that she was likely to be successful and that her own costs would be covered. I do not see how she can resile from her decision. She knew about the seriousness of a contempt finding from her own caselaw. She is a high-functioning individual who is very familiar with court processes. She continues to be the driving force in the long litigious history of this case.
[8] The respondent argues that the court ought to mitigate or reduce the amount of a cost award against her because of bad faith on the part of the applicant. She suggests that his behavior “over the last year and a half” needs to be considered. However, only behaviors in relation to the issues decided on the motion from the time they arose are relevant (Rule 24(5)(a)). Even if it were otherwise, the respondent would not fare well. Her bald statement that she “has no history of bad faith in this case” is in marked contrast to the findings made at trial.
Setting Costs Amounts: Subrule 24(12)
[9] As noted in Rule 24(12)(a), when setting the amount of costs the court is to consider the reasonableness and proportionality of each of the factors under the following general headings as they relate to the importance and complexity of the issues. I would observe that the motion was important to the parties, and in particular to the applicant given what has recently been described by the Court of Appeal as the “opprobrium of a contempt order”: Chong v. Donnelly, 2019 ONCA 799 at paragraph 12. I also find that there was a level of complexity. The motion contained six separate and distinct contempt charges with different and varying fact scenarios.
Behaviour
[10] I have addressed the behaviour of the parties in part above, and made a bad faith finding with respect to the respondent. I would add, however, that I was not impressed with the timeliness of the applicant’s response to the respondent’s polite requests for access to his benefits information, which I address further below.
Written Offers to Settle
[11] In assessing reasonableness, neither the offer made nor the lack of other offers on the motion impacts my decision.
[12] The applicant made an Offer to Settle on this cost hearing itself, which he filed in a sealed envelope with his submissions. In view of the respondent’s objection to the fairness of that process, I have not read it. I see no benefit in drawing out this summary exercise by inviting further submissions on offers related to the issue of costs alone. The envelope shall be returned unopened to the applicant.
Time Spent by Each Party, Legal Fees and Rates, Expenses Incurred (Subrules 24(12)(a) (ii), (iv) to (vi))
[13] The applicant’s lawyer’s Bill of Costs as noted is for $8,296.52. The respondent argues that the amount seems excessive as her own legal costs were just over $3,000. However, she represented herself, and did not submit a Bill of Costs. I have no difficulty with the applicant’s lawyer’s fees and disbursements. I find that they are proportionate to the overall task of defending six separate counts of civil contempt.
[14] The respondent asked the court for an order requiring the applicant to reimburse her for the cost of train tickets related to the ‘holiday schedule’ contempt charge. I decline to do so. That difficulty arose from her own misinterpretation of the interplay between the regular access schedule and the holiday access provisions.
Any Other Relevant Matter: Alleged Impecuniosity
[15] The respondent indicates that she has debt issues arising out of these very court proceedings, namely cost orders (her wages are being garnished) and her own legal fees. Her view, under the heading of “Impecuniosity” in her submissions, is that they should mitigate against a further cost order. She asserts that “further encroachment of the mother’s income would create hardship for the mother and the children, who do live primarily with the mother.”
[16] The hardship argument was made previously in her post-trial cost submissions and I noted the following at that time:
I have considered the financial situation of the parties as set out in the trial evidence and summarized in my decision. It does not have a significant impact on the cost award. The wife claimed financial hardship, and suggested that as the primary caregiver for the children her exposure to a cost award should be eliminated or significantly reduced. However, she earns a good income, the Judgment equalized their property, and the husband is contributing to the children’s expenses by way of an appropriate child support payment. I am not swayed by this argument.
[17] The respondent has provided a copy of a recent pay stub. It shows that she earns just under $100,000 per year. There is no evidence that she has dissipated her property. I understand that the applicant, who earns more than she does, is still paying table child support. In my view the respondent is not impecunious, and I am not convinced that the amount of costs being requested will have a significant impact on the care, maintenance or interests of children. I also have difficulty with her suggestion that her past cost orders are a defense to a further cost award. Her own defaults should not limit the applicant’s recovery.
Analysis/Summary
[18] The respondent’s financial challenges are of her own making, and they are not so severe as to justify disregarding the two fundamental purposes of the costs rule in play here, namely sanctioning inappropriate behaviour and partially indemnifying the successful party.
[19] Looking at proportionality and reasonableness, I am of the view that the applicant is entitled to a cost award in line with his request, but only after a reduction related to the sixth contempt charge. I found that he dragged his feet on his court ordered obligation to provide the respondent with access to his benefits information. Whether the respondent could have abandoned that charge with costs after the purging event is unknown.
Decision
[20] Having regard to the factors and considerations outlined above, I find that what is just and reasonable in the circumstances is an order that the respondent pay the applicant’s costs of $6,800 inclusive of HST and disbursements. Per Rule 24(8), those costs shall be payable immediately.
Mr. Justice Timothy Minnema
Date: October 29, 2019