Court File and Parties

COURT FILE NO.: FC-17-FS52879-0000 DATE: 2019-11-14

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Robbin Dienne Williams, Applicant AND: Robert John Williams, Respondent

BEFORE: The Honourable Madam Justice D. Piccoli

COUNSEL: Caroline Kim, Counsel for the Applicant Iain D.D. Sneddon, Counsel for the Respondent

THE HONOURABLE MADAM JUSTICE D. PICCOLI

costs endorsement

Preliminary Matter

[1] At paragraph 3 of the respondent’s costs submissions, he raises an issue in relation to the release of $50,000 to each party. It is my distinct recollection, and my notes indicate, that in rendering my decision with respect to the motion and cross-motion on September 12, 2019, the applicant proffered an offer. The applicant, through her lawyer, agreed to release $50,000 from the investments at the Royal Bank of Canada to the respondent on condition that $50,000 would be released to the applicant from the proceeds of sale of the property being held in trust by Ms. Kim’s law firm.

[2] Following receipt of the submissions on costs, I listened to the audio recording and my recollection was confirmed; Ms. Kim clearly indicated that her client would agree to the above-mentioned. Based on the respondent’s costs submissions, he too agrees to the release of funds. Based on the consent of both parties, the Order should be amended to provide for the release of funds as set out in the preceding paragraph. Should the parties encounter any difficulty having the Order issued and entered, the matter can be directed to my attention.

The Positions of the Parties on Costs

[3] The applicant seeks costs on a substantial indemnity basis in the amount of $17,114.75.

[4] The respondent seeks costs of $5,000 because he states he was partially successful and because the applicant failed to provide an offer to settle.

The Law Respecting Costs

[5] The starting point in addressing the issue of costs is s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 as amended, which provides that subject to the provisions of an Act or rules of court, costs are in the discretion of the court, which may determine by whom and to what extent the costs shall be paid. This section must be read in conjunction with Rule 24 of the Family Law Rules, O. Reg 114/99.

[6] Rule 24(1) creates a presumption that “a successful party is entitled to the costs of a motion.” An award of costs however, is subject to the factors listed in Rule 24(12), the directions under Rule 24(4) (unreasonable conduct), Rule 24(8) (bad faith) and Rule 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party: see Berta v. Berta, 2015 ONCA 918, 128 O.R. (3d) 730 at para. 94.

[7] Justice Pazaratz succinctly summarized the analysis a court is to undertake in determining costs in Jackson v. Mayerle, 2016 ONSC 1556, 130 O.R. (3d) 683, at paras. 16-21. In doing so he cited Serra v Serra, 2009 ONCA 395, [2009] O.J. No. 1905, which confirmed that cost rules are designed to foster three important principles:

a. To partially indemnify successful litigants for the cost of litigation;

b. To encourage settlement; and

c. To discourage and sanction inappropriate behavior by litigants.

[8] Pazaratz J. also pointed out that the assessment of costs is not a mechanical exercise. It is not just a question of adding up a lawyer’s dockets. The overall purpose is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case.

Application of the Law

[9] Rules 24(4) and 24(5) direct the court to evaluate whether a party has behaved reasonably or unreasonably, by examining:

(a) the party’s behavior in relation to the issues from the time they arose, including whether the party made an offer to settle;

(b) the reasonableness of any offer the party made; and

(c) any offer the party withdrew or failed to accept.

[10] The applicant brought a motion pursuant to Rule 14(10). That rule specifically contemplates that a motion can be brought by way of Form 14B if it is limited to procedural, uncomplicated or unopposed matters.

[11] Given the voluminous material filed, once it became clear that the respondent was opposing the amendment to the Order, the matter should have proceeded by way of oral motion. Having said that, the respondent unduly complicated this issue. His responding material made clear that he purchased the Chatham property with protected funds and, accordingly, this should have been an uncomplicated matter.

[12] Rule 24(6) allows the court to apportion costs as appropriate where success in a case is divided. However, I find the applicant was successful in her motion and in defending the respondent’s cross-motion.

[13] Rule 24(8) states that if a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately. In reviewing the law on bad faith in Jackson, Pazaratz J. quoted para. 17 of Perkins J.’s decision in S.(C). v. S(M.), 2007 20279 (ON SC), [2007] O.J. No. 2164:

In order to come within the meaning of bad faith in rule 24(8), behaviour must be shown to be carried out with intent to inflict financial or emotional harm on the other party or other persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court… The requisite intent to harm, conceal or deceive does not have to be the person's sole or primary intent, but rather only a significant part of the person's intent. At some point a party could be found to be acting in bad faith when their litigation conduct has run the costs up so high that they must be taken to know their behaviour is causing the other party major financial harm without justification.

[14] At paras. 58-64 of Jackson, Pazaratz J. continued his review of the jurisprudence, holding bad faith implies the conscious doing of a wrong because of a dishonest purpose or moral obliquity – it involves intentional duplicity, obstruction or obfuscation. The act is done knowingly and intentionally. The breach of the order or agreement must be done to achieve an ulterior motive or with a view to achieving another purpose. To establish bad faith there must be some element of malice or intent to harm. With respect to the issue of disclosure, there is an email from Louise Poole of Davis Martindale dated August 13, 2019 is attached at Tab “G” to the respondent’s costs submissions. The email—which was not before me on the motion—indicates that the respondent has been co-operating in providing documents to that firm since February 22, 2019 (a date which predates the March 20, 2019 Order of Braid J.). The full extent of the co-operation is unclear.

[15] While I do not find that the respondent acted in bad faith with respect to his cross-motion, I do find that he acted in bad faith in not consenting to the order sought in relation to the Chatham property; particularly in light of the facts set out in my endorsement dated September 12, 2019.

Quantum of Costs

[16] Once liability for costs has been established, the court must determine the appropriate quantum of costs. Rule 24(12) prescribes some of the factors which the court must consider in deciding the appropriate quantum. They are as follows:

(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.

[17] Proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs: see Beaver at para. 12.

[18] Rule 18(14) speaks to the cost consequences of failing to accept offers to settle. The only offer to settle made in this proceeding was made by the respondent. Given that the offer was non-severable, the respondent’s suggestion that he was partially successful is not accepted; he took an “all or nothing” approach. After the motion was brought, it became clear that the monies used to purchase the Chatham property came from protected assets. Accordingly, the respondent should have consented to the order sought by the applicant in that regard. Instead, in his offer to settle, the respondent made his acceptance of that position contingent upon the applicant accepting all his positions with respect to the issues raised in his cross-motion. The respondent’s offer does not reflect a compromise and, therefore, will not play a material role in determining the quantum of costs: see Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519 at para. 16.

[19] As aforesaid, the applicant did not make an offer to settle. Consideration may be given to the absence of an offer to settle in situations where it is realistic to expect offers to settle to be made: see Beaver at para. 15. In this case, the applicant’s ability to make an offer to settle was hindered by the respondent’s failure to provide complete disclosure and the resulting inability to obtain a business valuation. Accordingly, this is not a case where the absence of an offer to settle will play a material role in determining the appropriate quantum of costs.

[20] In Serra, Boucher v. Public Accountants Council (Ontario), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 2005 1042 (ON CA), 75 O.R. (3d) 638 (C.A.), the Court of Appeal for Ontario set out the following additional general principles relating to quantum:

(i) Ultimately, costs decisions should reflect what the court considers to be a fair and reasonable amount that the unsuccessful party should pay.

(ii) Costs need to be proportional to the issues and amounts in question and the outcome of the case.

(iii) Amounts actually incurred by the successful litigant are not determinative.

(iv) In assessing what is fair and reasonable, the expectation of the parties concerning the amount of a costs award is a relevant consideration.

(See also Selznick v. Selznick, 2013 ONCA 35, [2013] W.D.F.L. 1013).

Entitlement and Analysis

[21] I will consider the dockets commencing June 8, 2019. For the time period June 8, 2019 to June 21, 2019 I award costs to the applicant inclusive of H.S.T. in the sum of $3,400. I do not award costs to either party for the July 17, 2019 court attendance. For the time period July 24, 2019 to August 7, 2019 the applicant seeks $12,717.92. I have reviewed the time spent and considered same in proportion to the relief sought and order a further $8,000 inclusive of H.S.T. Accordingly, the respondent is to pay the applicant the sum of $11,400 in costs forthwith.

[22] Given that all of the respondent’s funds are frozen, these costs will be payable by the respondent from the corporate accounts held at the Royal Bank of Canada. The respondent may choose the account and the investments to be sold to affect the payment. To be clear, the respondent may now access the sum of $61,400 from the investments such that he will have access to the monies consented to and funds to pay the costs award.

D. Piccoli J

Released: November 14, 2019