Court File and Parties

Court File No.: FS-18-235-00 Date: 2020-04-27

Ontario Superior Court of Justice

Between:

Lovedeep Kang, Applicant Adela Crossley, Counsel for the Applicant

- and -

Gulwinder Singh Kang, Respondent Tahir Majeed, Counsel for the Respondent Gulwinder Singh Kang

Jagjit Kaur Bhullar, Third Party David Milosevic, Counsel for the Third Party Jagjit Kaur Bhullar

Heard: In Writing

Reasons for Decision

Lemay J

[1] I am case-managing this action which is scheduled for trial in January of 2021. As part of the trial, the Applicant brought an action against the third party, Ms. Bhullar claiming that Ms. Bhullar was holding assets that the Respondent had a beneficial interest in. Ms. Bhullar had sought to bring a summary judgment motion to remove herself from the action, and I had scheduled that motion when the parties were in Court on September 11th, 2019, returnable for July 22nd, 2020. A timetable was also established when the motion was scheduled.

[2] On December 8th, 2019, the Applicant withdrew her proceeding against Ms. Bhullar by way of a Form 12. However, Ms. Bhullar is now seeking costs against the Applicant. The parties have agreed that I should fix the costs of this portion of the proceeding, and that I could do so on the basis of written submissions.

Positions of the Parties

[3] Ms. Bhullar seeks full recovery costs in the sum of $37,536.13 on the basis that the Applicant brought the proceeding against Ms. Bhullar in bad faith. Ms. Bhullar alleges that the Applicant made allegations that she knew or ought to have known were untrue. In the alternative, Ms. Bhullar seeks costs on a substantial recovery basis in the sum of $25,032.93.

[4] The Applicant argues that no costs should be awarded in this case, because the Applicant’s claim was bona fide and justified at least when it was commenced. In any event, the Applicant argues that she did not engage in any bad faith conduct. Finally, the Applicant argues that the Respondent’s conduct has left her destitute and that she has received no support from the Respondent.

Analysis

[5] There are three main issues that I must address:

a) Did the Applicant engage in bad faith conduct?

b) What consideration should be given to the Applicant’s financial circumstances?

c) Given the answer to the first two questions, and the facts of this case, what is the appropriate quantum of costs?

[6] I will deal with each issue in turn.

a) Bad Faith

[7] Rule 24(8) of the Family Law Rules states that, if a party has acted in bad faith, then the Court shall decide costs on a full recovery basis and require that party to pay the costs immediately. This is a high standard to meet, and as such a finding of bad faith is rarely made (see S.(C.) v. S.(C.), 2007 ONSC 20279, [2007] O.J. No. 2164 (S.C.J.)).

[8] In order to establish bad faith, a party must demonstrate “the conscious doing of a wrong because of dishonest purpose or moral obliquity.” Jackson v. Mayerle, 2016 ONSC 1556 at para. 58. More generally, a party will only be able to establish bad faith on the part of another party by showing some intentional, wrongful conduct or an ulterior improper motive. See the discussion in Jackson, supra as well as Williams v. Williams, 2019 ONSC 6586 and Green v. Whyte, 2019 ONSC 7133.

[9] To support her claim that the Applicant acted in bad faith, Ms. Bhullar argues that the Applicant knew or ought to have known that the assets the Applicant was claiming were beneficially owned by the Respondent were never owned by him. Instead, the Applicant knew or ought to have known that those assets beneficially belonged to Ms. Bhullar. The fact, however, is that the Respondent and Ms. Bhullar currently have a personal relationship that may have started some time ago. As a result, it was not unreasonable for the Applicant to seek to explore the source of the funds for Ms. Bhullar’s businesses and other assets, as it was possible that the source of funding for these businesses could have been money received from the Respondent while he was still married to the Applicant.

[10] Pursuing this claim until disclosure was provided and the summary judgment materials were prepared was not an unreasonable position for the Applicant to take. It is not something that comes anywhere close to satisfying the test for bad faith conduct.

[11] More generally, the Applicant also conducted herself reasonably by abandoning the action against Ms. Bhullar long before the scheduled date for summary judgment. Indeed, the Applicant abandoned this action before the cross-examinations were to take place, as I understand the timetable. This approach to the litigation is a clear indication that the Applicant has been behaving reasonably.

[12] There is no merit to Ms Bhullar’s claim that costs should be paid on a full (or even substantial) recovery basis, and those requests are dismissed. In my view, the appropriate recovery for costs in this case is on a partial indemnity basis.

b) The Applicant’s Financial Circumstances

[13] The Applicant has indicated in her costs submissions that she has been “left totally destitute with 3 children to support.” There is no specific request for a reduction or elimination of the costs to be paid as a result of the Applicant’s financial circumstances.

[14] Ms. Bhullar’s counsel points to the decision in Baksh v. Baksh, 2017 ONSC 377 for the proposition that a legally aided client stands before the Court in exactly the same circumstances as any other litigant. Counsel argues that a party’s limited financial circumstances will not be used as a shield against liability for costs.

[15] However, Ms. Bhullar’s counsel also properly advises me of a line of cases summarized by G. Campbell J. of this Court in Snih v. Snih, 2007 ONSC 20774. Snih contains a detailed discussion of the issue of whether the financial situation of the parties can be taken into account in fixing costs. Counsel for Ms. Bhullar argues that the financial circumstances of the Applicant should not be taken into account in fixing costs. However, G. Campbell J. concludes that the financial circumstances of a party is a factor that can be taken in to account in assessing a costs award, although it will not shield a party from an award of costs. I agree with Justice Campbell’s view.

[16] However, I would also note that there will need to be evidence before the Court to support a claim of hardship or indigent circumstances. That evidence is not strong in this case, and I am not placing significant reliance on this factor in reaching my decision.

c) The Quantum of Costs

[17] At this point, I have determined that the costs should be assessed on a partial recovery basis. I am also cognizant of the Court of Appeal’s direction in Beaver v. Hill, 2018 ONCA 840. Specifically, proportionality and reasonableness are the touchstone considerations to be applied by the Courts in fixing costs.

[18] Rule 24(12) also sets out a series of factors that are to be considered when assessing the quantum of costs that should be paid. Those factors include the time spent by each party, any legal fees including the number of lawyers and their rates and any other relevant matter.

[19] In this case, Ms. Crossley (on behalf of the Applicant) has not filed her Bill of Costs, so I cannot assess what costs have been incurred by the Applicant in respect of the action against Ms. Bhullar. However, I know that the action was abandoned at an early stage, before cross-examinations had been completed or a factum had been prepared. The reasonableness and proportionality of the time spent by each party should be assessed in light of this fact.

[20] This brings me to the time spent by counsel for Ms. Bhullar. I do not have detailed docket entries for Ms. Bhullar’s counsel either. All I have are aggregate amounts of hours spent. The total amount of time spent on this matter for Ms. Bhullar’s various counsel is in excess of 80 hours of billed time between the various lawyers, students-at-law and law clerks that have participated in the file.

[21] It must be remembered that the work involved in this file was the completion of an Answer, a Case Conference Brief and an Affidavit for a Summary Judgment motion. This material would have had considerable overlap as the underlying facts for the three documents were the same.

[22] Although I acknowledge that the issues were important to Ms. Bhullar, I am not persuaded that the amount of time that was spent is proportional to the issues, given their early resolution. This is particularly true when it is remembered that counsel is seeking partial indemnity costs of $13,383.34 inclusive of HST and disbursements.

[23] I have no doubt that the costs claimed by Ms. Bhullar were actually incurred. However, in my view, those costs are not proportional or reasonable given the stage that this action was at when the Applicant voluntarily abandoned it.

[24] I am of the view that an order for costs in the sum of $6,000.00 inclusive of HST and disbursements should be made, with those costs payable at the conclusion of the action.

Conclusion

[25] The Applicant shall pay Ms. Bhullar’s costs in the sum of $6,000.00 inclusive of HST and disbursements at the conclusion of this action.

Lemay J Released: April 27, 2020