Court File and Parties

Court File No.: FS-17-89269-00 Date: 2020 05 08 Ontario Superior Court of Justice

Between: M.M., Applicant Barbara A. Barnett, for the Applicant

- and -

E.M., Respondent Self-represented

Office of the Children’s Lawyer Marion Gage, for the Office of the Children’s Lawyer, Respondent

Heard: September 11, 12, 13, 16, 17, 18, 19, 20, 23, 24, and 25, 2019

Costs Endorsement

Fowler Byrne J.

[ 1 ] This is my decision on costs of a family law trial on all issues arising from the marriage and separation of the parties. The trial was heard before me over 11 days in September 2019. My Reasons for Judgment were released on January 17, 2020 at 2020 ONSC 352.

[ 2 ] The parties were invited to make written submissions on costs. The Applicant M.M. filed submissions, but the Respondent E.M., who is self-represented, did not. As of the date this decision was released, E.M. had over three months to deliver her submissions. The Office of the Children’s Lawyer (“OCL”) also made no submissions, but M.M. does not seek costs against it.

Law

[ 3 ] 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, O. Reg. 114/99, sets out a framework for awarding costs in family law cases in the Superior Court of Justice: Mattina v. Mattina, 2018 ONCA 867, at para. 9.

[ 4 ] Modern family law 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. Rule 24(12), which sets out factors relevant to setting the amount of costs, specifically emphasizes “reasonableness and proportionality” in any costs award: Mattina, at para. 10, citing Serra v. Serra, 2009 ONCA 395, at para. 8, and Sambasivam v. Pulendrarajah, 2012 ONCJ 711, at para. 37.

[ 5 ] Rule 24(1) creates a presumption of costs in favour of the successful party in a motion, case or appeal. Success is the starting point in determining costs. This does not mean that a successful party is always entitled to costs. An award of costs is subject to r. 18(14), the factors listed in r. 24(12), r. 24(4) pertaining to unreasonable conduct, r. 24(8) regarding bad faith and the reasonableness of the costs sought by the successful party: Mattina, at paras. 12-13; Howarth v. Bilcliffe, at paras. 1-2; Berta v. Berta, 2015 ONCA 918, at para. 94.

[ 6 ] I also note that r. 24(6) allows the court to take into consideration divided success, although it is not mandatory.

[ 7 ] The Family Law Rules do not provide for a general approach of “close to full recovery” of costs. Instead, r. 24(12) sets out the appropriate considerations in fixing a quantum of costs. As the wording of the rule makes clear, proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs: Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at paras. 11-12, 19.

[ 8 ] The Family Law Rules expressly contemplate full recovery costs in specific circumstances, such as when a party has behaved unreasonably, acted in bad faith or beat an offer to settle under r. 18(14). Rule 24(4) addresses situations where a successful party has behaved unreasonably, and r. 24(5) provides guidance on how to evaluate reasonableness. Rule 24(8) discusses the costs consequences of a party who has acted in bad faith: Mattina, at paras. 15-18; Beaver, at para. 13. In addition, s. 22(2) of the Federal Child Support Guidelines, SOR/97-175 (“Guidelines”), states that if a court makes an order for financial disclosure as contemplated by the Guidelines, the court may make an order that fully compensates that other spouse for all the costs in the proceeding.

[ 9 ] Bad faith can be found in a number of ways. The essence of bad faith is the representation that one's actions are directed toward a particular goal while one's secret, actual goal is something else – something that is harmful to other persons affected or at least something they would not willingly have supported or tolerated if the true intention had been known. However, not all bad faith involves an intent to deceive. In rare cases, bad faith can be overt, such as when actions are carried out with an intention to inflict harm on another party without an attempt to even conceal the intent: S.(C.) v. S.(M.), at para. 16.

[ 10 ] In order to be considered bad faith, the behaviour must be carried out with an intent to inflict financial or emotional harm on the other party or other persons affected by their behaviour, to conceal information relevant to the issues or to deceive the other party or the court: S.(C.), at para. 17. If bad faith is found in relation to some issues but not the whole case, full recovery costs should be awarded in relation to the issues affected by the bad faith and then the whole picture should be reconsidered in light of the factors in r. 24(11) (now r. 24(12)). The discretion in that provision should be used as necessary to produce the correct result: S.(C.), at para. 24.

[ 11 ] When reviewing an offer to settle, the absence of a true element of compromise is a factor to be considered in deciding whether the offer properly impacts on the appropriate costs award. In addition, judges should be very cautious about relying too heavily on this factor to increase or decrease the quantum of costs when the specific Rules regarding such offers are not directly engaged. Even under r. 24(5) (a ) of the Family Law Rules, it is but one factor to be considered: Beaver, at para. 16.

Analysis

[ 12 ] The Applicant M.M. seeks costs on a full indemnity basis in the sum of $93,856.77.

i. Success

[ 13 ] Many issues were before the court. M.M. sought and obtained sole custody. Access by E.M. to the child is to proceed under the direction of a parenting coordinator or with the help of a therapeutic counsellor.

[ 14 ] E.M. sought and obtained retroactive child support. However, her claim that retroactive child support be paid on the basis of imputed income was dismissed. M.M. also sought retroactive and ongoing child support and s. 7 expenses based on income imputed to E.M from the date of separation. He received the requested order, but income was only imputed to E.M. from 2019 onwards and not to the extent requested. Further, not all expenses claimed were accepted as appropriate s. 7 expenses.

[ 15 ] E.M. sought and obtained retroactive and ongoing spousal support. She proved a strong compensatory spousal support claim in the mid to high range. Spousal support was paid by way of a lump sum, at the request of both parties.

[ 16 ] Both parties sought equalization. M.M. also sought and obtained a finding that he was an equal owner of the matrimonial home by way of a constructive trust. Equalization was difficult due to the lack of full and frank financial disclosure by E.M. She failed to provide up to date income information and supporting documentation, failed to have her share of a family business valued, and improperly claimed an exclusion for an inheritance. She was unsuccessful in her claim for an unequal division of the net family property in her favour.

[ 17 ] Both parties claimed post-separation adjustments, for which M.M. was mostly successful. E.M. was successful with respect to the small adjustments she sought.

[ 18 ] In summary, E.M. was successful in her claim for spousal support and was partially successful in resisting M.M.’s claim that a large income be imputed to her. M.M. was successful on all other issues.

ii. Factors under Rule 24(12)

[ 19 ] Before an amendment to this rule came into effect in July 2018, the court was directed to consider the “reasonableness or unreasonableness of each party’s behaviour” rather than just their “behaviour”. The new amendment avoids some confusion as the elements of unreasonableness are clearly set out in r. 24(4) and (5) and address a party’s willingness to resolve some or all of the issues. The amendment allows the court to consider more than just behaviour related to a party’s willingness to settle. A review of a party’s behaviour in general allows the court to consider their overall conduct throughout the proceedings.

[ 20 ] The behaviour of E.M., while professional and appropriate in the courtroom, was not so throughout the course of the litigation. The details of that behaviour are outlined in my Reasons for Judgment and need not be repeated here in any great detail. It is sufficient to note that she was belligerent and offensive to M.M. and his counsel. She unnecessarily involved M.M.’s employers, causing great embarrassment to him. She breached court orders with respect to disclosure and continually breached a restraining order, not to mention the various recognizances in her criminal proceedings. She declared herself at war and acted accordingly. To state it succinctly, she made M.M.’s life hell. These comments are measured somewhat by the fact that a psychologist retained by the parenting assessor held the opinion that E.M. suffered from depression, a diagnosis that E.M. vehemently resisted.

[ 21 ] By contrast, the behaviour of M.M. was appropriate and extremely patient throughout the litigation.

[ 22 ] E.M. was represented occasionally, either by counsel of record or by an agent, but provided no evidence of the time spent by either. Counsel for M.M. has provided her dockets, which do not include the time for attendances at motions or conferences except for those attendances with the case management judge that were specifically reserved to the trial judge.

[ 23 ] Some of the dockets indicate interaction with counsel for the OCL. As indicated, no costs are sought against the OCL, and for the most part, its position was aligned with M.M.’s at trial. Approximately 35-40 hours of dockets were identified as somehow related to the OCL, which includes the 1 to 2 hours it took to present its case at trial. M.M.’s lawyer docketed approximately $12,000 towards the OCL’s case.

[ 24 ] In total, M.M. claims that his lawyers spent over 300 hours on this matter from 2016 until late 2019. I note that counsel did not charge for junior counsel that assisted her at trial. Given the acrimonious nature of this matter, the time spent is not unreasonable. Ms. Barnett’s rate is also reasonable considering her years of experience. The disbursements seem reasonable. The cost of the various experts has already been divided between E.M. and M.M. and was part of my Reasons for Judgment.

[ 25 ] M.M. provided evidence of eight offers to settle that were served on E.M. throughout the course of this litigation. For the most part, they were severable, meaning that E.M. had the option to accept only a portion of the offer, so as to limit the issues for trial. The last offer was made on September 9, 2019, two days prior to trial, dealing only with custody and access. On September 4, 2019, an offer was served that offered to settle equalization, child support and spousal support.

[ 26 ] With respect to the offer regarding custody and access dated September 9, 2019, I find that M.M. received a judgment at trial that was roughly equal to what was offered with respect to custody and access. However, the offer was not served at least seven days prior to trial, so r. 18(14) is not engaged.

[ 27 ] With respect to the remaining financial issues in the September 4, 2019 offer, M.M. gave E.M. the option of either one global payment in satisfaction of all claims or a payment satisfying the property claim with ongoing child and spousal support. Reviewing the trial decision globally, E.M. would have obtained a better result had she accepted M.M.’s offer of a global payment in satisfaction of all claims. With respect to the second option, E.M. achieved a better result at trial with respect to spousal support, but a worse result with respect to property and child support. However, the net effect is that the second option also would have provided E.M. with a better result than what she received at trial. This offer was served seven days prior to trial, so r. 18(14) is engaged with respect to support and property issues.

iii. Unreasonable Behaviour

[ 28 ] While E.M. enjoyed partial success with respect to the issue of spousal support, the court has the ability to award costs against her as a result of her unreasonable behaviour: r. 24(4). When determining whether a party acted unreasonably, the court is to consider the factors listed in r. 24(5), which focuses primarily on the willingness of the successful party to try to resolve the matter.

[ 29 ] As indicated before, M.M. made several offers, none of which was accepted. There was no evidence that E.M. ever served an offer to settle. Accordingly, from that perspective, E.M. did not act reasonably.

[ 30 ] While not specifically part of the reasonableness analysis, I also note that the court is obligated to award costs against a party who is not properly prepared, although there is no requirement that those costs be on a full indemnity basis. As indicated, E.M. was not prepared in that she did not provide full and frank financial disclosure. Some disclosure was made during the course of the trial, which caused unnecessary delay.

iv. Bad Faith

[ 31 ] There are clear examples of E.M. exhibiting bad faith in this matter. These include the following:

a) her breach of disclosure orders; b) her breach of a restraining order; c) her overt threats to M.M. to leave the country with the child so that M.M. would never see him again; d) her practice of sending emails to his military superiors denigrating his character; e) her practice of using the child’s e-mail account to send threatening, vulgar and hurtful messages to M.M. about him, his friends and family, knowing that the child would have access to these messages; f) her threats of sending insulting and denigrating e-mails to everyone M.M. knew; and g) her practice of embarrassing M.M. at the school in which he is a principal.

[ 32 ] This conduct is not directed towards any one issue. The conduct existed when the child resided with her, but it escalated when the child resided with M.M. It could be argued that in some instances, her intent was not malicious with respect to her son. When she followed her son or showed up in places where he was in breach of court orders, she believed it was in his best interests for her to be part of his life. By contrast, her conduct towards M.M. could not be characterized as anything but overtly malicious, intending to embarrass and humiliate him.

[ 33 ] Accordingly, as directed by S.(C.), M.M. is entitled to full recovery costs in relation to some issues, re-examined in light of the factors set out in r. 24(12) and keeping in mind the goals of a cost award as set out in Serra and the principles of reasonableness and proportionality mandated by Mattina.

Conclusion

[ 34 ] M.M. seeks the sum of $93,857 on a full indemnity basis. It should be reduced somewhat to account for the following factors:

a) The time spent with respect to the OCL should not be fully attributable to E.M.; b) Rule 18(14) was not engaged with respect to the offer regarding custody and access; c) E.M. was successful on the issue of spousal support; and d) Some of E.M.’s behaviour motivated by the necessary malice to be considered bad faith.

[ 35 ] Accordingly, I order E.M. pay to M.M. the costs of this matter, fixed in the sum of $70,000 inclusive of fees, disbursements and taxes.

Fowler Byrne J.

Released: May 8, 2020