COURT FILE NO.: 603/19 DATE: 2020-06-01 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Parbattie Kisten, Applicant AND: Mariusz Kosewski, Respondent
BEFORE: The Honourable Madam Justice L. Bale
COUNSEL: Joshua Halpern, Counsel, for the Applicant Ms. Pamila Bhardwaj, Counsel, for the Respondent
Costs Endorsement
[1] AS A RESULT OF COVID-19 which has caused the suspension of regular Superior Court of Justice operations at this time, as set out in the Notice to the Profession dated March 15, 2020, as updated, costs submissions in accordance with this court’s endorsement of March 11, 2020 were filed electronically through the court house email address: Hamilton.Family.Superior.Court@ontario.ca and reviewed by the court:
a. Written Costs Submissions of the Respondent, Mr. Kosewski re: Long motion scheduled for September 2020 with accompanying Bill of Costs;
b. Written Costs Submissions of the Respondent, Mr. Kosewski re: Urgent motion returnable November 14, 2020 with accompanying Bill of Costs;
c. Responding Submissions of the Applicant Ms. Kisten, (undated) re: both motions, with accompanying Bill of Costs;
d. Reply Submissions of the Respondent, Mr. Kosewski (undated).
[2] Upon the resumption of court operations all materials will be duly filed in the physical record at the court house.
[3] At the court’s request, copies of the following additional documents were provided in electronic format to assist the court:
a. Endorsement of Bale J. dated March 11, 2020;
b. Ex-parte Notice of Motion of the Applicant dated April 30, 2019;
c. Affidavit of the Applicant sworn April 30, 2019;
d. Cross-motion of the Respondent dated July 9, 2019;
e. Affidavit of the Respondent sworn July 8, 2019;
f. Responding Affidavit of the Applicant sworn July 16, 2019;
g. Reply Affidavit of the Respondent sworn August 22, 2019;
h. Notice of Motion dated November 14, 2019;
i. Affidavit of paralegal Galit Menahem sworn November 14, 2019;
j. Respondent’s Offer to Settle dated May 17, 2019;
k. Order on Motion Without Notice of Brown J., dated May 1, 2019;
l. Minutes of Partial Settlement of Ex-parte and Cross-motion;
m. Endorsement of Pazaratz J. dated October 16, 2019;
n. Temporary Order and endorsement of Lococo J. dated November 14, 2019; and
o. PC Law client ledgers of the Respondent.
Overview
[4] The Respondent, Mr. Kosewski, seeks costs arising from two motions brought in this court:
a. A long motion scheduled for the September 2019 long-motion sittings (the “long motion”), which was ultimately settled; and
b. An urgent motion heard on November 14, 2019 (the “urgent motion”).
Respondent’s Position
[5] The Respondent seeks full indemnity costs as follows:
a. $16,405.08, inclusive of H.S.T. and disbursements with respect to the long motion;
b. $4,341.08, inclusive of H.S.T. and disbursements with respect to the urgent motion.
[6] In essence, the Respondent’s request for full indemnity costs is two-fold, based upon:
a. His Offer to Settle, served May 17, 2019, in relation to the long motion; and
b. The Applicant’s purported bad faith conduct in relation to the urgent motion.
Applicant’s Position
[7] The Applicant requests that the Respondent’s costs claim be dismissed or the quantum payable substantially reduced on the basis of the following:
a. The Respondent behaved unreasonably or in bad faith and that his conduct generally should deprive him of an entitlement to costs;
b. The Respondent’s Offer to Settle was ‘close’ but not good enough to attract costs consequences;
c. The Applicant made informal Offers to Settle that ought to have been considered; and
d. The Applicant is of limited financial means.
Background
Long Motion
[8] On April 30, 2019 the Applicant brought an urgent ex-parte motion seeking a Certificate of Pending Litigation (“CPL”) against real property. It appears that title to the property was held in the name of the Respondent and that the Applicant and her children from a previous relationship had been residing in the property for some period of time. The Applicant further sought a non-depletion order against various assets of the Respondent. The court granted a temporary CPL against the subject-property, but did not grant the additional preservation relief sought on an urgent basis.
[9] On or around May 19, 2019 the Respondent served an Offer to Settle on the Applicant offering that:
a. The subject-property be sold and the proceeds of sale held in trust; and
b. Each party would bear their own costs of the motion if the Offer was “accepted within two weeks of the motion being argued. If the offer is accepted less than two weeks prior to the motion return date, the Applicant shall pay $6,000.00 in costs.”
[10] The Respondent brought a cross-motion on July 19, 2019 seeking the sale of the subject- property, that the proceeds of sale be held in trust, and that the Applicant vacate the premises by August 2019.
[11] The long-motion was ultimately scheduled to be argued during the long-motion (trial) sittings of September 2019.
[12] On or about September 18, 2019 the parties executed partial minutes of settlement which settled the issues raised on the motion and cross-motion. The settlement terms are paraphrased below:
a. The subject-property would be listed for sale;
b. The Certificate of Pending Litigation ordered by Brown J. would be terminated, and the Applicant would “forthwith take the necessary steps (sic) remove the certificate of pending litigation” on the property;
c. A real estate agent was agreed to;
d. The Applicant’s consent would be necessary with respect to any sale for a value less than $870,000.00;
e. The Applicant would vacate the property by September 15, 2019 and would maintain the property in ‘broom-swept’ condition;
f. The Applicant would maintain the carrying costs; and
g. The proceeds of sale of the subject-property would be held in trust by the real estate lawyer with carriage of the sale.
[13] These settlement terms were incorporated into an order of the court on October 16, 2019, in chambers, by the Honourable Mr. Justice Pazaratz.
Urgent Motion
[14] As stated above, as a result of the settlement reached between the parties in relation to the long motion, the Applicant was required to forthwith take the necessary steps to remove the CPL from the subject-property.
[15] The Respondent asserts that the Applicant misled the Respondent into believing that she had filed a 14B consent motion to terminate the CPL. The Respondent only learned that the necessary steps had not been taken the day prior to the scheduled closing date of the sale in November 2019. The Applicant thereafter did not cooperate in removing the CPL on an urgent basis, rather she suggested an extension of the closing date of the sale. She would not consent to the sale proceeding by way of a solicitor’s undertaking, as suggested by the real estate counsel and agreed to by the Respondent.
[16] The Respondent brought an urgent motion for the removal of the CPL. The urgent motion was heard before Lococo J. on November 14, 2019. The relief requested by the Respondent was granted by the court. The Applicant did not attend the hearing, despite notice of same. The issue of costs was adjourned to the Settlement Conference.
[17] On March 11, 2020 at the Trial Scheduling Conference, the parties requested that this court determine all outstanding issues of costs in relation to both motions, on the basis of written submissions. Counsel agreed to timelines and page limits for the filing of costs submissions. I note that, while typically the issue of costs would return to the judge who accepted the settlement or granted the temporary relief, the parties’ joint request was consistent with the primary objective of the Family Law Rules and the court’s duty to promote the primary objective by active management of cases. As case management judge, I agreed that the procedural order requested by the parties was just in the circumstances.
[18] The parties were able to file their materials electronically during the suspension of regular court operations.
Costs Generally
[19] Costs in family law proceedings are addressed under Rule 24 of the Family Law Rules, O. Reg. 114/99, as. am.
[20] Counsel for each party have submitted and rely upon the well-accepted general principles pertaining to costs in family law proceedings which follow.
[21] Modern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the costs of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants: Fong v. Chan (1999), 46 O.R. (3d)330, at para. 22; Serra v. Serra, 2009 ONCA 395, at para. 8. The Ontario Court of Appeal has identified a fourth fundamental purpose, namely to ensure that cases are dealt with justly, in Mattina v. Mattina, 2018 ONCA 867.
[22] Proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs: Beaver v. Hill, 2018 ONCA 840 at para. 12.
Success
[23] A successful party in a family law action is presumptively entitled to costs, as per Rule 24(1) of the Family Law Rules:
Successful Party Presumed Entitled to Costs
- (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal. O. Reg. 114/99, r. 24 (1).
[24] At times, success is not obvious. This can be particularly true in situations that are resolved on consent. In Frape v. Mastrokalos, Justice Kurz provided a helpful review of the more recent evolution of caselaw under the Family Law Rules pertaining to costs in the event of settlement: 2017 ONCJ 915. Specifically, the court identified:
… compromise and accept a settlement, effectively abandoning certain pre-settlement claims and defences without pressing them to trial, not because the party concedes in any way that positions previously held in the litigation have no objective merit, but because the party is simply tired of the ongoing acrimony, and/or feels unable to incur the expense of litigating the matter through to a final conclusion after trial: 2015 ONSC 6378 at para. 42;
[25] Recently, in Hmoudou v. Semlali, Swartz J. endorsed the opinion of Justice Pazaratz in Scipione v. Scipione, noting that “who got what they asked for?” is the primary question in every costs decision: 2015 ONSC 5982. In Hmoudou the court elaborated:
a. It is completely unreasonable to not get what you ask for and then argue that somehow success was divided or that you were in fact successful;
b. There are situations where there is divided success, or where in examining a comprehensive settlement it may be impossible to unravel who got what and whether it was valuable to them or not;
c. Caution must be exercised in situations where a settlement has been presented to a court and then the court is asked to assess costs. Where there are allegations of unreasonable behaviour, bad faith, or where the minutes of settlement are so intricate as to be enmeshed in a global structure, this initial caution may lead to a refusal to order costs in such circumstances. There will clearly be compromises made and settlements reached, where the motivation and considerations are unknown. It may then be impossible to determine who was successful, to assess reasonableness and reach a just and equitable order of costs; and
d. However, where it is clear that one side has been successful, it is entirely appropriate to assess costs and determine whether someone should pay costs to the other: 2020 ONSC 1330 at para. 22.
[26] It is necessary to consider the circumstances of each motion separately in assessing relative success.
(a) Long Motion
[27] On initial review, it would appear that the Respondent was the successful party on the long-motion: he sought that the subject-property be sold, and the proceeds of sale be held in trust, which ultimately occurred. However, this court is reluctant to assign a label of success without consideration of the fluid nature of family law proceedings in general, and the particular facts of this case. Specifically, this court’s determination of success also considers the following:
a. In May 2019, the court was satisfied that a Certificate of Pending Litigation was necessary against the subject-property on a temporary basis, as requested by the Applicant. At some point in time during the conduct of the litigation this became unnecessary – there is no judicial finding to rely upon as to when that occurred;
b. In May 2019, this court might not have ordered the sale of the property, as requested by the Respondent. The Respondent’s Offer to Settle required that the property be listed for sale “immediately.” The Applicant was residing in the home with her children and claimed an interest in the property. While it was ultimately agreed, in September 2019 (four months later), that the home would be sold, this delay in the sale potentially permitted the Applicant the opportunity to get her affairs in order and to secure alternate accommodations for herself and her children. The Respondent’s cross-motion requested that the Applicant vacate the premises by August 19, 2019. The ultimate settlement reached permitted her to remain within the premises until September 15, 2019; and
c. The ultimate settlement reached in September 2019 also contained other sale conditions which provided a measure of additional protection for the Applicant. For example, the ultimate settlement reached required the consent of the Applicant before acceptance of any Offers to Purchase below a fixed minimum sale price.
[28] These circumstances suggest that indeed some level of compromise was at play in the settlement of this motion. I conclude that while the Respondent was generally more successful on the long-motion, he was not wholly successful. There was some measure of divided success, and likely the presence of other financial and emotional factors at play which ultimately led to the settlement of this motion. These considerations have factored into the ultimate determination of costs in relation to the long-motion: a much more modest costs award than the quantum sought by the Respondent is appropriate in consideration of the above.
(b) Urgent Motion
[29] A determination of success on the urgent motion is far simpler. The Respondent requested that the CPL be lifted and the instrument be removed from the title registry to permit the sale of the property. The Respondent was wholly successful, without condition and without delay.
Unreasonable Behaviour
[30] With respect to unreasonable behaviour, Rule 24(4) and Rule 24(5) read as follows:
Successful Party Who Has Behaved Unreasonably
(4) Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party’s own costs or ordered to pay all or part of the unsuccessful party’s costs. O. Reg. 114/99, r. 24 (4).
Decision on Reasonableness
(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,
(a) the party’s behaviour 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. O. Reg. 114/99, r. 24 (5).
[31] The Respondent was the more successful party in this action. A determination of whether he engaged in unreasonable behaviour requires consideration of whether or not he made reasonable offers, and/or failed to accept reasonable Offers to Settle.
a. Long Motion:
[32] The court has been provided with a copy of the Offer to Settle of the Respondent dated May 19, 2019, as summarized above. This was a reasonable Offer to Settle, made early in the conduct of this motion. The Offer was not time-limited and was not withdrawn.
[33] The Applicant asserts that throughout the motion she made “informal counter-offers” to settle. She advises the court that she proposed that the property be sold to her, and the proceeds of sale be held in trust. The Respondent cannot be faulted for not accepting ‘informal’ offers, and cannot be faulted for not accepting this particular proposal, as it is not at all similar to the ultimate resolution.
[34] As it pertains to the conduct of the long-motion and the issues raised therein, I find no evidence that the Respondent behaved unreasonably with respect to Offers to Settle – made or received.
b. Urgent Motion:
[35] The Respondent did not serve a formal Offer to Settle with respect to the urgent motion, however I accept that he made every effort to address the issue without necessity of an urgent court attendance. The Respondent certainly cannot be faulted for failing to make an Offer to Settle arising from the extremely time-sensitive nature of the relief sought. It was clear that the Applicant would not agree – formalizing his position into a written Offer to Settle would have been a fruitless exercise.
[36] The Applicant asserts that, to address the issue of the CPL, she attempted to negotiate an extension of the closing date. This was not a reasonable proposal. I do not accept that the Respondent behaved unreasonably in rejecting this alternative.
Other Unreasonable Behaviour
[37] The Applicant asserts that the Respondent should also be deprived of an award of costs on the basis of unreasonable behaviour towards the Applicant personally. Specifically, the Respondent wrote text messages of an insulting and derogatory nature to the Applicant in May 2019, during the time of litigation of the long motion.
[38] The Applicant relies upon the case of J.R.M. v. C.T.H. wherein the successful party was deprived of costs after publicly posting derogatory and profane commentary about the court. In declining to award costs to the party, the court noted:
“ The father's behaviour easily falls into the unreasonable category. This behaviour is not acceptable. Courts must discourage this behaviour. Unless courts discourage this behaviour, it will continue and increase. Depriving an otherwise successful party of costs is one way to discourage this behaviour.”: 2017 ONCJ 863 at para. 52.
[39] This case appears to have been judicially considered on only one occasion. In T.S. v. P.L., the mother sent abusive and inappropriate emails to the father. Citing J.R.M. with approval, the court in T.S. reduced the costs award that would have otherwise been payable to send the message that this type of behaviour has no place in family litigation, and parties should think twice before engaging in such conduct in the future: 2019 ONCJ 288 at para. 31.
[40] On the other hand, appellate authority exists for the proposition that the court’s consideration of conduct in determining costs should consider only the conduct of the litigation, and not conduct unrelated to the litigation itself. See for example Dorion v. Reberge, [1991] 1 S.C.R. 374, at para. 229, and Clayton v. Clayton 1986 CarswellOnt 5010 (Ont. C.A.).
[41] I am guided by the specific wording with respect to “reasonableness” as contained within Rule 24(4): “a successful party who has behaved unreasonably during a case” and 24(5)(a): “the party’s behaviour in relation to the issues from the time they arose”, under the Family Law Rules. In my view, a practical application of this language requires some measure of causal connection between the offensive behaviour, and the conduct of the litigation. That is, except in extreme circumstances, the behaviour will have resulted in unnecessary steps or increased costs. To suggest otherwise, in this court’s opinion, would lead to unintended and sometimes absurd results. By way of example, had the Respondent parked his car on the front steps of the court house for the hearing of the motion, most would agree that this would constitute unreasonable behaviour. However, this would not justify a costs award in favour of the Applicant – the remedies and consequences would be found in another forum.
[42] This is not to say that communications between parties could never rise to the level of attracting cost consequences: scenarios come to mind wherein communications are so threatening, intimidating, or insulting that they impact the course of ligation between the parties. However, this is not the case before me. I have reviewed the messages, and they are indeed derogatory and insulting. The name-calling and foul language reflects very poorly upon the Respondent. However, the complete chain of messages also suggests a measure of mutual grandstanding and empty threats. The messages are immature and unhelpful to the relationship between the parties, but do not rise to the level of depriving a party of costs to which he or she might otherwise be entitled in the circumstances of this case.
[43] There shall be no finding of unreasonable behaviour which would deprive the Respondent to costs to which he might otherwise be entitled, as it pertains to either (i) efforts to resolve the issues, or (ii) inappropriate conduct, on either motion.
Offers to Settle
[44] Rule 18(14) of the Family Law Rules is relevant to the Respondent’s claim for full-indemnity costs:
Costs Consequences of Failure to Accept Offer
(14) A party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:
If the offer relates to a motion, it is made at least one day before the motion date.
If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
The offer does not expire and is not withdrawn before the hearing starts.
The offer is not accepted.
The party who made the offer obtains an order that is as favourable as or more favourable than the offer. O. Reg. 114/99, r. 18 (14).
[45] Despite the presumptive provisions of Rule 18(14) the court still retains the discretion to award less than full recovery costs: Jackson v. Mayerle, 2016 ONSC 1556 at para. 90, MacDonald v. Magel, (2008), 67 O.R. (3d) 181 (Ont. S.C.J.); Guertin v. Guertin, 2015 ONSC 5498 (Ont. S.C.J.).
[47] The Applicant relies on the case of Carmichael v. Carmichael, for the proposition that ‘close is not good enough to attract cost consequences’: 2019 ONSC 7224.
[48] The Respondent’s Offer to Settle dated May 17, 2019 meets all formal requirements of an Offer to Settle. However, I am not satisfied that the ultimate resolution of the long motion reflects an order that is as favourable as or more favourable than the offer. As noted above, additional conditions and protections were included in the final settlement which were not included in the Respondent’s Offer to Settle.
[49] This is not a case that calls for the full recovery of costs of the long motion as requested by the Respondent.
Bad Faith
[50] Rule 24(8) of the Family Law Rules reads as follows:
Bad Faith
(8) 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. O. Reg. 114/99, r. 24 (8).
[51] This court also relies upon the thorough review of the caselaw pertaining to “bad faith” in the context of costs considerations as provided by Justice Pazaratz in Chomos v. Hamilton, 2016 ONSC 6232 at paras. 42-49, which was not referred to by counsel:
Pursuant to Rule 24(8) if a party has acted in bad faith, the court shall decide costs on a full recovery basis and order the party to pay them immediately.
Rule 24(8) requires a fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made. S.(C.) v. S.(C.), [2007] O.J. No. 2164; Piskor v. Piskor, [2004] O.J. No. 796 (SCJ); Cozzi v. Smith, 2015 ONSC 3626, 2015 ONSC 3626 (SCJ).
Bad faith is not synonymous with bad judgment or negligence. Rather, it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. Bad faith involves intentional duplicity, obstruction or obfuscation: Children’s Aid Society of the Region of Peel v. F.(K.J.), 2009 ONCJ 252, [2009] O.J. No. 2348 (OCJ); Biddle v. Biddle; Leonardo v. Meloche; [2003] O.J. No. 1969 (SCJ); Hendry v. Martins, [2001] O.J. No. 1098 (SCJ).
There is a difference between bad faith and unreasonable behaviour. The essence of bad faith is when a person suggests their actions are aimed for one purpose when they are aimed for another purpose. It is done knowingly and intentionally. The court can determine that there shall be full indemnity for only the piece of the litigation where bad faith was demonstrated. Stewart v. McKeown, 2012 ONCJ 644, 2012 ONCJ 644 (OCJ); F.D.M. v. K.O.W., 2015 ONCJ 94 (OCJ).
To establish bad faith the court must find some element of malice or intent to harm. Harrison v. Harrison, 2015 ONSC 2002.
In S.(C) v. S.(C) Perkins J. defined bad faith as follows:
In order to come within the meaning of bad faith in sub 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. A misguided but genuine intent to achieve the ostensible goal of the activity, without proof of intent to inflict harm, to conceal relevant information or to deceive, saves the activity from being found to be in bad faith. 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.
Long Motion
[52] As per the above, I have ruled that the name-calling evident in this matter does not constitute unreasonable behaviour sufficient to deprive the Respondent of costs that he might otherwise be entitled. Likewise, I do not accept the position that the Respondent’s name-calling rises to the more onerous level of conduct necessary for a finding of bad faith behaviour.
[53] I note that the wording with respect to bad faith behaviour in Rule 24(8) does not require the conduct to have specifically occurred “during a case” or “in relation to the issues”, however the name-calling evident in this case, in my opinion, reflects poor judgment; it is not synonymous with duplicity, obstruction, obfuscation or intent to deceive.
[54] I make no finding of bad faith behaviour as against either party in relation to the long-motion.
Urgent Motion
[55] The Respondent asserts bad faith behaviour against the Applicant in relation to the urgent motion.
[56] The Applicant argues that her failure to have the CPL removed in accordance with the agreement between the parties and subsequent order of the court does not constitute bad faith. She blames her failure to take the necessary steps on “a very rushed closing date of November 15, 2019.” I reject this argument.
[57] The Applicant was aware of her positive contractual obligation to forthwith take all necessary steps to remove the Certificate of Pending Litigation in September 2019, on signing the Minutes of Settlement. The obligation was formalized into a court-ordered term on October 16, 2019.
[58] The Applicant had approximately two months to take the necessary steps to remove the CPL and failed to do so. Further, she was in breach of a court-ordered term for more than one month. Her delay was not reasonable. These facts alone would not be sufficient for a finding of bad faith behaviour, however, I agree with the Respondent that the presence of other features of the Applicant’s conduct constitute more than simple delay and non-compliance.
[59] The Respondent specifically asserts in his cost submissions that:
i. The Applicant deliberately misled the Respondent, the Respondent’s counsel, and the real estate lawyer with carriage of the sale into believing that a 14B motion had been filed on November 4, 2019 - requesting the removal of the Certificate of Pending Litigation;
ii. On November 13, 2019 the Applicant refused to agree to the removal of the CPL in an email to the real estate lawyer (pursuant to a solicitor’s undertaking); and
iii. The Applicant deliberately attempted to force a delay of the closing date of the sale of the property.
[60] In response the Applicant argues that:
i. Due to the “very rushed closing date” (approximately two weeks) the Applicant had “very little time to inform herself of the situation and remove the CPL”;
ii. The Respondent was unreasonable in not agreeing to request an extension of the closing date; and
iii. Her actions were further justified as a result of a lack of trust between the parties and counsel.
[61] What is notably absent from the Applicant’s submissions is any denial of misrepresentation in relation to the 14B motion served on the Respondent.
[62] I reject the Applicant’s submission that the Respondent’s insistence upon the earliest possible closing date for the subject-property, and/or refusal to extend the closing date constitutes bad faith or unreasonable behaviour. It appears to this court that the Applicant was the unreasonable party in attempting to delay the sale. Delaying the sale of the property would likely have caused legal and financial harm to the Respondent, including but not limited to a potential breach of contract, mortgage repercussions, ongoing carrying costs, and legal fees. I find that the actions of the Applicant were intended to frustrate the sale and to cause harm to the Respondent.
[63] Until the eve of the closing date, the Applicant led the Respondent to believe that she was complying with her court-ordered obligation to “take the necessary steps to remove the certificate of pending litigation”. This was deceptive.
[64] The Applicant’s failure to cooperate with the suggested solicitor’s undertaking, which would have permitted the sale to close without further litigation, was obstructionist. In my view, this reflects a conscious motivation on the part of the Applicant to cause financial and legal harm to the Respondent.
[65] I find that the totality of these factors rises to the level of bad faith conduct on the part of the Applicant.
[66] The end result of the Applicant’s conduct in relation to this piece of the litigation, was that the Respondent incurred the legal expense necessary to remove the CPL. That expense should have been borne by the Applicant pursuant to the settlement. Furthermore, had the Applicant forthwith commenced the steps to remove the CPL in September 2019, upon settlement, there would have been no urgency to the situation. Instead, her failure to address her contractual and court-ordered obligations in a timely manner resulted in an urgent in-person attendance in court. The Applicant’s delay increased the number of steps, and increased the cost of the removal of the CPL. The Respondent should be fully compensated for this aspect of his litigation expense.
[67] I am satisfied that the Applicant acted in bad faith with respect to the urgent motion. As such, this court is compelled to order costs on a full recovery basis, payable immediately by the Applicant to the Respondent in relation to this aspect of the litigation.
Assessing Quantum
[68] Considerations relevant to assessing the appropriate quantum of costs which may be payable in a family court action are enumerated under Rule 24(12) of the Family Law Rules:
Setting Costs Amounts
(12) In setting the amount of costs, the court shall consider,
(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.
[69] The Applicant does not challenge the Respondent’s Bill of Costs as it pertains to time spent, number of lawyers and their rates, or disbursements. I note that the long motion was only settled on the eve of the motion, after extensive Affidavits and legal facta had been filed. I accept that the counsel’s hourly rate, and total fees and disbursements billed to the Respondent were reasonable and proportional to the importance and complexity of both motions.
Ability to Pay
[70] The Applicant asserts that she does not have the means to pay the Respondent’s costs. She relies upon the case of Witt v. Witt, wherein the court granted “some reduction in the quantum of costs that would otherwise be awarded” due to the “significant financial burden” it would impose upon the (custodial) parent: 2019 ONSC 3732 at para. 36. In that case the costs under consideration pertained to a very substantial request for costs incurred over a 14-day trial. In considering this request, the court in Witt noted that:
a. “ in the appropriate case, a relevant consideration would include the financial position of the other party”: M.(A.C.) v. M.(D.) at para. 42; and
b. “unless a party can meet the threshold of undue hardship, that party will not have relief from costs on the basis of affordability where a reasonable offer to settle has been served”: LeVan v. LeVan at para. 39.
[71] The Applicant argues that, as a single mother of two children (from a previous relationship), she cannot afford to pay the Respondent’s legal fees, noting that she has spent a considerable amount in legal fees herself. She provides little detail in support of this assertion.
[72] I note that cost consequences typically have a negative financial impact on the losing party. It is upon this basis that costs consequences serve to encourage settlement. Specifically, with respect to the urgent motion, the Applicant should have behaved in a more financially responsible manner. The urgent motion was entirely unnecessary. While I have considered the Applicant’s submission that she is of limited financial means, in the circumstances of this case, I have given this submission limited weight.
Overall Proportionality and Reasonableness
[73] The assessment of costs is not a mechanical exercise or line by line review of actual costs incurred by a successful party. Rather, a costs award should reflect an amount that is fair and reasonable for the unsuccessful party to pay: see Boucher v. Public Accountants Council for the Province of Ontario (2004), and Selznick v. Selznick, 2013 ONCA 35.
[74] I have considered the factors discussed above as against the standards of both reasonableness and proportionality and in the context of the levels of importance and complexity of both motions. In my view, in order to deal with this case justly, this court must make an award of costs in favour of the Respondent as follows:
a. A modest costs award is appropriate in relation to the long motion. Although counsel’s fees were reasonably incurred and appropriate in the circumstances, the Respondent was not wholly successful. He was more successful than the Applicant, but as indicated above, there was some measure of divided success. The Respondent’s Offer to Settle did not attract consequences under Rule 18 of the Family Law Rules, but the Applicant should also have made a formal Offer to Settle. Settlement between the parties should continue to be encouraged in future, ideally before they have each gone to the extent of filing such extensive materials and prior to the eve of the motion. I am influenced by the reality that this matter was ultimately resolved on consent, and that there are factors unknown to this court which likely impacted the concessions made by each party. In my view, an award of $3,800.00, inclusive of H.S.T. and disbursements in favour of the Respondent, is just in the circumstances on the particular facts of this long motion. The Applicant shall have 45 days to pay this sum.
b. With respect to the urgent motion, the Respondent will be fully indemnified for his legal costs. In addition to indemnifying the Respondent and encouraging future settlement, this costs award is necessary to discourage and sanction the inappropriate behaviour by the Applicant, in the context of this motion. The Respondent seeks costs fixed in the sum of $4,341.46, inclusive of H.S.T. and disbursements, and this amount shall be granted, payable forthwith.
Order to Issue
[75] The Applicant, P. Kisten, shall pay costs to the Respondent, M. Kosewski as follows:
a. Costs arising from the long-motion scheduled to be heard on trial sittings of September 2019, fixed in the sum of $3,800.00 inclusive of H.S.T and disbursements, within 45 days; and
b. Costs arising from the urgent motion heard on November 14, 2019, fixed in the sum of $4,341.06 inclusive of H.S.T. and disbursements, payable forthwith.
Miscellaneous
[76] On a final note, the Applicant makes multiple references to the (dated) Law Society history of counsel for the Respondent in her Responding Submissions. I found this information to be irrelevant, and the tactic employed by the Applicant to be distasteful. This commentary was an unwise use of the limited page numbers permitted for these costs submissions, and resort to this argument reflects poorly on the Applicant.