COURT FILE NO.: FS-16-86105 DATE: 20200730

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Raymond Tone Applicant

Matthew Pike, for the Applicant

- and -

Ana Tone Respondent

Laughlin Campbell and Sofia Dharamshi, for the Respondent

HEARD: In Writing

RULING ON COSTS

Baltman J.

Introduction

[1] These reasons deal with the costs of this family law trial, which ended in February 2020 after a bitter separation and highly-charged litigation.

[2] The trial spanned three weeks, but due to various breaks in its midst, was in session for only two thirds of that time, namely ten court days. At trial, the couple fought over almost everything: parenting (both the decision-making structure and the allocation of time); child support (including imputed income); spousal support; property division (including the date of separation); ownership of the matrimonial home (joint tenancy vs. resulting trust); and various post-separation adjustments.

[3] The trial was in many ways like the marriage: highly polarized on every issue; fraught with personal attacks (primarily by Ray) that had nothing to do with important matters; and complicated by Ray’s attempts to distort the issues so as to present himself in a better light.

[4] The tragedy is that this couple – who both clearly love their children – ended up spending enormous amounts of money on this trial instead of saving it for their children’s future needs. For that, Ray is largely at fault, as he rejected multiple exceedingly reasonable offers to settle that were presented well in advance of the trial, and ended up with dramatically less than what he sought at trial. In particular, the final Order [1] provided that:

a) Ana has final decision making on any major issues affecting the children, including health, education, religion, and extra-curriculars (Ray sought a “shared” decision-making structure, with him having the final say on all “ultimate” decisions);

b) The children shall reside primarily with Ana, with Ray to have access on alternating weekends (Ray proposed equal parenting time on a two-week alternating schedule);

c) For the purpose of child support, for the years 2015 onward, Ray’s income shall be (at minimum) the imputed amount of $60,000, except that for the year 2018 his income is imputed at $78,102 to include his RRSP income (Ray argued against any imputed income or inclusion of RRSP income, proposing that support should be based on his actual earnings over the recent years, which averaged $45,000 annually);

d) There is no spousal support payable (conceded by Ana should the court find in her favour on the date of separation, as I did);

e) The parties’ date of separation is February 1, 2015 (Ray claimed it was April 13, 2014), which bolstered Ana’s claim that their residence was a matrimonial home and undermined Ray’s claims for a resulting trust and occupation rent; and

f) The parties own their residence as joint tenants (Ray claimed it was a resulting trust in his favour).

[5] In sum, Ray lost – badly – on virtually every issue. The loss is even more disastrous when one considers the many generous offers to settle that Ana submitted before trial. Between October 31, 2019 and January 11, 2020, Ana served four severable offers to settle, any of which would have provided a significantly better outcome for Ray than the trial judgment. The highlights are:

1. Ana’s October 31, 2019 severable offer provided: 1) sole custody to Ana; 2) two overnights and three weeknights to Ray per fortnight; 3) imputation of Ray’s annual income at $52,000; 4) zero equalization to Ray ($7,315.02 as per the Agreed Statement of Facts), zero recovery to Ana for outstanding cost awards (over $9,000) and splitting the net proceeds of the house equally; and 5) no occupation rent, post-separation adjustments or retroactive support;

2. Ana’s December 20, 2019 and December 27, 2019 severable offers provided: 1) primary residence to Ana, joint-decision making with Ray with use of a parenting coordinator, and Ana having final decision-making power in the event of disagreement; 2) parenting time to Ray for 5/14 days (more overnights); 3) imputation of income at $46,840 ; 4) zero equalization payment to Ray ($7,315.02 as per the Agreed Statement of Facts), zero recovery to Ana for cost awards (over $9,000) and splitting the net proceeds of the house equally; 5) an additional payment to Ray from Ana of $40,000; and 6) no occupation rent, post-separation adjustments or retroactive support;

3. Ana’s January 11, 2020 offer provided: 1) primary residence to Ana, full joint decision making with Ray with use of a parenting coordinator; 2) parenting time to Ray for 5/14 days, plus additional time with the children on Saturday mornings in order to take them to an extra-curricular activity; 3) imputation of income at $46,840; 4) zero equalization payment to Ray ($7,315.02 as per the Agreed Statement of Facts), zero recovery to Ana for cost awards (over $9,000); 5) Ray to receive the first $100,000 of the net proceeds from the house before the remainder was divided equally ; 6) all outstanding claims to be dismissed; and 7) no occupation rent, post-separation adjustments or retroactive support. This offer was partially severable (items 1-2 together and items 3-5 together).

The Parties’ Positions on Costs

[6] Ana seeks costs on a full indemnity basis for the trial, in the sum of $160,741.95 [2] (inclusive of HST). She was represented at trial by two lawyers, senior counsel Laughlin Campbell and his junior associate Sofia Dharamshi. Ms. Dharamshi was present throughout, whereas Mr. Campbell attended for some of the more pivotal segments, for example to conduct the cross-examination of Ray. With the exception of a few troubling interjections by Mr. Campbell, which I comment upon below, together they conducted the trial in an efficient and competent fashion.

[7] In addition, Ana seeks full indemnity costs for steps taken earlier in the case, which allegedly were not addressed then, pursuant to r. 24(11) of the Family Law Rules, O. Reg. 114/99. For that she seeks an additional $22,318.91 (inclusive of HST).

[8] I have not received any costs submissions from Ray or his counsel. Apparently, that is because following receipt of my judgment, their relationship broke down and Mr. Pike, although still on the record, was unable to get instructions. Mr. Pike then sought – and was granted – a two-week extension of time, with the proviso that irrespective of whether he remained on the record, there would be no further extensions granted. [3] When that time period expired, Mr. Pike – still on the record - sought a further extension, which I denied.

The Legal Framework on Costs

[9] The principles governing costs awards in family law matters are contained in r. 24(1) of the Family Law Rules, and were helpfully summarized by Kurz J. in his recent decision M.C. v. M.A.C., 2020 ONSC 3845, at paras. 11-44. Of particular relevance here are the following:

General Costs Principles

[10] The jurisdiction of this court to award costs arises from s. 131 of the Courts of Justice Act. That provision gives the court broad discretion to determine costs.

[11] In Serra v. Serra, 2009 ONCA 395, at para. 8, the Court of Appeal for Ontario noted that modern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behavior by litigants. The same court in Mattina v. Mattina, 2018 ONCA 867, at para. 10, noted that r. 2(2) of the Family Law Rules adds a fourth fundamental purpose: to ensure that cases are deal with justly.

[12] Rule 24(1) creates a presumption of costs in favour of the successful party of a motion, enforcement, case or appeal. This presumption does not, however, mean that the successful party will always be entitled to costs. The court must also consider factors set out in r. 24(4) where a successful party has behaved unreasonably, r. 24(8) if a party has acted in bad faith, r. 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party: Berta v. Berta, 2015 ONCA 918, at para. 94.

[13] Moreover, r. 24(12) specifically emphasizes the “reasonableness and proportionality” of several factors as they relate to the "importance and complexity” of the issues:

i. Each party’s behavior;

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

vii. Any other relevant matter.

[14] More recent jurisprudence has placed less emphasis on counsel’s hourly rates and time spent, and instead focused on an award of costs that is proportional to the amount in issue and the outcome: Delellis v. Delellis, [2005] O.J. No. 4345 (S.C.), at para. 9. In Beaver v. Hill, 2018 ONCA 840, at para. 12, our Court of Appeal clarified that proportionality and reasonableness, the two key factors set out in r. 24(12)(a), are the touchstone considerations to be applied in fixing the amount of costs in family law matters.

Offers to Settle

[15] Subrules 18(14)-(16) deal with the cost consequences of offers to settle. To summarize, they provide that where a party at trial obtains a result as favourable or better than their offer made at least seven days before the trial began, they are entitled to costs to the date the offer was served and full recovery of costs after that date, unless the court orders otherwise: Family Law Rules, r. 18(14).

Bad Faith

[16] Rule 24(8) provides that “[i]f 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.” [my emphasis.]

[17] Bad faith is more than just bad judgment. It means intending to deceive or harm the other party, in the course of the litigation at issue, in order to gain an unfair or illegitimate advantage. There must be a conscious effort to deceive or obstruct. That includes prolonging the litigation in order to run the costs up so high that one must know that it is causing the other party major financial harm without justification: C.S. v. M.S., [2007] OJ No. 2164 (S.C.), at para. 16, aff’d 2010 ONCA 196, at paras. 9-12; Jackson v. Mayerle, 2016 ONSC 1556, at paras. 58-59; Cummings v. Cummings, 2020 ONSC 3592, at paras. 27-29.

Analysis

[18] By virtue of any of the yardsticks set out above to assess costs, I conclude that Ana is entitled to a very generous costs award, for several reasons.

Importance, Complexity or Difficulty of the Issues

[19] The issues here were numerous, pivotal and sometimes complex. They spanned custody, access, support and property. The questions of imputed income and resulting trust were nuanced and challenging. Significant time was required to document the couple’s history, as well as Ray’s extensive, prolonged and meritless complaints to the Children’s Aid Society, Peel Police, and the Office of the Children’s Lawyer. There was an appreciable amount of documentary evidence to wade through.

Each Party’s Behaviour

[20] In my reasons for judgment, I observed that both parties acted poorly during the initial years of their relationship. However, I also noted that for the last several years – and throughout much of this litigation – Ana has matured and taken the high road. I believe strongly that this litigation would have settled long ago had Ray done the same.

[21] Instead, he behaved in an unreasonable, litigious and aggressive fashion throughout these proceedings. He is obsessed with past “wrongs” and seeks to be vindicated on virtually every issue. Most of his three days of examination-in-chief were spent rehashing Ana’s alleged misbehaviour, much of it irrelevant to the issues before the court. He also changed counsel repeatedly (Mr. Pike is his third lawyer), which undoubtedly created delay and some duplication.

[22] I also agree with Ana that much of Ray’s conduct throughout these proceedings was in bad faith: 1) he refused to obey parenting orders, costs orders and the court’s directions; 2) throughout the litigation he waged a campaign against Ana to cause emotional distress while purporting to be co-parenting; 3) he dismissed the views of all third-party professionals involved with the parties; and 4) he repeatedly denigrated and maligned Ana to child protection workers and the police.

The Time Spent by Each Party

[23] As noted, I have no submissions from Ray, and therefore cannot use Mr. Pike’s time as a comparator. However, given the breadth and demands of this trial, I am satisfied that the hours incurred by Ana’s legal team were reasonable. Her counsel spent over a hundred hours preparing for this trial and worked every evening during it. They conducted research, organized evidence, strategized, and regularly met with Ana.

[24] The trial preparation time was compounded because the trial was adjourned twice, at Ray’s request. Moreover, two months before the trial, Ray amended his pleadings to include a claim for a resulting trust, forcing Ana’s counsel to revise their trial preparation.

[25] I also find that it was entirely reasonable and proportional to have two lawyers for Ana involved in this trial. Ms. Dharamshi was the backbone of Ana’s team. She was present throughout the trial, conducted many of the examinations and had intimate knowledge of the file, including the extensive documents. Mr. Campbell’s attendance was occasional and strategic, and a reasonable addition given his age and experience. Similarly, in light of the extensive document binders and legal briefs needed for the trial, it was reasonable for Ana’s team to require substantial assistance from the law clerks employed by the firm. The hourly rates charged by everyone on Ana’s team were also proportionate and reasonable.

[26] The trial proceeded over three weeks, and was preceded by a two-day settlement conference and an “exit” pre-trial, which occupied a further three days. Ray unnecessarily extended the trial, not only, as I have noted, by his several days of testimony rehashing insignificant matters from the past, but also by calling numerous witnesses to address topics that were irrelevant (e.g. that he is a very capable teacher) or undisputed (e.g. that he is a loving and attentive father). Further, the trial could not proceed on three of the days set aside because Ray and/or his counsel were either unprepared or unavailable.

The Results Achieved and the Written Offers to Settle

[27] On almost every issue Ana achieved results that met or were close to what she sought at trial. She was entirely successful on parenting (including decision making, residency and access), the issue which took up the bulk of trial time, highly successful on child support (including imputed income, albeit at a somewhat lower amount than she sought), and largely successful on the property issues (including date of separation, joint tenancy and occupation rent).

[28] Importantly, her recovery at trial not only met, for the most part, what she sought at trial, it far exceeded her various offers to settle. I have already described in para. 5 above the multiple severable and extremely reasonable offers that Ana served well in advance of trial. It is not as if Ray did not have time or occasion to ponder these offers. The first offer was made on October 31, 2019, over three months before the trial. The second and third offers were made in December 2019, a month before the trial began. The fourth and final offer (practically a Hail Mary pass) arrived on January 11, 2020, nine days before the trial began – enough time, had it been accepted, to avoid the major, intensive preparation that precedes any trial. I note that r. 18(14) (2) only requires an offer to be made seven days before the trial in order to take advantage of its full indemnity terms.

[29] Moreover, in the week before the trial began, there were numerous interventions by the judiciary to assist this family. Doi J. conducted a pre-trial on January 13, 2020. Kurz J., who has deep expertise in family law and is a highly-skilled mediator, presided over two days of settlement discussions on January 15 and 17, 2020. Undoubtedly, Ana’s offers to settle would have been carefully examined during those sessions. Although hindsight is easy, based on what the parties must have known at that point, it is surprising that Ray proceeded with this trial. This disaster was highly predictable and could have been averted. For that, Ray has mostly himself to blame. His rigid, uncompromising attitude drove this result.

[30] The impact of his folly is not limited to this family. A trial is not just about the litigants’ own time and money. It also consumes enormous public resources that are funded by taxpayer dollars. The trial office and court administration must schedule and coordinate any trial dates. Courthouse personnel are required to maintain the courtroom in a clean and usable condition. Support staff are needed to help conduct the trial, including, at a minimum, a registrar, a reporter, and a court services officer. A judge must be allocated for its duration. In the Brampton courthouse, which is notoriously overwhelmed and under-resourced at the best of times (this being pre-COVID-19), that requires pulling a judge and support staff away from other pressing cases, which in turn leaves other litigants in the lurch, waiting for their case to be heard.

[31] All this means that litigants must be responsible in their demands and expectations. A trial should not be seen as an opportunity to exact vengeance or air one’s grievances, oblivious to the impact on not only the opposing litigant, but other Ontarians who fund these courts and depend on them being accessible. Our courts can no longer be plagued by groundless lawsuits that waste limited public resources. These frolics must stop.

Counsel’s Misbehaviour

[32] Behavioural expectations apply not only to the litigants, but also their counsel. Rule 24(9), entitled “Costs Caused by Fault of Lawyer or Agent”, stipulates that if a party’s lawyer has wasted costs without reasonable cause, the court may, after giving the lawyer an opportunity to be heard, order the lawyer to absorb any related costs. The wording of the rule and the inclusion of the word “fault” in the heading require a finding of negligence, inappropriate conduct or abuse of process on the part of the lawyer. The conduct need not amount to bad faith: Ben Lolo v. Wang, 2012 ONSC 453, at paras. 27, 32.

[33] Regrettably, despite handling much of the trial capably, Ana’s senior counsel engaged in improper conduct at its conclusion. Having received a ruling a few days earlier (regarding the admissibility of evidence) that he disagreed with, Mr. Campbell waited until all the evidence and final submissions were complete and then complained to the court about the ruling, arguing that it was incorrect. Aside from the fact that a) counsel was wrong at law, and b) the issue was now moot as all the evidence and final submissions were complete, it is highly improper for counsel to challenge or criticize a court’s ruling after it has been delivered. The time and place to do that, if necessary, is on appeal, and not as a parting salvo to the court: Caplan v. Atas, 2018 ONSC 7569, at para. 50; R. v. Felderhof, [2002] O.J. No. 4103 (S.C.), at para. 188.

[34] That said, because this intrusion was brief, it did not increase the trial costs in any appreciable way. I therefore have not required submissions from counsel or adjusted Ana’s costs to reflect her counsel’s misbehaviour.

[35] Importantly, these comments do not apply whatsoever to Mr. Campbell’s associate, Ms. Dharamshi, who was present throughout the trial and at all times conducted herself with great courtesy and respect toward the court.

Summary

[36] In sum:

i. The issues here were numerous and challenging;

ii. Ana was highly successful;

iii. The trial consumed extensive time and resources from both Ana’s counsel and from the court;

iv. The fees charged by Ana’s counsel are reasonable and proportionate;

v. Ray not only demonstrated unreasonable behaviour, but also acted in bad faith; and

vi. Ray rejected numerous, generous offers to settle made well in advance of trial.

[37] For those reasons, I am satisfied that costs should be paid on a full indemnity basis, meaning the entire fees of $160,741.95 sought by Ana for the trial are reasonable.

[38] I take some issue, however, with the additional amount of $22,318.91 she seeks for costs incurred before the trial, covering the period between February 2015, when the action commenced, and September 2019, when the major trial preparation began. Most of those fees relate to motions or other steps in the litigation where costs have already been addressed by the presiding judge. The one exception is the December 2016 settlement conference, where Van Melle J. ordered costs in the cause. I find the amount sought for that step, namely $1,500, is reasonable. Added to the sum of $160,741.95, that brings the total fees to $162,241.95 (inclusive of HST).

[39] I further find all the disbursements claimed in relation to trial preparation are reasonable. The disbursements total $3,454.53 (inclusive of HST), bringing the grand total to $165,696.48.

Conclusion

[40] I conclude as follows:

1. Ana shall recover trial costs of $165,696.48, inclusive of HST and disbursements.

2. These costs are in addition to the unpaid costs orders of $8,705.48, from earlier in the litigation.

[41] The trial costs are enforceable pursuant to the provisions of the Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31.

[42] In the circumstances of the COVID-19 pandemic, this Endorsement is deemed to be an Order of the court. It is operative and enforceable from the time of its release, without any need for a signed or entered formal, typed Order.

Baltman J.

Released: July 30, 2020

COURT FILE NO.: FS-16-86105 DATE: 20200730 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: Raymond Tone Applicant - and – Ana Tone Respondent RULING ON COSTS Baltman J Released: July 30, 2020

[1] Tone v. Tone, 2020 ONSC 2965, at paras. 147-148, and Schedule A: Final Order.

[2] Ana benefited from a 25% discount on hourly rates as she is a member of an Employee Assistance Program, which Campbell Bader LLP participates in as an approved law firm.

[3] On my direction, Mr. Pike provided a copy of my correspondence to Ray.