COURT FILE NO.: 885/18

DATE: 2020-08-17

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: F.K., Applicant

AND:

A.K., Respondent

The Children Aid’s Society of Hamilton, Respondent

BEFORE: The Honourable Mr. Justice A. Pazaratz

COUNSEL: Nicole Matthews, Counsel, for the Applicant

Robert G. Wasserman, Counsel, for the Respondent, A.K.

John Bland, Counsel, for the Respondent, CAS of Hamilton

ENDORSEMENT

[1] In the board game Monopoly you only get to use the “Get Out Of Jail Free” card once. How often should a perennially unsuccessful litigant get to use the “I Can’t Afford To Pay Costs” card?

[2] I have reviewed written costs submissions in relation to my lengthy motion endorsement dated June 16, 2020.

BACKGROUND

[3] A quick recap:

a. On August 13, 2019 – only a year ago – the parties consented to a joint custody, equal-time sharing arrangement in relation to two children now ages eight and three. At the time the parties were both residing in Hamilton.

b. Within months the mother relocated to Dunnville and brought a motion for sole custody, primary residence, and supervised access for the father.

c. While that motion was outstanding, in January 2020 the mother unilaterally kept the children from the father claiming that the Children’s Aid Society of Hamilton (“CAS”) had authorized her to do so while they investigated allegations against the father. The mother also attempted to unilaterally change the older child’s school from Hamilton to Dunnville. The father was able to quickly establish that CAS had not instructed the mother to withhold the children. In fact, CAS had advised the mother that the existing order should be adhered to.

d. At an emergency motion brought by the father on January 8, 2020, the mother consented to an order restoring equal time and continuing schooling in Hamilton. I ordered $1,000.00 costs against the mother. My endorsement on that date included the following at paragraph 19:

I wish to warn the Respondent now however. If she does anything like this again, she should be worried not only about a larger costs order. She should be worried about whether the children will be entrusted into her care.

e. But problems continued. The mother repeatedly made complaints about the father to CAS. CAS repeatedly determined that the complaints were unfounded. But CAS also determined that the mother was exerting enormous pressure on the children (particularly the older child) to make false allegations against the father. The mother insisted that she be allowed to listen to and record the CAS worker’s interviews with the children.

f. CAS and the family doctor expressed serious concerns about the impact this high conflict parenting dispute was having on both children. Each child required counselling and therapeutic services. The mother insisted counselling could only take place in her jurisdiction, even though the children were already connected with counsellors in Hamilton. More to the point, once the COVID pandemic arose, counselling services were suspended indefinitely in the mother’s jurisdiction, whereas they were available in the father’s jurisdiction. Nonetheless, the mother refused to consent to the children attending the only services which were available. And when she learned the father had arranged counselling in Hamilton without her consent, she refused to allow the counselling to continue.

g. On May 22, 2020 the father brought an emergency motion seeking primary residence of the children, with the mother to have access alternate weekends. He requested authority to arrange all medical and therapeutic services for the children. For the most part CAS (which was added as a party in relation to the motion) ended up supporting the father’s position.

h. The mother brought a cross-motion asking that the father’s motion be dismissed; requesting involvement of the Office of the Children’s Lawyer (“OCL”); and asking that timesharing exchanges be at the mid-point between Hamilton and Dunnville.

i. At a June 4, 2020 court attendance, the mother consented to part of the relief requested by the father: She agreed he could arrange all counselling for the children. The mother took the position that none of the other relief requested by the father was urgent. However, I allowed the father’s motion to proceed and it was argued during what turned out to be a long motion on June 12, 2020. Lengthy affidavits were filed by the parents and by a CAS worker.

j. On June 16, 2020 I granted most of the relief requested by the father: Joint custody and decision making was temporarily suspended; The children were placed primarily in the care of the father in Hamilton; The mother was granted alternate weekend access with additional times; The father was permitted to arrange all medical and therapeutic care.

[4] The Applicant father seeks full recovery of costs in the sum of $9,930.00.

[5] The Respondent mother disputes the claim for full recovery. More to the point, she suggests $1,500.00 is the most she can afford to pay because of her limited financial circumstances.

[6] (Even though CAS was a party to the motion, they are not involved in this costs discussion.)

ANALYSIS

[7] Costs rules are intended to foster four fundamental purposes:

a. To partially indemnify successful litigants;

b. To encourage settlement;

c. To discourage and sanction inappropriate behaviour by litigants; and

d. To ensure that cases are dealt with justly pursuant subrule 2 (2) of the Family Law Rules ("the Rules") Mattina v. Mattina, 2018 ONCA 867 (Ont CA); Serra v. Serra, 2009 ONCA 395 (Ont CA)

[8] Costs awards are discretionary. In exercising that discretion, the court should be mindful of two touchstone considerations: reasonableness and proportionality. Beaver v. Hill, 2018 ONCA 840(Ont CA).

[9] Costs are an important tool to promote the efficient use of judicial resources and the orderly administration of justice. Costs can be used to sanction behaviour that increases the duration and expense of litigation, or is otherwise unreasonable or vexatious. British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, 2003 S.C.C. 71 (SCC); Lewis v. Silva, 2019 ONCJ 795(OCJ).

[10] Rules 18 and 24 govern the determination of costs in family law proceedings.

[11] Consideration of success is the starting point. Rule 24(1) creates a presumption of costs in favour of the successful party. Sims-Howarth v. Bilcliffe, 2000 22584 (ON SC), [2000] O.J. No. 330. In this case the Applicant father was overwhelmingly successful. The Respondent mother was not successful in relation to her cross-motion.

[12] Rule 24(4) provides that in some circumstances a successful party can be deprived of their costs if they have behaved unreasonably. Ajiboye v. Ajiboye, 2019 ONCJ 894(OCJ). But here there was no unreasonable behaviour by the Applicant which would justify any reduction of costs he would otherwise be entitled to.

[13] To determine whether a party has been successful, the court should take into account how the order compares to any settlement offers that were made. Lawson v. Lawson, 2008 23496 (ON SC), [2008] O.J. No. 1978 (SCJ); Ajiboye v. Ajiboye. Rule 18(14) sets out the consequences of a party's failure to accept an offer to settle that is as good or better than the hearing’s result.

a. On June 8, 2020 the father served a non-severable offer which fails to assist him as a result of a self-inflicted wound. It was pretty close in predicting the substantive result. But its final paragraph required the Respondent to pay costs in the sum of $50,000.00. Offers which include a non-severable pre-determination of costs inherently fail to satisfy Rule 18(14) – because costs can only be addressed after the substantive determination has been made. Chomos v. Hamilton 2016 ONSC 6232 (SCJ); Henderson v. Winsa 2019 ONSC 27 (SCJ). And this motion could never have justified $50,000.00 in costs. When lawyers toss around crazy numbers like that, do they really think they’re encouraging settlement?

b. On June 11, 2020 – the day before the motion was argued – the mother served a non-severable offer which wasn’t even close. And it also included a non-severable predetermination that there would be no costs.

c. So neither party benefits from the offers they filed.

[14] Once entitlement to costs is established, determination of the amount of costs is dealt with primarily in Rule 24(12).

[15] There is no presumption in the Rules that provides for a general approach of "close to full recovery" costs. The Rules expressly contemplate full recovery only in specific circumstances:

a. Matching/exceeding an offer to settle (Rule 18(14)).

b. Bad faith (Rule 24(8)). Beaver v. Hill

[16] And even in circumstances in which Rules 18(14) or 24(8) trigger "full recovery costs", the court still has an overriding discretion and responsibility to determine a costs award that is proportional, fair and reasonable in all the circumstances. Chomos v. Hamilton, 2016 6232 (SCJ).

[17] The father appears to be seeking full recovery costs based partly on an allegation of bad faith by the mother.

[18] A finding of bad faith on the part of a litigant is rarely made, because it requires a high threshold. S.(C). v. S(M.), 2007 20279 (ON SC), [2007] O.J. No. 2164 (SCJ): Piskor v. Piskor, 2004 5023 (SCJ); Cozzi v. Smith, 2015 ONSC 3626(SCJ); Hum v. Skoll, 2020 ONSC 275 (SCJ).

a. The behavior 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 behavior; to conceal information relevant to the issues at stake in the case; or to deceive the other party or the court. S.(C). v. S(M.)

b. 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. Calver v. Calver, 2019 ONSC 7317(SCJ).

c. The requisite intent to harm does not have to be the person's sole or primary intent, but rather only a significant part of the person's intent. S.(C). v. S(M.)

d. At some point a party can 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 behavior is causing the other party major financial harm without justification. S.(C). v. S(M.).

e. 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. Scipione v. Del Sordo, 2015 ONSC (SCJ); Children's Aid Society of the Region of Peel v. F. (I.J.), 2009 ONCJ 252 (OCJ); Biddle v. Biddle, 2005 7660 (SCJ); Leonardo v. Meloche, 2003 74500 (SCJ); Hendry v. Martins, [2001] O.J. No. 1098 (SCJ); Carter v. Carter, 2020 ONSC 1095 (SCJ); Jackson v. Mayerle, 2016 ONSC 1556 (SCJ); Green v. Whyte, 2019 ONSC 7133 (SCJ).

f. To establish bad faith the court must find some element of malice or intent to harm. Harrison v. Harrison, 2015 ONSC 2002 (SCJ).

g. There is a difference between bad faith and unreasonable behaviour. The essence of bad faith is when a person suggests their actions are motivated by one purpose when they are actually motivated by another purpose. It is done knowingly and intentionally. A bad faith finding on a specific issue does not necessarily have a spill-over effect to other issues. The court can order full recovery costs in relation to the portion of the proceeding where bad faith is applicable. Hunt v. Hunt, [2001] O.J. No. 5111 (SCJ). Scipione v. Del Sordo; Stewart v. McKeown, 2012 ONCJ 644 (OCJ); F.D.M. v. K.O.W. 2015 ONCJ 94 (OCJ)

h. Even where the "full recovery" provisions of the Rules are triggered by a finding of bad faith, the quantification of costs still requires an overall sense of reasonableness and fairness. The successful party is not entitled to a blank cheque. Goryn v. Neisner, 2015 ONCJ 318 (OCJ); Jackson v. Mayerle; Belair v. Bourgon, 2019 ONSC 2170; Slongo v. Slongo 2015 ONSC 3327(SCJ).

i. The court retains a residual discretion to make costs awards which are proportional, fair and reasonable in all the circumstances. M. (C.A.) v. M. (D.); Scipione v. Del Sordo; Jackson v Mayerle.

[19] In my detailed analysis on June 16, 2020 I made it clear that I felt much of the mother’s parenting behaviour was unreasonable – bordering on outrageous. That’s why she lost the motion. But in relation to costs I am not satisfied that her litigation behaviour is elevated to the level of bad faith as specifically contemplated by Rule 24(8).

[20] In the absence of one of the limited situations in which full recovery of costs is appropriate, the principles of reasonableness and proportionality include the following considerations:

a. Costs decisions should reflect what the court considers to be a fair and reasonable amount that the unsuccessful party should pay, rather than an exact measure of the actual costs incurred by the successful party.

b. Costs need to be proportional to the issues; the amounts in question; and the outcome of the case.

c. Determining the quantum of costs is not a mere mathematical exercise of lawyer's hours multiplied by an hourly rate. Except in rare cases, costs are not meant to reimburse a litigant for every dollar spent on legal fees. Amounts actually incurred by the successful litigant are not determinative.

d. In assessing what is fair and reasonable, the expectation of the parties concerning the amount of a costs award is a relevant consideration. Serra v. Serra; Boucher v. Public Accountants Council (Ontario), 2004 14579 (ON CA), [2004] O.J. No. 2634 (Ont CA); Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 2005 1042 (ON CA), 2005 CarswellOnt 189; Delellis v. Delellis and Delellis, 2005 36447; Hum v. Skoll; Bexon v. Mccorriston, 2020 ONSC 92 (SCJ); Jackson v. Mayerle.

e. The reasonable expectation of the parties should be informed by any previous costs determinations – or warnings – by the court.

[21] Rule 24(6) provides that where success in a step in a case is divided, the court may exercise its discretion to order and apportion costs as appropriate. However, the determination of whether success was truly "divided" requires a contextual analysis that takes into consideration the importance of the issues that were litigated and the amount of time and expense that were devoted to the issues that required adjudication. Jackson v. Mayerle; Slongo v. Slongo; Lippert v. Rodney; Norton and Norton, 2017 ONSC 5406(SCJ).

a. The mother submits that even though her time with the children was reduced to alternate weekends, those weekends now start on the Thursday rather than the Friday (as proposed by the father). She suggests that this is “divided success.”

b. I disagree that this is relevant to my costs determination.

c. Speaking plainly, this was a blow-out win for the father. He was overwhelmingly successful.

d. Salvaging a few remnants does not constitute “divided success.”

[22] The mother challenges the bill of costs submitted by the father’s counsel, which claims $9,930.00 based on 33.1 hours billed at $300.00 per hour.

a. I agree with the mother’s counsel that the bill of costs lacks sufficient particularity. It’s barely a page and a half long and doesn’t include much of a breakdown.

b. The mother’s counsel submits that 33.1 hours can’t be justified. On this topic, I’m not prepared to quibble. The father’s counsel had a herculean task of assembling huge amounts of information -- and responding to even greater amounts of mis-information presented by the mother. The narrative was complex and highly disputed. The father’s counsel did a superb job of preparing materials and organizing her presentation. Bearing in mind that this is not a “full recovery” case, I see nothing offensive in a total legal bill of less than $10,000.00 for a motion like this where the facts were so complex, and the issues so important.

c. (As an aside, I would note that while Mr. Wasserman challenged Ms. Matthews’ bill of costs, he did not submit a copy of his own bill of costs. A useful benchmark for determining whether costs claimed are fair, reasonable and proportionate is to consider the amount that the unsuccessful party paid for their own legal fees and disbursements in the same matter.) Smith Estate v. Rotstein, 2011 ONCA 491 (C.A.); Durbin v. Medina 2012 ONSC 640 (SCJ); Scipione v. Del Sordo, 2015 ONSC 5982 (SCJ); Goldstein v. Walsh 2019 ONSC 3174 (SCJ); Steinberg v. Steinberg 2019 ONSC 3870 (SCJ); Kang v. Kang 2020 ONSC 2571 (SCJ); Snively v. Gaudette 2020 ONSC 3042 (SCJ); Zhang v. Guo 2019 ONSC 5767 (Div Ct).)

d. I also reject the mother’s submission that the costs claim should be reduced because both parties are on Legal Aid. The case law is well settled that the receipt of Legal Aid is not a factor in determining costs. Ramcharitar v. Ramcharitar (2002) 2002 53246 (ON SC), 62 O.R. (3d) 107 (SCJ); Alvarez v. Smith 2008 10047 (ON SC), [2008] O.J. No. 941 (SCJ); Loncar v. Pendlebury 2015 ONSC 4673 (SCJ); S.G. v. A.S. 2015 ONSC 1882 (SCJ); Dhillon v. Gill 2020 ONCJ 68 (OCJ); Holt v. Anderson 2005 44179 (ON SCDC), [2005] O.J. 5111(Div'n'l Ct.);Trudel v. Trudel 2010 ONSC 5177, [2010] O.J. No. 3961 (SCJ); Fazuludeen v. Abdulrazack 2020 ONSC 3394 (SCJ); W. v. K. 2019 ONSC 3341 (SCJ); Leveridge v. Stephenson 2019 ONCJ 309 (OCJ); Goffi v. Goffi 2019 ONSC 2160 (SCJ); Sabeeh v. Syed 2018 ONCJ 580 (OCJ); C.A.B. v. A.E.H. 2018 ONCJ 178 (OCJ); Seman v. Handl 2018 ONSC 1218 (SCJ).

[23] The mother submits that any costs order should be reduced to reflect her difficult personal circumstances: She has recently given birth to another child; she is applying for government assistance; and the COVID pandemic reduces her employment opportunities.

[24] The financial implications of legal fees - and costs orders - must be taken into account. But this can be a complicated issue.

a. A costs order should take into consideration the ability of a party to pay costs. MacDonald v. Magel (2003) 2003 18880 (ON CA), 67 O.R. (3d) 181(Ont CA).

b. Although they are not specified in Rule 24 as factors in determining costs, the financial means of the parties, their ability to pay a costs order, and the effect of any costs ruling on the parties and the children are relevant considerations in reaching a determination on the issue of costs. Fyfe v. Jouppien 2012 ONSC 97 (SCJ).

c. A party's limited financial circumstances cannot be used as a shield against any liability for costs. Ability to pay will be taken into account regarding the quantum of costs. Snih v. Snih, 2007 20774 (SCJ); Dhillon v. Gill, 2020 ONCJ 68 (OCJ). But ability to pay will be less of a mitigating factor when the impecunious party has acted unreasonably, or where their claim was illogical or without merit. [Gobin v. Gobin ](https://nextcanada.westlaw.com/Link/Document/FullText?findType=Y&serNum=2019153833&pubNum=0007146&originatingDoc=Ia47642a765f30085e0540010e03eefe0&refType=IR&originationContext=document&transitionType=DocumentItem&contextData=(sc.Search))[(2009) ](https://nextcanada.westlaw.com/Link/Document/FullText?findType=Y&serNum=2019153833&pubNum=0007146&originatingDoc=Ia47642a765f30085e0540010e03eefe0&refType=IR&originationContext=document&transitionType=DocumentItem&contextData=(sc.Search))2009 ONCJ 278, 71 R.F.L. (6th) 209 (OCJ).

d. Parties cannot expect to be immune from an order of costs based on their limited financial resources. If this were the case, parties would be free to conduct litigation as they wished without fear of reprisal in the form of adverse costs orders and this would be contrary to the philosophy and requirements of the Rules. Culp v. Culp, 2019 ONSC 7051 (SCJ); Mark v. Bhangari, 2010 ONSC 4638 (SCJ).

e. Ability to pay alone cannot, nor should it, over-ride the other factors in Rule 24(12). Peers v. Poupore, 2008 ONCJ 615 (OCJ); Lawrence v. Lawrence.

f. Those who can least afford litigation should be the most motivated to seriously pursue settlement and avoid unnecessary proceedings. Mohr v. Sweeney, 2016 ONSC 3238 (SCJ); T.L. v. D.S., 2020 ONCJ 9 (OCJ); Balsmeier v. Balsmeier, 2016 ONSC 3485 (SCJ).

g. The impact of a costs determination on household budgets applies to both unsuccessful and successful parties. An onerous costs order against an unsuccessful custodial parent may impact on that parent's ability to provide for a child in their care. But equally, an inadequate costs order in favour of a successful custodial parent may result in similar deprivation for a child in their care. In both instances, we want to ensure that litigation expenses do not impoverish the household where the child resides. D.D. & F.D. v. H.G. 2020 ONSC 1919 (SCJ).

[25] This same Respondent mother used this same “ability to pay” argument back on January 8, 2020 after she withheld the children from the father:

a. At that earlier motion Ms. Matthews had requested $1,500.00 which I described as “very reasonable given the complexity of the issues and the skill with which she brought the matter to court.”

b. However, I took into account the mother’s financial circumstances and ordered $1,000.00 costs inclusive of HST.

c. I specifically warned the mother that next time she could be facing a larger costs order.

d. And yet the mother’s unreasonable and self-entitled behaviour continued.

e. At a certain point the “I can’t afford to pay for the mess I’ve created” argument starts to wear thin.

[26] And what about the taxpayer’s “ability to pay”? For things like Legal Aid certificates and courtrooms.

a. We do no favour to the administration of justice if we delude ourselves into thinking that cash-strapped governments won’t pounce on waste and inefficiency.

b. If an unsuccessful litigant’s ability to pay becomes the determinative costs consideration, that policy – combined with free Legal Aid – will heighten concerns about the sustainability of a system in which some litigants view a trip to court as a free ride.

c. In an economy demolished by the COVID pandemic, taxpayer tolerance for free rides is going to evaporate very quickly.

THE ORDER

[27] The Respondent mother shall pay to the Applicant father costs fixed in the sum of $6,000.00 inclusive of HST and disbursements.

Pazaratz J.

Date: August 17, 2020