NEWMARKET COURT FILE NO.: FC-19-58978-01
DATE: 20200114
ONTARIO
SUPERIOR COURT OF JUSTICE
FAMILY COURT
BETWEEN:
Gary Howard Vantriet
Applicant
– and –
Hope Jemimah Ogutu
Respondent
Michael J. Stangarone/Meghann Melito, Counsel for the Applicant
Self-Represented
HEARD: In Writing
RULING ON COSTS
JARVIS J.:
[1] This Ruling deals with costs of a successful Hague Convention[^1] application brought by a father involving the return of two infant children to their habitual residence in the State of Nevada, U.S.A. The mother had removed the children from Nevada during on-going legal proceedings there that included custody and access claims. The children have now been returned. The mother did not accompany them to Nevada.
[2] Directions were given with respect to delivery of costs submissions. The father claims costs of $139,705 in the aggregate for the proceedings in Ontario ($60,838.39) and for expenses associated with, among other things, his attorney’s fees in Nevada, the cost of retaining experts on Nevada family law and U.S immigration law, payments made for locating the children and travel expenses incurred for their return ($78,866.64) . This claim is supported by a detailed Bill of Costs from the father’s Ontario lawyer that identifies the various service providers, their experience, hourly rates and a description of the work done. The claim for services in Nevada includes attorney’s statements of account providing mostly similar details. Lastly, the father has provided a summary of expenses for his travel to Ontario to obtain new passports for the children, to pick up the children and for a private investigator; these are supported by receipted bills and invoice statements.
[3] The mother disputes the father’s entitlement to costs and, in submissions that well exceed the directions given, has sought to reargue her case, included evidence never before this court when the application was argued (and which the father disputes in his reply submissions) and evidence (which the father also disputes) about events after the court’s Ruling was released and the children were returned to Nevada. The mother justifies her behaviour as “a necessity done to avoid the further abuse and neglect of my children”: in several places she describes her situation as one involving “domestic terrorism” and trauma related to her “personal feelings of systemic injustice”. She claims no ability to pay costs but should any be ordered that their payment be deferred until December 2020. Although it is somewhat unclear from her submissions, the mother intends to remain in Ontario.
[4] With limited exception, I will only deal with those submissions based on the application evidence and will determine the issues of entitlement to, and liability for, costs and their amount in accordance with the Family Law Rules (“FLR”).
Law
[5] The FLR set out a principled framework for determining costs. Three fundamental purposes are served, all consistent with the primary objective to enable the court to deal with cases in a fair and timely manner, namely: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants.[^2] While family law litigants must act in a reasonable and cost-effective way and should, and will, be held accountable for the positions they take in their litigation,[^3] the amount to be awarded is what the “court views as a fair and reasonable amount that should be paid by the unsuccessful [party]”: Boucher v. Public Accountants Council for the Province of Ontario.[^4]
[6] The provisions of FLR 18(14) 2-5 and 24(1), (5), (8) and (12) provide as follows:
(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 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.
24. (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.
(5) In deciding whether a party has behaved reasonably or unreasonably, the court shall examine,
(a) the time properly spent on the case, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order;
(b) expenses properly paid or payable; and
(c) any other relevant matter.
(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.
(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. O. Reg. 298/18, s. 14.
[7] While a successful party is presumptively entitled to their costs, entitlement and quantification are subject to the factors set out in FLR 24. Even where the FLR contemplate “full recovery costs” such as where a party bests their Offer to Settle (FLR 18(14)) or the other party has acted in bad faith (FLR 24(8)) “proportionality and reasonableness are the touchstone considerations…”[^5] Two other considerations are relevant where Convention matters are concerned.
[8] Article 26 of the Convention deals with costs, expanding the context of FLR 24(12)(a)(vi) and (b) respectively, dealing with “other expenses paid or properly payable” and “any other relevant matter” in child abduction cases.
Upon ordering the return of a child or issuing an order concerning rights of access under this Convention, the judicial or administrative authorities may, where appropriate, direct the person who removed or retained the child, or who prevented the exercise of rights of access, to pay necessary expenses incurred by or on behalf of the applicant, including travel expenses, any costs incurred or payments made for located the child, the costs of legal representation of the applicant, and those of returning the child.
[9] In Brown v. Pulley,[^6] a case bearing many similarities to this, a mother was ordered to return two children to North Carolina. Sherr J. emphasized that “…the court needs to send a strong message to parents that resorting to self-help and wrongfully removing children from their habitual residence is unacceptable. There will be significant costs consequences for doing this”.[^7]
[10] In Pascual v. Pascual,[^8] O’Connor J. awarded a successful father full indemnity costs for a Convention proceeding in which the mother was ordered by a Brazilian court to return the parties’ children to Canada even though, after trial in Ontario, the children’s primary residence was awarded to the mother and they moved to Brazil:
[23] In these circumstances, the father is entitled to his costs of the Hague Convention proceeding on a full indemnity basis. I agree with the remarks of Turnbull J., as set out in Solem v. Solem, 2013 ONSC 4318, [2013] O.J. No. 2960 (Ont. S.C.J.), at paras. 9 and 10:
This litigation became necessary because of the “self-help” remedy chosen by the respondent to unilaterally remove the children from Norway. In my view the respondent has behaved unreasonably in these proceedings by simply taking the children from Norway without allowing the Norwegian courts to render considered decision with respect to the best interests of the children.
The objective of the Hague Convention would be defeated if the applicant were to fund the process of locating the abducted children and obtaining their return. The Hague Convention anticipates that all necessary expenses incurred to secure the children's return will be shifted to the abducting parent. This then restores the applicant to the financial position he or she would have been in had there been no removal or retention as well as deterring such conduct from happening again or in other cases.
[11] In my view the father is entitled to his costs as the successful party. Before their assessment though, three issues merit comment.
(a) Absence of Offers
[12] Neither party made an Offer to Settle in this matter.[^9] While that may not be surprising in Convention cases where the proceedings are expedited and the stakes are high, rarely (if ever) admitting of compromise, parties have a positive obligation to make reasonable Offers to Settle, the failure of which will usually be considered unreasonable behaviour.[^10] In Brown, Sherr J. commented that the successful father acted unreasonably in that he did not make an offer that could have included undertakings and terms for the mother’s return to North Carolina with the children.[^11] In this court, Mr. Vantriet did propose undertakings and terms in his September 16, 2019 affidavit that the court did accept, but he made no FLR 18-compliant Offer.
(b) Bad Faith
[13] The father asked that his costs be fixed on a full recovery basis and made payable forthwith by the mother because she had acted in bad faith in forum-shopping, abducting the children during on-going legal proceedings in Nevada, concealing the children’s whereabouts from him, causing multiple court proceedings in Ontario and Nevada, misleading the court about the children’s passports[^12] and unnecessarily increasing his costs. If a party is found to have acted in bad faith, FLR 24(8) requires the court to decide costs on a full recovery basis and to order their immediate payment.
[14] In S.(C.) v. S.(M.),[^13] Perkins J. defined what “bad faith” meant pursuant to the rule:
[17] In order to come within the meaning of bad faith in 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.
[15] In Scipione v. Del Sordo,[^14] Pazaratz J. elaborated:
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. (I.J.), 2009 ONCJ 252, [2009] O.J. No. 2348 (OCJ); Biddle v. Biddle, 2005 7660 (ON SC), 2005 7660, [2005] O.J. No. 1056 (SCJ); Leonardo v. Meloche, 2003 74500 (ON SC), [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.
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.) (supra); Piskor v. Piskor, 2004 5023 (ON SC), [2004] O.J. No. 796 (SCJ); Cozzi v. Smith 2015 ONSC 3626 (SCJ).
[16] In Brown, no claim of bad faith was made but the court made findings of domestic violence by the father against the mother that contributed to the series of events that led to the mother’s actions.[^15] A significant award of costs was made against the mother.
[17] In Pascual, the Ontario court accepted the denunciatory comments made by the Brazilian court about the mother’s conduct and noted her attempts to frustrate the implementation of the return Order but did not find that conduct reached the requisite level of bad faith to attract the consequences of FLR 24(8) because it could not “be said to have been carried out with the intent to inflict financial or emotional harm on the father, nor was it intended to conceal information or deceive the court”.[^16] Even so, the father was awarded full recovery of his Convention costs for his Brazilian counsel and reasonable costs for the Ontario proceedings.
[18] In S.(C.), Perkins J. catalogued a list of behaviours that crossed the threshold of “bad faith”, two of those involving disobedience of court Orders and acting in ways to harm the bond between the children and the other parent, in that case the mother.[^17]
[19] In her submissions to this court, the mother contrasted what she described as the father’s “extremely unreasonable” costs claim and his ability to fund them with his modest income as a janitor. At the very least, she knew, reasonably suspected, or hoped that the father had limited financial ability to pursue his parenting claims to Ontario. It is noteworthy too that:
(a) The mother concealed the whereabouts of the children from the father after she removed them from Nevada, and only disclosed where she and the children were residing mid-way through argument on September 18, 2019 despite an earlier Order of this court to disclose that information;
(b) There is no evidence that the mother made any effort to have the children communicate with their father after their removal from Nevada, even through third parties;
(c) The mother concealed from this court that problems would be experienced with the children’s passports held in Nevada and released by court Order there to the father’s Ontario lawyers because she had falsely reported them lost or stolen to the Canadian Consulate in Los Angeles. The mother told this court on November 4, 2019 that this was an innocent oversight. I don’t believe her.
[20] In my view, the mother acted in bad faith in disobeying the court Order made on August 28, 2019 to disclose the children’s whereabouts until three weeks later and only when that issue was raised during argument, failing to facilitate contact between the children and their father after their removal from Nevada, failing to disclose until after the court’s Ruling was released that she had obtained consular assistance to remove the children from Nevada under false pretences and then concealing this information when the application was argued and directions were given by the court predicated on the assumed viability of the children’s (then) existing passports. This finding does not apply to all her behaviour in these proceedings.
(c) Mother’s ability to pay
[21] The mother claims that she does not have the ability to pay costs. A sworn financial statement that accompanied her submissions disclosed a 2018 income of $19,993.60 and a 2019 expected income of $23,292.12 comprising Social Assistance and Child Tax Benefits. Her assets are less than $1,000. None of this evidence has been tested and was not before the court when the Convention application was argued.
[22] A party’s ability to pay costs is a relevant consideration under FLR 24(12)[^18]. This issue is often raised in custody cases where the impact of a significant costs award against a custodial parent would negatively affect a child’s best interests. But inability to pay costs, or impecuniosity, is not a shield from liability: it cannot be used to excuse a party’s litigation conduct.[^19] The fact is that the mother has caused a multiplicity of proceedings in Nevada and Ontario as a direct consequence of her wrongful behaviour and put the father to significant costs. The children are now residing with him in Nevada.
Accounts
[23] The father’s Ontario lawyer delivered one Bill of Costs for the period from July 1, 2019 to November 20, 2019: the Nevada attorney rendered five month-end statements of account for the period from July 1, 2019 to November 26, 2019. As already noted, all accounts were detailed although no information was provided about the experience of the Nevada attorneys: disbursements, and expenses, were also recorded, none of which appears inappropriate or unreasonable.
[24] Dealing, firstly, with the Ontario Bill of Costs, I find that the hourly rates charged were reasonable and the time recorded as being spent is fairly reflected by the quality of the material presented to the court and argued by the father’s lawyers. With minor exceptions, there was no duplication of lawyers’ time (e.g. lawyers consulting and charging their hourly rates for the same time): clerical time was commensurate with the service described.
[25] For comparison purposes, the mother provided two statements of account from her Ontario lawyers for the period from August 29, 2019 to October 25, 2019 in the aggregate of $15,271.55 but substantially discounted to $6,391.55. It is not possible to fairly compare these accounts to the father’s accounts because his accounts captured a greater period of time, the mother’s accounts did not contain any statements of experience or hourly rates for the service providers and while the second account dated November 14, 2019 contained a description of services rendered and hours spent, no amount was calculated and charged. It is clear to this court that the value of the services provided to the mother by her lawyers as reflected by their material and presentation was significantly greater than what she was charged.
[26] The statements of account from the Nevada attorneys dealt almost exclusively with the on-going proceedings in Nevada. Of the $50,362.98 USD charged to the father (or $66,956.07 CDN adjusted for a $1.32947 CDN/USD exchange rate), a review of those accounts indicates that about $6,640 USD (i.e. $8,827.68 CDN) related directly to the Ontario proceedings, being $5,390 for fees and a $1,250 expense for an expert whose identity is not disclosed but, based on a September 18, 2019 account entry, would appear to be referring to Ms. Chernysheva, the immigration lawyer, and for whom the father elsewhere claims additional costs.
[27] In Pascual, O’Connor J. awarded the father his costs for his Brazilian counsel after an Ontario custody trial in which the mother was successful. Unlike that case where the Brazilian proceedings were completed, there remain on-going proceedings in Nevada in this case that combine the parties’ continuing parenting dispute and the children’s wrongful removal. These inter-related service issues are reflected in the statements of account from the Nevada attorneys. Accordingly while I will deal with those services in Nevada clearly linked to the Convention proceedings in Ontario I am not prepared to deal with the father’s broader claim for the costs of his Nevada attorneys as I am of the view that those are best addressed by the court in Nevada: it has had far more extensive involvement in, and has more knowledge about, the parties’ dispute and can better assess whether the eviction of the mother and children from their home by the father’s relatives was more strategic than prudent in terms of the children’s best interests especially in light of the father’s relatives later making that home available for the return of the children and mother.[^20] There is no way in which this court can assess the mother’s claims that the eviction left her and the children in a desperate, potentially homeless and penniless crisis. In addition, this court has no information about the experience of the Nevada attorneys involved, local professional service rates or family law practice. To be perfectly clear, this Ruling will only deal with the Ontario part of the Convention proceedings and those services directly relating to those services as noted above.
[28] The father’s claim for additional costs of $11,695.77 was, as noted, supported by receipted bills and invoice statements and, where USD expenses were involved, adjusted to CDN. The father’s travel expenses, the private investigator fees incurred to locate the children, and the costs of returning the children to Nevada are precisely the kinds of expenses contemplated by Article 26 of the Convention and easily fall within the definition of proper expenses under FLR 24(12)(a)(vi) and “any other relevant matter” pursuant to FLR 24(12)(b). None of these expenses is unreasonable; all were incurred to obtain, and ensure compliance with, the Convention ruling.
Disposition
[29] The father’s total claim for costs relating to the Convention proceedings in this court amounts to $81,361.84 (i.e. $60,838.39 + $8,827.68 + $11,695.77), rounded to $81,362. This does not, as already noted, deal with the father’s Nevada litigation costs.
[30] In S.(C.), Perkins J. dealt with full recovery costs relating to the issues affected by bad faith first and then “the whole picture should be looked at again in light of the considerations in rule 24(11) [now rule 24(12)] and the discretion in that provision should be used as necessary to produce the overall correct result”.[^21]
[31] As already noted, the mother’s bad faith comprised her resistance to, and deception of, the court, especially involving the children’s passports, concealment of the children and failing to ensure contact by the children with their father. These actions, however, did not occupy much of the court’s time although they did necessitate an emergency motion on November 4, 2019.[^22] Without second-guessing the time spent on these issues or undertaking a line-by-line analysis, and to express this court’s disapproval of the mother’s conduct, she shall pay to the father full recovery costs of $6,240 comprising $5,000 for fees, $314 for the cost of the father’s travel to Ontario to apply for the children’s passports, $214 for the passport expense and H.S.T. of $718.64, rounded to $6,240.
[32] As for the balance of the father’s claim under the general provisions of FLR 24(12), it is my view that the mother should pay the father $30,000 inclusive of all disbursements and H.S.T., payment of which shall be deferred as set out below, without interest so to permit her to regularize her U.S. immigration status (if it should be her intent at any point to move to Nevada) and to enable her to pursue her small business plans as she represented in her submissions. Consideration may be given at the end of that time for a further, modest extension depending on the circumstances. This award includes the costs incurred by the father as set out in his Ontario lawyer’s Bill of Costs and the additional expenses claimed by him (excluding the November 12, 2019 travel and passport expenses above) and is intended to send a deterrent message that resorting to self-help and abducting children is unacceptable, and that the father should be restored as reasonably as possible to his pre-removal financial position taking into account the mother’s resources.
[33] Accordingly, the mother shall pay to the father costs in the amount of $36,240 as follows:
(a) Full recovery costs of $6,240 by March 31 2020;
(b) Subject to (c), payment of the $30,000 balance of the costs shall be deferred to February 28, 2021, without interest;
(c) The mother may move on 60 days’ notice to the father before the expiry of the period set out in (b) for a further, modest extension of time for payment or for reasonable terms of payment. As a condition of any such motion the mother must deliver a properly completed and sworn Form 13 Financial Statement, a Certificate of Financial Disclosure and an Affidavit detailing her employment and business-related efforts.
[34] Approval of this Order by the mother is dispensed with.
[35] A copy of this Ruling shall be sent by court administration to the Second Judicial Court of Nevada (Family Division) and to the Central Authority.
Justice David A. Jarvis
Released: January 14, 2020
[^1]: All references will be to the “Convention”.
[^2]: Serra v. Serra, 2009 ONCA 395.
[^3]: Heuss v. Sarkos, 2004 ONCJ 141, 2004 CarswellOnt 3317; Peers v. Poupore, ONCJ 615.
[^4]: (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, 48 C.P.C. (5th) 56, 188 O.A.C. 2001, [2001] O.J. No. 2634, 2004 CarswellOnt 521 (Ont. C.A.).
[^5]: Beaver v. Hill, 2018 ONCA 840, at para. 4
[^6]: 2015 ONCJ 238.
[^7]: Ibid, at para. 24. Italics in the original case report.
[^8]: 2015 ONSC 1303.
[^9]: The mother made an Offer dated December 13, 2019 well after the court’s Ruling was released proposing that the father pay her $6,000 costs. This was clearly in error. The mother transposed the payor and recipient identities since the balance of the Offer sets out the terms how the mother proposes to pay those costs.
[^10]: Blanchard v. Walker, 2012 CarswellOnt 16857, 2012 ONCJ 799, [2012] O.J. No. 6269, 25 R.F.L. (7th) 487 (OCJ) at paras. 22 and 23; F.(H.) v. H.(M.), 2014 ONCJ, at paras. 4 and 5.
[^11]: Supra #6 at para.7.
[^12]: See 2019 ONSC 6416, at paras. 3 and [4]. This was a Ruling on Emergency Motions brought by each of the parties heard on November 4, 2019.
[^13]: 2007 20279 (ON SC), [2007] O.J. No. 2164 (Ont. S.C.J.).
[^14]: 2015 ONSC 5982.
[^15]: Supra #6 at para. 16.
[^16]: Supra #8, at para. 30.
[^17]: Supra #14 at para. 21. An extensive list of what Perkins J. described was “serious, distressing, unfortunate and even harmful behaviour for the parties and the children” but which did not fall within the ambit of “bad faith” as intended by FLR 24(8) is set out in para. 19.
[^18]: M.(A.C.) v. M.(D.), (2003), 2003 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.).
[^19]: Izyuk v. Bilousov, 2011 ONSC 7476, 7 R.F.L. (7th) 358, [2011] CarswellOnt 14382, [2011] O.J. No. 5814 (QL), 210 A.C.W.S. (3d) 143.
[^20]: The evidence is that the father’s attorneys also acted for his relatives in issuing the eviction notice.
[^21]: Supra #14 at para. 24.
[^22]: Supra #12.