Court File and Parties

COURT FILE NO.: FC-20-0723-00 DATE: 20201201

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Archie James Rainey, Applicant AND: Kathryn-Renee Arlene Summers, Respondent

BEFORE: R. S. Jain

COUNSEL: Lynn Kirwin, Counsel, for the Applicant Derek Friend, Counsel, for the Respondent

HEARD: In Chambers (in writing)

COSTS ENDORSEMENT

[1] This ruling on costs follows an urgent motion brought by the applicant on issues under the Hague Convention. The applicant sought orders: declaring the habitual residence of the parties child Archie James Rainey (“Archie” and/or “the child”) born August 21, 2012 to be Drexel, Missouri, USA; declaring that the proper jurisdiction to deal with issues of custody and access to the child is Drexel, Missouri, USA; directing the respondent to return the child immediately to the applicant by making the child available to the applicant to pick up at the respondent’s home in Tiny Township, Ontario within 5 days of making the order. If necessary, the applicant sought an order for police enforcement of the order to locate, apprehend and deliver the child to the applicant.

[2] The applicant originally brought an urgent motion (without notice) on September 1, 2020. On that day, McDermot J. ordered that the applicant’s lawyer serve the respondent with a copy of the Application, Motion and Affidavit. McDermot J. scheduled the motion to be heard on September 10, 2020. On that day, the respondent appeared and advised the court that she opposed the applicant’s motion and she requested an adjournment. Her request was denied at first. However, after the respondent made submissions and serious allegations of risk of physical or psychological harm to the child if returned to his father’s care in Missouri, I reconsidered her request. I granted her a short adjournment to obtain legal counsel and file responding materials.

[3] The respondent filed a responding motion seeking an order dismissing the applicant’s motion and an order finding that the jurisdiction for issues of custody and access to the child is the Ontario Superior Court of Justice – Family Court in Barrie. She further sought a comprehensive order regarding custody and access to the child (including holiday sharing). The motion was adjourned to October 1, 2020. The courts decision was released on October 13, 2020. As the applicant was the successful party on the motion, he is presumed to be entitled to costs.

[4] I have now reviewed the written costs submissions from the applicant and respondent.

[5] The applicant seeks full recovery costs to recover all of his legal fees incurred to date in these proceedings in the sum of $18,929.20. The Bill of Costs submitted by the applicant shows that the total fees and disbursements were $16,751.50, plus HST of $2,177.70, for a total of $18,929.20. The total invoice includes Ms. Kirwin’s docketed 28.7 hours at a rate of $400.00 per hour; a junior lawyer docketed 10.3 hours at $250.00 per hour; a law clerk docketed 13.9 hours at $185.00 per hour; and lastly an administrative clerk docketed 0.4 hours at $312.50 per hour.

[6] The amount requested by the applicant includes costs for any work completed from August 27, 2020 (which is when the file was opened) to and including October 19, 2020 (when cost submissions were submitted). The amount does include time attributable to the applicant’s motion (without notice) that was adjourned by McDermot J. on September 1, 2020 to September 10, 2020.

[7] Rule 24(1) of the Family Law Rules[^1] creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs. The applicant was granted all the relief that he sought during the motion. The applicant is presumptively entitled to costs, subject to:

1. the factors listed in r. 24(11) of the Rules;

2. the directions set out under r. 24(4) regarding unreasonable conduct;

3. r. 24(8) regarding bad faith;

4. any offers to settle; and,

5. the reasonableness of the costs sought by the successful party.[^2]

[8] In Serra v. Serra[^3], the Ontario Court of Appeal confirmed that modern costs rules are designed to foster three fundamental purposes: to partially indemnify successful litigants for the cost of litigation, to encourage settlement and to discourage and sanction inappropriate behaviour by litigants, bearing in mind that the awards should reflect what the court views is a fair and reasonable amount that should be paid by the unsuccessful party.

[9] Rule 2(2) adds a fourth fundamental purpose for costs: to ensure that the primary objective of the rules is met – that cases are dealt with justly. This provision needs to be read in conjunction with r. 24, which states that counsel and parties have a positive obligation to help the court to promote the primary objective under the Rules. Rules 2(3)(a) and (b) set out that dealing with a case justly includes ensuring that the procedure is fair to all parties and saving time and expense.

[10] For the reasons set out below, the applicant shall have costs approaching full recovery. The court finds there are two main reasons for this: the applicant made a reasonable offer to settle and put the respondent on notice that he would be seeking his full legal costs if the offer was not accepted; and the respondent acted unreasonably and in bad faith.

[11] Subrule 18(14) of the Rules reads as follows:

COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER

18(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:

1. If the offer relates to a motion, it is made at least one day before the motion date.

2. 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.

3. The offer does not expire and is not withdrawn before the hearing starts.

4. The offer is not accepted.

5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

[12] There were multiple offers to settle served by the applicant. The respondent says that the applicant’s offers “were open for periods of less than 23 hours and 22 hours respectively.” With respect to the first offer, the applicant says that “the time frame for acceptance did not expire and was open for acceptance on alternative dates.” However, upon review of that offer, the court finds that the respondent is correct because it does in fact contain an expiry date as it said, “This offer is open for acceptance until Friday September 4^th at 5:00 p.m.”

[13] The second offer, dated September 23, 2020, did not contain a straightforward “expiry date” as the first one did. The court finds that the second offer did contain a time limit as it did say the following: “failure to return Archie Jr. on or prior to Monday September 28, 2020 will result in Mr. Rainey requesting a court order for all of his legal costs to be paid by Ms. Summer.” The applicant submits that the time frame for acceptance of his offers did not really expire as he was open to alternative dates if the mother had offered to return the child to the care of the father prior to or on the scheduled court date on September 10, 2020 or for any time prior to October 1, 2020. While the stated intentions of the applicant may have been genuine, the court finds that neither the first or second offer made it clear that the offers did not expire before the motion was heard. Neither of the offers stated that they were open for acceptance until the hearing began. Therefore, the court finds that both offers did not remain open for acceptance up until the motion commenced. The applicant advised that no response or counter offer was received from the respondent.

[14] With respect to the substantive issues at the motion, the court finds the applicant’s offers to settle were reasonable and, given the outcome of the motion, if the respondent had accepted the first or second offer, the parties could have saved thousands of dollars and hours of time that were spent unnecessarily. The court finds that cost consequences are triggered in favour of the applicant, however, the applicant shall not receive the full benefit of r. 18(14), and there shall not be an order for full recovery costs from the date of his offer to settle.

[15] The respondent provided written costs submissions. The only offer to settle that the respondent made was with respect to settling the costs issue (after the court’s decision on the motion had been released). Given that I was not provided with any offers to settle by the respondent (regarding the substantive issues in the motion) and she never responded to the applicant’s offers to settle, there are no cost consequences triggered in the respondent’s favor on any issue pursuant to r. 18(14) or (16).

Bad Faith and Unreasonable Behaviour

[16] Rule 24(8) states that 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. This rule requires a fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made.[^4]

[17] 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.[^5] 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 involved intentional duplicity, obstruction or obfuscation.

[18] Family law litigants are responsible for and accountable for the positions they take in the litigation.[^6] Sometimes in family law matters, the behaviour of both the parties may seem to be unreasonable at different times. They could be acting out of emotion or fear, or in reaction to or out of a lack of trust and information. These emotions and fears can cloud the determination of fault for the alleged unreasonable or bad faith conduct. In this matter, however, it was unfortunately not difficult to determine whether one party was acting in bad faith or behaving unreasonably prior the motion.

[19] The positions the respondent took on the issues in dispute left the applicant with no choice but to litigate, at a significant cost. The positions the respondent took delayed and lengthened the hearing of this matter. Significant efforts were made by the applicant and his counsel to avoid the need for the motion. When those efforts failed, efforts to prove the unreasonableness of the respondent’s position required extensive communication and multiple court dates. Finally, counsel had to gather evidence to discredit the respondent’s affidavit evidence. All these efforts were reflected in the applicant’s Bill of Costs.

[20] Unfortunately, this was not the only time the respondent has acted in bad faith or unreasonably in this matter. Prior to bringing the motion, the respondent’s communications with the applicant only spoke about her not being agreeable to returning the child to the applicant because of concerns due to COVID-19 and the travel restrictions. Despite the applicant offering many alternative ways to return the child, the respondent failed to return the child to the care of the applicant. Instead of cooperating, the applicant gave different excuses and said that she could not take time off work. When the applicant drove all the way from Missouri to Ontario to pick up the child, the respondent was unresponsive and uncooperative. She did not make the child available for pick up, (forcing the applicant to return immediately to Missouri without the child). Lastly, according to the applicant, after receiving my decision and order of October 13, 2020, the respondent absconded with the child. At the time of the court receiving cost submissions, the applicant did not know the child’s whereabouts. It is unknown to the court whether the child has been returned to applicant.

[21] When arguing for the adjournment (that was granted on September 10, 2020) the respondent denied the guidance of the court regarding jurisdiction. In addition, she suddenly (and without any notice or evidence being filed) made allegations that the child was being abused and neglected in the applicant’s care. All these behaviours, taken on their own or together, make it very clear to the court that the respondent was knowingly and intentionally acting in bad faith and was behaving unreasonably throughout this proceeding.

[22] The costs provisions of the Rules are designed to encourage settlement and make it clear that if one party chooses to unreasonably pursue or prolong litigation, they do so knowing that the likely cost consequences are that they will have to pay both their own lawyer and the other party’s lawyer.

[23] The court agrees with the submissions of the applicant’s counsel, Ms. Kirwin, that the respondent should not have needed to bring this motion at all. At the same time, the court agrees with the submission by Mr. Friend that the time attributable to the applicant’s motion (without notice) should be disallowed. On September 1, 2020, Justice McDermot determined the matter was not properly brought without notice. Mr. Friend says that this time and charge is not “readily determinable from a review of the CL. This may be kept in mind when assessing costs.” The court further agrees that it is a “high conflict” case with “difficult communications on both parent’s parts leading up to during the motion.”

[24] Despite these findings, the court does not believe that the respondent was purely driven by emotion and her anxiety for the best interests of the child. By making allegations of abuse and obtaining and submitting hearsay letters from the applicant’s mother and sister, the respondent drove up the level of conflict and costs to the applicant. The court finds that the respondent was attempting to obstruct and/or delay the fair and just resolution of this matter. By her behaviour, the respondent has shown that she had little regard or respect for the court or achieving a just resolution.

[25] In fixing costs, the overriding objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant. Based upon all of the above, I have determined that the applicant should have costs approaching a full recovery basis; however, those costs will be reduced based on what the court determines is fair and reasonable in these circumstances.

[26] I have considered the rates, time spent and disbursements, and I have determined that they are reasonable considering Ms. Kirwin’s year of call, experience and the effectiveness of her representation and presentation during the motion. I have also considered the complexity and importance of the issues to both parties.

[27] Taking all of the circumstances into account, the court finds that a fair and reasonable costs award is $15,000.00 inclusive of all fees, disbursements and HST. The applicant asks that these costs be enforceable as support by the Director, Family Responsibility Office, pursuant to s. 1 of the Family Responsibility and Support Arrears Enforcement Act, 1996 and Ontario Regulation 454/01 and that FRO shall take whatever means deemed necessary by them to enforce the cost award.

Conclusion

[28] There shall be an order as follows:

1. The respondent shall pay the applicant his costs in the amount of $15,000.00 (inclusive of H.S.T. and disbursements).

2. The entire sum of costs shall be enforceable as support by the Director, Family Responsibility Office. FRO shall take whatever means deemed necessary by them to enforce the cost award.

Madam Justice R.S. Jain

Date: December 1, 2020

[^1]: Family Law Rules, O. Reg. 14/99. [^2]: Berta v. Berta, 2015 ONCA 918, at para. 94. [^3]: Serra v. Serra, 2009 ONCA 395. [^4]: See: Cozzie v. Smith, 2015 ONSC 3626; and, Scipione v. Del Sordo, 2015 CarswellOnt 14971 (Ont. SCJ). [^5]: See: S. (C.) v. S. (M.) (2007), 38 R.F.L. (th) 315 (Ont. SCJ). [^6]: See: Heuss v. Surkos, 2004 CarswellOnt 3317, 2004 ONCJ 141.