COURT FILE NO.: FS-18-92192

DATE: 2021 03 26

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MICHAEL FEARON v. MARGARET TZENG FEARON

BEFORE: TRIMBLE J.

COUNSEL: William H. Abbott, for the Applicant

Mervyn F. White, for the Respondent

HEARD: 8 March 2021

COSTS ENDORSEMENT

The Motion

1After significant Case Management efforts by Daley RSJ (as he then was), seven days before the trial of the parenting issues was to begin before me on a fixed date of 30 September, 2019, the parties settled parenting issues. I signed the final consent order on parenting issues on 30 September 2019.

2The matter returned to Daley RSJ for continuing case management of the remaining issues, one of which was costs for the parenting issues. Because I was familiar with the case Daley RSJ asked that I hear the costs for the parenting aspects of the case.

3Mr. Fearon seeks full indemnity costs of $113,033.75 inclusive of fees, disbursements and HST, plus an additional $56,022.00 for expert’s accounts. Further, he asks that I vary Bloom J.’s cost order payable by him to Ms. Fearon from $18,000.00, to $0.00 because that order was made based on a false affidavit by Ms. Fearon.

4Ms. Fearon acknowledges that she has to pay costs to Mr. Fearon and that they should be calculated on a full indemnity basis. However, she says that the bill is excessive, includes time that is not related to parenting issues, and should be reduced significantly.

The Facts

5The parties began cohabitating in 1999 and married on 5 January 2002. They have two daughters, McKenzie Tzeng-Fearon (DOB 12 November 2003) and Addison Tzeng-Fearon (DOB 23 March 2006). There was a dispute as to their separation date which is irrelevant to the costs pertaining to the parenting issues.

6In December 2017, Mr. Fearon moved out of the matrimonial home into nearby rental accommodations. Ms. Fearon subsequently purchased Mr. Fearon’s interest in the matrimonial home.

7The marriage began to break down in 2016 when Ms. Fearon began a campaign of alienation of the children from Mr. Fearon. She marginalized Mr. Fearon’s role with the children. She isolated the children from Mr. Fearon and his family. She openly opposed Mr. Fearon’s role as a parent and discouraged the children from spending time with him. She engaged in behaviours designed to undermine his role with the children and exclude him from the family unit. For example, she:

• encouraged the children to refuse to eat with their father during their time with their father

• encouraged them to not use the term “dad” or “daddy”

• gave them food to eat so they would not eat with Mr. Fearon during his parenting time

• engaged in secret communications with the children throughout their time with the father

• encourage the children to lie to the father

• gave the children a “doggy cam” app to facilitate constant communication with the children

• encourage the children to fear their father and be apprehensive when in his presence or care

• she refused to cease her alienating behaviours and put the best interests of the children first

8Initially, Mr. Fearon attempted to resolve matters collaboratively. Ms. Fearon resisted. Mr. Fearon brought his Application on 10 May 2018.

9In litigation, Ms. Fearon took a scorched earth approach while continuing to alienate the children. Experienced family assessors and therapists Andrea Barclay and Dr. Polak both determined that Ms. Fearon is engaged in a campaign of parental alienation and that she had no intention of honouring any shared parenting regime or promoting a relationship between the children and Mr. Fearon.

10Notwithstanding the assessors’ clearly expressed views, Ms. Fearon continued to deny any wrongdoing with respect to Mr. Fearon’s relationship with the children.

11Mr. Fearon says that notwithstanding that both parties had agreed to retain Ms. Barclay and provided a scope of work to her, by swearing a false affidavit, Ms. Fearon influenced Bloom J. to find that Ms. Barclay had stepped outside her retainer and that her opinion might not be reliable.

12Because of Bloom J.’s ruling, the parties retained Dr. Polak to perform a section 30 assessment, who came to the same conclusions as Ms. Barclay.

13Ms. Fearon also attempted to involve the Office of the Children’s Lawyer which Mr. Fearon opposed because he believed that the children’s views would not be independent. Having obtained the court’s leave to involve the OCL, she dragged her feet in doing so. This was subject to comment by Daley RSJ on 13 November 2018.

14Dr. Polak expressed the view that the OCL did not need to be involved. Therefore, at the 11 December 2018 conference before Daley RSJ, he ordered that the motion would not proceed.

15Ms. Fearon delayed the progress of the application further by refusing to pay her share of Dr. Polak’s account for third-party testing. Mr. Fearon had to pay those fees in order to obtain the report.

16Dr. Polak confirmed that Ms. Fearon was alienating the children from their father and recommended immediate drastic action. Ms. Fearon resisted these recommendations and the matter was ordered to trial on the fixed date of 30 September 2019. Because of the urgency of the situation with the children, Mr. Fearon brought a motion on 6 August 2019 for an order that Dr. Polak’s recommendations be implemented. Because of the proximity to the trial, Shaw J. declined to make the order.

17Seven days before the trial, the parties settled all parenting issues. Ms. Fearon, who had been self represented for much of the proceedings, retained a lawyer who assisted her through the settlement negotiations.

18As part of the settlement, Ms. Fearon swore an affidavit dated 30 September 2019 in which she withdrew all of her allegations against Mr. Fearon and took “sole and unconditional responsibility for the disposition of our daughters towards the applicant, his family and friends.” She admitted that she accepted all of Dr. Polak’s findings. She admitted her alienating activities and that they had been the primary cause of the family’s dysfunction.

19Ms. Fearon made no offers to settle. It was not until the eve of trial when there was insurmountable evidence concerning her campaign of alienation that she settled on Mr. Fearon’s terms which included Ms. Fearon’s admitting that she had alienated the children, knowingly.

Positions of the Parties

Mr. Fearon

20Mr. Fearon says that he is entitled to full indemnity costs because of Ms. Fearon admissions in her 30 September 2019 affidavit, her withdrawal all allegations against Mr. Fearon, and her taking sole and unconditional responsibility for alienating the children towards Mr. Fearon, his family and his friends. Further, her conduct throughout the litigation is unreasonable, duplicitous, and malicious, thus entitling him to full indemnity costs.

21I note, however, that paragraph 43 of the 30 September 2019 judgement reserves the issue of costs in the parenting litigation to be decided later.

22Mr. Fearon’s full indemnity costs inclusive of fees, disbursements, and HST are $113,033.75. To this, one must add the following bills from therapists and experts:

(a) Andrea Barclay Invoice: $18,164.00;

(b) Dr. Shely Polak: $16,419.00;

(c) Howard Hurwitz: $1,680.00;

(d) Jacqueline Vanbetlehem: $1,086.00;

(e) Brian Ludmer: $6,000.00; and

(f) Lourdes Geraldo: $12,673.00.

Ms. Fearon

23Ms. Fearon concedes that she owes Mr. Fearon full indemnity costs. However, the Bill of Costs contains items that do not relate to parenting issues. For example, between 1 November 2020 and 27 January 2021, there is $4,539.50 of time for a trial management conference which, patently dealt with things unrelated to child issues. Further, there is another $4,500.00 within the same time frame of Mr. Abbott’s time that relates to non-child related issues.

24Further, the fees are excessive. At every attendance Mr. Fearon had two lawyers. Mr. Abbott is a senior, experienced lawyer. It was unnecessary to have two lawyers at every conference and motion.

25Ms. Fearon also questioned the necessity of many of the experts’ fees.

26It is up to Defence counsel to justify their account. It is not up to Mrs. Fearon to pick out every non-parenting time related entry. Ms. Fearon suggests, however, that a 30% reduction of the time on the file is a fair and reasonable adjustment to reflect non-parent related charges on the file.

Mr. Fearon’s Reply

27In response, Mr. Fearon pointed out that Ms. Fearon not only made no offers to settle, she did not produce her own Bill of Costs in order to show the court what she thought was a reasonable for fees and disbursements. As an example of Ms. Fearon’s own expectations with respect to costs, Mr. Fearon noted that while Bloom J., awarded costs of $18,000.00, Ms. Fearon submitted a Bill of Costs of $45,668.95 plus disbursements, for the appearance before Bloom J., and noted that Ms. Fearon had two lawyers appear at the motion.

28With respect to Bloom J.’s cost order, since it was a temporary order, Mr. Fearon submits that Rule 59.06 allows me to amend or vary it on motion. Accordingly, he asks me to amend that costs award to $0.00.

The Law on Costs

1. Who Pays?

29Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides that cost orders are in the discretion of the court. Rule 24 of the Family Law Rules sets out a framework for awarding costs for family law cases in family matters.

30The cost rules in Family Law are designed to foster three purposes:

1. to partially indemnify successful litigants;

2. to encourage settlement; and

3. to discourage and sanction inappropriate behaviour by litigants

(See: Mattina v. Mattina, 2018 ONCA 867, at para. 10; Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40, at para. 8; Fong v. Chan (1999), 1999 CanLII 2052 (ON CA), 46 O.R. (3d) 330 (C.A.), at para. 22).

31FLR 2(2) adds a fourth purpose, that of ensuring that cases are dealt with justly (see: E.H. v. O.K., 2018 ONCJ 578 at para. 8; Sambasivam v. Pulendrarajah, 2012 ONCJ 711 at para. 37). FLR 24(12)[1], which sets out factors relevant to setting the amount of costs, specifically emphasizes “reasonableness and proportionality” in any costs award.

32The Family Law Rules are different from some aspects of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. As such, case law pertaining to costs decided under the Rules of Civil Procedure should be approached with some caution (see: Frick v. Frick, 2016 ONCA 799 at para. 11; E.H. v. O.K., at para. 34).

33FLR 24(1) creates a presumption of costs in favour of the successful party of a motion, case, or appeal (see: Berta v. Berta, 2015 ONCA 918, at para. 94). This presumed entitlement to costs applies equally to custody and access cases (see: Britt v. Britt, [2000] O.J. No. 5981 (S.C.), at para. 9).

34The first question is which party was more successful? (see: Sims-Howarth v. Bilcliffe (2000), 2000 CanLII 22584 (ON SC), at para. 1). Although a successful party may be entitled to costs, an award of costs is subject to the factors listed FLR 24. An enhanced level of costs, including on a full indemnity basis, may be awarded in specific, extraordinary circumstances such as under FLR 24(4) when a party acts unreasonably, FLR 24(8) where a party acts in bad faith, or FLR 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party (see: Berta v. Berta, at para. 94).

35Assessing costs is not a mechanical exercise. The judge is not required to merely add up lawyer’s time (see: Boucher et al v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579; 71 O.R. (3d) 291 (Ont. C.A.); Dingwall v. Wolfe, 2010 ONSC 1044 (SCJ). The judge’s task is to fix an amount that is proportional to the issues in and outcome of the case, and fair and reasonable for the unsuccessful party to pay and the receiving party to receive as indemnity for costs (see: Selznick v Selznick 2013 ONCA 35 (Ont. C.A.); Delellis v. Delellis 2005 CanLII 36447 (ON SC), 2005 CarswellOnt 4956 (SCJ); Serra (supra); Murray v. Murray (2005) 2005 CanLII 46626 (Ont. C.A.); Guertin v Guertin 2015 ONSC 5498 (SCJ).

2. Scale of Costs

36The Family Law Rules contemplate, on their face, that full indemnity may be awarded where a party acts unreasonably (24(4), in bad faith (24(8) or because of offers (18(14).

37At paragraph 92 of Berta v. Berta, the Court of Appeal approved of the approach taken in Biant v. Sagoo (2001), 2001 CanLII 28137 (ON SC), 20 R.F.L. (5th) 284 (Ont. S.C.), in which the learned judge said at para. 20:

[T]he preferable approach in family law cases is to have costs recovery generally approach full recovery, so long as the successful party has behaved reasonably, and the costs claimed are proportional to the issues and the result. There remains, I believe a discretion under Rule 24(1) to award the amount of costs that appears just in all the circumstances, while giving effect to the Rules’ preeminent presumption, and subject always to the rules that require full recovery or that require or suggest a reduction or an apportionment.

(see also: Ruffudeen-Coutts v. Coutts, 2012 ONCA 263, 15 R.F.L. (7th) 35, at para. 4; Sordi v Sordi, 2011 ONCA 665, 134 R.F.L. (7th) 197, at para. 21; M. (A.C.) v. M. (D.), 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (C.A.), at para. 40.

38On 18 January 2016, however, the Court of Appeal issued a corrigendum to paragraph 94 which reads:

Thus, a successful party in a family law case is presumptively entitled to costs. An award of costs, however, is subject to the factors listed in r. 24(11), the directions set out under r. 24(4) (unreasonable conduct), r. 24(8) (bad faith) and r. 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party: M.(A.C.), at paras. 40-43.

39Unfortunately, many in the Bar and on the Bench followed the uncorrected statements of the Court of Appeal in Berta, leading to what I referred to in Pardy v. Kelly, 2020 ONSC 4482 as a cottage industry in full indemnity claims for costs in proceedings. Family counsel began to argue that any conduct by the opposing party which they found disagreeable is bad faith, giving their clients the right to recover every nickel charged to the client for every second of work on the file. Claims for costs since Berta became unnecessarily high and not reflective of that amount which is reasonable for the opposing party to pay, reasonable for the winning party to receive, proportionate to the issues in the litigation, and a reasonable reflection of the appropriate level of indemnity.

40The Court of Appeal in Mattina, appears to have retracted from Berta when it said at para. 15: The Family Law Rules only expressly contemplate full recovery costs in specific circumstances, e.g. where a party has behaved unreasonably, in bad faith or has beat an offer to settle under r. 18(14).

41This correction did not come to the attention of a differently constituted Court of Appeal panel in Forrester v. Dennis 2016 ONCA 214, 78 R.F.L. (7th) 114, (Ont. C.A.), which followed the original pronouncement in Berta.

42Some family cases have followed the approach in Forrester, i.e. that a successful party in a family law case is presumptively entitled to full recovery costs as long as the successful party has behaved reasonably, and the costs claimed are proportional to the issues in the result.

43In Anderson v Anderson, 2016 ONSC 7774, Pedlar J. attempted to reconcile the Forrester/Berta divide. In his view, the Court of Appeal in Mattina corrected itself in Berta, and that the Court of Appeal in Forrester was in error.

44Costs, at the end of the day, should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties” (see: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291, at para. 24.)

3. What is bad faith?

45Bad faith is characterized as conduct done with the intent to inflict financial or emotional harm on the other side, to conceal information relevant to the issues, to deceive the other party or the court, or actions designed to achieve a nefarious purpose. Conduct that is misguided but genuine, is not bad faith. (see: Negin v. Fryers, 2018 ONSC 6713, at para. 17; S.(C.) v. S.(C.) 2007 CanLII 20279 (ON SC), [2007] O.J. No. 2164).

46In Jackson v. Mayerle, 2016 ONSC 1556, at para. 58 Pazaratz J. defined bad faith as:

“…the conscious doing of a wrong because of dishonest purpose or moral obliquity and 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, 2005 CanLII 7660 (SCJ); Leonardo v. Meloche, 2003 CanLII 74500 (SCJ); [2003] O.J. No. 1969 (SCJ); Hendry v. Martins, [2001] O.J. No. 1098 (SCJ).” It requires malice and intent to harm.

47The conduct amounting to bad faith is usually manipulating and falsifying evidence, intentionally failing to honour an agreement in order to achieve an ulterior purpose, or intentionally breaching a court order to achieve an ulterior purpose.

4. Does other conduct attract full indemnity scale?

48It can, although it is a question of cumulative degree. Pazaratz J. indicated (Jackson, at para. 54 and 64) that unreasonable behaviour may also attract an award of full indemnity. Such behaviour includes:

• unfounded allegations significantly complicate a case or lengthen the trial process

• after an established parenting time arrangement, changing to a campaign to shut the other parent out of the child’s life

• unilateral or dictatorial behaviour

• using uncontrolled emotional behaviour and manipulation, oblivious to their effect on the child

• making dubious or false allegations against the other parent without credible supporting evidence

• surreptitiously recording the other parent, or children, or both

49This list is not exhaustive.

Result

50A reasonable amount for Ms. Fearon to pay and for Mr. Fearon receive for full indemnity costs, and that is proportional to the issues and result, under all the circumstances, is $146,013.55 for fees, disbursements, HST, and the expert accounts. In addition, I vary Bloom J.’s cost award in Ms. Fearon’s favour from $18,000.00 to $0.00.

Analysis

51Ms. Fearon concedes that because of her conduct throughout the action she should pay Mr. Fearon costs on a full indemnity basis. She should also pay the experts’ expenses except that of Brian Ludmer.

52Why do I make the adjustment to the all inclusive figure of $146,013.55?

53As indicated, my job in assessing costs in litigation is not to parse the time or individual disbursements incurred by Mr. Fearon’s lawyers. Rather, my job is to set fees that are proportional to the issues and result, and are fair and reasonable for the payor to pay, and for the recipient to receive as full indemnity cost (in this case), in all the circumstances.

54I make my assessment based on four broad circumstances.

1. Non-Parenting Time

55I am satisfied that the Bill of Costs presented by Mr. Fearon’s counsel includes time for activities related in whole or in part to non-parenting issues. Pursuant to paragraph 43 of the consent 30 September 2019 Judgement, these are not recoverable at this time. Whether they are recoverable at another time remains to be seen. I am satisfied that between 1 November 2020 and 27 January 2021 there is at least $9,000.00 of such non-parenting time.

2. Two Lawyers

56A client is entitled to have as many lawyers work on a file as that client wishes to pay for. Whether the opposing party shall be forced to pay for the cost of more than one lawyer on a party and party assessment is a different question. An award of costs in this context is no reflection on the economic relationship between lawyers and their counsel. Rather, the determination is whether it is fair and reasonable that the paying party should pay for more than one counsel in all the circumstances.

57On every court appearance, two lawyers appeared on behalf of Mr. Fearon. Sometimes, when she was represented, Ms. Fearon also had two lawyers appear.

58Mr. Fearon’s counsel, however, did not satisfy me that two counsel were reasonably necessary on each case conference or other appearance before the court. I am satisfied that on some instances two counsel were necessary, and that where only one counsel was necessary it is reasonable that the counsel should have been senior counsel.

59I also note that there is some duplication between senior and junior counsel, for which adjustment must be made.

3. Experts’ Disbursements

60I accept all the expert disbursements for which Mr. Fearon seeks reimbursement except that of Brian Ludmer.

61Mr. Fearon says that it is common that lawyers outsource work to other lawyers, and that the fees of the consulted lawyer are proper disbursements. That is what occurred in this case.

62The onus is on a party presenting a disbursement to demonstrate that the disbursement is reasonable in the circumstances. The only evidence of Mr. Ludmer’s involvement is his 13 November 2019 Statement which indicates that he rendered serviced during that billing period for reviewing and commenting on a Request to Admit and Settlement with a value of $461.04. That statement notes that there was a previous statement for $6,685.08 but provides no detail as to the work done.

63Mr. Ludmer’s total fees on this matter are $7,146.12. Mr. Fearon seeks reimbursement of only $6,000.00.

64I am prepared to accept that Mr. Ludmer provided services to Mr. Fearon’s counsel in the amount of $461.04 as supported by the 13 November 2019 statement. Mr. Fearon has not established that any other of Mr. Ludmer’s fees are recoverable.

4. Bloom J.’s Cost Award in favour of Ms. Fearon

65On 23 October 2018, Bloom J. heard Mr. Fearon’s motion for an order that the two children of the marriage be placed into his sole custody for 90 days, with no contact with the respondent or her family except as directed by the alienation counsellors. This relief involved varying an earlier interim order of Daley RSJ.

66On 2 November 2018, Bloom J. released his reasons in which he held that the variation was not warranted. He held that there was no clear evidence of alienation and that Ms. Barclay’s report should not be relied upon at that time. Ms. Fearon said in her affidavit that she had not alienated the children. She only conceded that the children’s conduct with respect to Mr. Fearon was problematic.

67In his 2 November 2018 reasons, Bloom J. invited cost submissions. After receiving them, he awarded costs to Ms. Fearon of $18,000.00.

68Mr. Fearon argues that in light of Ms. Fearon’s admissions on settlement, including that she had knowingly engaged in a campaign of alienation, Bloom J.’s cost award must be revisited. Mr. Fearon is not seeking $18,000.00 from Ms. Fearon. Instead, he seeks only to reduce Bloom J.’s costs order from $18,000.00 to $0.00.

69Rule 59.06(2) permits a court to vary or set aside an order on the grounds of fraud or of facts arising or discovered after the order was made.

70I am content that I have the authority to vary or set aside Bloom J.’s cost order of $18,000.00. Bloom J. accepted Ms. Fearon’s evidence with respect to alienation at least to the extent of concluding that because of her evidence, Mr. Fearon had not proved that the variance in access and custody was required. Ms. Fearon admitted that the evidence that she gave, under oath, in the affidavit she filed in respect of the motion before Bloom J. was not correct. Had she admitted that she was engaged in a campaign to alienate the children from Mr. Fearon, the motion may well have succeeded. It is doubtful that the cost award would have been made.

71Considering Ms. Fearon’s admissions, it might have been reasonable for Mr. Fearon to seek costs from Ms. Fearon for that motion. Instead, he seeks merely to vary that cost award to $0.00. I make that order.

Order

72Ms. Fearon will pay to Mr. Fearon the following sums for full indemnity costs with respect to the parenting time issues:

Fees, disbursements and HST:

Fees $80,000.00

HST on Fees $10,400.00

Disbursements $ 4,547.80

HST $ 582.71

Subtotal: $95,530.51 $ 95,530.51

Expert Disbursements:

Andrea Barclay $18,164.00

Dr. Shely Polak $16,419.00

Howard Hurwitz $ 1,680.00

Jacqueline Vanbetlehem $ 1,086.00

Brian Ludmer $ 461.04

Lourdes Geraldo $12,673.00

Subtotal: $50,483.04 $ 50,483.04

Total: $146,013.55

73Further, I vary Bloom J.’s cost order to $0.00.