.: Harper v Smith, 2021 ONSC 3420

Court File and Parties

COURT FILE NO.: FS-20-19356 DATE: 20210510

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

MAIKA HARPER Applicant

– and –

SEAN SMITH Respondent

COUNSEL: Kristen Normandin, for the Applicant Esther Lenkinski, for the Respondent

HEARD: In writing

COSTS ENDORSEMENT

M.D. Faieta J.

1The Respondent’s motion for an order directing that his two children be returned to Scotland was dismissed: See Harper v. Smith, 2021 ONSC 2504.

2The Applicant seeks her costs on a full indemnity basis in the amount of $99,809.24. The Respondent submitted a bill of costs in the amount of $69,448.56. The Respondent submits that no costs should be ordered as success was divided and because the Applicant behaved unreasonably in removing the children from Scotland.

ANALYSIS

3In a family law proceeding, the award of costs is in the discretion of the court and it is informed by the following principles:

1. An award of costs should foster the following purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement, and; (3) to discourage and sanction inappropriate behaviour by litigants; (4) to ensure that cases are dealt with justly as required by Rules 2(2) and 2(4) of the Family Law Rules, O. Reg. 114/99: Mattina v. Mattina, 2018 ONCA 867, para. 10;

2. A successful party is presumed to be entitled to their costs of the proceeding: Rule 24(1);

3. Proportionality and reasonableness are the “touchstone considerations” to be applied in fixing the amount of costs: Beaver v. Hill, 2018 ONCA 840, para. 12;

4. In setting the amount of costs, Rule 24(12) requires a court to 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.

5. In deciding whether a party has behaved reasonably a court shall examine:

a. the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;

b. the reasonableness of any offer the party made; and,

c. any offer the party withdrew or failed to accept: Rule 24(5);

6. Unreasonable behavior “in relation to the issues” includes behavior that: (1) is disrespectful of other participants or the court; (2) unduly complicates the litigation, (3) increases the cost of litigation: Beaver v. Hill, 2018 ONSC 3352, para. 51, rev’d 2018 ONCA 840 (on other grounds);

7. A successful party who has behaved unreasonably during a case may be denied their costs or ordered to pay an unsuccessful party’s costs: Rule 24(4)

8. Other relevant considerations include:

a. A party’s ability to pay costs is a relevant consideration in assessing the amount of costs payable only for the purpose of justifying a reduction, not an increase, in the amount of costs awarded: Beaver, para. 18;

b. A claim for costs cannot include a risk premium that reflects the fact that counsel provided legal services while bearing the risk that they might ultimately not be fully paid for their services: Beaver, para. 7;

c. The absence of an offer to settle cannot be used against a party in assessing costs unless it was realistic to expect an offer to settle to be made. Further, if an offer to settle that is not compliant with Rule 18 is made, it may be considered in assessing costs if it contains a “true element of compromise”: Beaver, para. 16;

d. An award of costs may be adjusted to reflect the parties’ divided success: Rule 24(6); Beaver, para. 21.

9. A successful party is entitled to its costs on a full recovery basis when a party:

a. obtains a result that is at least as favourable as its offer to settle: Rule 18(14);

b. has acted in bad faith: Rule 24(8). See [S. (C.) v. S. (M.)(2007), 2007 20279 (ON SC), 38 R.F.L. (6th) 315, paras. 17-18, aff'd 2010 ONCA 196 where Perkins J. stated that the impugned 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 behaviour, to conceal information relevant to the issues or to deceive the other party or the court.”

10. Unless Rule 18(14) or Rule 24(8) is applicable, a successful party is not entitled to its costs on a full recovery or “close to full recovery” basis: Beaver, paras. 13, 17.

11. A bill of costs shall be filed along with motion material, if costs are requested by a party on a motion: See Notice to Profession – Toronto, Toronto Expansion Protocol for Court Hearings During COVID-19 Pandemic, para. B.5.23.

See https://www.ontariocourts.ca/scj/notices-and-orders-covid-19/notice-to/

12. A trial judge should not make an order for costs in relation to any earlier step where no costs were ordered or where there was silence on the issue. Bortnikov v. Rakitova, 2016 ONCA 427, para. 34; Jackson v. Mayerle, 2016 ONSC, 1556, para. 74.

4In this case, each party alleges that the other party has behaved unreasonably however neither party alleges bad faith.

The Respondent’s Improper Reply Affidavit Evidence

5This motion was originally to be heard on January 25, 2021. The Respondent’s motion and his supporting affidavit (100 pages with 14 pages of text) were filed on about November 24, 2020. At a case conference, Shore J. ordered that: 1) the motion would be heard on January 25, 2021; 2) the Applicant’s material was to be delivered by January 11, 2021; 3) a Zoom call was to be held with Shore J. on January 13, 2021 to canvass the issue of questioning/cross-examination; 4) the Respondent’s reply material was to be delivered by January 18, 2021; 5) each party was to deliver a Factum January 20, 2021.

6On January 11, 2021 the Applicant filed her responding affidavit (184 pages with 21 pages of text). The Applicant delivered a supplementary affidavit on January 15, 2021 (4 pages long that attached a recent letter from Native Child and Family Services Toronto).

7On January 18, 2021 the Respondent filed three reply affidavits: 1) his own affidavit (214 pages with 24 pages text); 2) his mother’s affidavit (41 pages with 7 pages of text); and (3) his friend’s affidavit (4 pages).

8While I accept the Respondent’s submission that there was some evidence in the reply affidavits that responded to the evidence in the Applicant’s responding affidavit, the Respondent’s reply affidavits went far beyond the limits provided by Rule 14(20): See Nyari v. Velasco, 2008 ONCJ 272, para. 11. The Respondent’s reply evidence dealt with matters not raised in the Applicant’s responding evidence (such as alleged drug use, the Respondent’ alleged inability to work in Ontario) and matters that could have been addressed or amplified in the supporting affidavit delivered with the motion (such as providing additional evidence regarding the Respondent and his family’s relationship with the children).

9On January 25, 2021, the hearing of the motion was adjourned for one month to permit the filing of sur-reply affidavits and the cross-examination of the affiants.

10The Applicant states that the filing of improper reply evidence was unreasonable conduct by the Respondent that resulted undertaking work that more than doubled her legal fees. A Bill of Costs filed prior to January 25, 2021, shows that the Applicant’s legal fees were $48,454.97 on a full indemnity basis. The Applicant’s legal fees are now $99,802.67 on a full indemnity basis.

The Circumstances Under Which the Applicant and the Children Left Scotland

11The Respondent submits that:

Maika behaved unreasonably by leaving Scotland with both children without his consent or knowledge while making parenting arrangements with Sean in Scotland, and at the same time commencing an Ontario application for sole custody without specifying any parenting proposal. Maika did not notify Sean that she had left Scotland until after she arrived in Ontario. Sean behaved reasonably given his circumstances.

12In response, the Applicant states:

Maika further disputes Sean’s allegation that she acted unreasonably in returning to Ontario. Maika informed Sean numerous times that she had to return to Ontario with the children in October as lockdowns were worsening and she risked being prevented from leaving the UK. Sean refused to engage in productive conversations about the reality of their situation. Maika was without legal status, could not work and had mounting credit card debt. Sean was not contributing financially to the children’s care.

13On October 7, 2020 the Applicant told the Respondent that he could have parenting time with the children on October 9, 2020 while knowing that she and the children would on an airplane returning to Canada on October 8, 2020 without his consent. I find that the Applicant’s behaviour was disrespectful of the Respondent.

14I note that Perkins J. reduced costs significantly in circumstances where a “sham access arrangement” had been made for a date after the departure date: Perez-Lopez v. Cordero, 2012 ONSC 5589.

Concerns for the Applicant’s Mental Health and the Safety of the Children

15Without the Applicant or the Applicant’s counsel being notified, the Respondent contacted Native Child and Family Services in November, 2020 to express concern for the children’s safety in light of his concerns about the Applicant’s mental health. The NCFS investigated, determined that it had no concerns for the children and closed its file. Nevertheless, despite having received the views of the NCFS, the Respondent advanced these same concerns in his reply affidavit.

16I find that the Respondent’s behaviour was disrespectful of the Applicant.

Delivery of All Affidavits to Amy Dudley Prior to Her Questioning

17The Respondent relied on the affidavit of Amy Dudley. During questioning, Ms. Dudley acknowledged that Ms. Lenkinski had provided her with not only the Applicant’s Sur-Reply Affidavit that responded to Ms. Dudley’s affidavit, but also all other affidavit evidence that had been filed.

18The Applicant submits that “this ought to be considered when determining costs of this matter”. I have considered the matter but find that this behaviour goes to the weight to be assigned to the answers by Ms. Dudley on questioning and is not a matter for costs.

The Reasonableness of the Legal Fees

19The Respondent submits that the total amount of time spent by the Applicant is excessive. However, the Respondent did not provide a Bill of Costs which shows the time spent to prepare the Respondent’s notice of motion and affidavit as the first entry on the Respondent’s Bill of Costs starts on November 13, 2020 with “revision of affidavit and team re notice of motion”.

20Further, counsel for both parties to varying degrees each used junior counsel with lower hourly rates to prepare much of their work product. Neither counsel provided a breakdown of overall time spent by counsel. As a result, an analysis of overall time spent overall is not easy or helpful.

21Another approach is to compare the amount of legal fees claimed by each party. A comparison of each party’s Bill of Costs shows that the Applicant claims legal fees of $96,905.97, inclusive of HST, and the Respondent claims legal fees of $64,102.08, inclusive of HST. Accordingly, the Applicant’s legal fees appear to be about 50% more than the legal fees claimed by the Respondent. However, this high-level comparison is limited by the fact that the Respondent’s Bill of Costs does not reflect the work performed by counsel for the Respondent prior to November 13, 2020.

The Respondent’s Ability to Pay

22The Respondent submits that he should not be required to pay costs as he has extremely limited financial means and has depleted his savings and relied on loans from family to pay for his lawyers. He states that he will need to fund flights and accommodation for his parenting time in Ontario, child support and further litigation to secure parenting time.

23However, the Applicant also has limited means. The Applicant states she has had to sell her belongings, borrow funds from family, and incur significant debt to be able to ensure her evidence was properly before the Court.

24I find that the Respondent’s ability to pay should not lead to a reduction in the amount of costs that he is to pay the Applicant. Presumably, the Respondent was aware that he ran the risk of paying costs in the event that his motion was dismissed. It would be inconsistent to reduce the amount of costs otherwise payable to the Applicant when, despite his limited means, the Respondent has mounted a vigorous legal battle, incurred considerable legal costs in doing so, and predictably led to the Applicant incurring significant legal costs.

Offers to Settle

25There is no evidence that either party made a settlement offer. Hopefully, given their limited financial means, they will see fit to mediate, rather than litigate, their parenting and child support issues if they are unable to come to a settlement with the assistance of counsel.

Was Success on this Motion Divided?

26The Respondent submits that success was divided and thus no costs awarded. He states:

… both parties spent the majority of their written and oral submissions on two major issues: 1) whether the children were wrongfully removed from their habitual residence under Article 3 of the Hague Convention, and 2) whether they should not be returned to Scotland under Article 13(a) or 13(b). Maika was successful on the issue of the children’s habitual residence. Sean was successful on the second issue as the court found that none of the exceptions under Article 13 applied.

27The main issue on this motion was the determination of the habitual residence of the children. The focus of the submissions, both oral and written, addressed that issue. The secondary issue of whether the children should not be returned to Scotland, in the event that my conclusion that the children were habitually resident in Ontario at the time of their removal from Scotland, was given much less attention. While success on the motion was divided, the Applicant was successful on the main issue and is presumptively entitled to her costs. The circumstances do not support the conclusion that there should be no costs awarded.

CONCLUSIONS

28This is not a case that calls for full indemnity or close to full indemnity costs given the absence of bad faith and a settlement offer from the Applicant that was better than the result on this motion. Both parties have behaved unreasonably. Having regard to principles of reasonableness and proportionality, I order that the Respondent pay costs of $40,000.00, inclusive of disbursements and taxes, to the Applicant within 30 days. This order is effective from the date of the release of this Endorsement without a formal Order being issued and entered.