Superior Court of Justice - Ontario

COURT FILE NO.: FC-20-517

DATE: 20210513

RE: M.M., Applicant

AND:

L.O., Respondent

BEFORE: Justice D.A. Broad

COUNSEL: Shuchanna Swaby, for the Applicant

Raymond Wrubel, for the Respondent

costs ENDORSEMENT

[1] The parties have been unable to resolve the issue of costs of the motions heard on March 10, 2021 and have now delivered written submissions on costs.

Position of the Respondent Mother

[2] The respondent seeks costs on a full indemnity basis in the sum of $9,153 comprised of fees in the amount of $8,100 and HST thereon in the sum of $1,053.

[3] The respondent submits that the most disturbing aspect of the case was the applicant’s unilateral withholding of the child from the respondent on two occasions, the first for approximately six weeks in March/April 2020 and then for three months commencing in December 2020. Although it was fair for the applicant to raise concerns about the respondent failing to follow the separation agreement by commencing work when the child was in her care after October 2020, the applicant should not have used self-help but rather should have brought the matter before the court.

[4] The respondent also points out that the applicant did not agree to return the child to her care until 2 ½ months had elapsed following service and filing of her motion materials seeking the return of the child to her, and only two days prior to the return date of the motion on February 17, 2021.

[5] In addition to being successful on the vast majority of the issues raised in the motion and the cross-motion and obtaining relief equal to or more favourable than her Offer to Settle, the respondent submits that the court should impose a significant penalty against the applicant for his wilful behaviour in disregard of the separation agreement as well as the best interests of the child.

[6] The respondent states that the only issue upon which she was not successful related to continued COVID-19 testing of the child by the applicant. She maintains that she was successful in the two most important issues - gaining the return of the child to her care and allowing her to work when the child is in her care. Although the applicant agreed to return the child to the respondent’s care with a make-up care regime prior to the first court appearance in February, the respondent says that this should have happened in December.

[7] The respondent submits that the vast majority of the relief sought by the applicant was either dismissed or put to a Case Conference. She says that it should have been clear to the applicant that the only issues that were urgent related to the return of the child to her care, her ability to work when the child is in her care and COVID-19 testing for the child. The balance of the relief should have been adjourned to a Case Conference.

[8] The respondent also submits that the applicant was in flagrant disregard of rule 14(20) of the Family Law Rules by filing four separate affidavits of his own and two third-party affidavits, which were not proper reply affidavits. The applicant’s material lacked proportionality, requiring the respondent to expend significant time and resources on the motions.

[9] The respondent points to her Offer to Settle dated February 12, 2021 proposing (a) that she be allowed to work while the child is in her care; (b) that the child be returned to her and a schedule of three weeks on/two weeks off be maintained in order to provide partial make-up time to her with the child; (c) that the applicant be permitted to amend his application; (d) that the applicant be permitted to amend the title of proceedings; (e) that the balance of the issues in the motions be adjourned to a Case Conference; and (f) that each party bear their own costs.

[10] The respondent submits that she was as successful, or more successful, than her offer to settle and she is therefore entitled to full recovery of her costs from and after the date of the offer.

Position of the Applicant father

[11] Applicant seeks partial indemnification for costs incurred prior to and after the commencement of the proceedings and costs of the motions. The amount of costs sought by the applicant is not clear in his submissions. The applicant submitted two documents. The first is entitled “Applicant Father’s Bill of Post-Offer Costs” indicating counsel’s time spent on various tasks totaling 56.1 hours with associated full-indemnity costs in the sum of $17,430 plus HST thereon in the sum of $2,265.90 for a total of $19,695.90. The second document entitled “Details of Time Spent” breaks out the total time of 56.1 hours into three-time frames September 16, 2020 to December 10, 2020, December 10, 2020 to February 17, 2021 and February 17, 2021 to March 10, 2021.

[12] The applicant submits that the respondent behaved unreasonably throughout, examples of which included the following:

(a) surreptitiously working and refusing to comply with the terms of the two-week alternating parenting schedule included in the parties’ separation agreement;

(b) refusing all attempts to negotiate leaving litigation as the applicant’s only choice;

(c) failing to satisfy her onus to seek a court order to authorize her non-compliance with the parties’ agreement and public health protocols;

(d) refusing the applicant’s request to identify the child’s babysitter and to provide information about how public health protocols were complied with in the babysitter’s home; and

(e) refusing the applicant’s offers of the video and phone parenting time over the 10 weeks that the child was in his exclusive care;

[13] The applicant states that the separation agreement which the respondent breached was created for the protection of the child and of the applicant due to his immunocompromised status and the respondent’s reckless actions created a substantial risk to the health of the child, the applicant and to the applicant’s household.

[14] The applicant argues that in withholding the child from the respondent he acted in what he considered to be self defence. His intention was not to establish litigation advantage or to alienate the child from the respondent or to achieve any other improper purpose.

[15] The applicant states that the quantum of costs sought by the respondent is excessive. For example, since the parties agreed to the issue of initializing the names in the style of cause he should not be required to indemnify the respondent for her counsel’s time in reviewing materials on that issue.

[16] The applicant points out that he is a person of modest means, having lost business and musical performance opportunities due to the pandemic. He pays $247 per month for child support under the agreement and, despite the parties sharing equal parenting time and the respondent working full time, the respondent pays no child support. A significant award of costs against the applicant would deprive the child of the support to which he is entitled. He submits that if an award of costs is made against him, it should be minimal so as to not disrupt the child’s stability and payment should be no more than $100 per month.

[17] In conclusion, the applicant submits that he was successful on the issue of testing, but not on the issue of urgency or the respondent’s right to work. The remainder of the applicant’s claims were merely adjourned to be adjudicated at a later stage rather than being dismissed.

Guiding Principles Respecting Costs

[18] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that "subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid."

[19] Pursuant to sub rule 24(1) of the Family Law Rules, the successful party is presumed to be entitled to recover costs. Sub rule 24(11) requires the court, in setting the amount of costs, to consider a number of factors including the importance, complexity and difficulty of the issues, the reasonableness or unreasonableness of each party's behavior in the case, the lawyer's rates, the time properly spent on the case, expenses properly paid or payable, and any other relevant matter. These factors are to be applied flexibly (see M. (C.A.) v. M. (D.) (2003), 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.) at para 42).

[20] Consideration of the relative success of the parties on the issues in the case is the starting point in determining costs (see Butty v. Butty, 2009 CanLII 23111 (ON SC), [2009] O.J. No. 1887 (Ont. S.C.J.) at para. 4, citing Sims-Howarth v. Bilcliffe, 2000 CanLII 22584 (ON SC), [2000] O.J. No. 330 (Ont. S.C.J.)). In the case of Johanns v. Fulford, 2010 ONCJ 756 (Ont. C.J.) at para. 13, it was held that, for the purpose of Rule 24(1), "success" is assessed by comparing the terms of an order against the relief originally requested in the pleadings and against the terms of any offers to settle.

[21] In M. (C.A.) v. M (D.) the Court of Appeal confirmed, at paras. 40-42, that:

(a) although the Family Law Rules have circumscribed the broad discretion granted by s. 131(1) of the Courts of Justice Act, they have not completely removed the trial judge's discretion;

(b) although the general provision, Rule 24(1), enacts a "presumption" that the successful party is entitled to costs of the case it does not require that the successful party is always entitled to costs;

(c) a successful party may not obtain a costs award in his or her favour even in circumstances not falling within sub rule 24(4);

(d) there may be circumstances aside from the unreasonableness of the successful party's conduct that rebut the presumption; and

(e) the financial situation of the parties can be taken into account in setting the amount of the costs award either under Rule 24 or Rule 18 pursuant to the direction in sub rule 24(11) that the court take into account "any other relevant matter".

[22] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan, [1999] O.J. No. 3707 (Ont. C.A.) at para. 24).

[23] Importantly, the case law directs that a costs award must represent a fair and reasonable amount that should be paid, rather than an exact measure of the actual costs, must be consistent with what the unsuccessful party might reasonably have expected to have to pay, and must reflect some form of proportionality to the actual issues argued, rather than an unquestioned reliance on billable hours and documents created (see Mason v. Smissen, [2013] O.J. No. 4229 (Ont. S.C.J.) at paras. 5 and 6 and the cases therein referred to).

[24] In the case of Beaver v. Hill, 2018 ONCA 840 the Court of Appeal has recently stressed that proportionality and reasonableness are the touchtone considerations to be applied in fixing the amount of costs in family proceedings. Moreover, a “close to full recovery” approach is inconsistent with the fact that the Family Law Rules expressly contemplate full recovery in specific circumstances, for example bad faith or besting an offer to settle (see paras. 12-13).

[25] The Court in Beaver v. Hill also noted that, while it may be appropriate in the exercise of a judge’s overriding discretion to reduce the quantum of costs that a party will have to pay because of their financial condition, the principle does not apply in the reverse so as to increase the amount of costs as a consequence of the payor’s ability to pay.

Discussion

[26] In consideration of the relief sought by the parties in their respective motions and the offers to settle served by the parties, in my view the respondent was the successful party and is presumptively entitled to costs pursuant to sub rule 24(1) of the Family Law Rules.

[27] Of the many heads of relief sought by the applicant, he was only successful on the issue of COVID-19 testing for the child, and only partly so.

[28] As indicated at para. 21 of my Endorsement, the applicant took the position at the hearing of the motions that he should be entitled take the child to have COVID-19 tests at his discretion. He was granted the right to have the child tested, without symptoms, only upon the return of the child to his care from the respondent’s care.

[29] The respondent was successful in securing the return of the child to her care, ultimately on consent, with make-up time and was successful in obtaining the right to work while the child is in her care.

[30] In my view the presumption that the respondent is entitled to costs has not been displaced.

[31] The respondent seeks costs on a full indemnity basis.

[32] As indicated above, the Court of Appeal in Beaver v. Hill has made it clear that the Family Law Rules contemplate full recovery only in specific circumstances, for example bad faith or besting an offer to settle.

[33] I am not satisfied that the respondent obtained an order as favourable or more favourable than her Offer to Settle. The Offer to Settle did not address the question of COVID-19 testing for the child which was clearly a live issue for determination at the hearing. The respondent took the position that the applicant should not be entitled to have the child tested without her consent under any circumstances.

[34] In the case of Scalia v. Scalia, 2015 ONCA 492 summarized at para. 69 the legal test for bad faith in the family law context requires that the impugned behaviour be shown to be carried out with an intention to inflict harm or deceive.

[35] At para. 69, Epstein, J.A., writing for the panel, drew a distinction between unreasonableness and bad faith which requires a level of wrongdoing, dishonest purpose or moral in iniquity.

[36] Justice Pazaratz in the case of Jackson v. Mayerle, 2016 ONSC 1556 (S.C.J.) elaborated upon the distinction between bad faith and bad judgment or negligence at paras. 58-61 as follows (citations omitted):

58. 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...

59. 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 costs at a far higher level than those that there shall be full indemnity for only the piece of the litigation where bad faith was demonstrated.

60. To establish bad faith, the court must find some element of malice or intent to harm.

61. Bad faith can be established by the intentional failure to fulfill an agreement in order to achieve an ulterior motive, or an intentional breach of court order with a view to achieving another purpose.

[37] I am satisfied that the applicant exercised bad judgment and engaged in unreasonable behaviour by withholding the child from the care of the respondent contrary to the separation agreement. However, I am not satisfied that it was in bad faith as that phrase is understood in the jurisprudence.

[38] In the unique circumstances of this case, where the applicant was shown to be immunocompromised and to have legitimate concerns with respect to his vulnerability to severe illness or death if infected with COVID-19, I am unable to find that the elements of malice or intent to harm the respondent were present so as to support a finding of bad faith.

[39] It is true that the applicant should have brought the matter to court rather than using self-help. However, this is offset to some degree, but not totally, by the respondent’s failure to bring the issue of her ability to work while the child was in her care to court for determination rather than doing so unilaterally without informing the applicant.

[40] Considering all the circumstances, in my view the respondent is entitled to costs on a partial indemnity basis.

[41] I am unable to accept the applicant’s submission that the costs should be reduced to take account of his financial circumstances. I am not satisfied that there is a material discrepancy between the parties’ relative financial circumstances and to reduce the applicant’s responsibility for costs would unjustifiably shift the majority of the costs burden onto the respondent. The Bill of Costs produced by the applicant confirms that the quantum claimed by the respondent, converted to a partial indemnity basis, should have been within the applicant’s reasonable expectation.

[42] I do not agree with the applicant’s submission that the time spent by the respondent’s counsel as set forth in her Costs Outline was excessive. Rather, I find that the time was proportionate to the relief obtained by the respondent and her need to respond to the multiple issues raised by the applicant.

[43] I fix the respondent’s costs on a partial indemnity basis in the sum of $5,346 in respect of fees and HST thereon in the sum of $694.98, rounded to $6,000.

[44] Extending the time for payment over a five-year period, as suggested by the applicant, would, in my view, unjustifiably burden the respondent.

Disposition

[45] On the basis of the foregoing, it is ordered that the applicant pay to the respondent costs fixed in the sum of $6,000 within 30 days hereof.

D.A. Broad, J.

Date: May 13, 2021