COURT FILE NO.: FC-16-2206
DATE: 2021/06/25
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: JEFFREY HUTCHINSON v. JENNIFER PATRICIA PEEVER
BEFORE: Justice P. Kane
COUNSEL: Ms. Ile-Draga Counsel, for the Applicant
Ms. A. Campbell Counsel, for the Respondent
HEARD: In writing
Cost decision
[1] The parties were requested and provided their cost submissions prior to the release of the decision regarding the two motions decided. They were asked to presume their success on such motions in preparation of their cost submissions.
Parties’ Position on Costs
[2] The father seeks the following cost award:
a. $15,590 total costs, on a scale of substantial indemnity, if he is successful on both motions;
b. $10,393 total costs, on a scale of partial indemnity, if he is successful on one of the two motions.
[3] The father’s Bill of Costs:
a. includes a total of 81 hours docketed by members of the father’s law firm, plus an additional 11 hours preparation of cost submissions, for a total of 92 hours:
b. such time consists of two lawyers who combined docketed 68.4 hours, one law clerk who docketed 8.3 hours and 15.37 hours docketed by three assistants; and
c. $191 of disbursements.
[4] The mother seeks costs totalling $6,359, which includes a total of 18.2 hours docketed by two lawyers, 1.5 hours by a legal assisting, HST thereon and $303 of disbursements. The legal fees claimed total $5,324 or $6,016 including HST.
[5] The mother seeks costs on a scale of substantial indemnity. The $6,359 claimed pursuant to her Bill of Costs represents full indemnity.
[6] Engleking J. at the November 26, 2020 case management conference:
a. directed that the father’s motion for an assessment pursuant to s. 30 of the CLRA and the mother’s right to bring a motion related to the sale of the matrimonial home were to proceed to argument for one hour on January 15, 2021;
b. fixed the costs for that case conference at $1,500 with liability for that to be determined on January 15, 2021.
Analysis
[7] The Family Law Rules relevant to this cost decision include the following:
- (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal. O. Reg. 114/99, r. 24 (1).
(4) Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party’s own costs or ordered to pay all or part of the unsuccessful party’s costs. O. Reg. 114/99, r. 24 (4).
(5) In deciding whether a party has behaved reasonably or unreasonably, the 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. O. Reg. 114/99, r. 24 (5).
(6) If success in a step in a case is divided, the court may apportion costs as appropriate.
(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.
- (1) In this rule,
“offer” means an offer to settle one or more claims in a case, motion, appeal or enforcement, and includes a counter-offer.
(3) A party may serve an offer on any other party.
(4) An offer shall be signed personally by the party making it and also by the party’s lawyer, if any.
(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 motion, it is made at least one day before the motion date.
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.
(15) The burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party who claims the benefit of subrule (14).
(16) When the court exercises its discretion over costs, it may take into account any written offer to settle, the date it was made and its terms, even if subrule (14) does not apply.
Level of Success
[8] The mother was successful on both motions and pursuant to R. 24(1) is presumptively entitled to costs on those motions.
[9] The father is not entitled to costs given his lack of success on both motions.
Unreasonable Conduct as to Success Presumption and Bad Faith Conduct Warranting Full Indemnity
[10] The presumption of cost entitlement under R. 24(1) may be defeated by unreasonable conduct, pursuant to R. 24(4).
[11] Conduct which unduly complicates or unduly lengthens and increases the cost of a proceeding constitutes unreasonably conduct under R. 24(4): Goldstein v. Walsh, 2019 ONSC 3174, at para. 23.
[12] Bad faith conduct pursuant to R. 24(8) must be acts carried out with intent to inflict financial or emotional harm to the other party, to conceal relevant information or to deceive the court or the other party. Bad faith conduct can include deliberate disobedience of a court order if done to achieve an ulterior motive: S.(C.) v. S.(M.), 2007 CanLII 20279 (ON SC), [2007] O.J. No. 2164, paras. 16 and 17, Fatahi-Ghandehari v. Wilson, 2018 ONSC 669, para 39 and Jackson v. Mayerle, 2016 ONSC 1556, para. 61.
[13] Bad faith is different than bad judgment. Bad faith conduct must be consciously so performed, namely consciously doing a wrong because of dishonest purpose, involves intentional duplicity, obstruction or obfuscation and must be shown to be element of malice or intent to harm, but is rarely so determined by a court. Bad faith conduct is greater and not equivalent to bad judgment or negligent conduct: Jackson v. Mayerle, paras. 55 to 61.
Mother’s Allegations of Unreasonable Conduct and Acts of Bad Faith
[14] The acts of unreasonable and bad faith conduct alleged by the mother against the father include:
a. the father having brought four motions since the October 18, 2018 trial decision; and
b. the father’s refusal to comply with the 2018 trial decision and causing significant emotional and financial harm to the mother, including:
the 2018 trial decision determination that the matrimonial home be sold and the father’s conduct to defeat the subsequent efforts to sell the property; and
the father filing excessive and irrelevant materials on these two motions which re-argue matters previously determined in this proceeding, which includes his 692 pages of affidavit materials, some of which were irrelevant to the subject of these motions.
[15] The father since the 2016 commencement of this proceeding has been represented by four law firms. That has increased costs and caused delay.
[16] The reviewable conduct and costs however are as to these two motions and not other prior events in this proceeding. The costs of other steps and the overall costs of this proceeding will be determined and awarded at a later point.
[17] The quantity of material filed by counsel for the father on these motions was excessive and unreasonable. That inappropriately increased preparation time, lengthened argument of these motions to three hours rather than the one hour scheduled and thereby increased the cost of all parties.
[18] The evaluations of the children conducted by Ms. Ferenczy, Dr. Corriveau and Ms. Grenier, done without notice to the mother in contravention of that requirement and her final decision authority granted at trial, may have been intended for use in argument of the applications to vary the trial decisions, but were filed and argued by the father on his motion for a s. 30 assessment.
[19] Those then undisclosed evaluations of the children knowingly breached the decision authority granted at trial to the mother. It will be argued that such evaluations were for the children’s academic benefit and to be used on the variation applications. Despite those arguments, there should be some cost consequences given their breach of the trial decision authority to the mother and their use on the s. 30 assessment motion.
[20] I would not otherwise find the father has acted in bad faith on these motions.
Father’s Allegations of Unreasonable Conduct and Acts of Bad Faith
[21] The father alleges acts of unreasonable or bad faith conduct by the mother pursuant to R. 24(4) and 24(8). He submits that the mother acted unreasonably prior to these motions as:
a. her lawyer failed to respond to communication on behalf of the father;
b. the mother inflicted emotional harm on the father;
c. the mother failed to provide financial disclosure as ordered on consent in April 2020;
d. the mother as to setting terms for the sale of the matrimonial home, relied upon her September 2020 Notice of Motion seeking such relief and failed to serve a new Notice of Motion after November 16, 2020 and only sought such relief in her January 12, 2021 affidavit just prior to argument on January 15, 2021; and
e. the mother’s counsel was late in her filings on these motions and failed to serve a factum for these long motions.
[22] The court is unaware of any alleged emotion harm done by the mother to the father related to these motions. This argument is not articulated evidence and is not relevant.
[23] The father on January 15, 2021, did not seek to adjourn these motions until the mother had provided financial disclosure ordered some eight months before January 15, 2021. The April 2020 financial disclosure requirement that the mother produce her sworn financial statement, her 2016 to 2018 income tax returns and several years of her business records is unrelated to and had no impact upon whether the mother should have authority and carriage of the sale of the matrimonial home or whether a s. 30 assessment should be ordered.
[24] The costs of and the relevant reviewable conduct, are as to these motions, not unrelated prior conduct or steps in this proceeding.
[25] Following the November 16, 2020 case conference which set the January 15 date for these motions, the father waited until January 8, 2021 to serve his motion for a s. 30 assessment order. His motion includes his additional request that the children be placed with him until the mother demonstrates compliance with Covid-19 protocols. That additional relief was not mentioned nor authorized in the November 16, 2020 case conference endorsement which states that only the issue as to the mother’s carriage of the sale of the property and the father’s request for a s. 30 assessment will proceed on January 15, 2021.
[26] The father in argument on January 15, 2021 did not seek an immediate order that the children reside solely with him.
[27] The father then served an amended Notice of Motion and a reply affidavit dated January 13 and 14, 2021 respectively. His reply affidavit addresses in length why the mother should not be authorized to conduct the sale of the matrimonial home.
[28] Both parties could and should have served their motion material earlier. Each was unreasonable in that respect.
[29] The November 16, 2020 case management endorsement set one hour to argue these motions. They were not set as long motions as submitted by the father.
[30] Given R. 24(8)’s high threshold, I do not find the mother has acted in bad faith on these motions.
[31] The late filing of the mother’s affidavit which included her request for authority to sell the matrimonial home did not increase the cost of these motions, but undoubtedly caused the father’s counsel to quickly reply and respond to that argument.
Settlement Offers
[32] The mother served an offer of settlement dated September 1, 2020 together with her motion to vary the trial decision. Such offer includes but is not limited to an offer that she be granted carriage and authority regarding the sale of the matrimonial home. She was successful as to that issue on her motion. The other matters in that offer have not yet been determined by the court.
[33] Such September 2020 offer by the mother, understandably, is silent about the father’s subsequent request for a s. 30 assessment which he only by motion requested four months later.
[34] The mother did not pursuant to R. 18(14)(5), obtain relief on these motions equivalent to or exceeding the terms in her offer of settlement and thereby entitling her to costs on a full indemnity scale.
[35] The matrimonial home portion of the mother’s offer however remains a consideration pursuant to R. 18(16).
[36] The father served a conditional settlement offer dated December 14, 2020, in which he offers to pay the mother $19,031 for the transfer to him of her interest in the matrimonial home. Such offer is conditional as it states that the $19,031 figure does not take into account equalization entitlement of the parties including the division of all assets, debts, liabilities, the carrying costs of the home paid solely by the father since January 2016 or the Legal Aid lien registered against title regarding the mother’s legal services. Such offer accordingly is for an unknown amount, if any.
[37] The father’s above offer is not relevant as to the award of costs on these motions and should not have been so argued.
[38] The above analysis leads the court to conclude that the success presumption in R. 24(1) applies in favor of the mother.
Time Expended and Hourly Rates
[39] The time docketed by counsel for the mother is reasonable, as evidenced by the much higher time docketed by counsel for the father.
[40] The hourly rate of counsel for the mother, given their respective years of call, are reasonable.
Financial Means
[41] The father currently has limited financial capacity which warrants caution due to the passive impact of a cost award regarding the children. The opposite is also true as the mother currently also has reduced income and is the primary caregiver of the children.
Conclusion
[42] The father and the Johnsons should not have and breached the mother’s decision authority awarded at trial, when they submitted the children to testing and obtained the five evaluation reports the father used in argument of his s. 30 assessment motion. To not recognize those breaches as to the level of costs is to signal that breaching a court order has no consequences.
[43] The father via the quantity of materials filed by his counsel unnecessarily increased the costs of these motions.
[44] The father knew as to the mother’s motion seeking authority to manage and sell the matrimonial home, knew that that element in her September 2020 broader offer remained open for acceptance on January 15, 2021.
[45] The $1,500 costs determination for the November 16, 2020 case conference should follow the cost award herein in favour of the mother.
[46] In an attempt to award costs on a fair and reasonable basis, in an amount the unsuccessful party should have anticipated, factoring in the above cost elements as well as the provisions of the Family Law Rules reviewed and pursuant to s. 131 of the Court’s of Justice Act; the mother is awarded costs on a scale of substantial indemnity of 90% in the amount of $7,256, which consists of:
a. $4,792 of legal fees;
b. $623 of HST on such legal fees;
c. $341 of disbursements, including HST; and
d. $1,500, being the November 26, 2020 cost determination.
Justice P. Kane
Date: June 25, 2021
COURT FILE NO.: FC-16-2206
DATE: 2021/06/25
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: JEFFREY HUTCHINSON v. JENNIFER PATRICIA PEEVER
BEFORE: Justice P. Kane
COUNSEL: Ms. Ile-Draga Counsel, for the Applicant
Ms. A. Campbell Counsel, for the Respondent
Cost decision
Kane J.
Released: June 25, 2021