COURT FILE NO.: FC-16-FO000903-0000
DATE: 2021-07-27
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ANA MARIE FREITAS
Applicant
– and –
GERALD MESHACH CHRISTOPHER
Respondent
Brian R. Kelly, counsel for the Applicant
Barry T. Paquette, counsel for the Respondent
HEARD: November 23 – 27, 2020, December 15, 2020
THE HONOURABLE MADAM JUSTICE D. PICCOLI
COSTS ENDORSEMENT
[1] This endorsement follows the release of my decision in this matter on March 29, 2021 and regards the issue of costs.
[2] The court heard a five-and-a-half-day trial in 2020. On January 21, 2021, the parties appeared before me to speak to the issue of the Mother reopening the trial. The issue of reopening the trial was resolved by the order of Walters J. dated January 22, 2021.
[3] There were a number of issues that the parties resolved on consent, as is set out in my decision. After the trial, I made an order that the parenting schedule during the school year continue as set out in the interim order of MacLeod J. dated December 19, 2019. That order provided that the Easter weekend be shared and alternated, and that should either parent travel outside the Province of Ontario, that parent was to provide to the other with details of the travel as well as contact information.
[4] I also made an order imputing an income to the Father based on the greater of his actual income or an imputed income of $48,796.80, such that he would pay child support in the minimum sum of $450 per month. The Father was to advise the Mother of any changes in his employment and provide her with confirmation of reasons why any employment ended or, if he obtained new employment, a copy of his employment contract or a letter outlining his remuneration.
[5] The Mother seeks her costs on a full indemnity basis in the amount of $92,297.84 (including HST) plus $1,469.78 in disbursements (including HST). She seeks this amount for a number of reasons, which include the Father’s lack of credibility, the Father’s failure to admit that he committed family violence against her, his unreasonable behaviour, and his refusal to pay proper child support. The Mother asserts that the Father acted in bad faith. In support of her position that she was the “overwhelming successful” party, she points to, among other things, her non-severable offer to settle dated January 20, 2020 (“Mother’s offer to settle”).
[6] It is the Father’s position that each party bear their own costs. He states that there has been divided success. He points out that the Mother’s offer to settle was non-severable, that he made an offer to settle parenting issues dated January 15, 2020 and an offer to settle the support issues dated November 4, 2020. He has attached a chart to his costs submissions which he states indicates that when looked at as a whole, neither party was more successful than the other. He also notes that despite resolution on the issue of decision making between the parties, the Mother persisted in seeking an order for “custody” or a finding that the order made was equivalent to custody. He also asserts that he does not have the means to pay any significant costs order and finally that the Mother’s costs are excessive.
[7] The Father’s bill of costs for the trial was $75,303.27, including HST, plus disbursements of $495.62, for total fees and disbursements of $75,798.89.
Law and Rules Respecting Costs
[8] The award of costs is within the discretion of the court: see Courts of Justice Act, R.S.O. 1990, c. C.43, at s. 131(1).
[9] The modern costs rules are designed to foster four fundamental purposes:
i. to partially indemnify successful litigants for the costs of litigation; ii. to encourage settlement; iii. to discourage and sanction inappropriate behaviour by litigants; and iv. to ensure that cases are dealt with justly pursuant to subrule 2 (2) of the Family Law Rules, O. Reg. 114/99.
See Mattina v. Mattina, 2018 ONCA 867; Serra v. Serra, 2009 ONCA 395, 66 R.F.L. (6th) 40.
[10] The Court of Appeal for Ontario has stated that proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs: see Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at para. 12.
[11] Rule 24(1) of the Family Law Rules states that a successful party is presumptively entitled to their costs.
[12] Rule 24(12) outlines the factors to be considered by a court in setting the amount of costs:
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 behavior; 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 the experts and their rates, vi. any other expenses properly paid or payable; and b) any other relevant matter.
[13] Rules 24(4) and 24(5) direct the court to evaluate whether a party has behaved reasonably or unreasonably, by examining the following:
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.
[14] Rule 24(6) allows the court to apportion costs as appropriate where success in a case is divided.
[15] Rule 24(8) deals with what the court may do if a party has acted in bad faith, and indicates that in such cases, the court shall decide costs on a full recovery basis.
[16] If offers to settle that meet the requirements of r. 18 were made, I am required to have regard to r. 18(14), which sets out the costs consequences of failing to accept an offer. Rule 18(14) applies where the party made a written offer at least seven days before trial and obtained an order as favourable or more favourable as the offer.
[17] Rule 18(15) provides that the burden of proving that the order is as favourable as or more favourable than the offer to settle is on the party that claims the benefit of the rule.
[18] Rule 18(16) states that costs are at the discretion of the court and the court may consider any written offer to settle, the date it was made, and its terms, even if r. 18(14) does not apply.
[19] In Chomos v. Hamilton, 2016 ONSC 6232, 82 R.F.L. (7th) 395, at para. 19, Pazaratz J. stated that the court is not required to examine each term of the offer, as compared to the terms of the order, and weigh, with microscopic precision, the equivalence of the terms. What is required is a general assessment of the overall comparability of the offer as contrasted with the order.
Was Mother Successful?
[20] The Father sets out a useful chart as schedule G to his submissions on costs which I reproduce below:
| Issue | Ana’s Position At Trial | Ana’s Offer To Settle | Gerry’s Position at Trial | Gerry’s Offer To Settle | Court Order |
|---|---|---|---|---|---|
| Regular Parenting Schedule | Schedule to be in accordance with Order of MacLeod J. of December 19/19 | Same as at trial | Shared, equal parenting time, with Jack to be in each party’s care for one half the time | Schedule to be in accordance with Order of MacLeod J. of December 19/19 | Schedule to be in accordance with Order of MacLeod J. of December 19/19 |
| Easter | Jack to be in the Applicant’s care from Holy Thursday after school until Easter Sunday at 2:00 p.m. in each year, and with the Respondent from Easter Sunday at 2:00 p.m. until return to school on Tuesday in each year. | Same as at trial | The entire Easter Weekend to be alternated between the parties in each year. | Same as at trial | The court Order provided that the Easter weekend be divided, but alternating in each year |
| Child Support | That the Respondent pay ongoing child support of $582.00, as well as his proportionate share of section 7 expenses. | Her Offer did not address a specific amount of child support | Given the temporary and tenuous nature of his employment, the Respondent’s position was that he pay child support in the amount of $253.00 per month and his share of section 7 expenses based on the minimum wage of $29,640 per annum. Support to be adjusted at the end of the year based on his actual income. | That the Respondent pay child support in the amount of $196.00 per month and his share of section 7 expenses, based on his annual income of $24,496. | That the Respondent pay child support in the amount of $450.00 per month. |
[21] With respect to travel outside the Region of Waterloo, the parties’ positions were as follows:
(a) The applicant’s position at trial was that each party should be required to notify the other party of any intention to travel outside of the Region of Waterloo with Jack. (b) The applicant’s offer to settle did not address this issue. (c) The respondent’s position at trial was that this was not necessary. (d) The respondent’s offer to settle did not address this issue. (e) The relief requested was not granted by the court.
[22] The Mother’s non-severable offer included a provision that the Father pay $22,500 in full and final settlement of arrears of spousal support. Based on the minutes of settlement provided to me, there was no spousal support to be paid by the Father. Furthermore, a number of issues set out in each party’s offer were resolved in advance of trial.
[23] It is perplexing that the parenting schedule could not be settled before trial, as the parties ultimately agreed on this issue as can be seen in their respective offers. It is impossible for me to determine what caused them to have a five-and-a-half-day trial when the major issue in dispute was agreed upon between them and in the end was what I ordered.
[24] With respect to all issues except for child support, I find that there was divided success.
[25] With respect to the issue of child support, save and except for two days, the Father had been in arrears of child support since the date of separation. As I indicated in my decision, child support is the right of the child. The Father lost his job through his own actions and yet he still sought to underpay child support. Although the Mother’s offer was silent on the issue of child support, likely because she did not have any current income information for the Father until the eve of trial, I find that the Mother was wholly successful on this issue and should receive costs for that portion of the trial on a full indemnity basis. The bill of costs does not outline the amount of time spent on child support, but I would estimate that 20% of the trial was devoted to child support issues. This translates into $18,459.57 of the Mother’s bill of costs.
[26] It bears noting that litigants should be serving severable offers in any case where severable offers are appropriate. Further offers to settle should continue to be served once issues are resolved with respect to outstanding issues only. Offers to settle play an integral role in saving time and expense by promoting settlements, focusing parties and often narrowing the issues in dispute. Severable offers to settle or separate offers to settle specific issues are particularly helpful in attempts to settle cases: see Forlippa v. Khabemba, 2019 ONCJ 170, at para. 34. Parties cannot expect a court to ascertain success on settled issues.
Did Father Act in Bad Faith?
[27] Rule 24(8) of the Family Law Rules reads as follows:
BAD FAITH
(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.
[28] In Chomos v. Hamilton, at paras. 42-49, Pazaratz J. canvassed the caselaw pertaining to “bad faith” in the context of costs considerations. His Honour’s review is summarized as follows:
Pursuant to Rule 24(8) if a party has acted in bad faith, the court shall decide costs on a full recovery basis and order the party to pay them immediately.
Rule 24(8) requires a fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made. S.(C.) v. S.(C.), 2007 20279 (ON SC), [2007] O.J. No. 2164; Piskor v. Piskor, 2004 5023 (ON SC), [2004] O.J. No. 796 (SCJ); Cozzi v. Smith, 2015 ONSC 3626, 2015 ONSC 3626 (SCJ).
In S.(C) v. S.(C) Perkins J. defined bad faith as follows:
In order to come within the meaning of bad faith in sub rule 24(8), behaviour 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. A misguided but genuine intent to achieve the ostensible goal of the activity, without proof of intent to inflict harm, to conceal relevant information or to deceive, saves the activity from being found to be in bad faith. The requisite intent to harm, conceal or deceive does not have to be the person's sole or primary intent, but rather only a significant part of the person's intent. At some point, a party could be found to be acting in bad faith when their litigation conduct has run the costs up so high that they must be taken to know their behaviour is causing the other party major financial harm without justification.
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: 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 7660 (ON SC), 2005 7660 (SCJ); Leonardo v. Meloche, 2003 74500 (ON SC), 2003 74500 (SCJ); [2003] O.J. No. 1969 (SCJ); Hendry v. Martins, [2001] O.J. No. 1098 (SCJ).
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 that there shall be full indemnity for only the piece of the litigation where bad faith was demonstrated. Stewart v. McKeown, 2012 ONCJ 644, 2012 ONCJ 644 (OCJ); F.D.M. v. K.O.W., 2015 ONCJ 94 (OCJ).
To establish bad faith the court must find some element of malice or intent to harm. Harrison v. Harrison, 2015 ONSC 2002.
[29] In this case, it is true that the Father’s position that he did not commit family violence lengthened the proceeding. However, there is no proof of intent to deceive either overtly or covertly. I do not accept that the Father behaved so as to deceive, harm or conceal. I do not find that the Father acted in bad faith.
Did Father Behave Unreasonably?
[30] With respect to unreasonable behaviour, rr. 24(4) and 24(5) read as follows:
SUCCESSFUL PARTY WHO HAS BEHAVED UNREASONABLY
(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.
DECISION ON REASONABLENESS
(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.
[31] I am guided by the specific wording with respect to “reasonableness” as contained within r. 24(4), “a successful party who has behaved unreasonably during a case” and r. 24(5)(a), “the party’s behaviour in relation to the issues from the time they arose”.
[32] In Kisten v. Kosewski, 2020 ONSC 3380, at para. 41, Bale J. stated that “a practical application of this language requires some measure of causal connection between the offensive behaviour, and the conduct of the litigation. That is, except in extreme circumstances, the behaviour will have resulted in unnecessary steps or increased costs. To suggest otherwise, in this court’s opinion, would lead to unintended and sometimes absurd results.”
[33] Although I do not find that the Father acted in bad faith, I do find that his behaviour, as detailed in my decision of March 29, 2021, was unreasonable. His continual denial that he committed family violence against the mother was unreasonable. This denial lengthened the trial. In addition, his unsubstantiated allegations that the Mother also engaged in abusive communication towards him also lengthened the trial. For the Father to allege that he has already been penalized by virtue of his incarceration, and his long-held position, shows me that he continues to fail to understand the implications of his actions.
[34] I find the Mother is entitled to some of her costs in this matter.
Quantum of Costs for the Trial
[35] Once liability for costs has been established, the court must determine the appropriate quantum of costs. Rule 24(12) prescribes some of the factors which the court must consider in deciding the appropriate quantum.
[36] As noted above, proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs: see Beaver v. Hill, at para. 12.
[37] The assessment of costs is not a mechanical exercise. It is not just a question of adding up a lawyer’s dockets. The overall purpose is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances of the case: see Jackson v. Mayerle, 2016 ONSC 1556, 130 O.R. (3d) 683, at paras. 16-21.
[38] In Serra v. Serra, Boucher v. Public Accountants Council (Ontario) (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 2005 1042 (ON CA), 75 O.R. (3d) 638 (C.A.), the Court of Appeal for Ontario set out the following additional general principles relating to quantum:
(i) Ultimately, costs decisions should reflect what the court considers to be a fair and reasonable amount that the unsuccessful party should pay. (ii) Costs need to be proportional to the issues and amounts in question and the outcome of the case. (iii) Amounts actually incurred by the successful litigant are not determinative. (iv) In assessing what is fair and reasonable, the expectation of the parties concerning the amount of a costs award is a relevant consideration.
See also Selznick v. Selznick, 2013 ONCA 35.
[39] Rule 24(12) sets out specific factors the court should consider. I will address these factors in turn:
a. Each party’s behaviour, r. 24(12)(a)(i): In this respect, I have found that the Father acted unreasonably. I find that the Mother’s behaviour was reasonable. b. The time spent by each party, r. 24(12)(a)(ii): On this factor, I am satisfied that all of the time set out in Mr. Kelly’s bill of costs was required, reasonable, and only relates to this trial (as opposed to earlier legal steps). c. Written offers to settle, r. 24(12)(a)(iii): I have already commented on the written offers exchanged in this case. d. The legal fees, including the number of lawyers and their rates, r. 24(1)(a)(iv): In this respect, Mr. Kelly’s hourly rate of $400 is reasonable given his years of experience. I also find that he properly utilized junior lawyers and law clerks. e. Any other expenses, r. 24(12)(a)(vi): All of the disbursements claimed are reasonable.
[40] Having regard to the divided success on all issues except child support (for which the Mother was successful), the fact that the Father acted unreasonably and considering the principles of reasonableness and proportionality, I find that the Father shall pay to the Mother $45,000 in costs.
Enforcement Clause
[41] The Mother argues that the full costs I order should be enforced by the Family Responsibility Office (“FRO”). I do not agree.
[42] In Clark v. Clark, 2014 ONCA 175, at paras. 80-81, the Court of Appeal stated the following:
It is appropriate to address one additional aspect of Gregory’s challenge to the Costs Order at this stage. Gregory argues that only costs related to support are eligible for enforcement by the FRO under the Act. Accordingly, he submits, the trial judge erred by failing to identify those costs of the trial that were unrelated to support issues and by failing to direct that only those costs relating to support should be enforceable by the FRO.
The decision of this court in Wildman provides a full answer to this claim. In Wildman, a similar argument was advanced and rejected. Wildman holds, at para. 59, that where, as here, a support claim is a principal issue at a multi-issue matrimonial trial, the allocation of costs as between support and non-support issues may be both impractical and inappropriate. Although a trial judge, in the exercise of his or her discretion, may identify those costs of a proceeding that were directly incurred in relation to a contested support claim, so as to designate those costs as enforceable by the FRO, this is not a necessary undertaking. As this court noted in Sordi, at para. 25, trial courts have considerable discretion concerning requests that legal costs in a multi-issue matrimonial proceeding be designated as support for the purpose of FRO enforcement. Absent legal error, designations of this kind attract considerable deference from this court.
[43] In this case child support was not the principal issue. The principal issue was the parenting schedule. I have decided that $18,459.57 of the bill of costs is in relation to child support and that is the amount I order be enforced by the FRO.
Ability to Pay
[44] The Father asserts that he does not have the means to pay the Mother’s costs. He has claimed bankruptcy. In Witt v. Witt, 2019 ONSC 3732, at para. 22, the court noted the following:
(a) in the appropriate case a relevant consideration would include the financial position of the other party; (b) unless a party can meet the threshold of undue hardship, that party would not have relief from costs on the basis of affordability where a reasonable offer has been served: see LeVan v. LeVan (2006), 2006 31020 (ON SC), 82 O.R. (3d) 1, at para. 39.
[45] I note that cost consequences typically have a negative impact on the losing party. These consequences serve to encourage settlement.
[46] The Father’s statement on this issue in his bill of costs is “The Respondent does not have the means to pay any significant costs Order. It would definitely inhibit his ability to pay costs.” This does not meet the threshold of undue hardship. I do not agree that he does not have the ability to pay. He has no more or less ability than the Mother had when she paid her costs; $15,000 of which she was required to pay to the Father to avoid a motion to strike her pleadings at the commencement of trial.
Order
[47] The Father shall pay to the Mother costs in the sum of $45,000 within 90 days; $18,459.57 of these costs are enforceable by FRO.
[48] This costs order is payable forthwith and shall attract interest in accordance with the Courts of Justice Act.
D. Piccoli J.
Released: July 27, 2021
COURT FILE NO.: FC-16-FO000903-0000
DATE: 2021-07-27
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ANA MARIE FREITAS
Applicant
– and –
GERALD MESHACH CHRISTOPHER
Respondent
Defendnaondents
COSTS ENDORSEMENT
D. Piccoli J.
Released: July 27, 2021