Court File and Parties

COURT FILE NO.: FS-18-3999

DATE: 202109013

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Nazanin Eskandari, Applicant

and

Shervin Rowshani-Zafaranloo, Respondent

BEFORE: M. Kraft, J.

COUNSEL: Elena E. Mazinani, for the Applicant

Herschel I. Fogelman, for the Respondent

HEARD: In writing

COSTS ENDORSEMENT

[1] This is the costs endorsement in respect of the applicant’s (“the wife’s”) motion for leave to bring a motion prior to trial for an advance equalization payment of $100,000 or, alternatively, an order for interim costs of $100,000, pursuant to Rule 24(18) of the Family Law Rules (“FLRs”).

[2] On August 16, 2021, I dismissed the wife’s motion, having found that she had not met the evidentiary burden to prove she had a prima facie case to obtain an order for interim costs or an advance equalization payment.

[3] The respondent (“the husband”) seeks costs in the sum of $11,735.55, on a full recovery basis or $7,895.87, on a partial recovery basis.

[4] The wife seeks an order that the costs of this motion be left to the trial judge, as the matter is set to proceed to trial in February 2022. Alternatively, the wife submits that if the court makes a determination regarding the quantum of costs, it should be left to the trial judge to decide whether the costs award should be paid. Further, the wife submits that the quantum of costs sought by the husband are excessive and that she has limited ability to pay costs.

Legislative framework

[5] Subject to the provisions of an Act or the rules of court, costs are in the discretion of the court: Courts of Justice Act, R.S.O. 1990, c. C.43, s.131. Rule 24(10)(a) of the Family Law Rules, O. Reg. 114/99 (FLRs) requires that the court make a decision on the costs of a step in the case promptly after dealing with the step, in a summary manner.

[6] Modern costs rules are designed to foster four fundamental purposes (1) to partially indemnify successful litigants; (2) to encourage settlement, (3) to discourage and sanction inappropriate behaviour by litigants and; (4) to ensure that cases are dealt with justly under Rule 2 (2) of the FLRs: Mattina v. Mattina, 2018 ONCA 867.

[7] A successful party is presumptively entitled to costs pursuant to rule 24(1) FLRs. An award of costs, however, is subject to the factors listed in r.24(11); the directions set out under s.24(4) (unreasonable conduct); r.24(8) (bad faith); r.18(14) (offers to settle), and the reasonableness of the costs sought by the successful party: M.(A.C.) v. M.(D.) (2003), 2003 CanLII 18880 (ON CA), at paras.40-43; Berta v. Berta, 2015 ONCA 918, at para. 94.

[8] The factors to consider in setting the amount of costs are listed in r. 24(12). The court must consider the reasonableness and proportionality of a number of factors as they relate to the importance and complexity of the issues. These factors include each party’s behaviour; the time spent by each party; any written offers to settle, including those that do not meet the requirements of r. 18; any legal fees and any other expenses; and any other relevant matter.

[9] The touchstone considerations of costs awards are proportionality and reasonableness: Beaver v. Hill, 2018 ONCA 840, at para. 12. In Boucher v. Public Accountants Council (Ontario), 2004 CanLII 14579, at paras. 28-29, 37, the court held that costs must be fair and reasonable, and consistent with the reasonable expectations of the parties.

[10] I have considered the factors set out in Rule 24 (12) of the FLRs which reads as follows:

24(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

[11] Rule 24(5) provides criteria for determining the reasonableness of a party's behaviour in a case (a factor in clause 24(12)(a) (1) above). It reads as follows:

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.

Who was Successful on the Motion?

[12] The husband was successful on the motion and, as such, he is presumptively entitled to some costs.

Factors to be considered

Importance, complexity, and difficulty

[13] The motion was of importance to both parties but, particularly, to the wife who was seeking to obtain a $100,000 advance equalization or $100,000 in interim costs. The wife had brought the same motion before Faieta, J. on June 29, 2021, which was dismissed.

Reasonableness

[14] Rule 24(4) of the FLRs explicitly authorizes the use of costs orders to express the court’s disapproval of a litigant’s unreasonable conduct. It provides:

24.(4) Despite sub-rule (1) [which provides that a successful party is presumed to be entitled to the costs of a motion], 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.

[15] In determining reasonableness, Rule 24(5) of the FLRs, sets out what ought to be considered and is referred to above in paragraph [12].

[16] In my Endorsement, I found that the wife’s conduct was unreasonable given that she did not follow the directions set out in the order of Faieta, J. dated June 29, 2021 and did not correct her evidence in the motion before me, which was the same motion Faieta, J. dismissed on June 29, 2021.

[17] The husband submits that he is entitled to costs on a full recovery basis, in the sum of $11,735.55, because of the following findings I made in my Endorsement:

a. The wife’s initial motion for an advance equalization payment and/or interim costs was dismissed by Faieta, J. on June 29, 2021, and the wife did not appeal the decision;

b. The wife failed to establish the necessary evidentiary framework to show on a balance of probabilities that she had a meritorious claim for an advance equalization or for interim costs;

c. The wife did not attempt to adduce new evidence as to why the husband’s claims under s.5(6) of the Family Law Act should fail;

d. The wife did not provide a detailed estimate or bill of costs as required under the Family Law Rules;

e. The wife failed to clarify the deficiencies in her financial statement as pointed out to her by Faieta, J.;

f. The wife failed to account for the funds she had already received by way of advance; and

g. The wife failed to meet her onus regarding an advance on costs.

[18] Bad faith is not simply bad judgment but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity: Nairn v. Lukowksi, 2002 CanLII 78091 (ONSC), at para. 10. As noted in my Endorsement, the wife showed bad judgment in proceeding with the same motion Faieta, J. dismissed without following his guidance and establishing the necessary evidentiary framework needed to prove she had a meritorious claim for an advance equalization payment and/or for interim costs. However, I do not find that her unreasonable conduct amounts to bad faith,

[19] The wife asserts that only the trial judge will be able to determine whether the husband is entitled to an unequal division of the parties’ net family property; whether he has overpaid spousal support and should be given a credit against equalization; and what his date of marriage net worth was. Accordingly, she asks that I not determine costs of this motion or, if I do determine the quantum of costs owing by her, that I leave it to the trial judge to determine whether she has to pay costs to the husband.

[20] I do not agree with the wife that costs of this motion should be left to the trial judge. Although Rule 24(10)(b) gives a judge discretion to reserve costs to be determined at a later step in the case, the court hearing the matter is in the best position to consider the factors relevant to the costs award at that time: N.N.S. v. J.A.O.V., [2018] O.J. No. 3943 (S.C.J.) at para. 19.

Written Offers to Settle

[21] The husband made an offer to settle on August 9, 2021. The offer proposed that the wife withdraw her motion without costs up to August 10, 2021 at 5:00 p.m. The motion was heard on August 12, 2021. I released my Endorsement and Reasons for Order on August 13, 2021.

[22] The wife submits that the husband’s offer to settle does not comply with the formal requirements of Rule 18 since it is not signed by the husband and his lawyer.

[23] I do not agree with the wife. The husband’s offer to settle, dated August 9, 2021 is compliant with Rule 18. It was made in writing, more than 24 hours in advance of the motion, and is signed by counsel on behalf of the husband, as is clearly stated. Accordingly, I agree with the husband’s submission that pursuant to Rule 18(14), he is entitled to costs (at a level to be determined) to the date his offer was served and full recovery costs from that date onward, since my order was more favourable that what he proposed in his offer to settle.

Scale of Costs to be Awarded which Pre-dated the Husband’s Offer to Settle

[24] There is no general approach in family law of “close to full recovery costs”: Beaver, at para. 11. Rather, full recovery is only warranted in certain circumstances, such as bad faith under r. 24(8), or beating an offer to settle under r. 18(14): Beaver, para. 13.

[25] The FLRs do not explicitly provide for costs on either a partial or substantial indemnity scale. Rule 24(8) refers to “costs on a full recovery basis,” where a party has acted in bad faith. In a family law case, the court need not find “special circumstances” before ordering costs on a full recovery basis, see Sordi v. Sordi, 2011 ONCA 665, 283 O.A.C. 287. It has a range of costs awards open to it, from nominal to just short of full recovery.

[26] In Sims-Howarth v Bilcliffe, 2000 CanLII 22584 (ON SC), [2000] O.J. No. 330 (S.C.J.), Aston J. held that the two traditional scales of costs are no longer an appropriate way to quantify costs under the FLRs. He stated that, having determined that one party is liable to pay costs, the court must fix the amount at some figure between a nominal sum and full recovery, having regard to the factors set out in Rule 24, without any assumptions about categories of costs. This characterization of costs under the FLRs was approved by the Ontario Court of Appeal in C.A.M. v D.M., 2003 CanLII 18880 (ON CA), [2003] O.J. No. 3707 (C.A.), at para. 42.

[27] Costs must always be proportional to what is at stake in the case, and to the unsuccessful party’s reasonable expectation as to what costs he may face if he is unsuccessful. In appropriate circumstances, unreasonable behavior will result in a higher award of costs.

Lawyer’s rates

[28] The husband’s lawyer, Herschel I. Fogelman, is a 1990 call. His hourly rate is $750.00. An associate lawyer who works with Mr. Fogelman, Lauren Daneman, is a 2017 call and her hourly rate is $295.

Time properly spent on the case

[29] Based on Mr. Fogelman’s Bill of Costs, I find the time spent by the husband’s lawyers to have been reasonable and proportionate to the issues argued. Mr. Fogelman delegated work to an associate lawyer at a lower hourly rate when possible.

[30] I find that the costs incurred by the husband were reasonable in the circumstances of this case. They were also proportional to what was at stake and to the wife’s reasonable expectation as to what costs she might face if she was unsuccessful. I accept the record of time set out in the husband’s Bill of Costs.

[31] The husband submits that he is entitled to his full recovery costs from the date he served his offer to settle as set out in Rule 18(14) of the FLRs.

[32] After the date of the husband’s offer to settle (August 9, 2021), a further 10.4 hours of time was incurred by the wife, which equates to fees of $4,931 (not including HST). As set out above, the husband is entitled to his full recovery costs from the date he served his offer to settle onward.

Means of the Parties

[33] The wife submits that she has limited ability to pay a costs award; she is a disabled person with no income other than spousal support; and that an award that she pay costs will financially cripple her on the eve of trial.

[34] A litigant’s limited financial circumstances mat nor be used as a shield against any liability for costs when the litigant has behaved unreasonably. It may be relevant to the issue of the quantum or scale of costs, but not to another party’s entitlement thereto: Parsons v. Parsons, 2002 CanLII 45521 (ONSC), at para. 12.

CONCLUSION AND ORDER

[35] In light of the extent of the husband’s success on the motion; the reasonableness and proportionality of the work performed by the husband’s counsel; the fact that the husband offered to resolve this matter and is entitled to his full recovery of costs in the sum of $4,931 and costs on some lesser scale prior to the date his offer to settle was served; the fact that the wife should have expected to pay costs, if the husband succeeded in obtaining an order dismissing her motion, especially since her same motion was denied by Faieta, J. in July 2021; and the fact that the applicant is of limited means, an order that the applicant pay costs to the respondent, fixed in the sum of $8,500, inclusive of fees, disbursements and HST is reasonable and fair in the circumstances.

[36] Accordingly, this Court orders that within 30 days, the applicant, Nazanin Eskandari, shall pay costs of the motion to the respondent, Shervin Rowshani-Zafaranloo, in the amount of $8,500 inclusive of fees, disbursements and HST.

M. Kraft, J.

Date Released: September 13, 2021.