COURT FILE NO.: FS-19-38
DATE: 2021-09-20
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: C.S., Applicant
AND: S.C., Respondent
BEFORE: Chozik J.
COUNSEL: Applicant, self-represented Brian Burke and Joelle Ruskin, counsel for the Respondent
COSTS ENDORSEMENT
[1] The trial in this matter proceeded before me for ten days in October and November, 2020. The sole issue was what decision-making and parenting schedule were in the best interests of the parties’ child, N (age 9 at the time of the trial).
[2] The Applicant, N’s mother, sought an order for joint custody, parallel decision-making, and equal access or parenting time. The Respondent, N’s father, sought an order that he have sole custody and decision-making responsibility. He proposed a parenting schedule whereby N would spend 5 out of 14 days with his mother. The Respondent also asked that certain temporary therapeutic interventions be imposed to supervise and support the Applicant’s parenting of N.
[3] On January 8, 2021, I made the Final Order sought by the Respondent and provided brief Reasons for the Judgment. I concluded that it was in N’s best interest for the Respondent to have sole decision-making responsibility and that the sharing of parenting time be as the Respondent suggested. I also ordered the temporary therapeutic interventions proposed by the Respondent. The Order sought by the Respondent was entirely consistent with the recommendations of Howard Hurwitz, who conducted an exhaustive assessment under s. 30 of the Children’s Law Reform Act, R.S.O. 1990, c. C.12 (CLRA). The Final Order took effect January 11, 2021.
[4] I released supplemental Reasons for Judgment on May 28, 2021 and invited written submissions with respect to costs. I have received and reviewed the Respondent’s written submissions and bill of costs. To date, the Applicant, has not served or filed any responding submissions as to costs despite ample opportunity to do so.
The Respondent’s Position on Costs:
[5] The Respondent seeks partial indemnity legal costs of $350,000 plus $39,346.18 which is half of the cost of the custody assessment and related disbursements. He submits that his actual legal costs were in excess of $493,492.99 and even at this, the bill of costs does not reflect all of the time expended by the Respondent’s counsel in this matter. These costs relate only to the parenting issues which culminated in the trial before me. The parenting and financial issues were bifurcated, the trial before me dealt only with parenting issues. These costs, therefore, do not include the litigation of the financial issues which remain outstanding.
[6] The Respondent submits that this costly litigation resulted solely from the Applicant’s deplorable post-separation conduct and unreasonable positions she took during litigation. In effect, the Applicant forced him to undergo “an emotionally devastating and financially crushing litigation process”. The litigation of the parenting issues could have been avoided: within weeks of the separation, the Respondent proposed a parenting schedule that was far more advantageous to the Applicant than what she ultimately obtained at trial. In a letter to the Applicant’s counsel dated April 8, 2019, his lawyer proposed joint decision making and equal parenting time on “something like” a 5-2-2-5 schedule.
[7] He argues that for two years following the separation until the trial, the Applicant attempted to destroy his relationship with N. She also made unsubstantiated allegations against him of domestic and sexual violence against her and, on various occasions, accused him of drugging, physically assaulting and sexually touching N. Based on some of her allegations, the Respondent was criminally charged with physically and sexually assaulting her. All of the criminal charges against him were withdrawn by the Crown during the trial before me.
[8] For those two years, the Applicant made near constant allegations and complaints about the Respondent to the Children’s Aid Society (CAS), the police, the section 30 assessor, and every professional involved with this family. Despite a “mounting tide” of findings and recommendations against her, including those contained in the s. 30 CLRA assessment, the Applicant maintained an unreasonable settlement position culminating in this complex and lengthy trial. In the end, the Respondent was entirely successful and is entitled to his costs.
[9] On October 5, 2020 the Respondent made a formal offer to settle the parenting issues. That offer was very much in line with what the Order I ultimately made at the conclusion of the trial.
[10] The Respondent urges me to find that the Applicant acted in bad faith. He argues that the Applicant deliberately sought to mislead this court by expressing views that she did not genuinely hold.
[11] The Respondent argues that a substantial costs award in his favour is necessary not only to indemnify him, but to deter future unreasonable litigation conduct by the Applicant.
[12] Lastly, the Respondent argues that the costs of the s. 30 CLRA assessment and related costs ought to be shared equally by the parties.
Analysis:
[13] No party is absolutely entitled to costs in any case. Under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C. 43, the court retains wide discretion in ordering costs and in determining quantum. Discretion as to costs is always guided by the principles of reasonableness and proportionality (Berta v. Berta, 2015 ONCA 918, 128 O.R. (3d) 730; Frick v. Frick, 2016 ONCA 799, 132 O.R. (3d) 321.).
[14] Rule 24 of the Family Law Rules, O. Reg. 114/99 (FLR), sets out the factors to be considered in awarding costs. The importance and complexity of the proceedings, as well as each party’s behaviour, the time spent, and any written offers to settle must be considered. Under r. 24(12) the court is required to look at the reasonableness or unreasonableness of each party’s conduct during the course of the dispute. Rule 24(5) sets out the factors against which the reasonableness of the party’s conduct is to be assessed. These factors include:
(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.
[15] Successful parties are presumed to be entitled to costs unless there is a good reason to rebut the presumption, such as bad behaviour. A “successful party” does not necessarily mean the party who was successful on most or even all the issues. For example, it can mean the party who made a favourable offer that would have eliminated the need for extended litigation. Under r. 18(14) FLR, a party who makes a favourable offer may be entitled to costs on a “full recovery” basis from the time of the making of that offer.
[16] Modern costs rules are designed for three purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants: Serra v. Serra, 2009 ONCA 105, 307 D.L.R. (4th) 1, at para. 8; Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at paras. 12-15. Ultimately, costs should be in an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances of the case.
[17] In this case, the Respondent is clearly the successful party. As such he is presumptively entitled to his costs. He also made a formal offer to settle on October 5, 2020 that was as good or better for the Applicant than the result at trial.
[18] Having regard to all the factors in r. 24 FLR, the quantum sought by the Respondent is a fair and reasonable amount for the Applicant to pay in the circumstances of this case. The issues for trial were important, complex, and required significant expenditure by the Respondent. Though I do not find that she acted in bad faith, the Applicant’s conduct throughout this litigation was deplorable. She drove this litigation and by her unreasonable conduct caused this expense. Despite her mental health struggles, she is responsible for her conduct, the positions she took in litigation and must be held accountable.
[19] The Respondent, on the other hand, acted reasonably throughout: he matched his offer at trial and made extensive efforts to resolve the parenting issues. As I found at the conclusion of the trial, the result he sought was consistent with the recommendations of the professionals involved. In fact, it was exactly what Mr. Hurwitz recommended in his exhaustive s. 30 CLRA assessment. Put simply, this litigation could have been, and would have been, avoided had the Applicant acted reasonably.
Significance and Complexity of the Issues:
[20] I agree and accept the Respondent’s characterization of the legal issues in this case, as stated at para. 7 of his written costs submissions:
The legal issues went well beyond those of a "typical or “garden variety” family law case and included evidence and argument on: the impact of mental health issues in making parenting determinations; therapeutic supervision of parenting and therapeutic counselling; and complex evidentiary issues. Nine witnesses testified, including the parties, their section 30 assessor Howard Hurwitz, the forensic psychiatrist Dr. Hy Bloom, N.’s therapist Ms. Barclay, and several CAS case workers. The trial lasted two full weeks, even with submission of evidence in chief via affidavit. The volume of information was, in the circumstances of this case, vitally important to this Honourable Court's ultimate decision.
[21] The Respondent had no choice but to challenge the false allegations the Applicant made against him and to marshal cogent and compelling evidence to counter hers. If left unchallenged, the Applicant’s narrative could have confused or duped the trier of fact and resulted in a miscarriage of justice.
[22] The issues in this case were of fundamental importance – the wellbeing of a young child. The evidence was substantial and complex. The trial lasted ten days. In addition to viva voce evidence, the written record was voluminous – it contained thousands of pages. The written record included the affidavit evidence of most witnesses, the lengthy s. 30 CLRA assessment, psychiatric and psychological reports, the entire CAS file, and over 750 pages of Our Family Wizard messages.[^1] The volume of information was, in the circumstances of this case, essential for the proper adjudication of the merits of the case.
The Conduct of the Parties:
[23] While I am not prepared to conclude that the Applicant acted in bad faith, there is no doubt that her post-separation and litigation conduct was unreasonable. Her conduct, and her conduct alone, drove this litigation. It forced the Respondent to incur these exorbitant costs. He had no choice. The Applicant’s conduct was egregious. It included a campaign to shut the Respondent out of N’s life, obliviousness to the harm of her actions on the child, and resistance to professionals’ recommendations. The Respondent had to defend himself from her allegations. He had to litigate to do everything he could to ensure that the parenting issues were decided consistent with N’s best interests.
[24] At the conclusion of the trial, I found that the Applicant showed complete disregard for N’s wellbeing and that her behaviour included:
a. Alienating behaviours;
b. Unsubstantiated allegations that the Respondent physically, emotionally and sexually abused N;
c. Allegations of domestic violence, including sexual violence, made by the Applicant that were withdrawn by the Crown;
d. Adult “mental health behaviours” by the Applicant;
e. A refusal to involve the Respondent in parenting;
f. Interference and threats of interference with the Respondent’s parenting time;
g. Directly involving N in the parenting conflict;
h. Unnecessarily and repeatedly taking N. to doctors and hospitals to highlight concerns that were not there, including alleging that the Respondent drugged N and subjecting N to unnecessary medical testing and questioning as a result;
i. Extreme anger at the Respondent and high levels of legal involvement;
j. Refusing to accept the recommendations of various professionals;
k. Worsening conflict with the Respondent during the course of the section 30 assessment;
[25] It is readily apparent from this record that from the separation in March, 2019 until the trial in October of 2020, the Respondent was required to expend legal fees on a weekly and sometimes daily basis as a result of the Applicant’s conduct. For example, part of the Respondent’s release conditions in relation to the criminal charges restricted his communication with the Applicant. She continually tried to communicate with him and escalated daily parenting issues. She acted erratically and even threatened to call the police if he did not communicate with her. He was forced to use counsel to communicate about day to day parenting matters. Responding to her extreme behaviour increased his legal costs.
[26] All the evidence at this trial was against the Applicant. The s.30 CLRA assessment was available to the Applicant for six months prior to trial. She refused to accept the findings and the recommendations made in it. Even before the s. 30 assessment was ordered, the parties could have settled the parenting issues in a sensible way from the outset as set out above. Also, the Respondent’s pre-trial Offer was reasonable: it was entirely in keeping with the ultimate result at trial, if not more favourable to the Applicant. I am satisfied that the Respondent made consistent and constant efforts to reasonably resolve the parenting issues.
[27] Prior to the litigation commencing, the Applicant fled with N. from the family home without telling the Respondent that she was leaving. She obtained a restraining order against him on an ex-parte basis alleging domestic violence. A mere 8 days later, that restraining order was rescinded with her consent. Then began a crushing litigation process, due entirely to the conduct of the Applicant. The Applicant’s unreasonable and deplorable conduct drove this litigation and was the only reason the Respondent had to incur these legal costs.
[28] I, like all the professionals involved with this family, found that the Applicant’s claims against the Respondent were false. I found that she was neither credible nor reliable in her claims that she was prepared to co-parent with him. I concluded that she would not, could not, and did not, act in N.’s best interests. My findings in this regard were entirely consistent with the conclusions reached by Mr. Hurwitz.
[29] Regardless of the findings and advice of every professional involved with this family, the Applicant persisted with taking unreasonable stance on the parenting issues in this litigation. From the outset, she revved up the stakes by making unfounded allegations of abuse against the Respondent. She did not rescind those allegations at trial. Rather, she maintained that they were true but that she had put them behind her.
[30] Although I find that her conduct was unreasonable, I am not satisfied that the Applicant acted in bad faith under r. 24(8). A finding of bad faith requires a fairly high threshold; unreasonable conduct is not sufficient. The essence of bad faith is when a person knowingly and intentionally suggests their actions are aimed for one purpose when they are aimed in fact for another purpose. It implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. Bad faith “involves intentional duplicity, obstruction or obfuscation”: Peladeau v. Charlebois, 2020 ONSC 6596, at para. 37
[31] The legal test for bad faith was set out by the Ontario Court of Appeal in Scalia v. Scalia, 2015 ONCA 492, 126 O.R. (3d) 241, at para. 68 as follows:
The legal test for bad faith in the family law context, as set out in S. (C.) v. S. (M.) (2007), 2007 CanLII 20279 (ON SC), 38 R.F.L. (6th) 315 (S.C.J.), at para. 17, aff’d 2010 ONCA 196, 2 O.A.C. 225, is that the impugned behaviour must be shown to be carried out with “intent to inflict financial or emotional harm on the other party or persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court.” In short, the essential components are intention to inflict harm or deceive.
[32] In my view, the Applicant did not deliberately set out to mislead the court or inflict harm on the Respondent. I am of the view that at some level she honestly believes the various things she alleged about the Respondent. I do not believe that her purpose in behaving as she did was to deliberately inflict harm on him, though she clearly did not care that her conduct harmed him. It seems that at moments leading up to the trial and during her testimony, she honestly believed that she could co-parent with the Respondent. I infer this from the evidence of Dr. Bloom, who prepared a comprehensive psychiatric assessment. While I found the Applicant’s claims to be objectively incredible and unreliable, this does not mean that she subjectively did not believe them, or that she deliberately set out to deceive the court or that she operated with a dishonest purpose or moral obliquity. I am not satisfied that she acted in bad faith, though her conduct comes very close to it.
[33] At the same time, I agree with the Respondent that a significant costs order is warranted in this case. The costs order must serve a deterrent purpose. As I have stated, the Applicant’s conduct and her conduct alone drove this litigation. It forced the Respondent to incur these crushing costs. An order for costs is one of the few protections from litigants who use the court process inappropriately and act unreasonably.
[34] The Applicant struggles with her mental health. She deserves compassion. At the same time, her mental health or other struggles are not the Respondent’s fault. It would be unfair to the Respondent to shield the Applicant from her responsibility for these costs because of her mental health. The Respondent has been forced to bear extreme costs as a result of her unreasonable conduct and it is fair and reasonable that she should have to pay those costs.
Quantum:
[35] With respect to quantum in my view $350,000 in partial indemnity costs is reasonable for the preparation for and conduct of this 10-day trial, given the complexity of the evidence and the seriousness of the issues.
[36] The amount of preparation engaged in by the Respondent’s legal team was justified. He was entitled to incur such legal expenses as were commensurate with the significance of the issues. The issues in this case were clearly significant, including decision making and parenting time. At the conclusion of the trial, I found that the Applicant’s conduct was harmful to N. The determination of decision-making responsibilities, parenting time and appropriate therapeutic interventions was essential to N’s best interest. The child’s wellbeing was at stake.
[37] The courts are not to second guess the tactical and evidentiary decisions made by counsel after the fact. Services should be viewed from the perspective of what was apparent to counsel before the trial: Apotex Inc. v. Egis Pharmaceuticals (1991), 1991 CanLII 2729 (ON SC), 4 OR (3d) 321 (S.C.), pg. 10. Detailed documentation as to the various steps taken to prepare this matter for trial, and conducting the trial, have been provided. While determining costs is not to be done using a line by line analysis of the time spent, in my view the actions taken by the Respondent’s lawyers were justified. The stakes at this trial were incredibly high.
[38] I am also satisfied that the bill of costs does not include all of the time expended by the Respondent’s lawyers. Costs relating to financial issues between the parties, which are yet to be litigated, were taken out and may be subject to a later claim for costs should the need arise. Time relating to the Christmas 2019 motion (which was ultimately settled) was taken out. Time relating to closed parenting mediation with Lourdes Geraldo, M.S.W., was also taken out. Other costs, deemed excessive or not appropriate, were removed.
[39] Partial indemnity costs of $350,000 for this trial are fair, reasonable, and proportionate having regard to all the circumstances. It is the amount that an unsuccessful litigant in a case like this could expect to pay.
Costs of the Section 30 Assessment:
[40] On September 13, 2019, Kurz J. made an Order appointing Mr. Hurwitz to conduct the s. 30 CLRA custody assessment, with the consent of the parties. The Order required the Respondent to pay the upfront fees of the assessment, subject to reapportionment of those costs on agreement by the parties or order of this court.
[41] The Respondent submits that the costs of the s. 30 CLRA assessment should therefore be treated as an item separate from costs generally and reapportioned equally between the parties. I agree.
[42] There is no question that the s. 30 CLRA assessment was crucial at this trial. The costs relate to Mr. Hurwitz’s work as well as the two psychological reports prepared by Dr. Fitzgerald. Those psychological reports were integral to the assessment. The costs of the s. 30 assessment were $54,591.50 and $10,000 for Mr. Hurwitz’s and Dr. Fitzgerald’s work respectively. In addition, the Respondent paid the costs of these two witnesses to attend at trial; this cost $6,198.20. In my view, these costs must be shared by the parties equally.
Conclusion:
[43] In conclusion, the Respondent, as the successful party, is entitled to his costs. His formal offer dated October 5, 2020 was largely consistent with the Final Order. Indeed, it was slightly more favourable to the Applicant. The Applicant’s conduct since separation was deplorable. It forced the Respondent to incur these crushing litigation costs. The costs incurred are commensurate with the complexity and significance of the issues at trial. The issues and evidence at trial were complex. The stakes – the wellbeing of a young child and his ability to have a relationship with his father – were incredibly high. In the circumstances, costs of $350,000 for the trial plus half of the costs of the s. 30 CLRA assessment of $39,346.18, are fair, reasonable, and proportionate.
[44] The Applicant shall pay costs of $389,346.18 (inclusive of all taxes) to the Respondent forthwith.
(“Original signed by”)
Chozik J.
Date: September 20, 2021
[^1]: By agreement and order of the court, the evidence in chief of the parties and other witnesses was adduced at trial by way of affidavits to the shorten and streamline the trial.