Court File and Parties

COURT FILE NO.: FS-19-09107 DATE: 20220301 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: S.M., Applicant AND: C.B., Respondent

BEFORE: Pinto J.

COUNSEL: Gary S. Joseph, Matthew Pike and Margarit Jo, for the Applicant, Robert M. Halpern, Tharmini Kuhathasan and Alexander Sennecke, for the Respondent

HEARD: In Writing

ENDORSEMENT

[1] Following the release of my Reasons for Decision on January 21, 2022, published as S.M. v. C.B., 2022 ONSC 340, the parties were unable to agree on costs. They made written costs submissions which I considered in reaching this decision.

[2] My Reasons were made in respect of the applicant wife's motion dated November 3, 2021 which was to be heard on November 18, 2021. As the applicant had late filed her Reply Affidavit, I granted an adjournment and the applicant's motion was heard on December 9, 2021.

[3] Broadly speaking, the motion raised three issues:

(a) Ongoing interim spousal support for the applicant effective December 1, 2021;

(b) Retroactive lump-sum spousal support for the applicant from April 1, 2019 up to and including November 2021; and

(c) Interim disbursements for the applicant.

[4] I ordered that:

(a) The respondent should pay the applicant a lump-sum amount of $326,315 in uncharacterized support on a temporary and without prejudice basis;

(b) The question of retroactive spousal support should be deferred and dealt with at the long motion scheduled on March 31, 2022; and

(c) The respondent should pay the applicant $186,000 in interim disbursements, but as the respondent had paid this amount already, albeit as an uncharacterized amount pursuant to my order of November 18, 2021, the respondent should have no further obligation to pay.

[5] Neither party delivered an Offer to Settle in respect of the applicant's motion.

[6] In light my decision, and on the issue of costs, the applicant submits that:

(a) She was the more successful party on the motion.

(b) She is seeking costs on a full-indemnity basis in the amount of $57,457.39 based on a Bill of Costs of $50,847.25 plus HST of $6,610.14.[^1]

(c) She was successful on the issues of interim spousal support and interim disbursements, and her counsel consented to retroactive spousal support being determined at the long motion scheduled for March 2022.

(d) The respondent exhibited bad faith in refusing to provide timely disclosure concerning his bank accounts and financial position even in the face of Justice Steele's disclosure order of October 26, 2021.

(e) The respondent also exhibited bad faith by delaying the payment of the lump-sum of $326,315 in uncharacterized spousal support until February 1, 2022, despite my order of January 21, 2022 directing that the amount be paid forthwith.

(f) If a party has acted in bad faith, under Rule 24(8) of the Family Law Rules, the court shall decide costs on a full recovery basis.

(g) Under Rule 24(6), if success is divided, the court may apportion costs as appropriate. If success is divided, but one party is markedly more successful than the other, the more successful party is entitled to some costs. A contextual analysis should be used focusing on the importance of the issues and the time and expense spent. The court may also in those circumstances award costs to the party who was more successful on an overall basis.

[7] The respondent submits that:

(a) The applicant was unreasonable in resisting the respondent's unconditional adjournment request in respect of the attendance on November 18, 2021, so that the respondent could prepare a supplementary factum. Ultimately, the court ordered the matter adjourned to December 9, 2021 and permitted the respondent to file a supplementary factum. The costs of November 18 were to be reserved to me as the motion judge on December 9.

(b) While the applicant was successful in obtaining interim spousal support, she had originally requested $340,000 per month, whereas I ordered $65,263 per month, albeit as a lump sum for 5 months, meaning $326,315 in uncharacterized support on a temporary and without prejudice basis.

(c) I refused to deal with the applicant's request for lump-sum retroactive spousal support, and the issue has been deferred to the long motion in March 2022, which is a result more closely aligned with the respondent's position.

(d) While the applicant was successful in obtaining interim disbursements, she had originally requested an amount of $470,500, whereas I only ordered an amount of $186,000, and considered that already paid by the respondent pursuant to my order of November 18, 2021.

(e) Although it would appear from the above that there was divided success on the motion, overall, he was the more successful party on the motion.

(f) He is seeking $62,775, inclusive of HST, based on both Mr. Halpern's and Mr. Sennecke's Bill of Costs.

(g) If the court considers this a matter of divided success, it may decline to order costs, or it may award costs to the party who was the more successful overall or on the primary issues, subject to adjustments that it considers appropriate having regard for the lack of success on secondary issues and any other factors relating to the litigation history of the case.

Analysis

[8] The law on costs is well-established and the parties essentially cite the same Family Law Rules and law.

[9] Costs are in my discretion. The touchstones are proportionality and reasonableness. A successful party in a family law case is presumptively entitled to costs. An award of costs is subject to the factors listed in Rule 24(12) of the Family Law Rules, the directions set out under Rule 24(4) (Unreasonable Conduct), and Rule 24(8) (Bad Faith).

[10] The two Court of Appeal cases, Beaver v. Hill, 2018 ONCA 840 at paras. 9 to 14, and Mattina v. Mattina, 2018 ONCA 867 at paras. 8 to 18, have laid out the principles to be applied with respect to costs in family law matters.

[11] Both parties agree that there were three primary issues on the motion: (1) interim monthly spousal support; (2) retroactive lump-sum spousal support; and (3) interim disbursements.

[12] The November 18 attendance before me was significant, not only because I adjourned the matter, but also because I indicated that the focus should be on quantum, not entitlement, of interim spousal support.

[13] While the respondent is to be commended for focusing on quantum, not entitlement, on the December 9 attendance, the reality is that the respondent's position, on the record, was that he was only prepared to pay $3,647 monthly for interim spousal support based on his 2020 income of $287,475 and the applicant's 2020 income of $9,621. Instead, I ordered that the right monthly support payment was $65,263 per month for 5 months.

[14] The respondent fairly points out that the court did not agree to the applicant's position which was that she was owed $340,000 a month.

[15] Still, overall on the first, issue, I find that the applicant was the more successful party as the evolution of the respondent's position to conceding entitlement came late in the day and thereto, my award of $65,263 per month was far greater than the respondent's motion position. As well, a significant part of the debate on the interim spousal support point had to do with figuring out how to calculate the respondent's income since he had no employment income and the amount of his investment assets earning income was unclear due to his failure to disclose his banking statements in a complete and timely manner.

[16] I am prepared to find that there was an element of bad faith on the respondent's part in not providing full disclosure of his financial status and banking records in a timely manner. "Bad faith" is not simply bad judgment or negligence but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity: Fard v. Fard, 2002 CanLII 61493 at para. 12. In the endorsement of Steele J. dated December 15, 2021 appended as a schedule to the applicant's costs submissions, Justice Steele notes:

In my order dated October 26, 2021, in response to ongoing disclosure issues in this matter, I ordered, among other things, that each party provide to the other by November 5, 2021 copies of all bank statements for the period from August 2009 to date. The response provided by the respondent was that the bank statements had been requested from the banks. These have still not been provided to the applicant. I understand that some of the statements in the earlier years may take more time to track down, but certainly at least some of the statements should have been provided by now. Accordingly, I am ordering the production of the statements for the past 7 years by December 24, 2021. [Emphasis added]

[17] I find that at least part of the reason why the respondent delayed in providing full financial and banking disclosure was a litigation strategy to wear down the applicant who has significantly less resources and/or to delay the proper determination and therefore payment of interim spousal support.

[18] Under Rule 24(8) of the Family Law Rules, if a party has acted in bad faith, the court shall decide costs on a full recovery basis. Whereas the applicant would have me award full recovery on the costs associated with the entire motion, I would confine my finding of "bad faith" to the issue of interim spousal support, and factor that finding into my overall costs determination.

[19] On the second issue of retroactive spousal support, I would not consider it part of the costs calculus as, in my ruling, I held that the issue should be deferred to the long motion in March 2022. The applicant would have me distinguish between the respondent's initial position which was that retroactive support should be determined at trial, and my motion decision which was to defer it to the long motion, but I prefer not to delve into costs on the retroactive spousal support issue as I have made no substantive decision in that regard.

[20] On the third issue of interim disbursements, I find that the applicant was the more successful party. The respondent did not want to pay any interim disbursement but submitted that the applicant could obtain more financing including by taking out a loan that the respondent would guarantee. It is valid to point out that the quantum of interim disbursements that I ordered, being $186,000, is significantly less than the $470,500 sought by the applicant. And my ruling expressed a concern about the applicant's refusal to consider sale of the jointly owned $5.0 million cottage. Still, it cannot be said that the applicant was not successful, or the less successful of the parties on the interim disbursements issue.

[21] I note that the respondent's partial indemnity costs of $62,775 are greater than the applicant's full indemnity costs. This suggests to me that the applicant's overall costs are not unreasonable. In any event, I find that the applicant counsel's rates were reasonable as was the time spent. The Bill of Costs did not included disbursements.

[22] My preference is not to try to parse out the costs award against the time spent on each of the three issues. I have stated that the applicant was the more successful party on two of the three main issues, and I decline to take into account the retroactive spousal support issue. I would bump up what is a partial indemnity award of 60% of full-indemnity costs in light of my finding of "an element of bad faith" confined to the interim spousal support issue, and conclude that the appropriate scale of costs is 80% of full indemnity costs or what the applicant has termed her "substantial indemnity" costs. I find that this is a proportionate and reasonable award of costs in light of the Rule 24(12) factors.

[23] Accordingly, I award costs fixed in the amount of $46,000 payable by the respondent to the applicant within 30 days based on the following:

Fees: $40,677.80 (80% of $50,847.25)

HST @ 13%: $ 5,288.11

$45,965.91

$46,000.00 (rounded)

[24] The parties shall provide me with a draft costs order in WORD format for my review and signature to be sent through the family team's judicial assistant Anna Maria Tiberio via email at AnnaMaria.Tiberio@ontario.ca.

Pinto J.

Date: March 1, 2022

[^1]: There appears to be a typographical error in paragraph 1 of the Applicant’s costs submissions where the costs are described as $50,487 whereas the Applicant’s Bill of Costs suggests that the correct figure is $50,847.25.