Court File and Parties

COURT FILE NOS.: CV-22-15 and FS-21-304-00AP

DATE: 20220708

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jenna Ashley Austin, Applicant

AND:

Benjamin House, Respondent

AND RE: Benjamin House, Applicant

AND:

Jenna Ashley Austin, Respondent

BEFORE: Justice D.A. Broad

COUNSEL: Deborah L. Ditchfield, for the Applicant/Respondent Jenna Ashley Austin

Michael H.Tweyman, for the Respondent/Applicant Benjamin House

COSTS ENDORSEMENT

Background

[1] The parties have been unable to settle the issue of costs of the applicant Jenna Ashley Austin’s (the “mother”) successful application to declare the respondent Benjamin House (the “father”) a vexatious litigant and the father’s unsuccessful motion to extend the time to perfect his appeal from the order of the Honourable Justice Baker of the Ontario Court of Justice dated October 20, 2021. The parties have therefore each delivered written submissions on costs.

[2] The mother seeks costs of both proceedings on a substantial indemnity basis.

[3] In respect of her vexatious litigant application the mother seeks substantial indemnity costs of $26,214.39 comprised of fees in the sum of $22,264, HST thereon in the sum of $2,894.32 and disbursements, inclusive of HST on assessable disbursements in the sum of $1,056.07 or alternatively, partial indemnity costs of $21,753,26 comprised of fees in the sum of $18,316.10, HST thereon in the sum of $2,381.10 and disbursements of $1,056.07.

[4] In respect of the father’s appeal motion, the mother seeks substantial indemnity costs of $10,510.13 comprised of fees in the sum of $9,301 plus HST in the sum of $1,209.13, or alternatively, partial indemnity costs of $8,667.33 comprised of fees in the sum of $7,670.20 plus HST in the sum of $997.13.

[5] In addition, the mother seeks costs of preparing her written costs submissions of $1,441.88 inclusive of HST on a substantial indemnity basis or alternatively $588.03 inclusive of HST on a partial indemnity basis.

[6] The combined amounts which the mother seeks in respect of both proceedings is the sum of $37,110.33 on a substantial indemnity basis or $29,952.55 on a partial indemnity basis.

[7] The mother submits that was the successful party in respect of both proceedings and she is therefore presumptively entitled to costs. She submits that the court may weigh inappropriate behavior of the parties and the just disposition of the cases as relevant factors in determining how best to provide indemnification for her in respect of costs.

[8] The mother points to the unsatisfied costs awards against the father and his conduct in the underlying proceedings between the parties which the court found to have been vexatious. She also submits the father’s appeal in respect of which he sought an extension of the time to perfect was pursued without having made any effort to meet his costs obligations to her. In addition, the mother urges the court to take note that intentional infliction of financial and emotional harm through litigation conduct is a factor in support of an elevated scale of costs, citing the case of X v. Y, 2016 ONSC 5551.

[9] The father opposes the mother’s claim for elevated costs of the proceedings and submits that fair and reasonable amounts a losing party could expect to pay on a partial indemnity basis is the sum of $8,500 in respect of the vexatious litigant application and $1,500 in respect of the motion to extend time for a total of $10,000.

[10] The father submits that the proceedings before the court were self-contained and to be distinguished from past proceedings where bad conduct had been found against him. He says that he has not acted scandalously, outrageously, or reprehensibly in the course of the two proceedings under consideration. His materials and Factum were of reasonable length and both matters were argued efficiently. He says that costs decision should pertain to the proceeding before the court and not used to “re-punish” for past conduct.

[11] The father also submits that it cannot be said that it was unreasonable for him to defend the vexatious litigant application, especially given the interests of children that were involved. While the mother was successful on the application, that does not mean that bringing the application was her only option or was the most reasonable approach in the circumstances. He states that it was also reasonable for him to seek an extension of the time to perfect his appeal, noting that the court in its reasons acknowledged that there is an important right of appeal that should normally not be denied.

[12] The father submits that the reasonableness of the successful party’s claim for costs can be measured against the unsuccessful party’s own bill of costs. He points out that his bill of costs for both matters on a partial indemnity basis was in the sum of $5,688.42 inclusive of HST, a fraction of the mother’s partial indemnity costs for the vexatious litigant proceeding alone.

[13] The father makes the following specific comments respecting the mother’s bill of costs:

(a) $25,000 for an application which involved a half-day hearing is excessive given that there were no cross examinations and little external evidence beyond the court record;

(b) two lawyers doing an equal amount of work on the application is unreasonable and the father should not have to incur the cost of duplicative work between two lawyers acting for the mother;

(c) there should be no costs for the appearance on March 2, 2022 at which the mother’s primary position was that the vexatious litigant application is to be heard in writing and there is no right of cross-examination, an argument that was not accepted by the court;

(d) there are a significant number of entries which seem unnecessary and should not be considered in the costs award including, inter alia, reviewing the file and numerous internal meetings and instructions.

[14] In reference to the motion to extend time to perfect the appeal, the father notes that the mother filed no materials in respect of the appeal itself, and the motion is a very brief motion usually heard in an hour with a clear and defined test. He argues that the mother filed materials that were excessive. She originally filed a three-page affidavit dated February 24, 2022 which was reasonable and made it clear that she opposed the motion, however her affidavit of March 16, 2022 comprised 125 pages including exhibits, which exceeded the limits of the provincial practice direction with respect to affidavits to be used on motions. He says that the affidavit was lengthy and repetitive and included many exhibits that were already before the court on the civil application.

[15] In reply, the mother submits, inter alia, that on an overall basis there is a pattern of behaviour by the father which, in addition to individual instances of the vexatious conduct, gives rise to a “collective determination” that the father conducts his litigation itself in the manner of a vexatious litigant. She says that the father’s submissions that he does not meet the test for substantial indemnity costs are a continuation of his lack of insight into the effects of his vexatious behaviour on her and on the administration of justice. She says that the steps taken and the time expended were necessary and appropriate to safeguard her and the administration of justice against unchecked future perpetuation of the father’s pattern of misconduct.

Guiding Principles

[16] The predominant proceeding was the mother’s application to declare the father to be a vexatious litigant, the costs of which are governed by the Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, and subrule 57.01 of the Rules of Civil Procedure.

[17] Section 131(1) of the Courts of Justice Act provides that "subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.”

[18] The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in subrule 57.01(1), including, in particular:

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged, and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed.

[19] The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan, 1999 2052 (ON CA), [1999] O.J. No. 4600 (Ont. C.A.) at para. 24).

[20] Justice Perrell in the case of 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, [2010] O.J. No. 5692 (Ont. S.C.J.) reformulated the purposes of the modern costs rules, at para. 10, as follows:

(1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and (5) to encourage settlements.

[21] The usual rule in civil litigation is that costs follow the event and that rule should not be departed from except for very good reasons (see Gonawati v. Teitsson 2002 41469 (ON CA), [2002] CarswellOnt 1007 (Ont. C.A.) and Macfie v. Cater, 1920 401 (ON SC), [1920] O.J. No. 71 (Ont. H.C.) at para 28).

[22] It is a well-established principle of law that costs on a substantial indemnity basis are to be awarded only in rare and exceptional cases, where there has been reprehensible, scandalous or outrageous conduct in the course of the litigation. (see Hunt v. TD Securities Inc. (2003), 2003 3649 (ON CA), 66 O.R. (3d) 481, [2003] O.J. No. 3245 (Ont. C.A.) at p. 509).

[23] The overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is "fair and reasonable" having regard to what the losing party could have expected the costs to be (see Boucher v. Public Accountants Council (Ontario), 2004 14579, [2004] O.J. No. 2634 (Ont. C.A.) at para. 26 and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 2005 1042, [2005] O.J. No. 160 (Ont. C.A.)).

Discussion

[24] The mother made no suggestion that the father engaged in reprehensible, scandalous or outrageous conduct in the course of the two proceedings in respect of which costs are currently sought, Indeed I find that there was clearly no such blameworthy conduct on the part of the father. The mother’s sole argument in support of her position that an award of substantial indemnity costs ought to be made is that the father’s bad conduct in previous proceedings should be imported into the cost analysis in the present proceedings or that a “collective determination” ought to be made based on his past conduct in previous proceedings. The mother cited no authority for this proposition, and I am unable to accept it. The case of X v. Y, cited by the mother, is clearly distinguishable and does not assist her. At paragraph 60 of his Reasons in that case Trimble, J. stated as follows:

In order to prove bad faith, one party must show that the other carried on with the intention of inflicting financial or emotional harm on the other, 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 harm, conceal or deceive is insufficient. Intent must be proved or inferred from the activity. The onus is on the person alleging bad faith. The intention to harm, conceal or deceive need not be the predominant intention, but must be a significant part of the party's intent. Conduct may be in bad faith when it runs up costs so high that the party must have understood that his/her behaviour is causing financial harm without justification. (citations omitted)

[25] Trimble J.’s observations were made in the context of the unsuccessful party’s conduct in the specific proceeding in respect of which costs were being sought, not some prior proceeding or proceedings. I agree with the father’s submission in the case at bar that to take his conduct in relation to the prior proceedings into account would have the effect of re-punishing him for his past misdeeds, which is not appropriate nor fair.

[26] I find that the mother is entitled to costs in respect of both proceedings on a partial indemnity basis.

[27] I am unable to accept the quantum of the partial indemnity costs claimed by the mother in respect of either proceeding, as to do so would risk falling into the error of fixing the costs award by the actual costs incurred by her, which the Court of Appeal warned against in Boucher. As instructed in that case, the court’s determination is to be based on what is considered to be fair and reasonable having regard to what the losing party could have expected the costs to be. Although not determinative, the father’s bill of costs is a helpful guide in assessing his reasonable expectations.

[28] According to the bills of costs of both sides, both motions were argued in 3 to 3 ½ hours, and no cross examinations were conducted. The two proceedings were intricately related which is why they were ordered to be heard together on consent of both parties. In the circumstances, the reasonable expectations of the losing party respecting costs would not exceed fees of $12,500, plus disbursements and HST. I am guided in this determination by the Court of Appeal’s direction in Beaver v Hill, 2018 ONCA 840 at paras. 12-13, that proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs in family proceedings. Although this direction was made in the context of a family proceeding, the appeal proceeding at bar is a family proceeding and the vexatious litigant proceeding arises out of a family dispute.

Disposition

[29] I fix the mother’s (the applicant’s) costs on a partial indemnity basis in respect her application under ss. 140(1) of the Courts of Justice Act, (file CV-22-15) in the sum of $10,000 in respect of fees, HST thereon in the sum of $1,300 and disbursements, inclusive of HST on taxable disbursements, in the sum of $1,056.07 for a total of $12,356.07.

[30] I fix the mother’s (responding party’s) costs on a partial indemnity basis in respect the father’s motion to extend the time to perfect his appeal (FS-21-304-00AP) in the sum of $2,500 in respect of fees, HST thereon in the sum of $325 for a total of $2,825.

[31] These amounts are to be paid by the father (the respondent in file CV-22-15 and moving party/appellant in FS-21-304-00AP) within 30 days hereof.

D.A. Broad, J.

Date: July 8, 2022