COURT FILE NO.: FS-19-42424-00 DATE: 2023-07-21
SUPERIOR COURT OF JUSTICE – ONTARIO 491 Steeles Avenue East, Milton ON L9T 1Y6
RE: Ivan Capar v. Anna Vujnovic
BEFORE: Justice Ranjan K. Agarwal
COUNSEL: Robert Lepore, for the Applicant Shawn Philbert, for the Respondent
HEARD: July 12, 2023
ENDORSEMENT
INTRODUCTION
1The respondent Ana Vujnovic (incorrectly spelled “Anna” in the title of proceedings) moves for an order striking out the applicant Ivan Capar’s application. Ana alleges that Ivan has failed to obey several costs orders in this case. Alternatively, she seeks an order that Ivan can’t file an expert witness report for trial (to support his defence to Ana’s claim for spousal support) unless he complies with the costs orders first. The trial is scheduled for October 2023.
2Ivan acknowledges his non-compliance. But he proposes that the trial be adjourned to March 2024 so he has time to pay the costs orders. He argues that he can’t afford to pay them, and it would be unfair to him to proceed to trial without an expert witness report to support his defence.
3I endorse an order that: (a) Ivan can’t rely on an expert witness report; and (b) he’s not entitled to any further order from the court unless the court orders otherwise, unless he complies with the costs orders, dated October 18, 2022, and April 3, 2023. Allowing Ivan to force Ana into incurring significant disbursements for an expert witness report when he hasn’t obeyed this court’s orders would be an injustice.
4I also endorse an order fixing the costs of this motion in the amount of $5000, inclusive of fees and disbursements. I further an endorse an order that Ivan shall pay the costs of this motion to Ana in any event of the cause.
BACKGROUND
5Ana and Ivan were married in May 2012. They separated in January 2019. There’s one child of the marriage (age 10).
6Ana initially alleged that Ivan breached four monetary orders. Since Ana’s motion was served, Ivan has largely complied with two orders (post-judgment interest is still outstanding). The other two orders are for costs: (a) $30,000 from the parties’ respective summary judgment motions; and (b) $6500 from Ivan’s motion for an order varying an interim support order.
7This trial of this proceeding is scheduled for October 2023. The two issues at trial are: (a) spousal support; and (b) parenting. On spousal support, Ivan argues that Ana is under-employed. He intends to rely on an expert witness report, which must be filed by August 4, 2023 (under the endorsement of Justice Chang, dated June 13, 2023). Ana’s expert witness report, which she is only relying on in response to Ivan’s report, must be filed by September 4, 2023.
8Ivan is self-employed as a drywall taper. His annual income is $55,680. He’s running a deficit, largely because of debt payments. Ivan says he’ll pay at least $300 per month towards the costs orders, and they’ll be paid in full by July 2024.
9Ivan is now in Croatia. For the hearing, Ana filed evidence that Ivan planned to travel to Croatia. At the hearing, Ivan’s lawyer said these were only plans. After the hearing, Ivan’s lawyer communicated to the court that Ivan left for Croatia. Though Ivan’s lawyer’s communication breached rule 1.07 of the Rules of Civil Procedure, I allowed the parties to file affidavits and brief submissions (in part given that the issue related to a position taken by Ivan’s lawyer at the hearing).
10After the motion hearing, Ivan asked his brother for money to pay the costs orders. His brother refused, but suggested that Ivan travel to Croatia to either ask family or friends to lend him the money or to get a loan from a Croatian bank. Ivan’s brother paid for the flight and is hosting him in Croatia (so Ivan won’t be incurring any costs). Ivan says the trip will be short. Ivan is a refugee and hasn’t seen most of his family in 14 years. In response, Ana has filed hearsay evidence (from their child) that Ivan plans to stay in Croatia until October 2023, just before the trial.
11I find Ivan’s actions troubling. Though I don’t give Ana’s hearsay evidence much weight, I’m concerned that Ivan has been less than candid with the court about his request for an adjournment of the trial. If Ivan bought a return ticket, he hasn’t disclosed the date (leading me to infer that his return date is open, and could be in October as his daughter says). Ivan also filed no evidence that his family or friends have the means to lend him money to pay the costs orders. He’s filed no evidence that a bank would loan him the money, especially given his self-stated financial position. Though it’s possible to buy a plane ticket on short notice, Ivan surely paid a premium to do so if he flew 5 days after he told the court he was staying in Ontario. The suggestion that he’ll have no expenses while in Croatia isn’t believable. Given that Ivan’s self-employed, presumably he’ll earn little or no income when he’s abroad.
12Though there’s no evidence that Ivan was lying about his financial situation at the hearing, this new disclosure gives me pause about Ivan’s motives and truthfulness.
PARTIES’ POSITIONS
13Ana argues that she is being put to the extraordinary cost of engaging an expert witness only to respond to Ivan’s argument that she is under-employed. In contrast, Ivan is choosing to use funds that could pay the costs award to engage his expert witness to run this argument. She asks that his application be struck and the trial proceed undefended. Alternatively, she argues that the fairest remedy is one that avoids her spending money on an expert witness report only to respond to his arguments.
14Ivan responds that it would be unfair to deprive him of an argument at trial. Instead, the fairer thing to do is to adjourn the trial to the March 2024 sittings. He says he’ll pay the costs awards by then.
LAW
15If a person fails to obey an order in a case or a related case, the court may deal with the failure by making any order that it considers necessary for a just determination of the matter, including,
(a) an order for costs;
(b) an order dismissing a claim;
(c) an order striking out any application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit, or any other document filed by a party;
(d) an order that all or part of a document that was required to be provided but wasn’t, may not be used in the case;
(e) if the failure to obey was by a party, an order that the party isn’t entitled to any further order from the court unless the court orders otherwise;
(f) an order postponing the trial or any other step in the case; and
(g) on motion, a contempt order. See Family Law Rules, r 1(8).
16Traditionally, striking pleadings has been considered to be a “remedy of last resort”. In family law cases, pleadings should only be struck and trial participation denied in exceptional circumstances and where “no other remedy would suffice”. In a family law case, as the resulting judgment may provide for continuing obligations that can be varied only on proof of a change in circumstances, the striking of pleadings has added significance. If pleadings are struck, a “change in circumstances may be difficult to establish if the initial judgment is based on incorrect assumptions, thus perpetuating injustice.” See Mullin v Sherlock, 2018 ONCA 1063, at paras 32-35.
17Mullin establishes a framework for the application of rule 1(8) to financial disclosure cases. See Mullin, paras 44-46. That framework can be adopted for failing to obey a costs order.
18First, when faced with an allegation of failure to obey an order, before granting a remedy, the court must be satisfied that there has been non-compliance with the court order.
19Second, once satisfied, a judge may have recourse to the alternatives described in rule 1(8). In assessing the most appropriate remedy, a judge should consider these factors:
the primary objective of the Family Law Rules, which is to deal with cases “justly” (Family Law Rules, r 1(2); Diciaula v Mastrogiacomo, 2019 ONSC 2823, at para 33)
whether the responding party’s failure to comply with the costs orders is willful or egregious (see Norris v Norris, 2019 ONSC 2795, at para 30; Peerenboom v Peerenboom, 2018 ONSC 5796, at para 34-42, aff’d 2020 ONCA 240)
whether the responding party’s evidence discloses a “pattern of deception” or are misleading or untrue (see Purcaru v Purcaru, 2010 ONCA 92, at para 54; Norris, at para 28)
the responding party’s good-faith efforts to participate in the proceeding (see NP v MP, 2022 ONSC 7068, at paras 14-15)
whether adjourning the next event in the proceeding is in the parties’ and children’s best interests (Gordon v Starr, 2007 CanLII 35527 (Ont Sup Ct), at para 25)
the merits of the litigation, and the effect of prior orders on the responding party’s ability to pay (Diciaula, at para 35)
the responding party’s conduct during the litigation (see Johanns v Fulford, 2011 ONCJ 781, at paras 23-25; Quinn v Nicholson, 2013 ONSC 245, at para 24)
the length of time of non-compliance and when the trial is scheduled for (Norris, at para 74)
20Impecuniosity isn’t a defence to a motion to strike pleadings for failing to obey costs orders. See NP, at para 17; Peerenboom, at para 42; and Gordon, at para 19. That said, it’s a factor when determining the remedy for that non-compliance. For example, in Frankum v Frankum, 2007 ONCA 429, the court said it can’t bar parenting time only because of unpaid costs orders—the court must consider “amount of costs, the reasons they were unpaid, and the parent’s ability to pay” (at para 4). See also Durkin v Cunningham, 2014 ONSC 4659, at para 39.
21Third, having considered these factors, the judge will then determine the best remedy. The orders identified in rule 1(8) aren’t exclusive. Other approaches may be appropriate. The adversarial structure of a proceeding should be maintained whenever possible. The objective of a sanction ought not to be the elimination of the adversary, but one that will persuade the adversary to comply with the court’s orders. See Purcaru, at para 49.
22If the judge decides to strike, rule 1(8.4) becomes applicable. This section provides that certain consequences apply unless a court orders otherwise. Accordingly, a party may not participate in a case in any way unless the court orders otherwise. This provision gives the judge the ability to “frame the procedural consequences” to a defaulting party. In making this determination, consideration should be given to whether the consequence responds to the breach and whether it achieves a just outcome. See Mullin, at paras 32-48.
DISPOSITION
23Ivan admits non-compliance with two costs order.
24First, I dismiss Ana’s request to strike Ivan’s application. The trial will engage parenting issues. The court needs both parties’ participation and evidence to assess the child’s best interests. Though Ivan’s failure to obey the costs orders may be wilful or flagrant and there’s some evidence that he may be lying about his ability to pay, his non-compliance hasn’t reached the level that an exceptional remedy is needed.
25Second, an adjournment is unfair to Ana. Ivan’s evidence is that he can’t pay this debt in full until July 2024. There’s no evidence that he’ll make full payment before the parties’ expert witness reports would be due for the March 2024 trial sittings (using the same timetable, January or February 2024). This case has been ongoing since 2019. There have been several motions. Ana deserves the certainty and finality of a trial. Their child deserves the certainty and finality of a trial.
26In determining the best remedy, I’ve considered other remedies ordered for failure to pay costs awards:
in Gordon, Justice Quinn declined to strike the applicant’s application or adjourn the trial—instead, he adjourned the applicant’s interim motion for child support
in Diciaula, Justice Kristjanson declined to dismiss the applicant’s motion to change even though he hadn’t complied with several costs orders—he showed that he’d likely over-paid child and spousal support, and those overpayments interfered with his ability to pay the costs orders
in Zeineldin v Aly Elshikh, 2020 ONSC 6248, the court stayed the trial of the applicant’s jurisdiction application until he complied with outstanding costs orders
in NP, Justice Mandhane granted the responding party two months to comply because of the complexity of the financial issues in dispute—if he didn’t do so, his financial claims would be struck.
in Derouin v Derouin, 2023 ONSC 2517, Justice Labrosse held that the respondent shouldn’t be entitled to any further court orders until his non-compliance, including regarding costs, were resolved (which he described as a “common” remedy)
27The outcome that strikes a reasonable balance between hearing Ivan’s voice at trial and ensuring compliance with this court’s orders is to bar him from filing an expert witness report for trial (and thus requiring Ana to do the same) unless he pays the costs orders. Effectively, this means he must pay the outstanding costs orders by August 4, 2023. Allowing Ivan to make his argument on spousal support with an expert witness report, thus forcing Ana to do the same without the financial resources that she needs to present a proper defence, when he has fulfilled none of his court-imposed obligations as a litigant, would lead to a significantly unjust and unacceptable result.
28To be clear, I’m not barring Ivan from making arguments on spousal support at trial—he just can’t rely on an expert witness report unless he obeys the costs orders, and Justice Chang has already held that any such report must be filed by August 4th. If Ivan is telling the truth about going to Croatia, hopefully he’ll raise the funds in the next two weeks to allow him to file an expert witness report.
29Ana also asked me to allow her to bring another motion to strike Ivan’s application at the start of trial using the same materials from this motion. I decline to make this order. If the trial judge allows that motion, they can direct what materials can be relied on.
30I endorse an order that: (a) Ivan can’t rely on an expert’s report for his claim about spousal support; and (b) he’s not entitled to any further order from the court unless the court orders otherwise, unless he complies with the costs orders, dated October 18, 2022, and April 3, 2023.
COSTS
31Subject 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. See Courts of Justice Act, RSO 1990, c C.43, s 131.
32Under rule 24(12) of the Family Law Rules, in setting the amount of costs, the court shall consider, (a) the reasonableness and proportionality of each of these 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 don’t meet the requirements of rule 18 of the Family Law Rules, (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.
33There’s a presumption that a successful party is entitled to the costs of a motion, enforcement, case, or appeal. See Family Law Rules, r 24(1). Modern costs rules are designed to foster three fundamental purposes: (a) to partially indemnify successful litigants for the cost of litigation; (b) to encourage settlement; and (c) to discourage and sanction inappropriate behaviour by litigants. See Fong v Chan, 1999 CanLII 2052 (Ont CA), at para. 22.
34The main goal is to fix an amount of costs that is objectively reasonable, fair, and proportionate for the unsuccessful party to pay for the case, rather than to fix an amount based on the actual costs incurred by the successful litigant. See Boucher v Public Accountants Council (Ontario), 2004 CanLII 14579 (Ont CA) at para 26.
35Although each costs assessment is a fact-driven exercise related to a particular case, consistency with comparable awards in like cases is desirable and the reasonableness of costs that represent an outlier must be objectively scrutinized, considering the chilling effect on litigation that this kind of award could have. See Boucher, at para 63. That said, the amount of the costs award by itself doesn’t mean that the award is unreasonable or reflect an error in principle. See Apotex Inc. v Eli Lilly Canada Inc., 2022 ONCA 587, at para 64.
36Ana’s costs are $4890.64 on a full indemnity basis (before the post-hearing submissions). Ivan’s costs are $2800 on a full indemnity basis.
37Ana relies on an offer to settle she made on June 1, 2023. I don’t believe Ana has obtained an order here that is “as favourable or more favourable than the offer.”
38That said, I endorse an order that Ivan shall pay costs of $5000 to Ana in any event of the trial (which includes additional costs for the post-hearing submissions). Though Ivan argues that a costs order of $2500 is more reasonable, Ana shouldn’t have to chase Ivan for his costs. Ivan’s been given an indulgence by this court. The amount of $5000 is fair, reasonable, and proportional given the complexity of this proceeding and the importance of the issues to Ana.
39That said, I don’t see any point in pushing Ivan further under water. Given the trial is soon, the fairest order is that he must pay these costs to Ana regardless of the outcome at trial, but only after trial.
40I’m not seized.
Agarwal J.
Released: July 21, 2023
COURT FILE NO.: FS-19-42424-00 DATE: 2023-07-21
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Ivan Capar AND: Anna Vujnovic
BEFORE: Justice Ranjan Agarwal
COUNSEL: Robert Lepore, for the Applicant Shawn Philbert, for the Respondent
ENDORSEMENT
AGARWAL J.
DATE: July 21, 2023