Court File and Parties
Court File No.: FC-15-1279-1 Date: 2023/07/25 Superior Court of Justice - Ontario
Re: Steven Kenward Jacques, Applicant (Responding Party) And: Jessica Ann Leblanc, Respondent (Moving Party)
Before: Somji J.
Counsel: Eric Letts, for the Applicant (Responding Party) Steve Duplain, for the Respondent (Moving Party)
Heard: In Writing
Costs Endorsement
[1] The Respondent mother seeks costs of $50,000 following a three day trial on parenting issues. I found the mother to be successful party at trial: Jacques v Leblanc, 2023 ONSC 1689 (“trial decision”). The mother also seeks costs of $2,994.75 for follow-up work and a court appearance on June 20, 2023. The June 20th appearance was necessitated because of the father counsel’s lack of communication with opposing counsel about the handling of the outstanding issue of child support: Endorsement of Justice Somji June 26, 2023.
[2] The father argues that there was mixed success at trial, that the mother’s request is excessive, and given the parties’ respective incomes and financial obligations, each parent should pay their own costs for trial.
[3] The issue to be decided is whether the mother is entitled to costs, and if so, what is a fair and reasonable quantum.
Issue 1: Is the mother entitled to costs?
[4] Entitlement and quantum of costs is in the discretion of the judge: Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43.
[5] Rule 24 sets out the legal framework for cost orders in family cases: Mattina v Mattina, 2018 ONCA 867 at para 9. The starting point is that the successful party is presumptively entitled to costs: r. 24(1) of the Family Law Rules, O. Reg. 114/99 as am (“FLR”). However, in assessing entitlement, judges must consider one, written offers to settle: rr. 18(14) and 24(12)(a)(iii); two, any unreasonable conduct of the successful party: r. 24(4); and three, if a party has acted in bad faith: r. 24(8).
Success at trial
[6] The father argues that the mother was only partially successful. He argues that my decision aligned with his position on several issues such as the sharing of the child’s information from professionals, sharing of documents, sharing of holidays, and maintaining the child at the same school. He argues that my trial decision was consistent with his request to designate one parent as a primary caregiver as opposed to shared parenting.
[7] The father’s submissions accords neither with his position at trial nor with my decision. The main issue at trial was the child’s primary residence following the father’s unilateral decision to relocate to Smith Falls from Ottawa where the child was previously residing and going to school. At trial, each parent sought sole decision-making responsibility and for the child to live primarily with them.
[8] I ordered that the child have primary residency with the mother in Ottawa with the father having parenting time on one weekday and on alternative weekends. Notwithstanding that both parents sought sole decision-making responsibility, I ordered shared decision-making responsibility with the condition that the mother would have final decision-making power if the parents could not come to an agreement on an issue after reasonable consultation.
[9] Courts have granted costs to a party that was substantially successful, and this does not necessarily require success on all issues: Zhang v Guao, 2019 ONSC 5767; Blackwood v Nichols, 2022 ONCJ 357 at para 9. Boland v Boland, 2012 ONCJ 239; see also Baryla v Baryla, 2019 BCCA 192. The fact that I ordered the parties to share information and documentation related to the child’s needs which is necessary to facilitate shared decision-making responsibility or to share the child’s holiday times does not undermine the mother’s success on the main issue at trial which was the child’s primary residence following the father’s relocation.
[10] The mother is the successful party on the motion and presumptively entitled to costs.
[11] With respect to the June 20th appearance, I indicated in my June 26th endorsement that the mother would be entitled to costs for that court appearance and the related follow-up work. The parties were requested to file costs submission, but the father did not file one. Hence, the mother’s entitlement for costs for that appearance is not disputed.
Mother’s conduct
[12] The father argues the mother’s positions were unreasonable during the litigation disentitling her to a costs award. For example, he argues that the mother requested that the child move to a school in her catchment area. As noted in my trial decision, the mother initially made this request following the father’s move out of the city, but upon speaking to school professionals, she reconsidered her position. By the time of trial, both parents were agreeable to having the child remain at her school to ensure her continued stability. I did not find the mother’s initial position to be unreasonable. The father’s allegation that the mother was not forthcoming with disclosure regarding the Cross Boundary Transfer application for the child was also addressed in my decision. In short, I do not find there was anything in the mother’s conduct during the course of litigation that would disentitle her to a costs awards.
[13] On the contrary, and as discussed below, I find the father’s conduct in the course of the litigation was unreasonable and warrants an elevated costs award for the mother.
Issue 2: What is a fair and reasonable costs award in this case?
[14] In determining costs, the parties and court must consider that 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, as per r. 2(2), that cases are dealt with justly: Mattina at para 10.
[15] Rule 24(12) requires a judge to consider the following in determining quantum: (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 r. 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.
[16] Proportionality and reasonableness are the “touchstone considerations” in fixing the amount of costs: Beaver v Hill, 2018 ONCA 840.
Offers to settle
[17] Rule 18(14) FLR states that a party who makes an offer is entitled to costs to the date the offer was served, and full recovery of costs from that date, if the offer was made at least one day before a motion date, and the party who made the offer obtains an order that is as favorable as or more favorable than the offer. The burden of proving the order is as or more favorable than the offer to settle is on the party making the claim: r. 18(15).
[18] The mother made an offer to settle on May 20, 2022, which was more favorable for the father than the outcome at trial on the primary issue of the child’s residence and parenting time. The mother offered to maintain a week on/week off shared parenting schedule notwithstanding the father’s relocation to Smith Falls, whereas I found that it was not in the child’s best interests to operate under such a schedule and ordered that the child live primarily with the mother. Furthermore, the mother’s offer was more favorable in that each party would bear their own costs if the offer was accepted before May 26, 2022. Acceptance after that date would require the father to pay partial costs in the amount of $10,000. Finally, the other elements of the mother’s offer were as favourable as the outcome at trial. The mother offered that the parties withdraw their request for sole decision-making maintaining the status quo of shared decision-making which was as favourable as my decision ordering shared decision-making responsibility.
[19] The offer was also severable from the child support issues. The father did not accept the offer, and it was never withdrawn. On this basis, the mother is entitled to full recovery costs from the date of the offer forward and partial indemnity costs for the work prior to that date.
[20] The father also served an offer to settle on May 29, 2022. This offer was for the child to remain in the father’s primary care, to reduce the mother’s parenting time to every second weekend, for the father to have sole decision-making responsibility, and to eliminate all child support payments including arrears. The mother rejected the offer and the outcome at trial was significantly more favourable to her.
Conduct of the parties
i. At trial
[21] Unreasonable conduct is different from bad faith: Ali Hassan v Abdullah, 2023 ONCJ 186, at para 39. Various conduct might be considered unreasonable. It could include conduct that is: 1) disrespectful of other participants or the court; 2) unduly complicates the litigation; or 3) increases the costs of litigation: Harper v Smith, 2021 ONSC 3420, at para 3, citing Beaver v Hill, 2018 ONSC 3352 (“Beaver v Hill (ONSC)”), at para 51, rev’d on other grounds, 2018 ONCA 840. Poor litigation decisions and advancing unreasonable claims or filing meritless and incomplete pleadings may also justify an elevated costs award: Ali Hassan, at para 61; Beaver v Hill (ONSC), at para 51.
[22] The threshold for finding bad faith per r. 24(8) which warrants full recovery costs is higher: Scalia v Scalia, 2015 ONCA 492, 126 O.R. (3d) 241, at para 69; Scipione v Scipione, 2015 ONSC 5982, 68 R.F.L. (7th) 66, at para 99. To prove bad faith, the impugned behavior must be shown to be carried out with “intent to inflict financial or emotional harm on the other party or other persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court”: S.(C.) v S.(M.) (2007), 38 R.F.L. (6th) 315, (Ont. S.C.), at para 17; Ali Hassan, at para 40.
[23] I find the father’s conduct prior to trial was unreasonable warranting an elevated costs award. As noted in my trial decision, the Local Administrative Justice for Family Law, the Honourable Justice Audet, conducted three pre-trial management conferences (“TMC”) to narrow the trial issues and number of witnesses, to streamline documents to be filed, and to establish a strict timeline for the examination of witnesses within a two-day trial focused on parenting issues. I find the father’s lack of preparedness for trial added unnecessary time and expense for opposing counsel. For example, the father filed and uploaded extensive materials in Caselines including a large volume of Our Family Wizard messages on the eve of trial rather than in accordance with the deadlines specified at the TMCs. The father also failed to properly redact affidavit evidence to exclude events preceding 2019 as directed to by Justice Audet.
[24] Following trial, the parties were unable to agree on the wording of the draft Final Order in accordance with my decision. Counsel advised there was a difference of opinion on how to incorporate the terms of Justice Blishen’s 2019 Order that were not changed by the trial decision. I indicated to the parties that the draft order should reflect the findings of my decision which are clearly set out at paragraph 180 with draft wording. Save for a few minor wording changes, the drafting of the order by counsel is not intended to be an exercise for re-negotiation or re-litigation. I requested the parties forward me their draft orders if they were unable to come to an agreement, and I would issue the Final Order accordingly. I never received the father’s version of the draft order.
ii. The June 20th appearance
[25] In addition, I find the father’s conduct relating to the handling of the issue of child support to constitute bad faith conduct warranting full recovery costs. In my trial decision at para 22, I referred the parties to binding judicial dispute resolution (“JDR”) on the issue of child support and ordered them to prepare the necessary documentation for JDR on the assumption that this was the parties’ intention following their discussions before Justice Audet and their agreement to exclude the issue of child support at trial. In accordance with my trial decision, the mother’s counsel Mr. Duplain wrote to Trial Coordination and the father’s counsel Mr. Letts on April 12, 2023, with respect to proceeding to JDR on child support and attaching the mother’s completed consents and paperwork. Mr. Letts initially replied that he would be forwarding the necessary paperwork and then did not respond further to the mother’s counsel despite continued requests for same on April 25, 28 and May 4, 2023. Consequently, the mother’s counsel requested an appearance before me for judicial direction which was granted.
[26] Even after a further court appearance was scheduled before me, Mr. Letts did not communicate with opposing counsel when the mother’s counsel asked for a short call to confer matters on May 23, 2023. On June 20, 2023, Mr. Letts appeared in court without his client. Mr. Letts also failed to file a conference confirmation form setting out his position on the issue. At the conference hearing, Mr. Letts stated that his client is not interested in binding JDR. This was the first time the mother or counsel had heard of his client’s position.
[27] When asked why he did not communicate his client’s position until the court appearance, Mr. Letts stated that this is an “adversarial process”, and he does not have to communicate with the opposing counsel on what next steps he has to take. Mr. Letts went on to state that his client should not have to be “cornered” into accepting binding JDR which is an “experimental procedure”. As explained in my June 26th endorsement, I did not find Mr. Letts’ explanation to be an appropriate response. Mr. Letts had a professional obligation to communicate with opposing counsel the change in his client’s position with respect to JDR.
[28] Consequently, I ordered the issue of child support to proceed to a motion. However, as noted in my endorsement, it was the mother’s understanding that child support was to be resolved or proceed to binding JDR, as a result of which the parties proceeded to a trial on only the parenting issues. Had the mother known that the father was not agreeable to resolving the child support issue or attending for binding JDR, her counsel could have opted for a trial on all issues. The mother now finds herself having completed a three-day trial and having to incur further legal costs of a motion on the issue of child support.
[29] In addition, since my decision was issued in March 2023 and a new parenting arrangement ordered, the father has paid limited child support. Based on his known income, support was calculated at $259/month. The father paid for part of March, part of April, but has not made payments for May or June 2023. The father has also failed to deal with any of the child support arrears dating back to August 2020 as per the Order of Blishen J even though his income increased by almost $40,000 from $60,992 in 2020 to $96,602 in 2021. The mother’s income for 2020 was $37,903 and for 2019 had been $22,950. In short, the mother has essentially been without child support for almost three years.
[30] The father was not present in court to confirm when and why he changed his position with respect to binding JDR or to explain why he has not paid child support on a going forward basis since my decision in March 2023. The father has still not provided updated financial disclosure on his current income. I find the father’s conduct in regard to how the issue of child support should be addressed constitutes bad faith conduct that is intended to inflict further financial harm on the mother by both delaying payment of any child support owed to her and causing her to incur additional legal fees for a motion having just completed a three-day trial. On this basis, the mother is entitled to full recovery costs for the June 20th appearance and related work payable immediately: r. 24(8).
Reasonableness of legal fees and rates
[31] The mother’s counsel filed a Bill of Costs for pre-trial and trial excluding work done related to child support issues that will now be adjudicated by way of a further motion. The total costs was $61,866.26 inclusive of disbursements and HST.
[32] The amount of time spent was broken down as follows: lead counsel Mr. Duplain 133.39 hours plus 3 days of trial; Andrew Cooper: 32.99 hours, Lydia Lee Potter 3.7 hours, and Chelsea Ross: 1.48 hours, for a total of 171.56 hours plus 3 days of trial.
[33] Time was spent meeting with the client, drafting the Motion to Change, preparing pleadings and affidavits, corresponding with opposing counsel, attending at court appearances prior to trial on May 10 and August 6, 2021, February 14, June 1, June 8, and June 17, 2022. For these appearances, costs were either fixed or reserved in the cause for trial. The case conference of August 6, 2021 was fixed at $1500 in the cause. Costs for the combined Settlement/Trial Management Conference of February 14, 2022, was fixed at $2500 in the cause.
[34] The bulk of counsel’s time, approximately 90 hours, was spent preparing for trial which took place on July 28 and 29, 2022, and continued again on September 15, 2022. Counsel also spent an additional 26 hours preparing written closing submissions which included arguments contesting the legal admissibility of multiple documents filed by the father’s counsel. Counsel spent an additional 14 hours preparing costs submissions. Disbursements totaled $173.40.
[35] Lead counsel’s charged an hourly rate of $280 for preparatory work and a flat rate of $3000/day for attendance at trial. A lower rate of $175/hour was charged for an associate with 3 years’ experience, an articling student, and paralegal. I find these rates are reasonable and commensurate with counsel’s respective experiences.
[36] The father’s counsel argues that the billings are excessive, particularly with respect to the closing submissions, but does not explain in what respect. The mother’s closing submissions were 56 pages and 12 pages were devoted to addressing the admissibility of evidence filed by the father on the eve of trial on the grounds that it was hearsay or irrelevant. Upon agreement of the parties, these issues had to be addressed in written submissions because of the limited time available for trial and for which witnesses were scheduled to testify. Nonetheless, the trial spilled over to three days. Given the volume of testimony and documents that had to be addressed, I do not find the time spent on closing submissions to be excessive.
[37] I would also note that, in comparison, the father’s legal fees for pre-trial and trial were $42,639.42. However, the father’s counsel spent considerably less time on trial preparation. The father’s counsel spent 41.25 hours for trial preparation and 17.5 hours for closing submissions and follow-up work at a rate of $300/hour. The father’s counsel has 16 years’ experience.
[38] I find the mother’s legal fees for the various legal proceedings and trial was appropriate given the number of court proceedings, the complexity of the case, the evidentiary issues raised, and the volume of material that had to be reviewed, including the history of the parties’ communications and other disclosure related to the child over several years.
[39] Costs for the June 20th appearance and related follow-up work including fees, disbursements and HST was $5,040.37. Of this amount, the mother presently seeks only $2,994.75, on a full recovery basis because of some of the preparatory work done for the JDR can be used for the upcoming motion. The present amount sought consists of: (a) $3,023.32 inclusive of HST for the preparation of materials for the Binding JDR Hearing for which 33%, or $977.70, is sought as some of these materials will be reused for the motion on child support scheduled for September 14, 2023; (b) $210.18 inclusive of HST for the correspondence between counsel regarding the Binding JDR hearing for which 100% is sought; (c) $389.85 inclusive of HST for the preparation for the conference on June 20, 2023 for which100% is sought; (d) $455.39 inclusive of HST plus $6.50 parking fee for attendance at the conference on June 20, 2023 for which 100% is sought; and (e) $955.13 inclusive of HST for the preparation of a detailed bill of costs and cost submissions for which 100% is sought.
[40] As already noted, I find the father’s conduct in relation to the handling of the child support issue amounted to bad faith entitling the mother to full recovery costs for the June 20th appearance payable immediately pursuant to r. 24(8) in the amount of $2,994.75. This does not preclude the mother from seeking costs if successful on the motion for child support for the work related to preparing for the binding JDR.
[41] The mother’s counsel argues that given Mr. Letts’ failure to properly communicate his client’s position to opposing counsel in accordance with his professional obligations, a portion of the $2,994.75 should be ordered against the father’s counsel as per r. 24(9). R. 24(9) entitles a judge to order that a lawyer pay all or a portion of their client’s costs if the lawyer has run up costs without reasonable cause or has wasted costs. There is no bad faith requirement: but the court must exercise caution in ordering a lawyer to pay costs: Covriga v Covriga, 2010 ONSC 3030 at paras 11-15, leave to appeal dismissed 2011 ONCA 769. The order may be made on a motion or a judge’s own initiative after giving the lawyer an opportunity to be heard: r. 24(9).
[42] In Covriga, the Honourable Justice Horkins ordered that counsel be responsible a portion of legal costs ordered due to counsel’s disregard to the Family Law Rules and Rules of Professional Conduct which contributed directly to the delay and costs: Covriga at paras 185-186. In Sambasivam v Pulendrarajah, 2012 ONCJ 711 the Honourable Justice Sherr ordered costs against counsel personally when they failed to properly communicate their client’s intentions to opposing counsel as per their professional obligations and had no reasonable explanation for their conduct which resulted in additional costs: at paras 74 to 78.
[43] In this case, while I have concerns about Mr. Letts’ failure to inform opposing counsel of his client’s position, it is unclear how the situation came about and whether the delays are due to communication failures on the part of his own client. Mr. Letts did not file a costs submission in relation to the June 20th appearance on behalf of his client although given an opportunity to do so nor was his client present in court. However, given Mr. Letts has not been given an opportunity to specifically address the issue of costs against him personally and to extend the matter to allow him to do so would result in further delays, I will not make an order against counsel in this case.
Ability to pay
[44] In awarding costs, the court must consider the financial means of the parties, their ability to pay, and the effect of any costs ruling on the parties and children: Fyfe v Jouppien, 2012 ONSC 97, 10 R.F.L. (7th) 371, at para 11; M.(A.C.) v M (D.) (2003), 67 O.R. (3d) 181 (C.A.), at para 45. However, the court must also keep in mind the financial circumstances in each parent’s household including the impact of unrecovered legal fees on the other parent’s ability to similarly provide for the children: Beckett v Beckett, 2010 ONSC 2706 at para 38.
[45] The father argues he has incurred significant expenses arising from the death of another child and the birth of a newborn while simultaneously paying for the costs of the parties’ child, and consequently, the court should not order costs. I find the father’s arguments are not consistent with the evidence before the court.
[46] As already noted, the father’s income for 2020 and 2021 was double if not triple the mother’s income. According to his 2021 Notice of Assessment, the father’s income was $96,600. This is in addition to his spouse’s income of $31,562 for that same year such that their household income was $128,162 in 2021. The father has now incorporated. During these past years, the father purchased a new home in Smith Falls. His partner is fully employed. Despite the father’s high family income in 2021, the father did not pay child support from August 2020 save for two months in 2023 after the issuance of my decision.
[47] While the father claims his income decreased to $35,000 for 2022, the father did not file an affidavit or other evidence with the costs submission to substantiate that his or his household income has decreased considerably or that he now lacks any ability to pay. The mother’s counsel also awaits updated financial disclosure.
[48] In contrast, the mother supports four children. She makes less than $38,000 a year as a personal support worker and her partner is on disability income. Contrary to the father’s counsel’s suggestion, the mother has not relied on Legal Aid, but has had to make private arrangements to pay her legal fees.
[49] Finally, it is important to note that mother now faces further legal fees for a child support motion because of the father’s recent decision to opt out of binding JDR. As stated by Justice Mesbur in Amaral v Canadian Musical Reproduction Rights Agency Limited “Not only do plaintiffs have a choice as to whether to start litigation, they also have choices as to when to begin it, how to conduct it and whether to settle it. All of these factors bear on the issue of costs…”: cited in Mark v Bhangari, 2010 ONSC 4638 at para 9. Those comments apply equally to defendants in family law cases. Here, the father acted in bad faith and has made several choices and decisions that continue to contribute to delays and increase litigation costs. To allow the father to forego the cost consequences in these circumstances is inconsistent with the purpose of cost orders which is, in part, to discourage and sanction inappropriate behaviour by litigants: Mattina at para 9.
[50] Furthermore, the court has discretion to order full recovery costs upon a finding of bad faith under r. 24(8) even if a parent is of limited financial means: Kisten v Kosewski, 2020 ONSC 3380. In that case, Justice Bale placed little weight on the mother’s submission that she is of limited financial means and ordered full recovery costs for the urgent motion upon consideration of the mother’s bad faith conduct: at paras 72 and 74(b). In contrast, Justice Hardman declined to order full recovery costs in Saliba v Saliba, 2011 ONCJ 737 despite the father’s “completely unreasonable behaviour” at trial because of the father’s limited financial means. The court granted limited recovery in the amount of $4,000 rather than full recovery of $10,687.50 sought by the applicant due to the father’s financial circumstances including his continued child support obligations and his need to pay support arrears and an outstanding costs order: Saliba at paras 21 to 24.
[51] I do not find there is sufficient evidence that the father is unable to pay costs. However, given the father has child support arrears and continued support obligation, I have taken his ability to pay into consideration in the overall amount that is fixed.
Conclusion
i. Costs for pre-trial and trial:
[52] Having considered that the mother is the successful party, the father’s unreasonable conduct at trial, and the mother’s offer to settle which was more favourable on the primary issue warranting full recovery costs from the date of the offer, I find the mother would be entitled to costs of $55,651.46 as follows. a. Fixed costs for the case conference before Justice James on August 6, 2021 - $1,500.00 and combined conference before Justice Audet on February 14, 2022 - $2,500.00, for a subtotal of $4000; b. Partial indemnity costs for other pre-trial work (not including above) performed before May 20th offer in the amount of: $3,749.55 plus 487.44 HST = 4236.99 x 60% = $2,542.19 c. Full recovery costs from May 20th offer as per r. 18(14) in the amount of: $46,845.90 plus $6,089.97 (HST) plus $173.40 (disbursements) = $53,109.27
[53] The overall objective in a costs order is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful litigant: Boucher v Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.), at para 26.
[54] In this case, the mother seeks costs of $50,000 for pre-trial and trial. When one takes into consideration the additional factors such as the father’s ability to pay in light of his child support obligations, I find the mother’s request is more than fair and reasonable in the circumstances of the case. There will be an order that the father pay costs in the amount of $50,000 within 60 days in two installments.
ii. June 20th appearance
[55] Given my finding of bad faith conduct on the part of the father, there will an additional order for full recovery costs for the June 20th appearance and related work in the amount of $2,994.75 which is payable immediately: r. 24(8).
Order
[56] The father will pay costs in the amount of $2,994.75, immediately.
[57] The father will pay costs in the amount of $50,000 within 60 days in two installments. The first installment of $25,000 within 30 days of this order and the second installment within 60 days of this order.