Court File and Parties

Court File No.: FS-22-22980 Date: 2023-08-11 Ontario Superior Court of Justice

Between: David John Harley, Applicant And: Christine Suzana Harley, Respondent

Counsel: Alice H. VanDeven, for the Applicant Sarah A. Weisman, for the Respondent Kimberly Doucett, for the Office of the Children’s Lawyer

Heard: In writing

Costs Endorsement

King J.:

[1] The costs issues in this matter are a reminder of the prescient words of Karakatsanis J. in the seminal decision of Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 1, where she stated:

Most Canadians cannot afford to sue when they are wronged or defend themselves when they are sued, and cannot afford to go to trial. Without an effective and accessible means of enforcing rights, the rule of law is threatened. Without public adjudication of civil cases, the development of the common law is stunted.

[2] While those words were written in the context of recognizing the summary judgment process as being a more cost-effective method of resolving civil legal disputes, the sentiments she expressed reverberate throughout the costs issues in this matter as well. That is, how much time, and, as a result, money, is it reasonable for a party to expend to successfully respond to a Hague Convention application with a four-day hearing?

Background

[3] The parties were married and the parents of one child, David John Harley VI (d.o.b. August 23, 2010).

[4] The applicant father is American. The respondent mother was born in Canada. When the parties married, the respondent moved to the State of Ohio. It was there that the couple resided with their child. At that time, the respondent was a legal resident of the United States, but not a citizen.

[5] On June 17, 2022, the respondent left the matrimonial home in Newton Falls, Ohio with the child, and travelled to the residence of her parents in LaSalle, Ontario. They have remained in Ontario since that date.

[6] At that time, the applicant was hospitalized in the Newton Falls area for a medical procedure. Before departing the United States, the respondent delivered a vehicle to the hospital and left instructions for the retrieval of the keys when he was discharged.

[7] The applicant commenced this application shortly thereafter.

[8] To say the matter was highly contested throughout is an understatement. Without setting out all the details there were, inter alia, numerous affidavits, a cross-examination, several disputes regarding undertakings and the content of the various affidavits, a number of motions, and four full days of hearings before me in December 2022 and January 2023.

[9] On April 27, 2023, I issued my decision dismissing the application of the father.

[10] I did so on the basis that the respondent mother had satisfied two of the exceptions prescribed in the Hague Convention. More specifically, I concluded as follows:

1. The child’s habitual residence was in Newton Falls, Ohio in the United States of America.
2. The child was wrongfully removed from the United States of America on June 17, 2022.
3. Alternatively, the child was wrongfully retained in Canada on June 17, 2022.
4. The father had custody rights and was exercising those rights when the child was wrongfully removed or retained from his habitual residence.
5. The Article 13(b) exception does apply. I am satisfied the child would face grave risk of being exposed to physical or psychological harm or otherwise be placed in an intolerable position if returned to Ohio.
6. The Article 13(2) exception does apply. I am satisfied that the child objects to being returned and has attained an age and a degree of maturity at which it is appropriate to take account of his views.

[11] The full reasons are set out at 2023 ONSC 2563.

[12] I asked counsel to provide me with their respective bill of costs.

[13] I note that while the Office of the Children’s Lawyer participated in these proceedings, they neither seek costs, or expect to have costs awarded against them.

Positions of the Parties

Respondent

[14] The respondent seeks costs totalling $215,365.29, on a full recovery basis, as follows:

Fees: $ 180,667.50 HST on Fees: $ 23,486.78 Disbursements: $ 10,141.30 HST on Disbursements: $ 1,069.71 TOTAL $ 215,365.29

[15] Counsel submitted that these costs should be awarded on a full recovery basis for the following reasons:

1. The respondent made an offer to settle that was not accepted by the applicant. That offer proposed that the respondent would attorn to the Ohio jurisdiction and return to Ohio with the child, subject to certain conditions, if the applicant commenced divorce proceedings in Ohio. The applicant commenced no such proceedings. He also made no offer of settlement.
2. In her reply materials, the respondent plead in the alternative to her position that the application should be dismissed that the applicant should commence proceedings in the appropriate Ohio court and that such an application should be filed with her Ohio attorney and her Ontario counsel.
3. The respondent submits that the outcome she obtained exceeded her offer.
4. As the wholly successful party, and pursuant to s. 131(1) of the Courts of Justice Act, and the Family Law Rules, specifically, rules 24(1) and 24(12), she should receive costs and disbursements in the amount of $215,195.79, inclusive of HST and disbursements.

Applicant

[16] The applicant father takes the position that costs are discretionary. As well, the applicant did not act unreasonably.

[17] In the circumstances of this matter, the applicant submits that this matter was “not one that easily leads itself to settlement” on the basis that the child was either going to be ordered returned to Ohio or not.

[18] Accordingly, no such compromise was possible. Counsel relies on Gallardo Bazan v. MacDonald, 2011 ONCJ 612, in support of the all or nothing nature of the proceeding.

[19] Furthermore, the offer to settle offered no true element of compromise. Counsel added that the agreement to return to the Ohio jurisdiction to determine divorce/custody is not a requirement for bringing a Hague Application. As such, it was an effort to circumvent the Hague process and disregard the Hague Convention as “it is not for the Ohio courts to order the return of the child.”

[20] The applicant also submitted that success on the matter was divided, in that the court made the following findings in favour of the applicant, as follows:

1. Habitual residence (conceded).
2. Wrongful removal of the child from the United States.
3. Wrongful retention of the child in Canada.
4. Father had, and was exercising, custody rights at the time of wrongful removal.

[21] The applicant father submits he will be subject to hardship should the respondent be awarded the costs she seeks. He resides in a modest house that is in a state of disrepair and is currently receiving only disability income. He estimates his earnings to be under $20,000 U.S. per year. The value of his home is well below $100,000 U.S.

Analysis

[22] As Bondy J. stated in Cedar Beach Acres Ltd. v. Ace Ina Insurance Group (16 January 2018), Windsor, CV-12-17909 (Ont. Sup. Ct.) [unreported], at para. 16:

Modern costs rules are designed to advance five purposes in the administration of justice:

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 and sanction inappropriate behaviour by litigants in their conduct of the proceedings; and
5. to encourage settlements.

See: Vester v. Boston Scientific Ltd., 2017 ONSC 2498; Hamilton-Wentworth (Regional Municipality) v. Hamilton-Wentworth Save the Valley Committee, Inc. (1985), 51 O.R. (2d) 23 (H. Ct. J.); Fellowes, McNeil v. Kansa General International Insurance Co. (1997), 37 O.R. (3d) 464 (Gen. Div.); Fong v. Chan (1999), 46 O.R. (3d) 330 (C.A.); Somers v. Fournier (2002), 60 O.R. (3d) 225 (C.A.); British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371; 1465778 Ontario Inc. v. 1122077 Ontario Ltd. (2006), 82 O.R. (3d) 757 (C.A.); Reynolds v. Kingston (Police Services Board) 2007 ONCA 375, 86 O.R. (3d) 43.

[23] I start this analysis by indicating that I do not agree with the submissions of counsel for the applicant, Ms. VanDeven, that success on the application was divided. While I did make four findings sought by the applicant (i.e., residency in Ohio, wrongful removal, wrongful detention and that the father enjoyed parental rights), those findings were necessary pre‑requisites to granting the application and order the return of the child to the United States pursuant to the Hague Convention.

[24] In and of themselves, none of those four findings were dispositive of the application.

[25] However, the findings I made pursuant to the exceptions prescribed in sections 13(b) and 13(2) of the Hague Convention were individually (and collectively) dispositive of the application.

[26] Accordingly, I do not agree that success was divided. The child was not ordered to be returned to the United States. That is why the applicant pursued the application. In that fundamental respect, his application failed. The respondent was the successful party.

[27] Moving past that, the costs sought by the respondent are, on their face, breathtaking.

[28] I also note the following general principles.

[29] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides that costs are discretionary:

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.

[30] The court must also consider the factors prescribed in r. 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provide:

In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(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; (a) the amount claimed and the amount recovered in the proceeding; (b) the apportionment of liability; (c) the complexity of the proceeding; (d) the importance of the issues; (e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; (f) whether any step in the proceeding was, (i) improper, vexatious or unnecessary, or (ii) taken through negligence, mistake or excessive caution; (g) a party’s denial of or refusal to admit anything that should have been admitted; (h) whether it is appropriate to award any costs or more than one set of costs where a party, (i) commenced separate proceedings for claims that should have been made in one proceeding, or (ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and (i) any other matter relevant to the question of costs.

[31] While the successful party does not have a guaranteed right to costs, there is a reasonable expectation in this respect.

[32] That principle applies in this situation.

[33] The respondent had the right to retain counsel to oppose the application.

[34] However, as prescribed in the seminal costs decision of Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.) [“Boucher”], costs awards should be subject to the overriding principle of reasonableness. This overarching principle requires more than completing a perfunctory mechanical exercise of considering the experience, rates charged, and hours spent.

[35] This principle is further delineated in Zesta Engineering Ltd. v. Cloutier, at para. 4, as follows:

In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.

Amount Claimed

i) Success on the motion

[36] The respondent was fully successful.

ii) The complexity of the proceeding

[37] The evidence of was voluminous. While the legal issues were interesting and not frequently litigated, they were not overly complex.

iii) The importance of the issues

[38] The importance of the case to both parties was understandably significant.

iv) Reasonable expectations of the parties

[39] It cannot be concluded that the reasonable expectation of the parties would be that the amount of time and money spent by the successful respondent would be virtually unlimited. From the materials before the court, it was clear that prior to separation they had very modest financial circumstances. The respondent operated a small bakery out of their house and the applicant was receiving a disability allowance.

[40] In the respondent’s bill of costs, the hours spent on each attendance are listed and referred to by the person performing the specified task. Unfortunately, these hours are not totalled. However, by my calculation, it would appear that Ms. Weisman performed the preponderance of the work on the file. Her hours docketed are just shy of 500.

[41] It may be that the respondent has been able to arrange for the payment of the fees and disbursements totalling $215,365 from a financial windfall or highly paid employment she acquired subsequent to her arrival in Canada. Perhaps she has family and/or friends assisting her with the payment of this account. If either or both of those positive economic developments have occurred, good for the respondent.

[42] However, based on the evidence before the court on the application, under no circumstances did either party to this litigation have anywhere near the personal financial wealth to fund the amount of costs sought. More importantly, the sum far and away exceeds what the reasonable expectations of the parties would have been by an astonishing amount.

[43] I note from her Bill of Costs that Ms. VanDeven docketed 101.4 hours and her law clerks performed approximately 43 hours of work on this file. This amount seems somewhat less than I would have expected. However, I cannot rationalize how Ms. Weisman’s firm spent four to five times the number of hours on the file as Ms. VanDeven’s firm, even if I assume that the hours she submitted have been somewhat suppressed in the circumstances.

[44] I have concluded that the outcome achieved by the respondent exceeded the offer made by the respondent. It is mystifying why the applicant did not accept this offer. It was not an attempt to circumvent the Hague process. Rather, the offer would have rendered the Hague process moot. The issue of custody, access and support for the child could have been and would have been decided by an Ohio court of competent jurisdiction.

[45] To award the costs sought by the respondent would amount to setting aside reasonableness as the overriding principle in determining costs. I am not prepared to do so in this instance.

Conclusion

[46] This is not a case of divided success as referenced by the applicant in Parmar v. Flora, 2023 ONSC 2327.

[47] After careful consideration, I have concluded that the respondent is entitled to an award of costs that is appropriate and proportionate and subject to the reasonable expectations of the parties.

[48] I note that the applicant was not a reluctant participant in this matter. As was his right, he commenced this application and took the matter to completion before this court. However, the applicant had to appreciate that he could be exposed to a reasonable costs award against him should he not succeed. It would be counter-intuitive for applicants to assume that they could pursue claims without any risk whatsoever just because of their relative impecuniosity: see Greenstone (Municipality) v. Marshall Macklin Monaghan Ltd., 2013 ONSC 2030, at para. 5. Given the extensive work performed on this file, the applicant had to be cognizant that if his application failed, he could be subject to a significant award of costs.

[49] The respondent had every right to defend this application and to do so vigorously. The respondent did that and succeeded. She is entitled to reasonable costs.

[50] What the respondent does not have is the right to expect that she would be compensated for these costs, irrespective of the financial situation and reasonable expectations of the parties.

Order

[51] Accordingly, I am awarding the respondent costs as follows:

Legal fees: $35,000.00 HST 4,550.00 Disbursements 10,141.30 HST 1,069.71 Total: $50,761.01

[52] The respondent is awarded costs and disbursements totalling $50,761.01, inclusive of HST. That amount is payable within 60 days.

[53] There is no order for costs for or against the Office of the Children’s Lawyer.

“original signed and released by King J.” George W. King Justice Released: August 11, 2023

Correction Note

On May 29, 2023, a minor correction was made to correct the misspelling of Ms. Weisman’s name.