Court File and Parties

COURT FILE NO.: FS-21-100813-00 DATE: 2023 11 15

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

MAGANG SULE Applicant

• and -

KRYSTIAN FORMELLA Respondent

COUNSEL: Emily Banks, for the Applicant Ania Godek, for the Respondent

HEARD: In writing

Costs Endorsement

LEMAY J.

[1] The Applicant and the Respondent began a relationship in 2007, were married on September 1st, 2013 and separated on July 6th, 2019. There is one child of the marriage, Joshua, who was born on March 11th, 2019.

[2] I heard an undefended trial in this matter on October 13th, 2023. The Respondent had been given some limited participation rights by Barnes J. and attended at the trial. I released my reasons granting the Applicant the bulk of the relief that she was seeking on October 20th, 2023 (2023 ONSC 5935). It is now time to fix the costs.

[3] I should note that the costs that I am fixing are for the motion before Barnes J. and the application itself. There were a couple of other proceedings where costs were fixed by other judges and my award does not account for any of the time spent on those matters.

Positions of the Parties

[4] The Applicant argues that the Respondent’s conduct in this matter rises to the level of bad faith and, as a result, should attract an award of full recovery costs. The Applicant also argues that the amount of time that was spent by counsel was reasonable for the work that was performed. Finally, the Applicant argues that the offers to settle that she served were “more or less equivalent” to the final result at trial. As a result, the Applicant seeks costs in the sum of $23,463.36 inclusive of HST and disbursements payable out of the proceeds of the matrimonial home.

[5] The Respondent argues that, while his conduct prior to trial was reprehensible, it did not rise to the level of bad faith conduct. The Respondent also argues that he was partially successful at trial because he can seek a variation of the parenting Order within six months. Finally, the Respondent argues that the Applicant’s pre-trial offer “showed a complete lack of willingness to compromise and negotiate a fair resolution of the issues.”

[6] I should also acknowledge that counsel for the Applicant provided me with an e-mail that the Respondent personally sent after the Applicant’s counsel had served and filed her costs submissions. It was derogatory and abusive. However, that e-mail does not directly address the issue of costs and was not filed by the Respondent. As a result, I am not taking it into account in making my costs determination.

The Issues

[7] The positions of the parties require me to resolve the following issues:

a) Did the Respondent’s conduct amount to bad faith? b) What consideration should be given to the offers to Settle?

[8] I will address each issue in turn. Before turning to these issues, I should briefly explain why I accept that the quantum of costs sought by the Applicant is reasonable. I start by noting that the full recovery costs set out in the Applicant’s bill of costs are somewhat higher than the costs set out in the Respondent’s bill of costs. This is reasonable, as the Applicant had a great deal more material to assemble than the Respondent had. The Applicant also had to prepare the pleadings and prepare for the motion before Barnes J.

[9] In addition, the Respondent failed to provide proper financial disclosure. As a result, the materials that were prepared by the Applicant required research into various job rates and were more complex to prepare than they might otherwise have been. There was also a motion before Barnes J. and a trial before me where viva voce evidence had to be called. As a result, I accept that the quantum of costs sought by the Applicant are reasonable within the meaning of the principles set out in Beaver v. Hill 2018 ONCA 840, (2018) 143 O.R. (3d) 519. The parties disputes are over two question that relate to the scale of costs and I turn to those questions now.

Issue #1 - Was the Respondent’s Conduct in Bad Faith?

[10] The Respondent’s conduct led to an undefended trial being ordered. In addition to evading service and refusing to submit an Answer, the Respondent also failed to disclose any of the financial documentation that would have assisted the Court in assessing this matter. The Respondent also engaged in conduct that Barnes J. described as “deeply disturbing and concerning.” At paragraph 26 of my trial reasons, I set out the specifics of this conduct.

[11] Counsel for the Applicant points to the decision in Trudel v. Trudel 2010 ONSC 5177. In that decision, the Court found (at para. 17) that engaging in a catch-me-if-you-can approach to financial disclosure amounted to bad faith. In Trudel, the Respondent husband participated in the litigation but deceived both the Applicant wife and the Court about his income and other payments that he had received.

[12] More generally, the Appellant points to the decision in S.(C.) v. S.(M.) 2007 ONSC 20279, 38 R.F.L. (6th) 315, aff’d 2010 ONCA 196. In that decision, Perkins J. sets out the definition of bad faith conduct:

In order to come within the meaning of bad faith in subrule 24(8), behaviour 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. A misguided but genuine intent to achieve the ostensible goal of the activity, without proof of intent to inflict harm, to conceal relevant information or to deceive, saves the activity from being found to be in bad faith. The requisite intent to harm, conceal or deceive does not have to be the person's sole or primary intent, but rather only a significant part of the person's intent. At some point, a party could be found to be acting in bad faith when their litigation conduct has run the costs up so high that they must be taken to know their behaviour is causing the other party major financial harm without justification.

[13] The case law also confirms that there is a difference between behaviour that is merely unreasonable and bad faith behaviour. The essence of bad faith behaviour is the conscious doing of a wrong. Jackson v. Mayerle 2016 ONSC 1556, (2016) 130 O.R. (3d) 683.

[14] In this case, the Respondent has engaged in a protracted period of egregious behaviour that has made adjudicating this case more difficult. The question is whether it rises to the level of bad faith. In the costs submissions, Respondent’s counsel alleges that the behaviour was “not motivated in any way by malice or revenge.” There are two problems with this argument:

a) The Respondent was given the opportunity to provide a report from “a qualified medical professional on the state of his mental health” at least 90 days before the undefended trial, and he failed to do so. In the absence of this report, it is difficult to infer the existence of an explanation for the Respondent’s egregious conduct other than malice or revenge. b) The incident where the Respondent contacted the Peel CAS to report concerns about the Applicant’s care of Joshua has no good explanation for it, other than malice and revenge.

[15] As a result, when I consider the totality of the Respondent’s conduct, I am persuaded that the test for an award of costs on a standard of bad faith is met in this case. This means that costs are to be fixed on a full recovery basis and made payable forthwith. They shall be paid out of the proceeds from the sale of the matrimonial home.

Issue #2 - Offers to Settle

[16] Given my finding on the first issue, it is not necessary to spend a great deal of time on this second issue. However, I will briefly comment on two arguments that flow from the collection of Offers that both sides submitted.

[17] First, the Respondent claims that he was somewhat successful at trial because I permitted a variation application. This is not entirely correct for two reasons. First, my basis for permitting a variation application was narrower than what the Respondent proposed in his offers to settle. He suggested that he be permitted to apply for a variation of the parenting order if he had completed an anger management course. My decision only permits a variation application if there is evidence from a medical practitioner. As a result, the Respondent was not as successful or more successful than his offer to settle.

[18] Second, the Respondent asserts that the Applicant’s last offer showed a complete lack of willingness to compromise. There are two responses to this argument. First, given the Respondent’s conduct in this case, it should not be a surprise that the Applicant had to take a firm position on parenting time. Second, the Applicant was (in both her written materials and oral argument) prepared to soften that position if the Respondent’s conduct improved. This was not a case where the Applicant’s position was unyielding. Indeed, she was prepared to provide the Respondent with information in respect of Joshua and the parties were able to resolve some limited issues in this case.

[19] In any event, the Respondent’s conduct was sufficiently egregious that it would have attracted an award of elevated costs.

[20] Therefore, even if I had not been convinced that this case warranted full recovery costs, I would have awarded more than partial recovery costs.

Conclusion

[21] For the foregoing reasons, I order that the Respondent is to pay the Applicant the sum of $23,463.36 inclusive of HST and disbursements. These amounts are to be paid out of the sums that are currently held in trust on account of the sale of the matrimonial home.

[22] I retain jurisdiction over this matter to the extent described in my October 20th, 2023 decision.

LEMAY J. Released: November 15, 2023