Court File and Parties

Court File No.: FC-23-1491 Date: 2024-03-01 Superior Court of Justice - Ontario

Re: Dimitrije Sibanic, Applicant And Chloe Marie Genevieve Dupuis, Respondent

Before: The Honourable Mr. Justice Marc Smith

Counsel: Jessica Luscombe, Counsel for the Applicant Michael J. Stangarone / Tiffany Guo, Counsel for the Respondent

Heard: In writing

Costs Decision

M. Smith J

[1] The Respondent Mother was entirely successful in the Hague Application which took place in November 2023 (Sibanic v. Dupuis, 2023 ONSC 6957).

[2] The Mother seeks an order for costs in the amount of $50,714.80, inclusive of disbursements and taxes. The total amount sought is on a substantial recovery basis up to the Mother's offer to settle and on a full recovery basis from the date of the offer to settle. Also, the Mother submits that because of the Applicant Father’s bad faith conduct, full recovery costs is appropriate.

[3] The Father does not dispute that the Mother was successful in her defence of his Hague Application. He argues that the costs sought by the Mother are excessive and she is not entitled to costs on a full indemnity because her offer to settle does not meet the requirements under r. 18 of the Family Law Rules, O. Reg. 114/99 (“FLR”). He denies having acted in bad faith.

[4] For reasons that follow, the Mother is entitled to costs in the all-inclusive amount of $37,500.00.

Legal Principles

[5] Pursuant to s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, costs are at the discretion of the court. The framework for awarding costs is set out at r. 24 of the FLR.

[6] Rule 24(1) of the FLR creates a presumption of costs in favour of the successful party. In setting the amount of costs, the court shall consider the factors outlined in r. 24(12) of the FLR, which includes, without limitation, the importance and complexity of the issues, the parties’ behaviour, the time spent, written offers, and legal fees.

[7] 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 that cases are dealt with justly under subrule 2(2) of the FLR: see Mattina v. Mattina, 2018 ONCA 867.

[8] Proportionality and reasonableness are the touchstone considerations that need to be applied when fixing an amount of costs. A successful party is not entitled to full recovery unless r. 18(14) and 24(8) of the FLR are triggered: see Beaver v. Hill, 2018 ONCA 840 at paras. 4, 13 and 17.

[9] A party’s ability to pay is a relevant consideration under r. 24(12) of the FLR, and it goes to quantum, not liability. However, this inability to pay does not shield that party from liability or that it be used to excuse unreasonable conduct: see Grujicic v. Trovao, 2023 ONSC 1518, at paras. 27 to 31.

[10] Determining if full recovery costs should be awarded for bad faith behaviour has been the subject of numerous decisions. In Onuoha v. Onuoha, 2021 ONSC 17, at paras. 26 to 30, Marsden J. provides a helpful summary of the caselaw and principles that have been articulated, which include, amongst others, the following:

a. The threshold is high; the behaviour must be egregious, and not simply bad judgment or negligence. b. The egregious behaviour must have been done knowingly, intentionally, with some element of malice or intent to harm. c. Bad faith and unreasonable behaviour are not synonymous.

[11] Rule 18(14) of the FLR states that a party is entitled to costs to the date an offer was served and full recovery costs thereafter, only if an offer was served at least seven days prior to the trial date. However, r. 18(16) of the FLR provides that in exercising its discretion, the court may consider any offers made, even if not made in compliance with r. 18(14) of the FLR.

[12] Partial indemnity is the norm. To deviate from this general rule and impose an elevated costs award, there must be a reason for doing so.

Analysis

[13] It is undisputed that the Mother was the successful party in this Hague Application and as such, she is presumptively entitled to costs. In determining the appropriate scale of costs, I have considered the factors set out in the text that follows.

Complexity and importance

[14] The outcome was extremely important to both parties. The issues in this Hague Application had some complexities, namely the determination of the child's habitual residence and jurisdiction, as well as the diametrically opposed characterizations of the facts and intentions, requiring counsel to draft comprehensive materials and prepare for a two-day hearing.

Time spent and legal fees

[15] Experienced counsel had been retained by the parties. The Mother’s legal team was comprised of three lawyers and law clerks, where they collectively spent approximately 138 hours of time on this matter. With multiple timekeepers involved in a case, there is always the concern that there may be some duplication of work. However, in this case, having reviewed the bill of costs and considering the type of case that was before the court, I do not have any concerns regarding the time spent or the rates charged. They are reasonable and proportionate to the issues.

Offers to settle

[16] The Mother served an offer to settle one day before the hearing. Although the terms of the offer were as favorable as the order, and arguably more, it was not served within seven days of the hearing, thereby not triggering the costs consequences of r. 18(14) of the FLR. It is nonetheless a factor to consider in determining the appropriateness of a costs award because parties are always encouraged to settle their differences out of court.

Bad faith

[17] The Mother takes the position that the Father conducted himself in a bad faith manner, warranting that his conduct be sanctioned by awarding full recovery costs. Examples of the Father's bad faith conduct include his abusive behaviour during marriage, the commencement of a Hague Application after already having acquiesced to the child remaining in Ontario with the Mother, and his avoidance and evasiveness during cross-examination at the hearing.

[18] In my Reasons for Decision, I made the following findings: (a) the Father had exhibited a long history of abusive and controlling behavior towards the Mother; (b) the child's habitual residence was Ontario and the Father had acquiesced to the child remaining in Ontario; and (c) the Father's testimony was not credible, he was evasive and he repeatedly avoided to give evidence. These findings do not reach the levels of bad faith conduct. While the Father’s conduct is unacceptable, there must nonetheless be evidence of devious, malicious, egregious, and intentional conduct to harm, to make a finding of bad faith. The evidentiary record is lacking in that regard.

Ability to pay

[19] The Father submits that he does not have the financial capacity to pay the quantum of costs sought by the Mother. If such an award was made, he says that it would hinder his ability to see the child.

[20] The Father purports to earn approximately $166,000 CAD per year. He estimates that it will cost him $10,000 per trip to Canada to see his child, exclusive of meals, entertainment, and time off work. The Father says that he is unable to afford these extraordinary expenses.

[21] At the time of the hearing, the Father testified that he was no longer living in the matrimonial home, but he was residing with friends. Unbeknownst to the Mother, he had renovated the matrimonial home and temporarily converted it into an Airbnb rental. The Father was receiving some income from this rental to subsidize his litigation costs.

[22] Another important factor to consider is that I accepted the Mother's evidence that the Father had unilaterally stopped financial support. He depleted the accounts and refused to provide the Mother with access to any of the joint funds. To my knowledge, the Father's financial situation has not changed, nor has he commenced making child support payments.

[23] The Mother accurately reminds me that in November 2023, she had requested financial disclosure from the Father, but it was never provided. There is a lack of evidence to substantiate the Father's claims regarding his financial circumstances. In the absence of a sworn financial statement and income disclosure, as previously requested, I am unable to consider the Father's assertions that he cannot afford to pay an elevated costs award or that it will have a negative impact vis-a-vis his ability to exercise his parenting time with his child.

Disposition

[24] For all these reasons, the Father is ordered to pay costs to the Mother, within 90 days of this Costs Decision, in the all-inclusive amount of $37,500.00, representing a slightly higher award than on a partial indemnity basis.

M. Smith J

Released: March 1, 2024