Court File and Parties

Court File No.: FS-19-0008197 Date: 2024-04-15 Ontario Superior Court of Justice

Between: J.J.W., Applicant And: K.F., Respondent

Counsel: Paul Riley, for the Applicant Alexander Novak, for the Respondent

Heard: April 14, 2024 (in writing)

Costs Decision

Sharma J.

[1] On January 25, 2024, I released Judgment following a 10-day trial, reported at W. v. F., 2024 ONSC 265. If parties were unable to resolve costs, parties were directed to deliver written submissions. Final cost submissions were received on April 3, 2024.

[2] In summary, and as more particularized in my Judgment, I made the following Final Orders:

a. The Applicant father (“Father”) shall have swift, graduated expanded parenting time, resulting in an equal shared parenting arrangement as of June 28, 2024 (shared summer schedule). As of September 2024, a 2/2/5/5 regular parenting schedule was ordered (unless parties jointly agreed to a week-about schedule). I declined to order a blackout period and parenting reversal due to parental alienation, even though I did find there was parental alienation. I declined to order supervised parenting time for the father as allegations of abuse were not substantiated. Holiday parenting time was divided equally. b. Communications orders were made. c. Decision-making responsibility was divided as between the Father and the Respondent mother (“Mother”). d. I ordered that the child shall reside in Toronto. e. I found the Mother was intentionally unemployed and imputed income to her for the relevant periods, with income of $144,000 imputed as of July 1, 2024. f. I declined the Mother’s request to order retroactive child support from September 1, 2021 because it would constitute undue hardship for the Father to make a retroactive payment. g. I fixed on-going child support payable by the Father as of February 1, 2024 of $1,480.09 per month, pursuant to the Child Support Guidelines and based on his 2023 income of $175,152. h. As of July 1, 2024, I fixed set-off child support payable by the Father of $225.09 per month. i. I declined to order retroactive s. 7 expenses because there was no evidence of such expenses at trial. I fixed a proportionate sharing of s. 7 expenses as of February 1, 2024 and July 1, 2024. j. I made orders with respect to extended health care coverage and that both parties maintain life insurance policies with a face value of $150,000 with the other party designated as the irrevocable beneficiary. k. I ordered the Father to continue to make periodic spousal support payments to the Mother of $3,121, commencing February 1, 2024 but this support shall terminate on July 1, 2024. I declined to order a retroactive adjustment to spousal support. l. I dismissed the Father’s claim for damages for the tort of malicious prosecution. m. I declined to order a restraining order, but I did order that neither party shall molest, harass, or annoy the other.

[3] Up until trial, the Mother was also seeking an Order to relocate with the child, although this relief was abandoned at the start of trial.

[4] The Father was more successful than the Mother on the primary issues in this case, namely parenting and financial orders, however, he was not successful in some of the other relief he sought (e.g., tort of malicious prosecution, restraining order). The primary factual disputes were whether the Father sexually abused the parties’ child, whether income should be imputed to the Mother, spousal support and child support. In these areas, the Father was substantially successful. He is presumptively entitled to costs: rule 24(1) of the Family Law Rules (“FLR”).

Parties’ Positions

[5] The Father seeks costs on a full recovery basis in the amount of $329,718.32. He argues that he enjoyed substantial success on the issues at trial; he behaved reasonably throughout while the Mother did not; he made a reasonable Offer to Settle, and the Mother did not deliver an Offer to Settle; and that the issues in this case were important, difficult and complex. He also argues that the Mother’s counsel caused delay at trial, necessitating unnecessary trial adjournments.

[6] The Mother argues that any cost order made must consider the parenting schedule ordered. She says that because a 2/2/5/5 schedule was ordered, this schedule limits the days when she can return to work in the USA. She says it is unrealistic to expect the Mother to earn $144,000 CDN from working in Washington D.C. based on this parenting schedule, and therefore, it would render her unable to pay a cost order.

[7] The Mother also takes exception with the Father’s Bill of Costs because (a) it includes fees of $33,900 relating to the Father’s first criminal trial, and $45,200 related to the Father’s second criminal trial; (b) the Father seeks costs for every prior step in the proceeding and those Endorsements do not indicate that costs are reserved (with one exception from a motion for security for costs heard by Shore J. on August 29, 2023, and she states that she is entitled to costs of this motion which according to a Bill of Costs totals $5,102 on a full indemnity basis).

Analysis

[8] The modern rules respecting costs aim to foster the following four fundamental purposes: (a) to partially indemnify successful litigants for the cost of litigation; (b) to encourage settlement; (c) to discourage and sanction inappropriate behaviour by litigants; and (d) to ensure that cases are dealt with justly in accordance with the primary objective of the FLR set out in Rule 2(2). See: Ryan v. McGregor (1926), 58 O.L.R. 213 (Ont. C.A.), at p. 216; British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71; Fong v. Chan, 1999 CarswellOnt 3955, 181 D.L.R. (4th) 614, 46 O.R. (3d) 330 (C.A.); Serra v. Serra, 2009 ONCA 395 (C.A.) and Mattina v. Mattina, 2018 ONCA 867 (C.A.).

[9] When fixing costs, “the costs award should reflect 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 party.” See Zesta Engineering Ltd. v. Cloutier, 2022 ONCA 25577 at para 4, cited with approval in Boucher v. Public Accountants Council for the Province of Ontario, 2004 ONCA 14579 at para 24.

[10] Rule 24 of FLR sets out factors for the Court to consider when making a cost order. They include the reasonableness of the parties, and whether a party made an offer to settle (r. 24(4) and 24(5)); whether a party acted in bad faith (r. 24(8)); costs caused by fault of lawyer (r. 24(9)); and other factors set out in r. 24(12)).

What Scale of Costs to Apply?

[11] In the case of bad faith conduct under r. 24(8), the court shall order costs on a full recovery basis, payable forthwith. To come within the meaning of bad faith, “the behaviour must have been carried out with intent to inflect financial or emotional harm on the other party, or to deceive the other person or the court.” O.M. v. S.K., 2020 ONSC 4765 at para. 15, citing S.(C.) v. S. (M.), 2007 ONSC 20279 at para. 17. The requisite intent to harm does not have to be the party’s sole or primary intent, but rather only a significant part of the person’s intent: S.(C.) v. S. (M.), at para. 17.

[12] Unreasonable behaviour, even if it does not rise to the level of bad faith, can also result in an order for full recovery costs: Jackson v. Mayerle, 2016 ONSC 1556, at para. 62.

[13] Parental conduct that alienates a child from the other parent amounts to bad faith within the meaning of r. 24(8): Cantave v. Cantave, 2014 ONSC 5999, at para. 9, and cases cited therein.

[14] I am not persuaded that bad faith has been established. While I found the Mother had engaged in alienating conduct, this arose from an alleged incident of abuse. I accepted the Mother’s evidence at trial that she did not know and may never know whether the Father had in fact engaged in abuse of the child. She made alienating comments to her son in this context and with a genuine belief that, if the abuse was occurring, it was correct for her to say the things she did to her son. I do not find she said them with the intention of inflicting harm.

[15] However, I do find her conduct in this case was unreasonable because:

• She persisted in her steadfast belief in what her son reported, without considering the influence her family may have had upon the child, the child’s inconsistent reporting of what occurred, how she may have influenced the child’s narrative, and despite there being an absence of evidence to corroborate what the child was saying.
• At a settlement conference before Shore J., she agreed to an equal shared parenting schedule, but at the exact same time, she was in touch with CAS officials about the allegations of abuse and she made no mention of those allegations when agreeing to an equal shared parenting schedule.
• She persisted throughout the litigation in seeking a relocation, which was only abandoned on the eve of trial.
• She failed to abide by an order for the child to begin a trauma assessment on the earliest possible date, and instead opted to travel with the child.
• She engaged third parties, namely a Boost worker and the Police, to make new allegations to CAS officials that lacked a factual foundation.
• She failed to adduce evidence at trial of any reasonable job search efforts in Ontario.
• She made no offers to settle.

[16] Costs can also be awarded on a full recovery basis if an Offer to Settle has been made and certain conditions are met: r. 18(14).

[17] The Father made an Offer to Settle on October 26, 2023, and prior offers to settle going back to March 13, 2020. I have reviewed each. They typically contained provision for equal shared parenting time (with different schedules proposed), the Father having sole decision making responsibility, imputation of income to the Mother up to $80,000, termination of spousal support, and orders for costs. Notably, the Father’s final Offer to Settle on October 26, 2023, included a transitional “black-out” parenting order whereby the child would reside with his paternal Aunt and Uncle in Alberta for 60-days, during which time the Father would engage in reintegration therapy with the child. After which, and when deemed appropriate, a shared parenting schedule would be implemented and parties would pay set-off child support.

[18] The Father’s Offers to Settle were reasonable. He also achieved an outcome as favourable or more favourable than his offers in several areas (e.g., an equal parenting schedule was ordered; set-off child support was ordered as of July 1, 2024; spousal support was ordered to terminate on the same date; income of $144,000 was imputed to the Mother). However, the Father was not successful in certain areas (e.g., having sole decision-making authority; a “black-out” parenting order; earlier termination of spousal support; restraining orders). None of the offers (except the Offer of July 13, 2021) were severable. I cannot conclude the Father obtained an outcome that was as favourable or more favourable than his Offers, although he did achieve such an outcome in certain areas of his Offers. His July 31, 2021 Offer to Settle appears to most closely match the outcome at trial, although it still vested in the Father final decision-making responsibility and had other restrictive covenants.

[19] Having considered these factors, I find that an appropriate scale of costs is on a substantial indemnity basis, rather than a full cost recovery basis or a partial indemnity basis. The Mother’s unreasonableness, her failure to make any Offer to Settle, and the reasonableness of the positions taken by the Father at trial and in his Offers to Settle made since March 13, 2020, support this conclusion. I turn next to the quantum and reasonableness of the Father’s Bill of Costs.

Quantum

[20] Regardless of the scale of costs applied by the Court, the court must assess whether the costs incurred were reasonable.

[21] I agree with the Mother that a family cost order enables recovery of costs in relation to the family proceeding. The Father has not pointed to authority for this Court to grant costs arising from a criminal proceeding. This evidence ought to have been led at trial as part of the Father’s claim for malicious prosecution damages. For these reasons, I deduct from the Father’s Bill of Costs costs incurred in relation to the criminal proceedings. The Mother states these costs appear to total $79,100. The Father, in his reply submissions, does not challenge this. I deduct this amount from the Father’s Bill of Costs.

[22] The Mother argues that this Court should not grant costs for prior steps in this case because r. 24(10) of the FLR states that promptly after dealing with a step in a case, the court shall, in a summary manner, determine who is entitled to costs, or reserve costs. The Mother states that of the several endorsements in this case, only one indicated that costs were reserved to the trial judge (i.e., the Father’s unsuccessful motion for security of costs, heard August 29, 2023). As the Bill of Costs does not set out costs incurred in relation to each step in the case, the Mother states it is impossible for the Court to determine what costs are in relation to which step.

[23] I disagree with the Mother’s argument. R. 24(1) states that a successful litigant is presumed entitled to costs of “a motion, enforcement, case or appeal.” As is true in all family cases, there are many steps that parties must go through to get ready for trial, and costs are often awarded following trial encompassing costs incurred through to trial. Furthermore, r. 24(11) states that the failure of a court to determine costs under r. 24(10) “does not prevent the court from awarding costs in relation to the step at a later stage in a case.” The Father’s Bill of Costs is broken down by activities in each month since the litigation began. Upon review, it does reference tasks associated with the various steps taken in this case.

[24] Even after deducting $79,100 in costs for the criminal trials, I find that the remaining costs incurred are still unreasonable.

[25] Mr. Riley, the Father’s counsel and to his credit, relied upon law clerks to perform many tasks in relation to this case, and who billed at lower hourly rates that Mr. Riley. Fees charged by law clerks may be recovered for services they are authorized to provide by the Law Society of Ontario: Rules of Civil Procedure, Tariff A, Lawyers’ Fees and Disbursements Allowable under rules 57.01 and 58.05. Relying upon law clerks can be cost effective and is to be commended. However, when the duties given to law clerks can be done more efficiently by lawyers, any cost savings can be lost.

[26] In this case, Mr. Riley’s time totaled $72,743. His hourly rate was $500 but increased to $600. In comparison, the amount billed by two law clerks, Nicole Sexton and Liz Lewis, totaled $87,439 and $75,676, respectively (other law clerks also worked on this file). Some of their work involved drafting affidavits, case conference briefs, settlement conference briefs, and preparing amended pleadings, work that if done by a lawyer, may be done more quickly and efficiently. From the Bill of Costs, it is not possible to conclude how much time Mr. Riley spent reviewing these draft documents, and it is not possible to determine if efficiencies were realized by using law clerks. If the law clerks billed at substantially lower rates, it may still be economical to use law clerks to prepare initial drafts of such documents. However, they billed at hourly rates up to $300 – rates at which some family lawyers charge.

[27] Furthermore, many of the tasks billed by the law clerks are purely administrative that would more properly be completed by administrative assistants and which work would not normally appear on a lawyer’s Bill of Costs (e.g., organizing disclosure, emails to the court, preparing confirmation forms, preparation of Excel spreadsheets, leaving voicemails with third parties, forwarding emails from opposing counsel to a client). For these reasons, it is appropriate to discount time spent by the law clerks, and in my view, fair and just to do so by at least 50%.

[28] I find that the time spent by Mr. Riley and by his junior lawyer, Alix Nenniger, is reasonable, proportionate and fair.

[29] In terms of disbursements, I have deducted charges related to the Father’s defence of the criminal proceedings. I have included the costs of Shiona Robertson, who provided evidence at trial as the child’s trauma assessor.

[30] With respect to the motion for security for costs heard by Shore J. and reserved for the trial judge, I have not further discounted the Father’s costs due to the Mother’s success at that motion. I have already significantly discounted the Father’s Bill of Costs. Reasonable costs for such a motion are $5,000 (based on the Mother’s Bill of Costs for that motion), and I have already discounted the Father’s costs by over $80,000.

[31] On a full indemnity basis, I find that the reasonable costs incurred by the Father in this case total:

Lawyers: $79,523.75 Law Clerks: $83,000.00 (discounted from $166,934.50) Disbursements: $3,808.27 TOTAL: $166,332.02

[32] On a substantial indemnity basis, I order the Mother to pay the Father costs of this case fixed in the amount of $130,000, payable within 60 days.

[33] In fixing this amount, I have considered the Mother’s argument that the 2/2/5/5 parenting schedule ordered may inhibit her ability to return to work in the USA, and as a result, her ability to pay any cost order. However, my Judgment also stated that parties may agree to a week about schedule instead of the 2/2/5/5 schedule. I am required to only take into consideration the best interests of the child when making a parenting order, and at the time of Judgment, it appeared that a 2/2/5/5 schedule was appropriate for the child. But if by now, or soon from now, the child’s relationship with his Father has been repaired, I can see no reason why parties would not agree to a week about schedule. Furthermore, the Mother has not demonstrated any of her efforts to find work in Ontario, and as such, it may be possible if not probable that she can find work in Ontario that is conducive to a 2/2/5/5 parenting schedule.

[34] I have also considered that, in cases involving children, it can be the children who will shoulder the burden of a cost order: Husein v. Chatoor (No. 2), 2005 ONCJ 487. At the same time, fairness to the Father and the cost principles underlying the FLR demand that unreasonable conduct be sanctioned and that the Father be compensated for his reasonable costs.

[35] Finally, I have considered the Mother’s modest means, her level of debt, and ability to pay a cost order. While a party’s ability to pay a cost order is a relevant consideration (MacDonald v. Magel, 2003 ONCA 18880), modest means alone is not a barrier to the court making a cost order. As stated by McGee J. in Lenihan v. Shankar, 2021 ONSC 1537 at para. 46, “those who can least afford to litigate should be the most motivated to seriously pursue settlement, and to avoid unnecessary proceedings.” Here, the Father made multiple Offers to Settle and the Mother made none.

[36] For these reasons, I order the Respondent Mother to pay the Applicant Father costs of this case, fixed in the amount of $130,000, payable within 60 days.

[37] This Order bears interest at the post judgment interest rate of 7.0% per annum, pursuant to the Courts of Justice Act, with interest payable as of June 15, 2024.

Justice M. Sharma Released: April 15, 2024

Court File No.: FS-19-0008197 Date: 2024-04-15 Superior Court of Justice - Ontario Re: J.J.W. Applicant – and – K.F. Respondent Endorsement: Sharma, J. Date: April 15, 2024