Court File and Parties

Court File No.: FC-12-1007-02 Date: 2024-11-25 Ontario Superior Court of Justice

Between: M.M.B., Applicant – and – C.M.V., Respondent

Counsel: Applicant: Unrepresented Respondent: Kristin Normandin and Jared Teitel

Heard: In writing

Decision on Costs

J.P.L. McDermot J.

Background

[1] On October 23, 2024, I issued my corrected endorsement in this matter. In that endorsement, I described this litigation as “long and tortuous”. That is reflected by the fact that this is the fourth time in the litigation that costs have been considered by the court, something noted in the Applicant’s costs submissions. The first time was after this matter was settled immediately before trial before Justice Corkery in 2013 when a final order was agreed upon based upon an assessment completed in that litigation. There was a second lengthy trial in 2017 before Bennett J. resulting in an interim order and finally a trial in that motion to change before Justice Sutherland resulting in a final order; costs were ordered for each of those trials. The costs that I am considering are in the context of a second motion to change brought by the Respondent which was heard by me on June 5, 2024.

[2] This was a motion brought by the Respondent to vary child support ordered by Justice Sutherland in his endorsement of February 7, 2022. At that time, he ordered child support payable by the Respondent based upon the shared care of two of the children (the eldest child was attending university). Eventually both of those children ended up living primarily with their father, C.M.V. Justice Sutherland had ordered, concerning the youngest child, that if he was to be released from the order, the Respondent should bring a motion to do so when he turned 16; C.M.V. didn’t follow the order and permitted that child to move in with him and then claimed a change in child support. M.M.B. described this as the Respondent unilaterally releasing the child of the shared care arrangement without the sanction of the court.

[3] However, by this point, maybe because of the tortuous litigation history, all reason had long fled from these parties. Based upon the fact that the Respondent failed to bring the required motion to release the youngest child from the order, the Applicant not only refused to pay child support for the children in his care, but continued to collect the monthly child support that the Respondent was paying under the order made by Justice Sutherland in 2022. As far as I can determine, she did this because she thought that she was owed support until the parenting order was legally changed pursuant to Justice Sutherland’s endorsement.

[4] This hole became deeper as matters progressed. Justice Sutherland had provided for an annual review in his order commencing May 1, 2022 and C.M.V. approached M.M.B. in November, 2022. When these attempts were ignored, Ms. Normandin became involved and wrote to M.M.B. in February, 2023. When those efforts were again ignored, these proceedings were commenced. It was only at the Settlement Conference in October, 2023 that M.M.B. agreed to stop collecting the child support; however, she would not agree to pay any child support to C.M.V. for the children in his care.

[5] In my endorsement, M.M.B. was ordered to repay the child support that she had collected after the children moved in with the Respondent Father. She was also ordered to pay base child support as well as arrears of s. 7 expenses. She was unsuccessful in her attempts to delay child support until the order was formally changed, an issue that neither party placed before the court in this motion to change.

[6] M.M.B. blames the Respondent for the result at trial and her inability to obtain counsel to present a coherent case on her behalf. She says that his unreasonable behaviour (which she refers to in her costs submissions as bad faith behaviour) in failing to pay costs and arrears on a timely basis resulted in her having to take out a second mortgage for more than $180,000 for the costs of this litigation. Because of her inability to afford the support and the legal fees that she has incurred, she says that she was unable to afford counsel for this matter and that is one reason that she was unsuccessful. She also says that I got the decision wrong and failed to consider the costs that she paid for the children which she says should have been set off against the s. 7 expenses that she had paid. She says that Justice Sutherland and I both got it wrong concerning her hardship claim as her household income did not include a partner’s income as she did not have a partner either in 2022 or now. She says that, because of the Respondent’s bad faith behaviour throughout, both parties should bear their own costs of this motion to change notwithstanding the Respondent’s success at trial.

[7] The Respondent relies upon his success in the trial, the Applicant’s unreasonable behaviour in this litigation and the offers that he served. He says that he should be awarded with full recovery costs for at least a portion of the litigation. He seeks full recovery costs of $68,140.23 which include the costs of Mr. Codas that he paid to prepare affidavits for the two adult children which were used at trial to prove where they were living and to address their university costs.

Analysis

[8] 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 Family Law Rules). See: Mattina v. Mattina, 2018 ONCA 867. A further purpose is to encourage proportionality considering the issues before the court and the resources to be devoted to those issues: see Beaver v. Hill, 2018 ONCA 860.

[9] It is presumed that costs would follow the event and that the successful party is entitled to costs: see r. 24(1) of the Family Law Rules.

[10] It is without a doubt that the successful party is the Respondent who brought the motion to change. The offers to settle filed by each party make this apparent as does the result compared to what was addressed at trial and in the pleadings. M.M.B. took the position that, since the Respondent had not changed the parenting order as ordered by Justice Sutherland, he was not entitled to any child support. Indeed, she took the position for some time that C.M.V. should continue to pay support to her, partly because of the expenses of the children in her home while visiting and partly because the order had not been formally changed. This position was untenable as it failed to take into account the fact that child support belongs to the child, not the recipient and the children no longer lived with M.M.B. I made an order for base child support in favour of the Respondent according to the Child Support Guidelines. I also ordered arrears to be fixed and that overpayments of support be returned to the Respondent along with s. 7 expenses, largely in accordance with the Respondent’s offers. The success of the Respondent in this proceeding means that the Applicant should presumptively bear the Respondent’s costs.

[11] I note at this juncture that the Applicant says in her costs submissions that I got it wrong on several fronts (as she says Justice Sutherland did in 2022). That may be so, but costs submissions are no place to argue that. My decision, rightly or wrongly, has been made and the questioning of that decision is for the Court of Appeal and not in addressing costs which must be based on the decision that I have made and not what might have been.

[12] The Respondent says he is entitled to full recovery costs based upon the Applicant’s behaviour and based upon his offers to settle. The Applicant also says that the Respondent is guilty of blameworthy behaviour and that this behaviour is sufficient to displace the presumption of costs to the successful party. She also relies upon her own financial circumstances and hardship in addressing costs. In essence, she blames the Respondent for her own inability to obtain counsel and for her financial circumstances which she says should displace any entitlement to costs that he may have.

A. Offers to Settle

[13] Rule 18(14) speaks to the costs consequences of an offer to settle:

18(14) A party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if the following conditions are met:

i. If the offer relates to a motion, it is made at least one day before the motion date. ii. If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date. iii. The offer does not expire and is not withdrawn before the hearing starts. iv. The offer is not accepted. v. The party who made the offer obtains an order that is as favourable as or more favourable than the offer.

[14] The Applicant served three offers to settle. None were severable meaning that these offers were “all or nothing” and that all of the terms or none could be accepted: see Paranavitana v. Nanayakkara, 2010 ONSC 2257, [2010] O.J. No. 1566 (SCJ). The first two offers, made October 26, 2023 and February 7, 2024, provide that the Respondent would continue to pay child support to the Applicant of $1,632 based upon the a shared care arrangement for all three children. This was, as proven at trial, wishful thinking. All three children were then living with the Respondent, the youngest with him full time and the two oldest during the summer. The first offer suggested that the Respondent owed the Applicant $1,692.81 in arrears; the second provided that no arrears were payable.

[15] The third offer was made by the Applicant on May 3, 2024. It again was not severable and provided that no support would be paid by either party to the other and that there were no arrears of support or s. 7 expenses.

[16] Although the Applicant was successful on one issue mentioned in that offer, being the direct payment of tuition by her to the university or the child, the result at trial for the Applicant were not, in the words of r. 18, “as favourable or more favourable” than any of the three offers on the major issues considered at trial being retroactive and prospective child support for the three children. The offers were not severable. Her offers therefore do not attract any costs consequences in respect of this matter.

[17] The Respondent also submitted three offers. The first two were severable and the Respondent’s results at trial were more favourable than the offers insofar as the arrears of support in both offers were less than that ordered at trial and the repayment terms for those arrears in the offers were substantially more generous than those ordered at trial. He was spot on concerning ongoing base child support. Because they were severable, the offers would have permitted the Applicant to accept only the support provisions of the offers and, as these were the major issues, this would have probably avoided a trial.

[18] If the Respondent had left well enough alone with his first two offers, he would have been in a position to rely upon r. 18(14) and obtain an award of full recovery costs. However, he did not and issued a third offer on March 13, 2024. In that offer, the arrears were substantially less than that ordered and the ongoing child support was again less than that ordered. However, unlike his first two offers, this offer contained no repayment terms, crucial to the Applicant who had addressed her financial circumstances in her affidavit evidence. It was not severable, which made it all or nothing as with the Applicant’s offers. This means that, had the Applicant accepted this offer, the Director of the Family Responsibility Office would have then been immediately seizing half of the Applicant’s net income, putting her housing and financial security at. Because the offer was not severable, that omission, in my view, makes the result at trial less favourable to the Respondent than the offer and was not a “genuine effort at compromise” in the words of Beaver v. Hill, supra.

[19] Moreover, it is a bit rich for the Respondent to expect immediate payment of the arrears when he delayed payment of the costs that he had owed since 2018 until the eve of the Sutherland J. trial in December, 2022.

[20] Moreover, the Respondent’s earlier offers cannot be considered under r. 18(14) as they were effectively withdrawn by the final offer made on March 13, 2024.

[21] Therefore, I find that the Respondent’s offers also do not result in full recovery costs under r. 18(14). However, they were more of an effort to compromise than were the Applicant’s offers and I take that into account under r. 18(16) of the Family Law Rules.

B. Behaviour of the Parties

[22] The Applicant accuses the Respondent of bad faith behaviour. She says that he breached court orders continuously, refusing to pay court ordered costs and support. She says that his behaviour prior to Sutherland J.’s decision was just a sham and that he reverted to bad faith behaviour immediately after receiving that decision.

[23] Bad behaviour by a litigant is directly related to the costs to be awarded. Rule 24(4) permits costs to be awarded against a successful litigant who has behaved unreasonably. In setting the amount of costs to be awarded, r. 24(12) permits the court to take into account “each party’s behaviour”. Therefore, both in determining entitlement to costs and the quantum, either party’s unreasonable behaviour may be taken into account.

[24] The nuclear option, however, is bad faith behaviour as alleged by the Applicant. If a court finds bad faith behaviour, r. 24(8) requires the court to award full recovery costs against that party, payable forthwith. The Applicant claims that the Respondent is guilty of, not only unreasonable behaviour but bad faith behaviour.

[25] I do not believe that the Respondent is guilty of bad faith behaviour. Subrule 24 (8) requires a fairly high threshold of egregious behaviour, and in cases such as this a finding of bad faith is rarely made. See: Cozzi v. Smith, 2015 ONSC 3626; Scipione v. Del Sordo, 2015 ONSC 5982. There is a difference between bad faith and unreasonable behaviour. The essence of bad faith is duplicity, when a person suggests their actions are aimed for one purpose when they are aimed for another purpose. It is done knowingly and intentionally: see S.(C.) v. S.(M.) (2007), 38 R.F.L. (6th) 315 (Ont. S.C.J.). Bad faith is not synonymous with bad judgment or negligence; rather, it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. Bad faith involves intentional duplicity, obstruction or obfuscation. See: Scipione, supra.

[26] There is no question that the Respondent was badly behaved throughout, not only this litigation but the earlier iterations of this matter. The conclusions of Bennett J. and, to a lesser extent, Sutherland J., make this clear. As far as this motion to change goes, C.M.V. did not follow the directions of Sutherland J. in bringing a motion to change to release the youngest child, R.E. from the shared care arrangement when he turned 16 years old; instead, he just took it upon himself to pronounce to the Applicant that R.E. was 16 and could make up his own mind. This, amongst other things, was one of the direct causes of the breakdown in communication between the parties leading to this litigation. He was also arbitrary in refusing to provide tuition receipts to the Applicant when she requested them, arranging directly with the children their contribution to their expenses and the payment of that tuition. His actions in withdrawing his second from last offer and making a non-severable offer requiring payment of the arrears immediately was, again, unreasonable behaviour as this offer was not made in the spirit of compromise (unlike his first two offers).

[27] However, although the Respondent was badly behaved, I do not believe it meets the test of bad faith behaviour as defined in the cases. The Respondent was not doing this, in my view, to hurt the Applicant or for some nefarious purpose. The two older children in their affidavits express that any change in residency was their own decision and that they were content to work out their university costs with their father. Those children are now adults and prepared their affidavits with their own lawyer and I was satisfied that this evidence was independent of any pressure brought to bear by the Respondent, if any. The Applicant’s case was based largely upon the Respondent’s alleged bad faith behaviour, but that would not, in my view, affect child support which is the right of the child and not the recipient. I therefore do not find that the Respondent was guilty of bad faith behaviour. As stated by Perkins J. in S.(C.) v. S.(M.), supra at para. 17, “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.” I find this to be the case here as well.

[28] However, even if it does not meet the threshold of bad faith conduct, the Respondent is guilty of unreasonable behaviour. Unfortunately, so is the Applicant. None of her offers were made with compromise in mind. She failed to participate in the review of child support as ordered by Sutherland J. and did not respond to communications by either the Respondent or his lawyer. She was also arbitrary in her determination of the s. 7 expenses for the children, refusing to share in legitimate costs for the children. Her actions in failing to admit the residency of the children directly resulted in the children having to go back to their former counsel to complete and sign affidavit evidence as to their views and preferences and their version of arranging for payment of their s. 7 university expenses. That put them in the middle of this litigation which was unacceptable. The Applicant further continued to collect child support that she was not entitled to, notwithstanding the advice given to her by the DRO officer who conducted the first case conference. It took a judge’s advice to bring that to a halt. Her rigidity and unmitigated hostility toward the Respondent made this matter impossible of settlement and resulted in this trial.

[29] I find the statement of Dunn J. in Self v. Reid, 2006 ONCJ 30 at para. 29 particularly applicable to the Applicant’s behaviour:

With respect to Ms. Self’s request that Mr. Reid contribute to her legal costs, I accepted her proposition that this should have been a straightforward case moving towards a speedy settlement, but for the obstinacy of the respondent. To further her cause, the applicant incurred extensive legal fees that still did not lead to a settlement. Mr. Reid should have realized that he might have been responsible to pay the applicant’s costs, because the request was in the very application that started this case.

[30] Both parties in this matter gave as good as they got. These parties are locked in unrelenting litigation because of their mutual bad behaviour. Neither deserves to rely upon the unreasonable behaviour of the other in assessing the costs of this matter.

C. Entitlement to Costs

[31] Based upon my findings above, the presumption that costs are payable to the successful party under r. 24(1) is not displaced by unreasonable or bad faith behaviour. The successful party in this trial was clearly the Respondent. He succeeded in obtaining a repayment of the support that was paid by him after he broached the subject and the children ended up living with him full time. He succeeded in obtaining payment of the child support as offered by him in his offers to settle and also was successful in obtaining arrears of base child support and s. 7 expenses. As indicated by his offers and the major issues argued at trial, he was successful at trial.

[32] He is therefore entitled to his costs of this motion to change on a partial recovery basis.

D. Quantification of Costs

[33] The Respondent has filed a Bill of Costs. That Bill of Costs suggests that Ms. Normandin’s hourly rate is $600 per hour. She has 20 years of experience. Mr. Teitel’s hourly rates are set at about $400 per hour; he has 10 years of experience.

[34] M.B.B. filed a “fee schedule” from the Law Society of Ontario website. Although unclear from her costs submissions, I suspect that this was to prove that the hourly rates of the Respondent’s lawyers were unreasonable. However, the LSO fee schedule is not a suggested fee schedule for counsel; in fact, fee tariffs for lawyers are a thing of the past due to anti-trust legislation. What was submitted is a fee schedule of what the Law Society is willing to pay for outside counsel. [2] That does not suggest that Ms. Normandin’s or Mr. Teitel’s hourly rates are excessive; all it does is express what the Law Society is willing to pay outside counsel if retained.

[35] Considering counsel’s years of experience, I find their respective hourly rates reasonable. Ms. Normandin’s office has also avoided billing for two counsel when efforts were duplicated, again a reasonable practice under the circumstances.

[36] Full recovery costs for fees claimed by the Respondent in this matter are $65,016.81 inclusive of HST. Although I do not find any particular expense unreasonable, I am concerned about proportionality. Parenting was not part of this claim and the only issues before the court were arrears and the Respondent’s overpayment of child support as well as base child support and s. 7 expenses for two salaried employees. There were only three court appearances including a DRO conference, the settlement conference and the trial. The trial was only one day in duration. More than $65,000 in fees is disproportionate to the issues before the court.

[37] The disbursements claimed are reasonable, especially the invoice of Mr. Codas for preparation of the children’s affidavits which is directly attributable to the Applicant’s failure to reasonably respond to the Respondent’s Request to Admit. The travel expenses are also reasonable as Ms. Normandin does not appear to have charged her time out for travel time.

[38] M.B.B. asks that I take into account her impecuniosity in ordering costs. Considering the fact that the Applicant refused to negotiate a reasonable support arrangement when given the opportunity to do so, I decline to deprive the Respondent of costs because of the Applicant’s financial circumstances. As noted by Kaufman J. in Balsmeier v Balsmeier, 2016 ONSC 3485:

I adopt the comments of McGee J. in Mohr v. Sweeney, 2016 ONSC 3238, 2016 CarswellOnt 7716, at para. 17, citing Balaban v. Balaban, 2007 CarswellOnt 1518, at para. 7: “[T]hose who can least afford to litigate should be most motivated to seriously pursue settlement, and avoid unnecessary proceedings.”

[39] It is apparent that M.B.B. did not pursue settlement where possible; she refused to participate in the support review ordered by Sutherland J. and refused the advice of the Dispute Resolution Officer. She had before her two reasonable offers from the Respondent and refused to suspend his support payments when she clearly should have. She refused to respond reasonably to the Respondent’s request to admit, thereby putting her adult children in the position of being witnesses at this hearing. Her actions resulted in much of the Respondent’s legal fees including the fees paid by the Respondent to Mr. Codas for preparation of the children’s affidavits.

[40] However, in Van Rassel v. Van Rassel, [2008] O.J. No. 4410, 61 R.F.L. (6th) 364 (S.C.J.) at para. 9 Mossip J. concluded that the court should also consider the financial means of the unsuccessful party including the issue of the impact on the child of the paying party of a large costs order. In doing so, she followed Rosenburg J.’s suggestion in M. (C.A.) v. M. (D.) (2003), 67 O.R. (3d) 181 (Ont. C.A.) at para. 42 that, “In fixing costs, the courts cannot ignore the best interests of the child and thus cannot ignore the impact of a costs award against a custodial parent that would seriously affect the interests of the child.” Although M.B.B. is not the “custodial parent” of any of these children, two of the children are in university and M.B.B. has to pay a significant portion of their university expenses. C.M.V. has RESPs with which he can pay those expenses; M.B.B. by comparison has to pay those expenses out of her ongoing income. I take her financial circumstances into account in setting costs based upon the amount that any costs award is going to significantly impact her ability to assist her adult children in university.

[41] The Respondent’s partial recovery costs are stated to be $42,260.93 which is 65% of the full recovery costs claimed by the Respondent. Taking into account issues of proportionality and ability to pay, I find that the Applicant is liable to pay the Respondent’s costs in the amount of $25,000 which is substantially less than the partial recovery amount claimed. In addition, the Applicant shall pay the Respondent’s disbursements in full which are $3,123.42 inclusive of HST. Therefore, the Respondent shall have his costs of this proceeding in the amount of $28,123.42 inclusive of HST.

[42] In light of the Respondent’s failure to pay the Applicant’s costs of the 2017 trial on a timely basis, I decline to have this costs award enforced as support pursuant to s. 1(1) (g) of the Family Responsibility and Support Arrears Enforcement Act, 1996. As I stated above, it is a bit rich for the Respondent to expect immediate payment of the costs when he failed to do so over the course of years after trial in 2017.

Justice J.P.L. McDermot

Released: November 25, 2024

Footnotes:

[2] See Call For Expressions | Law Society of Ontario