Hosein v. Mohamed, 2025 ONSC 2273

COURT FILE NO.: FS-22-21
DATE: 2025-04-14
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Esa Hosein, Applicant
AND: Charmaine Mohamed, Respondent
BEFORE: Thomas A. Heeney
COUNSEL: Craig J. Potter, counsel for the applicant
Bipanpreet Kandola, counsel for the respondent (on a limited-scope retainer, limited to the issue of costs)
HEARD: February 4 and 5, 2025 at Woodstock; written submissions on costs completed April 1, 2025

Endorsement

[1] I have received and reviewed the submissions of Mr. Potter, counsel for the applicant, and Ms. Kandola, limited-scope counsel for the respondent, on the issue of costs. Those submissions also made representations on the manner and timing of the payment of the arrears of child support I determined to be payable by the applicant, in my reasons for judgment dated February 18, 2025.

[2] I will deal with the issue of costs first.

Presumption and Apportionment of Costs

[3] Rule 24(1) of the Family Law Rules provides that there is a presumption that a successful party is entitled to costs. If success is divided, r. 24(6) provides that the court may apportion costs as appropriate.

[4] To determine success, the starting point is to consider the pleadings, in order to assess how the party’s demands match up to the final result. In his Application, the applicant sought termination of his support obligation for the child Alyssa as of April 1, 2012, for the child Celisha as of November 1, 2021, and for the child Breanna as of January 1, 2021. He also sought reimbursement from the respondent for all child support paid for each child after the proposed termination dates.

[5] In her Answer and Claim by Respondent, the respondent asked that support for Alyssa be terminated effective October 16, 2019. As to the children Celisha and Breanna, she asked that child support be retroactively varied for them, as of November 1, 2019, and that the applicant pay the appropriate amount of support from that point forward, once his income was determined.

[6] At the conclusion of the trial, in the closing submissions of counsel, the applicant abandoned any claim to retroactive variation and reimbursement of child support relating to the child Alyssa prior to November 1, 2019. He continued to maintain that he had overpaid child support for the other two children from that point forward, until the interim support order was terminated by Grace J. in July, 2023. He submitted that support for Celisha should be terminated effective at the end of August, 2021, and for Breanna as at the end of May, 2020. He claimed reimbursement for the overpayment of child support in the amount of $14,744.

[7] The respondent, in her closing, made a verbal request that the court consider making a retroactive support payment prior to November 1, 2019, but I advised her that her pleadings had only claimed variation back to that date, and it was too late to change it. I disagree with the applicant where he alleges in his submissions that “throughout these proceedings and at trial” the respondent took the position that child support ought to be varied from 2005 onwards. She made the request for support prior to November 1, 2019 only in her closing submissions, and it was quickly dismissed. She accepted that.

[8] As to the termination date of child support, the respondent argued that Breanna’s child support should continue to July, 2023 on the basis of her disability, and that Celisha’s support should continue going forward, given that she has now returned to full-time studies at George Brown College. This was a change from her comments at the commencement of trial, where she stated that she was not seeking ongoing child support, only retroactive support.

[9] The respondent did not specify an amount that she was entitled to receive by way of arrears of retroactive child support, but left it to the court to determine, once the applicant’s income had been determined.

[10] In my reasons for judgment, child support for Alyssa was terminated effective October 16, 2019, as the respondent had proposed in her pleadings. As to the other two children, child support was varied as of November 1, 2019, again as proposed by the respondent, and belatedly agreed to by the applicant. Support for Breanna was terminated as at the end of May, 2020, and for Celisha as at the end of August, 2021. Both of these termination dates were consistent with the position taken by the applicant.

[11] However, the final result was radically different from what the applicant had asked for. After corporate income from his wholly-owned and controlled corporation was attributed to him, the retroactive child support that he was ordered to pay was vastly higher than the amount he was actually paying. In the final result, instead of recovering an overpayment of child support of $14,744, the applicant was ordered to pay arrears of retroactive child support in the amount of $34,247. That amounts to a reversal from the position he advocated for in the net amount of $48,991.

[12] That represents a substantial victory for the respondent by any measure.

Arguments on Divided Success

[13] The applicant argues that there was divided success. The first point he makes is that the respondent, in her closing submissions, argued that the court should consider awarding retroactive support prior to November 1, 2019. However, that request was quickly shut down, as outlined above, and did not affect the course of the trial. The fact is that the respondent, in her pleadings, sought a variation effective November 1, 2019, and that is exactly what the court ordered. There is no divided success in the applicant’s favour in that regard.

[14] While the applicant is correct that the court accepted his proposed termination dates for support for Celisha and Breanna, as opposed to those proposed by the respondent, he still suffered a stunning loss once income was attributed to him. Even accepting his termination dates, he still owed $34,247 in additional child support. This does not, in my view, amount to divided success. Since both the applicant and respondent were seeking a payment from the other once retroactive support was calculated, this case was all about the final number. It mattered little how one arrived at the number, since no further entitlement to support turned on it. Thus, the respondent was clearly the successful party.

[15] The applicant also claims partial success in that the amount of child support he actually paid since 2019 was offset from the amount of retroactive child support calculated by the court. That is not divided success, it is a simple mathematical exercise of crediting him with what he paid as against what he should have paid.

[16] The applicant also claims success regarding the respondent’s claim for s. 7 expenses. However, that claim was not pursued.

Conduct and Reasonableness

[17] He also claims that the respondent behaved unreasonably, and should be penalized in costs for not having filed Settlement Conference Briefs for three settlement conferences. The respondent’s response is that she was self-represented, and was unaware of her obligation to do so. In any event, the applicant could have sought costs from the presiding judge at those conferences, as provided for in r. 17(18), but did not. While r. 17(18.1) provides that this does not preclude the court from awarding them later, I am not disposed to do so. I accept the submissions of the respondent that, despite the fact that she did not file a brief, they were still able to discuss settlement with the presiding judge, and it was abundantly clear that the applicant was entrenched in his position. Thus, this case would not have settled whether she had filed a brief or not, which renders her filing default inconsequential.

[18] The entrenchment of his position is confirmed by the three offers to settle that he served. The first was dated October 27, 2022. It proposed the termination of all of his child support obligations, and reimbursement of the overpayment of support in the amount of $8,376, up to the end of 2022. He also demanded costs of $1,500.

[19] His second offer was dated October 17, 2023. It proposed that the respondent pay him $3,000 as reimbursement for his overpayment of support. Costs would be limited to the $1,500 that Grace J. ordered the respondent to pay on July 12, 2023 when he terminated the interim support order, provided that the respondent accepts his offer within 30 days. Failing that, he demanded costs of $5,000 in addition to the $1,500 already ordered.

[20] His final offer was dated February 20, 2024. It essentially waived his claim for reimbursement of child support paid, as well as his entitlement to the costs order of $1,500, and proposed that neither party pay any costs to the other.

[21] While the last offer was certainly the most reasonable of the three, it is nowhere close to the final result, where the applicant was ordered to pay $34,247 in retroactive support. I find all of his offers to settle to be unreasonable. They all fail to acknowledge that he had grossly underpaid child support for many years, and that the income available to him from his corporation for the payment of child support meant that he should have been paying far more than he was actually paying. He calculated his support obligation for 2019 forward based on annual income as follows: 2019 - $70,000; 2020 - $58,000; and, 2021 - $58,000. However, the income that was actually available to him, which I imputed to him in my reasons for judgment, was as follows: 2019 - $79,690; 2020 - $310,249; and, 2021 - $424,023.

[22] I agree with the respondent that, given the position the applicant had consistently taken, which never considered the payment of a single dime of retroactive support to the respondent, this case would not have settled, whether she filed her Settlement Conference briefs or not.

[23] Of more concern than the respondent’s failure to file briefs is her failure to serve any formal offers to settle. She said in her brief that she “made reasonable efforts to achieve an early resolution by attempting to engage in settlement discussions”, and “was unable to draft comprehensive Offers to Settle because she lacked the necessary information to accurately calculate child support figures”. However, she received the disclosure I ordered on December 22, 2022, which contained the corporate income records upon which I relied in attributing income to the applicant under s. 18(1) of the Federal Child Support Guidelines. That provided her with sufficient information to make an informed offer to settle, but she did not.

[24] A large part of the problem was the fact that the respondent was self-represented, throughout the lead-up to, and conduct of, the trial. I was left with the impression that she felt she lacked the knowledge and confidence to assess what income the applicant’s support obligation should be based on, which would explain her failure to commit to a figure in an offer to settle. This is reflected in the fact that, at trial, she declined to advocate for a specific result in that regard, but left it to the court to determine the applicant’s income for support purposes.

[25] The Rules and the decisions of this court emphasize the importance of the parties exchanging offers to settle, and encourage resolution so as to avoid contested trials. Indeed, one of the factors to be considered in determining whether a party acted reasonably is whether the party made an offer to settle: see r. 24(5)(a). Had the applicant’s offers been closer to the mark, the respondent’s failure to make a formal offer of settlement may have been a significant factor in the exercise of my discretion on costs. However, given that the applicant’s own offers were, in light of the result at trial, completely unreasonable, my view is that the respondent’s failure to make an offer to settle has much less significance than it otherwise would.

Disclosure and Bad Faith

[26] For her part, the respondent argues that the applicant acted in bad faith in failing to provide disclosure of his actual income, and seeks full recovery costs in the amount of $12,598.33.

[27] The applicant’s response is that he fully complied with the disclosure order that I made on December 22, 2022, as confirmed in the Request to Admit that the respondent did not contest.

[28] It is true that the applicant did comply with the order I made on December 22, 2022, that he provide disclosure of his corporate income from 2019 onwards, and his income tax returns and notices of assessment from 2017 onwards. However, it took a motion by the respondent in order for him to do so. He did not do it proactively. It was only once his corporate financial statements were ordered to be disclosed that the true extent of his earnings from his corporation was revealed. This was highly relevant evidence that the applicant withheld until it was ordered to be produced.

[29] Furthermore, he is guilty of failing to disclose his annual income, as required by the Guidelines, on a continuous basis ever since the final separation in 2010. As I pointed out in para. 7 of my reasons, “the obligation to provide annual financial disclosure in s. 24.1 of the Guidelines is automatic, and does not depend upon the written request of the recipient.” Had he complied with that provision, the respondent would have been aware that he had earned $100,483 in 2014, $94,156 in 2015, $64,487 in 2016, $99,371 in 2017 and $147,141 in 2018. Those numbers are all substantially higher than the income upon which the interim child support order was based of $37,000 per year. Had disclosure been made, the respondent would have been entitled to vary child support to an amount far greater than $808 per month, even assuming that support for Alyssa terminated upon her 18th birthday in 2013.

[30] According to the respondent’s testimony at trial, which I accept, when the respondent asked for more child support the applicant complained that he was already paying too much. That was clearly false. The Guidelines are readily available on government and other websites, and the applicant, unless he was wilfully blind, would have known how much more child support he should have been paying than he was, in fact, paying.

[31] The applicant’s breach of s. 24.1 continued in 2019, up to and beyond the commencement of this action. I find that his ongoing failure to provide statutorily-mandated income disclosure is an act of bad faith. However, to the extent that it preceded the date of retroactivity of November 1, 2019, it has little relevance to the present issue of costs of this action. His default from 2019 forward remains relevant.

Costs Outline and Expenses

[32] In the alternative to her claim for full recovery costs, the respondent proposed that she be awarded partial recovery costs of $10,078.66. Her costs outline reflects legal fees billed by Ms. Kandola for limited-scope assistance provided to the respondent in 2022 and 2023, as well as in 2025 on the issue of costs, to be $8,232.05 including HST. That is based on Ms. Kandola’s hourly rate of $350, which I do not find to be unreasonable.

[33] In addition, the respondent was put to considerable expense in having to take time away from work and come to Woodstock to respond to this application. It is significant that the procedure followed by the applicant, in commencing a completely new proceeding in Woodstock, was highly irregular, and contrary to the Rules. It is an application to vary/terminate an interim child support order that was made by the Superior Court of Justice in Orangeville in 2005. That action had been dormant for many years, but still remained a live action, given that no final order was ever made. The applicant should have brought his motion to change in Orangeville, within the existing action.

[34] The fact that he chose to commence entirely new proceedings in Woodstock compelled the respondent to travel to Woodstock for every court appearance. As a result, she incurred lost wages and travelling expenses totalling $4,366.28.

Balancing Exercise and Final Costs Award

[35] An award of costs is a balancing exercise, made in light of the considerations outlined in r. 24(12). In my view, the most important factor weighing against the respondent’s entitlement to costs is her failure to make an offer to settle, while the most important factor weighing in favour of her entitlement to costs, aside from her obvious success, is the applicant’s failure to provide timely and adequate disclosure of his income. I consider the applicant’s unreasonable behaviour to be the most egregious, which more than offsets the unreasonable behaviour of the respondent.

[36] In my view, a fair and reasonable amount for the unsuccessful applicant to pay in costs, which is proportionate to the amount recovered by the respondent, and is appropriate in view of all of the factors discussed above, is $10,000 all inclusive.

[37] An order will go that the applicant shall pay costs to the respondent, fixed at $10,000, within 60 days. There is no basis to interfere with the costs award of $1,500 made by Grace J. against the respondent. If that is still unpaid, it should be deducted from the award I have just made, resulting in a net costs award of $8,500.

Payment of Arrears

[38] The remaining issue relates to the manner of payment of the arrears of child support, which were fixed at $34,247. The applicant proposes that he pay them at the rate of $951 per month commencing April 2, 2025, until fully paid. He points to the fact that his corporation had a net loss of $96,613 in 2023, and business has been slow in 2024. At that rate, it will take three years to pay the arrears in full.

[39] The respondent argues that the applicant enjoyed the benefit of underpaying child support for an extended period, while his corporation was earning substantial profits. The children were suffering while he was using that money for real estate investments, rather than paying the proper amount of support. She proposes that the arrears be paid in a lump sum, within 14 days.

[40] I agree with the respondent. The arrears in question arose during 2019 to 2021 when the applicant was earning enormous profits, while failing to pay the support he should have paid based on the money that was available to him. As noted in my reasons for judgment, he was able to withdraw $322,000 from retained earnings in 2022, and a further $102,034 in 2023, which he invested in the purchase of one house in each year. Those investments will have generated a commensurate amount of instant equity in those properties, which he should be able to use as security to fund the payment of his arrears. He has, therefore, the means to pay these arrears in short order, and it is appropriate that he, in effect, pay them from the assets he acquired while he was grossly underpaying child support during the same period.

[41] An order will go that the applicant shall pay the arrears of child support of $34,247, together with post-judgment interest, within 60 days.

Thomas A. Heeney
Date: April 14, 2025