Nithiaraj v. Sellapu, 2025 ONSC 43

Nithiaraj v. Sellapu, 2025 ONSC 43

COURT FILE NO.: FS-21-22071

DATE: 20250102

SUPERIOR COURT OF JUSTICE - ONTARIO

RE:

CHRISTINA USHA NITHIARAJ

Applicant

AND

INBAJOTHY NITHIARAJ SELLAPU

Respondent

BEFORE: VELLA J.

COUNSEL: Christina Usha Nithiaraj, Self-Represented Applicant

Natasha Razack, for the Respondent

HEARD: IN WRITING

COSTS AND PREJUDGMENT INTEREST ENDORSEMENT

1The trial of this matter proceeded over the course of 6 days.

2A Corrected Reasons for Judgment was issued on June 20, 2024 (“Corrected Reasons”), after I received further submissions regarding an inadvertent error I made regarding the date of retirement of the Respondent, and the resulting treatment of the Respondent’s two OMERS pensions.

3I invited written submissions on costs and the calculation of prejudgment interest together with cost outlines from the parties. I received submissions (including subsequent revised submissions based on the Corrected Reasons) and cost outline, as well as submissions regarding prejudgment interest from the Respondent, served on the Applicant. However, I did not receive any responding submissions or cost outline from the Applicant.

Prejudgment Interest

4In my Corrected Reasons, I found that the Applicant owed $48,010.85 to the Respondent, which would ultimately be deducted from the remaining proceeds from the sale of the matrimonial home being held in trust.

5The Respondent is entitled to prejudgment interest on this sum.

6I accept the calculations provided by the Respondent, which is based on the prejudgment interest rate (calculated on a per day basis using the respective quarterly rates) set out by the Courts of Justice Act for pecuniary loss from Q1 2021 to Q2 2024 (date of Application to date of release of Corrected Reasons). Accordingly, I fix the prejudgment interest amount owed by the Applicant to the Respondent in the sum of $3,843.55.

Costs

7This matter was of moderate complexity and had many issues to resolve, including assets in Sri Lanka, alleged gifts versus loans, division of pensions, spousal support, equalization and the date of separation.

8By way of preliminary comment, the Applicant was self-represented during trial (though she had various lawyers for various periods of time prior to trial), while the Respondent was represented by very capable counsel. The fact that the Respondent was represented by capable counsel, and the same counsel, throughout the proceedings greatly aided with the efficiency of the trial. This included providing photocopies of the trial documents to the Applicant during the course of trial as the Applicant was unable to navigate Caselines and did not use a computer. The Applicant is responsible for the cost of these photocopies provided to her for her own use at $300.00.

9Furthermore, at paragraph 228 of my Corrected Reasons, I observed that “the appropriate place to address any failures of the Wife [Applicant] to comply with her obligations during the course of the litigation may be costs, subject to submission I will receive”.

Analysis

10The fundamental purposes of costs in family law proceedings are:

(a) to partially indemnify the successful litigant;

(b) to encourage settlement;

(c) to discourage and sanction inappropriate behaviour by litigants; and

(d) to ensure that cases are dealt with justly (Serra v Serra, 2009 ONCA 105, [2009] O.J. No. 432 (ON CA); Mattina v. Mattina, 2018 ONCA 105).

11The successful party is presumptively entitled to costs (r. 24(1), Family Law Rules; Berta v. Berta, 2015 ONCA 918, 128 O.R. (3d) 730, at para 94).

12In determining success, the court looks at the result as a whole (see generally, Talbot v Talbot, 2016 ONSC 1351). There is no doubt that, on the whole, the Respondent was successful. While the Applicant was successful on advancing some of her positions at trial relevant to a calculation of the equalization, on balance the Respondent achieved greater success overall on each of the overarching issues.

13There is no reason to displace the presumption. Accordingly, the Respondent is entitled to his costs.

14The next step is the level of recovery.

15The court must fix a level of recovery of costs on a continuum that spans from notional recovery (or no recovery) to full recovery (Goldman v Goldman, 2022 ONSC 6363, paras 119-120).

16The Respondent seeks costs for the trial on a “substantial indemnity basis” (meaning recovery at about 90% according to his bill of costs or near full recovery) in the sum of $57,831.71, inclusive of fees, disbursements and taxes (but excluding the $300 photocopy disbursement incurred at trial, as stated above). He also seeks “costs thrown away (meaning full recovery) for three in person settlement and trial management conferences fixed in the sum of $11,232.20, all inclusive.

17I will deal with trial costs first, and then the three trial management conferences.

Trial Costs

18While the court has discretion to fix the level and quantum of costs pursuant to s. 131 of the Courts of Justice Act, the court’s discretion is guided by the factors set out by the Family Law Rules, including r. 18 (offers to settle) and r. 24 (costs). The framework set out by the Family Law Rules is important as it promotes a degree of predictability for the parties with respect to the manner in which a court will fix costs.

19The factors of most relevance in this matter (though I have considered all the factors) are:

(a) offers to settle;

(b) the conduct of the parties during the litigation;

(c) proportionality of the legal costs to the importance and complexity of the issues;

(d) the reasonableness of the hourly rates and hours docketed by the Respondent’s lawyer.

20While the reasonable expectation of the losing party is a relevant consideration, I do not have the benefit of a cost outline or submissions from the Applicant to gauge her expectations. Accordingly, this factor is not a significant consideration in my fixing of costs.

21The Respondent relies on the Applicant’s conduct during the course of this proceeding, including at trial, in relation to her “lack of disclosure” and “consistent unpreparedness for court appearances and refusal to adhere to the Rules” as constituting bad faith pursuant to r. 24(8) or, alternatively, as unreasonable (r. 24(11)(b)) to warrant a claim for substantial recovery costs. The Respondent correctly notes that the fact that a party is self-represented does not relieve that party from complying with the disclosure obligations and other requirements under the Family Law Rules.

22The examples of noncompliance by the Applicant at trial provided by the Respondent were as follows:

(a) The Applicant requested (and was granted) a last minute extension to file her Trial Record which did not meet the requirements under the Family Law Rules;

(b) The Applicant did not file an updated sworn Form 13.1 Financial Statement and relied on an outdated Form 13.1 dated March 11, 2022 which was of limited use to the court (para 149, Corrected Reasons);

(c) The Applicant did not submit a trial affidavit from their son, Daniel, to confirm her position that although the lease for a 3 bedroom home she resides in is in Daniel’s name, she pays the monthly rent of $3,3300 and all of the utilities for the residence, her cell phone bill and her groceries relevant to her claim for spousal support (paras. 150 - 51, Corrected Reasons);

(d) The Applicant failed to adduce documentary evidence to confirm her current expenses, (para. 151, Corrected Reasons);

(e) The Applicant failed to adduce documentary evidence to confirm that the interim disbursement of the proceeds of sale from the matrimonial home she received in February 2023 in the amount of $60,000 were depleted by the time of trial (para. 150, Corrected Reasons);

(f) Th Applicant did not provide a satisfactory reason for her failure to file the requisite income tax returns required for her to apply for OAS and GIS (para.192, Corrected Reasons) (and nor did she file income tax returns for 2020 to 2022);

(g) The Applicant failed to apply for the shared CPP benefit, notwithstanding she was eligible to apply for the benefits at the time of trial (having reached the age of 65 years) (para. 192, Corrected Reasons).

23While some of the above failures were more egregious than others (especially the last minute extension to file a trial record, failure to file an updated sworn Form 13.1 Financial Statement, and lack of documentary evidence to justify the living expenses claimed for spousal support purposes), overall this conduct was unreasonable and caused the Respondent’s lawyer to have to prepare unnecessary cross examination (e.g.: failure to submit a trial affidavit from Daniel contrary to the witness list) and the lack of financial disclosure, in particular, reflects material non-compliance with the Family Law Rules.

24However, in order to establish bad faith conduct, the Respondent must demonstrate that the Applicant’s behaviour was carried out with the intent to inflict financial or emotional harm to him, or that she concealed information relevant to the issues at trial or deceived the Respondent or the court (S.(C.) v. S. (M.), 2007 CanLII 20279 (ON SC), at para. 17). He has not done so.

25Furthermore, the Respondent has not demonstrated that the Applicant’s behaviour or conduct reached the level of “the conscious doing of a wrong because of dishonest purpose or moral obliquity” (Hendry v. Martins, [2001] O.J. No. 1098 (Ont. S.C.J.). While “ignorance” of the law or ineptitude is generally no defence to a transgression of the law, it does not reach the level of malintent, dishonesty or moral obliquity generally required to justify full (or substantial) recovery costs.

26That said, the Applicant’s conduct was unreasonable within the meaning of r. 24(12)(a)(i) (for fixing costs) and caused either unnecessary additional preparation by the Respondent’s trial counsel and/or prolonged the conduct of the trial. Accordingly, it is a relevant consideration to the setting the costs recoverable by the Respondent that is fair and reasonable in the circumstances of this case.

27The Respondent issued three formal comprehensive offers to settle during the course of these proceedings. While he did not obtain a result as, or more, favourable than his offers, they are a relevant consideration and reflect genuine attempts to resolve the issues prior to trial (rr. 18(16) and 24(5)(b) & (c)).

28However, the Applicant also issued a formal comprehensive offer to settle on September 20, 2023 which was based on the Respondent’s choice of date of separation (with which I agreed) and in and of itself reflected a genuine compromise. While she did not obtain a result as, or more, favourable than her offer, it is a relevant consideration and reflects a genuine attempt to resolve the issues prior to trial.

29On balance, the exchanged offers to settle do not reflect a significant consideration in fixing the level of recovery or quantum of costs.

30The hourly rates and number of hours charged by the Respondent’s counsel are reasonable and proportionate to the number of issues at trial, their complexity, and the importance of the issues to the parties, as well as commensurate with trial counsel’s experience and the number of trial days, including the added complexities due to the Applicant not making full and/or timely disclosure.

31The fees and HST claimed are $57,023.19 while the disbursements and HST claimed are $808.52 for a total of $57,831.71 on a substantial indemnity or a total of $42,409.91 on a partial recovery (calculated by the Respondent at 66% of his full recovery costs) basis.

32I am fixing costs of the trial on a continuum between a partial and full recovery basis in the sum of $50,300.00 on an all inclusive basis. This reflects an enhanced level of recovery but below full recovery and includes the $300 photocopy disbursement to the Applicant which was not reflected in the trial disbursements submitted in the bill of costs.

Costs for the Settlement and Trial Management Conferences

33The Respondent also seeks separate costs for each of three settlement and trial management conferences conducted in this matter for a total sum of $11,232.20, all inclusive, on a full recovery basis (described as costs thrown away), as follows:

(a) Settlement Conference held on September 6, 2022 before Faieta J. in the sum of $5,339.25;

(b) Settlement Conference held on January 20, 2023 before Faieta J. in the sum of $4,350.50; and

(c) Trial Management Conference held on March 1, 2023 before Sharma J. in the sum of $1,542.45.

34Rule 24(10) of the Family Law Rules provides that the judge who deals with a step in the litigation shall decide who, if anyone, will pay costs. This is sound policy since it is the judge who has carriage of the particular step or stage in the proceeding who is best suited to determining entitlement and quantum of costs. However, the failure of a judge to fix costs does not preclude the court from awarding costs in relation to the step at a later stage in the case (r. 24(11)).

35In order to obtain costs for a prior step from a subsequent judge, those costs must have been expressly reserved to the trial judge or motion judge or conference judge, as the case may be, by the initial judge who presided over that step. A trial judge is not entitled to make an award for costs covering prior steps such as case conferences and settlement conferences where the endorsement is silent on the issue (Islam v. Rahman, 2007 ONCA 622, 2007 CarswellOnt 5718 (ON CA) at para. 2; and other cases referenced in Talbot at para. 7 (quoting, in turn, Davis v. Fell, [2016] O.J. No. 749 at para. 31).

36I have examined the respective endorsements of Justice Faieta and Justice Sharma arising from a settlement conference held on January 20, 2023 and the trial management conference held on March 1, 2023 respectively. I was not provided with the endorsement from the combined conference held on September 6, 2022. However, I was provided with the endorsement of Faieta J. in relation to a motion held on August 30, 2022 noting that a TMC was held on August 29, 2022, that the time was focused on settlement, and that “good progress was made”. Furthermore, a settlement conference was directed to occur on September 6, 2022 before Faieta J. The August 30, 2022 endorsement is silent as to costs.

37The endorsement of Faieta J. from the settlement conference held January 20, 2023 notes that “costs of today shall be reserved”. However, it does not indicate to whom the costs are reserved. Faieta J expressly notes that as the Applicant did not deliver a Settlement Conference brief nor an Offer to Settle in advance of the settlement conference, it could not proceed. His Honour, among other items, sets a trial date (which was subsequently adjourned), directed the Applicant to deliver her Trial Scheduling Endorsement Form by April 28, 2023, and scheduled a settlement conference for March 1, 2023 and a trial management conference for May 12, 2023, noting that the Respondent had delivered his TSEF. These conferences were to be before Faieta J., subject to His Honour’s availability.

38In the endorsement arising from the settlement conference held on March 1, 2023, Sharma J. notes that while the Applicant served an Offer to Settle, she did not file “any material”. Sharma J. vacated the 10 day trial date set by Faieta J. and scheduled a 5 day trial to be heard on October 30, 2023. His Honour notes the further trial management conference scheduled for May 12, 2023, and noted that in the event a party fails to abide by the filing requirements for a trial management conference under the Family Law Rules or the relevant Notices to the Profession, “the judge at the Trial Management Conference may strike pleadings or impose costs”.

39Justice Sharma did not address the costs of the March 1, 2023 conference nor the costs reserved by Faieta J. from the January 20, 2023 conference.

40In Islam, at para. 2, the Court of Appeal made it very clear that a trial judge is not to award costs for past steps in a proceeding, including motions and conferences, where the endorsement either states there will be no order as to costs or the issue of costs was not addressed (see also Bortnikov v. Rakitova, 2016 ONCA 427 at para. 34). Furthermore, the Court of Appeal states that “it is incumbent on that party to raise the issue (of costs) with the judge who deals with that step”.

41Pursuant to Islam, I do not have the jurisdiction, as a trial judge, to make an award of costs with respect to a prior step where the prior endorsement is silent on the issue of costs. This forecloses any award of costs to be made at trial with respect to the endorsement of Sharma J. who was silent on the issue of costs of the settlement conference His Honour presided over (Bortnikov, at para. 34). The comment of Sharma J. above quoted was an observation for the benefit of the parties (no doubt the Applicant in particular) so that they were on notice that any future noncompliance could be subject to a costs sanction.

42While Faieta J. did reserve costs of the day, His Honour did not indicate to whom. In my view, it was incumbent on the Respondent to pursue a request for costs before Faieta J. or the subsequent conference judge, Sharma J. or the subsequent trial management conference judge. I note that in Faieta J.’s endorsement, it was specified that the subsequent conference(s) were to be held before him, subject to his availability, but the settlement conference ended up being before Sharma J.

43Accordingly, I am not fixing costs with respect to any of the conferences submitted.

Disposition of Pre Judgment Interest and Costs

44The Applicant will therefore pay the sum of $3,843.55 as prejudgment interest.

The Applicant will also pay the sum of $50,300.00 as costs. This reflects a fair and reasonable amount in the circumstances of this case.