Court File and Parties
Court File No.: FS-16-16304 Date: 2025-10-16 Ontario Superior Court of Justice
Between: Winston Riley, Applicant – and – Anna Riley, Respondent
Counsel: Larry Belowus, for the Applicant Sheila Beaumont, for the Respondent
Endorsement on Costs
HEBNER J.:
Introduction
[1] The respondent brought a motion to strike the applicant's pleading for failure to comply with disclosure orders. Argument on the motion took four days. I released my ruling on April 16, 2025, striking the applicant's claim. This is my ruling on costs.
[2] The respondent is the successful party on the motion. By the time the motions were argued, the only remaining issue in the case was the applicant's claim for an equalization payment. As the applicant's claim was struck, the respondent was successful in the action. Pursuant to r. 24(3) of the Family Law Rules, O. Reg. 114/99 (FLR), she is presumptively entitled to her costs incurred in the motion and in the action. The respondent did not engage in unreasonable behaviour or bad faith. There is no reason for the respondent to be deprived of her costs. The question then becomes one of quantum.
Respondent's Position
[3] The respondent seeks a costs award in the range of $80,000 to $105,000. She makes the following points in her submissions:
The respondent obtained multiple orders requiring the applicant to provide disclosure to the respondent. The resulting orders contained itemized lists of disclosure that the applicant was to provide.
The respondent obtained business valuations of her own business and an appraisal of the matrimonial home so as to comply with her own disclosure obligations.
The respondent brought motions compelling third parties to produce her own records so as to comply with her own disclosure obligations. The applicant did not. Instead, the applicant suggested that he provide the respondent with consents to obtain his documents from third parties, whereby the onus to obtain the applicant's disclosure would be shifted to the respondent.
The respondent incurred the expense of questioning the applicant.
The respondent hired a private investigator to obtain evidence of the applicant's subterfuge.
[4] The respondent made two formal offers to settle the case. The first was in October of 2023 and provided for a withdrawal of the application. The first offer was withdrawn when the second offer was served. The second offer was made in December of 2023 and provided for the respondent to transfer a property in Jamaica to the applicant and the respondent to pay to the applicant the total sum of $80,000.
[5] The respondent's costs outline discloses that she incurred costs totalling $137,110.53.
Applicant's Position
[6] The applicant's position is that no costs, or alternatively only nominal costs, ought to be awarded in the circumstances.
Governing Principles
[7] The Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395, confirmed that modern costs rules are designed to foster three fundamental purposes, namely to partially indemnify successful litigants for the cost of litigation, to encourage settlement, and to discourage and sanction inappropriate behaviour by litigants. Costs awards should reflect what the court views is a fair and reasonable amount that should be paid by the unsuccessful party.
[8] Further guidance was provided by the Court of Appeal in Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, which clarified two important principles in exercising discretion, being reasonableness and proportionality. When setting the appropriate amount of costs, the court is required to consider the factors set out in r. 24(12) of the FLR:
(12) In setting the amount of costs, the court shall consider,
(a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues:
(i) each party's behaviour,
(ii) the time spent by each party,
(iii) any written offers to settle, including offers that do not meet the requirements of rule 18,
(iv) any legal fees, including the number of lawyers and their rates,
(v) any expert witness fees, including the number of experts and their rates,
(vi) any other expenses properly paid or payable; and
(b) any other relevant matter.
Bad Faith
[9] The respondent asserts that the applicant acted in bad faith throughout the litigation. Rule 24(10) of the FLR provides:
If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.
[10] In S(C) v. S(M), [2007] O.J. No. 2164, at paras. 16-17, aff'd 2010 ONCA 196, Perkins J. said the following about bad faith:
"Bad faith" has been explained as "not simply bad judgment or negligence but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity ... it contemplates a state of mind affirmatively operating with furtive design or ill will." See Biddle v. Biddle (2005), 137 A.C.W.S. (3d) 1164, [2005] W.D.F.L. 2089, [2005] O.J. No. 1056, 2005 CarswellOnt 1053 (Ont. Fam. Ct.), at para. 14. The definition of "bad faith" in The Concise Oxford Dictionary of Current English (5th ed., 1964, ed. by H.W. Fowler and F.G. Fowler) is simply "intent to deceive". The essence of bad faith is the representation that one's actions are directed toward a particular goal while one's secret, actual goal is something else, something that is harmful to other persons affected or at least something they would not willingly have supported or tolerated if they had known. However, not all bad faith involves an intent to deceive. It is rare, but not unknown in family law cases, for bad faith to be overt -- an action carried out with an intent to inflict harm on another party or a person affected by the case without an attempt to conceal the intent.
In order to come within the meaning of bad faith in subrule 24(8), behaviour must be shown to be carried out with intent to inflict financial or emotional harm on the other party or other persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court. 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. The requisite intent to harm, conceal or deceive does not have to be the person's sole or primary intent, but rather only a significant part of the person's intent. At some point, a party could be found to be acting in bad faith when their litigation conduct has run the costs up so high that they must be taken to know their behaviour is causing the other party major financial harm without justification.
[11] I find that the applicant's behaviour in this litigation has been unreasonable. He did not make his disclosure obligations a priority. He complied with many of the terms in the orders, but not all. His attitude was that his disclosure attempts were good enough and the respondent should make the effort to obtain the applicant's documents. In doing so, he displayed a lackadaisical attitude toward his disclosure obligations.
[12] The applicant gave contradictory evidence in his various affidavits, particularly about Original Riley's and Original Mattress. I take from this that he was careless in his evidence, making assertions that he thought would support his position at the time with a disregard for the truth.
[13] These actions are certainly unreasonable. However, I cannot conclude that the applicant acted with the intent to inflict financial or emotional harm on the respondent or with the intent to deceive that would therefore amount to bad faith.
[14] In my view the applicant's behaviour in the case engages r. 24(14)(a)(i) but does not engage r. 24(10).
Ability to Pay
[15] The applicant asserts that he is not in a financial position to pay the costs claimed by the respondent. He asserts that he has limited income and assets and lacks the resources to pay any substantial costs award. It is a bald assertion. The applicant said that he is "prepared to provide further financial disclosure to support this submission if required by the court."
[16] In my view, if a party seeks to have the court account for their ability to pay a costs award, they should provide proof in the form of a current sworn financial statement: see Levin v. Levin, 2020 ONCA 675, at para. 3. The applicant did not do so, and his filed financial statements are many years old.
[17] It is clear that the applicant has started a business after separation, Original Riley's, that competes with the business of the respondent. I have no information as to the success, or otherwise, of that business.
[18] Under these circumstances I am not prepared to take the applicant's financial position into account. Indeed, I am not aware of his current financial position.
Analysis
[19] The respondent served an offer to settle the action on December 12, 2023. Upon conclusion of the action, the respondent was more successful than this offer, making the applicant less successful than the offer that was presented to him. This brings r. 24(11) into play.
[20] The respondent is entitled to her "costs to the date the offer was served and full recovery of costs from that date to the conclusion of the step." All of the conditions listed in that rule are met.
[21] I turn to the respondent's costs outline. The respondent's legal fees from the date of the offer forward total $23,413. She is entitled to those costs. The respondent has included the fees of support staff in her costs outline. In 1188710 Ontario Ltd v. Gartner, 2013 ONSC 2008, Pierce J. said, at para. 43:
As the authorities indicate, unless a client agrees to pay for secretarial services, charges for secretarial and clerical services are part of the solicitor's overhead and not chargeable separately. The solicitor's hourly rate is understood to pay for the wages of secretarial and clerical staff, whose time cannot be separately billed.
[22] There was no breakdown of the support staff fees and I decline to include them in the costs award.
[23] The respondent is entitled to her costs on a partial indemnity basis incurred prior to the date of the offer. Before the respondent retained Ms. Beaumont, she used the services of Ms. Severs and Mr. Morga. I was not provided with a breakdown of their services, including their hourly rate, the number of hours spent, and the services they performed. I am not prepared to include their accounts in the costs award.
[24] The balance of Ms. Beaumont's costs outline accounts for her time prior to the offer to settle and totals $70,795. In my view, a reasonable costs amount for this time spent is $45,000.
[25] The respondent is entitled to her disbursements, including the amount paid to Tracey Business Valuations for her business valuation and the amount paid to a private investigator, totalling $14,282. I decline to include the cost of the mattress purchased by the investigator at Original Riley's.
[26] The total of these amounts ($23,413 + $45,000 + $14,282) is $82,695. In my view, this amount is reasonable given the many motions brought by both parties, the amount of work the respondent and Ms. Beaumont engaged in to comply with the respondent's own disclosure obligations, and the many attempts they made to try to force the applicant to comply with his. It is also my view that this amount is proportionate given the applicant was seeking an equalization payment of over $1,000,000 from the respondent.
Disposition
[27] For these reasons, I order the applicant to pay costs of the motion and the action to the respondent in the total sum of $82,695 inclusive of disbursements and HST. I am not prepared to deem the amount to be lump sum support, nor am I aware of any authority for doing so. Moreover, these costs were not "arising in relation to support or maintenance" and therefore are not included in the definition of a support order set out in s. 1 of the Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31. Rather, these costs were incurred in defending a claim for an equalization payment. The respondent must enforce payment of the costs in the usual manner.
Pamela L. Hebner Justice
Released: October 16, 2025