The mother in a recent Ontario case sought her costs of litigation, which amounted to $456,411.14, inclusive of disbursements and HST. The court had to determine whether the father’s conduct had been so unreasonable that it warranted ordering him to pay those costs.
The Parties’ Story
The parties were involved in acrimonious litigation for two years. At the end a 12-day custody and access trial, the father was found to have taken unreasonable and obstructive positions throughout the proceedings.
The mother sought costs on the basis that she beat her offer to settle and that the father conducted himself in a manner that substantially complicated the issues and resulted in high legal fees.
The father argued that the costs the mother incurred were “grossly punitive, excessive, unreasonable and disproportionate to the complexity of the proceeding.”
The Relevant Legal Principles
Section 131(1) of the Courts of Justice Act outlines that costs orders are in the discretion of the court. Costs of family law proceedings are designed to:
- partially indemnify successful litigants;
- encourage settlement;
- discourage and sanction inappropriate behaviour by litigants; and
- ensure that cases are dealt with justly.
While there is a presumption of costs in favour of the successful party, the Family Law Rules provide that in setting the amount of costs, the court must consider the importance and complexity of the issues, the reasonableness of each party’s behaviour in the case, the lawyer’s rates, the time properly spent on the case, the expenses and any other relevant matter. The court must also consider the unreasonable conduct of a successful party, bad faith, offers to settle and the reasonableness of the costs sought by the successful party.
In terms of bad faith, the court must find more than simple bad judgment or negligence. Rather, the term “bad faith” relates to behaviour that was carried out with the intent to:
- inflict financial or emotional harm on the other party or other persons affected by the behavior;
- conceal information relevant to the issues; or
- deceive the other party or the court.
The Court’s Decision
The court awarded full recovery costs to the mother in the amount of $420,000, inclusive of disbursements and HST. In doing so, the court found that the father’s bad faith and unreasonable conduct permeated the entirety of the litigation, and that the mother beat her offer to settle on the issues at trial. The court noted:
This bad faith is characterized by false allegations as to [the mother’s] role in parenting; requiring supervised access for a significant period of time based on nothing other than false allegations; and providing misleading evidence at trial with respect to a number of issues, in order to advance his claim that primary residency with [the father] was in the best interests of the child.
The court found that the father’s behaviour throughout the proceedings caused the matter to become much more factually complex than it should have been, and therefore drove up the costs of litigation. It also concluded that the rates of the lawyers who worked on the matter were reasonable, given the size of the matter, amount of issues, the acrimony, and the importance and complexity of the issues. Furthermore, the father did not dispute that the mother’s offer was as favourable as what she was awarded at trial, and did not produce any financial disclosure to support his allegation that his net worth had been grossly depleted.
In the end, the court determined that it was fair and reasonable to award the mother her costs in the amount of $420,000, as the father’s position in these proceedings resulted in the mother incurring substantial legal fees.
Lessons Learned
If your spouse has acted in bad faith throughout your proceedings, it is possible that the court will award you costs on a full recovery basis.
Contact Gelman & Associates if you are involved in a separation or divorce and have questions about your rights. At Gelman & Associates, our lawyers provide exceptional legal representation in all family law matters. Our goal is to always empower clients to make informed decisions about their future. We give all prospective clients a comprehensive family law kit during their initial consultation, as well as a copy of our firm’s handbook on separation and divorce. This information is full of resources that will help you understand and navigate the difficult and often complicated separation and divorce process.
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