There is a presumption of costs favouring the successful litigant in a motion, case or appeal
The Ontario Superior Court of Justice has ordered costs against a party who acted unreasonably and was in bad faith in a child support dispute.
In Beaudoin v. Stevens, 2023 ONSC 5265, Patricia Beaudoin sought costs against her former partner, Paul Stevens, on a full recovery basis. Patricia and Paul started living together in 2006 and separated in 2012. They have two minor children.
In a previous decision issued in July, the Ontario Superior Court of Justice ruled that Stevens was intentionally underemployed to avoid child support. The court imputed income to Stevens after finding him dishonest and lacking credibility. Despite court orders for financial disclosure, Stevens failed to provide the necessary information, leading the court to draw an adverse inference.
Beaudoin sought to recover costs of $66,220.84, arguing that she was successful in the action and that Paul had acted unreasonably and in bad faith. Beaudoin emphasized that Stevens attempted to avoid his financial obligations to the children, depleted his assets in Ontario, and concealed relevant information from the court.
Stevens acknowledged that "there are some costs he should pay" on "a partial indemnity basis." However, he contended that some of the costs are inappropriate due to two agreements signed by the parties in 2012 and 2014, which the court did not set aside. He alleged that those agreements did not require him to provide financial disclosure and did not understand that he would provide detailed disclosure throughout the years.
However, the Ontario Superior Court of Justice ultimately ordered Stevens to pay Beaudoin $50,000 in costs, which the Family Responsibility Officer will enforce.
The court explained that cost orders are in the court's discretion under the Courts of Justice Act. The court stressed that modern family law rules foster three fundamental purposes—to partially indemnify successful litigants, to encourage settlement, and to discourage and sanction inappropriate behaviour by litigants. The court further said that a fourth fundamental purpose is to ensure that cases are dealt with justly. Accordingly, the factors to be considered in setting the cost amount highlight "reasonableness and proportionality."
Furthermore, the court explained that there is a presumption of costs favouring the successful party in a motion, case or appeal. The court said that success is the starting point in determining costs. However, a successful party is not always entitled to cost because an award of costs is subject to unreasonable conduct, bad faith, and the reasonableness of the costs sought by the successful party.
The court emphasized that "proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs." The Family Law Rules expressly contemplate total recovery costs in specific circumstances, such as when a party has behaved unreasonably, acted in bad faith, or beat an offer to settle.
The court found that Stevens acted in bad faith. His failure to provide full and frank financial disclosure could not be excused because he was self-represented at trial. The court found that he had a lawyer at the commencement of the litigation, there were court orders made for disclosure, and it was his responsibility to know and understand the requirements.
The court noted that the trial involved six issues, and Beaudoin was successful on all but one of the tried issues. The court said that even if Stevens did not act in bad faith, his behaviour's unreasonableness, and failure to produce financial disclosure rose to the level where substantial indemnity costs were appropriate.
The court found that Stevens knew he was obligated to provide financial disclosure and had ample opportunity to do so but that he intended to circumvent his obligations and cause Beaudoin unnecessary financial and emotional costs.
Accordingly, the court found it fair, reasonable, and proportionate that he pays Beaudoin $50,000 in costs.