Marahar v. Marahar, 2011 ONCJ 639

Brampton Registry No. 1766-09 DATE: 14·IV·2011 CITATION: Marahar v. Marahar , 2011 ONCJ 639 ONTARIO COURT OF JUSTICE BETWEEN: HARPINDER MARAHAR Applicant — AND — GURPREET MARAHAR Respondent Before Justice Patrick W. Dunn In Chambers Ruling on Costs released on April 14, 2011 Ms. Balwant Sekhon .............................................................................................. for the applicant Murray Teitel, Esq. ............................................................................................. for the respondent P.W.

DUNN, J.: [ 1 ] Harpinder Marahar was the applicant/father in proceedings brought in this court and Gurpreet Marahar, the respondent/mother. In his Application, dated 30 November 2009, the applicant sought access and a restraining order. In her Answer, the respondent requested custody, child and spousal support and a contribution by the applicant to special expenses. On 16 March 2010, the applicant was ordered to provide financial disclosure. At a hearing on 6 May 2010, when the applicant appeared on a self-represented basis, and Mr.

Teitel was present with the respondent, the applicant had not produced the financial disclosure ordered on 16 March 2010. The court did not accept the applicant’s reasons for non-compliance with the financial disclosure order, and temporary orders were made requiring inter alia that the applicant pay child and spousal support. As part of the orders on 6 May 2010, the applicant was obliged forthwith to pay the respondent’s costs of $4,000.

The endorsement also provided: In any event, these costs must be paid in full before the applicant may file or bring any further proceedings in this court. [ 2 ] Such orders are now commonplace in family court, although they are a relatively new type of prohibition, and this case posed a problem unique to this kind of order. [ 3 ] There was also an order made pursuant to Rule 24(12) of the Family Law Rules (O.

Reg. 114/99 as amended) which states: The court may make an order that a party pay an amount of money to another party to cover part or all of the expenses of carrying on the case, including a lawyer’s fees. On 6 May 2010 pursuant to Rule 24(12) , the court ordered the applicant to pay $10,000. The order also stated: Administration is prohibited from accepting any further filings from the applicant until the respondent’s lawyer files a receipt with administration to acknowledge receipt of these funds. [ 4 ] The orders of 6 May 2010 were temporary in order to allow Mr.

Teitel to obtain confirmatory financial information from third parties. On 6 May 2010, the case was adjourned to 28 October 2010 for an uncontested trial. That day the respondent and Mr. Teitel appeared but the applicant did not, and he sent his brother-in-law as an agent. At the respondent’s request, final orders were given based on the temporary orders of 6 May 2010. These included in paragraphs 5 and 6, the requirement that the applicant pay the

$4,000. and $10,000. before filing or bringing any further proceedings in this court. [ 5 ] The applicant did not pay the $14,000. On 22 December 2010, the Ministry of Community and Social Services sent the applicant a first notice of intention to suspend driver’s licence. The applicant was required to file a motion to change, but was unable to do so, since court administration refused to accept his documents because of the prohibition on his filing further documents until $14,000. was paid.

The applicant then lost his driver’s licence, which was problematic because he operated a driver training school. [ 6 ] On 14 January 2011, counsel for the applicant filed a 14B motion without notice requesting leave to bring a motion to change the final orders of 28 October 2010, inter alia . Notice of this motion was not given to Mr. Teitel. Justice Pawagi reviewed the motion in chambers and on 17 January 2011, Her Honour’s endorsement required the applicant to serve the respondent with the motion and obtain a date for a hearing. [ 7 ] On 25 January 2011, the applicant with counsel but without notice to Mr.

Teitel, appeared before Justice Pawagi who wrote: Adjourn to 3 February 2011…for applicant/father’s motion on notice to respondent/mother to set aside that portion of Justice Dunn’s order dated 28 October 2010 requiring him to pay costs in full before filing further material in this proceeding. The applicant’s motion materials were sent to Mr. Teitel on 1 February 2011 by counsel for the applicant. [ 8 ] On 3 February 2011, a hearing on the applicant’s request to bring a motion to change came before myself as case management Justice. Each party was represented by counsel.

On this date the court dismissed the applicant’s request to bring a motion to change without paying the costs ordered on 28 October 2010. At the hearing on 3 February 2011, Mr. Teitel requested leave to request costs and this ruling dealt with that claim. [ 9 ] Mr. Teitel made the following requests: 1. The applicant should be required to pay the respondent’s costs of the 3 February 2011 motion; 2. The applicant acted in bad faith, so the respondent is entitled to full recovery of her costs; 3. Counsel for the applicant are equally responsible with the applicant for paying the respondent’s costs; 4.

Counsel for the applicant should be required to return to the applicant the fees he paid to them; 5. An order should issue requiring that the applicant’s fees paid back by his counsel to the applicant should be paid to the respondent. [ 10 ] I read the respondent’s Request for Costs dated 24 February 2011 and the applicant’s Answer dated 18 March 2011 and the respondent’s Reply dated 24 March 2011. I will deal with Mr.

Teitel’s requests seriatim: 1: THE APPLICANT SHOULD BE REQUIRED TO PAY THE RESPONDENT’S COSTS. [ 11 ] The respondent relied on Rule 24(1) which states that there is a presumption that a successful party is entitled to costs. I agree that the respondent was entirely successful and therefore is entitled to costs. I considered Mr. Teitel’s Bill of Costs, including his time spent, his hourly rate, the complexity of the issues and the reasonableness or lack thereof in each party’s behaviour. I found Mr. Teitel’s claim for costs to be in the acceptable range as far as quantum was concerned.

I also had enough evidence presented by the respondent about the applicant’s business acumen and financial resources to conclude that he would be able to pay the cost amount requested by the respondent. 2: THE APPLICANT ACTED IN BAD FAITH [ 12 ] Mr. Teitel argued that the applicant acted in bad faith when he brought the motion without notice dated 14 January 2011, in that he knew or ought to have known that he was required first to pay the costs before filing any further materials.

If the applicant was found to have been acting in bad faith, the respondent would be entitled to her full request for costs in the amount of $7,180. inclusive of H.S.T. and disbursements.

[13] In considering what constitutes bad faith as referenced in Rule 24(8), consideration should be given to S. (C.) v. S. (M.), (ON SC), [2007] O.J. No. 2164 (Ont. S.C.J.). The

summary states: …behaviour must be shown to be carried out with intent to inflict financial or emotional harm on the other party…to conceal informationrelevant to the issues or to deceive the other party or the court. A misguided but genuine intent to achieve the ostensible goal of theactivity, without proof of intent to inflict harm, to conceal relevant information or to deceive, saves the activity from being in bad faith.

The applicant’s motion dated 14 January 2011 should have been on notice to the respondent, but no harm came to the respondent by theapplicant’s actions because the motion only sought leave to bring a motion to change. Justice Pawagi gave an order for a hearing date onnotice to the respondent. I do not believe that the applicant acted with intent to deceive, because he knew or ought to have known thathis request to proceed without paying costs would come before a Justice for determination with the respondent being an activeparticipant.

It is arguable that administration should not have accepted the applicant’s 14 January 2011 motion, but once it was filed, itwould have to be considered by a Justice. Justice Pawagi in my view appropriately assigned the motion to myself, since the orders forcosts were made by me as case management Justice. [14] It will be necessary at this point to consider the meaning and effect of an order that further proceedings may not bebrought by a party until s/he pays a specified amount of costs.

For simplicity of reference, I will call these “pay costs first orders”. [15] Simple orders for costs are not determinative of an ability to return to court. Collection of costs in those orders is handledseparately from a party’s future litigation. The intent of pay costs first orders is to prohibit a previously unsuccessful litigant frombringing further claims against a successful party until the unsuccessful party has paid any costs ordered in a previous proceeding. Provided the cost award is nominal and affordable to the cost payer, the procedure will work as intended.

The costs will be paid, andthen the party can bring a motion to change. However, a serious difficulty can be posed to a litigant required to pay costs first beforefurther filings. What is nominal and affordable does not have an objective basis. What is affordable to a wealthy person may not be toan indigent. [16] So what are the options available for a person ordered to pay costs when the person finds them unaffordable? The partycould appeal but an appeal from a costs order would not likely be fortuitous. See Hobbs v. Hobbs, [2008] O.J. No. 3312, 2008 ONCA 598, 54 R.F.L. (6th) 1 (Ont. C.A.). A

summary states: Leave to appeal a costs order will not be granted save in obvious cases where the party seeking leave convinces the court there are stronggrounds upon which the appellate court could find that the Judge erred in exercising his discretion. A court should set aside a costsaward on appeal only if the trial Judge has made an error in principle or if the costs award is plainly wrong. [17] The only other option actually to paying the costs would be to return to court as the applicant did.

I repeat that theuniqueness in legal cost history of a pay costs first order requires the availability of a forum in which to being a grievance. At firstglance, the applicant’s motion is an invitation for the court to reverse its own decision; to sit in appeal on itself. That would not entirelybe the case. I observe that the court should not be requested al initio to review its decision requiring a party to pay costs. That orderwould go undisturbed; the request would be to review the quantum of costs. There ought to be an avenue for a cost payer to return tocourt.

For example, if there was a drastic change in a cost payer’s circumstances from the time the cost order was made, that person’splaint should have a forum to be heard, or otherwise the person would be excluded from ever returning to court. [18] Add to the difficulty the fact that often before a court makes a cost order, it does so on the request of counsel for thesuccessful party without the court having adequate financial disclosure of the losing party’s means. (Yes, the problem often arisesbecause the unsuccessful party did not do the financial disclosure as ordered.) [19] Hence, I do not find that the applicant acted in bad faith by seeking to delete the pay costs first provisions from the finalorders of 28 October 2010.

He was trying to find a way to get before a court to deliver a pleading. [20] There should not be a concern that courts will be flooded with motions to vary pay costs first orders. The majority of costawards are low or nominal and parties do pay the outstanding cost awards before proceeding further. And where a litigant believes s/hedoes not have the financial ability to pay the cost order, there can be a motion back to the court that gave the pay costs first order for areview, not of the cost order per se, but of its quantum.

The court may or may not agree with the litigant’s claim that s/he cannot affordthe previous cost order. If the court found that the party’s motion was vexatious, the party may be required to pay further costs beforebeing permitted to file other documents. 3: COUNSEL FOR THE APPLICANT ARE EQUALLYRESPONSIBLE FOR PAYING THE RESPONDENT’SCOSTS. [21] Mr. Teitel argued that counsel for the applicant should be required to pay the cost award because they acted in bad faithby assisting the applicant to bring his motion. Mr.

Teitel opined that the applicant’s counsel should have been bound by the plain wordsin the 28 October 2010 orders, that further filings were not to be permitted until the costs were paid. I quote from the respondent’sRequest for Costs:

27. Therefore…the two lawyers who directed [the applicant’s] motion were under a positive obligation when approached by [theapplicant] to explain to him that he was prohibited from filing something until he had first paid the money, and that as officers of thecourt, they were themselves prohibited from assisting him in carrying out

an act that would be plainly, clearly and obviously in violationof an order of the court. 28. Therefore, had the lawyers complied with their professional duty, the motion would never have been brought. It therefore followsthat the costs were run up and wasted without reasonable cause by the lawyers, and for that reason they are liable to pay them… [22] I find that counsel for the applicant acted within their professional duties in assisting the applicant to try to bring a motionto change.

Just as I found that the applicant did not act in bad faith in seeking to bring a motion to change when faced with a pay costsfirst order, and with the belief that he was financially unable to pay the cost order, his counsel also acted appropriately in supporting him. 4: COUNSEL FOR THE APPLICANT SHOULD BEREQUIRED TO RETURN TO THE APPLICANT THE FEESHE PAID TO HIS COUNSEL. [23] Mr. Teitel asked the court to require the applicant’s counsel to refund to the applicant any fees the applicant paid them inconnection with his request to bring a motion to change.

Rule 24(9) states: If a party’s lawyer…has run up costs without reasonable cause or has wasted costs, the court may on motion or on its own initiative, aftergiving the lawyer…an opportunity to be heard, (

a) Order that the lawyer…shall not charge the client fees…for work specified in the order and order the lawyer…to repaymoney that the client has already paid toward costs. It was Mr. Teitel’s position that the fees the applicant paid his counsel were useless fees, because the applicant was unsuccessful on hismotion. Other lawyers would be deterred from taking fees from “unscrupulous” clients who lead their lawyers to act without reasonablecause.

Since I found that the applicant’s lawyers acted reasonably, there will be no order under Rule 24 (9). 5: AN ORDER SHOULD ISSUE REQUIRING THAT THEAPPLICANT’S FEES PAID BACK TO THE APPLICANT BYHIS COUNSEL, SHOULD IN TURN BE REMITTED TO THERESPONDENT. [24] In view of my finding that the applicant’s lawyers will not be required to repay to the applicant any fees he paid to themin connection with his motion, it will not be necessary to consider Mr. Teitel’s final request. (The request was based on

section 34 of theFamily Law Act. If the applicant’s lawyers were ordered to pay to the respondent the fees the applicant paid them, the respondent wouldbe kept from becoming a public charge.) CONCLUSION [25] In determining the quantum of costs to be awarded to the respondent after the applicant’s motion, I considered Osmar v. Osmar, (ON SC), [2000] O.J. No. 2504, 8 R.F.L. (5th) 387 (S.C.J.). The

summary stated that it is not appropriate toaward more than eighty-five percent of a successful litigant’s bill, unless the unsuccessful litigant acted unreasonably or in bad faith tothe extent that censure is appropriate. After considering all aspects of the respondent’s request for costs, the applicant’s Answer and therespondent’s Reply, the following order shall issue: Order for the applicant forthwith to pay the respondent’s costs in connection with the applicant’s motion heard 3 February 2011,in the amount of $3000. inclusive of H.S.T. and disbursements.

This sum is to be collected by the Family Responsibility Office inthe same manner as child support. In any event, these costs must be paid in full before the applicant may file or bring any

further proceedings in this court. Released: April 14, 2011 ________________________________ Justice P.W. Dunn