J.L.H. v. P.J.H., 2017 BCSC 2192

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: J.L.H. v. P.J.H., 2017 BCSC 2192 Date: 20171130 Docket: E48664 Registry: New Westminster Between: J.L.H. Claimant And P.J.H. Respondent Before: The Honourable Madam Justice Forth Reasons for Judgment re Costs Counsel for the Claimant: W. Craig VaughanWritten Submissions from the Claimant: September 20, 2017(No Written Submissions received from the Respondent) Place and Date of Judgment: New Westminster, B.C.

November 30, 2017 Introduction [1] The parties were given leave to file written submissions on costs following my decision of August 14, 2017, indexed at 2017BCSC 1628. [2] Counsel for the claimant filed his written cost submissions on September 20, 2017. In a letter of October 27, 2017, counsel forthe claimant advised that counsel for the respondent had withdrawn and a review of the Court file discloses that a Notice of Withdrawalof Lawyer was filed on September 22, 2017. [3] A request was granted to extend the deadline for Mr. H. to file his cost submissions to October 9, 2017.

He did not file any costsubmissions. As he was given an opportunity to do so and he has not, I am prepared to issue my costs reasons. [4] The issues addressed in the cost submissions of the claimant are: a. Awarding of costs to the claimant; b. The appropriate scale; c. Whether a lump sum should be awarded; d. Double costs arising from an offer to settle; and e. Special costs.

Legal Framework [5] Rule 16-1(7) of the Supreme Court Family Rules [Rules] provides that costs of a family case must be awarded to a successfulparty unless the court otherwise orders. [6] Costs ordinarily follow the event unless the court exercises its discretion to order otherwise: Gold v. Gold (1993), (BC CA), 82 B.C.L.R. (2d) 180 at para. 19 (C.A.). [7] There have been a number of cases that have confirmed the approach that costs follow the event in custody and access

situations. In S.J.C. v. S.-J.C.A., 2010 BCCA 31, the court stated at paras. 61-62: [61] Counsel have suggested that this Court should take the opportunity to clarify the extent to which the usual rule that costs followthe event should be applied in custody and access cases. This has been the subject of considerable discussion in the B.C. Supreme Courtas reflected in the authorities summarized by the trial judge in this case and by Madam Justice Martinson in S.D.W. v.

C.W.W., 2006 BCSC 162, 55 B.C.L.R. (4th) 101. [62] While it is apparent there are different approaches to the issue of costs in matters of custody and access in the B.C. SupremeCourt, this Court has previously stated that the usual rule that “costs follow the event” (that is, that the “successful” party is entitled tocosts) applies in matrimonial proceedings, subject to a discretion to refuse costs to the successful party in certain circumstances. Theauthority for that proposition is Gold, in which this Court sat with five judges in order to determine that question.

Although Gold wasdecided in the context of a dispute concerning the division of assets, it has been applied by this Court in several cases where issuesconcerning the custody of children were involved, albeit in the context of costs of the appeal. See, for example, Karpodinis v. Kantas, 2006 BCCA 400, Yassin v. Loubani, 2007 BCCA 102, 67 B.C.L.R. (4th), and Falvai v.

Falvai, 2009 BCCA 387, [2009] 10 W.W.R. 453.(As noted in S.D.W., the Gold approach to costs in matrimonial matters also appears to be in keeping with the approach in otherprovinces, including Alberta and Manitoba.) In my view, it is not open to this division of the Court to re-open the debate and come to adifferent conclusion than that expressed in the prior decisions of this Court. [8] In Hansen v. Mantei-Hansen, 2013 BCSC 1854, Humphries J. declined to award costs in favour of the successful party wherethe central issue was the primary residence of two young children.

Her Ladyship said: [12] It is clear from the appellate decisions that, although there is no special principle of general application that costs should not beawarded in custody cases, there is a clear discretion in the trial judge, to be exercised judicially, to decide whether to award costs.

Gold v.Gold (1993) (BC CA), 82 B.C.L.R. (2d) 180 sets out a non-exclusive list of factors to consider when deciding how toexercise one’s discretion on costs: hardship, earning capacity, purpose of the award, conduct of the parties, not upsetting the balanceachieved by the award, and notes that the facts and issues in each family case vary widely. [13] It must be kept in mind, when considering that list of factors, that Gold v. Gold was not a case involving children.

It involved thedivision of substantial family assets “with each party ending up with a substantial estate”, and was heard by a five person panel because apractice had arisen of requiring all family litigants to bear their own costs unless special circumstances justified a different order. Thecourt decided there was no special rule for matrimonial cases. [14] The thoughtful analyses at the trial level in the custody cases listed at para. 10 above in K.D.P. and in many other cases show theoverwhelming importance trial judges place on the best interests of the children, as they are statutorily bound to do.

This was not a factorthat was considered in Gold because it was irrelevant to the considerations there, but it clearly governs all the trial decisions referred to.Of course, the court must always consider the best interests of the children and that is not necessarily a factor that would go to costs.However, it is a factor when the children would thrive under either parent and each parent has a legitimate position to put forward thattheir parenting plan should be preferred.

The very process of having an independent adjudicator decide which plan should be preferredthen becomes a matter of the best interests of the children.

In some cases, it is not fair to the children and their relationship with eachparent that the recipient of an offer to settle be forced to step aside for fear of not correctly predicting the outcome of the trial. [15] This is not to be confused with what has been termed the “genuine belief theory” of costs - that is, if you maintain your positionon custody in good faith and in the genuine belief you have a legitimate position you are somehow protected from an order for costs (seeK.D.P. at para. 19).

Obviously that is not a justifiable position. [16] The underlying reasoning in all the cases in which parents have been required to bear their own costs in a custody battle is basednot on a party’s “genuine belief”, but on the court’s assessment, after observing the parents and their witnesses and hearing all of theirevidence, that each parent was a worthy primary residence/custodial parent and the decision, often heart-breaking because of itsdifficulty and importance, could go either way.

For the children’s sake, a decision has to be made, and the trial judge is given thisimportant and difficult task of deciding what is in their best interests.

Where such circumstances exist, trial judges have often declined tomake orders for costs in custody cases, whether articulating it as a matter of principal (not the recommended approach, given the Courtof Appeal’s views on the wide applicability of Gold), or a matter of discretion (the approach approved by the Court of Appeal in Goldand the cases that have followed it). [17] Obviously there are custody cases where similar circumstances to those outlined above do not exist and the discretion to awardcosts might be exercised differently. [18] For instance, in S. (I.M.M.) v.

S. (D.J.) 2010 BCSC 891, cited by the claimant, the court referred to the defendants “protractedcourse of negative conduct in relation to the plaintiff that was clearly not in the best interests of the children” when awarding costs to theplaintiff. [19] In the present case, it is clear that the situation outlined in para. 16 above exists.

As counsel for the claimant said in his openingat trial, the parties have many strengths and had cooperated in the best interests of the children, managing to resolve all the other issues.The custody issue remained, and there were two competing plans upon which the parties simply needed to have an adjudication. [9] Cases that have declined to follow the usual rule that costs follow the event have turned on whether each parent had putforward a well-founded and reasonable parenting plan: see e.g. D.J.D. v. M.L.D., 2017 BCSC 1417 at paras. 26-27; compare J.E.H. v.J.A.B., 2016 BCSC 2190 at paras. 15-17.

Discussion [10] I find that the claimant was substantially successful on the central matter in dispute – the primary residence of E. There were

some issues on which the claimant was not successful, such as the reduction of parenting time for Mr. H. if the primary residence was changed, and the imposition of a fine pursuant to s. 61 of the Family Law Act , S.B.C. 2011, c. 25. [ 11 ] I do not see any basis for departing from the usual rule that costs should follow the event. The claimant was successful on the key issue in dispute – where E. should reside. The respondent was seeking to maintain the status quo, but that was in light of a significant change in the circumstances respecting E.

The residence of E. was the most important issue and the one that dominated the trial. [ 12 ] I see no basis for denying the claimant her costs in the matter. There was a significant concern, raised on the evidence, respecting the alienation of E. from her mother. There were several findings that supported that Mr. H. had not followed the direction of Judge Pothecary that he had a heavy responsibility to ensure that E.’s relationship with her mother was enhanced and encouraged in every way possible. There was no evidence to support that Ms. H. had acted in any inappropriate manner.

Level of difficulty [ 13 ] This case was straightforward, with three days of non-complex evidence and one day of argument. There were no difficult or complicated issues of facts or law. [ 14 ] As such, I find that this is a case in which the ordinary difficulty scale should apply. Lump sum costs be ordered [ 15 ] The claimant seeks, pursuant to Rule 16-1(1)(c), an order of lump sum costs in the amount of $26,541.57. She notes that she has paid for the entirety of Dr.

Elterman’s fees in this case. [ 16 ] The general reason for ordering lump sum costs is to save the parties from the further time and expense associated with assessment of costs. The discretion to order lump sum costs has been used to summarily fix costs on a special cost basis, but it should be exercised sparingly: see e.g. Dawson v. Dawson, 2014 BCSC 44 at para. 65 . In this case, the costs will be based on a bill of costs, for which the registrar is in a better position to assess the reasonableness. [ 17 ] Therefore, the request for lump sum costs is denied.

Offer to settle and double costs [ 18 ] The claimant made an offer to settle on January 13, 2016 (the “Offer Letter”), pursuant to Rule 11-1. The claimant seeks an award of double costs on the basis that the Offer Letter should have reasonably been accepted. [ 19 ] The following factors may be considered under Rule 11-1(6) when considering an offer to settle under Rule 11-1(5): (

a) whether the offer to settle was one that ought reasonably to have been accepted, either on the date that the offer to settle was delivered or served or on any later date; (

b) the relationship between the terms of settlement offered and the final judgment of the court; (

c) the relative financial circumstances of the parties; (

d) any other factor the court considers appropriate. [ 20 ] In considering the first factor, the court will determine whether, at the time the offer was open for acceptance, it would have been reasonable for it to have been accepted. This factor is not determined by reference to the award ultimately made.

A non-exhaustive list of considerations in determining the reasonableness of an offer includes the timing of the offer, whether it had some relationship to the claim (as opposed to simply being a “nuisance offer”), whether it could easily be evaluated, and whether some rationale for the offer was provided: Hartshorne v. Hartshorne , 2011 BCCA 29 at para. 27 [ Hartshorne ]. [ 21 ] The court may award costs from the date of an offer to settle, or from some other date after the date of the offer, allowing for a reasonable amount of time for the other party to consider it: see L.E.M v.

D.M.I. , 2014 BCSC 831 at para. 27 [ L.E.M. ]. [ 22 ] The Offer Letter was prompted by the receipt of the updated s. 211 report produced by Dr. Elterman. That report supported a concern that E. was exhibiting increasingly adverse behaviour towards Ms. H. It recommended that E.’s primary residence be changed to Ms. H.’s residence. [ 23 ] The Offer Letter proposed: a. The cancellation of the Pothecary Order; b. The change in custodial arrangements, namely primary residence of E. changed to Ms. H., with Mr. H. exercising three weekends per month in line with the Pothecary Order. The specific

schedule shall be agreed upon with a set amount of time after your client consents to varying the Pothecary Order; and c. That Ms. H. have final decision power over educational and medical decisions. [ 24 ] The timeline for a response was January 20, 2017, only seven days after the delivery of the Offer Letter.

[25] In addition, the Offer Letter stated that if the claimant did not receive an agreement, counsel would apply to court to change E.’sprimary residence on an interim basis until trial. [26] This offer was not accepted by the respondent, and the claimant brought an application for a change in E.’s primary residence,which was heard on March 9, 2017, by Mr. Justice Saunders. That application was unsuccessful, and E.’s primary residence remainedwith Mr.

H. on an interim basis. [27] However, at trial the claimant was ultimately successful on the issue of changing E.’s primary residence. [28] In considering whether an offer to settle should have been accepted, the issue is whether it ought reasonably to have beenaccepted. The respondent was seeking to maintain the status quo, which had been in existence since August of 2013. Dr. Elterman, on theother hand, recommended that E.’s primary residence be with Ms. H. if she continued to live on Vancouver Island. This arrangement hadoriginally been rejected by Judge Pothecary. [29] It is understandable that Mr.

H. would have rejected the offer of a change in primary residence leading up to the trial. [30] The financial positions of the parties are not so vastly different that they should play a role in the consideration of double costs.For both parties, the burden of legal costs is high considering their incomes. The respondent received property located in Port Coquitlam,and the claimant argues that recognition should be given to the rise in property values in the Lower Mainland.

There is no basis,however, to make any finding with respect to the increase in value of the respondent’s property in Port Coquitlam. [31] The claimant disclosed the Offer Letter during the trial of the action contrary to Rule 11-1(2).

Her rationale for doing so was toprovide a factual background for the respondent’s complaint to the Ministry of Children and Family Development and for his unilateraltermination of her parenting time. [32] In my view, the claimant could have given evidence about making an offer without the need for disclosing the Offer Letter, inwhich case the extent of the violation of Rule 11-1(2) would have been lessened.

Therefore, the claimant’s violation of Rule 11-1(2) isstill a factor to be considered. [33] An award of double costs is a punitive measure for a party’s failure in all the circumstances to accept an offer to settle thatshould have been accepted: Hartshorne at para. 25. [34] The considerations for granting or refusing an award of double costs were summarized in L.E.M. at para. 23: [23] The types of considerations that govern a court’s exercise of discretion not to award double costs were helpfully canvassed byLoo J. in Richardson at paras. 17-18: Gold v.

Gold (1993), (BC CA), 82 B.C.L.R. (2d) 180 (B.C.C.A.) considered the former Supreme Court Rule 57(9),but it is still applicable in my view to Supreme Court Family Rule 11-1(6)(d). McEachern C.J.B.C. for the Court stated at para 20: The question, then, is: when should the Court order otherwise? With respect, when the court should order otherwise is a matter ofdiscretion, to be exercised judicially by the trial judge, as directed by the Rules of Court.

To lay down any strict guidelines or even toattempt to give exhaustive examples is not, I think, helpful because the facts and issues in each family law case vary so greatly. Factorssuch as hardship, earning capacity, the purpose of the particular award, the conduct of the parties in the litigation, and the importance ofnot upsetting the balance achieved by the award itself are all matters which a trial judge, quite properly, may be asked to take intoaccount.

Assessing the importance of such factors within the context of a particular case, however, is a matter best left for determinationby the trial judge. [Emphasis in original] Double costs were refused in the following cases: Parties bear their own costs * Where double costs would upset the balance and the successful party withheld employment information: Lam v. Chiu, 2008 BCSC1367. * Where the parties had children, both parties behaved self indulgently, and a double costs award would upset the balance relating to theability of the parties to care for them D.K.H. v.

M.M.H., 2003 BCSC 1418. * Where the losing party would suffer financial hardship, the parties had only modest assets, and a double costs award would upset thereapportionment ordered: Purewal v. Purewal, 2007 BCSC 901. * Where both parties had contributed to a protracted and confusing trial and an award of double costs would upset the balance achievedin the judgment: Bhopal v. Bhopal (1997), 73 A.C.W.S. (3d) 488 (B.C.S.C.).

Ordinary costs granted to the successful party instead of double costs * Where double costs would upset the balance, there were genuine issues for trial, and because double costs are punitive: O’Brien v.O’Brien (1993), 88 B.C.L.R. (2d) 183 (B.C.S.C.). * Where double costs would have upset the balance, and the primary issues were custody and child support: Rockwell v. Rockwell,[1999] B.C.J. No. 2238 (B.C.S.C.). * Where the husband’s health made him unemployable, and double costs would have upset the balance: Pinto v. Pinto (1998), 20 C.P.C.

(4th) 228 (B.C.S.C.). Double costs awarded * The parties had relatively the same financial circumstances, even though the husband was disabled and unemployed, Lenko v. Lenko,2011 BCSC 129. * Although not actually awarded, Scale C costs would not have upset the balance, because the hardship must be more than ordinary, orhave an unfair effect on the parties: Gallant v. Gallant, 2007 BCSC 851. [35] It is my view that an award of double costs in the circumstances of this case will be punitive and upset the balance. Mr. H. is aself-employed painter who struggles with a severe learning disability.

The cost consequences of an award of double costs according toAppendix B and ordinary difficulty will be a hardship for him. In addition, he will have the responsibility to pay child support for E. [36] I am not persuaded that an award of double costs should be ordered pursuant to Rule 11-1(5)(b). Special costs [37] The claimant seeks an award of special costs, alleging that the respondent acted in a reprehensible manner which perpetrated thealienation of E. from her mother. She alleges that the respondent coached E. to hate her mother. She claims this allegation was supportedby Dr.

Elterman. [38] She further claims that the respondent engaged in misleading the court through untruthful testimony. [39] The law on awarding special costs was set out in Isacson v. Isacson, 2015 BCSC 736 at paras. 12-15: [12] With respect to special costs, the Supreme Court of Canada in Young v. Young, (SCC), [1993] 4 SCR 3 held thatspecial costs “are generally awarded only where there has been reprehensible, scandalous, or outrageous conduct on the part of one of theparties.” [13] In Garcia v. Crestwood Forest Industries Ltd. (1994), (BC CA), 9 B.C.L.R. (3d) 242, para. 17 (C.A.), theB.C.

Court of Appeal stated, at para. 17: [17] The word “reprehensible” is a word of wide meaning. It encompasses scandalous or outrageous conduct but it also encompassesmilder forms of misconduct deserving of reproof or rebuke. Accordingly, the standard represented by the word reprehensible, taken inthat sense, must represent a general and all-encompassing expression of the applicable standard for the award of special costs. [14] In Westsea Construction Ltd. v. 0759553 B.C.

Ltd., 2013 BCSC 1352, the court summarized the principles that should beconsidered when determining whether to award special costs as follows, at para. 73:

a) the court must exercise restraint in awarding special costs;

b) the party seeking special costs must demonstrate exceptional circumstances to justify a special costs order;

c) simply because the legal concept of “reprehensibility” captures different kinds of misconduct does not mean that all forms ofmisconduct are encompassed by this term;

d) reprehensibility will likely be found in circumstances where there is evidence of improper motive, abuse of the court’s process,misleading the court and persistent breaches of the rules of professional conduct and the rules of the court that prejudice the applicant;

e) special costs can be ordered against parties and non-parties alike; and

f) the successful litigant is entitled to costs in accordance with the general rule that costs follow the event. Special costs are notawarded to a successful party as a “bonus” or further compensation for that success. [15] The kinds of conduct that warrant an award of special costs include the following, as recently stated in the decision of this courtin Hu v. Dickson, 2015 BCSC 218, at para. 49:

a) acting with an improper motive such as to intimidate, exhaust or financially drain the other party in the hopes that they will giveup or soften their position in litigation;

b) dissipating and/or not disclosing assets;

c) abusing the court’s process by, among other things, failing to disclose documents, delaying in disclosing documents, failing torespond to reasonable requests, causing unnecessary interlocutory applications, and breaching the Rules of Court in a manner thatprejudices the other party;

d) misleading the court, through outright fabrications or through evasive and/or equivocal responses; and

e) disobeying a court order. [40] The respondent has not made submissions and has discharged his lawyer. As a result, I do not have the benefit of hissubmissions on the allegations made against him. Nonetheless, I did not view the evidence of Mr. H. to come within the category ofattempting to mislead the court through outright fabrications.

[ 41 ] It is my view that the allegations made do not elevate this case to one in which special costs should be awarded. Conclusion [ 42 ] The claimant is entitled to her costs against the respondent on an ordinary costs basis. [ 43 ] The signature of Mr. H. to this order is dispensed with. Counsel for the claimant will serve Mr. H. with a copy of the filed costs order. “The Honourable Madam Justice Forth”