Background

This is a cost endorsement following a lengthy and complex family law trial before the Ontario Superior Court of Justice. The trial spanned thirteen days, beginning in 2017 and concluding in 2018, with final written submissions delivered in July 2018. The court released its substantive decision on the merits in November 2018. This decision addresses the allocation and quantum of costs flowing from that judgment.

The litigation arose from the breakdown of a long-term spousal relationship and involved a wide range of contested financial and property issues. The court was required to adjudicate the commencement date of cohabitation, entitlement to and duration of spousal support, the enforceability of an Islamic marriage contract (Mehr), ownership and treatment of real property, equalization of net family property, household contents, and divorce.

Following the release of the trial decision, both parties delivered written submissions on costs. The applicant sought full recovery costs exceeding $200,000, inclusive of disbursements and HST. The respondent opposed the request, argued that the applicant should receive no costs, and additionally sought modest costs relating to a motion commenced but later abandoned by the applicant.

Issues on the Costs Motion

The court was required to determine which party was the “successful party” under Rule 24 of the Family Law Rules, whether any offers to settle attracted cost consequences under Rule 18, whether either party engaged in unreasonable or bad faith conduct justifying enhanced costs, and what quantum of costs would be fair and reasonable in the circumstances.

Findings on Success and Conduct

The court undertook a careful, issue-by-issue assessment of success. While the respondent was successful on the calculation of equalization of net family property, the applicant was found to be entirely or more successful on several of the most significant and contentious issues at trial, including the determination of the commencement of cohabitation, the enforceability of the Mehr, the treatment of a key Niagara Falls property acquired during the marriage, and the determination of ongoing spousal support.

Although the outcome was mixed, the court emphasized that success is not measured by tallying issues won and lost. Rather, the analysis focuses on which issues were most important, most contentious, and consumed the most trial resources. On that global assessment, the applicant was found to be the successful party and therefore presumptively entitled to costs.

A decisive factor in the cost analysis was the respondent’s conduct regarding the Niagara Falls property. While the litigation was ongoing and ownership of the property was in dispute, the respondent transferred the property into joint ownership with a third party, sold it, and distributed the proceeds without the applicant’s knowledge or consent. The applicant only discovered the sale months later.

The court characterized this conduct as clear bad faith and a deliberate attempt to defeat the applicant’s equalization rights. The respondent was described as the “author of his own misfortune,” and the court emphasized that such conduct undermines the integrity of the family law process and warrants serious consequences.

Costs Award

Despite the finding of bad faith, the court reaffirmed that costs must remain fair and proportionate. Applying Rule 24 and appellate authority, the court declined to award full recovery costs. Instead, it fixed costs on a partial indemnity basis.

The respondent was ordered to pay $110,000 in costs, inclusive of HST and disbursements, payable within 30 days. A portion of the costs was made enforceable as support through the Family Responsibility Office, reflecting the connection between litigation misconduct and the applicant’s financial entitlements. The respondent’s own costs claim was dismissed in its entirety.

Analysis

Why was the applicant treated as the successful party despite the respondent’s success on equalization?

The court’s approach reflects a well-established principle in family law: success is assessed globally, not mechanically. Although the respondent succeeded on the equalization calculation, the applicant prevailed on the most significant and heavily litigated issues, including spousal support, the enforceability of the Mehr, and the treatment of a major real property asset. These issues drove the length, complexity, and cost of the trial. As a result, the applicant was properly characterized as the successful party for cost purposes.

How did the respondent’s handling of the Niagara Falls property affect costs?

The respondent’s unilateral transfer and sale of disputed matrimonial property during litigation was central to the cost’s outcome. The court viewed this conduct as bad faith aimed at defeating the applicant’s equalization rights. Family law depends on transparency and preservation of assets while proceedings are ongoing. The respondents’ actions struck at the core of that principle and significantly increased his cost exposure, overriding any partial success he achieved on other issues.

Why were costs awarded on a partial indemnity basis despite bad faith?

The court emphasized that even serious misconduct does not automatically justify full recovery costs. Rule 24 requires proportionality and fairness. While the respondents’ conduct warranted a substantial costs award, not all aspects of the litigation were attributable to bad faith. By awarding $110,000 on a partial indemnity basis, the court balanced compensation, deterrence, and reasonableness without turning costs into a purely punitive measure.

Conclusion

This case demonstrates how Ontario courts assess costs after complex family law trials. Success is evaluated holistically, settlement offers must strictly comply with procedural rules to attract consequences, and bad faith asset dissipation during litigation will significantly increase cost exposure. At the same time, the decision confirms that even in cases of egregious conduct, costs must remain proportionate, fair, and grounded in reasonableness.