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Third-parties are free to act within the confines of their mandate without fear of facing liability for costs – Eustice v Eustice

Eustace v. Eustace, 2018 ONSC 2367 (CanLII), http://canlii.ca/t/hrmxm

Facts:

This third party claim for costs against the Ontario Children’s Lawyer (the “OCL”) was born out of a 22-day trial focused on a child custody dispute between the parents in the matter. The trial judge made an order requesting that the OCL act as the child’s legal representative. A psychological assessment of the child was ordered that denoted serious concerns with respect to health problems stemming from the family conflict.  The report expressed the opinion that it would be in the best interest of the child to have a positive relationship with both of his parents. The OCL maintained a position that was consistent with this report which the father did not agree with. The father’s disapproval with the OCL’s position appeared to have prevented the OCL from having any further interactions with the child.

The trial judge awarded custody to the father, awarded costs against the mother and held the OCL jointly and severally liable for 20% of the costs, which amounted to $20,000. The trial judge spoke to a number of findings in support of the OCL’s liability for costs. Specifically, he found that the OCL favored the mother’s position because the father refused to cooperate and may have allowed their personal views to overtake their professional function. Further, the trial judge believed that the OCL could have done more by way of filing a motion to compel the father to cooperate or to facilitate a meeting with the child to take instructions.[1]

The Appeal:

The OCL appealed the decision claiming:

  1. The trial judge applied the wrong threshold for awarding costs against them
  2. The trial judge misconstrued the mandate of the OCL
  3. The trial judge made findings about the conduct of the OCL in the absence of any evidence to support those findings

Justice Sachs and Justice Myers (the “court”), writing on behalf of the Superior Court of Justice Divisional Court, thoroughly discussed how a non-party can be liable for costs. In this particular matter, the court recognized that the Family Law Rules contain no provision for the awarding of costs against a non-party but look to 1318847 Ontario Limited v. Laval Tool & Mould Ltd. which confirms that superior courts of record have inherent jurisdiction to award costs against a non-party.[2]

 Further, the court looked to Proulx v. Proulx which discusses considerations of holding the OCL liable for costs. Notably, it is important to consider that counsel for the child may advance a position that deviates from the views and preferences of their client. To sanction them for doing so “would seriously undermine the role and value of child representation in custody and access cases.”

Looking to the principles emerging from Proulx v. Proulx, the court considered the following analysis to address the issues on appeal:

  1. If the OCL has acted in bad faith costs should be awarded against it.
  2. Costs may “also be ordered against the OCL in exceptional circumstances where its actions fall short of bad faith, but it engaged in patently unreasonable, unfair or indefensible conduct that exceeded its statutory mandate or had a significantly deleterious impact on the litigation[3]

Trial Judge Applied the Wrong Threshold

The court found that the trial judge misstated the threshold for awarding costs against a non-party by reasoning that the OCL can claim costs in a matter with little merit and therefore can be subject to costs on the same basis. On the contrary, the court followed the reasoning in 1318847 Ontario Limited and found that that costs against a non-party should only be awarded in the face of unfairness that “undermines the fair administration of justiceor otherwise constitute an abuse of process.

Trial Judge misconstrued the mandate of OCL

The court found that the OCL’s conduct did not exceed its statutory mandate. They had the power to act for the child as though he was a party to the proceedings. Further, the court found that the trial judge erred in reasoning that the OCL ignored general rules of fairness by not requesting the courts assistance in obtaining the cooperation of the child. The court found nothing in the order of the trial judge or the statute to suggest that the OCL was required to personally take all steps necessary to obtain the views and preferences of the child directly from the child.

Trial judge made findings about the conduct of the OCL in the absence of any evidence to support those findings

The court found that the trial judge erred in justifying his award of costs against the OCL because they may have allowed their personal views to interfere with their professional mandate. Neither the record nor the OCLs advocated position reflect any evidence of this.

Ultimately the court found that the OCL did not act in bad faith in handling the matter. There was no evidence of unfair or indefensible conduct that exceeded its statutory mandate or any significant deleterious impact on the litigation.

Takeaway

Holding a third-party liable for costs in an action is possible but there is a very high threshold. Third parties in a proceeding should be cautious but know that courts want to encourage them to function in their capacity according to their mandate, without fear of liability for doing what is required of them.

[1] Eustice v. Eustice, 2018 ONSC 2367

[2] 1318847 Ontario Limited v. Laval Tool & Mould Ltd., 2017 ONCA 184

[3] Proulx v. Proulx, 2017 ONSC 5134

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