Bad Faith When Costs Are Awarded

After a family law trial, the judge has to decide on the cost to be awarded to either party. Sometimes I’ve heard litigants tell me that the other party has been so unreasonable that they have litigated in bad faith. Normally, for bad faith, costs are awarded at an excessive rate. This is because bad faith is such a negative connotation and to sanction poor behaviour, the Court awards extra costs to compensate for such a negative behavior.

The meaning of bad faith in the family law context has been described in Jackson v. Mayerle 2016 ONSC 1556. In that decision, the Court noted (at paras 57-60):

[57] In order to come within the meaning of bad faith in Sub-rule 24(8), behaviour must be shown to be carried out within intent to inflict financial or emotional harm on the other party or other persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court. A misguided but genuine intent to achieve the ostensible goal of the activity, without proof of intent to inflict harm, to conceal relevant information or to deceive, saves the activity from being found to be in bad faith. The requisite intent to harm, conceal or deceive does not have to be the person's sole or primary intent, but rather only a significant part of the person's intent. At some point, a party could be found to be acting in bad faith when their litigation conduct has run the costs up so high that they must be taken to know their behaviour is causing the other party major financial harm without justification.

[58]   Bad faith is not synonymous with bad judgment or negligence. Rather, it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity.  Bad  faith  involves  intentional  duplicity,   obstruction or obfuscation.

[59]  There is a difference between bad faith and unreasonable behaviour. The essence of bad faith is when a person suggests their actions are aimed for one purpose when they are aimed for another purpose. It is done knowingly and intentionally. The court can determine that there shall be full indemnity for only the piece of the litigation where bad faith was demonstrated.

[60]  To establish bad faith, the court must find some element of malice or intent to harm.

Analysis:

The take away from the analysis is that bad faith is intentionally exhibiting poor behaviour to make the other party's life so miserable and so difficult instead of being straightforward and transparent that the Court is forced to intervene to sanction such behavior.

The remedy is to be straightforward, transparent and systematic right from the beginning. We will help you at Shankar Law to ensure that you follow all of the proper rules and procedures.

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