Cliff’s Notes – February 2019

In our February 2019 newsletter, Cliff Nelson, now-retired Justice of the Superior Court of Ontario, provides us with his comments on two recent Ontario court decisions.

Ignore Arbitration Awards at Your Peril

In the recent case of Blair v. Hamilton, 2019 ONSC 622, Justice P. MacEachern had to decide which of two parents would be awarded costs of motions brought by them to change parenting arrangements. The father was seeking “full indemnity” costs from the mother, alleging that she had refused to abide by the terms of a 2017 Separation Agreement and two Arbitration Awards, by unilaterally changing the parties’  parenting schedule.

The mother submitted that she was the more reasonable of the parties because, in part, the father brought a motion to Court while their Parenting Coordinator was dealing with the matter as part of an arbitration process. She described the father’s conduct in bringing the matter to Court as aggressive and bullying.

MacEachern J., after finding that it was the mother who acted unreasonably, awarded the father almost full recovery costs of the motions [with a small reduction for lack of a formal offer]. The court found that the mother acted unreasonably by failing to comply with the parenting plan in that she attempted to make unilateral changes to it, in the face of two Arbitration Awards which cautioned her against doing so.

Her excuse, which was not accepted by the Court, was that the children were telling her that they wanted changes.

In awarding costs to the father, the judge commented that there was a certain irony in her blaming the father for instituting a court case when the parties were still dealing with arbitration. The Court found it difficult to accept that the mother wanted to return to the very  arbitration process that she ignored, while blaming the father for coming to court.

The mother also made the argument that she could not afford to pay costs because of the high expense of legal fees. She earned over $100,000 a year while the father earned over $80,000.

The moral of the story is that both parties should obey the terms of their arbitration agreement.

The Death of Battling Experts

Justice Mesbur’s recent decision in Plese v. Herjavec 2018 ONSC 7749, has already been commented upon by Phil Epstein, in his weekly case briefs, and by Laurie Pawlitza in an article published by The National Post. This case offers a window into a world unknown to most of us –  that of the very rich. This fact alone is a good advertisement for mediation and arbitration as the parties could have kept their affairs private,  but, for whatever reason, chose litigation – and public access – instead.

The focus of my comments is on Justice Mesbur’s criticism of the way experts are presented to the Court. Her Honour’s view is that it is wrong to employ valuators or income professionals and present them as advocates for the client who has retained them.

In  my view, this is a return to basics. Experts are to testify in an unbiased manner, in order to guide the judge through complex technical  matters that would not be readily known. The purpose of a court expert is to assist the Court. The Rules now demand that these witnesses  sign certificates to indicate that their evidence will be neutral. However, this practice appears not yet to have been fully adopted by the Bar.

It will take lawyers to prevent excesses in this area. It will be up to lawyers to insist that the evidence given,  by a valuator or accountant  preparing an income analysis, be objective.It should now be a very short step to have each side retain a joint valuator.

I have been “banging this drum” for years during case conferences.

The costs charged by valuators are close to or may even exceed those of the lawyers. I predict that, once courts refuse to award even  successful parties their costs of these experts, there will be a different way of doing business.