Divorce can be an extremely contentious issue, and couples going through it can find themselves aggressively asserting their rights as they work through issues such as spousal support, child support, division of property, and more. While it is appropriate for people to strongly pursue their goals, it is important to keep in mind the importance of avoiding behavior known as “bad faith.” Being found to act in bad faith could have a significant impact. Ontario’s Family Law Rules state “If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.” This raises the question of what exactly constitutes bad faith, and how can people who aren’t regularly involved in family law matters know how to avoid it? The rules around bad faith are established, and were recently put to the test in a case before the Ontario Superior Court of Justice.

Request for costs stemming from earlier judgment

The issues before the court stemmed from an earlier judgment where the wife in a relationship sought to declare a separation agreement null and void as well as an increase in child support payments, while the husband sought an increased equalization payment as well as a lower level of imputed income.

At the trial’s outcome, the wife successfully resisted the husband’s claims and was also awarded child support (though the amount awarded was less than what the husband had offered prior to the trial). In the case at hand, the wife returned to court seeking costs because of her husband’s “egregiously bad faith behavior,” which she claims the judge did not properly consider at the original trial. The husband also sought costs while denying that he acted in bad faith. He also argued that the wife’s costs were excessive when compared to his own.

Determining bad faith

The court first turned to Rule 24 of the Family Law Rules, which as stated above, provide for the awarding of full costs, payable immediately, if a party has acted in bad faith.

The test for bad faith was reaffirmed in a 2015 Ontario Court of Appeal decision where the court stated  the test for bad faith “is that the impugned behaviour must be shown to be carried out with “intent to inflict financial or emotional harm on the other party or persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court.” In short, the court stated the essential components of bad faith are intention to inflict harm or deceive.

The judge in the current case noted there were several examples of the husband’s failure to comply with his disclosure obligations, including financial disclosure and his interest in two corporations. The judge wrote, “(the husband) does not care if he is complying with his disclosure obligation. He has made this clear through his repeated non-compliance with this important obligation. He is dismissive of the documentary disclosure process and the Family Law Rules. His chronic non-compliance reveals incomplete sworn financial statements and a failure to follow court orders.

“Simply put, (the husband) remembers what is beneficial to his position in this litigation.”

While noting that the husband’s non-disclosure was not significant, it was his disregard to his obligations that “created an atmosphere of distrust and unnecessarily contributed to the cost of this litigation.”

But with all of that said, the judge did not find the husband’s behavior to rise to the standard needed to establish bad faith. While his behavior was unacceptable and unreasonable, it did not constitute bad faith.

Divorce can be a stressful and emotionally draining process to work through. The knowledgeable team of Borden Family Lawyers helps our clients navigate all areas of family law, keeping your interests front and center while working towards a resolution. We focus exclusively on family law, and as such, are able to offer an in-depth understanding of the family legal system and the best strategies to apply to it. Please contact us online or by phone at 905-576-6090 to schedule a consultation. Please remember to ask about our flat fees.