“The test for bad faith in family law is set out in a number of decisions. In S.(C.) v. S.(M.), (2007) 2007 CanLII 20279 (ON SC), 38 R.F.L. (6th) 315, 2007 CarswellOnt 3485, Perkins J. stated:
In order to come within the meaning of bad faith in subrule 24(8), behaviour must be shown to be carried out with 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.
One of the most recent, and most comprehensive, decisions on the subject of bad faith was Jackson v. Mayerle, 2016 ONSC 1556, (2016) 130 O.R. (3d) 683. In that case, Pazaratz J. quoted the passage from S.(C.), above and went on to say (at paras. 58 and 59):
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: Children’s Aid Society of Peel (Region) v. F. (K.J.), 2009 ONCJ 252 (Ont. C.J.)(CanLII), [2009] O.J. No. 2348 (Ont. C.J.); Biddle v. Biddle [2005 CarswellOnt 731 (Ont. S.C.J.)] 2005 CanLII 7660 (ON SC), 2005CanLII 7660; Leonardo v. Leonardo, 2003 CanLII 74500; [2003] O.J. No. 1969 (Ont. S.C.J.); Hendry v.Martins, [2001] O.J. No. 1098 (Ont. S.C.J.).
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.”