CITATION: Sgrignuoli v. Melara, 2018 ONSC 255

DIVISIONAL COURT FILE NO.: 313/17
DATE: 2018 01 09

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

MARROCCO A.C.J.S.C., SWINTON and C. HORKINS JJ.

BETWEEN:

EVELYN SGRIGNUOLI

Ronald S. Sleightholm for the Applicant (Respondent on Appeal)

Applicant (Respondent on Appeal)

– and –

SILVANA MELARA (aka SILVANA SGRIGNUOLI, Estate Trustee of the Estate of ERNIE SGRIGNUOLI)

David C. Moore and Nicholas P. Reinkeluers, for the Respondent (Appellant on Appeal)

Respondent (Appellant on Appeal)

AND BETWEEN:

SILVANA MELARA (aka SILVANA SGRIGNUOLI), Estate Trustee of the Estate of ERNIE SGRIGNUOLI)

David C. Moore and Nicholas P. Reinkeluers, for the Respondent (Appellant on Appeal)

Respondent (Appellant on Appeal)

– and –

JUDITH HOLZMAN

Susan Sack, for the Respondent on Motion for Costs (Respondent on Appeal)

Respondent on Motion for Costs (Respondent on Appeal)

HEARD at Toronto: January 9, 2018

C. HORKINS J. (Orally)

1The moving party Silvana Melara also known as Silvana Sgrignuoli Estate Trustee of the Estate of Ernie Sgrignuoli (the “Estate”) seeks leave to appeal two final discretionary cost orders of Nelson J. The first order is dated September 4, 2015 and the second order is dated November 8, 2015.

2The September order dismisses the Estate’s motion for costs against the respondents. The November order directed the Estate to pay the respondent Evelyn Sgrignuoli (“Evelyn”) her costs of the first attendance. The Estate confirms that if leave to appeal the first order is not granted, then it abandons the request for leave to appeal the second order.

3I will briefly review some of the background.

4The respondent Judith Holzman commenced a family law Application on behalf of Evelyn against Ernie Sgrignuoli seeking spousal support. Evelyn, 74 years old, was impecunious and needed support to live and to pay for treatments required in her battle against cancer.

5The Application was initiated because of the adverse change in Evelyn’s financial and health circumstances, notwithstanding that Evelyn had previously released support claims against Ernie, including in 2003 when Ms. Holzman was acting for her. Evelyn knew that Ms. Holzman’s engagement was always intended to be short lived due to her 2003 involvement in the support release. Evelyn knew she had to retain counsel to assume carriage of the Application once Ms. Holzman commenced it. When Evelyn released her claims in 2003, it was Ms. Holzman who provided and signed a certificate of independent legal advice.

6Ernie died soon after the Application was commenced. The Estate continued to respond to the proceeding. Evelyn was unable to secure new representation to replace Ms. Holzman. Ultimately, she had no choice but to serve a notice to act in person. She then withdrew her Application when the Estate brought a motion for summary judgment against her.

7Following Evelyn’s withdrawal of her Application, the Estate brought a motion that was heard by Nelson J. seeking costs jointly and severally against Evelyn and Ms. Holzman personally. In comprehensive and cogent reasons, Nelson J. exercised his discretion, and declined to award costs against Evelyn based on her inability to pay, and he dismissed the claim for costs against her solicitor Ms. Holzman, personally.

8Section 133 of the Courts of Justice Act, R.S.O. 1990, c. C.43 requires that the Estate seek leave to appeal the final cost orders. The awarding of costs is highly discretionary and attracts significant deference. Leave to appeal a cost order is granted sparingly and only where there are strong grounds to believe that the lower court made an error in principle or if the cost award is plainly wrong, (see Feinstein v. Freedman, 2014 ONCA 205 at para. 52 and Hamilton v. Open Window Bakery Ltd., 2004 SCC 9 at para. 27).

9The Estate argues that leave should be granted because the motions judge did not consider whether Ms. Holzman owed a duty to the court and Ernie because she had provided a certificate of independent legal advice in 2003. The Estate argues that having acted for Evelyn in 2003 and provided independent legal advice that Ms. Holzman’s gatekeeping function in 2014 should have precluded her from commencing the Application against Ernie.

10This was a legal issue that was not argued before the motions judge. It is not appropriate to grant leave on a legal issue that was not raised and argued before the motions judge and we refuse to do so.

11This is not a case where leave should granted. Strong grounds upon which to grant leave do not exist and there is no basis upon which to conclude that Nelson J. was “plainly wrong”.

12Nelson J. is an experienced family court judge. He issued extensive reasons that clearly articulated the arguments that the parties made, why he refused to grant costs against Evelyn and why he rejected the Estate’s request to hold the lawyer responsible for costs.

13The threshold for seeking leave on a cost motion is high and the Estate has not satisfied the burden that rests upon it.

14Nelson J. correctly identified the applicable family law rules that govern the issue of costs. Nelson J. also reviewed the various decisions that set out when it is appropriate to order a lawyer to pay costs. Recently, the Supreme Court of Canada dealt with this issue in Quebec (DCPP) v. Jodoin, 2017 SCC 26, [2017] 1 S.C.R. 478 at para. 29:

In my opinion, therefore, an award of costs against a lawyer personally can be justified only on an exceptional basis where the lawyer’s acts have seriously undermined the authority of the courts or seriously interfered with the administration of justice. This high threshold is met where a court has before it an unfounded, frivolous, dilatory or vexatious proceeding that denotes a serious abuse of the judicial system by the lawyer, or dishonest or malicious misconduct on his or her part, that is deliberate. Thus, a lawyer may not knowingly use judicial resources for a purely dilatory purpose with the sole objective of obstructing the orderly conduct of the judicial process in a calculated manner.

15Nelson J. acknowledged that when Evelyn withdrew her claim, Family Law Rule 12(3) required her to pay costs “unless the court ordered otherwise”. Nelson J. exercised his discretion to order otherwise. He refused to order costs against Evelyn because she was impecunious.

16Nelson J. carefully considered the Estate’s request that costs be awarded against the lawyer, Ms. Holzman. His reasons detail why the request was made and rejected. Nelson J. rejected the argument that the lawyer pursued a claim when she knew it had no chance of success. He rejected the Estate’s position that lawyer issued an Application that was frivolous and vexatious. While it was a weak case, it was not devoid of merit. Evelyn was impecunious, had cancer and could not afford to pay for her medical treatment.

17Nelson J. noted, notwithstanding the releases that Evelyn had signed, s. 33(4)(a) of the Family Law Act, R.S.O. 1990, c. F.3 gave Evelyn the opportunity to demonstrate that the agreement and release was unconscionable. Evelyn was also alleging lack of financial disclosure when she signed the second cohabitation agreement. Nelson J. stated that she was entitled under s. 56(4)(a) of the Family Law Act to have her claim scrutinized by the court. Under this section, agreements can be set aside for lack of financial disclosure.

18The motions judge reviewed the role that Ms. Holzman played in 2003 and how she came to accept Evelyn’s request to issue the Application for her on a pro bono basis in 2013. Ms. Holzman made it clear to Evelyn that she would have to retain a new lawyer going forward to represent her. Ms. Holzman agreed to assist Evelyn in this limited fashion because she did not want to abandon her until new counsel was retained. In fact, Ms. Holzman did not continue to act for Evelyn. Evelyn was unable to retain a new lawyer and filed a notice to act in person.

19Based on the facts before the court, Nelson J. rejected the Estate’s position that the lawyer acted improperly. It was not a case where the lawyer “ran up” costs as contemplated in Family Law Rule 24(9)(a). Nelson J. found the lawyer’s actions on behalf of Evelyn worthy of “commendation not condemnation”. He said that she was a “lawyer fearlessly representing a client with very limited means”.

20In summary, we conclude that there is no basis to grant leave to appeal the cost orders of Nelson J. and the motion is dismissed.

MARROCCO A.C.J.S.C

I have endorsed the Motion Record as follows: “This Application is dismissed for oral reasons released today. Costs to the respondents. The parties agree on the quantum of costs. Cost on the motion payable by the applicants as follows: Evelyn Sgrignuoli $3,634.02 inclusive of disbursements and HST. Judith Holzman $18,852.13, inclusive of disbursements and HST on account of her costs for this motion and $19,673.70 inclusive of disbursement and HST on account of her costs in the proceeding before Sutherland J.”.

___________________________ C. HORKINS J.

I agree

MARROCCO A.C.J.S.C.

I agree

SWINTON J.

Date of Reasons for Judgment: January 9, 2018

Date of Release: January 11, 2018

CITATION: Sgrignuoli v. Melara, 2018 ONSC 255

DIVISIONAL COURT FILE NO.: 313/17
DATE: 2018 01 09

ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT

MARROCCO A.C.J.S.C., SWINTON and C. HORKINS JJ.

BETWEEN:

EVELYN SGRIGNUOLI

Applicant (Respondent on Appeal)

– and –

SILVANA MELARA (aka SILVANA SGRIGNUOLI), Estate Trustee of the Estate of ERNIE SGRIGNUOLI)

Respondent (Appellant on Appeal)

AND BETWEEN:

SILVANA MELARA (aka SILVANA SGRIGNUOLI), Estate Trustee of the Estate of ERNIE SGRIGNUOLI)

Respondent (Appellant on Appeal)

– and –

JUDITH HOLZMAN

Respondent on Motion for Costs (Respondent on Appeal)

ORAL REASONS FOR JUDGMENT

C. HORKINS J.

Date of Reasons for Judgment: January 9, 2018