COURT FILE NO.: FC-16-372-00 DATE: 20170224 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: JOANNE ROMANELLI, Applicant AND: MARIO ROMANELLI, Respondent
BEFORE: THE HON. MR. JUSTICE J.P.L. McDERMOT
COUNSEL: C.C. Sorley and B. Teskey, for the Applicant K.D. Zaldin, for the Respondent
HEARD: January 19 and February 2, 2017
ENDORSEMENT
Introduction
1Joanne and Mario Romanelli lived together for some 17 years from 1998 to 2015. They never married. Ms. Romanelli changed her name to that of the respondent in 2010, apparently with his agreement. Ms. Romanelli separated from Mr. Romanelli in December of 2015 because, she says, he was angry and abusive.
2Ms. Romanelli now requests spousal support and a share of Mr. Romanelli’s assets. Mr. Romanelli objects. He says the parties were never in a relationship for the 17 years suggested by Ms. Romanelli. He says that although the parties had an intimate relationship for about a year after they began living together in 1998, that quickly faded away and Ms. Romanelli was only his tenant after 1999. The respondent says that Ms. Romanelli is not eligible for spousal support as the parties did not live together for three years and therefore were not spouses as defined by the [Family Law Act][1].
3At the Case Conference on November 8, 2016, Graham J. apparently thought that Mr. Romanelli’s position on cohabitation was without any merit. He awarded spousal support at the Case Conference in the amount of $1,000 per month.
4Ms. Romanelli has now brought a motion for a number of heads of relief including orders for an increase in spousal support, disclosure and for a payment by Mr. Romanelli of interim fees and disbursements of $100,000. Mr. Romanelli brought a counter-motion requesting removal of a Certificate of Pending Litigation registered against the common residence in Gilford granted by me on March 21, 2016 as well as an order setting aside the spousal support obligation under the Graham J. order made on November 8, 2016.
5This motion was originally returnable before me on January 19, 2017. It was apparent to me that all of the issues could not be argued within the one hour limited to regular motions under the Consolidated Civil Provincial Practice Direction amended February 1, 2024 (the “Practice Direction”) [2]. In fact Mr. Zaldin on behalf of the respondent had brought a 14B Motion requesting the court to prejudge that issue; that motion was dismissed by Quinlan J. stating that it was best left the motions judge. In the end the applicant decided to proceed only on the interim disbursements issue, leaving the remaining issues raised in the two Notices of Motion to another day.
6Upon the return of this matter on January 19, 2017 the applicant had not filed any reply material other than an affidavit sworn by applicant’s counsel Mr. Teskey, who was also arguing the motion. Mr. Teskey was apparently not aware of the rule against counsel giving evidence in proceedings [3]; it was necessary to adjourn the motion with costs to the respondent of $900 thrown away so that the applicant could file adequate reply material. The issue of interim disbursements was finally argued on February 2, 2017 and Mr. Sorley filed a reply affidavit sworn by his client. All of the other issues in the Notices of Motion are to be adjourned to a long motion day on a date to be fixed through the trial coordinators’ office.
7For the reasons set out below, I have determined that the respondent shall pay the applicant interim fees and disbursements in the amount of $60,000. All other issues to be adjourned to a long motion date to be set through the trial coordinator.
Positions of the Parties
8As noted the applicant requests an advance by the respondent of $100,000 to pay interim fees and disbursements so that she can advance her case in this litigation. She says that these disbursements and fees are necessary because she is impecunious and all of the assets and income lie in the hands of the respondent. She notes that she is already facing unbilled legal fees and disbursements which total more than $50,000. As well, she claims fees for a future third party disclosure motion and for questioning. She requests disbursements for income and property evaluations necessary in order to make her case.
9She says that these fees and disbursements are necessary in light of the complexity of the matter. She notes that she is has no assets whatsoever while the respondent discloses more than $2 million in assets. Until spousal support was ordered, she subsisted on Ontario Works. The applicant says that she will not be able to prosecute her case adequately or for that matter at all if she does not receive financial assistance from the respondent who is well able to advance the sum requested.
10The respondent strongly objects. He says that the case for division of assets is without merit. He notes that most of the assets that the applicant claims a share of originated through an inheritance from his father which he received in 1983, well before the parties began cohabitation. He notes that no case law has been produced permitting interim disbursements for a business valuation where the property came to the responding party by way of an inheritance. He says that there is insufficient merit in the applicant’s case to warrant any need for a property valuation.
11He says as well that even if the parties cohabited for 17 years as alleged by the applicant, that the income issues are relatively simply as his income comes only from investments and CPP disability. Therefore, no income valuations are necessary as spousal support is easy to determine. He says that proposed fees and disbursements are excessive and unnecessary.
12Mr. Romanelli also says that he has made all of the disclosure that he can and that no further disclosure is necessary, and especially not a third party disclosure motion. He says that the information concerning the corporations in which he and his brothers have an interest are irrelevant to the applicant’s property claims. Mr. Romanelli requests a dismissal of the motion with costs.
Analysis
13This is a motion for interim disbursements and fees to be paid pursuant to [rule 24(12) of the Family Law Rules][4] which permits the court to “make an order that the party pay an amount of costs to another party to cover part or all of the expenses of carrying on the case, including a lawyer’s fees.”
14The case most often cited in Ontario interim disbursement motions is the decision of Stuart v. Stuart, 2001 ONSC 28261, [2001] O.J. No. 5172 (S.C.J.). In that case, Rogers, J. extensively reviewed the case law and determined that there were seven “themes” concerning the law of the granting of interim disbursements in family law matter which she sets out as follows [at para. 8]:
- The ordering of interim disbursements is discretionary;
- The claimant must demonstrate that the interim disbursements are necessary to pursue her case. She must, according to Rogers J., “demonstrate that absent the advance of funds for interim disbursements, the claimant cannot present or analyse settlement offers or pursue entitlement.”
- The interim disbursements must be shown to be necessary;
- The claim advanced must be meritorious;
- The exercise of discretion should be limited to exceptional cases;
- Interim costs are for the purpose of leveling the playing field;
- Monies may be advanced against an equalization payment.
15Rogers J. also acknowledged that the granting of interim disbursements must be made in light of the primary objective in family law cases as set out in Rule 2(3) which requires that the procedure be “fair to all parties”. Although that rule is most often cited as a basis for proportionality, Rogers J. relied upon this provision to temper the fifth “theme” noted above which requires that the exercise of discretion be limited to exceptional cases. That fifth theme is a requirement for civil cases pursuant to the judgment of the Supreme Court of Canada in British Columbia (Minister of Forest) v. Okanogan Indian Band, 2003 SCC 71 at para. 36. Rogers J. noted that she would interpret the Family Law Rules to “require the exercise of discretion in rule 24(12) on a less stringent basis than the cases that call for such only an exceptional cases.” She notes that the “discretion should be exercised to ensure that all parties can equally provide or test disclosure, make or consider offers, or possible (sic.) go to trial”.
16I note that there is support for this proposition in the Okanogan Indian Band case where Labelle J. noted that at para. 33 that interim costs were “most typically exercised in…matrimonial or family cases” and that interim costs will “be granted in family cases where one party is a severe financial disadvantage that may prevent his or her case from being put forward”. It appears that in family law cases the issue of “exceptional circumstances” is secondary to the goal of levelling the playing field where one party is at an economic disadvantage, the basis most often cited in the case law to justify an order under Rule 24(12).
17There was some suggestion by respondent’s counsel that the ability of the claimant to repay the funds in the event that her case fails is a further essential factor. This requirement was suggested in Rosenberg v. Rosenberg, 2003 ONSC 34049. At para. 18 of the case E.M. Macdonald J. suggested that the factors “applicable to an application for interim disbursements” are,
The merits of the matter, the hardship to the moving party if the relief is not granted and the ability of the moving party to repay any amounts ordered for interim disbursements in the event that the moving party is unsuccessful at trial in achieving at least the amount ordered for interim disbursements.
18If the suggestion is that the court must find that the moving party is able to repay an order for interim disbursements as a “requirement” for such an order, I respectfully disagree. If the goal is to address economic disadvantage, making ability to repay a requirement then begs the question. If the party requesting interim disbursements was able to repay the disbursements, wouldn’t that party be in a position to fund the litigation when the motion is made?
19It appears that the fundamental basis for ordering interim disbursements is to even the playing field between an impecunious litigant and a much more prosperous opponent. To require the party to have the ability to replay the costs it defeats the purpose of the rule which is to allow an impecunious litigant to pursue a meritorious family law claim. In fact the requirement of Rogers J. that “the claimant must demonstrate that he or she is incapable of funding the requested amounts” would seem to directly conflict the requirement that the impecunious litigant be in a position to repay the amounts in the event of failure. As well, I note that there have been a number of cases which suggest that an equalization payment need not be available at the end of the day to repay the advance of interim costs and disbursements: see Stuart at subparagraph 14 of para. 8 and Ma v. Chao, 2016 ONSC 585 at para. 10.
20I also note that impecuniosity in itself cannot stand alone as a basis for a Rule 21(12) order for costs; other factors are necessary as suggested in Stuart. Conversely, then, why should an inability to repay the advanced costs alone then bar a claimant for interim disbursements under rule 24(12)?
21There is little question that the applicant and moving party in this motion is impecunious and that the playing field between these two parties is not level. No issue was taken to these primary factors by Mr. Zaldin. Instead he based his argument on three issues:
a. Mr. Zaldin suggests that the the claim for property division is not meritorious. He says that the only legitimate prima facie claim is that of spousal support, assuming that the parties cohabited for 17 years rather than the one year that the respondent suggests; b. This being the case, spousal support is based upon the respondent’s income from disability insurance and investments. That is easy to determine, and there is no need for an income analysis beyond what is set out in his financial statement; c. The applicant has not sufficiently outlined or proven the expenses or disbursements to be funded through this motion.
22I will deal with each of these issues in turn.
a. Meritorious Claim
23It is apparent from the applicant’s materials that many of the costs and disbursements claimed surround the property claim being made by the applicant. The respondent states that the applicant’s claim is for unjust enrichment and constructive trust are not meritorious considering that Mr. Romanelli’s wealth as brought into the relationship consisted largely of an inheritance received from his father who died in 1983. This inheritance included a farm property near Bradford which was sold for development purposes during cohabitation for $13 million.
24It is clear that a case with little or no chance of success is not a “meritorious claim” for the purposes of Rule 24(12). However this does not mean that the claimant has to prove his or her case prior to obtaining an order for interim fees or disbursements. That would be too high a requirement: if someone has proven their case they would then not necessarily need an order for an advance to prove his or her case. For this reason the case presented at a motion must be a prima facie case only. It must be a case which, based upon the facts presented in the affidavits, makes sense to prosecute. It may be close to the test for approval of a legal aid certificate: Would counsel advise a client of modest means to proceed with the claim?
25However interim fees and disbursements are not meant to fund a fishing expedition: see Mcilvenna v. Pinkowski, 2010 ONSC 4900. In other words, if there is no reasonable case on the face of the facts before the court, interim disbursements should not be granted in order to track down evidence which might in the end prove there to be a meritorious claim. There must be enough on the face of the material filed to allow the court to find that the claims being made by the applicant are reasonable.
26However I note that the issue of whether a claim is meritorious is a fairly low threshold. In Rea v. Rea, 2016 ONSC 382, Douglas J. noted as follows (at para. 24):
At this early stage in the proceeding there is no reason to conclude that the claims advanced by either party are without merit. All claims advanced by the parties are prima facie meritorious at this early stage of these proceedings.
27In the present case we are also at an early stage in the proceedings. It is clear that the respondent feels that none of the applicant’s claims have any merit whatsoever. He claims that the parties only lived together a year. His financial statement does not disclose the assets he brought into the relationship. This may be because the financial statement speaks of a “date of marriage” value which of course is not the case here as the parties did not marry. However, had the financial statement indicated an estimate of the assets brought in, it would be easier to make a determination of the merits of the applicant’s claim.
28In essence the applicant is suggesting that there is a joint family venture which allowed for accrual of assets in the respondent’s name throughout the relationship while the applicant ended the relationship with no assets whatsoever. The fact that the applicant ended the relationship with no assets does not in itself make for a meritorious claim. However conversely the fact that the respondent inherited property in 1983 which was sold for $13 million during the relationship does raise issues of whether value was accrued in that property (on which the applicant says she worked) during the relationship. A portion of the proceeds from the sale of this property was used to buy the residence in which the applicant claims a trust interest as a result of unjust enrichment. The evidence indicates that the respondent appears to have been known to the outside world as the applicant’s common law spouse and the applicant appears to have been privy to the respondent’s business affairs. For example, the applicant appears to have been involved in assisting the respondent’s brother in reading through several affidavits used in litigation surrounding one of the corporations in which the respondent has an interest. The respondent acknowledges that the applicant met with their accountant, and states that she, in fact, was able to give instructions regarding the preparation of the parties’ income tax returns [5]. All of these factors point to the fact that the applicant appears to have been sufficiently involved in the respondent’s business affairs to present a prima facie meritorious claim concerning a joint family venture which may result in a claim for unjust enrichment.
29Moreover, as outlined below there are a number of corporate actors which in which the respondent is involved. I agree that if the only asset in issue were the respondent’s shares in Triple R Ranch, which owned the development property sold for $13 million, there might be no meritorious claim for a share of those funds, because this farm property was part of the inheritance and there was apparently no contribution by anyone to the accrual in value of that land other than its location [6]. However, the respondent also has an interest in Tri Rom Enterprises which, according to the evidence, only began building homes in 1999, well after cohabitation; this property did not arise from the respondent’s inheritance alone. As well, the respondent has two numbered companies, the function of which are, as yet, unexplained. It cannot be said that the inheritance alone is the basis of the respondent’s assets owned on the date of separation.
30The applicant does not have to prove her claim for unjust enrichment. She needs to present facts upon which a claim may be based. She has done so concerning the claim for unjust enrichment and in particular respecting the property in which she has registered a Certificate of Pending Litigation. I am not willing to find based upon the evidence before me that the applicant’s property claims are without merit. Certainly they would not be dismissed if were there a motion for summary judgment alleging no genuine issue for trial.
31In any event, the respondent acknowledges a meritorious claim for spousal support. Again this is a prima facie case only. However, apart from this acknowledgement, I find that both of the applicant’s claims are prima facie meritorious and sufficient to support an order for interim disbursements and costs under rule 24(12).
b. Need for interim disbursements
32The third criteria in the Rogers J. analysis in Stuart was that the expenses are necessary in order to prosecute the litigation by the claimant.
33Mr. Zaldin suggests that the expenses are unnecessary. If it is assumed that the spousal support claim is the only meritorious claim (which I have found not to be the case), then he says that Mr. Romanelli’s income determination is simple: he has income from CPP disability as well investment income as reflected in his tax return. There is no need for further analysis in order to determine spousal support. The only real issue is the length of cohabitation.
34However necessity is not only based upon the complexity of the legal issues to be litigated in the matter. It is apparent that this is hard fought litigation. For example, Mr. Romanelli takes the position that the parties only cohabited a year and accordingly there is no spousal support claim under the Family Law Act. He says that the applicant was a tenant and paid him rent.
35If there is an issue as to what is meritorious in this matter, then the claim that the parties did not cohabit other than for a year is, in fact, questionable on its face. Mr. Romanelli has not provided disclosure proving the purported rent paid by Ms. Romanelli through the 17 years of residence in the respondent’s properties. His position flies in the face of evidence given in discoveries conducted during litigation between Mr. Romanelli and one of his brothers, Tony Romanelli. It also flies in the face of a joint declaration of conjugal relationship which was apparently signed by Mr. Romanelli [7].
36In a case where there are few, if any, admissions, it is obvious that there will be a need for the applicant to continue to retain counsel in order to prove her case. Litigation where nothing is admitted and everything is denied is expensive and time consuming for counsel. The amount of evidence gathered together by Mr. Sorley in order to prove cohabitation for the purposes of this motion proves how extensive the efforts that Ms. Romanelli will have to take in order to even prove her claim for spousal support.
37As well, it is clear that there are a number of corporations involved in this proceeding and it is apparent that the respondent’s business affairs are complex. There is firstly Triple R Ranch which owned the Bradford farm property that eventually sold for $13 million. The respondent used his share of these proceeds to purchase the property that he presently owns in Gilford. There is Tri Rom Enterprises in which the respondent is a one-third shareholder; that was a construction company for whom Mr. Romanelli worked during cohabition; however, his shares were held in his brother’s name to avoid a claim against these shares by Mr. Romanelli’s second wife and there is presently litigation between Mr. Romanelli and one of his brothers concerning this corporation. In this litigation, Mr. Romanelli has given inconsistent statements as to the purposes of this litigation [8].
38Finally, financial statements of two numbered companies, 2342576 Ontario Limited and 1711887 Ontario Inc., were also included in the disclosure provided by Mr. Romanelli. The former of those companies received the respondent’s portion of the funds from the sale of the Bradford farm property.
39Finally, there are discrepancies as to Mr. Romanelli’s income. The credit card statements which had been provided to Mr. Sorley have indicated the expenditures to be well beyond the income that Mr. Romanelli claims that he has in his financial statement. There is an expressed concern that Mr. Romanelli is not being transparent in his income or assets from which income can be produced.
40Regarding the issue of constructive trust, it is apparent that the parties’ financial affairs were intertwined. That is apparent from the respondent’s statement that the applicant gave his accountant instructions regarding the filing of his income tax returns as “common law” [9]. Ms. Romanelli says that she completed significant improvements to both the Bradford farmhouse and the Gilford property, which Mr. Romanelli denies. Mr. Romanelli’s involvement in Tri Rom only occurred after cohabitation, and he stated in in the Statement of Claim in the sibling litigation that he was only involved in Tri Rom in 1996, a year before cohabitation, and only after 1999 did the company begin to construct houses in Bradford, Keswick, Innisfil and Pembroke. That company grew during the period of cohabitation and its value appears to be independent from the inheritance received by Mr. Romanelli and his brothers from their father. These are all issues to be addressed at trial as there are inconsistencies on the evidence provided in this motion, and evidence that conflicts with the position of the respondent that there is no case that there was a joint family venture or unjust enrichment allowing for a trust remedy.
41It might be suggested that the disclosure requested, including the third party disclosure is excessive and a fishing expedition. However, I go back to Rogers J.’s assertion in Stuart that the disbursements are to “primarily ensure that all parties can equally provide or test disclosure, make or consider offers, or possible (sic.) go to trial”. The applicant cannot pursue settlement or consider settlement offers without knowing where she stands. The third party disclosure may be necessary to enable the applicant to consider a settlement position apart from litigation. This may, in fact, include valuations of the properties and income of the respondent.
42In sum, even were spousal support the only meritorious claim, the positions taken by Mr. Romanelli in the litigation are such that Ms. Romanelli will have to continue to retain counsel in order to prove her claim for spousal support. Without assistance from counsel, she would be completely lost and the playing field would be completely uneven. I find that interim fees and disbursements are therefore necessary even were spousal support the only meritorious claim. There is a lack of transparency apparent on the face of the materials filed which leads me to make this finding and to find that these fees and disbursements are necessary.
c. Proof of Interim Fees and Disbursements
43Respondent’s counsel submits that the applicant has failed to adequately prove interim fees and disbursements necessary to continue with this litigation. He points out that without evidence of the fees and disbursements necessary and a proper breakdown of those fees and disbursements (including draft bills of costs) the applicant’s motion must fail.
44The case law appears to confirm that a motion for interim fees and disbursements must contain proper evidence of the reason for the fees and disbursements and the estimated costs of those disbursements. As noted in the Mcilvenna case above, there must be a purpose behind the fees and disbursements and not just a fishing expedition.
45In Hall v. Sabri, 2011 ONSC 4900 the applicant requested interim disbursements and costs. Based upon the lack of evidence provided by valuators or estimates of the cost of litigation, Bielby J. was unwilling to order interim disbursements or costs. He asserted that, “The amount claimed seems to have been pulled out of the air without any evidence of anticipated costs” [para. 78]. The motion was dismissed subject to leave to the applicant to reapply with “proper evidence”.
46In the present case, the applicant deposes that she requires $100,000 to make up the following:
- Outstanding legal fees and disbursements (unbilled to date) - $52,796.93
- The cost of a certified business valuation and income analysis - $25,000 (estimate)
- Long motion for third party disclosure - $10,000
- Motion to increase spousal support - $3,000 to $6,000
- Settlement Conference and Trial Management Conference - $8,000 to $10,000
- Questioning - $8,000 to $15,000
47She says that these costs do not include the costs of the trial and she wishes to reserve her rights to bring a further motion to fund a trial if necessary.
48It is concerning that the applicant has not broken down the legal costs already incurred in this litigation, by far the largest item in her list of litigation costs proposed to be funded by the respondent [10]. However, considering the energy that has been expended in gathering together evidence of cohabitation for this motion and meeting the respondent’s assertion that the parties cohabited for only a year, the fact that significant costs have been incurred to date is not surprising.
49The applicant does not provide the name of a proposed business and income valuator or his or her estimate of the anticipated costs; however this may very well be because she had not yet received a business valuation or adequate disclosure in order to estimate the costs of those valuations. The remainder of the figures are estimates of future legal costs. Although they lack specificity they are not what was referred to by Bielby J. as being “pulled out of the air”. Although there is no formal bill of costs attached to the applicant’s materials, there is a summary of anticipated steps and estimated expense of those steps which was also, at least, part of what was suggested to be necessary in a motion of this nature: see Harbarets v. Kisil, 2014 ONSC 5000 at para. 5. Indeed, other than fees and disbursements incurred to date, it would be difficult to produce a formal bill of costs as it is unknown exactly how long each of the steps would take.
50The applicant cannot provide an exact estimate of her future costs as that is necessarily uncertain at this early stage of the litigation. She can only provide her plan of attack and the steps that she wishes to take to bring this matter to the commencement of trial and this she has done. She anticipates that the third party disclosure motion is necessary and supports the need for this in her materials; she deposes that the respondent’s brothers will not consent to release of information about either of the corporations that they are involved in and it may very well be that that information is necessary to prove unjust enrichment or the applicant’s contribution to any accrual in value of either or both of those assets. The applicant has also noted that questioning and a Settlement Conference and Trial Management Conference will be necessary and none of this is surprising or frivolous considering the nature of this litigation and the position taken by the respondent.
51To summarize, I have before me a statement as to the legal fees and disbursements already incurred by the applicant as well as an estimate of legal fees and disbursements to be incurred in the future. Sufficient evidence has been supplied by the applicant for this purpose and I so find.
Result
52We are at the early stages of the proceeding at this point in time. As discussed above, the applicant does not have to prove her case at this early stage; she need only show the prima facie meritorious case. The fact that the respondent inherited the assets which he had when the parties commenced cohabitation does not mean that there is no genuine issue for trial; that indeed difficult to determine without an estimate or disclosure of the assets that the respondent owned when the parties commenced cohabitation as compared to what he left the relationship with. Only once those values are proven is the applicant able to properly assess the merits of her property claim.
53Once the materials are disclosed as requested in the applicant’s motion (and in particular the disclosure set out in para. 14 of the Schedule ‘A’ to the applicant’s Notice of Motion) the applicant may very well have to obtain assistance from a business valuator or accountant in order to determine values and to determine accrual and value over the length of the relationship. Certainly it is well known that the farm property in Bradford fetched $13 million when sold for development purposes. I have already commented that the applicant’s claim to share in those proceeds may very well be problematic. However, at this point in time because of the deficiencies in the respondent’s financial statement, the applicant is unable to rely upon anything other than the relative wealth positions of the parties on the date of separation as well as her contributions during cohabitation to the respondent, the respondent’s family and the respondent’s business.
54The applicant has requested $100,000 in interim costs and disbursements. This is large amount. It is largely based upon the applicant’s evidence of estimated costs and disbursements of $118,796.93 as set out in her affidavit, taking into account unbilled fees and disbursements presently owing to her lawyers.
55It is clear that the playing field is not even between these parties. The respondent has assets in excess of $2 million. The applicant has no assets whatsoever and, until lately, subsisted on Ontario Works assistance. Her income is only recently slightly increased by the $1,000 per month spousal support award of Graham J. from November 2016.
56It is also apparent that the applicant will not be able to prosecute this matter without an award of interim disbursements and fees.
57E.M. Macdonald J. in Rosenberg stated that he had not seen a request for interim disbursements and fees in excess of $35,000. However that case was heard in 2003 and since then the complexion of things have changed. In Rea v. Rea, Douglas J. surveyed a number of interim disbursement awards. Out of the six cases reviewed, there is were examples of a range of interim disbursements awarded in various cases of $100,000 to $500,000. Douglas J. awarded $250,000 in Rea. The Rosenberg figure of $35,000 is now out of date.
58The amounts set out for legal fees in the applicant’s affidavit are reasonable estimates of the cost of each of the steps noted in that affidavit. It is unknown what a business valuator will cost but it is apparent to me that some expert assistance will be necessary in order to provide the applicant with advice and guidance as to the case that she is to make leading up to settlement and/or settlement or trial.
59I note the words of Mesbur J. in Gold v. Gold, 2009 ONSC 4900 where the wife claimed $200,000 in advance costs for trial. Mesbur J. described this amount as “staggering” and stated that to grant this amount would “do more than level the playing field; it would give the wife carte blanche for the trial.” She also noted that the wife had available to her $90,000 in assets as well as payments to be received for retroactive support of approximately $80,000, none of which is available to the applicant at present; she has no assets or resources whatsoever. Mesbur J. granted the wife $50,000 for advanced costs.
60I agree with the comments of Mesbur J. Carte blanche is not what is intended by the rule. The rule is intended to level the playing field and not to cover all anticipated costs of the applicant leading up to the trial.
61I cannot say how the more than $50,000 in fees and disbursements was expended by the Sorley & Still firm as I did not receive a Bill of Costs or dockets to justify this amount. I also do not have any evidence other than the judicial notice that I might take of the actual costs of a business valuation. A more reasonable amount is $10,000 for an expert to review the evidence on a preliminary basis and provide advice as to the income of the applicant and the value of assets and as to the actual costs necessary to provide clarity to the wife. This will only be available once the parties have argued disclosure, including presumably a request by the applicant to provide the valuations requested in paragraphs 5 and 6 of the applicant’s notice of motion. That motion is yet to be argued.
62Taking this $10,000 figure for the business valuator into account, the anticipated steps to be taken by the applicant to continue to a trial management conference may amount to just over $50,000 based upon the anticipated costs set out in the applicant’s affidavit.
63Considering the failure of the applicant to fully account for the costs expended to date, and the uncertainties surrounding a business and income valuation, the amount of $100,000 appears to be excessive. A more reasonable figure for interim fees and disbursements would appear to me to be $60,000. This accounts for much of the costs of the anticipated steps to be taken and allows for something for the business valuator.
64There shall therefore an order that the respondent pay the applicant $60,000 for advance costs and disbursements. This amount is a loan by the applicant to the respondent and shall be accounted for in the final disposition at trial at the discretion of the trial judge.
65This order does not specifically address the full costs of a certified business valuator to the applicant, or the costs of trial. This order is without prejudice to the applicant’s right to bring a further motion for an advance prior to trial or upon receipt of an estimate of costs provided by a certified business valuator, as well as evidence confirming the necessity of such a valuation.
66All other issues in the motion and counter-motion adjourned to a date for a long motion to be set through the office of the trial coordinator in Barrie.
67The parties may speak to the issue of costs on a ten day turnaround with the applicant and then the respondent providing costs submissions. Costs submissions to be no more than 5 pages in length not including Bills of Costs and any offers to settle the motion.
McDERMOT J.
Date: February 24, 2017
[1] See the Family Law Act, R.S.O. 1990, c. F.3, s. 29 [2] Consolidated Practice Direction Concerning Family Cases in Central East Region (May 1, 2016) [3] See Rules of Professional Conduct (Law Society of Upper Canada, 2000), s. 5.2 [4] O. Reg. 114/99 [5] The applicant denies this to be the case and says that the parties only met with the accountant together. [6] There was, however, another $60,000 paid in insurance proceeds for the farmhouse on that property which burned and to which the applicant says she added value. [7] I understand that Mr. Romanelli denies that this was his signature; however the signature on the declaration which is an exhibit to the applicant’s affidavit sworn January 30, 2017 appears to be that of the respondent as it appears on his affidavit sworn in these proceedings as well as his affidavit sworn in the civil proceedings on July 11, 2013. [8] Mr. Romanelli originally said that this litigation involved a claim for expenses in a company in which he did not have an interest: see the respondent’s answer at para. 13 and 18; however later in the material Mr. Romanelli acknowledges that he is a one-third shareholder in that company: see paragraph 7 of the Statement of Claim attached as Ex. A to his affidavit sworn January 13, 2017. [9] The statement from the accountant does not necessarily support Mr. Romanelli’s assertion; in that letter filed as Ex. G to his January 13, 2017 affidavit seems to state that the accountant accepted Ms. Romanelli’s instructions respecting the filing of her income tax returns only. [10] There was a summary of incurred fees passed up to me during initial argument of this motion on January 19, 2017; however, this was part of the applicant’s solicitor’s affidavit and I have disregarded that evidence as a result. No such summary was made a part of the applicant’s reply affidavit sworn on January 30, 2017 and no time sheets or dockets were filed as exhibits to that affidavit justifying the legal costs and disbursements incurred to date.
