COURT FILE NO.: CV-10-9014-CL

DATE: 20121010

SUPERIOR COURT OF JUSTICE – ONTARIO

(COMMERCIAL LIST)

RE: CHRISTINE MARIE HAUNERT-FAGA, Applicant

AND:

STEPHEN LEONARDO GLEN FAGA, Respondent

BEFORE: CUMMING J.

COUNSEL:
Chris Reed and Bruce Smith, for the Receiver
Christine Marie Haunert-Faga, Self-represented
Jonathan Cooperman, for the Receiver, A. Farbar & Partners Inc.

HEARD: OCTOBER 10, 2012

ENDORSEMENT

The Motion

[ 1 ] The Receiver moves, inter alia, for the approval of professional fees. This is a matter that was adjourned at the hearing held May 11 and 17, 2012, as provided in paragraph 10 of my Order dated May 18, 2012. See my Endorsement: Haunert-Faga v. Faga , 2012 ONSC 2847 .

[ 2 ] Materials filed at the return of today’s hearing included the Affidavits of the four professionals, being Jonathan Cooperman sworn October 3, 2012, Ken Froese sworn October 3, 2012, Bruce Smith sworn October 4, 2012 and Christopher Reed sworn October 4, 2012. Minutes of Settlement Relating to Fee Claims, entered into between Christine Haunert-Faga, the legal counsel to the Receiver and the investigator of the Receiver, were filed, as was the Receiver’s Third Report dated October 5, 2012.

[ 3 ] The Receivership commenced on December 8, 2010 with the Receiver being appointed as an equitable receiver. The Receiver has realized in respect of some assets but only after very substantial effort and cost. The Motion Record (in particular, Volume II entitled “History”) sets forth the very concerted efforts of Stephen Faga, with the apparent assistance of others, to conceal his assets and avoid the claims of his former wife as a judgment creditor and frustrate her efforts to obtain a meaningful recovery.

[ 4 ] The Receiver, its counsel, and the forensic investigator conducted an extensive investigation and tracing of the flow of funds. The analysis of the forensic investigator disclosed money and assets belonging to Stephen Faga that were held in the names of various individuals and companies.

[ 5 ] At this point, the Receiver has realized some $2,007,150.65 in the Receivership, with monies on hand being $1,823,647.85.

[ 6 ] The professional fees to August 31, 2012 total $1,800,497.07. The professionals have volunteered to write off $105,000.

[ 7 ] It is noted the Receiver contemplates initiating a so-called “Recovery Action” in pursuit of further assets. Accordingly, the professionals have also agreed to defer collectively $335,000 of their fees so that the Receivership has on hand a total of some $511,114.56 to meet the ongoing costs of this litigation after a further contemplated distribution of $50,000 to Ms. Haunert-Faga.

[ 8 ] Thus, the recovery to date is approximately equal to the outstanding fees (inclusive of deferred fees) of the professionals.

[ 9 ] There is no question as to the reasonableness of the professional fees and that without their efforts there would not have been any recovery at all.

[ 10 ] Ms. Haunert-Faga is self-represented. She is quite obviously competent and fully understands the nature of her right to counsel and the advisability of having independent advice. She has refused to obtain independent legal counsel and, as set forth in the Minutes of Settlement, is quite supportive of the merits of the claims for professional fees, from both a qualitative and quantitative standpoint. She is very ably assisted by her father as an advisor and friend throughout this continuing ordeal.

[ 11 ] The reasons for the receivership at hand is due to the dishonesty of Stephen Faga in concealing his assets so as to defeat his former wife and children as a judgment creditor. The investigation has required a great degree of professional knowledge, experience and skill on the part of the Receiver and the Receiver’s professional advisors. I am satisfied the Receiver and the Receiver’s advisors have exercised all due diligence and acted within the Receiver’s mandate from the Court. The costs incurred stem from the fact the Receivership has resulted from a number of very complex transactions skillfully entered into by the perpetrators thereof with a view to concealing Stephen Faga’s assets from his judgment creditor, Ms. Haunert-Faga. The Receiver’s investigation has been competent and thorough. I am satisfied the professional fees ought to be approved.

[ 12 ] For the reasons given, the Receiver’s motion is granted. An Order is signed in accordance with this Endorsement.

CUMMING J.

Date: October 10, 2012