ONTARIO
SUPERIOR COURT OF JUSTICE
FAMILY LAW
COURT FILE NO.: 07-FA-015184FIS
DATE: 20130225
BETWEEN:
JOYCE IVY LINETT,
Applicant
– and –
MARC HARRY LINETT,
Respondent
L. Leslie Dizgun and Kristy A. Maurina,
Co-Counsel for the Applicant
Kenneth Cole and Allison Kotler,
Co-Counsel for the Respondent
Mark S. Shapiro, Counsel for Robert Karoly, a proposed Respondent
Ron E. Folkes, Counsel for 606314 Ontario Limited, a proposed Respondent
ENDORSEMENT ON WRITTEN SUBMISSIONS ON COSTS: GREER J.:
[1] On December 5, 2012, I delivered Written Reasons on the Applicant former Wife’s Motion to add Respondents to the matrimonial litigation between her and the Respondent, the former Husband. I added as Respondents, Robert Karoly, and 606314 Ontario Limited (“#606”) (which encompasses Tempra Management Ltd. and Tri World Marketing Corporation). There was really no argument presented as to adding Karoly’s wife and his family Trust, so they were not added.
[2] My Endorsement was 10 pages and 51 paragraphs in length. The Motion, itself, took a full day to argue. In para. 51, I said if the parties could not otherwise agree on Costs, they should send me brief written submissions within 30 days of my Order, no longer than 3 pages plus time dockets and case law.
[3] The Respondent, former Husband, took the position that I did not include him respecting service by the former Wife on him because I said she shall serve her Bill of Costs on the “added responding parties”. He was already a Respondent and would be served in any event. My wording therefore ensured that the newly added parties would have to bear some of the Costs, given that they all opposed the Motion to add parties, while the former Husband was already a litigant.
[4] The former Wife was successful on her Motion. My reasons are extensive and outline how all these parties played certain roles in this lengthy matrimonial litigation, which has been bitter and protracted between the former spouses since 2007. The added parties, however, were involved, in different capacities, from the beginning, given that the former Husband and Karoly were law partners when #606 was incorporated and when the property was sold.
[5] The former Husband and now added parties, took a strong stance in opposing the Motion to add parties. They did not want the oppression issue heard on the Family Law List. I found that List to be appropriate to hear all these intertwined issues. The #606 party was inactive, had no employees and the corporate records were “in shambles”. I held it was not an appropriate matter for the Commercial List, and said that all issues raised by the former Wife could be dealt with more expeditiously and at less expense on the Family Law List. I said it made “good common sense” to do so.
1. The parties and added Respondents’ positions on Costs
a) The former Wife
[6] The former Wife asks that she be awarded her full indemnity Costs in the amount of $55,538.64 inclusive of disbursements and HST plus $1,300 for the preparation of the Bill of Costs. This includes all the time of her counsel Gary Joseph (who did not appear on the Motion), his colleague Kristy Maurina, who did appear, with L. Leslie Dizgun, outside counsel, who I assume was there to argue the corporate issues and the claim of “oppression” raised by the former Wife.
[7] Mr. Joseph’s Bill covers the period from October 18, 2009 to November 5, 2012. He also sets out the figures of $39,008.43 for Costs on a substantial basis and $29,555.91 on a partial indemnity basis. Mr. Joseph only spent 14 hours at $475 per hour, with 35 years experience. Ms. Maurina, at $235 per hour for 148 hours has 5 years experience. The former Wife’s counsel were very careful not to overburden the file with senior counsel’s time.
[8] Mr. Dizgun has 24 years experience. His hourly rate is $425. He spent about 15 hours, a reasonable amount of time as special counsel. He asks for his Costs of $7,077.70, inclusive of disbursements and HST.
b) The former Husband
[9] The former Husband exceeded the 3 page limit on his Submissions and sent 5 pages. His position is that each party should bear his or her own Costs. He says the former Wife’s claims are “totally exhorbitant” and “go well beyond any reasonable expectation.” He further says that the added Respondents should have agreed to be added and consented to the Motion.
[10] He says the Court “…agreed, at paragraph 36 of the endorsement, that while some of the Applicant’s claims appear tenuous, she did nonetheless have the right to plead them.” With respect, that is not what I said. I said:
“Even if the claims appear tenuous to some, in my view, there is nothing about the claims that is so outrageous that the claims would be struck before the newly added Respondents have even pleaded.”
The words “to some”, refer to him and the others opposing the Motion.
[11] The former Husband sees his position as “reasonable” and says he did not oppose, in principle, adding parties. Again, he misstates facts. In para. 27 of my Reasons I said that he took the position that “all the relief the former spouse asks for should be dismissed, including her claim to amend the Application.” I do not see this as a reasonable position. He says Costs should be “in the cause” or fixed by the Trial Judge.
c) The position of Karoly
[12] Karoly sees himself as being “in the wrong place at the wrong time” when the parties’ marriage dissolved. Karoly, however was involved in #606 from the start. He says that he should not be ordered to pay any Costs as nothing he did would cause the former Wife to add him as a party.
[13] If, in any event, if Costs are to be awarded against him, Karoly says they should be modest, as the Motion Record contained much relief, which was unrelated to him. He sees his part as 5% of the whole and not related to the matrimonial matters. Costs should be in the cause, he says, at no more than $3,500 - $5,000.
d) The position of #606
[14] The added party #606, says it supports and agrees with the Submissions of the former Husband. It opposed being added as a party and did not participate in any of the settlement/case conferences. It says the former Wife alleges no wrong-doing on its part.
[15] It says Costs should be reserved to the Trial Judge and should be awarded “in the cause”.
2. Analysis
[16] Under Rule 24(1) of the Family Law Rules, a successful party is presumed entitled to his or her Costs. The former Wife, as Applicant, is entitled to her Costs. In Fong v. Chan, 1999 2052 (ON CA), 1999 CarswellOnt 3955 (C.A.), the Court in para. 22 says that modern Cost rules are designed to foster 3 fundamental purposes, namely:
(1) to indemnify successful litigants for the cost of litigation.
(2) to encourage settlements.
(3) to discourage and sanction inappropriate behaviour by litigants.
[17] The Court also examines the factors in Rule 24(11), in S.131 of the Courts of Justice Act and the factors in Rule 57(1) of the Rules of Civil Procedure. In the case before me, the Respondent former Husband and all the added parties vigorously opposed the Motion. They all refuse to accept the tenent set out in Rule 24(1) that a successful party is entitled to her or his Costs.
[18] While there may be some cases where a Motions Judge will let a Trial Judge determine the Costs of the Motion, in my view this is not one of them. As for all their positions that Costs should be “in the cause”, if awarded, there is a no-fault system in matrimonial proceedings, and I have yet to see an Order in that form in such proceedings.
[19] I find that the former Wife is entitled to her Costs on a substantial indemnity basis. Costs must be reasonable in the circumstances, and the principle of proportionality must be applied.
[20] All the now Respondents say the former Wife’s Costs should not go back to October 4, 2009, yet it is clear on the Bill of Costs prepared by counsel on the Wife’s behalf, that this is when the issue first arose. In my Reasons, I set out in some detail about the delays in moving the litigation forward. Even Karoly confirms that the Minute Book of #606 is in “a state of shambles”. He seems to have the most information about #606. Although each of the former Wife and former Husband are connected to it.
[21] In my view, despite the fact that the former Wife thinks that #606 should not have to bear any of her Costs, I disagree with her position. It is an integral part of all the amendments to the Motion and the pleadings.
[22] The Motion was originally scheduled to be heard in the spring of 2010, and the delays were the result of the parties’ attempts to settle their differences. I agree that Karoly and #606 should not have to bear Costs relating to earlier time while the Motion was in progress with attempts to settle the whole of the litigation.
3. Fixing the Costs
[23] The former Wife’s Costs are fixed on a substantial indemnity basis as she was wholly successful on the Motion. This is not a case for full indemnity Costs. There was no bad faith on the part of any party, but the amendments and adding of parties was vigorously opposed. The former Husband and #606 ought to have consented to the terms of the Motion but did not. I see nothing in the former Wife’s Bill of Costs that relates to Case Conferences or appearances before Mr. Justice Czutrin.
[24] While there may have been some duplication of conferring by the former Wife’s counsel with Mr. Dizgun, the corporate counsel who dealt with the oppression issue and #606, both counsel present on the Motion were necessary.
[25] I do not award Costs for the preparation of the Bill of Costs, as it is part of the overhead of a firm.
[26] I fix the former Wife’s Costs as follows:
- Fees $33,000.00
- Disbursements $l,114.20
- HST on Fees $2,310.00
- HST on Disbursements $84.17
- Mr. Dizgun’s fees of $7,077.70
TOTAL COSTS are $43,586.07
[27] The Costs shall be paid by the former Husband and the added parties as follows:
(a) the former Husband $33,586.07
(b) Karoly $5,000.00
(c) #606 $5,000.00
All Costs are payable forthwith, within 30 days of this Order. With respect to the Costs of #606, they shall be paid out of the monies held in trust by the law firm, Aird & Berlis LLP, which I am told holds nearly $500,000 in trust. If the law firm requires a separate Order in this regard, the former Wife’s counsel shall prepare it.
Greer J.
Released: February 25, 2013
TYPED VERSION TO FOLLOW
COURT FILE NO.: 07-FA-015184FIS
DATE: 20130225
ONTARIO
SUPERIOR COURT OF JUSTICE
FAMILY LAW
BETWEEN:
JOYCE IVY LINETT,
Applicant
– and –
MARC HARRY LINETT,
Respondent
ENDORSEMENT ON WRITTEN SUBMISSIONS ON COSTS
Greer J.
Released: February 25, 2013
TYPED VERSION TO FOLLOW