ONTARIO
SUPERIOR COURT OF JUSTICE
FAMILY LAW
COURT FILE NO.: 05-FD-305585-0001
DATE: 20141127
BETWEEN:
VALERIE YVETTE SIEBERT,
Applicant
(Responding Party on the Motion)
– and –
FABIEN ROMUALD SIEBERT,
Respondent
(Moving Party on the Motion)
Jaret Moldaver, Counsel for the Applicant
Sheldon Tenenbaum, Counsel for the Respondent
WRITTEN SUBMISSIONS ON COSTS
endorsement: greer j.:
[1] On September 15, 2014, I released a Judgment in this 8-day Motion to Change brought on by the Respondent, Fabien Romuald Siebert (“Fabien”) respecting the Arbitration Award (“the Sadvari Award”) dated January 29 and April 28, 2009, in this proceeding. The Applicant, Valerie Yvette Siebert (“Valerie”), in turn, brought on a Cross-Motion with respect to non-payment of S.7 expenses and other payments arising out of the Sadvari Award. The Motion was treated as a Trial of an issue.
[2] Fabien and Valerie were divorced on October 28, 2011, after a 9-year marriage. They have been litigating since the date of their separation and it has had a profound affect on each of them and their two children, Pauline and Clement, both now teenagers.
[3] In para. 131 of my Judgment, I directed the parties to provide me with Written Submissions on Costs, no longer than 3 pages plus a Bill of Costs, time dockets and any case law, within 30 days of the Judgment. I have received those submissions.
[4] In my Judgment, I ordered Fabien to pay Valerie $27,000 in S.7 expenses owing to her at the time of the Motion. Child support for 2 children was fixed at $4,123 per month based on my finding that Fabien’s income in 2013 was $335,162. I awarded Valerie the sum of $6,490 per month spousal support. The S.7 expenses were to be agreed upon by the parties, with Fabien paying 77% and Valerie 23%. The Order of Madam Justice Horkins was varied accordingly. While the 2013 income attributed to Fabien was reduced from the $500,000 found in the Sadvari Award, Valerie was the successful party in the litigation for the reasons which follow.
[5] I dismissed Fabien’s claim for a retroactive adjustment with respect to what he had been paying. Since Valerie was the successful party, under Rule 24(1) of the Family Law Rules there is a presumption that a successful party is entitled to costs of the Motion. Rule 24(5) takes into account whether a party has behaved reasonably or unreasonably in the proceeding. Rule 24(8) says that if a party acted in bad faith, the Court shall decide Costs on a full recovery basis and shall order the other party to pay them immediately.
Valerie’s Position
[6] Valerie asks the Court to award her full indemnity Costs of $184,288.87 plus disbursements of $163,833.50 plus HST included in both amounts for a total of $348,122.37 less $7,500 awarded to her recently by Mr. Justice Czutrin on an interim part of the proceeding from a non-party, Lofti Fettah (his role in the matter is outlined in my Judgment). There were other Motions during the proceeding, where Costs were left to the Judge hearing the matter, and these are included in the full amount Valerie asked for. The final amount she asks for, inclusive of HST, is $340,622.37.
[7] Valerie says that Fabien was once again duplicitous in terms of his actual income from all sources. I found this to be the case and accepted the expert report of Kenneth Froese, which set out how he calculated Fabien’s income. Again, Fabien lied about his income, as he had when Mr. Sadvari conducted the Arbitration in 2009.
[8] Valerie also points to my following findings to show that Fabien was less than honest and did not come to Court with clean hands:
• he committed perjury about the cash he took from the restaurant business since the Arbitration Award
• breached the interim Orders of 3 Judges
• conspired with his friend, Lofti Fettah by diverting income from the restaurants to him, and later received it back as “loans” from Fettah
• lied to his own expert about his income
• played the game again of “catch me if you can”, as he had in 2009
• refused to direct Thomson, Rogers to pay to Valerie $12,500 held by it in trust for the children
• failed to bring back to Canada some assets still held in France for the children
[9] Valerie’s Bill of Costs is set out in detail in her Costs Brief. Senior Counsel was Jaret Neil Moldaver, called to the Bar in 1999. He has been 15 years in practice. Between 2012 and 2013, Mr. Moldaver’s billing rate varied from $425 to $500 per hour. He says he spent approximately 186 hours on various Motions and at the Trial of the issues over the 8-day period. His Junior lawyer, Lindsay Konhol, spent approximately 60 hours with a billing rate in 2013 of $275 per hour and 2014 at $300 per hour. Joanne Clark, Senior Law Clerk with 28 years of experience, spent approximately 200 hours. The majority of the disbursement fees were those of Valerie’s 2 experts, Steve Ranot at $27,121 and Ken Froese at $107,842.73 for a total of $134,963.73.
Fabien’s position on Costs
[10] Fabien objects to Valerie’s Bill of Costs as being excessive in this situation. He acknowledges that Valerie is entitled to some Costs as she was successful in the matter. On the other hand, he says that Valerie should only be entitled to $100,000 all in, inclusive of disbursements and HST.
[11] Fabien agrees that the litigation has been prolonged, costly and contentious. He says, however, there was no bad faith on his part in the litigation. He says he has already paid Valerie $2,700,000 and cannot afford any more. This figure includes child and spousal support, S.7 expenses, equalization payment, and Costs of the Arbitration. He points to the fact that his assets were frozen and some remain so pursuant to the Order of Mr. Justice Ferrier, which was continued by me. That Order prevents Fabien from mortgaging or otherwise selling his cottage property. It provides Valerie with security for future up to $200,000, if Fabien continues to miss monthly payments and allow arrears to accumulate.
[12] Fabien says Valerie brought on too many interim Motions, changed her lawyer and changed her expert witness too many times. He also says Valerie spent far too much on expert’s fees. He says Costs should have been dealt with in each step in the proceeding and not left to the Trial Judge to decide.
[13] Fabien did bring all his payments up-to-date before the Trial of the issues. He claims both he and Valerie needed to have issues reviewed.
[14] Fabien says his conduct in the litigation was not unreasonable in the circumstances. He had counsel, but fails to mention he changed counsel a couple of times during the period after the Sadvari Award to the date of the Motion.
[15] Fabien maintains that Valerie is not entitled to full recovery Costs. He says that Valerie spent too much time on many Court appearances within the Motion, that he should not have to pay for. He says she adjourned their appointment before the DRO four times.
[16] Fabien says he should not have to pay all Valerie’s disbursements for two experts or even fully those of Mr. Froese who provided a report and was examined at Trial.
Valerie’s Offer to Settle
[17] Valerie served Fabien with an Offer to Settle under Rule 18 of the Family Law Rules. It is dated May 5, 2014, being 5 days before the Trial commenced. That Offer was open for acceptance until the commencement of the Trial or until prior withdrawal in writing. Valerie offered to accept the following compromises:
Commencing June 1, 2014, child support for 2 children would be $3,722 monthly
Commencing June 1, 2014, spousal support for Valerie would be $3,648 per month
S.7 expenses for the children would be paid 75.4% by Fabien and 24.6% by Valerie.
The issue of retroactive adjustment will be set off with the issue of Costs, such that neither party will pay to the other any amount on account of these two issues.
The Offer was not capable of being accepted in part. Fabien did not accept the Offer to Settle and did not serve and file any Counter-Offer.
Analysis
[18] Valerie, as the successful party at the Trial of the issues, is entitled under Rule 24(1) to her Costs of the Motion. Under Rule 24(11) in setting the amount of Costs, I consider the following factors:
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness or unreasonableness of each party’s behaviour in the case;
(c) the lawyer’s rates;
(d) the time properly spent on the case (including various factors set out therein);
(e) expenses properly paid or payable; and
(f) any other relevant matter.
[19] The Motion was of great importance to both Fabien and Valerie. The Motion was very complex, given the reports and evidence given by both parties’ expert witnesses. Some of this was due to the nature of a restaurant business, as Fabien owned and ran 2 restaurants in the theatre district. Some of the difficulty was due to Fabien’s failure to keep proper business records and properly account for the cash he was receiving in the business.
[20] In my view, Fabien was unreasonable in his behaviour in not accepting the reasonable Offer to Settle put forward by Valerie. The amount I awarded her in spousal support was considerably more than Valerie was prepared to settle for. Fabien showed signs of acting in bad faith. If he had listened to his own expert, Ms. Russell, and if he had carefully read her Report, he would have realized that no reasonable person would have believed him when he said his income was $60,000 annually and that he paid a reducing amount monthly for groceries and meals outside the home starting at $100 per month and having it reduced to $20 per month on the last Financial Statement, yet he swore his yearly expenses were in the $196,000 range. He did bring his support payments up-to-date by the time the Motion started, but never explained where that money came from. Further, with $650 in cash in his pocket during the Motion, his evidence that it was to be used to buy fresh produce for the restaurant, did not have a ring of truth to it.
[21] In Osmar v. Osmar, 2000 20380 (ON SC), [2000] O.J. No. 2504, (Ont. S.C.J.), Mr. Justice Aston noted in para. 11, that where a party acts unreasonably and in bad faith, the Court may consider awarding full recovery of Costs. One does not need to find “special circumstances” when Costs awarded approach substantial indemnity, [2011] O.J. No. 4681, 2011 ONCA 665 (O.C.A.) at para. 21. In that case, the Trial Judge had awarded $254,500 in Costs, of which $10,000 were awarded as enforcing spousal support. See also: C.S. v. M.S., 2007 20279 (ON SC), [2007] O.J. No. 2164, where Mr. Justice Perkins awarded full recovery Costs of $320,198.85 payable immediately.
[22] In my view, Fabien sought to conceal information and deceive Valerie, his own expert Ms. Russell, and the Court on what his true relationship with Fettah was, and how much cash he took from the restaurant business for his own living and other expenses.
[23] Costs must be reasonable in the circumstances of the case for an unsuccessful party to pay them. In addition, the principal of proportionality must be factored into account. See: Lawson v. Lawson, 2008 23496 (ON SC), [2008] O.J. No. 1978 (Ont. S.C.J.), in paras. 16 and 17.
[24] With respect to the rates charged by Valerie’s counsel, Mr. Moldaver’s rates are in the range for his years at the Bar and given that he is an expert in Family Law. This matter was complex and took as long as it did, given Fabien’s failure to go by way of “review” as set out in the Order of Madam Justice Horkins, and his insistence on proceeding by way of Motion to Change rather than the less expensive method of a review.
[25] Fabien was unreasonable in not accepting Valerie’s reasonable Offer to Settle, which would have saved 8 days of the Trial of the issues.
[26] I agree with Fabien that he should not have to pay for 2 experts’ fees, since Valerie switched experts part-way through the proceeding. I therefore deduct Mr. Ranot’s fee of $27,121 from the list of disbursements. I also reduce the paralegal rate of Ms. Clark from her average rate 2012/13 of $235 per hour during the time in question to that of $150 per hour, which is reasonable in her circumstances. Ms. Clark’s hourly rate is more than some counsel with 3 or 4 years’ experience charge. That reduction is $17,000, which I deduct from the total of her 200 hours at $235 average per hour.
[27] Mr. Moldaver’s time was reasonable throughout. During his leading of evidence-in-chief and cross-examination, he was to the point and did not waste time. He eliminated the need to call Fettah by reading in parts of the Fettah Transcript on discovery. I deduct an additional $500 due to Valerie’s cancellation of appointments with the DRO. Judges who heard the interim Motions had the discretion to leave Costs of those Motions to the Trial Judge.
[28] With respect to the issue as to whether “bad faith” applies in these circumstances, the term has been defined as “intent to deceive” and a conscious doing of a wrong because of dishonest purpose or moral obliquity. The cases have also said it can be a “state of mind affirmatively operating with a furtive design or ill will”. See: Paras. 16-19 in C.S. v. M.S., supra, where Perkins J. says it can be carried out with intent to inflict financial harm.
[29] Fabien certainly did his best to conceal his income. His dealings with Fettah were intended to deceive Valerie and perhaps CRA about what his true income was. His calculation of child and spousal support were based on his gross income.
[30] In the circumstances of this case, I find that Fabien acted in bad faith within the meaning subrule 24(8) of the Family Law Rules. I find that Valerie is entitled to her Costs on a full indemnity basis, which I fix as follows:
- Fees of $163,087.50 less $17,000 less $500 for a total of $145,587.50
plus:
- HST at 13% of $18,926.38, on the fee
plus:
- Disbursements of $144,985.40 less $27,121 for a total of $117,864.40
plus:
- HST at 13% on the disbursements, for HST of $15,322.37
TOTAL FEE: $297,700.65
I order Fabien to pay to Valerie the sum of $297,700.65 for her Costs fixed on a substantial indemnity scale, payable 25% on December 31, 2014, with a further 25% of the original amount due to be paid on January 31, 2015, a further 25% of the original due on February 28, 2015, and the balance due on March 31, 2015. Post-Judgment interest shall run on any amount unpaid by April 1, 2015 at the Courts of Justice Act rate on that date until paid in full.
[31] I find that 25% of the Costs are related to the issue of what variation was to be made to spousal support and child support and this amount of $74,433.42 is part of the support order to be enforced by the FRO for enforcement purposes. I have used this figure as reasonable since most of the time was spent determining what income was to be attributed to Fabien for child and spousal support purposes.
Greer J.
Released: November 27, 2014
COURT FILE NO.: 05-FD-305585-0001
DATE: 20141127
ONTARIO
SUPERIOR COURT OF JUSTICE
FAMILY LAW
BETWEEN:
VALERIE YVETTE SIEBERT,
Applicant
(Responding Party on the Motion)
– and –
FABIEN ROMUALD SIEBERT,
Respondent
(Moving Party on the Motion)
ENDORSEMENT
Greer J.
Released: November 27, 2014