ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY COURT

CITATION : Pereira v. Pereira et al, 2015 ONSC 2956

NEWMARKET COURT FILE NO.: FC-08-031074-01

DATE: May 15, 2015

BETWEEN:

Maria Stella Pereira

Applicant

– and –

Americo Antonio Pereira a.k.a. Marco Pereira

Respondent

Belina Rossi, Agent for the Applicant

– and –

Vitanova Homes Ltd. Respondent

Maxine Kerr, for the Respondent (Not appearing on Motions)

Robert MacDonald, for the Respondent

HEARD: April 29, 2015

RULING ON MOTIONS

JARVIS J.

[1] There are two motions before the court. The Corporate Respondent, Vitanova Homes Ltd (“Vitanova”), seeks an Order in the nature of a summary judgment dismissing as against it the Application now before the court. The Applicant (“wife”) does not oppose a dismissal Order but, among other things, requests an Order traversing the forthcoming Trial in this matter to the Fall sittings of the court. Neither the Respondent husband nor his counsel appeared or participated in the motions and otherwise took no part in them. At the conclusion of argument, Vitanova’s motion was granted, and the issue of costs was reserved.

Facts

[2] The wife and husband were married on June 25, 1988 and separated on October 8, 2008. There are three children of the marriage, all of whom reside with the wife.

[3] On October 4, 2013, the wife commenced this Application against her husband and Vitanova. In her Application the wife did not plead any cause of action against Vitanova, nor in the section of the prescribed form identifying the “Important Facts” supporting her claims did the wife plead any facts demonstrating that Vitanova was a necessary or proper party to the proceedings.

[4] The husband and Vitanova retained separate, independent counsel. There was no issue that the husband was involved with Vitanova either as its principal owner or employee: but whatever was (or is) the nature of that involvement, he agreed through his counsel to provide to the wife the disclosure she asked about the company’s ownership, assets and operations. There was no dispute when Vitanova’s motion was argued that the disclosure requested about it had not been satisfied, although a new valuator retained by the wife had made a recent request for further disclosure of the husband’s personal and business interests.

[5] On July 9, 2014, the wife moved for, among other things, an order that the husband make monthly payments on a line of credit registered against title to the parties’ matrimonial home in which she and the children resided, and for listed disclosure from Vitanova. As counsel for Vitanova had not been served with the wife’s motion, no order was made involving it. Directions were given with respect to a disclosure motion in the event that Vitanova refused to produce the information requested by the wife. Interestingly, in an affidavit sworn on July 9, 2014, the wife acknowledged that Vitanova “is no longer a necessary party to this action or the motions before this court.”

[6] By letter dated July 28, 2014, counsel for Vitanova (MacDonald) wrote to the wife’s counsel that,

If…your client does not intend on proceeding with her motion for disclosure as against Vitanova Homes Ltd., then the company should be let out of this action without delay. I have instructions to consent to an order dismissing the action against Vitanova Homes Ltd., on a without costs basis, provided there is no further litigation as against the company. Please let me know if your client will consent to such an order.

[7] There was no response to this letter.

[8] On or about August 18, 2014, the wife changed counsel.

[9] The husband wished to schedule a Settlement Conference in correspondence dated mid-December, 2014. The wife’s new counsel thought the request premature and noted in a letter to husband’s counsel:

Secondly, I note that you may not have served Mr. MacDonald with your Settlement Conference Brief which was served on my office yesterday by courier. The Rules are clear – Mr. MacDonald’s client is a party and he must be served and Mr. MacDonald must be in attendance at the Settlement Conference. If Mr. MacDonald fails to appear, I will be seeking costs against both him and his client. You will recall that Mr. MacDonald and you made quite an issue at the last Motion before Justice Vallee in July, 2014 that my predecessor had failed to serve him with the Motion materials.

[10] The next day Vitanova’s counsel, Mr. MacDonald, e-mailed wife’s counsel and after expressing concern about the extent of the delay in the action, indicated that he was,

… attaching a copy of my July 28, 2014 letter to your predecessor, Ms. Blenman. I never received a response to my letter and I would appreciate hearing from you with respect to the issues that I have set out. If your client maintains that there is outstanding disclosure required from Vitanova, I would like to deal with that issue cooperatively, if possible. If Vitanova is no longer a necessary party to the action (as your client deposed), then Vitanova should be let out of the action so that unnecessary costs are not incurred.

[11] There was no response to this e-mail.

[12] In early January, 2015, a Settlement Conference date was scheduled on the consent of all parties for March 24, 2015. By letter dated January 27, 2015, the wife’s counsel made a request for additional disclosure but ignored the earlier letter and e-mail from Vitanova’s lawyer (as already noted) and advised that if this most recent request was refused a disclosure motion would be brought “and for the disclosure requested in the Motion…in July of last year…” Nowhere in the record before me is there any evidence that wife’s counsel acknowledged her client’s earlier admission that her pleadings involving Vitanova were deficient, that she (wife’s counsel) had reviewed the disclosure provided by Vitanova or, if that disclosure had been reviewed, what disclosure was outstanding, refused or unsatisfactory.

[13] The Settlement Conference proceeded before Madam Justice McGee on March 24, 2015. Counsel for Vitanova attended. In dealing procedurally with Vitanova’s intention to move for an order dismissing the Application against it, Justice McGee gave directions for the hearing of that motion on April 22, 2015, and scheduled a Trial Management Conference. The case was listed for the Spring trial sittings commencing May 19, 2015. At some point at court that day, wife’s counsel served the husband with a Statement of Claim issued six weeks earlier by another law firm retained by the wife seeking relief against the husband and several companies, one of which was Vitanova.

[14] One week later the wife’s counsel withdrew her representation of the wife due to what she said were health reasons. Days after that “shocking revelation” (according to the wife) she learned that the business valuator and income determination expert whom she had retained could not conclude his engagement in time for Trial. The wife “scrambled” (her words) to retain alternative legal representation, and a new expert. Vitanova’s dismissal motion was rescheduled (over its objection) to April 29.

[15] In resisting Vitanova’s motion, the wife acknowledged that she did not oppose the dismissal of her action against Vitanova “as currently pled” but requested that any such order be without prejudice to her ability to later amend her pleadings, add Vitanova as a party and make claims against it. A draft amended Application was appended as an Exhibit to the wife’s affidavit.

[16] After the motions were argued on April 29, an order was made dismissing the wife’s Application as against Vitanova, but noting that the dismissal in no way determined the merits of any claim involving that company.

[17] Both parties submitted a Bill of Costs. Vitanova is seeking costs ranging from $18,559.04 (partial recovery) to $27,364.90 (full recovery) inclusive of disbursements and HST. The wife submitted a Bill of Costs limited to Ms. Rossi’s engagement relating to the motions argued and ranging between $4,042.07 (partial recovery) to $5,389.42 (full recovery). The wife has challenged the costs claimed by Vitanova for a number of reasons arguing that they are excessive, they involve a duplication of time, no substantiating documents were produced and no orders respecting costs were made at Conferences at which counsel for Vitanova attended.

[18] Vitanova and the wife exchanged Offers to Settle: Vitanova’s offer was dated March 25, 2015 (slightly amended on March 26) and the wife’s offer was dated April 23, 2015. Each offer proposed that the proceeding be dismissed as against Vitanova. Where the offers differed related to the costs payable by the wife, and whether the dismissal precluded the wife from either later amending her pleadings to rejoin Vitanova as a party or advancing a claim against it in future. Neither offer had severable components.

Analysis

[19] A successful party is presumptively entitled to costs pursuant to Rule 24 of the Family Law Rules. Rule 24(5) requires the court to consider whether a party has acted reasonably and subrule (6) confers on the court a discretion to apportion costs as appropriate if success “in a step in a case is divided.”

[20] Rule 24(11) more broadly mandates the factors to be considered in setting the amount of costs, one of which is whether a party has acted reasonably or unreasonably in the case, and another of which, in subrule (f), is “any other relevant matter.” Pursuant then to Rules 24(5)(c) and 24(11) the provisions of Rule 18(14) dealing with the costs consequences of failure to accept an offer are engaged.

[21] In this case there is no question that while the parties agreed that Vitanova should be released from the proceedings, they could not agree on how that should impact either the issue of costs payable by the wife or whether the wife should be precluded from, at some later point in time, commencing an, as yet unascertained, claim against Vitanova. Much of the argument before me focused on these issues: there was no argument how the more recent claim involving Vitanova was related.

[22] There are a number of facts which stand out:

(a) The wife’s pleadings, as already noted, were deficient in asserting a cause of action against Vitanova or alleging any fact that would otherwise have supported a cause of action;

(b) The wife acknowledged very early in the proceedings, in her July 9, 2014 affidavit, that Vitanova wasn’t a necessary party to the proceedings or to the motions before the court but took no step at any time afterwards to withdraw her Application as against Vitanova, likely due to her certain costs exposure as reflected in Rule 12(3) of the Rules;

(c) Vitanova took no steps after July 9, 2014, to have the proceeding dismissed or withdrawn against it until after the Settlement Conference held on March 24, 2015;

(d) Inexplicably, both counsel for the wife ignored overtures by Vitanova’s counsel to cooperatively deal with the disclosure requested by the wife and to, without the need for a motion being brought, release it from the proceedings;

(e) More concerning, the wife’s succeeding counsel (not Ms. Rossi who appeared as agent for the wife in these motions) demanded the continuing involvement of Vitanova in the proceedings, even going so far as to put Vitanova’s counsel on notice that his non-appearance at the Settlement Conference could invite a costs sanction request against him personally. Either the wife’s counsel had not familiarized herself with her client’s pleadings and earlier affidavit admission (and seemed to ignore it afterwards even when those facts were brought to her knowledge) or there was some other, never explained, reason or reasons why the wife still required Vitanova as a party. While these facts alone should engage the costs sanctions contemplated by Rule 24(9) of the Rules dealing with costs caused by the fault of counsel, neither party to the motions argued sought that relief on notice to wife’s former counsel nor, in the circumstances, am I inclined to initiate that inquiry now. Suffice it that there were clearly costs caused unreasonably, and wasted;

(f) Vitanova sought a disposition that overreached the merits of its complaint. It was unreasonable for it in July 2014 to propose a without cost dismissal of the action against it “provided there is no further litigation as against it” and to later require in its March 25, 2015 Offer that the wife sign a comprehensive Release against the company which would include a no claims-over clause;

(g) Vitanova, subject to (f) above, proposed that it be released without costs in late July, 2014. By March 25, 2015, Vitanova offered to accept $5,500 costs, its counsel stating in a covering letter to wife’s counsel that his client’s actual costs exceeded $10,000.

[23] Success on the motions was divided. Vitanova was successful in having the proceeding dismissed against it but overreached and was unsuccessful in precluding the wife’s right to pursue future claims against it if so advised, and if properly pleaded. There is no question though that Vitanova’s joinder as a party was improper in the circumstances and its continued, and demanded, participation in the proceedings indefensible. The issue now for the court is setting the appropriate amount for costs payable by the wife.

[24] This is not a case for full recovery costs in light of the parties’ divided success on the motions but the wife’s failure to proactively deal with the issue of Vitanova’s joinder as a party even after she had acknowledged its involvement was unnecessary, and especially her counsel’s demand that Vitanova participate at the Settlement Conference is (as already noted) indefensible.

[25] Vitanova claims costs on a partial recovery scale for its review of the Application, input to the Answer filed by the husband (on behalf of himself and Vitanova), a general review of the pleadings and Case Conference Briefs, and related correspondence totaling $4,120. In my view, the time seems excessive - the amount of $2,250 for fees is appropriate.

[26] Vitanova’s counsel was obliged to attend the July 9, 2014motion brought by the wife but delivered no material and was released early. An appropriate amount is $1,000 for fees.

[27] No endorsement respecting costs was made at the Settlement Conference. In Islam v. Rahman, 2007 ONCA 622, [2007] O.A.C. 371, 41 R.F.L (6th) 10 (Ont. C.A.) the Ontario Court of Appeal held [paragraph 2] that the absence of a specific order for costs at a step such as a Conference precluded an award being made. None will be made here.

[28] Dealing with the wife’s request to adjourn Vitanova’s motion on April 22 (which Vitanova opposed) and the motions heard on April 29, it is my view that the adjournment request ought to have been accommodated in light of Ms. Rossi’s recent retainer (even as agent) and that over 48 hours of counsel and clerical time claimed by Vitanova for both events is excessive. As already noted, Vitanova overreached in maintaining what was, in essence, a “with prejudice” dismissal of the wife’s claim against it. In my view, and in light of the divided success, Vitanova’s claimed costs of $8,400 must be discounted. The appropriate amount is $6,000.

[29] Vitanova has claimed disbursements of $1,187.33 and the wife claimed disbursements of $394.82. Neither parties’ Bill of Costs relates the disbursements recorded to any identifiable step in the proceedings but it is clear that disbursements had to be incurred. In my view, an amount of $600 is appropriate.

[30] The total of the foregoing is $9,850 comprising $9,250 on account of fees and $600 on account of disbursements.

[31] The wife shall pay to Vitanova the sum of $9,850 plus HST within 90 days of the date of release of these Reasons. Interest shall run only after that. In the event of default, interest shall run at the prescribed rate now in effect.

Justice D.A. Jarvis

Released: May 15, 2015