Falagario v. Falagario, 2016 ONSC 1911

CITATION: Falagario v. Falagario, 2016 ONSC 1911

COURT FILE NO.: CV-12-444364

DATE: 20160318

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: FRANK FALAGARIO AND PAMELA CONDE, Plaintiffs

AND: APOLLONIA FALAGARIO ALSO KNOWN AS POLLY FALAGARIO ALSO KNOWN AS POLLY CARTAGENESI, NICOLE CARTAGENESI ALSO KNOWN AS NICOLE D’AMBROSIO AND MICHAEL CARTAGENESI ALSO KNOW AS MICHAEL CARTAGENSI, Defendants

BEFORE: Justice Matheson

COUNSEL: J. Lester Davies, for the Plaintiffs Eric D. Freedman, for the Defendant Michael Cartagenesi Apollonia Falagario, Self-represented

HEARD: In writing.

COSTS ENDORSEMENT

[1] This costs endorsement arises from a four-day trial for which reasons for judgment were released on January 27, 2016, cited as 2016 ONSC 648.

[2] In this action, the plaintiffs sought to set aside the conveyance of the family home by their father, Michele Falagario, to himself and his grandson, Michael Cartagenesi, as joint tenants. Michele has passed away and, given the joint tenancy, the house is now in Michael’s name, rather than forming part of Michele’s Estate.

[3] The defendant Michael was successful at trial. He therefore seeks costs in the amount of $35,000 all-inclusive, which is almost full indemnity. The self-represented defendant, Apollonia Falagario, was also successful and seeks costs totaling $5,500.

[4] The plaintiffs submit that it was reasonable to proceed as they did, and no costs should be awarded. They further submit that they were essentially disinherited and should not also have to pay costs. In the alternative, the plaintiffs submit that any costs order should be paid by Michele’s Estate.

[5] The specific context of this case explains the plaintiffs’ position on costs to some degree. The litigation arose because Michele, the family patriarch, chose not to tell the plaintiffs that he had changed his will, and chose not to tell them that he had gifted his only significant asset, the family home, to one of his grandchildren in preference to them. Obviously, it was his decision to proceed in this fashion. However, there is no doubt that his choice not to disclose these steps substantially caused this litigation to occur. It was not until after his death and after the commencement of this litigation that the plaintiffs discovered what had happened, and while they were unsuccessful in the end, there was good reason for them to search for explanations. The defendants also bear some responsibility. Their position and basis for it did not come out until after the litigation was commenced. It was also unhelpful that the defendant Apollonia chose not to take steps to deal with the Estate in her capacity as the designated estate trustee, which could have assisted in an earlier dialogue about the events giving rise to this dispute.

[6] The general principles applicable to the order of party and party costs are well settled. Costs are discretionary. Rule 57.01 of the Rules of Civil Procedure sets out factors I may consider in exercising my discretion, in addition to the result of the proceeding and any written offers to settle. Overall, the objective is to fix an amount that is fair and reasonable, having regard for, among other things, the expectations of the parties concerning the quantum of costs: Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634, 71 O.R. (3d) 291 (C.A.) at paras. 26, 38.

[7] Although both sides made offers to settle at earlier stages, there were no Rule 49 offers. I have, however, taken the offers into account.

[8] The defendant Michael’s total costs were about $39,000, from which he seeks costs of $35,000. He seeks to justify this amount in large part on the basis that his counsel’s hourly rate was closer to a partial indemnity rate, among his other reasons. However, he acknowledges that there is no basis for substantial indemnity costs. As well, this defendant notes that he too was not responsible for Michele’s choices regarding disclosure and that even after the plaintiffs had discovery in the litigation, they still proceeded to trial.

[9] The defendant Apollonia submitted that, in her opinion, her legal fees totaled $5,500. However, she did not provide any documentation in support of this submission. Also, her submission only mentioned one amount that she indicated was paid by her (rather than by her and Michael or by someone else). She submits that she paid $2,000 to Mr. Freedman to represent her and Michael at the outset of the litigation. Mr. Freedman’s time spent in that period is also included in Michael’s costs.

[10] I have considered all of the parties’ submissions in connection with the exercise of my discretion under Rule 57.01. While it was reasonable for the plaintiffs to commence the litigation and through it discover what happened, I am not satisfied that there should be no costs awarded at all. Michael was successful. In all the circumstances, I conclude that he should have partial indemnity costs for the trial and related trial preparation. Having regard to all relevant factors, I fix those costs at $15,000, all inclusive. With respect to the defendant Apollonia, I am not satisfied that she has a separate claim from Michael’s claim for costs. In all the circumstances, I make no costs order in Apollonia’s favour.

[11] There remains the question of whether the costs payable to Michael ought to be paid by Michele’s Estate. I accept that I have the jurisdiction to make such an order, which is provided for in s. 131(1) of the Courts of Justice Act, but I am not satisfied that it should be made here. The jurisdiction to award costs against a non-party should be exercised rarely and the plaintiffs have provided no authority where a non-party was the subject of a costs order in the circumstances of this case or otherwise. All of the authorities that the plaintiffs relied on are all cases where the Estate was a party. In any event, I am not persuaded that Michele’s role in provoking this dispute justifies such an order. It was the plaintiffs who decided to go to trial after they had the benefit of the discovery process, and they were unsuccessful.

[12] I therefore order that the plaintiffs each pay Michael $7,500 in regard to costs within 180 days of today, and that there be no costs paid to Apollonia.

Justice W. Matheson

Released: March 18, 2016