Citation: Bordin v. Iacobucci, 2016 ONSC 1975

COURT FILE NO.: FS-14-393536

DATE: 2016-03-21

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Nancy Bordin, Applicant -and- Archie Iacobucci, Respondent

BEFORE: F.L. Myers J.

COUNSEL: Harold Niman and Jessica Brown, for the applicant Stephen M. Grant and Melanie Battaglia, for the respondent

READ: March 21, 2016

COSTS ENDORSEMENT

[1] In my Endorsement, reported at 2016 ONSC 1333, the applicant was fully successful in obtaining the relief that she sought. I found that the respondent had inappropriately taken steps to move assets to "disentangle" them from this proceeding. I found that he had failed to fulfil his disclosure obligations. The order made concerning one of the applicant's undertakings was given out of an abundance of caution and was of trivial import in the overall outcome.

[2] I invited costs submissions of no more than five (5) pages in length and required that costs outlines to be provided by both parties. I stopped reading the applicant's costs submissions after the fifth page. The costs incurred by the parties are within $5,000 (or less than 10%) of each other on a full indemnity basis.

[3] The applicant seeks punitive costs because she beat her two offers to settle or, alternatively, because the respondent conducted the proceeding unreasonably contrary to Rule 24(11)(b).

[4] The offers to settle delivered by the applicant do not assist her in this case. The first offer was delivered just before an earlier return of the motion which was adjourned. The offer expired long before the full hearing of the motion. The second offer was delivered on the Sunday night before the Monday motion. It was not delivered "at least one day before the motion" as required by Rule 18(14)(1). It also was not signed by the applicant and her counsel as required by Rule 18(4).[^1]

[5] I would not grant enhanced costs under Rule 18 in light of the late delivery of the applicant's recent offer. Delivery of an offer Sunday night for a Monday morning motion left insufficient time for the responding party to engage in a proper analysis. In these days of instantaneous electronic communication, we have come to expect people to respond almost immediately. However, if we want a thoughtful response, rather than a mere reaction, we must allow sufficient time for the recipient to take advice and formulate a considered position. The Rule requires that "at least one day" be provided. That is not a long time. But, in my view, it is an important minimum time that should be respected if a party wishes to take advantage of the costs provisions of Rule 18.

[6] As to the respondent's conduct, in my Endorsement, I specifically declined to determine whether the respondent had prevented the applicant from obtaining a line of credit as had been ordered by Moore J. previously. The question resolves then to whether the respondent should be penalized in costs for his failure to make timely disclosure and for the steps that he has taken to try to avoid transparency in this proceeding.

[7] In Blaney v. Blaney, 2012 ONSC 1777, Czutrin J. (as he then was) discussed the central importance of disclosure to family law litigation before this court. He wrote:

[3] The Family Law Rules that first came into effect in 1999 had as its objective, promotion of settlement and early disclosure. It created a process that would allow early access to judges. The process was and is still dependant on readiness and parties and counsel being able to use the judicial time appropriately. Far too often, little, particularly where the issues are financial may be achieved, if disclosure remains an issue.

[4] Soon after parties separate, or perhaps even in anticipation of separation, parties no doubt look for information about the process and what is required of them. If they consult family counsel they will be advised that they need to start gathering documentation to deal with property and support issues.

[5] Particularly where a party is self employed, or is a shareholder of a company and works for that company they should know that, for support purposes, their Income Tax Returns may not be enough to establish income and that the value of their interests in a company will need to be established by the use of and need for experts in many instances. The obligation and onus to satisfy the court as to income and the value of assets and debts is on the person whose income or asset or debt is called into question. Here, the Respondent (husband) had that obligation. His obligation existed prior to any court orders, conferences or court attendances.

[8] As in that case, the burden on the respondent to prove his income and the value of his assets was obvious and was not fulfilled by the respondent on a timely basis. "References to production of voluminous disclosure being made by the husband fail to answer whether the necessary, relevant, complete disclosures for income and valuation purposes to meet disclosure obligations have been made." Blaney at para. 30.

[9] Here, the respondent and his family retained counsel specifically to "disentangle" his assets from this proceeding. As discussed in my Endorsement, the rationales provided for the transactions undertaken do not make sense on a business basis and are consistent with the respondent doing just as his counsel advertised – trying to move assets out of the reach of the applicant and the court in this proceeding. But title to business assets is not in issue in equalization and support proceedings (absent proprietary claims). "Disentangling assets" therefore was just a euphemism for moving title to assets out of the respondent's name to try to shield the asset values from inclusion in the equalization and income calculations that the respondent was and is legally required to disclose. The respondent's failure to make timely disclosure strikes at the heart of these proceedings as discussed by Czutrin J. in Blaney above. Full, fair, and early disclosure is the rule. Delays and tactics to delay or to make less than full, fair, and early disclosure deserve condemnation. Such steps add costs, increase distress, undermine efficiency and affordability, and risk worsening the harm inflicted on the children by raising the temperature and lengthening the proceedings. Delaying disclosure and hiding asset values are not legitimate legal strategies in family law proceedings. They are unreasonable steps and behaviour that violate the prime directive set out in Rules 2(2) to (4).

[10] In this case at least, the respondent's failure to make full and fair disclosure at the outset of the proceeding and his efforts to alter his affairs to avoid transparency were unreasonable and are important costs considerations under Rule 24(11)(b). In my view therefore, the applicant is entitled to her costs on a substantial indemnity basis.

[11] The applicant quantifies her costs on a substantial indemnity basis at approximately $58,000 which is approximately 75% of her full costs of approximately $77,000. As noted above, the full indemnity costs of both parties are nearly the same. Therefore, the costs sought by the applicant are within respondent's reasonable expectation of the level of costs risk that he might face.

[12] The respondent criticizes a few specific docket entries made by the applicant's counsel and Mr. Niman's billing rate.

[13] In setting the costs of a motion, I am not assessing the lawyers' dockets on an item-by-item basis. Rather, the task is to find a fair and reasonable costs amount bearing in mind the factors set out in the Rules, proportionality, and access to justice.

[14] Mr. Niman's rate charged to his client is $820 per hour. While at the upper end of the market, this rate is not out of line with the rates charged by senior commercial litigation counsel in Toronto. This case resembled hardball commercial litigation as much or more than typical family law litigation. Sadly, while the parties have chosen to approach this proceeding as a commercial battle, the economic outcome will not address the embittered feelings that underlie the parties' efforts. It is the fundamental disconnect between the driving motivations of the parties in family law proceedings and the available economic outcomes that makes these types of hard-fought proceedings so deeply troubling. The parties will spend themselves into no greater happiness as an economic judgment will not heal what ails them. Having said that, given that the proceedings address economic and not emotional issues, the rates charged by Mr. Niman and his colleagues are reasonable for the economic ends sought.

[15] As the costs sought are already reduced to 75% of the full indemnity accounts, in my view the amounts claimed are fair and reasonable even considering the specific objections raised by the respondent. The respondent will therefore pay costs to the applicant forthwith on a substantial indemnity basis fixed at $58,000 all-in.

F.L. Myers J.

Date: March 21, 2016

[^1]: It seems to me that the lack of signatures is more an indication of the last minute delivery of the offer than of a failing that necessarily prevents the costs consequence of the Rules from being considered.