FW: CITATION: Buccilli v. Pillitteri, 2016 ONSC 2466

COURT FILE NO.: 08-CL-7399

DATE: 20160412

SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL COURT

BETWEEN:

PATRICIA BUCCILLI and DRAPERY INTERIORS ETC. INC.

Plaintiffs

AND:

PASQUALE PILLITTERI, also known as PAT PILLITTERI, CHRISTINA PILLITTERI, PATRON CONTRACTING LIMITED, also known as CDC CONTRACTING, BIRCHLAND HOMES INC. and VENDRAIN INC.

Defendants

BEFORE: Newbould J.

COUNSEL: Michael R. Kestenberg and Thomas M. Slahta, for the plaintiffs Linda Galessiere and Gustavo F. Camelino, for the defendants

ENDORSEMENT

[1] On March 9, 2016 on a motion for partial summary judgment, I ordered that the defendants other than CDC and Birchland pay to Ms. Buccilli $6,098,427 plus any amount to be paid to her under paragraph 23(ii) of the reasons. I ordered that she be paid her costs. I have now received cost submissions.

[2] Ms. Buccilli claims costs on a substantial indemnity basis. This is opposed. The normal rule is that costs are to be paid on a partial indemnity basis. However, conduct of a party that is reprehensible, scandalous or outrageous are grounds for costs to be awarded on a substantial or complete indemnity basis. See Young v. Young, 1993 CanLII 34 (SCC), [1993] 4 S.C.R. 3. The conduct giving rise to such an award can be conduct either in the circumstances giving rise to the cause of action or in the proceedings themselves. See Orkin, The Law of Costs, 2nd ed. at para. 219 and Ford Motor Company of Canada v. Ontario Municipal Employees Retirement Fund (2006), 17 B.L.R. (4th) 169 (Ont. C.A.).

[3] In my opinion Ms. Buccilli is entitled to costs on a substantial indemnity basis. It is said that the only finding I made of oppression on the motion was with respect to the legal fees of $366,666 that were paid out of CDC for the benefit of the Pillitteris. This argument overlooks findings I made regarding improper actions of the defendants such as Humberplex situation involving a circulation of money. It also overlooks the basis on which all payments were claimed, being the finding from the first trial that the defendants had engaged in conduct that was oppressive and included undue influence, unconscionability involving the Transfer Agreement, misrepresentation and breach of fiduciary duty and that the defendants had transferred assets that properly belonged to Ms. Buccilli. This conduct constitutes an award of costs on a substantial indemnity basis.

[4] In the first trial, I held that Ms. Buccilli was entitled to a one-third interest in all money, benefits and opportunities withdrawn or diverted by Christina or Pat Pillitteri either directly or directly from CDC and Birchland, including but not limited to the beneficial interest in the seven properties acquired in 1996 and 1998 by the Plex Group joint venture, and that all subsequent growth and profit derived therefrom were subject to a constructive trust in favour of Ms. Buccilli. The second trial was ordered to determine what all benefits and opportunities were diverted away and the quantum to be paid to Ms. Buccilli resulting from them and E&Y were appointed to investigate and report on this issue.

[5] The issue on the partial summary judgment motion was what amounts could be proven to be owing to Ms. Buccilli before the second trial resulting from the conduct of Christina or Pat Pillitteri. The reason for the motion without going straight to the second trial was caused by the failure of the defendants to properly deal with E&Y in their request for documents and their failure to pay outstanding E&Y accounts. I referred to this in my endorsement of March 9, 2016. This conduct has caused excess costs being incurred, not only by E&Y but by counsel for Ms. Buccilli.

[6] Ms. Buccilli claims costs of $190,000 inclusive of disbursements and taxes. The disbursements claimed are $20,925.95. No objection was taken to these disbursements. The partial indemnity fees claimed are approximately $120,000 plus HST which together with disbursements amounts to approximately $155,000. The actual fees charged were approximately $164,000 plus HST which together with disbursements amounts to approximately $204,500.

[7] The defendants say that the motion was not entirely successful and so costs should be reduced to account for divided success. One of the factors in rule 57.01 is the amount claimed and the amount recovered. In this case, significant amounts claimed for Seasonal Treasures and 758 and for Humberplex were reduced from the one-third claimed because it had not yet been established that the assets rightly belonged to CDC. There was no determination that the balance of the one-third was not recoverable at all. Other claims were reduced somewhat, but the payments ordered were substantial and I would not make a deduction for that reason. The claim for one-third of the retained earnings of CDC was dismissed as were two of the three claims for diverted cash. I will make a deduction for these dismissed claims.

[8] No opposition to the hourly rates claimed on behalf of Ms. Buccilli is made, nor could there be. It is said that time is being charged for work done before the motion was served. That however is ordinary and no reason to deny the claim. On a motion of the kind brought here, and particularly with the inability of E&Y and thus counsel for Ms. Buccilli to obtain information from the defendants, a substantial amount of work would need to be done before the motion could be served.

[9] The defendants have disclosed that their counsel’s legal fees were “less than $115,000 (exclusive of taxes and disbursements)”. I take that figure to be close to $115,000 which is quite a bit less than the actual fees charged by Ms. Buccilli’s lawyers of approximately $164,000. Of course, it is often the case that plaintiff’s counsel has to spend more time in building a case, and here the amount of work needed for Ms. Buccilli’s motion was compounded by the failure of the defendants to be forthright with E&Y.

[10] Taking into account all of the circumstances, I order the defendants other than CDC and Birchland to pay costs of the motion in the amount of $170,000 inclusive of disbursements and taxes, to be paid within thirty days.

Newbould J.

Date: April 12, 2016