Court File and Parties

Court File No.: DC-16-911-00 Date: 2016-07-20 Ontario Superior Court of Justice

Between: EVELYN SGRIGNUOLI Applicant/Respondent on Appeal – and – ERNIE SGRIGNUOLI Respondent/Appellant on Appeal

Counsel: Ronald Sleightholm, for the Applicant/Respondent on Appeal Brian P. Bellmore and Diana M. Soos, for the Respondent/Appellant on Appeal

And: ERNIE SGRIGNUOLI Respondent/Appellant on Appeal – and – JUDITH HOLZMAN Respondent on Motion for Costs/Respondent on Appeal

Counsel: Brian P. Bellmore and Diana M. Soos, for the Respondent/Appellant on Appeal Susan M. Sack, for the Respondent on Motion for Costs/Respondent on Appeal

Heard: In Writing

Ruling on Motion for Leave to Appeal

MCKELVEY J.:

[1] This is an an application for leave to appeal two cost decisions of Nelson J. The first decision dealt with liability by the applicant and her counsel for costs following the withdrawal of an application by the applicant. In that application the applicant was seeking a support order which was inconsistent with the stated provisions of two cohabitation agreements. This decision with respect to costs is dated September 4, 2015. In his decision, the motion judge declined to make any award of costs in favour of the respondent by either the applicant personally or her counsel who issued the application.

[2] The second decision for which leave is sought is also an order for costs which is dated November 18, 2015. This decision deals with the costs of the earlier motion for costs. The motion judge granted partial indemnity costs in the sum of $3,845 to be paid by the respondent/appellant.

[3] In the first ruling dated September 4, 2015, the motion judge based his decision not to award any costs against the applicant based on her financial inability to pay. He further declined to make any order for costs against Judith Holzman who was the applicant’s counsel at the time the application was commenced. The respondent/appellant argues that this is a case in which the issues on appeal are errors of law and that because this is a case in which the motion judge never conducted a trial, heard viva voce evidence or determined issues of credibility warranting deference the standard of review is correctness. I disagree.

[4] The test for leave is set out in Rule 62.02 of the Rules of Civil Procedure which sets a high threshold for granting leave. This rule provides as follow:

Leave to appeal shall not be granted unless,

(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or

(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance, that in his or her opinion, leave to appeal should be granted.

[5] Further, a judge’s discretion with respect to an award of costs is entitled to considerable deference unless an appellate court is satisfied that the exercise of his discretion was exercised on wrong principles. See, for example, Culligan Springs Ltd. v. Dunlop Lift Truck (1994) Inc. at para. 16.

[6] With respect to the costs decision of September 4, 2015, the motion judge correctly identified the rule which requires a party who withdraws an application to pay the costs of the other party, subject to the discretion of the court to order otherwise. The motion judge in this case did exercise his discretion to order otherwise based on the financial circumstances of the applicant. There may be an issue as to whether the motion judge was entitled to deny any award of costs based solely on the applicant’s ability to pay. In LeVan v. LeVan, at para. 36, Justice Backhouse comments that while a court may take into account a party’s financial situation, the ability or inability to pay goes to the amount of costs and not the liability for costs.

[7] In his reasons the motion judge comments at para. 117:

Evelyn cannot afford to pay any costs; therefore, I decline to award them against her.

[8] By denying any liability for a payment of costs by the applicant there is an issue about whether the motion judge exercised his judgment on an incorrect principle. However, at para. 50 of the decision the motion judge describes the personal circumstances of the applicant as follows:

Evelyn’s position is straight forward. She points out that she is 73 years old, suffers from cancer, and earns a minimum wage. She has almost no assets of value. Her lack of funds, she argues speaks to the issue of quantum. This position recognizes that the applicant’s would, prima facie, be entitled to their costs because Evelyn withdrew her application for spousal support.

[9] Under Rule 62.02 (4) (b) it is not sufficient for the appellant seeking leave to establish that there is good reason to doubt the correctness of the order in question. It is required further that the appellant show that the matter is of such importance that leave to appeal should be granted. Given the personal circumstances of the applicant and her inability to pay an award of costs I have concluded that the second requirement of the rule has not been satisfied and I decline to grant leave to appeal on that basis.

[10] The major issue with respect to costs in the motion judge’s ruling of September 4, 2015, relates to his decision not to make an award against the applicant’s former counsel. The motion judge correctly identified Rule 24(9) of the Family Law Rules which provides that where a lawyer has run up costs without reasonable cause or has wasted costs, the court may order the lawyer to personally pay the costs of another party. The motion judge also proceeds to consider a number of cases where parties have sought an award of costs against another party’s lawyer.

[11] The motion judge reviewed the facts on the motion before him and considered whether the application was either frivolous or vexatious. He concluded that the action was not frivolous and had at least some opportunity for success. This finding of fact is entitled to deference on appeal and I would not grant leave to appeal the costs decision on this basis.

[12] Similarly the motion judge considered the respondent/appellant’s argument that the initiation of the application was frivolous because it was made for an ulterior motive and was being used to unreasonably extort money from the respondent. On this issue the motion judge concluded:

Under these circumstances, I find that Holzman’s actions on behalf of Evelyn were inconsistent with an attempt to either ʽshake downʼ Ernie or extort money from him.

[13] This finding of fact is also entitled to deference on appeal and does not justify the granting of leave to appeal the decision.

[14] The appellant/respondent also argues that the respondent’s counsel at the time the application was initiated was in a conflict of interest because she had previously given advice on one of the cohabitation agreements. The respondent/appellant argues that there was a clear conflict of interest which justified an award of costs against the lawyer. The motion judge disagreed with the assertion that Ms. Holzman was in a conflict of interest and described it as a “potential conflict of interest situation”.

[15] Regardless of whether this situation is described as a conflict of interest or a potential conflict of interest I do not see a basis to grant leave to appeal the motion judge’s decision to deny an award of costs personally against the solicitor who initiated the application. The motion judge was clearly alive to these issues and considered them. He ultimately concluded it was not a basis to make an award against the lawyer personally. The exercise of his discretion is entitled to deference especially in light of his earlier findings that the application was neither frivolous nor vexatious. In the context of this leave application, I have concluded that this issue does not involve a matter of such great importance that leave to appeal should be granted on this basis alone.

[16] With respect to the costs award in the motion judge’s decision of November 18, 2015, this relates to the costs award given on the earlier motion for costs where the applicant was successful. I regard this as a routine order for costs for which there is no basis to grant leave.

[17] In light of these findings I conclude that there is no basis to grant leave to appeal on either the order of September 4, 2015 or November 18, 2015.

Costs

[18] If counsel are not able to agree on the costs of this leave application, then an appointment should be taken out within 30 days of the release of this ruling to address the issue of costs. Prior to the hearing on costs, counsel are to deliver written briefs with respect to costs at least five days in advance of the hearing. If no steps are taken within 30 days from the release of this ruling to address the issue of costs, then there will be no order for costs on this motion.

Justice M. McKelvey Released: July 20, 2016