Eve Gaudreau v. Stephane Poupart, 2016 ONSC 7861

CITATION: Gaudreau v. Poupart, 2016 ONSC 7861

COURT FILE NO.: 147-2015

DATE: 2016/12/14

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Eve Gaudreau

Applicant

– and –

Stephane Poupart

Respondent

L. Cardill for the Applicant

M.Y. Simard for the Respondent

COSTS DECISION

KANE J.

[1] The issues are entitlement to costs for:

(a) the Respondent’s success on his March 31, 2016 motion before Pelletier J., who ordered the deletion of privileged financial information provided by the Respondent from the Applicant’s affidavit ( “Motion #1”); and

(b) the Applicant’s success in obtaining the $200,000 credit towards a higher net equalization payment liability which the Court anticipates will be owing to the Applicant, or as an interest free loan and other relief in this motion (“Motion #2”).

[2] The Applicant seeks costs for Motion #2 on a scale of substantial indemnity in the amount of $16,158, or alternatively $10,866 on a partial indemnity scale.

[3] The Respondent seeks costs:

(a) for Motion #1 in the amount of $4,120 being a scale of full indemnity; and

(b) for Motion #2 in the amount of $10,113 on a scale of partial indemnity.

Background

[4] Relevant facts and the proceeding chronology include the following:

(a) The Applicant commenced this application and filed her Financial Statement with income tax returns and notices of assessment on July 8, 2015;

(b) The Respondent financially is in a much stronger position than the Applicant and pays monthly spousal support to the Applicant;

(c) The Respondent filed his Answer on September 8, 2015 and a Financial Statement without a NFP Statement which required valuations to be conducted of several pieces of real property and corporations owned by him;

(d) The Court on September 15, 2015 ordered specified disclosure and productions by the Respondent. The Respondent did not need from September 2015 until May 2016 to obtain and produce the valuation reports upon which he is relying and to serve his signed NFP Statement in this proceeding;

(e) The parties subsequently negotiated their numerous issues but did not conclude an agreement.

(f) The Respondent during such negotiations on January 6, 2016 made a without prejudice offer of settlement and as part thereof provided his draft NFP Statement and several real property valuation reports;

(g) On March 10, 2016, the Applicant served her Motion #2 seeking numerous interim heads of relief. Some of that relief was granted by court order on the return of that motion on May 20, 2016. The Applicant’s motion material included the Respondent’s draft NFP Statement and real property valuation results from reports provided during settlement discussions by the Respondent;

(h) The Respondent brought Motion #1 to expunge the above without prejudice information provided during negotiations from the Applicant’s Motion #2 materials. He served a March 23, 2016 written offer of settlement which provided that the privileged information contained in the Applicant’s Motion #2 material was to be expunged. That offer however was conditional upon her payment of his costs on a partial indemnity basis. Following argument on March 31, 2016, Pelletier J. ordered the Applicant to remove the privileged information from her Motion #2 materials and reserved costs of Motion #1 to the judge determining Motion #2.

(i) The Respondent on March 23, 2016 served a second offer of settlement as to the to the Applicant’s Motion #2 in which, then 6 months after the September 15, 2015 disclosure order, he agreed to have his four business valued, to serve five real property valuations and to advance the Applicant $100,000 towards her NFP entitlement, etc. The Respondent however made that offer conditional upon her responsibility to pay the cost of such business valuations if their values did not exceed specified amounts and provided that she would withdraw her motion to vary interim child and spousal support.

(j) The Applicant submits the Respondent only fully complied with the September 15, 2015 disclosure order on May 10 2016 and produced the requisite valuations on May 18, 2016, some 2 months after being served with Motion #2 in March 2016.

(k) The Applicant in her costs submissions states she “made an offer of settlement” on May 11, 2016 regarding her Motion #2 proposing that the Respondent provide her with business and real property valuations or funding for her to obtain the same, a $200,000 advance as to the NFP equalization, a $100,000 advance for her legal expenses, the remaining disclosure ordered on September 15, 2015, child and spousal support pursuant to that order and life insurance to secure that obligation, OHIP and dental coverage as well as a non-dissipation order. The Court was not provided a copy of this offer of settlement.

Rule 24 Considerations Common to Motions #1 and #2

[5] R. 24(1) creates the presumption that motion costs should be awarded to a successful party, thereby favoring the Applicant as to Motion #2 and the Respondent as to Motion #1.

[6] The factors under r. 24 (7), (8) and (9) as to an unprepared party, bad faith and costs caused by a lawyer are inapplicable as to Motion #1 and Motion #2.

[7] The subject matter in Motion #1 and Motion #2 were important to each party.

[8] Hourly rates charged by counsel for each party are reasonable give the respective year of call.

[9] The cost of a lawyer’s legal assistant normally is part of a law firms’ operating costs. That cost is normally considered in fixing the hourly rates to be charged by lawyers and should not be added in addition to the hourly fees claimed as costs on a motion.

Motion #1 – Other R. 24 Considerations

[10] The subject matter and complexity level of Motion #1 was simple. The outcome of Motion #1 as ordered, was obvious prior to argument given the privileged nature of the information and documentation expunged.

[11] The Respondent’s offer of settlement of Motion #1 was contingent upon payment of his legal costs which that Court reserved and did not award despite granting his relief to expunge the privileged information from her motion materials.

[12] The Respondent’s legal obligation was to comply with the disclosure obligations in the September 15, 2015 order in a timely way, which he failed to do because that was to his advantage in attempting to negotiate a complete settlement while he controlled the valuation information critical to those negotiations. Hoping to advance the unresolved issues, the Applicant improperly included privileged information in her Motion #2 materials. By March 2016, the valuations and the NFP Statement from the Respondent should have been available to the Applicant and the Court.

[13] In some respects, the Respondent should not be entitled to costs given his late compliance to the September 2015 disclosure ordered. That disclosure was only provided in response and upon the return of the Applicant’s Motion #2. Given his delayed compliance to that requirement, the Respondent should not as to Motion #1 be entitled to costs on a scale in excess of partial indemnity.

[14] The Applicant’s response to the Respondent’s failure to disclose however should have been dealt with at a case conference or by a motion by the Applicant to enforce the September 15, 2015 order which would have been successful, rather than placing privileged information before the Court.

Conclusion – Motion #1

[15] Balancing the above circumstances as to Motion #1, the Respondent is entitled to his costs of Motion #1 on a partial indemnity scale. The full actual value of the lawyer’s docketed hours for the Respondent totals $1,365.

[16] As to Motion #1, the Applicant is to pay within 30 days from today costs to the Respondent on a scale of partial indemnity in the amount of $ 1,000, inclusive of tax and disbursements.

Motion #2 – Other R. 24 Considerations

[17] The number and complexity of the Respondent’s corporate interests and real properties creates a formidable and costly undertaking for the Applicant to evaluate, analyze and litigate in this proceeding.

[18] The Respondent’s knowledge of and access to the corporate information and his superior financial capacity created a distinct advantage to him in obtaining the necessary valuations.

[19] The Respondent’s production on May 10 and 18, 2016 of certain valuations and the remaining items of disclosure as ordered, resulted in the narrowing of relief initially sought in Motion #2 and did not require the respondent to prepare argument as to those matters produced on May 20, 2016.

[20] The relief granted on May 20, 2016 was less than the Applicant sought in Motion #2, which included a $100,000 advance to retain evaluators and a $400,000 advance towards her NFP equalization entitlement.

[21] The relief granted was also less than the terms of her May 11, 2016 offer to settle Motion #2. That settlement offer accordingly is not determinative of her cost entitlement.

[22] Although the Applicant did not obtain all relief sought in Motion #2, she was materially successful. That outcome supports her entitlement to costs and denial of costs to the Respondent on Motion #2.

[23] Similarly, the May 20, 2016 relief granted exceeded the terms of the Respondent’s offer of settlement of Motion #2, which would financially penalize the Applicant if the to be obtained business valuations did not exceed specific dollar amounts per business interest. The relief granted also exceeded the proposed $100,000 advance towards her equalization entitlement.

[24] The Respondent’s settlement offer accordingly is not determinative of his cost entitlement.

[25] Based on the above factors, the Respondent is not entitled to costs on Motion #2.

[26] The Applicant’s cost entitlement should not exceed a scale of partial indemnity.

[27] The Applicant’s disclosure as to the time of her counsel is limited as the work description provided does not identify the dates of the work performed. It is noted that the disbursements claimed date back to November 2015, as compared to March, 2016 when Motion #2 was served.

[28] The work description provided by Applicant’s counsel in his Schedule A certificate includes un-quantified services regarding Motion #1, as to which the Applicant is not entitled to costs for the reasons stated. The Applicant’s legal costs as to Motion #1 should not have been large and should have been much less than those related to Motion #2. The legal fees disclosed and claimed are accordingly reduced by 1/3rd.

Conclusion – Motion #2

[29] For Motion #2, the Respondent is to pay within 30 days from today costs to the Applicant on a scale of partial indemnity in the amount of $7,500, inclusive of tax and disbursements.

Mr. Justice Paul Kane

Released: December 14, 2016