Superior Court of Justice – Ontario – Family Court
CITATION: Benarroch v. Abitbol et al, 2017 ONSC 6787
NEWMARKET COURT FILE NO.: FC-15-49325-00
DATE: 2017-11-16
RE: Alberto Benarroch, Applicant and Monique Abitbol, Carlos and Sara Abitbol, Jacob Benarroch, Louis R. Montello, HPI Administrative Services LLC, Hercules Products Inc., Turnberry TS2 Corp., Miami Alone Products Corp., Plasticos Hercules CA, Productos Hercules, CA, Las Princesas Corp., and Rafael Benarroch, Respondents
BEFORE: The Honourable Mr. Justice D.A. Jarvis
COUNSEL: Ms. D. MacKenzie, for the Applicant Mr. J. Moldaver, for the Respondent Monique Abitbol
The Respondents Jacob Benarroch, Louis Montello, HPI Administrative Services LLC, Hercules Products Inc., Turnberry TS2 Corp., Miami Alone Products Corp., Plasticos Hercules CA, Las Princesas Corp., and Rafael Benarroch are not participating in this Motion.
HEARD: April 26, 2017
Ruling on costs
JARVIS J.
[1] On August 21, 2017 this court ruled on motions by the parties which primarily involved support, interim disbursements and disclosure. The wife was the successful party in that she obtained most of her claimed relief. Directions were given with respect to delivery of costs submissions in the event that the parties were unable to resolve that issue which, in fact, is what has transpired.
[2] The wife asks for an award of $48,221.92 inclusive of disbursements and HST. She has provided the court with a comprehensive Bill of Costs identifying the individuals and their services who were engaged for the motions.
[3] The husband submits that any award should be “significantly less” than the amount claimed by the wife but he is not otherwise forthcoming about that amount or even an acceptable range. No comparative Bill of Costs from him was provided.
[4] Neither party made an Offer to Settle the motions.
Family Law Rules
[5] Family Law Rule 24 governs the awarding of costs. Subrules (1), (6), (8), (10) and (11) are relevant, and they provide as follows:
- (1) There is a presumption that a successful party is entitled to the costs of a motion, enforcement, case or appeal.
(6) If success in a step in a case is divided, the court may apportion costs as appropriate.
(8) If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.
(10) Promptly after each step in the case, the judge or other person who dealt with that step shall decide in a summary manner who, if anyone, is entitled to costs, and set the amount of costs.
(11) A person setting the amount of costs shall consider,
(a) the importance, complexity or difficulty of the issues;
(b) the reasonableness or unreasonableness of each party’s behaviour in the case;
(c) the lawyer’s rates;
(d) the time properly spent on the case, including conversations between the lawyer and the party or witnesses, drafting documents and correspondence, attempts to settle, preparation, hearing, argument, and preparation and signature of the order;
(e) expenses properly paid or payable; and
(f) any other relevant matter.
[6] As observed by the Court of Appeal in Serra v. Serra, 2009 ONCA 395, modern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants.
[7] The overall objective in determining costs is fixing an amount which the “court views as a fair and reasonable amount that should be paid by the unsuccessful [party]”; Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291, 48 C.P.C. (5th) 56, 188 O.A.C. 201, [2004] O.J. No. 2634, 2004 CarswellOnt 521 (Ont.C.A.). Since the primary objective of the Family Law Rules is to enable the court to deal with cases justly, it is incumbent on parties who, by choice or necessity, litigate to act reasonably and in a cost effective manner. This means that family law litigants are responsible, and accountable, for the positions they take in their litigation: Heuss v. Sarkos, 2004 CarswellOnt 3317, 2014 ONCJ 141 and Peers v. Poupore, 2008 ONCJ 615.
[8] Although the wife did not prevail on the issues of interim disbursements and the full range of disclosure requested, she was largely successful on the principal issue of support, achieving a substantial award. With respect to each party’s motion, she was the more successful party and is presumptively entitled to costs.
[9] The wife also argues that the husband’s conduct attracts the full recovery costs sanction for bad faith as contemplated by Rule 24(8) in that he engaged in a pattern of deceptive disclosure and non-disclosure, the intended effect of which was to prejudice the well-being of the children and her and to deny her and the court a comprehensive and comprehensible picture of his financial circumstances.
Analysis
[10] Many considerations factor into determining costs as set out in Rule 24(11). Fairness and proportionality frame the analysis.
(a) Importance, Complexity or Difficulty of the Issues
[11] The husband’s cavalier regard to comprehensible disclosure needlessly complicated the assessment of his means and ability to pay support. He delayed disclosure, failed to provide evidence which, for example, could have corroborated his bald allegations about loans from his father and Mr. Avan and defaulted to the wife and court the task of making sense of his financial circumstances. In Luckman v. Luckman [2017] O.J. No. 3776, 2017 ONSC 4364, Shelston J. observed that the husband’s obfuscation of his income made more complex and difficult the important determination of his actual income. Those observations apply in this case. The husband has virtually abdicated responsibility for the support of his family.
(b) Reasonableness or Unreasonableness of Each Party’s Behaviour
[12] As already noted, neither party made an Offer to Settle.
[13] In Clark v. Collymore, 2013 ONCJ 501, a case upon which the husband relies, Zisman J. observed that a party’s failure to make an Offer to Settle is unreasonable litigation conduct (the irony of the husband’s criticism of the wife’s behaviour for not serving an offer where he made none himself is not lost on the court).
[14] In F. (H.) v. H. (M.), 2014 ONCJ 526 Sherr J. observed,
…it should be a fundamental step in any family law case to serve at least one offer to settle. Parties and their counsel now have a mandate under subrule 2(4) of the rules, to promote the primary objective of the rules; to deal with cases justly (subrule 2(2)). Dealing with a case justly includes taking steps to save time and expense (subrule 2(3)). Offers to settle play an important role in saving time and expense in a case. They are an important vehicle in promoting settlements, focus the parties and often narrow the issues in dispute.
There are consequences in the rules for not making or accepting reasonable offers to settle. Subrule 18 (14) sets out the costs consequences of not accepting an offer to settle that is as good as or better than the final result. When determining the reasonableness of a party’s behaviour in the case, clauses 24 (5) (b) and (c) of the rules direct the court to examine the reasonableness of any offer made, withdrawn or not accepted. This does not preclude the court from examining the failure of a party to make an offer to settle.
[15] An Offer, even one having severable parts to take into account outcome uncertainties, should always form part of a party’s court preparation. Its absence is, however, only one of many factors to consider.
[16] Unreasonable litigation behaviour may constitute bad faith. In Benzeroual v. Issa and Farag 2017 ONSC 6225, Pazaratz J. found that a “defiant, uninformative and misleading approach to financial disclosure constitutes bad faith as contemplated by Rule 24(8)[^1].” In that case, much like this case, the principal issue was the husband’s income. The court observed that the husband’s threadbare information about his income and remunerative activities was inconsistent with his lifestyle and pattern of spending[^2]. As Pazaratz J. observed a number of considerations inform a bad faith analysis.
[32]…a. The adequacy of disclosure must be considered in the context of the circumstances of the case; the complexity of financial regime; and the nature and magnitude of potential claims.
b. In addition to the adequacy or volume of the disclosure produced, the court must also consider the intention or motivation behind the litigant’s approach to disclosure. Inattentiveness to the obligation will, at a minimum, constitute unreasonable behaviour. Deliberate concealment, evasiveness of obfuscation will more likely constitute “bad faith.”
c. Given the fundamental importance of income determinations with respect to the application of the Child Support Guidelines, persistent refusal by a party to make accurate financial disclosure and reveal their income will give rise to a level of bad faith. Ascento v. Davies, 2012 ONCJ 581, 2012 ONCJ 581 (OCJ).
d. Inadequate disclosure should always lead to costs sanctions. In some cases, the misconduct can be so serious as to constitute bad faith – with heightened cost consequences.
[17] There is merit to the wife’s bad faith claim in this case. As detailed in the Reasons for Decision[^3] the husband’s evidence about his and the family’s financial circumstances was implausible, incredible[^4] and likely deceptive. His unacceptable delay in producing meaningful disclosure and his failure to satisfactorily to substantiate his allegations of impecuniosity impacts the administration of justice. The husband’s litigation conduct was not only unreasonable, it demonstrated bad faith. Even so, the full costs recovery impact of that finding must be tempered by the court’s dismissal of the wife’s interim disbursements claim, divided success relating to the Plasticos disclosure ordered[^5] and the absence of an Offer to Settle. She was awarded $50,000 monthly support, having requested $60,000.
(c) The Lawyer’s Rates and Time Properly Spent
[18] The wife’s Bill of Costs spans a period from July 4, 2016 to April 26, 2017. Her $48,221.92 substantial recovery claim comprises fees ($39,683.60), disbursements ($2,990.66) and HST ($5,547.66). Senior and junior counsel were engaged as were a senior and junior law clerk: the hourly rates charged are reasonable.
[19] The Bill records docketed entries showing service date, the service-provider and a description of the service provided. The husband has critiqued the 61 page account as recording “in several respects” time not spent on the motions, and conflating motion services with services relating to the civil proceedings between the parties and Mr. Avan but without identifying the objectionable dockets. There are several references in the Bill to issues involving service of the pleadings on other parties, and contacts with the Venezuelan consulate, which fit this description but they are few in number and modest in time spent.
[20] The wife, more so than the husband, filed extensive affidavit material accompanied by exhibits documenting her disclosure efforts and supporting her allegations about the revenue histories of the Plasticos companies. She was obliged to access, and correlate, third party banking and government records. The effort expended was significant and impressive.
(d) Expenses Properly Paid
[21] The husband raised no objection to the $2,990.66 disbursements claimed. They comprise document service, courier, copying and teleconferencing charges. They appear reasonable and are allowed in full.
(e) Any Other Relevant Matter
[22] In considering its disposition the court has taken into account what would have been the reasonable expectations of the parties, proportionality and, given this court’s finding about the income available to the husband, his ability to pay costs.
Disposition
[23] The wife is entitled to full recovery of the costs associated with the support issue which occupied much of the time and services expended. A line by line assessment of the wife’s Bill of Costs would involve a more mechanical parsing of her counsels’ dockets than warranted and is inappropriate in the circumstances: Delillis v. Delillis, 2005 36447 (ON SC), [2005] O.J. No. 4345 (Ont. S.C.).[^6] In all of the circumstances a fair and reasonable award is $35,000 inclusive of disbursements and HST, of which an all-inclusive sum of $25,000 of that award shall be enforceable as a support Order. This award takes into account the absence of an Offer to Settle from the wife, the husband’s bad faith and the overall outcome of the motions.
[24] A Support Deduction Order shall issue.
Justice D.A. Jarvis
Date: November 16, 2017
[^1]: Para. [32] [^2]: Para. [30a] [^3]: Para. [33], [44] and [45] [^4]: The husband’s claim that he only earned slightly more than $36,000 a year while owing more than $25,000,000 was breathtaking in its audacity. [^5]: Para.[78] [^6]: Para. [95]