COURT FILE NO.: FS-14-00398336-0000 DATE: 20190307 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Jennifer Ann Leitch Applicant – and – Anthony James Charles Novac in his personal capacity and in his capacity as trustee of The Novac Family Trust (2013) and the Lulu Trust (2006) Respondent – and – Michael Novac in his personal capacity as trustee of each of The Novac 2011 Trust and The Novac Family Trust (2013) Nelly Novac in her capacity as a trustee of the 2011 Novac Family Trust Sonco Group Inc. The Novac 2011 Family Trust The Novac Family Trust (2013) John McLure, in his capacity as trustee of the Lulu Trust (2006) David Tam, in his capacity as trustee of the Lulu Trust (2006) Third Party Respondents
COUNSEL: S. Gibb, I. Zylberman-Dembo and K. Warren for the Applicant A. Rosen and K. Eckert for the Respondent B.R. Smith and L. Love-Forester for the Third Party Respondents Gavin Tighe
RULING ON COSTS – MOTION FOR SUMMARY JUDGMENT AND CROSS-MOTION
GILMORE, J.
OVERVIEW
[1] This motion for summary judgment and cross-motion took place over nine days in May, June and November 2018. My judgment was released on January 31, 2019.
[2] The applicant (“Jennifer”) had no success in this matter. Her motion for a declaration as to the existence of a conspiracy with damages to be assessed at trial was dismissed. The Novac/Sonco motion for summary judgment was granted. The respondent’s (“Anthony’s”) motion for a significant decrease in child and spousal support was granted.
[3] The costs sought against Jennifer are significant. The main issue to determine with respect to the issue of costs in this case is proportionality, given that both responding parties did better than their Offers, the matter was lengthy and complex and both responding parties had significant disbursements.
THE POSITION OF THE THIRD PARTY RESPONDENTS NOVAC/SONCO
[4] The materials and time required to respond to Jennifer’s allegations were significant. This included 15 days of questioning of the respondents and Sonco’s accountant, 17 compendia - some with multiple volumes - from Jennifer, four compendia from Novac/Sonco, five days of cross-examination of Michael and Anthony, four days of oral submissions and hundreds of thousands of documents, including answers to over 400 undertakings.
[5] Novac/Sonco seek costs fixed in the amount of $1,531,947 (inclusive of disbursements, third party costs and HST). These costs are calculated on a 100% recovery basis. Novac/Sonco submits they are entitled to costs on this scale because of Jennifer’s unreasonable approach to this litigation, and their success both in the result and based on their Offers. Novac/Sonco submits that none of Jennifer’s attempts to avoid or reduce costs should be considered by the court.
[6] Novac/Sonco’s request for costs does not include any costs for the disclosure motion in November 2017, the sealing order motion in July 2017 or the restraining order motion in May 2017.
[7] Novac/Sonco submits that Jennifer did not prove a single element of her alleged conspiracies. Further, Novac/Sonco made two Rule 18 Offers which they submit entitle them to costs on a full recovery basis. None of Jennifer’s three Offers attract Rule 18 consequences given the terms of the judgment. All three of Jennifer’s Offers required that costs be paid to her in exchange for Novac/Sonco withdrawing their motion.
[8] In terms of Rule 24 considerations, Novac/Sonco submits that Jennifer’s behaviour was unreasonable casting a wide net which included six separate conspiracies. This approach created a large and unnecessary expense with accompanying productions. Novac/Sonco submits that the massive disclosure they were required to produce was not proportionate with respect to the probative value of that disclosure.
[9] Jennifer did not produce her own Bill of Costs until ordered to do so. This initially deprived the court of a comparator for evaluating her claim that Novac/Sonco’s costs are too high.
[10] In terms of expenses incurred by Novac/Sonco, Jennifer demanded production of records from Burchells LLP, Grant Thornton and Stewart McKelvey, all third-party professionals retained by Novac/Sonco during the relevant periods.
[11] While Novac/Sonco does not specifically allege bad faith, they are critical of Jennifer’s “shotgun” approach to this litigation and say that her request for disclosure going back to the 1990’s was unreasonable and overbroad. This approach has substantially increased the cost of this litigation. Jennifer was repeatedly warned by counsel for Novac/Sonco that the work put into answering her far reaching requests for document and email production would be an issue with respect to costs in relation to arguments based on reasonableness, proportionality and relevance. A copy of correspondence dated October 13, 2017 to Jennifer’s counsel containing such warnings forms part of the Novac/Sonco written costs submissions.
[12] Novac/Sonco rejects Jennifer’s position that costs associated with disclosure should be discounted because it would otherwise be required for trial. Novac/Sonco argues that Jennifer could have focused her claim on the River Cree transactions but instead included the Grey Eagle fees, ongoing unearned profits, the DeGroote fees, Great Blue Heron and Casino New Brunswick. As such, Novac/Sonco was obliged to produce documents for entities in which Anthony had no interest and transactions to which he had no entitlement going back to 2012.
[13] Any award of costs should not be reduced by Jennifer’s inability to pay. Jennifer made strategic choices and knew the risks of going ahead. She was also trained as a litigation lawyer and has a better understanding than most of the cost/benefit analysis of proceeding with a complex motion.
[14] There is no basis, as Jennifer suggests, for Novac/Sonco to seek indemnification for costs from Anthony. There is no finding of damages that have been caused by the fault or neglect of two or more persons. As such, the principles of contribution and indemnity under the Negligence Act are not engaged.
[15] Novac/Sonco submits that the rates charged by their counsel are both consistent with the rates charged by Jennifer’s counsel and in line with the senior members of the family bar who represented Anthony. Jennifer was well aware of the costs associated with this proceeding and the consequent risk to her if unsuccessful.
THE POSITION OF THE RESPONDENT ANTHONY NOVAC
[16] The respondent, Anthony Novac, was successful on his motion to reduce both child and spousal support. He also did better than his Offer dated January 27, 2017.
[17] Anthony seeks full recovery costs for the support motion as well as the summary judgment motion since the motions were heard together and he was obliged to file material in relation to the summary judgment motion.
[18] Anthony seeks $320,277.50 for the motions and full recovery costs for the disclosure motion in November 2017, being a total of $435,025.54.
[19] Anthony submits that he is entitled to costs on a full recovery level for the following reasons: a. Jennifer’s actions have caused Anthony to incur legal fees far beyond what he will ever be able to recover. b. Anthony’s January 27, 2017 Offer meets the criteria in Rule 18(14) of the Family Law Rules. He is therefore entitled to full recovery costs from January 27, 2017 and partial indemnity costs prior to that date. c. Anthony was required to deplete his capital in order to meet his support obligations. d. The issues were complex, particularly as they related to the conspiracy claim. e. Jennifer was unreasonable in failing to agree to any reduction in support prior to the motion, given the ample disclosure available in relation to Anthony’s income. f. The lawyer’s rates are reasonable, given the experience of counsel and the delegation of work where reasonable. The rates were within the range of what Jennifer should have expected to pay. g. Jennifer’s allegations of improper conduct related to the character and reputation of the third parties and Anthony. Such allegations were unfounded. There is authority for an award of full indemnity costs where such allegations related to a party’s conduct are found to be without merit.
[20] Anthony is very concerned about Jennifer’s costs submissions. The possibility of her bankruptcy and her continued intention to litigate (as evidence by her Notice of Appeal and her intention to proceed to trial) indicate that Jennifer takes no responsibility for the fees incurred by Anthony and his father.
[21] Given Jennifer’s position, Anthony asks that 50% of costs awarded to him for the support motion be apportioned for securing set-off child support such that they will survive Jennifer’s possible bankruptcy.
[22] Anthony notes that Jennifer did not take issue with the costs sought by his lawyer, inferring that her costs must have been at least as much or more.
[23] Anthony, like his father, is also concerned that Jennifer has conflated the law of costs and the law on damages. Attempting to rely on the Negligence Act is improper and has no application under Rule 24 of the Family Law Rules.
[24] Anthony completely rejects Jennifer’s contention that a large portion of costs claimed by Anthony relate to disclosure required for trial and therefore they are not costs thrown away. Anthony points out that following Jennifer’s amendment to add the conspiracy claim in June 2016 Anthony was required to attend for four days of questioning related to the conspiracy claim. This resulted in many undertakings and refusals. Jennifer then brought a motion for disclosure which was heard by Faieta, J. in November 2017. His order makes it clear that the disclosure sought at that motion related to Jennifer’s conspiracy claim.
[25] Anthony urges this court not to accept Jennifer’s request for a reprieve from the court due to her own financial circumstances. Jennifer had more than two years’ notice of Anthony’s support motion and received $420,550 by way of support from Anthony since January 2017.
[26] Jennifer has failed to put forward a reasonable Offer, ignored evidence which did not fit within her conspiracy narrative and refuses to accept any responsibility for the cost consequences of her aggressive litigation strategy. Costs should not be reserved to the trial judge but, especially in relation to the two lengthy and complex motions before the court, should be decided at each step of the case in accordance with the case law.
THE POSITION OF THE APPLICANT
Response to the Novac/Sonco Submissions
[27] Jennifer acknowledges that Novac/Sonco did better than their Offer and were successful on the motion. However, her position is that any costs award in their favour should be no more than $200,000, inclusive of disbursements and HST.
[28] Her reasons for suggesting that costs should be awarded at this level are as follows: a. Had Anthony not actively misrepresented his income and been forthcoming about disclosure, time and money would not have been wasted on disclosure issues. b. Michael minimized Anthony’s role in securing the RCC contract and the RCC buyout and only conceded Anthony’s involvement when emails were put to him in open court in 2018. Had Michael been forthcoming about Anthony’s involvement in the Sonco businesses the voluminous amount of disclosure ordered in this case may not have been needed. c. The disclosure from the email database was critical in demonstrating Anthony’s entitlement to a share of the $5.75 million RCC buyout. d. Jennifer’s claims were pursued in good faith and the court found that the RCC buyout proceeds may well be characterized as an income stream at trial. e. Additional costs incurred between June 25, 2018 and November 1, 2018 should not be included as the adjournment was necessitated by a death in the family of Michael’s counsel. Delays in this matter should not be visited solely upon Jennifer. Jennifer requests that $85,413 be deducted from Novac/Sonco’s costs for the additional preparation after June 25, 2018. f. Jennifer has limited resources, given the dramatic drop in her support and the payment of costs. A large support order would impact on her ability to meet the children’s needs. g. The disclosure ordered by Faieta, J. is required to prepare for trial and in particular in relation to imputing income to Anthony both retroactively and prospectively for support purposes. Costs related to the disclosure made by both Anthony and Novac/Sonco should be reserved to the trial judge. Jennifer requests that $441,222 be deducted from the costs claimed by Novac/Sonco related to the disclosure issue. h. Novac/Sonco should seek indemnification from Anthony for a portion of their costs given the motions judge’s negative findings related to Anthony’s conduct. i. Costs must always be proportional and reasonable in relation to the issues raised.
Response to Anthony’s Submissions
[29] Jennifer’s approach to costs in relation to Anthony is that he should not receive any costs due to his bad faith conduct. Specifically, the motions judge found that Anthony misrepresented his income over several years. Had he not lied about his involvement with the RCC contract and his income from that contract, it is likely that Jennifer would not have had any reason to amend her pleadings or seek a large database of disclosure.
[30] Jennifer makes similar arguments to those in support of her position in relation to Novac/Sonco as follows: a. Much of the costs claimed by Anthony relate to disclosure which is required for trial and therefore are not costs thrown away. b. Jennifer has limited resources especially, after the dramatic reduction in her support. A significant costs award would have a detrimental effect on the children. Already, as a result of the dramatic reduction in support, Jennifer is faced with having to move and to remove the children from the York School. c. Anthony’s behaviour in this litigation was unreasonable and blameworthy. His deliberate and consistent intent to deceive the court rises to the level of bad faith. d. Jennifer did not act unreasonably nor did she delay proceedings. Two separate judges determined that the summary judgment motion and the support motion were linked and should be heard together. e. The issue of costs should be deferred to trial. At trial, the available disclosure will be used to impute income to Anthony. Jennifer may be entirely successful at trial. As such, a costs award that would stop her in her tracks would be neither fair nor reasonable. f. The Family Law Rules permit deferral of the payment of costs to trial. If Anthony is awarded costs, they should be deferred to trial to account for the possibility of Jennifer’s success on the support and income issues.
The Offers
[31] It is important in this case to review the Offers made by the parties as they impact on the quantum and scale of costs to be ordered.
[32] The Novac/Sonco parties first made an Offer on July 25, 2016. The offer provided that that Jennifer would agree to a dismissal of her claims against the third parties in exchange for no payment of costs. If the Offer was accepted after August 2, 2016, Jennifer would pay costs to the Novac/Sonco parties on a complete indemnity basis.
[33] The second Offer served by the Novac/Sonco parties was dated September 28, 2017. This Offer contained an Option A and an Option B. Jennifer was free to choose either option.
[34] In Option A, Novac/Sonco offered to withdraw their motion for summary judgment and have Jennifer’s claims against them proceed to trial. If Option A was accepted before October 6, 2017 costs incurred to that point by Novac/Sonco would be determined by the trial judge as part of the overall proceedings.
[35] If Jennifer accepted the Option A after October 6, 2017, costs prior to October 6 2017 would be determined by the trial judge. Thereafter, Jennifer would pay Novac/Sonco’s costs on a full indemnity scale. This Option remained open until the start of the summary judgment motion.
[36] Option B provided that Jennifer would consent to the granting of the summary judgment motion and sign a release in relation to her claims against the third parties. Novac/Sonco would pay Jennifer’s costs fixed in the amount of $25,000 within 30 days. Option B remained open until the start of the summary judgment motion.
[37] Anthony served an Offer dated January 27, 2017 in relation to his support motion. He offered to pay set off child support of $2000 per month and spousal support of $2000 per month commencing January 1, 2017. Section 7 expenses were to be apportioned 65% to the respondent and 35% to the applicant.
[38] If the Offer was accepted before February 14, 2017 at 12:00 p.m., both parties would bear their own costs. If accepted after that date, Jennifer would pay Anthony’s costs of the motion on a substantial indemnity basis to the date of acceptance of the Offer. The Offer remained open until the commencement of the support motion.
[39] Jennifer made an Offer to settle the Novac/Sonco motion by way of a letter dated March 30, 2017. She agreed to a withdrawal of the Novac/Sonco motion in exchange for a payment of costs to her of $75,000 within 30 days. This Offer was updated by way of letter dated June 2, 2017 in which Jennifer would consent to the withdrawal of the Novac/Sonco motion in exchange for a payment of costs of $215,000 within 15 days.
[40] On September 15, 2017, Jennifer made her final Offer. She would accept a payment of combined costs of $250,000 (plus a further sum of costs as agreed or as ordered by the court) in exchange for Anthony and the third parties withdrawing all motions by September 25, 2017. The Offer remained open until five minutes after the commencement of the motions.
Analysis of the Result with Respect to the Offers
[41] There is no dispute that the Offers in this case (other than the Offers contained in the letters dated March 30 and June 2, 2017) complied with Rule 18 of the Family Law Rules and remained open for acceptance at the commencement of the motions.
[42] The Novac/Sonco third parties and Anthony did better than their Offers. Jennifer did not even mention her Offers in her submissions as this matter could clearly not be settled by way of a payment of costs to Jennifer.
[43] Rule 18(4) sets out the cost consequences of failing to accept an Offer. Specifically, the successful party is entitled to costs to the date the Offer was served and full recovery costs thereafter. The conditions for receiving full recovery costs in Rule 18(14) are also not in dispute.
Analysis and Findings
[44] I want to first make it clear that I reject Jennifer’s position on the following two points: a. That Novac/Sonco should look to Anthony for their costs; and b. That, notwithstanding the moving parties’ clear success, Anthony should have no costs and that Novac/Sonco’s costs should be limited to $200,000.
[45] These positions are simply untenable in the face of the considerations in Rule 18 and Rule 24 of the Family Law Rules and the fact that this case is not about contribution and indemnity under the Negligence Act.
[46] I start with the assumption that both Anthony and Novac/Sonco are presumptively entitled to costs based on their success and their Offers. Thereafter, the analysis mostly relates to proportionality given the significant costs sought. Specifically, Rule 24(12) directs the court to consider the reasonableness and proportionality of the Rule 24 factors as they relate to the issues.
Rule 24 Considerations
[47] While I do not accept that Jennifer acted in bad faith, I do accept that she acted unreasonably. She failed to step back and objectively analyze what was at stake with the respect to a possible lack of success. Her offers were not reasonable. Her litigation strategy was to barrel ahead at any cost making serious allegations of misrepresentation about both Michael and Anthony.
[48] While I did make some findings that Anthony misrepresented his income, those findings related to income earned prior to January 2017. The support motion only dealt with income earned after January 2017. The findings made in relation to the support payable related almost exactly to the disclosed income for Anthony in both 2017 and 2018. With the conspiracy claim dismissed, I reject Jennifer’s position that costs should be reduced because Anthony misrepresented his income for support purposes during the relevant periods.
[49] There can be no doubt that the issues in this case were complex, and in particular the issues related to the conspiracy claim. Jennifer insisted that the conspiracy claim extended to multiple transactions over many years. She insisted on, and ultimately received, disclosure related to all of those transactions. In the end, that significant disclosure was insufficient to prove her conspiracy claim.
[50] In response to the motion for summary judgment, Jennifer served 17 volumes of compendia. The review of that material alone by the responding parties was significant.
[51] As well, the parties attended questioning on both motions, with an agreement that questioning was not specific to one motion or the other. Anthony and Michael attended for four days of questioning on the motion and Keith McIntyre for two days. Both Anthony and Michael’s counsel had to prepare extensively for that questioning.
[52] Jennifer demanded and received production of records from Burchells LLP (Novac/Sonco’s corporate lawyers), Grant Thornton (Novac/Sonco’s accountants), and Stewart McKelvey (the law firm that prepared the 2011 trust deed). These various third party professionals billed Novac/Sonco $291,921. Copies of all of the accounts were provided with Novac/Sonco’s Bill of Costs.
[53] All of the responding parties were represented by senior counsel. Jennifer should expect that they would bill at rates reflecting their experience and their time at the bar. Given that Jennifer did not submit a Bill of Costs, the court required that she provide one. Not surprisingly, that Bill of Costs revealed that costs incurred by Jennifer’s counsel for both motions were $1,282,327.79.
Costs of the November 2017 Disclosure Motion
[54] Novac/Sonco is not seeking costs for this motion. Anthony seeks full recovery costs of $148,207.50 in relation to that motion. He does so on the basis that Faieta, J.’s November 17, 2017 order makes it clear that the purpose of the additional disclosure sought by Jennifer at that motion was for the conspiracy claim.
[55] While Jennifer suggests that these costs are not “costs thrown away” by Anthony because the disclosure is required for trial, Anthony insists that this is not the case. In fact, the majority of the disclosure sought and obtained by Jennifer is not required for trial. At issue for trial is the amount of over/under payment of support owed, and equalization. The issues are straightforward.
Costs to be Decided at Each Step
[56] As indicated above, this court has no intention of deferring a significant portion of the costs of these motions to trial. That would be exceptionally unfair to the responding parties who have expended significant amounts to defend Jennifer’s claims.
[57] There is no doubt that the costs of the motion for summary judgment must be decided at this stage as those claims no longer exist, unless Jennifer is successful on appeal.
[58] As for the motion to change support, Anthony’s success and his reasonable Offers simply cannot be ignored in favour of a future trial which may be delayed and which will proceed based on straightforward and different family law issues.
The Complexity and Importance of the Issues
[59] None of the parties dispute that the issues in this matter were complex. Particularly as they related to the conspiracy claim, since there is little case law dealing with the tort of conspiracy in family law matters. Further, the law on the tort of conspiracy is complicated and multi-faceted.
[60] As well, Anthony’s motion to reduce support was complicated. If the conspiracy claim had been upheld, that may well have impacted on the income used to calculate support and whether Anthony had met the required threshold.
[61] It is trite to say that much was at stake here. The results of this motion are significant for all parties. The effects are far reaching and will no doubt extend to the children, their paternal grandparents, the partners of both parties, and their careers and lifestyles.
Case Law Considerations
[62] The general principles related to modern costs rules are set out in Serra v. Serra, 2009 ONCA 395. In that case, the husband sought $412,000 for trial costs. He was awarded $275,000. The court held that modern costs rules are designed to foster three fundamental purposes: 1) to partially indemnity successful litigants, 2) to encourage settlement, and 3) to discourage and sanction inappropriate behaviour by litigants. [Ibid. at para. 8.]
[63] The court found that the issues were complex, difficult and important. The court also considered the fact that the wife was not entitled to shield herself from the consequences of refusing to make or accept reasonable offers.
[64] In reducing the amount sought by the husband, the court considered the principles in Boucher v. Public Accountants Council (Ontario) with respect to what was a “fair and reasonable amount that should be paid by the unsuccessful parties.”
[65] In Boucher [Ibid. at paras. 24 and 38.] the court encouraged a “step back” analysis in terms of determining what is fair and reasonable. While the court observed that an exact measure of actual costs need not be awarded, part of that analysis includes the expectation of the parties concerning the quantum of the costs award. It defies logic that Jennifer would think that a costs award of $200,000 to Novac/Sonco is reasonable. Or that no costs, or a deferral of all costs to trial for Anthony, is reasonable, especially where Anthony incurred significant costs in defending the conspiracy claim.
[66] In DiBattista v. Wawanesa Mutual Insurance Co. the court awarded costs on a substantial indemnity scale where the plaintiffs were found to have made unfounded allegations of fraud, dishonesty or improper conduct which were prejudicial to the character or reputation of the impugned party.
[67] In 1175777 Ontario Ltd. v. Magna International Inc. the defendants claimed substantial indemnity costs in the face of a failed conspiracy claim by the plaintiffs. The defendants claimed total costs of over $820,000 after a 14 day trial. The plaintiff submitted that the costs requested were “grossly excessive.” The court ordered total costs of $754,541. In coming to this determination, the court considered the following factors: a. The unfounded allegations of improper conduct which were prejudicial to the character and reputation of the defendants; b. Unproved allegations of conspiracy frequently attract costs awards on a higher scale; c. The matter was complex; d. The conduct of the plaintiff added to the expense and complexity of the litigation; e. Trial time was shortened by a planned and focused defence; f. The fees charged were reasonable given the experience of counsel and the level of advocacy; and g. In the final analysis, the amount of costs was fair and reasonable.
[68] In Benoit v. Kerr, 2014 ONSC 5401 the court considered the mother’s request that her lack of means be considered with respect to awarding costs against her. In that case, the father had served two Offers which were more favourable than the result. The court declined to substantially reduce the father’s cost award despite the mother being on long term disability and claiming various other hardships.
[69] The court held that the mother’s litigation was “expansive and reckless” and that “individuals of limited means do not engage in litigation without risk.” Further, the court held that engaging in reckless litigation ultimately deprives the children of financial security. [Ibid. at paras. 41, 43 and 46.] The court awarded $55,000 of the $66,751 sought by the father.
Application of the Case Law and Rule 24 Factors to the Facts in this Case
[70] Novac/Sonco has provided detailed briefs containing all of their accounts and disbursements. The dockets begin shortly after the amendment to Jennifer’s claim was made in 2016. Mr. Smith billed out at $625 per hour throughout 2016 and 2017. His rate increased to $650 per hour in January 2018. Ms. Love-Forester billed out at $360 per hour until February 2017 when her hourly rate increased to $375 per hour. I do not view the hourly rates billed by Mr. Smith or Ms. Love-Forester to be unreasonable or excessive given their experience and the level of advocacy at the motions.
[71] Further, the increases to their hourly rates over almost three years of litigation were, frankly, modest.
[72] Jennifer takes great exception to the amounts billed by third-party professionals hired by Novac/Sonco. Of note is that these professionals were not hired by Novac/Sonco solely in relation to these motions. These were consulting professionals who had long standing relationships with Novac/Sonco and who had access to information that was required for court ordered disclosure purposes.
[73] I have reviewed the dockets contained in the Schedules Brief in relation to the dockets of Grant Thornton, Burchells LLP and Stewart McKelvey. It is clear that the dockets have been carefully reviewed and charges for unrelated matters removed.
[74] I do not see why these disbursements should not be included in the costs sought by Novac/Sonco. The dockets relate to the summary judgment motion. Jennifer was well aware of their involvement as she had access to thousands of emails between these professionals and Michael and Anthony. Further, she cannot be surprised that Michael sought professional advice from his advisors when required to make detailed disclosure on complex financial matters.
[75] I have also reviewed Ms. Rosen’s dockets. I accept that her hourly rates and those of Ms. Eckert (including any increases over the years) are reasonable in the circumstances. I am also satisfied that counsel for Michael and Anthony availed themselves of the services of Ms. Eckert and Ms. Love-Forester as often as possible in order to keep costs down while maintaining quality work standards.
[76] It should be noted that the hourly rates billed by Jennifer’s counsel were comparable to those of both Michael and Anthony’s senior counsel.
[77] With respect to the Faieta, J. motion in November 2017, I am not persuaded that Anthony is entitled to full recovery costs for that motion. While I understand the concern with respect to the result of these motions and their relationship with that motion, it would seem at odds with both the costs award made ($40,000) and the fact that Michael is not seeking costs for that motion to award Anthony costs of $114,000 for that same event. What is fair, in these circumstances, is simply to award Anthony the same costs awarded to Jennifer which would neutralize the result in the event that any of the disclosure is needed for the trial.
[78] Finally, with respect to proportionality, this court has somewhat less discretion than what otherwise may be available on a Boucher-type analysis for the following reasons: a. Both Michael and Anthony did better than their Offers. b. Jennifer’s Offers were not reasonable. c. Jennifer had no success. d. Jennifer made accusations that impugned the character of the respondents. None of those allegations against Michael were borne out. Those against Anthony were only partially borne out, but not in relation to the conspiracy. e. The case law does not persuade me that Jennifer is entitled to any deduction in relation to her position that she is of limited means, given her aggressive pursuit of this litigation. f. Jennifer should have expected to pay costs of at least $1.2 million if she had no success, as that is what her own counsel billed. It is fair and reasonable to permit the respondents equal recovery for defending a claim with equal vigour.
[79] Based on all of the above, I make the following orders: a. Jennifer will pays costs, inclusive of HST, disbursements and fees as follows: i. To Novac/Sonco the sum of $900,000; and ii. To Anthony the sum of $300,000 for the within motions plus $40,000 for the November 2017 motion for a total of $340,000.
[80] Of the $300,000 owed to Anthony for the within motions, 50% (or $150,000) will be enforceable as legal fees related to the payment/collection of spousal and child support and shall be enforced as such.
C. Gilmore, J.
Released: March 7, 2019
COURT FILE NO.: FS-14-00398336-0000 DATE: 20190307 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Jennifer Ann Leitch Applicant – and – Anthony James Charles Novac in his personal capacity and in his capacity as trustee of The Novac Family Trust (2013) and the Lulu Trust (2006) Respondent – and – Michael Novac in his personal capacity as trustee of each of The Novac 2011 Trust and The Novac Family Trust (2013) Nelly Novac in her capacity as a trustee of the 2011 Novac Family Trust Sonco Group Inc. The Novac 2011 Family Trust The Novac Family Trust (2013) John McLure, in his capacity as trustee of the Lulu Trust (2006) David Tam, in his capacity as trustee of the Lulu Trust (2006) Third Party Respondents
REASONS C. Gilmore, J.
