Court File and Parties

Court File No.: FS-16-86960 Date: 2019-03-22 Superior Court of Justice - Ontario

Re: Anna Maria Zeppieri, Applicant And: Roberto Zeppieri, Respondent

Before: Barnes J.

Counsel: G. Cacciola, for the Applicant H. Dhaliwal, for the Respondent

Heard: December 13, 2018

Endorsement

Introduction

[1] On March 28, 2017, Robert Zeppieri and Anna Zeppieri reached Minutes of Settlement. On consent and on the same date, Fitzpatrick J. made an order in accordance with the Minutes of Settlement (the “Order”). Shortly thereafter, Anna Zeppieri sought and was granted leave to bring a motion to set aside the Order.

[2] Robert Zeppieri seeks to recover the costs he incurred in anticipation of the motion to set aside which she threatened but never brought. Mr. Zeppieri shall recover costs incurred in efforts to encourage Anna Zeppieri to clarify her position on whether she still intended to proceed with her motion. He shall not recover costs for preparing material in anticipation of a motion never brought. Mr. Zeppieri is not entitled to costs incurred in anticipation of a further step in the case that never took place. Ms. Zeppieri’s actions rendered efforts undertaken to reach the settlement and obtain the Order unproductive. Her behaviour was unreasonable.

Background Facts

[3] On March 28, 2017, a Case Conference took place. Fitzpatrick J. provided extensive assistance to the parties. After protracted negotiations, the parties entered into Minutes of Settlement on the same day. On consent, Fitzpatrick J. issued the Order.

[4] Subsequently, Anna Zeppieri informed Robert Zeppieri that she will seek leave to set aside the Order. She said she was suffering from anxiety and depression at the time the Minutes of Settlement were reached and this compromised her ability to make decisions. She also alleged that Robert Zeppieri had failed to provide full financial disclosure.

[5] On July 5, 2017, Fitzpatrick J. granted Anna Zeppieri leave to bring a motion to set aside the Order (leave to set aside). Fitzpatrick J. ordered that a Case Conference must be held before this motion was heard. This Case Conference was scheduled for February 1, 2018. Anna Zeppieri did not attend. She sent her (now deceased) brother in her stead. He produced a Power of Attorney authorising him to act on her behalf. Anna Zeppieri was allegedly ill. Price J. ordered her to pay $1,500 in costs forthwith for failing to provide any notice of her inability to attend or to provide a reasonable explanation for her failure to do so. Price J. rescheduled the Case Conference to March 9, 2018. This was to allow Anna Zeppieri time to arrange for a court-appointed litigation guardian. Anna Zeppieri’s motion to set aside the Order was scheduled for August 1, 2018.

[6] The March 9, 2018 Case Conference did not proceed. No new date was set for this Case Conference. Anna Zeppieri filed no materials for her long motion. The motion date was subsequently vacated by the court. On October 4, 2018, Anna Zeppieri informed Robert Zeppieri that she would not proceed with her motion. By this time, Anna Zeppieri had replaced counsel who represented her in negotiating the Minutes of Settlement with new counsel.

Issue

[7] Robert Zeppieri seeks to recover his costs incurred in anticipation of a motion Anna Zeppieri threatened to bring but never brought. These costs fall into two broad categories:

1. costs incurred in efforts to seek clarification from Anna Zeppieri on whether she intended to bring the motion; and
2. costs incurred in preparing draft motion materials for a motion that she threatened but never brought.

Law

[1] Rule 24(1) and (2) of the Family Law Rules, O. Reg. 114/99, s. 24 establishes a presumption that a successful party is entitled to their costs. These costs are determined and fixed after each step of the case. It is a completion of a “step in the case” that triggers a determination of the issue of costs: Rule 24(10).

[2] Thus, the bedrock of the analysis is whether the cost is incurred in relation to a “step in a case”. For example, any motion brought during the course of a trial is brought in relation to the step under consideration i.e. the trial. Such a motion becomes a subsidiary step in the trial. This is a step related to the completion of a “step in the case”. Under such circumstances, any costs incurred to prepare for a motion threatened during the course of the trial is a subsidiary step related to the completion of the step under consideration, i.e. the trial. Thus, even if the motion is abandoned the associated costs are part of costs incurred in preparing and conducting “a step in the case” the trial. For example, in Aviado v. Goralczyk, [2005] O.J. No. 2698, at para. 18, costs were awarded for the preparations for motions threatened during the trial but never brought.

[3] This circumstance is distinct from a stand-alone motion, i.e. a motion not raised in the course of a trial and thus not a subsidiary step in the completion of a trial. A stand-alone motion is a “step in the case”, the completion of which will trigger an assessment of costs incurred in completion of that step. The conceptual framework focuses on the motion alone because the stand-alone motion is the “step in the case” under consideration.

[4] The presumption that the successful party is entitled to costs can be rebutted when a court determines that the successful party has acted in an unreasonable manner: Rule 24(4) and (5). Where a party has failed to appear for a step in the case, is not prepared to deal with issues in the case, “or contributes to that step being unproductive”, the court may award costs against that party: Rule 24(7).

[5] Where a party has acted in bad faith, the other party shall be awarded full recovery costs which shall be paid immediately: Rule 24(8). A party’s conduct will constitute bad faith where the conduct meets any of these criteria:

(1) There is an intent to inflict financial or emotional harm on the other party or parties affected by the behavior; (2) There is an intent to conceal information; (3) There is an intent to deceive the other party or the court; or, (4) There is conduct designed to inflate litigation costs of the other party without reasonable justification: S.(C.) v. S.(M.) (2007), 38 R.F.L. (6th) 315 (Ont. S.C.), aff’d 2010 ONCA 196, 262 O.A.C. 225; Anderson v. McWatt, 2015 ONSC 7328, at para. 11.

[6] The effect of Rule 24(10) is that where a court makes no costs ruling or is silent on costs in an earlier preliminary step, it is not open to the motions or trial judge to rule on costs with respect to the earlier preliminary step: Klimowicz v. Moffat-Klimowiz, at para. 1. This was the status quo in March 2017, when the Order was made. Since then, Rule 24(10) has been modified by Rule 24 (11) as follows:

The failure of the court to act under subrule (10) in relation to a step in a case does not prevent the court from awarding costs in relation to the step at a later stage in the case.

Position of the Parties

[7] Robert Zeppieri submits Anna Zeppieri acted in bad faith by “intentionally inflicting financial and emotional harm and by intending to deceive” when she did the following:

1. She failed to abide by the terms of the Minutes of Settlement;
2. She failed to attend the case conference;
3. She advised the court she was bringing a long motion, caused a date to be set for the long motion, caused Mr. Zeppieri to prepare for the motion and then abandoned it;
4. She said she needed time to appoint a litigation guardian and then proceeded without one;
5. She inflicted financial harm by causing Mr. Zeppieri to incur costs, over a protracted period, to inquire on the status of the motion. This was due to her failure to take action to perfect the motion; and
6. Her failure to promptly adhere to the terms of the settlement forced Robert Zeppieri to incur costs associated with protecting the parties’ financial interests in the matrimonial home for almost two years after the matter settled.

[8] Anna Zeppieri submits that Mr. Zeppieri has taken no steps that entitles him to costs and his motion should be dismissed with costs because:

1. Mr. Zeppieri’s motion materials were allegedly prepared in advance yet they were never served upon Ms. Zeppieri;
2. Mr. Zeppieri ‘s motion materials were never filed with the court;
3. Mr. Zeppieri did not provide a copy of draft materials; and
4. Mr. Zeppieri refuses to provide redacted lawyer’s dockets.

Discussion and Analysis

Costs incurred in preparing draft motion materials for a motion that was threatened but never brought

[9] Mr. Zeppieri elected to prepare material in anticipation of Ms. Zeppieri’s motion. It was his prerogative to take such action. However, since Ms. Zeppieri never proceeded with her motion, she never commenced “a step in the case” the completion of would have triggered the issue of costs. This step was never commenced. It was never completed and therefore no costs will be awarded.

Costs incurred in efforts to seek clarification from Anna Zeppieri on whether she intended to bring the motion

[10] The Order was issued prior to Rule 24(11). Therefore, the statutory regime pre-enactment of the rule will govern this analysis. The Klimowicz v. Moffat-Klimowiz principle will be considered.

[11] This case is different from Klimowicz v. Moffat-Klimowiz. In that case, Steinberg J. considered a request for costs for a preliminary step completed before another judge. The judge reserved costs to “the judge hearing the motion or cross motion”. Steinberg J. ruled that this provided jurisdiction for the motions judge to address the issue of costs stemming from the preliminary step: Klimowicz v. Moffat-Klimowiz, at paras. 1 and 2.

[12] Unlike in Klimowicz v. Moffat-Klimowiz and as is typical in consent orders, the Order is silent on the issue of costs. However, Ms. Zeppieri’s actions rendered the settlement discussion unproductive as implementation of the settlement was held in abeyance because of her threat to bring a motion to set aside the Order. This continued for one year and seven months. Thus, Mr. Zeppieri’s efforts to inquire whether Ms. Zeppieri intended to proceed with her motion is directly related to the completion of the step in the case related to the Order. Therefore, the associated costs can properly be considered pursuant to Rule 24(10).

[13] In his communication with Ms. Zeppieri, Mr. Zeppieri made several inquiries of Ms. Zeppieri on the status of her promised motion. He received no response for several months. He threatened to bring a motion to set aside the Order granting her leave to bring her motion. He elected not to follow through on this threat. The motion he threatened would have constituted a new step in the case, the completion of which, will trigger a consideration of whether costs associated with it should be awarded.

[14] The matters on the motion were settled. The discrete issue of whether costs should be awarded on the basis of Ms. Zeppieri actions was not complex but were of importance to the parties because it was related to the implementation of a settlement. On balance, I do not conclude that Ms. Zeppieri’s actions constituted bad faith. There is evidence that she suffered from an illness that warranted the consideration of the appointment of a litigation guardian. However, her decision to contest the Order and her unresponsiveness to Mr. Zeppieri’s legitimate and reasonable queries caused a lengthy delay of almost two years. Overall, her actions were unreasonable and caused Mr. Zeppieri to incur legal costs to query the status of her promised motion. Counsel’s rates and items billed for communications to determine the motion status is reasonable. It is fair and just in all the circumstances to award costs in the amount of $3,500.00 which Ms. Zeppieri shall pay forthwith.

Barnes J. Date: March 22, 2019