Court File and Parties
Newmarket Court File No.: FC-15-49711-00 Date: 2019-10-23 Superior Court of Justice – Ontario – Family Court
Re: Diane Florovksi, Applicant -and- Louie Florovski, Respondent
Before: The Honourable Madam Justice M.E. Vallee
Counsel: Ms. F. Yehia, for the Applicant Mr. N. Epstien, for the Respondent
Heard: In Writing
COSTS ENDORSEMENT
Introduction
[1] This endorsement concerns costs for the applicant wife’s (AW) motion for an order to strike the respondent husband’s (RH) pleadings or, in the alternative, an order for disclosure. The motion was first before Bennett J. It was adjourned. It was before me on three other dates before it was concluded. My order is the sixth disclosure order relating to the RH’s failure to provide documents. The AW issued her Application in November 2015. Four years later, disclosure is still an issue. The AW was the successful party. The RH’s position is that she should not be entitled to any costs.
[2] The RH’s litigation strategy as shown by his behaviour is an overriding factor in setting the costs of this motion. The motion was first before me on October 31, 2018. The RH requested an adjournment. A considerable amount of time was spent arguing the adjournment which was denied. Then the motion began. The AW produced a comprehensive chart showing the outstanding disclosure; however, due to the time spent on the RH’s unsuccessful adjournment request, there was not enough time to complete the motion. It was adjourned to November 2, 2018.
[3] On the morning of November 2, 2018, the RH provided a document dump. The motion could not begin on time because the AW’s counsel had to sort through numerous pages to determine what had been produced and to update the chart. This required several hours. As a result, the motion could not be completed on that date. On March 22, 2019, counsel attended on a court conference call to discuss the status of the matter. After November 2, 2018, seven months passed before the motion was back before me on July 30, 2019. The delay was partly attributable to the AW’s stating that she required a forensic accountant to assist with the RH’s complicated finances. The RH did provide more documents in the interim but not everything that was required. He had more than ample opportunity in the seven months to produce the remaining disclosure required to resolve the motion.
[4] On July 30, 2019, the third time this matter was before me, the RH was unprepared to respond to the outstanding items in the AM’s revised chart. On all three motion dates, the RH provided no responding affidavit.
[5] RH’s counsel made comments from the floor saying he believed certain items were not available. At my request, on a break, he made a call to a Hollis Wealth employee to see if certain outstanding statements were available. He stated he believed letters had been produced. He could not identify them in his client’s earlier affidavits. He stated that he thought they were at his office.
[6] The RH stated that the AW kept certain financial documents after separation as a reason for his difficulty in providing them; however, the outstanding disclosure related to statements for RH’s accounts from financial institutions. These documents or a letter that they were not available would have been easy for him to obtain. Counsel attempted to offer an excuse and stated from the floor that the RH had been ill; however, there was no medical evidence. The RH’s approach to disclosure was “I thought I provided it” or “I did the best I could but I don’t have the documents. A third party, such as a financial institution has them.” This equates to a “prove that I could provide it” strategy.
[7] Quite surprisingly, prior to the third attendance on the motion, the RH filed his own motion requesting orders for variation of child, spousal support and a divorce. Counsel stated that it should be heard “because it was important”, despite the endorsement of Jarvis J. dated February 25, 2019 which states, “Pending the conclusion of the applicant mother’s motion to strike, no motions shall be brought by either party without leave to be addressed by 14B motion brought on 10 days notice to the other party.” The RH’s conduct in bringing his own motion without leave constitutes a breach of the court order. The RH’s energy seems to have been spent preparing this motion, with a one-inch thick affidavit, despite the fact that he had not requested the required leave. In the RH’s costs submissions, he acknowledges that he needed leave for this motion which leaves one to wonder why he brought it and expected it to be heard on the third hearing day for the disclosure motion. His efforts should have been spent obtaining the outstanding disclosure.
[8] The order of MacPherson J., which was the fifth disclosure order, states that the RH’s failure to produce basic disclosure constituted bad faith. In my order, I stated that his non-compliance was exceptional and egregious. Given the litigation history, the prospect of the RH’s compliance with my order was poor. Stiff consequences were required and imposed.
[9] The RF states that he provided disclosure as it became available from third parties. Therefore, there is divided success on the motion. I reject this position. It is contradicted by the fact that counsel could not locate any evidence in the RH’s materials that certain documents had been provided or that letters had been provided from third parties stating that the documents could not be provided. Counsel stated from the floor that these documents could be in his file at his office. Furthermore, given the fact that the application was issued in November 2015, the RH has had four years to request and produce documents. The fact that some disclosure was provided in between hearing dates does not mean that the RH was partly successful. The disclosure was not provided until the AW brought the motion. The RH is not credited for partly complying with a court order in the midst of a motion compelling him to do so.
[10] The RH also states that the AW made the proceedings more difficult than needed because before the court dates she delivered “additional supplementary affidavits with revised charts which could not be cross-examined on nor replied to by responding affidavits.” I reject this submission. The revised charts were needed because the RH was providing disclosure piecemeal between hearing dates. They were essential in order to determine the disclosure that remained outstanding. In order for the charts to be evidence, they had to be provided by way of affidavit. As noted above, at no time did the RH provide a current affidavit in response to this motion.
[11] Section 24(8) of the Family Court Rules[^1] states that 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. In Trudel v. Trudel, 2010 ONSC 5177 at paras 17 and 18, the court stated, “Where, as here, a party adopts a catch-me-if-you-can approach to financial disclosure, thereby demonstrating bad faith, that fact overshadows everything else such that full-recovery costs should follow. Litigation in Family Court relies heavily on the timely and true disclosure of financial information.” (para 17) “The financial non-disclosure of the husband amounts to dishonesty. This equates to bad faith. Thus, the wife is entitled to full-recovery costs on this basis alone.” (para 18)
[12] In Mullin v. Sherlock, 2018 ONCA 1063, a case that dealt with “the recurring issue of striking out pleadings in family law proceedings in the face of incomplete disclosure” (para 1), the court stated that in family law matters, “Fully compliant disclosure is the expectation, not the exception.” (para 46)
[13] The AW seeks full recovery costs in the amount of $46,934.32 which is noted on her costs outline to be substantial recovery of actual fees - $57,971.03. Counsel on the motion has 14 years of experience. Her rate is $400 per hour. Another lawyer, Assunta Ruggerio (referred to in the costs outline as AR), whose rate is $200 per hour, did work that resulted in approximately 20% of the fees billed. There was some over-lawyering on the file. For example, counsel billed for providing instructions to AR and AR billed for receiving them. AR prepared a number of documents which counsel spent considerable time reviewing.
[14] The disbursements for photocopies, process serving and couriers are in order. They total $2,787.48 including HST. The work for this motion began in September, 2018. The matter was first before the court on September 26, 2018 at which time it was adjourned. Bennett J. noted that the judge hearing the motion was to determine whether the RH was substantially compliant with the disclosure sought by the AW and if not, that costs of $3,000 be payable to the AW for that attendance. Clearly, the RH was not substantially compliant.
[15] The work required for this motion was equivalent to the work necessary for almost three motions because the second and third attendances each required careful review of documents provided, updating the chart and preparation of a supplementary affidavit. When considered in this context, the costs requested would be approximately $15,000 per motion.
[16] Given the bad faith demonstrated and the fact that this is the sixth disclosure order, I find that an appropriate amount of costs for this motion with three attendances is $40,000. Including the costs of $3,000 as per Bennett J.’s order, the total is $43,000 which the RH shall pay to the AW immediately.
Vallee J.
Released: October 23, 2019