Superior Court of Justice - Ontario
RE: Marie Fiorellino-Di Poce
AND:
John Di Poce
BEFORE: J.T. Akbarali J.
COUNSEL: Harold Niman and Chloe Van Wirdum, for the Applicant
Heather Hansen and Jenna Beaton for the Respondent
HEARD: November 15, 2019
ENDORSEMENT
Overview
1The applicant brought a long motion seeking disclosure, and an order for $425,000 in interim disbursements. The parties settled the disclosure portion of the motion prior to its return. The applicant’s request for interim disbursements proceeded before me. These reasons address the motion for interim disbursements and the costs thereof.
Background
2The parties married on October 29, 2010, after having cohabited for over four years. They disagree on the date of separation. Depending on the date used, they were married for six or seven years before they separated.
3The marriage was a second marriage for both parties. The applicant is 62 years old and in poor health. The respondent is 84 years old.
4The respondent is very wealthy, and was at the time the parties married. He conducted estates freezes before meeting the applicant and before marrying her.
5The respondent alleges that no equalization payment will be owing to the applicant because his net worth went down during the marriage such that his net family property is zero. He has delivered an estimate of value report that supports his contention.
6The respondent has not delivered an expert income report. He states that he has the means to pay whatever spousal support award is made, such that the determination of spousal support will focus on the applicant’s needs, not his income and means. He states that no income report is necessary or proportionate given his concession.
7The litigation between the parties thus far has been high conflict and expensive. The applicant seeks $425,000 in interim disbursements at this stage. Of this, she seeks $50,000 for legal fees and $375,000 for a forensic analysis of the respondent’s income and financial circumstances, and for the preparation of two reports: an income report and a valuation report.
Issue
8The issue for determination on this motion is whether the applicant is entitled to an order for interim disbursements, and if so, in what amount.
Analysis
The Legal Framework for an order for Interim Disbursements
9Rule 24(18) of the Family Law Rules, O. Reg. 114/99, allows the court to “make an order that a party pay an amount of money to another party to cover part or all of the expenses of carrying on the case, including a lawyer’s fees”.
10The purpose of an award for interim disbursements is “to level the playing field to ensure that meritorious claims in the family law context are not abandoned or forfeited by those who lack financial resources and, as a result, are at a significant financial disadvantage relative to the other party in the proceeding”: Morton v. Morton, 2015 ONSC 4633, at para. 98.
11Rule 24 evidences a less stringent approach in the family law context than is the case in public interest litigation. Consistent with the primary objective, r. 24 seeks to ensure the just determination of the issues between the parties, and recognizes that there may be circumstances where one party cannot afford to seek justice on meritorious claims given the disparity in financial resources available to that party: Morton, at para. 99.
12On a motion seeking interim disbursements, the moving party must demonstrate:
a. The interim disbursements for which an advance payment is requested are important to matters in issue in the proceeding as a whole;
b. The disbursements are necessary and reasonable given the needs of the case and the funds available. If the disbursements are for payment of an expert, the moving party must demonstrate a clear need for the services of the expert;
c. The moving party is incapable of funding the requested amounts;
d. The claim or claims being advanced in the case must be meritorious as far as can be determined on the balance of probabilities at the time of the request for disbursements; and
e. The imposition of the payment on the responding party will not cause undue hardship to the payor: Morton, para. 97, citing Stuart v. Stuart, 2001 CanLII 28261 (ON SC), [2001] O.J. No. 5172 (S.C.), at paras. 7, 11-13.
13It is no longer necessary to find exceptional circumstances to order interim disbursements under the Family Law Rules. The order is a discretionary one. The court must ensure the primary objective of fairness under the Family Law Rules is met: Ludmer v. Ludmer, 2012 ONSC 4478, at para. 15.
14The court’s discretion should be exercised to ensure that all parties can equally provide or test disclosure, make or consider offers, or possibly go to trial – in other words, to level the playing field: Stuart, at para. 8; Ludmer, at para. 16.
15An order for interim disbursements should not immunize a party from cost awards. The order is to allow the case to proceed fairly and should not be such that a party feels a licence to litigate: Stuart, para. 8; Ludmer, para. 16.
16I turn to consider the application of these legal principles and the test for interim disbursements to the case before me. I review the evidence relating to the relevant criteria in the course of my analysis.
Are the disbursements for which an advance payment is sought important to matters in issue in the proceeding as a whole?
17The applicant seeks disbursements for legal fees and expert fees. The expert fees relate to the valuation report and income report the applicant seeks to have done. The expert fees are broken down into five phases: project management, tracing, business valuation, annual income and reporting.
18The respondent does not argue that the disbursements sought are not important to matters in issue in the proceeding as a whole. He disputes the reasonableness and necessity of the expert’s fees, which I address in that stage of my analysis, later in my reasons.
19In my view, when evaluating the importance of these disbursements, I must be cognizant of the scope of issues in dispute, which include spousal support and equalization of net family property. The respondent disputes that he will have to make an equalization payment, but there is no doubt that the respondent’s net worth is significant. That the applicant is in a position to test the respondent’s claims will be important to the resolution of the parties’ property issues.
20In addition, I note that the litigation thus far has been expensive, including an interim support motion that cost the applicant over $150,000 in legal fees. The husband has four times been ordered to pay costs to the applicant and has taken an aggressive approach to the litigation, including, for example, seeking leave to appeal a costs award to the Divisional Court.
21In these circumstances, the reality of the parties’ litigation is that disbursements for legal fees and expert fees are important to matters in issue in the proceeding as a whole.
Are the disbursements necessary and reasonable given the needs of the case and the funds available?
22The applicant seeks disbursements for legal fees and for expert fees. She seeks to retain KPMG to do an income report and a valuation report. I consider the reasonableness and necessity of these disbursements individually.
Legal Fees
23With respect to legal fees, the applicant has provided a budget of estimated fees. The estimate includes time for three lawyers: Mr. Niman, Ms. Maleki and Ms. van Wirdum. The respondent argues that it is not reasonable or necessary for the applicant to have three lawyers. The respondent has two lawyers on his file.
24The applicant argues that Ms. Maleki and Ms. van Wirdum are sharing, not duplicating, duties and that the involvement of both of them relates to a maternity leave taken by Ms. van Wirdum, during which Ms. Maleki stepped in to assist with the file.
25I do not accept the respondent’s criticism about the involvement of both Ms. Maleki and Ms. van Wirdum. Staffing a file to account for the realities of counsel’s family obligations is entirely appropriate. I note that on the estimate of fees provided by the applicant, Ms. van Wirdum and Ms. Maleki’s time is accounted for interchangeably, using a blended rate, while Mr. Niman’s fees are accounted for separately.
26The budget includes fees for the preparation of affidavits of documents, document review, and preparing for and attending the parties’ questioning. Given the issues raised in the litigation, the fees spent to date, the steps taken in the litigation to date, and the number of counsel each party has involved, the budget is both reasonable, and the legal fees outlined in the budget are necessary.
Expert’s fees: Valuation Report
27The respondent argues that the applicant will not be entitled to an equalization payment. He states that the bulk of his assets (approximately $80 million of the approximately $100 million he claims to hold) relate to his business interests, and the value of those assets are frozen as a result of the estate freezes. He states that his net value decreased by about $30 million over the duration of the marriage, and that $20 million of that decrease is accounted for by a donation he made to a hospital and a loan owed to Scotiabank. He states that these are not forensic issues, but rather, they can be dealt with on questioning without the need for a forensic analysis. The respondent accepts that the applicant should be entitled to critique the valuation report he has already prepared.
28The applicant argues that she is entitled to undertake a forensic analysis of the respondent’s financial circumstances. She notes his repeated statements in earlier affidavits attesting to the complexity of his financial affairs. In particular, she relies on his sworn statement that, to prepare a valuation of his corporate interests as at the date of marriage and as at the date of separation, and to prepare an income calculation for support purposes, could take 12 to 18 months and cost more than $500,000.
29It is not clear what the respondent has actually spent for his estimate of value report. Although he could have, he did not provide any evidence about his actual expert costs.
30I have already noted that in Stuart, the court held that an order for interim disbursements is primarily to ensure that all parties can equally provide or test disclosure, make or consider offers, or possibly go to trial. In my view, being able to test disclosure includes testing expert reports. Making or considering offers includes understanding the expert evidence that each party will or can offer at trial. Going to trial includes being able to present expert evidence where required.
31In this case, I note the following:
a. The respondent has deposed that his “assets are extremely complicated”, and his “financial affairs are extremely complex”.
b. The respondent retained Farley Cohen of Cohen Hamilton Steger & Co to prepare an estimate of valuation report. Mr. Cohen was retained at least by March 5, 2018, and his report is dated April 18, 2019. The respondent deposed the work would take 12-18 months. The record shows it took over thirteen months, if not longer, for Mr. Cohen to prepare his report.
c. The respondent has also had the assistance of other members of his team, outside of Mr. Cohen’s organization, in responding to enquiries about his financial circumstances.
d. The respondent estimated the cost of the work Mr. Cohen would do (including an income report) could be more than $500,000. He has not provided any evidence about its actual cost, or of the cost related to the support or assistance provided by his other team members.
e. Both the estimated time and cost for Mr. Cohen to prepare his reports supports the respondent’s statements that his financial affairs are complex.
f. The estimate provided by the applicant’s expert suggests professional fees of $375,000, of which about $20,000 can be identified as relating solely to the income report.
g. Mr. Cohen’s estimate of value report includes 27 schedules and 24 appendices. It is not a simple document.
32I do not place much weight on the respondent’s argument that of the $30 million reduction in his net worth during the marriage, $20 million relates to two items which require no forensic analysis: the Scotiabank loan and the donation to a hospital.
33First, it is not clear to me where the other $10 million of the $30 million reduction is found.
34Second, the applicant raised questions about the Scotiabank loan. Although the respondent states those can be addressed on questioning, the Scotiabank loan does not appear to me to be a straightforward matter; it may require expert analysis.
35Third, there are questions about the respondent’s donation to the hospital. For example, why does the donation not appear as a deduction for charitable donation on the respondent’s income tax return? This raises further questions about the resulting impact of the deduction (or lack thereof) on the donation’s actual net cost to the respondent.
36Moreover, the applicant alleges that the respondent may have dealings with his company that affect his net family property outside of the value of his shares that was frozen on the estate freezes he conducted. The respondent argues that these are baseless suspicions, but with the complexity of his financial affairs, and the issues at stake between the parties, the applicant should not have to take the respondent at his word.
37The respondent argued that the applicant could commission a critique report rather than a full forensic analysis. I considered whether a critique report would suffice as a starting point, but I have concluded that it will not. The question of whether an equalization payment is owing is a question of potentially significant economic value. In view of the length of time Mr. Cohen took to prepare the estimate of value, and the respondent’s repeated affirmations that his financial affairs are complex, I am concerned that a critique report will not level the playing field between the parties.
38Given the complexity of the respondent’s financial affairs, it is reasonable and necessary for the applicant to test his conclusion that his date of marriage deductions exceed his net family property on separation. This requires the preparation of a valuation report.
39I return to the question of the reasonableness of the quantum of the report after I consider the reasonableness and necessity of the income report the applicant seeks to fund.
Expert’s Fees: The Income Report
40The respondent argues that an income report is not necessary because he has reasonably and proportionately conceded that his ability to pay spousal support is not an issue. He can afford to pay whatever amount in spousal support the court may order.
41The respondent’s evidence as to his income is that he spends without regard to a budget, and at year end, his team helps him determine how best to characterize his spending.
42The applicant argues that any determination of support begins with a determination of income, even in cases with high income earners: see, for example: Plese v. Herjavec, 2018 ONSC 7749, at paras. 263, 269.
43In Climans v. Latner, 2019 ONSC 1311, at paras. 146-164, Shore J. considered the income of the payor spouse. She noted that he did not really take a position on what his true income was for support purposes, because he acknowledged that his means was not an issue. Shore J. held that the quantum of support would be driven mainly by the recipient’s needs. However, she concluded she still needed to make some finding with respect to the payor’s income. She then reviewed the evidence relevant to the payor’s income. She summarized the evidence, finding that he “would still have had an average income of over $6.5 million per year, for the last three years, or at least $7 million for 2018”. She then held, at para. 164:
If I were to go through the exercise of determining his income for support purposes as provided for under the Guidelines (by starting with his income tax returns, grossing up dividend income as well as capital gain income), his income would be even higher. Suffice to say, I am satisfied that there is sufficient income from which to pay support. In this case, Ms. Climans’s needs, measured against her standard of living during the relationship, will be the driving factor in determining the quantum of spousal support, not Mr. Latner’s means.
44The respondent notes that proportionality is a core principle that not only governs the conduct of proceedings generally but is specifically applicable to fixing costs in family law matters: Beaver v. Hill, 2018 ONCA 840, para. 19. The import of this argument is that the court should not order interim disbursements to fund steps that are not proportional to the litigation as a whole. If costs would not be awarded for steps that are not proportional, a litigant intending to take such steps ought not to be able to receive interim disbursements to fund them either. The respondent argues that it is not proportional to undertake an income analysis when he has already conceded that he has the ability to pay any amount of support the court might order.
45In my view, while the starting point for support is determination of income, there is little point in trying to determine the respondent’s income with precision in this case. By his own admission, his income is whatever he wants it to be. He spends without regard to a budget. He characterizes his spending at year end with help from his team. Spousal support will thus be driven by the applicant’s needs, measured against her standard of living during the relationship, and whatever the quantum ordered, the respondent will be able to pay it.
46It would be inconsistent with r. 2 of the Family Law Rules to require the parties to engage experts to prepare an income report that would conclude, at the end of the day, that the respondent’s income is enough to support the applicant’s needs, whatever they are determined to be. Doing so would add expense and delay where none need be added. In my view, it is not reasonable and necessary to have expert evidence in these circumstances to assist the court in understanding that the respondent’s income satisfies any means test the court might employ, and the court’s focus in determining spousal support should be on the applicant’s needs.
47This is not to say that the applicant is not free to obtain an income report. However, I find that an income report is not a disbursement that is reasonable and necessary in the circumstances of this case. Put another way, the applicant has not demonstrated a clear need for an income report. If she wants to obtain one, she will have to pay for it herself.
Quantum of Reasonable and Necessary Expert Fees
48The question then becomes the quantum of the expert fees that are reasonable and necessary for the valuation report but not the income report. As I earlier noted, the estimate provided by the expert includes close to $20,000 that is clearly identifiable as relating to the income report. There are other items in the proposed budget that appear to include amounts relating to the income report, such as the time estimated for reporting, and the time estimated for tracing. I note that of the items I can definitively identify as being related to valuation as opposed to income, the estimate provides for about 1.5 times more hours spent on document review and analysis relating to business valuation than it does to income analysis. Put another way, of time estimated for document review and analysis, roughly 60% relates to valuation and 40% relates to income.
49In considering quantum of the expert fees, I also rely on the estimate provided by the respondent for his expert reports, which he has not qualified in materials filed on this motion, although he must know what Mr. Cohen has charged for his valuation report. In the absence of direct evidence from the respondent on the point, I infer that the cost of the estimate of value report that the respondent had prepared was more or less consistent with the estimate he earlier deposed to, less some amount for the income report.
50The applicant’s expert has estimated $62,000 for reporting. I conclude that, consistent with the time devoted to analysis and document review, 60% of the cost of reporting relates to valuation reporting as opposed to income reporting. I make a similar assessment for the costs claimed under tracing.
51With respect to the amount estimated for project management, it is a minimal expense in the context of the overall estimate – only ten hours of partner time. I make no deduction to expenses under this head.
52Making these adjustments, I conclude the expert’s estimate supports costs of the valuation report, as distinct from the income report, of $195,850.
53The respondent argues that the applicant has not discharged her burden to prove the necessity of these fees. He relies on Ludmer, at para. 58, where the court wrote:
I have no evidence of the wife requesting any further information or explanation from Mr. Ranot about his proposed fees, although she has had months to do so. Mr. Ranot does not outline with any particularity how much time he expects the engagement to require, why it requires that time, who will be performing the bulk of the work, and why.
54In my view, the applicant’s evidence of her expert fees is satisfactory. The estimate provided outlines how many hours is expected to be invested by the partner, senior manager and senior consultant/consultant at KPMG to prepare the report. I am reasonably able, from the estimate provided, to identify the amount of time estimated as it relates to the valuation report, and its associated cost. I can assume, from the allocation of time by timekeeper, that work is being assigned to the least expensive person who is capable of performing the task. For example, 100% of the data entry time is allocated to the senior consultant/consultant, and none of it to the partner or senior manager.
55As to why this much time is required, while I do not have a specific explanation from KPMG, I have the husband’s estimate that Mr. Cohen would need 12-18 months to complete his work, and evidence that Mr. Cohen took, at minimum, over 13 months to actually deliver his report. I also have the respondent’s evidence about his very complex financial affairs. The estimate provided by KPMG aligns with the evidence before me on these points.
56I thus conclude that legal fees of $50,000 (rounded) are reasonable and necessary, and expert fees of $200,000 (rounded) are reasonable and necessary for preparation of a valuation report. I find that no fees are reasonable and necessary for preparation of an income report.
Is the applicant incapable of funding these amounts?
57By order of Kiteley J. dated April 6, 2018, the applicant is receiving $54,000 gross per month in temporary spousal support. In addition to the temporary monthly spousal support, the respondent is covering the costs of a personal care assistant for the applicant up to $28,000 a month.
58Kiteley J.’s temporary spousal support order was based on a budget she found reasonable under the circumstances, set out in para. 34 of her endorsement: 2018 ONSC 2194. The budget includes amounts for rent, utilities, household expenses including entertainment, personal care assistant, transportation, clothing and hair care, gifts, and miscellaneous.
59The applicant argues that no provision is made in the budget for her legal fees. I note that there is a “miscellaneous” item in the budget set out by Kiteley J. Of interest, Kiteley J.’s endorsement makes clear that the budget the applicant proposed included $8,300 for miscellaneous expenses “to purchase household items such as flatware and furniture and art”. Kiteley J. found, at para. 33 of her reasons, that capital expenditures for furniture and art did not belong in a budget. Presumably, then, the $16,000 she provided for under the miscellaneous category was meant to address other expenses.
60Other than her spousal support, the applicant has no income of significance, nor is there any evidence before me to suggest that the applicant has any realistic prospect of obtaining income from another source. Her assets include a condominium. According to her financial statement, it is worth $900,000, but the respondent holds an on-demand mortgage of almost $400,000 on the condominium. The respondent has made a demand on the mortgage by way of letter from his counsel dated May 9, 2010, but has taken no further steps to pursue payment under the mortgage. The applicant has about $33,000 in RSPs and $232,000 in her bank accounts, however, approximately $200,000 of that amount is owing in taxes and was paid by the respondent for that purpose pursuant to an endorsement of Kiteley J. dated May 9, 2018. I understand a cheque has been written to CRA for that approximate amount but, as of the date her most recent financial statement was sworn, the cheque had not yet been cashed.
61It is thus apparent that other than the approximate $500,000 in net equity in her condominium, the applicant does not have an asset base to fund her legal and expert expenses.
62The respondent argues that with appropriate budgeting, and accessing the equity in her condominium, the applicant can fund the reasonable and necessary expenses of this litigation.
63With regard to her asset base, accessing the equity in the condominium would likely require the applicant to place a second mortgage on it, and then make ongoing mortgage payments. I have concerns about the equity of requiring a 62-year-old woman in poor health to mortgage the only asset of significance that she has to litigate against her former, exceptionally well-resourced spouse, in litigation in which he has taken an aggressive stance. This is particularly so where the most significant costs of the litigation arise due to the spouse’s very complex financial affairs. I also note that ongoing second mortgage payments would have to be funded from the budget Kiteley J. found was reasonable to meet the applicant’s living expenses, and that budget did not provide for mortgage payments.
64However, I agree that the applicant can fund some of these expenses. In my view, the applicant should be able to contribute $50,000 to fund her litigation over the next year. This is roughly 25% of her miscellaneous budget per month. I find that it is reasonable to consider her contribution over the next year because, given the time Mr. Cohen took to prepare his report, a year is a reasonable time to complete the steps related to the disbursements the applicant wants the respondent to pay for.
65Thus, the applicant has $200,000 (rounded) of reasonable and necessary litigation expenses, relating to her legal fees and the expert valuation report, that she is incapable of funding herself.
Are the claims the applicant is advancing meritorious?
66To satisfy this element of the test, it is not necessary for the claimant to prove her case. Rather, she need only prove a prima facie case. In Romanelli v. Romanelli, 2017 ONSC 1312, at para. 24, the court stated that it “must be a case which, based upon the facts presented in the affidavits, makes sense to prosecute”.
67The question of whether a claim is meritorious is a lower threshold than the test for summary judgment: Dillon v. Dillon, 2013 ONSC 3134, at para. 30.
68In Rea v. Rea, 2016 ONSC 382, at para. 24, the court held that “at this early stage in the proceeding there is no reason to conclude that the claims advanced by either party are without merit. All claims advanced by the parties are, prima facie, meritorious at this early stage of these proceedings.”
69I am not prepared, before questioning, and without the applicant having had the means to properly test the respondent’s expert report, to conclude that the applicant’s claim to an equalization payment is not meritorious.
70While I have found that an income report is not a reasonable and necessary expense, to the extent the applicant’s proposed legal fees relate to her claim to spousal support, her claim to interim disbursements for those is also prima facie meritorious. That is apparent from the temporary spousal support order made by Kiteley J.
Will the imposition of the payment on the responding party cause undue hardship to the payor?
71The respondent does not claim undue hardship if an order for interim disbursements is made. He could not maintain such a position, given his position on the lack of necessity for an income report.
72In any event, the evidence before me indicates that there is no issue about the respondent’s ability to pay interim disbursements.
Conclusion on Interim Disbursements
73The respondent shall pay to the applicant, within thirty days, the amount of $200,000 (rounded) in interim fees and disbursements which shall be a credit to him in the case.
74This order is without prejudice to any further motion for interim disbursements the applicant may seek to bring at a later date.
Costs
75At the hearing of the motion, the parties agreed that they would deliver their costs submissions to me in a sealed envelope, for me to open after I reached my determination on the merits of the motion. I subsequently sought electronic copies of their submissions, which counsel provided to me. I did not review the submissions or their attachments until after I had written my reasons on the merits of this motion.
76As it turns out, given the result of this motion, each party seeks their full indemnity costs. The applicant’s full indemnity costs are about $24,250 after the costs of the disclosure motion are excluded, while the respondent’s full indemnity costs after removing the costs of the disclosure motion are about $32,000. The applicant also notes her costs of the costs submissions of about $1,000.
77The applicant seeks her full indemnity costs because, she argues, the respondent behaved unreasonably by not making any offers to settle. In contrast, she initially asked for $100,000 in interim disbursements at a conference in April 2019, and later served an offer to settle the motion for $300,000. It is apparent she did not beat her offer to settle the motion.
78The respondent seeks his full indemnity costs if the applicant is awarded interim disbursements in an amount less than $300,000, mostly for the reasons he resisted her motion for interim costs, and which I have largely rejected, with the exception of his position on the necessity for the income report and the applicant’s ability to fund some amount of her costs herself.
79Modern family costs rules are designed to foster four fundamental purposes: to indemnify successful litigants for the cost of litigation, to encourage settlements, to discourage and sanction inappropriate behaviour by litigants, and to ensure that cases are dealt with justly: Mattina v. Mattina, 2018 ONCA 867, at para. 10. The touchstone considerations of costs awards are proportionality and reasonableness: Beaver, at para. 12.
80Subject to the provisions of an Act or the rules of court, costs are in the discretion of the court, pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. By r. 24(10)(a) of the Family Law Rules, the court is directed to make a decision on the costs of a step in the case promptly after dealing with the step, in a summary manner.
81Pursuant to r. 24 of the Family Law Rules, the successful party is presumptively entitled to costs, subject to the factors set out in r. 24: Beaver, at para. 10.
82The factors to consider in setting the amount of costs are listed in r. 24(12). The court must consider the reasonableness and proportionality of a number of factors as they relate to the importance and complexity of the issues. These factors include each party’s behaviour, the time spent by each party, any written offers to settle, including those that do not meet the requirements of r. 18, any legal fees and any other expenses, and any other relevant matter.
83There is no general approach in family law of “close to full recovery costs”: Beaver, at para. 11. Rather, full recovery is only warranted in certain circumstances, such as bad faith under r. 24(8), or beating an offer to settle under r. 18(14): Beaver, para. 13.
84Offers to settle play an important role in the landscape of family law in Ontario: Lawrence v. Lawrence, 2017 ONCJ 431, at paras. 37-38. In my view, given the importance of offers to settle, failing to make one may amount to unreasonable conduct.
85In determining the appropriate costs award in this case, I note the following:
a. The applicant is the successful party on this motion. While she did not beat her offer to settle, she has succeeded in obtaining an order that the respondent pay $200,000 towards her interim disbursements.
b. The applicant behaved reasonably by making offers to settle, both at case conference for less than she obtained, and subsequently in writing to resolve the motion, although she did not beat the latter offer.
c. The respondent acted unreasonably by failing to make any offer to settle.
d. The applicant’s costs are less than the respondent’s costs. I thus conclude that the applicant’s costs are within the respondent’s reasonable expectations as the unsuccessful party.
e. In view of the circumstances of the parties and the matters in issue between them, as well as the history of this litigation, in my view, the hourly rates charged by the applicant’s counsel are appropriate, and the overall costs the applicant invested into this motion are fair and reasonable.
86I am not prepared to order full indemnity costs to the applicant. While I have found that the respondent behaved unreasonably by not making any offer to settle, I am not prepared to conclude that his conduct rises to the level of bad faith referred to in Beaver warranting an award of full indemnity costs. In my view, in the circumstances, costs of $18,000, inclusive of disbursements and HST, and including costs of the costs submissions, are fair and reasonable. This amount is about 70% of the applicant’s full indemnity costs which, in my view, is appropriate in view of the factors I identify above.
87The respondent shall pay costs to the applicant in the amount of $18,000 within thirty days.
J.T. Akbarali J.
Date: December 5, 2019.