Court File and Parties

COURT FILE NO.: CV-20-82646 DATE: 2020/10/07

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Robert Roppovalente, Applicant AND T’Sheal Danis, Respondent

BEFORE: Justice R. Ryan Bell

COUNSEL: Andrew Lister, for the Applicant Wade Smith, for the Respondent

HEARD: In writing

COSTS ENDORSEMENT

[1] Mr. Roppovalente and Ms. Danis are equal shareholders in BCO Group Inc. On February 7, 2020, I made an interim order relating to the co-management and general operations of BCO Group pending the hearing of Mr. Roppovalente’s oppression application in June. The application did not proceed as scheduled because of the COVID-related suspension of the court’s regular operations. Instead, Mr. Roppovalente brought an urgent motion alleging that Ms. Danis had breached her fiduciary duties by appropriating for her own benefit, a corporate opportunity belonging to BCO Group: a lease extension for the company’s premises on Queen Street. Mr. Roppovalente also sought an order that Ms. Danis be found in contempt of the February 7 order on the basis that she had repeatedly and defiantly breached the terms of that order. Ms. Danis responded with a motion to remove Mr. Lister as counsel of record for Mr. Roppovalente. She also moved for the consolidation of the oppression application and the family law proceedings, a timetable, and the appointment of a business valuator.

[2] I heard the motions over the course of two days. The motion to remove Mr. Lister as counsel of record was argued on July 24, 2020. During the first day of the hearing, Mr. Roppovalente also advanced many of his arguments relating to the lease extension issue. On July 27, I dismissed the removal motion and provided oral reasons. Counsel completed their submissions on Mr. Roppovalente’s motion on July 29.

[3] In reasons released September 4, 2020, I dismissed Mr. Roppovalente’s motion: Roppovalente v. Danis, 2020 ONSC 5290. I also determined that the issues of consolidation and timetabling were better addressed at a joint case management conference and I directed the parties to finalize their retainer of the business valuator by no later than the joint case management conference.

[4] Ms. Danis seeks her costs of the motions on a partial indemnity basis in the amount of $30,019.00. She submits that she was the successful party on the corporate opportunity argument – which Mr. Roppovalente characterized as the issue of “utmost concern” on the motion – and in relation to the contempt issue. Ms. Danis acknowledges that she was unsuccessful on her motion to have Mr. Lister removed as counsel of record for Mr. Roppovalente, but she submits that this was the “least complex” issue and required the least amount of time to address.

[5] Mr. Roppovalente submits that there should be no costs of the motions because success was divided. In the alternative, he says that costs of the motions should be reserved, pending the hearing of the application. In the further alternative, he asserts that Ms. Danis’ costs should be proportionate to the level of success achieved by each party and that the amount payable should be $15,009.50, representing one half of her claimed partial indemnity costs.

[6] Mr. Roppovalente’s position is predicated on both motions being of equal importance. I do not agree with this assertion. The substantive motion related to the lease issue and the contempt allegations raised against Ms. Danis. Although Mr. Roppovalente filed a separate factum to respond to Ms. Danis’ removal motion, Ms. Danis did not. Ms. Danis relied only on the Law Society of Ontario’s Rules of Professional Conduct. Mr. Roppovalente did not pursue his request for a sealing order. As I have noted, many of Mr. Roppovalente’s submissions in relation to the lease extension issue overlapped with his submissions on the removal motion.

[7] In support of his position, Mr. Roppovalente relies on Joy Estate v. 1156653 Ontario Ltd., 2007 CarswellOnt 7323 (S.C.J.), where the court stated “…other circumstances which justify an award of substantial indemnity costs can arise where unfounded allegations of improper conduct or illegality seriously prejudicial to the character or reputation of the party have been made.” Joy Estate does not assist Mr. Roppovalente. The conflict allegations were made against Mr. Lister, not against Mr. Roppovalente.

[8] Mr. Roppovalente also refers to the fact that in her cross-motion, Ms. Danis requested 22 different items of relief.[^1] He submits that Ms. Danis did not succeed in any of her requests. Mr. Roppovalente’s assertion is too sweeping. Ms. Danis did not pursue her contempt motion against Mr. Roppovalente. I deferred the timetable and consolidation issues to a joint case management conference. On the substantive motion in which Mr. Roppovalente alleged Ms. Danis misappropriated a corporate business opportunity and willfully breached the February 7 order, Ms. Danis was the successful party.

[9] In his costs submissions, Mr. Roppovalente argues that, “[w]hile both the Applicant and the Respondent requested Orders to find the other in contempt of Court, only the Applicant’s submissions were substantiated” and “the Applicant was not found to be in contempt of Court.” These statements are inaccurate. As I noted in my reasons for decision, counsel for Ms. Danis expressly confirmed that Ms. Danis was not pursuing her contempt allegations against Mr. Roppovalente. I found that the evidence fell far short of establishing civil contempt on the part of Ms. Danis.

[10] Rule 57.03(1)(a) of the Rules of Civil Procedure provides that on the hearing of a contested motion the court shall fix the costs of the motion and order them to be paid within 30 days unless the court is satisfied that a different order would be more just. Mr. Roppovalente argues that, similar to the costs of the February 7, 2020 attendance, costs of the motions should be reserved pending the hearing of the application. There is, however, a key distinction: the parties agreed to the term relating to the disposition of costs of the February hearing; they do not agree on costs with respect to these motions. I am not satisfied that an order different from that contemplated under rule 57.03(1)(a) would be more just in the circumstances.

[11] The remaining issue is the quantum of costs that should be awarded to Ms. Danis. The rule 57.01(1) factors applicable in this case are: the principle of indemnity; the amount of costs the unsuccessful party could reasonably expect to pay; the complexity of the proceedings; the importance of the issues; and the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding.

[12] There is no question that the issues raised in Mr. Roppovalente’s motion were important to both parties. Mr. Roppovalente brought his motion on an urgent basis because BCO Group’s deadline to notify the landlord of its intention to extend the lease expired on August 3, 2020. Mr. Roppovalente requested an order voiding the new lease entered into by Ms. Danis’ company and an order compelling BCO Group to extend its lease. In dismissing Mr. Roppovalente’s motion, I observed that even if I had the jurisdiction to make the orders requested by Mr. Roppovalente, I would not have granted them because of the futility of compelling two deadlocked parties to continue in a long-term relationship beyond the expiry of BCO Group’s current lease. The contempt issue was of critical importance to Ms. Danis: Mr. Roppovalente requested that Ms. Danis be imprisoned for her alleged contempt of the February 7 order.

[13] I agree with Ms. Danis that her removal motion was the least complex of the three central issues addressed on the hearing. The compendium (which addressed all three issues) consisted of 11 volumes. Cross-examinations were conducted on the affidavits filed. Mr. Roppovalente’s factum on his motion was 74 pages in length. Ms. Danis’ factum (which also addressed her request that Mr. Lister be removed as counsel) was 19 pages in length.

[14] Mr. Roppovalente’s attempt on the second day of the hearing to introduce a letter regarding the landlord’s position (a request I denied) unnecessarily complicated the proceeding. As I stated in my reasons, Mr. Roppovalente was keenly aware of the relevancy of the landlord’s evidence in relation to the relief sought; however, at no time prior to the hearing did he seek to obtain the landlord’s evidence.

[15] Mr. Roppovalente does not take issue with the rates charged by counsel for Ms. Danis. I find the rates charged to be reasonable, having regard to counsel’s years of experience. The large number of hours incurred by counsel – 139.5 hours in total – is, in part, explained by the fact that these hours include the time spent on Ms. Danis’ removal motion. I also expect that there may have been some overlap in certain of the tasks completed by junior and senior counsel. A much more detailed breakdown of the costs claimed by Ms. Danis would have been both helpful and appropriate. The general summary provided does not permit me to determine either the amount of time spent by counsel in relation to the removal motion or whether there was overlap in the hours spent by both counsel.

[16] In the end, the costs fixed by the court “should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant”: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.). One measure of what is fair and reasonable to pay in costs is to consider the costs incurred by the unsuccessful party in addressing the same legal issues. Mr. Roppovalente has not provided any information regarding his own legal fees. However, based on his alternative argument that Ms. Danis’ costs should be reduced by half to reflect, in his view, the parties’ equally divided success on the motions, I infer that Mr. Roppovalente’s legal fees are not dissimilar to those of Ms. Danis.

[17] Having regard to all of the above, and reducing the total costs claimed to reflect Ms. Danis’ lack of success on her removal motion, I find that $24,000, all inclusive, is a fair and reasonable amount for Mr. Roppovalente to pay to Ms. Danis in respect of the motions. This amount is to be paid by Mr. Roppovalente to Ms. Danis within 30 days.

Justice R. Ryan Bell

Date: October 7, 2020

COURT FILE NO.: CV-20-82646 DATE: 2020/10/07

ONTARIO SUPERIOR COURT OF JUSTICE

RE: Robert Roppovalente, Applicant AND T’Sheal Danis, Respondent

BEFORE: Justice R. Ryan Bell

COUNSEL: Andrew Lister, for the Applicant Wade Smith, for the Respondent

COSTS ENDORSEMENT

Ryan Bell J.

Released: October 7, 2020

[^1]: Mr. Roppovalente’s notice of motion requested more than thirty items of relief.