NEWMARKET COURT FILE NO.: FC-14-45935-00

DATE: 20201008

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Kamelia Iacobelli, Applicant

AND:

Mario Iacobelli, Respondent

BEFORE: McDermot J.

COUNSEL: Michael Stangarone, for the Applicant

Frank Mendicino, for the Respondent

HEARD: By written submissions

COSTS ENDORSEMENT

[1] In November and December of 2019, I completed a five-day family trial in this matter. The major issues were support and property. As well, there were remedies issues, as the Applicant had requested a transfer of the Respondent’s interest in the matrimonial home to herself to satisfy a portion of her child and spousal support claim.

[2] The Applicant was entirely successful at trial. In my endorsement dated June 10, 2020, I found that the Respondent had significantly understated his income and that he had engaged in a fraudulent conveyance of matrimonial assets prior to separation in an attempt to defeat his wife’s equalization claim. I also found that, based upon the Respondent’s behaviour, he was unlikely to pay his support and his interest in the matrimonial home was transferred to the Applicant.

[3] The Applicant now requests her costs of this proceeding. She seeks fees and disbursements of just over $350,000 on a full recovery basis, including the costs of her income expert in the amount of about $110,000. Ms. Iacobelli bases her claim for costs on the following factors:

a. Her success at trial;

b. The offers to settle made by both parties;

c. The conduct of the Respondent.

[4] In his costs submissions, Mr. Iacobelli acknowledges the Applicant’s substantial success at trial although he says that, to some extent, success was divided and he was successful on several matters (the restraining order, reduction in income, imputation of income to Ms. Iacobelli) as well. Effectively, he acknowledges the Applicant’s entitlement to costs and requests that the amount that is being claimed be reduced as being excessive and disproportionate.

Was Success Divided?

[5] The major issues addressed at trial were Mr. Iacobelli’s income, the equalization of property including a fraudulent transfer of funds to Mr. Iacobelli’s mother as well as the issue of whether the home would be transferred to Ms. Iacobelli in partial satisfaction of the equalization and lump sum spousal support.

[6] Mr. Iacobelli was successful on some minor issues, including some reductions in his income, some imputation of income to Ms. Iacobelli and the issue of the restraining order. The imputation of income addressed on cross-examination of Ms. Iacobelli while the experts differed on tax rates; I adopted Mr. Iacobelli’s expert’s evidence on the issue of the notional tax to be assessed to Mr. Iacobelli, but this would not have been necessary had Mr. Iacobelli been more transparent on his own income issues. Finally, the restraining order took little time at trial.

[7] As stated by Pazaratz J. in Jackson v. Mayerle, 2016 ONSC 1556, the issue is who “was entirely or mostly successful on the issues which consumed the greatest amount of trial time.”

[8] On that basis, I find that success was not divided. I also find that Ms. Iacobelli was the successful party at this trial and is accordingly entitled to a costs award.

Offers to Settle

[9] Both parties made offers to settle this matter. The Applicant made eight offers; the Respondent three.

[10] Under Rule 18 of the Family Law Rules,[^1] if an offer complies with the formal requirements of Rule 18(4) and a party obtains an award at trial that is as favourable or more favourable than the offer, that party is entitled to full recovery costs from the date that the offer is made.

[11] The offers compared to the result at trial are summarized in the chart found at Schedule A to this endorsement.

[12] The progress of negotiations can be seen through the various offers to settle, and it appears that the various offers were both driven by the consequences of Rule 18 and in a bona fide attempt to settle the matter: see Beaver v. Hill, 2018 ONCA 840.

[13] However, it is concerning that, close to the end of the day in October 2019, Mr. Iacobelli stepped back from his course of negotiations and withdrew all offers to settle. His last offer made in November 2019 was significantly less favourable than his previous offers, with the payment for the transfer of the home by the Applicant increased by about $20,000 and no spousal support payable rather than the $150,000 in lump sum support previously offered.

[14] As far as Rule 18 goes, the essentials of the offers are set out in the schedule. It is to be noted that, on its face and on the major issues argued at trial (imputation of income, vesting of the home, support and equalization), the Applicant’s offer of May 7, 2019 and all of her subsequent offers were bettered at trial by the Applicant. The offer stated that income was to be imputed at $75,000 per annum while income was imputed at trial in the amount of $142,000 per annum. The offer provided that the home would be transferred into the Applicant’s name in full satisfaction of all equalization or spousal support claims. On the major issues addressed at trial, all of the Applicant’s offers after May 7, 2019 were a better result for the Respondent than the result at trial.

[15] However, on lesser issues, the May 7 offer, as well as most of the following offers, did not match the judgment in this matter. All of the offers, including the Respondent’s offers, after April 13, 2017, provided that the RESPs would be transferred into the Applicant’s name; that was not ordered or requested. All of the offers after May 7, 2019 (other than the Respondent’s offer dated November 18, 2019) provide for support life insurance being obtained by the Respondent in the amount of $100,000; evidence regarding support insurance was not led at trial and that issue remained unaddressed at trial and no order was made. All of the Applicant’s offers after November 13, 2018 provided for a restraining order or non-communication order; that claim was dismissed at trial.

[16] Offers need not be exactly the same as the result at trial. The court is not required to examine each term of the offer as compared to the terms of the order and weigh with microscopic precision the equivalence of the terms. What is required is a general assessment of the overall comparability of the offer as contrasted with the order: see Wilson v Kovalev, 2016 ONSC 163. However, to trigger full recovery costs a party must do as well or better than all the terms of any offer (or a severable section of an offer). Paranavitana v. Nanayakkara, 2010 ONSC 2257, [2010] O.J. No. 1566 (S.C.J.); Rebiere v Rebiere, 2015 ONSC 2129 (S.C.J.); Scipione v Scipione, 2015 ONSC 5982 (S.C.J.).

[17] The fact that no offer made in this matter was severable is particularly concerning. In Paranavitana, Wildman J. commented on non-severable orders at para. 13:

Unfortunately, this offer was not severable. There would have been no disadvantage to the wife in making the custody offer, in particular, severable from the financial and property terms. Severable offers are an underused tool that can confer considerable settlement and cost advantages. Because of the full recovery provisions of Rule 18(14), they can provide much more flexibility to the court to award full recovery for at least a portion of the overall costs, if the party is successful on only some of the issues. Had the custody terms of the wife's offer been severable from the other terms, I would have been prepared to consider ordering full recovery costs on the custody issue from the date of the offer forward. As this was the majority of the trial time, that would have been a significant cost advantage to the wife.

[18] After the offer made by the Applicant in November 2018, no offer made by either party was severable. It can be seen that the negotiations between the parties had, by then, resolved themselves down to all or nothing offers. That may have worked for the parties in the context of their negotiations, but it makes it difficult to invoke the provisions of Rule 18(14) after trial. That is because all of the clauses of the offer have to be taken into account in setting the costs and the court cannot ignore parts of the order which were not addressed or ordered after trial. This would not have been the case had the offers been severable, which would have allowed for partial acceptance of the offer and would have allowed the court to take into consideration, under Rule 18(14) of the Family Law Rules, portions of the offer rather than the entirety of each of the offers to settle.

[19] Based upon the clauses concerning the support insurance, transfer of the RESPs and the restraining or non-communication order, the Applicant’s offers to settle therefore do not meet the requirements of Rule 18(14) and therefore do not attract the costs consequences of that rule. Portions of the offers, even though they are not primary issues at trial, were not bettered at trial or addressed in the trial judgement.

[20] However, based upon the major issues contained in the offers, and the fact that it would have been wise had the Respondent accepted any of the offers made by the Applicant after November 13, 2018, I do take the offers made by the Applicant into account in setting the costs amount in this matter under Rule 18(16). Considering how close the parties were on many of the offers, the parties were close to settlement and a trial could have been avoided. The results of any of the offers made by the Applicant were much better for the Respondent than were the trial results; to toss the dice instead cost everyone a great deal of money, and the responsibility for that is the Respondent’s. This is especially so where the Applicant had offered on July 9, 2019 to actually make a small payment of $25,000 to obtain a transfer of the home to herself. The result at trial was the opposite with the Respondent still owing money after the transfer of the home.

[21] I also take into account the fact that the Respondent withdrew all his offers on October 13, 2019 in order to withdraw any offer to pay spousal support and in order to raise the amount that would be paid to him on a transfer of the home to $194,000 more or less. The offers of the Applicant show an increasing willingness to “sweeten” the deal to obtain a settlement; the last offer of the Respondent shows that he was becoming increasingly unwilling to settle the matter, and was actually taking things off of the table as the trial grew closer.

Respondent’s Conduct

[22] I made a number of comments on the Respondent’s conduct during trial. His behaviour was concerning on a number of fronts, including his hiding of his income, the transfers to his mother as the marriage was breaking down, and the loss or destruction of the evidence of his cash income as disclosed on his cell phone contrary to an undertaking given at his questioning.

[23] There are several provisions in the Family Law Rules which connect a party’s conduct with amount of costs to be ordered. Rule 24(12)(a)(i) permits the court to take into account “each party’s behaviour” in setting the amount of costs. Moreover, under Rule 24(8),

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.

[24] Therefore, if the court determines that there is bad faith conduct by a party, the rules require the court to determine the costs on a full recovery basis, and that the costs shall be payable forthwith.

[25] Bad faith conduct requires substantially more than a finding of unreasonable behaviour. There must be egregious or morally wrongful behaviour. Perkins J. makes the distinction in S.(C.) v. S.(C.), 2007 CanLII 20279 (ON SC), [2007] O.J. No. 2164 (Ont.S.C.J.):

In order to come within the meaning of bad faith in Rule 24(8), behaviour must be shown to be carried out with intent to inflict financial or emotional harm on the other party or persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court. A misguided but genuine intent to achieve the ostensible goal of the activity, without proof of intent to inflict harm, to conceal relevant information or to deceive, saves the activity from being found to be in bad faith. The requisite intent to harm, conceal or deceive does not have to be the person's sole or primary intent, but rather only a significant part of the person's intent.

[26] In Piskor v. Piskor, 2004 CanLII 5023 (ON SC), [2004] O.J. No. 796 (S.C.J.), Blishen J. considered a case where a party refused to make disclosure, and refused to pay support, leaving the other party destitute. At para. 8, she cites Campbell J. who, in Hendry v. Martins, [2001] O.J. No. 1098 (S.C.J.), adopted the definition of “bad faith” from Black’s Law Dictionary, 6th ed. (1990):

Bad faith is not simply bad judgment or negligence but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity ... it contemplates a state of mind affirmatively operating with furtive design or ill will.

[27] I believe this is applicable to the present case. Mr. Iacobelli’s litigation conduct could not be described as anything but, as pointed out in the trial endorsement, egregious. His actions cannot be seen as operating from anywhere other than a clearly malicious motivation and they were designed to cause harm to the Applicant and the children and, in fact, did cause such harm. The actions that he took which fit within this description are numerous and include the following:

a. When the parties separated, Ms. Iacobelli and the children moved out of the matrimonial home and into her parents’ residence. At that time, they lived in crowded conditions, as Ms. Iacobelli’s sister was also living there while their home was being built. Notwithstanding requests through the Applicant’s solicitor, Mr. Iacobelli refused to move out of the home until the Applicant brought a motion for exclusive possession. Only then was he ordered to pay the household expenses and he agreed to move from the home; it is to be noted that he moved in with his mother, where he says he remains today;

b. During the two years prior to separation, Mr. Iacobelli withdrew funds from a joint TD Waterhouse bank account over a two-year period. By December 2013, the account was emptied. Although he transferred the funds to another joint account, he then proceeded to transfer nearly $150,000 to his mother by a set of matching payments to the business Visa which were paid from the parties’ account with money transferred from the business to pay his mother. He testified that he was doing this to repay his mother for cash income paid to him from the partnership that she did not receive, but I found this to be untrue and that his explanation of the amount paid made no sense. I found that the transfer of the $150,000 was a fraudulent conveyance, and set that transfer aside for equalization purposes. It was a transaction designed to prevent access to those funds by Ms. Iacobelli when Mr. Iacobelli knew that the marriage was coming to an end and it was fraudulent in purpose.

c. In 2012, Mr. Iacobelli elected to repay a debt that he said that he owed his mother for the purchase of the matrimonial home. He paid these funds from a joint business account. He had no real explanation as to why this $200,000 debt was repaid in 2012, about 17 years after the funds were advanced other than he wanted to make sure that the account had sufficient funds to pay the debt. This was again found to be a fraudulent conveyance intended to frustrate Ms. Iacobelli’s equalization claim and set aside.

d. Subsequent to separation, in October 2015, Mr. Iacobelli emptied the children’s RESP funds which were in joint names, and placed them in his own name. He said that he did this to protect himself because Ms. Iacobelli had removed about $3,000 from the account and he felt threatened. Two court orders had to be obtained, the final one adding Ms. Iacobelli to the account. Then when the parties’ oldest daughter, Alexandra, who was in university, asked for $11,400 for her university expenses, he would only release the monies payable for her tuition. The net result was that Alexandra had to have recourse to OSAP even when there were funds available for her education.

e. On August 13, 2014, Justice Nicholson ordered that Mr. Iacobelli pay support by way of payment of the expenses of the matrimonial home. Included in these expenses were the utilities, the taxes and the Applicant’s vehicle costs. There was also a support component of $2,000 per month payable to the Applicant. He defaulted in payment of support and these expenses a number of times. On one occasion, he failed to pay the utilities when the Applicant was away on a holiday, and the power was shut off when the children were in the home. On another occasion, he failed to pay the realty taxes on the home, and a tax sale was close at hand when he brought it into good standing. His pattern was to fail to pay the amounts owing, waiting for a motion to strike pleadings, and then to bring it into good standing along with paying the costs of any motion brought to strike pleadings; as I noted in my judgment, this constituted slow financial torture for the Applicant and the children.

f. There was evidence that Mr. Iacobelli had purposefully destroyed evidence necessary to prove what his cash income was. In his questioning, Mr. Iacobelli gave an undertaking to retain his records of cash income. Later, when requested, he said that those records were on his phone, and his phone crashed and he lost the data. Those were the only “tallies” that Mr. Iacobelli said existed respecting his cash income, and he otherwise asked us to take his word for it, which partly resulted in the income report by Mr. DeBresser and the ultimate trial that inevitably ensued.

[28] All in, these actions were hurtful to Ms. Iacobelli and the children. At one point, the children were left in the matrimonial home without power because of Mr. Iacobelli’s actions: the food spoiled in the freezer and a motion had to be brought. At another occasion, the home was nearly sold by the municipality for unpaid taxes. It is doubtful that any of these occurrences would have happened had the parties never separated and Mr. Iacobelli was paying the expenses of the home as he had done throughout the marriage. He attempted to secretly remove funds from the marriage assets and this was only discovered through the efforts of Mr. DeBresser. All of these actions can be seen as designed to injure, and done in bad faith. For obvious reasons, these actions also increased the costs that Ms. Iacobelli had to bear for this litigation.

[29] I find that Mr. Iacobelli’s litigation conduct constitutes bad faith on his part. Because of this, I have little choice under Rule 25(8) to assess costs of this proceeding on a full recovery basis.

Bill of Costs

[30] I have determined that Mr. Iacobelli is guilty of bad faith conduct and because of this, costs will be assessed on a full recovery basis under Rule 24(8) of the Family Law Rules. However, that does not mean that the Applicant has carte blanche on what she claims for costs; she is still subject to Rule 24(12) which states that costs must be based upon “reasonableness and proportionality” and the “importance and complexity of the issues”: see Kang v. Kang, 2018 ONSC 4948 and Shepiashvili v. Shepiashvili, [2001] O.J. No. 2843 (S.C.J.). The parties’ respective behaviour is also to be taken into account (already assessed) as is the “time spent by each party”, “legal fees, including the number of lawyers and their rates” as well as the “expert witness fees”.

[31] Mr. Mendicino says that the costs claimed by the Applicant are excessive. He points out that two counsel attending for trial were unnecessary and costs should be accordingly reduced. He also suggests that the costs of the expert income evidence were also excessive and should be reduced or eliminated.

Double Recovery

[32] I firstly note that there were a number of awards of costs thrown away throughout the proceedings and these costs cannot be claimed again. I note that there were costs claimed in respect of the motions and to again allow those costs would be double recovery. The endorsements which spoke to costs during these proceedings which I could find on the record are as follows:

August 13, 2014 Motion

[33] The first motion in this matter addressed support issues and possession of the home. It took place on August 13, 2014 and, according to the minutes filed at the time, there were to be no costs for exclusive possession. Nicholson J. ordered $7,000 for the support motion which was argued.

[34] The Bill of Costs indicates that there are no time entries respecting this motion.

November 27, 2015 order re RESPs

[35] On November 27, 2015 the RESPs were ordered to be frozen and the costs issue for that motion were reserved to the judge hearing the motion on December 16, 2015. There was no endorsement from that date and apparently costs were not fixed as provided for in the November 27, 2015 motion, but were also not reserved.

[36] Again, there are no time entries respecting this motion.

April 24, 2017 order re Support Arrears

[37] On April 24, 2017, the Respondent agreed to pay support arrears owing under the Nicholson J. order, and also agreed to pay costs of $1,500 for the appearance before Bennett J., which had been scheduled for a trial scheduling conference.

[38] There is no entry in the Bill of Costs for this particular appearance in court.

November 17, 2017 TSC Appearance Adjourning Trial

[39] On November 17, 2017, another return of the trial scheduling conference, the Respondent agreed to pay costs of the custody and access proceedings which were finally settled on that date. The trial was adjourned. He also agreed to pay the costs of attendance on that date before Bennett J. in the amount of $3,500, presumably because of the adjournment request.

[40] There is an entry in the Bill of Costs for an 8-hour appearance by Mr. Stangarone at this Trial Scheduling Conference which totals $2,880. A credit will be given against the costs claim for this appearance as costs were already paid by Mr. Iacobelli for this Trial Scheduling Conference.

Second Counsel / Proportionality

[41] In her Bill of Costs, Ms. Iacobelli claims legal fees of $202,716.00 plus disbursements of $14,742.65 (not including the account of Mr. DeBresser). With HST added in the total fees and disbursements claimed on a full recovery basis are $245,607.80. Taking into account the double accounting for fees from November 17, 2017, the amount is still high, rounded off to $242,600.

[42] Marmer Penner confirmed that Ms. Iacobelli paid that firm $94,717 between 2014 and 2019. Mr. DeBresser has since left Marmer Penner, and he billed a further $14,321.06 for his witness fees at trial, which includes HST. This means that the expert’s fees total $109,038.06. Added to the legal costs noted above, the claim for costs totals $351,638.06. Ms. Iacobelli’s claim for costs is therefore over $350,000 for these proceedings including a five-day trial.

[43] This amount of fees and disbursements would be financially devastating for most family law litigants. At trial, evidence was given that the Applicant’s parents were forced to sell their home to pay Ms. Iacobelli’s legal fees and disbursements. They now reside in a condominium.

[44] Mr. Mendicino argues three points:

a. The Bill of Costs indicates that the lawyer’s time and efforts were not well spent. In particular, he notes that four different lawyers worked on the matter, and there was a second counsel at trial, Mr. Kirby, whose attendance was unnecessary considering the amount in issue and the complexity of the issues.

b. Even if the time was well spent, the amount claimed was disproportionate to the result and the issues before the court.

c. The expert’s account is excessive and should be reduced.

Co-Counsel

[45] Mr. Stangarone had the assistance of a second counsel at court. According to the Respondent’s costs submissions, this cost was included in the Bill of Costs in the amount of $11,000 plus HST of $1,430 for a total of $12,430. Mr. Mendicino asks that this be deducted from the Ms. Iacobelli’s costs.

[46] There have been a number of cases on whether co-counsel is or isn’t necessary at a trial. In Shepiashvili, Wildman J. disallowed a second counsel’s appearance at the questioning of a party, stating that competent counsel could do that alone. In Diamond v. Berman, 2020 ONSC 4301, McGee J. suggested a legal principle whereby that multiple counsel cannot be claimed in costs against another party:

As a general principle, I am of the view that the costs of multiple counsel cannot be recovered in costs. The recovery of fees for multiple counsel does not create an exception to the ordering of costs in an amount that would have been reasonably expected to have been paid by the unsuccessful party. One cannot shift to the other party the financial consequences of engaging multiple counsels any more than the consequences of engaging counsel with a higher hourly rate than is reasonable in the circumstances. To allow otherwise would be to permit litigants to financially intimidate their opponent and to potentially discourage meritorious claims.

[47] That may be a general proposition, but the complexity of the matter also would dictate where co-counsel would be permitted at trial. If a matter is sufficiently complex or the efficient presentation of evidence requires two counsel, an exception might very well be made. However, the message has to be given that, where co-counsel is employed at trial, the client risks those costs being disallowed unless the particular matter warrants it. The matter must be extremely complicated for the court to find that there is a need for second counsel, and this is particularly so in family law matters where the affordability of trials and the cost of representation for matrimonial clients is increasingly in issue and the affordability of family law counsel has resulted in some 70% of matters involving unrepresented parties.

[48] In the present case, this matter was complicated. There were issues of proving undeclared income; even though the Respondent admitted to there being cash income, his own disclosure and evidence was so opaque that the Applicant had to go through extreme efforts to prove his income because he refused to provide sufficient evidence of his income to do so. The court must recall that Mr. Iacobelli had actually breached an undertaking to retain evidence of his cash income given to Mr. Stangarone at the questioning in 2016. The Respondent put the Applicant to great lengths to prove his income as a result of the lack of clarity in his own evidence and disclosure, and he must pay for this.

[49] As well, there were issues of a fraudulent conveyance of funds by Mr. Iacobelli raised by Mr. DeBresser’s report and that had to be proven partly through cross-examination of Mr. Iacobelli’s mother, Annunziata Iacobelli, which was conducted by Mr. Kirby. That was a complicated issue, and rarely addressed in family law matters.

[50] Finally, it could be argued that Mr. Kirby’s involvement may have resulted in a reduction in trial time. Certainly, the evidence in this matter was provided in a sufficiently efficient manner by both counsel working together to reduce the trial time in this matter. Mr. Kirby, I am sure, assisted in this, and his involvement in this trial was appreciated. The cost of reducing the time needed to complete the trial, if it involved co-counsel, may have come, however, at too great a cost: $12,000 or so in extra counsel fees would have paid for one counsel to attend at trial for several more days.

[51] Mr. Mendicino conducted his side of the trial on his own, and his client’s case did not suffer by reason of a lack of second counsel. Mr. Stangarone could have done the same, although he would have had to work long hours to do so. Mr. Kirby’s assistance was valuable; however, I do not think that this case warranted two counsel especially considering the amounts in issue. I note that this was largely a battle of the experts, not of counsel and that battle was largely fought by Mr. Stangarone at trial. I therefore disallow the costs of the second counsel in this matter.

[52] Therefore, deducting the fee for second counsel from the fees and disbursements figure of $242,600, this leaves a costs amount (excluding Mr. DeBresser’s account) of $230,170 on a full recovery basis.

Expert’s Fees

[53] Mr. Mendicino suggests that Mr. DeBresser’s account is excessive under the circumstances and should be reduced by half. He notes that there was already an income report provided by Melanie Russell and that it is disproportionate to go over old ground.

[54] The difficulty with this position is that Melanie Russell’s report was based upon Mr. Iacobelli’s self-reporting only without verification. The report called for another approach, which was the lifestyle report prepared by Mr. DeBresser which resulted from Mr. Iacobelli’s failure to adequately disclose his cash income, which he had always acknowledged. It does not assist to agree that you make cash income, but then refuse to provide any means by which the court can assess the amount other than on your own say-so. The household expense analysis was necessitated by Mr. Iacobelli’s own lack of clarity in his evidence concerning his cash income.

[55] We also have to remember that Mr. DeBresser in his analysis discovered the fraudulent transfers that took place in the years prior to separation; were it not for him, that issue may have remained undiscovered.

[56] However, the evidence was that the legwork in preparing the income analysis was conducted by Ms. Iacobelli and her sister, who prepared the spreadsheets used by Mr. DeBresser in preparing his report. As well, it is difficult to assess the account of Mr. DeBresser as a great portion of his fees, $94,717, was based on a letter from Marmer Penner which outlines the fees paid to that firm by Ms. Iacobelli and nothing more. There are no time dockets or accounts indicating how that amount was arrived at.

[57] I reduce the account of Mr. DeBresser by one quarter to $81,778.55, rounded up to $82,000. This means that the total fees and disbursements without more would be $312,170.

Reasonableness and Proportionality

[58] Apart from what is reasonably chargeable for fees and disbursements in this costs award, the court must also determine whether the amount of costs in this matter, $312,170, is reasonable and proportionate considering the complexity and importance of the matters in issue. As stated by the Court of Appeal in Beaver v. Hill, supra, at para. 12, “As the wording of the rule makes clear, proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs.”

[59] The issue is therefore whether the costs amount of $312,170 is reasonable and proportionate concerning the proceedings in this matter.

[60] Rule 24(12)(a) makes it clear that the behavior of the parties is a factor in determining the reasonableness of a costs award. I have already outlined the fact that Mr. Iacobelli’s behavior was not only unreasonable; it crossed the line into bad faith conduct. In this regard, Mr. Iacobelli is largely responsible for the fact that Mr. DeBresser had to be retained, and he is also largely the author of this costs award, as his lack of clarity in the evidence that he made available to the court, and to Mr. Stangarone by way of lack of disclosure, resulted in the Respondent incurring excess costs.

[61] I also take into account that Mr. Iacobelli agreed that he would be responsible for the costs of the custody and access aspects of the case, which were not settled until November 17, 2017 when the matter was ready for trial. That position would have resulted in Ms. Iacobelli’s lawyer initially preparing for a full custody and access trial which was originally estimated to take 11 days to complete. That would obviously mean that trial on its own, five days on financial issues only, would not be reflective of the actual costs paid by Ms. Iacobelli.

[62] All of that being said, the costs are essentially in respect of a five-day trial on financial issues. The Applicant obtained almost everything that she requested at trial subject to some adjustments made on the evidence at trial. The lawyers at trial presented the evidence in an efficient manner, reducing trial time substantially. The result was judgment for $677,535 being a combined lump sum spousal support and equalization payment. As well, Ms. Iacobelli obtained the remedy she requested, which was the transfer of the home to her in partial satisfaction of that payment. Child support was set at $3,066 based upon a finding that Mr. Iacobelli’s income was $142,000 per annum. Ms. Iacobelli also managed to prove that the Respondent committed a fraudulent act in transferring assets to his mother in an attempt to frustrate Ms. Iacobelli’s matrimonial settlement in this matter and in an attempt to hide financial assets from both the Applicant and the court.

[63] All of this was in the face of an offer to settle which would have essentially required the Respondent to transfer the home to the Applicant with no other obligation; in fact, the Applicant had offered to accept a transfer of the home along with a payment to the Respondent in the amount of $25,000. The Respondent responded to this offer in an unreasonably aggressive fashion by withdrawing all previous offers and stepping back from the negotiations by demanding that Ms. Iacobelli pay him an overpayment of $194,890 under the Nicholson J. order after the home was transferred. That overpayment was not proven at trial and there was no ultimate claim for a retroactive adjustment made at or after trial.

[64] It can be seen from the offers that Ms. Iacobelli was dealing with a moving target and that she was reasonable in the positions that she took, yet was in a position to make her case at trial. Mr. Iacobelli, on the other hand, was unreasonably aggressive and made offers without anything behind them. The preparation for trial was, for Ms. Iacobelli, intertwined with the Respondent’s unreasonable position, lack of disclosure and concern that the Respondent had evidence available to back up his position. Mr. Iacobelli had also asked that the trial be adjourned on at least one occasion, and it was not reached at a subsequent sittings, resulting in trial preparation on three occasions; on at least one occasion and possibly two, the trial preparation was for both custody and access, as well as the financial issues, resulting in greater costs thrown away in this matter. None of this was the responsibility of the Applicant, and on at least one occasion, it was at the request of the Respondent when he obtained new counsel; in fact, he changed counsel on three occasions as this matter progressed.

[65] All of these factors increased the costs of Ms. Iacobelli, and it is unfair to substantially reduce the costs when she had no choice but to expend much of those costs in these proceedings by both his actions and his aggressive stance as reflected by the offers to settle. Therefore, although costs of over $312,000 would seem to be excessive concerning a five-day trial, Mr. Iacobelli gave the Applicant little choice but to expend much of those costs in these proceedings by both his actions and his aggressive stance as reflected by the offers to settle. Therefore, although I intend to reduce the costs claimed by reason of proportionality, I take into account the necessity of the expenditure of costs in this proceeding, and the adjournments of the trial resulting in costs thrown away on several occasions.

Result

[66] I therefore find that the Applicant is responsible to pay the costs of this proceeding in the amount of $250,000 inclusive of disbursements and HST.

[67] As much of the trial as well as the previous negotiations were taken up by income and support issues, costs shall be collectable as support.

Justice J.P.L. McDermot

Date: October 8, 2020

Schedule “A”

Date of Offer	Party Making Offer	Terms of Offer	Severable/Non-Severable?	Comparison with Results at Trial
April 1, 2015	Applicant	Offer to Settle on Support only: Respondent’s annual income imputed at $167,000	n/a: on income only	Income imputed at trial at $142,000
May 6, 2015	Applicant	Offer to Settle on Custody only: Applicant to have custody of children with communication through OFW and no access to children	n/a: on custody only	Settlement provided that the Applicant have custody of children; no access to older children and the offer provided for reconciliation counselling re Michael only
May 7, 2015	Applicant	Offer to settle on support only: Respondent’s annual income imputed at $167,000	n/a: on income only	Income imputed at trial at $142,000
April 13, 2017	Applicant	Comprehensive Financial Offer: a. Income imputed at $167,000 with support set at $3,405; spousal support set at $1,628 and Respondent to pay 83% of the children’s s. 7 expenses; b. RESP accounts to be transferred to Applicant c. Arrears of child support set at $22,280 after deduction for the carrying costs of the home; arrears of spousal support set at $45,000 and the Respondent to pay an equalization payment of $250,000; arrears and equalization to be satisfied by a transfer of the Respondent’s interest in the matrimonial home to the Applicant.	Each of (a), (b) and (c) are severable.	Income imputed at $142,000; child support set at $3,066 per month; Respondent to pay 74.6% of the children’s s. 7 expenses; lump sum spousal support set at $335,465 and the Respondent ordered to make an equalization payment in the amount of $342,070; the equalization payment and a portion of the lump sum spousal support satisfied by the vesting of the Respondent’s interest in the matrimonial home into the Applicant’s name, leaving $147,535 in lump sum spousal support outstanding.
November 13, 2018	Applicant	The Respondent to pay child support in the amount of $3,506 based upon imputed income of $167,000; to pay 90% of s. 7 expenses; RESP accounts transferred to the Applicant; lump sum spousal support in the amount of $250,000,[^2] ongoing spousal support in the amount of $1,238 per month; Respondent to reimburse the Applicant $134,348 for monies owed under the Nicholson J. order for reimbursement of home expenses; monies owing, arrears and spousal support to be satisfied by a transfer of the Respondent’s interest in the matrimonial home to the Applicant; restraining order to go and Respondent to pay $150,000 in costs for custody and access issues as previously settled.	Non-severable	See above. Income imputed at $142,000; child support set at $3,066 per month; Respondent to pay 74.6% of the children’s s. 7 expenses; no ongoing spousal support although matrimonial home vested in the Applicant’s name in satisfaction of the equalization payment and no credit granted for any overpayment under the Nicholson J. order. After transfer of the home, the Respondent still owed $147,535 in lump sum spousal support outstanding. No restraining order made.
May 7, 2019	Applicant	Respondent to pay child support of $1,778 per month based upon annual income imputed at $75,000; to pay 90% of s. 7 expenses; RESP accounts transferred to Applicant; matrimonial home to be transferred to the Applicant in full satisfaction of the equalization and spousal support claims with release to be signed; non-contact order to go. Respondent to obtain $100,000 in support insurance.	Non-severable	See above. Income imputed at $142,000; child support set at $3,066 per month; Respondent to pay 74.6% of the children’s s. 7 expenses; matrimonial home vested into Applicant’s name in satisfaction of spousal support and equalization claims leaving $147,535 in lump sum spousal support outstanding. No restraining order made. No support insurance requested or ordered.
May 11, 2019	Respondent	Offer assumes each party’s net equity in the matrimonial home is $529,894; Respondent’s income set at $75,000; Respondent had overpaid $169,449 under the Nicholson J. order; therefore matrimonial home to be transferred to the Respondent to satisfy equalization payment of $140,000 and lump sum spousal support of $150,000 and Applicant to pay $151,272.85 to the Respondent upon the transfer to the Applicant of the matrimonial home; Respondent to continue paying $1,778 per month based upon annual income imputed at $75,000; Respondent to pay no s. 7 expenses (offer says fully paid by RESP accounts); RESP accounts to be transferred to Applicant. If he qualifies, Respondent to obtain $100,000 in support life insurance.	Non-severable	See above. Respondent to pay child support of $3,066 per month based upon income imputed at $142,000 per annum. Respondent to pay 74.6% of the children’s s. 7 expenses. Matrimonial home transferred into Applicant’s name with no payment to Respondent; in fact, there remains $147,535 owing in spousal support after the transfer. No evidence re support life insurance requested at trial or ordered.
May 13, 2019	Applicant	Respondent to continue paying $1,778 per month based upon annual income imputed at $75,000; matrimonial home to be transferred to Applicant in full satisfaction of all other claims including spousal support, payment of the children’s special expenses and equalization; RESP accounts to be transferred to the Applicant; non-contact order to go. Respondent to obtain $100,000 in support life insurance.	Non-severable	Respondent to pay child support of $3,066 per month based upon income imputed at $142,000 per annum. Respondent to pay 74.6% of the children’s s. 7 expenses. No order as to RESPs. Matrimonial home transferred into Applicant’s name with no payment to Respondent and there remains $147,535 owing by the Respondent in spousal support after the transfer. Restraining order claim dismissed. No evidence re support life insurance led at trial or ordered.
May 21, 2019	Respondent	Matrimonial home to be sold with the proceeds equally divided. The Respondent to have income imputed to him in the amount of $100,000 and the Applicant to have income imputed to her in the amount of $29,120. Respondent to pay child support of $2,288 per month and 77% of the children’s s. 7 expenses to a maximum of $7,700. The RESPs to be transferred into the Applicant’s name. Equalization payment of $155,000 to be paid from the Respondent’s share of the matrimonial home proceeds and the Respondent to pay lump sum spousal support of $150,000. Applicant to pay Respondent $176,425.65 from her share of the matrimonial home being an overpayment under the order of Nicholson J. If Respondent qualifies, he will obtain $100,000 in support life insurance.	Non-severable	Respondent to pay child support of $3,066 per month based upon income imputed at $142,000 per annum. Applicant imputed with income at $30,000 per annum (minimum wage). Respondent to pay 74.6% of the children’s s. 7 expenses. No upper limit. No order as to RESPs requested or granted. Equalization set at $342,070 and lump sum spousal support set at $335,465. No overpayment requested and no evidence led concerning the overpayment issue. After vesting the matrimonial home into the Applicant’s name, there remained $147,535 owing by the Respondent in spousal support. No evidence re support life insurance led at trial or ordered.
July 9, 2019	Applicant	Respondent to pay $1,778 per month in child support based upon imputed income of $75,000 per annum; Home to be transferred to the Applicant in satisfaction of all spousal support, equalization and s. 7 expenses with a $25,000 payment to the Respondent; RESPs transferred to the Applicant and no contact order. Respondent to obtain support life insurance of $100,000.	Non-severable	Respondent to pay child support of $3,066 per month based upon income imputed at $142,000 per annum. Respondent to pay 74.6% of the children’s s. 7 expenses. No order as to RESPs. Matrimonial home transferred into Applicant’s name with no payment to Respondent and there remains $147,535 owing by the Respondent in spousal support after the transfer. Restraining order claim dismissed. No evidence re support life insurance led at trial or ordered.
October 30, 2019	Respondent	All offers withdrawn
November 18, 2019	Respondent	Matrimonial home to be sold with the proceeds equally divided. The Respondent to have income imputed to him in the amount of $100,000 and the Applicant to have income imputed to her in the amount of $29,120. Respondent to pay child support of $2,288 per month and 77% of the children’s s. 7 expenses. The RESPs to be transferred into the Applicant’s name. Equalization payment of $155,000 to be paid from the Respondent’s share of the matrimonial home. No spousal support payable although entitlement to 18 years spousal support acknowledged. Applicant to pay Respondent $194,890 from her share of the matrimonial home being an overpayment under the order of Nicholson J.	Non-severable	Income imputed to Respondent in the amount of $142,000 and to the Applicant in the amount of $30,000. Respondent to pay child support of $3,066 per month and equalization set at $342,070 and lump sum spousal support set at $335,465. No overpayment requested and no evidence led concerning the overpayment issue. After vesting the matrimonial home into the Applicant’s name, there remained $147,535 owing by the Respondent in spousal support.

[^1]: O. Reg. 114/99

[^2]: Having reference to the earlier offer and the fact that ongoing periodic spousal support was offered, I suspect that what was intended was that the $250,000 was to be the equalization payment as this was not addressed elsewhere in the offer.