Court File and Parties

Date: 2021-06-30 Superior Court of Justice - Ontario

Re: Nancy Wu, Applicant And: Anthony Di Iorio, 8821488 Canada Ltd. and Decentral Inc., Respondents

Before: Kiteley J.

Counsel: Ilana Zylberman Dembo, Aaron M. Franks and Adam Prewer, counsel for the Applicant Harold Niman and Richard Niman, counsel for the Respondent Di Iorio Jorge Cartaya, counsel for the Respondent Di Iorio Duncan Boswell, counsel for the Respondents 8821488 Canada Ltd. and Decentral Inc.

Heard: in writing

Endorsement As To Costs Arising From Motion In Writing

[1] In this endorsement I refer to Anthony Di Iorio as the Respondent and 8821488 Canada Ltd. and Decentral Inc. as the Corporate Respondents.

[2] In an endorsement dated March 26, 2021 [ONSC 2332], (the “decision”) I dismissed the motion brought by the Applicant for an order that Anthony Di Iorio, 8821488 Canada Ltd. and Decentral Inc. provide a complete copy of the file of their lawyer Mr. Addison Cameron-Huff.

[3] In paragraphs 39 to 49 of the decision, I dealt with the submissions of the Applicant that challenged most of the affidavit of the Respondent sworn February 5, 2021. I ruled that, other than the few passages based on his personal knowledge, the affidavit was inadmissible.

[4] In paragraph 52 of the decision, I indicated that since the Respondents had been successful, they were presumptively entitled to costs pursuant to Family Law Rule 24(1). In paragraph 53, I pointed out rules 24(4), 24(5) and 24(12). In paragraph 54, I indicated that if the parties did not settle, I expected counsel to make submissions on the issue as to whether the Respondents had behaved reasonably and I listed nine aspects of the factum of the Respondents that I described as possibly relevant to their entitlement to costs most of which derived from the inadmissibility of the Respondent’s affidavit. Those nine aspects are as follows:

Repeated reliance on what Mr. Cameron-Huff said, did or did not say or do.

NOTE: Most of that “evidence” has been found inadmissible.

Paragraph 38: It is apparent that she was seeking to have Mr. Cameron-Huff swear an affidavit so that she could cross-examine him on her unfounded claims. Mr. Cameron-Huff was so concerned about this tactic that he retained counsel to definitively and unequivocally deny any retainer agreement or solicitor-client relationship between Ms. Wu and Mr. Cameron-Huff.

Note: No evidence upon which to draw the inference that that was her objective. No evidence that Mr. Cameron-Huff was so concerned that he retained counsel. The fact that he has counsel does not constitute evidence as to his intention.

Paragraph 45: In her Supplemental Factum, Ms. Wu seizes upon the fact that the Respondents have not put forward an affidavit from Mr. Cameron-Huff and instead rely on Mr. Cameron-Huff’s advice to Mr. Di Iorio. Respectfully, Ms. Wu’s complaint is a conundrum of her own making, and her assertion that significant portions of Mr. Di Iorio’s affidavit should be struck out is preposterous.

NOTE: The evidence was struck out and therefore the “complaint” was not preposterous.

Paragraph 47: The Corporate Respondents have no authority to compel a third party to swear an affidavit in this action. In fact, Mr. Cameron-Huff retained his own counsel to assist him upon becoming aware of Ms. Wu’s claims to his legal files. This supports that Mr. Di Iorio and the Corporate Respondents are separate and apart from Mr. Cameron-Huff.

NOTE: As indicated above, there is no evidence that Mr. Cameron-Huff retained counsel for that reason. The extent to which the factum purports to support Mr. Cameron-Huff’s position suggests that the Respondents and Mr. Cameron-Huff are not “separate and apart”.

Paragraph 50: If Ms. Wu truly believes that Mr. Cameron-Huff was her lawyer, she is now skating very close to suggesting that not only is Mr. Cameron-Huff improperly disputing that fact, but so is his independent counsel Ms. Susan Sack. To resolve the issue, Ms. Wu should take any steps she deems appropriate with Mr. Cameron-Huff and his counsel directly and not continue to pursue the file through the Corporate Respondents.

NOTE: May be considered threatening.

Paragraph 51: Ms. Wu purports to rely on the Family Law Rules to further criticise Mr. Di Iorio’s affidavit. While this action is in part a family law action, the motion for production of Mr. Cameron-Huff’s solicitor-client privileged legal files is not a family law matter.

NOTE: The Applicant makes a claim based on joint family venture which is a family law matter. She also makes a claim based on oppression which is related to the family law matter in that both arise from the assertion that she is a 50% shareholder. The requested disclosure arises from both claims. It is a family law matter.

Paragraph 52: In any event, Mr. Di Iorio’s affidavit complies with Rule 14.8 of the Family Law Rules. Mr. Di Iorio clearly states the source of his information as Mr. Cameron-Huff, and that he believes such information to be true.

NOTE: Mr. Di Iorio did not depose his belief in the information where he did acknowledge the source as Mr. Cameron-Huff.

Paragraph 53: . . . Ms. Wu also conveniently ignores the independent evidence that Mr. Cameron-Huff denies he was her personal lawyer.

NOTE: There is no independent “evidence” that Mr. Cameron-Huff denies he was her personal lawyer.

Paragraph 70: The suggestion that a representative of LBW, a non-party to this action, ought to swear an Affidavit as to authorship of such documents is, respectfully, ridiculous. The Corporate Respondents have no authority to require or direct a non-party to this action to swear evidence. In any event, whether LBW mistakenly prepared a document showing Ms. Wu as a director of 882 for a brief period has no bearing on this application, which is for production of Mr. Cameron-Huff’s solicitor client privileged legal files.

NOTE: There is no evidence that LBW mistakenly prepared a document as described. And that “fact” was relevant.

[5] In paragraph 56 of the decision, I set a timetable for delivery of written submissions.

[6] On April 19, 2021 I received the submissions of the Corporate Respondents asking for partial indemnity costs in the amount of $14,328.81.

[7] On April 26, 2021 I received the submissions of the Applicant in which she took the following position:

Given Anthony’s behaviour, this is not a case where it is appropriate for costs to be ordered to any of the Respondents, all of whom Anthony wholly controls. If anything, to discourage and sanction their inappropriate behaviour, Anthony and the Corporate Respondents should be jointly and severally responsible for paying costs to Nancy in the sum of $7,500.

[8] On April 27, 2021 I received reply submissions of the Corporate Respondents.

[9] I did not receive submissions from the Respondent from which I conclude that he is not seeking costs.

Analysis

[10] This was a motion for disclosure that gave rise to the five issues listed in paragraph 19 of the decision and that was dependent on the court finding that (a) the Applicant had a solicitor client relationship with Cameron-Huff (and related issues) or the Respondent Di Iorio explicitly or implicitly waived privilege over the files of Cameron-Huff. The motion was not successful. Pursuant to rule 24(1), the Corporate Respondents are entitled to costs. The question is whether they should be deprived of part of their costs pursuant to rule 24(4).

[11] The initial costs submissions by the Corporate Respondents contained four material paragraphs: the Applicant was not successful, having failed to meet her onus; the Corporate Respondents were successful and rule 24(1) applied; the Corporate Respondents were required to respond to the motion by reviewing the record and the affidavits, preparing the affidavit of the Respondent Di Iorio, reviewing the supplemental factum of the Applicant and preparing a supplementary factum and book of authorities.

[12] In her submissions, the Applicant stresses the context in which the motion occurred, namely, that the Respondent maintains “a false dichotomy between himself and the Corporate Respondents”; the points raised in paragraph 54 of the decision and the one sentence response by the Corporate Respondents indicated below; her reference to Wildman v. Wildman 2006 33540 ONCA at para. 49; and her assertion that the Respondent was content to let the Corporate Respondents be his front and make the submissions on costs.

[13] In their reply submissions the Corporate Respondents assert that the Applicant repeatedly conflates the separate legal personalities of the Corporate Respondents and the individual Respondent; the Applicant brought claims against both the Corporate Respondents and Mr. Di Iorio and as a result, the Corporate Respondents have been compelled to incur legal costs to respond to the claims and were successful in doing so; the Applicant’s costs submissions ignore the statement at paragraph 1 of Mr. Di Iorio’s February 5th affidavit in response to the motion which was as follows:

I am one of the Respondents, and am an officer and director of the Corporate Respondents, Decentral Inc. and 8821488 Canada Ltd., in this proceeding and as such I have personal knowledge of the matters which I discuss in this Affidavit, except where stated to be on information and belief, in which case I believe same to be true.

[14] In paragraph 6 of the reply submissions, the Corporate Respondents assert that the Applicant’s criticism of Mr. Di Iorio’s affidavit is misplaced in respect of its reliance on information obtained from Mr. Cameron-Huff and that “such reliance was specifically dealt with at the outset in congruence with common legal practice when an affidavit relies on information of which he does not have personal knowledge”.

[15] Based on the initial and reply submissions of the Corporate Respondents and the lack of submissions by the Respondent, I draw these conclusions.

[16] First, the Corporate Respondents are correct in law that they and Mr. Di Iorio have separate legal personalities. In their written submissions, they routinely referred to “the Respondent Companies”. However, in paragraph 5 of their initial submissions on costs, in response to the issues raised in paragraphs 52-54 of the decision, the following appeared:

The Respondents and the Applicant behaved reasonably in relation to the issues and the motion.

[17] In other words, in the initial written submissions of the “legally separate personalities,” the Corporate Respondents have taken a position on behalf of the Respondent that the Respondent behaved reasonably, justifying the Applicant’s assertion that the dichotomy the Respondent attempts to maintain between himself and the Corporate Respondents is false.

[18] Second, as indicated in paragraph 14 above, the Corporate Respondents criticized the Applicant for her submission with respect to the information obtained from Cameron-Huff and points out a familiar legal position that the opening paragraph in his affidavit sworn February 5, 2021 was a complete answer. That submission by the Corporate Respondents ignores the ruling in the decision that most of that affidavit was inadmissible. Furthermore, the Corporate Respondents did not specifically deal with the issues raised in paragraph 54 of the decision in which the issues that might be relevant to the entitlement of all Respondents to costs were identified. As a result of the limited one sentence response, I infer that the Corporate Respondents take the position that they need not respond to a clear direction from the court.

[19] Based on those conclusions, pursuant to rule 24(5) I find that the Corporate Respondents’ behaviour in relation to the issues in this motion was unreasonable.

[20] The motion was not successful because the Applicant did not meet her onus and the Corporate Respondents are therefor entitled to costs. Pursuant to rule 24(4) a successful party may be deprived of part of their costs. I am satisfied that this unreasonable behaviour warrants a reduction. I discount the partial indemnity costs by approximately 25% to reflect the additional legal services that the Applicant incurred as a result of the unreasonable behaviour of the Corporate Respondents that caused the Applicant to incur unnecessary legal costs to successfully challenge the affidavit dated February 5, 2021.

ORDER TO GO AS FOLLOWS:

[21] The Applicant shall pay costs to the Corporate Respondents in the amount of $7,500.00 payable by August 31, 2021.

[22] This order takes effect immediately.

Kiteley J.

Date: June 30, 2021