Court File and Parties

COURT FILE NO.: CV-15-541-00, FS-17-195-00 DATE: 2021-09-07

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N: CV-15-541-00

ORIENTAL GARDEN CHINESE & VIETNAMESE RESTAURANT INC. and HUONG CAO QUE TANG also known as QUE TANG Plaintiffs

Mr. J. Illingworth, for the Plaintiffs

-and-

PHUC VAN NGUYEN Defendant

Mr. M. Cupello, for the Defendant

FS-17-195-00

CUC THI CAO Applicant

-and-

PHUC VAN NGUYEN Defendant

Ms. S. Filipovic, for the Applicant Mr. M. Cupello, for the Defendant

HEARD: In writing, at Thunder Bay, Ontario

Madam Justice T. J. Nieckarz

REASONS ON COSTS

OVERVIEW:

[1] There were three motions before the Court involving related parties. They were:

a. The Plaintiffs’ motion in the civil action for an order: i. For payment of funds out of court to the parties pursuant to the terms of an accepted offer to settle reached at a pre-trial conference; ii. Directions to give effect to the Minutes of Settlement dated June 4, 2019 made in the family action, and to give effect to the Direction dated August 19, 2019 and signed by the Defendant regarding moneys paid into court in the civil action; and iii. An order dismissing this action without costs on the terms of the accepted offer to settle of December 6, 2019.

b. The Applicant’s (“Cao”) motion in the family law action for: i. A final order in accordance with the terms of the Minutes of Settlement dated June 4, 2019; ii. An order directing the Respondent (“Nguyen”) to sign the releases required by the Minutes of Settlement; iii. An order directing that Cao shall receive the sum of $63,191.36 out of the funds paid into court in the civil action, in accordance with the terms of the Minutes of Settlement; and iv. In the alternative to the foregoing, directions from the Court.

c. Nguyen’s motion in the family law action for an order: i. Determining that only $64,218.66 remains available for equal division between the Cao and Nguyen, with Cao receiving payment equal to one-half that amount, being $32,109.33; and ii. That the balance of the $100,000 shall be payable to him.

[2] On consent, an order was made at the hearing of the motions that all funds paid into court other than the $100,000 in dispute shall be paid to Oriental Garden. The issue remaining in dispute, and to be determined, was how much of the $100,000 are each of Cao and Nguyen entitled to pursuant to the terms of the Minutes of Settlement signed in the family action.

[3] The case was driven primarily by a dispute as to the proper interpretation of the family Minutes of Settlement. Nguyen and Cao were spouses. Oriental Garden was the family business, with the Plaintiff, Tang (“Tang”) being the current owner of the business and the daughter of Nguyen and Cao.

[4] Oriental Garden and Tang became involved in the family dispute by virtue of an irrevocable direction signed by Nguyen in the family matter, that had been sent to the lawyer for Tang in the civil action. This direction required Mr. Illingworth, Mr. Cupello and the Accountant for the Superior Court of Justice to pay 50% of any monies payable to Nguyen in the civil action to Cao.

[5] A dispute over what was required to give effect to the direction prevented the parties from reaching consensus as to the wording of the final Minutes of Settlement in the civil action, despite having reached mutually agreeable terms for a resolution of the issues in that matter. There was also correspondence in evidence from the lawyer for Cao suggesting that she and Tang align to ensure that Nguyen did not defeat the settlement intended by the family Minutes of Settlement.

[6] The facts are more particularly set out in Oriental Garden et. al. v. Nguyen, Cao v. Nguyen, 2021 ONSC 2872. The primary issues pertained to the amount of an add-back to available settlement funds contemplated by the family minutes on account of legal fees paid to Nguyen’s former counsel for family law matters (Mr. Melchiorre) and whether Nguyen was entitled to a deduction from the funds to be shared with Cao for the legal fees he spent in the civil action that resulted in those funds being available for division.

[7] For reasons outlined in that decision, I ordered that:

a. With respect to the civil action: i. Subject to any adjustment required as set out in the decision, the Accountant of the Superior Court of Justice shall pay the $100,000 remaining to the credit of the civil action as follows: A. $56,843.63 payable to Cao; and B. $43,156.37 payable to Nguyen. ii. Subject to a determination of costs on the motions, the civil action was dismissed without costs on the terms of the accepted offer to settle of December 6, 2020.

b. With respect to the family action: i. A final order shall issue in accordance with the terms of the Minutes of Settlement dated June 4, 2019; ii. Each party shall comply with any outstanding obligations they may have pursuant to the Minutes of Settlement within 60 days; and iii. Other relief pertaining to confirming the amount of a possible adjustment to the amounts provided for in paragraph 7(a)(i) above.

[8] The net effect of the decision was that Nguyen was successful in his position with respect to the add-back for Mr. Melchiorre’s fees, but not with respect to the adjustment sought for fees on the civil matter. The parties were invited to make written submissions on costs if the issue could not be resolved.

[9] The positions of the parties with respect to costs will be set out in greater detail below.

[10] By way of overview:

a. In the family action: i. Cao claims her full recovery costs of the motions against Nguyen in the amount of $29,428.34 inclusive of fees, disbursements and H.S.T., including costs incurred for submissions on costs. She claims that full recovery basis is warranted in the circumstances of this case given the bad faith demonstrated by Nguyen in failing to honour the terms of the Final Minutes of Settlement. ii. Nguyen takes the position there should be no costs, or in the alternative nominal costs payable by him, to Cao, in the amount of $2,000. He argues divided success.

b. In the civil action: i. The Plaintiffs, Oriental Garden and Tang claim costs on a substantial indemnity basis in the amount of $12,857.81 against Nguyen’s lawyer personally, or in the alternative against Nguyen. ii. Mr. Cupello denies that costs are payable by him personally. He argues that the legal test for such an award cannot be met in the circumstances of this case in which he was merely advancing his client’s position and made genuine efforts to avoid any involvement of the civil action in the family dispute. iii. Nguyen similarly argues that there should be no costs payable to the Plaintiffs for their motion as it was unnecessary by virtue of the settlement proposals made by him. If costs are payable, Nguyen argues that the amount claimed is excessive and should be reduced given the costs claimed for items pre-dating the motion, inappropriate claims for clerk time, and for fees claimed in relation to their claim against Mr. Cupello.

[11] For reasons set out below, Nguyen shall pay costs to Cao in the amount of $10,000 and to Oriental Gardens and Tang in the amount of $5,500.

ANALYSIS:

1) What costs should be awarded in the family action?

[12] The primary issues for determination in considering the question of costs of the motions in the family matter are:

a. Was Cao the successful party or was there divided success? b. If Cao was successful, what quantum of costs is appropriate? This requires consideration of whether there was bad faith on the part of Nguyen that warrants full recovery costs pursuant to Rule 24(8) of the Family Law Rules.

General Legal Principles Applicable:

[13] In Fong v. Chan, 1999 CanLII 2052 (ONCA), 46 O.R. (3d) 330 at para. 22 the Court of Appeal held that there were three fundamental purposes for modern costs rules:

1. To indemnify successful litigants for the cost of litigation;
2. To encourage settlement; and
3. To discourage and sanction inappropriate behavior by litigants.

These fundamental purposes are to be kept in mind in deciding costs and crafting an appropriate award.

[14] In addition to the three fundamental purposes of modern costs rules set out in Fong v. Chan, Rule 2 (2) of the Family Law Rules, O. Reg. 114/99, as. am. (“FLR”), seeks to ensure that family law cases are dealt with justly. See: Mattina v. Mattina, 2018 ONCA 867.

[15] Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. See: Beaver v. Hill, 2018 ONCA 840.

[16] Rule 24 of the FLR specifically governs the issue of costs in family law proceedings.

[17] Rule 24(1) creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs. Any settlement offers made, along with the positions adopted by the parties should be examined in determining costs.

[18] If success is divided, Rule 24 (6) of the FLR gives the court discretion to apportion costs as appropriate.

[19] An award of costs is subject to the factors listed in subrule 24(12), subrule 24(4) pertaining to unreasonable conduct of a successful party, subrule 24(8) pertaining to bad faith, subrule 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party. See: Berta v. Berta, 2015 ONCA 918 at para. 94.

Who Is the Successful Party?

[20] Nguyen argues that success was divided in the family matter because:

a. The court agreed with him with respect to the amount of add-back related to Mr. Melchiorre’s fees, which reduced the amount to Cao by $12,696.47; b. The court agreed with Cao by denying an adjustment to the amount subject to division claimed by Nguyen for fees paid in the civil action in the approximate amount of $49,000; c. Each party was successful on one important issue that involved a substantial sum of money; and d. Each issue required a similar amount of time and expense with respect to fees incurred for materials and argument.

[21] Cao denies that success was divided. She argues that she was the successful party and is presumptively entitled to her costs. The primary issue that was argued was the adjustment to the amount available for settlement sought by Nguyen on account of his legal fees and not the fees payable to former family counsel. The later was more a point of confusion than contention given the changing positions adopted by Nguyen and lack of proper information.

[22] Where there are a number of issues before the court, it can have regard to the dominant issue. See: Firth v. Allerton, [2013] O.J. No. 3992 (S.C.J.); Mondino v. Mondino, 2014 ONSC 1102.

[23] Divided success does not equate with equal success. It requires a comparative analysis. Most family cases have multiple issues. They are not equally important, time-consuming or expensive to determine. See: Jackson v. Mayerle, 2016 ONSC 1556, para 66.

[24] While Nguyen was successful on the issue pertaining to Mr. Melchiorre’s fees, I do not agree that this amounts to divided success that should either disentitle Cao to costs or render them nominal.

[25] There was not divided success in any meaningful way. I disagree with Nguyen’s position that similar effort in terms of preparation of materials and argument of the motion was required for each, or that each issue was as important as the other.

[26] The issue with respect to Mr. Melchiorre’s fees was one that Nguyen created. The Minutes of Settlement in the family matter were signed in June 2019. They required an add-back to the settlement to Cao on account of legal fees paid to Mr. Melchiorre for family law matters. Shortly thereafter, Mr. Cupello confirmed to Ms. Filipovic that the amount paid to Mr. Melchiorre on account of legal fees was $15,000. The family minutes required confirmation of this amount by Mr. Melchiorre. On June 21, 2019, Mr. Melchiorre confirmed that this amount was payable for the family, civil and lease matters Nguyen was involved in. It was not until December 31, 2020, that Mr. Cupello sought a breakdown as between the three files and confirmation of the amount paid on account of the family file. That was promptly addressed by Mr. Melchiorre on January 4, 2021, but questions still remained. This was only weeks before argument of the motion and for the year and a half prior to that, Cao’s counsel was left with the impression that $15,000 was the number.

[27] By far the more significant issue was Nguyen’s claim for an adjustment to the settlement for fees paid on the civil action. The most time was devoted to this issue in argument. In paragraph 33 of my Reasons on Motion, I noted that the biggest issue between the parties was this adjustment. If nothing else, it was the largest financial issue raised. Cao was entirely successful on this issue and is entitled to her costs. The question becomes the amount.

What is the Appropriate Quantum?

Bad Faith:

[28] Cao argues that Nguyen’s conduct necessitated the motions, and the position he took in those motions amounted to bad faith for the purpose of Rule 24(8) of the FLR. She argues that this entitles her to full recovery costs.

[29] Cao argues that Nguyen engaged in a pattern of inappropriate bad faith behaviour by taking positions contrary to the clear wording of the Minutes of Settlement. Cao had made compromises in arriving at the Minutes of Settlement in the belief that the litigation would be concluded. Nguyen then refused to resolve this, and the civil matter, on the basis that he disagreed with the calculations as to the amounts payable to each of him and Cao, but refused to explain why until shortly before the motion was to be argued. His counsel did not respond to efforts to resolve the issue or other correspondence in a timely manner. His actions were intended to cause additional delay, expense and stress to Cao. His actions are exactly the type of actions that should be sanctioned pursuant to Rule 24(8).

[30] Nguyen denies any bad faith. He argues it was reasonable for him to adopt the position that the costs incurred by him in preserving the value of the asset subject to division in the family minutes should be deducted before sharing with Cao. He submits that the family minutes lack clarity on this issue.

[31] Rule 24(8) states that if a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.

[32] Rule 24 (8) requires a fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made. See: Cozzi v. Smith, 2015 ONSC 3626; Scipione v. Del Sordo, 2015 CarswellOnt 14971 (Ont. SCJ).

[33] There is a difference between bad faith and unreasonable behaviour. The essence of bad faith is when a person suggests their actions are aimed for one purpose when they are aimed for another purpose. It is done knowingly and intentionally. See: S.(C.) v. S. (M.) (2007), 2007 CanLII 20279 (ON SC), 38 R.F.L. (6th) 315 (Ont. SCJ).

[34] Bad faith is not synonymous with bad judgment or negligence; rather, it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. Bad faith involves intentional duplicity, obstruction or obfuscation. See: Scipione, supra.

[35] I do not find that the conduct of Nguyen as alleged by Cao amounted to bad faith as contemplated by Rule 24(8). There is insufficient evidence of ulterior motive.

[36] I do not, however, believe his conduct was reasonable or that the position adopted by him was reasonable. It caused unnecessary litigation in both the family and the civil matter. While it may not attract full recovery costs, it warrants sanction by the court and a higher award of costs than otherwise for an unsuccessful motion. I find his behaviour to be unreasonable as opposed to bad faith.

Discussion of Quantum:

[37] Rule 24(12)(a)(i) requires the court to consider each party’s behaviour in determining costs. I have found that the behaviour of Nguyen was unreasonable with respect to the adjustment sought for his legal fees paid on account of the civil action.

[38] Costs can be used to sanction behaviour that increases the duration and expense of litigation or is otherwise unreasonable or vexatious. Courts routinely employ the power to order costs as a tool in the furtherance of the efficient and orderly administration of justice. See: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 SCR 371, at para. 25.

[39] As I found at para. 42 of the Reasons on Motion, if Nguyen wanted to be able to share the burden of the legal fees incurred in the civil action with his spouse, then he should have stated that in the family minutes. There was nothing in the wording of the minutes or any evidence I had as to the circumstances surrounding the reaching of the terms of the minutes that suggested it was reasonable for him to adopt the position that he was entitled to this adjustment.

[40] In para. 44 of the Reasons I expressed that parties need to have a clear understanding as to what the terms of settlement are. It is not reasonable to try to adopt a creative interpretation of the wording of those minutes and to attempt to inject, after the fact, terms that were not negotiated. I cannot say whether the position of Nguyen was based on a genuinely held belief that this was the most equitable result or whether it was for nefarious purposes. I can say that his interpretation was unreasonable and caused unnecessary costs. His approach was extremely unfair to his former spouse, who had a right to know what she bargained for. When final minutes are negotiated, a party has a right to expect that the litigation is concluded, and not that new issues will have to be litigated. This is contrary to the spirit of settlement.

[41] I also find that Nguyen’s failure to explain exactly what his position was with respect to the Melchiorre add-back and adjustment for the civil legal fees, is unreasonable. Nguyen was not upfront from the start of the dispute as to what he was seeking. In family and civil litigation that had been high conflict and emotionally charged, this created an atmosphere of suspicion, justifiable concern, and caused Tang and Cao to feel the need to present a united front to protect Cao’s interests. The first time Nguyen’s position came to light should not have been in an affidavit served two weeks before the motion hearing. This issue had been ongoing for a considerable amount of time prior to that. In these circumstances there was absolutely no way Cao could have avoided the costs associated with a motion or focus her materials accordingly. Nguyen was refusing to carry out the terms of the settlement or give a fulsome explanation why. Cao could not even make appropriate offers given that she did not know what the issues really were. This conduct was sufficiently unreasonable and contrary to the principles underlying the FLR and modern costs rules that it warrants a substantial costs award.

[42] Rule 24(12)(a) also requires consideration of the time spent on the motions, the legal fees, including the number of lawyers and their rate, expenses properly paid and any other relevant matter.

[43] Nguyen challenges the time spent by counsel for Cao on the matter, arguing it is excessive and could not have been within the reasonable contemplation of the unsuccessful party. He argues that the total time of approximately 69 hours claimed for two senior lawyers to work on a half day motion is excessive. He notes that there is significant time on Cao’s bill of costs for charges incurred prior to the motion and dealing with matters that would have had to be done to implement the family minutes, regardless of the dispute. For example, revising draft orders and releases. Nguyen further takes issue with the significant time spent by a legal assistant and claims it was more in the nature of secretarial time than clerical time that advances the file and saves on lawyer fees. Finally, he argues that the amount sought is disproportionate to the issues in dispute.

[44] In exercising discretion in determining the amount of costs, a court must ensure that a costs award is fair and reasonable. It is not just a mechanical exercise of considering hours and rates. It should also reflect the reasonable expectations of the parties and seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) at paras. 37-38; Andersen v. St. Jude Medical Inc., 2006 CanLII 85158 (ONSC Div. Court) at para. 22.

[45] I agree that a reduction is warranted to the amount claimed. A large amount of what is claimed does not pertain to this motion. There is considerable time spent before the motion. It is not always clear from the docket entries that this was time required to prepare the motion documents, arising out of this issue or is properly recoverable from an opposing party. These comments apply to fees and disbursements. For example, there are fees claimed to initially finalize aspects of the minutes that would have been incurred regardless of the motion issues arising. I also note there is a disbursement claimed of $300 for marriage certificate translation fees and related legal fees. I am uncertain as to how this relates to these motions. These are merely examples and not an inclusive list.

[46] The legal issues in these motions were not complex. Large volumes of materials were prepared by each party to provide the context and background necessary to determine the issues. Not all was relevant given that the minutes were clear, in my view, as to their meaning. There was some duplication between the parties. Having said this, having the full context of the case provided gave me confidence in my interpretation of the minutes. In fairness to Cao’s counsel, they did not know what the issues were. Furthermore, the costs issues have certainly become more complex than the actual motions themselves.

[47] Taking into consideration the conduct of Nguyen, the importance of the issues at stake, the complexity of the matter, the time spent and all other factors required by Rule 24 of the FLR, including the reasonable expectations of the opposing party and proportionality, I find that a reasonable award of costs is $10,000 inclusive of fees, disbursements and H.S.T.

2) What costs should be awarded in the civil action?

[48] The issues to be determined are:

a. Are the Plaintiffs entitled to costs? b. If so, should the Plaintiffs’ costs be payable by Nguyen’s lawyer personally or Nguyen? c. What is the proper amount of costs payable?

General Legal Principles Applicable:

[49] The costs of a step in a proceeding, along with to whom and to what extent costs shall be paid is in the discretion of the court by virtue of s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[50] The court’s direction with respect to costs in a civil proceeding is to be exercised taking into consideration the result, offers to settle, and the factors provided for in Rule 57.01(1) of the Rules of Civil Procedure. These factors include, but are not limited to: the amount claimed and recovered; the complexity of the case; the importance of the issues; the conduct of the parties that tended to shorten or lengthen unnecessarily the duration of the proceeding; whether there were unnecessary steps; and a party’s denial of, or refusal to admit anything that should be admitted.

[51] The fundamental principles underlying modern costs award as set out in Fong v. Chan earlier in this decision, in addition to the importance of reasonableness and proportionality are equally important considerations in determining the costs of a civil matter as a family matter.

Are Costs Payable to the Plaintiffs?

[52] I find that the Plaintiffs are entitled to their costs.

[53] In making this decision I acknowledge the efforts of counsel for Nguyen to arrive at a resolution that avoided the Plaintiffs’ participation in these motions. Mr. Cupello initially suggested that the Plaintiffs receive their portion of the funds, while the disputed portion be held or paid into a lawyer’s trust account pending a determination of the remaining issues between the family law litigants. In the days before the hearing of the motions, Nguyen offered to have the Plaintiffs’ settlement funds paid to them and have the disputed funds remain in court. He argues that the issues in dispute did not require involvement of the Plaintiffs and that particularly in light of these overtures, the Plaintiffs’ participation in these motions was entirely unnecessary.

[54] There were two issues for the Plaintiffs and their counsel. Firstly, the Plaintiffs’ counsel was bound by the terms of an irrevocable direction and concerned with ensuring his obligations were met. If Cao, the beneficiary of that direction, along with the Plaintiffs and Nguyen agreed to relieve Plaintiffs’ counsel of that obligation, this could have minimized the Plaintiffs’ involvement in these motions. Instead of doing this, Cao and Tang chose to present a united front, not relieve Mr. Illingworth of his obligation under the direction, and must accept some responsibility with respect to quantum of costs awarded each of them for that choice. Having said this, as I found in paragraph 44 of this decision, Nguyen is still primarily responsible for creating the air of suspicion and concern that caused Cao and Tang to adopt this position. His actions caused costs to be incurred unnecessarily and warrant censure by the court in the form of a costs award.

[55] The second issue for the Plaintiffs was that the civil action could not be concluded until the issues in the family matter were determined. Despite an agreement on terms for a resolution, no Minutes of Settlement could be reached, and the action remained ongoing. The Plaintiffs’ motion resulted in a dismissal of the action and a final conclusion, but for costs submissions. I cannot conclude, as Nguyen invites me to do, that the Plaintiffs’ participation in these motions was entirely unnecessary.

Should costs be payable by Mr. Cupello personally?

[56] Rule 57.07 of the Rules of Civil Procedure deals with costs payable by a lawyer personally. This rule gives the court discretion to require a lawyer to pay the costs of any party personally if the court determines that the lawyer has caused costs to be incurred without reasonable cause or to be wasted by undue delay, negligence or other default.

[57] In Young v. Young, 1993 CanLII 34 (SCC), [1993] 4 S.C.R. 3 (S.C.C.) at pp. 135-136 the court held that costs awarded personally against a lawyer are intended as compensation for a successful party and not as punishment of the lawyer. Examples of instances in which such costs would be ordered included proceedings that were cluttered by repetitive and irrelevant material, or excessive motions and applications, when the lawyer had acted in bad faith in encouraging such abuse and delay.

[58] In Young, the Supreme Court of Canada cautioned that because lawyers are under a duty to guard a client’s instructions as confidential, and to fearlessly represent unpopular causes, courts should be extremely cautious in making such costs orders. Within reason, and keeping in mind the ethical obligations of lawyers, they cannot be afraid to advance the instructions of their client for fear of an award of costs personally.

[59] The discretion granted by Rule 57.07 is to be exercised with extreme caution, sparingly, and only in the clearest of cases. See: Carleton v. Beaverton Hotel, 2009 CanLII 92124 (ON SCDC), at para. 15.

[60] The parties agree that the principles governing when an award of costs should be paid by the solicitor personally are set out in Carleton v. Beaverton Hotel and Galganov v. Russell (Township), 2012 ONCA 410.

[61] The court must first determine whether the lawyer’s conduct falls within Rule 57.07(1) in the sense of causing costs to be incurred unreasonably. Costs consequences can be triggered by either professional negligence or by actions or omissions which fall short of negligence. Bad faith on the part of the lawyer is not a necessary factor triggering cost consequences. The court, looking at the lawyer’s conduct holistically, must determine whether the lawyer,

…pursues a goal which is clearly unattainable or is clearly derelict in his or her duties as an officer of the court that resort should be had to [r]. 57.07.

[62] Secondly, the court must consider in applying the “extreme caution” principle identified in the Young case, whether discretion should be exercised, in all of the circumstances of the case, to award of costs against the lawyer personally. Just because the conduct of a lawyer appears to fall within the circumstances described in Rule 57.07(1) does not necessarily mean it is one of those clearest cases in which costs should be awarded against the lawyer personally.

[63] The Plaintiffs argue that the position of Nguyen was driven by Mr. Cupello’s need to protect his legal fees. He put his self-interest ahead of that of his client. He knew what the family minutes intended. He also remained disingenuously silent until weeks before the motions were to be heard as to what the dispute was. His silence exacerbated the suspicion of the Plaintiffs and Cao in the context of already high conflict litigation. His intentions were not revealed until the January 4th, 2021, affidavit of Nguyen was delivered. Mr. Cupello’s lack of candour and conduct was an abuse of process of the court and unnecessarily delayed the resolution of both the civil and family actions, each of which had been settled for some time. Significant time and costs were wasted.

[64] Mr. Cupello argues that he did nothing other than advance Nguyen’s position and instructions. Nguyen disagreed with Cao regarding the add-back and deduction of the civil legal fees. This disagreement required court intervention. Whether one agrees with Nguyen’s position or not, Mr. Cupello argues that he should not be penalized for advancing his client’s position with vigour.

[65] I am not prepared to speculate as to Mr. Cupello’s motives for the positions taken on these motions. While Nguyen’s position regarding the add-back for Mr. Melchiorre’s fees had merit (despite the confusion he created), his position with respect to the civil legal fees had none. I cannot say with any certainty based on the evidentiary record before me as to what the motivation was behind the position adopted on behalf of Nguyen with respect to the civil matter fees. Both the Plaintiffs’ theory and Mr. Cupello’s explanation for the position adopted are plausible. Because of this, this is not one of those clear cases that warrant the payment of costs by a lawyer.

[66] Again, it is troubling that Mr. Cupello did not communicate his client’s position with respect to the add-back and adjustment for the civil legal fees. This left the other parties to high conflict litigation in a state of confusion, anxiety, and flux. I disagree with his submissions when he says it did not cause wasted costs. The Plaintiffs and Cao attempted to resolve this issue in a vacuum, without the benefit of the information necessary to do so. They had to prepare their motion materials not knowing the true issue as to why Nguyen was refusing to finalize the settlements. They could not focus their materials on these issues.

[67] No explanation is offered by Mr. Cupello for these actions. While I appreciate that these past 18 months of the pandemic have been challenging for lawyers and that many matters have stalled by virtue of suspension of operations of the courts, province-wide shutdowns, and increased workload for counsel, some effort should have been made to communicate the true issues to opposing counsel so that they could be addressed. While I agree that court intervention was probably still necessary with respect to Nguyen’s position regarding the civil legal fees, had the issues properly been communicated, at least the other parties would have known the case they needed to meet as opposed to being left to speculate. In this regard, the first part of the Rule 57.07(1) test is met.

[68] Despite the first part of the test having been met, I am not satisfied that this is one of the clearest cases that warrants sanction of the lawyer by the court. The failure to clearly communicate Nguyen’s position until weeks before the motion was heard is a factor that has increased the costs payable by Nguyen to the other parties. This will have to be addressed between Mr. Cupello and his client, if the circumstances warrant it.

[69] Mr. Cupello seeks the opportunity to make costs submissions for his time spent in defending the unsuccessful claim of costs against him. I am not granting that request. While the Plaintiffs’ position on this issue was not successful, it was not unreasonable, and I cannot conclude in the circumstances of this case that they should pay costs to Mr. Cupello.

What is the quantum of costs payable?

[70] Taking into consideration all of the factors considered in this decision, I find that costs on a partial indemnity basis shall be paid by Nguyen to the Plaintiffs.

[71] Nguyen takes issue with various items claimed in the Plaintiffs’ bill of costs. Nguyen’s bill of costs is approximately half that of the Plaintiffs’. While it is not clear, Nguyen’s bill of costs also appears to include costs associated with the family motions. As with Cao’s bill of costs, there were items claimed that I have not allowed. For example, the initial drafting of releases and reviewing draft minutes of settlement are steps that would have been taken even without the issues raised by Nguyen. I have also reduced the amounts claimed for some consideration of administrative assistant time described as clerk time, and for items not properly recoverable on a partial indemnity basis.

[72] I have considered that bringing the litigation to a conclusion was important to the Plaintiffs. I have also considered that their position on the motions was not complex, with materials and argument being extremely focused, but brief. The focused nature of the argument and material takes time and skill.

[73] Given these, and other factors referred to elsewhere in this decision, I find that a fair and reasonable award of costs to the Plaintiffs for the motions is $5,500 inclusive of H.S.T., disbursements and fees.

[74] There were no submissions made with respect to the charging order sought. A brief 15- minute appearance may be scheduled before me to address this issue in the civil action, if required.

ORDER:

[75] Nguyen shall pay costs as follows:

a. to the Applicant, Cao, in the amount of $10,000; and b. to the Plaintiffs, Oriental Garden and Tang, in the amount of $5,500.

“Original signed by” The Honourable Madam Justice T.J. Nieckarz

Released: September 7, 2021