Court File and Parties

COURT FILE NO.: FS-20-72 DATE: 20211021 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Tanya Castrichini, Applicant AND: Steven Aquino, Respondent

BEFORE: Justice Mills

COUNSEL: Esther Lenkinski, Alexandra Carr, for the Applicant George Karahotzitis, for the Respondent

COSTS ENDORSEMENT

[1] As noted in my endorsement of August 16, 2021, the Applicant was largely successful on her lengthy motion and in resisting the Respondent’s cross-motion. The Respondent concedes the Applicant is entitled to her costs. The quantum of those costs is the only issue.

[2] The issues to be decided on the motion and the cross-motion were important and they were complex. The parties exchanged extensive materials, totalling 1,644 pages. Questioning was conducted over two full days. The parties were represented throughout the proceeding by very experienced counsel, with commensurate billing rates at the higher end of the spectrum. Both parties had second chair counsel with comparable billing rates, both of whom carried the lion’s share of the work drafting the motion materials and preparing the clients for questioning in order to reduce the costs incurred. Offers to Settle were exchanged in advance of the hearing.

[3] The Applicant seeks an Order for costs in the amount of $70,000; her Bill of Costs reflects a total of $74,555.99 was incurred for this motion.

[4] The Respondent submits an Order for costs of $37,500 would be more appropriate. His Bill of Costs reflects fees and disbursements of $58,680.75 were incurred for the motion, discounted to account for steps taken which the Respondent believes will also benefit the parties in the Application. If the discounted amounts are added back into the Bill of Costs, the Respondent incurred $68,692.25 on this motion – $5,864.74 less than the Applicant and $1,307.75 less than is sought by the Applicant as a cost order.

[5] Proportionality and reasonableness are the touchstone considerations when fixing the quantum of costs under r. 24(12) of the Family Law Rules.[^1] In exercising my discretion to order costs, I must consider the factors outlined in r. 24(12) in conjunction with the four fundamental purposes that an Order for costs is intended to foster – to partially indemnify the successful party, to encourage settlement, to discourage and sanction inappropriate behaviour, and to ensure matters are dealt with in a fair and just manner.[^2] The Family Law Rules permit full recovery costs in circumstances where a party has behaved unreasonably or in bad faith, or where a party has beat an offer to settle.[^3]

[6] The Respondent submits that the costs associated with the questioning and the requests to admit are costs that would have been incurred in any event in the proceeding and the information obtained will be of use beyond just this motion. This is true, and generally can be said for all motions where leave for questioning is granted. That fact is no basis to warrant a 50% reduction in the costs sought relative to the questioning process. Depending on the disclosure which has been ordered to be produced, further questioning may be required in respect of the Application. So too for the request to admit. There may be some duplication, but at this juncture it is unknown the extent to which these efforts may have to be undertaken again. It will largely depend on the proper financial disclosure not yet produced by the Respondent.

[7] On May 20, 2021 the Applicant served an Offer to Settle which was severable in nature, addressing ongoing child support, interim disbursements, and disclosure. The Respondent served a non-severable Offer to Settle on the same day which addressed ongoing child support and requiring the balance of the Applicant’s motion to be dismissed. The Respondent’s Offer does not reflect a genuine compromise on the key matters in dispute. The parties reached a consent order for ongoing child support order in advance of the hearing, precisely on the terms as offered by the Applicant. The Respondent’s Offer to Settle is not a factor to be considered in my determination of the appropriate quantum of costs to award the Applicant on this motion.

[8] In her submissions, the Applicant sought $250,000 in interim disbursements. I ordered $100,000 to be paid. The Applicant’s Offer to Settle proposed a payment of $75,000. She has clearly achieved a better result in the motion than her offer. The Applicant is therefore entitled, pursuant to rule 24(12)(a)(iii) of the Family Law Rules, to her fair and reasonable costs relative to this issue on a partial recovery basis to the date of her Offer to Settle and then on a full recovery basis thereafter.

[9] Although not entirely successful in obtaining the disclosure relief sought, there were only a few minor disclosure requests not ordered. The Applicant was significantly more successful on the motion than the Respondent’s offer of a complete dismissal. Moreover, had the Respondent made any efforts towards full and fair disclosure, this aspect of the motion may have been entirely avoided. The Applicant is entitled to recover fair and reasonable partial recovery costs to the date of her Offer to Settle and thereafter on a substantial recovery basis.

[10] The Applicant asks that I award full recovery costs for all steps taken on the motion on the basis the Respondent behaved unreasonably throughout by resisting meaningful financial disclosure. He is alleged to have unnecessarily driven up the Applicant’s costs as she tried to ferret out the required information. The “catch-me-if-you-can” approach makes a mockery of the obligation to make full and frank financial disclosure and has been held to constitute bad faith, which will attract full recovery costs.[^4]

[11] There is no question the Respondent was provided every opportunity to make full and frank financial disclosure. The Applicant made many requests for it, the Respondent promised it, the court ordered it, and yet there remains significant information outstanding. The Respondent has knowingly driven up the costs of this litigation by his ongoing refusals to be honest and forthright with his financial disclosure, thereby causing significant financial harm to the Applicant without justification.[^5] This conduct can only be characterized as longstanding and persistent obfuscation, amounting to bad faith.

[12] As both parties incurred relatively similar legal fees on this motion, neither can properly submit the fees of the other are unreasonable. The only issue for consideration in this respect is whether the Applicant’s fees ought to be discounted to account for the possibility the information will be of use later in the proceeding, as was submitted by the Respondent. I prefer to consider the matter from the other perspective. If the questioning and the requests to admit are of use in the future, the costs ordered now may be considered at that time. Any future costs may be adjusted to account for the information having been provided or obtained from the efforts on this motion. In my view, this is a more appropriate approach than to speculatively discount the costs now without any evidentiary foundation to support such a reduction.

[13] Having found the Respondent’s conduct amounted to bad faith and with the Applicant obtaining in most respects a result better than her Offer to Settle, it is appropriate to order costs on a full recovery basis. The amount sought by the Applicant is higher than one would expect for a motion, however the issues were complex, they were important, and the Respondent’s costs are similar in amount. That in and of itself does not make the costs reasonable or proportionate, but it is an indication that the amount sought by the Applicant is within the reasonable contemplation of the Respondent. He claims to be hundreds of millions of dollars in debt and suffering a significant financial disparity from the circumstances of the Applicant. Nonetheless, the Respondent has sufficiently “deep pockets” to incur almost $70,000 in legal fees resisting this motion when a reasonable Offer to Settle had been proffered. It is disingenuous to suggest he now has a limited ability to satisfy a cost order in favour of the Applicant.

[14] The Respondent shall pay costs to the Applicant in the amount of $70,000, inclusive of fees, disbursements and HST.

[15] As the costs were incurred for the sole purpose of establishing income for the calculation of the Respondent’s child support obligation, it is appropriate the costs be characterized for enforcement purposes as child support[^6]. It is so ordered.

[16] A Support Deduction Order shall issue.

J. E. Mills, J.

Date: October 21, 2021

[^1]: Beaver v. Hill, 2018 ONCA 840 at para. 12 [^2]: Mattina v. Mattina, 2018 ONCA 867, at para. 10 [^3]: Rule 18(14) [^4]: Trudel v. Trudel, 2010 ONSC 5177 at paras. 17 & 18 [^5]: S. (C). v. S. (M), 2007 CanLII 20279 (ON SC), [2007] O.J. No. 2164 (ONSC), affd 2010 ONCA 196, [2010] O.J. No. 1064 (ONCA) [^6]: Family Responsibility and Support Arrears Enforcement Act, 1996, S. O. 1996, c. 31 s. 1(1)(g); Sordi v. Sordi, 2011 ONCA 665, para. 23