Kronberger v. Kudrocova, 2021 ONSC 7764

Court File and Parties

COURT FILE NO.: FC-12-FS047180

DATE: 2021/11/24

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Ferdinand Kronberger

Applicant

– and –

Claudia Kudrocova

Respondent

Mr. M. Ruhl, for the Applicant

Ms. T. Frederick, for the Respondent

THE HONOURABLE JUSTICE J. R. HENDERSON

COSTS ENDORSEMENT

[1]

Overview

The applicant brought a motion for, among other things, an order compelling the respondent to comply with the 2019 order of Justice Broad by co-operating in filing the corporate tax returns for the parties’ corporation, KFC. In written reasons, I made an order for a timetable to complete the steps that are necessary to file the outstanding tax returns. Thus, the applicant was successful in this part of his motion. The applicant’s additional request to set a date for a contempt hearing was dismissed.

2The respondent brought two cross-motions, both of which were largely unsuccessful. I dismissed most of the requests in these two cross-motions, including the respondent’s requests for an order that KFC pay the fees of respondent’s accountant, for the release of money held in trust, for an order that the applicant answer all of the questions raised by the respondent’s accountant, for production of further documentation from KFC, for further access to KFC’s records, and for disclosure of the credentials of KFC’s accountant. As part of the abovementioned timetable, I did order that three of the questions raised by the respondent’s accountant were to be answered by KFC’s accountant.

[3]

Background

It is important to note that the parties had settled the outstanding issues with respect to KFC in 2019 by way of minutes of settlement. The final order of Justice Broad, dated May 3, 2019, was based on those minutes of settlement. Paragraph 9 of the 2019 order stated that the parties were to co-operate and jointly file the 2017, 2018, and 2019 corporate tax returns for KFC.

4As a step toward filing the tax returns, the applicant arranged for KFC’s accountant to prepare the draft corporate tax returns, and the related documentation, for the relevant years. These were sent to the respondent’s counsel for approval in 2019, although the respondent may not have seen them until 2020.

5Since that time there have been significant delays. The respondent retained an accountant who raised several questions and asked for productions from the applicant and KFC. For the most part, those questions and requests were answered. However, the draft tax returns have not yet been approved.

6The applicant delivered his motion in September 2020. The respondent delivered her two cross-motions in October and December 2020. These three motions have been before the court on three occasions.

7On the first return of these motions, in December 2020, Justice Breithaupt-Smith embarked upon a focused conference in an attempt to assist the parties. In her endorsement Justice Breithaupt-Smith ordered, among other things, that the respondent’s accountant be given access to KFC’s records, that the two accountants communicate with each other directly about the filings, and that the respondent provide her position regarding the draft tax returns by January 15, 2021.

8On the second return of the motions, before Justice MacLeod in September 2021, the respondent requested an adjournment, which was granted on terms. In his endorsement Justice MacLeod requested that the respondent confirm what issues remained outstanding.

9Then, I heard oral argument on the three motions on October 14, 2021.

[10]

Entitlement to Costs

As I indicated in my reasons, the completion and filing of the tax returns has taken far too long. The delay has been caused, in part, by the fact that the questions raised by respondent’s accountant have been very general, and in many cases the scope of the questions has gone well beyond what is necessary.

11Further, it has been difficult to ascertain the position being taken by the respondent. Both Justice Breithaupt-Smith and Justice MacLeod made orders or requests for the respondent to enunciate her position. However, the position of the respondent was not clarified until oral argument before this court, at which time counsel requested answers to three specific questions raised by the respondent’s accountant.

12Accordingly, I find that it was necessary for the applicant to bring his motion and attend before the court on three occasions in order to obtain some relief. Therefore, I find that the applicant is entitled to his costs of the applicant’s motion and the two cross-motions on a partial indemnity basis.

[13]

Quantum of Costs

Regarding quantum, I accept that the motions were important to all parties as there is a substantial sum of money being held in trust pending receipt of a tax clearance certificate. However, I also find that the applicant’s motion was simple and straightforward. The 2019 order was clear, and it was obvious what the parties had to do to satisfy the order. Further, the arguments on the respondent’s cross-motions were quite simple.

14I have reviewed the bill of costs submitted by the applicant. After allowing for some duplication of services, and considering the reasonableness and proportionality of the charges, I am prepared to allow $1,500 for each of the first two appearances before the court, $2,500 for the argument on October 14, 2021, and $2,000 for all preparation, for a total of $7,500 plus HST on a partial indemnity basis.

[15]

Disposition

Therefore, I award costs of these motions fixed at $8,475, all inclusive, payable by the respondent to the applicant, payable within 180 days.

J. R. Henderson J.