Court File and Parties
COURT FILE NO.: 01-3675/18 DATE: 20220629
SUPERIOR COURT OF JUSTICE – ONTARIO (ESTATES LIST)
IN THE MATTER OF THE ESTATE OF ROSALBA DI NUNZIO, deceased
RE: Lucia Di Nunzio, Applicant AND: Teresa Di Nunzio and Roberto Di Nunzio, Respondents
BEFORE: Kimmel J.
COUNSEL: Anthony Colangelo, for the applicant, Lucia Di Nunzio, on privilege issues Aaron Hershtal, for the applicant’s appeal lawyer Benjamin Arkin Jenny Bogod, for the applicant’s lawyer Constantine Tsantis Michael Deverett, for the moving party/respondent Teresa Di Nunzio Robert Levesque, for the responding Non-Party, Ian Forrest
HEARD: May 25, 2022
Endorsement
1The parties are siblings and are the three adult children of Rosalba Di Nunzio (deceased).
2This motion by the respondent Teresa Di Nunzio (“Teresa”) seeks an order for the payment of her costs of this application by Ian Forrest (“Forrest”), who is the partner of the applicant Lucia Di Nunzio (“Lucia”) but not a party to this application (the “Non-Party Costs Motion”).
3The applicant challenged the validity of the last will and testament of her mother Rosalba Di Nunzio (the “Will Challenge”). Pattillo J. directed as follows in his October 8, 2021 Reasons for Judgment dismissing that application (Di Nunzio v. Di Nunzio, 2021 ONSC 6689, at para. 112):
Teresa seeks to recover her costs, once assessed, against Ian Forest, Lucia's boyfriend. In order for that to occur, Teresa must serve Mr. Forest with a motion record for the claim as well as a breakdown of the costs. Once the motion record has been served, the parties shall arrange a 9:30 scheduling appointment before me.
4In a subsequent November 8, 2021 costs endorsement, Pattillo J. awarded costs of the application to the respondent Teresa on a partial indemnity basis, fixed at $111,395.45 in total, payable by the applicant forthwith. The judgment and the costs award are both being appealed.
5During his cross-examination on this Non-Party Costs Motion, Forrest admitted that he sent emails expressing his opinion to Constantine Tsantis, the lawyer acting for Lucia on the application. Forrest also admitted that he did not copy Lucia on some of the emails sent to Mr. Tsantis, and that the responses he received from Mr. Tsantis may have only been sent to Forrest. Forrest was not sure whether Mr. Tsantis copied Lucia on all emails sent to Forrest. Further, in his affidavit, Forrest does not deny that he sent emails to Benjamin Arkin, the lawyer acting for Lucia on the appeal. Forrest initially refused to produce the emails that he sent and received from Lucia’s lawyers.
6Lucia acknowledged in her affidavit on this motion that Forrest attended meetings with her lawyer and, at her request, was copied on some of the communications with her lawyer. She explained that the reason for this is that they were in a long term, committed relationship. It was important to her that Forrest was aware of what was going on in the litigation so that he could support her through what she described as a very difficult process. Additionally, Lucia explained that because Forrest was a witness to many of the events that were the subject of the Will Challenge, he assisted Lucia’s lawyer in preparing for cross-examination of witnesses, and also corresponded with her lawyer for that purpose.
7Teresa alleges that these interactions between Forrest and Lucia’s lawyer, coupled with her belief that Forrest interfered in Teresa’s efforts to settle with Lucia, are indicia of his intermeddling in and prolonging Lucia’s Will Challenge, which was ultimately unsuccessful and resulted in a significant costs award in favour of Teresa, totalling $111,395.45. Lucia does not have funds with which to pay these costs. Teresa is asking the court on this Non-Party Costs Motion to order Forrest to pay them.
8The theory of the moving party’s claim against the non-party Forrest is that he was the one who insisted upon the minimum settlement threshold (of one-third of the estate), expressed his opinions to Lucia’s lawyer about the case in private communications, intermeddled in the application, and maintained it by funding the litigation costs. Teresa says this conduct continued in the appeal, which is alleged to also constitute a collateral attack on the earlier decision of this court.
9To establish this theory, Teresa’s motion was amended to also seek production of the emails that were exchanged directly between Forrest and Lucia’s lawyers, so that the court could consider them in the context of this motion.
The Issues to be Decided
10The issues to be decided on this motion are as follows:
a. Should emails between Forrest and Lucia’s lawyers be produced?
b. Should Forrest, a non-party, be ordered to pay costs?
Production of Emails Between Forrest and Lucia’s Lawyers
11Counsel for Lucia’s lawyers on the application and the appeal appeared at the outset of this motion to advise that their clients will abide by whatever order the court makes with respect to production of emails from their files.
12At the hearing of the motion, it was clearly stated that Teresa is not suggesting that there has been a waiver of privilege by virtue of Forrest having participated in communications with Lucia’s litigation counsel.1 The theory is that the emails will demonstrate that Forrest was directing the litigation and very much inside the scope of the privilege.
13Prior to the hearing of this motion, Lucia had offered to produce all of the emails from her lawyer for a specified timeframe, between August 2018 and October 2019, not limited to the ones that Forrest was involved in. However, Teresa’s position was that Lucia should not be permitted to selectively or conditionally waive privilege. Teresa also challenged the proposed timeframe (said to be arbitrarily cut off in October 2019 for no apparent reason), insisting that the emails right up to the date of the hearing of the application should be produced, or at least reviewed by the court.
14At the conclusion of the hearing, after reading the parties’ written submissions and hearing their oral submissions, Lucia was ordered to produce the equivalent of a Schedule “B” listing all emails with her lawyers up to the May 13, 2021 hearing of the application that Forrest was the author or recipient of, or copied on. The court also directed Lucia to provide a confidential file just to the court containing copies of all of the emails that were sent and received between Forrest and Lucia’s lawyers that Lucia was not copied on.
15Forrest argued that the court should avoid having reference to these emails: see BIE Health Products v. Attorney General (Canada), 2022 ONSC 15, at para. 17. The court was urged to hear submissions about the emails if their contents were to be considered. However, it was ultimately left open to the court to review the sub-set of confidential emails after reviewing the broader list if deemed appropriate in the exercise of the court’s discretion and by analogy to the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, at r. 30.10(3): see r. 1.04 and Canadian National Railway Company v. Holmes et al., 2022 ONSC 1682, at para. 40.
16This material was provided to the court on May 31, 2022. After reviewing the listed emails, I determined that I did need to look at the sub-set of emails sent and received as between Forrest and Lucia’s lawyers to satisfy myself that that they were about the topics that Lucia and Forrest had testified to, as Teresa invited me to do: Solosky v. The Queen, 1979 9 (SCC), [1980] 1 S.C.R. 821, at p. 837, cited by Canadian National Railway Company v. Holmes, 2022 ONSC 1682; Blank, at paras. 44–45; Smith v. London Life Insurance Company (2007), 2007 745 (ON SCDC), 219 O.A.C. 309, at paras. 25–26.
17Having done so, I am satisfied that privilege has been properly asserted over these communications and that it has not been waived because of Forrest’s involvement. My overall observation from a high level review of these emails is that Forrest’s involvement (at least insofar as these emails disclose) was, as Lucia and Forrest described in their testimony, primarily: a source of factual information (some within his direct knowledge and some being passed through him from Lucia), a resource for historical context and perspective, and a source of both financial and emotional/personal support for Lucia.
18Lucia and Forrest have testified that Forrest supported Lucia's decision to pursue the Will Challenge. He was present at meetings between Lucia and her lawyer and he also corresponded with the lawyer by email about the litigation, either on Lucia's behalf or to share his own observations and recollections to help the lawyer prepare for cross-examinations in the application. The contents of the emails I reviewed are consistent with this.
19Forrest has been in a relationship with Lucia for a number of years. It is not surprising that he may have his own views about some of the historic events that transpired. What I did not see was evidence of Forrest instructing counsel about matters that Lucia was not privy to or involved in.
20I have given effect to the request by Teresa for the court to review the emails between Forrest and Lucia’s lawyers that Lucia did not receive at the time. Having done so, I do not consider that there is any further need for those emails to be produced or reviewed by Teresa or her counsel. I have affirmed that the privilege assertion was appropriate, and no one is suggesting it has been waived. I observed nothing in those emails that caused me to question what Lucia and Forrest had said about the purpose and rationale for Forrest having sent and received them.
Request for an Order for Non-Party Costs
21The parties agree on the law to be applied to the court’s determination of this issue.
22Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 ("CJA"), states, "Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid."
23The court’s inherent jurisdiction is only invoked to order non-parties to pay litigation costs in exceptional circumstances, such as where the non-party is the real litigant and/or orchestrated the claim or conduct of the litigation and, beyond providing financial or other support, intermeddles in the subject matter of the claim by fabricating evidence and/or otherwise interfering in the conduct of the litigation by disobeying a court order, misusing the court’s process for their own purposes, or when the conduct of the non-party resembles a maintainer: see Smith v. Canadian Tire Acceptance Ltd. (1995), 1995 7163 (ON SC), 22 O.R. (3d) 433 (Gen. Div.), at p. 444, aff’d (1995) 26 O.R. (3d) 94 (C.A.), leave to appeal to refused, [1996] S.C.C.A. No. 12.
24Teresa alleges that Forrest was a maintainer of Lucia’s lawsuit, his funding and involvement in the litigation is an abuse of process, and that one of Lucia’s grounds of appeal is a collateral attack on earlier decisions of the court.
A) No Maintenance
25The tort of maintenance requires that the non-party be shown to have: i) intermeddled in a lawsuit in which they do not have a genuine interest; ii) provided financial support to a party to bring or defend the lawsuit; and iii) an improper motive. In considering the question of improper motive, the court stated in Smith, at p. 448:
A person who, without malice or any desire to stir up strife or litigation or to officiously interfere with the business of others, assists another to recover his or her legal rights, has not committed maintenance. The person providing the assistance is not required to ascertain whether or not there is reasonable ground for the litigation. It is sufficient to possess a bona fide belief in the litigant's inability to sustain the costs. A common interest, either direct or indirect, in the litigation will constitute a proper motive.
26I will deal first with the question of Forrest’s motive. Lucia's evidence is that she made the decision to initiate the Will Challenge after learning that she had been disinherited, based on concerns about the validity of her mother’s 2017 will. She was not cross-examined on this evidence. For the purposes of this motion, it does not matter whether that is true, as long as Forrest believed at the time that Lucia’s concerns were genuine. There is no evidence to suggest or to support an inference to the contrary.
27Roberto (Teresa and Lucia’s brother) speculates about Forrest’s motivations. Roberto testified that he believed Forrest was influencing Lucia in this proceeding, that Forrest was mad because Rosalba refused to let him park in her driveway, and that Forrest wanted Lucia to receive one-third of the estate. However, even if Roberto’s evidence were accepted at face value , it would not establish malice or improper motive on Forrest’s part.
28Forrest’s decision to support Lucia in bringing the Will Challenge is equally consistent with his evidence that he was motivated by his desire to see his partner of more than ten years pursue her legal rights. He acknowledges that he wanted Lucia to win the Will Challenge and he wanted Teresa to lose. Further, both Lucia and Forrest say that he was supporting her in the pursuit of legal rights that she believed she had. The law is clear that these are not improper motives, and that assistance provided towards these ends does not constitute maintenance.
29Forrest clearly did provide supply financial support to Lucia. He does not deny that he provided funding to Lucia for her lawyers, both on the application and the appeal. Teresa contends that Forrest was hoping to gain from the litigation through Lucia’s recoveries as her partner and that he insisted she hold out for a larger settlement thereby interfering with Teresa’s early and continuing efforts to settle with her sister. Teresa says this undermines the administration of justice, which favours early resolution of cases, without resort to litigation if possible: see Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37, [2013] 2 S.C.R. 623, at para. 13.
30Arguably, as Lucia’s partner, Forrest did have a genuine interest in the outcome of the litigation, in that it might have benefitted their lifestyle for Lucia to have received a significant inheritance. However, that actually undermines Teresa’s claim for maintenance.
31In any event, I do not consider Forrest’s conduct to amount to improper intermeddling. I will address the various arguments about this in turn.
32Teresa argues that Forrest’s failure to submit an affidavit on the application, while working behind the scenes financing Lucia’s claims, makes him an officious intermeddler who tried, unsuccessfully, to remain hidden while directing the conduct of Lucia’s case. However, Teresa’s belief that Forrest was intermeddling existed at the time that the evidentiary record was being developed and if she thought he had relevant evidence, Forrest was not protected from a request by her for him to attend to be examined. The mere fact that he did not provide evidence on the application, while supporting Lucia, does not make him an intermeddler.
33Based on a comment Lucia made to Teresa about Forrest’s displeasure with their mother’s will and the fact that both Lucia and Forrest acknowledge that Forrest intervened to cut off a specific telephone conversation following a settlement meeting between Teresa and Lucia after they met at Tim Horton’s on November 27, 2016, Teresa asks the court to infer that Forrest was intermeddling in the Will Challenge and discouraging Lucia from settling. However, the evidence of this is contradictory and speculative.
34Teresa asserts that Forrest told her he would not allow Lucia to settle for anything less than one-third of their mother’s estate or to engage in settlement discussions on any other basis, but he denies having said that. Teresa further testified that Lucia told her that Forrest was constantly complaining about the will and was really “pissed,” but Lucia denies having said this.
35Nor does the fact that Forrest communicated on his own with Lucia’s counsel necessarily lead to the inference that he was calling the shots, pulling the strings, or the like. I have reviewed the emails between Forrest and Lucia’s lawyers leading up to the hearing of the application that were provided pursuant to the direction I gave at the hearing. They do not support such an inference (the general tenor of those emails is outlined earlier in this endorsement).
36Forrest was active in the development of the factual record for the application, but he was also directly involved in many of the historic events that were covered in the record. It is not surprising that he was a resource and/or a conduit of factual information for the case. The fact that he occasionally expressed his views about some of the evidence, historic events, interactions between the parties, or their positions does not detract from the primary role he played as a resource.
37The emails produced between Forrest and Lucia’s lawyer do not support Teresa’s contention that the failure of the mediation and potential settlement was due to positions being asserted or insisted upon by Forrest, or that Forrest prevented Lucia from having settlement discussions with Teresa. Lucia says she came to her own decision about Teresa’s settlement offers. There is no evidence that undermines Lucia’s testimony.
38I am not satisfied on the record before me that Forrest was a maintainer of Lucia’s case. As her partner of over ten years, Forrest assisted Lucia in pursuing her legal rights. While he provided financial support to Lucia, he was not an intermeddler. He had a genuine interest in supporting Lucia’s pursuit of the litigation and there is no evidence of an improper motive or malice.
B) No Abuse of Process
39The court has the inherent jurisdiction to control its own process and protect itself from abuse, such as in situations where a non-party has initiated or conducted litigation in a manner that amounts to an abuse of process due to gross misconduct, vexatious conduct, or other conduct that undermines the fair administration of justice: see 1318847 Ontario Ltd. v. Laval Tool & Mould Ltd., 2017 ONCA 184, 134 O.R. (3d) 641, at paras. 18, 65–66 and 76.
40The court should only exercise its inherent jurisdiction to award costs against a non-party in exceptional cases, “sparingly and with caution”: see Hunt v. Worrod, 2019 ONCA 540, at para. 34; see also Dallas/North Group Inc. (Re) (2001), 2001 3636 (ON CA), 148 O.A.C. 288 (C.A.), at para. 15.
41The circumstances of the present case are not of the exceptional nature that the Court of Appeal envisions. There is no evidence that Forrest has committed gross misconduct in the instigation or conduct of the litigation. In both Laval Tool and Dallas/North Group, a non-party brought an action through a nominal plaintiff to oppress, bully, or intimidate the defendant. The facts of the present case are distinguishable. The application was not commenced for an improper purpose, the application was not “fictitious,” and it has not been established that judicial resources were needlessly wasted due to unnecessary proceedings.
42Forrest’s funding of Lucia’s legal costs and/or his involvement as a resource and support of her position do not rise to the level of gross misconduct or vexatious conduct that would be necessary for me to find that it constituted an abuse of process or compromised the public confidence in the administration of justice: see Laval Tool, at para. 76.
C) No Collateral Attack
43The alleged maintenance and abuse of process is alleged to have persisted in Lucia’s appeal. Even if this was relevant to the question of whether Forrest should pay Teresa’s costs of the application (on some theory of continuity), the evidence about this in respect of the conduct of the appeal, beyond evidence of Forrest continuing to pay Lucia’s legal costs, is no stronger than the evidence regarding his alleged maintenance and the abuse of conduct in the application.
44One of the stated grounds of appeal is that the applications judge erred in refusing to hear oral testimony when that was requested by Lucia towards the end of the hearing (despite the agreed timetable that did not provide for it). Teresa argues that this ground of appeal constitutes a collateral attack on earlier decision(s) rendered by this court, orchestrated and directed by Forrest, and that is an abuse of process justifying the costs award sought against him. While this ground of appeal may be determined to be relevant on the appeal itself, I fail to understand how it could be relevant to the question of whether the non-party should pay the costs of the application below that is the subject of the appeal (e.g., costs incurred before the appeal was even launched).
45Teresa argues that because the costs decision was not released until November 8, 2021 and the Notice of Appeal was filed on November 5, 2021 that somehow brings the conduct of the appeal into the scope of conduct that led to the costs award in Teresa’s favour on the application. In my view, that logic does not flow.
46As a general rule, the Court should not order costs against the non-party if those costs were incurred before the alleged misconduct occurred: Marcos Limited Building Design Consultants v. Lad, 2018 153617 (Ont. S.C.), at para. 34; see also Williams Medical Technologies Inc. v. Source Medical Corporation, 2017 ONSC 5074. There is no reason to depart from that general rule in this case.
Costs of this Non-Party Costs Motion
47At the conclusion of the hearing of this motion, the parties were not ready to argue costs. I agreed to afford them the opportunity to finalize and upload their costs outlines into CaseLines and to try to reach an agreement on the appropriate quantum of costs for the losing party to pay.
48The court expects parties to be ready to address the question of costs at the conclusion of any motion. It is not a given that parties will be permitted to make further written and/or oral costs submissions. The parties in this case were advised that they should not expect that opportunity would be afforded here.
49The parties did upload their costs outlines into CaseLines (both dated May 30, 2022).
50The costs outline filed by Teresa’s lawyer indicates all-inclusive partial indemnity costs of this motion of $35,436.95, substantial indemnity costs of $48,781.61, and full indemnity costs of $53,779.61.
51The costs outline filed by Forrest’s lawyer indicates all-inclusive partial indemnity costs of this motion of $30,264.23, substantial indemnity costs of $41,582.01, and full indemnity costs of $48,535.77.
52The dispute on this motion was about whether the non-party Forrest should pay the $111,000 costs award made against Lucia. The parties were invited to try to reach an agreement about the appropriate quantum of costs to be paid by the losing party to the winning party and to advise the court by June 3, 2022 if they were able to do so. The court did not receive anything from either side about costs, other than their signed costs outlines that were uploaded into CaseLines.
53Forrest was successful on this motion, which I have dismissed. He is entitled to his costs of this motion.
54I have considered the factors under r. 57.01 having regard to the issues raised on this motion. I do not consider this to be an appropriate case in which to award a scale of costs higher than partial indemnity. While there were assertions made by Teresa about Forrest’s motivations, they do not rise to the level of fraud or misconduct tantamount to fraud that might lead the court to consider a higher scale of costs.
55The partial indemnity costs claimed by both sides are roughly the same, which is an indication that each side should have objectively expected to pay between $30,000–$35,000 in costs to the other if they lost. While this is high relative to the amount at issue, I do not consider it to be disproportionate.
56In the exercise of my discretion under s. 131 of the CJA, and having regard to the factors under r. 57.01, I am awarding Forrest all-inclusive partial indemnity costs of this motion fixed in the amount of $30,264.23, payable by Teresa forthwith.
57I did consider whether these costs awarded in favour of Forrest should be offset against the costs that Lucia has been ordered to pay Teresa. However, given my findings on this motion, Lucia and Forrest are not “privies” in the sense that would be required for me to order these costs to be set-off.
58Even with the costs awarded on this motion, Forrest is out of pocket for some of his own and all of Lucia’s legal costs that he funded. Lucia is in debt for the costs she has been ordered to pay Teresa (plus interest) and Lucia did not receive the $165,000 Teresa offered to her (that she rejected).
59In the meantime, Teresa’s costs shall remain, for all practical purposes and unless and until Lucia satisfies her debt, an unfortunate collateral to the estate litigation, which has diminished the available funds in the estate. But Teresa also did not end up paying out the funds that she offered to Lucia (that Lucia did not accept), so from an economic perspective (and in general terms) funds that might have gone to Lucia were instead used to fund Teresa’s litigation costs.
Final Disposition
60Upon the exercise of the court’s discretion to review the confidential emails between Forrest and Lucia’s lawyer that Lucia did not receive, it was determined that the privilege over those emails had been properly asserted, they are not probative to the matters at issue on this motion (but rather simply corroborative of evidence already given) and that there was no need for them to be produced to or reviewed by Teresa or her counsel.
61Teresa’s motion for an order requiring Forrest to pay her costs of the application is dismissed, with partial indemnity costs payable forthwith by Teresa to Forrest fixed in the all inclusive amount of $30,264.23.
62This endorsement and the orders and directions contained in it shall have immediate effect as a court order without the necessity of the formal issuance and entry of an order. Any party may, however, take out a formal order if so advised, by following the procedure under r. 59.
Kimmel J.
Date: June 29, 2021
Footnotes
- It is not clear whether Teresa relies on the litigation privilege analysis asserted in her factum in which she suggests that there is no litigation privilege because the application has been decided (and the litigation privilege thus has been “spent”). If she does, I do not agree with it. My understanding of the law of litigation privilege is that it persists until the litigation that gave rise to the privilege has ended. Lucia’s appeal is a sufficiently closely related proceeding that extends the litigation privilege. Further, contrary to what is asserted in Teresa’s reply factum, litigation privilege can attach to communications between a party’s lawyers and a non-party who is contributing to the fact gathering and providing financial and emotional support to their partner: Blank v. Canada (Department of Justice), 2006 SCC 39, [2006] 2 S.C.R. 319, at paras. 27–28, 36–38; R. v. Codina #7, 2018 ONSC 1096, at para. 46.