Court File and Parties

FILE NO.: FS-15622/18 DATE: 2023Feb16 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: SUZANNE MICHELLE OLSZOWKA Applicant – and – GREGORY FRANKLEN OLSZOWKA, in his personal capacity and also in his capacity as a trustee of the Olszowka Family Trust, OLSZOWKA FARMS LTD., Respondents

Counsel: L. Mazza, for the Applicant S. Nash, for the Applicant C. Lloyd, for the Respondents E. Fan, for the Respondents

HEARD: Written Submissions

Costs Endorsement

The Honourable Justice R. J. Harper

Issues

[1] Should there be an order for costs, to whom, if so, what quantum?

The Decision

[2] This was an interlocutory motion brought by the Respondent (Greg) seeking an Order to transfer the shares of the Applicant (Suzanne) in the family farm corporation, Olszowka Farms Ltd. (Farm Corp), to him.

[3] In my reasons for judgment on the motion I made the following comment:

In this case, the impact of an interlocutory order transferring Suzanne’s shares may very well severely prejudice Suzanne at the trial of the family law issues.

This matter is going to trial in a little over 3 months. The lengthy and unfortunate saga of this case since August 2018, in my view, is an example of how parties who are permitted to disobey orders for productions, support and for improperly delaying undertakings given can create an amorphous blob of litigation that can be ruinous financially and emotionally on the other party. That type of conduct also unnecessarily occupies the court and prevents others from having access to their justice. It cannot be allowed to continue.

I dismiss Greg’s motion to transfer Suzanne’s shares.

[4] The Greg’s motion was dismissed in its entirety.

[5] The Suzanne was completely successful and should be entitled to her costs.

[6] The Greg previously brought a motion for effectively the same relief (the forced sale of the forced sale of Suzanne’s shares, amongst other things) in February 2022. He abandoned that motion on the eve of its hearing in July 2022 after cross-examinations had been completed and facta had been exchanged. On December 13, 2022, Sweeny RSJ. ordered costs against moving party arising from his abandoned motion (amongst other motions), in the amount of $33,800, which costs became payable on January 13, 2023.

[7] I noted in my reasons for judgment that the conduct of the moving party amounted to bad faith multiple reasons that include:

“He has been noncompliant with court orders.

a) He simply stopped paying spousal support that was ordered.

b) He has not complied with a substantial part of court ordered production and financial disclosure.

c) When an order was made by Justice Milanetti to allow Suzanne, as a 30% shareholder of the Farm Corp., to have access to the bank accounts of the Farm Corp., Greg stopped using those bank accounts and operated Farm Corp. out of his personal accounts.

d) Recent financial statements of Farm Corp. show that personal expenses, such as his professional legal and expert witness costs have been shown as corporate expenses. This casts doubt on the accuracy of the statements that valuators would have considered when assessing the value of Farm Corp.

e) He sought a loan for Farm Corp. in order to pay off federal capital gains taxes owing to CRA. However, once he obtained the loan, it was discovered that CRA did a reassessment and refunded approximately $131,000.00. Nevertheless, he did not use the money to pay off the loan obtained to pay the taxes.”

[8] The Suzanne’s full indemnity costs are $24,113.64. I have reviewed the bill of costs submitted by the responding party and I find the items charged for fees, disbursements and HST to be reasonable in all of the circumstances.

[9] However, the Suzanne submits that if the court does not award full indemnity costs, it should at least award the amount of costs that the moving party claims are their partial indemnity costs, were claimed to be $22,218.61 by the moving party.

The Law and Analysis

[10] [12] Rule 57.01 of the Courts of Justice Act reads as follows:

57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(a) the amount claimed and the amount recovered in the proceeding;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding, or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and

(i) any other matter relevant to the question of costs.

[11] In Davies v. Clarington (Municipality), 2009 ONCA 722, 2009 CarswellOnt 6185 (O.C.A.), the issue on appeal was the limits of the court’s discretion to award costs on either a substantial indemnity or full indemnity scale. The Court of Appeal confirmed that elevated costs are warranted in only two circumstances:

a) Where substantial indemnity costs are explicitly authorized under the operation of Rule 49.10 of the Rules of Civil Procedure; and,

b) Where the losing party has engaged in behavior worthy of sanction.

[12] I find that the Suzanne is entitled to her costs. This matter was made complex by the bad faith conduct of the moving party. The importance of this motion to Suzanne was at the highest level. The Greg conducted himself in a manner that I can only characterize as litigation bullying. His bad faith and egregious conduct cannot be condoned. His conduct is worthy of sanction. Having regard to all of the circumstances an award of full indemnity costs are appropriate.

[13] I make the following Order:

The moving party shall pay the costs of $24,113.64 to the responding party. Such costs are payable forthwith.

HARPER, J. Released: February 16, 2023