Court File and Parties
COURT FILE NO.: FC-17-1323 DATE: 2023/03/06 SUPERIOR COURT OF JUSTICE – FAMILY COURT
RE: BARBARA COHEN, Applicant AND STEVEN COHEN, in his capacity as Trustee of the Estate of Sidney Cohen and Susan Charendoff, Respondents
BEFORE: Justice A. Doyle
COUNSEL: Anne E. Posno, Melanie Battaglia and Stephen A. Victor, Counsel for the Applicant Barbara Cohen Daniel Swartz and Marta Siemiarczuk, Counsel for the Respondent Steven Cohen, in his capacity as Trustee of the Estate of Sidney Cohen Jonathan Richardson, Counsel for Susan Charendoff Hilary Book for the non-party, Brian Cohen Michael Wade for the non-parties: Campbell Steel and Ironworks Limited, Rideau-George Real Estate, Somerset Towers and Hickory Developments Inc.
HEARD: In writing
Costs Endorsement on Applicant’s Motion for Financial Disclosure
1On January 10, 2023, this court dismissed the applicant’s motion for disclosure.
2The motion was brought within the context of a trial to determine the sole issue of whether the domestic contracts signed by the applicant, Barbara, and the deceased, Sidney Cohen, are valid or whether they should be set aside. Justice Audet had ordered that this issue be first determined before the parties proceed to a trial to determine the equalization payment.
3One of the main reasons for her order to bifurcate the proceedings was to avoid the delay and costs of the extensive financial disclosure required to value the estate. The estate is valued at a minimum of $34m as admitted by the Estate for the purposes of this motion.
4If the parties were unable to agree on the issue of costs, they were to provide the court with costs submissions.
Estate’s Position
5The Estate requests the amount of $67,000 on the basis that it was the successful party on a partial indemnity basis. It is also claiming $4,068 in costs, inclusive of HST, for the preparation of its costs submissions and bill of costs.
6The Estate’s actual costs for the past two years is approximately $125,000 on the issue of disclosure, inclusive of HST.
7In the bifurcation motion over 4 years ago, Justice Audet ordered $35,000 in costs to the Estate.
8However, this motion was more complex as it required numerous court appearances and procedural steps resulting in more correspondence, analysis and preparation, and the review of the applicant’s expert evidence.
9It submits that instead of appealing Justice Audet’s bifurcation order, the applicant attempted to “undo the bifurcation order” by advancing a weak argument that a precise valuation of the estate is required to prove fairness in step 2 of the Levan test.
10This motion lengthened the proceedings as it required a total of 3 procedural conferences, subsequently increasing the Estate’s costs due to added preparation and attendance.
11The original disclosure motion was set to proceed in May 2021 but the applicant chose to pursue an appeal on the laches amendment granted by the court and vacated the disclosure motion date. She abandoned the appeal and two further appearances were required: April 19, 2022, with extensive briefs and then May 24, 2022, because the applicant refused to accommodate counsel’s out-of-town holiday schedule.
12Over the two-year period, the applicant served three sets of motion materials for this motion, i.e. for October 5, 2021, July 26, 2022 and September 27, 2022, all of which were required to be reviewed and assessed by the Estate’s lawyers.
13The Estate attempted to settle this matter by way of an offer to settle forwarded on September 29, 2022, which offered to value the estate within a certain range.
14With respect to the other motions decided by the court where costs were deferred, it not appropriate to set off these costs against costs that the applicant hopes to secure in the future.
Ms. Charendoff’s Position
15Ms. Charendoff submits that she is entitled to costs of $7,649.49 on a full recovery basis. Her counsel with 16 years of experience hourly rate was $325 per hour which is lower than that of one of law clerks in the law office of applicant’s counsel.
16Her costs are 50% of the fees of the non-party corporations who filed no materials and provided little in submissions and 10% of the fees of the application.
17Also, the court found that the applicant’s motion was a collateral attack on Justice Audet’s order that ordered a bifurcation of the matter. She submits that this is ‘unreasonable behavior’ within the meaning of Rule 24(4) of the Family Law Rules, O.Reg. 114/99 as am., (“Rules”).
18She had already provided all the disclosure requested of her by the applicant before the hearing of the motion. She has also only shown half of the time expended on her bill of costs for the preparation of the affidavit filed in the motion.
Brian Cohen’s Position
19As a successful party, he is presumptively entitled to costs and is seeking costs on a partial indemnity basis in the amount of $28,000 which includes his participation in the trial management conference dealing with the financial disclosure motion.
20Barbara sought all audio recordings between Brian and his father Sidney regarding information about gifts to Brian. Brian had voluntarily provided the information but declined to provide those that were private conversations about his personal life.
21After providing the recordings dealing with the gifts before the hearing of the motion, Barbara made more demands including requesting information about a mortgage with his brother that is not relevant to the proceedings.
22During the hearing of the motion, Barbara dropped her demands for the complete recordings and the parties resolved the issue.
23Any costs should be payable forthwith as Brian is a non-party and has no potential liability to Barbara in any future steps.
24He retained Toronto counsel with comparable hourly rates and this motion raised important and complex issues for him.
Other Non-Parties’ Position
25Hickory Developments, Rideau-George Real Estate, Campbell Steel and Ironworks Ltd., and Somerset Towers (co-tenancy) were non-parties to this disclosure motion. They are collectively requesting costs in the amount of $14,903 on a full indemnity basis.
26They submit that based on the court’s finding that the motion was an attack on Justice Audet’s bifurcation order, this was unreasonable behaviour within the meaning of Rule 24(4) of the Rules, the court should order costs on a full indemnity basis.
27Disclosure from the non-parties was not necessary for Phase 1 of this litigation. The documents requested by Barbara contained commercially sensitive information which required the non-parties’ participation in the motion. It was only during the break that the parties agreed on the procedure to protect this commercially sensitive information.
28The costs of the non-parties represent the participation of four parties who jointly retained Soloway Wright LLP to represent their interests in the motion.
Applicant’s Position
29The applicant submits that since the court has reserved the costs of each in-trial motion to the conclusion of the trial (including the costs of the laches motion and the dismissal of the respondents’ refusals motion), the court should continue this approach.
30The trier of fact at the conclusion of the trial will be in a better position to determine the most equitable and fair distribution of costs.
31She argues that the reasonable expectation of the parties is that the costs of the motions within the trial will be deferred to the conclusion of the trial.
32The applicant’s motion for production was not an attack on the bifurcation ruling nor unreasonable. The Estate’s laches motion undermined the bifurcation ruling and other orders of this court and its findings.
33In the April 21, 2022 endorsement, the court permitted the applicant to bring this motion for production in light of the laches defence and so that it may assist the court in the second step of Levan.
Legal Principles
34In Mattina v. Mattina, 2018 ONCA 867, [2018] O.J. No. 5625, the Court of Appeal confirmed the purposes of costs: (1) to partially indemnify successful litigants; (2) to encourage settlement; (3) to discourage and sanction inappropriate behaviour by litigants and; (4) to ensure that cases are dealt with justly under r. 2(2) of the Rules.
35Subrule 24(1) of the Rules creates a presumption of costs in favour of the successful party. Consideration of success is the starting point in determining costs. Sims-Howarth v. Bilcliffe, [2000] O.J. No. 330 (S.C.).
36Costs awards are discretionary. Two important principles in exercising discretion are reasonableness and proportionality. Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519.
37One of the considerations in an assessment of costs is to fix costs in an amount that is “fair and reasonable” for the unsuccessful party to pay in a particular proceeding.
Analysis
38The responding parties to the motion, as the successful parties, are presumptively entitled to costs.
39The court dismissed the applicant’s motion because it found that the exact value of the estate was not necessary when considering fairness in the second part of the test set out in Levan v. Levan, 2008 ONCA 388, i.e. whether the court should exercise its discretion in setting aside the marriage contract signed by the applicant and in response to the Estate’s recent amendment to its answer to include a defence of laches.
40In ordering a Phase 1 trial, Justice Audet found that a bifurcation of the issues was the most efficient and expedient manner to deal with this matter. If the marriage contracts are set aside, then the finalization of the value of the respondent’s estate can be litigated and then determined. Justice Audet noted in her endorsement that a considerable amount of time and expense had been spent with respect to the issue of financial disclosure. If the court first determined the validity of the marriage contracts, then the parties would only need to move to obtain the expensive valuations if the marriage contracts were set aside.
41The filing of the applicant’s motion did produce further information from Ms. Charendoff with respect to gifts she had received from her father. In addition, Brian Cohen was willing to produce audiotapes of conversations with his father which were pertinent to the issues at this hearing and disclose a trust declaration. This suggests that these respondents believed this information was necessary and relevant.
42Also, the court did not prevent the applicant from bringing this motion but rather permitted it to allow this issue to be fully argued in light of the laches defence and for an in-depth determination as to whether disclosure was necessary for the court’s analysis of step 2 under Levan.
43However, the extent and reach of the disclosure sought attacked the spirit of Justice Audet’s order and the request for documents at the hearing of the motion that were not articulated in the notice of motion necessitates a costs sanction.
44In its disclosure decision, the court said this:
60Barbara’s motion is attempting to undo the bifurcation order in this matter.
61It is clear that Justice Audet’s order for bifurcation was aimed at avoiding this type of motion on requesting numerous documents. In my view, this is an attack on the spirit of her order.
62Also, this disclosure is now not relevant because there is a laches defence. Barbara has received the information requested and this was with the cooperation of Susan and Brian Cohen.
63Although the court will consider the fairness factor when dealing with step 2 under Levan, it is not necessary to have an exact value of the estate. The Estate has conceded that the White report may not accurately reflect the true value of the estate for the purposes of this motion. The court recognizes that if the marriage contracts are set aside, then there will need to be fulsome disclosure so that Barbara can satisfy herself with respect to the values of the real estate and the Estate’s minority interest in other assets.
45The court agrees that there have been several motions in this trial and the court has reserved the costs. However, this motion dealt with non-parties and given their participation has ended, it is prudent and just to deal with their costs.
46The court has reviewed the bill of costs of Brian Cohen and the other non-parties and find the lawyers’ time on the file and their hourly rates to be reasonable.
47A relevant factor in determining the quantum of costs is what amount an unsuccessful party could reasonably expect to pay should they be unsuccessful at trial.
48The court has considered the factors set out in Rule 24 of the Rules and a fair, reasonable, and proportional award for costs of these non-parties in light of the importance and complexity of the motion are:
- Brian Cohen: Mr. Cohen is awarded $17,000 (inclusive of HST and disbursements) payable within 30 days. His lawyer was required to respond to inquiries, obtain instructions and communicate with the applicant’s counsel with respect to documents that they were prepared to disclose; and
- Other non-parties: They filed a letter setting out their position, they filed no other material; they had discussions with counsel, they had to review the extensive motion materials and attend the full day motion. They are awarded $7,500 on a partial indemnity basis (inclusive of HST and disbursements) payable within 30 days.
49With respect to Susan Charendoff, although she is a party to these proceedings, her involvement is less extensive than the Estate as her involvement largely centres around the mortgage on the applicant’s property.
50She may be liable for costs in the future as her involvement will continue.
51The court can quantify her costs of this motion, and in light of the complexity and importance of the issues, her willingness to cooperate to provide the information sought, the court finds that a fair, reasonable and proportional award is $6,000. This amount is payable only after the court has determined the final costs of the parties at the end of the trial.
52With respect to the Estate, as one of the main parties in this litigation the legal fees and disbursements were more extensive.
53In light of my findings above, the court assesses a reasonable and proportionate amount payable for this motion to the Estate is $55,000 (inclusive of HST and disbursements).
54The costs payable to the Estate are payable only after the court has determined the final costs of the parties at the end of the trial.
Justice A. Doyle Released: March 6, 2023