Court File and Parties

COURT FILE NO.: FS-18-00000324-0000 DATE: 2023 06 13

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

Nagaveni, MANJUNATH D.K. Sherr and K. Montagnese, for the Applicant Applicant

- and -

Manjunath KUPPA G.S. Joseph and A. MacEachern, for the Respondent, Manjunath Kuppa Respondent

Danashankara MALLAPPA & Satish Kuamr SUBRAMANI A. Bakaity, for the Respondents, Danashankara Mallappa & Satish Kuamr Subramani Added Respondents

HEARD: In Writing.

COST ENDORSEMENT

RSJ RICCHETTI

[1] Written cost submissions received from the Applicant and the Respondents Kuppa, Mallappa and Subramani.

Position of the Parties

[2] The Applicant submits that costs should be awarded costs of $137,774.92 (all inclusive) on a full recovery basis from all the Respondent’s, on a joint and several basis.

[3] The Respondent Kuppa, while acknowledging that the Applicant is entitled to costs, then proceeds to submit that no costs should be awarded or costs of $20,000 (all inclusive) should be awarded.

[4] The Respondents Mallappa and Subramani adopt the submissions/position of the Respondent Kuppa and make additional submissions.

Entitlement to Costs of the Motion to Strike

[5] I have no hesitation concluding that the Applicant should receive her costs of the motion. The Applicant was entirely successful in striking the Respondent’s pleading.

[6] There is no rational reason, given this court’s findings as to the conduct of the Respondents and the results of the motion, to deprive the Applicant of her costs.

[7] It is fair and reasonable that costs follow the results in this motion.

[8] There is an issue regarding the abandoned motion for contempt and the different “steps” in the proceeding for which costs are claimed. However, these will be dealt with in determining the quantum of costs.

Scale of Costs

[9] In my view a punitive award is necessary in the conduct of the Respondents, the circumstances, the findings of the court and the results on this motion.

[10] The Respondents deliberately caused the Applicant to expend consider legal effort to obtain financial information and disclosure which was central to the motion, much of which came piecemeal, and some critical disclosure remain unknown to the Applicant.

[11] The motion should have been unnecessary given the disclosure obligations under the FLR and the many prior court orders. This complex, extensive and highly important motion was solely the direct result of the Respondents’ bad faith conduct (as I said in my reasons “rising to the level of fraudulent conduct”) – all of the Respondents.

[12] This is not just a case of non-disclosure. This is a case where there was a failure to disclose substantial financial dealings, followed by a deliberate and misleading information provided to the Applicant and this court, followed by continued non-disclosure and non-compliance with numerous court orders.

[13] These failures lead to a prejudice to the Applicant’s ability to properly advance her claim and potentially serious inability to recover any financial entitlement in this case.

[14] This is a rare case where full indemnity costs should be, and are hereby, awarded to the Applicant.

Quantum of Costs

[15] The modern costs rules are designed to foster three fundamental principles: (a) to indemnify successful litigants for the cost of litigation; (b) to encourage settlements; and (c) to discourage and sanction inappropriate behaviour by litigants.

[16] In setting the quantum of costs in family law matters, the court must consider factors such as: the complexity of the issues, each party’s the reasonable/ unreasonable/improper behaviour/conduct in this motion, the reasonable time properly spent on the motion given the circumstances, and any other relevant matter. The court must also consider whether a party has acted in bad faith, importance, complexity and any other relevant factor(s) many of which are set out in the Rules.

[17] The court has a duty to review the costs claimed for reasonableness in the circumstances of the case and the motion, not just assess and order the amount sought.

[18] It is obvious from my reasons that the importance of this motion could not be understated. I found the Respondents have all acted in bad faith.

[19] There are three issues which need to be considered in determining a reasonable, full indemnity award of costs:

a) What steps in this motion should be assessed at this time (as opposed to costs of the proceeding)? b) What is the impact on the abandoned motion for contempt? c) Should costs be joint and several amongst the Respondents?

What Steps?

[20] The Applicant seeks costs of al attendances going back to May 13, 2022 when this motion was first brought. These attendances were to either move the Applicant’s contempt/breach of orders motion ahead OR to obtain financial documentation directly from third parties (Norwich order) or enjoin disposition of assets.

[21] The successful attempts to delay the Applicant’s contempt/breach motion for approximately one year are simply incredible.

[22] In some, at these attendances, the issue of costs was not address in the endorsement. In others, costs were reserved (see November 15, 2022 and November 25, 2022 endorsements).

[23] I am satisfied that all these attendances claimed were related to and necessary to move the Applicant’s contempt/breach motion forward and should form part of the costs of the motion before me (subject to the issue of the impact of abandoning the contempt motion).

Abandoned Contempt Motion?

[24] The February 23, 2023 attendance focused on setting a timetable for the Contempt motion.

[25] The Applicant simply insisted on proceeding with the contempt motion despite the procedural issues identified of seeking a contempt motion at the same time as an order under the Family Law Rules (FLR) for breaching a court order(s).

[26] Subsequently, the Applicant abandoned the contempt motion and decided to proceed solely with the Respondent’s alleged breach of the court orders.

[27] Given the Applicant’s withdrawal of the contempt motion, I am satisfied that there must be a reduction for the “contempt motion”.

[28] However, after the contempt motion was abandoned on March 21, 2023, there is no reduction of the Applicant’s reasonable full indemnity costs to prepare and attend at this hearing.

[29] Unfortunately, the Applicant’s Bill of Costs is not broken down on a basis to separate and identify the legal costs associated with the contempt motion versus the breach of court order motion. I do note that because the two motions are so closely intertwined, the reduction of costs is not that significant. In other words, aside from the first attendance before me, very little would have changed in the motion materials or the Applicant’s attendances and attempts to move the motions forward.

What is a Reasonable Cost Award?

[30] Even though the Respondents do not point specifically to any item, this court still has an obligation to ensure that the amount awarded is reasonable both in terms of the steps taken and when “standing back” the amount is reasonable in the circumstances.

[31] It is difficult to break down the costs for a better assessment of for each step taken to bring the Applicant’s motion to a hearing.

[32] What is clear is that some of the costs are excessive by any measure. Some examples:

• 322.8 hours for this motion – which is almost a quarter of a year’s legal services;
• Registration of preservation orders ($2,483.92) – which is not strictly related to the motion;
• Almost 60 hours for research and preparation of factum (20 hours for hyperlinking documents alone) – while the issues were important, the law was not. This was a factual driven motion;
• Significant hours for communications with client or “debrief” client – the extent of which cannot be ascertained; and
• 8 hours to prepare the cost submissions.

[33] The test is what was reasonably necessary for the motion to be prepared, scheduled, brought, heard and preparation of cost submissions. While I do not question that the hours claimed were spent, that is not the test for awarding full indemnity costs. Proportionality must also be considered.

[34] Some of the steps for which costs are claimed are for the Mareva Order, which is not strictly relevant to this motion and is much more relevant to the proceeding overall and subsequent enforcement. These are more properly costs of the action.

[35] I am left with considering what is reasonably necessary given the obstructions to the Applicant’s motions being heard and the necessary steps to get to the financial information before the court on this motion (given the failure to disclose and obstruction by the Respondents). The Respondent’s did their utmost to obstruct the motion being heard (see the reasons for the Respondent’s grounds for adjournments).

[36] The motion was important.

[37] In addition to the numerous attendances due to the Respondents, the Applicant had to go to extreme steps to get the evidence for the motion.

[38] In my view, costs of $100,000 all inclusive is reasonable in the circumstances for the Applicant’s contempt/breach of court order motion. I deduct $10,000 for the abandoned contempt motion. I have used this modest amount as most of the legal work was applicable to both prongs of the initial Applicant’s motion. It is only a portion of the time before J. Doi in December and before me in February 2023 that was wasted due to the inclusion of the contempt motion. This was a significant but not a substantial amount of time.

[39] Accordingly, I find that $90,000 all inclusive is a reasonable amount for costs of the Applicant’s motion to strike the Respondent’s pleadings for failure to comply with court orders.

Should the Cost Award be joint and several?

[40] This issue can and is easily disposed of.

[41] I simply point to the joint and concerted effort of the Respondents to avoid full financial disclosure to the Applicant; and to this court; and their joint and concerted efforts to delay the motion; their efforts to obfuscate the true financial circumstances; their continued efforts to provide financial information. For example, the Respondent Kuppa continues to refuse to disclose full and accurate financial information and the Respondent Mallappa and Subramani continue to not disclose the exact whereabouts of the proceeds of sale having allegedly made perfunctory requests of the Respondent Kuppa.

[42] In these circumstances, the cost award should be and is joint and several amongst the Respondents.

Conclusion

[43] Costs payable by the Respondents Kuppa, Mallappa, and Subramani on a joint and several basis of $90,000 all inclusive forthwith to the Applicant.

RSJ Ricchetti

Released: June 13, 2023