COURT FILE NO.: FS-15-20362 DATE: 2023-01-25
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Jyoti Lakhtakia Applicant – and – Vineet Mehra Respondent
Counsel: Steven Benmor and Misha Leslie, for the Applicant Elena Mazinani, for the Respondent
HEARD: In Writing
PINTO J.
COSTS DECISION
Overview
1Following this 12-day trial and the release of my Reasons for Decision on January 7, 2022, published as Lakhtakia v. Mehra, 2022 ONSC 201, the parties were unable to agree on costs. They made written costs submissions. The applicant sought leave to reply to the respondent's costs submissions and submitted an outline, in chart form, of the points that she proposed to raise if permitted to file longer written submissions. I granted leave to the applicant to provide reply submissions in chart form but declined the request to provide detailed reply submissions. I have taken all costs submissions into consideration in reaching my costs decision.
2The applicant seeks cost of $1,044,464 (all-in) on a full-indemnity basis, and $8,500 plus HST for the cost of preparing costs submissions. The applicant submits that the respondent demonstrated bad faith and unreasonable conduct throughout the litigation and at trial, and that such an exceptional costs award is justified.
3The respondent disagrees and suggests that the applicant has made legal and other errors in arriving at such an exorbitant costs request. The respondent acknowledges that he should pay costs as the unsuccessful party at trial, but suggests that the appropriate costs award should be in the range of $350,000.
4For the reasons that follow, I find that the respondent should pay costs in the amount of $950,000 within 21 days of the release of this decision.
Facts
5The trial was primarily concerned with ascertaining the respondent husband's income for the purposes of determining his child support and spousal support obligations. The trial also examined whether the respondent's parenting of N, the parties' 7-year-old daughter, should be supervised given the applicant wife's concerns that the respondent may abduct the child from Canada and take her to a jurisdiction that is not a signatory under the Hague Convention.
6The applicant was successful on most of the contested issues at trial. I determined that:
(a) The respondent fraudulently transferred his Universal Wealth Assets Ltd. (UWA) shares to the applicant in 2016. (b) The respondent is the beneficial owner of UWA. (c) The parties' incomes were as follows:
| 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |
|---|---|---|---|---|---|---|---|
| Applicant | $165,000 from HSBC + other sources | $239,958 | $219,589 | $175,924 | $89,482 | $45,843 | $11,632 |
| Respondent | $7,120,000 | $7,280,000 | $7,380,000 | $6,900,000 | $7,870,000 | $7,020,000 | $4,870,000 |
(d) The respondent should pay $20,000 per month in child support effective January 1, 2015 and each month thereafter for so long as N is entitled to support under the Family Law Act, or until varied by agreement of the parties or by court order. (e) The respondent should pay $20,000 per month in spousal support from January 1, 2015 to October 31, 2020. (f) The respondent should be credited for amounts paid. (g) The respondent should pay 75% and the applicant 25% of the section 7 expenses. (h) The respondent's parenting of N should be supervised
Applicant's Position on Costs
7The applicant seeks cost of $1,044,464, inclusive of fees, disbursements, and taxes on a full-indemnity basis, and $8,500 plus HST for the cost of preparing costs submissions.
8The break-down of the applicant's full-indemnity costs is as follows:
| Organization | Activity | Professionals | Time | Costs claimed |
|---|---|---|---|---|
| Boulby Weinberg LLP | Preparation of Application, motion material and financial statement for Uncontested Trial before Myers J. | Sarah Boulby, counsel Law Clerk | 40 hours 18 hours | $32,050.36 |
| Wilson Christen Barristers | Correspondence with client, opposing counsel, third parties and court, preparation of motion materials, attendance upon questioning, prepared, exchanged and reviewed financial disclosure, and argument of 8 motions, 3 Case Conferences and 1 Trial Management Conference. | Alexandra Seaton, counsel Farrah Hudani, counsel Law Clerk | 191 hours 423 hours 93 hours | $390,627.46 |
| Benmor Family Law Group | Correspondence with client, opposing counsel, third parties, witnesses and court staff, preparation of all materials and attendances in court for 7 motions, 1 Case Conference, various Trial Management Conferences and an Appearance before Shore J., and at Trial | Steven Benmor, counsel $590/hour, 1994 Call to Bar Misha Leslie, counsel $325/hour, 2019 Call to Bar Law Clerk | 313 hours 451 hours 25 hours | $371,562.02 |
| Jeremy Morley | Preparation of Expert Report on Child Abduction | Jeremy Morley, International Law and Child Abduction Expert | 29 hours | $22,900.92 |
| Marmer Penner Inc. | Prepared various requests for financial disclosure, received and analyzed respondent’s financial disclosure, prepared report with appendices on the respondent’s global income, attended meetings with the respondent’s CBVs, appeared on several occasions at exit-TMC before Shore J., prepared for trial, attended trial. | Anna Barrett, Financial Expert | $315,457.75 | |
| Total | $1,132,598.51 | |||
| Less | $88,134 [1] | |||
| $1,044,464.51 |
9The applicant submits that she was successful throughout. She states that, over six years of litigation from August 2015 to the trial in February 2021, her counsel had to prepare for and/or defend a total of 23 motions and had to attend court on 35 occasions. The applicant served 22 Offers to Settle, 6 of which were designed to settle the proceeding in its entirety.
10The applicant's final Offer to Settle dated February 8, 2021 proposed that the respondent pay the applicant $10,000 per month in retroactive and ongoing child support, $10,000 per month in retroactive spousal support, and be restricted to supervised parenting. The applicant's Offer to Settle was not accepted and the applicant fared better at trial than had the respondent accepted her final Offer to Settle.
11The applicant points out that since the respondent's Offer to Settle dated February 5, 2021 was withdrawn on February 12, 2021, no offer to settle by the respondent can be considered for the purposes of costs consideration under the Family Law Rules.
12In addition to her Offers to Settle, which were rejected, the applicant proposed that the parties attend mediation/arbitration with Alf Mamo in December 2019. However, after multiple calls with Mr. Mamo, the respondent pulled out of the process at the 11th hour.
13The applicant submits that, because of the egregious nature of the respondent's conduct throughout the litigation including and up to trial, she is deserving of costs on a full-indemnity basis.
14The applicant refers to various points in my judgment where I was highly critical of the respondent's conduct such as my finding that the respondent refused to provide the bulk of his financial disclosure, and my finding that he fraudulently transferred the ownership of UWA to the applicant.
Respondent's Position on Costs
15The respondent concedes that the applicant was the successful party and is entitled to costs, but disagrees that the applicant is entitled to costs on a full-indemnity basis. Moreover, the respondent submits that the applicant's costs request is exorbitant. Instead, the respondent submits that the applicant should only be entitled to a costs award of $350,000, which is the amount that the applicant sought in her February 5, 2021 Offer to Settle.
16With respect to the applicant's Offers to Settle, the respondent claims that none were severable. For the respondent to have accepted any of the applicant's Offers to Settle, he would have had to agree to supervised parenting time with N on a permanent basis.
17Further, the respondent points out that the applicant did not consent to the respondent's child abduction expert, Mr. Malhotra, being a qualified expert notwithstanding that her own expert, Mr. Morley, referred to Mr. Malhotra as an expert in the field. Ultimately, I found Mr. Malhotra qualified as an expert.
18The respondent acknowledges that the applicant outperformed her final Offer to Settle and is presumptively entitled to costs on a full recovery basis pursuant to Rule 18(14) of the Family Law Rules, but submits that that Offer to Settle only applies to applicant costs incurred from February 8, 2021 onward. The respondent submits that the applicant did not outperform her other Offers to Settle, some of which contemplated the respondent paying a large equalization payment to the applicant, even though the Indian court had jurisdiction over the property related issues in the case.
19The respondent also submits that the applicant's request for costs is excessive for four reasons:
(a) The applicant is seeking costs for prior attendances where costs were already decided, or for which costs were not reserved to a later stage. (b) The quantum of costs is simply excessive and cannot be justified. The request for over one million dollars in costs would set a very negative precedent for family law litigants. The amount is not supported by the limited details provided by the applicant regarding her costs. (c) The applicant had three different lawyers throughout the proceedings. The court should reduce a costs award where there has been duplication of work by different sets of lawyers: Islam v. Rahman, 2007 ONCA 622. (d) The respondent made a severable Offer to Settle in which he offered the applicant $350,000 on account of her costs in the litigation.
20The respondent submits that the applicant should be only permitted to seek costs for the trial and the 7 court attendances where the court explicitly reserved the determination of costs to a later date. The respondent has identified these attendances in his costs submission.
21The respondent is also critical of the division of labour in completing the work at Mr. Benmor's firm. The respondent points out that nearly all of the work was done by lawyers and only 25 hours or 3.1% of the work was performed by a law clerk.
22Likewise, the respondent is also critical of the applicant's financial advisor Ms. Barrett's costs which are $315,457. Describing them as excessive, the respondent suggests that it did not make sense for Ms. Barrett to charge significant amounts to "prepare for trial" given that her expert report had already been tendered.
Applicant's Reply to Respondent's Position on Costs
23The applicant requested leave to file Reply submissions. In the request for leave, the Applicant included a chart of her reply to the Respondent's position on costs. I herein grant leave to the applicant to file Reply costs submissions, however, I find that the applicant's chart is sufficient and that I do not need more detailed Reply submissions.
The Law
24The law of costs in family law proceedings in Ontario is well established and succinctly set out in the decision of Swinton v. Minifie, 2022 ONSC 5102, per McEachern J. (footnotes omitted):
5Modern costs rules are designed to foster four fundamental purposes; (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 (Rule 2(2) of the Family Law Rules).
6Rule 24(12) of the Family Law Rules sets out factors relevant to setting the amount of costs, and specifically emphasizes "reasonableness and proportionality" in any costs award.
7There is a presumption of costs in favour of the successful party. This presumption does not, however, require that the successful party always be entitled to costs. An award of costs is subject to: the factors listed in Rule 24(12), Rule 24(4) pertaining to unreasonable conduct of a successful party, Rule 24(8) pertaining to bad faith, Rule 18(14) pertaining to offers to settle, and the reasonableness of the costs sought by the successful party.
8Rule 24(12) sets out a list of factors the court shall consider in determining an appropriate amount of costs:
(a) the reasonableness and proportionality of each of the following factors as it relates to the importance and complexity of the issues: (i) each party's behaviour, (ii) the time spent by each party, (iii) any written offers to settle, including offers that do not meet the requirements of Rule 18, (iv) any legal fees, including the number of lawyers and their rates, (v) any expert witness fees, including the number of experts and their rates, (vi) any other expenses properly paid or payable; and (b) any other relevant matter.
9The Family Law Rules only expressly contemplate full recovery costs in specific circumstances, e.g., where a party has behaved unreasonably, in bad faith or has beat an offer to settle under Rule 18(14).
10Rule 18(14) provides that a party is, unless the court orders otherwise, entitled to costs on a full recovery basis from the date an offer was served, if the following conditions are met:
(1) If the offer relates to a motion, it is made at least one day before the motion date. (2) If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date. (3) The offer does not expire and is not withdrawn before the hearing starts. (4) The offer is not accepted. (5) The party who made the offer obtains an order that is as favourable as or more favourable than the offer.
11Rule 24(4) addresses the situation in which a successful party has behaved unreasonably:
Despite subrule (1), a successful party who has behaved unreasonably during a case may be deprived of all or part of the party's own costs or ordered to pay all or part of the unsuccessful party's costs.
12Rule 24(5) provides guidance on how to evaluate reasonableness:
- In deciding whether a party has behaved reasonably or unreasonably, the court shall examine, (a) the party's behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle; (b) the reasonableness of any offer the party made; and (c) any offer the party withdrew or failed to accept.
13Rule 24(8) discusses the cost consequences for a party who has acted in bad faith:
- If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.
Discussion
What is the impact of the various Offers to Settle?
25The respondent's Offer to Settle dated February 5, 2021 plays no part as it expired on February 12, 2021. In any event, the respondent fared worse at trial than his Offer to Settle, so the favourable cost consequences to the respondent do not apply.
26I find that the only Offer to Settle that should be considered is the applicant's final Offer to Settle dated February 8, 2021.
27The applicant's previous Offers to Settle are not under consideration because they expired or because they were impliedly withdrawn by the provision of another Offer to Settle: Real One Realty Inc. v. Liu, 2020 ONSC 4425 at para. 11(a).
28A list of the applicant's Offers to Settle is as follows:
| Date | Were the provisions severable? | Expiry Date |
|---|---|---|
| March 9, 2017 | No | None |
| May 10, 2017 | No | None |
| January 31, 2018 | No | February 21, 2018 |
| March 7, 2019 | Partially [2] | March 21, 2019 |
| February 5, 2021 | Yes | February 8, 2021 [3] |
| February 8, 2021 | No | February 16, 2021 |
29Under Rule 18(14) of the Family Law Rules, a party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date, if certain conditions in the subrule are met. As I find that the conditions in the subrule are met, the applicant is entitled to her full costs from February 8, 2021 which are primarily the costs of the trial.
30The applicant's Bill of Costs describes the following steps taken on or around the time of trial, which I find to roughly coincide with the February 8, 2021 date:
| Preparation of Applicant’s trial materials including Affidavits, Factum and Brief of Authorities and the review and analysis of all the Respondent’s trial materials including Affidavits, Factum and Brief of Authorities | $75,000 |
| Legal Research | $5,000 |
| Preparation for Trial | $30,000 |
| Attendance at Trial | $150,000 |
| Preparation of Closing Submissions | $8,500 |
| Total | $268,500 |
31I find that, subject to any further reductions that I may impose, due to the respondent's failure to accept the applicant's Offer to Settle dated February 8, 2021, the applicant is entitled to costs of $268,500 which do not include any disbursements or HST.
32According to the applicant's Bill of Costs, she spent another $100,000 at Mr. Benmor's firm for all non-trial fees.
33Recall that the applicant is seeking total costs of $1,044,464, inclusive of fees, disbursements and taxes on a full-indemnity basis. The question then becomes whether there is a principled basis to award the applicant her costs on a full-indemnity basis on the amount beyond the $268,500.
Did any of the professionals docket their time or charge excessively?
34Looking at each set of professionals (legal counsel, financial expert, child abduction expert), I shall now address whether the applicant's request for costs should be reduced because the professionals overworked or overcharged on the file.
Basman Smith LLP / Boulby Weinberg LLP - Request for $32,050.36
35Chronologically, this is the first set of legal invoices that the applicant paid. Ms. Boulby charged $621.50 for an initial consultation while she was at Basman Smith LLP. The rest of the $32,050.36 was through Ms. Boulby's subsequent firm, Boulby Weinberg LLP. The work done was in respect of the preparation of the application, motion material, and financial statement for the Uncontested Trial before Myers J. I have reviewed the invoices associated with this amount and do not find anything of concern. I would not adjust this bill in light of the respondent's concern about over-working the file.
Wilson Christen Barristers - Request for $390,627.46
36This was the applicant's second set of lawyers. Work was done in respect of correspondence with the applicant, opposing counsel, third parties, and the court, preparation of motion materials, attendance upon questioning, preparation, exchange and review of financial disclosure, and argument of 8 motions, 3 Case Conferences and 1 Trial Management Conference.
37The firm’s first bill was for $2,952.69, inclusive of fees, disbursements, and taxes based on time entries for Ms. Seaton and Ms. Hudani on October 31, 2016. The activity undertaken was an initial consultation with the applicant and to review documents in preparation of a motion. I find that this initial bill is largely duplicative of what Ms. Boulby’s firm had done and I would not include this bill in the assessment of costs to be paid by the respondent. This reduces the amount of costs under consideration to $387,674.77 (i.e. $390,627.46 - $2,952.69).
38Upon review of the remainder of the Wilson Christen invoices, I find that the time spent was somewhat excessive and that it would be unfair to charge the respondent for all the time charged. Examples of excessive work include:
- November 2, 2016 - 6.0 hours for "call with client, review all pleadings and preparation of affidavit", following by 3.30 hours for "preparation of affidavit of Manoj Lakhtakia, meeting with client and Mr. Lakhtakia, etc."
- November 23, 2016 - there is an entry of 8.0 hours by Ms. Hudani for "affidavit of nanny, affidavit of Mother, call with M. Gelgoot, calls with client, affidavit of client, prepare argument."
- Feb 22, 2017 - preparing questioning for 4.0 hours followed by another 3.0 hours for "prepare for questioning" on February 23, 2017, followed by another 4.0 hours for "finalize questioning."
- On March 20 and 21, 2017, there are a series of time entries such as Ms. Seaton spending 9.5 hours for "preparation and attendance at questioning of the husband/father" and Ms. Hudani also spending 8.0 hours to "prepare for and attend questioning."
- Earlier, at a 4-way meeting on March 16, 2017, Ms. Seaton and Ms. Hudani spent 7.0 and 7.6 hours respectively on the attendance.
39The point is not that these lawyers spent less time than they have represented. Rather, I find that it is excessive for the respondent to be charged for the full extent of counsel time on such occasions.
40Based on my review of the Wilson Christensen invoices, I would apply a reduction of 15% to the costs request of $387,674.77 to arrive at $329,523.55.
Jeremy Morley - Request for $22,900.92
41The applicant retained Mr. Morley to prepare an expert report on child abduction. Mr. Morley spent 29 hours at a rate of $600 USD per hour which, based on the currency conversion rate in place at the time, resulted in a charge of CAD $22,900.92. I find Mr. Morley's bill to be reasonable and would not adjust it.
Marmer Penner Inc. (Anna Barrett, CBV) - Request for $315,457.75
42Ms. Barrett provided her expert report on January 29, 2021. The report consisted of 158 pages and 670 pages of exhibits analyzing 25 corporations with which the respondent had an association. The parties agreed that Ms. Barret was qualified to provide expert evidence on the respondent's global income for support purposes.
43Ms. Barrett prepared various requests for financial disclosure, received and analyzed the respondent's financial disclosure, prepared a report with appendices on the respondent's global income, attended meetings with the respondent's CBVs, appeared on several occasions at the exit-TMC before Shore J., prepared for trial, and attended trial.
44In reviewing Marmer Penner's invoices, I do not have any concerns about the time entries prior to Ms. Barrett's submission of her final report on January 29, 2021. However, I agree with the respondent that Ms. Barrett's docketed time after that date appears excessive. I also note that another timekeeper "PC", whose rate was $185.00 per hour, also docketed considerable time on the same days as Ms. Barrett, which also raises concerns about why Ms. Barrett needed so much time to prepare for trial or whether all of the time docketed ought to be charged to the respondent.
45Here is an excerpt of the time entries by Ms. Barrett, from February 5 to February 24, 2021 that I am concerned about. Keep in mind that the first day of trial was February 16, 2021:
| Date (all are in 2021) | Amount of Time by Ms. Barrett (in hours) | Description of Activity |
|---|---|---|
| February 5 | 6.43 | Trial Prep |
| February 7 | 4.33 | Trial Prep |
| February 8 | 1.75 | Affidavit Review |
| February 9 | 7.75 | Draft Chief, Trial Prep |
| February 10 | 10.50 | Trial Prep, revision re HSBC deposits, chief draft |
| February 11 | 6.75 | Trial Prep |
| February 12 | 7.75 | Trial Prep, exhibit review, UWA review, schedule reference |
| February 13 | 4.33 | Review docs in CaseLines |
| February 14 | 5.00 | Trial Preparation |
| February 15 | 5.75 | Trial Preparation |
| February 16 | 6.33 | Trial Preparation |
| February 17 | 6.75 | Trial Preparation |
| 2.25 | Chief Revision re: brief summary | |
| February 18 | 5.75 | Trial Prep, AC Questions for Cross |
| February 19 | 8.75 | Prepare for trial and attend trial |
| 2.25 | Prepare for trial | |
| February 20 | 5.50 | Prepare for trial |
| February 21 | 6.75 | Prepare for trial |
| February 22 | 8.0 | Prepare for trial and attend trial |
| 2.75 | Prepare for trial | |
| February 23 | 8.50 | Prepare for trial and attend trial |
| 2.50 | Preparation for trial | |
| February 24 | 6.75 | Prepare for trial and attend trial |
| Total Hours: | 133.17 |
46It is unclear why so many hours of trial preparation were needed after Ms. Barrett completed her report, although I have no doubt that some preparation was needed to appear at trial and testify. In her Reply submission, the applicant did not respond to the respondent's concerns about Ms. Barrett’s excessive trial preparation time. I would reduce the amount of this time from the current 133.17 hours to 50 hours. All of the impugned time entries appeared on the February 28, 2021 Marmer Penner invoice. Since Ms. Barrett billed out at $430 an hour - a rate which I find reasonable - this would reduce the amount associated with the Marmer Penner charges by 83.17 hours or $40,412.30 (i.e. $35,763.10 + $4,649.20 HST). Accordingly, I would revise the Marmer Penner amount down to $275,045.45 (i.e. $315,457.75 - $40,412.30).
Benmor Family Law Group - Request for $371,562.02
47The applicant's last set of lawyers who took the matter to trial were Steven Benmor and Misha Leslie from the Benmor Family Law Group. I have no issue with these counsel's rates.
48The respondent criticizes this firm's billing on the basis that:
- It is simply excessive, for instance, the lawyers spent 33.5 hours on drafting the applicant's affidavit in chief for trial
- The firm relied too heavily on lawyers rather than a law clerk to do the work
49Mr. Benmor spent 313 hours, Ms. Leslie spent 451 hours, and a law clerk spent 25 hours on the matter.
50I reviewed the Benmor firm's time dockets. I do not find the time docketed excessive. However, the first invoice for $4,056.70 sent on June 11, 2019, appears to have been mainly concerned with meeting the applicant and learning more about her case. I do not think the respondent should pay for this orientation given that this is duplicative of work done at previous law firms. The adjusted amount of costs under consideration becomes $367,505.32 (i.e. $371,562.02 - $4,056.70).
51But in all other respects, I do not see any issue with the billing at Mr. Benmor’s firm. I do not find it surprising, for instance, that the firm billed $150,000 for this 12-day trial. I note that this is what the respondent claims to have spent at trial. I also do not find spending 33.5 hours to draft the applicant's affidavit in chief to be excessive given the importance, length, and level of detail needed for that trial affidavit. While it may be the case that the applicant could have been charged less had the firm used a law clerk for certain activities, I find that the firm was retained closer to the time of trial. A significant amount of strategy and legal judgment was required on the file. For the above reasons, I am not prepared to adjust the amount in light of the respondent’s criticisms. I would maintain the adjusted full-indemnity costs as $367,505.32.
Should I reduce the amount of costs in light of costs decisions already made on endorsements?
52The respondent submits that the applicant should be only permitted to seek costs for the trial and the 7 court attendances where the court explicitly reserved the determination of costs to a later date. The respondent has identified these attendances in his costs submissions. In my view, the applicant convincingly rebuts the respondent's argument in her Reply Chart (at paragraph 8). I disagree that if an endorsement is silent on the issue of costs at an interim stage, a party cannot claim those costs, where otherwise justified, following trial.
53With respect to awarding costs for a Case Conference, while Rule 17(18) states that costs are not awarded for conferences unless the conference was unproductive because of the conduct of a party, I find that, because the respondent’s disclosure was so lacking, costs for a Case Conference should be awarded. I further rely on Rule 17(18.1) which says that Rule 17(18) does not prevent the court from awarding costs at a later stage in the proceedings.
54I would not adjust the amount of costs requested in light of the respondent's concern about how previous courts have handled costs. Parenthetically, I note that the applicant has already received costs of $88,134 from the respondent and this is reflected in the ultimate award of costs below.
Is the applicant's request for full-indemnity costs justified?
55The respondent correctly points out that full-indemnity costs are rarely awarded other than for "Offer to Settle" reasons. However, the question is whether this is one of those rare cases where full-indemnity costs are justified because of the respondent's unreasonable conduct or bad-faith: Swinton, at para. 9.
56I agree with the applicant that the respondent demonstrated bad-faith deserving of the highest costs sanction by the court awarding full-indemnity costs.
57The meaning of “bad faith” behaviour in the family law context was considered by Kurz J. in Cameron v. Cameron, 2018 ONSC 6823, at paras. 45 and 46:
45 [d]eliberate disobedience of a court order can be bad faith if that disobedience is intended to achieve an ulterior motive (Fatahi-Ghandehari v. Wilson, 2018 ONSC 460 at par. 39) or inflict financial harm (S.(C) v. S.(C), 2007 ONSC 2164, [2007] O.J. No. 2164 (S.C.J.)); and
46 As Pazaratz J. of this court's Family Court wrote in Jackson v. Mayerle, 2016 ONSC 1556: ‘... Rule 24(8) requires a fairly high threshold of egregious behaviour, and as such a finding of bad faith is rarely made. … Bad faith requires some element of conscious wrongdoing.’ As Pazaratz J. put it at paras. 58-59: ‘Bad faith is not synonymous with bad judgment or negligence. Rather, it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. Bad faith involves intentional duplicity, obstruction or obfuscation...’
58As the applicant noted in her costs submissions, my Reasons for Judgment listed many instances of wrongful and bad faith conduct by the respondent throughout the litigation and at trial. These were noted in the applicant's costs submissions as follows:
The Honourable Court found that Vineet refused to provide the bulk of his financial disclosure to assess his global income and found that Vineet went as far as fraudulently transferring the ownership of Universal Wealth Assets Ltd. (UWA) to Jyoti.
On Vineet's blameworthy conduct and credibility, Justice Pinto wrote:
410"In short, it is very difficult to trust the respondent."
397"It bears repeating about how many ways the respondent has breached court orders, misled the court and others and generally been deceptive about his true conduct."
319"I find that there was blameworthy conduct on the part of the respondent."
69"I therefore find that the respondent's claim about Mr. Cochran having a reputation as a quitter is a complete fabrication offered to distract the court from Mr. Cochran's stated reasons for resignation. I find the respondent's claim to be utterly preposterous…"
71"Mr. Cochran's testimony represented confirmation, from someone other than the applicant and Ms. Barrett, that the respondent failed, indeed refused, to provide necessary or sufficient disclosure and instead attempted to mislead his own expert and, by extension, the court."
172"In particular, I find that the respondent feigned cooperation by emailing Mr. Lee..."
401"He sought an adjournment before Justice Shore on February 1, 2021 by seriously misrepresenting the true basis of his financial expert's decision to resign, which was in no small measure due to the respondent withholding information from and actively misleading his own expert."
404"In finding that the respondent was the beneficial owner of UWA all along, I also find that all the representation made by the respondent in his motion to set aside the Uncontested Order of Myers J. were also false."
412"…I find there is a sufficient risk that, despite the respondent's assurances to the contrary, he cannot be trusted and he may flout this court's order."
- On Vineet's failure to make adequate financial disclosure, Justice Pinto wrote:
398"It is now clear, based on the trove of documents unearthed by the applicant through orders from foreign courts, Equiom and the Singapore Police, that the respondent flagrantly breached the following disclosure orders of this court:
- Order of Justice Gilmore dated January 10, 2018
- Order of Justice Stewart dated September 4, 2018
- Order of Justice Hood dated April 3, 2019
- Order of Justice Kristjanson dated October 22, 2019
- Order of Justice Horkins dated April 28, 2020
- Order of Justice Shore dated December 14, 2020"
170"An entire chapter could be written about the respondent's failure to produce complete or timely disclosure throughout these proceedings - not just UWA, but about all his financial holdings."
173"As discussed earlier, the respondent's own expert, Mr. Cochran, resigned due to the respondent's failure to provide full disclosure and be truthful."
71"If the intention of the respondent was to compel Mr. Cochran to testify to dispel the notion that the respondent had not acted above board concerning his disclosure obligations, it failed spectacularly."
406"The respondent refused to admit that coaltradeindia@rediffmail.com was his email address even though he was clearly responding to emails sent to that email address. He did this to avoid the inevitable implication that he was the beneficial recipient of millions of dollars income associated with Coal Trade India, a company he claimed his brother owned."
409"Even when confronted with his own American Express Statements showing a slew of personal luxury purchases, the respondent distanced himself from any responsibility, as he did with several other documents showing him to be extremely wealthy."
- On the issues of forgery and fraud perpetrated by Vineet, Justice Pinto wrote:
403"The respondent engaged in fraud by relying on a document, the Tan Affirmation, that he knew or ought reasonably to have known was fraudulent."
157"I find that there is overwhelming evidence that the respondent, not the applicant, was the beneficial owner of UWA for the years 2014 to 2020. In reaching this conclusion, I also find that the respondent relied on documents that he knew, or ought reasonably to have known, were fraudulent."
159"I find that the respondent presented an incoherent and improbable narrative about UWA belonging to the applicant that was contradicted at every turn."
What are the adjusted full-indemnity costs?
59The applicant requests costs of $9,605 (i.e. $8,500 plus HST) for preparation of her written costs submission. I would have found that somewhat excessive, but note that the applicant subsequently sought leave to file reply submissions which I permitted in chart form. I found the applicant's reply submissions of assistance. Accordingly, I am prepared to allow the applicant's request in respect of the preparation of costs submissions.
60I find that the respondent's Bill of Costs in the amount of $150,000 is of limited assistance as it can only be compared to the applicant’s costs of trial which are comparable. But the respondent did not provide a Bill of Costs in respect of all the other steps involved in bringing this matter to trial. I draw an adverse inference from the respondent’s failure to provide me with a comparable Bill of Costs, and assume that if his Bill of Costs demonstrated significantly less costs than those being claimed by the applicant, the respondent would have disclosed that Bill of Costs to the court.
61I find that the adjusted full-indemnity costs are as follows:
| Applicant requested | Adjusted Amount | Reason for Adjustment | |
|---|---|---|---|
| Basman Smith / Boulby Weinberg LLP | $32,050.36 | $32,050.36 | |
| Wilson Christen | $390,627.46 | $329,523.55 | Duplicative and/or Excessive billing |
| Benmor Family Law Group | $371,562.02 | $367,505.32 | Duplicative billing |
| Marmer Penner | $315,457.75 | $275,055.45 | Excessive pre-trial / trial billing |
| Jeremy Morley | $22,900.02 | $22,900.02 | |
| Sub-total | $1,132,598.51 | $1,027,024.70 | |
| Less costs already paid | $88,134 | $88,134 | |
| Sub-total | $1,044,464 | $938,890.70 | |
| Plus costs submissions | $8,500 plus HST | $9,605.00 | |
| $948,495.70 |
62Costs are in my discretion. I would round up the award of $948,495.70 to $950,000.
Are the costs proportionate and reasonable?
63In Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, the Court of Appeal cautioned that the final determination of costs must still respect the touchstones of proportionality and reasonableness. Notwithstanding the previous steps that I have undertaken, I must still address whether the sizeable award of $950,00 is reasonable and proportionate to the issues at trial.
64One measure of proportionality is to compare the before and after trial position of the respondent about his income with my actual trial finding. Just before trial, the respondent claimed that his annual income was $219,000, and by the end of trial, he said it was $430,000 at most. Yet, the financial expert and I found that the respondent’s annual income has consistently been around $7.0 million since 2015.
65I also recognize that the touchstones should be viewed in their proper context where the unsuccessful party has forced a long and expensive trial. In Fielding v. Fielding, 2019 ONSC 833, Monahan J. stated at para. 80:
I echo the comments of Gray J. in Cimmaster v. Piccione [footnote omitted] to the effect that a party who has chosen to raise numerous serious allegations which are ultimately determined to be unfounded cannot then complain about the resources that were found necessary in order to rebut the claims. As Gray J. noted:
The concept of proportionality should not normally result in reduced costs where the unsuccessful party has forced a long and expensive trial. It is cold comfort to the successful party, who has been forced to expend many thousands of dollars and many days and hours fighting a claim that is ultimately defeated, only to be told that it should obtain a reduced amount of costs based on some notional concept of proportionality.
66Keeping the above principles in mind and the factors under Rule 24(12) of the Family Law Rules, I would not make a further adjustment to the costs award of $950,000.
67I find that there were a number of aspects to this case that made it exceptional:
(a) The trial was the culmination of 6 years of hard-fought litigation that lasted from 2015 to 2021. (b) The parties had 23 motions, multiple family conferences and attendances. (c) There were 40 judicial endorsements and orders issued in this proceeding. (d) I, and many judges before me, found that the respondent failed to provide full disclosure. (e) The applicant's expenditure on her financial expert was extraordinary because the financial expert was integral to the review of the respondent's relationship with at least 25 corporate entities around the world in order to estimate his global income for support purposes. The applicant’s financial expert was also indispensable to critiquing the initial assessment of the respondent’s financial expert who, as it turned out, had been misled by the respondent. (f) I found the respondent to have engaged in fraudulent activity. (g) In addition to the financial issues around child and spousal support, the case had a significant parenting component that featured the involvement of competing experts in the area of child abduction. (h) I found the respondent to have engaged in bad faith and unreasonable conduct throughout, warranting an award on a full recovery basis.
68To clarify, I consider the final amount of $950,000 to be proportionate and reasonable in light of the issues involved in this litigation.
69I would breakdown the $950,000 as follows:
a) $268,500 in fees (which does not include any disbursements or HST) is based on Rule 18(14) and the fact that the applicant did better at trial than her final Offer to Settle. In the alternative, if I am wrong about the applicability of Rule 18(14), then I would rely on the fact that the respondent demonstrated bad faith and, as per Rule 24(8), the applicant should fully recover $268,500 in fees. b) On the remainder of $681,500 (i.e. $950,000 minus $268,500), I would rely on my finding that the respondent engaged in bad-faith, and that the applicant should fully recover the applicable fees, disbursements, and taxes on the remainder, which has been adjusted to take into account any duplicative or excessive work.
70In the alternative, if I am wrong about my finding of bad faith in respect of any part of my costs assessment, I would find that the respondent’s conduct was unreasonable and that an award of $950,000 is still a proportionate and reasonable costs award in light of the Rule 24(12) factors and the costs jurisprudence.
Order
71The respondent shall pay costs to the applicant fixed in the amount of $950,000 within 21 days of the release of this decision. While Rule 24(8) speaks of a party who has engaged in bad faith paying costs “immediately”, given the amount of costs here, I have provided the respondent with more time to do so.
72This costs award shall bear interest at the prescribed rate pursuant to the Courts of Justice Act, R.S.O. 1990, c. C.43.
Pinto J. Released: January 25, 2023
Footnotes
[1] Costs already paid by the respondent. [2] The severability provision stated: “The Respondent may accept Part “A” or Part “B” of this Offer to Settle, but with either option, he must accept Parts “C”, “D”, “E” and “F”. [3] The applicant’s Offer to Settle stated that the favourable costs consequences would expire after “February 8, 20 20 ” which I took to be a typographical error.