ONTARIO
Superior Court of Justice, Family Court
at 50 Eagle Street West, Newmarket, Ontario, L3Y 6B1
RULING ON COSTS
CITATION: Gulamali v Gulamali 2024 ONSC 2845
Applicant(s)
Full legal name & address for service — street & number, municipality, postal code, telephone & fax numbers and e-mail address (if any).
Lawyer’s name & address — street & number, municipality, postal code, telephone & fax numbers and e-mail address (if any).
Shanoor Gulamali 78 Sprucewood Drive Thornhill, Ontario L3T 2R1 1029629 Ontario Inc. (“The Corporation”) 78 Sprucewood Drive, Thornhill ON L3T 2R1
Andrew Feldstein Feldstein Family Law Group 20 Crown Steel Drive Suite 8 Markham, Ontario L3R 9X9 Tel: 905-415-1635 ext. 255 Fax: 905-415-0785 andrew@feldsteinfamilylaw.com
Respondent(s)
Full legal name & address for service — street & number, municipality,
Lawyer’s name & address — street & number, municipality, postal code,
postal code, telephone & fax numbers and e-mail address (if any).
telephone & fax numbers and e-mail address (if any).
Ismail Gulamali
Deborah Squires
c/o counsel
Barrister & Solicitor
235 Lakeshore Road East, Suite 206
Oakville, Ontario L6J 1H7
Tel: 905-337-2499; Fax: 905-337-1199
Tropical Land Developments Limited
Mark A. Ross (for four Corporate Respondents)
c/o counsel
Ross Nasseri LLP
123 John Street, Suite 300
Toronto, Ontario M5V 2E2
Tel: 416-593-7107
Mount Nicholas Holdings Inc. c/o counsel
Mark A. Ross (for four Corporate Respondents) Ross Nasseri LLP 123 John Street, Suite 300
Toronto, Ontario M5V 2E2
Tel: 416-593-7107
First Beaverton Inc. c/o counsel
Mark A. Ross (for four Corporate Respondents) Ross Nasseri LLP 123 John Street, Suite 300
Toronto, Ontario M5V 2E2
Tel: 416-593-7107
David Goodman (added for disclosure motion only) 1500-439 University Avenue
Self Represented
Toronto, Ontario, M5G 1Y8
Tel: (416)595-5555 x 1; Fax: (416) 595-7020
RULING ON COSTS
Heard in writing: May 17, 2024
[1] This Ruling deals with the costs of three motions. The applicant (“the wife”) seeks an aggregate award of $50,352.04 inclusive of HST, not including costs relating to preparation of her submissions. The respondent husband (“the husband”) contends that an all-inclusive award of $15,163.97 is appropriate. The third party (“Goodman”) seeks costs of $16,100 plus HST: he is a lawyer who has acted for the Gulamali family since 1989 providing services involving corporate, real estate, estate planning, matters of a personal nature for the parties and for other members of their family, although he primarily dealt with the husband.
[2] The three motions involved a non-depletion/Mareva motion, a disclosure motion and a motion to vary the support Order in this case that the husband withdrew after materials had been prepared by the wife but before the matter was scheduled to be heard.
[3] The background facts to this case are set out in a July 7, 2021, Summary Judgment Ruling of this court dealing with the choice of valuation date (December 20, 2019), jurisdiction over property (Ontario) and, on a temporary basis, spousal support ($25,000 a month).[^1] There were other terms to the Order which are not relevant to this ruling.
[4] None of the parties’ submissions or this ruling applies to the corporate respondents.
Non-depletion/Mareva motion
[5] On June 29, 2019, McCarthy J. made an Order (“the McCarthy Order’) without notice to the husband and four companies in which he was involved. The Order permitted the wife to obtain Certificates of Pending Litigation (“CPL”) against six properties, directed that the husband not dissipate assets, and granted a global Mareva injunction with respect to the husband’s assets. The matter was directed to return to court on July 14, 2021, which it did. Costs were reserved to the return of the wife’s motion.
[6] On July 14, 2021, this court upheld the McCarthy Order but varied it slightly with respect to one of the CPL-affected properties and directed the parties to collaborate on refining the terms of the McCarthy Order to enable the husband to conduct his business operations without prejudicing the wife’s interests. That was done and an Order was issued on September 2, 2021.[^2]
[7] The wife submits that she incurred total costs for this motion of $39,370.90 but only seeks $20,000 inclusive of disbursements and HST. She made five inter-connected Offers to Settle, all dated July 9, 2019, as follows:
(a) Offer to the husband. This Offer dealt with non-depletion, the Mareva injunction, the CPL and disclosure. It proposed that the non-depletion Order and Mareva injunction remain in place;
(b) Four Offers to the corporate respondents, three of which were similarly worded and each particularized to the affected corporate respondents, namely First Beaverton Inc., Mount Nicholas Holdings Inc., Second Beaverton Inc. and the fourth dealing with a Vendor Take Back (“VTB”) mortgage registered in favour of Tropical Land Developments Limited (“Tropical”), another company in which the husband was interested. The Offers to the first three corporate respondents proposed that the CPLs remain registered on title and that the Mareva injunction continue in full force and effect. The fourth Offer dealing with the VTB proposed that the CPL be discharged and that all payments under the VTB be paid to the solicitor for Tropical to be held in trust pending further agreement between the parties or a court Order.
[8] Each of the several parts of the Offers was severable but the paragraphs in each part were not severable.
[9] Each Offer’s acceptance was time-limited: if accepted before a specified deadline, the accepting party would only be obliged to pay the wife’s partial recovery costs but if accepted afterwards then the accepting party would be obliged to also pay the wife’s full recovery costs from and after the deadline. All Offers expired one minute after the start of the motion.
[10] Appended to each Offer was a draft Order incorporating the terms of the wife’s Offers.
[11] No Offers to Settle were made by any of the respondents other than suggested revisions to the draft Orders. This is concerning. In this court’s summary judgment/valuation date Ruling on Costs,[^3] the importance of Offers to Settle was emphasized:
[6] The husband contends, rather curiously, that serving an Offer in response to the wife’s support motion would have been “counterproductive to the overall settlement of the matter” and that his valuation date motion was, by its either/or nature, of little practical application. That is nonsense. In Blanchard v. Walker [citation omitted] Curtis J. commented on the importance of Offers to Settle:
Offers to settle are a significant part of the costs landscape in family law in Ontario. They are important to the possible resolution of cases. In addition, they are important to determining costs.
Parties and their lawyers have a positive obligation to behave in ways which enable the court to move cases forward to resolution (Rule 2). Rule 2(4) imposes a duty on parties and their lawyers to promote the primary objective of the rules to deal with cases justly (Rule 2(2)). This includes taking appropriate steps to save time and expense (Rule 3(3)). Offers to settle play an important role in saving time and expense by promoting settlements, focusing parties and often narrowing issues in dispute [Citations omitted].
[7] Similarly, in F. (H.) v. H. (M.) [citation omitted] Sherr J. observed,
- …it should be a fundamental step in any family law case to serve at least one offer to settle. Parties and their counsel now have a mandate under subrule 2(4) of the rules, to promote the primary objective of the rules; to deal with cases justly (subrule 2(2)). Dealing with a case justly includes taking steps to save time and expense (subrule 2(3)). Offers to settle play an important role in saving time and expense in a case. They are an important vehicle in promoting settlements, focus the parties and often narrow the issues in dispute…
[12] This court was unimpressed with what it described was the husband’s “cavalier approach to his litigation obligations.”
[13] The Bill of Costs that accompanied the wife’s submissions is an aggregate of the costs for which she was billed by her lawyers but broken down into constituent components corresponding to the three motions. The Bills are structured in manner consistent with the Bill of Costs presented to this court when it made a costs Order in 2021. The Bill in this case is informative and provides the essential details required by the court to assess the compensable value of the wife’s claim.
[14] No comparative Bill of Costs was presented by the husband contrary to Family Law Rule 24 (12.2).
[15] In my view, the amount sought by the wife is reasonable and while the terms of the Offers may not have been completely mirrored in the Order, the claim is fair. The husband and the corporate respondents are individually and severally ordered to pay the wife $20,000 for costs of this motion.
Disclosure motion
[16] A Ruling on two motions by the wife which were rolled up into a broader disclosure motion (the “revised” motion) was heard on July 26, 2022. This motion involved nine affidavits and two financial statements from the parties. Forty-nine headings of disclosure were involved, supported by an affidavit from the wife’s expert valuator. The husband and Mr. Goodman were the targets of the motion.
[17] The wife provided for the court helpful colour-coded charts distinguishing the disclosure needed from the husband and, separately, from Mr. Goodman. With almost no exception, the disclosure sought from the husband was ordered, although in fairness the husband did not strenuously oppose producing most of the disclosure. Mr. Goodman was exercised because several of the requests involved matters about which he knew nothing, was unable to answer or did not have any information and other requests the wife withdrew at the motion. Mr. Goodman submitted that some of the information requested could have been voluntarily provided had the wife reached out to him for it, with which point the court agreed. In her cost submissions, the wife submitted that Mr. Goodman had been less than frank with the court about how cooperative he had been. Certainly, his email responses to the wife’s lawyers were less than cordial and, quite frankly, intemperate.
[18] The wife incurred $46,186.60 for costs and seeks $20,000 all-inclusive. The husband points out that the wife’s motion was revised three times, each adding more disclosure requests, that by his calculation the actual charges should have amounted to no more than about $16,000 and that, in the end, her total costs for both the disclosure and withdrawn motions should be capped at about $8,000.
[19] The wife did have to bring her revised motion. And its merits were well supported by her expert’s evidence. The husband’s document dump (945 pages) shortly before the motion was heard was, however prudent, unacceptable so shortly before argument (although the wife had amended her motion several times).
[20] The wife presented two Offers dated July 12, 2022, one with respect to the husband and the other with respect to Mr. Goodman. Attached to each was a Schedule of the disclosure forming part of the Offer, if accepted. Her Offers broadly sought the disclosure identified in her motion and $20,000 (against the husband) for what she contended were outstanding breaches by him of disclosure which he had been earlier ordered to produce. No Offer to Settle was delivered by the husband or Mr. Goodman. The husband suggested that crafting an Offer to Settle would have been an exercise in futility anyway. A curious position inconsistent with family law (or any civil) practice.
[21] No comparative Bill of Costs from the husband was submitted to the court.
[22] Again, the amount sought for the disclosure motion was reasonable. The wife noted that her Bill did not include any fees associated with the expert in preparing for the motion. In my view, the husband should pay $20,000. Costs relating to Mr. Goodman and his claim will be addressed later in this Ruling.
Motion to vary/terminate spousal support and leave to vary preservation Orders
[23] A motion by the husband to vary or terminate the support Order and for leave to vary the preservation Orders (i.e., the asset non-depletion Order and Mareva injunction) was scheduled to be heard on the same date as the wife’s revised disclosure motion but had to be adjourned because the court’s docket could not accommodate their hearing together. The husband needed to reschedule his motion through the trial coordinator’s office. On June 21, 2023, almost a year after the disclosure motion was argued, the husband advised the court that he was abandoning his motion. This was not on consent.
[24] The parties had exchanged affidavits for the motion. The wife had also prepared a factum. She claims $10,352.04 for the support motion, all-inclusive. The wife served an Offer to Settle dated July 12, 2022. This Offer dealt with both the disclosure and support motions. With respect to the support motion the wife proposed that the husband withdraw it without any cost consequences provided that was done no later than the start of argument of the motion. That, obviously, did not happen. The husband delivered an Offer to Settle dated July 14, 2022, proposing that the support Order be reduced to $12,500 from $25,000 and that it continue to be paid from funds held in trust by his lawyer.
[25] The husband submitted that it was not his fault that the motion did not proceed on the scheduled date (true) and that the passage of time required the motion to be reconstituted which, inferentially, it never was. Abandoning his motion entitled the wife to her costs thrown away.
[26] In Ierullo v. Ierullo,[^4] this court dealt with “costs thrown away” in circumstances where a trial had to be adjourned on the day of trial. Of the three generally recognized categories for “costs thrown away” (fault of counsel, court scheduling and the absence of fault) only the third obtains in this case. The adjournment of the husband’s support motion attracts no fault consequence sanctionable by costs in this case but his later abandonment of it does. As reflected in the case law, full recovery costs are generally payable in this circumstance. Such an award is not purposed to punish a party but to indemnify the other party for their wasted preparation time.
[27] The wife’s Bill of Costs totals $10,352.04. No Bill of Costs was submitted by the husband.
[28] In my view, the amount of time spent by the wife for preparation was somewhat excessive, in part relating to a factum (a nice touch but unnecessary in my view and not required by the prevailing practice). A fair and reasonable award is $8,000, all-inclusive.
Mr. Goodman
[29] Mr. Goodman seeks costs from the parties in the amount of $16,100 plus HST. He was called to the Bar in 1972, has a $700 hourly rate and claims that he spent 23 hours “for these people, putting together documentation and answers to the disclosure requests” which this court reviewed in detail on July 26, 2022. No Bill of Costs accompanied his submissions. Those submissions provided some helpful insight into Mr. Goodman’s long-standing, but now apparently fractured, relationship with the parties, their extended family and their personal and business interests. In several respects he is collateral damage to the parties’ lis but he did have, and does have, a continuing involvement in the parties’ affairs relating to the issues in these proceedings in this jurisdiction.[^5]
[30] The wife submits that Mr. Goodman’s involvement was not as benign as represented because he swore an affidavit for the husband in support of the husband’s ultimately unsuccessful bid for a much earlier valuation date than the court found in favour of the wife, had for years been a close friend of the husband and had been delegated by the latter to answer many of the wife’s disclosure requests.
[31] Mr. Goodman is entitled to a reasonable award of costs. The absence of a Bill complicates the court’s assessment. As already noted, several of his responses to the wife’s requests were intemperate and likely involved his having been not only caught in the middle of the disclosure issues in this proceeding by the husband but also frustrated by the wife’s continuing disclosure requests and, in some instances, her later withdrawal of some of those requests.
[32] Mr. Goodman did have to engage a lawyer (Simon Morris) for the 2021 motion dealing with the valuation date, support and his questioning and to argue costs for that motion involving him (no costs were awarded to him). He submitted that he had been obliged to incur counsel “at great expense” for which Releases were exchanged but there is no evidence (certainly no substantive submissions or documentation) that any part of this current claim involves those expenses (the quantum of the claim is the hours spent multiplied by his hourly rate).
[33] Two factors impact the assessment of Mr. Goodman’s costs. The first his less than civil responses to the wife’s disclosure requests and the second is the failure of counsel to collaborate on disclosure. In my view, an award of costs in the all-inclusive amount of $10,500 inclusive of HST would not be inappropriate. This should be paid by the husband as it was he who delegated disclosure obligations to Mr. Goodman.
Payment of costs
[34] The husband’s lawyer (Squires) holds funds in trust to which the wife is presumptively entitled, in whole or in part, and which the husband has been allowed to access for business purposes (as per Orders made on September 2 and 15, 2021). The costs awarded to the wife and Mr. Goodman by this ruling shall be paid by the husband from funds other than those held in trust.
Disposition
[35] Accordingly, the husband shall pay costs (inclusive of disbursements and HST) as follows:
(a) To the wife, the sum of $48,000, of which $8,000 shall be enforceable as a support Order.
(b) To Mr. Goodman, $10,000.
[36] Costs shall be payable by June 17, 2024.
[37] A Support Deduction Order shall issue.
[38] Counsel may forward copies of the proposed Orders to the judicial assistant for timely issuance.
The Honourable Justice D.A. Jarvis
[^1]: Gulamali v. Gulamali, 2021 ONSC 4787.
[^2]: Gulamali v. Gulamali, 2021 ONSC 5566.
[^3]: Gulamali v. Gulamali, 2021 ONSC 5823.
[^4]: 2023 ONSC 74.
[^5]: See #1 above, at paras. 38 to 45.