COURT FILE NO.: FC-22-106 DATE: 2024-01-24 SUPERIOR COURT OF JUSTICE, FAMILY COURT- ONTARIO

RE: Debra Lynn Mary Sferrazza, Applicant AND: Giovanni (John) Sferrazza, Respondent

BEFORE: Mr. Justice Robert B. Reid

COUNSEL: B. Macdonald, and C. White, Counsel, for the Applicant J. Almas, Counsel, for the Respondent

HEARD: November 30, 2023; costs submissions due January 11, 2024

decision on costs of motions

Introduction

[1] On November 30, 2023, the parties argued two motions before me: one brought by each of them.

[2] I made an endorsement as to the relief claimed on November 30 and encouraged the parties to resolve the issue of costs consensually, failing which they could file written submissions and bills of costs according to a timetable. Those submissions have now been received.

Background

[3] The motion by the applicant dated July 7, 2023, sought an order for the sale of the matrimonial home, and for distribution to her of half the proceeds of the cottage sale.

[4] The motion by the respondent dated July 28, 2023, sought an order that each party be entitled to a realtor of choice in the home listing, and that on sale there be an equal distribution of the net proceeds. He also sought a fresh sworn financial statement by the applicant including full information required in part 3 to be served before questioning, and a date for the questioning.

[5] At the hearing, I was advised that the property had been listed for sale with two agents as of October 3, 2023. I was also advised that detailed minutes of settlement as to the terms of sale were pending, that 50 percent of the cottage sale proceeds had been paid to the applicant, and that questioning (as ordered on consent by Bordin J. dated December 5, 2022) had been arranged for December 7, 2023.

[6] Although distribution of the home sale proceeds was not part of the relief claimed in her notice of motion, the applicant submitted in court that 50 percent of the net house sale proceeds should be paid to her with the remaining 50 percent to be held in trust to be available if required to fund the equalization payment. The respondent submitted that he should receive proceeds on the same terms provided to the applicant.

[7] I ordered that all the net proceeds of the home sale would be held in trust by the applicant’s solicitor pending agreement or court order.

[8] I also ordered that part 3 should be completed by the applicant on a new financial statement, but without the need to disclose the address or name of the third party, to be served prior to the questioning on December 7, 2023.

Submissions on Costs

By the Applicant

[9] The applicant sought costs in her favour on the equivalent of a partial indemnity basis in the amount of $4,208.35, inclusive of disbursements and HST. She noted that counsel spent 13.6 hours, including 1.7 hours of clerk time.

[10] The motion was brought because the respondent had been inactive and unreasonable as to a response to the issues, especially as to the sale of the matrimonial home, from November 2021 through November 2022, and then appeared to change his position about the terms of sale: from a desire to buy out the applicant’s interest, to listing with a right of first refusal, to a 60-day financing requirement on his part, and then for a buy-out subject to the completion of a signed separation agreement to permit him access to financing.

[11] The home sale listing was signed after the motion was served, and finalized minutes of settlement dealing with how the transaction would proceed were still unsigned and being negotiated.

[12] In short, based on the history of the respondent’s conduct, the motion was needed to achieve a fair resolution of the issues.

By the Respondent

[13] The respondent sought costs in his favour on the equivalent of a partial indemnity basis in the amount of $3,143.15 inclusive of HST and disbursements to be paid out over three months commencing February 1, 2024. Counsel was engaged for 10.9 hours of time plus 1.7 hours of clerk time.

[14] Counsel submitted that the applicant’s motion was unnecessary.

[15] As to the home sale, counsel for the respondent had forwarded a letter dated June 29, 2023, intimating that the house sale issue was resolved. Half the cottage sale proceeds were paid out to the applicant as requested on counsel’s return from vacation at the end of July 2023. His August 19, 2023 letter confirmed agreement to the house listing for public sale and identified his agent of choice, assuming that the applicant would choose her own agent. The listing agreement was signed by the applicant on September 12 and sent to the respondent who signed it on October 3. Each of the parties retained their own listing agent.

[16] The respondent took the reasonable position that any payment out of the anticipated home sale proceeds should be equal as between himself and the applicant, and at the motion hearing, they both conceded that all the proceeds should be held in trust.

[17] The key outstanding issue argued on the motion was the need for a completed part 3 of the financial statement, on which point the respondent was successful.

Analysis

[18] The applicable law as to costs of motions in family law cases is not controversial. The court has discretion based on s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The exercise of that discretion is guided by the provisions of r. 24 of the Family Law Rules, O. Reg. 114/99.

[19] The costs rules are designed to foster three important principles, as per the decision of the Ontario Court of Appeal in Serra v. Serra, 2009 ONCA 395: (a) to partially indemnify successful litigants for the cost of litigation; (b) to encourage settlement; and (c) to discourage and sanction inappropriate behavior by litigants.

[20] The costs claimed and the amount awarded should be proportionate to the issues involved and results achieved and should reflect what the court views as a fair and reasonable amount for the unsuccessful party to pay the successful party.

[21] A successful party is presumed to be entitled to costs but may be deprived of that entitlement based on unreasonable behaviour during the case. Where success is divided, the court may apportion costs as appropriate in its discretion.

[22] In this case, there were no offers to settle.

[23] The amounts claimed and the hourly rates charged by both counsel appear reasonable and proportional to what an unsuccessful party could expect to face in all the circumstances of this case.

[24] The applicant appears to have brought her motion after an extended period of frustration at the inaction of the respondent. She simply did not believe the assurances made through new counsel that the home sale issue was resolved. That having been said, once written correspondence agreeing to the real estate listing was provided and a listing agreement ultimately signed by both parties, it is reasonable that she could have adjusted her direction away from a need to argue the motion. The payment of half the cottage proceeds to her shortly after the motion was brought was at the very least a good faith sign of progress toward resolution.

[25] Other than the specific terms of the minutes of settlement relating to the home sale (which were not argued but deferred at the parties’ request for final negotiation), there were no outstanding issues from her Notice of Motion at the date of hearing.

[26] As to the respondent’s motion, the realtor-of-choice issue had been resolved, as had the request for a date for questioning. The terms for payment of the house sale proceeds were compromised at the hearing. The only contentious item was the request for a properly completed part 3 of the applicant’s financial statement. The respondent was successful in receiving an order to that effect, except as to the name and address of the third party living with the applicant, and without the pre-authorized penalty for failure to comply – namely the dismissal of her spousal support claim.

[27] In my view, neither of the motions should have been necessary, at least to the point of argument at a hearing. The applicant, having brought her motion, would have been well-advised to adjourn sine die pending completion of the minutes of settlement, or to have made an offer to that effect. Taking the matter forward ran up costs unnecessarily. She should have complied with the Family Law Rules and provided a properly completed financial statement. The respondent had no choice but to proceed with his motion for proper detail in part 3 of the statement, given the outright refusal of the applicant to provide that information prior to questioning and faced with the need to respond to the applicant’s claim for spousal support. Although my order was not as robust as he wanted, it did reflect success on the respondent’s part.

[28] In the result, it is appropriate that the respondent have a costs order against the applicant, fixed in the all-inclusive amount of $3,000 payable by her to the respondent from her share of the net proceeds of sale of the matrimonial home at 80 October Drive, St. Catharines.

Reid J. Date: January 24, 2024